You Get Rich From What You Own, Not What You Do

0:00I was originally asked to talk about branding on social media. I will talk about brand for about five minutes and the main reason for that is because I don't think it's going to make you more money. So, I'm going to be hijacking the other 55 minutes of my talk to more [ __ ] that I think will make you money than talking about social media branding. And that may sound uh conflicting with how I am doing things, but it's more about context. So, everyone here, who here owns a brick-and-mortar gym? Can I just get like a show of hands? Wonderful. Okay, here's my quick thing on brand and then I'll get to all the stuff I'm going to draw. So, big picture, brand isn't actually a thing.

0:46It's an association we make between things that we know and things that people don't know, which is usually our company. And so if you think about a brand like a bouquet of flowers, right? Got these little flowers. These are my flowers. A bouquet of flowers. Thank you. Uh you you're going to love the rest of the presentation. A bouquet of flowers isn't actually a thing. It's many things put together and then we put it in our heads as an idea as one, but it doesn't it's not actually anything because if you spill it on the floor, it's not a bouquet anymore, right? And so when we brand, think of a brand as a bouquet of flowers, but it's your bouquet of flowers. And what you're putting inside of that bouquet are the individual intangible ideas that you want to associate together with the thing that people don't know about, which is usually our company, right? And so if I were to say some things about my brand, you'd probably know that I have the best cabs ever, right? So that would be something that's like associated with my brand. There'll probably be some things like dessert. That's something that's associated with my brand. Now, those are like fun little dooddads. But hopefully some of the things that you really associate with my brand are giving first, providing value, being patient, doing the boring work, whatever, doing blah blah blah, right?

2:08Dot dot dot. And so there are these intangible things that we associate. And the thing is is that like if I were standing on stage next to let's say a guy who owns a brothel and a drug dealer, you would associate my brand with that. And so you think differently like the bouquet would look different. And the reason brand and reputation is so hard to maintain is because so many people want to rub their [ __ ] on yours because if as soon as yours gets better, they want to associate theirs with yours, which is the right move for them to make. But it gets harder and harder for you to make to get them to not do that because they continue to dilute and not really dilute because you don't actually dilute anything. You just make more associations that aren't with what you want to do. All right. So, let me give you an idea here. So, let's say here's my bouquet and I've got this sad flower.

2:59So, this is a sad face flower. There's my sad flower. If I handed my wife this bouquet, all of the roses are perfect. And there's this one that's just wilted and dead. It looks a lot different, right? The bouquet, the brand, the perception of it massively shifts even with one [ __ ] up flower. And so that's why creating a brand is much more about cultivating deliberately the associations you want to make with the thing you have that people don't know with the things that your ideal audience likes that you want them to like too.

3:34Does that make sense? I'm seeing some head nods. And so if you have a clean gym, people will start to associate your gym with the intangible idea of being clean, right? If you have really friendly people, they'll start associating smiley faces, recognizing their name when they walk in the door with the brand, which in the beginning they don't know what it is. The name is meaningless to them. But we create the meaning by associating with the things that we know that they like. And that is the process of branding done at scale.

4:05And you do it over and over and over and over. Right now, we put out 250 pieces of content a week. And in six months, we'll probably be at a thousand a week in terms of what we're going to be putting out. And it's just an absolutely brutal, repetitive, violent process to get as many people as possible to remember one or two things about you. Does that make sense? Now, let me tell you what doesn't probably make sense for you.

4:32You probably can't do that. [laughter] which is why I talked to Kale before I I got up here. The brand that you're going to build in a local community is going to be based on the quality of your product and your service. Your reputation is going to be based on that. And so if you feel like you want to strengthen your brand, strengthen the product.

4:57You don't need to make a video on Instagram every day talking about fat and carbs because real talk, you're not going to be better most likely than the hottest chick on planet earth talking about the same thing in terms of reach. And the thing is, and here's the double-edged sword. Let's say you are amazing at it. If you do that, what's going to happen is that you're going to get more demand on your personal brand and online, etc. people who don't live close to you that you're that will be a greater business opportunity for you than a single local location. And so then you're going to have a choice. And many of you probably have done this.

5:32Well, I've got some online clients. I've got some inerson clients and it's I'm totally spread thin. I don't know what the [ __ ] I'm doing. Right. Real talk. Anyone? Does this resonate? Right. Okay. And so that's why it's really about focusing on the one opportunity that's going to give you the highest ROI, which is going to be the remainder of the time that I'm going to be talking today. All right. And so I was asked to talk about social media and branding. I think that for most local businesses, the brand is going to be about the reputation. The reputation is going to be built on consistently meeting expectations. Now the thing is is we always talk about overd delivering and I've even talked about overd delivering. But I think a lot of times I think about this and the real real is that most people just can't even meet expectations because we sell so hot. And so if you could just meet the perception that this person has, the expectation they have of this the service that they're going to get, you already won.

6:21Make promises. Keep promises. Make promises. Keep promises. And if they liked the first promise you made them and you keep it, they'll be with you forever. Okay, that was brand. So, if you were like, I don't care about brand, welcome to the next Tik Tok. All right, so these are the topics that I want to hit on today. So, we're going to start with a little exercise. I'm going to call it the magic wand. All right. So, right now, if I have a magic wand or you have a magic wand and you wave it and you get to make as much money as you want. All right?

6:55So, write down or put at least think about it in your head what number that would be per month. Okay? How much money are you making per month? Okay? Hopefully, it doesn't take too long to think of a number. Now, who here currently is making that amount of money? Please raise your hand. Wonderful. So, what we have just done is establish a gap between where you are and where you'd like to go. Fantastic.

7:19So, here's you. Here's goal, which we all just established. Now, in scenario one, you have these goals, right? And there's all of these different ways of getting there, right? And the problem is you're like, "Which one do I do?" Before I explain more on that, scenario two is I don't know what to do to get to there. Let me tell you how these feel.

7:54This one feels like anxiety. So if you feel stressed or you are overwhelmed about which thing you should do, that's this. If you don't know what to do, you're at a loss. You feel hopeless because you're like, I don't know what the [ __ ] to do. Like, I don't know. I don't know what to do. And it's not about picking. It's like you don't even know where to start.

8:23And this has been really important for me to identify if I feel anxiety, it's because I don't know which thing to pick. If I'm feeling sad, it's because I feel hopeless. I'm like, okay, hopelessness means I have a lack of choices. So, I have a lack of choices means I am I have ignorance around this topic. Okay, this makes it solvable. So then I can start solving for I need a path so that I know what to do. It's the only thing I know me personally. That's what makes me sad is if I don't know what to do, I get sad. Is this resonating with anyone here?

8:52>> Okay, so that was Tik Tok too. This one was about figuring out which thing to do. This is about figuring out what to do. So when you're deciding which thing to do, this is a clear case of lack of strategy. All right. Now, strategy is a big fluffy amorphous word that gets tossed around a lot and no one knows what the [ __ ] it means, but it's probably important and in my opinion is the most important. But I'm going to give you a different definition for this to make it a little bit more useful.

9:31Okay? Strategy is just prioritizing. It's all it is. Like whenever you hear someone say we have to figure out our strategy, it just means we have to figure out our priorities. That's all it means. And in layman's terms, it's what's going to get us the most bang for the buck. If you want the fancy definition that I have, it's how you choose to allocate resources that are limited against unlimited options.

9:58That is strategy. And the tough part about this about strategy in general is that when you're looking here, you have all these options. Strategy is figuring out actually there's one that's right here that takes us off the page because the most costly thing in business isn't just the unknowns, but it's the unknown unknowns as in the things that you didn't even know you could pick from.

10:23So, let me give you three examples. Example number one, we had a company. So, the first investment we made, I was still I still owned 100% of gym lunch at this point. Uh, it was a photography company. And so, this photography company had a single location and the owner had an agency to help photography owners. And he was like, I want to do what you did with uh gyms with photography. I was like, okay. And so, the more I got to know him, the more I learned about the business. I was like, nah, I don't think we should do that because I'll tell you the stats around it. So he's like, "Well, uh, it cost, you know, I I charge five grand." And I was like, "Okay, well, what does the average photography studio ad in revenue after using your thing?" He said, "400,000 a year." I was like, "So they add 400,000 a year." He was like, "Yeah." I was like, "And you're charging, say it again." He's like, "$5,000." I was like, "Okay, let's not do that anymore."

11:14And uh I was like, "Does it cost less than $400,000 to make?" And mind you, that was added revenue, not total. And his was doing millions. And I was like, "Okay, how much does it cost to start one of these?" And he was like, "Not a ton." I was like, "Huh, crazy idea here." I was like, "What if we own a mall?" And so that's what we did two and a half years ago. Now we have 77 individual studio locations in terms of rooms where we take pictures. Um, and that business went from, I don't know, a million and a half a year to two and a half million a month in that time period. The point, the reason I bring this up is that it wasn't a move that was on the board. He's like, "How do I grow this agency? How do I turn this into a coaching thing?" And I was like, "No." Like, you have a business model that has amazing returns on capital.

12:01Let's just do a ton of them, right? And it was operationally simple. We could centralize a lot of the stuff, which is different than like a gym. Gym is a lot harder to centralize things. It's more decentralized. So, I show this to say that right now, if my goal here is to make you guys as much money as humanly possible by the time I am done my 46 minutes, then if I can just get you to make the one chess move that will make you the most money, then it will ROI everything you do this year or maybe the next five years.

12:29Because fundamentally, people don't actually move faster than other people. Like, you see me walk, it's not like I'm hyperactive. It's just you get more for each step when you are more strategic. When you have better priorities and you allocate your resources, time, money, energy into the fewest moves that get you the most bang for the buck, you make the most money. So, back to this.

12:56You guys want to hear a different example? So, we had a we have a PR company that we bought um that was was selling a 100 units a month of PR services and they did decent decent business, really good marketer, so so delivery. But I really like the founder and so we dove into the data and it looked like 85% of the businesses turned out within two or three months, which is horrendous.

13:2215% of the customers paid the most and stayed the longest and they were different. I was like, "Wow idea. What if we stop selling these 85% and only sell these 15 and cater our stuff to only them?" He was like, "That would kill my business." Mind you, recurring theme of the first one when I told him to shut his agency down, he had to go to zero. And then built the next thing. And for nine months, he was basically at zeroish. Hard like tough. Very simple to say, very hard to do. Could you guys imagine if you have two locations? I was like, "Hey, I can help you get there.

13:55for a year, you're gonna have to make no money. Cool. What do you do? Play long game, right? And he was willing to do that. And that was me talking to him off a cliff every week being like, "Hey, man. We're going to get there." [laughter] And so with this individual uh with the PR, we he cut 85%. We catered the messaging and we made it way more niche down to this specific avatar and we 10x the price. And now we sell more units than we did before. We 10x the company.

14:25strategy rather than thinking, okay, what am I going to do to just get more? Now, there's always a time for more. Believe me, violence is the answer. Big fan, all right, of brutal, relentless effort. But we want to make sure that we're capturing the most per unit of effort. And so, the equation for this is volume times leverage equals output.

14:50Which means the more times you do something and the more the more you get for each time you do it, the more you get ultimately. Now, if you're a lazy [ __ ] guess what? You better have a shitload of leverage. No, you can be lazy and still make tons of money. You just have to have lots of leverage. You got to be really strategic in the moves you make. The more activity you have, the more you can let a little bit of that uh violence [laughter] um work for you, but it ends up becoming a cap soon enough because at the end of the day, we only have x amount of hours.

15:20And if you want to do big [ __ ] you need a lot of other people's hours to work for you, which is a form of leverage. Okay. So, one moment. It's a different style. Tik Tok versions. All right. A little little stop and go. Okay. Got that. We got that. I'll give you a third one. So, we had a a company that uh was an association of of uh trying to keep it vague. Let's call dentists. Association of Dentists.

15:50They had a they had a business that like they glob all the savings together of all the dentists so that they would charge less than all of them saved with with the conglomerate of buying power, right? So if you save $30,000 a year as a dentist, they would charge 10. Super sticky model. Great business. And so he's like, "Hey, I think I could sell this thing for 20 or 30 million." And uh I was like, "How many dentists do you have there?" He's like, "I don't know, 500." like, "And they all run the same systems?" He's like, "Yeah." I like, "What's the average dentist make like per unit?" He's like, "I don't know, 500,000."

16:25I was like, "Wow idea. What if we take 10 every year, bundle them up, and sell them from 100 million every year? Get 20%, give 80% to them. That'd be chill, right?" I was like, "Then you get your exit every single year." And then if you want to sell it, we exit the machine that does rollups because then that you have roll-up machine does 20 or 30 million a year in profit and we get 10x on that. Now you have a $300 million a year exit rather than a $25 million year. He's like that sounds better. I was like, I'm with you. I agree.

17:00Strategy prioritizing. What move will get me the most for the effort I put in? All right. Now, this is a perfect transition to you're like, okay, that sounds very pie in the sky. So next Tik Tok theory of constraint. So everything that we do at acquisition.com and the approach that we have with growing any business is spending a lot of effort to try and identify the constraint of the business because every single business is constrained. There's one thing that is limiting its growth.

17:30So right now and here's the [ __ ] up part. Many of who here works all the hours of the day like most of the hours that you're awake. Okay, half of you. If your business is not growing as fast as you want it to, you are working on the wrong stuff. If it has stayed the same and you spending all your time working on it, you're not going to get more hours. So, you're doing the wrong [ __ ] So, it means that you have not properly identified the constraint of the business. So, I'll give you an example of this. We had a media company that came to us, big YouTubers, 40 million plus subscribers, and they were like, "Hey," I was like, "What's the goal?" They're like, "We want to make money." I was like, "Cool, love it. Great goal." So, they're like, "We think that we need to create a better media machine." It's like, "Okay." They're like, "We need to really systematize this and do it better." It's like, "Okay, how are you monetizing?" AdSense, by the way, very inefficient way to monetize. Okay. And so they're like, I think we're I think this is these are all the things we need to do to eliminate our constraint for our production. Cool.

18:44It's like, have you thought of wild idea? Maybe we just like the constraint of the business is that you don't have something to sell. I was like, you're like a 97 out of 100 on media and you're a zero out of 100 on [ __ ] to sell and you're trying to talk about how to get to a 99 rather than like if we just went from zero to 20, we would probably make you 10 times more money than you're currently making. And so that is an idea of the theory of the constraint, right?

19:11Like the constraint of that business was not media. And many of you the constraint of your business is not making better [ __ ] workouts, right? That's not the constraint. It's not the constraint, right? That's not the constraint. And so, right now, if you spend all your day working on [ __ ] that doesn't move the ball, working on the wrong [ __ ] So, let me tell you how we do it so that hopefully you can too. So, one of the questions I like to ask is why can't we 10x this business?

19:41Like, why can't we? And sometimes asking that question and then it becomes really apparent what the problem is. And the answer is sometimes, well, we just need to hire all these people. It's like, well then let's [ __ ] do that, right? And so here's how we transition into the tactics around this.

20:08So this is the actual first part of my planning process, prioritizing process, strategy process, whatever shoe fits you for figuring out what we're going to do with a company that we're going to grow. So when we're thinking about all the objectives, all the things we could potentially do, it has to map to one of these three objectives, which is one, how is this thing that we're going to spend time, money, effort on going to get us more customers?

20:37Two, how is this thing going that we're going to spend time, money, and effort on get us increased LTGP, make them worth more? Or three, how is the time, energy, etc. going to decrease the risk that this does not continue to happen in the future, which is another way of translating how do we increase the enterprise value overall? So, for example, if you do all of this stuff, that's great. Still really risky because if you die, the business dies. Now, if we have to hire someone to do the same thing as you, is it going to get more of either of these? Probably not. Will it make the thing more valuable?

21:12Absolutely. Does that make sense? So, I'm going to segue briefly. We're going to side quest. Imagine two people. 5 million topline, 5 million top line. 2 million in bottom line, 2 million in bottom line. This guy is a single owner. Runs every all the day-to-day. has lots of minions, no one with real brains, and they just do what he says. Okay, if this person dies, the business dies.

21:42This guy has a team that runs the whole thing, and he makes $2 million in income from the business, but it doesn't require him. Who's richer? This guy. Question is, how much richer? A lot. this guy because he doesn't have to do anything means that somebody else could also not have to do anything and also collect that $2 million a year which means his thing is probably worth depending on what type of industry it's in 10 15 sometimes $20 million and so when this guy here's where the leverage comes in big L if you go from 2 million a year to three million a year in income he just added $10 million to his net worth this guy is concerned about all of the tax evasion strategies because he's trying to maximize his income and forgetting the fact that the asset is the thing that's going to build his net Earth. This took me a really long time to learn, [laughter] like an absurdly long time. Everything I did was all about like, how do I take the income I have, be more efficient with it, blah blah blah blah blah. When it's really like you become wealthy from the [ __ ] you own, not the [ __ ] you do.

22:44So, everybody here has a business and right now many of the businesses in this room are not valuable. No one would buy them because it's really just you with some helpers. And so the idea is that we have to transition and this is a skill that is worth getting because no matter what you do for the rest of your entrepreneurial career, you're going to need people. You need to have the skill of hiring, recruiting, training, onboarding, managing talent. Who here has one amazing superstar person who works for you?

23:11Cool. Imagine if you had four of them at your one location. How easy would life be, right? You make a ton of money. Here's what's [ __ ] crazy. The difference between small businesses and big businesses is how many A players they have. And so what happens is most small business owners hire a lot of people, get lucky, one sticks, actually works their ass off at a fair rate, and you're like, man, if I had six more Sandras, right, I'd be good to go. The thing is is that big business owners maintain a higher level or a lower tolerance for mediocrity.

23:49And so they actually do keep looking until they find six and address and then it does become too easy for them to kill it because I got six. How could I lose? That's the idea. Make sense? Okay, this took me a long time to learn. Like I would just put up with people who are mediocre. And right now many of you have a think of somebody who's mediocre on your team. Actually, I'll make it easier. Think about that person that you thought about today who you shouldn't have thought about because if they're not making you money and you're not sleeping with them, don't think about them first thing in the morning. All right. So, anybody have somebody in mind?

24:24So, if you have that person in mind, that person is taking up 25% of your bandwidth. What a cost, right? And probably many of you, the biggest lever of growth is on the other side of a few hard conversations. I now talk to portfolio CEOs all the time and it is incredibly clear the people who will win and the people who will not is simply based on their ability to confront discomfort. And it's interesting because this is a mostly h that's a kind of 50-50 actually audience u between male and female but a lot of guys beat their chest. I can cold plunge. I can run a long time without stopping lift lots of weight.

25:09But you can't just say, "Hey, man. I think you suck a little bit." Real can't do it. And for that reason, they suffer for [ __ ] decades because they can't fire Sarah. Not Sandra. Sandra's a stud, right? Can't fire Sarah. It's like, "Yeah, I know she's slept with one of the clients, but like I mean, I think her heart's in the right place." It's like, whenever you're whenever you're qualifying that someone's heart's in the right place and deep down they're a good person, it's because it's obvious they suck.

25:40Right. [applause] Hit a nerve on that one. Um, so right now, do me a favor. Write down the name of the person that you know you need to get back to and start what we call a performance improvement plan, which is you got 14 days to fix your [ __ ] or get out. And many of you can't even have the conversation because you're too much of a [ __ ] pansy.

26:10Real talk. And this will keep you poor. Seriously. Like you have like you got to grow up. Got to be able to have hard conversations. Be like, "Hey, my biggest my biggest piece of advice for this is you know the [ __ ] you say about Sarah while you're here behind Sarah's back. God, she's just like she's been slipping lately. You know what I mean? Like she's not showing up on time.

26:36She's not cleaning up after the classes. She's short with the with the clients. I had two people complain about her, right? Say that to her. That's it. Just think about what you'd [ __ ] talk and just say it to them. It's just the truth. Just say it to them. See what happens. One of two things. Either they're like, "Fuck, I've had my head up my ass. That's why it's been so dark." Um, [laughter] right.

27:01You're totally right. Thank you. Pull it out. Right. And uh all of a sudden they have a total 180. That happens like one out of five times. Four out of five times you say, "These are the things that you have to do." They either say, "I won't do that." Or they say, "Sure, I'll try." And we both know they're not going to. And then you elegantly exit them from the business. The problem is that right now Sarah teaches like six classes. [ __ ] Now what? Got to find somebody else.

27:35She's killing your business. So get rid of Sarah. All right. So that was a side quest, but hopefully we found some treasure there. And uh write the name of the person you need to have that hard conversation with and be like, "There's this [ __ ] speech and this guy was talking [ __ ] about you and I should have talked to your face and so this is me talking [ __ ] to your face so that I feel better about it. You kind of suck." Okay.

27:58Thank you. [applause and cheering] Really took that Tik Tok thing to heart. Um, okay. So, I'm going back to this. That was a side quest, main quest. So, right now, there's a lot of [ __ ] that you guys probably learned so far and you're going to learn tomorrow and the rest of the day, etc.

28:26If it doesn't do one of these three things, toss it. Number one. Number two, you might only be able to do one of them or two of them. And so then you got to pick, okay, of all of these things, which of these has the highest likelihood of working with the least amount of effort? You do that one first. And as silly as this sounds, many of you won't do this. And the reason I say this is because I talk to people who are making a million a month, a million a week, and they sometimes forget too. So like when you have the same conversation over and over again, you start to develop frameworks around it. All right?

29:05And the first framework that I wanted to give you around strategy is how does this get us more customers? How does this make them worth more? And how does this increase the likelihood that those two first things don't stop happening? If it doesn't map to that, forget about it. just cut it because there are other things that will do that that we should be doing instead. Cool. Now, the second framework is going to go one level down.

29:38What, who, how. So, usually when you do this whole thing, you get a big list of what's, right? These are all the things I got to do. What? What? What? What? What? What? You're like, "Fuck, there's a lot of whats. Who's going to do it?" Most of the time you're like, "Me." [laughter] Right? The difference between the guys who become bigger business owners and the ones who don't is they have to think, "How can I get my team to do this for me?" Now, this is not a team team talk, but I am telling you that the reason that gym launch went from 3 million a year or whatever it was to 37 and still cranks.

30:15Um, was because of Ila because I was like, we're going to make it the Alex show. And she's like, that's a terrible idea. Um, and so she built a team and started empowering the team. She's like, you can't do that. She started taking things off my calendar. I was like, hey, I like that. She's like, no, not for you. That's for Sandra. Look, I got six Sandras. They all want to work. And so what ended up happening is, has anyone given a task to someone on your team and they actually just did a great job with it and you're like, "Oh, thank God. That was awesome." Anyone had that happen?

30:48Okay, so big businesses do that all the time and you just do it with lots of Sandras. And if you can't give [ __ ] to any Sandras, then you're the problem because you have really low standards and you're a [ __ ] You can't have hard convos. That's what it is. Like literally, it comes down to that. Big macho guys can't tell the female trainer that she sucks.

31:15Can't do it. Can't do it. And so what happens is we have this big list of whats and then we put Santana on the first two and we're like but man it'd be cool if we could do some of these other ones. Who should we give it to? And then we start assigning the who's. But here's a fun trick. If you've given the same who the same thing 12 weeks in a row like each quarter and the what's not done, the who's the problem.

31:47Winners win. And I'm sure that the best people that you have on your team hit the ground running. Started taking [ __ ] off your plate immediately. Started executing. Everybody loved them. Remember what that felt like, that blueprint is what talent looks like. And you just have to do more of that. Get more of those people. Which then opens up the next thing, which is I'm not the type of leader who will attract that type of talent.

32:12I don't have time to get into fixing you right now, but that is what the next thing that happens is. Okay. Fantastic. So, Tik Tok over for this strategy session. Go to the next one. All right. Oh, good. I'm great. I'm crushing on time. Next framework for you.

32:45More better. So as soon as we figure out that we have the highest strategic leverage activity that we can in a business, we then are asking ourselves, can we just do more? Why can't we do more? I want to do more. More money. Let's do that. More. More. More. Right? Or we say, can we do it better? We don't have to invest any new resources. Just do it better. We're going to go from calling leads in 30 minutes to calling leads in under five. Deal. Fantastic.

33:18Once we do all the mores and all the betters, then and only then do we do new. Now, here's how most small business owners decide what they're going to do. There we go. All right. No.

33:45And the thing is is a lot of you guys are going to come back from here with lots of new and you're going to be like, "Hey team, I'm going to vomit all over you. I'm going to make no plan. It's going to be awesome." And they're just going to be like, "Let's give it a week." He'll forget about all the things he said and we'll go back to normal. Real talk. It's going to happen. Gym launch since we sold it to whateverish years ago, whatever the time was, 2021.

34:10I'm so proud of Kale and the team because they consistently ask. Thank you. Um, how can we do more of what we're doing? How can we do it better? Jim Launch has grown 40% since Alex and Ila exited the majority share. We still own 30 plus% of it. But, and I think in a lot of ways Kale's a better CEO than I am because I also like new shiny things, too. But Kale is super disciplined. He's an exceptional CEO. There's a lot to learn from him.

34:39How can I do more? How can I do it better? So, it's like, hey dude, I think we should be getting on TikTok. He's like, you know what we could also do? We [ __ ] double our cold call team. Do that. What if we do that? What's the likelihood that if we double our cold call team, we'll make more sales. High. We already have a trotten path there. Let's just do more of that. But what about Tik Tok? It's like, yeah, likely that we're going to get sales. I don't know. We've never done it before. I don't know. But what about this kid I saw on the internet? He's making millions.

35:08Let's just double our cold call team and then let's look at our better and say like do you think we can clean the numbers more? Do you think we can improve the script? Do you think we can follow up faster? Do you think we can personalize the reachouts more? Probably. And so right now this is real real. The thing that is killing most of you guys is the desire to 10x in 90 days.

35:37and then not doing it and trying something new and hoping for a silver bullet that never comes. It's just it's a hundred golden BB's. Like the big businesses, it's just golden BB's. It's just improving lots of little things over and over again. The 40% improvement that Jim Launch has had since we sold our majority share has there's been no one thing. And man, wouldn't I love to make that short video. There isn't one thing. We just improved a lot of little things. And that creates the big outcome. And so right now you probably have this big list of should dos like I should do that. I should probably email my list sometime right at some point. I should do that, right? I should probably do more cold DMs or do more reachouts. I should probably make more ads to run. I should probably do that. I should probably figure out our pricing and optimize it.

36:32I should probably create that sales training program or get my team to go through that sales training program. I should probably set up a role playinging cadence for my team so they sell better. But you know what's new? That sounds cool. the should dos. If you actually just wrote all the things that you need to do down and then you tick them off and you realize that it takes two years to build an exceptional business and you did nothing but just actually do all the [ __ ] you know you should be doing, you usually build a pretty exceptional business.

37:05It's the rush that kills everyone. It's the hope that this new thing is somehow going to shortcut the work that needs to be done. And like this has just been truer and trueer because the thing is is that that list for a $10 million company is longer and bigger. That list for a hundred million dollar company is longer and bigger. And it's just [ __ ] that needs to get done. And so the faster you can confront the work that has to get done, the faster you start getting the getting to the getting. There you go. Is this making sense? All right. Thanks, man.

37:37Appreciate [applause] it. All right. Now, you're going to have a lot of different things. You're going to have a lot of different things that uh that you could do, right? And you've noticed this is the central theme is like you've got a lot of decisions to make and I just want you to make the right one. I want you to make the one that makes the most bang for the buck. And an easy way to order this is impact ease. Here we go.

38:15So, when you have your big list of [ __ ] just put it as one, two, three, four. Just put a number next to it. Really easy. Lots of impact. Really easy. Do these first. Then once you've done all of those, hey, don't consume any more information.

38:39Once you've done, wait, but I have I haven't f once you do all of these, then start working on these. Then start working on these, then [ __ ] these. I really want to rebrand the logo. Why? No one knows that you exist to begin with. What are we talking about? You're like, I want to rebrand. It's like why? Like you have a nameless ass.

39:07No one has any association with your first thing. Like Xerox is just made up letters, right? They created a brand because branding is the consistent action of associating the unknown with the known, right? It's I know I'm supposed to talk about social media branding. I didn't think it was going to be super important for you guys. Uh because you don't need to for now in my opinion. Not because it wouldn't benefit you, but because there are other things that I think would benefit you more. Just to be clear. Okay. Now, I'm going to give you this little uh this little tirade and then I may I may have time, but I may not have time at the end for Q&A. We'll see. So, oftentimes the things that is limiting the business is the big obvious thing.

39:53So, we have really big egos about our business. We assume that it's exceptional. assume that it's excellent, right? But in your heart of hearts, you probably know that if you were actually [ __ ] exceptional, you would not be asking questions about how to get more leads because you'd have people referring their friends. And referrals, by the way, are nonlinear in that they are exponential in nature. Two bring four, four bring eight, etc. So the book, the $100 million offers book was probably my first big experience with that because I spent like a very long time writing it and then I gave it away for 99 cents and I made one post and I think this one had like 20,000 Instagram followers in total and I didn't have really any other platforms and that book to this day sells more copies every month than it did the month before. And like last month it sold 25,000 copies. It's like almost a thousand books a day, thousand customers every day. No marketing spend, just word of mouth, right? And 14,000 five stars. And so, like, it's the big obvious thing. And from being in the room with millionaires and sorry, billionaires and decad billionaires, the thing that has become so clear to me is that the people who are obsessed with their product are the ones that get the compounding. And so, every business needs to have some sort of compounding vehicle within it. Otherwise, you're going to spend the rest of your life trying to promote it. So, think about this way. If I spend two years trying to write a book and at the end of the two years, it's exceptional.

41:27I'm going to give the alternative example first. If I spend two months writing a book and I publish it and then I have to spend the rest of my life trying to promote it to get people to buy it, it's a tough life. Low leverage. On the flip side, if I spent two years trying to build something [ __ ] incredible and then let my customers market it for me for the rest of my life, more work upfront, less work long term. It's just that being willing to delay satisfaction or gratification is, in my opinion, the single greatest skill that you can develop. And what's wild is that a lot of you guys think you have that skill, you only do when it comes to cookies, but not when it comes to money.

42:08And so you like give your clients all these lectures about self-discipline and being hard and like you know believing in your better self, but like you will take actions that are in direct contradiction that same thing. It's just we're switching calories for dollars. Same thing. And so when I see a lot of the business like the gym owners that struggle, it's just the big obvious thing. The sandwich sucks. They're like, "Dude, what's the new marketing thing for like gyms?" I'm like, "Have you tried your sandwiches? They are terrible.

42:38Why would you want more people to know, [laughter] right? Like it's it's it's real though, right? Like imagine I had a mediocre book, which is what most people would have, and then I spent tons of money trying to market it. Why would I do that? It sounds ridiculous when you think about it. You're like, I'm just going to let everyone know I'm mediocre. That would suck. But that's what a lot of people in this room do every day.

43:04And so the thing is is that in my opinion, if I were to start a gym over today, I would consistently work on the actual product, the experience, the way people get greeted, the trainings for all of the teams into the world's simplest model. And until people were not leaving, I would not be worried about bringing more customers in. Once you get that right, then when you're pouring all this gas in, you can catch it. Because if you got a hole out the other side, your constraint is the fact that people don't stay. And so the biggest thing that you have to solve for because now we we buy into a lot of brick and mortar chains. It's one of my favorites unsurprisingly is LTV or lifetime gross profit over everything.

43:51The guys who can spend the most money on marketing are the ones who make the most money from ads. So when you see these massive marketing companies or these massive campaigns that are out there, it's not because they're better at marketing. It's because their LTV enables them to spend as much as humanly possible on the marketing. If you print cash on the back end, you can get silly on the front end.

44:17This has to sink in. Like this has to sink in. And I keep being repetitive about this because I continue to get the same questions whenever I go and it's like, what's the new marketing trick? What's the new hack? It's like you have to solve the root issue. And it's kind of like the uh it's like it's like the gal who's like, "Hey, is it keto? Is it intermittent fasting? Is it you know, like I'm just trying to give the parallel here. Like that's what you sound like. You don't get it. You got to understand how to count your macros. It is what it is. Done."

44:46And so like in the business, it's like you have to figure out how to get the mouse trap to work even at its simplest level so that people actually like the thing you have. And I just feel like so many of the gyms that I see and I go to, it's obvious, like takes five seconds to see why they're not successful. And the gym owner, because they're in it, can't see it because their ego, their identity is attached to it because you think that if your gym sucks, it means you suck.

45:12And that's not true. So, you have to break that. You should be like, "Oh, yeah. We suck at that." [laughter] Onboarding non-existent. Churn through the roof. You should see my trainers slaving each other. It's terrible [laughter] place. Absolute pigsty. Right. So what what's your plan? I'm going to market it. I'm going to market it.

45:39[applause] So to give a quick a quick uh re recap and if I have time for Q&A I will. One brand is making associations between things that are intangible with things that are tangible and unknown. So things that people like. If I hold a bunch of bricks of gold on stage or I hold a bunch of stacks of cash, you will make associations of money with me. And if you didn't know who I was, you would assume that I have something to do with money. That would be your assumption.

46:17That would be the association. If I stand next to a porn star, you would assume other things, right? Associations. And so, if you want to build a brand, associate the service that you have with the intangible ideas you want the prospect to believe about you. So if you want them to think that you are clean and you are friendly and that you care, then start there.

46:41Magic wand. If you feel sad, immediately translate that into I do not know what to do next. It massively simplifies this very like hard, painful experience. It's been really helpful for me. So if you feel hopeless or you don't know what to do, it means you just don't have options. Like you don't perceive that you have options. It's a lack of options. So you just have to become informed. All right? So whenever I think sadness, I think ignorance. It's like, oh, that's solvable. And then I can start attacking it. On the flip side, if you have lots of options and you feel anxiety, it's because you don't know how to pick, which means you have to prioritize. It means you have a lack of strategy.

47:21Strategy is getting the most bang for the buck. It is allocating finite resources against infinite options and some of the biggest strategic moves are outside the board and that's where sometimes having gym launch other people etc is helpful because you have outside eyes. So your mouth inch below your nose but you still need somebody else to tell you a bad breath. I heard that the other day. I really liked it.

47:54Right now there's a constraint in your business. If you do not know what the constraint of your business is, you will not solve it. You'll continue to do the [ __ ] you have been doing and that has not been getting you what you want. So right now unless you change the activities you do, you will not change the getting that you are getting. So if you go back, so I'll give you a different one. So intelligence and learning. This will be fun.

48:26So the definition of intelligence as I define it is rate of learning. It's a speed. Someone learns fast, they're smart. Someone learns slow, they're a little slow. Right? Rate of learning. Okay. What does learning mean? This is how you can remember it. Same condition, new behavior.

48:52Which means if the phone rings and I trained you and you answer it one way before I trained you and then I have the same condition, the phone rings again and then after I trained you, you behave differently, you have learned. If you come to this event and you do things and then you leave this event and you do the same things, you have learned nothing.

49:19Which means that change in behavior is the way that you can measure intelligence. The speed at which you change behavior with within the same conditions is your rate of learning. The faster you do that, the smarter you are. And so some of y'all are hold on, I got to figure out the politically correct one. Uh dumb. But again, when I define words or operationalize them, it becomes a lot more under my control. So, I'm like, man, I don't want to be stupid. It's like, they got to do this thing. [sighs] I went to this marriage seminar and they say that when my wife walks in the door, I should say something nice to her.

49:58Damn. Right. Walks in the door. You went to the seminar and you're like, nice blouse. She's like, is that the top one or the bottom one? You're like, I don't know. [laughter] One of them, right? And so, same condition, new behavior. It's also a great way to teach your team, which is like, I'm going to present this condition. We're going to train and when I present this condition again, I need you to change your behavior. That's what learning is. And so everybody here, if you don't know what to do, then you're not going to be able to change your behavior, which means you're not going to get a different outcome. So most of the success that I've had is my effort to try and boil everything down into an inputs to outputs equation.

50:44I remember when I was studying for the GMAT back in the day, I found this research study that showed that the number of problems that you solved was in direct correlation with the score you got on the test. And I was like, oh yeah, okay, this is a clear input output. Like life isn't always this clean. But I was like, fantastic. So I did about a stack of phone books this high. I did four hours a day for 16 weeks of problems. And then I scored above Harvard's midcore. I didn't start there, but I had the graph. I was like, the more problems I do, the higher my score is. And by the time I got to the actual test, I was like, I've literally seen every one of these problems before, and I've done all of them a hundred times, right? It's became really easy.

51:22And so, if you don't have the inputs outputs equation, which will be the last thing I do because Kale asked me to talk about leads, then you're not going to get there. All right? So, I'm going to give you guys a sneak peek. You can write it down. You can't take pictures or talk about it. [snorts] There's only eight ways to get customers. You got warm outreach, you've got cold outreach, you got paid ads, got content.

52:04These are the only four things that you can do. So, if you claim that your constraint because everything's amazing about your gym and your trainers aren't sleeping with each other and the gym's really clean and people don't churn and you're priced appropriately and you have really good onboarding experience and people get reached out on a regular basis to uh check in on them to show that you actually give a [ __ ] You do all that stuff, right? And you think that your constraint is more marketing, which by the way, everyone thinks that's what it is. And if you keep thinking that nothing changes, maybe wrong.

52:33Anyways, let's talk about leads. So these are the only four things you can do. You can either post content, do warm reachouts, do cold reachouts, or run paid ads. Simple. I like to quantify this by the rule of 100. Which means you either spend 100 bucks a day on ads, you do 100 cold outreaches, you do 100 warm outreaches, or you do 100 minutes of content. You do it every day.

52:57And if you want to get there faster, do more because what? You'll also get better because you did more. Just like the problems on the GMAT test, if you're not doing this stuff, what are you doing? You might be thinking about marketing or advertising, might be strategizing, planning. You're not doing any of it. And the amount that you get will be directly proportional to how much of this stuff you do. This is how you let other people know about stuff. That's it. It's all there is. Now, OP is other people. You've got your customers who can refer you people.

53:34You've got affiliates who can send you people. You've got employees who work for you. And then you've got agencies. Those are the other four types of people who can get you the stuff. [clears throat] If you think about it, any of these four do these on your behalf. This, by the way, is leverage. If I can go get my customers to tell everybody about my book, then I won't have to. If I can get affiliates, all the chiropractor places in a five mile radius from my gym and all the massage studios in a five mile radius for my gym to just give a free month with any new customer they have because they know that I will treat them right. Then I can just have 200 different businesses that come to me.

54:23Now, do those 200 businesses come out of the sky? Nope. What would you do? warm reachouts, cold reachouts, run ads or make content targeting those people. Then they'd come and then they do those things on your behalf. Agency will do those things on your behalf. Or if you do all that stuff, then you cold outreach, cold outreach, warm outreach, paid ads, make content to get employees and then the employees will do those things on your behalf. Is this simplifying some [ __ ] Right now, business can feel confusing and usually it's because we have not defined terms. If you define the terms, then you can know what you're actually talking about rather than like making noise with your face. Okay? If you don't make noise with your face and just know what you're talking about, it becomes a lot easier because the variables become defined. And so, if you want to get more leads, you have to do these things. If you want to get even more leads, you get other people to do these things for you, which starts with you doing these things to get those people. That's it.

55:23I have three minutes. So, I'm gonna see if I missed anything. By the way, giving away really good free stuff. Great way to get more people to opt into your thing just in case anybody needed to be convinced about doing free stuff. All right, covered branding, covered all this stuff. [sighs] All right, let's talk about this last three minutes. Last Tik Tok of the day.

55:51Who here wants to look know what it looks like when it's all the way right? Yeah. Talk about scaling it. Okay. So, this give you a little bit of vision for the future. So, we love local brands. They're great. They're wonderful capital compounding vehicles. What you need to know is how much does it cost to open a facility. All right. Cost to open. Then you got to know your topline revenue or more specifically your bottom line profit per facility. The ratio between these things. Let's say it's cost me 100k to open a facility and let's say I make 100k per year then I have a 100% cash on cash return who here remembers what the stock market is less than that right which is why I like it now this would not be that interesting to me why because I know there's a lot of operational drag associated with opening a facility just to make 100 grand right and so the idea is how can I is there a way that I can get a more leverage model so I can make maybe like 250 50 to 500,000 per facility. And then maybe even if it cost me 500 to make 500, then I only have to open one as many facilities in order to compound my cash.

57:01Now, the way to do this, and this is one of the things that I've observed with some of the most successful franchisers in the space, is you have your facility. Now, it has been your special child. You have lots of duads and lots of whisbangs that you've attached to it, specialized sessions, blah blah blah blah blah. The franchise, the franchises that are the most successful, simplify it. Even if their corporate or headquarters has like all this stuff, when they want to scale, they massively simplify. They think, how little square footage can I possibly use because I'm not using this to fulfill my ego. I'm using it to fill my bank account. Big difference.

57:36How little can I make this so that I'm really efficient with capital? And then how can I make it as little operational drag as possible? I can do it with six people, but can I do it with three? How would I incentivize those people? I know I went from like super dirt, sorry, clouds to dirt here. Um, but that's that is how you unlock going from five locations to 50 locations. And then you start building the machine that builds the locations. So then you have launch teams that fill it up before it opens. You turn it over to management.

58:08They keep running it. And the big key of making all of these work is that it can't just be based off some unique acquisition channel because those all eventually go away. All advertising platforms will eventually become too expensive and they will eventually die because attention always moves, right? And so the only way to become enduring with your business like if you really want to not like if you want to sleep well at night, you have to fix the back end. If you know that if you don't sell any new customers, you're still going to be fine next month and you do that for three or four more months and you'll still be fine. That's the perfect business to then go market. But like that's the boring work that no one wants to do. I'm going to end with this one thing.

58:53a franchiseor of a really popular uh not really popular, they had I think 20 locations uh franchise came to me and he's like my franchise isn't working right and they had I think six corporate stores, 14 franchised and the average store cost about a million bucks to open and they made about $150,000 in profit per year, right? It's like you might as well just like invest in a stock and just not bother, right? Like that's that's what you have to think with. And when I saw that they were doing I think the average was like 1.3 in topline and 150 in bottom line and I think they were running like a very small margin. I thought to myself, I think it was actually less than 150. Point is shitty margins.

59:47He was trying to figure out how to market his franchise better. How ridiculous is that, right? But the thing is is that like many people who are in this room are thinking the exact same way. And so instead, what I said was, "Hey man, I actually think your margins blow and I think you have a lot of interest." Because that's why I took the call. I knew the brand and I was like, "I think you have really good products. I think you just you just have to get the ops right. So get your margins in check, right? You've got this menu that has 500 items on it. boil it down to the top 15 that everyone usually does. Look at all the ingredients by type. See if we can negotiate better deals with vendors because we're going to consolidate all of our demand. We'll get more volume, etc., etc. And so what I did was I said, "Hey, we've got 12 months. I want you to spend one month, 12 months in a row to get 1% profit back. Month one, you get 1% back. It's all you have to do. It's my only thing that's 1% back. And next month, you're going to find another 1%.

1:00:42Next month you're going to find another 1%. So all you have to do and hey if you find three three months ahead next month another 1%. And 12 months from now you would have a business that would be sellable, would be investable and would have already tripled or whatever it was the profit of that and made it a scalable enterprise. But he had spent 10 years 10 trying to scale the franchise when it was the big obvious thing. The sandwich just wasn't that good.

1:01:09The sandwich in the literal sense was okay for the customer, but it was terrible for the investor. So, you had to fix the model. And so, I think right now a lot of everyone here, as much as everybody loves to come for leads, and that's great. A lot of you guys are just serving mediocre sandwiches, and I think if you spent a year eating your own sandwich, you would immediately see all the things that are wrong with it, you'd fix that, and then the rest of your life, you'd be able to scale this thing. Thank you guys. If you like this video and you're a business owner who wants to break through your current revenue ceiling, I distilled every lesson from scaling 10 businesses past 10 million and three businesses past 100 million into a completely free scaling road map that I've used to go from 0 to 1, 0 to 10, and 0 to 100 plus. And so you can click here and you can check it out.

1:01:51Again, absolutely free. And since you're a business owner, appreciate you. And uh enjoy.