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Sell something people never stop buying or add on people who never stop selling for you.
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Key takeaways
- And there's only two ways to build a compounding business.
- And so if you have for example, a real estate brokerage, the realtors you have really are the customers of the business because each of them represents a certain amount of revenue that they will collect for you.
- And then for this one, you continue to get more customers and then they never stop buying.
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Full transcript
Locally archived YouTube transcript with timecodes. Speakers are assigned heuristically and may be corrected editorially.
0:00The best businesses start are ones that compound. And there's only two ways to build a compounding business. Number one is you build stuff that people never stop buying. All the way through they buy again, they buy again, they buy again. The other way is to add on people who never stop selling for you. And so that means that even if they sell people only once, they themselves consistently sell month after month after month. And so if you have for example, a real estate brokerage, the realtors you have really are the customers of the business because each of them represents a certain amount of revenue that they will collect for you. They're going to sell two houses a month every single month and you can count on that. Versus something like Coca-Cola where you'd have somebody who buys this month, buys the next month, and buys the next month.
0:46But in both situations, these realtors get more realtors and then the next month they sell more houses and that's how this compounds. And then for this one, you continue to get more customers and then they never stop buying.