The SIMPLE (& Proven) Way To Earn $100,000 From Nothing! | The Money Making Experts

I've got three boxes here. One of them

contains $1,000. One of them contains

$10,000. And one of them contains

$100,000. And you three are the avengers

of entrepreneurship on the internet. So,

you're going to tell me what you would

do with that amount of money to build a

scalable business.

So, do I get to give the money? Is that

how this works?

Okay. So, I would three highly

successful entrepreneurs with three very

different perspectives. This is the

ultimate master class in creating and

scaling your businesses to make

millions. There's two paths to making

money quickly if you don't have any. And

the first path is go find the best

entrepreneur and go work for them. Learn

as much as you can.

Totally agree. Like Kim Kardashian was

Harris Hilton's assistant and she

learned the playbook for being famous.

And then she took it to a new level.

And then the second way is high risk but

highest reward. Go do it yourself.

And the first business that you start,

you're going to be learning the game of

business even more than you're learning

the business that you're doing. Things

like if you wait 8 seconds after you ask

someone to buy, you close 30% more

sales. And there are actual studies now

that show that if I'm a woman, you make

more money if you do one thing. You wear

makeup, which is wild.

And what about making content?

Building a content empire that builds

your business. This is brand new to a

lot of people. And so a lot of creators

online don't think about how do I

monetize on top of this,

right? And I can name some Tik Tokers

with 50 plus million followers that have

had failed launches because they have

views but they have zero influence. And

in order to create influence, there's

four things. So number one is

okay so let's go on to simple actionable

frameworks.

So I have a framework in order to raise

money.

I have a framework for pitching

and I have one that can increase sales

by 20 to 40%.

And then if you want to know if your

business is going to make you money or

not. We use the moat strategy

and there's a lot more. So let's go

through all of this.

I see messages all the time in the

comment section that some of you didn't

realize you didn't subscribe. So if you

could do me a favor and double check if

you're a subscriber to this channel that

would be tremendously appreciated. It's

the simple, it's the free thing that

anybody that watches this show

frequently can do to help us here to

keep everything going in this show in

the trajectory it's on. So, please do

double check if you've subscribed and uh

thank you so much because in a strange

way you are you're part of our history

and you're on this journey with us and I

appreciate you for that. So, yeah, thank

you

[Music]

Daniel, Cody, Alex. I feel like I have

waited a long time to have this

conversation with you three because in

my mind you three are the avengers of

entrepreneurship on the internet and for

very different reasons. You do very

different things. You have very

different perspectives. You run very

different businesses. But that is why

I've been so looking forward to this

conversation. Before we get into some of

the technical stuff and really specific

topics, I wanted to start with a more

broad question. You're all

entrepreneurs. you will speak to and

educate millions of entrepreneurs on

your own channels in your own rights.

And the question I wanted to start with

is from a psychology perspective and a

mindset perspective,

what does it take to be an entrepreneur?

And can anyone listening to this right

now become an entrepreneur, a successful

entrepreneur? I'm going to throw that

question across the table straight away

to Alex. So starting with the second

question first, can anyone become an

entrepreneur? At the basic level, if a

kid can go around the neighborhood and

say, "Hey, I will mow your lawn or I'll

rake your leaves or I'll babysit your

kid uh in exchange for money."

Fundamentally, it's entrepreneurship. If

we're just taking it at the most basic

level and so what prevents someone from

doing that, basically, if you can get a

job, then you can be a self-employed

entrepreneur. And so I would say that is

like my baseline number one from a

behaviors perspective. Then you get

into, okay, I want to learn about the

game of entrepreneurship. And then there

it's basically a lifelong journey of how

much leverage can I apply to this um at

all all pieces of the business because

even going around knocking on a door and

saying hey can I be a babysitter you

have all levels of business all all

functions of the business still exist

there. They're just done a lot of times

simultaneously and at very low leverage.

So you have some level of advertising

you went up you knocked on a door you

have some sort of presentation that you

give in exchange for money and they

agree okay great we have a selling you

know component to it. Um, then we have

some sort of delivery that's going to

happen, which is like I might show up

with my human body and then take care of

this other human body and make sure they

don't die, right? And probably have a

couple other things that I might clean

the house while I'm here as a little

value ad. And then fundamentally, it's

like that's a complete that's a complete

cycle of exchange. And then, you know,

maybe they leave a review because you

start have a website, but that starts to

create leverage and then then you expand

from there. But I think fundamentally at

the most basic level, that is

entrepreneurship. And then everything

else is just more.

Cody,

you can be an entrepreneur if you're

willing to tolerate pain. I I think

being an entrepreneur is largely a

byproduct of three things. One being how

much pain can you tolerate? Two being

how consistently and three being can you

take the consistent pain that you have

and find a way to decrease it which just

means can you learn from the things that

you've gone through as an entrepreneur.

By and large it is a hard path because

uh at the end of the day you can't blame

anybody else and there's a scoreboard

constantly behind you. And so, you know,

if you if you have a job, it could be

the boss. It could be the other

decisions. It could be somebody else's

fault. But if if you are the

entrepreneur in charge, there's nobody

else. And the thing that I love about

entrepreneurship, and I think all

entrepreneurs love, is you either win or

you lose. In a lot of ways, it's a zero-

sum game. And it's measured

predominantly by do I grow my profits

and and revenue in the way that we set

up this the system today. So, yes, I

think anybody who is willing to tolerate

pain can become an entrepreneur. And I

think it's actually okay to have pain in

your life and you should seek it a

little bit. The same thing as the gym.

We don't go in there and think it's

going to feel great to have a workout

and have our muscles literally rip apart

in order to rebuild. And yet that's what

it takes in order to get more fit. And

so um I think part of the game of

entrepreneurship is just like can we

increase pain tolerance over time

consistently? And once you do that, then

the things that used to be hard today,

you'll look back on and you'll sort of

chuckle because they will not be hard

any longer.

So there's various types of pain in my

life that I'm not willing to tolerate.

And there's other types of pain that

I've like volunteered to choose over

long periods of time. So I'm trying to

understand, and this is just a question

to all of you, we'll get into Daniel

straight after is

how do I know what pain is worth

tolerating and over a long period of

time? Because some pain is not good

pain. some pain is not worth it. How do

I know what pain is worth it?

Well, I think that's what comes into

that third level of you have to be able

to be on a a journey to decrease the

pain, which is learn. Like that's what

learning means. Like you try something,

you touch the stove once, you realize

that the stove burns you when you touch

it, you don't do it again. If you

continue to touch the stove continuously

over time, then you haven't really

learned. Um, but you know, I mean,

there's lots of different types of pain.

There's acute pain, which is like you

feel it in this moment really, really

deeply and intensely. And that in

entrepreneurship often is things like

I've completely run out of money. Nobody

is going to fix this problem. I'm the

last one on the line. And then there's a

type of pain that is low-grade pain. So

kind of consistent over time. I have to

work harder. Every single Friday there's

a you know a paycheck that I have to

give somebody else. That's sort of

consistent pain. And I think in

entrepreneurship we should assume you're

always going to have some version of

lowgrade pain.

I had pain when I worked in the call

center and I have pain now. Did you have

acute pain when you worked in the call

center?

It was just drudgery and boredom and so

you are out of alignment. So when you

have an origin story, a mission and a

vision and you feel an alignment between

your past, your present, your future and

you feel excited about the future that

this is working towards then the pain

becomes meaningful.

And what you're looking for is pain that

is in alignment with origin, mission,

and vision.

So meaningful pain,

meaningful pain.

What do you think? What do you think

about that same question about can

everybody be an entrepreneur? And what

does it take from a psychology

perspective? I'm I'm asking this

question because there's people at home

that are going to wonder. They're

they're in a job at the moment. They're

pondering a lot. They see people like

you three who seem like you're a million

miles away.

Yeah.

But you didn't start a million miles

away.

So, what does it take to be successful

at the highest level

in the comments of every one of these

videos is not everyone can be an

entrepreneur. Not everyone wants to be

an entrepreneur. Interestingly,

uh the idea of a job is a very recent

innovation if you take a long view of

history. Uh jobs really only came into

existence around the 1850s. the idea of

a wage. Prior to that, people got paid

for tasks and essentially you completed

a task, you got paid and all sorts of

levels of society and that gave rise to

very entrepreneurial classes of people.

Uh you had to be quite entrepreneurial

prior to the 1800s. So it's definitely

built into us. I personally think that

the human brain has three kind of

levels. The base level is very concerned

with survival. It's fight, flight,

freeze, freak out. The next level up is

just interested in status quo and it's

interested in repeating the past and

doing what's safe and just doing what's

comfortable. And then there's this other

part of us that is a visionary and it's

interested in exchange. It's interested

in empathy, strategy, love, compassion,

adding value to others and it's it's a

higher mind. It's a higher way of

thinking. Unfortunately, what happens in

most of society, especially with a lot

of um social media and especially with

the way we were raised through the

schooling system, is that we keep get

just getting dragged back into the

autopilot and the reptile brain. Uh as

opposed to being able to have a little

bit of time for the visionary and it's

that visionary mind that makes you feel

very entrepreneurial. I have seen people

who have never had a business. They've

never been entrepreneurs and they get

around a group of entrepreneurs and the

buzz and the energy from that group of

entrepreneurs becomes contagious and

they start opening up this other part of

their mind and they go, "Oh, wait a

second. I've got an idea. I could do

this." And they start thinking about

what's possible. And I've watched people

go from I could never do this to I could

totally do this in a day.

Alex, you wrote something down there. It

was when you were talking about, you

know, what kind of pain, you know, is

there? And I think there's a a classic,

um, example of when do I push and when

do I pivot? And so, um, pivoting comes

from, at least from my perspective where

you have an underlying assumption that

your original thesis was based on that

has been disproven. So, if I say, hey, I

want to start, you know, um, a doggy

toothbrushing business,

um, you know, there's an underlying

assumption that people are willing to

pay for their dogs to get their teeth

brushed, right? Um and within the

context of like I have presented this in

a way that follow the normal persuasive

you know taxes of uh you know this is

the benefit you know these are the these

are the prices that I would need to

charge in order to make a profit etc. If

I find out that no one cares about this

then that would be a moment where I

would say I don't think you should push

harder I think you should consider

pivoting. The pushing scenarios is

typically when your underlying thesis is

still is still true. You have not

invalidated that and so you just haven't

figured everything out yet. Um, and most

of that is where the pain comes in. Um,

that that Cody is referencing. Now, I

think the third door where it gets

really tricky is that there's

opportunity cost. And I think this is

where most entrepreneurs get trapped.

And in some ways, rightfully so,

because, you know, it's very, very hard

to build a successful restaurant that's

local. And if you want to be a

trillionaire, it's probably not the way

to do it. And so, what happens is you

develop skills, you know, developing

your first opportunity. You figure out

how to do doggy toothbrushing. and you

find out that people don't actually care

as much about brushing their dog's

teeth, but they do care about their dog

having good breath and being, you know,

clean and groomed or whatever. And so,

like, so you pivot a little bit and then

you're doing this thing, but then you

have these big aspirations of being a

trillionaire. And you're like, I don't

know if I can turn this into being a

trillionaire, but I did learn how to

market. I did learn how to sell. I did

learn how to manage. And then you think,

okay, well, should I start an AI

startup,

you know what I mean, as my next thing

because I did develop all these skills.

So, now what do I do? Right? And I think

a lot of people are in uh maybe you know

one step later entrepreneurs are in this

camp where they're like okay I didn't

understand the world as well. Now I

understand different opportunity

vehicles have different returns but also

risk associated with them. All of them

require pain and work. And so if pain is

basically I can only interpret pain as 1

to 10 and 10 out of 10 restaurant days

will still suck as much as 10 out of 10

AI software days. But this one has a

billion dollar payout and this one has a

$2 million payout. Well, if I'm going to

suffer either way, I might as well do

the thing that gets me the best return,

which is good entrepreneurial thinking.

But then so is focus and so is

longevity. And so then what do you do,

right? And so um and so I I I just

thought about that from a pain

perspective because you have a lot of

times the pain happens from insufficient

volume. Like you think that this like

this business isn't working, but it's

realized it's usually because you're not

working enough. Um and when I say that,

I mean doing enough in it. So it's like,

hey, I knocked on 20 doors and like no

one wants this. It's like, well,

obviously with 20 doors, you have no

[ __ ] idea if somebody wants it or

not. It's like knock on 2,000, you'll

probably get a better idea. And so, but

most people like have never had

rejection before. And so, they think 20

is a sufficient amount. Um, or like,

hey, there's no good there's no good

engineers in insert city. It's like,

well, how many did you interview? You'd

keep talking and eventually it's three.

You're like, okay, well, no [ __ ] I

mean, if you're going to marry somebody,

do you think you'd only go on three

days? And then you just say, I guess I

have to pick from one of these. So, it's

probably not a good idea. And so, I

think the same idea of insufficient

volume is one of the things that can

that can create pain, you know, for

entrepreneurship. you have opportunity

cost of like, okay, well, now there's

the green, the grass is green over

there. Should I stop what I'm doing now,

right? And then you have kind of

underlying thesis, which absolutely if

you have your underlying thesis for the

business that is disproven, then that's

one of those times where it's probably

worth pivoting. But for anybody who's

listening who's a newer entrepreneur, my

my big my ask to you would be I probably

wouldn't start an AI uh startup caveat

as my first business. And what I mean by

that is like if I as in building an

actual tool now if you want to like

implement AI using other people's tools

that's a different thing but the first

business that you start you're going to

be learning the game of business even

more than you're learning the business

that you're doing. And so then once you

learn the game of business then you

start to see kind again you start to see

more clearly the opportunities that

exist.

The next step for me in what Alex said

was about how do I know which idea is

worth pursuing. Alex was saying there

that which I completely agree with is

that the first thing you do is actually

teaches you the fundamentals of how

business works, team building,

marketing promotions customers

customer service. But for those people

that are sat at home and they have an

idea and they're mulling whether that is

the idea worth pursuing, is there a

framework for knowing if it's a good

idea or a bad idea?

What we use that comes from private

equity. If you want to know if your

business is going to make you money or

not or investable or not, we use the

moat strategy which is basically M

stands for margin. So you want a

business that actually makes you money,

doesn't just generate revenue. And so a

good business typically has at least 15%

net margin. So that's the money you put

in your your pocket, right?

So that's profit.

Yeah.

Yeah.

Exactly. And then uh the O stands for

operations. So operations being can this

thing actually scale over time or will I

really have a job not a business?

And what's the difference there? The

difference between the two is if you

have a job not a business that might be

for instance without AI if my entire

business was just me talking

continuously to camera and I'm an actor

it's really hard to turn acting to a

business right

you're trading time

right you're still an employee you're

just self-employed as opposed to a

business owner and there's a real

difference between a CEO and a

self-employed person and then the A

stands for advantage which is do I have

an unfair advantage in my business I

think over time all arbitrage windows

close so if you don't have some sort of

advantage antage. It's hard to stay in

business over a long time. An advantage

might be I have distribution because I

have social media so I can get more

eyeballs. I can figure out how to talk

to 2,000 people quickly because I can do

it via video as opposed to knocking on

20 doors. Or it could be logistics or it

could be uh 10 years of experience in an

industry. And then the T stands for TAM,

total addressable market, which goes

back to the doggy teeth issue, which is,

you know, is this a real market that

enough people are interested in that I

can build a business that is big enough

for me? And, you know, to Alex's point,

I don't think everybody should try to

play the trillion or billion dollar uh

game. In fact, I think it can be quite

miserable to to strive for billions. And

so the the total addressable market for

your local fruit stand in your community

may be a perfect amount of income for

you, but let's actually know what amount

of income is reasonable for you. And the

cool thing about entrepreneurship in

like today's age, the data is available

everywhere.

And so in private equity, you would take

this model like that. So you'd go moat,

you would I take them and for each one,

I rank them one to 10 and businesses. So

margin operations advantage total

addressable market. each one of them. A

10 is perfect. A one is the worst you

could have. And businesses that are

better than 30 across all four, well,

that's a fund it. That's a fundable

business model. Businesses that are less

than 30 but more than 20, that's a fix

it. You've got some problems in the

model. And businesses that are less than

20, that's a flee it. This is probably

not right for you and a hard business to

do.

I think it's not just the people who are

looking for a new opportunity or people

who don't currently have a business. I

personally think at the moment every

single person on the planet who has a

business should assume that their

business is on borrowed time because AI

is going to disrupt everything and in

that disruption everyone has the

opportunity to rethink whether they want

a different opportunity or whether they

want to pivot. It's the perfect time. I

look at simple things when I'm thinking

about is it a good opportunity. I think

every good business is built upon

somebody's case study. So when I look at

not just businesses as a thing on their

own, I think businesses as a thing on

their own have to be taken in

consideration with who's the

entrepreneur. So your entre like

something that's a great opportunity for

Cody may be just a disaster for me and

like and likewise.

So I'm looking at the background of the

entrepreneur. Do you have a case study

to leverage? Do you have knowledge? Do

you have a network? Do you have

resources? Have you got a reputation in

something? Because those are the things

that we can then leverage. And then I'm

just going to have a look at three

little things. I'm going to say this

idea that you've got going forward.

Does this address someone's pain? Right?

Is there some sort of problem that this

solves? And that to we could measure

that, right? Because people pay to move

a metric. They love to move some sort of

a number. So, is there a pain that we

can measure and can I take people out of

that pain based on my story?

The next thing is does that type of

person who I'm going to solve that for,

do they have money to spend? Because

ultimately 60% of all the money is in

the top 10%. So the top 10% have about

60% of the available disposable income.

So groups that t tend to have money is

business owners, executives, people

who've got accumulated wealth. Um you

know, so you're looking at like some

sort of indication that you're selling

to a group of people who have money.

Underneath that top 10%, Amazon's

already got them, McDonald's has already

got them. Like that's a saturated part

of the market. You looking for that top

10% who've got disposable income. And

then the final part is passion. Like are

you passionate about this? And my

definition of passion is a willingness

to suffer. So it's not do you get joy

from it, not are you super happy from

it. It's are you willing to suffer for

this? Are you willing to have delayed

gratification um would an objective

third party who looks at your behavior,

who looks at the way that you show up in

the world, would they agree that you

seem to be willing to push through

difficult times in order to have this?

So those are some of the conversations

I'd have with anyone. And not just

people who are starting out, people who

have already got a hundred million

dollar business.

It's like the adult marshmallow test

basically.

Yeah. I think Cody had a had a great

framework in terms of thinking about

this from an investing perspective for

the people who are considering starting

their first business. I like the pain

passion profession angle of like

typically it'll be something that comes

from a personal pain that you overcame

whether it's you had an eating disorder

or you have kids who have allergies and

you figured out how to pack lunches or

you figured out how to store stuff for

twice as long because of some unique

thing that that you retrofitted a cooler

with. whatever some passion which is

just like a hobby that's that's you're

deeply interested in or it's a

profession so something that you already

currently do like in a way this is I

think one of the easiest self-

entrepreneur you know self-employment

path is just going from employed to

self-employed doing the same thing that

somebody already pays you for

so like you don't need to worry about

like market risk of like I wonder if if

accounting is still going to be desired

by other people like right now because

everyone's so interconnected like remote

work and being able to be fractional

like many people can start kind of mini

consulting businesses doing, you know,

because a lot of businesses and

entrepreneurs are very um bad at

allocating resources. And so they have a

lot of quote full-time employees that

are working 20% of their effort and

still keep, you know, keeping their

paycheck and at the end of the day like

they do enough to keep their job, but

not so much that they are nearly at

their full discretionary effort. And so

all of a sudden you think, okay, well, I

could probably do the same work for half

the price and the entrepreneur be

willing to pay it, but I could do that

same work for half the price for five

times the people and make three times as

much and do it on my own time. And so

that becomes I think a great like foray

into entrepreneurship. Now what do you

have to learn there? It's like well you

already have delivery down because you

already do the job. You just have to

learn how to promote. It's just like how

do you reach out to people and ask them

if they want what you have and then get

them to trade you money for it. Um but

that like at least takes half of it out

of the equation. And almost all three of

those pain, passion, profession, you

already have kind of the back end. Like

you have the pain, you figured out the

thing. Uh the passion, you've already

spent all this time loving this thing.

So you've already done a lot of the the

work and research. And so really you

just need to learn the front end which

is like how do I promote and how do I

sell, right? how to get someone to give

me money for it. And then in terms of um

how much money you make, I think Dana

had a great perspective of like, you

know, sell the rich, like they're the

ones who have the money. And if you uh

sell rich people, you get to sell at

rich people prices, which is more fun.

Uh and so I mean, I'll give you a simple

example. Um I have a CRO company that

that we do a conversion rate

optimization across our sites and our

portfolio. And so if that company go

works with an e-commerce business and

they, you know, add 10% to, you know,

topline and goes from 1 million to 1.1

million, they make $100,000 of value. If

they work with an e-commerce business

that's doing $100 million a year and

they do the same exact work and they add

10%, they add $10 million a year. So

it's a hundred hundred times more in

terms of value that's being created. And

so fundamentally, you have the value

they create, your ability to negotiate a

slice of that pie, how unique that is.

As in, for example, I could have plenty

of sales guys are like, "Hey, Alex, I

could sell millions of dollars of stuff

for I'm like, "Yeah, but so could every

other salesperson." So, you have

significantly less uh you know,

negotiating power even if you have the

negotiating skill just because many

other people can do it, right? And then

the third the the final component is

risk. And that's the one that I would

multiply everything by, which is how

much risk you take on.

People often say this idea of selling to

the rich, but as you explained it there,

what what it actually sounded more like

is sell to the person who's going to

yield the most returns from your skill.

And I I reflect on this because I spent

the first half of my career doing social

media marketing. Yeah. I think I said

this when we sat down that I used to

work with fast fashion companies or

fashion and the net return

of me selling them all dresses was tens

of thousands. I then left that business

and spent two years working in

psychedelics in the biotech industry

where if this was around the g the meme

stock thing where if they could

galvanize people on social media to care

about their stock the upside the swing

was billions of dollars. I was the only

employee in this biotech firm that ended

up listing on the NASDAQ for $3.2

billion. And so their remuneration to me

for the six months contract was many

many many many many millions.

Yeah.

Because they they made billions.

So for me they they thought they were

ripping me off.

Yeah.

And and I think about funnily enough

when you put the same company on

different stock markets

the the company is worth wildly

different. And I think the same about

our skills where think about the stock

market where you're trading your skills.

I've got a I got a small example of that

really small example. There was a guy

who we worked with who was an

occupational health and safety uh

consultant and inside the workplace in a

typical office he would charge a couple

of grand a day

uh to go in and it was about 10 days so

about 20 grand to do an occupational

health and safety. And I asked him the

question, "What is the most dangerous

workplace you've ever worked in?" And he

says, "Well, there's this type of

manufacturing that has lasers, freezing

stuff, boiling stuff, lava, you know,

the sharks, you know, the whole thing,

right? Whatever it is, and not actual

sharks, but you get the idea." And I

said, "Do you know how to solve the

problems of that workplace?" And he

says, "Yeah, I absolutely know how to

fix those problems." I said, "Why don't

you position yourself and why don't you

run a campaign that you're one of the

best in the world for that and that

you're actually going to just run a

campaign around that?" Um, within a year

his day rate had gone to 20,000 a day

from 2,000 a day and a typical

engagement had gone up to 400 grand.

Mhm.

Mainly because he went from, you know,

the same skill set, but he applied it to

a a much, you know, more valuable

environment. Podcasting is somewhat

similar, you know, because if I podcast

in the UK, the amount of money I get per

view from YouTube is half versus if I do

the same activity, the same amount of

effort, the same amount of hours in the

United States, the platforms pay me

double for the same amount of views. And

I think many of us are like trying to

get a pay rise from our boss or

whatever, but actually thinking about

are you trading your skills on the

highest return market is a great way. We

I used to hire writers at my old company

and those writers would be paid you know

30 $40 $50,000 whatever it was in the UK

when when I was working in biotech and

we were looking for someone that could

write about biotech it was a quarter of

a million the salary it was five times

more for the same fundamental skill of

writing.

I think that I think that a lot of times

when you're starting out as a brand new

entrepreneur it's scarier to sell to

rich people. You're like I don't know

rich people. I'm not a rich person. I'm

going to sell to my friends. That is

very normal. That's the people that you

have the closest proximity to. But the

problem is is that means you have to

play the volume game. And the volume

game is actually really hard. It's hard

to get a lot of people to buy your

thing. Incredibly difficult. It's

actually much easier to get a few rich

people to buy your thing. And so, you

know, we had this home inspection

company and I didn't know it at the

time but

he was telling me they were having like

major cash issues in their business. And

uh and I could kind of tell because when

an entrepreneur is under stress, like

you can sort of see it, you know, it's a

it's a a visual thing, too. and he was

about 45 days away from uh running out

of cash. And when I was sitting down and

talking to him, I was trying to

understand his business. Home inspection

has been around forever. It's a

normalized business. This business

works. It functions. It has good

margins. It's a rollup for private

equity. The business model is not the

issue. So, what was the issue? The issue

was their clients and their pricing. So,

he was trying to be the home inspector

for everyone at a lower price point. And

what does that mean? It means it was

actually really hard for him to

advertise because he wasn't niching

down. He was competing with all of the

major players and he had very little

margin because he was competing for

people who couldn't afford very much in

their home inspection costs. We made one

change which is we just said in front of

his business name and in all of his ads

luxury home inspections instead of just

San, you know, San Diego home

inspections or whatever city he was in

previously. And that one change

increased his margins by 45% and they

saved his business. He didn't do more

volume. He didn't hire more people. He

didn't get smarter. He didn't get

better. He just sold to rich people

instead. And because that increased the

surface area that he was covering, so

each house was like, I don't know,

thousands of dollars instead of a couple

hundred bucks to inspect, his business

was saved forever. And so I I think

protecting your profit is so crucial

when you start a business. And nobody

tells you that because it feels safer to

sell things cheaply to people who don't

have very much money. But there's that

old adage which is, you know, try to

work with a $50 client and they will

say, "I need everything under the sun

for this $50 I'm going to give you." And

then go to a $50,000 client and they'll

say, "Why are scent?" And so, you know,

so

in the beginning, go for the $50,000.

And the last thing I'll say on that is

also when you're a young gun

entrepreneur, a lot of times people who

have money, they got there through

business nine times out of 10. They see

themselves in you as a young hard

worker. You can often get away with

things when you are young working for

somebody who is rich and sees themselves

in you, especially in service businesses

that you just can't at volume when

you're selling to people that really

need that last dollar. And so I think

that's why most businesses go

servicebased business. You trade your

time for money in some sort of way. Then

you productize the service. So now you

make the service so other people can run

it too. And then finally you turn it in

technology software as a service. you

increase your margin at every single one

or your profit at every single one, but

they're the same business. You're just

smarter. You're you're a higher level

entrepreneur when you're able to create

tech around it. And but really all tech

is is process at scale. And so it sounds

scary when you're just starting out, but

it it's it's really just the difference

between 10 years in entrepreneurship and

learning and not

I think when you um when you're starting

out, you a lot of times you sell out of

your own wallet to to Cody's point. So,

it's like you have no dollars in your

wallet, so you assume everyone else has

no dollars in their wallets either.

And you're so afraid of getting

rejection that you continue to lower the

price until you get here. You hear

people say yes. But just as like a

benchmark for people who are starting

out is that like usually you're

appropriately priced when seven out of

10 people are saying no. Um that's like

about the appropriate price. So if you

have like if I you know see a business

and they're doing 80% close rates as in

like 80% of uh the people they talk to

say yes, they usually have a double or

triple in pricing just sitting there. If

they're at like 60% close rates, they

usually have a one and a half to 2x

price increase that's sitting there. If

they're at, you know, 40 to 50, they've

got a 50% price raise in there. And if

they're right at that, you know, 30-ish

35%, then they're usually appropriately

priced. And if they're at 20, they just

need to learn how to sell better. But

and so, but fundamentally, I say this

because usually, you know, in the

beginning of entrepreneurship, you're so

afraid of hearing no. Um, but the

reality of it is that you need to be

hearing no more than you hear yes to

know that you're being appropriately

priced

because you like I way back in the day I

had a gym. Um, and I had I can't

remember how many members it was, but uh

I I said that's it. And I decided to

triple my prices, which is a pretty big

move. Uh, we have a recurring membership

base. And so I gave everyone a trial of

the new level of service I wanted to

give. I wanted to go from large group to

semi-private. And um, I tripled the

price alongside that. and I lost

one-third of my customers. Um, but I had

twothirds of the people at three times

the price. And so I made um two times

the revenue and I cut my costs by

twothirds.

And so I made a lot more money.

And it was probably better for your

clients as well. More exclusive

experience.

100%. And it was like right as I was

beginning to learn how like pricing uh

worked with profit in a business. And so

it and by doing that tripling in price,

it didn't like triple my profit. It did

way more than that. And so like when you

have a 10% or 15% margin business, like

Cody saying, if you actually can pull

off a double in your pricing, it'd be a

6x or 7x increase in profits.

So there's a lot more sensitivity to

that price number. What's interesting is

that it's really just like, you know, a

lot of like, how do I raise my price?

It's like you do the exact same thing

you normally do and then right when

you're about to say the number, you just

add a zero and then and then you just

act the same. Dan Kenny had this great

quote. He said, um, go as high as you

can without cracking a smile. Uh, and I

think that's usually a pretty a pretty

decent place to start. Yeah. And if

nobody is giving you push back on

pricing, that means you're too cheap

immediately. Like I mean value metrics I

think are so un listen the thing is like

if you're a serious business person, you

want to make more money, pricing is

going to be really interesting to you.

If you're not a serious person wanting

to make a lot of money, pricing seems

like such a boring conversation. This

will never go viral on the internet

except for people who actually are in

the game of business and they understand

that pricing save saves businesses. And

the the thing that I learned that I

thought was like wrong at first, and I'd

be curious if you guys were the same. I

thought it was wrong to charge different

people different prices. I was like,

"No, no, everybody gets the same price.

That's the right way to do business."

And then I realized there's something

called value metrics, which is basically

your prices should be a representative

of three things. Usage, so does somebody

use this service a ton? Then you should

charge them more. Do they have a lot of

users? Do lots of people use it on their

behalf. Or then finally, uh, value. How

much value do they derive from it? Do

they make a ton of money? Um, you know,

can they have some sort of quantifiable

return? And if you're charging everybody

90 bucks a month for whatever your

service is, you are wasting a ton of

money from a segment of your clients

that would pay you way more.

Like Typeform is a good example. I I

started using Type Form, started using

it myself. They charge me $50 a month.

Then I started running tens of thousands

of surveys through there and I put my

whole team on there. Now I'm paying

$1,000 a month. It's the same [ __ ]

tool.

Yes, it is. But I'm using it way more

and I've got more of my team using my

account as well. So they're charging me

a thousand just over $1,000 a month

and they only had to acquire you which

is amazing. So from acquiring one person

and you're like you know your cost of

good or their cost of goods don't

escalate at the same rate at all. So

that's how these SAS companies get this

80% margins.

That's it. When you look at uh this this

little pyramid of customer segmentation,

you get 1% of people who have 15% of the

budget, 9% of people have 45% of the

budget. 90% of people combined 40%.

Right? So when you actually break that

down, you have one person willing to pay

15 grand, you have nine people willing

to pay 5 grand each, and you have 90

people willing to pay 445 each. So you

are almost always better off going I

think the best place for most small

businesses to go is that 9%. And the

reason is the top 1% typically shop on

pedigree. They want to work with the

best businesses out there. They want to

win work with the ones who have won

awards and the ones that have been

around for a long time.

Relationships

and and through trusted relationships.

The 90% they shop on price. They have a

fixed price and they only want to shop

on that price. The 9% shop on passion.

They want to follow someone who's an

interesting uh who has an interesting

new take on things who's putting

together a group who's done some

education or entertainment around it. So

the this 9% I would call that the

affluent niche. And that affluent niche

is really good place to start. And that

9% are the ones that are closest to

moving into the 1%. So you can grow with

a client over time, which we saw a lot.

You could help get them up to the 1% and

then then they'll take you and introduce

you to all the others.

This was one of the really fascinating

things for me when I was running a

marketing business, which is I think you

you referenced this Cody, which is when

I started the company, I was working

with founders who had a 10K budget and

the amount of times they would call me

because of that 10k budget because that

was do or die for them. And then when we

signed Uber and Coca-Cola and Samsung,

the budgets are massive and they they

call me less.

They sign things off quicker.

The meetings are easier, life is easier.

And that's just one of these sort of

interesting phenomenons with um with

client services, I guess, and service

businesses generally is the bigger the

budget, it typically it requires the

same or less units of effort to keep

them happy than someone whose life is on

the line because it's their five grand

out of their own pocket.

I think part of that you earn too as an

entrepreneur. I think I mean I'll speak

for myself. I uh you start out selling

way too cheap.

Um because you also need the money

because as much as it's like a nice it's

very comfortable for me to say like yeah

you need to add a zero to your price

tag. If I don't get paid for the rest of

my life it doesn't matter.

And so I have a lot of leverage and

people can feel that. That's really

interesting,

right? Whereas I mean this is also like

if you behave as if, right? If I behave

as if I have a significant amount of

money, then I tend to attract people who

are going or basically somebody else who

also has a lot of money will recognize

that behavior and say, "Okay, this guy's

a player." And so then they'll be more

willing to do business with me. Now,

it's tougher when you don't have that

and you present that way, right? Which

is so I think that a lot of this kind of

does become earned because like either

you're faking it, which is not my not my

recommendation, or you just do a decent

amount of volume and you realize you're

like, "You know what? can't charge $99 a

month for this. It doesn't make sense

for me. And then you have a different

level of confidence going into this

where you just look at someone, you're

like, I just can't do it for that price.

That's the word confidence, isn't it?

Yeah. Well, that's how I how

does one build that confidence or

portray that confidence when really they

don't believe it themselves.

You outwork yourself, right? You do you

do so much volume that um you get bored

of it. Like when you can basically train

out your your affective response or your

emotional response to a given activity,

then at that point I would say like you

are ready. And so whenever I hear

someone, he's like, "How do you get rid

of nerves?" I was like, "You're just not

you haven't done it enough times like

until you're bored and you hate it."

At that point, I'm like, "Okay, now

you're ready."

Is that what like self-belief is to you?

To me, yeah.

There's two two types of confidence.

There's a confidence that comes from

repetition. And I think it takes courage

the first 30 times and then you get a

little bit of confidence and then it

takes courage and then you get

confidence. But I think it's like 30

block little blocks of 30 repetitions

and then you get rewarded with a little

bit of confidence upgrade. That's one

type of confidence. There's another type

of confidence which is an abundance of

options. So, let's say you run a lead

generation campaign and you want to get

10 clients and you're hoping to sign up

10 clients and a thousand people

respond. You end up with this with or

without you energy. And the with or

without you energy is I'm going to be

fine with or without you. I'm going to

definitely make my 10 sales. I've got a

thousand leads. I've got 10 sales I can

make. So, therefore, it's out of

balance. Mhm.

I I go back and forth on this because

the good thing about today actually is I

think people do less than ever but think

that they do more than ever in

entrepreneurship. And so we have a lot

of mental masturbation that goes on.

I've thought about this a lot. I've

really pondered it. I've wondered about

this. I've worried about it, etc. Right?

I've watched all these videos. I've

consumed all this stuff, but I've

actually done nothing.

Keep watching the videos.

Like and subscribe.

But you know I if if if I if you take

the quantity advice then what you do

when you try to go get a job let's say

whether it's it's a job uh that that you

have in your business or you're trying

to get an actual job then you just go

and you apply to 15,000 of them. I

actually think you'd be much better off

by applying to five and doing as much

work as it would take to reach out to

15,000 to obsess on those five. And so

even if you haven't done 10,000 hours of

painting uh somebody's house, if you go

and sit down and you sit down with uh

AI, get in front of Perplexity and you

write down, okay, what is the average

painting job cost? What are the problems

that come up with painting jobs? Uh who

are who is the most expensive? Um how do

I upsell them? And you put together a

package that is like here is everything

that you think you need to know

data-wise on this job that I want. Like

you will be the 1%. Nobody preps for

anything anymore to the degree that you

need to execute. And so I don't think

you always have to do the job if you do

the preparation to show that you care

about the job. And just think about it

like how many times have we all had

people reach out to us and they're like,

I want to come work for you or I want to

come get this job and they're like, hey,

can I send you a video of XYZ and if I

do it then then you'll hire me or can I

do a sales pitch for you? You know what

you should actually do? Make the video.

Make the video. Put together an entire

prep document. Put together a strategy

document on why I should hire you. And

make it so that it is almost impossible

for somebody to say no to you because it

shows how obsessed you are in a world of

super curious, uninterested, not that

deep obsession. And I've hired God, I

probably hired 15, 20 people solely

because obsession is rare and competence

is rare. And if you can show those two

things, you can be people who have been

doing it for 20 years. Because I know

many painters. We we own one of the

bigger painting franchises in the

country and I know very many painters

that have all the experience but they

don't know how to properly communicate

it and show the preparation that they've

already done.

Let's talk about that because that's a a

function of really sales. I guess that's

sales that's marketing. Um, I was

mulling the other day because I've I've

just hired someone called Harry who's

our new head of happiness in our in

Flight Story. And she and she didn't

just make a seven-minute video. She also

sent the video via unsaturated, less

noisy channels. And it made me think

about this framework of the resonance of

the message and the high signalness of

the medium

because as you all know, you're getting

DMs from people that say, "Any jobs

going?" that's like low emotional

resonance and a terrible medium. So I

think of it as like this four sort of um

square quadrant where in the top right

of the quadrant you have message the

7-inute video but then figuring out how

to get it round back past the PAS not

into the saturated inboxes maybe into

the post. I think post is so like

unbelievably unappreciated as a medium

in a world of like laziness where nobody

wants to like go to the post box. you

you're all on the receiving ends of

thousands of DMs and messages a month

and sometimes some of them get through.

Sometimes some of them result in someone

being offered a job or you investing in

their company. So if I'm listening at

home and I'm thinking, okay, I've got

four people here who get thousands of

DMs. What is the secret that penetrates

your your fortresses?

I would be careful reaching out to

people who get who have millions of

followers because it's hard for you if

you've never had millions of followers

um or even hundreds of thousands of

followers. It's it would blow most

people's minds just how much traffic is

moving on in the background on any given

day. There are plenty of people who have

10,000 followers or 20,000 followers or

they've got a very successful business.

They don't get a,000 emails a day. They

get maybe a thousand emails a year. So

there's a there's something that you can

reach out with which is called a proof

story which you mentioned. And the

format that I like to use is I did

something special. I recently worked

with a extremely famous uh YouTuber

um who has over 22 million followers

and we were able to spin out a new

business

um which became very very successful and

exitable

um and that business uh got you know 10

million worth of revenue in the first

six months uh and I project managed the

whole thing and I can explain exactly

how we did that step by step. So that

the format is I did something special

with a certain type of person. We got a

great result. Here's what the result was

and here's how I can explain it step by

step.

And what's in that for me or am I making

the the link?

So I'm reaching out to you with my proof

story. Yeah.

So I'm telling you this is this is what

I've done

and are you asking me for something?

I'm saying would you like to know how we

did it step by step? Now the other way

we can do this that works pretty well is

to do this in the public domain. So, for

example, you could reach out by actually

posting a video or a or a post on

LinkedIn or on Instagram or um or on uh

X. And what you can do is have five,

six, seven, eight friends who then jump

in and start commenting on it. Now, for

me personally, if you've tagged me in

something in the public domain and

people are now commenting it, so that

the the the the thing might be I've got

a little bit of advice for Daniel

Priestley

and I go, oo, what's going on here?

Right? And then I see that there's a

public video and I see several people

commenting on it. And then I look at the

video and it's a proof story and it's

really complimentary. I really like your

stuff and here's what here's going and

here's the here's my proof story. And by

the way, Daniel, I'd love to get in

touch. Drop me a DM. I'm I'm going to

check that out because it's in the

public domain

because

well because it could be negative. It

could be

like I don't know.

I want to know what the heck's what

what's being said there, right? I I

think the real thing is don't confuse

famous with rich. Like you guys

shouldn't care about us and reaching out

to us. There are people that are richer

than all of us even though we all have

some means as far as I understand. There

are people that are way richer than us

that nobody knows that nobody's reaching

out to that want to give you their

money. And so I think a lot of people

spend time focusing on fame as opposed

to rich. And when you're young, who

cares? Like you can't eat fame. Fame is

not lasting. We will all be totally

irrelevant probably sooner than we even

want to

speak for some

like and subscribe.

Alex will be remembered in 500.

So like it, you know, for young people,

I do think sometimes uh because we get

DMs, we think that it's important, but

if you're watching this, you should

really be obsessed with just making

money and then you can be sitting at a

table like this and not worry about, you

know, slipping into our DMs. I mean, the

richest guy that you know probably

started a sprinkler head company, lives

down your street in a big house, and if

you went and asked knocked on his door

and asked him how he made it, and if you

could do a service for him, he would

probably let you.

So true.

I wouldn't mess around with famous

people.

The people that gave me my first leg up

in the world of business were no one.

They didn't have followers.

They were some guy who had built a

business similar in the city and was now

living out in Monaco, living an isolated

life. It was someone who'd sold some

kind of company was running uh you know

some kind of marketing business but and

they were at that level. They were

probably at the $50 million level in

terms of net worth and they were

delighted to have an email from me

tickling their ego

of course

and saying that I was reading their blog

etc.

Yeah.

It's very exhausting to do the very deep

level of work that you do in order to

get a high level client and then have no

response. Right. That can be that can be

really you know extinguishing from a

behavior perspective. But if you do that

work for, you know, Steven Bartlett and

then you make the post and you say,

"Hey, this is this like I'm a XYZ, you

know, whatever designer and I've worked

with these types of clients and let me

just show you my breakdown of what I

would do. I think his stuff's awesome.

This is just some stuff I would do." And

then I tag you, then I'll probably like

things is enough people will see that

that you'll get it sent to you from

somebody else who you will answer the

response from messenger messaging type

perspective. like somebody whose DMs you

will open will be like, "Hey, I don't

know if you saw this

team member."

Right. Exactly. Um and you do respond to

them.

I do. Yeah.

And so all of a sudden it's like that's

actually how you can get in, but you

also get all the free exposure of the

work that you're doing. And then another

person who might not be you and it might

be me and saying, "Hey, I like Stephen

stuff too and I thought this was a

pretty good breakdown. Um hey, do you

have services?" Uh you know, in exchange

for money.

Yeah. I'm I'm nab that [ __ ] Um, and so

and so yeah, I actually actually really

like that perspective because it doubles

it allows the work that you do for your

lead magnets to basically double as

content and so doubles as promotion. And

so you get you kind of get multiple

bites of the app, which I think is

really uh good.

And I think if you do do it though, be

sure you're good because

because you know the truth of this

happens all the time with you and I. I

mean there we go back and forth because

people will say online like, I built

everything that Alex Formoszi owns. Can

I come work for you, Cody? Yeah, you

know, I received those emails, too. I

built

He'll have this. He has the same people.

You know, I built everything Cody has.

How? And then, you know, kind of

funnily, I'll be like, "God, I don't

remember that person ever working for

me." Like, did

did this actually happen? And so, I do

think this is just a little listen, you

got to hustle when you're young. You got

to do things you're going to cringe

about later. I am so on board for all of

that. But also remember that the world

is small, especially with people. pause

on that cuz I think this is an important

point is all the people that have had

the biggest net impact on my success, my

career in my team, they don't they don't

seem to have time to be telling the

world that they did everything.

Yeah.

I mean, Jack is a good example. Jack is

Jack was here from episode one of the

podcast, but Jack in my view is doing

the like least personal branding,

milking the cow, and he's in my view

arguably the most responsible

Yeah.

for all of this stuff. And there's

almost this inverse correlation between

someone that works for you for three

months and then builds a personal brand

off the back of that

and is on stage claiming, you know, the

success versus the people in the in the

trenches

in the circle. Yeah,

it's a it's a bit of a side point, but

um one of the things people are so

fascinated by is this idea of passive

income.

And I think I think they're fascinated

by it because it's a promise of big

returns for no work. And that's you talk

about offers a lot. That's like the

perfect offer.

Yeah.

What what's your what's your thoughts on

passive income, Alex, and is it

something we should be aspiring for?

So, um, first I think it'd be helpful

for everyone to even define in terms of

how to think about passive income versus

active income. So, one is that people

often discuss it in binary terms,

passive versus actum, when it's really

more of a continuum of how passive is it

versus how active is it? And that way it

becomes way less black and white. When I

think about passive versus active, um,

when people are starting out, I

generally just discard it entirely

because they typically don't have

sufficient capital in order to actually

make meaningful passive income and they

would get significantly higher returns

on increasing their active income. And

virtually every extremely rich person

who self-made as my asterisk generally

has gigantic active income and only

begins to look at passive when they have

so much money from reinvesting in their

higher return things, which is what got

them this very large active income that

they're like, where else should I put

it? And then at that point it's really a

question of diversification which is

like how much more do I not want to

double down on the main thing and that's

a completely personal question and I

don't there is no in my opinion there's

no right answer to that um of because

that's a fundamental like how much risk

do I want to take um which I see is

entirely personal but I'll give you a

very a real example of like an

investment I made you know 5 years ago

which was um we did ex exited the

business um and I had more time on my

hands and I was like okay well why don't

I just start spending you a couple

million bucks a year on making content.

Now, that had basically zero return in

that time period, but if I were to look

at the return on capital for that, you

know, $2 million a year I did for the

first few years compared to today was

probably the highest return capital that

I made. But is that was that a passive?

No, it's definitely not passive. It was

100% active in from an investing

perspective. And so, this is when people

are like, what do you mean by investing

yourself? I mean that right like you're

investing in either the skills that

you're acquiring the businesses that

that you have and a very simple

investment a lot of times uh can get you

ideally leverage on your time and so I

would rather think for the person who's

starting out not like how do I make this

passive I would say how do I get more

leverage on my active and so like I

could start by shoveling snow in the

beginning and then once I save up enough

of my shekels then I'll buy a snow

blower and all of a sudden I can go from

doing you know one driveway an hour to

doing three driveways an hour and then

boom I tripled my income. Now, for that

one week that my cash flow is down

because I had to buy the equipment, I'll

I'll have made less money, but then I'll

very quickly recoup it. Now, to the same

degree, that's in a capital expense from

an equipment perspective, but you can do

the same thing from a skills perspective

of I give a classic example of a

phabotamist as somebody who draws blood.

Um, in the US, I think they make

somewhere in the neighbor of like $25 an

hour or something like that. It doesn't

take very long in order to become a

phabotamist and it doesn't take a lot of

money. And so, you know, a couple weeks

you do the studies, you get your cert,

and then all of a sudden you take

minimum wage and as long as you're not

in San Francisco, you will have double

or tripled your earning capacity in just

a very short period of time. And so,

that's a very good return on capital.

And so, that's where I think about the

best investments for people who are

starting out who have call it sub

$10,000, sub maybe $25,000. It's like I

put all my money into how I get more

leverage on my active, which is either

going to be more skills or or more

actual physical equipment in order to

get returns on the skills I already

have.

Interesting. more leverage on my time.

I I personally like the idea of asset

income versus passive income. So if you

actually look at what's really going on

with passive income, it's that there is

a an asset and that asset is in some way

generating income. So for example, you

own a house and you get rental income or

you write a book and you've got

intellectual property and that

intellectual property generates a

royalty income. So first there's an

asset. Income follows assets. So the

first thing you need is an asset and

then you get the yield from the asset.

And there's traditional assets which are

very very good if you've already made

money or you already have money and you

want to park it somewhere and you want

to stay ahead of inflation.

Traditional assets are terrible for

trying to make money.

Give me an example of a traditional

asset in this definition.

Um I think of something like art, wine

and watches as more like a speculation

but or or perhaps a store of value. But

then there's something else which is

called a performance asset. And a

performance asset is typically

intellectual property, media, code, or

data. And when you have these

performance assets, if you can build

these, these are ones you don't have to

buy, you build them. So, for example,

you could write a book, and now you've

got intellectual property. You could

build a system like a a SAS platform.

Uh, and now that SAS platform is in some

way an asset, and you can rent that out

to to more people. uh you could build a

database of a thousand people and build

a relationship with those thousand

people and then every time you write one

email it goes out to a thousand people

and they've got a little newsletter. So

that's a performance asset. So typically

when you look at um the people around

this table we're actually got we we're

very lucky to have a lot of performance

assets big followings uh lots of media

and content um books that we've written.

So these are kind of like the

performance assets that anyone can

create. It used to be until very very

recently that you just couldn't build

assets like you couldn't. It was very

very difficult. But we live in this

magical moment where almost anyone with

a phone and a laptop can start creating

performance assets with intellectual

property, media, data, and code. And uh

and then you can basically start the

process of building those assets and and

then those assets produce more income.

Here's my conspiracy theory about

passive income. And uh I think that

passive income, it's a tax code, right?

It is a real thing. It exists. You pay

less money to the government if you have

passive income than active income. Like

that's where the word comes from. But I

think the reason that it's been so

idealized is because there's an entire

industry where people have told all of

us for decades that they are better at

managing our money than we are. That's

the mutual fund industry, that's the

investment industry, that's the real

estate industry, that's the private

equity industry. and they have said we

are uh professionals and thus we will

charge you 2 and 20. We'll charge you uh

an investment fee on top of your assets

for you to give us the professionals

your money to beat inflation over time.

The problem is is that to your point

they will never make you wealthy.

Investing overtime in those assets are

are great for beating inflation or

making sure you have downside protection

for your cash over time in order to

allow it to grow and have

diversification. But they're very bad if

you want to get rich. If you want to get

rich, you're not going to get rich in

mutual funds and sitting it in somebody

else's private equity fund. The people

who get rich off those things, they do

the active income. They're the ones who

are running the private equity fund.

They're the ones that are running the

private equity companies and they're the

ones that are running the real estate.

And so there's this fascinating world we

live in actually where people think that

it is better and more sophisticated to

not teach you how to become capable of

running your own business and creating

active income, but that instead uh

you're more sophisticated if you're on

Wall Street. And and so I think that

passive income was actually in a lot of

ways a way for the wealthy class to gain

a lot of our assets.

But people click it. And this is why

there's a generation of younger people

as well that are obsessed with trying to

figure out how to make passive income.

It's it's it's clickbait, isn't it?

I think it's forex trading,

but I think it's almost deeper than

that. I think it is actually that um it

sounds, you know, if Alex says this, I

say it too, but like invest in yourself.

People are like, "What does that mean?

What do of course I'm trying to but how

do I invest in myself? That's hard. I

don't know exactly how to do it. What

are you trying to sell me courses or

tell me to buy your books or whatever?"

And that's the the reaction. But the

truth of the matter is is that you will

never be able to have the return on

investment in somebody else's asset that

you will in yourself. You just won't.

Okay. So, let's go on to that then.

Investing in yourself.

If you were starting out in your career

today without the skills that you have,

without the audience that you have, and

you had to choose how to invest in

yourself, what is that investment you

would make in yourself today in 2025?

I'm going to give two answers. So um so

I started at zero once and then I've

lost everything twice. And so I have the

I have done that three times now. Um

starting from zero without a reputation

um or money. And so um what I did in all

three times was the same thing which was

the first thing I did was I learned how

to advertise which is how to let people

know about the stuff I have. The second

thing I did was that I went to people

who had an existing business and I said,

"Hey, for as little as little money as

possible, what would you do to fulfill

your existing services

and then when someone uh I would then

use the advertising that I had, so at

the time it was Facebook ads. Um, I

would run ads and then I would sell

those leads into that business based on

the pre-determined price. And so let's

say it's a a chiropractor or for me it

was a gym. So I went to a gym owner. I

said, "What would you, you know, take

for a member?" And they said, you know,

we would actually take them for if you

can just bring them, you can keep the

money. We just want the customer for

free. And so I said, okay, well, the

first six weeks of the time that they

spend money with you is mine, and then

after that, they're all yours. And they

said, "That's fair." And so then I just

spent money and I sold into someone

else's business, and I kept everything

above the spread, which since the basis

was zero, I kept all of the money, and I

had zero cost of delivery. So literally,

it was just cash collected minus CAC,

all of that was profit. And so when I

started over from zero the third time,

um I was able to make $100,000 in the

first month when I needed it

because you had that skill of

advertising.

And so when we say like invest in

yourself, it's just a it's a it's a very

uh amorphous term, but fundamentally you

have to learn the the the skills of

generating money. And so you're going to

have to have some level of promotion.

You have to let people know about your

stuff, which is either be through

content, through paid ads, through

outreach, right? Or it's going to be

through affiliates. So somebody already

has an audience you negotiate some sort

of thing with. Honestly, so many

businesses, like you can go to a

chiropractor and say, "Hey, you know,

how little will you do 10 sessions for?"

And you'd be amazed if I say, "Hey, I

can bring you a hundred people. How

little can you do 10 sessions for?" They

might say 20 bucks a session. Now, I

might sell it for 200, but that's on me.

And I make my 90% spread. I don't have

to do anything. I just have to promote

and sell. And so, that is an example of

something that like I have done and did

do each of the times when I needed to

make money in the beginning when I had

nothing.

What skill that you currently have?

Yeah. would get you back to being a

hund00 million entrepreneur.

So, it's a really good question. I think

it's actually stacking skills. So, a lot

of a lot of times like when this

question gets asked um basically the

assumption is that you have to stay in

the same vehicle. And so, like the

fastest way to make $100,000 is not the

fastest way to make $10 million, but I

might make $10 million faster if I

started with $100,000. And so, if I have

zero, then I'm going to do something

that costs zero capital and is pure

skill, which is exactly what what that

was. right now to make let's say to

actually start running those ads I might

need $1,000. And so it's like I might

drive Uber for a,000 bucks, get my

thousand, then spend the,000 on ads to

make my 30,000 and during that process I

can reinvest that to get the hundred.

Okay, great. Now I've got the hundred.

Now with the hundred I can flip that

into and the key of each of those is

that none of those are really businesses

per se and that like I can just walk

away from them whenever. I don't have

ongoing delivery or ongoing commitments

and so that gives you a lot of

flexibility. And I mean, I think there

are a lot of entrepreneurs, at least the

ones that I know, um, have have had

these moments where they needed to

generate a lot of capital in a short

period of time and have a few kind of

like fast money skills that they don't

flex normally because there's there's

caps to them, right? What

I think is cool about entrepreneurship,

too, is we can all do it. You have to

find your unfair advantage. One of your

unfair advantages is you're very good at

paid promotion and getting to the

masses, right? That was never really my

unfair advantage. I think there's two

different ways you could do this. One

would be promotion. So, are you an

incredible salesperson to go direct to a

ton of people? The other way is

partnerships. And I think you can think

of these different ways. Promotion could

be BTOC often, which is like going

direct to consumer. Um, often

partnerships is B2B, going to a few big

people. Um, I think of partnerships as

employment, which is a very fast way

often to make money, too. Like Jack

might make way more millions with you

than he does individually. And so, my

background when I didn't have any cash,

I didn't know how to go to people

directly. I didn't know how to do paid

ads. I wasn't sure how to do promotion,

which is a volume game that you have to

be good at. So, I went towards

partnerships. I said, I can get to

fewer, bigger, faster. I can't get to

many fast. And so, I think there's like

two paths to making money quickly if you

don't have any. And and the first path

has less risk, but perhaps midsize

returns. And that is go find the best

entrepreneur, founder, business builder

you can find who you can still get to on

a daily basis in some way and go work

for them. Learn as much as you can, earn

as much as you can. As you learn more,

ask for more continuously over time.

This is how I mean Cheryl Sandberg is

one of the richest people in the world

and she's never had her own business,

right? She's only worked for other

people and she's doing just fine. So I

think that's the first way and that

would be what I would call partnerships

or employment. And then the second way

is to go do it yourself, right? which is

high risk but probably highest reward.

And in that instance, you have to go and

figure out how to get people to buy your

things continuously over over time. But

like when I didn't have money in the

beginning, um you know, I had just I had

gotten out of finance. I didn't want to

work for somebody else again. I was

pretty miserable. I had worked for a

billion hours for people in investment

banking and asset management. And uh I

had massive gold in handcuffs. Like I

made a lot of money. And um I had no

brilliant idea. I didn't have a business

idea. I had no idea what to do next and

I'm pretty riskaverse actually. I was

like way too scared to go do do what you

guys all did which is start businesses

from scratch. And so instead I partnered

up. I went to another company that

needed to raise capital and get a few

investments in it. And I went to them

and said, "I can raise money from a few

of these people that I know. If I do

that, can I negotiate a little bit of

equity in the company? Can I negotiate

upside return for the money and dollars

that I bring in? And I want to I want to

be a partner in the company." And so you

don't always have to start your own

thing. If you can negotiate with

partnerships, I think sometimes you can

skip to the front of the line if you're

not a great natural salesperson, you

know, or marketer. And so you really

just need to decide which one. And

neither of them are better than any

others. They're just better for you.

The amount of resources you have access

to is a factor of knowledge, network,

and reputation. So you're at all times

you're trying to build your knowledge.

You're trying to build your network.

You're trying to build your reputation.

A lot of people are worried about the

knowledge, but they've probably done

interesting things already in their

history. They probably if they looked

over the last 3, four, five years, they

could say, "Actually, I've done all

sorts of things, but I've never told

anyone about that, right? I've never

actually explain to I've never posted on

LinkedIn. I've never posted an update

telling people what I've done. So

therefore, I've actually got things that

could build a reputation, but I've never

leveraged that reputation." If you're a

young person, especially, network is

actually you've got a superpower with

network. And I'll tell you why. Because

if you go to a private bank that

normally banks people with 3 million,

but you say, "I want to be an

entrepreneur. I want to come to some of

your entrepreneur events that you host,

they'll bring you along cuz you're

you're an ambitious young person." If

you go to a large accounting firm and

say, "Do you ever host big events? Could

I attend some? Can I jump on a

newsletter that lets people know about

the events?" They'll invite you along.

And I'm talking about like Ernston Young

and KPMG. Every single week, they've got

some thing that they're doing in their

offices. They've got experts, they've

got rich people, they got all that sort

of stuff happening there and they'll

invite you along. So, you've got this

ability to build your network, you got

this ability to leverage uh your

reputation. I actually don't think that

you can make good decisions about the

knowledge on your own. I think you need

someone who's at the higher level to

tell you this is the skills you should

go for. These are the things you should

do. So, for example, at the time that

Alex did ads, it was a great time for

doing ads. But now fast forward to

today, it's probably better to study AI

and and to bring that to the table. So

sometimes those rep sometimes those

things change. So let's say you figure

out what is your reputation? What can

you talk about when you're in front of

people, you go networking, you go to a

few of these events, you outreach, you

get yourself in front of some people,

and you actually ask the question, what

kind of skills do I need? What what sort

of um I need to build my skills? I need

to build my knowledge. What do you think

would be a valuable thing uh to do?

because people who are at that next

level up, they're they're noticing what

they what they need. Uh they're noticing

what's hot, what's not. Um so they're

going to be able to teach you or or

guide you. And and um to Cody's point,

you know, you you want to have a mentor

in your life. You want to have someone

who's who's been there, done it. You

want to, you know, partner with a bigger

organization and get some of those.

Before Kim Kardashian was Kim

Kardashian, she was Paris Hilton's uh

assistant and she learned the playbook

for being famous for being famous. and

then she took it to a new level. Took it

to a new level. So she she uh she did an

apprenticeship and then she applied the

apprenticeship.

One of the things that all of us have in

common is we make content and it's

almost a bit of an elephant in the room

that no one's no one's really doubled

down on when I asked what what you guys

think is the most sort of like

undervalued skill or the best place to

invest in yourself. I was actually

expecting you all to say start making

content for a variety of reasons. Not

just because you want to build an

audience so you have more customers, but

actually

and I can see it on all of you. It's

helped you to think better.

It's helped you to communicate better.

It's helped you to sell better. When you

get that chance to sit down with that

investor or that rich person, you said a

second ago, you said earlier that if I'd

sat old Alex here, one of the big

differences is this one's much more

focused, concise, articulate. So, I'm

wondering what you guys think of that

content as a undervalued,

underappreciated skill in the world

we're heading in.

If I'm starting to today rather than

when I had, you know, zero, there's

still a huge amount of attention that

sits on social media, if not more. And

there's even more demand for content now

than there was. And so you can supply

that and get compensated for it. And

you'll have to do repetitions for a

period of time until eventually you get

good. And then you can develop an

audience and then you obviously can sell

things to them.

I think um content content's a little

bit of an interesting one because

content works when you've got

intellectual property to leverage. So I

remember Alex popped onto my screen the

first time and he says, "I've sold my

company for $40 million and I've got

nothing to sell you. I'm just going to

tell you how I did it." Cody's the same.

She's like, uh, you know, I, uh, I was

working at Goldman Sachs, but then I

left Goldman Sachs to earn more money

through laundromats. I'm like, that's

interesting. That's fascinating. Right.

So, I'm going to watch that content

because there's some interesting

intellectual property there. Um, my

channel took off when I started talking

about I've done seven startups that went

zero to a million in the first 12

months. So, it's that ability to have

some intellectual property that people

are going to want to get to. I can think

of a bunch of examples of creators that

hadn't done anything but their ideas

were the value. So if you think of

someone like George Mack or even James

CLA or lots of other of these sort of

like J Shetty online writers who

J Shetty had a great one which was uh

I've got monk wisdom for the modern

world

and we've got Ali Abdal I left the I

quit being a doctor to be a YouTuber. M

so there's these little hooks that work

and

does everyone have a you don't have to

have sold a business for tens of

millions or made millions

from I think there's some intellectual

property that you've got but bear in

mind that there was a different time

where you could just burst onto the

scene and we now have AI generated

content so if you imagine like airplanes

and they're at the airport and the fog

rolls in and if you're on the ground

it's very hard to take off but if you're

already up in the air it's very easy to

stay up in the air and it's kind of like

the AI content that's coming in is is

that fog Right? There's just going to be

thousands of AI generated content pieces

just flooding onto everyone's feed. And

if you don't have a really good hook,

you're just not going to drown out that

noise.

You guys must all be thinking about

this.

I have I have so much I'm all right. All

right. So So

one thing I think everyone has to decide

on if they're going to start making

content is am I an entertainer or am I

an educator? Right. Right off the bat.

And so I think AI content for sure will

have tremendous leverage on

entertainment more so than education

because the big underlying thing that

Daniel's hitting at is that you have to

have proof, right? Like like an AI

avatar cannot come in and say I sold my

company for free. They can't. They

didn't do anything because they don't

exist in the real world. Which is why in

my opinion like the absolute foolproof

method for making educational content is

dop Epic [ __ ] and then talk about the

epic [ __ ] you did. Period. And so like I

um so yes I'm in you know I'm in LA.

Yesterday we also um we had the school

games winners come out schools platform

that hosts online communities and the

winner of the last school games. So 90

days he got to like 300 and something

thousand a month from a YouTube uh

channel that he started 16 months ago.

So he started 16 months ago making

videos about AI. Now what was his

interesting thing? So he was just always

into AI learned about the tools and then

he started helping small businesses for

like $1,500 $2,500 a month where he

would just help them implement these

automations that would save them money

and time. And then people were like well

how did you do that? And so he just

basically would just explain each of the

automations that he made for each of

these businesses on his channel. And he

made one video a day explaining one of

the automations. And then he said, "If

you want I have a group that's whatever

$300, $400 a month that shows you how to

build the same automations." To your

point about the education is like you

just need some proof. And it doesn't

like you don't have to like the bigger

the proof you have the wider basically

the wider TAM you'll be able to reach

because more people be I'll just put the

words impressed. if you just are in your

20s and to be fair, you just quit

Goldman Sachs. It's like that is enough

of a thing that because that's it's a 1%

type deal, right? But you can also you

can 1% through achievement. But the

other side that I think people widely

underestimate is you can 1% through

volume of work. So if I said I read 200

books last year,

let me show you the 200. They're all

dog, you know, dogeared. Let me tell you

what I learned. Like I'd be like, well

shoot. Because I think everybody wants a

bargain on time, right? Like I went on a

100 speed dates. this is what I learned.

It's like, well, I don't want to go on

100 dates, but like anyone can do that.

So, it's either 1% achievement or 1%

effort, but this one you can do. And

even if you have zero outcome, there's

still stuff that you'll learn. And then

that will people find interesting that

you can build an audience around. And if

you do that enough times, eventually you

do achieve something that is

interesting. And then that kind of

becomes permanent. But at the end of the

day, like proof always beats promise. I

I also think anybody can go viral online

with one of two things. We've talked a

lot about experience. So if you do have

experience, if you built a billion

dollar and assets under management

business, gone to Goldman, built seven

startups, that's incredible. That's not

normal. That's totally fine. But that

means that you could just have the

everyday other e of starting the

experience. I think we we obsess on

expertise. Expertise is the way to make

content online and make millions. But

what about just the experience? You

could say, "Actually, I've done nothing.

I'm a college dropout. I've [ __ ]

around a lot. I don't have much figured

out, but over the next year, I'm gonna

try to make a million dollars. And you

can go just as viral, if not more. I

mean, a good example would be like Ryan

Tran, who who I love, who's in Austin,

Texas, too. And Ryan is just like, I'm

trying stuff, and this might fail and I

have no idea, and you guys can come

along. The proof could actually be you

just trying a thing and it not working

one way or the other. And so I think the

only problem with this type which is

experience as opposed to expertise is

that with expertise you have attention

and intention aka intent to buy whereas

if you're just experiencing thing you

might have attention but what are you

going to sell because you don't have

like a value derived from it where's

your intent I mean if you think about

who are the biggest creators online

only fans the Kardashians you know what

are the biggest websites online porn

sites that's a lot of attention but the

intent to buy is going to be low for any

of those over time at large. And so I

think you have to ask yourself, okay, if

I get a ton of attention, let's make

sure I'm really thoughtful on what I get

attention for. And then let's think

about once I have that attention, where

do I actually have some sort of

expertise or value that I can trade in

order for people to have an intent to

buy? And I think about it like this.

Rihanna, huge star, right? Big

celebrity, billionaire now because of

Fenty Beauty. Drake, giant celebrity,

arguably more views, more hits than

Rihanna, worth one, one six, 1/8 what

Rihanna is worth. Why? Because he has

ton of sub attention, but he hasn't

actually done much to get intent to buy

from him. And so Rihanna's just

categorically better, if we define

better as bank account and scoreboard on

uh net worth, than Drake is at

monetizing their intention. And so, um,

I think that a lot of creators online

think too much about views, likes,

subscribes, and don't think very much

about how do I monetize on top of this

because nobody stays relevant forever

online. And so, I think while you're in

the spotlight, you do have to think

about how you going to convert that

funnel in some way.

That's a really great point. A lot of

the people you see blowing up online,

they do have a backend that monetizes it

because to your point, it costs money.

you know, I probably spend 40 50,000 a

month just on retainers of people who

are working on that stuff and

content.

Yeah. Content related stuff and you know

because I have businesses that can

monetize that then it it worth doing but

it's hard to compete with that if you

don't have a back end. The the other

option is to work with someone who does

have a business and they do have

experience. they do have something to

talk about, but they're busy and they

need someone to project manage this

because one thing that's happened is

that to the traditional business owner,

this personal brand thing and this

building a content empire uh that builds

your business, this is brand new to a

lot of people. So, there are plenty of

people who've got a $50 million a year

business and they're going, "Oh, should

I show up online at all? Maybe I

should." and they're just starting to

tiptoe into the water and they've got a

story, they've got a back-end business,

they can monetize it, they can allocate

budget to it, you could be the person

who does that and you'd be, if you did

do that, you would be one of the very

special people in their life. Um, I had

a guy come to me a couple of years ago

and said, "Daniel, I just cannot believe

you've written five books at the time.

You've got seven different companies.

You've got all this stuff going on and

you've got a few thousand followers and

I've had a look online. You get like

10,000 views a month." And I'm like,

"Yeah, but I'm busy. I'm running my

businesses." And he came to me and said,

"I will project manage you into the

millions per month." And he just

literally picked this up, a guy called

Martin, right? And he just said, "I I'm

going to do this and I'm going to turn

up at your house, do a day of filming

every month. I'm going to edit it. I'm

going to chop it all up. I'm going to do

all this stuff and I'll project manage

the whole thing." Now, the two of us are

very uh close now. We've got a good

relationship. And he's now got an idea

for an AI startup, and I'm going to back

that. Every single one of you watching

this right now has something to offer,

whether it's knowledge or skills or

experience. And that means you have

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If you guys were starting from zero

today

with AI in the picture and all of these

platforms and the way things are going,

I I spent I've spent a lot of time

thinking about the next big opportunity

in content and I think about the next

big platform. Where would you be

starting today based on who you guys are

and the skills that you have and the

things you're interested in is probably

a better way of saying it. Would you be

on LinkedIn posting once a day? Would

you be on Tik Tok making videos? Would

you be on YouTube starting a channel?

Would you start a newsletter?

And with AI in the picture, I think it

changes the answer because content is

going to become very easy to make. So

where does the value acrew to? Like

where does the value move to in a world

where every kid a kid in Mumbai could

make uh a real or a quote picture now

with Chat Gyt? So where is the value

going to acrew and how are you going to

milk that cow? How are you going to

capitalize? Like what is the one thesis

you have about the future of content

that you haven't told anybody yet? Tell

me.

Well,

I'll tell you mine. I'll tell you mine.

I want to ask a question too for

everybody at the end of I'll give you my

my quick thing. One, I will say like um

and I'd be curious if you all agree.

When I first started making content, um

most people that I knew thought it was

really cringe. Actually, they're like uh

why would you make content? If you've

actually had any success that you

supposed to have had, why would you be

so idiotic as to be on the internet

making content, it can't be true that

you've done these things if you're

making Tik Toks all day? And um and I

think they totally miss the boat that

like the 21st century concern uh

currency is attention and attention

could be bought with ads or attention

could be bought in a different way but

through organic content creation. And so

you go like cringe to content to

conversion. And actually, I think all of

us would probably agree it was a pretty

good play, but like I'm sure Did you

guys all get laughed at when you first

got on the internet?

Of course.

Yeah. Right.

Never.

Like still get laughed at now.

I still get I still get laughed at. So

like I just want to prepare. If you get

online, be prepared. People will think

you're idiotic and

and your friends the shedding period

where you transition to

100%. And and people who are serious for

whatever reason have not figured out

that there is a huge arbitrage

opportunity with being known. Even if

even if you don't care about the views

and all I have as something that's a

differentiator is that if I ping Stephen

you'll respond to me because I am

somehow I have some prefence online.

Same with Alex, you know, right with all

of us. And so one I just want to say

that up front because it will suck. You

know, I'm in these creator groups and at

some point it just happened yesterday.

I'm in a group with like some of the

biggest creators in the world and uh all

of them were listening. I mean maybe 50

responses of a moment where um everybody

hated them on the internet. it was super

dark. You know, they couldn't stop

watching and reading the comments and

they felt like there was like a fight

orflight situation from a bunch of

strangers. And so, I think it's worth

just saying content can have a little

bit of a downside and you got to like

protect against that, but like also go

full [ __ ] bore into it because who

cares? Uh, you'll be forgotten anyways.

And um

embarrassment is the price of entry as

they say.

Yeah.

And we've all all faced that and had to

go through that to get to the other

side. Now, I want your content secret.

We talk about social media and I think

um there's been a lot of talk about it

shifting really more towards interest

media rather than social media. Right.

So I think this is extremely important

because what what Cody was referencing

earlier is again entertainment versus ed

education. And so Rihanna and Drake I

see both as entertainers. Now what's

interesting is that where do they have

influence? So she used the word intent

but fundamentally I say like how do we

increase the likelihood that someone

complies with a request or complies with

a solicitation. Right? Right? If I tell

you to do something one, I mean, we've

all seen some creators who have tiny

audiences, but if they say, "Hey, go do

this thing." You know, they have 100%,

not really 100, but they have a huge

conversion on a very small audience. And

then other people, you know, I can name

some Tik Tockers right now that have,

you know, 50 plus million uh followers

that have had 13 failed launches because

they have views, but they have zero

influence. No one listens to them for

their advice.

And so, um, in order to create

influence, there's four things. So,

number one is, and so I just remember

SPCL, right? So, you have status. So

somebody who controls scarce resources.

So a bartender at a bar, there's alcohol

behind them. It's a scarce resource. In

the bar, they have status. When they

walk outside of the bar, no one cares

about them. But in the bar, they have

status, right? So that get so they give

influence. The second is power. And so

power is basically um say do

correspondence, meaning if I tell you to

do something, follow these instructions,

and a good thing happens, then you I

I'll increase the likelihood that you

comply with requests in the future. And

so like for example, Martha Stewart uh

was the first self-made female

billionaire. And I think there's there's

a huge amount of reasons for that. And

one of the biggest ones is that she

literally gave people recipes and they

followed their recipes and they had a

good thing happen. And then people told

them they were great and this cake was

great and this lasagna was amazing.

Their family, their friends, they got

they also got status. So a massive good

thing happened after following explicit

directions. And so then when she said

follow my next directions and by this

thing, people said okay the last 10

times I did it, it worked. I'll do this

too. And so that's why she had so much

influence. The next is credibility,

which is do you have proof? Right? Now,

all of these can um happen at the same

time or separately. So, I'm trying to

give more isolated examples for each of

them, but like one thing can check

multiple boxes. So, if I say, "Hey, I

sold a company for $46.2 million." I

have money, which is where the status

comes from, but I also have credibility

that the stuff that I do works. I

wouldn't have power yet though until I

say, "Hey, if you take what you're

currently doing and then add a bonus,

urgency, scarcity, a guarantee, you

know, think about a value equation, all

of a sudden you can sell it for way more

money." And then you followed those

instructions and then you do make more

money. Then you're like now I'll be more

likely to comply with this person's

requests in the future. And so then that

person gains influence. And then the the

fourth L is likeness, right? Do they

look like me, right? Do they act like

me? Which is both, you know, physical

but also psychographic. Like do they

have they share the same values as me?

Are they similar? And so if I have two

people that both have SPC, so they have

status, they have power, they have

credibility, and then one of them just

also looks like me, I'm more likely to

listen to that person. So each of these

are additives. So if you have all four,

you'll be more influential, right? And

so, um, lading this back up to

conversion, we think, okay, well, if I'm

going to make content with the purpose

of conversion, then I want to make stuff

that demonstrates these four things,

right? And so, that is why educators

typically have significantly smaller

audiences, but can usually

generate a lot more money than

entertainers can. And entertainers

typically can monetize almost

exclusively through sponsorships as the

most efficient means or vehicle. Now,

where does an entertainer have

influence? Rihanna is beautiful and so

she does have credibility in terms of

beauty. She does have um and then

especially if she starts making content

around that stuff, she takes her

entertainment audience but she's talking

about something she has credibility to

and then she can add power to that

because people start following what she

does, right? And then they start looking

a good way and then they say, you know

what, she really does know what she's

talking about here. And then all of a

sudden when she does point people to,

you know, to to a thing that that that

they can buy, then they're more likely

to do so. And so it's it's it's how do

we merge those two things together? And

then when we're making the content, and

I think a lot of people we're starting

out are very obsessed with views, which

I would strongly recommend, especially

in this interest media time, that it's

it's so irrelevant. And what I mean by

that is if we think, all right, I want

to I want to start a a bait and tackle

drop shipping business, whatever, right?

You for for fishermen. Well, if I just

start making videos on philosophy, I

might get way more views than I do if I

make, you know, videos on bait and

tackle stuff. But the likelihood that

the people who are watching philosophy

also want bait and tackle is very low.

And because the content is now the

targeting for social, like if if

anyone's run ads before, you have to

select, okay, I think I want 42 year

olds and I want, you know, men and I

want, you know, whatever, right, as you

go through it. But the thing is is that

the algorithms are so good and the AI is

so good at understanding what the

content is about. And they also know

what type of people consume this type of

content, they just do the targeting for

you. And so if you want to reach a

certain type of person, you just only

make content that that certain type of

person wants to consume. It's actually

easier now than it was before. And so

you can have a 40,000 person audience,

but that 40,000 person audience might be

made up entirely of fishermen who buy

tackle, which I'll bet you you'll crush.

And so, um, that is how I kind of see

the the the quote future of of media at

least, um, is that if you want to have

maximum persuasion or conversion power,

we want to make content that is

explicitly for a specific audience. And

we want to demonstrate the proof that

we've done, right? We want to have

things that they want. We want to give

them instructions that they follow that

good things will happen for them. and we

want to look like them. And if you do

that, you have somebody who's gonna make

a lot of money from an audience.

That last point is super interesting as

well. How do I make myself look more

like my audience? And I think

relatability

and humanizing yourself is one of the

great ways to do that.

I think it's a very fair point. I mean,

I also think it's not just physical

traits. So, you know, let's say that you

don't look like the audience that you

want physically. what are the values

that that audience has that you can have

them see themselves in you and and you

know it's kind of like whether or not

you like the guy who cares but let's say

you know Trump for instance really looks

not a lot like his audience

predominantly you know in suits and ties

constantly sort of a blueblood

billionaire from the east coast how does

he associate with this group of people

when really he doesn't look like them on

average well it's because they believe

that he has a similar moral compass to

them they believe that he has similar

ethics to them. And so I don't think

that creators have leaned into this

enough. And I don't mean to become

clickbaity or political or or divisive

or anything like that. I mean that it is

rare to see people in business h take a

stance that could hurt their business

values, for instance. And Chris and I

have a rule which is we don't have close

friends that haven't done something

publicly that could be against their

best interests. I I just don't want

friends that don't have that that

haven't done that because I think that

the world is really hard and I want to

see if somebody's going to have like

moral fiber before I become quite close

with them.

Super interesting.

Yeah. And so I I think you could do that

as somebody who is a content creator

today like be value aligned with your

users and show that and um also to the

point about the algorithm becoming about

interest based. It's also becoming value

based. We're seeing echo chambers emerge

around ways of thinking, right?

Well, I the content that I saw of you

that most interested me was when you

were talking about um how important

ownership is and you were talking about

just the philosophy of ownership and you

said there's a group of people who want

you to own nothing and be happy about it

and I was like I really resonate with

that. I want people to own their

businesses and I want them to own their

stuff. And I liked the fact that you

were standing in front of a huge

audience taking that position and

everyone knew that it was a little bit

of a a position to take and it wasn't

specifically content about how to build

a business, but you were sharing

something about yourself.

I have a belief you don't actually ever

sell anybody anything. You only find

those who are already predisposed to

want the thing that you are selling.

And if you believe that, then I think

your business gets easier too, easier to

target people. That's why I never kind

of got off on that content. You know,

it's really big online on sales where

it's like here's how you close them, you

know, here's how you do this. Here's how

you you switch them and you give them a

hot dog and then they buy the car

because you gave them the hot dog

because of reciprocity and you're like,

"Huh, I've never bought a car because

somebody gave me a hot dog." But

apparently this is what works on

Instagram. And so I don't think that's

actually true. I think you just find

people at a trigger moment that they

want something and then you give it to

them.

Mhm. Regarding content, for me

personally,

I find that the only reason I'm going to

create content is if it's in alignment

to a mission that I've got. So I don't

actually want to create content. I don't

want to be out there naturally. I would

much rather be a way more private

person. Um, and you won't you won't find

a lot of stuff about my family or my my

kids, my you know, very rarely do I post

anything like any of that sort of stuff.

But for me, I do it in alignment with

the mission. I really believe that if

you're on a mission, you've got

something you want to achieve in the

world, you're going to need other people

to believe in it. You're going to need

other people to get involved. Um, you're

going to want to hire talented people.

Those talented people are going to want

to, you know, see you online first. And

it's all about the building

relationships at scale. And content is

just people discovering someone new like

you would a friend and then getting to

know someone. And I think the big play

in a postAI world is having really deep

relationships with a lot of people using

long form content

uh where you share who you are, what

you're about, what's your mission,

what's your origin story, what's your

vision,

um what are your values and people then

say in a very noisy world I will pay

attention to what Steven says.

I agree. And so to give my answer to

this question, my thesis here in the

world of AI is actually that if you look

at who has the most loyal engaged fan

bases, it's not necessarily podcasters.

We're doing pretty well, but it's not

podcasters. Podcasters can sell out

arenas and when they go on tour, they

can sell out globally. Streamers.

And it's I think it's because of this

the depth of the parasocial relationship

is the the equity value of the

connection. And I was sat with a

streamer who's 18 years old, massive in

Europe. And we were on we're playing at

Old Trafford for the for the soccer aid.

And I got just got to sit down with him.

So I was like, "Explain to me what you

do." He goes, "So I wake up in the

morning." I go, "Then what?" He goes, "I

sit there." And I go, "For how long?" He

goes, "Eight hours." And I go, "What do

you do?" He goes, "Like nothing." And I

go, "How many people tune in?" He's

like, "100,000." I'm like, "Concurrently

100,000 people sit there with you." He

goes, "Yeah, people are quite lonely. I

sit there and what we do is we watch TV

together." Now the So when when we got

to the the stadium, 70,000 people in the

stadium, we're playing soccer. The

stadium when they announced your name,

the size of the cheer correlates to the

amount of hours you spend with your

audience. The streamers are the

celebrities.

The podcasters sometimes come in, but

the the actors almost, you know, but the

but the streamers own the stadium. When

you play Soccer Aid, it doesn't matter

how much money you've got or how big

your following is, the streamers are the

ones. the streamers have this particular

streamer has less of an audience than

me, but he sits with them for 7 to 8

hours a day,

deep connection.

So, if we think about depth as the as

the metric that you you can you can

exchange on, especially if you have

authority in a niche and you're

educating, as Alex was saying,

that's why I think a lot about my behind

thes scenes channel. I think it's when

we go on tour, it's so funny. We we do

we did a tour in Australia and

remarkably I'd say about 50% of people

were talking to me about Dario and then

50% of people were talking to me about

behind the diary which is the behind the

scenes channel where you get to know me

a bit better

and that that channel has a fraction of

the viewership and actually that same

thesis is the reason I started

podcasting. I was doing Facebook watch

videos. They were getting tens of

millions of views, which by the way, no

one remembers because no one remembered

any of them. And no one came up to me in

the street and said, "I love that

two-minute viral philosophical video you

made about motivational fluff." No one

ever said that. Then I started this

podcast and it got a thousand downloads.

And it felt like I was like Oprah

Winfrey. Like people were coming up to

me and I was like, "Oh, there's this

interesting correlation between like the

depth of the medium and the resonance

and the memorability and therefore the

value." So just pursue depth as much as

you can. the strength of the parasocial

relationship

part of the brain that has short-term

memory. We've driven a truck through

that.

You know, we've now got just hundreds of

things a day that hit that. But then

there's this other part of the brain

where I've spent seven hours with

someone and if that's the depth.

Are you guys thinking about that?

Because you guys, you all make content

which is educational but is less

personal. And I mean you you two

podcast, Alex and Cody, you both

podcast. You don't podcast yourself.

I'm a guest.

You're a guest.

but you don't like run your own podcast.

So, are you thinking about a deeper

format for for yourselves? What are you

thinking about?

Yeah. Well, there's two things I want to

talk about there. One, I think it's it's

depth, but I would also wonder if it's

not rawness like in an era in which we

cannot trust what we see anymore because

of AI and anything can be recreated,

reproduced, and overproduced.

Increasingly, a stream is interesting

because it is raw. it is it is for a

thous% whatever is happening on there is

happening in real time and thus we can

actually trust it and so I think as I

mean we've all seen it content has

gotten so produced and overdone and that

actually I think decreases trust because

we can't tell if something is real or

not because it's been edited and

filtered and overlaid

we say with our 40 person teams yeah

great

but it's true but think about think

about the content even like this is like

sort of tact practical, but um maybe a

year ago, the big content uh change in

video on Instagram was that you had a

lot of um B-roll and images overlaid on

top of videos. And I don't know if you

guys have noted, but that doesn't work

very well anymore. Actually, the more

that you have third-party assets in your

video and it's been overdone, the less

the video works,

the more you're just walking along with

your handout,

right? Because it's it's more real. So,

I think it might actually be like depth

and rawness.

Rawness. Yeah. Authenticity, I guess.

Yeah. [ __ ] hate that word, but yes.

Yeah. It's like 60 minutes versus Joe

Rogan, you know? 60 minutes is like just

it's just

no cuts.

No cuts. Yeah. Yeah.

And then when it comes to am I thinking

about this for our channel? Yeah. I

mean, I think about it. We we have

something that we teach everybody which

is like the marketing affinity loop. And

and basically it goes like this. I'll

show the graph so you can see it, but

you start with awareness, right? And

that awareness is what we're all talking

about. How do we get more people to just

see us? And then we go to consideration.

Okay, I maybe I like this person. Maybe

I'll follow them. I'll give them a quick

follow. And then we go, well, I actually

I like them. I follow them. And I might

buy something from them. Okay, that's

interesting. And then I might not only

buy something from them, but advocate

for them. Write a testimonial, a review,

something like that. And then finally, I

might be loyal to them. Aka, I'll refer

a friend. I'll sign up for their

year-long program. I'll buy again and

again. And so, we go from awareness to

consideration to purchase to advocacy to

loyalty. And like, if you can get most

people stop at awareness. Very few

people can get somebody to go from

awareness to purchase. Even fewer people

can get them to advocate for them, leave

a review, and the very very fewest refer

a friend. And so like the holy grail of

business is always have your clients

tell other people nice things about you.

And so I think in content, what I think

about is I don't always care that people

buy things from me at this point. Like I

I love money, don't get me wrong. I want

to keep making it, but I actually really

care that they're loyal and they tell

other people about what we're doing. And

that is something we now measure for

videos. We can actually now measure with

like a little UTM link how many of all

of our videos get shared and how many of

those shares actually go to a a purchase

or something that goes a little bit

deeper. And so I I am thinking about

that. But then I think you also have to

decide what's your personal line is. So

for me, I can't imagine wanting to

stream all of my life continuously

because I'm not sure that's good for the

audience actually. I think they should

live not watch. So it's like I just have

a line that like I kind of don't want to

cross.

Yeah.

And Chris and I actually have a rule

too. We only post so much about our

relationship. We actually because it

always does well. So the team's like

just full send Chris shirtless nipples

every day. The internet loves it. And

and and Chris has been really good about

saying no, we have to keep some things

sacraant. And so I think you have to

decide how deep you want to go down the

rabbit hole in order to win.

Yeah. I've I've been the same with my

kids. it's their decision as to whether

they want to build a profile and how

they want to build it. So you won't, you

know, I won't put them in that position.

The depth that I'm loving is writing

books because someone who reads a book

like you really get to go deep with a

book. Um, and also live experiences. So

every year for the last four years, I've

taken about 80 of my clients to the uh

to the snow and we go skiing. and those

80 clients who if if someone has gone on

my ski trip, the level of loyalty and

depth because we've shared fund

together, I'm about to take 30 clients

to Neker Island and spend a week with uh

Sir Richard. And I' I'm convinced that

just doing that with 30 people will

build, you know, lifelong like

friendships. So this idea that like

there, you know, that you do stuff in

the online and offline world, you know,

that you actually figure out who are the

people who are at the core group, those

real uh dieh hard fans, and then let's

do something together and and and do fun

stuff together. Go skiing, go to

islands, go sailing, that sort of stuff.

Alex, I see you wrote uh it looked like

you drew the universe or something.

Oh, I was thinking about um again, it

was we're just talking about like

authenticity. Um, and so with each with

each of like SPCL, right, all of them

exist in a continuum, right? And so I

can say credibility. I could say, "Hey,

I sold a company." But I if you see a PR

article, that will increase the

credibility. If you were uh somebody you

heard about it from somebody else,

that'll increase the credibility of that

specific credibility driven event.

Likeness is the same thing. And so I

think um like the connection between

streamers and having huge influences

that they have tremendous likeness and

that because they are quote authentic

and that there's very few there's

there's very little ability to distort

you have basically when you what you see

is what you get. And so if you're the

type of person who likes that particular

streamer then you'll have super strong

you know affinity towards them and

you'll be likely to you know comply with

their requests like show up to a stadium

so that you can support me. Um but you

know even authenticity is again a term

it's like how do you define authenticity

right which I see is how you how you act

when you have no risk of punishment and

so

different way of saying this is like how

do you act when you're alone when no one

else is around and so I see the

discrepancy between how you behave when

you're alone and how you behave in

public as basically your authenticity

you know score right the question is or

the problem is that no one really knows

how you behave when you're alone and so

unless you're

unless you're like streaming all the

time

right yeah and So,

so you're saying authenticity is that

there's not a difference between how you

act when there's when there's no risk of

punishment and how you act normally. Is

that okay? Got it.

Right. And I think that also being like

very candid for all of us is like they

were like sure we have audiences that

can punish us with their comments I

guess but our like we've all built

enough of call it a fortress if you will

of currency network relationships etc

that like even even within our companies

like if you go into the room like I can

be really authentic in my company

because no one can fire me right like my

risk of punishment is low is is lower

than saying employees is and So, it's a

a relatively I'd never use this word,

but it's a relatively privileged, you

know, um position to be in to to be more

authentic because no one can really

punish you. And I think this is kind of

the the essence of the like [ __ ] you

money that people want to get to, which

is like I just want to be me, but I

can't be me because I have this risk of

punishment.

And so, um since degrees of freedom

basically, um I think your happiness is

is very correlated with your degrees of

freedom.

So, Elon's authentic.

I mean, I don't think anyone would argue

that he's not authentic. They might not

agree with him, but I don't think they

think that he's he's trying to pull one.

I do think that when like if you're

going to go online, one of the ways to

inoculate yourself against being

cancelled or to inoculate yourself

against caring so much is to do

ridiculous things every so often that

are super authentic to who you are out

loud because then what happens is the

people that hate you, they leave. Uh and

the people that like you kind of like

you a little bit more or trust you a

little bit more for it. So I think um

you know one of the things that that I

do not really on purpose but it it is

just like it's like getting a vaccine.

You go out on the internet and you say

something that you know other people are

not going to like but you believe

strongly in. And when you do that kind

of consistently over time I also think

that increases your trust because we've

all met like other creators that you're

like

ah man like you're just never going to

say anything that's not PC. Like I can

think of two in my head where I'm like

they're never going to say anything and

if it could hurt their audience, they're

not going to say it. And that just

decreases my trust level. And I think

the audience is really smart. People are

smart. And so um I think you should

inoculate yourself more often.

Before we move on to a little game that

I've prepared for us here, um I you're

all very good at pitching and you all

have your own frameworks for pitching.

So I wanted to to pause on that for a

second. What is Daniel? What is your

framework for pitching a business or an

idea? There there's two things to start

with which I believe that

entrepreneurship is the journey of a

thousand pitches. That basically what we

do as entrepreneurs is we pitch stuff

into existence. Um and the penalty for

an average pitch is that you do a

thousand pitches and you get nothing to

show for it at the end of it. And the

payoff for a great pitch is that you do

a thousand pitches and you end up with

10 to$100 million. You end up with an

amazing team of people and lots of

customers and everything everything's

great. I think treat entrepreneurship as

the journey of a thousand pitches and

also treat pitching as

this magical thing where you get what

you pitch for and you can't switch it

off. So for example, if you say the

economy is bad, the economy is bad, the

economy is bad, as if by magic the

economy is going to be bad. Uh if you

say I'm seeing lots of opportunities

right now, I'm seeing lots of

opportunities right now. You you start

conversations where people go, oh I I've

seen an opportunity as well. So,

whatever you're out there talking about,

you tend to bring those conversations to

the surface and then it's a

self-fulfilling loop. With that said,

you have to have a framework for

pitching. If you're going to do a good

pitch, it's got to be a framework. I've

got social pitching framework, scheduled

pitching framework, and sales pitching

framework. So, social pitch, name, same,

fame pain aim game.

What's a social pitch?

Social pitch is on social media.

Yeah. or um in a social situation, it's

basically a situation where you've got

about 30 seconds before someone thinks

that you're being uh too obtuse.

Okay?

Right? So, you've got about 30 seconds

of people's attention, and you're going

to say, "What is your name? What are you

the same as that they already

understand? What makes you famous or

different? Uh what are you aiming for

right now? What's your bigger game? Or

what pain do you solve? What are you

aiming for? What's your bigger game?"

So, there's a few things you can put in

there and it rhymes so you can remember

it in a in a social situation. scheduled

pitches, I always do something called

capstone. And it's clarity, authority,

problem, solution, traction, or the why,

either way, opportunity, next steps, and

an emotional ending. Right? So, that

spells out capstone. Now, is that the

best pitching framework? Maybe, maybe

not. Maybe there's better frameworks.

But the point is is that you've got a

framework that you're not just winging

it. You're not just, you know, randomly

spewing words. you've actually gone

through the process of thinking through

your pitch uh in a framework approach.

One thing that's really fascinating is

the three of us have a framework for

everything like we we're just like very

framework thinkers and I've noticed that

with a lot of entrepreneurs. Um do you

guys have pitching frameworks? Be

shocked if you didn't.

Yeah, I do. I mean I think I'm like lazy

intellectually and frameworks help you

remember things and so if you don't have

very good memory then it's just easy to

put it in something that can make sure

that you remember it. It's why when we

were in school, you know, they used to

make us sing songs about how to remember

the varian states. If if if I wanted to

raise a bunch of money from other people

that didn't know me and I wanted to

never have a problem raising money

again, I didn't want to use any of my

money ever, I would use what I learned

in venture capital, which is the

mightest touch. And and basically, I

think you need one of these four in

order to raise money. You don't have to

have all four, but if you do, that makes

it really, really easy. The easiest one

is profit, right? If you have a business

right now that's making money profit in

your pocket, you can raise capital. You

can raise money from people as long as

that amount that you're raising is

reasonable to the amount of profit. If

you don't have any profit, but you have

growth, let's say like Replet, we were

talking about a big AI company, great.

You can raise a bunch of money if you

got growth, too. The third thing, if you

don't have either one of those, you

don't have profit, you don't have

growth, but you have a history. I've

sold a company before. I've built this

before. you can raise purely on the fact

that you've done this before. And if you

haven't done any of those three, you've

done nothing in life, then you need a

really good story. And the story is

something that you can often raise money

off of. So I believe that we are going

to create the next XYZ. And if we do

this thing, then you will all make

money, I will make money, and we will

change the world together. And so I call

it the touch because I think people who

accum if you can accumulate this over

your life, it's not that hard, right? So

eventually at some point you'll have a a

history which is your proof. Then you

can craft a story. You'll get better at

it as you continue to grow. You will

learn how to get profit in some way. And

because you've driven profit before,

you'll know how to get growth. So I

think like almost any entrepreneur over

time, if you focus on those four things,

can raise money. And you start with only

the story when you have nothing.

Alex, I have a lot of pitching.

Yeah.

Um I I I'll say first and foremost like

if you're trying to sell anyone

anything, um proof will always be

promised. And I can say that, you know,

a thousand times in a row. Like you

could literally say nothing, get on

stage and then just hit next on

testimonials for 60 minutes and you will

close a percent. Like literally the last

slide just says like go over there to go

buy something and you could say nothing

and you will you will sell.

Why?

Because I think um proof acts as a as a

as a an an approximation of something

that would happen uh for the prospect.

And so like the only reason that like

that proof works is that they think, oh,

some element of this is like me. And so

if I do the same thing that this person

did, and the closer the proof is to the

prospect, the more compelling it is for

that specific prospect, which is like

when we used to um, you know, run ads

for different markets, we'd go into

like, you know, an entirely black market

and surprise surprise, if we had black

testimonials, the pages would convert

better than if we had white testimonials

and then flip-flop in the other

direction, too. And so, right, and so we

want to show as many different types of

proof as we possibly can. And obviously,

not all proof is created equal. You can

have live proof versus recorded proof.

You can have a demonstration of

something that like us using the thing

is going to be more compelling uh than

than than not using and just describing

it, right? If I have a um like and so

there's there's a bunch of things on

proof. But that's just like big thing

number one. And so that's why for me if

somebody's going to sell something, I

recommend most people just get five or

10 clients for free up front with the

primary purpose of getting proof because

you're going to make more money on the

proof than you will have trying to, you

know, just get the the tiny amount that

you can charge with absolutely no proof.

Mhm.

So, it's like, don't do that. Just get

10 and on your 11th, you'll be able to

charge 10 times more because you'll be

able to say, "Hey, look at the 10 people

that I helped." And realistically,

you'll get more out of that than they

will because you probably suck.

Yeah.

So, so it's probably for everyone's best

interest that you don't charge anything.

Um, but from an actual like closing

perspective, and I'll talk about this

from a from appointments, I think to use

uh Daniel's language, I've taught the

closer framework for a very long time.

Um, which is C L O S E R. Uh, and so C

is clarify why they're there, which is,

and typically anybody who's going to be

in that appointment has taken some

action. So whether that's they

responded, you know, to a post, they

commented, they liked, they actually, I

mean, if someone's already set an

appointment or they walked in the door,

like there's always some like why'd you

pick up the phone? Like there's always

some reason like, "Why'd you give me 5

seconds?" There's always something

they've done that you could say, "Hey,

so tell me why, right?" And so then

you're you're you're clarifying why

they're there, why they're still

listening. So you listen to them because

we often think about sales as me just

hitting you with [ __ ]

So the perfect salesman says nothing and

only ask questions

because there's nothing to disagree

with.

And fundamentally they're going to

believe way more of what they say than

what you say. So you want them to say

it, not you. And so you clarify whether

they're there. See,

it reminds me of spies. I've interviewed

a couple of CIA spies now and every

single one of them, I was expecting some

like incredible technique or whatever.

They all say, "No, we just spend six to

eight weeks in the back of the cab

listening to the Iranian taxi driver to

figure out what that his son has a

health issue that we can then leverage

later to get him to turn against his

country." For the first eight weeks,

you're just listening to him offload.

And they're like, "It's crazy how people

will just offload if you let them.

Everyone wants to talk."

Oh, 100%. So, one is, you know, clarify

where they're l is label them with a

problem that you can solve. So it's like

okay so it sounds like you're here you

respond to my ad you DM me thing or you

you whatever it because of this reason

is that right? Right. So you get

confirmation on the problem uh which is

L. Then you O which is overview past

experiences or past pain. So it's like

what have you done so far to try and

solve this? And this is important

because uh motivation is the equal

opposite of deprivation. So the more

deprive someone is of something the more

motivated they are to solve it. And so

like if you haven't eaten in an hour

you're probably not that motivated. If

you haven't eaten in two days you're

very motivated. If you haven't slept in,

you know a day or you're normal

motivated. I guess that was a bad one.

But if you haven't slept in 3 days,

you'll be incredibly motivated to sleep.

And so we want to find we want to find

what they're deprived of and then try to

increase that deprivation uh in the

conversation. Basically, uh make them

more aware of the deprivation, the

things that they don't have, right? Then

once we have, you know, enough

deprivation that it's very clear it's

like, okay, this is this is what why

you're here. This is you agreed with

this is the problem that you want to

solve. You've tried all these things and

it hasn't worked for you. I can imagine

how frustrating that would be. Um S,

which is then you sell, right? you sell

the vacation, which typically is just

three points. Um I I usually keep it to

three cuz most people can't remember

more than that anyways. And the three

points are usually you can always find

three. And if you need two, you can

chunk up if you've got five. And if

you've got, you know, two chunk down as

in like break into smaller pieces. But

like when I was in the fitness world, it

was fitness, nutrition, accountability.

If when I was selling, you know,

mortgage leads, it's like you want the

leads to be unique, you want them to be

timely, and you want them to be

exclusive, right? And so like or

qualified. And so it's like there's

always three things that you can usually

triangulate. But when you say the three

points, you don't then feature, you

know, Jarble about the the points. You

then just usually put like a one

sentence analogy of of what that thing

is. So, it's kind of like this. And so,

these are like little 30 secondond sound

bites to make the three points. That

should never last longer than 90 seconds

cuz um most people waste all this time

on the selling part and that doesn't

really matter because the more we can

talk about them, the more they're going

to want to buy. Um and then E, like at

the end of that, you say, "Cool, ready

to get started, ready to rock and roll,

ready to start on Monday, whatever it

is." And then E, E and R around what

happens if they say no, right? You

explain it with their concerns. E, and

then R is you reinforce the decision.

And so R was actually something I added

much later when I was teaching, you

know, many sales people because um after

they would like explain away and then

close, they would just like see you

later. I got the credit card. It's like

you're dead to me. Um but the R is like

no, no, like reinforce the decision like

I think it's a great decision. I'm going

to introduce you to Polly. Paulie's

going to get you onboarded. And then

Polly also continues the R and being

like you know Jack definitely helped you

out. Let me let's get you all squared

away.

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lot of people say that 70 60 80% of our

communication is body language. Do you

think much about that, Alex? You have a

with or without you energy body

language. It's a casual It's a very

casual body language, which in fact

reinforces your authority in a way. So

do you think about if people are right

that 60 or 70% of our communication is

the things we don't say. Do you think

about training people on how to hold

themselves, how to be you kind of

alluded to something there which I think

people don't think about which is

actually the less you say sometimes the

higher conviction and the more I believe

you.

Yeah.

And some people can oversell because

Yeah. So, I'll So, I'll because I think

getting So, I'll just There's so many

variables here, but I'll just try and

focus on the ones that um a lot of

people sell over the phone and even via

Zoom, it's harder to see body language

as well, which nowadays I think a lot of

selling happens in those two

environments, even more than in person,

even though that's where I came from,

which I actually think is the best place

to learn because you have to control

every variable. And then you have far

more leeway on the phone or on Zoom than

you do in person.

And so, to that extent, um there's

basically five things you can control

about how you talk. And so you have your

speed of talking, like how t how fast

you talk. You have your cadence. You

have your um basically your um your

annunciation, like do I pronounce every

letter in the words that I'm saying? You

have the volume that you speak at

because if I talk too low like you on a

phone, it doesn't really matter because

they're just going to increase the

volume. But if I lower what I'm saying

right now, it sounds more important in

person. It's more important to volume is

more important in person. And so those

first three I consider there's kind of a

persuasive tone which all three are

constant. And the only point of those is

to maximize comprehension. It's just

that they can hear you, that they can

understand what you're saying because

you're talking in a speed that they can

understand. Like I'm somebody who talks

fast and I have to I have to pull back

how fast I talk when I'm in like a

selling situation. There's only two that

you that I teach sales people to try and

actively control, which is going to be

pauses

to draw attention

and when do I raise my voice.

And the reason that those are the only

two things you really need to teach a

salesperson outside of the persuasive

tone, which is that that you're going to

talk at a certain speed, which usually

about 150 to 170 words a minute, because

that's the amount of speed that most

people can understand. You're going to

enunciate the words, which is going to

force you to actually speak at that

speed.

Um, and you're going to talk loud enough

they can understand you. This sounds

very simple, right? Like this sounds

like so simple, like I can't believe

people don't do this. Except they don't

and they don't close. And so the only

things that you have to teach a

salesperson and these are so important.

Like there's been three independent

studies that are like massive

metaanalyses of sales people,

the sales people who one speak less

close more. And number two, the sales

people who know when to shut up most

importantly after you ask for the sale,

like if you wait 8 seconds after you ask

someone to buy, you close 30% more sales

if you wait 8 seconds.

Yeah. So you ready to start?

Okay. So

Mhm. And so people they'll like they'll

close themselves but the sales people

are so afraid of that silence that they

then jump back in. It's like you had the

sale just shut up. And so I used to talk

about how emphasis was super important.

And so like a very easy example to

demonstrate this in terms of

communication is that if I say I didn't

say he hit his wife. I didn't say he hit

his wife. I didn't say he hit his wife.

I didn't say hit his wife. Those all

mean very different things. But

fundamentally it's just cuz I change

where I pause. Right. Mhm.

What word? So, I'm emphasizing a

different word. And so, I used to talk

about emphasis a lot, but I've I've

trained more and more and more and more

sales people over time. I just say, when

do you shut up and when do you raise

your voice? That's it. The rest of this

we we speak in the exact same tone. And

the reason that I feel very confident

about this is that AI is doing

increasingly good job at ads. If I don't

know if you you've noticed this, but

like a lot of ads are just being voiced

over AI and they convert higher because

people can understand them.

I think a huge part of it is just they

can comprehend it. they can actually

hear all the words and it's set in a

tone that's loud enough and there's

annunciation and they actually get it

cuz most like it's like one of the

easiest ways you can improve copy on a

website is just get it below third grade

reading level like 50% of people can't

read above sixth grade

in the US

it's crazy

so you're you're alienating 50% of the

market now you might think oh well those

are the idiots no I know plenty of

people I mean like I've got two friends

who dropped out of high school and are

super super successful entrepreneurs

barely can write their names and they

like they make fun of it, but like

they're smart. They just didn't weren't

educated. Those are different things,

right? And so I say this to say like if

if you're if you're in these selling

situations and you're like because what

happens is you get nervous, right? You

get this fight, flight, freak out, the

ones that Daniel was saying earlier. And

so your adrenaline kicks up and so you

want to talk faster, you want to talk

louder, uh you interrupt the other

person. And all those things are

antithetical to closing. And so just

teaching someone to be okay with pauses

can increase the likelihood that people

pay attention to the words that they

say. Because all we do is we draw

attention when we pause. You have short

pauses that draw attention. And then you

have long pauses that solicit response.

If I pause long enough, what do people

do? They talk.

And I just think of someone as being

higher value if they if they're taking

pauses. Mhm.

Um, one of my one of my great mentors

early in my career, he

there's something about the way that he

spoke, he was incredibly slow with the

way he sp he was like that. And the

minute he started speaking when when my

company were over there and having these

men mentorship sessions with him,

everybody would stop and just like was

fixated on him. And then I remember this

girl who worked in my New York office,

he was

opposite.

And it's just it's just the use of your

this instrument. Yeah.

Um, do you think much about that? Do you

think much about how you present

yourself? Do you think much about your

body language?

I think it it's natural. I think more

important is the distinction between are

you coming across as a newbie? Are you

coming across as a standard worker be or

are you coming across as high status,

key person of influence level? And each

one of those has body language

associated. It has different ways of

presenting yourself. But it's a

self-identity thing. And if you can

shift that selfidentity, you can

naturally become more of a key person of

influence. When we meet someone, we

within a few seconds, we evaluate their

status level relative to us. And you

can't switch it off. And there's plenty

of evidence to say that like

unfortunately, you just do it

automatically. I've seen people

completely change their life by just

simply changing the way that they pitch

from a a newbie worker B to a key person

of influence. I can think of an example.

There's this woman who I asked her,

"What do you do?" And she said, "I'm a

financial planner. I can help anyone

with their financial planning. If anyone

wants to talk about their wills or any

of those sorts of things, then that's

what I can help people with, right? And

it sounds workery. And her her body

language was kind of like this.

Uh I asked her a question. I said, "When

did you do something special that was

really transformational, something

something important?" She said, "Last

month, I went out to the countryside. I

worked on a farm and I worked with the

owner of the farm and their kids and

their grandkids to get alignment between

the three generations. the farm was

going to be sold off to private equity

and instead I helped them to get

alignment as to how they're going to

keep the family farm. And I said, "How

did you do that?" And she said, "Well, I

used to be a city girl and then I

married a country boy and I I learned

how to do it." I got her to change her

pitch and I said, "Pitch yourself as a

key person of influence at that." So she

stood up in front of the group and she

said, "For the last 20 years, I've been

working with rural families who own

farms and I help them with their

financial planning and I secure their

family farm for the next two

generations."

And her body language just went like

like key person of influence and

everyone just responded differently. And

when I asked the audience, in the first

instance, what do you think her day rate

was? Everyone said $500. I said, in the

second instance, what do you think she

charges per day? 10 grand. And it was

just the ability to pitch yourself as

that key person of influence in the

room.

You know what's fascinating is there are

actual studies now that show for women

in particular that you make more money

if you do one thing which is you wear

makeup which is wild. So they did

there's three studies that have been

done totally different groups one by

Harvard one by Stanford and I can't

remember it was either Oxford or

Cambridge and the studies showed that

women who there was no attractiveness

differential between them but one wore

makeup consistently uh at work and one

didn't. They made anywhere from 20 to

40% more money inside of this study.

What I thought was really interesting

about that, because I'm not really

historically a makeup girl, although

being fully face painted for this, is

that that actually makes sense in a lot

of ways because we do have this initial

reaction that we always have uh with

people. You know, we judge somebody like

you talked about almost immediately. And

so when I saw that study, I thought,

well, first of all, that's interesting.

You don't have to be smarter, better

looking uh or anything else, and you can

make more money just by the way you

present yourself. And so I thought

thought, well, what about the way that

you dress? Is is that also the same? And

there are studies that back this as well

that in fact you can make more money as

a man for dressing one way and as a

woman and women are interesting because

you are not the norm.

What am I missing?

You got the lumberjack.

I've got 20% sitting on the table right

now.

But what's fascinating is, you know, I

like things where you don't have to you

don't have to be better than anybody

else. You can just use human psychology

to make more money. And so if I'm a

woman, I know that the way that I dress,

so when I pay attention to my dress and

dress professionally, whatever that

means in this instance, in the study

that I saw, it was like, you know, what

what I would have on a blouse, a suit,

something like that, women make two

times more than men when they dress when

they dress better. Men, it actually is

less important. Still more important

though, if you dress professionally in a

suit and you don't have all the other

proof and things you have, you have this

sort of interesting thing that's like a

you have sort of um diametric

opposition. I make a lot of money and

yet I care so little about money that I

dress in a wife theater. Yeah. Exactly.

And so and so men make somewhere between

15 and 18% more when they dress in

suits. So I think there's a a real um

argument to be made for if you're going

to pay attention to the way your voice

sounds. That takes some training.

Doesn't take much training to change the

way that you look professionally and and

how you dress. And the only other thing

that I would talk about on sales and

pitching is we tell all of our company

people. Um the line is show don't tell.

We increasingly do not believe the

things that were heard. So like think

about a sales pitch that goes like this.

Um you know uh we for instance have a

lot of home service companies. So these

home service companies are selling a

homeowner on let's say landscaping. And

so I'm going to come and we're going to

clean up your lawn and here's what we're

going to do and this is how much it's

going to charge. I'm going to charge and

this is how long it's going to take. And

you can tell the client that we're an

expert at this. I've been in business

for 42 years. We have, you know, 1,000

reviews on Trustpilot, etc. Or you could

do something that'll double your

conversion, which is simply bring a

phone or an iPad with you and say, "Can

I show you what we did for your

neighbors down the street?" And just

show them the image of it. Just go, "We

do have a thousand Trust Pilot views. I

don't right here. We could see what the

last one said. Click on it. Show them

the Trust Pilot review." You don't have

to train that. And I really like my

salespeople to not have to become

experts but to be enabled by what's

called sales enablement or technology

just to show because we are a visual

species. And so wherever possible if you

want to increase your conversions I tell

my team you are not allowed to close a

sale without showing something.

Some visuals

you have to have a visual because it's

just a trust transfer and a higher

signal. What's wild now is that in that

same business, you could take a photo

just right there in chat GBT say do the

landscape gardening and then show them

this is your house. Exactly.

Fully landscaped. People are vis 70% of

the brain is visual processing.

Exactly. And then you believe it and

then you've already seen it happen.

I work with a lot of entrepreneurs and I

get them to create a brochure

like a physical brochure for their

business and people are like what on

earth am I creating a brochure for in

2025? I because the the act of creating

a brochure gets what's in your head, out

of your head, and into a document we can

all explore. And I I still think a

brochure is actually one of the coolest

things that an entrepreneur can do as an

activity to really just solidify what

they do.

I saw you scribbling again, Daniel.

Oh, I have lots of things, but yeah. No,

I was thinking about like uh makeup

versus suits and whatnot. And so, you

know, one it's like if you have if you

have zero status, you have no credit,

like SPCL like we went through, then

it's like, well, then what are the

smallest versions of that that you can

demonstrate? And so, I would also bet

that if the girls did makeup like hooker

makeup and then you also do like

professional makeup, I'll bet you

there's a very different outcome that

happens because if you have like

understated business makeup, then that

probably signals a certain level of

status and they will treat you like

other people that they have treated in

the past because that associates with

the status people had. Same thing with a

man in a suit. Like literally fancy

pants, right? Um, it's like this guy's

got fancy pants, therefore he is must be

15 18% better on average. Now, to to to

comment on on on Cody's point earlier,

it's like I have other statusinducing

points that are superior to a suit and

so I don't need one,

right? So, like how how do I get away

with that? It's like, yeah, like having

a suit only means that you have $500,

right?

But billionaires don't wear Louis

Vuitton because in the status game

they're playing that would be an inverse

signal of wealth.

Exactly. Yeah. Who you're trying to And

then um to Cody's point about proof,

like proof is always number one, right?

And so like

trust pilot reviews is a kind of proof.

Somebody down the street is a closer

approximation which is a higher form of

proof. And so proof is always going to

be number one what you can lead with.

You can almost immediately in any sales

process if they don't have one of these

just implement a video sales letter and

increase sales by 20 to 40% with like

really doing nothing else. Um sometimes

more. And so that typically is like,

okay, what's the what's the promise that

we're gonna, you know, what do we do?

What's the pain that we're solving? What

is the uh plan or sorry, what is the

proof that we have that we can solve it?

And then what is the plan for the rest

of this video? And then typically after

you have you've demonstrated each of

those P's, you then say great picture

number five. Uh which then gives you

kind of the visual road map. And then

after that, I typically like to have

people just respond to the all of the

biggest objections that people have

around whatever the specific service is

um as the main points of the video. And

then after that, you just make your call

to action or you just reinforce the

appointment. Say, "Hey, like if you like

this video, text me this keyword. That

way, I know you watched it and we'll

give you an extra 5% on whatever." And

that way the salesperson knows the

person watched it. Um and it gives them

incentive to do so. So it's like, "Hey,

if you watch the video, you get 5%."

It's like, "Oh [ __ ] that's amazing." Um

but then that way they know that they

actually watched it. The one other thing

that I've found that is the most

powerful sales closer

is to pitch the assessment. And to pitch

the assessment is, I don't know if I can

help you, but if we answer these 40

questions and we go through this

assessment, then we'll figure out

whether we can help you or not. So, it's

kind of like if you went to the doctor

and said, I don't know whether you need

anything, but we'll put you through a

blood test and and an X-ray and then

we'll see. So one of the biggest way I

I've scaled multiple companies where you

pitch the assessment. You just you don't

tell people whether you can can or can't

help them. You just simply say the next

step is to take an assessment and when

we do the assessment it will tell us

whether I can help you or not. And it's

one of the best sales closing

techniques.

There's a lot of psychology around that.

They did that the study where they had

the boring focus group and they had one

group of people who were allowed

straight into the boring f community

group and then they had the other group

of people who had to take a survey to

get in and the group of people that took

the survey to get into the boring

community group all said that it was

great in there.

So much better.

And there's something about how friction

upon entry makes you value the thing

more

bazillion%. Like I can't I cannot I c I

can't emphasize this more. Like in every

single CRO split test that we increase

friction or increase the quality of

leads, we make more money.

CRO split test.

So conversion optimization test that

you'd run across a a landing page or

funnel or sales sales motion. Um like

when you add more friction and it's good

friction ideally, meaning you're not

getting out bad people, you're getting

sorry, getting out good people, which is

bad friction. You want good friction

which gets out bad people.

Yeah. um you will typically always

increase the cost per action. So your

lead cost will go up, your cost per call

will go up, but your show rates will go

up and your close rates will go up and

your cash collected will go up.

And it seems counterintuitive to apply

friction to a process, but

and I can almost promise that like it I

I have so few examples where it didn't

work that I almost believe that it's law

at this point. And I think it's law

because it's so counterintuitive because

it's scary to add friction because you

know that you're actively decreasing

your lead flow and increasing your cost

per lead. You're decreasing your calls,

you're increasing your cost per call.

Like that is frightening for just about

every business, which is usually why it

works.

At the Louis Vuitton store, they put a

security guard to keep you out and then

it pushes the prices up.

Yeah. Like they they after co none of

them stopped doing because they're like,

"Oh, wow. We made more sales during CO

because we had people wait in line and

showed scarcity."

It's like, isn't it? You don't even get

to pick the bag you get and you have to

join a waiting list. Then they interview

you to buy the bag

and then they decide whether they should

let you have

what do you bring to the table.

That's how Ferrari works. You're not

allowed to buy Ferraris unless you go

through this list. And if you're ever so

shown to to flip them or sell them,

you'll never buy another Ferrari again.

So

I've got three boxes here and these

three suitcases contain different

amounts of money. One of them contains

$1,000. one of them contains $10,000 and

one of them contains $100,000. You're

going to pick a suitcase and you're

going to tell me what you would do with

that amount of money if you were

starting with that amount of money today

to build a scalable business.

So,

do we keep the money?

He wants to buy a watch.

I'm like, I'm feeling 100,000.

All right. What do we got?

Oh, I have $1,000.

So, do I get to keep the money? Is that

how this works?

Yeah, you can keep it. It smells smells

like money. Okay, so I have $1,000. So I

would um take the $1,000, put it in my

pocket, do nothing with it, and I would

watch YouTube videos on AI integration

into small businesses. And then I would

go to small businesses, and once I had a

specific integration that I would do,

which I would probably bet would be

around likely email list activation

because that's typically like fastest,

easiest money that most business owners

have, is their contact list. They've

got, you know, they've been in business

10 years. They've got, you know, 8,000

customers they've sold over that whole

time period and maybe a list of, you

know, call it 20,000 leads that they've

had. They never email them ever. If they

do, it's just like, here's our random

discount that we send once a quarter for

Christmas or whatever. And I would say,

hey, um, I will email those people and I

will uh get everything approved by you

and don't pay me anything. Just pay me a

percentage of the sales that we generate

afterwards. How's that sound? And that

offer tends to do well. And I know that

because I've done it. So, that's what I

would do. in the thousand dollars, I

would, you know, go buy Leila something

for a little bit of time so that she can

stay with me until uh I make the money

for my my email reactivation campaign.

See what I get?

I got the 10K.

Ah,

all right. We're going around the circle

here. Um, I like it.

I would find the person who would buy

what I was selling for the highest

dollar amount humanly possible, which

means I would probably go to private

equity companies. So, Alex gave me the

idea for Main Street. I I know that Main

Street businesses are like often cash

crunched, right? They don't have a lot

of money and they often cannot extract

enough value from a lead that I need

them to. So, Alex would need to find the

perfect company to do that and there's

lots of them or he would build his own

which would be great. I think in my

specific instance, I want to go to the

people who are already good at

extracting the most value humanly

possible. So, I'd probably try to go to

a private equity firm. And I would

What's a private equity firm?

It's basically a fancy way for saying

that people use their own money to buy

businesses as opposed to public equity

where people use the stock markets

dollars to buy businesses. And so,

examples would be like u you know KKR,

Carile, uh Cberus are some of the

biggest in the world.

So, they go around buying people's

businesses with their own money.

That's right. Yeah. Yeah. they find

entrepreneurs right about the point

where they cannot take it anymore and

they buy those businesses and then they

they grow them hugely and and and again

because I'm better at partnerships I

would want to go to them and I would

want to say and it really what's

interesting is I bet all of us are going

to be really similar the money actually

doesn't matter and so even though I have

$10,000 10x what Alex has it doesn't

actually matter because what I would do

still $10,000 is not enough for me to

make a couple million which is what I

would want to do with this so what

actually is the differentiator what is

the business model I choose? Who do I go

to sell it to so that I can get the most

value out of it? And with these PE

companies, what I would do is I would go

to them and they're buying companies all

the time. And so there's two ways to

sell to a PE company and I'd see which

ones I could get them to sign up for. On

one hand, there's something called a

deal sourcing fee, which is if you can

find companies that are in the niche

that PE companies want to buy, they will

pay you for sourcing the company. Um,

and I know this because I pay deals

fees. And so I would go to private local

private equity companies. You're not

going to be able to get to Cberus or the

big guys. So I would go to the ones in

my local neighborhood that you could

find by searching on AI to say local

private equity companies buying these

types of companies. I would reach out to

the GPS. Those are the general partners

of the company, the guys who run it. And

I would say what type of companies are

you actively purchasing right now?

What's your investment thesis and

dealbox? And if I could get them to

respond to me, great. If not, I'd

search, what do private equity companies

typically want to buy? what what is the

deal box or investment thesis of a

private equity company? I would find

that dealbox and then I'd play the game

of doornocking. I'd go to a bunch of

these businesses and try to find

companies that wanted to sell and then

when they tell me they want to sell and

I have a buyer, which is the private

equity uh company, the private equity

company will pay me either a percentage

of the sale or a flat fee for sourcing

it.

What might that look like in terms of a

percentage and dollar number? Yeah, I

mean, if you're like a a

non-institutional player doing this, I

think you would go to them and say, "Can

I get like 10k for every company that I

source you that's over a million dollars

in revenue that's profitable and within

your dealbox?" They'd probably say yes.

The normal sourcing fee is somewhere

between 3 and 5%. But you're not going

to get that when you're brand new. So,

but I like the idea of making 10K on one

deal to start. Then, what else am I

learning while I'm doing this? I'm also

learning simultaneously how do you buy

businesses? What type of businesses? How

do you find businesses for sale? I think

this is the highest leverage activity I

know how to do. Like I just I know more

how to buy a business that's already

making money and make it make more money

with a higher degree of certainty

because if it's already profitable, it

gets out of the valley of death, which

is where a company starts and never

actually makes any profit. And so I

would start there and then what would I

do for that? Well, the second that they

see that I'm good at sourcing deals,

there's going to be they're going to be

throwing offers at me. But what I might

do instead is go to those GPS and say,

"Hey, I'm pretty good at doing the

hardest part of private equity, which is

finding the deals. Why don't you guys

back me for me to find the deals for

you?" Maybe they'll invest in my company

for me to then run a private equity

firm. Or maybe they'll say, "Come work

for me, and then I can make a couple

hundred,000. I can learn what I think is

the best uh skill out there to learn,

which is dealm. And I can use my

leverage, which is knowing what a

company's worth and how to buy it using

other people's money in order to

increase uh my earnings. And that's

interesting. You'd both use the money

for personal things, probably just pay

your rent or take your

doesn't make a difference at that level.

And I mean,

no,

even the hundred is close to I mean,

it's more than 10 in one, but

yeah. And and this is just one idea. I

think there's so many things you could

do with one and

but they're all very similar in their

fundamentals

where you go to find some like the

leverage comes from going tapping into

existing networks. You find an existing

business and either you're selling the

business as the product or you're

selling the product of that business.

Right. Exactly. So you're selling either

way and all of it is promotion. You're

selling and you're trying to get a

percentage of upside. I'm getting a

percentage of because like to Cody's

point, a lot of mainstream businesses

don't have money and you're like, "Cool,

pay me on money that I make you and

they're usually very very generous with

money they don't have yet."

Um, same same for, you know, a deal that

we haven't made yet, I'll give you, you

know, a fee for those things. Again, it

depends on the timeline. If I have 30

days, then like

getting a deal done in 30 days will be

tough.

Um, but like getting a brick and mortar,

it's like probably do that in 48 hours

to get somebody to say yes to free money

for like no risk and I do all the work.

It's an easy offer. So again, I think it

dep that's where like the constraints of

the initial prompt is like how much

money and how much time. If it's a year,

it's like all of this changes. If it's

30 days and I have nothing, it's like

well then we want to generate as much

cash as we can in little time as

possible with no risk.

Yeah.

Daniel's about to invest in the S&P 500.

Right. Because

he's like, I take your your $10,000 and

I raise you. Yeah.

So I have 100,000.

So

he's leaving with it.

This this is a dangerous amount of

money.

Yeah. This is the worst case scenario

for most people because if you have a

thousand, you know, you don't have

money. If you have 10,000, okay, you

might get a cleaner, you might get an

assistant, you might do a few little

things with it. The danger of a h

100,000 is you can kid yourself into

thinking that you've got money. And it

will make your head spin how fast you

can blow through $100,000 if if you

don't know what you're doing. If you

give me a Formula One car and ask, "What

am I gonna do with it?" I'm gonna crash

it, right? if I can get it even started

in the first place. So, I've got to come

up with something that the first problem

that I have is I don't have the

knowledge. I don't have the network. I

don't have the reputation. So, here's

what I'm going to do. I'm going to

leverage Cody's. I'm going to go to Cody

and I'm going to say, "Cody, can I do a

deal with you? I would like to start a

business. I know you've got lots of

ideas that you just don't have time for.

I'm going to invest $100,000 as debt for

equity for 10%. So, I'm going to put 100

grand in and that'll come out of the

business at some point, but debt for

equity on 10%. and I'm going to do sweat

equity for 10% and you keep 80%. And

it's your idea and it's your network and

it's your reputation, but I'll be the

person who's heavily invested in this.

And the only condition is that as the

business becomes profitable, we can

repay the 100 grand. Um, and then once

it's repaid the 100 grand, either you

buy it or we can sell the business.

Now, what I'm doing there is I'm

basically acknowledging I don't know

what I'm doing. I'm acknowledging I

don't have the reputation. I don't have

the knowledge. um all I have is this 100

grand and I have a very strong desire or

will to be an entrepreneur. Now, what's

going to happen is that probably with an

hour of Cody's time per month, she's

going to be able to say, "Here's the

idea. Here's here's my CFO. Talk to my

CFO. Here's my head of marketing. Talk

to my head of marketing. Here's my

friend who's actually got even more

money and wants to invest." And she's

just going to like fire off a few emails

and she's going to love the idea because

it's her idea. And I'm going to I'm

going to work hard, right? And what's

cool is that when the time comes that

that business becomes valuable, I've got

one buyer on the table. Cody's either

going to say, "Hey, look, I'll buy you

out because it's only 20% and now I own

the whole thing." Uh, or we go to market

and Cody will know someone who can buy

the business and I get 20% of the exit.

So, but the key here is that just that

acknowledgement that the it's really

it's the knowledge, the network, and the

reputation that is the valuable bit. And

the money is a bit of a red herring.

And you're going to get Cody's skills

because you're going to be in her

proximity. you're going to get a little

bit of her reputation

at the end of that deal. I will then

have knowledge. I'll then have

reputation. I'll then have uh all of

those things will have leveled up for

me.

You know what else is interesting too?

It's really what you're proposing is is

something that I used to not like and

since have think and since think that

when you find the right ones, it's it's

really fascinating which it's a

franchise model. You're essentially

saying which is what you do when you

come to a franchise. If you come to

Resibrands, you go, "Okay, I have

$75,000. I don't know anything about

window cleaning. I don't know anything

about running a business. But I do know

that you know how to do it. And I know

that you have all these case studies,

aka proof of other people just like me

that have done it. So, I'm actually

going to pay you for this business for

the right for you to take a percentage

of my ownership forever in perpetuity.

Um, but I will teach you how to or you

will teach me how to run the business.

And so I think that's actually I I think

I used to think that franchises weren't

good for entrepreneurs because I am

relatively unemployable and I don't like

to be told what to do. But for people

that have never run a business before

like what you're saying is like I'm

paying you for the right to learn

because you have a proven system that if

I use it over time I have a lower

likelihood of failure because we know

the truth which is 90% of startups fail.

Most startups never make any money. you

pay for the right to maybe potentially

one day make money. And so I do think

stealing other people's homework is is

real and valuable. I

I wanted to ask you all a question which

I have an answer to. So I assumed you

would but maybe you don't, which is what

is the one thing about entrepreneurship,

wealth creation, finance that you think

most people undervalue that you you put

a a disproportionate amount of weight

on. So like for me, I can think of a

game in business. I think of business as

a set of games we're playing. I can

think of a particular game in business

that I don't think other entrepreneurs

understand the value of and I'm

wondering if you all have an answer to

that as well. Is there one game in this

game of business, one fundamental game

that you think most entrepreneurs

listening now don't appreciate and they

should from the entrepreneurs you've

worked and invested in and being one

yourself?

Well, I think I'll say one that everyone

here at the table will agree with. But I

think that brand and distribution is

still wildly undervalued. M

I mean I think that's the reason that

all of us decided to get into it is

because you just I mean at least I saw

just the wild discrepancy between cost

of of building brand and building

distribution versus the value of that

distribution and you know the the primes

the lunches the you know some of these

in insane zero to many billion dollar

case studies uh term huda beauty proper

proper uh whatever it is for yeah like

there's there's so many examples at this

point that it's almost trite um I still

think it's undervalued distribution,

which is building an audience that you

own

that has a high likelihood of of

complying with requests,

aka brand.

Yeah. I mean, well, I think that's a

very good one. And and the reason that

we know that it's so undervalued is

we're all offered things all the time

that do not I mean, I remember talking

to my president of my company, and I was

the former president of Mr. Beast. It

was interesting is he said like every

deal we looked at,

we almost regretted doing it. Like we

couldn't I think you and I talked about

this. We we we couldn't do a deal that

the other party fully understood the

power of our distribution upfront. We

almost had to like prove it, put in a

bunch of milestones on a later date

because the deal is so good. And I found

the same thing in the deals that I did.

Like we've talked about like I mean I

did a bunch of deals early on where I

bought businesses and they couldn't

benefit from distribution. All my

laundromats, my car washes, like it

doesn't matter that I have a big

audience online and so the leverage

wasn't there for me. So I think um I

think distribution and brand are huge.

Uh the secondary thing that I do not

think most entrepreneurs understand is

financial engineering. The richest

people in the world are rich if if they

didn't get it from daddy and mommy and

they didn't get it from uh investing in

third party companies. They got it from

um they got it from owning companies and

buying them over time. Like every

billion there is not a billion dollar

company that exists that hasn't bought

other companies. It doesn't exist. When

you say financial engineering, how do

you simplify that for someone that's 16

years old?

Man, understanding how to get other

people's money, to say it really simply,

like how to get other people's money,

which sounds a little scammy, except

it's not. You know, most businesses are

bought with the SBA loans, loans from

the government that allow you to buy a

business. Businesses need lines of

credit. That's just money from the bank

for future state. So, like if you

actually understood how money and

finance works in your business, it's

harder to die because cash flow is what

keeps your company alive. And also, it's

easier to buy your competitors because

whoever is most funded wins typically.

Um, and so I think

I think more entrepreneurs need to

obsess on the thing that uh isn't the

magic. Like the magic is coming up with

an idea, having the grit, doing the

brand, doing the distribution. That

stuff's actually really really hard.

financial engineering is is modelable.

It's just it's the same every single

time. It's just been gatekept by by Wall

Street

money games. I I had this I had such an

epiphany moment when I was like 20 23 24

years old when my um a German group had

basically bought the majority of my

company out and I got to spend a lot of

time because we now had this German

office. So, I was there a lot and I just

observed this one individual who I shan

and I I I'm there building this business

and pitching to clients and doing all

this hard work and I met him and he

says, "I don't want to do any hard work.

I just want to do deals."

And I was like, "Tell me more." And I

lent in. I'm like, "What do you mean

deals?" Cuz I'm like, "I'm not sleeping

here." And this guy looks like he's

sleeping like tremendous amounts of

hours. And he was like, "I just want to

play money games.

I want to be in the middle of the

transaction of the deal and taking

some." But then he's also when he says

money games is like leverage and

arbitrage

raising money against an asset,

overvaluing that asset and buying lots

of cheaper assets with the value of the

expensive asset.

And he made a lot of money doing exactly

that and almost never working cuz he

understood exactly what you're saying is

that really really rich people

understand money games.

Just how to use money leverage to make

more money.

Look at the Forbes 100 list. It's all

comprised of people who do financial

arbitrage in one way or another.

How do I go learn that skill? Do I have

to go work in finance?

No, you don't have to work in finance.

But I mean, the best business school is

always be in business. So, get into

business and then obsess on one like I

think it's like tiered. Bottom level is

like understand a P&L. Most

entrepreneurs don't have a profit and

loss statement. They don't actually

track their profit and loss statement. I

mean, we invested at a $60 million a

year year business. The guy didn't have

an up-to-date profit and loss statement.

It's incredibly common. I'm sure you see

it. you look at a bunch of businesses

too. Second level after a profit and

loss statement is do I understand where

my financing is coming from? All you

need to do to understand that is talk to

your bankers like do you have a bank

that will lend you money? Understand

why. Uh explain to them what you do and

see if they understand it and how much

money they'll give you. And then the

third level of the game is go and talk.

Every like learning that needs to be

done is just getting in the room with

other people who have their Tuesdays are

like your dream days. So I think you

know you want to get in a room with a

bunch of people who are doing deals.

That's how you do more deals.

When I um I told you earlier we were

talking about psychedelics before we

started recording.

Yeah.

Um when I left my last company I had

that year and a half where I invested in

this massive psychedelics company and it

was the pandemic. So we're working from

everyone was working from home. I was

working from the billionaire's apartment

in London. And I got to see in the

leadup to the IPO he did 10 IPOs a year.

So I got to sit in his kitchen and he we

used to work over there and I just got

to see what was going on. And all he was

doing was making phone calls to people

with lots and lots of money and he was

giving them access to the IPO before it

IPOed at a valuation which we all knew

was going to 10x. And I just thought, oh

my god, like this is how rich people

make money. They have some kind of

access or arbitrage and they move money

around to capitalize on on these

multiples. And I thought, [ __ ] hell,

like that's

that's the game.

Get around billionaires. I know it's a

crazy thing, but you started a podcast.

I've done a podcast. Well,

I'm slightly older than you guys. Like,

I remember before the internet, before

YouTube, before all of this sort of

stuff. There was no access to the this

information. You couldn't get this

information. And now you can you can

listen to podcasts. You can chat to chat

GBT. You don't even have to get in the

room and like it's it's all on the

internet. And it blows my mind because I

remember a time before that. I I love

what you said. I totally agree with what

you said. I'm going to go with um the

one game that most people don't

understand is bananas.

That's the end of the podcast.

In lesson one of every economics class,

they say if you've got 10 bananas and a

100 people want a banana, you're going

to have high prices and profit. Demand

outstrips supply. If you've got 10

bananas and only one person wants

banana, you're going to drop the price

of those bananas and you're going to

make a loss and your business is going

to go badly. And what most people do not

understand is that the whole game

relates to constrained supply and excess

demand. And if you can't constrain the

supply and create excess demand, you

won't get a profit. You can take

something like Google Maps, which

probably costs 500 million to set up and

and launch satellites and everything,

they have to give it away for free

because they have infinite supply. They

have they can supply everyone on the

planet with Google Maps. So, because

there's infinite supply, they just give

it away for free. But Google Ads,

there's a limited number of people who

can advertise on every search. So

because that's limited, the the price

goes up. So I have a client who saves

lives and they do first aid training and

they're an amazing person and they

literally save children's lives and all

this sort of stuff. And she's telling

me, you know, why aren't I able to

trade, you know, charge more money? I'm

literally saving lives. I'm a really

good person and I'm very valuable. I say

because the whole game, no one that

that's not the game. The game is demand

outstrip supply. So you need to

constrain the supply of something and

you need to manufacture excess demand

and unfortunately as as much as you

might be the most amazing human being if

you can't manufacture demand and supply

tension you can't make a profit.

I was hoping and thinking someone might

say hiring

because for me my answer is hiring.

That's the first thing I go to. I

remember Richard Branson sitting me down

when we spoke in New York and saying

listen I built one of the biggest groups

in Europe and my CFO had pulled me out

of the room and said I don't know what

net profit is and he says my CFO got

crayons and a piece of paper and drew

fishes in a net in an ocean and said

Richard that's your net profit and then

they walked back in the room and he was

at the time running one of the biggest

groups in Europe.

When he said that to me, I was like,

"Wow." He was like, "You don't really

need to know much if you're a really

masterful delegator."

And he said I was a dyslexic thinker.

So, I was always forced from the very

beginning to just find someone to do it.

That was exceptional. And actually, the

further I've gone in my career, the more

just like you figure out like

the game, this game, that it's actually

just a couple of fundamental things that

sway the outcomes. Like most of the

returns come from like a couple of

things. In business, I've just come to

learn the further I've got that my

returns come from truly exceptional

people, binding them with a culture and

then setting them the sort of strategy

or more technical things that

I would agree with that. And the reason

you can find such amazing talented

people and so could Richard Branson is

because first he could create excess

demand for that role and then you could

choose from that list.

So I go back to when I was 18. I was 18,

broke, drop out of university, parents

aren't speaking to me, shoplifting food.

I managed to get a guy called Chris who

was running a business to

um stop his business. He was he was

double my age and successful to stop his

business and to decide to come and build

a social network with a kid who was

stealing Chicago town pizzas in

Manchester who had never built a

technology company before in exch I

didn't pay him in exchange for 30% of

the company. And this goes back to this

whole thing about offers. My pitch, my

offer at that time, I was trading in

future money, equity, and he believed in

the value of the future money. So I say

to kids all the time, actually, you

don't need to be in my position now.

You've all got future money. And the

future money is determined by how good

your pitch is. Yeah.

Your sell is.

But I think that goes back to that like

how I talk about pitching for money.

That's your mightest touch. You didn't

have profit.

You didn't have growth. You didn't have

a track record. What did you have? An

incredible [ __ ] story. Yeah. So if

you got nothing else but a story, then

you can hire people much smarter.

Exactly.

This actually brings me to a point that

I haven't told the world about yet. I've

just built something called culture

test. You can find it at culture

test.com. Essentially, the thinking is

that one bad hire, as I'm sure all of my

guests here will agree, can ruin your

business. It can ruin your idea. So,

culture test helps you figure out and

spot red flags and people you're

thinking of working with or currently do

work with by making a personalized

culture test survey and it scores that

person in terms of how aligned they are

to you and your mission. It has been a

gamecher for my business. We've culture

tested about 40,000 people. I just wish

I was doing this before. Check it out.

Cultureest.com. Make your own culture

test. Use it and thank me later. Alex,

you you've got this book about to drop

called 100 million money models. What is

the one money model in this book that's

added the most to your net worth?

So, it's more the concept. So, like each

of the the so offers had the value

equation which is kind of the core

concept that the book was built around.

Uh the lead's book was about the core

four um the ways to promote anything.

And so, $100 million money models is

about client finance acquisition which

is fundamentally how you get customers

to fund your own expansion. And so Cody

said this earlier, but depending on the

source, it's roughly like 80% of

businesses fail because of uh poor cash

flow or they they just don't have enough

money, right? And the other 20 is

probably just people just give up. And

so as long as you don't give up, the

reason you go to business is you just

don't have cash flow. And so that book

solves cash flow, which is why the sub

headline is how to make money, which is

pretty pretty on the nose. But

fundamentally like each of the examples

that I had in my business um and I

define that within client fun

acquisition as I define it when you have

like a $100 million money model is that

you're able to get a customer to pay you

twice as much as you spend on them in

the first 30 days. And by doing that the

the more specific equation would be that

your 30-day gross profit from a customer

exceeds two times CAC plus COGS meaning

CAC is in cost of car customer plus cost

uh COGS which is cost of goods sold. So,

how much does it cost me to get them?

How much does it cost me to deliver

them? Times two. If I can get that from

one person, then for the rest of my

expansion, all the customers finance the

acquisition of the next customer and

then cash flow is no longer a constraint

of the business. You'll still have

constraints, you'll still have supply

constraints, you still have hiring

constraints, you'll still have other

constraints, but cash won't be one of

them. And so, as a result, you can grow

B pretty much as fast as you can handle.

And so, that is how I've grown all the

companies that I've started without

funding and been able to grow very fast

in each of them um is with that core

concept.

Thank you. Thank you for uh choosing to

be here today. And I invited you here

because you're the three people that

guide me, that I listen to, that I think

have the most credible, important

information that can guide my audience.

And I know who they are. They're people

that want to improve their lives in some

subjective medium to that the northstar

that they have. And you all represent

different perspectives and also

different strategies. But there's so

much so many overlaps that I think

actually getting three people like you

around the table to understand where we

overlap and where you think the same is

incredibly powerful. Um, I highly

recommend everybody goes and reads Cody

Sanchez's book, Main Street Millionaire,

how to make extraordinary wealth buying

ordinary businesses, which is really

what, you know, one of the things Cody

has pioneered the idea of um, and made

accessible to the masses because most

people didn't think you could do that.

So many of my friends are now buying

boring businesses, as Cody says, because

Cody has laid out a framework to do that

and to create wealth in this book. And

my favorite book of Daniel, if I was

over subscribed, how to get people

lining up to do business with you. And

there's so many that I could have chose

from, but also you all have YouTube

channels and your YouTube channels are

amazing. So, I'd ask my audience, I'm

going to link them all below, to go and

check out your YouTube channels. Um,

Daniel, you're just starting out on

YouTube. You're getting you're getting

your your feet wet in YouTube.

But, but Cody and Alex have been making

so much incredible actionable content. I

love one of your new your new formats

where you sit with someone and you sort

of redesign their business with them.

and Cody's been making some of the most

entertaining and informative content on

on how to get going with with simple um

companies and businesses for the longest

time. So, please go check out their

their work and go follow them on social

media. These are the people that I

admire the most in this space. And if

you like what we do here on the

Darvisio, you're going to love what they

do. So, thank you so much everybody for

being here, for being so generous with

your time and hopefully we'll do this

again sometime soon.

This has always blown my mind a little

bit. 53% of you that listen to this show

regularly haven't yet subscribed to the

show. So, could I ask you for a favor

before we start? If you like the show

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to your feedback. We'll find the guests

that you want me to speak to and we'll

continue to do what we do. Thank you so

much.

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