Inside The Backroom: Building Audiences, Playing Long-Term, and Selling For 8 Figures

Every mistake I have ever made in business was playing short term or not going all in on building an audience.

It's taken me several years.

I think I'm probably better than most at those two things. And I still say that those are my two biggest regrets. So for those of you who are still like sub $5 million in a business, I say every ounce of profit needs to be going into the area of building that audience. I had this moment where I saw all of the pieces that I've been working so hard on for like more than 10 years start to really come together. And behind me is my mentoring group, which is called the Backroom. The point of this is to grow businesses that are already in motion. Over 10 million. So into that eight figure mark. And we have like private equity groups over here that want to buy a business. We have investors in the group that want to help scale businesses. We're bringing in my Buddy who runs $100 million health and wellness company who's going to be doing some advising for the group. So that's what this is about. And what happened yesterday was there were a couple conversations, there were two conversations that just kind of aligned everything together. One was a panel that we did with some individuals who buy and sell businesses. And I saw for the first time that I can now see that opportunity. That is when I go out and buy a company, private equity group, like you buy a big company, you buy a Levi's clothing company and you apply the model that we all know of scaling physical products, brands, of taking digital marketing to old school brands and you blow up that business and then you sell it or you bring on a big equity partner that allows me to cash out from my billion dollars, that allows me to buy the Cleveland Indians. And I just, I saw it, I had a glimpse of it because there's somebody in the room right now who's working on, you know, a big deal like that, not quite the billion dollar, many, many millions of dollars. And all of a sudden it's becoming normal. It's starting to normalize. The idea of there was somebody in the group. I think I was the first in the group to have over $10 million exit. And then somebody had a $20 million exit and then somebody here in the group is about to have a 30 million dollar exit. So the numbers are starting to become normal here inside of the back room. And so all of a sudden I just had that glimpse of like I can see.

And the second thing is I started to put together, we call it the board, the advisory board, I have this group of people that I mentor intimately and it's kind of my most expensive in my closest network of entrepreneurs that I'm working with. And I bring them on the podcast, we feature them, we help them get exposure. And all of a sudden I saw how each one of these individuals is bringing so much value and to my life and to the people in this room and to the individuals who follow capitalism.com and I had this moment where I saw this big epiphany and it was this. We were at dinner, we took the partners out for dinner. And one of them advises Amazon presences, so they advise businesses who are on Amazon to help them optimize and scale. One of them is a financial planner, manages a lot of wealth for a lot of people. And one of them is basically a SaaS business for Amazon sellers. And I started to see, oh my goodness, the point is, the day is going to come when I acquire a business probably from this room that someone started. Somebody was watching a video like this, followed us, started a business, started to scale. We acquired it here in the group and then we handed it over to Mr. Optimizer. The SaaS company came in and started running their optimization strategies. And wealth manager had all of these rich people come in and fund the deal and fund the growth. And it was like, oh my goodness, I can see it happening.

We're baking something. And everything in me wants to force whatever the thing is that gets you to that hundred million or billion dollar deal. Everything in me wants to just force it and figure it out and know the how. But what I can sense instead is that there's something being baked, there's something percolating that if we just keep doing the right things for long enough and bringing in right people and hanging out with people with the right mindset who are on the right path for long enough, something great is going to get baked. And it might be in six months or it might be in 10 years, but if we keep doing the right things for long enough, there is something with all of this collective power being baked that is going to be bigger than all of us realize. And I don't know what that is. I have ideas, but I don't know.

What that is yet.

I know I can't force it, but I can see something coming to life. And it was just this moment where it was like all the highs, all the lows, all the lefts and rights, all the mistakes, all the false starts, all the failures, it was like, I can now. It was a moment where I could Connect the dots backwards, as Steve Jobs used to say. And that's a really, really good feeling when you feel like all of those bumps and all those things that got you here are heading somewhere.

And it was just a really, really fulfilling feeling. In the $10 million pyramid is the audience, which means that you either need to have product going out to those groups where they already hang out, or you need to have a message that.

Gets enough moms to rally behind you.

And to get you to stop thinking.

About product and start thinking about people.

And just connecting the two. And you have the best crowd in the world to be able to do that targeting. And when you realize that, you'll see.

10 new product offerings that'll be perfectly in alignment with your brand that are.

Not just mop, but it's completely something.

You'Re not even thinking of right now.

That you can go develop. And I would guess the bottleneck for you is seeing how you would take.

Something that you've never made work before.

And distribute it out through a platform, you know, because you know how to.

Go from, from 100k to 110k. But going from 100k from 200k is going to require you to do a.

New type of product that you currently are not developing.

So I say that 80% of really like the answer to everything is who. Even what you want to do with your life, it comes down to really who you want to spend your time with. Because we all know people that we could do nothing with and have a great time. So I say in masterminds like this or in mentoring groups, 80% of the value comes out to outside the room, and 20% of the value comes from something you learn from a tip or a tactic that someone shares. So, for example, there's someone who is teaching their wholesaling model here. And it was a really, really profitable strategy that is only being shared here inside the room. And that tactic or that tip is really going to make someone a lot of money. So that's great. But where the real value is is when that person comes off stage and goes to dinner with everybody else in the room and there's all these collaborations that happen and somebody is like, hey, I really like that model that you taught on stage. Who in your network wants to run that? I'll fund it. And they can use your intellectual property to be able to do that and we'll all make a whack ton of money. And then somebody comes in and is like, hey, well, you know, I know that I have this Rockstar project Manager who I'm looking to give a project to. Why don't we bake them all together and make that happen? So all of the value comes out of those connections and those opportunities that get created organically because someone shared an insight on stage. That was the 20% and the 80% comes from who they meet, go to dinner with, have some wine with, you know that I had a moment where I saw the culmination of my career starting to come together. It didn't happen while we were here in the room. It happened at dinner with some of the partners around my dinner table. We made up some wagyu sirloin steak last night at my house and we're all, all eating it. And we had that insight. And it came from that. It doesn't come from when you're being heady, trying to figure it out. It comes from when you're centered and connecting with other people that you want to do business and life with.

Life is almost always about who. And so 80% of the value comes from the people that you meet, not just from the things that you learn. I found that people who are starting their successful journey focus on the what or the how and really successful people focus on who. Because people, it's always about the person that you meet that changes everything. And so the faster you can meet the people that take you to that point, the faster you get the results that you want.

My strategy has always been kind of a three tiered approach with the engine being the business. Assuming that I'm making my money from the business, the business is the cash flow engine. That that is the thing that is.

Paying for my life.

That's the thing where I'm taking money off the table or I'm selling it. And so I'm getting a big waterfall that needs to go into a system. And that system at its foundation for me has a very deep security bucket. And the security bucket is like the foundation of this strategy. Because I know as an entrepreneur, the way I'm wired, like, I wish I.

Could be completely analytical and make my.

Decisions just based on data, but I can't. We make our decisions emotionally, we justify them logically. So for that reason, my security bucket needs to, like, I have a feeling that ultimately makes me feel either tense about the decisions that I make or it makes me feel free to make better decisions. And so I have numbers in my security bucket that need to be in place in order for me to feel like I'm free to make those decisions. And so for me, if there's not A certain number in the bank. I feel tense, actually. I went to my team earlier this week and I was like, this is the amount of money that's in the business bank account. This is how much money needs to be in the account for me to feel like we can comfortably run the systems and processes to grow our business so we have some room to make up. And I'm not saying that's right or wrong or good or bad.

It's just how I feel.

And if we don't hit these numbers, we get Grumpy Pants Ryan. And no one likes Grumpy Pants Ryan. No one likes hanging out with him. C. Money is shaking his head. No one likes Grumpy Pants Ryan. He makes terrible decisions. Right. So I keep a small bucket for what you might call speculative investing, fun investing. This would be me writing a check, which we talked about on the podcast, of $85,000 to one of our tribe members that I just believed in and wanted to back. I don't expect to see any return for that for the next two years, but it was fun.

I believe in her story.

I wanted to do it, so that was a piece of that. This would be when I buy a penny stock or I'm buying any stock that does not produce immediate dividend cash flow. So that like, 10% of your portfolio that goes into those speculative investments. So if you want to put it into crypto or you want to put it into. There's actually one of our backroom advisors has a crypto and a Silicon Valley fund, so his name's Kamal. He runs a fund that is started in just Silicon Valley investments, now has like, backdoor crypto deals as well. I've invested in his fund. Like, that's the speculative part of the portfolio that if it all goes to hell, it's fine. You have all this other cash flow, you have all this other tax efficiency, you have all this other downside protection, but if one of them goes to the moon, you're happy. So that's basically my model for investing. And I treat it like a waterfall, meaning when money comes in, it trickles into its respective bucket. And I'm just looking to build that as an empire over time. And that's basically my model. This is my favorite thing to talk about. And so one of the things I try to do is actively create those opportunities here in this room. So if you want any connections to people who do that, those relationships do exist.

Brian, go ahead.

Can you rebalance those budgets? You know, I should, but I probably only do it every few years. And mostly because.

The foundation for it only changes every few years. Meaning the amount of security that I need only changes every few years. Which, by the way, studies have shown that you never really feel safe. And done, the numbers just change.

But thankfully, they. They can change slowly. So I only rebalance them when I feel like I'm not making good decisions based on the emotions that I have about the money.