The Game with Alex Hormozi - 13 Years of Marketing Advice in 85 Mins | Ep 713

Episode Date: July 4, 2024

"In the beginning, you just want to get flow through the system." In this episode, Alex (@AlexHormozi) shares marketing lessons learned from 13 years scaling and selling businesses. Tactics are relevant for everyone from those just getting started to seasoned marketers looking to optimize their funnel just a little more.Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned on his path from $100M to $1B in net worth.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

I've been marketing for 13 years. I built and sold nine companies. I sold my last company for $46.2 million to American Pacific Group. I've also written two books on marketing that have sold over a million copies. Here's 13 years of marketing advice that will make you more money. Piece of advice number one, start with low prices or even gasp free. The reason that I say that is because if you start there, then you can go up. It's very difficult to come down.

And in the beginning, you want to get flow through the system. And so it's totally fine to start it free and then start bumping up for. And so I'll give you three quick examples, and then I'll show you how to do this tactically. So when I started my first ever business, it was an online personal training business, since this is 13 plus years ago. And when I started, I didn't know anything

and I was so afraid to charge people money to begin with. And so, but I did want them to pay something because I wanted them to be invested, because otherwise people don't follow through with their workouts or their nutrition plans, et cetera. And so I said, hey, just donate to the charity of your choice, whatever charity you want to, in exchange, I will then train you for 12 weeks.

And so people would donate, I think it was $500 or $1,000 was their choice to a charity of their selection. And by doing that, I actually got my first 13 or so customers just by making posts and DMing people that I knew. And it didn't feel weird because I was like, hey, I'm doing this kind of nonprofit thing. I want to help you out if you want to lose weight. And you can feel good about it and it's a write-off. And so we were like, oh, this is pretty cool.

But the thing is, that was the first time I ever did it. And then from there, I said, huh, would you guys be willing to pay me now after we finish this 12 weeks? And a lot of them were like, sure. I was like, yeah, I'm the charity now. And so after I did a good job, they were willing to do that and refer me customers. The next business that I did this with was gym launch when I actually started flying out to other gyms. So I used to do turnarounds and I did that for two plus years.

So I'd fly out to a gym, set up all the pricing, do the marketing all this stuff. And I did it all for free. And I did it that way because I didn't know how I could sell those gym owners. And the deal that I made was I only make money if I make sales and I'll front the cash for the marketing. So like they took zero risk on and I would do everything, including pay for my hotel, my flights, my food, my rental car, everything. But being able to do that, it allowed me to get way more yeses quickly, test out the system in 30 plus markets that I had, which then eventually led me to license in that system to 5,000 plus locations. And that was the company that I sold to APG. The third time that I did this was when I started my software company, Allen. And so when I started

the company, I was like, I need to get some case studies. I need some testimonials. I need some stories to show successes, right? And so I think a lot of people in the beginning think this is only a beginner thing. But even if you're a big business owner, when you start out a new product or a new division, starting with free customers just makes a lot of sense. And it's for four reasons. One is that free customers become customers, you become paying after the period as long as you do a good job. So it makes money in one way. The second way it makes you money is that they'll also refer your customers because you do a great job. They'll just send you other people and that can be contingent on why you do it for free for them. The third is that they'll leave you testimonials and

reviews. So those reviews and those testimonials also you advertise and you can get more from them. And then finally, whenever you do stuff for free, I do it in exchange for feedback. I say, hey, tell me what I could do to make this better. And again, it's not saying, like, tell me all the ways I suck, it's just saying, tell me how I can make this better. Tell me how I could make it worth it for you to want to stay and continue to pay. And ideally, the easy test of knowing whether or not this works is that they actually stay

and pay afterwards. And so it's the easiest way to get going on any new product, and I think so many people start trying to sell stuff too soon without it. enough proof and in the beginning you suck. That's why it's a new product or new division. And so I'd rather not ruin my reputation. Sam giving away for free, give the reason is I'm brand new at this thing or I'm trying this new thing out. And that way I'll get a little bit of grace and then that way I can make the thing better in an iterative process much faster with way more people because I'm giving away for free or at cost. And then once

I get those massive success stories that they feel like they owe me because I've done a great job, then I can market those and go at full price. So here's how you actually do this tactically, going from starting a low prices to moving all the way to where you want to be, which is high prices with big premiums, right? And so what I'd say is after you have your first test case study batch, so call it 10 or 20 people, depending on the size of your product or your services, after that, every five, I just go up by 20%. And so let's say, okay, I started at zero and I have a marketing agency.

I might say, okay, the next five I'm going to do for a thousand bucks. Right? And then from there, I might say, okay, the next five I'm going to do for $1,200. The next five I'm gonna do for 1500 bucks and so you just keep going up by 20% until the conversion rate times the price goes down. So that way you can just calculate the total amount of money made off of X number of sales calls. And by doing that, you'll be able to see, okay, here's the sweet spot where I sell the most amount of units at the highest potential price.

So my company Jim Launch that has sold for $46 million. That company, you know, at its peak before I was selling it, we were taking home over a million a month in personal income. But that's what a lot of people think happened the whole time. but it wasn't like that. The actual very first business that I started in fitness, I actually gave away my services for free. I actually did it as a nonprofit for charity

so that I could get clients in the door and test out whether my stuff actually worked and that I could deliver services. And when you're having the conversation with those first few people, whether you're doing it for free or you're going to do it for a big discount, you say, hey, I plan on going to this price point,

but I'm willing to do it for free in exchange for X, which is usually a feedback, feedback for me, and a public testimony if you're comfortable doing it. And by having those two things, then one, you guarantee that you get the feedback, which is the thing you need most,

but you also can get the testimony that you can leverage. And then finally, you can also tack on a referral if you want to. Again, I'd say the testimony in the referral should be contingent on you doing a good job. And you say, hey, if I do a good job, would you be willing to do these two things? If they say yes, then you're good to go.

The fourth one, which is, do they actually want to buy at full price later, which will be the real test of how good you were? And I think the bottom line here is that when you start out, you're not that good. And even if your ego is like kind of kind convincing you that you are good, which I think is silly, just even imagine two years from now

that you're gonna be much better than you are now. Well, that guy is probably way more experience. So give that guy a running start by starting free now and then building momentum into it. And I have this saying that I repeat all the time in my team, which is create flow, monetize flow, then add friction. And so it's like you have to run water through the machine.

You have to get flow into the system to see where it's going to break so that you know what real actually looks like rather than just trying to get rich on Excel. The second is the framework that I use for scaling advertising or scaling marketing in any niche. More, better, new. When you're starting out, more is almost always the answer.

And so I remember when I was thinking about getting into content, I paid someone who had made a lot more content, had much bigger brand, and I said, hey, what should I be doing? What should I do to make my content better? And he's like, dude, he's like, you don't make your content better. He was like, you're just not making anything. And so what he did was he pulled up his profile on LinkedIn, and he pulled up my profile on LinkedIn.

And he was like, I posted five times a day. You haven't even posted. And then he pulled up Instagram, and he pulled up my Instagram. And he's like, I posted two times a day. You posted once a week. I was like, man, he's like, okay, let's pull up YouTube. And then my YouTube.

And he just went platform by platform. And he showed that he was doing 3x, 5x, 10x, the volume that I was. And he was like, dude, you just gotta do more. And that was this like, I felt embarrassed because I just paid all this money to have someone just look at me and just say, do more, but hopefully I can save you the money

and just tell you, you probably need to do more. And the interesting thing about this is that I later on had like at the point now when we had maybe, this is gonna be a year ago, I had five-ish million subscribers across all platforms. I had a friend of mine who's a billionaire who wanted to start getting into personal branding.

And he said, hey man, can you check out my Instagram and see what's going on and why we're not growing as fast as I want to? And so I said, well, before I look at it, I was like, how many posts we were you making across all platforms? He's like, oh, got that now. He's like, I'm posting one today. And I was like, dude, I was like, we post 50 plus

time today. And he was like, got it. He just was like, you don't need to say anymore. I understand. Because he had had enough experience in other realms to know that like, oh, all of the things in volume that work in sales, that work in customer success, that work in product in terms of iterations, the same concepts apply to advertising and marketing. Like you just need to do a lot in order to figure out what works so that you can do better later. Now, what's interesting about this is that this also applies on the paid side. So I remember there was a chiropractor, Carripractor agency that approached me. They were doing about $2 million a year. And he was like, hey, man, I think I've saturated Facebook. And so I was like, and this is when it was Facebook, not meta. And I was

like, what do you mean? He's like, I just think I've saturated the chiropractor niche. And I was like, this is a $10 billion year industry. And you feel like your $2 million per year agency has saturated Facebook. I was like, how many, I was like, do you know of any of chiropractor agencies that exist? He's like, yeah, there's loads. It's like, you know, there's hundreds of them. I was like, okay. So explain to me why every sale that is keeping all of them in business is somehow not sales that you should be making. He was like, got it. I was like, right, you're spending 40 grand a month when in aggregate, all the agencies that are selling to chiropractors are probably spending four million a month. And so all of the spend that those businesses are

able to make in your market is your opportunity. If you can out-compete them, you can provide better service, you can have longer LTV means you can spend more to acquire the customer than they can and then you can eventually price them out of the marketplace because fundamentally paid ads is actually an auction for attention and so people bid against each other for ad space and so if you can outbid your competition you can have an ethical monopoly by literally bidding more than everyone else while still making money and that's the crazy thing and that's what fundamentally what you want to build in terms of the mousetrap of your business is how can

I make more money from every customer than anyone else does so that I can spend more than anyone else can to acquire them and so I had a I had a portfolio company CEO who's a good marketer you know come up to me and he was like hey man I really need to scale our ads. And I was like, I agree. And I was like, well, how many, how many pieces of creator are you putting out, you know, per week? And he's like, oh, well, I just record once a month. I was like, okay, fine. Then how many ads are you making per session? He was like, we do about 15. So we do about 15 new ads per month. And I just kind of looked at him. I was like, dude, when I was trying to go from your size to five times your

size, I was making 35 a week. And like nowadays, we make way more than that in terms of content and in terms of the ads that we do, because I make ads for school, and then I inform the ads across our portfolio. And so the big saying that I have that's plastered on the wall, that actually applies to sales and marketing, is volume negates luck. Like, if you don't want to rely on luck

and rely on one of those 10 ads or five ads that you make to be amazing, you just make more ads. And I can't tell you the amount of times that it just reset the bar, and that's what I'm hoping to do with this video, is like the amount of volume that the people who are ahead of you are doing is not 2x or 3x more. It's oftentimes 100x more, right? Even the 35 times four, I think 140 pieces,

the guy was making 15. It was 9x, the volume of what he was doing, right? And some of you guys are making five ads a month or one ad a month and thinking that that's somehow going to be sufficient to get to your goals. And nowadays, and I'll explain later in this how my whole ad creation process,

but just the big headline is that in the very beginning, you just need to do a lot more than you think you do. The second is once you've done more, then at what point do you start shifting to better? And the way that you can figure that out is when the return on effort for better exceeds one incremental unit of more, meaning if I've got one sales guy, if I add a second sales guy, then I think I have a high degree of certainty that I can probably double my sales by doing that. But when you have 10 sales guys, adding one more sales guys the same level of effort as adding going from 1 to 2, going from 10 to 11, but it's only a 10% increase and so So if I can increase the overall throughput of my entire team by 20% or 25% by tweaking some sharp rate stuff or doing a headline split test or changing CTAs on my ads, then those

are things that would make me more money per unit of effort. And so in the beginning, you usually just need to blow as much volume through there as possible. That's the create flow, monetized flow, then add friction. The optimization steps really only matter when you have flow going through. And so you do more first, and then once you're big enough, better becomes a better return on effort, but once you then go through the better steps, then you usually have to go back to, okay, how do we do 10 times more than we are now? How do we go from 10 sales guys to 100 sales guys? And that's the thinking that you have to go through in order to start scaling in

terms of orders of magnitude. And when you have so much volume, you're able to iterate so much faster. Like even us recently, we started making more content on YouTube. And we already noticed as a team we're like, oh, this is awesome. We're learning so much faster again with, like, We're literally putting out four or five videos a week instead of one video week. And so we're learning about headlines and thumbnails and there's less pressure per video because we're like, cool, learn that. Let's move on to the next one. And so it allows you to just iterate so much faster without getting your ego and your emotions,

you know, tied into it. Here's how I do it is I ask the question, what would stop me from 10xing the business right now? And if the answer is nothing, then we 10x the business. Now, most times there is something that would break. Like what would break first? And so as soon as we identify, what is the first thing that would break if we 2x, 5x, 10xed. We then isolate that thing, put all of our focus towards fixing it, and then we do the increase in volume. And that is how we continue to deconstrain until we go to the next bottleneck, and then deconstrain that, and then grow into the next bottleneck,

because we have a fundamental belief that all businesses will continue to grow until their point of constraint, and then they will grow no further. So you identify the constraint, relieve the constraint, and allow it to grow again. Growth occurs as an after effect of the inputs you put into the system. Now, once you've done as much as you can, more, and you've done it as well as you can, better, when you can't do any more, any better, you start and trying something new. And the reason that I have new last is because the cost of change of doing something new is guaranteed, but the return on something new is not. And so I like to say that is a big warning for the fact that the vast majority of entrepreneurs

want to spend 80% of their time on doing new stuff, when really they should spend 90% of their time doing more and better of what is already working for them. The only time you do new stuff is when nothing is working. So when you're starting as an entrepreneur, everything's new, and you keep trying and keep trying until something works. Once it works, you have to unlearn the whole experimentation idea, and then you have to go, great, and you do as much as I possibly can,

and do it as well as I possibly can. And so it's a different mindset that you have to get into, but that's how you start scaling. Now, what point do you start doing something new? Well, if you've already said, okay, I can't do more for a very clear reason that there's a big cost. Like sometimes there's a huge incremental cost,

past a certain barrier. And you're like, okay, I think we really are, let's say you're a local gym, all right? If you're a local gym and you're spending, call it $10,000 a month on ads, you're reaching every single person in your radius multiple times a week. And so that's on one platform.

And so you're like, okay, in order for me to scale this, it's not really about doing more or even doing that better. It's like I've saturated the crap out of the eyeballs here. Well, that's when doing something new will yield a higher return, you get a better return on effort. And so that's where like, okay, maybe I'm gonna start doing an outbound. Or I'll start doing the paid ads, but just on another channel.

I'll start running YouTube ads. I'll start running Google search ads. I'll start running display ads. I'll start doing direct mail pieces. I'll start radio ads. Like there's a number of things that you could do in terms of other channels, but they would be new. And so this is the thought process that I have when I approach that,

which is if you could double the sales of your company and it would take a year, would you do it? But you had to wait a year before they doubled. Most people would say yes. If I said, you had to invest, call it half a year's profits in order to getting your business to double, would you do it? Yes, that'd probably be a really good return on investment. If you put half years profits and you double the business, you're getting a 200% return. That's awesome, right?

And so the thing is that people start something new and they spend one month of ad spend and they say, oh, it didn't work. I lost money. Why? Like, I'm going to stop. But the reality is that it's going to take you three months, six months, sometimes 12 months, to get that return to actually pay off. And what I mark is progress, not the dollar.

So it's like, okay, first are we getting clicks? Okay, we're getting clicks. Okay, are we getting opt-ins? Okay, we're getting opt-ins. Are the opt-ins we're getting the right type of people that we're looking for? Okay, yes. Or if they're not, then we start tweaking the messaging,

we start tweaking the funnel until we get the right people. Okay, now we have the right people who are opting in. Great, now can we get them on the phone? Can we get them in person? Can we get them to show up to some sort of conversion event, some sales event that we can then try and sell them something, right? And so you keep walking, walking the dollar over the bridge until eventually it comes to the other side. But that takes money and that takes time and that takes learning.

But it's a return on investment because if you do double your lead flow in a year, one, it doubles the business. Two, it more than doubles the value of the business because now you have two different ways to get customers. And so it makes the business more stable because if one of them goes down, then you still have the other one. And so you have a more stable business that's also bigger. Market advice number three, how to do better. And so this is double-clicking into the better concept because this is especially for the bigger business owner.

So if you're at a few million dollars a year to tens of millions of dollars a year, like this is really going to start paying massive dividends. So number one is optimize front to back when it comes to marketing. So that's the 80-20. So David Ogilvie said famously, after you've written your headline,

you spent 80 cents of your advertising dollar. So he knew that 80% of people aren't going to do anything past read the headline. And so if you'd put 80% of the headline, And so he'd put 80% of his effort towards those first few words. And the really experienced marketers who are watching this are like nodding their heads right now. The first five seconds, the headline, the packaging in my history of the 13 years that I've been doing this has only increased. I haven't even gotten to a sweet spot.

They just continue to become more and more important in my mind because it's the frame through which everyone contextualizes what they're about to consume. So one, it increases the likely they consume it. Two, it introduces the frame that they consume the advertisement or the promotion through. And like we now have such great data, even across on the content side, that like if we have two different thumbnails, you can literally see the average view duration go up by two or three minutes sometimes simply by changing the thumb that people click before they watch the video. It's wild.

And so how people, the frame that people consume the content in has a massive impact on how effective it is. Now, I'll tell you a quick story to show you just how important this is. So a friend of mine, Dean had this massive advertising campaign and he had written a new book and he went on Larry King Live and so he wanted to use the Larry King interview to advertise the book. And so he shot the whole interview and he basically wanted Larry King to introduce him in a cool way to make him, you know, sound cool, of course, you know, and like he would laugh if I was

telling the story now. And so he knew that the ad was killer, and so he ran it. Spent $250 grand, and nothing came back. And he was like, what's going on? Like, I know this ads a killer. Like, what's happening? So he went back through his old history of ads, and he looked at the top performing ads he'd ever done.

And as soon as he started watching me, he realized that he missed the hook, that the hook was wrong. And so he flew Larry King back out. He paid him again. They set up a whole new set again just to re-requake. to re-record the first 30 seconds. And so they re-recorded the first 30 seconds with the hour-long interview and then re-ran

the infomercial and did $100 million in sales. And so when I heard that story, I was like, this is why the first five seconds, the headline, the hook, is so important. And that's what I spend now a disproportion of my time on. And people are listening to this. And you guys are nodding along. But you're still not getting it because it's not real

for you. And it took me forever to figure this out. When we make ads and I'll get it, in my ad creation process later, you have, like I, I do 10 times the effort on the first five seconds. 10 times, actually 10 times. So if I have an hour, I would spend 55 minutes on the first five seconds and then five minutes on everything that's after that. Like that's the proportion of how much time I'm spending on just getting that first part right.

I'll give you a content example of this. So I was invited to this content creator thing with all the, you know, you know, you know, you know, top guys, probably 10 guys there. The lowest guy in the room was me, and the next lowest guy was at like 10 million plus subscribers only on YouTube, so they just had me there for entertainment, who knows. And I remember one of the guys had about 15 million subscribers,

and he was pissed that this other content creator had basically copied his video, and the copied video had done better than his, like three times more. He got like 30 million views, and he's got like 10 million views. And the main guy there who had several hundred million subscribers across all his channel, was like, let's pop it in, let's roast it.

And so they press play on the video, and five seconds in, he stops the video, he was like, dude, you didn't confirm the thumb. He's like, the headline and the first five seconds weren't confirmed. And he was like, I don't need to see anymore. And he just walked out of the room. And so this guy had spent weeks, you know,

making this thing, obsessing about every detail of it. He had a 20-page-plus brief on how he was making this video, and he missed the first five seconds, and that was the guy who had the multiple 100 million subscribers, was like, that's it, and he just walked out. and got lunch. And so when I saw that, I was like, wow, like it just reinforced how important this was. And recently, just at a micro level, one of our portfolio companies, this is an eight figure plus business, we simply changed the headline on the landing page. Like, we did nothing

else. We kept same ads. Just changed the headline. We increased booking rate by 62%. Now, here's what's crazy is the opt-in rate remained the same, but simply because of the frame of the promise in the headline, 62% more people chose to book calls for that business. And so it just shows you that how you frame what people are then going to consume has a massive impact on how much value and how likely they are to take the next step. So here's how you do it in terms of optimizing 80, 20 front to back. So number one is assume that they have no idea who you are, what you do, how it works, they're in a rush, and they have a third grade education.

All right, so clear beats clever, deletion beats explanation. And so what you want to do is you want to try and make it as short as humanly possible. And then once you have it as short as possible, put it into a third grade reading calculator, look at the grade level and keep editing it down until it's third grade. Because the thing is, is you're not going to attract dumber people. You're going to make accessible to everyone. A smart person needs to use less brain power to understand simple language, and it makes it understand double to everyone else.

And as a reminder, 30% of people can barely read. And so this is like relying on them to have this skill. It's like you want to meet them where they're at. And there are some very rich people who can barely read. And so it has nothing to do with intelligence, that's everything to do with how they were educated, which may have no connection with their purchasing power. Okay, and tactically, what I'll do is I probably,

I'd make about 50 hooks every time I start recording ads. So I have 50 hooks that I've written down that I think are awesome. And then I have three to five meat pieces of an advertisement, and then I do one to three CTAs, meaning call to actions at the end. And so that means I have way more on the front end in terms of effort, compared to the three to five and the one to three

that I do on the back. And that's because I know that that's where all of the effort needs to go, because that's where all the returns are. And here's the difference, and this is why I say from, you optimize advertising specifically from front to back, because it's very rare that you're gonna be able

to double or triple, a quadruple, the amount of throughput you get in a funnel by optimizing the back end. If you have a 30, you know, a 50% showup rate, okay, if you get it to 75%, that's massive, that's a 50% jump, and that would be a massive increase in show rate if you did that.

But I can absolutely get CTRs from 1% to 4% by just optimizing the hell out of the front end and that's a 4x increase That's four times the throughput that goes through the entire funnel and so I put my effort there because you can achieve 100% 200% 3% increases on the front end whereas it's much more difficult on the back end now for sure you want to optimize this thing But if I'm gonna allocate my effort I want to get the biggest bang for buck So when you're making your hooks I called a call out so reading page 136 for my book a call-out a call-out a call-out a call-out a call-out is whatever you do to get the attention of your audience. Call outs go from hyper-specific to get one person's attention to not at all specific to get everyone's attention. So let me explain. If someone drops a tray of dishes in a party, everyone looks. If a child yells mom, then the

mom's look. If someone says your name, only you look. But again, they all get attention. And so I try to make my call-outs as specific as possible to get the right people, but broad enough to get as many of them as I can. So pay close attention to advertisers use call-outs, especially the ones targeting your audience. And so what I'll do is I'll look at all the ads from other competitors who are targeting that same audience as me. And the ads that are running a very long time, I know that that callout is working well. And so I will write down all the callouts that I see, and then I will write out the words that I know my customers go by.

And I'll either start with a problem that I think that they're struggling from, or a question that I think that I know that they'll say yes to, or I'll simply state, moms in Nevada, homeowners in Clark County, right? Very clearly calling out, this is for you. And that's exactly what you want the person to say when they read the headline or hear the all out, this is for me. And the more specific you get, oftentimes you'll be surprised. You think that going as broad as you can is going to increase the number of opt-ins. But when you get really specific about the type of customer you're really trying to attract, you will often find that

they're like, oh, I wouldn't have responded to the broad thing, but this one's just for me. And you get more people in terms of qualified leads in the door by being more specific. Piece of advice number four, LTV to KAC is the only thing that matters. And if I had only one that I could find out about a business. If I only had one that I could pick, it would be the LTV to KAC ratio. And let me tell you a quick story that will kind of drive this home.

So a friend of mine owns a bow manufacturing business, and they do $20, $30 million a year, so relatively large business established. And he was like, hey, we're trying to get into paid ads. Now, they had all these distribution relationship, but they want to open up this new channel. And he says, hey, you're the marketing guy, right? So what would you do here?

And so as I was explaining the process that the strategy that I want to outline for him, He was like, well, what's the benchmark I should be looking at in terms of leads? And I was like, dude, the benchmark is irrelevant. Everything just comes back from what's gross profit. So it's like, okay, so what's the average gross profit on a bow? I'm making this up. Say it's $500.

Okay, so if we get leads for, call it $20, and we know that we can get one in five leads to buy a bow, then it means it cost us, our KAC is $100, and our gross profit is $500. So it costs us $100 to make $500 a gross profit. Five to one. Awesome. And so fundamentally, is $20 a good lead cost? Well, yeah, he's getting 5 to 1. If it was at $10, then he'd be getting 10 to 1.

And that's assuming the same ratios. And so it just depends on what percentage of customers you convert and at what price point you're converting them at. CAC to LTV, or CAC to LTGP, so I use LTGP to be more specific. Lifetime value is just the amount of gross profit you make from a customer over the lifetime of them being a customer of your business. CAC is the cost to acquire a customer, which is the all in cost, including sales, marketing, software, everything, to get someone to give you money.

And so the Cactel TV ratio is simply how much money it costs you to make more money. It's the foundational economic unit of any business. And so making sure that you know how much money it costs you to make money, that fundamentally feels like a very important metric in order to scale the business. And over time, as long as you don't have some big capital expenses in terms of scaling your business, that fundamental return that you get will reflect the compounding growth of the business provided you don't have other constraints to growth. So, for example, if I have meals that I sell for $10,

and it costs me $9 to package and ship them and deliver them, then I have $1 of gross profit per meal. And so if someone buys 10 meals for me, I'm not making $100, I'm making $10 in gross profit. And if the average person buys, call it, five weeks of meals, then I would make $50 in lifetime gross profit. And so the only way that I would want to be able to acquire our customers is that the cost to require our customer in this example,

I don't want to have probably at $15 or less. Because you can't do it at even because then there's no money left over to do everything else in the business. And so the rule of thumb is that you want to have at least three to one on LTV to KAC. But again, LTV is not lifetime revenue. It's lifetime gross profit.

And that's what people I think a lot of times mess up is they don't even know what their gross profit is and then they spend blindly. So I'll tell you a fun one. So if you've seen Starbucks advertise, now a lot of them, they just use their storefronts as they're advertising at this point. But they make about $14,000 in LTV.

per customer. And so they can spend absurd amounts of money to get customers in the door. Like even if it cost them $500, they're still making 28 to 1 on the money they put in. And that is why that company has been able to scale to the moon in terms of the number of locations. And so I will say that all the money that I've made in my life, that has been the crazy money, has come from crazy LTV to KAC ratios. And so the smallest ratios that I've made crazy money on is 30 to 1, all the way up to 100 to 1 to 200 to 1 returns in some of the businesses I have. And so those windows don't stay forever.

And when you do have one of those, you just want to dump as much money into that machine as you possibly can because a lot of wealth is made in very short, punctuated periods, and then sustained by long periods of maintenance where you're getting 5 to 1, 8 to 1, 10 to 1. Those are fine numbers. But most of the time, when you're at 10 to 1, as soon as you start scaling it, it might drop to 5 to 1. And so I actually end up seeing the bigger the ratio is at the beginning, the more indication it is that I can scale profitably. Because if I'm, let's say, spending $1,000 a day

and I can get 100 to 1, then I know that I'm probably able to get to $100,000 a day and get $5 to 1, right? And so that's the idea is like, how can I scale this up? And I care about absolute return, not relative return, but the KAC to LTV ratio gives me an indication how much room I have to blow this thing out of the water. The easiest way to calculate what your lifetime gross profit

is is look at all the customers that you sold over the last year, Look at gross profit, and if you don't know what gross profit is, it's just the cost of goods, basically the price you charge minus the cost of goods sold, which is whether it's, if it's services, then it's the labor that you use to provide the service. If it's a widget, then it's the cost of the widget and the shipping associated with it.

So the cost of goods sold minus the revenue, and that left over is the gross profit. And so you say, okay, I had 100 customers this year, I made this total amount of gross profit this year, you divide that amount of gross profit by the total of number of customers. That'll give you a broad brush stroke of what you make per customer.

Now, that'll always underestimate it, especially if you have a recurring revenue business, because they're gonna hopefully have some people who buy again and again over time. But I would always rather be on the safer side and underestimate my lifetime gross profit or lifetime value rather than overestimated and potentially lose money.

If I wanna then take that number and say, okay, well, what am I willing to spend per customer? Then at most, you wanna have a third of that number. But for me specifically, I wanna make sure that whatever I collect in the first 30 days, I wanna make sure that I collect that back from customers. So if I'm set, let's say I sell something for 10 bucks a month, people stay for 10 months and there's a hundred percent gross Marges to make this simple. So I make a hundred bucks in gross profit. I want to see if I can find a way to make

$10 back or get my KAC back in that first 30 days. And so sometimes it means having a one-time up charge up front so they can offset the cost of acquisition so then the remainder of the customer relationship can be profitable. And if these concepts about scaling like LTV to KAC are interesting to you, we just opened up a new workshops division at Acquisition.com for companies that were not invested in. If you would like us and my team to help you personalize kind of applying this stuff to your business, you can go to Acquisition.com, click the scale button, and you can see if your business qualifies.

Otherwise, back to the video. Piece of advice number five, my ad creation process. So I've been running ads for 13 years, and I'm saying, when I say running ads, I mean like, I've been making ads or directly influencing ads that have been run across my portfolio or companies that I directly owned or founded for 13 straight years.

And so I have this process pretty nailed. and I haven't really ever gotten too far away from it, partially because I like it a lot, and I've gotten just pretty good at it. And so this is how I do it. So number one is that at all times I'm collecting data, what I mean by that is like, if I see ads on Instagram, I see ads on YouTube,

like I have no pre-mic accounts on any platform because I want to hear the ads. I want to hear the hooks. I want to hear what they're doing to draw attention. And I like using that stuff because I'm also a business owner. So the people who advertise to me are the people that are gonna try and hook my attention, and so I can still use

that stuff to get to my avatar. And so if you are your avatar, the ads count double for you. And so I screenshot, I record the stuff that I find interesting, and I add it into one folder. Then when I get to my ad creation process, which I do once a week, I then sit down, first thing in the morning, and I do these the same day I record. So that's just a piece of advice that has worked well for me,

like cramming for the test. I cram for my ad sessions because then everything's top of mind as I go into the day. And so I pull up all my swipe files of all the things that I want like my inspiration from. The second thing that I pull up is all my historical best performing ads. So I look back one years, two years, three years sometimes,

at all my best ads. And I drink those back in, and I watched the first 10 seconds, watched the first 30 seconds, see, okay, how's the caption, what was the angle, what was the hook here? And then I start the actual hook creation process. Now, 40 of my 50 hooks that I'm gonna write out

are going to be stuff that is tried and true. I'm not gonna try and reinvent the wheel. We've already spent zillions and zillions of dollars. I know that these hooks, these entrances work well. Now 20%, the last 10 is where I get to use all my inspiration and other ideas to try and experiment on.

But most people flip this. They try and do a little bit of the stuff that worked and then they have lots of new ideas. I'm telling you, I've done this a long time. It's way more efficient to just do more of what worked and then leave a little bit of experimentation so that if some of those things stop working over time, you have this fresh batch that you've been trying out

that then can become the control that you try and beat. So citing back to the 80-20 concept of you put 80% of your effort into the hooks, and 80% of your effort goes into stuff that's tried and true and 20% for the effort. the things that are new. All right, so I make about 50 hooks, so 80% of that is 40 hooks, and 20% of that is 10 hooks. So 40 out of my 50 hooks, I do for things that I already know have worked in the past. Ten hooks, I say for my new creative ideas, and so that's for the

inspiration stuff that I see, or anything that I come to that cram session that I want to get out. From there, I then have my three to five angles that I'm going to write that's going to be educational or some sort of value that I'm going to deliver, or some sort of belief that I want to break, or some sort of list or steps or stories that I want to tell as the core media. to the ad, some sort of proof I want to demonstrate, and then finally just a quick CTA in terms of call to action. But the majority of my effort is all on the 50 or so hooks that I'm going to write, 40 of which being recycled versions of things that I already know work, and 10 being net new.

And this sounds boring, and it is boring, but it's also what works. And believe me, I have tried to change this process a lot of times like this works. Let's say that you have a mega winner, and these happen, and this is where you get, this is power law. that top 5% makes 95% your income. Like you, we run all these ads to figure out which is the one ad that can sing and just crank and print money. And so what I do is I use something that I call the kaleidoscope process. I've never heard anyone who sell it, so I'm owning that title. All right. And so the collidescope process, this is how you do it, is that let's say you've got

a winning ad. So I had an ad at Jim Launch that actually the now president, Kale made when he was a customer of him in front of his gym, the gym being full, and his wife's next to him. And he's like, you know, six months ago, I was working a full-time job in order to pay rent at this gym. And my wife was pregnant, and I had a two-month-old, and I had no idea how it was going to make ends meet. And then here we are six months later. The gym is full. It's completely outsourced. And I've already got an offer for $250,000 on the gym.

If you've ever been worried, like, take the jump, just follow the process. It works. Right. It's very simple at. But it murdered. It absolutely crushed. And so rather than say, wow, okay, well, that was nice. Let's try and do that.

let's try and get somebody else to say that. We took that and we squeezed the living life out of it. And so here's 10 things that I did to get more out of that ad. So one is I change the color of the backgrounds if I can do that, right? Or backdrops. Is there a way that we can record that ad with a different background or a different background color, like if you have a green screen? Second, are there different props that we can introduce that ad?

All right? So can we show stuff? Can we show visuals or we can show physical props? Three, can we just reenact it? I just, hey, Kayo, can you just do it again? Just literally do the same ad, different T-shirt if you want, same exact thing, just do it again. And if you're the one making the ads,

you just do your best performing ad again. You can, four, reorder it. So we took the ad that was already the original winner and we just re-changed the order up of the ad and it's still converted. The next thing is we added visual filters. So think black and white, think sepia, think high contrast, low contrast.

These are all different things that made the ad look different than it was, but it still delivered the same message. The next one is visual effects, right? VFX like dude ads and whiz bangs and things like that that you can add to again make it look different. The next is changing fonts and captions. So it's like if we had a font style that was one way, we just changed the way the font style looks.

Another is that you can change the pacing or the speed of the video itself. You can actually do it at 1.2 or 1.5 and have it go through or slow it down at portions. You can add music to it. There's another one, right? You can also use the same hook, which is like we knew the hook from that first ad,

obviously crushed, and then just say, hey, re-record it again. We'll use the same hook and use a different back. And so all of those are different ways that will take a winner, and then 10x or 100x, how much that winner gets us. And I'm telling you, if you take one thing from this video from advertising, squeeze the living out of the winners.

So market advice number six is that there's only four ways they can let other people know about your stuff. And so think about this like a four box. You've got one-to-one conversations and one to many, which is broadcasts, right? There's the two styles of communicating, either communicate to a group of people or one person individually.

And you're either talking to people who know who you are or you're talking to strangers. And so if you cross that, you've got four ways. You've got one-to-one to people who know you, one to strangers, one to many, to people who know you, one to many to strangers. And if you look at that in terms of what that is in advertising, it means this is warm outreach, cold outreach,

making content, which is one to many to people you know, and then running ads, which is one to many to strangers. And so there's the only four things that you can do to advertise, to let people know about your stuff. And basically, if you're not spending your day doing one of those core four things, you are not advertising. You are not marketing your business. And so sometimes it gets, you have to get it to that simple.

When you look at how many hours per day am I spending, letting people know about my stuff, Most people spend zero zero per day letting people know about their stuff, and then for some reason, they're curious as to why their business isn't growing. Well, no one knows you exist. I was at a conference, I was at GymCon recently, and I asked the audience, who here wants to grow their gym faster? Everybody raised their hand. And I said, okay.

And these are all small businesses. So these are most of the guys here are doing, I would say, $500,000 a year to $3 million a year. So these aren't massive businesses. They're normal, you know, one location, three location, five location, owner-operators of service-based, you know, businesses. And I said, okay, who here is spending the first four hours of their day promoting their business, either doing cold outreach, making content, or running ads? Who is spending the first four hours every day on that? Literally, no one in the audience had their hand raised. And I was like, this is why you're small. Like, this is it. Like, it was mind-blowing to me that that was what it was.

And so if you're making less than, call it a million, maybe three million dollars a year, like all of your effort, the first four hours of your day, which if you have to wake up early, awesome. If you have to stay up late to do it, awesome. I don't care. But you need four hours that you're dedicating because you've got to do the job of promoting and then you've got to run your business. But if you're just running your business, you're never going to get ahead.

So if you want it to grow, you've got to force it to grow. You have to force people to find out about your stuff and you do that through advertising. I recommend this so violently leave because small businesses need to do more. And in the beginning, they just don't get enough leads. So fundamentally, like most businesses, if you just had more leads, you would make more money. Now, realistically, and I'll get to some of the specifics on this, is that in order to get more leads, you need to be able to do so profitably, which then comes back down to the business and building the business back to front. We advertise front to back, we build the business back to front, and I'll get to lots of details on that in a second.

But big picture, you just need to get, especially when you're starting out, you're at $500, a million, you know, less than 3 million. And those are big numbers. So I don't say, I don't mean that to demean it, but I want you to build massive enterprises that make huge impact. You have to get more flow through the system so that you can learn how to improve the product so that you can build a better back end. And then you basically you promote and you stay at that level of promotion until you tweak this and nail it then you go back and scale it. And so one of our sayings internally is nail it then scale it. So nail the back end. You do enough promotion to get flow in, right? Then you monetize. Then you create fiction. That's when you tweak the hell out of it and then you can go back and say, hey, it turns out we can spend five times more to get customers. Then you scale. So I'll give you my quick back of napkins scaling framework for this. So when you're at zero to six figures, you sell one product to one avatar on one channel. That's it. No shiny object, no multiple channels, no trying to scale yourself out of it. You're just selling one product to one avatar

on one channel. When you go from six to seven figures, you scale, you sell one product to one avatar on one channel consistently because in the beginning you're super volatile right you're not you're making a sale this week not next week then this week again or the next month whatever it's super volatile when you get to seven figures it's more consistent you just you get it to be reliable so when you go from seven figures to eight figures you go one avatar one channel two products that means you have an upsell you sell something else and then you do that consistently right that's what gets you to eight figures that's what gets you to ten million bucks here

and if you want to go to you know multiple eight figures then you start going two channels, one avatar, two products consistently. And so over time, this is how I've seen, I've just seen this pattern. Now, can you find somebody who disobeys this pattern? Sure, AG1 has one product, one avatar, a zillion channels, right? So, yes, there are ways to break this rule, but when I look at, by and large, the vast majority of businesses, they follow this structure, and they mess up along the way

until they follow the next step. And you'll notice that scaling up to eight figures, figures and even sometimes a little beyond that you're still only focused on one avatar and I'm gonna talk about this in a lot of depth in one of the later advice points because it's super important and this may be one of the bigger unlocks you could have in the business market advice number seven state the facts and tell the truth this is probably one of the most repeated phrases besides volume negates luck that I have internally to my business and so I remember when I was

at that same little meetup with the super creators and I was I was talking to the guy who had the most you know subscribers there and I was like yeah you know like we don't really like this whole clickbait title thing. And he looked at me with disgust. And he was like, you absolutely make clickbait titles. He said, you just back it up with truth. And he's like, so it's crazy clickbait. He's like, but it also happens to be true.

And I remember when he said that to me, and I was like, shit, that's real. And it's funny because that was a concept that I have in terms of paid ads, but I hadn't thought about it in terms of content. And so it's so interesting how some of these principles just apply across domains, but like sometimes you have to relearn the same lesson, which I hate doing, but I did it anyways. And so the problem is that most businesses don't track results. And it's because if you don't track, you don't care. Now, they don't track partially because it's kind of like ignorance.

Like they know they don't deliver good results. And so if they track it, then they'll have facts and truth that they will be proven that they're delivering bad results. But the first step is tracking it. Because once you start tracking it, you can improve it. And measurement as intervention is actually a scientifically proven method to lose weight, to improve sales, to improve anything you want. You can literally simply tracking it, not trying to do anything else,

but simply tracking your weight, simply tracking your close rate, simply tracking your ad performance will improve it because you're just putting attention on it. And so if you don't track, you don't care. Now, once you do start tracking it, you can start doing things to actually improve it beyond just measurement as intervention.

And so when you do that, lo and behold, your stats get better. And then you can state the facts and tell the truth, and have that truth be wildly compelling. And so real talk, part of the reason that gym launch to this day has still not been beaten or dethroned as the largest company in that space is because we still have better stats and better results than anyone else does. The average gym who goes through 12 months of gym launch makes over 100 plus thousand a year an added profit by using the systems we have. That's just what it is.

And so like if someone, if it makes sense for somebody to triple their money, then they make the, They make the purchase, right? It's, I like to take a lot of emotion out of the sale. Like, if this makes sense for you, if this return makes sense for you, then do it. If it doesn't make sense, then don't do it. Now, the risk they take on is, what about the bottom 20%? And so the nice thing is that we track that.

So the bottom 20% average $40,000 in additional revenue. So they basically broke even. And so it's like, that's the bottom. And so like, if that's you, then it's like, yeah, you worked and you basically broke even. That kind of sucks. Now I'm not talking about the top 20% because this guy's had 500,000 plus per year.

But the thing is that if you track the stats, then you can promote the stats, and you can do so truthfully. They go from unsubstantiated claims to substantiated claims. Like, one of the things that I'm most proud of in school, school.com, which is the platform for people who are trying to start their businesses, this video is mostly for people who already own a business, but if you're trying to start a business, 30.4% of people who finish their first month make their first dollar online.

Like, I'm super proud of that. And we just rolled out this massive new thing to basically make it even easier, even faster to do it. And right now, we have 35% more people actually succeeding there. So I think we're going to be a little bit over 40% now. So I'm super stuck about that. But unless you measure, like if you don't track, you don't care. Here's the tactical steps.

Collect data first. So you implement a data step where you collect data for people day one, day 30, day 60, day 90, at the end of the program or whatever your implementation is, you track data throughout. Number two is you keep improving things until the data becomes compelling. And number three is how do you actually present that data? So there's four variables that matters when you're presenting the data. Number one is the percentage of people, whether that's the median, the average, the average, or the percentage overall of people, that's number one,

who two, achieve X outcome, three in Y time or after X attempts, and four under Z conditions. And so it's like, we get X percent of gyms, so it was whatever is the average gym, so right, average gym owner, makes an extra $100,000 per year in profit, so that's the outcome, after their first 12 months in gym lords,

or gym legacy, which is the program that we have at gym launch. And so those are the conditions, right? And so it covers the first 12 months in gym lords, all four of those. So when you're making these, you want to hit all four of those things when you're explaining the data publicly. And I will say that the fewer conditions you have, the more compelling it is. Because for example, if I said, the average gym who spends $10,000 a month and has 10 employees and has two methods of acquisition and a large group training and a small group training achieves, by the time I even get to that, you're like, whatever, right?

And so you want to strip away and really, like, I would rather have a fewer condition statement that has lower results, me personally, than a higher result one with more conditions. Market advice number eight, say what only you can say, show what only you can show. And so this is one of the other isms that I have internal to my business. And so if you're the only triple black belt in Ohio for Muay Thai, then say that you're the only triple backbelt in Ohio for Muay Thai, right? This is talking about the things that you have done rather than telling people what to do. It's how I versus how to And so my my concept for making amazing ads and making amazing content is two steps do epic stuff Talk about what you did and so you can out-outcome people or you can outwork them So it starts with the outworking and then the outworking creates the out-coming and the out-coming is a much shorter headline

But the outworking them still works right I can start by saying hey I I I I wrote these two books. Writing two books would be an outworking thing. Like anyone could do it. There's no outcome, but hey, I wrote these two books. But then if the books are good, then I get the outcome, which is that we sold over a million copies. There's still number one and number two in marketing to this day, multiple years later.

And so the idea is that first you do the work and then you get the outcome. But most people want to say epic stuff having done none of it. And so you can get past the judgment of other people because you're not saying, hey, you have to do anything. I'm saying this is what I did. And so the idea is that everybody wants a return on their time. And I remember hearing this first concept from Arak, who's a YouTuber, and he said, dude, I made this thing where I went on 100 dates in, basically I did an entire season of The Bachelor,

but I did it in 16 minutes. He's like, what a steal. And he said that to me and I was like, man, such an interesting concept. Like he just took something that was really long and made it really short and he crammed it in there. So value per second was super high. And I'll just give you this one, is that it's not about seconds of value, it's value per second. That's what matters. Like, everybody has access to infinite information.

So you just saying I'm going to give you more stuff is not helpful. What you want to do is curate it and pack it and distill it and crystallize all the value and as tight a package as easily possible so that their value per second skyrockets. And you can do that by saying, hey, I spent 10 hours editing, you know, I spent 20 hours making a summary of this book and you can read the whole thing in 10 minutes. That's why summaries still always work, right? Because people want to get a deal on their time. If they get the same result for a fraction of the time, it's always a good deal.

By the way, if you ever want to sell to rich people, just promise the same result in half the time for twice the price. And even if you think about this video overall, it's like, well, I spent 13 years doing all this stuff, and I'm trying to compress those lessons into whatever amount of time this video is. Certainly less than 13 years. And so this is a great deal for the right person, for the right business owner who's actually trying to scale. So how do you actually do this? So if I had a marketing agency, showing what only I can show, I want to demonstrate.

And so I don't say, hey, I'm going to get you leads. What I want to do is get on a sales call, and I'm going to play what a live lead that I got for one of my companies, one of my clients sounds like. And I'd be like, hey, listen to this call. It's a minute long. Could you take 50 of these a month? Wow. So much more compelling than say, I'll just get you 50 leads. They're actually getting a fractionalized version.

They're getting a taste of what it looks like to be in the future. They're experiencing the result vicariously through the other person. And fundamentally, that's what a good testimony does is they put themselves in the shoes to the person who got the result. and then they put a discount on that and say, okay, how likely is that for me? And that's what I'm willing to pay. Now, if it were guaranteed, then all money-making opportunities would be worth it because, hey, if you spend $1,000 to make $100,000 a year by buying this course, then everyone would buy it if they knew for sure it would happen.

There would be an amazing deal. The problem is that people apply a discount to it because of how unlikely it is for them. And so we want to increase that likelihood by showing them rather than telling them, right? And so agency example, that was that one. The software example that I have is this is why demos are. so effective, right? You want to see this, hey, you have a video clipping software. Great. Do you have a video on you? Cool. Send it to me. We're on the phone. Great, I'm going to pull this video up. This is what we do to put the captions on and shorten and find those moments. Click, click, click, click,

click. Okay, so normally how long does that take you? Well, it takes me this long. Well, watch me do it. Click, click, click. Wow, would that make your life easier? Yes, cool. Boom. They go in, right? You're demonstrating in advance. And I'll give you a final one. When I was at my gym in Huntington Beach, so my first location I ever had. I remember this. I had a door-to-to-to-door sales guy who came up. all right and this guy was a clear set a pro he was really good and he sold me cleaning products he really did like it's probably the only door-to-door thing I've ever bought and it was just because it was such a good it was such a good sale and he had it down it's so tight I think he was in and out in like 13 minutes like it was stupid and so he just said hey I've got this stuff

it'll take care of any stain that you've got on this floor and I had turf and so I had gum that had gotten in the turf it was really black and like gone in there and so he just took that thing and he poured it on the gum and he just got in his hands and he's scrubbed it and it actually came out and the gum was actually impossible to get out. And I was like, wow, like he, I didn't have to think will this work for me. He just did it in front of me on a stain I actually had. He's like, cool, looks like you got 20 other stains. If this is worth it, it's 100 bucks for this stuff.

So I paid 100 bucks for some cleaning supplies, but it was totally worth it, right? And I ended up using that stuff for actually years because I had the, you sold my fucking huge gallons of it, right? And so again, it's whenever you can, and don't say, oh, this doesn't work for my business. Try and imagine how can I make this work for my business. them what they will experience and do it in a way that no one else can do it. And so for example, me, I, the reason I say like do epic stuff and then talk about

is that you continue to live life every day. And so things continue to happen. And so you can use the things that happen that you're doing as the content that you're making. And the content will always be shorter than the amount of time it took for the thing to happen. And so we have a portfolio of companies. And so I share case studies on this channel of like, hey, here's how we added 40 sales guys.

we increased, you know, we cut refunds by two-thirds. Here's how we, X, Y, Z. And it's because we're doing stuff, and then we just talk about what we did. And so the key point, step one is do stuff, and then step two, talk about it. Everyone else is stuck in the step where they don't wanna, they wanna figure out what to talk about,

but it's because they haven't done anything. If you do stuff, you have more than enough to talk about. Marking Truth, number nine, how and when to expand your market, there's five ways. Now, big picture, the vast majority of people need to do way more with their current market. So just to give you context on this,

I had a guy who came out to a workshop, said, hey, I'm a coach of coach coaches, right? I was like, all right, fine. And he said, I'm making $2 million a year. It's a really saturated space. So I think should I go broader to general business? And I was like, dude, how many coaches, coaching coaches exist? And he was like zillions.

And I was like, dude, I think you just need to get better. Because if you were the best coach of coaching coaches, then you would be able to take all of the market share that all of those guys have, and it would come to you, when it takes all if you're the best. And so just to give you an example, and this is the one I gave him. I said, gym launch.

Everyone knows this is a gym company. But you don't know how niche it really is. So one, we didn't work with personal trainers. Number two, we didn't work, we do now, but we didn't for the first four or five years work with big box facilities. So large facilities where you pay $10 to $70 a month to have access to the pool, the racquetball thing,

the cardio area, the weights, basketball, whatever, we didn't work with them at all. I call this facility leasing. We didn't use those. We didn't work with yoga. We didn't work with spin. We didn't work with Pilates. We literally only worked,

with microjims that did before and afters of weight loss and transformations. They had to do fitness and weights or some combination of those. That was it. That's a niche of a niche, and that business still cranks out $30 plus million a year. All right. And so the idea here is that you want, like the market, if you are the best, is still massive. You just need to solve the thing that matters most, which is being the best. Now, if you have solved being the best, there's five ways that you can expand. And so I'll tell you what we did because Jim Launch has expanded. I told you now we do do big box, but there's five ways you can expand. One, I think about it like a pyramid. So let's say you're in the middle. You can go upmarket, meaning you go to higher value customers.

So for us that would be health clubs, the big boxes like I was talking about, multi-location owners or franchisors, those would be going up market, more valuable but fewer of them, like the pyramid. On the other hand, you can go down market. I could go after personal trainers. I didn't go after them. We don't go after them. But if I wanted to, that would be a move that I could make. I would have to sell a lot more volume at a lower price and build the infrastructure to support that kind of volume. I could go adjacent, which would be, okay, I've got gyms, I'll do chiropractures,

or I've got gyms, and I can do weight loss clinics, right, or med spas, or something like that. So something that's adjacent that serves a similar avatar, but a slightly different business model. That would be adjacent. And the fifth way you can do it is that you actually go narrower. So that's the fourth way.

So the fourth way is you can go narrower, which is say, okay, instead of all gyms or just microgims that service before and after I say I only do, you know, ones that do weights, or I only do ones that only do cardio, right? Or I only do boot camps, or I only do semi-private, like I niche down even more. The alternative is that you go broader,

and I say anyone that's in health and wellness. And so those are the five ways that you can expand. You can go a market, you can go down market, you can go adjacent market, go narrow, or you can go broad. Now, despite me saying these five ways of expanding and everyone gets their juices, you know, their jollies off by thinking about how they're going to expand, most time, I'm going to start with that original story,

which is that you can make 10, 20, $50 million a year just serving one very specific avatar. And the vast majority of businesses, this is including portfolio companies that we purchased. I would say more than half the portfolio companies we've purchased, we did this exercise and we made the avatar narrower. We got more specific, not broader. I learned this process from Vista Private Equity. So if you don't know they are, they're $100 billion plus private equity, one of the most

successful private equity of all time, they focused on software companies. And I talked to their head of pricing and packaging, and he gave me this one line and it changed my life. He said, you want to know how we get the crazy returns that we do? And I was like, yeah, obviously, I want to know what you guys do. Now, obviously, they do lots of things. But the one thing that he pulled out, he said, we just know the company that we're buying customers better than they do. And so we go into the data room. So whenever you do an acquisition, there's something called a data room. You put all the data for your business in there so people can analyze it and make a decision about whether they want to invest. And so we go into the data

room and we analyze all their customers and we say, okay, we order them by who pays the most and who's worth the most. And we say, this is the 20% that does 80% of the revenue. And what they do is they look at what channels those people come in on, what offers, what marketing those customers do. And they basically stop doing the rest of the 80%. And then they expand that 20% to be 100% of the business. And so by doing that, they can have the same size business but 5x the revenue and arguably even more on the profit. And so just parallel, the Pareto principle, 8020, and they just apply it to the customers. And so right now, this is how you do it for you, is you look at all the customers you have up to this point.

You look at the top 20% and you say, okay, what do these people? people all have in common. And so I like to think about this in terms of psychographics, what do they think, geographics, what do they live, demographics, what do they look like? And then I would say like actions, like what have they done or what do they do to get this result. And so when I look at each of those frames, I try and eliminate as many variables as I can, so I get to two or three variables that clump all the best customers together. And then I make that in my marketing, and I tell my sales team, we only sell these people going forward because I know that these people are worth five times more, ten times more. And then guess what's able to happen? We run ads for

those people. And then our LTV skyrocket so we can spend more to acquire customers, and this is what allows you to scale by going narrower. And so the problem is that most business owners can't say no to fast money, and so they never get the big money. And so I had two companies that came out for a workshop that we had. And one, they were both agencies. It was a very simple example. So one was a generalist agency. They just did anybody who knocked on the door, they would take their money. The other one just did professional services. So that's legal, financial, insurance, like those types of services. And the generalist guys, I said,

okay, you have this big list of customers. I'm sure that there's a sub-segment of those customers that you do exceptionally well with. They're like, oh my God, we crush it for IT people. And I was like, okay, cool. So what percentage of your customers are there? They're like 8%. I was like, but are they more profitable by a percentage?

And he's like, oh, by a mile, they're by far the most profitable. I was like, okay. So if your entire business, and they were really struggling in terms of infrastructure, they were like super stressed out. You could see it. I was like, if your whole business was just those,

do you think you would like that business? And he was like, oh my God, that would be a breeze. And I was like, well, then we can build that business. And so that means that from here on out, you only sell those people. And over time, the percentage of the pie that's those customers has continued to increase until eventually you can cut the customers that are not your main thing. And then in a year or two years, you've completely transformed your business into something that's been productized.

You get really efficient. You get even better at it because you only serve those customers. You get better acquiring them, get better servicing them. You get higher margins, and you actually like your life. And so the same thing happened with the second agency where I said, what are the customers you have? And they're like, actually, we're really good at specifically family law attorneys, so like divorce attorneys.

And they had all these other things. I was like, but divorce attorneys you're really good with. And I was like, then just sell divorce attorneys. And because the thing is if you just sell divorce attorneys, it's a multi-billion dollar per industry. Like there's no reason you can't do $100 million a year or $200 million a year just selling those people.

And the same with the IT. So the idea is like people start taking on more avatars because they think that's what's necessary to grow. But, and I've said this before, but better creates bigger. Bigger creates bloat. And so if the goal is to get bigger, you want to focus not on getting bigger, but on getting better,

and then getting bigger occurs. Growth occurs as a result. Growth is not a goal. Growth is an outcome of inputs. And so I'm telling you, like, it took me a very long time to understand this. So I'm trying to get, like, every entrepreneur has this ego goal of like, I want to hit this a month, and I don't hit that a month, and I don't hit that a month. But the thing is just like you don't want to make the income, the goal.

If you do, it gets really hard to get out of that game, because sometimes you take the wrong steps, you artificially inflate revenue, and then you increase costs to sustain that revenue, but it was the wrong strategic move. But then you can't go backwards. You stay in the cycle forever. You don't want to do that. You have to think, OK, how do I make the core thing

that I do better? Because fundamentally, if this were twice as good as it is now, would I be bigger? Yes, because your customers would demand it. You get far more leverage by doing the same thing a hundred times than doing a hundred things one time. And so the vast majority of businesses, especially when they're starting out,

are doing 100 things one time rather than the same thing a hundred times. And you get a hell of a lot better when you do something on the 100th time. And so that means that you drive up your operational efficiency, you drive up your gross you get better at your acquisition because your marketing messaging, your sales scripting, the results that you can promise, all those things get better.

And now you're competing in a smaller pond so you can dominate everyone. But when people think small pond, they think that somehow that means that they're not going to make a lot of money. Like I said, Jim Lunch makes a lot of money. And it's in a very, very, very, very narrow niche. And so you just got to be more specific most times and break the limiting beliefs you have around the idea that like, okay, well, I just need to go from, you know, I've saturated chiropractors, right?

I've saturated this with $2 million a year in revenue. Of course not, right? Every single other business that exists that serves your customer, the fact that they're allowed to be alive and breathe shows you how much opportunity you have if you were better than them. Number 10, provide value. Now, everybody talks about providing value.

What does that even mean? All right? So in this book, I talk about something called the value equation is probably the most cited chapter in this whole book. But I break down what are the elements of value? And so there are four. Number one is the dream outcome, which is what does somebody actually want?

So if I were to offer like Daniel, who's behind the camera right now, I said, hey, you can get in shape or I can make you a million dollars, right? Making money for most men is more valuable than getting a better shape. And so the relative opportunity or the relative outcome will dictate how much money you can charge. That's why in general, B2B offers are higher ticket. Now, there are also fewer people who buy making money than people who buy consumer products. So you have about one-tenth, so 9% of people are business owners.

So you have a much smaller market. That being said, does the size of the market really matter based on the thing I just said? Probably not. But, again, number one is dream outcome. That's what differentiates. Now, let's say you've got two products that offer the same solution. So let's say the weight loss example, or the getting shape example.

If I have a PDF for that and I've got liposuction, both of them promise the same thing, which is that you're going to get a better shape, you're gonna lose weight. Okay, well, then why is liposuction so much more expensive than a PDF that I could buy on the internet for 20 bucks? They both promise the same outcome. Well, there's three other variables.

So variable number one is the perceived likelihood of achievement or the risk associated with the purchase. So risk would be the negative, perceive likelihood of achievement as the positive. And so we want to increase the perceived to perceive likelihood as much as possible. So if we had that liposection, and we've got one surgeon who's his first day out of medical school,

and we've got another surgeon who's done 10,000 surgeries, which of these guys can price higher? Well, obviously, you'd want to take the 10,000 one, even though it's the same procedure and the same outcome, the perceived likelihood of you actually getting what you want, the risk associated is lower, and so you're willing to pay more for that guy because you have more experience. The third variable of this is time delay.

The equal opposite of that is speed. How quickly between when someone buys and when they get the promise that you outcome. Now, if you're going to do that you'll come. Now, if you do liposection, it's like, great, you make the purchase, then you go to sleep and you wake up and you're thin. Very, very condensed, which is why it has a lot of value, right? Whereas if you have to do all this eating and this exercising and not drinking and changing

your diet and all this, waking up early and being sore, all this, like there's a lot of, there's a lot of delay there in terms of how much time and effort, it's, time specifically it's going to take to get the outcome you want. So the faster it is, the more valuable it is. And then finally, you have effort and sacrifice, or equal opposite ease. How easy can you make it? And so if you're trying to think about this in simple terms, it's how risk-free can I make it, how easy can I make it,

how fast can I make it, and is the thing that I'm promising, the outcome that I'm promising is something they actually want. And so if you have all four of those, you have something that people really want, they have no risk of doing it, it comes immediately, and it's easy. It's easiest pushing a button, you've got an incredibly valuable thing. And so when people say add value,

what you want to think about is, what does my customer, what does my avatar want to accomplish, or what do they want to avoid? So you've got towards good stuff and away from bad stuff. And so you say, okay, I can help you avoid this bad stuff, risk-free, faster and easier than otherwise. And the dream outcome, the good stuff, same thing again, is how can I help you get that good stuff faster, easier, and risk-free?

And so every time you make content, or every time you get a PDF, or every time you make a lead magnet, whatever it is, or you make content, the whole goal should be to be useful, the whole goal should be to provide value. And you do that by helping them achieve their goal, which hopefully with this video, I'm helping you market better, your business, by making it risk-free, so you don't have to make the mistakes I did.

Get to your goal faster and get their easier. So the easiest way to think, okay, got it. Well, how do I find the problems that people are suffering from so that I can make it faster, easier, and risk-free for them? Great question. So one is any comments that you get in response to content, that creates more content. This is the endless content wheel.

It's like you make content, people have questions about the questions, they have questions about those questions. The good thing is that problems never end, and people never stop complaining. And so as long as people stop complaining, people have problems, you're always gonna have problems to solve, which is one of the nice things about being an entrepreneur. Humanity, if you told us hundreds of years ago

that we'd have the internet in our hands and we'd have air conditioning and Wi-Fi and all this stuff, we'd be like, oh my God, all of our problems are solved, but we have more problems now than we did before because we're more aware of the problems that we didn't know existed before. And so whenever you solve a problem,

you create another one, it's the problem solution cycle, it never ends. And so one is you can look at that. The other is you can look internal to your business, which is what are the things that people struggle with internal in terms of implementation for whatever the thing that you do is. Whether it's a product that you sell,

there's some friction points along the way. And you think, okay, what are the friction points, and how can I make it easier? Number 11 is a fairly well-known marketing saying, give away the secrets, sell the implementation. The way that I think about this is make your free stuff better than they're paid stuff.

And that's an easy ism to say. But the real real is like, you actually have to think, if I give away something for free, I have to be willing to charge for it. And if you were willing to charge $100, or $1,000, or $10,000 for the thing that you give away for free, my God, must that be valuable? Yes, and what that does is it increases the likelihood

of conversion, increase the likelihood the person consumes the thing and then buys the next product. because what a lead magnet is or what content is, it's a complete solution to a very narrow problem. And that's fundamentally how I think about this. A lot of people are very afraid of giving way value value. But you shouldn't be. Give away all the secrets, give away all the things that you do,

and then if someone wants help with implementation, they can call you up. And this allows you to provide value to the masses, build your brand up, and then they use results in advance as an approximation of the results they're going to get after they purchase. And so even when you're marketing in terms of making content,

I'd like to think of being a bit of being a product, like to think of being okay with narrow because deep is where the dollars are. All right, so let me tell you, let me tell you a couple stories about this. So there was a lady who I just recently met who was doing just under a million dollars a year in profit, profit from 5,800 followers on Instagram. She had no other platforms, she sourced 100% from Instagram and this blew my mind. I mean like I say this stuff but having having that level like it was such an extreme example of tiny audience, big money, it broke my beliefs.

even further than I already had them broken. And when I looked at her page, here's what's crazy. It wasn't like she had crazy deep engagement either. It was like the post she would get would get, you know, one, five, maybe 10 comments on a great post. And she would get, you know, 10 likes, 20 likes, 30 likes, if it was a crazy one. But 100% of her content was about how registered dietitians

can more accurately bill insurance to make more money. It was a niche of a niche. It was literally like registered dietitians who bill insurance and how to bill insurance more effectively to make more per hour. That was her offer. And that's all she talks about. Her cheat sheets are on that. She talks about different insurance companies and how to bill each of them, the codes that you go that you plug in like all this jargon. I had no idea when I went to the page.

But for her avatar, I'll bet you of the 5,800 people that follow her, 5,700 of them were registered dietitians who were trying to find out what they needed to do. to make more money by billing insurance. And so she was selling five to ten little cheat sheets a day at like 99 bucks, plus two to three high ticket people per week into her thing, into her association of registered dietitians that followed her process for billing. And so I say this because I've also learned this personally. We used to make some wider content for about six months.

We did this experiment. We got the data back. It turned out we got lots of views, but we didn't get lots of business owners. And so we switched back to hardcore business stuff, which I love anyway, so I'm very happy about the experiment. And because of that, all of our stats are up. So we have more opt-ins, more people buying books,

more people go to workshops, whatever it is, more people apply into the portfolio so we can invest in their companies. All of those stats were up, despite the fact that the general views per video went down. And again, I'm here for the money, not for the fame. And so I encourage you, if you can break your attachment to the egotometrics,

like the likes and the views and things like that, and just focus on the bottom line, just get really specific on the avatar that you want to serve and make content only for them that's useful. So I've got a buddy of mine who runs a multi-nine-figure per-year marketing company. And he makes content online. He has a personal brand.

And he was like, oh, dude, my personal brand makes no money. He's like, but, and he goes super in-depth tactical-like stuff. He's an SEOG. And so all of his stuff is like how to make SEO content, blog content, things like that. And his content gets like so few likes and engagement. And he has like charts and graphs and all. this data to support all he does. He's obviously really, really good at this. But the thing is his lead quality that comes from him, he's like, they're all Fortune 500, Fortune 100,

CEOs, executives that are like, hey, you obviously know this stuff, can we just hire you? And that's exactly what he wants. He wants, he makes it so complex, he gives away everything. And he says it. He's like, you could just follow all my stuff and do it. Most people are like, man, this is too much work. And so can I just hire you? Which is an exceptional way to get customers. So, here's how you do it in three easy steps. One is you just give away your best stuff. Give it all away. If you have a low ticket thing that sells to lots of people

and you have a high ticket thing, I would encourage you, just give away the low ticket thing too. You're probably not making those money on it anyways and those customers are probably paying the butt. So just give it to them. And you can even show, hey, I used to charge for this and give it to you for free because I love you. All right, and by doing that, you make an exceptional thing,

and you put really heavy effort into follow-up and calls to action within the content itself. All right, so within the thing that you're giving away, you have CTAs and you follow up with your team to try and send them in the next thing if they're qualified and I'll give you a pro tip on this when you want to make the CTA make it about personalization not about more so just saying hey if you want more stuff like this go here say hey if you want me to help apply this stuff to your business or apply this stuff to your body or this stuff to your

life then let me know it's personalizing it because that is significantly more valuable than just more stuff and what's crazy is that a lot of people use the things they give away as an afterthought it's the last thing they think about But here's the crazy stat is that 99% of people who consume your free thing will never buy from you Which means that your reputation is getting made by the 99% of people not the 1% and so if you want to improve your reputation in the marketplace make sure the stuff that you give away for free is awesome Also make sure the stuff that you sell is awesome and if both those things sound like a four-letter word which is work Welcome to business and so I talked earlier about going upmarket or getting narrower on the advertra that you want to serve a lot of people have down sales and I think over time I've gotten less and less into having down sales and more along the lines of like

If we have a lower avatar and we're downselling 10% of calls into this thing that's paid, if 10% of people are buying something that's one-tenth the price because it's a downsell, then it's gonna change my revenue by 1%. I don't really care. It's not even worth the headache. I'd rather just give that away to hundreds of people

for free because if the cost is free, way more people will consume it, and then get a higher percentage of people to buy my next thing and I allow my marketing messaging to attract the higher quality customers. So this allows me to go upmarket or narrower and give away all the other stuff so I can create my more qualified customers.

The amount of businesses that I know that, one, that we've invested in or do that we've helped, simply make way more money by just giving away the thing that was their big headache, that was a low ticket thing, just so that they could focus on serving the best customers, most times you'll make money going up market. Marketing advice number 12, all advertising works.

It's just a matter of efficiency. I'm really, I want to drill this down people's stories. The amount of time I've said Facebook ads don't work for us, Google ads don't work for us, TikTok ads don't work for us, direct mail doesn't work for us, radio ads don't work for us, doesn't work for us. Fundamentally, if you have a qualified person on the other side and you make an offer to them that solves a key problem for them, if you can get them on the phone,

you can make money, period. So if you can rephrase the problem is, I don't know how to make Facebook ads work for us, I don't know how to make TikTok work for us, I don't know how to make content work for us, then that becomes a problem that you can solve. Now, this is really important. So I talked earlier about optimizing your advertising from front to back, and that's true. But when you optimize a business, you optimize this from back to front. And so the back, the LTV, how much you make per customer, enables how much you can spend on the front end. And so you optimize the throughput on the front end,

obviously because that's where you can get the highest returns. But the engine that you can spend on that depends on how much you make per customer. And so you can either be really, really, really, really exceptional at Lauren Kack or really, really good at increasing LTV. And if you do both, you have huge arbitrage, that's where you make stupid money.

And so let's go through hypothetical. Let's say that you sold something that was a billion dollar thing, okay? If you had a billion dollars in gross profit that you'd make from one sale, you could reach a lot of people on earth. And just to give you context on this, if I wanted to become an A-list celebrity, I back-calculated what I believe it cost to become an A-less celebrity. It was about $50 million. And the way that I calculated that was I thought, what person went from complete obscurance,

so no one knew who they were, obscurity, to omnipresence or some, like, you know, that everybody knew. And so the simplest example are people who were no-name actors who become the star of a big Marvel hit. And so what I did was I said, OK, how many of these have I seen? What was the movie budget? Now you have to divide that by the other characters

in the show, or in the movie. And between the big blockbusters, where you think about like the Hunger Games girl, right? I can't remember her name right now, but that girl. Like the marketing budget for those types of films, and you think, OK, with $50 million, she went from knowing who she was, to being famous.

And so for $50 million, you can reach so much of America. And so I use this as a hypothetical, because if you had something that you sold for a billion dollars, you could spend that and still make 20 to 1. And so the idea is, yes, we optimize our advertising from front to back. We put our effort on the front. But in terms of where our LTV comes from,

we work from back to front so that we can spend more on the front end. A big problem in terms of efficiency is that oftentimes if you do start running ads profitably, for example, you reach some sort of ceiling. You're like, hey, we can't, we can't, can't get past $1,000 a day, hey, we can't get past $10,000 a day, hey, we can't get past $100,000 day, whatever it is, right? Usually it's because the ads that you have aren't good enough

to reach the next level of awareness. So Eugene Schwartz, in breakthrough advertising, talked about something called five levels of awareness. And so they go from unaware, somebody has no idea who you are, what the problem is or anything. They're just unaware. The next level is problem that's where you see ads that are like having trouble sleeping in night. Do you have back pain when you lean over? Like, things like that. They ask open-in questions that make someone aware of the problem. Underneath of that is solution aware. Have you tried this before? Have you tried this before? Have you tried this before? This is where someone knows the solutions that potentially exist. Then you have product aware, which is them advertising, you advertising your own

product, like, okay, have you tried like my product before? And let me talk you about this. And then finally, you have Most Aware, which is usually passed in existing customers. And so there's a five levels awareness. And so most times, smaller advertisers, beginner advertisers, get returns marketing to Most Aware, right? If you email your list or you make a post or you send out an email, right? Those are through Most Aware people. So you can make sales from that for almost no money. One degree above that is like, okay, or are there other people who are in the market? That's product aware they're looking for something to solve a specific problem, right? And they're aware of the options that are out there and you market to them.

So you have to be a little bit better to market to those people than to just your existing customers. Now, if you go one level above that, right, solution aware, is that they know that there are people. They don't know how they're solving the problem, but they know that there is a solution that exists. And so you have to have another order of magnitude improvement of your ads and the hooks to call out those people. And so most times, the problem isn't that your market isn't big enough, it's that your ads aren't good enough. And they're not specific enough to hit this next massive tranche of the audience. And I say this with our largest company in the portfolio is about $100 million a year. And we spend millions of dollars a month in advertising.

And we go to the most unaware people. We go to people who have no idea that this product or this problem exists. We actually have to make them aware of the problem. And then we make them aware of the opportunity to solve it. And then we have to make them aware of the problem. We have to take them through all the stages of awareness in a very short period of time, and that comes from a very well-crafted ad.

And so I have this saying that I have internal, which is that the size of the plane is directly correlated with the length of the runway. The bigger the plane, the longer the runway. And so if you want to sell a very expensive thing, or you want to sell a very cold person. So the price and the coldness, or how aware the person is,

so the longest sale possible would be someone who's completely unaware for a very expensive thing, right? The shortest sale possible would be someone who's very aware for a very cheap thing. And so the amount of runway, the amount of selling, the amount of advertising that you have to do to get someone through these stages is directly proportional to those two things. And if you're having trouble scaling, it usually means that this is mismatched. You're sending a warm message to a cold audience or you're getting people on the phone who aren't prepared to spend a huge amount of money that haven't been warmed up enough.

And so it's making sure that we're hitting each of these boxes for the audience that we're starting to target. And so as you go to a new tranche of, let's say you go from solution-aware to problem aware. So it's a bigger area, right? And so think about this is concentric circles like a pizza like the area of the pizza you know like a pizza that's this big if you could take an inch off it's almost the same size as a as a two inch pizza in the middle like the diameter circumference whatever that is I probably failed geometry the point is that it just gets bigger and exponentially bigger as you go out and so this is a weird visual that I have for this but if you think about a watermelon slice and at the tip there's lots of seeds and as you go

down there's fewer seeds but you still have to pay the same amount to reach all these eyeballs to find the few seeds versus in the beginning when you have lots of seats. So your density of sales per thousand eyeballs goes down as you go to more unaware people because you're going to go to people who just simply don't care and never will care. But you have to, and this is where the LTV matters so much and the optimization matters so much, but you still, if you can be profitable in a larger trunch that's 10 or 100 times as big, that's when you start really printing money. Right.

And so if you have, call it 20 to 1 LTV to KAC in the beginning when you have lots of little seeds, Lots of density of potential buyers, because it's really warm, really problem wear, or really solution or product aware, right? Like really high end. As you go down, you might drop to five to one in the middle. You might drop to three to one at scale,

but you're at 100 times the spend. And so in that case, you're still making way more absolute return on the investment. Another way to think about this is like a golf course. And so if you could only put, then you're going to only make six-inch putts. That's only the top little seeds of the watermelon. But think about how much more area,

if you learned how to drive, and you learned how to hit a three iron. I'm not very good at golf. You can obviously tell. Then you learn how to hit a wedge. There's so many more shots that you can make if you have these other skills in your arsenal. And so think about each of the level's awareness

as another club that you have to learn how to hit so that you can get more balls in the hole from any part of the course. Marketing advice number 13. We need to be reminded more than we need to be taught. And I think this is one that's going to break a lot of your beliefs. And so I want to really emphasize this one because it's important. Once you start making content, once you start running ads,

running ads and you start putting stuff out publicly, you start advertising, you're going to get to a point where you're like, I feel like I've said everything that I was going to say. Now, remember, you continue to live life every day, you continue to do stuff and you can talk about what you did, so that can break that. But my mom said this to me once, and I always remembered it. She said, the news never changes, just the names. And I really thought about that.

It was like, there's always a rape, there's a war, there's a murder, there's a car accident. Like, the actual story doesn't change, only the names. And so if you think about that with content, like there is no new content. Like the human condition has not changed for thousands of years. Like the older the problem, the old of the solution. And so we're making content and we're putting stuff out there.

And when I think about myself, the things that I follow, like I follow philosophy pages because I am okay rereading Epictetus' stuff. Like I read his stuff before and I read it in quote form again. And when it comes up again, I like to be reminded. I like to keep the stuff top of mind. That's why I follow those pages. And many people follow your pages for that exact same reason, is that the stuff you talk about is stuff that they want to keep top of mind.

They want to be reminded of that stuff. And getting taught is much more difficult than being reminded, but they're equally valuable. Because if it changes their behavior, then you still did teach them. Again, you just reminded them. And what's crazy about this is that, like, the Friends Show right now, if you've ever heard of it, is being watched more now than it was a few years ago. So reruns. Like people watch reruns because there's nostalgia or whatever reasons you want to pick to it, but people are willing to rewatch the same thing because they know how it ends and they know they liked it. And so you can make the same thing again because also your audience who's new a year later hasn't seen that thing. And so if you make something new to them, even though it's quote old or a reminder to your existing audience, your existing audience doesn't mind the reminder and the new people never saw it to begin with.

And if you want to have different ways of creating variety, even around the same topics, I would encourage you instead of thinking of getting into trend hacking and talking about the news, talk about your news. So it's about what are the new things that are happening now? This is the do epic stuff, talk about what you did. And so this is where we tell new stories

to explain the same concept because for that specific audience, you'll reach a different type of person or different avatar that still might be within your market with a story about a mother and daughter versus a father and a son, versus a military vet,

versus a small business owner, right? There are different avatars and you can tell the same story, but it happens to a different name, just like the news. and people still watch the news every single day, and then what we want is them to watch our news. You can tell the same concept, like the value equation.

The value equation I explained in my book. I also have a course on my site that I explained the value equation in a different format. So think about it in terms of formats. This is written. I have an audio. I've got videos that are my site that are in a course format. I'm mentioning it here now.

I have it on whiteboards that I've explained it. I've applied it to services. I've applied it to education. I've applied it to physical products. I've applied it to software. And so you can take the same idea and think, how can I display it in new formats, new mediums, and new contexts.

And so when you have that, and then you extrapolate on top the news of your life, even though you feel like it's saying the same thing, the amount that it takes to create something novel is very small. And so I'll tell you the story that I think will wrap this up, it's the story of Henry Ford. And so Henry Ford had, in his office, he had his marketing person right next to him. So he walked past the marketing department over and over and over again.

And this is back in the day when they didn't have computer screens. have computer screens. So it was just like they had mock-ups and like big posters and things like that for whatever the next ad campaign for a new Ford car was. And so you walk past this guy's office for three months. And the end of the three months he was like, hey, John, when are we going to stop running this ad? I'm so sick of it. And John, the marketing judge looked at me and he said, we haven't even started running it yet. And so the thing is that we get so much sicker of our own content before our audience even remembers your name. And so the thing is that we assume that every person consumes every piece of content you ever put out. We put out 50 plus pieces of content a day.

grateful if somebody watches one a week. And so the idea here is that like you put out significantly more, but we have this assumption that everyone's paying attention and no one is. And so we put out tons of volume with the hope that we catch one person on that one day. And you might have made four things about the value equation. Actually, you can give me good feedback, so this would be good.

If you haven't heard about the value equation whatsoever in my content up to this point, drop a comment. Because I want to prove that this, even though I've talked about it in a zillion formats, some of you guys didn't even know how to book, right? People need to be reminded more than need to be taught. Hey guys, real quick, at Acquisition.com, our whole mission is to make real business education accessible for everyone.

It would mean the world to me if you helped us accomplish that mission by sharing the show. If you can share the show on your Instagram story or wherever it is that you post content, you can tag me in it. I'm sharing as many back to my stories as I possibly can. It means a lot. Thank you.