"I Run Two Businesses. Which One Should I Shut Down?" — Transcript

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1. 0:00Sorry. Now to your Now to your next
2. 0:01thing. I think that'd be relevant for
3. 0:02the
4. 0:03>> you. Thank you for clarifying. Um yeah,
5. 0:05so I guess that uh leads me the reason I
6. 0:08asked you that first question like um
7. 0:10you know, what would you do? But I just
8. 0:12in my head, I just kind of something
9. 0:14I've been thinking about doing. I
10. 0:15haven't done it yet, but
11. 0:17I guess shutting down the coaching
12. 0:19business, but I still love teaching what
13. 0:22I teach, but in a way that is I guess
14. 0:25more
15. 0:26interactive or done for you. So, for
16. 0:28example, instead of people going through
17. 0:30a course, which some people don't even
18. 0:32go through it,
19. 0:33>> Yeah.
20. 0:34>> uh giving them like an interactive way
21. 0:36of doing it. So, like for example, "Hey,
22. 0:38you know, you got to go find a product,
23. 0:39but um you know, there's a software that
24. 0:42I created that actually helps them find
25. 0:44the thing." Um so, I don't know. What do
26. 0:46you think of that? Have you ever heard
27. 0:47of anything like that where it's like
28. 0:49>> I've never heard of anything like that,
29. 0:50but I mean, I think you
30. 0:52providing more services to increase the
31. 0:54likelihood of someone's success is not a
32. 0:55bad idea. Just depends on cost.
33. 0:57>> Right. Well, I mean, now with AI you can
34. 0:59create software is pretty quickly,
35. 1:01right? So, I mean, like in my head, I'm
36. 1:02like, "Okay, I have
37. 1:04tons of knowledge and when how to do all
38. 1:05these things, you know, you put it in a
39. 1:08>> question should I add software to my
40. 1:09existing offering so that I can increase
41. 1:11the likelihood that people will succeed?
42. 1:13>> Yes.
43. 1:14>> Yeah, I think that's fine. I mean,
44. 1:15there's no if there's no real cost to
45. 1:16it.
46. 1:16>> but sell like you know, you always say I
47. 1:19give my best stuff for free.
48. 1:21Austin over here, he he gives his best
49. 1:23stuff for free and then he has his
50. 1:25syllabi AI software. So, I'm like, this
51. 1:27is that's a great idea where it's like
52. 1:29he gives all his stuff for free, but
53. 1:30then
54. 1:31>> They have to use your tool.
55. 1:32>> They have to use the tool. So, that I
56. 1:34don't know. That's I think it's a good
57. 1:34idea.
58. 1:36>> Yeah.
59. 1:36>> I have yet to see someone pull it off.
60. 1:40>> I'll be the first.
61. 1:41>> Okay.
62. 1:42I just I just look at I'm again, well,
63. 1:46hubris aside, right? Or you know, ego
64. 1:48aside,
65. 1:49I prefer to take bets where I think that
66. 1:51like you it's your life. You can do
67. 1:52whatever you want.
68. 1:53Um if I see that no one else has
69. 1:55succeeded doing something, then I think
70. 1:57there must be some fundamental
71. 1:58assumption that I'm unaware of or that
72. 2:00I'm making that is not true that is
73. 2:02causing all these people to fail. Like
74. 2:04what is it?
75. 2:05And I'll tell you what my theory on what
76. 2:06it is is that it is the wrong type of
77. 2:09avatar.
78. 2:10When you are promoting get rich quick,
79. 2:13get rich easy,
80. 2:15get rich passive,
81. 2:16you are attracting the absolute cesspool
82. 2:18of the internet, right?
83. 2:20I mean it
84. 2:21I mean it is, right?
85. 2:23Um
86. 2:24And so if you do that, you have to
87. 2:27there's so much effort that has to go in
88. 2:29to making a scalable offering. Also, if
89. 2:31you really do it right, it also won't be
90. 2:33profitable for a long time.
91. 2:35So,
92. 2:36it I take the position that the best
93. 2:38businesses operate on either side of the
94. 2:40barbell, which is either you sell
95. 2:42extremely expensive things to people who
96. 2:44are qualified to buy them and you try
97. 2:45and sell them, you know, as many times
98. 2:46as you can and keep them buying from you
99. 2:48as long as you can until eventually you
100. 2:50have the cash and the infrastructure to
101. 2:51be able to sell to everyone.
102. 2:54The middle is where everyone dies.
103. 2:58So, like my the first part of my career
104. 3:00has been all this and obviously we still
105. 3:01have the advisory practice, which is
106. 3:02here, but school sells $9 a month. How
107. 3:06can we make that make money? Cuz we have
108. 3:07a good business model, but like it takes
109. 3:08a long time and it burns capital in
110. 3:10order to get to a multi-billion dollar
111. 3:12deca-billion dollar company.
112. 3:14And so what happens is people are
113. 3:15under-capitalized try to pursue this
114. 3:16strategy but don't have the product
115. 3:19chops and so marketers make terrible
116. 3:21product people
117. 3:24because they only think about what they
118. 3:25can sell, not what they can deliver.
119. 3:29Like every marketer that I know I have
120. 3:31yet to meet a marketer that is a pure
121. 3:33marketer that still does their marketing
122. 3:35stuff and then has a software and then
123. 3:37is able to have an exit from it.
124. 3:40And there is a a graveyard full of
125. 3:43half-built semi-BS, semi-white label,
126. 3:46whatever software that never actually
127. 3:48accomplished anything.
128. 3:49Like you have to In order for software
129. 3:51to actually be software and is for
130. 3:52everyone because I feel like I get this
131. 3:54every every day.
132. 3:57Software is not valuable.
133. 3:59Like please write like software is not
134. 4:01inherently valuable. What makes software
135. 4:03valuable is the fact that it has high
136. 4:05gross margins
137. 4:06and when it's built right, it's sticky
138. 4:09and it's high revenue retention. And
139. 4:11when it's built even more right, it has
140. 4:12virality or some sort of growth loop
141. 4:14that's built into it. So if you have a
142. 4:16business of any kind that can grow on
143. 4:18its own, has high incremental or growth
144. 4:20gross margins for the product
145. 4:23and so I said growing margin, what was
146. 4:25the third one?
147. 4:27Thank you. And high revenue retention
148. 4:29you have an incredibly valuable business
149. 4:30whether you sell trash or whether you
150. 4:31sell software. It's just that software
151. 4:33tends to be something that can
152. 4:34accomplish those things. But the amount
153. 4:36of marketers are like, I have an info
154. 4:37business, I'm going to start a software
155. 4:38so that I can get a hundred million
156. 4:39dollar exit. It doesn't work that way.
157. 4:40That's why none of them do it. They
158. 4:41think that cuz they don't know how it
159. 4:42works.
160. 4:44You have to build a product that has
161. 4:45those components
162. 4:47and then in it of itself it will become
163. 4:48valuable.
164. 4:49But if you need to keep filling it up in
165. 4:51order for it to maintain a certain level
166. 4:52of revenue, it is not a good product
167. 4:53because people are churning out. It has
168. 4:55to be sticky.
169. 4:58And when you have this cesspool of the
170. 5:00internet, it's very tough because they
171. 5:01inherently jump
172. 5:04jump around over and over again. And
173. 5:05typically the price points that people
174. 5:06who come from the info direct response
175. 5:07world is way too high for someone who's
176. 5:10a newer person or a beginner to actually
177. 5:13be willing to keep paying even if they
178. 5:15haven't gotten results yet.