This 3 Step ‘Offer’ Framework Makes $10,000 Per Month! | The Money Making Experts

0:00 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.

0:46 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%.

1:32 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. [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 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

2:18 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

3:04 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, 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. H 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

3:49 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

4:35 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

5:21 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

6:06 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

6:52 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

7:37 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

8:23 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.

9:10 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

9:55 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

10:41 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

11:27 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.

12:13 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

12:59 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

13:45 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

14:30 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

15:16 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

16:02 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

16:48 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

17:33 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.

18:19 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

19:05 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

19:50 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

20:35 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

21:20 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

22:07 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

22:52 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

23:38 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

24:23 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

25:09 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

25:55 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

26:40 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

27:27 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?

28:12 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

28:57 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

29:43 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

30:30 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

31:15 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

32:02 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

32:47 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

33:34 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

34:20 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,

35:06 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

35:51 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

36:38 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,

37:23 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

38:09 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,

38:54 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

39:40 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

40:26 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

41:12 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.

41:58 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

42:44 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

43:30 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

44:16 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

45:01 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

45:47 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

46:32 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,

47:18 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

48:05 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.

48:51 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

49:38 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

50:25 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,

…