How to Make Money So Fast It Feels ILLEGAL

00:40:53
https://www.youtube.com/watch?v=k-3PoOT4vOM

Resumen

TLDRMotho enoa o arolelana boiphihlelo ba hae ba ho etsa chelete e ngata ho feta baetapele ba bang ba likhamphani tse kholo nakong e khuts'oane. O boletse hore thuto ea bohlokoa ke ho utloisisa 'value equation,' moo o fanang ka boleng bo abarabetseng ho feta chelete e lefiloang ke bareki. Ka ho khetholla lintlha tse kang sepheo se seholo sa bareki, monyetla oa katleho, nako e hlokahalang, le boiteko bo hlokahalang, o ile a etsa hore khoebo ea hae e atlehe ka matla. O totobatsa bohlokoa ba ho fana ka chelete kapele ho lefa litšenyehelo le ho qala papatso, e leng leano le matla ho fumana bareki ba bacha le ho boloka bareki ba teng.

Para llevar

  • 💡 Utloisisa bohlokoa ba ho theha boleng ho bareki ba hao.
  • 🔑 Etsa bonnete ba hore lihlahisoa kapa litšebeletso li fihla litebello.
  • 📈 U lokela ho hlahisa chelete kapele ho lefa litšenyehelo tsa khoebo.
  • 🤝 Ho boloka bareki ba teng ho bohlokoa haholo ho fapana le ho fumana ba bacha.
  • 📊 Papatso e nang le phello e ka holisa khoebo ka matla.
  • 💰 Ho eketsa boleng ho sehlahisoa kapa tšebeletso ea hau ho tlisa phaello e eketsehileng.
  • 🕒 Nka khato ea ho fokotsa nako pakeng tsa ho rekisoa le tefo.
  • 🎯 Tseba 'hyper buying cycle' ea bareki ho etsa hore thekiso e atlehe.
  • 🛠️ Ntlafatsa leano la ho tsamaisa khoebo hore le fane ka boleng.
  • 💼 Sebetsa ka hloko 'me o loantše matšoenyeho a kotsi a kotsi e tlase khaontareng.

Cronología

  • 00:00:00 - 00:05:00

    Mokhoa oa mantlha oa ho fumana phaello e potlakileng ke ho utloisisa boleng ba ho etsa chelete le puisano le boleng, mohlala o tsamaeang le sebopeho sa tebello ea ho etsa phaello, nako le boiteko boo motho a lokelang ho bo kenya.

  • 00:05:00 - 00:10:00

    Ho fapana le ho beha theko ea hau holim'a litšenyehelo, beha theko ea hau holim'a boleng boo u bo fang. Lekhalo la mofuta oa tafole ea lb, ka lebaka la ho etsa qeto e fosahetseng ka mabapi le boleng.

  • 00:10:00 - 00:15:00

    Ha o rekisa lihlahisoa kapa litšebeletso, ela hloko ho nka monyetla ka ho fumana khoebo ka fumana chelete kapele ka ketsahalo ea phetoho ea chelete, kahoo o ka etsa chelete kapele ntle le bothata ba lichelete ka banka e le lerole.

  • 00:15:00 - 00:20:00

    Khaso e lebisitsoeng ke ho qoba ho ba le mefokolo ea lichelete ka ho ntlafatsa mekhoa ea ho theha bareki kapa bareki likhoebong tsa hau, 'me u se ke ua ba le bothata ba ho ba fumana.

  • 00:20:00 - 00:25:00

    Reka bareki ka chelete ea bona, empa u e sebelise ho fumana bareki ba bang - sena ke se bitsoang Acquisition Financing ea moreki. Ha litjeo li le sieo, chelete e se na qobello.

  • 00:25:00 - 00:30:00

    Se ke oa rekisa ho feta seo bareki ba batlang ho se reka bothateng ba theknoloji bo sa lumellaneng ka potlako le theko tlase hore bareki ba rekisoa ka theko e tlase.

  • 00:30:00 - 00:35:00

    Khōlo ea ka e qalile ka ho fana ka litšebeletso tsa ho fokotsa boima ba 'mele, ho hapa bareki ka morero oa tlhōlo ea libeke tse tšeletseng, 'me ho nepahetse le ho sa khonehe ho hahuoa ka sebopeho sa fokolang, empa feela ka bareki ba chenchang bana ka ho sebelisa chelete ea bona bakeng sa menyetla e latelang.

  • 00:35:00 - 00:40:53

    Qetellong, phetoho ea khōlo e ka ba ka chelete e ngata ka ho etsa joalo, ho rekisa ho bareki ba tloaelehileng le barapeling, ka ho khutlela kapele.

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Mapa mental

Vídeo de preguntas y respuestas

  • Mokhoa oa ho etsa chelete o potlakang ke ofe o buuoang videong ee?

    E 'ngoe ea mekhoa e buuoang ke ho utloisisa le ho sebelisa equation ea boleng moo u fanang ka ntho e nang le boleng ho feta eo bareki ba e lefang.

  • Tšilafalo ea chelete e potlakileng ke efe?

    Ke ho etsa khoebo ka tsela eo bareki ba bapisang chelete ea bona ho uena kapele ka hohle. Sena se kenyelletsa ho etsa hore bareki ba sebelise chelete e ngata mathoasong moo ho khonahallang.

  • Phapang ke efe pakeng tsa 'recurring' le 'reoccurring'?

    'Recurring' e bolela litšebeletso tse lefuoang ka teka-tekano e sa khaotseng joalo ka Netflix, ha 'reoccurring' e bolela bareki ba etsang thekiso khafetsa empa e sa folesele e le maemo.

  • Bohlokoa ba ho hlahisa boleng bo boletsoeng ke bofe?

    Ho hlahisa boleng ho buuoa ka ho fana ka thepa kapa litšebeletso tse fetisang litebello tsa bareki, ho fokotsa kotsi, ho etsa hore ho be bonolo le kapele ho lula bophelo bo se na mathata.

  • Na ho khoneha ho fana ka litšebeletso ka litšenyehelo tse tlase 'me ho asymmetrical ka phaello e kholo?

    Ho joalo, empa u tlameha ho sebelisa 'value equation' ho etsa bonnete ba hore boleng ba sehlahisoa bo fetisa litebello tsa bareki, bao ba tla ikemiselitse ho lefa haholo.

  • Ke hobaneng ha ho le thata ho boloka bareki?

    Hobane lik'hamphani tse ngata li tsepamisitse maikutlo a tsona ho hohela bareki ba bacha ho e-na le ho nts'etsapele le ho boloka kamano le bareki ba teng.

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Desplazamiento automático:
  • 00:00:00
    you guys want to hear something
  • 00:00:00
    absolutely insane I made more in a year
  • 00:00:03
    than the CEOs of McDonald's Ford
  • 00:00:06
    Motorola Yahoo and Ikea combined as a
  • 00:00:10
    kid in my 20s believe me no one was more
  • 00:00:13
    surprised than me and so I'm going to
  • 00:00:16
    show you how to make money so fast it
  • 00:00:19
    feels illegal the first way to make
  • 00:00:21
    money so fast it feels illegal is to
  • 00:00:23
    understand value creation I want to tell
  • 00:00:25
    you a story I sent my father a picture
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    of our largest annual event that we held
  • 00:00:31
    in our company which licensed to gym
  • 00:00:32
    owners um we had a room of 700 plus
  • 00:00:35
    people and he said oh that's awesome
  • 00:00:37
    that's so many people uh how much did
  • 00:00:39
    they pay to be there and I said $42,000
  • 00:00:42
    a year and he said oh my God he said do
  • 00:00:45
    they know that they're paying that much
  • 00:00:46
    and I was like yeah they're aware it's
  • 00:00:48
    not like I'm magically siphoning money
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    from their accounts and um it was like
  • 00:00:53
    okay uh now rather than respond and be
  • 00:00:55
    like really you know mean about it I was
  • 00:00:57
    like well let's walk through this I said
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    if you were able to pay a dollar and get
  • 00:01:03
    $5 back would you do it and he's like
  • 00:01:06
    well it would depend I said it would
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    depend on what he said well what's the
  • 00:01:10
    what's the likelihood that the five to
  • 00:01:12
    one actually happens I said that's just
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    the average so some people are below
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    average some people are about aage he
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    like okay that feels like a fair bet
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    well what would I need to do I was like
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    great question you'd have to dedicate
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    probably 10 plus hours a week to fully
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    kind of implementing a new model within
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    your business he was like
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    okay how long would it take between when
  • 00:01:32
    I started and when I got those types of
  • 00:01:34
    results and I said about a year he was
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    like okay well then yeah I think I would
  • 00:01:40
    do it and so that thought process was
  • 00:01:43
    kind of the first big unlock to making
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    so much money that it should feel
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    illegal which is that you can't sell out
  • 00:01:50
    of your wallet you have to sell off of
  • 00:01:53
    the value that you're creating for
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    someone else we were able to charge
  • 00:01:56
    significantly more and profit
  • 00:01:58
    significantly more than everybody else
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    in my space and so everyone else in my
  • 00:02:02
    space was charging literally a tenth of
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    what I was able to charge or I prefer to
  • 00:02:08
    say command from the marketplace and the
  • 00:02:11
    reason that was able to happen was
  • 00:02:12
    because I Ed something called the value
  • 00:02:14
    equation all right and so the value
  • 00:02:15
    equation has four components and I'm not
  • 00:02:16
    going to go super deep on it but I'll
  • 00:02:18
    just walk you through it real quick so
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    you've got the dream
  • 00:02:21
    outcome which is what's the big thing
  • 00:02:23
    that people want so in this instance
  • 00:02:25
    it'd be they want to make more money in
  • 00:02:26
    their gym they might want to lose weight
  • 00:02:28
    they might want to have a fixed their
  • 00:02:30
    relationship they might want to look
  • 00:02:31
    cool in front of their friends whatever
  • 00:02:33
    the next is the perceived likelihood of
  • 00:02:35
    achievement or the equal opposite of
  • 00:02:36
    that is risk How likely is it that when
  • 00:02:38
    I buy this thing I get what I want which
  • 00:02:40
    when he asked the question well How
  • 00:02:42
    likely is it this is what he's teasing
  • 00:02:44
    out the next question is time how long
  • 00:02:48
    is it going to take between when I start
  • 00:02:51
    and when I get and the longer that is
  • 00:02:53
    the less valuable the thing is and then
  • 00:02:56
    you have effort and sacrifice which is
  • 00:02:58
    how hard am I going to have to try what
  • 00:03:01
    am I going to have to start doing that I
  • 00:03:02
    don't want to do or stop doing that I do
  • 00:03:04
    want to do to be clear the reason that I
  • 00:03:06
    I made this value equation is because
  • 00:03:08
    for so long many people and you probably
  • 00:03:10
    heard them in conent are like provide
  • 00:03:11
    value create value but I was like what
  • 00:03:13
    does this even mean how does one create
  • 00:03:15
    value and so I set out to try and figure
  • 00:03:17
    out what makes me want to buy stuff and
  • 00:03:19
    so in a hypothetical example you'd want
  • 00:03:21
    something that would be immediate it
  • 00:03:23
    would be no effort it would be
  • 00:03:25
    guaranteed and it would be exactly what
  • 00:03:26
    they want the way they want it that
  • 00:03:28
    would be the most valuable version of
  • 00:03:30
    whatever you could sell and then you
  • 00:03:32
    would say let's say that our average is
  • 00:03:34
    $100,000 of value all right now in a B2B
  • 00:03:36
    setting it might literally be that
  • 00:03:38
    because it's a monetary outcome and if
  • 00:03:39
    it's a B to C setting selling to
  • 00:03:41
    Consumers then we have to abstract the
  • 00:03:43
    value of what fitting back into your
  • 00:03:45
    high school GS is worth to you or
  • 00:03:47
    looking good on prom night or just
  • 00:03:48
    feeling good every single day whatever
  • 00:03:51
    but we have this Roi uh and then we have
  • 00:03:54
    some sort of discount that we're going
  • 00:03:56
    to apply to it which accommodates risk
  • 00:04:00
    right one is it's in the future I would
  • 00:04:02
    pay less for something that is uh that
  • 00:04:04
    is guaranteed and immediate then not
  • 00:04:06
    guaranteed and at a delay so let's say I
  • 00:04:08
    sell tables right so this is a retail
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    product and you get you would
  • 00:04:11
    immediately think oh this is probably
  • 00:04:13
    highly commoditized well I'm not so sure
  • 00:04:16
    think about it on the lowest end you can
  • 00:04:18
    buy a foldout plastic table from uh
  • 00:04:21
    Lowe's or Home Depot for probably 50 or
  • 00:04:24
    100 bucks I haven't checked plastic
  • 00:04:26
    table pricing recently on the flip side
  • 00:04:28
    you can buy a
  • 00:04:30
    $20,000 handcarved wood table both of
  • 00:04:33
    them allow you to put stuff on top of it
  • 00:04:35
    and eat right and so the idea is how can
  • 00:04:38
    we position our thing separately from
  • 00:04:41
    other people now if the dream outcome
  • 00:04:43
    for that table is not okay I just need
  • 00:04:45
    to have something that I could put stuff
  • 00:04:46
    on top of the dream outcome might be
  • 00:04:48
    when people walk into my home they feel
  • 00:04:50
    immediately impressed so now we're
  • 00:04:51
    actually relating this to status so this
  • 00:04:53
    is a business because B2B is actually
  • 00:04:55
    pretty easy it's just this is how much
  • 00:04:56
    money it is and then the rest of your
  • 00:04:57
    time is trying to make it easier for
  • 00:04:59
    them less risky um and faster business
  • 00:05:02
    consumer sometimes you need to spend a
  • 00:05:03
    little bit more time on translating what
  • 00:05:06
    this status increase might mean for them
  • 00:05:08
    and how meaningful that is or the
  • 00:05:10
    reverse how terrible and painful it's
  • 00:05:12
    been to lack this status right and so if
  • 00:05:14
    we have this big expensive nice table
  • 00:05:16
    then we say okay here's the status now
  • 00:05:18
    the risk of this not happening this is
  • 00:05:20
    where we might show trends of this being
  • 00:05:21
    a hot thing that many people understand
  • 00:05:23
    the value of so the risk of them not
  • 00:05:25
    getting the status is lowered the time
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    is like hey I can have this at your
  • 00:05:29
    house by the end of today that would be
  • 00:05:31
    something like wow this could happen
  • 00:05:32
    right in time for this dinner party I
  • 00:05:33
    have or my boss is coming to my house
  • 00:05:35
    and then effort and sacrifices don't
  • 00:05:36
    worry we have a white glove service that
  • 00:05:38
    we'll make sure that we can fit it into
  • 00:05:40
    your doorways even though it's this
  • 00:05:41
    massive thing and we will assemble it
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    there for you you just need to say yes
  • 00:05:45
    right now and it will be there by the
  • 00:05:46
    end of the night and you can have dinner
  • 00:05:47
    on it when you have your guest tomorrow
  • 00:05:50
    right now we've tied them buying to all
  • 00:05:52
    of the value components to getting them
  • 00:05:54
    to then be willing to spend $20,000
  • 00:05:57
    because it's not about the wood it's not
  • 00:05:58
    about the table it's about how much
  • 00:06:00
    status is worth to them within this
  • 00:06:02
    context and they get to keep it forever
  • 00:06:04
    right and so this is how we have to
  • 00:06:06
    unpack what we're selling so that many
  • 00:06:08
    of you are selling tables and pricing
  • 00:06:11
    like it's a plastic table but you're
  • 00:06:12
    then trying to half do the work but then
  • 00:06:14
    you can't make the margins work with the
  • 00:06:15
    white glove because people say I only
  • 00:06:17
    want to pay $100 like well I would
  • 00:06:18
    deliver it and they're like oh I have to
  • 00:06:20
    assemble this too and all of a sudden
  • 00:06:21
    they're they're combating you when if
  • 00:06:23
    you just had charged more and positioned
  • 00:06:25
    it differently you could then give them
  • 00:06:27
    all these other things that they want
  • 00:06:28
    anyway and the reason this is so
  • 00:06:29
    important is that price is the single
  • 00:06:31
    largest lever on profit so let's say
  • 00:06:33
    we've got a before all right which is
  • 00:06:35
    that you sell your tables all right and
  • 00:06:37
    you've got an after this obviously works
  • 00:06:39
    for services or whatever else you sell
  • 00:06:40
    all right and so let's say you charge
  • 00:06:42
    $100 for your table and your cost uh for
  • 00:06:45
    that table is uh is I'll be extreme here
  • 00:06:49
    we'll say it's $50 okay now let's say
  • 00:06:52
    that you have other costs like marketing
  • 00:06:54
    and sales and other stuff like that that
  • 00:06:56
    amounts to $30 all right so that means
  • 00:06:58
    that your net profit is going to be 20
  • 00:07:00
    bucks when you sell a table gross profit
  • 00:07:02
    is 50 net profits 20 okay now let's say
  • 00:07:05
    that we reposition our table as this
  • 00:07:08
    amazingly valuable thing that is now a
  • 00:07:10
    $1,000 table okay now our cost on this
  • 00:07:14
    the table itself might be 50 but let's
  • 00:07:15
    say we include some of those perks let's
  • 00:07:17
    say we've got the hand delivery uh and
  • 00:07:19
    things like that okay well let's say
  • 00:07:20
    that the delivery is going to be another
  • 00:07:22
    $200 uh for one of your guys to go out
  • 00:07:24
    there uh and and use the truck gas
  • 00:07:27
    whatever so now we got $250 here okay
  • 00:07:29
    okay got it and then the other costs
  • 00:07:31
    maybe maybe your cost of uh sales goes
  • 00:07:33
    up a little bit to sell this you got to
  • 00:07:34
    get more leads okay so we'll call it 130
  • 00:07:37
    all right so now what are we actually
  • 00:07:39
    making in net profit for this table so
  • 00:07:41
    we got 3 380 okay I wish I had done
  • 00:07:44
    easier math but I think it's 620 here
  • 00:07:46
    all right so $620 in profit and so this
  • 00:07:50
    is how you can get unreasonably wealthy
  • 00:07:53
    in a very short period of time by simply
  • 00:07:55
    repositioning what you sell based on the
  • 00:07:58
    value provide someone else rather than
  • 00:07:59
    the
  • 00:08:00
    cost that it costs you and so to put
  • 00:08:03
    this in context this is a 31x increase
  • 00:08:06
    in profit and so I I'll tell you this
  • 00:08:08
    quick story there was a guy that was in
  • 00:08:10
    the same exact space as me that paid me
  • 00:08:11
    for a Consulting day years ago and when
  • 00:08:14
    I looked at his numbers what was
  • 00:08:15
    fascinating was that he was actually
  • 00:08:17
    selling the same amount of people per
  • 00:08:18
    month as I was and so he was spending
  • 00:08:20
    the same amount of marketing he was had
  • 00:08:22
    the same number of sales guys and he was
  • 00:08:23
    closing roughly the same amount as we
  • 00:08:25
    were and so what what was interesting
  • 00:08:27
    about this and this was a massive lesson
  • 00:08:28
    that I learned is that CAC or the cost
  • 00:08:30
    of getting a new customer in an industry
  • 00:08:32
    as long as you're proficient at
  • 00:08:34
    marketing more or less is actually not
  • 00:08:36
    that different um that you'd be
  • 00:08:38
    surprised I look at a zillion companies
  • 00:08:40
    every year and between Industries like a
  • 00:08:42
    local plumber and another local plumber
  • 00:08:43
    it's not going to be that different and
  • 00:08:45
    so the big difference though is that we
  • 00:08:48
    were able to make somewhere in the
  • 00:08:49
    neighborhood of about eight times uh
  • 00:08:51
    more money per customer than this guy
  • 00:08:53
    was but here's the crazy part we were
  • 00:08:56
    making somewhere near of 50 times more
  • 00:08:58
    profit and it's because of this so we
  • 00:09:00
    had eight times more money but then it
  • 00:09:02
    resulted in so remember this is just
  • 00:09:04
    this is a 10x right so this is a 10x
  • 00:09:06
    increase in price but it resulted in a
  • 00:09:08
    31x increase in profit and so this is
  • 00:09:11
    why price is such a strong lever on how
  • 00:09:13
    much you make now where it gets
  • 00:09:15
    competitive is if somebody else can do
  • 00:09:16
    something just like you and do it for
  • 00:09:18
    less but there was a I think a Mackenzie
  • 00:09:21
    survey where they looked at uh a number
  • 00:09:24
    of companies and 85% of them competed on
  • 00:09:28
    price and only 1% of them won on price
  • 00:09:31
    so it's literally the worst possible
  • 00:09:33
    strategy you can have because there's
  • 00:09:35
    only one person who wins lowest price
  • 00:09:37
    Dan Kennedy said this famously there's
  • 00:09:39
    no reward you get for being the second
  • 00:09:41
    cheapest competitor you just lose a lot
  • 00:09:43
    of money right and so there is however a
  • 00:09:47
    benefit to being the most expensive
  • 00:09:49
    person and that's going to be a direct
  • 00:09:51
    correlation to the amount of value that
  • 00:09:53
    you can provide any individual person
  • 00:09:56
    and so again it's about thinking how
  • 00:09:58
    much is this worth and then can I
  • 00:10:00
    deliver it to them and can I eliminate
  • 00:10:02
    the risk make it faster and make it
  • 00:10:04
    easier for them so that I can get less
  • 00:10:07
    discount on the value that I think it
  • 00:10:08
    can provide that person now the 2011
  • 00:10:10
    version of this is selling out of their
  • 00:10:12
    future Wallet not today's wallet and
  • 00:10:15
    then the ways that we pull apart that
  • 00:10:18
    value so let's say it's a $100,000 of
  • 00:10:20
    value there's going to be a discount
  • 00:10:22
    that's going to be apply to that
  • 00:10:23
    $100,000 based on How likely it is which
  • 00:10:26
    is the risk it's going to be based on
  • 00:10:28
    how long it's going to take which is the
  • 00:10:30
    time it's going to be how how easy it is
  • 00:10:32
    how much work they're going to have to
  • 00:10:34
    put in and then fundamentally the dream
  • 00:10:36
    outcome which if they want to make more
  • 00:10:37
    money that one's clear now if you have a
  • 00:10:39
    b Toc business a business consumer
  • 00:10:41
    business then you have to translate what
  • 00:10:43
    looking amazing On Prom Night means to
  • 00:10:45
    someone financially or how much pain
  • 00:10:48
    they've been in for not having the
  • 00:10:49
    specific solution in their life and so
  • 00:10:52
    if I buy stuff and it gets to me faster
  • 00:10:54
    I'm willing to pay more for it if
  • 00:10:55
    someone I buy stuff and they guarantee
  • 00:10:57
    it or they make it risk-free or they
  • 00:10:58
    show me tons of proof I'm more likely to
  • 00:11:00
    pay for it and pay more for it if
  • 00:11:02
    someone says oh you don't have to do
  • 00:11:04
    anything versus you have a ton of work
  • 00:11:05
    associated with it I'm more willing to
  • 00:11:07
    pay for it and then the dream outcome is
  • 00:11:08
    just making sure that I actually want
  • 00:11:10
    this thing versus something else and so
  • 00:11:12
    this actually operationalizes what we
  • 00:11:13
    can do as business owners how do we make
  • 00:11:14
    it faster how do we make it easier how
  • 00:11:16
    do we make it risk-free and deliver it
  • 00:11:17
    the way they want it so that was the
  • 00:11:20
    first of the three kind of beliefs that
  • 00:11:22
    I had to break in order to make crazy
  • 00:11:23
    money in my 20s the second way to make
  • 00:11:26
    money so fast it feels illegal is to
  • 00:11:28
    sell in a fast cash conversion cycle if
  • 00:11:31
    you don't know what that is I'll explain
  • 00:11:32
    it right now this is what allowed me to
  • 00:11:34
    have $1,000 in my bank account in
  • 00:11:37
    December of
  • 00:11:39
    2016 I had a th000 bucks in my bank
  • 00:11:41
    account after losing everything for the
  • 00:11:43
    second time uh actually that was the
  • 00:11:44
    first time I lost everything and then I
  • 00:11:46
    lost everything again I think three
  • 00:11:47
    months later so just figuratively
  • 00:11:50
    imagine I didn't have a lot of money now
  • 00:11:52
    10 months later I was able to put in $10
  • 00:11:54
    million in sales and bake I think
  • 00:11:57
    something probably close to Six Million
  • 00:11:58
    in profit all right now here's the crazy
  • 00:12:01
    part is that how can you get this to
  • 00:12:04
    equate to $10
  • 00:12:06
    million in such a short period of time
  • 00:12:09
    well the first thing is we got 100 to1
  • 00:12:13
    return on our advertising and so every
  • 00:12:15
    dollar that I put in so I put I put
  • 00:12:16
    $1,000 in ads I made $100,000 and then I
  • 00:12:19
    put that $100,000 into ads and I made 10
  • 00:12:23
    million and that is fundamentally what
  • 00:12:25
    happened and so the constraint of the
  • 00:12:26
    business no longer was acquisition but
  • 00:12:28
    the reason
  • 00:12:29
    that was not the constraint meaning it
  • 00:12:30
    wasn't the thing that blocked me from
  • 00:12:32
    growing was that we had figured out
  • 00:12:34
    something that I call client finan
  • 00:12:36
    acquisition which is just a fancy way of
  • 00:12:38
    saying using your customers money as a
  • 00:12:40
    loan to get more customers so let me
  • 00:12:42
    explain so if someone walks into your
  • 00:12:44
    business right today and let's say it
  • 00:12:47
    cost you $100 in marketing to get them
  • 00:12:48
    to buy something from you all right just
  • 00:12:50
    keep it really simple so it cost me $100
  • 00:12:52
    to get this guy now let's say that my
  • 00:12:55
    thing costs
  • 00:12:56
    $100 okay now you think oh I grw even
  • 00:12:59
    but that thing just like the table is
  • 00:13:01
    not going to be 100% margin not likely
  • 00:13:03
    and so if it's like the table then I
  • 00:13:05
    only make plus 50 on this but I minus
  • 00:13:08
    100 because I had to pay this 100 to get
  • 00:13:10
    them in the door so I'm actually 50
  • 00:13:13
    right now for my first transaction now
  • 00:13:15
    should I do this transaction um unless I
  • 00:13:18
    have something else to sell not really
  • 00:13:19
    because it means I'm spending 100 to
  • 00:13:20
    make 50 bad deal now if this person's
  • 00:13:23
    going to spend three or four more times
  • 00:13:24
    over the next however many months then
  • 00:13:25
    yeah it's a good idea but it's still
  • 00:13:27
    going to take me time and I'm still
  • 00:13:28
    going to to lose money up front now for
  • 00:13:30
    me to do this whole thing I got to do it
  • 00:13:32
    a different way and so this kind of
  • 00:13:34
    enters the new way of doing things which
  • 00:13:37
    is I would acquire the customer for $100
  • 00:13:40
    same guy right now he's smaller for
  • 00:13:42
    whatever reason um and this time I say
  • 00:13:44
    okay how can I get this guy to not only
  • 00:13:48
    pay for himself that's point one that's
  • 00:13:50
    breaking EV on getting customers but
  • 00:13:52
    point two is I need to get him to be
  • 00:13:54
    able to buy me my next customer and so
  • 00:13:56
    if I know my next customer is also going
  • 00:13:58
    to be $100 then it means I want him to
  • 00:14:00
    pay himself back so I need 100 all right
  • 00:14:03
    then I need my next customer so I need
  • 00:14:04
    another 100 and then I need to make sure
  • 00:14:06
    I get my my cost of my table back which
  • 00:14:08
    is 50 all right so I need to make
  • 00:14:12
    $250 uh on this transaction for me to
  • 00:14:15
    then be able to use this dollars to then
  • 00:14:20
    go get my next customer and then I
  • 00:14:22
    repeat this
  • 00:14:24
    process over and over and over again and
  • 00:14:28
    then that result
  • 00:14:29
    in this massive amount of money because
  • 00:14:31
    if you had a machine that for every
  • 00:14:34
    dollar you put into it you got a $100
  • 00:14:36
    back out what would your marketing
  • 00:14:38
    budget be it would be everything you had
  • 00:14:40
    and so here's the crazy part is that
  • 00:14:42
    this these types of returns pretty much
  • 00:14:45
    only exist in businesses like this type
  • 00:14:48
    of Arbitrage which is why if you look at
  • 00:14:50
    the wealthiest people in the world they
  • 00:14:52
    own assets they own businesses that
  • 00:14:54
    generate cash flow because the most
  • 00:14:56
    significant Arbitrage that exists is
  • 00:14:59
    what it cost to get somebody to buy
  • 00:15:01
    something from you and if you have a
  • 00:15:03
    well-designed business how much you can
  • 00:15:04
    make from that person and so think about
  • 00:15:06
    this as every business is a little mini
  • 00:15:08
    investing machine and so you pay X to
  • 00:15:11
    get customers uh you get y dollars back
  • 00:15:13
    and then instead of waiting a year for
  • 00:15:15
    10% improvements on the S&P 500 you can
  • 00:15:18
    wait one day and get a $100 back and so
  • 00:15:21
    why would you invest in anything else
  • 00:15:23
    well the richest people in the world
  • 00:15:24
    don't they're highly concentrated in the
  • 00:15:26
    businesses and industries that they
  • 00:15:28
    understand well and so this concept of
  • 00:15:30
    clent finest acquisition was the big
  • 00:15:33
    unlock that I had and I have in four
  • 00:15:36
    times in my life have I gone through
  • 00:15:37
    what I would consider a wealth warp
  • 00:15:38
    where I had a material change in my net
  • 00:15:41
    worth in a very short period of time and
  • 00:15:43
    most of the money that I've made has
  • 00:15:44
    been in short periods of time and then
  • 00:15:46
    followed by kind of like level sets for
  • 00:15:49
    a while then I figure out something else
  • 00:15:50
    and then I get a huge step up in income
  • 00:15:52
    so if you're you're like man we've been
  • 00:15:53
    stuck for a while you're usually just
  • 00:15:55
    this far away from figure out what that
  • 00:15:57
    constraint is now it could have been
  • 00:15:58
    capital so for me I didn't have any
  • 00:16:00
    money and so this solved my Capital
  • 00:16:02
    constraint now what did did not solve it
  • 00:16:04
    didn't solve my people constraint it
  • 00:16:05
    didn't solve my you know hiring didn't
  • 00:16:07
    solve didn't solve uh didn't solve you
  • 00:16:09
    know keyman R I didn't solve any of
  • 00:16:10
    those problems but it gave me enough
  • 00:16:12
    cash to be able to solve those problems
  • 00:16:14
    in the future so let me put this in
  • 00:16:16
    perspective for you my weight loss
  • 00:16:18
    business which was my my actual gyms
  • 00:16:20
    which are called United Fitness all
  • 00:16:22
    right United Fitness I was able to open
  • 00:16:25
    up a new location every 6 months off of
  • 00:16:27
    the cash flow no money out of pocket
  • 00:16:29
    using this exact same process and so I
  • 00:16:32
    would put $5,000 down I would sign a
  • 00:16:34
    lease I would begin spending money on
  • 00:16:37
    Advertising like $100 a day and for
  • 00:16:39
    every $100 that I would spend I would
  • 00:16:41
    get somewhere in the neighborhood of
  • 00:16:42
    $2500 to $3,000 back immediately and so
  • 00:16:46
    in the first week I would then order the
  • 00:16:47
    equipment and the next week I would
  • 00:16:48
    order the flooring and the next week I
  • 00:16:50
    would set up the lobby and get the
  • 00:16:51
    painting done and by the fourth week IID
  • 00:16:53
    made around $100,000 which is roughly
  • 00:16:56
    what it cost to open the business and
  • 00:16:57
    give me six weeks of payroll so that by
  • 00:17:00
    the end of the promotion that I was
  • 00:17:02
    selling which was a six week challenge
  • 00:17:03
    at the time I would have something they
  • 00:17:05
    have 20 or $30,000 of recurring Revenue
  • 00:17:07
    at that gym but it cost me almost no
  • 00:17:09
    money out of pocket because I let my
  • 00:17:11
    customers pay for my gym for me I would
  • 00:17:13
    say I will spend $5 a lead close one out
  • 00:17:16
    of five leads on a $500 thing and so I
  • 00:17:19
    would pay 25 bucks to get a customer and
  • 00:17:21
    make 500 back and then I would take the
  • 00:17:23
    rest of that to go get another 25 spend
  • 00:17:25
    another $25 to get another customer get
  • 00:17:27
    another 500 and then that's how I was
  • 00:17:28
    able to to finance the growth of the
  • 00:17:29
    gyms and that's how at 23 years old and
  • 00:17:32
    then 24 and then 25 it was six locations
  • 00:17:35
    and again the constraint was no longer
  • 00:17:37
    cash it was trainers it was managers it
  • 00:17:39
    was salespeople that's what limited my
  • 00:17:41
    growth this was the first time I
  • 00:17:42
    discovered this concept and then I was
  • 00:17:44
    like oh man I should do this again and
  • 00:17:46
    so then I started gym launch 1.0 which
  • 00:17:48
    is where I flew out from location to
  • 00:17:51
    location and I would make $100,000 at
  • 00:17:54
    the gym but then I didn't have to pay
  • 00:17:55
    for the buildout and I didn't have to
  • 00:17:57
    manage the gym afterward so I could just
  • 00:17:58
    take $100,000 it was just me with a
  • 00:18:00
    little fold out table probably $100 from
  • 00:18:03
    lows um and then just a stack of
  • 00:18:05
    contracts and I have videos of me going
  • 00:18:06
    through just random places and selling
  • 00:18:09
    all day every day for 21 days straight
  • 00:18:11
    and then eventually I taught that system
  • 00:18:13
    to other people but the average amount
  • 00:18:14
    that I'd spend in advertising in those
  • 00:18:16
    markets was somewhere there of like1 to
  • 00:18:18
    $5,000 and I would make upwards of
  • 00:18:21
    $100,000 in that first month and so this
  • 00:18:24
    is what allowed me to go from again zero
  • 00:18:26
    to doing 32 plus launches in like 18ish
  • 00:18:29
    months now the third time that this
  • 00:18:31
    wealth Alchemy occurred for me was when
  • 00:18:33
    gym launch transitioned to licensing now
  • 00:18:35
    in the licensing business this is when
  • 00:18:37
    things got even Wilder because I had
  • 00:18:39
    fewer operational constraints to scale
  • 00:18:41
    and so here I had to keep scaling more
  • 00:18:43
    and more sales guys because I had to fly
  • 00:18:45
    them out which was actually a tough
  • 00:18:46
    value proposition for them they
  • 00:18:47
    apparently had wife and kids that wanted
  • 00:18:48
    to see them go figure um and so when I
  • 00:18:50
    switched to licensing which was just
  • 00:18:52
    showing people how I was filling these
  • 00:18:53
    gyms that's where we went from the0 to
  • 00:18:56
    $10 million in sales in 10 months all
  • 00:19:00
    right that's what's that's almost
  • 00:19:01
    crazier in my opinion than the second
  • 00:19:03
    the second full year of business we did
  • 00:19:06
    we did around 16 million in iida all
  • 00:19:08
    right that means profit all right and we
  • 00:19:10
    did 26 million
  • 00:19:13
    TopLine in revenue and again this is
  • 00:19:16
    coming from somebody who had then lost
  • 00:19:17
    it all because I have made some bad bets
  • 00:19:19
    in my life and you're like okay well it
  • 00:19:21
    must have only been a fluke that time
  • 00:19:22
    well the next business I started was
  • 00:19:23
    Prestige Labs which is our supplement
  • 00:19:25
    company when from zero 1.7 million per
  • 00:19:29
    month this was at the launch this was
  • 00:19:30
    month one all right and then I had Allen
  • 00:19:34
    which Allen went from zero to 1.7
  • 00:19:37
    million per month weirdly that it was
  • 00:19:38
    the same number um in six months so
  • 00:19:41
    these types of numbers only can occur
  • 00:19:43
    when you remove capital or money as a
  • 00:19:45
    way of scaling as a thing that blocks
  • 00:19:47
    you if you had unlimited money which if
  • 00:19:50
    you set up the way that you acquire
  • 00:19:51
    customers correctly you can if you think
  • 00:19:54
    this video helped you make more money or
  • 00:19:56
    would help someone else make more money
  • 00:19:57
    it would mean the world to me if you
  • 00:19:59
    shared it as a DM or send it to them as
  • 00:20:01
    a text so they could watch it and get
  • 00:20:02
    the benefits too and Associate those
  • 00:20:04
    benefits with you so what you really
  • 00:20:06
    want that math to work out to is that
  • 00:20:09
    you want two times
  • 00:20:13
    CAC plus cogs to equal
  • 00:20:19
    30-day cash collected all right uh which
  • 00:20:24
    is basically gross profit so you're like
  • 00:20:27
    okay that sounds like a really complex
  • 00:20:28
    equation I'll say it in in plain English
  • 00:20:31
    you want to make two times as much as it
  • 00:20:33
    cost you to get a customer and deliver
  • 00:20:35
    on that customer within 30 days based on
  • 00:20:38
    the amount of cash that you generate
  • 00:20:40
    from them in excess of the cogs right
  • 00:20:42
    and so if we have let's say $100
  • 00:20:45
    remember to get the customer and then
  • 00:20:46
    $50 of cogs right then we want to make
  • 00:20:49
    sure that we can have $300 I actually
  • 00:20:51
    did the math wrong before this is why
  • 00:20:52
    equations are useful right we want to
  • 00:20:54
    make sure we make $300 on that first
  • 00:20:56
    customer so that in the the first 30
  • 00:20:59
    days and you're like why is he thinking
  • 00:21:01
    about 30 days the reason I'm so
  • 00:21:03
    obsessive about 30 days is because that
  • 00:21:05
    is the amount of time that anybody can
  • 00:21:06
    get interest rate free cash and so
  • 00:21:09
    everybody has access to a credit card
  • 00:21:10
    and it doesn't matter what your limit is
  • 00:21:12
    even if it's a $500 limit that you start
  • 00:21:14
    out with which is typically what they'll
  • 00:21:15
    start most people on a $500 limit guess
  • 00:21:17
    what you can do you pay it off tomorrow
  • 00:21:19
    and so if you can get it within that
  • 00:21:20
    period of time you'll only be limited by
  • 00:21:22
    that card now if you can do it in seven
  • 00:21:23
    days then you can repeat the cycle uh
  • 00:21:25
    four times in a month if you can do it
  • 00:21:26
    every day then you repeat it 30 times in
  • 00:21:28
    a month right and so very quickly based
  • 00:21:30
    on your speed of collecting the cash
  • 00:21:32
    back which is called the cash conversion
  • 00:21:33
    cycle you can accelerate your growth I
  • 00:21:37
    honestly think the reason that most
  • 00:21:39
    businesses don't do this is because they
  • 00:21:40
    believe a narrative that because other
  • 00:21:42
    people in the industry don't do it they
  • 00:21:44
    can't and I think that that belief keeps
  • 00:21:47
    many business owners poor the amount of
  • 00:21:49
    businesses that I've we've gone into and
  • 00:21:51
    been like uh okay well let's just get
  • 00:21:53
    people to prepay 3 months at a time
  • 00:21:55
    they're like no we it's industry
  • 00:21:56
    standard to to do services and then
  • 00:21:59
    collect a net net 60 and I'm like yeah
  • 00:22:01
    well that's their standard we don't have
  • 00:22:02
    to do that well why don't we just give
  • 00:22:04
    them incentive to pay and they're like w
  • 00:22:07
    well what if what I'm like what if what
  • 00:22:09
    what if they say no well they say
  • 00:22:10
    they're saying no today sometimes too
  • 00:22:11
    might as well like collect more when we
  • 00:22:13
    do it and then we say hey we we happen
  • 00:22:15
    to build quarterly and with that
  • 00:22:17
    convenience we also give you a 5%
  • 00:22:19
    discount which of course we baked into
  • 00:22:20
    the price anyways right or we add some
  • 00:22:22
    sort of onboarding process that normally
  • 00:22:24
    people might charge separately for or
  • 00:22:25
    that we add in so that we can collect
  • 00:22:27
    more cash up front
  • 00:22:29
    and I'm willing to give a significant
  • 00:22:30
    amount of things up front so that I
  • 00:22:32
    don't have my cost of getting customers
  • 00:22:35
    as anything that gets in the way of me
  • 00:22:36
    growing a business I never want my
  • 00:22:38
    ability to get customers or money to get
  • 00:22:40
    them to be the thing that limits my
  • 00:22:42
    growth and I think that's the reason
  • 00:22:43
    that all these businesses that I just
  • 00:22:45
    explained went from zero to million plus
  • 00:22:47
    per month within a year and I'm saying
  • 00:22:49
    within a year as a sof most of them
  • 00:22:51
    within 6 months if you want to make more
  • 00:22:53
    money ask to get paid sooner so think
  • 00:22:55
    about this so if you if you are uh a
  • 00:22:58
    minimum wage employee right then you do
  • 00:23:01
    work and then you get paid afterwards at
  • 00:23:03
    a delay right now if you're a contractor
  • 00:23:07
    sometimes uh you can do work and get
  • 00:23:10
    paid but usually you get paid and then
  • 00:23:11
    you do work if you're a surgeon you get
  • 00:23:14
    paid and then months pass and then you
  • 00:23:15
    do the surgery if you're an insurance
  • 00:23:18
    company you get paid and then you may
  • 00:23:20
    not have to ever work at all and if
  • 00:23:22
    you're the church you get paid off of
  • 00:23:24
    someone's income their Topline a royalty
  • 00:23:28
    that goes straight to the church now
  • 00:23:30
    royalties happen the same way leans do
  • 00:23:32
    so if you if someone owes you money you
  • 00:23:34
    can take a lean off the top you skim off
  • 00:23:36
    the top and so basically your position
  • 00:23:39
    in What's called the capital stack is
  • 00:23:41
    predicated on your leverage in the
  • 00:23:42
    situation and so if it's up to you you
  • 00:23:45
    might as well choose to get paid sooner
  • 00:23:48
    now you might be looking at this and
  • 00:23:49
    thinking yeah but how do I get all of
  • 00:23:52
    that cash up front how do I get people
  • 00:23:54
    to actually spend more money with me
  • 00:23:56
    faster well it comes down to one you can
  • 00:23:59
    either raise the price of your thing or
  • 00:24:01
    two you get people to buy more stuff
  • 00:24:03
    immediately and so one of the big
  • 00:24:05
    misconception business owners have is
  • 00:24:07
    that they're afraid of making offers and
  • 00:24:08
    so I want to be very clear you don't
  • 00:24:10
    want to try and force someone to do
  • 00:24:11
    something people don't like to be sold
  • 00:24:13
    but they do love buying right I mean
  • 00:24:14
    think about how much money Amazon makes
  • 00:24:15
    people love buying and so what we want
  • 00:24:17
    to do is make offers when it's
  • 00:24:19
    convenient for them to take them and so
  • 00:24:21
    an offer only doesn't work if it's
  • 00:24:23
    something that they don't want or you
  • 00:24:24
    present it at the wrong time or you know
  • 00:24:27
    advanced verion 3 they don't it's not
  • 00:24:29
    being delivered in the way they want it
  • 00:24:30
    to be delivered all right and I'll tell
  • 00:24:32
    you a quick story about that so when I
  • 00:24:34
    was in the in the weight loss business
  • 00:24:35
    we discovered that there were some
  • 00:24:36
    customers that would come in and they
  • 00:24:38
    didn't want to buy gym services and I
  • 00:24:40
    was like okay well that's lame but I
  • 00:24:43
    then figured out hey why don't I in
  • 00:24:44
    invite them to a nutrition seminar and
  • 00:24:46
    so we invite them to nutrition seminar
  • 00:24:48
    even though they said no to our services
  • 00:24:49
    think how crazy this is they come in
  • 00:24:50
    virgy we try to sell them they say no I
  • 00:24:52
    say hey can I just help you with your
  • 00:24:53
    food and they say sure then they go to
  • 00:24:55
    the nutrition seminar and they buy more
  • 00:24:57
    than the people who bought gym services
  • 00:24:59
    on average and so I was like oh we just
  • 00:25:03
    needed to make them a different offer to
  • 00:25:05
    solve the same problem so they wanted to
  • 00:25:07
    lose weight still they just didn't feel
  • 00:25:08
    like sweating they wanted to take
  • 00:25:10
    supplements and eat differently fine so
  • 00:25:13
    learning to make multiple offers to a
  • 00:25:15
    customer is not only beneficial for them
  • 00:25:17
    because you help them solve the problem
  • 00:25:19
    in more ways it's also beneficial for
  • 00:25:20
    you because you get more cash up front
  • 00:25:22
    and so thinking through how do I get
  • 00:25:24
    someone to buy because there's something
  • 00:25:26
    that people enter called a hyper buying
  • 00:25:27
    cycle so if someone makes any kind of
  • 00:25:30
    new decision especially if it's like
  • 00:25:32
    okay I'm now somebody who's going to
  • 00:25:33
    start taking care of their lawn hey I'm
  • 00:25:34
    I just bought this new car hey I I'm
  • 00:25:35
    going to run a marathon there's these
  • 00:25:37
    little cycles that people enter there's
  • 00:25:39
    these buying windows and what a
  • 00:25:42
    traditional business owner would say
  • 00:25:43
    let's say somebody who runs a marathon
  • 00:25:45
    they they sign up for the marathon and
  • 00:25:46
    then they go to The Running Store when
  • 00:25:47
    they go to The Running Store they have
  • 00:25:49
    to buy some shoes now the store owner
  • 00:25:51
    says oh I don't want to offer them you
  • 00:25:53
    know fancy socks or an i iPod wristband
  • 00:25:55
    or new tank tops I don't want I don't
  • 00:25:57
    want to seem like I'm being pushy but
  • 00:25:59
    what are they going to do they're still
  • 00:26:00
    going to go buy that stuff because they
  • 00:26:02
    have to get the whole thing and so
  • 00:26:04
    there's this natural problem solution
  • 00:26:06
    cycle that continues over and over and
  • 00:26:09
    over again within every customer's
  • 00:26:11
    purchases provided the first problem is
  • 00:26:14
    solved with the first purchase and then
  • 00:26:16
    that then opens up the next problem so
  • 00:26:18
    once you have your shoes what else do
  • 00:26:20
    you need you're going to need socks once
  • 00:26:22
    you have socks what else you're going to
  • 00:26:23
    need you're going to need shorts once
  • 00:26:24
    you have shorts what else you going need
  • 00:26:25
    you need tank top that doesn't you know
  • 00:26:27
    rub on your on your your underarms
  • 00:26:28
    you're also going to need an iPod
  • 00:26:30
    carrier all of these different things
  • 00:26:31
    you're also going to want the number
  • 00:26:33
    thing you might want a coach you might
  • 00:26:34
    want an app you might want a hydration
  • 00:26:35
    thing like there's there's supplements
  • 00:26:37
    there's all these different things that
  • 00:26:38
    stem from this and everyone's afraid to
  • 00:26:41
    ask so just make the offer available and
  • 00:26:44
    if they choose not no worries if you're
  • 00:26:46
    like if you go buy something and then
  • 00:26:47
    the thank you page says hey would you
  • 00:26:48
    want this too if you're offended by
  • 00:26:50
    that well the business doesn't really
  • 00:26:53
    care I put it that way because other
  • 00:26:55
    people won't be offended by it and will
  • 00:26:56
    be happy that you made it available and
  • 00:26:57
    more can convenient for them so
  • 00:26:59
    ultimately you're providing more value
  • 00:27:00
    and you're getting rewarded for it yeah
  • 00:27:01
    and and at each one of these uh upsells
  • 00:27:04
    that you might want to include you still
  • 00:27:05
    think through each of the value equation
  • 00:27:07
    components so you still think what's the
  • 00:27:09
    dream outcome they ultimately want how
  • 00:27:10
    do I make it risk-free for them how do I
  • 00:27:12
    do it faster and how do I make it easier
  • 00:27:14
    so number one we're charging as much as
  • 00:27:15
    we possibly can because we're doing it
  • 00:27:17
    based on value not based on cost the
  • 00:27:19
    second thing we're doing is we're
  • 00:27:20
    structuring our economics of the
  • 00:27:22
    business how we upsell how we down sell
  • 00:27:24
    so we can generate more cash in the
  • 00:27:25
    first 30 days so that we can get enough
  • 00:27:27
    to pay for this customer and the next
  • 00:27:28
    customer and delivering for both of them
  • 00:27:30
    in that same time period so that cash
  • 00:27:32
    and getting customers is not limited the
  • 00:27:33
    business and the third way to make money
  • 00:27:35
    so fast it feels illegal is to
  • 00:27:38
    understand wealth Alchemy and ignore
  • 00:27:40
    taxes or kind of just play the game the
  • 00:27:42
    right way so let me walk you through an
  • 00:27:44
    example so let's say that you give away
  • 00:27:46
    free trials of your thing okay cool
  • 00:27:49
    makes sense we give away free trials and
  • 00:27:51
    let's say a free trial of your thing
  • 00:27:53
    cost $100 to get someone to start fine
  • 00:27:56
    now let's also for simple math say the
  • 00:27:58
    trial is $100 per month all right we'll
  • 00:28:00
    keep this really simple all right that's
  • 00:28:02
    the price that's our free trial after
  • 00:28:04
    the conversion okay now let's say that
  • 00:28:06
    we get uh one out of uh three people who
  • 00:28:11
    start a free
  • 00:28:12
    trial to become a customer okay that
  • 00:28:15
    means that it's going to cost us
  • 00:28:18
    $300 right this times three to get a
  • 00:28:21
    customer okay now let's say that we know
  • 00:28:23
    one out of three customers becomes a
  • 00:28:26
    permanent customer meaning once they get
  • 00:28:29
    on our subscription they never leave
  • 00:28:32
    which would mean that our permanent CAC
  • 00:28:33
    is somewhere close to $900 okay now if
  • 00:28:37
    our price here is $100 a month then that
  • 00:28:40
    means that the annual
  • 00:28:42
    revenue Anor recurring revenue is
  • 00:28:46
    $1,200 per year okay so we pay $900 to
  • 00:28:50
    make $1,200 per year Well if you had a
  • 00:28:53
    stock that you could buy for $900 and
  • 00:28:54
    then it and then it sent you back $1,200
  • 00:28:57
    um within 12 months you probably be like
  • 00:28:59
    that's a great investment now if it kept
  • 00:29:00
    doing that you'd be like it's
  • 00:29:01
    unbelievable investment well let me show
  • 00:29:03
    you how much more wild this can really
  • 00:29:05
    get now let's say that we have this
  • 00:29:07
    let's just say this is a software
  • 00:29:08
    company all right so if it's a software
  • 00:29:10
    company let's say that it trades at 10
  • 00:29:12
    times Topline which is fairly typical
  • 00:29:14
    for like a B2B SAS business as long as
  • 00:29:16
    you have good retention metrics which is
  • 00:29:18
    why this is so important permanent CAC
  • 00:29:20
    permanent customer so if we know that
  • 00:29:23
    then it means that we're actually making
  • 00:29:25
    $122,000 in Enterprise Value which means
  • 00:29:28
    how valuable the business is that can
  • 00:29:29
    create this kind of
  • 00:29:31
    money now here's where it gets even
  • 00:29:34
    nastier is
  • 00:29:36
    that this is tax-free and so you get
  • 00:29:40
    paid this money but you also get this
  • 00:29:44
    it's not either or it's an and so when I
  • 00:29:47
    figured this out I was like
  • 00:29:49
    oh this is how people just make stupid
  • 00:29:53
    money really fast and so let's let's
  • 00:29:56
    work this out okay I want to make $120
  • 00:30:00
    million let's say that was my goal okay
  • 00:30:03
    so $120 million I would have to how many
  • 00:30:07
    $112,000 customers in terms of
  • 00:30:09
    Enterprise Value would I need well let's
  • 00:30:10
    go look all right so I need 10,000
  • 00:30:15
    customers of this of this $900 times
  • 00:30:20
    10,000 to
  • 00:30:23
    get my $120 million Enterprise Value
  • 00:30:29
    here so let me ask you a question does
  • 00:30:33
    10,000 time 900 so you're telling me if
  • 00:30:37
    I pay $9
  • 00:30:39
    million I can make this year an increase
  • 00:30:43
    of a 120 million in asset value
  • 00:30:47
    taxfree and and make $12 million in
  • 00:30:54
    Revenue that I add for the 9 million and
  • 00:30:57
    so
  • 00:30:59
    walk through this in sequence with me
  • 00:31:01
    you spend 9 million you get back $12
  • 00:31:04
    million in annual revenue and that $12
  • 00:31:06
    million of annual revenue is worth1 120
  • 00:31:09
    million that you paid zero taxes on that
  • 00:31:12
    is the
  • 00:31:13
    game this is the wealth Alchemy this is
  • 00:31:17
    how it works this is how these software
  • 00:31:19
    companies that IPO at three billion how
  • 00:31:22
    in four years it goes from you know
  • 00:31:24
    nothing right to a multi-billion dollar
  • 00:31:27
    thing if you look at how much it cost
  • 00:31:29
    them to get customers you're like like
  • 00:31:32
    when I understood this I was like oh
  • 00:31:33
    it's literally just a massive Arbitrage
  • 00:31:36
    between the permanent cost of acquiring
  • 00:31:38
    customers relative to the annual value
  • 00:31:41
    relative to the Enterprise Value
  • 00:31:42
    multiple and then those three things
  • 00:31:44
    spit together is what creates this
  • 00:31:46
    massive discrepancy between what you put
  • 00:31:48
    in and what you get out which because of
  • 00:31:51
    my fancy fancy t-shirt here I will show
  • 00:31:54
    you is the definition of Leverage and so
  • 00:31:57
    the reason that there are two symbols
  • 00:31:59
    that are woven into the acquisition.
  • 00:32:00
    comom logo which is supply and demand
  • 00:32:02
    and a full Chrome for leverage is that
  • 00:32:05
    you get more for what you put in and so
  • 00:32:07
    if you have two businesses right so
  • 00:32:09
    let's let's let's paint this out let's
  • 00:32:10
    say we had a different business that we
  • 00:32:12
    did the same thing but let's say that we
  • 00:32:14
    actually these types of businesses
  • 00:32:16
    whatever business it was traded on
  • 00:32:18
    bottom line and so if the business uh
  • 00:32:20
    was doing 12 million let's say that it's
  • 00:32:22
    doing $3 million in profit whatever this
  • 00:32:25
    new other business is okay it's doing $
  • 00:32:28
    million in profit and let's say that we
  • 00:32:29
    get a uh 7x multiple on the on this uh
  • 00:32:34
    on this eida which is fancy word for
  • 00:32:36
    profit which means that we have $21
  • 00:32:38
    million now if I paid 9 million for 21
  • 00:32:42
    million would I be down for that
  • 00:32:44
    probably I mean it's still a 2 point
  • 00:32:45
    something X it's not bad but this is why
  • 00:32:48
    picking a good opportunity vehicle
  • 00:32:50
    because in both of these situations you
  • 00:32:53
    still spent the $900 per customer you
  • 00:32:55
    still make the $1,200 per year but the
  • 00:32:57
    big difference was how much is that
  • 00:32:58
    $1,200 per year worth yeah and so let's
  • 00:33:01
    dive into this permanent customer
  • 00:33:02
    concept for a second this concept took
  • 00:33:05
    me so long to grasp as an entrepreneur
  • 00:33:08
    what every business owner needs to focus
  • 00:33:10
    on is how do I not lose customers and
  • 00:33:13
    the reason for that is that let's
  • 00:33:15
    compare two businesses all right so
  • 00:33:17
    let's say you've
  • 00:33:19
    got business a and business B okay so
  • 00:33:25
    business a acquires 100 customers your
  • 00:33:27
    one and loses 100 customers and the next
  • 00:33:30
    year they double their acquisition they
  • 00:33:32
    double their marketing and sales they
  • 00:33:33
    acquire 200 customers and then year
  • 00:33:35
    three they you know they lose all 200
  • 00:33:38
    and then they they they add another 50%
  • 00:33:40
    acquisition they do 300 customers in
  • 00:33:42
    year three okay so it's a 300 customer
  • 00:33:44
    business now Company B sells 100 first
  • 00:33:48
    year now second year they do aund they
  • 00:33:50
    keep their first 100 but they don't
  • 00:33:52
    increase their marketing and sales so
  • 00:33:53
    now they have 100 from last year plus
  • 00:33:55
    100 to this year and then the third year
  • 00:33:57
    they have 100 from two years ago 100
  • 00:33:59
    from one year ago and then 100 this year
  • 00:34:01
    both of these businesses A and B have
  • 00:34:03
    300 customers but which company would
  • 00:34:06
    you rather own this one absolutely no
  • 00:34:09
    question so why is that you want time to
  • 00:34:12
    be on your side not your enemy because
  • 00:34:14
    time is going to pass no matter what and
  • 00:34:16
    you want a business where no matter what
  • 00:34:18
    happens it just keeps growing so you can
  • 00:34:21
    sell the same amount of customers you
  • 00:34:22
    could even not sell customers and still
  • 00:34:24
    make money and so this is a far less
  • 00:34:27
    risky business and as a result of that
  • 00:34:29
    if you recall the value equation from
  • 00:34:30
    earlier an investor is valuing a
  • 00:34:33
    business fundamentally on the same
  • 00:34:34
    things which is How likely is this to
  • 00:34:36
    occur how much effort and sacrifice is
  • 00:34:38
    this going to take what is the time
  • 00:34:40
    delay between now and when this becomes
  • 00:34:42
    this ultimate thing right and so the
  • 00:34:45
    same process is still done obviously at
  • 00:34:46
    a slightly more complex scale but when
  • 00:34:49
    we're thinking about permanent customers
  • 00:34:51
    this companies is turning customers into
  • 00:34:53
    permanent customers company a is just a
  • 00:34:56
    churn Factory they sell something want
  • 00:34:57
    and people don't like it and they leave
  • 00:34:59
    which means the only way to grow this
  • 00:35:00
    business is market and sell more but
  • 00:35:02
    that is only a oneway road at some point
  • 00:35:04
    you sell through all the customers
  • 00:35:05
    within a given base and so it would
  • 00:35:07
    behoove us to spend more time just
  • 00:35:09
    figuring out how to not lose people so
  • 00:35:12
    that 10 years from now what like as we
  • 00:35:14
    keep going because this this map would
  • 00:35:16
    continue this guy is going to slow down
  • 00:35:18
    right it being able to double Marketing
  • 00:35:20
    sales every single year is tough but
  • 00:35:22
    just keeping the customers you had for
  • 00:35:24
    10 years significantly easier but people
  • 00:35:26
    don't focus on because it's not as sexy
  • 00:35:29
    but this is where the real leverage
  • 00:35:30
    occurs and this is where that wealth
  • 00:35:31
    alchemy that I was referencing earlier
  • 00:35:33
    this is how you get stupid RIT and so
  • 00:35:35
    let me give you a real word example so
  • 00:35:38
    Starbucks do you want to know what their
  • 00:35:40
    LTV per customer is
  • 00:35:43
    $114,000 that's how much they make per
  • 00:35:45
    customer and that is why Starbucks makes
  • 00:35:48
    so much money so you think about these
  • 00:35:50
    like high ticket businesses and stuff
  • 00:35:51
    that's all around B2B whatever they're
  • 00:35:53
    making $14,000 per customer from like
  • 00:35:56
    everyone and so what does it cost to get
  • 00:35:59
    somebody to to buy a cup of coffee I
  • 00:36:00
    promise you significantly less than
  • 00:36:02
    $14,000 and this relates back to my very
  • 00:36:04
    first point that I was telling you where
  • 00:36:06
    I had another company that was in the
  • 00:36:07
    same space as me the cost to get a
  • 00:36:09
    customer for Starbucks to get somebody
  • 00:36:10
    buy coffee is probably similar to a
  • 00:36:12
    Dunkin Donut it's probably similar to
  • 00:36:13
    another random you know coffee shop down
  • 00:36:15
    the street the difference is that they
  • 00:36:17
    had engineered their model such that
  • 00:36:18
    people wanted to keep coming back that
  • 00:36:20
    they became recurring or reoccurring
  • 00:36:23
    customers so the difference there really
  • 00:36:25
    quickly is recurring means it's a
  • 00:36:26
    subscription like netflex reoccurring
  • 00:36:28
    means that you buy on a regular basis so
  • 00:36:31
    you might buy Coca-Cola for example or
  • 00:36:32
    whatever one of their products that you
  • 00:36:34
    like you're probably not on a
  • 00:36:35
    subscription for it but you buy it when
  • 00:36:36
    you're out at restaurants or you buy it
  • 00:36:37
    when you ship it to your house whatever
  • 00:36:40
    or you just buy Costco when you're there
  • 00:36:41
    from a distribution center either way
  • 00:36:43
    you are a reoccur customer for them and
  • 00:36:46
    so figuring out what is my cost of a
  • 00:36:48
    permanent customer and all you have to
  • 00:36:50
    do is figure because a lot of businesses
  • 00:36:52
    have this is you say okay let's say
  • 00:36:53
    you're an agency a super high- turn
  • 00:36:55
    business typically okay there are some
  • 00:36:57
    customers that have been with you for a
  • 00:36:59
    long time and we will I will consider
  • 00:37:01
    somebody who's been with you two plus
  • 00:37:02
    years as a permanent customer within the
  • 00:37:04
    context of what we're talking about now
  • 00:37:05
    you might figure out and this is why
  • 00:37:07
    this is so important that there it's
  • 00:37:09
    only one out of every 10 of your
  • 00:37:11
    customers becomes a permanent customer
  • 00:37:13
    well then you say okay well how much
  • 00:37:14
    does it cost to get a customer multiply
  • 00:37:15
    it by 10 this is actually the recurring
  • 00:37:18
    base that we're trying to build everyone
  • 00:37:19
    else is just sifting through the you
  • 00:37:21
    know the weat from the the the shaft I
  • 00:37:23
    think is what it's called Uh to get the
  • 00:37:25
    just get the kernels right the main the
  • 00:37:26
    main part and if you want to be smarter
  • 00:37:29
    about it you can say huh well it takes
  • 00:37:31
    us 10 customers to get these ones but
  • 00:37:33
    what if these customers look and smell
  • 00:37:35
    walk and talk a little bit differently
  • 00:37:37
    than the other nine well I'll bet you if
  • 00:37:39
    we changed our advertising and attracted
  • 00:37:41
    only those types of customers we would
  • 00:37:42
    be able to get a higher hit rate on that
  • 00:37:46
    so even if our CAC for this specific
  • 00:37:48
    Avatar doubles but we get it to one out
  • 00:37:50
    of three it cost us $600 to get a
  • 00:37:53
    customer rather than $1,000 and we're
  • 00:37:55
    still winning overall and so so the big
  • 00:37:58
    picture here is that number one we have
  • 00:38:00
    to sell off a value we have to use the
  • 00:38:02
    value equation to make things less risky
  • 00:38:04
    faster and easier for the customers once
  • 00:38:07
    we do that we are decoupled from a race
  • 00:38:09
    to the bottom price War number two once
  • 00:38:12
    we know what our premium prices we want
  • 00:38:14
    to pull that cash forward and speed up
  • 00:38:16
    the cash conversion cycle so that
  • 00:38:18
    capital or money is not the limiter of
  • 00:38:20
    the business and so we can get customers
  • 00:38:22
    on demand and we can do so profitably
  • 00:38:24
    we're literally getting paid to get new
  • 00:38:26
    customers they pay us they finance our
  • 00:38:29
    acquisition which why I call it customer
  • 00:38:30
    Finance acquisition and then finally we
  • 00:38:34
    understand the game of wealth Alchemy
  • 00:38:35
    which is of the customers that we
  • 00:38:37
    acquire what percentage of them become
  • 00:38:39
    permanent customers and they become the
  • 00:38:41
    reoccurring Revenue base within this
  • 00:38:44
    business and then that reoccurring base
  • 00:38:46
    is what we are going to be valued on and
  • 00:38:48
    then what is that value multiple and so
  • 00:38:50
    then we just look at the Arbitrage
  • 00:38:51
    between what it costs us to get a
  • 00:38:52
    permanent customer versus what our
  • 00:38:55
    Enterprise Value multiple is going to be
  • 00:38:56
    which is until the day you sell it
  • 00:38:59
    growing taxfree and so I'll show you one
  • 00:39:02
    last little hack here that I think is
  • 00:39:03
    important so let's just say in this
  • 00:39:06
    business it's in the original vehicle so
  • 00:39:08
    you can just forget about this little
  • 00:39:09
    side Stu so it's in the original vehicle
  • 00:39:10
    and let's say that we've got $3 million
  • 00:39:12
    in profit for this business it doesn't
  • 00:39:14
    matter okay so you have three million
  • 00:39:16
    bucks in profit in this business and
  • 00:39:17
    let's say that you live in a high tax
  • 00:39:19
    state and you get tax 50% for tax
  • 00:39:21
    reasons so you're going to take home
  • 00:39:23
    $1.5 million after taxes now you're butt
  • 00:39:27
    hurt about this cuz you're like what the
  • 00:39:29
    heck government you're taking half of
  • 00:39:31
    what I made but if you added $12 million
  • 00:39:36
    to the business and you spent this money
  • 00:39:38
    to do that what did you really increase
  • 00:39:40
    well you increased your personal net
  • 00:39:42
    worth by $120
  • 00:39:44
    million and so if you had1 120 million
  • 00:39:48
    plus the 3 million that you made in cash
  • 00:39:50
    flow and you only had to pay 1.5 million
  • 00:39:53
    on
  • 00:39:54
    123 now you're paying I don't know 1 .5%
  • 00:39:58
    in
  • 00:39:59
    taxes when I realized this it
  • 00:40:02
    fundamentally shifted how I played the
  • 00:40:03
    game I I I I was really obsessed with
  • 00:40:06
    tax strategy and trying to maximize all
  • 00:40:08
    these loopholes when the biggest and
  • 00:40:10
    most obvious one is just build something
  • 00:40:13
    valuable and as long as you keep
  • 00:40:16
    building it and you don't want to cash
  • 00:40:17
    it out all of that growth is taxfree and
  • 00:40:20
    compounds and the the the clue that I
  • 00:40:23
    got on this was realizing I was like
  • 00:40:25
    this is before Elon moved from
  • 00:40:26
    California so I was like elon's in
  • 00:40:29
    California I was like Zuckerberg is in
  • 00:40:31
    California and I looked at the the
  • 00:40:32
    Forbes list said all these people in the
  • 00:40:34
    US were in California but I was like but
  • 00:40:35
    California has the highest taxes how is
  • 00:40:37
    this possible I was like oh they
  • 00:40:40
    understand something about wealth
  • 00:40:41
    creation that I don't understand what is
  • 00:40:44
    that and that was when I dove deep and
  • 00:40:46
    understood this level of wealth creation
  • 00:40:48
    or what I like to call now wealth
  • 00:40:50
    Alchemy if you like this video you'll
  • 00:40:52
    love these
Etiquetas
  • ho etsa chelete
  • boleng ba boleng
  • ntlafatso
  • cash conversion
  • bareki ba sa feleng
  • digital business
  • customer acquisition
  • marketing strategies
  • profit maximization
  • business growth