Jay Abraham 0:00
2d thinkers, just to put it in perspective, look at revenue minus expenses equal profit. It’s a very static way of looking at business. A little more sophisticated a 3d thinker, Brad looks at the yield we can keep getting and enhancing off of an asset. And when you start thinking at that level, you automatically have a competitive advantage to use either in more advertising, more bonuses, more sales commission, whatever you want to do. If you have a business in a desirable category, and your growth trajectory is much higher. If you have far less what’s called concentration risk, and you have a much higher LTV, you’re doubling your wealth every two or three years and your net worth, which is quite profound if you’re building a real, solid business that people would want to own.
Brad Weimert 0:49
How do you define value to the end user?
Jay Abraham 0:53
I don’t they do.
Brad Weimert 0:56
Congrats on getting beyond a million. What got you here won’t always get you there. This is a podcast for entrepreneurs who want to reach beyond their seven figure business and scale to eight, nine and even 10 figures. I’m Brad weimert, and as the founder of easy pay direct, I have had the privilege to work with more than 30,000 businesses, allowing me to see the data behind what some of the most successful companies on the planet are doing differently. Join me each week as I dig in with experts in sales, marketing, operations, technology and wealth building, and you’ll learn some of the specific tools, tactics and strategies that are working today in those multi million eight, nine and 10 figure businesses, life can get exciting beyond a million. Jay Abraham, I have yet to get face time with you, but your reputation precedes you. I really appreciate you carving out time to talk to that.
Jay Abraham 1:45
It is my pleasure, Brad. It sounds like you have a very quality audience of thirsty entrepreneurs who are insatiable for quality direction, expertise and and competitively superior qualitative direction. So maybe we can add some value today. Well, there are definitely
Brad Weimert 2:02
some crazy ones in the audience too, but I think that you’re largely right. So you have this huge, wild body of work around business in general. For the last five decades, you have done consulting for, I mean, fortune, 50 companies all the way down to 1000s of smaller entrepreneurs before we dig into kind of some background with you and how you got here. What advice do you have today for a younger entrepreneur that’s just getting started? Yeah,
Jay Abraham 2:36
so I can give you the Genesis, and it’s it is the genesis of my expertise and my my Accidental Tourist path and career, is that breakthroughs do not usually come from within your industry. Breakthroughs usually come from outside. As an example, fiber optics that transformed telecommunication wasn’t developed by telecommunication. Was aerospace, and it was borrowed FedEx basically used what’s called the Hub and Spoke check clearing process to to it’s what the Federal Reserve Bank uses so people don’t balance checks to get packages delivered by 10am either the ballpoint pen or roll on deodorant borrowed from each other. Rogaine came from pimple. Viagra came from heart. Pardon me, most successful baby buggy manufacturer, they do $400 million has collapsible wheels from aerospace. Breakthroughs come from outside. If you become hopelessly curious, we created 3540, years ago, something called Funnel Vision versus tunnel vision, because there’s a fallacy. Brad, everyone thinks best practices are going to be the breakthrough. Be all and and have all to give you performance superiority. And if you’re lucky enough to get an early window, an early adoption window, you might have three, four months access. But in this world, when any kind of breakthrough is being being disseminated as a profit instrument by some information marketer, not knocking it, but just a clinical reality. Sooner or later, everybody has it, and that advantage just becomes standard operating procedure. And if you do what everybody else is doing, a little better, you’ve got an incremental advantage. If you do it nobody’s doing. You understand strategy, business model, distribution, value creation, yield factors, reclamation of some cost and turning it into profit centers, you have a huge advantage. That’s sort of a protracted answer, but that is my answer
Brad Weimert 4:35
well, so let me dig into that. So the one of the challenges that specifically younger entrepreneurs have today, but really everybody is what you just said, which is that there’s so much information out there, and so if the goal is to get information from somewhere outside of your industry, how do you reconcile this idea of being broad versus being focused and paying attention to what. Target. Goal is,
Jay Abraham 5:01
well, the first thing I do is, why don’t you read the book? Not you, but rhetorically, anybody range by somebody Epstein, and it talks about the people are going to own and dominate the second half of the 25th excuse me, the 20, yeah, the 25th century. Or, excuse me, the 20, you know, 25 and beyond. Or the 20, you know this century, 21st century, are the ones that have the most range, because hindsight, insight, foresight aren’t going to carry you. So there’s many ways to do it. One way is allocate discipline time to force yourself to learn about things you’re not interested in, things that are outside your comfort zone. You can look at all the different categories that are popular, online product, service issues, anything from health, wealth, social, relationship, romantic, anything, and then look up the providers. Look up how they market, look up what they’re doing. Look up breakthroughs. Look up trends. Look up magazines. I tell people that if I lived in a major market and I wanted to really accelerate my knowledge base, every Saturday, Sunday, I would make it a point to go to any conference hotel and walk the the corridors and see what’s going on. And because there’s going to be 9 million different realities you don’t know about, I’d go ask if I could sit in watch, ask questions. See all the different realities, all the different industries, all the different ways people grow. I meet as many people as I can outside my industry. Ask them how they sell, how they market. They’re strategic, if they have a strategy or tactical belief. And I process all that and and comparatively, question, is there a breakthrough there that nobody else is thinking about? Is there a connection? Is there a correlation things like that?
Brad Weimert 6:46
I love that one of the things that you are seemingly very good at are overarching strategic movements. And what I will try to do in our conversation is pull out some tactical items as well, because you seem to be good at both, as you just articulated, yeah,
Jay Abraham 7:05
I mean, I would say I’m better strategist today. I used to do a lot of tactical stuff, but most of the stuff I do is strategy. But you know, maybe most people don’t understand that, if you change your strategy, you change your results, and most people’s strategy, frankly, as being tactical.
Brad Weimert 7:22
Do you think about the pragmatically? Let’s say you have a million dollar company versus a $50 million company, if you are trying to strategically shift or grow, do you think about the approach differently from a newer company versus an established one?
Jay Abraham 7:39
Sure, my stock and trade is what’s called revenue system optimization. I’m a catalyst that is very good at playing off of I’ll call Velocity and motion critical mass and just a lot of momentum. And that means a lot of leads that either are aren’t converting, a lot of buyers that buy once and could be mine. Many times, a lot of buyers have bought everything and don’t buy don’t have nothing else to sell. A lot of distribution channels that aren’t optimized. A lot of salespeople there. There’s variable performance. But if you’re, if you’re a small enterprise, and I mean, I don’t really do a lot of small enterprises, except we do a couple of, I do 4000 people together in Japan, because it’s a giggle, and we do it by translation, and they’re small, and they’re sort of fun to impact them and change their culture. But yeah, if you’re a small if you’re a small enterprise, the first thing I always say is, who’s already got access to the audience you want that you can you can establish a collaborative relationship much deeper than an affiliate. Who can you become co branding? Who can you become the recommended provider? Who can you get the ongoing endorsement? Who can you become an upsell, a down sell an entry level product for? Who can you be get? Who can you get to co sponsor webinars, things that give you a lot more yield for a lot, for little or no risk, time or effort. That’s an easy way to start. Then you look at what you’re doing, and you say, Okay, since most people aren’t going to optimize their how they target, who they target, what they do when they get the first interaction, whether it’s a lead or first purchase, a revenue system is composed of all kinds of interrelated factors that each advance and enhance the, you know, the next step. And there’s certain KPIs. Everybody looks at Brad, but there’s lots of what I call op eyes, overlooked performance indicators. They don’t so you’re looking for everything you can increase a small amount, years and years ago, and now Tony Robbins makes his whole business mastery at least starting grounding on this. I created a three way to grow a business model, which is really he calls it the 1010, 10, but it’s the essence of geometric growth. Working on the geometry of your business, if you would create, if you increase three factors in the business, 10% each, it’ll play out to be 33 and a third. Percent, which could double or redouble your profit. If you double your numbers, your number of buyers, your number your size of transaction, your frequency or utility value. Utility means, if you don’t have anything else to sell, you find other collaborative things you can sell. You can eight times your revenue. So there’s a lot of easy, simple, safe, rapid ways to explode performance. Also it’s you can 10x your bottom line, about 100 times easier than 10x in your top but most people don’t look at it that way. But this just sort of a rat tat. Tat response to
Brad Weimert 10:36
you, yeah, but that’s great. And so double clicking on that, drilling into one of those things, let’s take the last element here you can 100x your bottom line easier than you can 10x your top line. Can you give me a little more insight on that? Sure,
Jay Abraham 10:50
one of the more sophisticated things we teach is the difference between a 2d and A 3d thinker in entrepreneurial terms, and that we ask them to look at their business like a hedge fund or an investor. And if you look at your business like a hedge fund and an investor, a hedge fund has a portfolio of asset classes that are put into it, usually, and they are there for different reasons. They have different risk, different rewards or different yields. Most people don’t look at the performance of all the intangible assets they have in their hedge fund called their business, it’s very possible you’re putting a lot of opportunity costs, a lot of resource, a lot of time, a lot of effort and something and it’s very high risk, low yield, and you’re putting far less into something that’s much more higher yield, low risk, but you don’t allocate the right amount of attention, opportunity cost and resource allocation. So if you’re generating leads, first thing is, how many other ways could you get not just quantity, but quality, if you’re converting X, I’ll never forget this back in that and I go back so many decades, back in the in the 2000s when it was.com everyone would come to me and go, I’m getting 20,000 visitors, and I’m I’m converting 2% How can I get 40,000 I’d go, you crazy. Why don’t you try to go, two to four, four to six. I’m getting 30, $30 of sale. Why don’t you try to get 70? You know, I’m selling one thing. Why don’t you try to figure out all the other things they buy, before, during, after, even instead and compete against yourself. I go on and on, but it’s just thinking at a much more strategic way.
Brad Weimert 12:29
Brad, so functionally, what I heard is kind of increase LTV of the client, instead of trying to increase the volume of clients.
Jay Abraham 12:37
Well, I mean, it costs you. You have the biggest fixed time, effort, expense in bringing them in the front door, you have no real extra effort other than communication, in monetizing them and your worldview, how you think about the relationship with the lead, A buyer, a distribution channel, media salesperson partner is how you really optimize, on a on a perpetual basis, the yield you’re going to get. And if you look at this as your 3d 2d 2d thinkers, just to put it in perspective, look at revenue minus expenses equal profit. It’s a very static way of looking at business a little more sophisticated, a 3d thinker brand looks at the yield we can keep getting and enhancing off of an asset, a relationship, a lead, a brand and anything. And when you start thinking at that level, you automatically have a competitive advantage over everyone else, because you’re playing a game before, a lot more LTV, a lot more profit, either per transaction or per per computation period, which gives you an enormously greater amount of allowable acquisition cost to use, either in more advertising, more bonuses, more sales commission, more discount for a sale, whatever
Brad Weimert 13:59
you want to do, it’s important to think about because lots of people, when they’re figuring out a business, particularly if they’re bootstrapped, they’re figuring out a business. They’re trying to get the core USP to get delivered right. They’re trying to deliver one product. And specifically, if you’re doing paid advertising, to do this, the first goal is to cover the cost of the ad, to break even, right. And what you said for 2d thinkers is that their goal is pay for the ad and make some money. And that’s how they see the exchange. And the transition here in the 3d thinker is pay for the ad and think about all the things you can do to provide value, to increase the value of that relationship over time. That’s
Jay Abraham 14:38
one that’s one interpretation. It’s not one size fits all. You come from the real estate business. You know hard, hard asset lenders. You may not want to pay for the ad. You may find that by going deeper and not making any money on the initial sale, but having a very much more sophisticated revenue model that’s going to produce a lot. More ongoing yield. You can get your acquisition financed if you don’t have any any real capital or resources. It’s funny, I’ve had many clients when I was younger and they were smaller, saying that, let’s look at what the data really tells you. It’s telling you. I’ll give you an example. My famous story is I see on ice when we started, we bought a mail order product that was sold for $3 we were going to close it, but we started looking at the economics. Every time 10 people started out and bought a $3 jar of this, eight of them would buy another jar almost every month, forever till you came up with a cure for arthritis or bursitis. Four of them would buy another product every month concurrently to from the catalog, almost two of them would buy bulk every year. The bottom line was, every time we brought in three, excuse me, 10, $3 buyers. Even though two never even continued, we were making $50 profit every year on every one of them. And and we didn’t have a lot of money, we were able to go to the media and get them to run ads, and we would let them keep all the money, and we pay them more, because we got cash flow back very quickly. But had we been smart, we weren’t, we could have paid him $10 a lead, I mean, a sale, as long as I got somebody finance it. And if you got a hard asset lender, and you said, look, I can show you better yield better. I’ll give you double the interest somebody gives you. I’ll give you a piece of the upside. You just have to know your numbers.
Brad Weimert 16:30
That’s great. So the question I was going to ask is, different sized businesses, different size and shape businesses, entrepreneurs, at what phase of business. Do you think you should allocate the time to stop and think about the strategic approach to is the business model the most efficient model period? Well,
Jay Abraham 16:49
I mean, optimally, before you start, we’ve got, over my career, we’ve looked at all kinds of leverage points in business performance, and we have one. And it’s almost trite, because I’ve been doing this off and on for 3540, years, but we looked at what’s called the nine drivers. And I do more revenue system, the nine drivers of explosive economic or, excuse me, of exponential growth. First is strategy, change of strategy. Change the results. Have a strategy. Change your results. Next is marketing. There’s a multitude of other areas than the standard interpretation. Next is your business model. Next your distribution channels. Next is your value proposition. Next is your your relational capital. The next is, I don’t remember what they all are, and it gets to process, a system procedure. Then the biggest is your ideology, your belief system.
Brad Weimert 17:43
Yeah, I love that. And I mean, I ask because there’s just this consistent element of focus, where today, when your attention is driven by so many different things everywhere, I think one of the hardest things for an entrepreneur to do is just stay focused on the outcome that they’re after. But obviously, if your strategy is ridiculous, then your focus isn’t going to be of much value. Yeah?
Jay Abraham 18:07
Well, there’s also, I mean, I look at at, we, we, a lot of the things I’m all about are not original. I’m a synthesizer, but I’m a very good one. And I would say that that there’s a really great concept that I call the Akito School of marketing. It’s looking at the opposite of the problem and turning it into an advantage like keto, the martial arts methodology that uses the power of the enemy against each other, if everyone else is as diffused, if you can figure out how to be more focused, disciplined and and have sort of 3d glasses when everyone else doesn’t, or have a nuclear microscope when everyone else doesn’t, you’ve got great advantage. Yeah,
Brad Weimert 18:47
one of the things that you said tactically a few minutes ago was when we were talking about creating the strategy tactically, if you can just allocate a certain amount of time, every day, every week, every month, whatever it is to have an opportunity to look at the broad picture. That’s a tactical approach, where you can be focused the rest of the time and spend a limited amount of time looking at the bigger picture. You’re
Jay Abraham 19:11
good. You’re a good torque converter and translator for me. Thank you. Yeah, we used to do these massive seminars when I was younger, and once it were five days they’re very expensive. Once we gain somebody’s trust, probably the second day we had our staff, try to figure out we’d have maybe 800 people, and it was 1520 grand back then, so very expensive. And we’d have, we’d have our staff, excuse me, try to figure out, what do you what do you really folk? What do you really like? And so let’s say you like mechanics motorcycles and I like tennis. We would go to the bookstores and we get we would get non fiction books, and we would get magazines, and we would give you a book or a magazine on something totally out of your comfort zone. Take decorating, macro May, uh, ice skating. It didn’t matter. We. Make you go and read two chapters or two articles and come back to your table and report on one or two distinctions you realize had adaptability to your business. And everybody did it, but they would never do it if you didn’t, if you didn’t force yourself. We did one time, just as a daring experiment, and I think it still exists, and if you wanted, I’d give it to you. Give it freely. You put on your website. Because the only thing with it, we did a cheap program, like a grant, and it was called do something different for 13 weeks in a row. Every week, I gave somebody one thing to do different, to break their pattern. Totally called pattern interruption. First one, I think we said, look, every day you get up, you have a routine. You probably pee, because it’s pretty necessity. Then depending on yourself, you either take a shower, you got coffee or juice or tea or a smoothie. You go to your your your emails, you go to the investment or you go to whatever you go to. Maybe you eat, maybe you don’t, maybe you do something else, and you get dressed. If you don’t work at home, you get in your car, you go on the bus, you go on the train, on your bicycle or your scooter. You go somewhere. If you work at home, you get right to your desk. And we said, do it differently. You know, obviously Pete, but everything else. Do it opposite. If you work, don’t take the highway, even though it’s faster. Take the side streets. Pay attention to break your your rigidity. And we had a bunch of things like that. And it was fascinating, because if Tony will say it, unless you change their their environment, he says it differently, you got to change their state to get someone to see their world differently. And if everyone sees their world the same as everybody else, at very, very best, this is a reality. I learned very early in my career, all you have is a minor, temporary, incremental advantage. And I’ll tell you one other thing. You’re not going to ask this because you wouldn’t know, but I’ll tell you this because it’s pretty profound, and I’m not trying to dominate, but I’m trying to add as much value in the limited time brand. So I got started as a marketing expert, and I was very far ahead of everybody for many years. I don’t purport to be a digital marketer or social media guy. I’m much more of a business builder in the more holistic sense. But after a while, I realized something I thought, quite profound, and this might help, because off line, we were talking about the difference between an extended promoter or promotion and a real business. I realized that as great as marketing and advertising are in the process of generating initial revenue, they’re very diminishing resources. They last for a finite amount of time. They either get saturated. People emulate, plagiarize, worse, they innovate. Can
Brad Weimert 22:43
I interject real quick to define those terms for people? So you mentioned a promoter or a real business, and the context through which we were discussing this was sort of the ease of creating and grabbing attention for functionally, an influencer today. So it’s easy to, you know, spin up a social brand, and promote something, whether it’s an individual or a company, but it’s not the same as creating a long term, stable business. And that’s kind of the jump off point to this. And you were saying the promoter or the influencer you were just now when I interrupted you so pleasantly, was that you were talking about the diminishing return of that as an asset, or the lack of that being an asset. So
Jay Abraham 23:21
I realized probably 15 years ago that you can, I mean, because I used to be quite a good copywriter and quite a, I would say, a master level marketer. And I realized that as good as my marketing and advertising was, there are, there are myriad of variables you couldn’t control, saturation competition, you know, as as the as online became popular, you know algorithmic changes, you know, shifts and things like that popularity. You get a COVID, you can’t travel, you can’t do conferences, seminars. You can’t go to people’s offices or homes, and all of a sudden, all this great front end revenue generation is diminished. So I realized long ago that strategy, business model, distribution channels, very significant relationships, partnerships, endorsement deals, co branding deals, recommended provider deals, referral networks, and then masterful capability at converting sunk cost investment into profit centers was much, much more critical long term than just having temporarily great marketing or advertising. So
Brad Weimert 24:37
what I heard was the structure of the business and the strategy behind it is more important than the attention on the front end.
Jay Abraham 24:47
And the answer is yes, but yes, if you understand that that the same effort, time, properly invested, can. Eight wealth, as opposed to taxable ordinary income. And so we have a concept we’ve been teaching at a higher level at Tony Robbins people, and it’s called the hyper growth business playbook. And the concept, and this is too sophisticated for most, but I’ll let you torque it down. The concept is that it is is, first of all, is how to grow a business safely and predictably at least 40% a year, which is almost a double every every two or three years. But as I got into it, I realized something even more profound, if you have a business in a in a desirable category, and your growth trajectory is much higher as a percentage, if your profit margin is much greater as a percentage, if you have far less what’s called concentration risk, which means you’re not dependent just on Facebook or on just One offer or one partnership, and you have a much higher LTV, which is actually a killer, a killer sort of a stealth advantage, because you’ve got a lot more availability to buy the front end. Buy leads, buy buyers, pay sales people share with partners on the front end of sale, you can basically build a business that is sellable for many times more than the industry average. We we have a segment of a keynote that I did on this, and you look at the industry average is 3x and we’ve got all these businesses that sold for 8x 10x what it means is, while you’re doing this, if you try to build an asset, as opposed to just an ordinary income, lifestyle wise, you’re you’re doubling your wealth every two or three years, and your net worth, which is quite profound, if you’re building a real, solid business that people would want
Brad Weimert 26:56
to own. So within the creation of the business itself. So when you talk about your the wealth creation, what we’re talking about is the ultimate exit value of the business you’re building. That’s the context through which we’re talking about wealth right now. Is that accurate or or the
Jay Abraham 27:13
the higher value you create? So if you need to bring in partners or investors, you don’t dilute that heavily. So more we’re getting into more sophisticated areas. But you can take a spin on the book I did with Rowan and Rowan’s work, Roland Frasier, that most people try to start a business from scratch, and it’s got a one in 20 success rate in year one and a one in I don’t five or 10 in year five. Whereas you can find a business that’s already been validated five or six years that is really underperforming its potential, you get control of it for almost frequently, very little out of pocket. There’s 200 ways to finance it, and then you blow it up, and then you add more to it, and you build a little empire. You can do incredible things with a somewhat different strategic band.
Brad Weimert 28:03
So let’s tie this back to what you said before, because when you look at there, there’s a whole huge category, and we’ll go back to this term. You use promoter right? Whole huge category of entrepreneurs that are making decent money, and they’ve launched something, they’re getting attention, but it’s not really a stable business model, and a lot of them are doing it for lifestyle or cash flow, which is great. But the challenge here and your perspective along the lines of wealth building, is if you look outside of your model, or outside of your industry, of how other companies create long term value in the market when they sell right how do I get a higher multiple and apply it to your business model. It’s potentially a bigger lever for you than anything else.
Jay Abraham 28:45
Well, if you can, I mean, I always looked at it as you’re dedicating basically the biggest part of your date day for the rest of your life to whatever entity you’re involved in. You should want to get the maximum current and future yield out of it, and the same effort or less same time, or less same opportunity, or less same resource deployment, or less properly strategize, can give you more today, but an enormous more later, and that that more later can be more residual value, more assets that You can monetize different ways, and ultimately, something that’ll work a lot harder for you. If you want to keep it, you can get someone else to manage it for you. If you want to sell it, you’re going to have a ton if, you know, if you need it to fund your retirement. Just, I don’t think, I think there are a lot of young people that play and it’s not bad. I mean, I admire the ones that understand technology and all the, you know, all the online social media elements, I don’t very well but, but I think they’re playing a limited game, and with that intellect properly harnessed to a far more I’ll call it sophisticated strategy. That same intellect, that same effort, that same. Grit could be channeled into much higher leverage points that could build them wealth. And when you’re young, you don’t think about it. When you get to be older, I mean, I’m older than all you guys. You realize that what you know, I made it, and only in my latter years. I made millions and millions and millions and millions of dollars, but I didn’t really focus as much because I was hopelessly curious on equity. Well, when you get older, you go an ordinary income is gone. Those millions of dollars I paid taxes on them. I I wanted my lifestyle. I wanted my Ferraris. I wanted my turbo Porsches. I wanted my my, you know, first class travel. I wanted my private jets, and they’re really cool, but it’s a diminishing and when you get older, you go, wow, what can I do with wealth? You buy houses. What can I do if I had assets that would work harder and harder for me, that I work for them, and that only happens if you rethink your strategy right now. Yeah,
Brad Weimert 31:00
I love that. And for me, I think about this in terms of both things you just said. The first is rethinking the approach to the business for the and I think about it in terms of for the sake of exit, not because I want to sell, but because it’s foolish to build a business that is not able to be sold. And then I think about it in terms of where the money goes outside of the business. So what am I? What am I spending it on? What am I deploying it into? And it is, Am I doing something ridiculous with it, like, you know, a jet or a Ferrari or whatever, which, obviously, there’s some tax benefits to the jet thing, and those can work in their own way. Or is it going into an asset that’s going to keep doubling, tripling, quadrupling over time and not getting taxed as it does it, yeah,
Jay Abraham 31:43
well, it’s also, there’s a couple things I’m gonna I’m gonna unbundle what you said. And again, I’m thrilled that you’re good at talking down my more complex. And I think we talked offline. I started with smaller companies, and I got into more complex ones because they were got a lot of more moving parts. I believe every entrepreneur, and by the way, there is a decisive difference between an entrepreneur and a business owner, a proprietor, a proprietor is just basically that he or she is doing something that sucks economic oxygen out of a market, but isn’t really creating a unique value creation experience and distinction, and that’s a very long discussion that if I come back, I’ll be happy to do. But in the meantime, you need to know you talked about spending verse, verse, investing every moment, every decision you make, every action you take, every opportunity you explore, every waking hour of thought you do is an investment, whether you realize it or not, and and if you don’t know the yield you’re getting out of that investment, you are a speculator. Think about it. You know access to markets and investment opportunity cost is an investment. Time is an investment. An hour it at at Monday at at nine o’clock is where the hell a lot more than an hour Friday at at seven when you’re, you know, sitting watching Netflix or going in your Uber to dinner. But most people don’t understand that. I mean, the quality highest and better use of time is an asset. You know, your leads that don’t convert are really assets. We made more money for clients by fine by by having them sell that compete against themselves. I go on and on, but it’s if you’re very enlightened in how you think strategically, and you realize we’re all decision scientists. Brad, everything in life, 2% of what is this is sort of a very profound thought, and none of this is original. I was influenced. I think you may not know this, but I’ve helped over 1000 industries, but I’ve also helped over 300 world class experts over my career. None of them came to me for help with their expertise, but I had to learn a distillation of it before I could help them command more value pricing superiority. So I understand a lot of really interesting, soft things, and we’re all decision scientists. 2% of what happens to us in our lives are acts of God that we have no control of. 98% of the result of decisions we make or don’t, actions we take or don’t, factors, forces, principles, laws that exist, that are there for us to harness or be whipsawed by. And it’s a pretty profound concept. One
Brad Weimert 34:34
of the things that you said just now was something to the effect of 2% of the things happen in your life you have no control over. Truly, they’re world events, societal events, whatever it is, but 98% are a result of things you do. And here’s the other thing that you said or don’t do, and that little part or don’t do got swept away and amidst 1000 other. Ideas that you had, but I think that that’s a really important element, because people think about the actions they take, but they frequently don’t think about how the actions they don’t take impact their lives just as much. Can you give me a couple examples of how that has impacted your business or people you know,
Jay Abraham 35:14
sure, most people don’t understand that most hypothesis can be validated or invalidated with a relatively safe test. Most people don’t look at correlations and implications. I’ll give you a fascinating example. I’ve had many clients. I had one client one time that was the largest driving school in Japan, they were in Tokyo, and they had three big facilities. That’s the good news, the bad news, it’s a terribly shitty business. The only window of prospects is aged about 1819, to 26 finding them is very hard. They only want to really do one training program when all the dust settles that they make about $1,200 of gross profit on the training nobody wants to do defensive driving. Now that’s the first part of the problem. Second part of the problem is 50% of the of the people that get a license in Japan never drive. It’s a badge of honor. The other 50% half of them buy a car. 25% of the total. The other half just rent cars on the weekend, when I realized that, I said to the to the driving school that was making very poor money on their effort, opportunity, actions, deployment of resources, you’re in the wrong business. You should be in the rental business, because you’ve got the people that are going to rent for life. And we made a deal where we made a partnership with a rental company, and it kicked ass. But then I said, Why would you limit it to your three facilities? Why don’t you get control of that relationship and take it to every other driving school all over Japan? And mean, it’s just a different way of thinking, right? 9 million. I mean, I’ve done so many that it becomes just a hazy Phase II, you know, sort of a an obscure amount of case studies and success stories. But, I mean, we’ve done tons of that. I had a guy, similarly, we had a lumber Bill one time in South Carolina that I’m going to give you everybody, you can be great on your I mean, this is fun. You can be great at a cocktail party. So in in creating lumber, lumber that you would use to build something, you start with the tree, you cut the tree into boards, but it’s green and soft. The only way it turns into rock solid lumber is it has to go through a curing heating process in a massive kiln. Okay? And that kiln requires a lot of expensive energy. Energy is the singular biggest expense in lumber mill process. I mean, I’m just going to be fasting, because I’ll get to the end in just a minute. So, so the majority of of the people in a lumber mill doing this, it’s very difficult. You do it wrong, and you get a lot of of scrap warpage or sub sub standard lumber. You do it right, and you get a lot of double A my guy was better at reducing his energy cost, the biggest single cost by 30% in his lumber mill. He was getting almost all double A very little scrap. That’s the good news. Make it a couple million dollars a year as many years ago. The bad news is he could give his lumber to you in Austin, and you wouldn’t be able to accept it gratis, because the the shipping would be too expensive. With that simple realization, and that he had knowledge that 95% of his contemporaries, not competitors, but contemporaries, had we drew a circle around his realistic distribution radius, you know, 500 800 miles. And we went to every lumber mill in the world, and we offered to teach them and license them. His kilt drying process for $25,000 a year. We got 250 to do it every year they renewed. He’s making $6 million licensing it and $2 million using it. I mean, just figuring all the different ways that you’ve got value you’re not optimizing. And I’m talking about external, internal, you know, you know, I’ve, I’ve had people compete against themselves. So let me give you an example. You sell, hypothetically, a supplement for weight loss. Let’s be very honest. If you’re going to get a lot of people that don’t buy, you’re going to get a lot of people who buy. If you’re going to, they’re going to buy either ad hoc, or they’re going to buy on a subscription, unless you’re very unique. I don’t know the metrics anymore. You’re going to get three or four months and they’re going to stop. It’s delusional to think that that’s the only thing they’re doing. They’re probably doing other things. They may be doing other supplements. They may be doing portion control food. They may have a two. Trainer. They may be buying books. They’ll certainly do that after they stop with you. You’ve got the sunk cost in the relationship. You know, this person probably isn’t going to change his or her lifestyle the way they should. They’re probably not going to do the exercise, probably not going to change their their nutritional regiment. So instead of being an ostrich and saying, Well, I sold them a supplement, maybe I should go and spend a fortune in the lab and research, develop another one. You can compete against yourself. You could sell them porch control food. You can sell other supplements. You partner with. You can sell equipment. You can sell training. I mean, just thinking much more expansively. Brent,
Brad Weimert 40:43
so one of the things that I’ve heard you say is essentially the goal isn’t to optimize LTV, it’s to provide as much value as you can to the person you’re selling to, and that will take care of itself. Your follow up to that is that value is subjective. Through this situation, when you look at the weight loss example of somebody buying supplements, maybe the supplement isn’t the thing providing them value, and maybe what you need to provide them value is the meal prep, is the training, whatever else. How do you define value to the end user?
Jay Abraham 41:24
I don’t they do. We have a concept called mind of the market. First of all, people who’ve really studied me know that I created crap decades ago, something called the strategy preeminence. It is the ultimate strategic philosophy, and philosophical strategy should drive all your culture, your marketing, your advertising, your belief system. And it’s all about establishing your business in a role in the eyes of your market, as the most trusted advisor for life, the only possible choice they could turn to. And it’s got lots of elements to it, and the first is being able to articulate in words what people want to get closer to or further away from that no one has ever uttered. And if you put that onus on a copywriter, what he or she is normally going to do is probably use a lot of bullets and a lot of hyperbole and look for divine guidance up above. We created years ago, something called the mind of the market. It’s also called the amazon.school.com School of Business. What it means is this, let’s take a concept. Let’s take weight loss, because that has some interesting derivatives. So the first thing you do is go to Amazon, or whatever book provider you want. You look at the last three or four years of the best selling 10 or 20 books in the category. You’d look at the titles, the subtitles and all the chapter titles, because tragically, but truly, most books are sold by the premise and the promise, as opposed to the content. Then you’d go to reviews. You’d look at the zeros and the fives. I think, because I haven’t done it for about fives of the top, best ones, zeros are the worst. And when people are passionate, positively and negatively passionate, when they’re thrilled or when they’re angry, if you cut out the vulgarities and you think about it, anybody you’ve ever observed when they’re thrilled, they express that their delight in very, wonderfully elegant, very sinewy, very graphic, very metaphoric ways, when they’re mad. The same thing if you take out the you know what’s in the you know what’s and so you put the positives in one file, the negatives in another. Then you go to all the derivatives of weight loss. Why do you want weight loss? You want weight loss for fitness. You want weight loss for health. You want weight loss for a romance. You want weight loss for, for self esteem, you get all the books on that. You see the same thing. Then you go to all the discussion groups, and you see what people have said about things they got a lot of value, things they didn’t. People hope streams. Then you go to all your competitors, directly, indirectly, look at their reviews. You do the same thing. Now you got three big categories. One is the title, subtitles and all the positivity. Then you got the positive negatives that are commentary based, including on yourself. Now you do a hierarchy. Brad of the 8020 the most common ones you can use, use, synthesize them all together. Now you’ve got the ability to speak to the subconscious in ways nobody else has that’s a protracted answer to your question. That’s
Brad Weimert 44:24
amazing. It would also be the answer to, how do you create the mess? The best marketing message for a product, scripts,
Jay Abraham 44:30
bullets, emails, and I do it all the time, and it works better than any copyright. You know, maybe if you get a Gary Benson finger type, it doesn’t but it’ll out produce everyone we actually have. My daughter has a business that sells a little tool that helps you scrape all that or get ready to take it to market, but it’s infallible, but you’ve got to be able to now come back to your to your question you probably know Rich Scheffer, and maybe you don’t. Do you know I do? Yeah, yeah. So Rich and I, many years ago, did a very expensive seminar. We did six hours on the topic of value, and that value is not what you think. What you think value is, I’m giving you stuff that’s generated 50 or $100 billion of profit increases. To me, it’s the most valuable stuff in the world. But if I’m talking to lifestyle entrepreneurs who are looking for a better funnel, or they’re looking for a better way to get likes, or whatever it is what I just shared, which, even though it’s multi billion dollars of of of profound knowledge, could be worthless to them. So you have to align with what your audience values and how they articulate it differently than everybody else, because if all you do is another reiteration of the same rhetoric everybody else uses in their landing pages and their emails and their in their videos, and you have no advantage.
Brad Weimert 45:56
Yeah, that’s brutal. One of the things that I that I hear with you frequently is, and I think this is worth articulating, because from I want to hear about it from a marketing perspective, but you make, and I’m not saying that they’re not true to you, but you make bold claims around the importance of certain topics or ideas or strategies. Do you do that deliberately? Or do you just think that everything you say is profound?
Jay Abraham 46:27
Well, I think, well, give me a very specific example. If you can be a little more concrete, then I’ll give you a very honest and it’s a great question I’ve never been asked. So I’ll decide whether I’m arrogant, egotistical, conceited, or whether I’m being a great advocate for the power of the concept, because it’s two different things.
Brad Weimert 46:44
So well, I’ll give you, I’ll give you an example, actually, with somebody that we both know. So Ryan dice is a friend, and years ago, he told me that he was so careful in his marketing to not overstate something that he was diminishing the power of the message because he was afraid to make an absolute comment. So when you say something is the best idea that you could have, or it’s the most important thing in the world to you,
Jay Abraham 47:14
yeah, it’s so I don’t think one size fits all, and I have a great, a great contemptuous disdain for people who would have you believe that any singular thing they recommend is the be all and catch all. Have you ever seen a lot of women in a one size fits all dress? And I’m not trying to be discriminatory. One looks stunning for everybody else is too short, too long, too tight, too loose, I believe, in an aggregate hybrid that is very sort of bespoke formulation of strategy and the tactical elements that would drive optimum for somebody. But I have an advantage that most people don’t, and I would say this very, not arrogantly, just clinically. I don’t know of many people who have worked in over 1000 industries on the front lines of capitalism. I don’t know many people that have worked with the Tony Robbins and the and the Stephen Covey’s and the Stephen Mr. COVID. He’s in the Brian Tracy’s and advised them. I don’t know many people who have had leading edge companies in on five continents, and I don’t know many people that have gotten have developed 97 different proprietary methodological categories for producing exponential growth with almost no risk or investment. Are they absolutely the best? Maybe not, but are they universally validated, that they work almost everywhere they are properly applied and integrated Absolutely? So I don’t know if that answer helps or not.
Brad Weimert 48:49
It does, and I think that for me, there was, there was a both, I think it’s topically fun, but also I was curious about whether it was that you had seen it be profound for somebody, or you, you had seen it be the best possible thing for somebody, or if it was a deliberate choice to use that language in your marketing,
Jay Abraham 49:07
yeah, it’s probably, it’s an advocacy. It’s a heartfelt advocacy. I mean, think about this. I mean, most people know, I’ve helped Tony and Damon, John, the CO the, you know, the co founder of FedEx, was a client that, you know, the CO CEO of Keller Williams was a client, the guy that started Planet Fitness build it originally on my stuff, Chicken Soup for the Soul of my stuff, the number one company, the number one candy company in China, the number one specialty dating site in Europe, the number One. I mean, I could just go on and on. So it’s pretty good affirmation of the viability and the veracity of the principles, don’t you think, yeah,
Brad Weimert 49:50
100% but I know that you’re a very good marketer, and so I had this point of curiosity of if it was a strategic decision to deliver messaging with that. It’s
Jay Abraham 50:00
probably, it probably, I mean, it’s, it’s interesting. We’re actually doing some wonderful things now. Most, the only thing I really do now is most, I mean, I have lots of programs in the can and things like that. But most of my work now is with, is with companies 10 million and above that have resources moving a lot of moving parts, a lot of assets that I can catalyze, and they can pay a big enough retainer, and they’ll share upside with me, but, but we’re run, we run ads looking for deals all the time, and they’re very understated. They’re very clinically written. When I was younger, I think I was so not trying to be hyperbolic. I was just so enraptured with the power of these distinctions that I was so in my early stages, I had knowledge nobody else did. I’ll tell you the really fascinating history you didn’t ask it. We’re going to run out of time, so I’ll use it as an Epilog. So when I got started, I came from the mail order business. Back in my initial era, mail order was the only disciplined and highly highly analytical marketing business that existed. They understood variability, they understood testing, they understood risk reversal. They understood lifetime value. They understood allowable, allowable acquisition costs. They understood back end, front end. They understood upsell, down sell. Most people did not. I was a low level practitioner, but I was also the one eyed man in the land of the wine when I came into what then would be called brick and mortar, but it was the majority of the enterprises who did institutional advertising and had no idea, you know, what drove people to action, what drove people to buy, what drove people to loyalty, to refer all these things. And I understood it not because, frankly, in the beginning I was that intelligent. I was just the one eyed man in the land of the blind, and I was on a mission and a crusade to go don’t do it that way. Geez, you’re wasting such opportunity. And so I think in the beginning, my my aggressive advocacy was really heartfelt, because I saw how wasteful people would waste, opportunity, cost, effort, access, capital, human capital. It just drove me crazy if they were providers of significant value.
Brad Weimert 52:33
Well, as you said, we’re running out of time, and I have a lot of questions around that initial endeavor before we close, one of the questions that I’m curious about all the time with people that have spent a ton of time in consulting is, why do you why do you elect to spend all of your time on consulting and helping other people with their businesses, as opposed to building a behemoth company yourself?
Jay Abraham 53:02
Well, there’s three answers. One is, I’m stupid. Two is, I have hopeless curiosity, and I got I’m a poster boy for an adult attention deficit. My concentration level on one thing is like a fly the title a a lobotomy. So I I made in the beginning, I was pretty immature. I came from very humble background. I always wanted nice things. My parents were very loving, but they couldn’t afford even nice clothes. I had my my car. I lived in Indianapolis. First car I had, had all the rocker panels we lived it was terrible snow and salt was a piece of crap. Car. Always wanted nice things, and I was able, in the beginning on my formula, because I used to get 25% of the upside. I made more than my clients. And I was really not I didn’t have good financial literacy. So I had, you know, geez, I had, you know, I had Ferraris. I had I had classic Corvettes, I had turbo Porsches, I had 3e jag convertibles. At one time, I had everything I ever wanted, and I had plenty of money left, and I was not really of the ill to what assets until my last divorce that cost me $40 million and then I started thinking maybe I should thought differently about it, because I never spent all that I made and I gave most of it to my ex wife. I think that you it’s a bit building a business singularly is admirable, but it was just so much, so thrilling for me to be able to look at a business from a much higher elevation and be able to see all these simple but profound shifts that could be made in actions and strategies and and, and and. So I call it the game plan, and produce such mean. The successes that I was able to achieve by just insinuating this different way of doing, thinking, actions and transactions, was, I mean, it was profound. It was profound. I mean, you know, we did, I see on it grew. We did Entrepreneur Magazine. It grew. We did all the financial newsletters grew. Guy that’s the CO influence in agora, was a mentee of mine. We did all these things, and it was just so much fun to move beyond things. And if you can, there’s no such thing as really multitasking, but I was able to have my hands in, you know, 50 things at a time, and people are paying me 100 grand a month from here and 50 grand a month from there. And it’s pretty fun. I mean, it’s, it’s if you’ve never been, if you’ve never had that kind of intoxicating capability experience and result, it’s hard to express, but I would say that if you’re going to be in a single business, play the game for optimal strategic outcome, why be content with short term, you know, a nice living or maybe a superior income, when that can perhaps diminish, if you shift Your strategy, you’re building this asset that could be, maybe not unimaginable in its value, but it can be a vehicle you can use to acquire others, to create income you can then deploy to real estate or some other appreciating asset. I just think, yeah, I think you’re right for me, I was just always just enraptured with so many things, and I, I was able to formulate methodology that was so universally translatable. I mean, you wouldn’t believe the 40 or so clients that I serve today. I mean, it just amazing. Yesterday was the logistics company that does Grumman and and all the aerospace companies. The day before, it was a guy that is the number one trainer of high level presenters in the investment field. The next day, you know, I’ve got the number one psychiatrist in all of Asia. The next day. This is very, it’s, it’s, if it’s a whole different world than frankly, Brad, most people are introduced to, you know, I’ve helped everybody from you know, I’ve helped you know, the publisher of success, the publisher of entrepreneur, Anthony Scaramucci, as I said, Stephen Covey. And I’ve done around the world. It’s very intoxicating, but I wouldn’t recommend it to most people, because it’s the equivalent of walking a tightrope without a net across the Grand Canyon. The expectation that people have of your of your prowess and your and your capability is off the chart because you charge a lot. Most people don’t come to you with easy problems. They have complexities. They have Gordian knots. You need to untangles. I love it. It’s very adrenaline driving. It’s a lot of Tony calls it juice, but I wouldn’t recommend it to most people, because it’s very intense.
Brad Weimert 58:17
Yeah, I believe that. I think that that’s a great answer, and I think you articulated it well. Well, I know you’re, I know you’re pressed on time, if you I’ve got a million other questions, and perhaps, perhaps next time you’re in Austin, but in the meantime, where, where do you want to point people? Where can people find out more about you if they want to dig in? Yeah,
Jay Abraham 58:38
I mean, it’s, it’s our website. I don’t even pay attention. I think we still give a lot of things. We used to give 800 resources gratis, without even an opt in for 10 years. And all I wanted were people to share it, and they did. So I took them off. I think if you can, if you’re very ingenious, they’re still behind something, and they’re gratis. You can look for that if you’re large enough. I always am eager to talk to somebody and see what the collaboration can be, and they can get a hold of me directly at J, a, [email protected], but I’ll be happy if you want. I can find that program and have it given to you. You can put on your website. I don’t need to ever get somebody’s name because most of them are not an audience that I could directly monetize, but I’m happy to contribute and give you some of my books you can give away if you’d like. I mean, it doesn’t matter to me. If it helps. I
Brad Weimert 59:26
love it, man, well, we’ll we’ll post something in the show notes here and get something up on the beyond a million.com website to do that, but I greatly appreciate the time. It’s been a thrill talking to
Jay Abraham 59:36
you. My pleasure. I hope I’ve added value. I know it’s different than most people, but maybe that’ll be a catalyst to get people to think differently about everything
Brad Weimert 59:47
for sure. Jay Abraham, I hope you enjoyed the episode as much as I enjoyed doing it. I need your help. There are three places you can find beyond a million. The podcast itself, beyond a million.com. Which has some cool free resources and. Including a free course, and we finally launched the beyond a million YouTube channel. I would love it if you would go there and subscribe, and if you don’t want to, you still will probably enjoy seeing the visual content. Check it out, youtube.com, forward slash at beyond a million.
