Money Making Experts: This 3-Step 'Offer' Formula Makes $20k Per Month! Alex Hormozi, Codie Sanchez, Daniel Priestley

Transcript from https://podmenti.com/t/cdb78a4ed97f1c25

I've got three boxes here.
One of them contains a thousand dollars, one of them contains ten thousand dollars, and one of them contains a hundred thousand dollars, and you three are the avengers of entrepreneurship on the internet. So you're gonna tell me what you would do with that amount of money to build a scalable business. So do I get to give the money? Is that how this works? Okay. So I would three highly successful entrepreneurs with
Three very different perspectives. This is the ultimate masterclass in creating and scaling your businesses to make millions. There's two path to making money quickly if you don't have any. And the first path is go find the best entrepreneur and go work for them. Learn as much as you can. Totally agree. Like Kim Kardashian was Harris Hilton's assistant. And she learnt playbook for being famous. And then she
And then the second way is high risk but highest reward. Go do it yourself. And the first business that you start, you're gonna be learning the game of business even more than you're learning the business that you're doing. Things like you wait eight seconds after you ask someone to buy, you post thirty percent more sales. And there are actual studies now that show that if I'm a woman, you make more money if you do one thing.
You wear makeup.
Which is wild.
And what about making content? Building a content empire that builds your business. This is brand new to a lot of people. And so a lot of creators online don't think about how do I monetize on top of this. Right, and I can name some TikTokers with 50 plus million followers that have had failed launches because they have views, but they have zero influence. And in order to create influence, there's four things. So number one is
Okay, so let's go into simple actual framework. So I have a framework in order to raise money. I have a framework for pitching. And I have one that can increase sales by twenty to forty percent. And then if you want to know if your business is going to make you money or not, we use the mode strategy.
Uh
Alex, I feel like I have
wait a long time to have this conversation with you three, because in my mind, you three are the
Avengers of entrepreneurship.
on the internet. And for very different reasons, you do very different things, you have very different perspectives, you run very different businesses. But that is why I've been so looking forward to this conversation. Before we get into some of the technical stuff and really specific topics, I wanted to start with a more broad question.
You're all entrepreneurs, you all speak to and educate millions of entrepreneurs on your own channels in your own rights. And the question I wanted to start with.
Is
Фром а психолє перспективі перспективі
What does it take?
To be
An entrepreneur.
And
Can anyone listening to this right now?
become.
An entrepreneur, a successful
Entrepreneur.
I'm gonna throw that question
across the table straight away to
Alex.
So starting with the second question first, can ever anyone become an entrepreneur at the basic level, if a kid can go around the neighborhood and say, Hey, I will mow your lawn or I'll rake your leaves, or I'll babysit your kid.
Uh in exchange for money.
Fundamentally, it's entrepreneurship if we're just taking it at the most basic level. And so what prevents someone from doing that? Basically, if you can get a job.
Then you can be a self employed entrepreneur.
And so I would say that is like my baseline number one.
From a behavior's perspective.
Then you get into, okay, I want to learn about the game of entrepreneurship. And then there it's basically a lifelong journey of how much leverage can I apply to this, um, at all all pieces of the business, because even going around knocking on a door and saying, Hey, can I
Be a babysitter.
you have all levels of bus all all functions of the business still exist there. They're just done a lot of time simultaneously and at very low leverage. So if you have some level of advertising, you went up, you knocked on a door, you have some sort of presentation that you give in exchange for money and they agree. Okay, great. We have a selling, you know, component to it.
Um then we have some sort of delivery.
That's gonna happen, which is like I might show up with my human body and then take care of this other human body and make sure they don't die. Right. And probably have a couple other things that I'm I might clean the house while I'm here, the little value add. And then fundamentally it's like that's a complete that's a complete cycle of exchange. And then
you know, maybe they leave a review because you start to have a website, but that starts create leverage and then then you expand from there. But I think fundamentally at the most basic level, that is entrepreneurship and then everything else is just more.
Cody.
You can be an entrepreneur if you're willing to tolerate pain. I I think being an entrepreneur is largely a byproduct of three things. One being how much pain can you tolerate, two being how consistently, and three being can you take the consistent pain that you have and find a way to decrease it, which just means can you learn from the things that you've
gone through as an entrepreneur.
By and large
It is a hard path.
Because uh at the end of the day, you can't blame anybody else and there's a scorebo constantly behind you. And so, you know, if you if you have a job, it could be the boss, it could be the other decisions, it could be somebody else's fault. But if if you are the entrepreneur in charge, there's nobody else.
And the the thing that I love about entrepreneurship, and I think all entrepreneurs love, is you either win or you lose. In a lot of ways, it's a zero sum game. And it's measured.
Predominantly by
Do I grow my profits and and revenue in the way that we set up this the system today? So
Yes, I think anybody who is willing to tolerate pain.
Can become an entrepreneur, and I think it's actually okay.
To have pain in your life. And you should seek it a little bit. It's the same thing as the gym. We don't go in there and think it's gonna feel great to have a workout and have our muscles less literally rip apart in order to rebuild. And yet that's
What it takes.
In order to get more fit. And so um
I think part of the game of entrepreneurship is just like can we increase pain tolerance over time consistently? And
Once you do that, then the things that used to be hard today, you'll look back on and you'll sort of chuckle because they will not be hard any longer. So there's various types of pain in my life that I'm not willing to tolerate.
And there's other types of pain that I've like volunteered to choose over long periods of time. So I'm trying to understand, and this is just again a question to all of you, we'll get into Daniel straight after, is
How do I know?
What pain is worth tolerating and
Over a long period of time.
Because

Good pain. Some pain is not worth it. How do I know what pain is worth it?
Well, I think that's what comes into that third level of you have to be able to be on a s a journey to decrease the pain, which is learn.
Like that's what learning means. Like you try something, you touch the stove once, you realize that the stove burns you when you touch it, you don't do it again. If you continue to touch the stove continuously over time, then you haven't really learned.
But you know, I mean, there's lots of different types of pain. There's acute pain, which is like you feel it in this moment really, really deeply and intensely. And that and entrepreneurship often is things like, I've completely run out of money. Nobody is going to fix this problem. I'm the last one on the line. And then there's a type of pain that is low grade pain, so kind of consistent over time. I have to work harder.
Every single Friday there's a, you know, a paycheck that I have to give somebody else. That's sort of consistent pain. And I think in entrepreneurship, we should assume you're always going to have some version of low grade.
Pain.
I had pain w when I worked in the call centre, and I have pain now.
Did you have acute pain when you worked in the call center? It was just drudgery and boredom and you were out of alignment.
So when you have an origin story, a mission and a vision, and you feel an alignment between your past, your present and your future, and you feel excited about the future that this is working towards, then the pain becomes meaningful. And what you're looking for is pain that is in alignment with origin, mission and vision.
So meaningful pain. Meaningful pain. What do you think? What do you think about that same question about can everybody be an entrepreneur and what does it take from a psychology perspective? I'm I'm asking this question because there's people at home that are gonna wonder, they're they're in a job at the moment, they're pondering a lot, they see people like you three who seem like you're a million miles away. Yeah, but you didn't start a million miles away. So what does it take
In the comments of every one of these videos is not everyone can be an entrepreneur, not everyone wants to be an entrepreneur.
Interestingly.
Uh
the idea of a job is a very recent innovation if you take the long view of history.
Uh jobs really only came into existence around the eighteen fifties the idea of a wage. Prior to that, people got paid for tasks. And essentially you completed a task you got paid and and uh all sorts of levels of society. And that gave rise to very entrepreneurial classes of people. Uh you had to be quite entrepreneurial prior to the eighteen hundreds. So it's definitely built into us.
Uh I personally think that the human brain
has three kind of levels.
The base level is very concerned with survival.
It's fight, flight, freeze, freak out.
The next level up is just interested in status quo and it's interested in repeating the past and doing what's safe and do just doing what's comfortable.
And then there's this other part of us that is a visionary and it's interested in exchange, it's interested in empathy, strategy, love, compassion.
Adding value to others.
And it's it's a higher mind, it's a higher way of thinking.
Unfortunately
What happens in most of society, especially with a lot of um social media
And especially with the way we were raised through the schooling system.
is that we keep get just getting dragged back into the autopilot and the reptile brain.
uh as opposed to being able to have a little bit of time for the visionary.
And it's that visionary mind that makes you feel very entrepreneurial.
I have seen people who have never had a business, they've never been entrepreneurs.
And they get around a group of entrepreneurs
and the buzz and the energy from that group of entrepreneurs becomes contagious.
and they start opening up this other part of their mind and they go, Oh, wait a second, I've got an idea.
I could do this and they start thinking about what's possible.
And I've watched people go from I could never do this to I could totally do this
In in a day.
Alex, you wrote something down there.
Oh, it was the one you were talking about.
You know, what kind of pain, you know, is there. I think there's a a classic
Um example of when do I push and when do I pivot?
And so
Um
pivoting comes from, at least from my perspective, where you have an underlying assumption
that your original thesis was based on that has been disproven. So if I say hey, I want to start
you know, um, a doggy toothbrushing business. Um, you know, there's an underlying assumption that people are willing to pay for their dogs to get their teeth brushed, right? Um and
Within the context of like, I have presented this in a way that I follow the normal persuasive, you know, taxes of uh, you know, this is the benefit, you know, these are the these are the prices that I would need to to charge in order to make a profit, et cetera. If I find out that no one cares about this, then that would be a moment where I would say, I don't think you should push harder, I think you should consider pivoting.
The pushing scenarios is typically when your underlying thesis is still
is still true. You have not invalidated that. And so you just haven't figured everything out yet.
Um and most of that is where the pain comes in.
Um that that Cody is referencing.
No, I think the third door where it gets really tr tricky is that
There's opportunity cost.
And I think this is where most entrepreneurs get draft.
And
In some ways rightfully so.
Because, you know, it's very, very hard to build a a successful restaurant that's local. And if you want to be a trillionaire, it's probably not the way to do it.
And so what happens is you develop skills, you know, developing your first opportunity, you figure out how to do doggy toothbrushing, you find out that people don't actually care as much about brushing their dog's teeth, but they do care about their dog having good breath and being, you know
clean and groomed or whatever. And so like so you pivot a little bit and then you're doing this thing, but then you have these big aspirations to being a trillionaire. And you're like, I don't know if I can turn this into being a trillionaire, but I did learn how to market. I did learn how to sell. I did learn how to manage. And then you think, okay, well
Should I start an AI startup? You know what I mean? As my next thing, because I did develop all these skills. So now do I do? Right. And I think a lot of people are in in.
uh maybe you know one step later entrepreneurs are in this camp where they're like, okay, I didn't understand the world as well. Now I understand different opportunity vehicles have different returns, but also risk associated with them. All of them ha require pain and work. And so if pain is
Basically, I can only interpret pain as one to ten and ten out of ten restaurant days will still suck as much as ten out to ten AI software days, but this one has a billion dollar payout and this one has a two million dollar payout. Well, if I'm gonna suffer either way, I might as well do the thing that.
gets me the best return, which is good entrepreneurial thinking. But then so is focus and so is longevity. And so then what do you do?
Right.
And so I I I just thought about that from a pain perspective because you have a lot of times the pain happens from insufficient volume. Like you think that this like this business isn't working, but it's realized it's usually'cause you're not working enough.
Um, and when I say that, I mean doing enough in it. So it's like, hey, I knocked on twenty doors and like no one wants this. It's like, well, obviously with twenty doors, you'll have no fucking idea if somebody wants it or not. It's like knock on two thousand, you'll probably get a better idea. And so, but most people like have never had rejection before. And so they think twenty is a sufficient amount.
Um or like hey, there's no good there's no good engineers in insert city.
It's like, well, how many do you interview? You'd keep talking and eventually it's three. And you're like, okay, well, no shit. I mean, if you're gonna marry somebody, do you think you'd only go in three days and then just say, I guess I have to pick from one of these? So it's probably not a good idea. And so I think the same idea of
Insufficient volume is one of the things that can that can create pain, you know, for entrepreneurship. You have opportunity cost of like, Okay, well now there's the green the grass is green over there. Should I stop what I'm doing now?
Right. And then you have kind of underlying theses, which absolutely, if you have your underlying thesis for the business, that is disproven.
Then that's one of those times where it's probably worth pivoting. But for anybody who's listening who's a newer entrepreneur, my my big my ask to you would be, I probably wouldn't start an AI.
Uh start up.
Caveat.
As my first business.
And what I mean by that is like
If I as in building an actual tool. Now if you want to like implement AI using other people's tools, that's a different thing. But
the first business that you start, you're gonna be learning the game of business even more than you're learning the business that you're doing.
And so then once you learn the game of business, then you start to see kind of again, you start to see more clearly the opportunities that exist.
The next s step for me in what Alex said was about how do I know which idea is worth pursuing. Alex was saying there that I which I completely agree with is that the first thing you do it actually teaches you the fundamentals of how business works, team building, marketing, promotions, customers, customer service.
But for those people that are sat at home and they have an idea and they're mulling whether that is the idea worth pursuing.
Is there a framework for knowing if it's a good idea or a bad idea?
What we use that comes from private equity. If you want to know if your business is going to make you money or not, or investable or not, we use the Mode Strategy, which is basically M stands for margin. So you want a business that actually makes you money, doesn't just generate revenue. And so a good business typically has at least fifteen percent net margin. So that's the money you put in your your pocket, right? So that's profit. Yeah.
Yeah. Exactly. And then uh the O stands for operations. So operations being can this thing actually scale over time, or will I really have a job, not a business? And what's the difference there?
The difference between the two is if you have a job not a business, that might be, for instance, without AI, if my entire business was just me talking continuously to camera and I'm an actor, it's really hard to turn acting to a business, right? You're trading time.
Right. You're still an employee, you're just self employed as opposed to a business owner. And there's a real difference between a CEO and a self employed person.
And then the A stands for advantage, which is do I have an unfair advantage in my business? I think over time all arbitrage windows close. So if you don't have some sort of advantage, it's hard to stay in business over a long time. Advantage might be
I have distribution because I have social media. So I can get more eyeballs. I can figure out how to talk to 2,000 people quickly because I can do it via video as opposed to knocking on 20 doors. Uh, or it could be logistics, or it could be uh 10 years of experience in an industry. And then the T stands for TAM, Total Addressable Market, which goes back to the doggy.
teeth issue, which is, you know, is this a real market that enough people are interested in that I can build a business that is big enough for me? And you know, to Alex's point, I don't think everybody should try to play the trillion or billion dollar uh
game. In fact, I think it can be quite miserable to to strive four billions. And so the the total addressable market for your local fruit stand
in your community may be a perfect amount of income for you, but let's actually know what amount of income is reasonable for you. And the cool thing about entrepreneur entrepreneurship in like today's age, the data is available everywhere. And so in private equity, you would take this model like that. So you'd go moat, you would to I take them and for each one, I rank them one to 10.
And businesses, so margin operations, advantage, total addressable market.
Each one of them, a 10 is perfect, a one is the worst you could have, and businesses that are better than thirty across all four, well, that's a fundit, that's a fundable business model.
businesses that are less than thirty, but more than twenty, that's a fix it, you've got some problems in the model. And businesses that are less than twenty, that's a flee it. This is probably not right for you and a hard business to do.
I think it's not just the people who are looking for a new opportunity or people who don't currently have a business. I personally think at the moment every single person on the planet who has a business
should assume that their business is on borrowed time.
Because I is gonna disrupt everything.
And in that disruption, everyone has the opportunity to rethink whether they want a different opportunity or the whether they want to pivot. It's the perfect time. I look at simple things when I'm thinking about is it a good opportunity?
I think every good business is built upon somebody's case study.
So
When I look at
not just businesses as a thing on their own. I think businesses as a thing on their own
have to be taken in consideration with who's the entrepreneur. So your entre like
Something that's a great opportunity for Cody, maybe just a disaster for me, and like and likewise.
So I'm looking at
the background of the entrepreneur. Do you have a case study to leverage? Do you have knowledge?
Do you have a network? Do you have resources?
Have you got a reputation in something? Because those are the things that we can then leverage.
And then I'm just gonna have a look at three little things. I'm gonna say
This idea that you've got going forward.
Does this
address someone's pain.
Right. Is there some sort of problem that this solves and that to th we could measure that, right? Because people pay to move a metric. They love to move some sort of a number. So is there a pain that we can measure and can I take people out of that pain based on my story?
The next thing is
Does that type of person who I'm gonna solve that for, do they have money to spend?
Because ultimately
Sixty percent of all the money is in the top ten percent.
So the top ten percent have about sixty percent of the available disposable income.
So
Groups that t tend to have money.
Is business owners.
Executives.
People who've got accumulated wealth.
Um, you know, so you're looking at like some sort of indication that you're selling to a group of people who have money.
Underneath that top ten percent.
Amazon's already got'em.
McDonald's has already got'em. Ever like that's a saturated part of the market. You were looking for that top ten percent who've got disposable income.
And then the final part is
Passion. Like are you passionate about this? And my definition of passion is a willingness to suffer.
So it's not do you get joy from it, not are you super happy from it.
It's are you willing to suffer for this? Are you willing to have delayed gratification?
Um
Would an objective third party
who looks at your behavior, who looks at the way that you show up in the world, would they agree that you seem to be
willing to push through difficult times in order to have this. So those are some of the conversations I'd have with anyone, and not just people who are starting out, people who have already got a hundred million dollar business.
It's like the adult marshmallow test, basically.
Yeah, I think Cody had a had a great framework in terms of thinking about this from an investing perspective for the people who are considering starting their first business. I like the pain, passion, profession angle of like typically it'll be something that comes from a personal pain that you overcame, whether it's you had an eating disorder or you have kids who have allergies and you figured out how to
pack lunches or you figured out how to store stuff for twice as long because of some unique thing that some that you retrofitted a cooler with, whatever.
Some passion, which is just like a hobby that's
That's you're deeply interested in.
Or it's a profession. So something that you already currently do. Like in a way, this is I think one of the easiest self entrepreneur, you know, self employment path is just going from employed to self employed, doing the same thing that somebody already pays you for. So like you don't need to worry about like market risk of like I wonder if if accounting is still gonna be desired by other people. Like right now, because everyone's so interconnected, like
remote work and being able to be fractional, like many people can start kind of mini consulting businesses doing.
You know, because a lot of businesses and entrepreneurs are very um bad at allocating resources. And so they have a lot of quote full time employees that are working twenty percent of their effort and still keep you know keeping their paycheck and at the end of the day, like they do enough to keep their job, but not so much that they are nearly at their full discretionary effort. And so all of a sudden you think, Okay, well
I could probably do the same work for half the price and the entrepreneur be willing to pay it.
But I could do that same work for half the price for five times the people and make three times as much and do it on my own time. And so that becomes, I think, a great like foray into entrepreneurship. Now, what do you have to learn there? It's like, well, you already have delivery down because you already do the job.
You just have to learn how to promote. It's just like how do you reach out to people and ask them if they want what you have and then get them to trade you money for it. Um that like at least takes half of it out of the equation. And almost all three of those pain passion profession, you already have kind of the back end. Like you have the pain, you figure out the thing.
uh the passion, you've already spent all this time loving this thing. So you've already done a lot of the w the work and research. And so really you just need to learn the front end, which is like how do I promote and how do I sell?
Right, how to get someone to give me money for it.
And then in terms of
um how much money you make. I think Dana had a great perspective of like, you know, some of the rich. Like they're the ones who have the money. And if you uh
Sot rich people get to
sell at rich people prices, which is more fun. Uh and so I mean I'll give you a simple example. Um
I have a CRO company that
that we do a conversion optimization across our sites in our portfolio.
And so if that company go works with an e commerce business and they, you know, add ten percent to you know top line and goes from one million to one point one million, they make a hundred thousand dollars of value. If they work with an e commerce business that's doing a hundred million dollars a year and they do the same exact work and they add ten percent, they add ten million dollars a year.
So it's a hundred, hundred times more in terms of value that's being created. And so fundamentally, you have the value that you create, your ability to negotiate a slice of that pie.
How unique that is. As in, for example, I could have plenty of sales guys are like, Hey, Alex, I could sell millions of dollars of stuff for you. I'm like, Yeah, but so could every other salesperson. So
you have significantly less uh you know negotiating power.
even if you have the negotiating skill just because many other people can do it.
Right. And then the third the the the final component is risk. And that's the one that I would multiply everything by, which is how much risk do you take on. People often say this idea of selling to the rich, but as you explained it there, what what it actually sounded more like is sell to the person who's gonna yield the most returns from your skill.
And I I reflect on this because I spent the first half of my career doing social media marketing. Yeah. And I I think I said this when we sat down, Cody, that I used to work with fast fashion companies or fashionies and the net return
So the
Client.
Of me selling them more dresses was tens of thousands.
I then left that business and spent two years working in psychedelics in the biotech industry. Where if this was around the gate the meme stock thing, where if they could galvanize people on social media to care about their stock, the upside, the swing was billions of dollars.
I was the only p employee in this biotech firm that ended up listing on the Nasdaq.
For three point two billion dollars.
And so that remuneration to me
for the six months contract.
With many, many, many, many, many, many, many millions. Yeah.
Because they they made billions. So for me they th they thought they were ripping me off.
Yeah. And and I think about it funnily enough, when you put the same company on different stock markets,
the the company's worth wildly different. And I think the same about our skills, where
Think about
The stock market where you're s trading your skills. I've got a I've got a small example of that, really small example. There was a guy who we worked with
who was an occupational health and safety
Uh consultant.
А інсайдой
in a typical office, he would charge a couple of grand a day uh to go in and it was about ten days, so about twenty grand to do an occupational health and safety.

What is the most dangerous workplace you've ever worked in? And he says, Well, there's this type of manufacturing that has lasers, freezing stuff, boiling stuff, lava, you know, the sharks, you know, the whole thing, right? Whatever it is. And not actual sharks. But you get the idea.
And I said, Do you know how to solve the problems of that workplace? And he says, Yeah, I absolutely know how to fix those problems.
I said, why don't you position yourself and why don't you run a campaign that you're one of the best in the world for that and that you're actually going to just run a campaign around that?
Um within a year.
His day rate had gone to twenty thousand a day from two thousand a day.
And a a typical engagement had gone up to four hundred grand.
Mm. Mainly because he went from
You know.
Uh the the same skill set.
But he applied it to a a much
you know, more valuable environment. Podcasting is somewhat similar, you know. Because if I podcast in the UK
The
Amount of money I get per view.
From YouTube.
It's half.
versus if I do the same ac tap activity.
The same amount of effort, the same amount of hours in the United States.
the platforms pay me double for the same amount of views.
And I think m many of us like trying to get a pay rise from our boss or whatever, but actually thinking about
Are you trading your skills on the highest return market is a great way. We used to hire writers at my own company and those writers would be paid, you know, thirty, forty, fifty thousand dollars, whatever it was in the UK.
When when I was working in biotech and we were looking for someone that could write about biotech
it was a quarter of a million in the salary. It was five times more for the same fundamental skill of writing.
I think that I I think that a lot of times when you're starting out as a brand new entrepreneur, it's scarier to sell to rich people.
You're like, I don't know rich people. I'm not a rich person. I'm going to sell to my friends. That is very normal. That's the people that you have the closest proximity to. But the problem is, is that means you have to play the volume game. And the volume game is actually really hard. It's hard to get a lot of people to buy your thing. Incredibly difficult. It's actually much easier to get a few rich people to buy your thing. And so, you know, we have this
home inspection company and I didn't know it at the time, but
He was telling me they were having like major cash issues in their business. And uh and I could kinda tell because when an entrepreneur is under stress, like you can sort of see it, you know, it's a it's a a visual thing too. And he was about forty five days away from uh running out of cash. And when I was sitting down and talking to him, I was trying to understand his business. Home inspection has been around forever.
It's a normalized business. This business works, it functions, it has good margins, it's a roll up for private equity. The business model is not the issue. So what was the issue? The issue was their clients and their pricing.
So he was trying to be the home inspector for everyone at a lower price point.
And what does that mean? It means it was actually really hard for him to advertise because he wasn't niching down. He was competing with all of the major players. And he had very little margin because he was competing for people who couldn't afford very much in their home inspection costs. We made one change, which is we just said in front of his business name and in all of his ads,
luxury home inspections instead of just San you know San Diego home inspections or whatever city he was in previously. And that one change increased his margins by forty five percent. And they saved his business. He didn't do more volume.
He didn't hire more people, he didn't get smarter, he didn't get better, he just sold to rich people instead. And because that increased the surface area that he was covering, so each house was like, I don't know, thousands of dollars instead of a couple hundred bucks to inspect, his business was saved forever. And so I I think protecting your profit is so crucial.
When you start a business and nobody tells you that because it feels safer to sell things cheaply to people who don't have very much money. But there's that old adage, which is, you know.
try to work with a fifty dollar client and they will say, I need everything under the sun for this fifty dollars I'm gonna give you, and then go to a fifty thousand dollar client and they'll say why or sent. And so in the beginning, go for the fifty thousand. And the last thing I'll say on that is also when you're a young gun entrepreneur, a lot of times people who have money, they got there through business.
Nine times out of ten. They see themselves in you as a young hard worker. You can often get away with things when you are young working for somebody who is rich and sees themselves in you, especially in service businesses.
that you just can't at volume when you're selling to people that really need that last dollar. And so I think that's why most businesses go service based business. You trade your time for money in some sort of way, then you productize the service. So now you make the service so other people can run it too. And then finally you turn it in technology software as a service.
You increase your margin in every single one or your profit in every single one, but they're the same business. You're just smarter. You're you're a higher level entrepreneur when you're able to create tech around it. And but really all tech is is process at scale.
And so it sounds scary when you're just starting out, but it it's it's really just the difference between ten years in entrepreneurship and learning and and not.
I think when you um when you're starting out you a lot of times you sell out of your own wallet to to Cody's point. So it's like you have no d dollars in your wallet, so you assume everyone else has no dollars in their wallets either. And
You're so afraid of getting rejection that you continue to lower the price until you get here to you hear people say yes. But
just as like a benchmark for people who are starting out is that like usually you're appropriately priced when seven out of ten people are saying no.
Um that's like about the appropriate price. So if you have like
If I see a business and they're doing 80% close rates, isn't like 80% of uh the people they talk to say yes, they usually have a double or triple in pricing just sitting there.
If they're at like sixty percent close rates, they usually have a
one and a half to two X price increase that's sitting there. If they're at, you know
40 to 50, they've got a 50% price rise in there. And if they're right at that, you know, 30-ish, 35%, then they're usually appropriately priced. And if they're at twenty, they just need to learn how to sell better. But and so but fundamentally I say this because usually, you know, in the beginning of entrepreneurship, you're so afraid of hearing no.
Um
But
the reality of it is that you need to be hearing no more than you hear yes to know that you're being appropriately priced. Because you like I I way back in the day, I had a gym.
Um, and I had
I can't remember how many members it was, but uh I I said that's it. And I decided to triple my prices, which is a pretty big move. Uh we have a recurring membership. And so I gave everyone a trial of the new level of service I wanted to give. I wanted to go from large group to semi private. And um I tripled the price alongside that and I lost one third of my customers.
Um, but I had two thirds of the people at three times the price. And so I made
Um two times the revenue and I cut my cost by two thirds.
Yeah.
And so I made a lot more money. And it was probably better for your clients as well. It was a more exclusive experience. And it was like right as I was beginning to learn how like pricing uh worked with profit in a business. And so it and by doing that tripling in price, it didn't like
triple my profited to way more than that. And so like when you have a ten percent or fifteen percent margin business, like Cody's saying, if you actually can pull off a double in your pricing, it'd be a six X.
Or seven X increase in profits.
So there's a lot more sensitivity to that price number. And what's interesting is that it's really just like, you know, a lot of those price. It's like you do the exact same thing you normally do. And then right when you're about to say the number, you just add a zero. And then and then you just act the same. Dan Kennedy had this great quote, he said, um
Go as high as you can without cracking a smile. Uh and I think that's usually a pretty a pretty decent place to start. Yeah. And if nobody has given you pushback on pricing, that means you're too cheap immediately. Like I mean, value metrics, I think, are so un
Listen, the thing is, like if you're a serious business person, you want to make more money, pricing is gonna be really interesting to you. If you're not a serious person wanting to make a lot of money, pricing seems like such a boring conversation. This will never go viral on the internet except for people who actually are in the game of business. And they understand that pricing saves saves businesses.
And the the thing that I learned that I thought was like wrong at first, and I'd be curious if you guys were the same, I thought it was wrong to charge different people different prices. I was like, no, no, no, everybody gets the same price. That's the right way to do business. And then I realized there's something called value metrics, which is basically your prices should be a representative of three things.
usage. So does somebody use this service a ton, then you should charge them more. Do they have a lot of users? Do lots of people use it on their behalf? Or then finally, uh value. How much value do they derive from it? Do they make a ton of money
Um, you know, can they have some sort of quantifiable return. And if you're charging everybody ninety bucks a month for whatever your service is, you are wasting a ton of money from a segment of your clients that would pay you way more. Like typeform is a good example. I I started using typeform.
Start using it myself.
They charge me fifty dollars a month.
Then I started running tens of thousands of surveys through there and I put my whole team on there. Now I'm paying a thousand dollars a month. It's the same fucking tool. Yes, it is. But I'm using it way more and I've got more of my team using my account as well. So they're charging me a thousand just over a thousand dollars a month. And they only had to acquire you, which is amazing. So from acquiring one person.
And your like, you know, your cost of good or their costs of goods don't escalate at the same rate at all. So that's how these SaaS companies get this 80% margins.

When you look at uh this this little pyramid of customer segmentation, you get one percent of people who have fifteen percent of the budget, nine percent of people have forty five percent of the budget, ninety percent of people combine
Forty percent.
Right.
So when you actually break that down, you have one person willing to pay fifteen grand.
You have nine people willing to pay five grand each.
And you have ninety people willing to pay four hundred and forty five each.
So
You are almost always better off going.
Th I think the best place for most small businesses to go is that nine percent. And the reason is the top one percent
Typically shop on Pedigree.
They wanna work with the best businesses out there. They wanna win th work with the ones who have won awards and the ones that have been around for and through trusted relationships.
The ninety percent they shop on price, they have a fixed price and they only want to shop on that price.
The nine percent shop on passion.
They want to follow someone who's an interesting uh who has an interesting new take on things, who's putting together a group, who's done some education or entertainment around it.
So these this nine percent, I would call that the affluent niche.
And that affluent niche is really good place to start. And that nine percent are the ones that are closest to moving into the one percent. So you can grow with a client over time. Yeah, which we saw a lot. You could help get them up to the one percent. And then then they'll take you and introduce you to all the others. This was one of the really fascinating things for me when I was running a marketing business, which is
I think you you referenced this, Cody, which is when I started the company, I was working with founders who had a ten K budget and the amount of times they would call me.
Because of that 10K budget, because that was do or die for them. And then when we signed Uber and Coca-Cola and Samsung.

The budget's a massive.
And they they call me less.
They sign things off quicker.
The meetings are easier, life is easier.
And that's just one of these sort of interesting phenomenons with um
With c client services, I guess, and service businesses generally.

It requires the same or less units of effort to keep them happy than someone who's
Life is on the line because it's their five grand out of their own pocket.
I think part of that you earn too as an entrepreneur, I think
I mean I'll speak for myself. I uh
You start out selling way too cheap.
Um, because you also need the money.
'Cause as much as it's like a nice it's very comfortable for me to say, like, yeah, you need to add a zero to your price tag. If I don't get paid for the rest of my life, it doesn't matter.
Yeah.
And so I have d I have a lot of leverage and people can feel that.
That's really interesting. Right. Whereas I mean, this is also like
If you behave as if
Right.
If I behave as if I have a significant amount of money, then I tend to attract people who are going or basically somebody else who also has a lot of money will recognize that behavior and say, Okay, this guy's a player.
And so then they'll be more willing to do business with me. Now it's tougher when you don't have that and you present that way.
Right, which is so I think that a lot of this kind of does become earned because like either you're faking it, which is not my not my recommendation, or you just do a decent amount of volume and you realize you're like, you know what, I can't charge ninety nine dollars a month for this. It doesn't make sense for me. And then you have a different level of confidence going into this where you just look at something, like, I just can't do it for that price. That's the word confidence, isn't it?
Yeah, well that's how I how do I yeah. And how does one
Building.
that confidence or portray that confidence when really they don't believe it themselves. You outwork yourself doubt, right? You do s you do so much volume that um
You get bored of it. Like when you can basically train out your your affective response or your emotional response to a given activity, then at that point I would say, like you are ready. And so whenever I hear somebody's like, How do you get rid of nerves? I was like, You're just not you haven't done enough times. Like until you're bored.
And you hate it.
At that point I'm like, Okay, now you're ready. Is that what like self belief is to you?
To me, yeah. There's there's two types of confidence. There's a confidence that comes from repetition. Sure. And I think it takes courage the first thirty times, and then you get a little bit of confidence, and then it takes courage, and then you get confidence. But I think it's like thirty bloc little blocks of thirty repetitions and then you get rewarded with a little bit of confidence upgrade. That's one type of confidence.
There's another type of confidence which is an abundance of options.
So let's say you run a lead generation campaign.
And you wanna get ten clients and you're hoping to sign up ten clients and a thousand people respond.
You end up with this with or without you energy. And the with or without you energy is I'm gonna be fine with or without you. I'm gonna definitely make my 10 sales. I've got a thousand leads.
I've got ten sales I can make.
So therefore it's out of balance. I I go back and forth on this because the good thing about today actually is I think people
Do less than ever.
But think that they do more than ever in entrepreneurship. And so we have a lot of mental masturbation that goes on. I've thought about this a lot, I've really pondered about it, wondered about this, I've worried about it, et cetera, right? I've watched all these videos, I've consumed all this stuff, but I've actually done nothing. Keep watching the video.
Like and subscribe.
If if if
I it's if you take the quantity advice, then what you do when you try to go get a job, let's say, whether it's it's a job uh that you that you have in your business or you're trying to get an actual job, then you just go and you apply to fifteen thousand of them. I actually think you'd be much better off by applying to five and doing
As much work as it would take to reach out to fifteen thousand to obsess on those five. And so
Even if you haven't done 10,000 hours of painting uh somebody's house, if you go and sit down and you sit down with uh AI, get in front of perplexity, and you write down, okay, what does the average painting job cost? What are the problems that come up with painting jobs? Uh, who are who is the most expensive? Um, how do I upsell them? And you put together a package that is like, here is everything that you think.
you need to know data wise on this job that I want. Like you will be the one percent. Nobody
preps for anything anymore to the degree that you need to execute. And so I don't think you always have to do the job if you do the preparation to show that you care about the job. And just think about it, like how many times have we all had people reach out to us and they're like, I wanna come
work for you or I want to come get this job. And they're like, hey, can I send you a video of XYZ? And if I do it, then then you'll hire me, or can I do a sales pitch for you? You know what you should actually do?
Make the video.
Make the video, put together an entire prep document, put together a strategy document on why I should hire you, and make it so that it is almost impossible for somebody to say no to you because it shows how obsessed you are in a world of super curious.
Uninterested, not that deep obsession. And I've hired God, I probably've hired 15, 20 people solely because obsession is rare and competence is rare. And if you can show those two things, you can be people who have been doing it for 20 years. Because I know many painters. We we own one of the bigger painting franchises in the country. And I know very many paintings.
Painters that have all the experience, but they don't know how to properly communicate it and show the preparation that they've already done.
Let's talk about then'cause that's a a function of really sales, I guess. That's sales, that's marketing.
Um I was mulling the other day because I've I've just hired someone called Harry who's our new head of happiness in our in Flight Story. And she and the she didn't just make a seven minute video.
She also sent the video via unsaturated, less noisy channels. And it made me think about this framework of the resonance of the message and the
high signalness of the medium.
Because y as you'll all know, you're getting DMs from people that say any jobs going?
That's like low
emotional resonance and a terrible medium. So I think of it as like this four
Sort of um
square quadrant where in the top right of the quadrant you have message at the seven minute video, but then figuring out how to get it round back past the PAs.
Not into the saturated inboxes, maybe into the post. I think post is so like unbelievably unappreciated as a medium in a world of like laziness.
Where nobody wants to like go to the post box. You you're all on the receiving ends of thousands of DMs and messages a month. And sometimes some of them
Get three.
Sometimes some of them result in someone being offered a job or you investing in their company.
So if I'm listening at home and I'm thinking, okay, I've got four people here who get thousands of DMs, what is the secret that penetrates your
Your fortresses. I would be careful reaching out to people who get who have millions of followers because y it's hard for you if you've never had millions of followers, um, or even hundreds of thousands of followers, it's it would blow most people's minds just how much traffic is moving
In in the background on any given day. There are plenty of people who have ten thousand followers or twenty thousand followers or they've got a very successful business. They don't get a thousand emails a day. They get
Maybe a thousand emails a year.
So there's a there's something that you can reach out with which is called a proof story.
Which you mentioned. And the format that I like to use is I did something special.
I recently worked with a v extremely famous
Uh YouTuber.
Um who has over twenty two million followers.
And we were able to spin out a new business.
Um which became very, very successful and exitable.
Um
That business uh got
You know.
Ten million worth of revenue in the first six months?
Uh and I project managed the whole thing and I can explain exactly how we did that step by step.
So the the format is I did something special with a certain type of person
We got a great result. Here's what the result was and here's how I can explain it step by step.
And w what's in that for me, or am I making the the link? So I'm reaching out to you with my proof story. Yeah. So I'm telling you this is this is what I've done. And are you asking me for something? I'm saying, would you like to know how we did it step by step?
Now the other way we can do this that works pretty well is to do this in the public domain.
So for example, you could reach out by actually posting a video or a or a post on LinkedIn or on Instagram or um or on uh X.
And
what you can do is have five, six, seven, eight friends who then jump in and start commenting on it.
Now, for me personally, if you've tagged me in something in the public domain
And people are now commenting it. So that the
The the the thing might be.
I've got a little bit of advice for Daniel Priestley.
And I go ooh.
What's going on here?
Right. And then I see that there's a public video and I see several people commenting on it.
And then I look at the video and it's a proof story.
And it's really complimentary. I really like your stuff, and here's what here's going and here's the here's my proof story.
And by the way, Daniel, I'd love to get in touch. Drop me a DM.
I'm I'm gonna check that out because it's in the public domain.
Because
Well,'cause it could be negative. It could be like I don't know. I've read it. I want to know what the heck's what uh what's being said there, right? I think the real thing is
If
Don't confuse famous with rich.
Like you guys shouldn't care about us and reaching out to us. There are people that are
Richer than all of us, even though we all have some means, as far as I understand. There are people that are way richer than us, that nobody knows, that nobody's reaching out to, that want to give you their money. And so I think a lot of people spend time focusing on fame as opposed to rich. And when you're young, who cares? Like you can't eat fame.
Fame is not lasting. We will all be totally irrelevant probably sooner than we even want to. Like it's the remembered in five hundred years. So like it you know, for young people, I do think sometimes
Uh because we get DMs, we think that it's important. But if you're watching this, you should really be obsessed with just making money and then you can be sitting at a table like this and not worry about, you know, slipping into our DMs. I mean, the richest guy that you know probably started a sprinklerhead company.
lives down your street in a big house, and if you went and asked knocked on his door and asked him how he made it, and if you could do a service for him, he would probably let you. I wouldn't mess around with famous people. The people that gave me
My first leg up in the world of business were
No one they didn't have followers.
They were some guy who had built a business similar in the city and was now living out in Monaco, living an isolated life. It was someone who'd sold some kind of company, was running uh, you know, some kind of marketing business. But and they were at that level, they were probably at the fifty million dollar level in terms of net worth. And they were delighted to have an email from me tickling their ego.
And saying that I wasn't reading their blog, et cetera.
Yeah.
it's very exhausting to do the very deep level of work that you do in order to get a high level client and then have no response. Right. That can be that can be really ex you know, extinguishing from a behavior perspective. But if you do that work
for you know Stephen Bartlett. And then
You make the post and you say, Hey, this is this like I'm a XYZ, you know, whatever designer, and I've worked with these types of clients. And let me just show you my breakdown of what I would do. I think this stuff's awesome. This is just some stuff I would do. And then
I tag you.
Then
I'll probably thing is enough people will see that that you'll get it sent to you from somebody else who you will answer the response from messenger messaging type perspective, like somebody whose DMs you will open will be like, Hey, I don't know if you saw this. Right. Exactly. Um
And you do respond to that. I do, yeah. And so all of a sudden it's like that's actually how you can get in, but you also get all the free exposure of the work that you're doing. And then another person who might not be you and it might be me and saying, Hey
I like Steven Stuff too.
And I thought this was a pretty good breakdown.
um hey, do you have services uh you know in exchange for money. Yeah, I'm a nap that um and so and so yeah, s I actually actually really like that perspective because it doubles it allows the work that you do for your lead magnets to basically double as content. And so it doubles as promotion. And so you get you kinda get multiple bites of the app, which I think is really uh good.
And I think if you do do it, though, be sure you're good. Because you know, the truth this happens all the time with you and I. I mean they're
We go back and forth because people will say online, like I built everything that Alex Swarmozy owns. Can I come work for you, Cody? You know, you'll have us he has the same people, you know, I built everything Cody has.
Remember that person ever working for me. Like did this actually happen? And so I do think this is just a little listen, you gotta hustle when you're young. You gotta do things you're gonna cringe about later. I am so on board for all of that. But also remember that the world is small.
Especially if people have to do it. I'm going to pause on that, because I think this is an important point. Is all the people that have had the biggest net impact on my success, my career in my team.
They don't they don't seem to have time to be telling the world that they did everything.
Yeah.
I mean Jack is a good example. Jack is Jack was here from episode one of the podcast.
But Jack, in my view, is doing the like least
Personal branding.
Milking the cow.
And he's
In my view.
Arguably the most responsible.
For all of this stuff. And there's almost this inverse correlation between someone that works for you for three months and then builds a personal brand off the back of that.
And it's on stage.
claiming, you know, the success versus the people in the
In the trenches. In a circle, yeah. It's a it's a bit of a side point, but um one of the things people are so fascinated by is this idea of passive income.
And I think it I think they're fascinated by it because it's a promise of big returns for
No work.
And that's
You talk about offers a lot. That's like the perfect offer.
Yeah. Wha what's your what's your thoughts on passive income, Alex, and is it something we should be aspiring for?
So um
First, I think it'd be helpful for
Everyone to even define.
in terms of how to think about passive income versus active income. So one is that people often discuss it in binary terms, passive versus active, when it's really more of a continuum of how passive is it versus how active is it. And that way it becomes way less black and white.
When I think about passive versus active, um, when people are starting out, I generally just discard it entirely because they typically don't have sufficient capital in order to actually make meaningful passive income. And they would get significantly higher returns on increasing their active income. And virtually every extremely rich person who's self made as my asterisk.
generally has gigantic active income and only begins to look at passive when they have so much money from reinvesting in their higher return things, which is what got them this very large active income, that they're like, where else should I put it?
And then at that point, it's really a question of diversification, which is like how much more do I not want to double down on the main thing? And that's a completely personal question. And I don't there is no in my opinion, there's no right answer to that. Um of
Because that's a fundamental like how much risk do I want to take, um, which I see is entirely personal. But I'll give you a a very a real example of like an investment I made.
five years ago, which was um
We did ex exit the business.
Um, and I had more time on my hands.
And I was like, Okay, well
Why don't I just start spending
Yeah.
A couple million bucks a year.
On making content.
Now that had basically zero return in that time period, but if I were to look at the return on capital for that, you know, two million dollars a year I did for the first few years compared to today was probably the highest return capital that I made. But is that was that a
Passive, no, it's definitely not passive. It's 100% active and turn from an investing perspective. And so this is when people are like, What do you mean by investing yourself? I mean that.
Right. Like you're investing in either the skills that you're acquiring, the businesses that that you have, and a very simple investment a lot of times uh can get you
ideally leverage on your time. And so I'd rather think for the person who's starting out, not like how do I make
this passive, I'd rather say, how do I get more leverage on my active? And so like I could start by shoveling snow in the beginning. And then once I save up enough of my shekels, then I'll buy a snow blower and all of a sudden I can go from doing, you know, one driveway an hour to doing three driveway an hour. And then boom, I tripled my income. Now for that one week that my cash flow is down because I had to buy the equipment,
I'll have made less money, but then I'll very quickly recoup it. Now to the same degree, that's in a capital expense from an equipment perspective, but you can do the same thing from a skills perspective of I give a classic classic example of a phlebotist as somebody who draws blood.
Um, in the US, I think they make somewhere in the like twenty five dollars an hour, something like that. It doesn't take very long in order to become a automist and doesn't take a lot of money. And so, you know, a couple of weeks, you do the studies, you get your cert, and then all of a sudden you take minimum wage and as long as you're not in San Francisco, you'll have double or tripled your earning capacity in just a very short period of time. And so that's a very good return on capital. And so that's where I think about the
best investments for people who are starting out who have call it sub ten thousand dollars, sub maybe twenty five thousand dollars. It's like I put all my money into how I get more leverage on my active, which is either gonna be more skills or or more actual physical equipment in order to get returns on the skills I already have.
Interesting.
More leverage on my time.
Mm.
I I personally like the idea of asset income versus passive income. So if you actually look at what's really going on with passive income, it's that there is a an asset.
And that asset is in some way generating income. So for example, you own a house and you get rental income, or you write a book and you've got intellectual property, and that intellectual property generates royalty income. So first there's an asset, income follows assets. So the first thing you need is an asset. And then
you get the yield from the asset.
And there's traditional assets.
Which are very, very good if you've already made money or you already have money and you wanna park it somewhere and you wanna stay ahead of inflation.
Traditional assets are terrible for trying to make money. Um I think of something like uh art, wine and watches as more like a speculation, but or or
perhaps a store of value.
But then there's something else which is called a performance asset.
A performance asset.
is typically intellectual property, media, code.
Or data.
And when you have these performance assets, if you can build these, these are ones you don't have to buy, you build them. So for example, you could write a book.
And now you've got intellectual property, you could build a system like a a SaaS platform.
uh and now that s SaaS platform is in some way an asset and you can rent that out to to more people. Uh you could build a database of a thousand people and build a relationship with those thousand people and then every time you write one email, it goes out to a thousand people and now you've got a little newsletter. So that's a performance asset.
So typically when you look at um the people around this table
We're actually got we're we're very lucky to have a lot of performance assets.
Big followings.
Uh lots of media and content. Um
books that we've written. So these are kind of like the performance assets that anyone can create.
It used to be.
Until very, very recently.
That you just couldn't build assets.
Like you couldn't y it was very, very difficult. But we live in this magical moment.
Where almost anyone with a
Phone and a laptop.
can start creating performance assets.
with intellectual property, media data and code.
And uh and then you can basically start the process of building those assets and and then those assets produce more income.
Here's my conspiracy theory about passive income. And uh I think that
Passive income, it's a tax code, right? It is a real thing. It exists. You pay less money to the government if you have passive income than active income. Like that's where the word comes from. But I think the reason that it's been so idealized is because there's an entire industry.
Where people have told all of us for decades that they are better at managing our money than we are.
That's the mutual fund industry, that's the investment industry, that's the real estate industry, that's the private equity industry. And they have said, We are uh professionals, and thus we will charge you two and twenty, we'll charge you uh an investment fee on top of your assets for you to give us the professionals your money to beat inflation over time. The problem is that
To your point, they will never make you wealthy. Investing overtime in those assets are great for beating inflation or making sure you have down downside protection for your cash over time in order to allow it to grow and have diversification. But they're very bad if you want to get rich. If you want to get rich,
You're not going to get rich in mutual funds and setting it in somebody else's private equity fund. The people who get rich off those things.
They do the active income. They're the ones who are running the private equity fund. They're the ones that are running the private equity companies, and they're the ones that are running the real estate. And so there's this fascinating world we live in, actually, where people think that it is better.
And more sophisticated.
To not
Teach you how to become
capable of running your own business and creating active income, but that instead uh you're more sophisticated if you're on Wall Street.
And and so I think that passive income was actually in a lot of ways a way for the wealthy class to gain a lot of our assets.
But people click it. And this is why there's a generation of younger people as well that are obsessed with trying to figure out how to make
Passive income.
It's it's it's clickbait, isn't it?
I think it's flickbate. But I think it's almost deeper than that. I think it is actually that
Um, it sounds you know, if Alex says this, I say it too, but like invest in yourself. People are like, What does that mean? What do you of course I'm trying to say, but how do I invest in myself? That's hard. I don't know exactly how to do it. What are you trying to sell me courses or tell me to buy your books or whatever? And that's the the reaction. But the tr
truth of the matter is, is that you will never be able to have the return on investment.
in somebody else's asset that you will in yourself. You just won't. Okay, so let's go into that then investing in yourself.
If you were starting out in your career today, without the skills you have, without the audience
That you have and you had to
Choose how to invest in yourself.
What is that investment you would make in yourself today in twenty twenty five?
I'm gonna give two answers. So um
So I started at zero once and then I've lost everything twice. And so I have the I have done that three times now, um, starting from zero without a reputation um or money.
And so um
What I did in all three times was the same thing.
Which was the first thing I did was I learned how to advertise, which is how do I let people know about the stuff I have.
The second thing I did was that I went to people who had an existing business.
And I said, Hey, for as little as little money as possible, what would you do to fulfill
your existing services.
And then when someone uh I would then use the advertising that I had. So at the time it was Facebook ads, um, I would run ads and then I would sell.
those leads into that business based on the pre
determined price. And so let's say it's a
a chiropractor or for me it was a gym. So I went to a gym owner. I said, What would you, you know, take for a member? And they said
you know, w we would actually take'em for f if you can just bring'em, you can keep the money. We just want the customer for free.
And so I said, Okay, well, the first six weeks of the time that they spend money with you is mine. And then after that, they're all yours. And they said, That's fair. And so then I just spent money and I sold into someone else's business and I kept everything above the spread, which since the basis was zero.
I kept all of the money and I had zero cost of delivery. So literally it's just
Cash collected minus cack.
All of that was profit.
And so when I started over from zero the third time, um I was able to make a hundred thousand dollars in the first month when I needed it.
Because you had that skill of advertising.
And so when we say like invest in yourself, it's just a it's a it's a very uh amorphous term, but fundamentally you have to learn the the the skills of generating money. And so you're going to have to have some level of promotion. You have to let people know about your stuff, which is either be through content, through paid ads, through outreach.
Right, or it's gonna be through affiliates if somebody already has an audience to negotiate some sort of thing with. Honestly, so many businesses, like you can go to a chiropractor and say, Hey, you know.
How little will you do 10 sessions for? And you'd be amazed if I say, Hey, I can bring you a hundred people, how little can you do 10 sessions for? They might say twenty bucks a session. Now I might sell it for two hundred, but that's on me.
And I make my 90% spread not have to do anything. I just have to promote and sell. And so that is an example of something that like I have done and did do.
Each of the times when I needed to make money in the beginning when I had nothing.
What skill that you currently have? Yeah.
would get you back to being a hundred million dollar entrepreneur.
So
It's a really good question. I think it's actually stacking skills. So
A lot of a lot of times like when this question gets asked, um, basically the assumption is that you have to stay in the same vehicle.
And so like
the fastest way to make a hundred thousand dollars is not the fastest way to make ten million dollars.
But I might make$10 million faster if I started with$100,000. And so if I have zero, then I'm gonna do something that costs zero capital and is pure skill, which is exactly what what that was, right? Now to make, let's say to actually start running those ads, I might need a thousand dollars. And so it's like I might drive Uber for a thousand bucks, get my thousand, then spend the thousand on ads to make my
thirty thousand. And during that process I can reinvest that to get the hundred. Okay, great. Now I've got the hundred. Now with the hundred I can flip that into and the key of each of those is that none of those are really businesses per se, and that like I can just walk away from them whenever I don't have ongoing delivery or ongoing commitments.
And so that gives you a lot of flexibility. And I mean, I think there are
A lot of entrepreneurs, at least the ones that I know.
Um, have have had these moments where they needed to generate a lot of capital in a short period of time and have a few kind of like fast money skills that they don't flex normally because there's there's caps to them.
Right. I think is cool about entrepreneurship too is we can all do it. You have to find your unfair advantage. One of your unfair advantages is
You're very good at paid promotion and getting to the masses, right? That was never really my
Unfair advantage. I think there's two different ways you could do this. One would be promotion. So are you an incredible salesperson to go direct to a ton of people? The other way is partnerships. And I think you can think of these different ways. Promotion could be B2C often, which is like going direct to consumer. Um, often partnerships is B2B, going to a few big people. Um, I think of partnerships as in
Which is a very fast way often to make money too. Like Jack might make way more millions with you than he does individually. And so my background, when I didn't have any cash, I didn't know how to go to people directly. I didn't know how to do paid ads. I wasn't sure how to do promotion, which is a volume game that you have to be good at. So I went towards partnerships. I said I can get to fewer than I've been doing.
Bigger, faster. I can't get to many fast. And so I think there's like two path to making
money quickly if you don't have any. And the first path has less risk, but perhaps mid-sized returns. And that is go find the best entrepreneur, founder, business builder you can find who you can still get to on a daily basis in some way and go work for them. Learn as much as you can
Earn as much as you can, as you learn more, ask for more continuously over time. This is how I mean Cheryl Sandberg is one of the richest people in the world and she's never had her own business, right? She's only worked for other people and she's doing just fine. So I think that's the first way. And that would be what I would call partnerships or employment. And then the second way is to go do it yourself, right? Which is high risk, but probably highest reward.
And in that instance, you have to go and figure out how to get people to buy your things continuously over over time. But like when I didn't have money in the beginning, um
You know, I had just
I'd gotten out of finance. I didn't want to work for somebody else again. I was pretty miserable. I had worked for a billion hours for people in investment banking and asset management.
And uh I had massive golden handcuffs. Like I made a lot of money and um I had no brilliant idea. I didn't have a business idea. I had no idea what to do next. And I'm pretty risk averse, actually. I was like way too scared to go do
Do what you guys all did, which is start businesses from scratch. And so instead I partnered up. I went to another company that needed to raise capital and get a few investments in it. And I went to them and said, I can raise money from a few of these people that I know. If I do that, can I negotiate a little bit of equity in the company? Can I negotiate upside return for the money and doll.
that I bring in and I want it I wanna be a partner.
in the company. And so you don't always have to start your own thing. If you can negotiate with partnerships, I think sometimes you can skip to the front of the line if you're not a great natural salesperson, you know, or marketer. And so you really just didn't need to decide which one. And neither of them are better than any other. They're just better for you.
The amount of resources you have access to is a factor of knowledge, network and reputation.
So
You at all times you're trying to build your knowledge.
You're trying to build your network, you're trying to build your reputation.
A lot of people are worried about the knowledge.
But they've probably done interesting things already in their history. They're probably if they looked over the last three, four, five years, they could say, actually, I've done all sorts of things, but I've never told anyone about that.
Right, I've never actually explained to I've never posted on LinkedIn, I've never posted an update telling people what I've done. So therefore I've actually got

Leverage that reputation.
If you're a young person especially
Network is actually you've got a superpower with network.
I'll tell you why, because
If you go to a private bank that normally banks people with three million, but you say, I want to be an entrepreneur, I want to come to some of your entrepreneur events that you host.
They'll bring you along because you're a you're an ambitious young person.
If you go to a large accounting firm and say, Do you ever host big events? Could I attend some?
Can I jump on a newsletter that lets people know about the events?
They'll invite you along. And I'm talking about like Ernston Young and KPM G. Every single week they've got
Some thing that they're doing in their offices.
They've got experts, they've got rich people, they've got all that sort of stuff happening there.
And I'll invite you along.
So you've got this ability to build your network, you've got this ability to leverage uh your reputation.
I actually don't think
that you can make good decisions about the knowledge
On your own.
I think you need someone who's at the higher level.
to tell you this is the skills you should go for. These are the things you should do. So for example, at the time that Alex did ads,
It was a great time for doing ads. But now fast forward to today, it's probably better to st uh study AI.
And and to bring that to the table.
So sometimes those rep sometimes those things change. So let's say you
Figure out what is your reputation. What can you talk about when you're in front of people.
You go networking, you go to a few of these events, you outreach, you get yourself in front of some people, and you actually ask the question.
What kind of skills do I need? What what sort of um I I need to build my skills, I need to build my knowledge. What do you think would be a valuable thing uh to do? Because people who are at that next level up, they're they're noticing what they
What they need.
Uh they're noticing what's hot, what's not.
Um so they're gonna be able to teach you uh or t or guide you and and um to Cody's point.
You know, you you want to have a mentor in your life, you wanna have someone who's who's been there, done it, you wanna, you know, partner.
With a bigger organization and get some of those. Before Kim Kardashian was Kim Kardashian, she was Paris Hilton's.
uh assistant.
And she learnt the playbook.
for being famous for being famous, and then she took it to a new level took it to a new level. So she she uh she did an apprenticeship
And then she applied the apprenticeship.

have in common is we make content.
And it's almost a bit of an elephant in the room that no one's no one's really doubled down on when I asked what what you guys think is the most sort of like undervalued skill or the best place to invest in yourself, I was actually expecting you all to say, start making content. For a variety of reasons, not just because you want to build an audience so you have more customers, but actually
And I can see it on all of you. It's helped you to think better.
It's helped you to communicate better. It's helped you to sell better. When you get that chance to sit down with that investor or that rich person, you said a second ago, you said earlier that if I'd sat
old Alex here, one of the big differences is this one's much more focused, concise, articulate. So
I I'm wondering what you guys think of that content as a undervalued, underappreciated skill in the world we're heading in. If I'm starting to today rather than when I had, you know, zero, there's still a huge amount of attention that sits on social media, if not more, and there's even more demand for
content now than there was. And so you can supply that and get compensated for it. And you'll have to do repetitions for a period of time until eventually you get good. And then you can develop an audience and then you obviously can sell things to them.
I think um content
Yeah.
Content works when you've got intellectual property leverage. So I remember Alex popped onto my screen the first time.
And he says I've sold my company for forty million dollars and I've got nothing to sell you. I'm just gonna tell you how I did it. Cody's the same. She's like, uh, you know, I
Uh I was working at Goldman Sachs, but then I left Goldman Sachs to earn more money through laundromats.
Like that's interesting.
That's fascinating, right? So I'm gonna watch that content because there's some interesting intellectual property there.
Um, my channel took off when I started talking about I've done seven startups that went zero to a million in the first twelve months.
So it's that
ability to have some intellectual that people are going to wanna
Get to.
I can think of a bunch of examples of creators that
Hadn't done anything, but the ideas
With a value.
So if you think of someone like George Mack or even James Clare or
Lots of other of these sort of like J Shady online writers who
Chase Shetty had a great one, which was
Uh, I've got monk wisdom for the modern world. And we've got Ali Abdal. I left the I I quit being a doctor.
To be a YouTuber.
Mm. So there's these little hooks that work and
Does everyone have a you don't have to have sold a a business for tens of millions or made millions for another. I think there's some intellectual property that you've got, but bear in mind that there was a different time where you could just burst onto the scene.
And we now have AI generated content. So if you imagine like airplanes and they're at the airport and the fog rolls in and if you're on the ground, it's very hard to take off.
But if you're already up in the air, it's very easy to stay up in the air. And it's kind of like the AI content that's coming in is is that fog, right? There's just gonna be thousands of AI generated content.
pieces just flooding onto everyone's feed.
And if you don't have a really good hook, you're just not gonna drown out that noise. You guys must all be thinking about this. I I have so much to get I'm
All right. All right. So one thing I think everyone has to decide on if they're gonna start making content is am I an entertainer or am I an educator? Right, right off the bat. And so I think AI content for sure wifes tremendous leverage on entertainment, more so than education. Because the big underlying thing that Daniel's hitting at is that you have to have proof.
Right, like like an AI.
avatar cannot come in and say, I sold my company for free. They can't. They didn't do anything because they don't exist in the real world, which is why, in my opinion, like the absolute foolproof method for making educational content is do epic shit and then talk about the epic shit you did.
Period. And so like I um so yes, I'm in, you know, I'm in Lake yesterday, we also um we had the school games winners come out school's platform that hosts online communities and the winner of the last school games, so ninety days, he got to like three hundred and something thousand a month.
from a YouTube uh channel that he started sixteen months ago.
So he started sixteen months ago making videos about AI.
Now what was his interesting thing?
So he was just always into AI, learned about the tools.
And then he started helping small businesses for like$1500,$2,500 a month, where he would just help them implement these automations that would save them money and time. And then people were like, Well, how did you do that? And so he just basically would just explain each of the automations that he made for each of these businesses on his channel. And he made one video a day explaining one of the automations. And then he said,
If you want, I have a group that's whatever, three hundred, four hundred dollars a month that shows you how to build the same automations. To your point about the education, is like you just need
Some proof.
And it doesn't like you don't have to like the bigger the proof you have, the wider, basically the wider Tam you'll be able to reach because more people will be I'll just put the words impressed. If you just
are in your twenties and to be fair if just quit Goldman Sachs, it's like that is enough of a thing that'cause that's it's a one percent
type deal. Right. But you can also you can one percent through achievement.
But the other side that I think people widely underestimated is you get one percent through volume of work. So if I said, I read two hundred books last year, let me show you the two hundred, they're all dog, you know, dog eared.
Let me tell you what I learned. Like
I'd be like, well, shoot, because I think everybody wants a bargain on time.
Right, like I went on a hundred speed dates. This is what I learned. It's like
Well, I don't want to go on a hundred dates, but like anyone can do that. So it's either one percent achievement or one percent effort.
But this one you can do, and even if you have zero outcome, there's still stuff that you'll learn. And then that will people find interesting that you can build an audience around. And if you do that enough times, eventually you do achieve something that is interesting. And then that kind of becomes permanent. But the end of the day, like proof always beats promise.
I I also think anybody can go viral online with one of two things. We've talked a lot about experience. So if you do have experience, if you built a billion dollar in asset center management business, gone to Goldman, built seven startups, that's incredible. That's not normal. That's totally fine. But that means that you could just have
The everyday other E of
starting the experience. I think we we obsess on expertise. Expertise is the way to make content online and make millions. But what about just the experience? You could say, actually I've done nothing. I'm a college dropout, I've fucked around a lot, I don't have much figured out, but over the next year I'm gonna try to make a million dollars.
And you can go just as viral, if not more. I mean, a good example would be like Ryan Trahan, who who I love, who's in Austin, Texas, too. And Ryan is just like, I'm trying stuff and this might fail and I have no idea, and you guys can come along. The proof could actually be you just trying a thing and it not working one way or the other. And so I think the the only problem with this type.
which is experience as opposed to expertise, is that with expertise you have attention and intention, aka intent to buy. Whereas if you're just experiencing thing, you might have attention, but what are you going to sell? Because you don't have like a value derived from it. Where's your intent? I mean if you think about
Who are the biggest creators online?
OnlyFans, the Kardashians, you know, what are the biggest websites online? Porn sites. That's a lot of attention, but the intent to buy is going to be low for any of those over time. Uh
writ large. And so I think you have to ask yourself, okay, if I get a ton of attention, let's make sure I'm really thoughtful on what I get attention for. And then let's think about once I have that attention, where do I actually have some sort of expertise or value that I can trade in order for people to have intent to buy? And I think about it like this Rihanna, huge star, right? Big celebrity.
billionaire now because of Fenty Beauty.
Drake.
giant celebrity, arguably more views, more hits than Rihanna, worth one fifth, one sixth, one eighth what Rihanna is worth. Why? Because he has ton of stuff int attention, but he hasn't actually done much to get intent to buy from him. And so Rihanna's just
Categorically better if we s define better as uh bank account and scoreboard on uh net worth, than Drake is at monetizing their intention. And so um I think that a lot of creators online think too much about views like.
subscribes and don't think very much about how do I monetize on top of this because nobody stays relevant forever online. And so I think while you're in the spotlight, you do have to think about how you're gonna convert that funnel in some way.
It's a really great point. A lot of the people you see blowing up online, they do have a backend that monetizes it because to your point, it costs money. You know, I probably spend forty, fifty thousand a month just on retainers of people who are working on that stuff.
And Content.
Yeah, content related stuff and
you know, because I have businesses that can monetize that, then it it w it's worth doing. But it's hard to compete with that if you don't have a back end.
The the other option is to work with someone who does have
a a business and they do have experience. They do have something to talk about, but they're busy and they need someone to project manage this because one thing that's happened
is that to the traditional business owner, this personal brand thing
And this building a content empire that builds your business. This is brand new to a lot of people. So there are plenty of people who've got a$50 million a year business.
And they're going, Oh, should I
show up online at all, like maybe I should. And they're just starting to tiptoe into the water and they've got a story. They've got a backend business. They can monetize it. They can allocate budget to it.
you could be the person who does that. And you'd be if you did do that, you would be one of the very special people
in their life.
Um, I had a guy come to me a couple of years ago and said, Daniel, I just cannot believe
You've written
Five books at the time.
You've got seven different companies, you've got all this stuff going on.
And you've got a few thousand followers.
And I've had a look online. You get like
ten thousand views a month. And I'm like
Yeah, but I'm busy, I'm running my businesses.
And he came to me and said, I will project manage you into the millions per month.
And he just literally picked this up, a guy called Martin, right? And he just said, I I'm gonna do this, I'm gonna
Turn up at your house, do a day of filming every month. I'm gonna edit it. I'm gonna chop it all up.
I'm gonna do all this stuff.
And all project managed the whole thing. Now
The two of us are very uh close now, got a good relationship and he's now got an idea for an AI startup.
And I'm
Gonna back that.
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If you guys were starting from zero today.
with AI in the picture and all of these platforms and the way things are going. I I think I've spent I've spent a lot of time thinking about the next big opportunity in content. And I think about the next big platform.
Where would you be starting today?
based on who you guys are and the skills that you have and the things you're interested in is probably a better way of saying it. Would you be on LinkedIn posting once a day? Would you be on
TikTok making videos, would you be on YouTube starting a channel? Would you start a newsletter?
And with AI in the picture, I think it changes the answer because
content is gonna become very easy to make. So where does the value accrue to?
Like where does the value move to in a world where every kid a kid in Mumbai could make
a a real or a a quote picture now with ChatGPT. So where is the value gonna accrue and how are you gonna
Milk that cow.
How are you going to capitalise?
Like what is the one thesis you have about the future of content that you haven't told anybody yet?
Tell me.
I want to ask a question too for everybody at the end of my I'll give you my my quick thing. One I will say like
Um
And I'd be curious if you all agree. When I first started making content, um
Most people that I knew thought it was really cringe. Actually they're like, uh, why would you make content? If you've actually had any success that you supposed to have had, why would you be so idiotic as to be on the internet making content? It can't be true that you've done these things if you're making TikToks all day. And um, and I think they totally miss the boat that like the 21st century concern.
uh currency is attention and attention could be bought with ads or attention could be
bought in a different way, but through organic content creation. And so you go like cringe to content to conversion. And actually I think all of us would probably agree it was a pretty good play. But like I'm sure did you guys all get laughed at when you first got on the internet? Of course. Yeah.
Right. Never. Still get laughed at now. I still get laughed at. So like I just want to prepare. If you get online, be prepared. People will think you're idiotic and And your friends. And your friendshedding period where you transition to
A hundred percent. And and people who are serious for whatever reason have not figured out that there is a huge arbitrage opportunity with being known. Even if even if you don't care about the views and all I have as something that's a differentiator is that if I ping Steven, you'll respond to me because I am
Somehow I have some preference online, same with Alex, you know, right? With all of us. And so one, I I just want to say that up front, because it will suck. You know, I'm in these creator groups, and at some point, it just happened yesterday. I'm in a group with like some of the biggest creators in the world. And uh
all of them were listening. I mean maybe fifty responses of a moment where um everybody hated them on the internet. It was super dark. You know, they couldn't stop watching and reading the comments. And they felt like there was like a fight or flight situation from a bunch of strangers. And so I I think it's worth just saying
content can have a little bit of a downside and you gotta like protect against that.
But like also go full fucking boar into it because who cares? Uh
You'll be forgotten anyways. And um
Embarrassment is the price of entry, as they say. Yeah. And we've all all faced that and had to go through that to get to the other side. Now I want your content secret.
We talk about social media and I think um there's been a lot of talk about it shifting really more towards interest media rather than social media, right? So I think this is e extremely important because what what Cody was referencing earlier
is again entertainment versus edu education. And so Rihanna and Drake I see both as entertainers. Now what's interesting is that where do they have influence
So she used the word intent, but fundamentally I say like how do we increase the likelihood someone uh complies with a request or uh complies with a solicitation, right? If I tell you to do something one, I mean, we've all seen some creators who have tiny audiences, but if they say, Hey, go do this thing, you know, they've a hundred percent not really a hundred percent, but they have a huge conversion on a very small audience. And then other people, you know, I I can name some TikTokers right now that have you know fifty plus million uh followers.

They have views, but they have zero influence. No one listens to them for their advice. And so um, in order to create influence, there's four things. So number one is, and so I just remember SPCL.
Right. So you have status. So somebody who controls scarce resources. So a bartender at a bar, there's alcohol behind them, it's a scarce resource. In the bar, they have status. When they walk outside of the bar, no one cares about them, but in the bar they have status, right? So that gets so they give influence. The second is power.
And so power is basically um
Say do correspondence, meaning if I tell you to do something, follow these instructions, and a good thing happens, then y I
I'll increase the likelihood that you comply with requests in the future. And so like for example, Martha Stewart
uh was the first self-made female billionaire. And I think there's there's a huge amount of reasons for that. And one of the biggest ones is that she literally gave people recipes.
And they follow the recipes.
And they had a good thing happen. And then people told them they were great and this cake was great and this lasagna was amazing. Their family, their friends, they got they also got status. So a massive good thing happened after following explicit directions. And so then when she said, Follow my next directions and buy this thing, people said, Okay, the last 10 times I did it, it worked, I'll do this too. And so that's why she had so much influence.
The next is credibility, which is do you have proof?
Right.
Now all of these can um happen at the same time or separately.
So I'm trying to give more isolated examples for each of them, but like one thing can check multiple boxes. So if I say, hey, I sold a company for 46, 22 million dollars, I have money, which is where status comes from, but I also have credibility that the stuff that I do works. I wouldn't have power yet, though, until I say, Hey.
If you take what you're currently doing and then add
a bonus, urgency, scarcity, a guarantee, you know, think about a value equation, all of a sudden you can sell it for way more money. And then you follow those instructions and then you do make more money, then you're like, now I'll be more likely to comply with this person's request in the future. And so then that person gains influence. And then the the the fourth L is likeness, right? Do they look like me?
Right, do they act like me, which is both, you know, physical but also psychographic. Like do they have do they share the same values as me? Are they similar? And so if I have two people that both have SPC, so they have status, they have power, their credibility, and then one of them just also looks like me, I'm more likely to listen to that person. So each of these are additives. If you have all four, you'll be more influential, right?
And so um laddering this back up to conversion.
We think, okay, well, if I'm going to make content with a purpose of conversion, then I want to make stuff that demonstrates these four things.
Right. And so that is why educators typically have significantly smaller audiences, but can usually generate a lot more money than entertainers can. And entertainers typically can monetize almost exclusively through sponsorships as the most efficient means or vehicle. Now, where does an entertainer
have influence.
Rihanna.
Is beautiful.
And so she does have
Credibility.
In terms of beauty.
She does have
Um then
Especially if she starts making content around that stuff, she takes her entertainment audience, but she's talking about something she has credibility to, and then she can add power to that because people start following what she does. Right. And then they start looking a good way. And then they say, you know what, she really doesn't know what she's talking about here. And then all of a sudden, when she does point people to to a thing that that that they can buy, then they're more likely to do so. And so
It's it's it's how do we merge those two things together. And then when we're making the content, and I think a lot of people we're starting out are very obsessed with views, which I would strongly recommend, especially in this interest media time, that it's it's so irrelevant.
And what I mean by that is
If we think
Alright, I wanna I wanna start a a bait and tackle
drop shipping business, whatever, right? You you for for fishermen. Well, if I just start making
videos on philosophy, I might get way more views than I do if I make v you know videos on bait and tackle stuff.
But the likelihood that the people who are watching Philosophy also want bait and tackle is very low. And because the content is now the targeting for social, like if if if anyone's run ads before, you have to select, okay, I think I want 42 year olds and I want you know men and I want, you know, whatever, right? As you go through it. But the thing is that the algorithms are so good and the AI is so good at understanding what the content is about, and they also know
what type of people consume this type of content, they just do the target for you. And so if you want to reach a certain type of person, you just only make content that that certain type of person wants to consume. So it's actually easier now than it was before. And so you can have a 40,000 person audience, but that 40,000 person audience might be made up entirely of fishermen who buy tackle, which I'll bet you you'll crush.
Mm-hmm. And so um
That is how I kind of see the the the quote future of of media, at least. Um is that if you want to have maximum persuasion.
or conversion power. We want to make content that is explicitly for a specific audience.
And we want to demonstrate the proof that we've done.
Right. We want to have things that they want. We want to give them instructions that they follow that the good things will happen for them. And we want to look like them.
And if you do that, you have somebody who's gonna make a lot of money from an audience.
That last point's super interesting as well. How do I make myself look more like my audience? And I think relatability
And
humanizing yourself is
One of the great ways to do that.
I think it's a very fair point. I mean, I also think it's not just physical traits. So, you know, let's say that you don't look
like the audience that you want physically what are the values that that audience has that you can have them see themselves in you and and you know it's it's kind of like whether or not you like the guy who cares but let's say you know Trump for instance really looks not a lot like his audience.
Predominantly, you know, in suits and ties constantly, sort of a blue blood billionaire from the East Coast. How does he associate with this group of people where really he doesn't look like them on average? Well, it's because they believe that he has a similar moral compass to them. They believe that he has similar ethics to them. And so I don't think that creators have leaned into this enough. And I don't mean to become clickbaity.
or political or or divisive or anything like that. I mean that it is rare to see people in business take a stance that could hurt their business values, for instance. And Chris and I have a rule, which is we don't have close friends that haven't done something publicly that could be against their best interests. I I just don't want friends that don't have that.
That haven't done that because I think that the world is really hard and I wanna see if somebody's gonna have like moral fiber before I become quite close with them. Interesting. Yeah, and so I I think you can do that as somebody who is a content creator today. Like be value aligned with your users and show that.
And um that's rare. Also to the point about the algorithm becoming about interest based, it's also becoming value based. We're seeing echo chambers emerge around ways of thinking.
Well I the content that I saw of you that most
interested me was when you were talking about
Um
How important ownership is.
And you were talking about just the philosophy of ownership and you said there's a group of people who want you to own nothing and be happy about it. And I was like
I really resonate with that. I want people to own their businesses and I want them to own their stuff. And I liked the fact that you were standing in front of a huge audience taking that position.
And everyone knew that it was a little bit of a a position to take.
And it wasn't specifically content about how to build a business, but you were sharing something about yourself. I have a belief you don't actually ever sell anybody anything, you only find those who are already predisposed to want the thing that you are selling. And if you believe that, then I think your business gets easier too, easier to target people. That's why I never kind of got off on that content. You know, it's really big online on sales where it's like, here's how you close them.
You know, here's how you do this. Here's how you you switch'em and you give'em a hot dog and then they buy the car because you gave'em the hot dog'cause of reciprocity. And you're like, Huh, I've never bought a car because somebody gave me a hot dog. But apparently this is what works on Instagram. And so I don't think that's actually true.
I think you just find people at a trigger moment that they want something and then you give it to'em. Mm-hmm.
Regarding content, for me personally
Uh
I find that the only reason I'm gonna create content is if it's in alignment to a mission that I've got.
So I don't actually want to create content. I don't want to be out there naturally. I would much rather be a m a way more private person.
Um
And you won't s you won't find a lot of stuff about my family or my ki my kids, my m you know, very rarely do I post anything like
Any of that sort of stuff.
But for me, I do it in alignment with the mission. I really believe that if you're on a mission, you've got something you want to achieve in the world, you're gonna need other people to believe in it, you're gonna need other people to get involved.
Um, you're gonna wanna hire talented people. Those talented people are gonna wanna, you know, see you online first. And it's all about
the building relationships at scale.
And content is just
People discovering someone new, like you would a friend.
And then getting to know someone. And I think the big play in a post AI world.
is having really deep relationships with a lot of people using long form content uh where you share who you are, what you're about, what's your mission, what's your origin story, what's your vision, um, what are your values.
And people then say in a very noisy world
I will pay attention to what Steven says.
I agree.
And so to give my answer to this question.
my thesis here in World of AI is actually
That
If you look at who has the most loyal engaged fan bases
It's not necessarily podcasters. We're doing pretty well, but it's not podcasters. Podcasters can sell out arenas and when they
go on tour they can sell out globally.
Streamers.
Mm.
And it's I think it's because of this the depth of the parasocial relationship is the the equity value of the connection. And I was sat with a streamer who's eighteen years old, massive in Europe. And I we're on playing at Old Trafford for the for the soccer aid. And I got just got to sit down with him. So I was like, Explain to me what you do. He goes, So I wake up in the morning, I go, then what? He goes, I sit there.
And again, for how long he goes, eight hours.
I go, What'd you do? He goes, Like nothing.
And I go, how many people tune in? He's like a hundred thousand. I'm like concurrently a hundred thousand people sit there with you. He goes, Yeah, people are quite lonely. I sit there and what we do is we watch TV together.
Now the so when when we got to the
The stadium. Seventy thousand people in the stadium. We're playing soccer.
The stadium
When they announce your name.
The size of the chair.
Correlates.
to the amount of hours you spend with your audience. The streamers are the celebrities.
The podcasters sometimes come in about the the actors almost you know but the but the streamers
own the stadium when you play Soccerade. It doesn't matter how much money you've got or how big your following is, the streamers are the ones. The streamers have the this particular streamer has less of an audience than me, but he sits with them for seven to eight hours a day. Deep connection. So if we think about depth as the as the metric that you you can you can exchange on, especially if you have authority and a niche and you're educating as Alex was saying.
That's why I think a lot about my behind the scenes channel.
I think it's when we go on tour, it's so funny, we we do we did a tour in Australia and remarkably I'd say about fifty percent of people were talking to me about Diary CO, and then fifty percent of people were talking to me about behind the diary, which is the behind the scenes channel where you get to know me a bit better.
And that that channel has a fraction.
of the viewership. And actually that same thesis is the reason I started podcasting. I was doing Facebook watch videos, they were getting tens of millions of views, which by the way no one remembers.
Because no one remembered any of them.
came up to me in the street and said, I love that two minute viral philosophical video you made about motivational fluff.
No one ever said that. Then I started this podcast and I got a thousand downloads and it felt like I was like Oprah Winfrey. Like people are coming up to me. And I was like, Oh, there's this interesting correlation between like the depth of the medium and the resonance and the memorability and therefore the value. So just pursue.
Depth as much as you can.
The strength of the parasocial relationship.
That has short term memory.
We've driven a truck through that. You know, we've now got just hundreds of things a day that hit that.
But then there's this other part of the brain where I've spent seven hours with someone.
And if that's the depth. Are you guys thinking about that?
Because you guys uh y you all make content which is educational, but is less personal
And I mean y you you two podcast, Alex and Cody you both podcast, you don't podcast yourself. I'm a guest.
You're a guest. But you don't like run your own podcast. So are you thinking about a deeper format for
Feet yourselves? What are you thinking about? Yeah, well, th there's two things I wanna talk about there. One, I think it's it's depth, but I would also wonder if it's not rawness.
Like in an era in which we cannot trust what we see anymore because of AI, and anything can be recreated, reproduced, and overproduced, increasingly a stream is interesting because it is raw. It is
It is for a thousand percent whatever is happening on there is happening in real time. And thus we can actually trust it. And so I think as I mean, I we've all seen it, content has gotten so produced and overdone. And that actually I think decreases trust because
We can't tell if something is real or not because it's been edited and filtered and overlaid explained. We say with our forty person teams. Think about the content, even like this is like sort of tactical, but um maybe a year ago, the big content uh change in video on Instagram.
was that you had a lot of um b roll and images overlaid on top of videos. And I don't know if you guys have noted, but that doesn't work very well anymore. Actually, the more that you have third party assets in your video and it's been overdone, the less the video works. And then you're just walking along with the hand out.
Right, because it's it's more real. So I think it might actually be like depth and
Rawness. Rawness, yeah. Authenticity, I guess. Yeah, I fucking hate that word, but yes. It's like sixty minutes versus Joe Rogan. Uh-huh. Sixty minutes is like just it's just No cuts. No cuts, yeah, yeah. And then when it comes to am I thinking about this for our channel, yeah. I mean, I think about it, we we have something that we teach everybody, which is like the marketing affinity loop, and and basically
It goes like this. I'll show the graph so you can see it. But you start with awareness, right? And that awareness is what we're all talking about. How do we get more people to just see us? And then we go to consideration. Okay, I maybe I like this person. Maybe I'll follow them. I'll give them a quick follow. And then we go, Well, I actually I like them, I follow them, and I might buy something from them. Okay, that's interesting. And then I might not
Not only buy something from them, but advocate for them, write a testimonial, a review, something like that. And then finally, I might be loyal to them. AK, I'll refer a friend, I'll sign up for their year-long program, I'll buy again and again. And so we go from awareness to consideration to purchase to advocacy to loyalty. And like if you can get most people stop at awareness.
Very few people can get somebody to go from awareness to purchase. Even fewer people can get them to advocate for than leave and review, and the very, very fewest refer a friend. And so like the holy grail of business is always
Have your clients tell other people nice things about you. And so I think in content, what I think about is I don't always care that people buy things from me at this point.
Like I I love money, don't get me wrong, I want to keep making it, but I actually really care that they're loyal and they tell other people about what we're doing. And that is something we now measure. For videos, we can actually now measure with like a little UTM link how many of all of our videos get shared and how many of those shares actually go to a a purchase.
or something that goes a little bit deeper. And so I I am thinking about that.
But then I think you also have to decide what your personal line is. So for me,
I can't imagine wanting to stream all of my life continuously because I'm not sure that's good for the audience, actually. I think they should live, not watch. So it's like I just have a line that like I kinda don't want to cross. Yeah.
And Chris and I actually have a rule too. We only post so much about our relationship. We actually because it always does well. So the team's like just
Full send Chris shirtless nipples every day. The internet loves it. And and and Chris has been really good about saying, no, we have to keep something sacrosanct. And so I think you have to decide how deep you want to go down the rabbit hole in order to win.
Yeah. I've I've been the same with my kids. It's their decision as to whether they want to build a profile and how they want to build it. So you won't you know, I won't put
them in that position.
The depth that I'm loving is writing books.
Because someone who reads a book
Like you really get to r go deep with a book.
Um and also live experiences. So every year for the last four years I've taken about eighty of my clients to the s uh to the snow.
And we go skiing.
And those eighty clients who
If the if someone has gone on my ski trip
The level of loyalty and depth because we've shared fun together.
I'm about to take thirty clients to Necker Island and spend a week with uh Sir Richard.
And
I've I'm convinced that just doing that with thirty people
We'll build you know, lifelong
Like friendships.
This idea that like they're you know, that you do stuff
in the online and offline world.
you know, that you actually f figure out who are the people who are at the core group, those real
Uh die hard fans and then let's do something together and and and do fun stuff together. Go skiing, go to islands, go sailing, that sort of stuff. Alex I see you wrote uh
It looks like you dreamed the universe or something. Oh, I was thinking about um we're again it was talking about like authenticity.
Um, and so
With each with each of like SPCL, right? All of them exist on a continuum, right? And so I can say credibility, I could say, Hey, I sold a company, but I if you see a PR article that will increase
the credibility if you were uh somebody you heard about it from somebody else that'll increase the credibility of that specific credibility driven event. Likeness is the same thing. And so I think um like the connection between streamers and having huge influence is that they have tremendous likeness and that because they are quote authentic and that there's very few uh there's there's very little ability to distort
you have basically when you what you see is what you get. And so if you're the type of person who likes that particular streamer, then you'll have superstar you know affinity towards them and you'll be likely to, you know, comply with their request, like show up to a stadium so that you can support me. Um
But
You know, even authenticity is again a term. It's like how do you define authenticity, right?
Which I see as how you how you act when you have no risk of punishment.
And so
different way of saying this is like how do you act when you're alone when no one else is around.
And so I see the discrepancy between how you behave when you're alone and how you behave in public as basically your
authenticity, you know, score. Right. The question is, or the problem is that no one really knows how you behave when you're alone.
And so is that strange. Unless you're like streaming all the time. So you're saying authenticity is that there's not a difference between how you act
When there's when there's no risk of punishment and how you act normally. Okay, got it.
Right.
And I think that also to being like very candid for all of us is like
There were like sure we have audiences that can punish us with their comments, I guess.
But our
Like
We've
Um
built enough of a call it a a fortress, if you will, of currency, network relationships, et cetera, that like even even within our companies, like if you go into the room, like I can be really authentic in my company because no one can fire me.
Right. Like my risk of punishment is low is is lower than say an employees is. And so it's a a relatively I'd never use this word, but it's a relatively privileged, you know, um position to be in to
to be more authentic because no one can really punish you. And I think this is kind of the the essence of the like fuck you money that people want to get to, which is like I just want to be me, but I can't be me because I have this risk of punishment. And so
Um
So degrees of freedom, basically, um I think your happiness is is very correlated with your degrees of freedom. So Elon's authentic. They might not agree with him, but I don't think they think that he's he's trying to pull one. I do think that w like
If you're gonna go online, one of the ways to inoculate yourself against being canceled or to inoculate yourself against caring so much is to do ridiculous things every so often that are super authentic to who you are out loud. Because then what happens is the people that hate you, they leave. Uh, and the people that like you kind of
like you a little bit more or trust you a little bit more for it. So I think um, you know, one of the things that that
I do not really on purpose, but it's it's it is just like it's like getting a vaccine. You go out and on the internet and you say something that you know other people are not going to like, but you believe strongly in.
And when you do that kind of consistently over time, I also think that increases your trust. Because we've all met like other creators that you're like.
Ah man.
Like
You're just never gonna say anything that's not PC. Like I can think of two in my head where I'm like, they're never gonna say anything. And if it could hurt their audience, they're not gonna say it. And that just decreases my trust level. And I think the audience is really smart. People are smart.
And so um I think you should inoculate yourself more often.
Yeah.
Before we move on to little game that I've prepared for us here, um I you're all very good at pitching and you all have your own frameworks for pitching. So I wanted to
To pause on that for a second, what is Daniel, what is your framework for pitching a business or an idea?
The the
Two things to start with, which I believe that entrepreneurship is the journey of a thousand pitches.
that basically what we do as entrepreneurs is we pitch stuff into existence.
Um and
The penalty for an average pitch is that you do a thousand pitches and you get nothing to show for it at the end of it.
And the payoff for a great pitch.
is that you do a thousand pitches and you end up with ten to a hundred million dollars.
you end up with an amazing team of people and lots of customers and everything everything's great. So I think
On treat entrepreneurship as the journey of a thousand pitches.
And also
treat pitching as
This magical thing where you get what you pitch for
And you can't switch it off.
So
For example, if you say
The economy's bad, the economy's bad, the economy's bad. As if by magic the economy's gonna be bad.
Uh, if you say, I'm seeing lots of opportunities right now, I'm seeing lots of opportunities right now
You you start conversations where people go, Oh, I I've sp seen an opportunity as well. So whatever you're out there talking about, you tend to bring those conversations to the surface and then it it's a self fulfilling loop.
With that said.
you have to have a framework for pitching. If you're gonna do a good pitch, it's gotta be a framework.
I've got
Social pitching framework.
scheduled pitching framework and sales pitching framework. So social pitch.
Name, same, fame,
Pain I am game.
What's the social pitch? Social pitch is on social media. Yeah.
Or um
uh in a social situation. It's basically a situation where you've got about thirty seconds before someone thinks that you're being
uh to abuse. Okay. Right. So you've got about thirty seconds of people's attention and you're gonna say, what is your name?
What are you the same as that they already understand? What makes you famous or different?
Uh, what are you aiming for right now? What's your bigger game? Or
What pain do you solve? What are you aiming for? What's your bigger game? So there's a few things you can put in there and the rhyme so you can remember it in a in a social situation.
Scheduled pitches.
Mm. I always do something called capstone.
And it's clarity.
Authority.
Problem solution.
Traction or the Y, either way.
Opportunity next steps.
And an emotional ending.
Right.
That spells out capstone.
Now is that the best
pitch framework, maybe, maybe not. Maybe there's better frameworks.
But the point is is that you've got a framework. That you're not just winging it, you're not just
you know, randomly spewing words.
You've actually gone through the process of thinking through your pitch
uh in a framework approach. One thing that's really fascinating is the three of us have a framework for everything. Like we we're just like very framework thinkers and I've noticed that with a lot of entrepreneurs. Um do you guys have pitching framework?
Be shocked if you didn't. Yeah, I do. I mean, I think I'm a like lazy intellectually and frameworks help you remember things. And so if I you don't have very good memory, then it's just easy.
to put it in something that can make sure that you remember it. What's why when we were in school, you know, they used to make us sing songs about
How to remember the variant states. If if if I wanted to raise a bunch of money from other people that didn't know me and I wanted to never have a problem raising money again, I didn't want to use any of my money ever.
I would use what I learned in venture capital, which is the mightest touch. And and basically
I think you need one of these four in order to raise money. You don't have to have all four, but
If you do, that makes it really, really easy the easiest one is profit, right? If you have a business right now that's making money, profit in your pocket, you can raise capital, you can raise money from people as long as that amount that you're raising is reasonable to the amount of profit.
If you don't have any profit
But you have growth, let's say, like Replit, we were talking about a big AI company, great. You can raise a bunch of money if you got growth, too.
The third thing, if you don't have either one of those, you don't have profit, you don't have growth, but you have a history.
I've sold a company before, I've built this before, you can raise purely on the fact that you've done this before. And if you haven't done any of those three, you've done nothing in life, then you need a really good story. And the story is something that you can often raise money off of. So I believe that we are going to create the next XYZ. And if we do this thing, then you will all make money. I will make money.
And we will change the world together. And so I call it the Myest Touch because I think
People who accum if you can accumulate this over your life, it's not that hard, right? So eventually at some point you'll have
a s a history, which is your proof. And then you can craft a story, you'll get better at it as you continue to grow. You will learn how to get profit in some way. And because you've driven profit before, you'll know how to get growth. So I think like almost any entrepreneur over time, if you focus on those four things, can raise money.
And you start with only the story when you have nothing.
Alex
I have a lot of pictures. Um
I'll I'll I'll say first and foremost, like if you're trying to sell anyone anything, um, proof will always be promised and I can say that
You know, a thousand times in a row. Like you could
Literally say nothing.
Get on stage and then just hit next on testimonials for sixty minutes and you will close
a percent like literally the last slide just says like go over there to go buy something and you can hit say nothing and you will c you will sell. Why?
Because I think um proof acts is a de is a is a an appropriate
an approximation of something that would happen uh for the prospect. And so like the only reason that sort like that proof works is that they think, oh, some element of this is like me. And so if I do the same thing that this person did, and the closer the proof is to the prospect, the more compelling it is for that specific prospect, which is like
When we used to um you know run ads for different markets, we'd go into like you know an entirely black market and surprise, surprise, if we had black testimonials, the pages would convert better than if we had white testimonials and then flip flop in the other direction, too. And so
Right. And so we want to show as many different types of proof as we possibly can. And obviously not all proof is created equal. You can have live proof versus recorded proof. You can have uh a demonstration of something that like us using the thing is gonna be more compelling uh than than than not using and just describing it. Right. If I have a
Um like and so there's there's a bunch of things on proof. But
That's just like
Big thing number one. And so that's why for me, if if somebody's gonna sell something, I recommend most people just get five or ten clients for free up front.
with the primary purpose of getting proof because you're gonna make more money on the proof than you will have trying to, you know
just get the the tiny amount that you can charge with absolutely no proof. So it's like don't do that. Just get 10 and on your 11th, you'll be able to charge 10 times more because you'll be able to say, Hey, look at the 10 people that I helped. And realistically you'll get more out of that than they will.
Because you probably suck. Yeah. So so it's probably for everyone's best interest that you don't charge anything.
Um, but from an actual like closing perspective, and I'll talk about this from a from appointments, I think to use uh Daniel's language, I've taught the closer framework for a very long time, um, which is C L O S E R
Uh and so C is clarify whether they're.
Which is and typically anybody who's gonna be in that appointment has taken some action. So whether that's they responded, you know, to a post, they commented, they liked, they actually I mean, if someone's already set an appointment or they walked in the door, like
there's always some like why'd you pick up the phone? Like there's always some reason. Like, why'd you give me five seconds? There's always something they've done that you can say, Hey, so tell me why. Right. And so then you're in you're you're clarifying why they're there or why they're still listening.
So you listen to them. Because we often think about sales as me just hitting you with fucking So the perfect salesman says nothing and only ask questions.
Because there's nothing to disagree with.
Mm-hmm.
And fundamentally they're gonna believe way more what they say than what you say. So you want them to say it, not you.
And so you clarify whether they're see. It reminds me of spies. I've interviewed a couple of CIA spies now, and every single one of them, I was expecting some like
incredible technique or whatever. They all say no, we just spend six to eight weeks in the back of the cab listening to the Iranian taxi driver to figure out
Yeah.
That his son has a health issue.
that we can then leverage later to get him to turn against his country. So the first three weeks are just listening to him offload. And they're like, it's crazy how people will just offload if you let them. No one wants to talk.
Oh, a hundred percent.
So one is s you know, clarify whether they're L is label them with a problem that you can solve. So it's like okay, so it sounds like you were here, you responded to my ad, you DM me thing or you you whatever because of this reason. Is that right?
Right, so you get confirmation on the problem.
Uh, which is L.
Then you owe, which is overview past experiences or past pain. So it's like what have you done so far to try and solve this? And this is important because uh motivation is the equal opposite of deprivation. So the more deprived someone is of something, the more motivated they are to solve it. And so like if you haven't eaten in an hour, you're probably not that motivated. If you haven't eaten in two days, you're very motivated. If you haven't slept in, you know, a day or
You're normal motivated, I guess that was a bad one. But if you haven't slept in three days, you'll be incredibly motivated to sleep. And so we want to find we want to find what they're deprived of and then try to increase that deprivation uh in the conversation. Basically uh make them more aware of the deprivation, the things that they don't have, right? Then once we have, you know.
enough deprivation that it's very clear that's like okay, this is
This is what why you're here. This you agreed with this is the problem that you want to solve. You've tried all these things and it hasn't worked for you. I can imagine how frustrating that would be. Um S, which is then you sell, right? You sell the vacation, which typically is just three points. Um, I I usually keep it to three because most people can't remember more than that, anyways. And the three points are usually you can always find three.
And if you need to, you can chunk up if you've got five, and if you've got, you know, two chunk down as in like break into smaller pieces. But like when I was in the fitness world is fitness, nutrition, accountability. If when I was selling, you know, mortgage leads, it's like you want the leads to be unique, you want them to be timely, and you want them to be exclusive, right? And so like or uh qualified. And so it's like there's always three things that you can usually triangulate, but when you say the three points.
You don't then feature, you know, Jarvel about the the points you then just usually in a
but like a one sentence analogy of of what that thing is.
So it's kinda like this. And so these are like little thirty second sound bites to make the three points. That should never last longer than ninety seconds, because
Um, most people waste all this time on the selling part and that doesn't really matter because the more we can talk about them, the more they're gonna want to buy. Um
And then E, it's like at the end of that, you say, Cool, ready to get started, ready to rock and roll, ready to start on Monday, whatever it is. And then E, E, and R are around what happens if they say no, right? You explain it with their concerns. E.
And the R is you reinforce the decision.
And so R was actually something added much later when I was teaching, you know, many salespeople because um after they would like explain away and then close, they were just like
See you later. I got the credit card like
You're dead to me. Um, but the R is like, no, no, like reinforce the decision. Like, I think it's a great decision. I'm gonna introduce you to Polly. Polly's gonna get you onboarded. And then Polly also continues the R and being like, you know, Jack definitely helped you out.
Let me let's get you all squared away.
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A lot of people say that seventy, sixty, eighty percent of our communication is body language. Do you think much about that? Alex, you have a
With or without you.
Energy body language.
It's a casual it's a very casual body language, which in fact reinforces your authority in a way. So do you think about if if people are right that sixty or seventy percent of our communication is the things we don't say, do you think about training people on how to hold themselves, how to be
You you kind of alluded to something there which I think people don't think about, which is actually the less you say sometimes, the higher conviction and the more I believe you.
Yeah. And some people can oversell because
Yeah. So I'll so I'll uh because I think getting so I'll just there's so many variables here, but I'll just try and focus on the ones that um a lot of people sell over the phone. And even via Zoom, it's harder to see body language as well, which nowadays I think a lot of selling happens in those two environments even more than in person, even though that's where I came from, which I actually think is the best place to learn because you have to control every variable.
And then you have
far more leeway on the phone or on Zoom than you do in person.
And so to that extent.
Um, there's basically five things you can control about how you talk. And so you have your speed of talking, like how t how fast you talk, you have your cadence. You have your um basically your um
Your enunciation, like do I pronounce every letter in the words that I'm saying?
You have the volume that you speak at because if I talk.
Too low.
Like you on a phone, it doesn't really matter because they're just gonna increase the volume. But if I lower what I'm saying right now, it sounds more important in person, it's more important to volume is more important in person. And so those first three, I consider there's kind of a persuasive tone, which all three are constant. And the only point of those is to maximize comprehension.
It's just that they can hear you, that they can understand what you're saying because you're talking at a speed that they can understand. Like I'm somebody who talks fast and I have to I have to
pull back how fast I talk when I'm in like a selling situation. There's only two that you that I teach salespeople to try and actively control.
Which is gonna be
Pauses.
To draw attention.
And when do I raise my voice?

And the reason that those are the only two things you really need to teach a salesperson outside of the persuasive tone, which is that you're gonna talk at a certain speed, which is usually about 150 to 170 words a minute.
because that's the amount of speed that most people can understand. You're gonna enunciate the words, which is gonna force you to actually speak at that speed.
Um
And you're going to talk loud enough they can understand you.
This sounds very simple.
Right, that like this sounds like so simple. Like I can't believe people
Don't do this, except they don't and they don't close. And so the only things that you have to teach a salesperson, and these are so important, like
There's been three independent studies that are like massive meta-analyses of salespeople.
The salespeople who won speak less close more.
And number two, the salespeople who know when to shut up, most importantly, after you ask for the sale, like if you wait eight seconds.
After you ask someone to buy, you close thirty percent more sales. If you wait eight seconds. Yeah.
Is he ready to start?
Okay, so
And so people
They'll like they'll close themselves.
But the salespeople are so afraid of that silence that they then jump back in. It's like you had the sale just
Shut up.
And so
I used to talk about how emphasis was super important. And so like a very very easy example to demonstrate this in terms of communication is that.
If I say I didn't say he hit his wife.
I didn't say he hit his wife.
I didn't say he had his wife.
I didn't say hit his wife.
Those all mean very different things.
But fundamentally it's just because I change my pause.
Right. What word. So I'm emphasizing a different word. And so I used to talk about emphasis a lot, but I've I've trained more and more and more and more salespeople over time. I just say, When you shut up.
And when do you raise your voice?
That's it. The rest of this we we speak in the exact same tone. And the reason that I feel very confident about this is that AI is doing an increasingly good job at ads. If I don't know if you've you've noticed this, but like a lot of ads are just being voiced over in AI and they convert higher because people can understand them.
I think a huge part of it is just they can comprehend it. They can actually hear all the words and it's said in a tone that's loud enough and there's enunciation and they actually get it. Because most like it's like one of the easiest ways you can improve copy on a website is just
Get it below third grade reading level.
Like fifty percent of people can't read above sixth grade.
In the US.
Crazy.
uh you're alienating fifty percent of the market. Now you might think, Oh, those are the idiots. No, I've no plenty of people. I mean like I've got two friends who dropped out of high school and are super, super successful entrepreneurs.
barely can write their names and they would like they make fun of it, but like they're smart. They just didn't weren't educated. And those are different things.
Right. And so
I say this to say like if if you're if you're in these selling situations and you're like, because what happens is you get nervous, right? You can just fight, flight, freak out the the ones that Daniel was saying earlier. And so your adrenaline kicks up and so you want to talk fast, you want to talk louder, uh, you interrupt the other person and all those things are antithetical to closing.
And so just teaching someone
To be okay.
With pauses.
Can increase the likelihood that people pay attention.
to the words.
Did they say.
'Cause all we do is we draw attention when we pause. So you have short pauses that draw attention.
And then you have long pauses that solicit response.
If I pause long enough, what do people do?
They talk.
And I just think of someone as being higher value if they
if they're taking pauses. Um one of my one of my great mentors earlier in my career, he
Yeah, okay.
There's something about the way that he spoke.
He was
Incredibly slow.
With
The way he spoke that and the minute he started speaking when when my company were over there and having these men
mentorship sessions with him, everybody would stop and just like was fixated on him. And then I remember this girl who worked at my New York office was it's just the use of your this instrument. Yeah. Um
Do you think much about that? Do you think much about how you present yourself? Do you think much about your body language?
I think it

It's natural.
I think more important is
The distinction between are you coming across as a newbie?
Are you coming across as a standard worker bee, or are you coming across as high status key person of influence level?
And
Each one of those has body language associated, it has different ways of presenting yourself.
But it's a self identity thing. And if you can shift that self identity
You can naturally
become more of a key person of influence. When we meet someone, we within a few seconds we evaluate their status level relative to us. And you can't switch it off, and there's plenty of evidence to say that like unfortunately you just do it uh automatically.
I've seen people completely change their life by just simply changing the way that they pitch from an a newbie worker bee to a key person of influence. I can think of an example.
It's this woman who I asked her, What do you do? And she said, I'm a financial planner. I can help anyone with their financial planning. If anyone wants to talk about their wills or any of those sorts of things, then that's what I can help people with, right? And it sounds work of be. And her
Her body language
Was kind of like
This is the
Uh, I asked her a question. I said, When did you do something special?
That
was really transformational. Something something important. She said last month I went out to the countryside. I worked on a farm and I worked with the owner
And their kids and their grandkids.
to get alignment between the three generations. The farm was going to be sold off to private equity, and instead I helped them to get alignment as to how they're going to keep the family farm.
And I said, How did you do that? And she said, Well I used to be a city girl and then I married a country boy and I I I learned how to do it.
I got her to change her pitch and I said.
Pitch yourself
As a key person of influence at that.
So she stood up in front of the group and she said
For the last twenty years I've been working with rural families who own farms.
And I help them with their financial planning and I secure their family farm for the next two generations.
Mm.
And her body language just went
Like
Like key person of influence.
And everyone just responded differently. And when I asked the audience
In the first instance, what do you think her day rate was? Everyone said five hundred dollars.
I said in the second instance, what do you think she charges per day? Ten grand.
And it was just
the ability to pitch yourself as that key person of influence in the room.
You know what's fascinating is there are actual studies now that show for women in particular that you make more money if you do one thing.
Which is you wear makeup.
Which is wild. So they did there's three studies that have been done, totally different groups, one by Harvard, one by Stanford, and I can't remember it was either Oxford or Cambridge. And the studies showed that women who there was no attractiveness differential between them.
But one wore makeup consistently uh at work and one didn't. They made anywhere from twenty to forty percent more money inside of this study. What I thought was really interesting about that, because I'm not really historically a makeup girl, although being fully face painted for this.
is that that actually makes sense in a lot of ways because we do have this initial reaction that we always have uh with people. You know, we judge somebody like you talked about almost immediately. And so when I saw that study, I thought, well, first of all, that's interesting. You don't have to be smarter or better looking uh or anything else, and you can make more money just by the way you present yourself. And so I th thought
thought, well what about the way that you dress? Is is that also the same? And there are studies that back this as well. That in fact you can make more money as a man for dressing one way and as a woman. And women are interesting because
You are not the norm. Am I missing it? You've got the lumbaje. I've got twenty percent sitting on the table right now. But what's fascinating is, you know, I like things where you don't have to
You don't have to be better than anybody else. You can just use human psychology to make more money. And so if I'm a woman, I know that the way that I dress. So when I pay attention to my dress and dress professionally, whatever that means in this instance, in the study that I saw, it was like, you know, what what I would have on a blouse, a suit, something like that. Women make two times more than men when they dress.
When they dress better. Men, it actually is less important. Still more important, though, if you dress professionally in a suit and you don't have all the other proof and things you have, you have this sort of interesting thing that's like a you have sort of um diametric opposition.
I make a lot of money and yet I care so little about money that I dress in a white spirit. Yeah, exactly. And so and so men make somewhere between and eighteen percent more when they dress in suits. So I think there's a a real
um argument to be made for if you're going to pay attention to the way your voice sounds, that takes some training. It doesn't take much training to change the way that you look
professionally and and how you dress. And the only other thing that I would talk about on sales and pitching is we tell all of our company people, um, the line is show, don't tell. We increasingly do not believe the things that were heard. So like think about a sales pitch that goes like this. Um
Uh, uh we, for instance, so have a lot of home service companies. So these home service companies are selling
A homeowner on let's say landscaping. And so I'm gonna come and we're gonna clean up your lawn and here's what we're going to do and this is how much it's gonna charge I'm gonna charge and this is how long it's going to take. And you can tell
The client
that we're an expert at this. I've been in business for forty two years. We have, you know, one thousand reviews on trust pilot, et cetera. Or you could do something that'll double your conversion, which is simply bring a
phone iPad with you and say, Can I show you what we did for your neighbors?
Down the street.
And just show them.
image of it. Just go, we do have a thousand trust pilot reviews. I'm right here. We could see what the last one said, click on it, show them the trust pilot review. You don't have to train that. And I really like my salespeople to not have to become experts, but to be enabled by what's called sales enablement or technology just to show because we are a visual species. And so
So wherever possible, if you want to increase your conversions, I tell my team, you are not allowed to close a sale without showing something. Some visuals. You have to have a visual because it's just a trust transfer and a higher.
What's wild now?
Is that in that same business you could take a photo?
Just write there in chat GBT, say do the landscape gardening.
And then show them this is your house. Exactly. People are visuventy percent of the brain is uh visual processing. Exactly. And then you believe it, and then you've already seen it happen. I work with a lot of entrepreneurs and I get them to create a brochure.
Mm-hmm. Like a physical brochure for their business. And people are like
What on earth am I creating a brochure for in twenty twenty five?
I s because the the act of creating a brochure
gets w what's in your head, out of your head and into a document we can all explore.
And I I still think a brochure is actually one of the coolest things that
an entrepreneur can do as an activity
To really just solidify what they do.
So you scribbling again, Daniel. Oh, I have lots of things. But yeah. No, I was thinking about like uh makeup versus suits and whatnot, and so
You know, one it's like if you have if you have zero status, you have no credit like
SPCL like we went through, then it's like, well, then what are the smallest versions of that that you can demonstrate? And so I would also bet that if the girls did make up like hooker makeup and then you also do like professional makeup, I'll bet you there's a very different outcome that happens because
If you have like understated business makeup, then that probably signals a certain level of status. And they will treat you like other people that they have treated in the past because that associates with the status those people had. Same thing with a man in a suit, like literally fancy pants, right? Um it's like this guy's got fancy pants, therefore he is must be fifteen, eighteen percent better on average. Now to to to comment on on
On Cody's point earlier, it's like I have other
status inducing points that are superior to a suit, and so I don't need one.
Right. So like how how do I get away with that? It's like yeah, like
Having a suit only means that you have five hundred dollars. But billionaires don't wear Le Vuetton because in the the status game they're playing, that would be an inverse signal of wealth. Exactly who you're trying to and then um to Cody's point about pro like proof is always number one.
Right. And so like
Trust pilot reviews is a kind of proof.
somebody down the street is a closer approximation, which is a higher form of proof. And so proof is always going to be number one, what you can lead with. You can almost immediately in any sales process, if they don't have one of these, just implement a video sales letter and increase sales by twenty to forty percent with like really doing nothing else. Um, sometimes more.
And so that
Typically it's like okay.
What's the
What's the promise that we're gonna you know, what do we do? What's the pain that we're solving.
What is the uh
plan or sorry, what is the proof that we have that we can solve it? And then what is the plan for the rest of this video? And then typically after you have you demonstrate each of those Ps, you then say great picture number five, uh, which then gives you kind of the visual roadmap.
And then after that, I typically like to have people just respond to the all of the biggest objections that people have around whatever the specific service is as the main points of the video.
And then after that, you just make your call to action or you just reinforce the appointment and say, Hey, like if you like this video, text me this keyword. That way I know you watched it and we'll give you an extra five percent on whatever. And that way the salesperson knows the person watched it.
Um and it gives them incentive to do so.
So it's like if you watch the video get five percent, it's like oh shit, that's amazing. Um, but then that way they know that they actually watched it.
The one other thing that I've found that is the most powerful sales closer.
Mm-hmm. Is to pitch the assessment.
And to pitch the assessment is I don't know if I can help you.
But if we answer these forty questions and we go through this assessment, then we'll figure out whether we can help you or not.
So it's kinda like if you went to the doctor and said, I don't know whether you need anything, but we'll put you through a blood test and a and an X ray and then we'll see. So
one of the biggest way I I've scaled multiple companies
where you pitch the assessment. You just you don't tell people whether you can can or can't help them.
You just simply say the next step is to take an assessment.
And when we do the assessment, it will tell us whether I can help you or not. And it's one of the best sales closing techniques. There's a lot of psychology around that. They did the the study where
They had the boring focus group and they had one group of people who were allowed straight into the boring fo community group. And then they had the other group of people who had to take a survey to get in. And the group of people that took the survey to get into the boring
So much better.
And there's something about how friction upon entry makes you value the thing more. A zillion percent.
Like s I can't I cannot.
I can't I can't emphasize this more. Like in every single CRO split test that we increase friction or increase the quality of leads. CRO split test so a conversion optimization test that you'd run across a a landing page or funnel or sales sales motion.
Um
Like
When you add more friction.
And it's good friction ideally, meaning you're not getting out bad people. You're getting sorry, getting out
good people, which is bad friction. You want good friction which gets out bad people. Yeah. Um
you will typically always increase the cost per action. So your lead cost will go up, your cost per call will go up, but your show rates will go up and your close rates will go up and your cash collected will go up. And it seems counterintuitive to apply friction to a process. And I can almost promise that like
Yeah.
I have so few examples where it didn't work.
that I almost believe that it's law at this point. And I think it's law because it's so counterintuitive because it's scary to add friction because you know that you're actively decreasing your lead flow and increasing your cost per lead. You're decreasing your calls, you're increasing your cost per call. Like that is frightening for just about every business, which is usually why it works.
At the Louis Vuitton store, they put a security guard to keep you out. Yeah. And then it pushes the prices up. Yeah. Oh, like they they after COVID, none of them st stop doing'cause they're like, Oh wow, we made more sales during Covid because we had people wait in line and showed scarcity. You don't even get to pick the bag you get. And you have to join a waiting list. Then they interview you to buy the bag. Yeah.
And then they decide whether you they should let you have what do you bring to the table. It's crazy. That's how a Ferrari works. You're not allowed to buy Ferraris unless you go through this list. And if you're ever sol shown to to flip them or sell them, you'll never buy another Ferrari again.
So
I've got
Three boxes here.
And these three suitcases contain different amounts of money.
One of them contains
A thousand dollars, one of them contains ten thousand dollars, and one of them contains a hundred thousand dollars.
You're gonna pick a suitcase.
And
You're gonna tell me what you would do with that amount of money if you were starting with that amount of money today to build a scalable business.
So Do we keep the money?
I'm like I'm feeling hundred thousand.
Alright, what do we got?

Oh, I have a thousand dollars. So do I get to give the money? Is that how this works? Yeah, you can keep it smells. Smells smells like money. Okay. So I have a thousand dollars. So I would um
Take the thousand dollars, put it in my pocket, do nothing with it, and I would watch YouTube videos on AI integration into small businesses, and then I would go to small businesses and once I had a specific integration that I would do, which I would probably bet would be around
likely email list activation because that's typically like fastest, easiest money that most business owners have is their contact list. So they've got
You know, they've been in business ten years. They've got
you know, eight thousand customers they've sold over that whole time period and maybe a list of, you know, call it eight twenty thousand leads that they've had. They never email them ever. If they do, it's just like here's our random discount that we send once a quarter for Christmas or whatever. And I would say, Hey, um I will email those people and I will uh get everything approved by you.
And don't pay me anything, just pay me a percentage of the sales that we generate afterwards. How's that sound? And that offer tends to do well. And I know that because I've done it.
So that's what I would do. And the thousand dollars I would, you know.
go buy uh Leila something for uh a little bit of time, uh so that she can stay with me until
Uh I make the money from my my email reactivation campaign.

See what I get?
I got the 10 cake.
All right, we're going around the circle here.
Um
I like it.
I would find the person who would
buy what I was selling for the highest dollar amount humanly possible, which means I would probably go to private equity companies. So Alex gave me the idea for Main Street. I
I know that Main Street businesses are like often cash crunched, right? They don't have a lot of money.
And they often cannot extract enough value from a lead that I need them to. So Alex would need to find the perfect company to do that. And there's lots of them. Or he would build his own, which would be great. I think in my specific instance, I want to go to the people who are already good at extracting the most value humanly possible. So I'd probably try to go to a private equity firm. And I would have a private equity firm.
It's basically a fancy way for saying that people use their own money to buy businesses as opposed to public equity, where people use the stock markets.
dollars to buy businesses. And so examples would be like uh you know, KKR, Carlisle, uh Cerberus are some of the biggest in the world. So they go around buying people's businesses with their own money. That's right. Yeah. Yeah. They find entrepreneurs right about the point where they cannot take it anymore. And they buy those businesses and then they they grow them hugely. And and and
Again, because I'm better at partnerships. I would want to go to them and I would want to say, and it really what's interesting is I bet all of us are gonna be really similar.
The money actually doesn't matter.
And so even though I have ten thousand dollars, ten X, what Alex has, it doesn't actually matter because what I would do still, ten thousand dollars is not enough for me to make a couple million, which is what I would want to do with this. So what
actually is a differentiator. What is the business model I choose? Who do I go to sell it to so that I can get the most value out of it. So you're going to be able to do And with these PE companies, what I would do is I would go to them and they're buying companies all the time. And so
There's two ways to sell to a PE company and I'd see which ones I could get them to sign up for. On one hand, there's something called a deal sourcing fee, which is if you can find companies that are in the niche that PE companies want to buy, they will pay you for sourcing the company. Um and I know this because I pay deal sourcing fees. And so I would go to private local private equity companies, you're not gonna be able to get to Cerberus or
the big guys. So I'd go to the ones in my local neighborhood that you could find by searching on AI to say local private equity companies buying these types of companies. I would reach out to the GPs, those are the general partners of the company, the guys who run it, and I would say what type of companies are you actively purchasing right now? What's your investment thesis and deal box? And if I could get them to respond to me, great. If not, I'd
search what do private equity companies typically want to buy? What is the deal box or investment thesis of a private equity company? I would find that deal box and then I'd play the game of door knocking. I'd go to a bunch of these businesses and try to find companies that wanted to sell.
And then when they tell me they want to sell and I have a buyer, which is the private equity uh company, the private equity company will pay me either a percentage of the sale or a flat fee for sourcing it. What might that look like in terms of
A percentage and dollar number. Yeah. I mean, if you're like a a non institutional player doing this, I think you would go to them and say, Can I get like ten K for every company that I source you that's over a million dollars in revenue that's profitable and within your deal box? So they'd probably say yes. The normal sourcing fee is somewhere between three and five percent, but you're not gonna get that.
when you're brand new. So but I like the idea of making 10K on one deal to start. Then what else am I learning while I'm doing this? I'm also learning simultaneously, how do you buy businesses? What type of businesses? How do you find businesses for sale? I think this is the highest leverage activity I know how to do.
Like I just I know more how to buy a business that's already making money and make it make more money with a higher degree of certainty because if it's already profitable, it gets out of the valley of death, which is where a company starts and never actually makes any profit.
And so I would start there. And then what would I do for that? Well, the second that they see that I'm good at sourcing deals, there's gonna be they're gonna be throwing offers at me. But what I might do instead is go to those GPs and say, Hey, I'm pretty good at doing the hardest part of private equity, which is finding the deals. Why don't you guys back me for me to find the deals for you? Maybe that'll invest in my company for me to then
run a private equity firm, or maybe they'll say, come work for me. And then I can make a couple hundred thousand dollars. I can learn what I think is the best uh skill out there to learn, which is deal making, and I can use my leverage, which is knowing what a company's worth and how to buy it using other people's money, in order to increase
Uh.
My earnings. That's interesting. You'd both use the money for personal things probably just pay your rent or take your own. And I mean even the hundred is close to I mean, it's more than ten and one.
But
Yeah.
And and it's just one idea. I think there's so many things you could do with one and they're all very similar in their fundamentals. Well, you go to find something like the leverage comes from going tapping into existing networks. You find an existing business and either you're selling the business as the product or you're f selling the product of that business. Right, exactly. So you're selling either way and
All of it is promotion.
you're selling and you're trying to get a percentage of upside. I'm getting a percentage of because like to Cody's point, a lot of mainstream businesses
don't have money and you're like, Cool, pay me on money that I make you and they're usually very, very
generous with money they don't have yet. Um, same same for
you know, a deal that we haven't made yet, I'll give you, you know, a fee for those things. Again, it depends on the timeline. If I have thirty days, then like
Getting a deal done in thirty days will be tough. Um, but like getting a brick and mortar, it's like probably do that in forty eight hours to get somebody to say yes to free money for like no risk and I do all the work. It's an easy offer.
So again, I think it's where like the constraints of the initial
Prompt is like how much money and how much time? If it's a year, it's like all of this changes. If it's thirty days and I have nothing, it's like well then we'd want to generate as much cash as we can at a little time as possible, no risk. Yeah. Daniel's about to invest in the S P five hundred. He's like, I take your your ten thousand dollars and I raise you. Yeah. So I have a hundred thousand.
Yeah.
So
He's leaving with it. This this is a dangerous amount of money.
This is the worst case scenario for most people.
Because if you have a thousand you know you don't have money.
If you have ten thousand, okay. You might get a cleaner. You might get
An assistant, you might do a few little things with it.
The danger of a hundred thousand is you can kid yourself into thinking that you've got money and it will make your head spin how fast you can
blow through a hundred thousand dollars if if you don't know what you're doing.
If you give me a Formula One car
And ask what am I gonna do with it? I'm gonna crash it. Right? If I can get it even started in the first place.
So I've got to come up with something that the first problem that I have is I don't have the knowledge, I don't have the network, I don't have the reputation.
So here's what I'm gonna do. I'm gonna leverage Cody's.
I'm gonna go to Cody and I'm gonna say, Cody, can I do a deal with you?
I would like to start a business. I know you've got lots of ideas that you just don't have time for.
I'm gonna invest a hundred thousand dollars as debt for equity for ten percent.
So I'm gonna put a hundred grand in and that'll come out of the business at some point, but debt for equity on ten percent. And I'm gonna do sweat equity for ten percent, and you keep eighty percent.
And it's your idea.
And it's your network and it's your reputation.
But I'll be the person who's heavily invested in this.
And the only condition is that as the business becomes profitable we can repay the hundred grand?
Um and then once it's repaid the hundred grand, either you buy it or we can sell the business.
Now what I'm doing there is I'm basically acknowledging I don't know what I'm doing.
I'm acknowledging I don't have the reputation, I don't have the knowledge.
Um, all I have is this hundred grand and I have a a very strong desire or will to be an entrepreneur.
Now what's gonna happen is that probably with an hour of Cody's time per month
She's gonna be able to say, here's the idea, here's here's my CFO, talk to my CFO, here's my head of marketing, talk to my head of marketing, here's my friend who's actually got even more money and wants to invest.
And she's just gonna like fire off a few emails.
And
She's gonna love the idea'cause it's her idea.
And I'm gonna I'm gonna work hard.
Right. And what's cool is that
When the time comes that that business becomes valuable, I've got one buyer on the table.
Cody's either gonna say, Hey, look, I'll buy you out'cause it's only twenty percent and now I own the whole thing.
or
We go to market and Cody will know someone who can buy the business and I get twenty percent of the exit.
So
The the c but the key here is that just that acknowledgement that the it's really it's the knowledge, the network and the reputation that is the valuable bit. And the money is a bit of a red herring. And you're gonna get
Cody skills'cause you're gonna be in her proximity, you're gonna get a little bit of her reputation.
Knowledge.
I'll then have reputation. I'll then have uh all you know, all of those things will have leveled up for me.
You know what else is interesting too? It's really what you're proposing is is something that I used to not like and since have th
And since think that when you find the right ones, it's it's really fascinating, which it's a franchise model. You're essentially saying, which is what you do when you come to a franchise, if you come to Resi Brands, you go, Okay, I have seventy five thousand dollars. I don't know anything about window cleaning, I don't know anything about running a business, but I do know that you know how to do it.
And I know that you have all these case studies, aka proof of other people just like me that have done it. So I'm actually going to pay you.
for this business, for the right for you to
Take a percentage of my ownership.
forever in perpetuity. Um but I will teach you how to or you will teach me how to run the business. And so I think that's actually
I I think I used to think that franchises weren't good for entrepreneurs because I am relatively unemployable and I don't like to be told what to do, but for people that have never run a business before.
Like what you're saying is like I'm paying you for the right to learn because you have a proven system that if I use it over time, I have a lower likelihood of failure.
Because we know the truth, which is ninety percent of startups fail. Most startups never make any money. You pay for the right to maybe potentially one day make money. And so I do think stealing other people's homework is is real and valuable. I I wanted to ask you all a question, which I have an answer to, so I assumed you would, but maybe you don't, which is
What is the one thing about entrepreneurship, wealth creation?
Finance.
That you think
Most people.
undervalue that you
You put it
a a disproportionate amount of weight on. So like for me I can think of a game in business, I think of business as a set of games we're playing. I can think of a particular game in business that I don't think other entrepreneurs understand the value of.
And I'm wondering if you will have an answer to that as well. Is there one game in this game of business, one fundamental game that you think most entrepreneurs listening now don't appreciate?
And they should, from the entrepreneurs you've worked and invested in, and being one yourself.
Well, I think I'll say one that everyone here at the table will agree with, but I think that brand and distribution is still wildly undervalued.
I mean, I think that's the reason that all of us decided to get into it is because you just I mean, at least I saw just the wild discrepancy between cost of a of building brand and building distribution versus the value of that distribution. And
You know, the the Primes, the lunchleaves, the
You know, some of these in insane zero to many billion dollar case studies, uh, Termana, Huda Beauty.
proper t proper uh whatever it is for yeah like there's there's so many examples at this point that it's almost trite. Um
I still think it's undervalued.
Distribution which is
Building an audience that you own.
That has a high likelihood of
Of complying with requests.
A K brand.
Well I I think that's a very good one.
And and the reason that we know that it's so undervalued is we're all offered things all the time that do not I mean, I remember talking to my president of my company, and I was the former president of Mr. Beast. It was interesting as he said, like every deal we looked at
We almost regretted doing it. Like we couldn't, I think you and I talked about this. We we we couldn't do a deal that the other party fully understood the power of our distribution up front. We almost had to like prove it, put in a bunch of milestones on a later date because the deal is so good. And I found the same thing in the deals that I did. Like we've talked about. Like, I mean, I did a bunch of deals early on where I bought

And they couldn't benefit from distribution. All my laundromats, my car washes, like it doesn't matter that I have a big audience online. And so the leverage wasn't there for me. So I think um
I think distribution and brand are huge. Uh the secondary thing that I do not think most entrepreneurs understand is.
Financial engineering.
The richest people in the world are rich.
If if they didn't get it from daddy and mommy.

And they didn't get it from uh investing in third party companies. They got it from
Um they got it from owning companies and buying them over time. Like every billion there is not a billion dollar company that exists that hasn't bought other companies.
It doesn't exist. When you say financial engineering, how do you simplify that for someone that's sixteen years old? Man, understanding how to get other people's money, to say it really simply, like how to get other people's money, which sounds a little scammy, except it's not. You know? Most businesses are bought with s the SBA loans, loans from the government that allow you to buy a business.
Businesses need lines of credit. That's just money from the bank for future state. So like if you actually understood how money and finance works in your business, it's harder to die because cash flow is what keeps your company alive. And also it's easier to buy your competitors because whoever is most funded wins, typically. Um and so I think.
I think more entrepreneurs need to obsess on the thing that
uh isn't the magic. Like the magic is coming up with an idea, having the grit, doing the brand, doing the distribution. That stuff's actually really, really hard. Financial engineering is
Is
modelable. It's just it's the same every single time. It's just been gate kept by by Wall Street. Money games.
Well, I had this I had this such an epiphany moment when I was like twenty th twenty three, twenty four years old when my um
a German uh group had basically bought the majority of my company out. And I got to spend a lot of time'cause we now had this German office. I was there a lot. And I just observed this one individual who I shan't name.
And I I I I'm there building this business and pitching to clients and doing all this hard work. And I met him and he says, I don't want to do any hard work. I just want to do deals. And I was like, Tell me more And I learned and I'm like, What do you mean deals?'Cause I'm like
I'm not sleeping here. And this guy looks like he's sleeping like tremendous amounts of hours. And he was like, I just want to play money games. Yeah. I wanna be in the middle of the transaction of the deal and taking some, but then he's also when he says money games, is like
Mm.
Raising money against an asset.
overvaluing that asset and buying lots of cheaper assets with the value of the expensive asset.
And he made a lot of money doing exactly that and almost never working. Cause he understood exactly what you're saying, is that really, really rich people understand money games.
It's just how to use money leverage to make more money.
Look at the Forbes one hundred list. It's all comprised of people who do financial arbitrage in one way or the other. How do I go learn that skill? Do I have to go work in finance?
No, you don't have to work in finance, but I mean the best business school is always be in business. So get into business and then obsess on one like it I think it's like tiered. Bottom level is like understand a PL. Most entrepreneurs don't have a profit and loss statement. They don't actually track their prof profit and loss statement. I mean, we invest in a 60 million dollar a year year business.
The guy didn't have an up to date profit and loss statement. It's incredibly common. I'm sure you see it, you look at a bunch of businesses too. Second level after a profit and loss statement is do I understand where my financing is coming from? All you need to do to understand that is talk to your bankers.
Like do you have a bank that will lend you money? Understand why.
uh explain to them what you do and see if they understand it and how much money they'll give you. And then the third level of the game is go and talk every
like learning that needs to be done is just getting in the room with other people who have
their Tuesdays are like your dream days. So I think
They know you want to get in a room with a bunch of people who are doing deals. That's how you do more deals.
When I am I I told you earlier we were talking about psychedelics before we started recording. Um when I left my last company, I had that year and a half where I had invested in this massive psychedelics company and it was the pandemic. So we're working from everyone was working from home. I was working from the Dillionaires.
Apartment in London.
And I got to see in the lead up to the IPO, he did ten IPOs a year.
So I got to sit in his kitchen and he we used to work over there. And I just got to see what was going on. And all he was doing was making phone calls to people with lots and lots of money.
And he was given them access to the IPO before it IPO'd at
evaluation which we all knew was gonna
Ten X.
And I just thought, oh my God, like this is how rich people make money. They have some kind of access or arbitrage and they move money around to capitalize on
On these multiples. I know it's a crazy thing, but you've all podcasts.
Like I remember before the internet, before YouTube, before all of this sort of stuff, there was no access to the inf this information. You couldn't get this information. And now you can look you can listen to podcasts, you can chat to chat GPT. You don't even have to get in the room and like it's it's all on the internet. And it blows my mind because I remember a time before that.
I I love what you said. I totally agree with what you said. I'm gonna go with um
The one game that most people don't understand is bananas.
In lesson one of every economics class, they say if you've got ten bananas and a hundred people want a banana
you're gonna have high prices and profit.
Demand outstrips supply.
If you've got ten bananas and only one person wants banana, you're gonna drop the price of those bananas and you're gonna make a loss and your business is gonna go badly.
And what most people do not understand is that the whole game relates to constrained supply
and excess demand.
And if you can't constrain the supply and create excess demand, you won't get a profit.
You can take something like Google Maps.
Which probably costs five hundred million to set up and and launch satellites and everything. They have to give it away for free.
Because
They have infinite supply.
They have they can supply everyone on the planet with Google Maps. So because there's infinite supply
They just give it away for free.
But Google Ads, there's a limited number of people who can advertise on every search.
So because that's limited
the the price goes up.
So I have a client
who saves lives and they do first aid training and they're an amazing person and they literally save children's lives and all this sort of stuff.
She's telling me, you know, why aren't I able to trade tra you know charge more money? I'm literally saving lives. I'm a really good person and I'm very valuable.
I say
Because the whole game
that that's not the game. The game is demand outstrips supply.
So you need to constrain the supply of something and you need to manufacture excess demand.
And unfortunately
As m as much as you might be the most amazing human being
If you can't manufacture demand and supply tension.
You can't make a profit.
I was hoping and thinking.
Someone might say hiring.
Mm.
Because for me, my answer is hiring. That's the first thing I go to. I remember Richard Branson sitting me down when we spoke in New York and saying, Listen, I built one of the biggest groups in Europe and
my CFO pulled me out of the room and said, I don't know th what net profit is. And he says my CFO got crayons and a piece of paper and drew fishes in a net in an ocean and said, Richard, that's your net profit. And then they walk back in the room. And he was at the time running one of the biggest groups in Europe. So when when he said that to me, I was like Well he was like, You don't really need to know much if you're a really masterful delegator.
Can he said I was a dyslexic thinker, so I was always forced from the very beginning to just find someone to do it.
That was exceptional. And actually the further I've gone in my career, the more
Just like you figure out like
The game this game that it's actually just a couple of fundamental things that sway the outcomes.
Like most of the returns come from like a couple of things. In business, I I've just come to learn the further I've got that my returns come from
Truly exceptional people, binding them with a culture and then setting them the sort sort of strategy or more technical things that I would agree with that and
The reason you can find such amazing talented people and so could Richard Branson
is because first he could create excess
Demand.
For that role.
And then you could choose from that list. So I go back to when I was eighteen.
I was eighteen, broke, drop out of university, parents aren't speaking to me, shoplifting food.
I managed to get a guy called Chris.
He was running a business.
Two.
Um
Stop his business. He was he was double my age and successful to stop his business and decide to come and build a social network with a kid who was stealing Chicago Town pizzas in Manchester, who had never built a technology company before in exchange I couldn't pay him.
in exchange for thirty percent of the company. And this goes back to this whole thing about offers.
My pitch, my offer at that time, I was trading in future money.
Equity.
And he believed in the value of the future money. So I say to kids all the time, Actually, you don't need to be
In my position now, you've all got future money and the future money's determined by how good your pitch is, your sellers.
But I think that goes back to that like how I talk about pitching for money. That's your minus touch. You didn't have profit.
You didn't have growth.
You didn't have a track record, what did you have? An incredible fucking story. Yeah. So if you got nothing else but a story, then you can hire people much more together. Exactly. This actually brings me to a point that I haven't told the world about yet. I've just built something called culture test. You can find it at culturetest.com.
Essentially the thinking is that one bad hire, as I'm sure all of my guests here will agree, can ruin your
business, it can ruin your idea. So culture test helps you figure out and spot red flags in people you're thinking of working with or currently do work with by making a personalized culture test survey. And it scores that person in terms of how aligned they are to you.
And your mission. It has been a game changer for my business. We've culture tested about forty thousand people.
I just wish I was doing this before. Check it out culture test dot com, make your own culture test, use it.
And thank me later.
Alex Us.
You've got this book about to drop called A hundred and
Million.
Money.
models. What is the one money model in this book that's added the most to your net worth?
So it's more the concept. So like each of the the so offers had the value equation, which is kind of the core concept of the book was built around. Uh the leads book was about the core four.
um the ways to promote anything.
And so
A hundred million dollar money models is about
Client finance acquisition, which is fundamentally how you get customers to fund your own expansion. And so Cody said this earlier, but
Depending on the source, it's roughly like eighty percent of businesses fail because of uh poor cash flow, right? Or they they just don't have enough money, right? And the other twenty is probably just people just give up. And so as long as you don't give up, the reason they go to business is you just don't have cash flow. And so that book.
solves cash flow, which is why the subheadline is how to make money, which is pretty pretty on the nose. But fundamentally, like each of the examples that I had in my business, um, and I define that within
Climate finance acquisition is I define it. When you have like a hundred million dollar money model, is that we're able to get a customer
To pay you twice as much.
As you spend on them.
In the first thirty days.
Mm-hmm.
And by doing that
the the more specific equation would be that your thirty day gross profit
from a customer exceeds two times CAC plus COX, meaning CAC is in cost to a car customer plus cost uh
Cogs which is cost of goods sold. So how much does it cost me to get them?
How much does it cost me to deliver them?
Times two. If I can get that from one person then
For the rest of my expansion.
All the customers finance the acquisition of the next customer. And then cash flow is no longer a constraint of the business. You'll still have constraints, you'll still have supply constraints, you'll have hiring constraints, you'll still have other constraints, but cash won't be one of them. And so as a result,
you can grow b pretty much as fast as you can handle. And so that is how I've grown all the companies that I've started.
Without funding.
And been able to grow very fast in each of them.
Um is with that core concept.
Thank you.
Thank you for uh choosing to be here today. And I invited you here because you're the three people that guide me, that I listen to, that I think have the most credible important information that can guide my audience and I know who they are. They're people that want to improve their lives in some subjective medium to that the North Star that they have. And you all represent different perspectives and also different strategies, but there's so much
So many overlaps that I think actually getting three people like you around the table to understand where we overlap and where you think the same is incredibly powerful. Um, I highly recommend everybody goes and reads Cody Sanchez's book Main Street Millionaire, How to Make Extraordinary Wealth Buying
ordinary businesses, which is really what, you know, one of the things Cody has pioneered the idea of
um and made accessible to the masses, because most people didn't think you could do that. Most so many of my friends are now buying boring businesses, as Cody says.
Because Cody has laid out a framework to do that and to create wealth in this book. And my favorite book of Daniel so far is oversubscribed, how to get people lining up to do business with you. And there's so many that I could have chosen from. But also you all have YouTube channels and your YouTube channels are amazing. So I'd ask my audience, I'm gonna link them all below to go and check out your YouTube channels. Um
Daniel, you're just starting out on YouTube. You're getting you're getting your your feet wet in YouTube. But but Cody and Alex uh have been making so much incredible actionable content uh
I love one of your new f your f your new formats where you sit with someone
And you sort of redesign their business with them. And Cody's been making some of the most entertaining and informative content on on how to get going with with simple um uh companies and businesses for the longest time. So please go check out their their work.
And go follow them on social media. These are three are the people that I admire the most in this space. And if you like what we do here on the Diver CO, you're gonna love what they do. So thank you so much, everybody, for being here. And hopefully we'll do this again sometime soon.
Uh