How much more successful would you be if you had lunch once a week with an insanely successful entrepreneur who shared their biggest secrets on how they think and achieve success? Well, now you can! Grab your seat at the table as successful entrepreneurs reveal their step-by-step strategies, fascinating stories, travel hacks and other delicious tidbits each week with serial entrepreneur/business strategist, Roland Frasier.
The Importance of Direct Communication with Roland Frasier and Ryan Deiss
27:22A good leader communicates directly and truthfully without sugarcoating. In today’s episode, co-hosts Roland Frasier and Ryan Deiss recount a recent leadership meeting of their central holding company, Scalable Equity. According to Ryan, the meeting was going “fine” until Roland “started yelling at this one guy out of nowhere.” Roland’s rendition of what happened is nothing like Ryan’s. These differing perspectives caused Roland and Ryan to reevaluate things and ask some important questions like: How do you yell at people when they’re screwing up? How do you talk to people at an executive leadership level vs. your subordinates? Do we need to worry about people’s feelings? What’s the best way to deliver uncomfortable truths? Listen in as they tackle a hard topic head-on. Two Sides to the Same Story Ryan gives his version of the leadership meeting first. Things were going fine. They were talking over their priorities. Then Roland started yelling about how they had goals that didn’t get met, projects that didn’t get finished on time. He was frustrated and let his feelings be known. Ryan said they were all frustrated, but he was still surprised that Roland came in with “guns blazing.” Roland says Ryan’s characterization isn't accurate. He felt like the meeting was all BS. Everyone was being inauthentic and pretending to be this perfect image. He was surprised that people were faking fine. From Roland’s point of view, it started with looking at one particular company’s financials. They received PPP money, and have a line of credit. The company had missed its goals by a fair amount, and the current month was tracking even worse. They’d made a lot of changes, but they were using PPP money that was supposed to be sacrosanct. Roland says there had been rumors of people complaining about variable comp, and they needed to understand they were underperforming. A company called DigitalMarketer shouldn’t have a struggling marketing department. He loves them all, but they need to fix this, and the leadership team is responsible. He says he wasn’t picking on one guy. He was talking to everyone. (He called this person after the meeting to clear things up.) Sugarcoating vs. Being Real Roland and Ryan discuss the whole “praise in public, reprimand in private” concept. They agree that yes, you need to be careful not to damage someone reputationally by coming down on them hard in front of others. But, in a leadership meeting, you need to be able to talk directly. It’s tempting to sugarcoat, but the longer you go without saying what you need to say, the harder it gets. If you’re going to talk to a person about their performance (or lack of), that should be done in private. But when you’re talking about the company and saying, “Here’s where we’re falling down and here’s where we stand as a consequence of that, and that can’t continue and we all need to pull together and figure out how we’re going to help correct that,” you’ve got to be able to have that conversation with your leadership team. They don’t need to be beat up on or singled out, but they need to hear the truth and where the collective leadership is failing. Roland said he didn’t make an emotional outburst; he delivered the facts intentionally in the way he thought would convey the biggest impact. He thought about the words he was using and chose to say “marketing” instead of a person’s name. Ryan said he wished he would have known ahead of time that Roland was going to bring it up, so he could have been prepared. But he realizes that a leadership meeting is literally for discussing problems. If they’re not going to meet for real talk, then why are they even meeting? He says a leadership team can’t be effective unless they can piss each other off and still move on from that. If you’re hyper-obsessed with not hurting people’s feelings, how will you ever get good work done? From This Point Forward In the past, Roland would have said, “Screw those people if they don’t get it. I don’t care if their feelings are hurt.” But Ryan and Richard have taught him a lot about being focused on culture. He now sees the importance of hearing people and apologizing and constructive criticism. From now on, Roland is going to talk to Richard and Ryan ahead of the meeting, then bring up negative things by saying, “I’ve talked to Richard and Ryan, and we’ve agreed this needs to be addressed.” The company will go so much further so much faster and the praise will mean so much more when everyone is willing to be constructively critical of themselves. They need to know they’re all there to improve the company and each other. Be honest when things are great, and be honest when things aren’t going so well. Let’s tie a bow on this, be done with it, and get back to making money. OUR PARTNERS: Scalable Impact Live (November 2-3, 2021) Get a free proposal from Conversion Fanatics Get 3% cash back on your ad spend with AdCard PodBean, your all-in-one podcasting solution
Reflections from Traffic & Conversion Summit
32:19Get the behind-the-scenes inside scoop on what went right (and wrong) at T&C 2021. In today’s episode, co-hosts Roland Frasier and Ryan Deiss pull back the curtain and take a very honest look at what it’s like to pull together a huge conference not only during a pandemic, but when your celebrity guest pulls out at the last minute. Before they share those details—and what you can learn from them—don’t miss the opportunity to be part of what’s coming up next. You’re invited to Scalable Impact Live on November 2-3, 2021. It’s an event like no other. Roland, Ryan, and Richard will be up close and personal, workshop style, teaching cool stuff, helping you network with amazing people, and getting actual work done. Register here TODAY. Now listen in as the hosts describe a very intense three days at T&C. A Last-Minute Scramble for a Celebrity Guest Traffic & Conversion Summit celebrated its 10th anniversary in 2019. Then it got canceled in 2020 because of Covid. Roland and Ryan and their team had high hopes for T&C 2021, with fingers crossed that Covid would be a thing of the past. Their goal was 10k in attendance, a new T&C record. Then, the week they announced the event—and celebrity guests Snoop Dogg and Martha Stewart—the Delta variant was all over the news. Their timing could not have been worse. Then, on the first day of the event, Roland got a call that Snoop was sick and couldn’t make it. How were they going to deliver a great experience to their guests without him? They had to decide on the spot whether they’d cancel him altogether or keep him for next year. They decided to keep him. And had a day and half to find a comparable replacement. Meanwhile, Ryan was having recurring nightmares and waking up in cold sweats about walking out to do the keynote at a sold-out event with no one in the audience. On the actual day, backstage, waiting to walk out, he had a near panic attack and texted Roland. (His keynote fortunately went great.) Roland Gets the Job Done Ryan is very impressed by Roland’s seeming unflappability in times of great stress. When Snoop Dogg canceled, Roland called in every favor he possibly could and came up with a list of 22 possible replacements. They narrowed it down to Gwyneth Paltrow and Magic Johnson and decided on Magic. Roland wrote the contract on his laptop on the way to the conference center. That night he slept from 1am to 3am, because he had to cram on Magic interviews and his book, so he could craft a list of questions they’d be asking him (per his PR team’s requirements). Ryan says Roland is suck it up, buttercup, and never looking for pity. He just gets the job done. When crap goes sideways, it’s a reason to sleep less, but not to give up. You make the thing every bit of what you promised it would be to the people who have invested their time and money to come. Roland shouts out Martha Stewart for being a suck-it-up person as well. She had just gotten out of the hospital from surgery on her broken ankle. Her doctor told her not to move, but she wasn’t going to back out of the job she signed up for. She had someone helping her walk, but she showed up, and she delivered in a big way. When Bad Things Happen, Freak Out for a Minute, Then Deliver Not everyone can be as calm as Roland Frasier, but a good leader needs to stay calm enough to lead the team and make things right for the customers. Ryan noticed that some people on the team were able to do this and pursue solutions. Others seemed drawn to the drama and just added to it. Those people probably weren’t ready for a leadership position. Ryan also admitted that he had a general sense of disappointment during the whole T&C event. He later realized he was comparing this year’s event to the picture he had in his mind of what T&C 2021 would have been if there was no pandemic. This is an incredibly unhealthy and unhelpful mindset to have. He told his wife Emily and she said, “I don’t understand. Everyone else seems pretty happy.” And they were. The trade floor was elevated. It looked amazing. There were people all over the place. It was popping. The VIP area was great. Vendors were thrilled. Martha Stewart and Magic Johnson were awesome. Ryan realized his comparison wasn’t fair to himself or to those who were busting their tails to put on a great event. Or to the customers who were frankly enjoying themselves and getting tremendous value from it. In retrospect, he’s really proud of the team and the content and product they put out there. The Biggest Takeaways Roland says don’t panic; just move forward. Everyone did whatever it took. So many people worked their butts off, double time, triple time, didn’t sleep, to bring this event to life. Difficult times build resilience muscle, scar tissue. It’s the only way to do it. Now they know that, if they have a celebrity drop at the last minute, they can get through it. Every bad thing leads to a better thing. Snoop will come in next year from a good place. They developed a relationship with Magic and talked to him about working with their foundation and DigitalMarketer. Ryan realized how much his personal ego was wrapped up in stuff. He was worried about low numbers, because he didn’t want to look dumb. If you’re afraid of something, haven’t taken that action, launched that product, made that sales call, how much of it is wrapped in your actual concerns about the business and how much of it is your ego? If you’re ever at a live event, focus on delivering the absolute best performance you can with the people you’ve got. Don’t get all bent out of shape. Get to work. Do your job. Stop making it about you. If you impact one person in the audience, you had a huge win. Because it was a huge win for them. OUR PARTNERS: Scalable Impact Live (November 2-3, 2021) Newsletter Pros BKA Content Ready to Lead
Taking a Project from Start to Finish with Roland Frasier and Ryan Deiss
29:00Starting a new project is easy; finishing what you start is crucial. If you want your business to grow and scale, you can’t just do one thing. But you also can’t just have a bunch of great ideas, start a bunch of projects, and never finish them. 80% done is zero. In today’s episode of Business Lunch, co-hosts Roland Frasier and Ryan Deiss take an honest look at some of the struggles they’ve had lately in their multiple businesses. They talk through some challenges at DigitalMarketer in particular. Things haven’t been getting completed at the speed, frequency, and level of excellence they want them to. The good news? They’ve had some hard discussions with their leadership team, and they’ve finally solved this challenge. But it has involved relearning lessons they’d already learned from past mistakes. If this happens to you too, you’re not alone. One Team Takes One Thing at a Time from Beginning to End It’s a classic mistake—trying to do too much with just one person or one team, stretching people too thin. This temptation is always present, but it never works out. Roland and Ryan’s longtime friend, Carl White, talks about half-built bridges. Instead of building a whole bridge, you keep starting bridges. You put in tons of labor, and it’s worth nothing, because nothing is finished. It’s not that, if you get it to 80%, you’ll get 80% of the results. Nope. You’ll get zero results. They’re not saying your business can’t do more than one thing at once. In fact, you have to, if you want to grow and scale. The iPhone doesn’t go away while Apple is developing the iWatch. But you have to acknowledge that one team can only take one thing from beginning to end at a time. When you have a team working hard on something, you can’t ask, “Hey, can you do this thing too?” Whatever gains you get on the new thing, you’re going to lose on the first thing. What Roland and Ryan did to solve this was very simple. Each team stopped doing everything but this one thing. They tackled until it was done and it was great. Every piece of it. Then they moved on to the next thing. So how do they solve for the long term? How do you start something new and keep the other things running? Don’t Ask a 0 to 1 Person to Do a 1 to 10 Job You have to know the difference between a “0 to 1” person and a “1 to 10” person. These are two totally different personality types. A 0 to 1 person takes a project from start to finish, but then they’re done, and a 1 to 10 person takes it from there. They run it, manage it, optimize it. And the 0 to 1 person starts something new. One mistake they’ve made in the past: asking a 0 to 1 person to do 1 to 10 job in their spare time. A second mistake: giving the 0 to 1 person a team and hoping they can do both the launching of new projects and the maintenance of old projects. You wind up building a team of people who aren’t as talented as the 0 to 1 person. And, even more importantly, you’re asking a 0 to 1 person to be a manager. That’s not in their wheelhouse. They want to get things done quickly and correctly, not take the time to teach other people how to do it. The bottom line: if you want to do multiple things at the same time, you need multiple 0 to 1 people. What This Looks Like in Real Life At DigitalMarketer, one of their portfolio companies, they’ve had marketing and products centralized for the longest time at the holding company level. Now that they’ve hired a general manager, they can begin to build a marketing team made up of “1 to 10” people. They’ve also identified this at Scalable as something they need to fix. Entrepreneur founders are often 0 to 1 people who burn out or don’t have the skillset to go to the next place or continue at a subscale level. The whole idea behind Scalable is that the tools you need to be the 1 to 10 entrepreneur are available, and growth is the 0 to 1. Scalable has all the tools, the operating systems, but they need the right people to optimize those tools. They’ve been good about implementing systems, but they have either handed over systems to people who were too low-level to run them, or they’ve handed them over to 0 to 1 people instead of 1 to 10 people. They often tried to hire internally, but it’s not worth it if they’re not truly a fit for the job. Put an F16 pilot in an F16, not a helicopter. A big part of the Scalable operating system is quarterly planning. Part of that quarterly planning process is figuring out which projects they’re going to greenlight to help them close the gap between where they are and their growth goals. Just about anything they want to do—launching a product, rolling out a new marketing campaign, a new sales funnel—takes one, two, or three weeks. When things have taken longer, it’s because they did a start/stop. In each given quarter, a 0 to 1 team can do 3-5 new things. Make sure those things you pick are great, not just good. In your quarterly planning meeting, decide on the scope of the project. Determine what “done 100%” looks like and map out each little component part. Then everybody works on their individual tasks, comes back, and reviews. Finish your half-built bridges. Increase both actual completion of each project from 80% to done AND the quality from good to great. And make sure you have the right people for each phase of the job. This will make a huge difference in your business. PARTNERS: Scalable Impact Live (November 2-3, 2021)
Selling Less and Profiting More with Russ Ruffino, Founder of Clients on Demand
34:48What if you could sell less but make a bigger profit? Sound too good to be true? Russ Ruffino, creator and founder of Clients on Demand, helps experts, coaches, consultants, and thought leaders do this very thing. In this episode of Business Lunch, Russ sits down with host Roland Frasier to talk about how he went from selling products that cost less than $10 to selling programs that cost $10,000 or more. Russ started out in online marketing in 2011. After some affiliate marketing success, he realized the real money was in creating his own stuff. He bought everything he could afford on his bartender salary and started selling products at a really low price. It didn’t take long before he decided to flip the model on its head. Instead of selling thousands of copies of something that cost $7, why not sell a handful of something that costs $7k? The Model Is Simple Russ tried a massive experiment. He designed a funnel, found some committed folks to enroll in his program, and they got results. His income went from $20k/month to $200k/month as soon as he got it cranking. They scaled and scaled, and now they’re doing around $1.7 million/month. He says his model is simple and elegant. It’s what’s left when you toss out everything extreme or unnecessary. ad webinar phone call new client They run ads on YouTube and Facebook and drive traffic into a 40-minute webinar. On the webinar, they invite people to book a call. On the call, they book them straight into their high-ticket program. And that’s the same model they teach to their clients. Their program is 8 weeks long. On the back of that, they have a 1-year mastermind ($24k). Then they have a higher-level mastermind for $85k/year for people who want to go to multiple 7, 8 figures. The vast majority of their clients are in the health space, relationship space, nutrition space, real estate space, NOT the business building space. They don’t want to create their own competitors. Their ideal customer is anyone who can solve a major life or business challenge. They have to have something to teach people and an outcome they can help people achieve. One of their clients is a handstand coach. He teaches how to do a press up to a handstand, which is the holy grail of yoga/fitness people. Russ was skeptical at first, but it’s wildly popular and way more than just a handstand. There are a cascade of benefits—no back or shoulder pain for the rest of your life, literally being an inch taller—that make it well worth the high ticket. What About Downselling and Outsourcing? A lot of people believe you have to warm people up by starting with a low-ticket item, then move toward a high-ticket program. What are Russ’s thoughts on the value ladder concept? His method works without a warm-up. He’s filtering out people who aren’t willing to invest and commit, and getting right to the people who are. He might be leaving money on the table by not having a downsell, but he doesn’t know what he’d even sell. He could do an information-only program without the support, but that defeats the whole purpose. It’s like giving a stick of dynamite to a kid. About 95% of their enrollments come on the first call. They have 30-35 people a day reaching out to his company, and he has 5 people on the phones full-time. They watch the webinar, then book their appointment right after. He says he hasn’t had much success with outsourcing sales. It’s difficult to find someone completely aligned with their values. They only make an offer to 80% of the people they talk to. They firmly believe in only selling to people it’s really going to work for. When you have an outside commissioned sales team, they’re not going to abide by that. They just want to sell. They don’t work with copycats. They don’t work with people whose niche is too narrow or whose market is too hard to reach. And they make a judgment call on the spot about whether or not their offer is viable. They spend about $800k/year trying to break their sales model. They test different things, but nothing ever works better than their consultative, open method. How to Build the Very Best Team When it comes to building a good team, Russ says you have to start with yourself. You want to be a cool person to work for. If you have trouble getting along with people, you’ve got to fix that. As far as prioritizing what you should delegate, there might be two or three things you love and are absolutely brilliant at, and every moment you’re not doing that, you’re wasting money. You have to surrender your ego if you want to grow your company. Russ knows it’s not his job to change people’s lives. It’s his job to build a machine that changes people’s lives. When he realized that, it set him free from having to be the guy who’s hand-holding every client. On his team, he’s got Facebook people, copywriting people, mindset and performing people who guide clients through self-sabotage, overwhelm, and fear. HIs team is super hands-on, teaching people how to do everything (like Facebook marketing) and doing it with them. Is Russ afraid he’ll train people who will go out and compete against him? Not really. He’s upfront from the get go. Whenever he brings people on, he sits down to get a clear sense of whether they have an entrepreneurial bug or are more motivated by security. You want to find people who are brilliant at what they do but don’t want the pressure of running their own business. He’s also a big believer in reminding his team about the impact they're making in people’s lives—and creating space for them to shine. When a client has a win, they celebrate that win, and they celebrate everybody in the company who played a role in that win. What It Looks Like to Be Russ If Russ didn’t want to scale, his company could run on its own. Right now he spends 6 hours a week on client support, mostly with people in their highest level mastermind. He spends 3-4 hours a week meeting with his team, making sure the trains are running on time. And the rest of his time is spent scaling the company. He wants to go from $15-20 million a year to 9-figures. How will he get there? It’s all about finding additional value adds, like developing software for their clients and ramping up what they do. But he knows the importance of balancing the growth of the company with still being able to provide an amazing service. What resources does Russ recommend for people who want to be like him? The number one book that changed his life was The 4-Hour Workweek. The chapter on fear is the best thing he’s ever read. He also highly recommends Principles: Life and Work by Ray Dalio and Letting Go: The Pathway of Surrender by David R. Hawkins. That one blew his mind. If you want to find out more, book a call with Russ’s team HERE. They’ll dig into your business with you, put their heads together with yours, and make a plan moving forward. That one call will massively give you clarity about what you should be doing in your business.
The Creator Economy, Sales Models, and Privacy Invasion with Roland Frasier and Ryan Deiss
38:07There’s a lot of buzz right now about a surprising new privacy announcement from Apple and a “new” thing called the creator economy. Of course you can count on co-hosts Roland Frasier and Ryan Deiss to have some thoughts about it all. Summer is over, and Roland and Ryan are looking forward to getting back into the normal groove of business, which they both love. Traffic & Conversion Summit is just around the corner. These are exciting times. And, hey, if you’re enjoying the podcast, take a minute to review it. Today’s episode is a virtual smorgasbord of great topics, and they start off by discussing a recent article titled “The Year that Everyone Became a Creator.” The article essentially states that we have this creator economy right now and, as a result of that, anyone and everyone can be a creator, someone who is able to scale without permission. There’s Nothing New Under the Sun Ryan says this development—individuals thinking more like businesses—is a good thing. In the past, an individual putting themselves out there was a fairly limited business model. They’ve shown they can monetize their own stuff, but then go beyond that and leverage investments in other businesses. His only problem is with the terminology. This idea of a creator economy, or even creators in general, is just a rebranding of the word “entrepreneur.” It’s not new. Sure, there are more opportunities right now, so we have more winners. But businesses have been doing this forever. Like Roland says, it’s a reskinned version of an age-old thing. Ryan’s marketer side thinks it’s brilliant to rename a category, but the teacher in him warns us not to lose the opportunity of learning from all the models we have in the past. Roland agrees. He’s a fan of reading the classics in business and finance and marketing. Like that Shakespearean assertion that there are only 7 plots in the world, all of this has been seen before. Don’t go out and read all the new books on becoming a creator. It’s called business. What Goes Into Being a Business? So, to break this down, what does every business need to do? Three basic things: They’ve got to have something to sell. They need a distribution channel. They’ve got to have monetization. A lot of creators/influencers right now (on TikTok, etc.) are entertainers. There are no more gatekeepers. You don’t have to get on the radio or TV. You still need to have something you’re selling—a product or a service. Entertainment is a service. You still need distribution and monetization. And there are a lot of opportunities to cross-monetize your celebrity. A lot of people are now able to get into micro-funds, to micro-invest. Roland and Ryan are developing a fund that will help small businesses. They’ll put their own money into it and raise money as well. It’s an example of creators investing in other creators and keeping small alive. There’s a great opportunity to create your own network, like they’re doing with their podcast. It’s just eliminated the giant infrastructure with investment. Democratization is an overused word, but it’s appropriate. Don’t limit your monetization. Do all the things you’re doing but also make semi-passive investments in other companies. Diversify how you make money. Is Our Privacy in Jeopardy? The host switch gears for a bit to talk about something pretty important: your privacy. Apple announced recently that, in hopes of stopping child trafficking and abuse, they’re going to be scanning your personal devices for red flags. When the iOS 15 rolls out, they’ll scan your personal devices and Cloud uploads to match content against prohibited content (child pornography). On the one hand, this is very noble. On the other hand, it seems really dangerous. Apple is now protecting us from advertisers but not from the government. Red flags go to a panel at Apple—made up of humans—then on to the government for prosecution. People who abuse it could potentially use their powers for bad, take bribes to frame people. Roland says this makes him consider leaving Apple, which would be a really difficult choice. And Ryan thinks Apple is doing this to keep from getting broken up. If they cooperate with the government, they’ll probably be allowed to keep their monopoly status. It’s a surprisingly unpleasant precedent for a company that supposedly cares about your privacy. We’re giving up a lot of our privacy for safety and security, but that’s how dictatorships start. Roland isn’t a conspiracy theorist, and he doesn't think it’s in our immediate future, but as a student of history and law, he sees it as a slippery slope that many societies trip down. Which Sales Model Is the Best? Because they don’t want to end the show on a downer, Roland and Ryan move on to talking about sales models. They’ve been playing around with webinars recently to convert people into different programs they have at Scalable, DigitalMarketer, and the Epic Network. They’ve tried a few models and haven’t found one that’s the absolute greatest yet. Ryan’s background is marketing first. For the first two decades of his career, he got people to a website where they could learn about a product or service, click a button, give him money, and get what they want. But there are limitations to that. People will buy online up to a certain price point (usually around $2k), but if they’re spending more than that, they want to talk to a real human about it—or go see it, touch it for themselves. As they’ve explored the top end of the market, they’ve gotten more sales driven and added a sales team. They came up with a hybrid model. On one end of the spectrum, here’s the link; go buy. On the other end, we’ve got lots of ways we can help you; no mention of a specific program or price. In the middle, we have this specific program for these specific programs; let’s talk about it. With this hybrid model, the sales cycle is longer, more consultative. And you have to consider that there’s about a 20% cost increase with a sales team that does not exist with an online direct sale. But that’s where they’re headed, and they think it will be worth it. From this point on, their webinars will be less about getting the sale and more about driving the human-to-human conversation.
Building a Company to Sell with John Warrillow
43:00Build your business smart, and you can make a lot of money when you sell it. In today’s episode of Business Lunch, host Roland Frasier sits down with John Warrillow, founder of ValueBuilder, author of three great books, and all-around good guy, to talk about building and selling businesses. Each of his books is geared toward a different phase of your business. Built to Sell is for anyone feeling trapped in their business and shows you how to create a business that can thrive without you. The Automated Customer is for anyone looking for a recurring revenue stream. And The Art of Selling Your Business is for anyone on the last chapter of their entrepreneurial journey. He also has an exclusive offer for Business Lunch listeners who want to apply the lessons from his latest book to their own businesses. Listen in as Roland and John dig deep into how to build and sell your business well. Building a Company You’ll Eventually Sell John has a radio show called Built to Sell where he interviews a different entrepreneur each week about their exit strategy. He says there are a few dozen people out there playing at a higher level, out-maneuvering and outthinking the other side. They were the inspiration behind his most recent book. What tactics can we learn from these people? What mistakes can they help us avoid? The biggest issue entrepreneurs face when they go to sell their business is: what do you want for it? John says if you put a super-high number out there, you’ll lose people before you even start the process. On the other hand, if your number is too low, you’re cheating yourself. There’s virtually no good answer to this question, but this is a decent one: “Hey, I’m a reasonable person. I’m happy to review any offer you think is reasonable.” He tells them that he’s willing to look at an IOI (indication of interest) if they want to put that together. An IOI is not the same as an LOI (letter of intent). An LOI gives a specific price and includes a no-shop clause where you agree not to market your business to anyone else. That’s a dangerous document to sign. You’ve lost leverage. You want a process to try to get multiple bids from multiple people at a time. The Importance of Building Your Own Media A lot of Business Lunch listeners own ecommerce companies, and right now FBA (Fulfillment By Amazon) roll-ups are all the rage. They’ve raised over $1 billion in funds and hold workshops on how to get the most for your business. They create a deal flow mechanism—How to Sell Your Amazon Business—then go in and buy at low multiples. They’re like the fox in the henhouse. How would John advise someone who gets an offer from one of these groups to proceed? He asks the question: who owns the customer? If Amazon is seen as the ultimate owner of the customer, and you’re a fulfillment house with a 3rd party product you sourced, you don’t have a direct relationship with the customer. This puts you in a weak negotiating position. If you own the brand, the customer list, and you have multiple marketing channels, one of which is Amazon, you can do a lot better. You don’t want to be dependent on the traffic from one platform, and you want access to your clients. John tells a story about Ben Leonard who built a cool workout platform, Beast Gear, selling weight lifting straps and gloves. He started selling on Amazon and, in the package he included a note that says, “Make sure you tag us on IG when you get a PR. I’d love to know about it.” Then he DMs anyone who posts, says something like, “I can’t believe you dead lifted that many pounds!” and builds rapport. On top of that, he gives them a $20 gift card for the Beast Gear website. This lessens his dependency on Amazon, which is always a good thing. Selling Your Business to a Private Equity Firm or an Individual Investor Entrepreneurs thrive on freedom. If they wanted to go work for someone, they’d do that. Most of them are successful and smart. Selling to a private equity firm is usually the worst of both worlds. You’re giving up control (60% to the PE firm) and you’re a minority shareholder in a company they want you to run. People in charge may not know the details of your company, and there’s significant risk. It comes down to the quality of the buyer and their history in executing this kind of plan. You have to know your stuff to do this. It can work, but it’s tough. The key is to think about building your concerns into the deal. Do your research and know what to ask for. Private equities in general are a bit like sheep. They all have identical investment criteria. The good news is that, if you attract the attention of one private equity group, others will be attracted too, and you can negotiate and get a better deal. Individual investors are the most likely buyers for small businesses. That person is either looking for a job or a business that fits together nicely with their own business. They often need to borrow money to buy your company. The more bankable your business it is, the easier it will be to get a loan. You’ll likely have to carry a note, finance at least a little of the sale. Figure Out Your Freedom Point Your freedom point is when the sale of your company after taxes will create enough liquid wealth for you to live comfortably for the rest of your life. When you crest that point, ask yourself, is now the right time to get out? If you stay, and your business is a big part of your net worth, you’re effectively gambling your freedom. Once you crest the freedom point, get out. Take the amount of annual income you need to feel totally free, multiply it by 33, and that’s what you need. Most entrepreneurs are happiest when they’re creating, building new things. Once you’ve crossed a certain point in your business where the excitement is wearing off, it’s a good time to sell.
Good Ideas vs. Great Ideas with Roland Frasier and Ryan Deiss
31:56You need a process for distinguishing a good idea from a great idea. It’s fairly easy to tell the difference between good ideas and bad ones, but what about good ideas and great ones? As many people have said in a lot of different ways, sometimes the enemy of a great idea is a good idea. (For great ideas delivered to your inbox weekly, sign up for the Scalable Memo.) Good ideas are a dime a dozen, and if you say yes to all of them, you’ll never have the capacity to try out some really great ideas. At a recent strategic planning meeting, Roland and Ryan sat down with their team to look at where they’re at as a company and where they’re headed. They felt frustrated that growth hasn’t been what they’d hoped of late. They concluded that they’d been investing too much time and money into good ideas, instead of great ones. It was time to let some of those good ideas go. But how do you know when and how to do that? Tweaking the ICE Model and Clearly Stating the Hypothesis The ICE Scoring Model is helpful when deciding whether an idea is good or great. You rank your project on a scale of 1-10 in each of three categories: Impact, Confidence, Ease. Then you multiply the numbers to get the ICE score. To make sure an idea is great, and not just good, Roland and Ryan have decided to go for a high score in all three categories, not just one or two. If something will have a high impact and is easy, but you don’t have confidence in it, it’s not going to be great. They also decided to get very clear on their hypothesis from the beginning and put it in writing. A simple paragraph is fine. “We believe that, if we do the following, it will achieve this particular result. And we’ll know when x happens.” Don’t just say, “We think that, if we do this, we’ll get more leads.” That’s not specific enough, and there’s no time frame. You need to know when to kill if something doesn’t work as quickly as you wanted. You need a system for identifying whether or not an idea lives up to expectations in a stated time frame. Just because you have the capacity doesn’t mean you have to take on a project. If it’s not a great idea yet, let it bake. Getting Your Employees to Think Like Owners The theory is that the more we can help employees to think like entrepreneurs, to have an owner’s mindset, the more aligned we all are toward achieving our goals as owners. But how do you do that? How do you instill an entrepreneurial mindset in the people who work for you? Ryan thinks most people are at one end of the spectrum or the other. They’re either a serial entrepreneur who’s always starting something new or someone who just wants a job where they clock in and out and do what they’re told. He doesn’t see many people in the middle. One way to motivate employees to act like owners is to offer variable compensation (incentive on top of a base salary used to motivate and retain employees). But Ryan hasn’t seen that work. He thinks you either have that mindset or you don’t, and their company isn’t going to pay a salary at market rate and put variable comp on top of that. For owners, if there’s no money, there’s no paycheck. If lots of great ideas bring in lots of money, they get more. You can’t have your cake and eat it too. When you’re interviewing, you look for people who take ownership of things. Ask them questions and see if they get responsibility and already take ownership of their lives. People with owner mindsets are going to make decisions for the good of the company, not just themselves. Micro-Ownership as a Prerequisite to the Owner Track There are two tracks: the employee track and the owner track. Instead of offering variable comp right away, you can do a probationary period. Give someone micro-ownership, see how they do, before you put them on the owner track and give them more opportunities to be entrepreneurial. Make them prove their ownership mentality. Equity in the company is earned. What does this look like? You give someone the opportunity to take ownership of a project or team. They’re not getting more pay, but they’re getting a valuable opportunity. You test it out. If they fail, they can go right back to where they were. You don’t have to let them fail publicly and spectacularly. There’s such a thing as an opportunity with a safety net. For your part as owner, you want to build a culture within your company that’s attractive to people with entrepreneurial mindsets. Become more mission-focused, flexible on work hours and location, plenty of opportunities to take on certain projects. Give people who want the owner path a chance to take a shot at it. You need to find these people. If you always have to be the person who goes to make sure things get done, you won’t ultimately scale. The Stages of the Entrepreneurial Journey Need some help putting some systems in place to help your business grow and scale? Roland and Ryan just started working on what will be Scalable’s third flagship accelerator. Scalable Growth Accelerator Scalable OS Accelerator Scalable Impact Accelerator These accelerators will take you through each stage of your entrepreneurial journey, getting you to 6- and 7- figures, then to 8-, then to 9- and beyond. Each accelerator helps you build the capacity for the next level of scale. The Scalable Impact Accelerator will also offer an exit strategy for when you’re ready to sell your business. It really is the holy trinity of scale. Sign up for the next cohort today!
7 Attributes of a Successful Sales Person with Neal Tricarico, Head of Sales at Scalable
27:47Learn the importance of systems when it comes to inside sales. Before Neal Tricarico joined Scalable as Director of Sales, inside sales was one of the biggest missing pieces in the business. Scalable was born from a digital marketing company, and they didn’t have anybody on the phones. They were literally missing out on half the sales they could have made. They snagged Neal from the Tony Robbins organization, and he brought his vast experience, impressive credentials, and his great personality with him. He has developed several systems that have proven wildly successful with sales teams, and he amped up Scalable’s inside sales in no time. In today’s episode, he sits down with host Roland Frasier to share some valuable information with listeners, including exclusive access to his brilliant Sales Strengths Identifier (SSI). Whether you’re hoping to improve your inside sales—or get it started in your business—Neal has just what you need. An In-House Sales Team vs. an Outsourced Solution What are the pros and cons of hiring your own sales team vs an outside sales team? Basically, the biggest advantage to an outside team is a lower investment risk. And an internal team is more aligned with the culture and values of your company, which is a huge advantage. Neal says that hiring your own team means your sales reps “have an opportunity to eat their own dog food.” They can experience what they’re selling. An outside sales team, on the other hand, has a potential disconnect from the products they’re offering. There’s no buy-in. They’re just doing their job. What’s the First Step to Bringing Sales In House? That first hire is most important. Scalable brought in Neal, and he brought in his own successful system. Then he recruited and hired sales reps who understand and work in that system. If you’re just starting out, you’re looking for a player-coach, someone to roll up their sleeves, be sales rep #1 so they understand what’s actually happening on the front lines. They can build out the framework of success. Then you can scale and hire more reps. Great. So, how do you find that person? Neal believes there’s a confluence of science and skills. There are specific capabilities required. You can assess someone to see if they have those skills with The Sales Strengths Identifier, which Neal invented. It’s both data-driven and experiential, and you can match it with your interview process. So, what are those strengths/skills? Strength #1: Mindset Mindset is the critical foundational step in this process. You need someone who has the ability to shift their focus from their own needs/wants to the client’s. Mindset-wise, you’ll never feel bad or smarmy when doing sales, because you know the value of what you’re offering exceeds the price. You’ll feel good about it the whole way through. Strength #2: Rapport You want someone who has the capability of establishing rapport with clients—and quickly. You have to earn your customer’s trust and respect as soon as possible. First impressions are huge. You establish this rapport by focusing first on the client. Seek to understand before being understood. No old school small talk; that’s a turnoff. Instead, ask an open-ended question: What led us to this call today? Strength #3: Diagnose Needs A doctor who prescribes without diagnosis is guilty of malpractice. It’s the same with sales. When we pitch or present our solution before we’ve actually diagnosed the client’s needs, we’re guilty of malpractice. Your moral obligation is to conduct a gap analysis that helps the prospect understand what they actually need. Strength #4: Build Value In old school terms, this is your pitch or presentation. This is where you’ve won the right to engage the how. You’re tying their needs to your product or service. You can solve their wants and whys. Strength #5: Create Buy-In You can ask the client: “I’m curious. Why is this something you must move forward with now?” Then the client articulates in their own words the value that would make it worth investing in. If you reach “create buy-in,” and the client can’t tell you why they must move forward, they’ll ask questions and you can provide answers. Strength #6: Overcome Objections Here’s some good news: if you do #1-5 well, you don’t have to do #6. If the value is there, price will never be an objection. The value always has to exceed the price, or there’s no need to do it. Price is only an issue when the value is not clear. If you’ve made the value clear in steps #1-5, there should be no objections. Strength #7: Enrollment As a sales rep for any company, your responsibility is to unlock the value in their eyes that would make it worth it for that client to invest their time, money, and effort. When you do that, you’ll have an enrolled client. Success loves sequence. Order matters. In old school sales, it would be the other way around. We would spend very little time developing rapport; we’d ask a question or two; then start pitching, asking for the sale; then get in negotiations, spend a ton of time overcoming objections, and finally closing. Get the Sales Strengths Identifier For You and Your Team Roland and Ryan can’t recommend Neal’s SSI highly enough. You can use it to find sales people to hire for your business—or even a sales director. You can use it to determine whether or not you’d be good at sales (if you’ve never tried it) or how you can get better. The questions in the assessment actually have nothing to do with sales. They’re grounded in the DISC profile. Take the Sales Strengths Identifier and get a report across the seven stops. Within each of the steps, there are 5-7 sub-attributes and recommendations. There’s no perfect assessment, but this one is very thorough. Attributes like establishing rapport and overcoming objections tend to be much more innate. If you don’t score at least a 7 out of 10, sales is not likely a career for you. Some of the other attributes are more trainable. Roland and Ryan want their listeners to have access to this awesome program. Click here to take the SSI.
Important Conversations to Have with Your Business Partner with Roland Frasier and Ryan Deiss
28:33Honest communication with your business partner while things are going well can prevent disaster down the road. On today’s episode of Business Lunch, co-hosts and business partners, Roland Frasier and Ryan Deiss, talk about something they hope their listeners will never experience in their business: mutiny in the ranks. They discuss the three biggest challenges co-founders face and how to proactively avoid them and ensure the success of your company. They also share two big things businesses can do RIGHT NOW if they want to grow: Implement an operating system that will give you more free time as you scale. Find out more about the Scalable OS Accelerator here. Take your business partner (or your whole team) to Traffic & Conversion Summit LIVE in San Diego, CA on September 13th-15th. When a Business Partnership Goes Sour Great Jones is a direct-to-consumer cookware company that has become really popular the past few years, especially among the Instagram crowd. Two women, who were great friends in college, went off to start their own careers. One was a designer and understood branding and social; the other was more of an operations person. Then they decided to combine their talents and started a company together. They were great at PR, and everything looked perfect, but behind the scenes, it was a mess. One cofounder pushed the other out, but the one who got pushed out had a better relationship with the team, so the whole team walked. Roland and Ryan know it’s not always as cut and dry as good person/bad person. Ryan and his former partner, Perry, had ideological differences. Ryan thought Perry was a jerk, but now realizes he had to own his part. Generally, Roland and Ryan agree, but sometimes they don’t. So, how do they ensure disagreements don’t lead to infighting? What to Know Before You Go Into Business Together First, be careful who you go into business with. Don’t go into business with someone with ideological differences just because you’re friends. If one of you wants to do good, and one of you just wants to make money, it will be hard to work together. Make sure your values align. Take an honest look at your work ethic, finances, family values. Are you workaholics or do you take vacations? Do you want to take money out of the company or leave it in? They recommend grabbing a long-form partnership agreement from LegalZoom and taking a look at questions like these: What happens if one of us wants to leave? What happens if we need more money in the company? What happens if we get deadlocked? Ideally, you want partners with complementary skills so there can be clear divisions of labor. You each play different roles in the company. But you’ll still have to communicate. Roland is a huge believer in consensus. If he wants to do something and Ryan doesn’t, but Ryan decides to disagree and commit, as far as the rest of the team is concerned, Ryan is all in. Just like there have been times when Roland doesn’t agree, but he goes along with it anyway. Bottom line: they put on a united front for the team. “We don’t fight in front of the kids,” they say. The Three Biggest Challenges Co-Founders Face The Business Insider article about the Great Jones mutiny addressed three big challenges these business partners didn’t handle well. #1: Hiring too many junior team members at high levels When one of the team members wasn’t doing their job, one of the cofounders had to pick up the slack, and they started getting resentful about it. #2: Misalignment of vision One of the partners wanted to pursue profitability, and the other wanted to shoot the moon. Unicorn or die. #3: One cofounder was the face of the brand with the other behind the scenes This is a recipe for bitterness and resentment, not to mention that having multiple faces of your business makes it stronger. Have Those Hard, Healthy Conversations From the Beginning What relief valves can you put in place for potential resentment? “Let’s have a conversation now about all the ways we might piss each other off,” Roland and Ryan say. They suggest sitting down with your partner and your favorite adult beverage, setting aside a couple hours. “It’s therapeutic and oddly fun.” What do you talk about? Money and time are biggies. Maybe it takes you 20 hours a week to get your job done, and it takes your partner 80. You need to have a conversation about that. Are you focused on equal time commitment or getting things done? One huge question to ask is: “What does it look like for us to get divorced?” It feels counterintuitive to ask this when things are going well, but it’s actually the best time. Address those tough things now while you have good emotional capital with each other, before something gets out of control. Have these conversations regularly—on good days. Don’t wait to have them when your money is almost gone or resentment is already festering. It’s like this: “Because things are so awesome, I think we need to have a conversation about what it will look like if things get less awesome.” It’s an imperfect world, and we’re all imperfect people. But honest communication means two imperfect people can run an awesome company together for a long time.
Building Trust and Working With Celebrities, With Roland Frasier and Ryan Deiss
32:22Learn what you need to know about working with celebrities when it comes to your brand. Advertising executives refer to celebrities as trust agents. When a celebrity endorses your business, it breaks down the barrier of the cold, unknown brand and gives your customers the sense of a friend telling them it’s okay. If you know, like, and trust a celebrity, you’ll buy the brand. Speaking of brands and celebrities, it’s almost time for Traffic & Conversion Summit LIVE, the largest digital marketing event in North America. This year’s event is being held in San Diego, CA on September 13th-15th. Thousands of folks come out every year to hear about the latest and greatest developments in marketing in the online space. The speakers are always phenomenal, the takeaways beyond valuable, and every year there’s a really cool celebrity appearance as well. On today’s episode, Roland Frasier and Ryan Deiss have a BIG announcement about T&C. The one and only dynamic duo of Snoop Dogg and Martha Stewart are coming to Traffic & Conversion Summit 2021! Find out how Roland and Ryan made this magic happen—and what you need to know about working with celebrities when it comes to your brand. All on today’s episode! Making the Case for Brands Working with Celebrities Years ago, at Traffic & Conversion 3, Roland was a new partner in the business and adamant about getting a celebrity for the event. Ryan was just as adamantly against it. “This is a stupid waste of money” were his exact words back in the day. They went with Roland’s gut, brought William Shatner to the event, and that changed everything. Shatner isn’t just an actor; he’s a brilliant marketer and a spokesperson for so many great brands. Just like the wildly famous mismatched pair, Martha Stewart and Snoop Dogg. They’re very successful business people with a lot of expert advice to share. So why should brands be thinking about working with celebrities? It’s that whole concept of celebrities as trust agents. Why pay cool celebrities to come to T&C? Because it draws people in who might initially be skeptical. If T&C is good enough for Martha and Snoop, it’s good enough for me. It takes the risk out of the equation. It’s also a signal. If T&C can get big celebrity names at their event, clearly they’re legit. The brand elevation you get from that signal is off the charts. From a marketing perspective, it lowers your acquisition costs. The celebrity deals always pay for themselves. Not to mention the amazing energy that comes when you’re in the same room with a bunch of people and some cool celebrities. You can’t put a price tag on that. How To Do a Celebrity Deal So how do you get celebrities to work with you? Obviously, you don’t just go out and hit them up on Twitter. There’s a process. Do you (or anyone you know) already have a relationship with this celebrity? If you don’t know them directly, you go to their agent. If it’s a big celebrity, the agent won’t return your call. You need a connection to their agent (a broker). You can Google “celebrity broker Los Angeles” or go to IMDb and register for a Pro account to find the agent’s information. If you don’t get replies, reach out to event coordinators at places they’ve spoken at before. A lot of celebrities don’t have a set fee. You make a firm offer. The amount of money they command depends on their popularity at the time. Then you negotiate for weeks or months. If you’re talking about a single event appearance, it won’t cost you as much as endorsing a product. How much money are we looking at? The celebrities T&C wants are asking between $100k and $800k for an appearance. Not less than $1m for the Rock, $2m for J-Lo. Celebrities on reality TV are maybe $50k to $100k. Well-known authors might be $75k. How to Offset the Risk with Other Monetization Opportunities There are a lot of ways to make sure these celebrity partnerships pay for themselves. Find someone with a book coming out, and you’ll get sweeter deals by doing book buys. You can also give them a piece of the event revenue (a part of the door) instead of paying the whole fee upfront. If the celebrity is selling something, you can offer them a custom advertising package for their product (like The Rock’s tequila) in addition to their fee. A lot of B-level celebs, for an endorsement of your brand, will require a $50k test budget fee to see if the thing you’re doing actually works. Then you’ll pay them monthly or quarterly or royalties. If you’re bringing a celebrity to an appearance, you can sell a VIP ticket that allows people to get closer to them. Front row seating. A speaker dinner. A meet and greet. Photo ops with the celeb + an opportunity to hang out in a group can be sold for $15k. Roland and Ryan will also interview the celebrities LIVE at the event for the Business Lunch podcast. That drives a lot more listeners to the show. And they do their research and ask amazing questions. They’re not overly starstruck. They play it cool. Opportunities You Don’t Want to Miss Speaking of cool, there are some great opportunities coming up for you. Like the EPIC challenge that teaches you how to acquire businesses for little to no money out of pocket. Next challenge starts September 23. Register now! There’s also another cohort of the Scalable OS Accelerator opening up, for anyone who wants to scale their business without losing their mind. Learn how to grow and implement great operating systems into your business and get more free time back. Jump on the waitlist today!