13 Years of No BS Business Advice in 79 Mins

I've been in business 13 years I've sold nine companies my last company I sold for $ 46.2 million my current portfolio at acis.com just over $17 million a month and I'm going to compress 13 years of business advice into this one video number one have something extremely expensive to sell that you never even plan on selling I learned about this anchoring tactic from a friend of mine and he said listen man you can just put something on your menu of items or services that you sell that's 10 or 100 times more expensive and just by

having it there it'll anchor everything else on your menu or the rest of the prices that you have and just make it something that if someone actually bought it you'd be stoked that they did but what ends up happening is that one you'll sell more people on your core offer because they have this big price anchor second it allows you to nudge up your main offer's price because related to the big one it looks like almost nothing I was talking to a different friend of mine and I said hey you know you should consider just

adding one of these things in and he had a weight loss business a very generic online weight loss business and so he added uh a six times higher price version of his offer and then the craziest thing happened people started buying that more than his core offer and when he did that he tripled his profit overnight and so the thing is is that it also breaks you especially if you're starting in business out of this fear of raising prices by just saying hey there's no there's no way anyone's going to buy this I'm going to

make this so expensive no one's going to buy it and that's okay so you give yourself permission to just fly it out there but what you will find is that 10% of customers just want to buy the most expensive thing these are the whales and the only thing worse than making a $1,000 offer to somebody with a $100 budget is making a $100 offer to someone with a $1,000 budget because in the first scenario you lose a 100 bucks in the second scenario you lose $900 of the money that you should have made but didn't

number two no one knows knows you exist advertise more and so to give you context on this when I walk through the streets I usually get stopped four or five times on like a 60-minute walk and when I was launching my book last year I had you know 500,000 plus people who were registered it was this massive event broke the internet whatever but during the month leading up to it we're advertising on all channels we're running ads we've got Affiliates that are pumping it I'm making content all over the place and over the 4 weeks

of people that stopped me only one person knew that I had a book coming out and so every time I'd see somebody like hey you going to be at the book launch and they're like oh you have a book and I was like how can you not know that I have a book there's a story from Henry Ford that I love which is that he was walking by his the CMO of Ford was right next to his office and every day he'd walk by and he'd see the marketing campaign he he'd see the marketing campaign

a day after day after day and so 3 months into seeing the same campaign he knocked on a CMOS door and he's like hey when are we going to stop running this thing he's like I'm getting exhausted of seeing it and the guy just looked at me he's like we haven't started running it yet and so the thing is is that we get so sick of our advertising so much before our customers or potential customers even remember our names and so the extent of advertising that you have to do there are so many people in

the world and people's attention is so spread thin and so they're so distracted that in the off chance you actually do get an advertisement of some sort in front of them the likel that they remember that it was even you and the core message of that advertising is even lower and so many of us have this big fear that we're harassing our Audience by repeating ourselves over and over and over again but the vast majority of the time no one even a knows you exist or B specifically knows the message that you're trying to let

them know and so I like to tell my team and remind myself that we need to be reminded more than we need to be taught and so your audience needs to be reminded more than they need to be taught and I don't know about you but I followed plenty of accounts where like they have the same four or five messages more or less that they put out there and the reason I follow them is because I like the reminder I like to be reminded to be patient I like to be reminded to to to not

think take things too seriously I like to be reminded that I have to think long like those are the things that I like to be reminded of and so imagine if that accounts like I already said be patient once I don't want to say it again they've already heard that from me it's like no people have messages that they want to continue to get fed into and every time you feed that same message that they likeed before back into them they'll have another positive experience with you the amount of novelty that's required in content is

significantly less than you think as a creator think about it like you're going after a girl and she's with somebody right now all right so you're like okay well I'm going to ease off but I'm just going to just let let them know I'm just going to throw these little flares out there that I'm that I'm I'm interested I'm here I'm not being disrespectful but I'm I'm available right and then what happens is as soon as uh she gets out of that relationship or whatever then she's receptive to your message and so the thing is

same way works with customers is that they might not be looking for a marketing solution they may not be looking for a plumbing solution they might not be looking for an IT services provider for 3 months 6 months 9 months but they might like to hear your stuff but the moment they are in the market you're the first one they think of because you continued to repeat the messages that resonated with them to begin with the big thing is the 4x4 all right which is especially when you're starting out four hours a day doing the

core four and so the core four means you're reaching out to people you know oneon-one reaching out to strangers one-onone making content one to many or running ads one to many and so there's the four ways the only things one person can do to let other people know about their stuff and so I use the rule of 100 as my my guide there which means you either make a 100 minutes of content you do a 100 outreaches so either cold or warm or or and if you want to get really spicy or at least $100

a day of advertising now obviously the $100 a day you can scale as much as you want but as a baseline for anybody who's starting a business those are three ways that you can just say okay what do I have to do to let more people know about my stuff if you're not making 100 minutes of content you're not doing 100 outreaches a day day or you're not spending $100 a day on ads no one's going to know you exist and that is the biggest threat to your business the reason it's so important as a

Founder to do this in the business is that you have to be able to make it rain and so every business at the most basic level has to advertise before it can have money right so like if you want to make money people cannot give you money until they know you exist and so is a is a pre-requisite for making money in business is that you advertise first and then you have a product that you can deliver on and that's the most basic form that you have to have if you just have the product that

no one finds out you will continue to not make money which leads me to number three until you're at $100,000 a month advertising is all of your focus and the main reason for that is if you don't have enough people coming in you're not going to have enough iterations of the product to get feedback to know if your stuff's good or not and what you need to do to make it better now the thing is is that up to $100,000 a month at that point it's all advertising but at some point in order to continue

to scale you need to fix the product you need to make sure that people are refg you need people make sure people are happy that they're referring other people that they're staying month after month or they're repurchasing month after month after month and so if you're not solving that then you've got a leaky bucket and that's going to be a problem that you're going to deal with later and so the smart move is to fix that stuff now so that you can grow a really big business and this is one of the biggest mistakes that

I made so many times in my early career is that you start advertising you start understanding a sell and acquire customers and you say oh that worked I'll do more of it and you should do more of it but within this current context of you have to make sure that you're delivering and so my recommendation is get to a million doll so get to $100,000 a month is then put all of your focus on filling all the holes in the bucket so that and the thing is is when you do that you're actually going to

keep growing because if you keep the same activities and then you fix the holes you're still going to keep growing steadily month after month after month even with the same level of advertising effort then once you fix the holes then you go back to the front end and say how do I 10x this and that is how you can stair step even though your actual Revenue growth will still look flat because when you fix the holes you'll make more money but the doing this of the business will shift now if you do the alternative of

that which is you just advertise more and more and more there's going to get to a point it's an ASM toote so basically you start growing and you start plateauing like this because then your infrastructure is too big and there's too many moving pieces to fix the thing that you should have fixed earlier but then you're in a rock and a hard play scenario because then you can't B dial back the advertising because you got all these people that you've hired but the more you sell the more your reputation goes in the tank because the

stuff's not good and so you get a really hard scenario and so fixing it first fixing it early sets you up to build a much bigger business later number four under a million dollars a year it's one channel one Avatar one product I see way too many small business owners saying hey I've got two businesses or I have seven products or have two different avatars or blah blah blah blah right no focus on one specific type of customer and if you s if you just say yes to everyone with money you basically saying no to

your business because you're never going to be able to focus and make something really good you can't serve six customers and then make a good product only doing $100,000 a month it just doesn't like it's it's too small volume like you don't get enough reps and so you need to do one very specific thing which means you have to say no to people who aren't that that type of person you serve one problem which means you have one product for that specific Avatar and you get better and better at templatized at at productizing the service

or product whatever the product is itself making iterations on it and you advertise through one channel meaning you just know how to make cold email convert or you just know how to make cold calls convert or you just know how to make uh Tik Tok ads convert or you just know how to make YouTube videos that convert whatever your channel is you just stick with that channel because as soon as you're like oh I'm going to do two different things like that's not the objective of this stage you just need to get it reliable so

that that you can then keep tweaking the product so that then you can 10x the existing Channel you're on once you get to about a million a month is when I recommend starting to to think about second and tertiary channels of getting customers and part of the reason I recommend that is that when you start a second channel it's going to cost you money and it's going to cost you time and so the reason that you keep that one channel and keep doing it longer than you think is because you need to be able to

get it working at the same level or higher with not you doing it so that you can have the secondary Channel if you're the one who's gassing this first channel and then you move to the second well now you have this second one that's not going to be working out nearly as efficiently as the first one especially in the beginning the first 3 months 6 months it's not going to be cranking like the first one is but the first one's also going to go down because you're not there and so you spend the extra time

there you put the right people in place you make sure the training is such that they actually can meet or exceed what you were doing on your own and then when you start the second Channel you can pour resources into it because you still have cash flow from your main thing and that little switch is where most people get lost and they just Crush their businesses so don't do that so to give you guys some context I didn't open up a second channel of acquisition until we were at 4 million a month now mind you

I started with paid ads because I was good at paid ads and I learned how to run paid ads in my local business which then when I went National I KN had to do the same skill set but after 4 million a month I was like okay I need to get this second Channel going and so I started increasing that channel via cold email cold call cold DMS with an outbound team but I say that because a lot of people are like shouldn't I do this I try to delay that as long as I possibly

can because I know it's going to cost a huge amount of time a huge amount of money and it might not work for 6 to 12 months and to give you context it took me 12 months for outbound to be responsible for half of my Revenue so it's not going to happen overnight number five always start for free always and I know and I I don't usually use explicit 100% black and white language but I have yet to see a time where starting for free has not made me more money so let me explain so

when I started my Fitness business way back when I started with free I wanted to get people results and I said I don't have any experience so please let me just train you for free and because of that I have lower Stakes because they didn't pay me money they're still paying in other ways they're still paying time time they're paying inconvenience all the other things that a customer has to do those costs are still there by the way those hidden costs are the things that you want to decrease as much as you can in your

product so that you can charge more money because you'll find over time that the most expensive thing about your product often isn't the price it's everything else you require a customer to do as a result of the purchase which is what things do they have to give up that they like doing as a result of the purchase and what is what are the things that they have to start doing that they hate doing as a result of the purchase and this happens with everything and when I say like and hate I use those as extremes

but fundamentally there's some sort of friction there's some sort of inconvenience like when I buy a car I have to now get gas that is now an inconvenience in my life now compared to all the other cars maybe all cars that have that inconvenience until they have an electric car and all of a sudden that inconvenience has been removed because I can plug the car in at night so I'm a co-owner of school.com and I talk to beginner entrepreneurs a lot and so I see this happening more often than not which is that they say

hey no one wants to buy my thing and I say okay well where's your where are your testimonials where are the people that you've used before this that you've helped get the result and they're like well I don't have any I'm like well why would I believe you they're like well I have this amazing offer and I'm going to talk about this in number six at length but if you don't start for free why should anyone believe you and if you are doing this for the first time why would you want to take money for

something that you don't even know if it's good yet and so this can both give you the conviction and give you the confidence to get going because you actually have some results that you can go off of you can use those results to Market to get more customers I do this at every level of business and so everything that I do I always start with free no matter what it is and whether it's a new product line in a massive company one of our portfolio companies we built out a software product uh for the existing

service base and so we said hey we can now have a DIY version of our services that you can use with this software product and what did we do we started for free we took our top 100 customers and said hey why don't you try it out let us know get us feedback and they just kept giving us feedback back and honestly in the beginning the fact that some people want to charge for this is insane it's like they're giving me so much valuable stuff I'm just happy that they use it right and so you

go with free and then you go with a small small amount of money and then you keep raising your prices over time which I'll get to in a second and for those of you who are worried about your pocketbook like I'm Froning all these costs well yeah that's why it's called investing in a business but people who you work with for free can make you money in three ways number one is they can leave you a testimonial number two is they can refer you other customers via Word of Mouth that you did a good job

and number three they can actually stay on and pay after a certain period of time when you do make it not free and you make it uh for money because if you want to keep surfacing and this is ideally how it works out is that you do such a good job that they're like I don't want this to stop and then you say great now you can do it in exchange for money because I can't do this anymore in exchange for nothing because I have enough demand because I've done a good job that I have

these referrals and I have this proof that people do want to pay me for my services so if You' like that too you can get get the same price they have number six and this is a big one proof over promise so what a lot of beginners do and they read you know $100 million offers and they're like I have a grand slame offer and so because of that I've got this big thing with all these bonuses and the stack and these guarantees and I've got a premium price and yet no one's buying it so

what I want to do is walk you through a hypothetical let's say on one extreme we've got somebody who has an amazing crazy awesome offer for whatever they promise you the world and Beyond on this stream same core product or core Service as the first guy except he has no crazy offer he just has 1,000 testimonials who is going to get the most customers this guy and so your proof is going to do more selling than any promise can possibly do because the promises all function as an approximation of the likelihood that they're going to

get a result and proof is always going to be more compelling and so when you're starting out you want to capture as much proof as humanely possible now I have a huge amount of stuff on proof because I I'm obsessed with it but I'll give you four very good things that you can do to make your proof more compelling number one recent proof is better than delayed proof so if proof was 5 years old proof that's from last week is going to be more compelling second is you want it to be as visual as possible

so just a bunch of words on a screen is less compelling than a screenshot of someone's bank account after they made money or someone saying hey I lost 20 pound is not as compelling as the picture of them losing 20 lbs which is also less compelling than a video of them weighing in and then a video of them weighing out the third component for proof that I'll give you is you want high volume and the nice thing is that most businesses actually have a lot more proof than they know they do they just never capture

it and so one of the things that I did in our brick and mortar chains that we had with all of the the gyms I do across all our brick and mortars is if you look at Yelp you look at Google you look at Facebook all of these have reviews for your business and so for me and if you're digital then you have Facebook reviews on your Facebook page and things like that and so I would go into the Stars you click into it and there's like a hundred of them and then you just screenshot

each one of them so if you have hundred five star reviews on Yelp that's like a mediocre Yelp account right but if I screenshot a hundred of those and then I frame them and I put them on my Lobby wall from floor to ceiling it's overwhelming the amount of proof that is and so most businesses have way more proof than they think they do they just don't leverage it and so one of the easiest things you can do take the screenshots of all all review sites across all platforms show them individually and show them as

your new wallpaper and the fourth element of proof is that you want to capture pain and so let me explain by this so I've been able to look at a zillion ads across all companies where they have testimonial ads from customers or user generated content to be fancy right the thing is is the content that begins with pain converts significantly higher and so this is my theory around this which is that the pain relates to the customer or Prospect where they're currently at if they start with the promise it's too far disconnected but if you

start with pain they relate to the person and then you can take them through the story of them getting the result but if you start with the end result it's too disjoint it's too far away it becomes less believable so if you had to pick between proof or promise double down on proof and that's also the reason that I tell everyone to start with giving stuff away for free because it's the easiest and fastest way to get tons of it best time to ask someone for a testimonial at the moment of greatest satisfaction all right

so that's also by the way different from the best time to sell all right because you want to sell at the moment of greatest pain you want to get a testimoni at the moment of greatest satisfaction so think about this way if I were to say hey uh you have a steak dinner and you have a steak and you're starving you're like oh this is great blah blah blah blah the moment to sell you the steak is right before you've had the steak and then you eat the steak now after you have the steak is

that the moment that I say would you like another steak not really because you're like I'm full I'm good so that's the point of greatest satisfaction not the point of greatest deprivation now after I've had the steak if I say hey would you mind like looking in the camera and saying how great the Stak was people like oh my God it was amazing it was so great you guys should definitely check this place out it's awesome right and so point of greatest deprivation is when you make your sale point of greatest satisfaction is when you

collect your proof number seven raising prices almost always makes you more money but you hear no more often and so let me break this down so I had a a sales guy in one of our portfolio companies and we doubled the price of a product so a lot of people are like really afraid of like 10% or 20% increases like I'll test 4X 5x price differences pricing in many instances is far more inelastic than you think it is all right so elastic versus inelastic pricing I'm not getting into that but basically if you have a

$5 sandwich going to $10 sandwich there's a lot of elasticity with food meaning people are very responsive to small increases in price the classic counter example is if you have life saving medication it's not very elastic at all meaning if you double the price people still going to pay for it because they need to live right and so the thing is is that if you have a very bable thing the price is usually a lot a lot more flexible than you think it is in terms of how much you can move it up all right

and so I like making massive price tests but the thing that you have to have when you do this is the balls or the stomach to deal with more nose and so when I walked that sales team through the price increase I said hey we're going to double the price I said you have to understand that we're for sure going to get less or fewer yeses but the question is will we get half the yeses so we had a 35% reduction in conversion percentage but we doubled the price and so we made more money in

multiple ways so one we made more absolute Revenue we literally just made more Topline but the magic of this is that let's say the cost of our thing was $500 and we sold the thing for $1,000 okay so we have 50% margins well if we double the price we go from making $500 $ in profit to $1,500 in profit so I actually triple the amount of money I make by doubling my price and so even if I have a 35% reduction or a onethird reduction in sales I tripled how much money I made on the

other 2/3 of my sales which means me doubling the price with a one-third reduction in sales still doubled the profit in absolute amounts despite selling onethird fewer customers and one of the nice benefits of having fewer customers is that you have fewer costs associated with delivering on them so not only is the gross margin per customer higher your fixed cost that you have to incur to continue to expand your infrastructure go down and fundamentally a smaller amount of customers that make more money is an easier business to run than more customers that make you less

money and let me tell you how important this is I've seen businesses that have not changed their prices for five six seven years right because they're afraid to do it whatever but I want to give you some real hard truth right now in 2017 if you sold something for $100 that was your only product and you were running 20% margins as a business if you did not change your price from 2017 until 2024 that $100 now means that your costs in that business have gone up by 20% which means that your profit is now zero

and so if you feel like your margins continue to compress year after year after year it's usually because you're not appropriately adjusting your prices so to give you context $79 in 2017 is the equivalent of $100 today and so that would be like you going back in time where you had a 20% margin business and running it at a $79 price point rather than a $100 price point and so you just like that eliminate all the profit in the business and so you have to do the reverse of that because inflation is a compounding threat

to your business that every year stacks on top of itself and so if you're not making three 6% increases in prices at least annually you're not even keeping up with inflation and to give you little story around this Warren Buffett when he bought C candies said that he only wanted to control one thing and so what that one thing was is that every year he would look at all the prices of all the candies and he would ship them the new pricing and he has raised prices 50 years in a row sometimes in a single

year as high as 177% onto their pricing and as a result of that he's cleared himself a billion dollars in profit and so if it was the one thing that he focused so hard on it might be something worth thinking about so if you do make a pricing change there's two components to this one is new customers the other is old customers the easiest thing to do is just change the price and and just apply it to everyone who's new that's simple and if you're in a transactional business then it's fine even because the old

customers come back and buy again right but if someone's on some sort of recurring service is a little bit trickier now I have some tactics around this but I'll just give you the high levels which is you want to have a price increase letter you want to talk about all the things that they're going to get as as a result of the investment that you're now making into the business and that it's the only way that you'll be able to stay in business given inflationary pressures Etc all right and so you just want to say

here's the thing here's the stuff you're going to get I want to keep my promise to you which is to keep our thing as good as possible and only way for me to ethically keep my promise is for us to reflect that in the prices which are now having to be changed effective this date but don't worry I've grandfathered you in to your old price by this time and that's key is that the old customers you say I've Grand everyone wants to be grandfathered you say so I'm grandfathering you in until this and that way

it's not like it's changing tomorrow it's delaying the pain and giving them a gift right now as a way of honoring the fact that they've been loyal customers to you those are the main bullets of what that price letter would go out and say and if you are going to raise your prices you want to be measured about it you should know what your conversion rates are prior to you making the price change and you should be able to give a statistically significant sample size of shots on goal with the new price before you make

a decision if you get on the phone and the first two people say no well we one knew more people were going to say no we already expected that and if you have call it 40% close rates right now well if you make double the price and you go to 30% close rates then that's still a great deal for you you might just be getting the first two NOS out of the seven NOS you already know you're going to get when you talk to 10 people and so talking to two or three people getting NOS

doesn't mean you need to change your price it might have just been the nose you're normally going to get even at your lower price and so you can't be emotional about this you have to be calculated and this in my opinion is the the reason most people don't raise their prices or can't do it successfully number eight talk to customers to solve all your problems so Paul Graham said this and I think it's really good he said you can solve just about every business Problem by talking to your customers so if your advertising isn't converting

talk to your customers if your pages aren't converting talk to your customers if the price seems weird talk to your customers If the product isn't delivering talk to your customers at the end of the day your customers are the people you serve and they have all the information you need to make your product better so especially when you're starting out even if you have very low prices so let's say you charge $10 a month for something all right and it's and you want this thing to have thousands and thousands of customers okay fine but if

you don't talk to customers you're not going to know what's going to drive them to convert buy and stay and so I come from an industry where people meet face tace in person to sell $10 a month memberships and so I don't want to hear it all right I spent the first four or five years of my career selling $30 $50 $100 things all day long I don't know a very successful advertising entrepreneur who's a rain maker meaning they know how to get customers who didn't have four or five years of Hardcore sales under their

belt that no one knew who they were right that's the rocky cut scene is where you take hundreds and thousands of calls with customers where you hear the words they use so that when you you say does this suck but they say it differently and so then you say that in in your advertising and when you take these sales gos for $10 a month you're not doing it for the $10 a month you're doing it so that you can learn more about them and you just so happen to get paid but you find out the

words that get them to move because you might think these are all the selling points to your thing but when you're talking to them nothing really happens then you say one thing and then boom their eyes light up and they're like yeah that and then all of a sudden you reorder your sales scripts you reorder your headlines you re order the the road map on the things that you're going to improve in the product because these are actually the things that are driving purchases for the first purchase and getting them to stay and so most

entrepreneurs are afraid to talk to customers I have no idea why that is they're afraid to talk to random people who are giving them money I don't get it but one of the easiest ways you can learn more about your business to make more money is pick up the phone and call people who've given you money and ask them why they did and just as importantly maybe more importantly talk to all the people who didn't buy and ask them why they did it yeah and if you think you're above this you're right you should just

keep doing that but for everybody who wants to beat that guy just get on the phone with your customers so inside of school.com we run a contest every month where the top 10 people who are new to the platform who generate the most Revenue in their communities get to fly out to Vegas and spend a day with me and Sam who's the other owner of school and part of the reason we do this is that of course it's a great prize for all the winners and they get to meet each other and it's an awesome

event but for us we get such valuable user feedback from Super users these are the highest most invested users users and so we're like hey do you like this thing hey this is the product room hey would you prioritize this over this so recently we used the feedback from this group we said hey we have this thing that could be controversial with the rest of the community because we could see people taking it like this if we made this change in the product what would you guys think and unanimously they're like oh no that would

make us more money we're totally in for it and so we're like wow and so months of deliberation of like oh do you think they'll like it I don't know if they'll like it what if they don't like it all of that got solved by just asking them and then we got our answer and then we did it and everyone was happy and so the beauty of this is that you get certainty around your decisions and so you can make decisions faster and the entrepreneurs who make faster decisions move faster and when you do talk

to customers whether it's in person like this school event that I was talking about or just on the phone what do you think happens to them you can take someone from a neutral customer to a Super Fan in one call you can tell the story of the business you can tell them why they started you show that you care and guess what that person might bring you 10 or 50 more people people when you think two rows down the line of Word of Mouth referrals and of course they're probably going to stay way longer than

they would otherwise because if they do have an issue guess what they're going to do instead of cancelling they're going to call you and let you know a great time to do this that a lot of people don't like is that the moment people ask to cancel so if you have any kind of recurring membership or if they ask for a refund if you have onetime transactions get on the phone with them and it's not necessarily to try and like you know hard sell them back into it which by all means you can but the

more valuable thing is to understand what went wrong and you'd be surprised how many times you just let someone vent and here's the key don't minimize what they said get more angry about the reason they're cancelling than they are because you're like that's ridiculous that should have never happened to you I can't believe that was your experience I completely understand why you'd want a refund I would want to refund 10 times over I'm surprised you're not trying to put me in jail I get it all right is there is there a world that I can

make this right or what would it take for me this is the question what would it take for me to make this right and so now you get into them solving what it would cost or what it would take for them to stay and more times than not it's not as big as you think you want to talk to all sorts of customers so you want to talk to the super users you want to talk to the moderate users and you want to talk to the low users but you're going to get different things out

of it like I don't I'm not going to prioritize a road map or things that I'm going to reinvest in the business based on people who are not that invested in the business I want to I want to talk to the super users who are getting the most out of it because they're going to have more context but in terms of what problem do I want to solve for these people it's like why didn't this work for you so this would be stuff that's like friction so this is going to be way more about getting

new customers like I'm going to solve new customer Problems by finding out why people didn't buy or bought and then left and then I'm going to figure out how to make my customers more valuable and get them to stay longer by talking to Super users uh and your super fans or the best customers you have about what would make this even better number nine what to say to prospects on the phone when you're just starting to get your first sales so I use something called The Closer framework I'll make it very short but the call

should go something like this C so closer is an acronym C clarify why they're there so what made you hop on the call what made you take a step what made you respond to my email what made you comment on my post whatever it is they took an action to become an Engaged lead and that is your advantage because any person that you get on the phone with with the exception of a true true cold call first pickup with the exception of that everyone has responded to an email they've commented on a post they've responded

to an ad they've opted in whatever so you ask them why they did that that clarifies it gives you also big Authority in the frame because they've taken a step towards you and you're just receiving so you say hey why'd you do that and then they'll tell you what it was then you move on to L which is like okay so what I'm hearing is and this is labeling with a problem so it sounds like you want this and this is the problem or you're you want to have this outcome and you haven't gotten it

yet is that sound about right they're going to say yes and you're like okay cool then you go to O and you say you're going to overview their past experiences you're like okay so what have you done so far to try and make this happen why is this so important to you what else has happened in the meantime that has costed you from not having this occur right and we call this the pain cycle the reason you do the pain cycle before you sell something is that you want to temporarily increase their deprivation around that

outcome so we want to temporarily in the state of the conversation increase how important that outcome is for them so you've probably heard in in politics whatever the topic is of the debate it's like it's the economy it's education it's the border right whatever media puts more attention on is what people say is the main reason they vote for candidates they basically make that the topic of the election which is the macroeconomic situation or whatever right when you're in a micro event like a sales call you have sometimes 10 minutes sometimes an hour to basically

in that very small call Elevate the importance of that problem in their life so that you can motivate action they were kind of hungry when they get on the call but as you talk about the food that they could be having and the bad food they've been eating every single day and how crappy it is and how it's not good for them and how tasty and delicious this food is what are we doing we're increasing their deprivation we're making them hungrier so that when we make our offer they're more likely to take it which then

goes to S which is you sell the vacation and the reason I say sell the vacation not the plane flight is most salespeople most new entrepreneurs want to focus on their features they want to talk about the flight they want to talk about TSA they want to talk about check-in they want to talk about their bags they want to talk about their seat all of these things that are on the way to Maui their destination you want to just talk about Maui you want to talk about the lick your fingers good what it's going to

be like when they have a full stomach and they're feeling great with their family at the restaurant that's what we want to talk about we don't want to talk about how they're going to order it we don't want to talk about the the selection we don't to talk about how many times they're going to get their drinks refilled we don't talk about any of that we want to talk about Maui we want to talk about being on the beach with the wind in their hair with a my tie in hand that's what we want to

talk about sell the vacation typically is a three-point pitch which is by the way you can separate anything into three points right now you just Chunk Up or chunk down based on hey what does it take to be successful it's like you need Fitness Nutrition accountability you need the leads to be timely personalized and qualified right whatever it is so it doesn't matter what you're selling you can come up with three points and the people have to say yeah if I had all three of those things I would succeed now at that point someone doesn't

say yes you move on to E which is explain away their concerns which are what are the specifics they have that are the reasons that they're not buying which is usually going to be some sort of specifics about the program something time related something money related something decision maker related meaning they have to give the decision-making authority to somebody else or finally them just simply avoiding the decision for fear of making a mistake and so you need to account for all five of those and know how to overcome each of them which I cover in

a 4H hour plus video that you can watch on my channel somewhere else R is reinforce the decision so once they have made a decision to buy you're not done yet now the work begins which is the next 24 hours is crucial to making sure that they feel really wowed and impressed with your business most customers will judge a business based on the first 24 hours post purchase and so if you say hey I'm going to get you three things the next 24 hours you're going to get introduced to this person she's going to do

this and this is what's going to happen next then you make those promises and you keep those promises within that time frame and ideally you do it even faster than you promised you want their impression to be like man these guys are dial The Closer framework is simple that simple enough that you can teach it to somebody else and when I was starting in my gym journey I had sold every single membership for a year plus and until I had somebody else come in who had never sold weight loss and have them follow the c

l s r framework in the sales pitch and then saw them close their first sale without me I like I actually cried I was like so I was like oh my God I someone else can sell this like I this may actually be a business and so learning to sell in this framework also make makes it duplicatable so that you can give it to somebody else over time number 10 and this is big before you even think about doing something new do 10 times more of what's already working and so this is like one of

the things as soon as I buy a portfolio company what I'll do is I go to the head of marketing I go to the founder and I say hey why can't we 10x what we're currently doing tell me why we can't honestly two times out of three they're like I mean we could and I'm like then why aren't we doing that and what happens is they have all these other priorities that are not going to 10x the business and they have this one thing that we already know works that that we have nothing that's stopping

us from 10 Xing the business and I say great let's do that call me in 6 months now the thing is is in one out of three times to say well we can't 10x this because of this thing then I say guess what the constraint of this business is solving that and if you're doing anything but solving that then you're not growing the business right as a Founder rather you're not growing it as fast as you could be growing it you doing outbound it's like great why can't we do 10 times the outbound well I

don't have enough leads from from lists okay great so our constraint of 10x in this business is that we need to find more sources for list so we need to either scrape more lists we need to buy more lists or make more lists ourselves eles okay that's solvable let's do that if it's hey uh if we 10x are advertising dollars like we just need to add more to the budget oh we can't do that because our ads aren't good enough okay great so we need to have more creative that's the constraint of the business if

it's content which is why can't we make 10x content or make our content 10 times better or maybe realistically a combination of the two which is we're going to put out two times the content and we're also going try to make it two to three times better great then guess what now we have a Sixx can we triple the content and make it three times better sure well what did we do in the best content that we had that we're not doing in all the other pieces great can we tempti that and make that the

Playbook that we use with every piece of content great we're not doing that cool let's do that before we do any of these other ideas that you had and so a lot of entrepreneurs because it's boring to them they figured out how to do this one thing and they think oh I should figure out how to do something else when once you get something to work the whole goal is to beat the living hell out of it is to squeeze every last drop from that thing that works and you do as much as you possibly

can as well as you possibly can before even thinking about doing something new so let me walk you through the five stages of the traditional entrepreneur for advertising or even for business they have something that they hear about that they think is cool so they go into uninformed optimism they're really optimistic but they have no idea then they jump into this new thing and they become an inform form Med pessimist and so they find out way more about this thing and then they're like wow this is actually kind of hard and then they go to

stage three which is the value of Despair where they're like wow this isn't working this isn't what I thought it was going to be and then what they do is dot dot dot they start over at uninformed optimism because they hear something else is easier but they miss out on step four and five which is they become an informed optimist so they say okay I understand how outbound works I understand how PID ads work I understand how organic works and what are the things that it takes to scale and how much work it really is

and then finally get to level five which is achievement which is they actually achieve the goal but most people just repeat 1 2 3 one 2 3 uninformed optimism informed pessimism value of Despair start back over and they just hit all three of those over and over and over again whether that's new marketing channels new products new businesses and this is a version of the woman in the red dress is that it's always deceptive to think that the new thing is going to be easier and the only reason you think it's easier is cuz you

don't know enough I wish I could just give you the scar issue of having done that three-part triangle over and over again but all I can tell you is that like when I get that little tickle in the back of my neck where I'm like ooh this looks exciting it's now become a warning flag to me because I've been burned so many times doing it to say oh I must not know enough about this because everything is hard I'll give you an an analogy that a mentor gave me that I really liked and I think

it applies to a lot of things but when he was talking to me about departments in my business he said you have to know where the bodies are buried and I was like what do you mean by that he said if have you ever talked to like a head of a department like I or HR legal or whatever and they say yep everything's good if you don't know what problems are actually going on in the department you're too far away and so that's in a way uninformed optimism they're just telling you it's great and you

don't know any better so you're uninformed but you should know enough about the business to know where all the bodies are buried you should know where all the skeletons in the closet are and so if you're getting into a new thing you have to know all of the ways or as many ways as you possibly can about what's going wrong and once you do a little bit more research you often find out that there's a lot of things you don't know about and guess what the thing you do know is working right now and the

likelihood that you doing 10 times more of that has far fewer unknowns than you doing brand new on something net new entrepreneurship already has so many risks and so much unknown basos talks about this he says we want to manage as many of the risks as we can so of course we're going to incur some risks that are going to happen that are unforeseen to us but the risks that we know about we want to limit to the greatest degree possible because there's enough risk of our business going out of business by being a business

why take on more risk for no need it's risking what you have and need to survive for what you don't have and don't need which brings me number 11 which is growth is stressful stagnation is stressful decline is stressful that means that business is stressful and so the only stressfree people are people people who are dead and if you're in business you need to accept stress as a fact of life and not something wrong with you or wrong with your particular business it's just that things are stressful in general welcome to life and so I

see a lot of entrepreneurs try and change their businesses because they feel stressed but every scenario of business has stress there are different kinds of stress but they're all stressful and so the idea that there's something wrong with you or wrong with your business because it is stressful misses the point of how business works and I'll tell you an analogy to make this make sense so if you've been in business for any period of time think about your first business or think about your problems that you had two years ago or three years ago in

business you're probably like oh my God those weren't even real problems those were like nothing problems well future you three years from now thinks that about your problems right now and so I think about this a lot because when I think about my problems of like when I was worried about how to get trainer show up on time and like you know some somebody's membership wasn't wasn't recurring I had churn issues or whatever it was within the within the gym that I had those problems I could solve those in my sleep now right because the

problems that I have are bigger and so the thing is is that you just become more enduring you become tougher and your tolerance level for stress or what you deem to be stressful goes up and so what's really interesting about this is that I still have the same problems I had when I had a much much much smaller business I just don't think they're problems anymore and so then that means that my choice to categorize the issue as a problem is actually the greater source of stress than the problem itself and if you can adopt

that perspective you can be less stressed as you grow and make better decisions and so I just I wanted to to hit this point because I I almost stopped and killed so many businesses early on because I thought there was something wrong with me or something wrong with the business because I was stressed rather than accepting that stress is a fact of life and that I'm going to continue to be stressed as long as I'm alive so fundamentally stress comes from an aversive stimulus a stimulus that's not that's not enjoyable right but if you grow

there's tons of things that are not enjoyable about growth if you're stagnating there's tons of things that are not enjoyable about stagnating and if you're declining there's tons of things that are not enjoyable about declining so there's just always going to be things that you don't like get used to it number 12 this is a really tactical one I've come to adopt this theory of something called the look back window which is that customers determine whether a purchase was good based on the last purchase they made and so if you've heard the phrase what have

you done for me lately it basically it's phrasing for the look back window so let me give you an example if you're an agency owner right and you start running ads for a customer now let's say the first month you charge $55,000 and they make $40,000 with your ads they're happy you're happy the next month you charge the same $5,000 and let's say they make $5,000 well they're less happy you still made $5,000 but they're not thrilled but in your mind you're like well I covered myself last month for eight plus months because of how

much money I made them and on the third month they cancel and you're like WTF on the first month I made you eight months worth of paying me but the thing is is that the way the customer perceives that is the first month I paid five and got 40 that was a good deal the second month I paid five and got five third month you know what I don't want to risk it anymore I'm out and so they will make a judgment on the purchasing decision based on the last purchase and so we can leverage

that as business owners by extending the look back window which means that the less frequently we Bill the longer people stay think about this for a second if I build every single day there would likely be a day that I had not provided that customer value and maybe there's two or three days in a row and so likely they would cancel two or three days into not getting value being buil daily is pretty high if I build annually they would only have an opportunity to churn once a year and the thing is is at that

point of turn what would they do now in the agency example I gave let's say they made the 40 and the five and then they made five and five let's say throughout the year we had two more good months and all in all we made them 100 Grand and they paid US 60 right or whatever now when they look back they're going to see 100 versus 60 but if we bill monthly there's going to be multiple months where they were negative or break even and so the longer the window of time you do between Billings

the longer the time you have to provide value and excess of your price so it allows for Less vola fa ility in their business and yours and so this is something that took me way too long to learn but as much as possible try and build for longer durations and I'm not saying get people to commit to contracts that's not what I'm saying I'm saying try and Bill Upfront for longer periods of time I'm willing to take a hit on some pricing which may seem counter to what I'm saying so that I can get higher

LTV meaning if I know that I can cut churn by 3x by reducing my price by 30% so that they can pay three months up front or six months up front then I'm more than happy to do that and so there's two ways you can use a strategy strategy one is you just say this is how we do business and we need people who are committed because there's going to be volatility and we don't want the short-term volatility to affect our relationship and that's a legitimate reason to do it the other way you can do

it is just have it as one of two options one that has some sort of prepayment discount that's associated with it or prepayment bonus which is one of the things I like um some level of service or some guarantee that comes with prepayment that doesn't come with month-to-month all right and by the way you can add a guarantee to people who prepay and not to people who don't so if people want to decrease their risk so think about they're they're taking on more Risk by prepaying but you attenuate or you offset that risk by adding

a guarantee so they pay the same price but they get a reduction in risk for taking on an increased amount of risk so if you offer an annual pricing we know across our portfolio because we do this in a lot of businesses if you if you don't make it the default payment method and you just offer it you'll get about 10 to 15% of people who take the the prepaid annual option now here's what's cool about that is that if call it 10% of people take that option you double your cash flow in the business

because you get a 12x Price Right on one out of 10 or one out of seven people who decide to buy well if you do that then you double the amount of cash you get up front and so for many people and many businesses that little change alone can allow marketing and advertising to be profitable and the reason having more cash up front is helpful for a business owner is that you can offset the cost of advertising and the cost of sales commissions and so you can have the these costs you have to incur to

get the person in the door and so if you can frontload the cash from the customer then it means that you can do more of that faster because something called a cash conversion cycle which basically just means how fast do I get the cash back that I put out to get somebody new in and if I can break even on that or even be profitable on that in the first seven days then guess what I can do with the money go back and get another customer or two or five throughout my history as a business

owner I've had four periods where I had tremendous growth and in each of those periods it's where I was making more more than two to three times what it cost me to both acquire and deliver for two customers in the first 30 days and so what that means is if I pay to get a customer and then that customer comes pre-loaded with the cash to deliver for him and get another customer and deliver to that customer then cash no longer is a constraint in the business which means that I can pretty much just crank the

advertising until something else breaks in my business I mean this is how I had $1,000 in my bank account in December of 2016 and then in 20 months was doing 4.4 million a month like the only way you could do that is getting it is basically have an infinite money glitch that happens because the thing is is that the money that you want is out there there's money everywhere if you look out the window if you look in the room you have there's somebody who paints your walls there's somebody who buy who manufactures those camera

there's an electric company that funds this whole thing there's internet there's money in everything that you see with your eyes and you're afraid that there's not enough money out there there is you just have to access it and you can access it with skill by making sure that the pricing that you have and the terms that go with the purchases that you have allow you to advertise profitably so that you can get as many customers as you darn well please without entering your pockets but by entering theirs number 13 try and sell sawdust so I

was talking a really good friend of mine who does 100 plus million a year and I was talking about this concept of sawdust which is in the businesses that we have I try and look at what are all of the assets that we already have at our disposal right and so with acquisition. for example I was talking to him about this I was like well I already have a building I already have the team that runs my portfolio and I already have all this lead flow from companies that are not big enough to be portfolio

companies but they're still big enough that we could help and then someday later become portfolio companies and I was like is there a way that without adding more infrastructure to my existing business I could use the sawdust the stuff we already have to create a product or service that would meet the needs of those customers and so the sawdust analogy just comes from Saw Lumber Mills so they take these trees they put them in through the the lumber Mills they cut them up and they put them in the planks but at the bottom what they

figured out is there's all the sawdust and then some very intelligent engineer was like huh we're just taking all the sawdust and we're throwing it out the back is there something we could do with this well it turns out one sawdust is great for plants and growing and putting it in a mulch and things like that but also if we mix this with glue we have more wood planks that we can create afterwards just using the sawdust and the chips and so they created a whole another Revenue line from stuff they already had and so

right now in your business you have sawdust and it just takes a little bit of creativity to think how can I recombine some of these things that I'm already doing to then create another product line that doesn't take operational infrastructure for me to add to sell and then those added product lines often are huge margin increases because it's all profit because it's something that you already are incurring the cost for your main business so you can have this and the key to making this work is that it can not increase operational drag if you have

to do a whole another thing in order to make this work that's not what you want the idea is the sawdust is already there and then all you have to do is gather it put the glue on it and then you have another product that's the concept I didn't buy another building I didn't hire another portfolio team it's just I use the team that I already have and they come down and they explain what they do within our portfolio companies to these businesses so they can become portfolio ready so they understand oh this is how

they Market at a higher level oh this is how they hire at a higher level oh this is how they price oh this is how they uh sell and how they scale sales teams all of those Concepts I already have the information and expertise within my existing portfolio because I do it every day but by just having another way for people to have access obviously less than a portfolio company would to that team then I have another way to generate Revenue without having to occur the cost associated with building out a whole another business so

the process that I go through is I think about all of the resources and assets that I have currently available so you have to be as detailed as you can because it's usually like a tiny piece from here it's the glue that we use for this part of the the log process but then we have the sawdust from over here if we put those together boom we have these new logs and we have the plank making machine Let's combine them and then we can do it ourselves right and so you have to think okay what

are the what are the talents and the people that I have available what are the digital assets or physical assets that I have uh available to me and is there a new way that I can combine these things and so a simple one with was like in in the gym space right I had brick and mortar but we were only using the space from 5:00 a.m. to 9:00 a.m. and then from 5 uh then from 400 p.m. to 700 or 8:00 p.m. right so that means the rest of the day if I wanted to be

a more clever business owner I could say what businesses use a gym and turf in the middle of the day that I can rent that space to that's sawdust that's additional Revenue that basically cost me nothing and so all I would have to do is say hey I'm available so if you have a team training thing or you you have some sort of sports thing with kids that goes in the middle of the day or Ends by 4 then you can use my whole facility and now my facility is generating Revenue because I'm paying the

cost of owning that facility 247 and so I might as well make money from that so a different way of using that is called excess capacity so if you have excess capacity like uber is based on excess capacity people have cars they're not using them Airbnb you have an extra room it's excess capacity these are businesses built on other people's sawdust and you have sawdust in your business so you might as well use it yourself this is really the concept of double and triple and quadruple dipping is how can I get more leverage from the

same thing and so I tell stories about our about our portfolio companies which like that gives me I have to do an intervention with the portfolio company either way but if I tell the story about it I get to double dip and use that as content and so there are many opportunities where you can get leverage you get more for what you put in by reusing the same thing in multiple different scenarios and so most businesses have tons of these excess capacity or double and triple dip potential poal sitting inside their business and they're not

using them the workshops that I talked about I get to make content from those workshops I get deal flow from those workshops we get cash flow from those workshops my team gets more exposure to different types of businesses Industries so they also get better and so there's many value additive uh things that stack on top of each other from one decision by the way if you want to check out one of our workshops you can go to acquisition. comom we'd love to talk to you it's for business owners only so if you don't have a

business go to school.com and we can help you start one number 14 arm your salespeople so I see too often a lot of Founders and entrepreneurs have this kind of like animosity between their sales team they feel like they shouldn't pay their sales team that much my Sal team so needy they only want lay down customers they're always complaining about the leads whatever no like you should be the tightest with your sales team because your sales team is the life is the cash flow is the life flow of your business if you don't have sales

you don't have a business so they should get that level of esteem and honestly a huge portion of the business should be pretty much allocated to supporting them anding their core activities and so one of the main things that I like to do is two things one I arm my salespeople with an Excel sheet that has all the pieces of content that I have that can help overcome specific concerns from customers and so right now if you don't have a piece of content that overcomes every main concern a customer has about your services or your

products do it and then as soon as you do it the best converting of those things one you'll know because you'll get sales from them because people will DM you about it like oh I didn't know that now I'm interested take those put them into a list so that your sales guys have them and they can send them to customers either before they talk to them or after they talk to them so that they can schedule a follow-up call and say hey let me send you this video it might explain your concerns let's let's touch

base tomorrow after you watch it and then you can allow that content to do some of that selling for you and as soon as I did this with my sales team in Fitness when I had weight loss customers and then in gym launch when I had gym owner customers our sales went up and and the thing is is this is nice cuz I didn't have to train any of them anymore they just now had assets and resources they could deploy to leads who were a little bit colder who need a little bit more selling and

they wouldn't have to spend time on the phone they just let me do the selling for them via the content that overcome that specific concern now that leads me to the second one which I'll just make as number 15 which is really big a lot of businesses don't do this but you should unify sales and advertising so those should roll into the same person and so I saw this really early on in gym launch we had two departments we had a sales department and we had a marketing department and marketing always said the sales guys

weren't closing as many leads as they should and the sales guys always said that the leads weren't good enough or they didn't have enough leads right but when we unified that under a cro Chief Revenue officer which if you're the founder that's you you then say there's really just an acquisition department and fundamentally as I see it advertising and sales sit on the exact same Continuum you have low information buyers and you have high information buyers and so fundamentally a low information buyer needs not a lot of information or already has a certain amount of

information to make a purchasing decision a high information buyer requires more information or doesn't have as much information when they start talking to you and so you have to fill in more holes fundamentally sales just fills in the holes that advertising failed to answer and so if you have exceptional best-in-class advertising you don't need sales it's not that they're separate departments they solve the same problem one just communicates one to many the other communicates one-onone people buy real estate on the internet via auction you don't necessarily need to have salese if you give a customer

enough information they can make a purchasing decision that being said you're like wait Alex you have salespeople of course I do because there's always going to be a certain number of customers that I can get people to buy automatically and then there's people who still want more information that most likely they didn't see the advertising that answered that question and so then the salesperson can just say oh these are the three piano keys I need to play in order to get you to buy great and they fill that specific information need to turn the customer

from a maybe to a yes and so unifying the two departments is one of the highest leverage moves that you can make as a Founder because it eliminates the cross- departmental BS it's we're all here to sell customers and so advertising Works hand inand with sales not in competition with them so that they can get a pat on the head from you or whatever director is running that department so often times you are the chief Revenue officer who's uniting both of those fronts but over time if you can find someone who does that that usually

is the FastTrack to being C so kale for example at gym launch became Chief Revenue officer right he basically stood on top of sales and marketing so that he could control the customers coming in the door and then once he knew how to make it rain he could run the business number 16 there are three legs to the stool and so every business needs three big functional leaders you need one person who's in charge of getting customers acquisition you need a second person who's in charge of delivery and getting those customers exactly what was promised

and then third you need someone to run the internal operations of the business this is the day-to-day this is everything we do to support the other two functions so this is it legal HR these are the things that are required to keep you out of prison and so you have to have contracts you have to pay people on time you have to have a CRM that that collects all this information and this one functions as a vendor to the other two heads so think about this that person should never be making the big decisions in

the business they should be supporting the decisions that enh allow us to get more customers or deliver on those customers better which if you think about it those three legs of the stool roll up to the only three things that you can do to increase Enterprise Value in business you can get more customers you can make them worth more get more customers acquisition make them worth more delivery and you can decrease risk in the business and so that is where the operations comes in if I know that everything's completely dialed we have no massive risk

that we're supposed to and we can get as many customers as we don't or please and our LTV can continue to scale that is a valuable business and so it makes sense to have people who are in charge one throat to choke one chest to poke who's in charge of that function and in the beginning you may be all three but as you develop as the entrepreneur you have to think which of these three hats is more Central to my best skill set and then you can start finding the people who will compliment you and

so I'll give you my rule of thumb here is that if you're not learning from these people in the interview process about what they can do better than what you're doing you need to hire better now if you're early days and you don't have the cash to bring something like that in then you got to learn a lot and that's part of Entrepreneurship but at some point you want the people that you bring in to be better at the thing than you which if you really think about it means that every business pretty much trickles

up to the same thing when taken to its natural extreme which means you're going to have a head of acquisition who might have a sales director a marketing director you're going to have some sort of head of Ops who's going to have it legal HR recruiting all rolling up to them and you're going to have some sort of customer delivery or product person who is going to have fulfillment product experience ux engineering if you have software that are rolling into them if that is what the ultimate end of every business is then guess what your

day-to-day looks like in a really big business the same in just about every business and so the idea that you need to keep jumping from thing to thing to thing when the ultimate expression of that business is going to be the same for you at the end kind of seems stupid if I don't like something about the business it's like I just need to get out of it I just need to get above it and so you can just develop the business bring someone else in who does like that thing and then you can have

that person reporting to you and then at that point you're doing what every entrepreneur does which is they have a team of people who report to them about the things that they're doing on a daily basis and so don't get too bent out of shape about this is my opinion here this is Al this is advice from me don't get too bound out of shape About the Passion thing like love the game and whether that's selling dry cleaning or selling software or selling books or running a portfolio at the end of the day day it's

more or less the same you're going to have a team of people that you like that share your values that share your mission and that you're walking alongside together with and so if you can if you can maintain that frame it will decrease the relative excitement for the woman in the red dress because you know that when it's taken to its natural end it'll be the same as The Natural end of the current business you're in number 17 the person with the highest standard should be in charge so you can think about this at every

level of the business and so let's say you have a department for media buyers or you have a department for Content creators or you have a a department for salespeople or you have recruiting at every level in the company the person who has the highest standard the lowest tolerance should be the person who's in charge and that goes all the way up to the top of the business if there's ever someone in your business who is a lower tolerance or has a higher standard for excellence than you that person should be in charge and not

you and so I use this as a wonderful litmus test to figure out who do I think should be promoted within a company or a division or a department or even on a tiny team who should be the lead of that team the person who has the highest standards and so when I think okay I've got all these customer support support reps who here has the highest standard for what they believe a customer service experience should look like that's the person you want in charge and so it's not tenure it's not it's not suaveness it's

not how much you like them it's not what they look like it's who has the highest standard and so when I was starting up I made a lot of these mistakes I would promote people that I liked a lot I promote people who'd been there longer CU I felt it felt bad bad that this guy had been here for 18 months and this person had only been there for 2 months and I'm going to promote that person over the 18-month person but guess what when you have one of those hard situations guess what you get

to do you get to talk to the 18-month person and you get to explain exactly why the other person got the promotion and what they need to do so that they can get promoted in the future and if you have a winner that person will step up and if you have a loser that person will step out and that's okay number 18 whenever you're hiring make sure that the person raises the average bar and so this is this is one I stole from B this is not mine but it's such a I love decision-making Frameworks

because one of the hardest questions I could asked it's on a repeated basis is I don't know who to hire right or I don't know what good for this role looks like and so I'll give you two filters for that hiring process number one is during the hiring process am I learning more from them than they're learning from me now if you take three interviews guess what you might have just three bad candidates just like if you take three sales calls and you might not close any of the three it doesn't mean that you should

change anything it might just mean that you got in the phone with three bad customers and just as likely three bad candidates so you want to talk to 10 or 20 candidates and then what happens is if you talk to 20 candidates you'll very quickly see who are the people who really know their stuff and who doesn't and so I look for the quantity and quality of metrics that they discuss about their position in terms of how they influence success and so it's how do you define success and then what are the things that you

will do what are the actions you take that will influence or increase the life that this successful event occurs and so if someone can't describe to me this sounds very basic in what ways do your actions contribute to this outcome now if you want to the 2011 version this is for leadership and up you say how does that outcome Drive outcomes in the larger business if they can't connect those dots guess what they probably won't connect them in your business either now once you have an idea of okay I've talked to 20 people I there's

you know three of them actually seem like they knew their stuff they gave me good quantitative quality me they could tie their behaviors to the outcomes they want and they could track that outcome to the overall business okay now I just asked the question of the people that I'm considering which of them raises the bar of the team and it's the team that they're joining so I'm not expecting a Frontline customer service rep to raise the bar of the executive team it's a different skill set different level of employee but if that Frontline customer service

rep is going on a team of 10 reps then that person needs to raise the bar we were interviewing for one of our portfolio companies and so we we uh we recruit for our portfolio companies because we have a bigger brand than they do and so we can put really high Lev talent in using my brand to grow their their business faster so it's a way of me growing the Enterprise value of Business Without purposely using my face to grow it so I don't become keyman risk I just leverage my face to get the best

talent into those companies and that's why they grow so fast Pro tip but so we were looking at um a media buyer for one of our portfolio companies and I and I think the you know they they passed a number of candidates and they were like this is is the final guy we want you to talk to him so I said fine so I talked to the candidate and the guy was great nothing wrong with him seemed you know had had decent experience and when I got off the call I I got the recruiter from

my team was like hey so what you what you think should I should I pass him along or should we hire him and I was like I don't think so he's like why he's like he met all the all the requirements he had the experience he seemed like a nice guy and I thought about it more and I was like name the other people on that team so he named all the other people and I said is that guy better than any of them and he was like No And I was like then we're making

the company worse and so that person has to raise the bar of that team because think about the equal opposite if every person that comes in lowers the bar of the team you eventually dilute the company to a bunch of people who suck but if you maintain that bar which is that this person has to increase the average of the team then over time a company only improves and gets better and as that person now is in the team the whole the whole team's bar now raised a little bit and so when we bring someone

else in the bar goes up and if you're like wait that means that I have to keep hiring better and better people you damn stra you do that's the whole point and a mentor of mine said this and I just loved this quote he said your best talent has yet to come your best talent is in the future you haven't met them yet and so in me thinking about this and I can pass that same advice along to you is that the best employees the best teammates the best partners are in your future not your

past number 19 when you're dealing with that team there's five reasons that someone is not doing what you want them to do and this is super helpful for these hard conversations and I usually draw a diamond here but I'll just do it visually here's the condition someone hasn't done what you want them to do reason number one they didn't know that you wanted them to do it so you didn't communicate it clearly or you didn't do it in a written fashion whatever it was there was a miscommunication they didn't know that you wanted them to

do it okay now let's say they knew that you wanted them to do it the second reason is they didn't know how to do it if they didn't know how to do it then it means that they need to be trained on the steps in order to recreate that thing now once you train them if they know that you want to do it and they know how to do it then they might not have know when you wanted to do it which means you needed to add a deadline or a timeline with the thing that

you asked them to do so it's like oh I knew that I just know you needed buy Tuesday okay great so we're working our way around the fourth reason that someone won't do it is because they know that you wanted them to do it they knew how to do it and they knew when you wanted them to do it but they just didn't want to do it so they weren't motivated and with motivation obviously a massive topic a lot of it comes down to the reward cycles and Punishment Cycles associated with the work that they

do and so it's how can I incentive them incentivize them properly and not necessarily monetarily you can incentivize someone by Praise and by giving them Kudos you want to know something that really incentivizes people freedom and reinvesting in them if you want your team to love you give them autonomy and invest in them if you do that they're like holy cow I get so much investment from these people basically what you want is you want reciprocity to still be like if the only reason someone does something is for the paycheck you're going to miss out

on the vast majority of human effort which is discretionary effort so let's say it takes this much effort to not get fired someone usually has 10 times that amount of effort available to them that they put to their Hobbies they put to their other things they put to their shower time they put to music or whatever else but they're not putting it to their role and reinvesting in it but if you invest in them and you try and uplevel their skill set either as a human being or as a professional or both then they become

more valuable in your business and I think about it this way it's like well what if I invest in them and they leave well it's what if you don't and they stay so that's the fourth reason so they know that you want to do it they know how to do it they know when they want it done by and they're motivated to do it well why why still or they haven't done it they have something blocking them and so an easy analogy here is I could have the best chef in the world in the most

amazing kitchen and I would say hey make me an omelet and if he knows how to make an omelette and he knows and he knows I want it right now in front of me and he's motivated to do it because he's on television but he's like I don't have eggs there's nothing he's not going to an egg out right there's nothing he's going to do and I'll tell you a real world example of this so my imunity team uh we spending a lot of so we have a big office and we built a Hu a

bunch of Studio stuff invested almost a million dollars into this building just on the media side to make it awesome for them but a lot of the guys were spending their time at home editing stuff and I was like dude what the hell I was like I think we've made this a pretty sweet place like why not you know what it was the bandwidth on upload speed was low at the office and so their houses were higher or faster upload speeds and so it was it was making them way less efficient which kudos to them

for being more efficient by being at home but then I was like okay well this is obviously constraint and so then we spent 120 Grand to get Google Fiber drilled through the floor not through the floor like from the road to get brought into the building and now we've upload speeds of 1.2 gigs a second and so now we're way faster than they were at home and guess what the media team's here and so that was the thing that was blocking them and so here's the cool thing about this framework is that if you have

a hard conversation with somebody or you perceive it to be a hard conversation because they're not doing something that you want them to do you can say I think there's five reasons that someone doesn't do it let's walk through them together and that way you can attack the reason rather than the person number 20 the hardest work work is the work that you don't know how to do and the reason this is so tough is that the vast majority of the time if I said what would it take to grow your business if you only

had one thing you could do by the end of the year and make sure that it was accomplished that if you just did that one thing all of your other goals would get accomplished what would that one thing be by the way that one thing is what we call a priority now the thing is is that you might not know how to make that one thing happen so it could be if I had a mega brand by the end of the year all of my other issues would go away it could be if I didn't

have the turn issue that I have by the end of the year all my other issues would go away if I had a good sales director that could scale of sales team all of my issues would go away many businesses have one thing that if you think about it long enough have enough Downstream effects that it would accomplish many of these other goals that you have or more likely make them irrelevant and so what we do often times as entrepreneur is we solve the problems we already know how to solve and so we like doing

those because we have fast feedback loops because it's rewarding because we you know how to solve it and so it's basically like going back to level two when you're at level three and you don't know how to beat that boss you just keep beating level two again because it feels good but the thing is is that the level three boss hasn't changed and he's still sitting there Bowser you know with his fist and his spikes sitting there ready to wreck you and so the thing is is that the hard work of Entrepreneurship is the failure

that you're inevitably going to encounter by not knowing what you're doing and then taking action steps despite that with the idea that you will eventually succeed if you don't stop and so we as entrepreneurs have to accept that that is what hard feels like it is confronting the unknown that we don't know how to do and realizing that we're going to take our best shot and probably be wrong four five six times in a row and yet that single priority has not changed if we still built the Big Brand if we still hired that really

good sales director if we still fixed churn in our business if that thing were solved it still doesn't become less of a priority but what happens is the entrepreneur fails once fails twice and then decides you know what I'm going to go back to level two and beat that to feed my ego to feel good about myself but most of Entrepreneurship is eating glass and that's why I said earlier growth is stressful stagnation is stressful decline is stressful because in each of those scenarios you're still doing the same thing which is that you're solving a

problem you don't know how to solve yet and so the actual doing this in all three of those scenarios is the same and so that's why when you want to when you want to say stress is the problem it's not the problem stress is a fact that occurs when you solve problems and if you're solving problems you don't know how to solve welcome to the game if you knew how to do everything you'd already be Elon Musk and so the whole journey of Entrepreneurship is turning the unknown into the known through trial and error there's

a company that was thinking about investing in that has a consumer package good cpg product that I asked the founder I said how hard is this to manufacture and he said it's actually a lot more complicated than I thought it would be and I was like that's amazing and he just looked at me cross-eyed and he was like why is that amazing I was like because that's more things that anyone who's going to try and copy us is going to have to overcome and if we can bet on the fact that we're more perspicacious that

we're more Relentless that we're more unyielding in our desire to keep solving the problem and keep bashing our heads against The Rock until the rock gives way then we will be able to be the winners and any single thing that you have to overcome to be successful is what anybody who behind you wants to compete with you will also have to solve and so I like to think about it like there's this big rock that I have to figure out how to move with rope and some duct tape and a lot of sweat and a

few guys with me and on the other side of that rock is a big bag of money and the bigger the Rock in general the bigger the bag of money I mean I use this Frame all the time at one of our other portfolio companies we have a software uh that we've developed and has now gotten really really good and is generating a lot of Revenue and there's this next big feature that we have to build out and he's like this is going to be really complicated I said well the good news is we're going

to get paid $150 million when we solve it and he was was like well when you say it like that and I was like well it is like that and so when you think about these things whether it's I need to add a second uh acquisition Channel or I need to learn how to hire manage and train a sales director each of these are hard things that you have to figure out how to do but if you can quantify how much more valuable your Enterprise or your business will be as a result of this change

then you can ascribe a value to it and if I said hey man if you hire that sales director I'll pay you $5 million guess how motivated You' probably be more motivated but the thing is is that your business business will pay you $5 million when you solve the problem and so if you frame it that way it stops being this wo as me people are hard uh man life is stressful it's we get compensated for our ability to deal with that stress and take action despite it one of the biggest unknowns that I had

when I started a few years ago is how do you run a family office so I went from an entrepreneur building businesses to I have to manage cash at a portfolio and allocations of resources in capital across multiple businesses and different Industries how many resources do I allocate in terms of man- hours to each of these companies is it proportional to the capital what kind of deal structures are going to be the things that are going to mitigate risk but also give us the most upside these are all these things that I had no experience

with and so I just got on the phone with anybody who would give me time and asked them as many questions I possibly could and then guess what happened once I started doing it I learned way more than I did from all of those conversations and I developed my own thesis of how this works and so the thing is is that every time you start on something new whether it's starting a business to begin with OR learning how to run unpaid ads or learning how to sell it always feels like this big amorphous thing but

once you take your first phone sale once you run your first ad once you hire your first person all of a sudden you're like oh okay I kind of wrapped my arms around it and now I can see all the holes that are there and so in my experience the faster I can get to me just wrapping my arms around me actually taking the first action you'll learn a hundred times more from your first hundred phone sales than you will from 10,000 hours of reading books about it and so my goal with a lot of

the content that I have here is if I can just shrink the time between you thinking about doing it and doing it the faster you're going to get to your goal because learning is same condition new Behavior if you have not changed your conditions and your behavior Remains the Same after this video you have learned nothing and you can measure how intelligent someone is by their rate of learning which means by the rate at which they change their behavior with given a the same stimulus so if I say hey pick up the phone and answer

it someone picks up the phone they say blah blah blah I say great I want you to read the script now pick up the phone now they pick up the phone they read the script same condition new Behavior they've learned and so right now in your life there are conditions that probably remain unchanged and so if your behavior does not change you learned nothing and you can measure every video every piece of content every book that you or every sales exchange every meeting you have as to will this change my behavior if it didn't it

was a waste of time and if you're a younger guy and you're just getting started like you don't have a business I don't make as much content anymore for people who are getting started but if that is you I just made a video called uh brutally honest advice to my younger self uh check it out I think you'll enjoy it and it might help you get started and change your behavior