#TBT - The 4 Step Formula to Success in Any Business w/ Mark Ford aka Michael Masterson

I was always out there looking for people and could never find them until I discovered the secret of the empty seat. When you have somebody mediocre in an important position, of course what you want to do is find the person, then slowly train them and integrate them. But if you do that, you're never going to find the person. The secret is to actually fire the mediocre person and put your business in peril.

Hey, capitalists. In traditional Throwback Thursday fashion, we're re releasing one of our most popular episodes that we've had on capitalism dot com. Enjoy today. I am very excited, privileged, honored to have Mark Ford here on the show. Mark goes by the pen name Michael Masterson and that was the author of Ready Fire Aim, which was a book that really changed my life and it also served as the foundation of my 12 months to 1 million strategy. I modeled it off of what was published in Ready Fire Aim and as a result, that's been viewed by 1.4 million people on YouTube. It's created tons of millionaires. It's really changed a lot of lives. But it was modeled off of The Ready Fire Aim formula, which is about going from 0 to 100 million in a handful of years. I boiled it down to going from 0 to 1 million in 12 months and it has been done a lot faster than that as well. Mark opens up a lot in this podcast interview. He talks about the four stages to 100 million. He talks about hiring good people along the way. And he talks about sales formulas to take you to a million dollars and to $10 million and why they're similar over a variety of different products, physical products, digital products, and even services. The formula stays mostly the same. Mark also opens up about his imposter syndrome, but which is really a universal imposter syndrome. Even those of us who have made millions and created millions of dollars for other people still deal with the fear of being found out. And Mark talks about that a bit in this interview. I also end the interview by asking Mark what he's investing in now that he is semi retired. And he's also the person who was behind a lot of investment newsletters. I asked him, what are you doing with your money now, now that you've made it and you're investing it and you're semi retired. And I really enjoyed his response because he talked about things that he was investing in for growth as well as things that he's investing in for cash flow, which is kind of what I am all about. I wanna give you a heads up that Mark's audio wasn't the best on this interview and it takes him a few minutes to really warm up and to get into the good stuff. So please stick with it. And I think this is one of the most valuable interviews that I've done here on Freedom Fast Lane. Whether you sell physical products, digital products, or something else, you're really going to enjoy this formula from Ready Fire Aim with none other than Mark Ford.

I am privileged. I'm excited, a little bit humbled and even nervous maybe to be introducing Mark Ford to you. Mark has had a profound impact on me because I based his four stage formula to be the context for which I created the 0 to 1 million plan. He authors under the pen name Michael Masterson and he wrote the book that I have gifted more than any other book called Ready, Fire, Aim. So, Mark Ford, welcome to Freedom Fast Lane. Thanks for hanging out with us.

Well, thank you, Ryan. It's a pleasure to be with you and your subscribers.

So, Mark, I want to go into the four stages to 100 million. But before we go into that, for anyone who has been living under a rock somewhere or maybe got into this game after you retired, would you give a little bit of background into your journey as an entrepreneur and a teacher to other entrepreneurs?

Yeah, I'd be happy to. But before I do that, I'm going to throw out a bullet to tell you that if I ever write this again, it may be five stages because Agora, the primary business I work with, has just hit the $1 billion mark.

Wow.

So maybe I'm going to have to try to figure out what the heck we did to go from 100 to a billion. Maybe I'll write an appendix on that.

Well, congratulations.

Thanks. Well, I started out when I was a very small baby. I always wanted to be a writer. My parents were originally writers and they had eight children and they became teachers. But I kind of put it away when I went to after I got my master's degree from the University of Michigan, I went to Africa for two years with the Peace Corps. And when I was there, I did a lot of writing. Actually. I published the Peace Corps newsletter there. And then when I came back to the States, I thought, well, let me give it a try. And I went to work for a small publishing company in Washington, D.C. that published kind of a business and economic newsletters about Africa. Not just Africa, Africa, Soviet Union, Eastern Europe, somewhere else, China. And I was on the Africa desk since I had been there and I was editing what I was just allowed to write and edit this newsletter In Africa. It was called Africa Business and Trade. At the time, I didn't actually know the difference between business and trade. I had to look it up. And having had a kind of traditional academic education, I never realized that. This newsletter was subscribed to by ambassadors, but mostly international business people who were all kind of conservative, pro capitalist, et cetera, et cetera, business people. And I was fresh out of the Peace Corps. I was still kind of a slightly changing socialist. And so I started filling that newsletter up with all this, you know, my theories about economics, which didn't go over very well with our, the generals, you know, the fascist generals and the international business people. And so we started getting cancellations. And so rather than lose my job, I knew I had to either change my social politics or change my job. So I decided to change my social politics and then started kind of figuring out how to give them the information that they really needed, which was basically basic economic and business data. So that was an experience and taught me a lot about communication and about what an audience is and something about publishing. And then after four years there, I was running the place after four years, but there's nowhere else to go. The business was probably as big as it could have gotten. And I got three job offers. One of them was in, oh, they were all in Florida, because I went down to Florida, Miami Herald, St. Petersburg Times, and working for a newsletter business in Boca Raton. And I tell a story about that, but I won't tell the whole story. But the bottom line is that I knew that Boca Raton represented making money and that the other two represented being a real journalist and getting a Pulitzer Prize one day. And.

I asked a kid whose only job in life was to fill up jet skis with gasoline and smoke pot. While he was doing that, I decided to let him decide because I didn't have a three sided coin. And he told me to go to Boca and that's what I did. And there I was a editorial director of a newsletter publishing business at the time that was run by an entrepreneur who was not really interested so much in publishing, but he was involved in business because publishing offered people limited tax advantages. There was basically tax shelter. So he was building a tax shelter business, but I was interested in publishing. And make a long story short, after a year or two, in less than a year, he realized that he liked me and he told me that he was going to help make me rich. And we changed the business into from a business that was about business publishing to an investment newsletter business. And we grew that from basically.

Less than a million dollars to about $65 million in about three or four years. And then that was 1987.

That's when $65 million was a lot of money, Mark.

Yeah, it was a lot of money. We were doing very well. We went from being well, we went into the newsletter. It's funny.

He taught me a lot about making money, more than anybody.

And one of the things we did is, this is a lesson toward some startup people, is we went into the newsletter. He had had a seat at the New York Stock Exchange and knew all about the stock market. And the investment newsletter business was in its infancy then, and there were all these gurus out there talking about ways to make money with stocks, and he knew more than all them put together. So we decided to focus on that. But since neither of us knew anything about marketing, we decided to. Instead of selling our newsletter for $99, we sold it for $39. And instead of coming up with our own guru or our own system, we decided to digest everybody else's newsletter. And so basically, the proposition was, look, why pay $99 for the six top investment newsletters? Went to $39. We'll tell you what they said. Needless to say, this worked very well, but it also made us very unwelcome in that community because we were cutting the price drastically and basically reset selling what other people were selling. I never even realized how unethical or whatever that was until, I mean, I just really was so naive about the business. But we grew very quickly. We stopped at that digest stuff as soon as I started meeting other publishers and could see why they would object to it and that we really didn't have any right to digest their information.

So, Mark, I have to ask, at this point, though, you have a product, you have this newsletter, you go from less than $1 million to $65 million in less than four years. You couldn't have just done that because the newsletter was so good. You had to have the sales process or something really dialed in. So what was the reason? What was the all spark there that allowed you to grow so quickly in such a short amount of time?

Well, I would say that, you know, that four years was a microcosm of ready, fire, aim. Ready, fire, aim. That book, when I talk about the four stages, was based on my experience there. There were actually two parts. We went from 0 to 65, and then in the next four or five years, we went from 65 to $135 million in a different area entirely in the merchandise area. And within both of those mega businesses, each business had 10 to 20 separately incorporated businesses that had slightly different or entirely different functions. So I was getting this enormous experience. And these were all startups. Basically, the only common denominator was that they were all done by direct mail marketing. But we were selling during those two periods of time. I sold everything from newsletters of every publications. We had a newspaper, we had magazines, we sold books. But besides that, we sold plaques, we sold watches, we sold TVs, we sold perfume, we sold. I mean, you name it. And then we did contests, and we did sweepstakes, and we did just about. So I had this very, very wide experience, and basically, I was following his lead. He, Although he knew nothing about direct marketing, there are two components about direct marketing. One is marketing, and the other is the copywriting. And I was a writer. And so I kind of figured out the copy side of things, how to write good copy, what good copy really was.

And how different it was than what all the experts in copy were telling everybody at the time. And so between, I think, my understanding of copy and his fundamental understanding of how to sell things, which was just like. And better than anybody I've ever worked with before, since we just were able to just grow things so quickly. And there was one period of time, though, I must say, during that.

Nine or ten years we worked together where there was a year where nothing would work, nothing worked. And just before, he had given me a little plaque saying, world's greatest marketing genius is something. I'm so happy. And I remember during that year, looking at that every day and saying to myself, God, you've been found out. You're for it. You really don't know anything.

Wow.

And, you know, and sometimes I would talk to him, and I felt like getting up. Honestly, I did, because I felt, well, we didn't found out, you know. And I remember he just kept telling me. It's funny, because he was. In many ways, he was a very. Kind of a ruthless guy, you know, he was kind of a. The direct marketing equivalent of, what's that guy, Gordon Gekko or something, in some ways. But in other ways, he was the most caring, loving person. He treated me like a son. And he just kept, you know, counseling me, saying, just keep doing the same thing. What we're doing is right. Just not working. We don't know why. Just keep at it. And I'll never forget that, because since then, I work. Businesses that I work with have gone into slumps like that.

What I remember now and what I tell People is it may be that what you've been basically doing is still right, but there's some little thing, some little ingredient that's not right now. But don't give up the whole program. Just continue doing it. Change little pieces at a time. And also the market itself is going to change in some way and then you'll come back from it.

Well, that is actually refreshing to hear because I think all entrepreneurs deal with some amount of imposter syndrome and the fact that you had grown so quickly and still dealt with feelings of doubt or wanting to quit. I deal with those emotions, those feelings all the time. So were there times with you that you were like, you thought about closing up shop and not growing to where it became?

Yes, many times. And you know, the imposter syndrome never goes away. And we could have a lot of fun talking about why that is. But. Yeah, but I think that what happened after that was that I, even though I felt like I never thought closing up for that reason because I always remembered that it was so, so kind of encouraging. It's not exactly the right word, but there was some part of my psyche that was deeper than the fear that was just saying, don't you remember last time you were feeling the same way. You were lost and yet it worked out. And that I reminded myself the second time I felt like that and then the third time and the fourth time. So eventually it's kind of like public speaking. You know, I don't know if you've gone on stage, but I always hated to go on stage. I still do. But after you've done it 20 or 30 or 40 times and it's turned out okay, your fear is still the same. It's exactly the same. You still think you're a fraud. Everybody's going to, you know, finally stand up and say, we know who you are, you're a, you know, you're an imposter. But you just remind yourself that somehow it's worked in the past and then you keep going forward.

That's fascinating to hear. Thank you for sharing that, Mark. Well, I mean, the way that I perceive you is you have basically boiled down the $100 million formula into a formula. So regardless of how you felt about it, the formula freaking works. So let's go there now. Would you walk us through a quick, high level summary of the four stage formula to go from 0 to 100 million in no time flat?

Okay, sure. Stage one is, I call infancy.

For the book, to.

Give it some kind of definition. I said that this is zero. To a million. But the actual. There are different ways you could do that. You could do it by the number of employees you have, or you could do it by the number of customers you have. But I chose zero to a million because I just thought it would be simpler for people to understand. But my point is that depending on the industry you're in, it might be not a million, but 100,000, or it might be not a million, but 10 million, depending on the size of the industry and what you're doing. But in stage one infancy, you're an entrepreneur and you're going into a business about which you know something, nothing. You think you know a lot, but if you've never actually been in the business.

Then you probably don't know the most important things. I always say this, that in every business, all that you can figure out from the outside by looking at a business is kind of important. It's not untrue, it's true. But the real secrets that make that business work are hidden. You just can't get them by looking from the outside. And that usually includes reading books from experts and even from entrepreneurs, especially when they become real famous. Because when entrepreneurs become famous, they never tell you what really happened. They just tell you the version of how they want to see themselves. And they were always so caring and giving to their employees, and they. So anyway, what I've always tried to do when I write is try to tell the story as truly as I can remember it. And so for me, every time I got into a new business and in these early stages with my first partner, we just didn't know the secret sauce. But because we were so good at pushing and trying different things and studying different outcomes, that we found out.

The stage one, the big problem is just that you don't really know what you're doing. You don't know how to make that profitable. First sale I call it the optimal selling proposition. Which means that your primary job in stage one is to find out how you can acquire a new customer for a cost that is allowable, for an allowable acquisition cost. And finding that out means what media, what product you offer, what price, what other offer considerations like guarantees and so on. The delivery and what kind of sales message you have to. All those things you have to figure out in stage one to sell this beginning product and not just bring in a customer, but bring in the customer that's going to have a good lifetime value for you, a valuable customer. You have to figure that out before a clock is running. There's three clocks Running at the same time. One clock is the money that you have. You have a certain amount of money to start out, and that's disappearing. The second clock is the faith that all the people that you're working with have in you. And then the third is your own belief in yourself. So as time is moving on and that money is running down. But it's not just the money. As the money is running down, your people are starting to wonder if you really know what the heck you're doing. And you yourself are. So that's the race. And if you can find that thing, that one sale that brings in cash flow profitably, then you've done your job. That's, of course, the problem with most entrepreneurs that fail is that the hardest thing in the world is to do what I just talked about. And the easiest thing in the world is to do everything else, from getting your office organized to having office protocols, to making the product prettier and better. And there's, there's all kinds of things. Making the product better is, I would say, the number one, a mistake that most. In most industries, listen, if you're making a rocket, this is an exception or a plan. You have to make that product proper. But in most, 90% of what we sell in the world, 95% are things we want, not need, and things that are not mission critical. So of those 95%, the biggest, I think, most common mistake that entrepreneurs make is they focus on getting the product perfect. Because they think if the product is perfect, then everything else will work out. But really, your first job is to find out how to sell something. And I always tell people, luckily I was in the merchandise business and I did a lot of merchandising. When people want to get in that business, I say the thing you should do is go to a flea market, start selling your product. Because there's so many things you don't know. You don't know if the product itself is attractive. Let's say you're selling, you're selling some kind of skin cream. You don't know that the name, the name that you chose for it is appealing. You don't know that the ingredients that you put in it are known to you, to potential customers, as being good ingredients. You don't know what size the bottle should be. You don't know how to price it. You don't know what words to say to sell it. You don't know whether you need to demonstrate it or you need to tell them some amazing facts. All those things you can find out for yourself very cheaply by spending 10 or 20 days in a flea market trying a bunch of different things. And by the time you got that done, you would have discovered two or three of those little invisible secrets I talked about that shocked you. You would have discovered that even though everybody else is selling their face creams for $29, you did best when you sold it for $299. So that's the kind of thing that this first stage needs to do.

So the primary job in that first stage is to figure out what the offer is that makes attractive enough to the right target customer. And that's all you need to figure out at that point. And that's the most important and hardest part of the process. Is that a decent summary?

I wouldn't say offer because people may misunderstand. I think you're using offer in a more general sense. I would say that you need to figure out what. You need to figure out your product.

How to some people begin with a product that's in existence?

It's much better if you can, in the digital world, if you can formulate your product as you're selling it. But you have to figure out at least how to describe what your product is. You know, your product could be a book, or it could be a course, or it could be. There's 10 different ways of saying what your product is. That just depends on burp. So you have to figure out.

What your product is. How are you going to talk about your product? You have to figure out exactly the offer. For me, the offer is the price, the guarantee, and the other terms of the payment methods and so on. Then you also need to figure out the actual sales copy. What exact words are you going to use to sell it? And then you have to figure out what media are you going to go to if you're in the digital world, are you going to sell it? Are you going to SEO? Are you going to do direct sales? And if so, what kind of are you going to have a gauntlet? All that stuff you have to figure out during stage one, it's not easy because it's so hard and because it's so critical. You need to use Pareto's law and make sure that you're spending 80% of your time on that and only 20% of your time on everything else that has to do with the business. Nothing. All the legal stuff, the accounting stuff, all that stuff that when you read these junky magazines for entrepreneurs, they tell you it's so important to do it in the beginning is completely Unnecessary, you don't need to do it. You're small, nobody's going to care and you can fix it later if you have positive cash flow. If you don't have positive cash flow, none of those things matter.

Yeah, I 100% agree and I just want to speak to those of you who are listening that sell on Amazon. This is one of the reasons why I get so frustrated when people say they have a quote, Amazon business because they're expecting Amazon to take care of this part for them. And it can to a certain extent. But if you haven't dialed in your sales messaging, your pricing strategy, your branding strategy, then you are at the mercy of other competitors coming in and just doing the exact same thing, but out pricing you or outranking you.

Your primary job in this stage is to figure out how you communicate what you sell. Connect that with the infrastructure of Amazon and you explode really quickly. It's why we've created so many million dollar success stories with this formula. So Mark, that makes total sense to me. Your primary job in infancy is to figure out what you're selling and how you're selling it and to get positive cash flow so that you can reverse that cock that's been running in terms of cash flow and faith. So when you figure that out, what comes next?

Okay, so stage two, I call it childhood is one to $10 million. And the main problem you're facing is that, yes, you know, you've got one product out there that's working, you're bringing in customers, but you know, there's a lot of cost of running your business. So usually the business at that point is not profitable, it's breaking even or it may be even losing some money. And the way to correct that and grow is to start to create both secondary front end. When I say front end, I mean, I guess all your people know by use those terms front end and back end.

Does that mean a second front end product when you say that?

Yeah, yeah. So by front end I mean I think everybody, these are the terms that Bill and I invented in 2000 and now everybody uses. I think everybody uses them. But in other words, you have products. Front end product to me is a product that you sell to prospects that are not customers to bring them in as new customers. And then back end is products that you sell to existing customers. So you have to do two things in stage two. You have to find another front end product and maybe even a third. But even just as importantly, you have to create back end products. Now back end products are much easier to do because a back end product is basically somehow a more exclusive, a more refined, a more sophisticated, a more whatever version of the front end product. And if you understand the psychology of selling, you'll understand that it has to be that. And that the way I tell people, the way I try to explain this to people, is that if you're bringing 1000 names a day or a thousand names, a new customers a week or a month or whatever it is, there's some percent of them, 30% of them, and let's say you're bringing them in at $30. There's 30% of them that want to pay you $300 for basically the same thing that they just bought. And your job is to give them a reason. They want to pay you that $300, they're not happy paying you $30. They are not satisfied as a customer excited about a new product infatuation until they spend over $300. So you have to find that 30% of your file and you have to market to it and you have to come up with a product that you can sell for $300 that's going to satisfy that group. And then there's another 10% that won't be satisfied until they pay you. Unless they pay you at least 1,000 or maybe even $3,000. And those people, again, they don't necessarily want anything different. They just want the thousand dollar version of it because they have or perceive themselves to have a much more disposable income. And we're all that way. And that's why some watches cost, some luxury watches like fossil watches cost $60 and some luxury watches like.

Richard Meehl start at $40,000 and go up to $600,000. It's because at every level of one's perceived disposable income, there's this need to spend. So stage two is basically taking what you know about selling and creating a number of back end products that you can sell to existing customers that will create a lot of cash flow for you quickly. That's pretty easy to do. And we talk about it in the book and elsewhere. I'm sure you do too. Then a little harder to do is find another front end product that's kind of like yours but with a difference. You want to go back to the same media, you don't want to go to a different market, you want to go back to the same market and you want to offer them a similar product at a similar price but with a different selling proposition. And if you can, if you can get that working. And this is even especially true if your first entry is a hit. What my old partner and I learned a long time ago is once we started having one hit after another, we had a problem because as soon as we put something in the mail, everybody else could see that we was doing well and somebody would knock us off almost verbatim. And so we would have a competitor. That was if we sold 30,000 subscriptions, they were selling 15,000 by knocking us off. So one day I woke up and said, why are we letting this happen? Why are we getting upsetting? We're sending them letters and stuff. I said, let's knock ourselves off. So the moment we knew we had a hit, we produced a near identical clone and then we got that extra 50% of the market.

Then the third person, he's not going to get 50%, he might get 10% if he's lucky. And you've absorbed the bulk of that red hot market by being number two. Like, I mean, literally we would do that in a week. And this is direct mail days, this isn't the, in the digital days, it could be done in 24 hours.

So basically it was a similar product, almost the same value proposition, but under a different name or branding. So that you would own the entire market.

Exactly.

Yeah. That is beautiful. I have a question for you and that's personally, I have struggled with a little bit of shiny object syndrome in terms of if something isn't hitting really quickly, I'll change up the entire strategy. So as a result, I have, you know, I might have four products that are singles rather than one home run. And that can make my life pretty chaotic. Or if one traffic medium or conversion medium starts to dwindle, I'll just throw my hand at a bunch of different things. I know I'm not alone in that, but what would you say to me or someone like me that is struggling with that ability to dive really deep into one of those sales channels or mediums?

When you say.

We'Re talking about front end products now, right?

Yeah, that's correct.

Okay, and are we talking about, are we talking about information products or are we talking about hard products?

Well, I'm in both industries, so they're both fairly relevant.

Let me try to give you, I'm going to try to give you an answer for both because it's a little bit different. So let's say hard, let's say that, let's take health supplements, something that I know something about. So you've created a supplement that's going to be that's going to help with benign prostate enlargement. And it's doing kind of okay. And then you have, just so I understand you, would the second product that just doing okay, would that be another prostate product or would be a pain product or a potency product or would it be that, you know what I'm asking?

Yeah. I mean my strategy would be to say, okay, who would be the market that would buy that? What else would that person buy? But if it didn't hit right away, I'd be like, ah, let's figure out another product. Let's figure out another product.

Okay, right. So let's stay there. So.

What'S the market for prostate? It's men 55 and older or their wives that are concerned about that. So those guys will buy prostate pain and potency. The three Ps, the big Ps for those guys. And then there are some other products that they'll buy as well. So what I would say is that in replicating, you're in stage two now, you've got one product working, but it's not really working well enough to roll out.

If you're in that market. The problem is in your copy. Your copy isn't strong enough. If, you know, just to say there, you know, that's a big market, by the way. We're talking about, in that market, we're talking about multibillion dollar market. So if you look at all the competitors that are out there, and there are thousands of them, you're going to find out that most of the products are selling for between 29 and $69 a month, let's say 95% of them, you're going to know that really is the sweet spot in terms of the pricing. If you look at the offer, what they're offering, the guarantees, everything, and you're pretty much where you need to be in that market. And yet your file size, your customer base is so much smaller then the problem is in your copy. So now you could jump from prostate to pain and maybe that would be your big hit and that's fine. But you're not going to fix the prostate thing until you get better copy. You really need to just try different copy versions until you find one that really breaks through. So yeah, you're talking about a real problem because now you're going, well, should I try another copy on prostate or should I try pain? Maybe I'll just be better at my copy with pain, you know, and maybe you will be. So I'm not going to like say that there's a definitive answer. But I think the thought process should be to recognize that so long as your offers, if the market is big enough and if your product has a unique selling proposition, it's working and you can see that you've done everything right. But it's not really bringing in the numbers that you want to make your business grow fast. Then you just got to focus on the copy. The copy is the thing. In direct marketing we say copy is the king. There's three things that matter. Media marketing, or they call them List, offer, four things and copy. But the list where you go to is pretty much defined everybody. You can eventually find out where the active market is, the offer too. You can see whatever all the hot people are, what their offer is. And you can imitate that too. Of course you can try different things. But in the beginning you don't want to. You want to your media and your list, you want to imitate what other people doing and the marketing in terms of the sequence, how they're setting that all those things you want to basically be imitating. The thing that is different is going to be your copy. And that's going to make a big difference. Now if you send good copy to a bad list, you'll get no response at all. So list is actually has the greatest effect and offer and marketing second and third. Copy is. Copy is a fourth. But in actuality, the reason we say copy is king is because. Because if you're a smart entrepreneur in the beginning, you're not going to get fancy with all those other three things. You're going to do them exactly the way everybody that's successful in market is doing them. You're going to see what they're doing. You're going to knock them off. It's not even knocking off. I mean, it's not like you're stealing paragraphs from them. You're just finding out whether the pricing. Do they offer? Do they say half price offer? Do they say buy one, buy two, get one, buy one, get two. That can make a huge difference in a particular market. You need to know it. And if 80% of the people are doing it one way, why would you try to do it another way in the beginning?

So when you say the list is what's most important? That of course might also be the Facebook target that you're going after. It's whoever the target market is that makes the biggest difference. I 100% agree.

Yeah. Where the prospects are. If you're in the wrong area, they're not there. So it's like trying to sell. I don't know. I won't come up with an allergy.

Okay. All right, so state stage one is all about figuring out what you're selling and how you're selling it. Stage two, now that you have customers, is selling more to those customers and releasing a second front end product that gets additional front end customers and continuing to build that out until you're at about $10 million.

Right. What is stage you want to get? I'll get. You want to get on the back end. You want. You may want five backends. And they should have. And they should. And remember the pricing, it's not the same price. You can have some backends that are the same price, but generally you want to get their commitment up considerably so that you can do that by continuity sales, or you can do by creating products that cost three to ten times what your current product costs. This works in everything you do. In every business, this will work. Even a service business, even a lawn business. I've shown people how to make this.

Work, Meaning you develop that customer experience so that they're giving you more money and then releasing more front end products.

You could be cutting people's lawn for $30. And if you cut a millionaire's lawn, you better not cut it for $30, you better cut his lawn for $300. And then give him super duper package of $3,000 a month and he'll buy it as long as you can figure out what you could do for him that he feels will be worth spending $3,000 a month.

Yeah, I completely agree. Beautiful. All right, so what does stage three look like, Mark?

All right, stage three. What happens in stage two can grow pretty quickly. What's happened there is you've created a culture in your business of innovation and speed. You've taught people how to come up with new ideas that are variants of existing ideas, test them quickly, and then roll out with them. And you've gotten so good at that that this next stage, stage three, which I call adolescence, is often a very fast growth stage. I mean, I must have been involved with two, three dozen companies at least that have gone from 10 to $50 million. And it's shocking. I mean, this usually happens within a three or four year period. It happens as quickly as stage one going from one to 10. You go from 10 to 50 in about the same like adolescence as fast growth, just as childhood is. And because you're now you have 60 to 100 people working for you that all they all kind of know what they're doing now. You know, they know how to drum up ideas, they know how to test them, they know how to roll out with them. And so the business is growing very fast. So the challenge in this stage three is that while you're growing your business, your marketing, your copy, your media people, all that stuff is you're killing it. The rest of your business, product quality, customer service, has been neglected because you've been a very entrepreneurial company and you have been spending 80% of your time on sales and only 20% of your time on everything else. So now what's going to happen is you're going to be generating a lot of problems in terms of quality of your product and quality of customer care unless you shift your focus and recognize that this is a stage where you have to bring in serious guys that are. I don't mean pencil pushers, I mean serious systems and organization people that are going to make sure that the trains run on time. And this is a lot of entrepreneurs make lots of mistakes at this point. Never bring in somebody from an Ivy League school. That's a complete disaster. They never work in entrepreneurial situations. Let them start their own businesses. But typically this happens because the entrepreneur is so intimidated by that side of his business that he thinks that if he hires an ideal E guy, it's going to make a difference. That's not what you're looking for. What you're looking for is somebody who.

Knows how to make people work harder than they want to work, who knows how to make protocols that make sense, who knows how to create programs that people can follow, and who also understands that as critical as his job is, and it's critical to the business, he's keeping the heart pumping. He's not as important as the marketing copy side. That's still the brain, but without him, your business is going to fall apart. So you need to bring in three or four people that are extraordinary people, superstars, who won't think that they're actually running the business. Because the way you kill a stage three business is you're so impressed with somebody like that who's getting everything so organized, you let that person actually run the business. This is what happens often when venture capitalists come in and take over entrepreneurial businesses. They put a person like that in charge, an executive, a competent executive, and those people usually have the business pretty much destroyed within two or three years, and then the original guy comes back and buys it back for 10 cents on the dollar.

So is the proper way to do that then to maintain the sales and marketing people at the helm and let the operations team that you're talking about button up those systems. Is that a better alternative?

I don't know. I don't know for everybody, but that's not the way I did it. I brought in those guys as CEOs, CFOs, and so on. But then I made the other guys the entrepreneurs. See, I believe especially as you get more towards the 50 million that you have to start, one great solution is decentralizing the company. So in our business, in my publishing businesses, I made the entrepreneurs. I had three or four, let's say superstars. I would give each of them their own product lines and I would call them a publisher and they're equal to a CEO. But the CEO is the central guy. And so they work as peers. The CEO helps them make their business run efficiently. They're not his boss.

If you make the entrepreneurial guys, especially that work for you, the boss of your CEOs and your CFOs, they're just going to destroy. They don't care. They're just going to subordinate. So everything will be running badly. They'll be yelling and screaming at your IT people and your systems people, because they don't. You need to care about that side of your business. You need to care about product quality. You need to care about customer service. And the only way that I believe that you can do that is if you have your cfo, your COO and your CEO at an equal status to your profit center executives. Call them what you will, your CEOs of your individual product lines.

So here's where I'm a little bit confused. You said that when you bring in people to run the show that are those Ivy League style or venture capital people, that the business often goes to the ground, obviously because they're not focused on sales and marketing. But you still mentioned that you need three to four of those people when you're around 50 million in order to make sure the business doesn't fall apart. So where I'm not understanding is where the balance or the connection is, where we still have those people keeping the business together, but it's still running like an entrepreneurial company.

Okay, I'll give you Agora as an example. So when we were at that stage, we brought in this guy, Miles Noren. He was an outside auditor. And we, after working with him, we knew that he could run like the accounting and financial part of our business. And we made him. At that time he was cfo. And then we had another guy, Darrell. We Made him coo. And so the structure, and then the structure was Bill and I were at the top, but we weren't. We never tell people too much what to do, but we were at the top. And then we had, we had three or four people that we called publishers each that had a group of. We gave each of them a group of like four or five front end products and 20 or 30 back end products at the time. So we had three or four people who were called publishers. And then we had, we created what we call the central services unit that had finance, customer service, it, you know, the various branches. And each of those divisions had a head guy. And one of those of those four guys was head of the four. Okay. And so the publishers had a collegial relationship, but they knew, because I made it very clear to them that they were not the bosses of those other people. They were colleagues and they had to work, they had to have a consensus, they had to do things together. Because at stage three, your main threat is not for your business to pull apart because you're doing a crappy job of everything.

You have to bring in people. On the one hand, you have to bring in these technicians who can make things run on time, but on the other hand, the technicians themselves recognize their job is not to tell the other people what to do. Likewise, your profit center managers, let's call them the people that are your intrapreneurs, that are running your need to be free to create whatever products they want, but they have to work reasonably with the people that are keeping the blood flowing, keeping the emails going out, making sure that things don't get shut off. The profit center managers, if they do something that screws up the customer service or the outflow of mail or what have you, they know I'm going to be very, very upset about it, especially if they ignore the warnings or the advice of people on the other side of the business.

Got it? So you have individual product owners that are the CEOs of those divisions and they work alongside a central team that does the boring business stuff, that makes sure that everything else doesn't fall apart. Is that correct?

It's very correct.

That is awesome.

And I tell these profit center managers every day those guys are just as important to me as. You don't think you're better just because you're bringing in the money and don't think you're better just because you're making more money than them. The reason you're breathing is because they're making the oxygen machine work. So don't you know, don't get on your high horses. I think it's very important if you want to have a quality business at that level, to keep that balance between the entrepreneurial side of your business, which is growing like gangbusters anyway, they can't stop themselves. Now you've got the young bucks. These guys are telling you what to do now. They know more than you do. And so you've got to find a way of holding them down and taming them. And so that's why it's so important that the people on that other side, that left brain side of your business are very good, they're very smart, they're confident, they can talk to the entrepreneurs, not be intimidated, and also not try to restrict their creativity.

Now, Mark, a lot of this assumes that you can find really good people, which we like to talk about in theory, but that's a beast all in and of its own. So would you comment on finding really good people that indeed are better than you, that can tell you how to do things better than you could do on your own?

Yeah. Look, in every business I've ever been in, the.

Biggest problems that you have are always related to people. The people problems, whether they're products of a division falling apart, morale, product quality, when you dig to the bottom, there are always people problems. And people problems are messy. But the biggest problem or the biggest opportunity, I would say, in growing a business is finding superstars. And you're right.

Unfortunately, there's no place you can go that says, we sell superstars. And the trouble is that when you're a busy entrepreneur, and this was true of us, me and Bill, too, and it's true of my partner and I before that. You know, how important, eventually, when I was younger, I didn't think it was important. I thought I was a genius, I was a superstar, and that's all that mattered. But as the business started growing, when we got into that stage three and even up to 100 million, by the time our business at Agora got to 100 million, Bill and I realized it was all about these superstars that we had working for them. We just had to supply them with everything they need and they would grow. But finding them, the truth is that.

It'S almost impossible to go out there and find one. It's not going to happen. The reason, I mean, if you're already a $50 million business, $100 million business, it's going to be very, very hard to find one. If your objective is to continue to grow, if your objective is to Stay the same size and automate your business, that's different. There are people. Those people are much easier to find. But to find a superstar, entrepreneurial people, and the reason why it's so hard to find is because they were already working for somebody else.

Nobody fires superstars. The only people that fire superstars are businesses that are going to die within two or three years anyway.

Are you finding them through recruiters?

Then you can't get them for them. Recruiters. 90% of your superstars, you're going to get out of college. Look, there's a bottom line. You don't want to believe it, but it's true. You got to get them when they're young, because believe me, they show themselves from day one. Nobody wants to fire them. They want to keep them and they're going to bribe them. But I do recommend that you do everything that you can to get you make it part of your business, whether you do it yourself or somebody that you trust. Get out there and do everything you can to attract people. If you have a growing business like Agora now, billion dollar business, we have some of our publishers like Joe Schreiffer. I don't know if he is. He's superb at recruiting people because. And he can actually bring people over from other businesses. But he doesn't do it by. By trying to actually get them, like poached them. He does it by having these open forums where he brings marketers together and he pays to have people that are outside of our business learn all our secrets. He teaches all our secrets to everybody. And I approve of that. That's my philosophy, too. And in doing so, he just attracts a lot of people who, who are working for other companies, who are superstars themselves, who think, well, who would never have left that other company because they're already making tons of money. But they say, you know what? I really like this person. So there is a way of bringing people in that are not homegrown. And the way to do that is to be open, to be out there. When you meet a superstar, be very careful about what you say. You don't want to poach, but you should say, you are a superstar. You should be working for my business. We would be great together. And you just have to say that once at a cocktail party and then wait three or four years. And if you say that to 20 people, you're going to get two or three calls in three or four years, but you're not going to get a call within a year or two. When you put that message out There, but they'll never forget it. Other than that, the main way is you've got to bring people in in the beginning, and you've got to work with them. And if they're mediocre, you've got to fire them quickly. And if they're superstars, you'll know from day two. And you're just going to have to bring them up. And it takes a while. The superstars will learn three or four times faster than anybody else, but it's going to take them two or three years before they're at a certain level, and five or six years before they can start running the business. A whole division of your business.

Yeah. That's something that I've learned, is that people are the long game, and they're also what make everything. And so often I just need someone in this position. I'm looking for someone who is unbelievable out of the gate, and it is a very. It can be a very slow process to develop those superstars.

Yeah, you have to. You just remind yourself the time is going to pass anyway. Bring that superstar in now. Sure, if you get somebody better, great. But bring them in now and start teaching. The other thing that I only learned a long time, like a year and a half or two years ago, that has been a big, big help to me, is I always believed in firing 15. The Jack Welch thing, firing 15% of your workforce. But the truth is, I always found it hard to fire people. And let me express this right, I was always out there looking for people and could never find them until I discovered the secret of the empty seat. When you have somebody mediocre in an important position, of course what you want to do is find the person, then slowly train them and integrate them. But if you do that, you're never going to find the person. The secret is to actually fire the mediocre person and put your business in peril. Now you have an empty seat, and now all of a sudden, you're going to be working your butt off to get somebody good. And you know what? You will never replace that seat with somebody worse. In my entire career, I've never heard anybody I worked for say, gee, I wish I had waited longer to fire that person. Has that ever happened to you?

No.

Fire anybody and say, gosh, I wish I would have let that mediocre person hang around another year or so.

But I have never heard it said in the sense of that being kind of the secret for creating the space for the superstar to come in. I hear most people trying to turn poor situations into good ones rather than clearing up.

And I'm glad you said that because you're talking about how now I can't Everything I see, all the advice I see is advice I was giving 17 years ago. That's a new piece of advice that on your show.

Let'S call it. We'll name it something because in five years everybody will be able to sang it. It's the secret of creating the empty seat. The superstar will never appear until you know that great Zen Cohen, which is.

The master appears when the student is ready. Well, this is the equivalent. The superstar will appear only when the seat is empty. As long as the seat is full with mediocre person. Nobody in your organization is going to be trying desperately to bring the person in somehow. It's a magical potion.

Well, that's what happens. You get more gems when you spend more time on freedom fast lane. Mark, we're coming up on time and I still have one more question for you after we get to the fourth stage. But let's briefly hit on that last stage of going from a 50 to 100 million.

Okay, so 50 to 100 million is now you've got that good growth and you've got those people working with your executive team, your operational team. Well, everything's going smoothly. The challenge there is that your business is going to have a tendency to slow down. Because if you decentralize like we have and now you're at 50 million and you've got two or three people running divisions, everybody's kind of making a lot of money. Things are going smoothly. What's going to happen is that the business is going to. There's going to be tendency on even the part of your superstars. And this is true because this has always driven me to kind of slow it down a little bit themselves and to let the business cruise. Because all the problems in business, all the stress comes from trying to grow. Growing a business causes stress. And if your business is making plenty of money and you're making money, how do you make your life happier? You just stop pushing. And so that's what's going to happen to you. That's the natural tendency of your business at that level. So you just need to be aware of it. You need to be aware, be looking at these guys that are running your businesses and see if you can't gently encourage them to be a little bit more competitive. And there are, there are very good ways of doing that, most of which have nothing to do with what people say and then also introducing more people. So that there's other people that have an opportunity to move up to their level. You don't want your business to become like a corporatized at that point because there is a tendency to let things run as they are and grow 2 or 3% a year. So you have to do a number of things. And I talk about how to do that in the book and I've learned a lot more since I wrote the book about how to.

Regenerate within your business more of that entrepreneurial activity.

Well Mark, I so appreciate you sharing that with us. This formula has had a profound impact on me and countless other entrepreneurs. I just have one more question for you which is now that you have worked with several businesses over the $10 million mark and you have essentially retired. I know that your background was in investment newsletters and you consider yourself an investor now. What are you investing in now that you are are no longer active in a business?

Well, listen, I. This is the fourth time I've tried to retire and.

Actually I'm embarrassed to tell you that I'm not actually retired because Bill asked me to. He gave me. He has a project he wants to do with one of our global businesses. So I told him I would stick to it for another two or three years, four years maybe some I'm not actually retired but all my other. I've retired from working with all my other clients and all my other businesses. But I've been investing for a long time, ever since I was 30, 40 years. And I've written a lot about that and would be happy to.

Actually. I'll give you if any readers want to look at my. It's my private website. It's markford.net I'll be warned. You know, it's all the stuff I'm just coming out with. You're going to read poetry, you're going to read fiction, but you'll also read my stuff on productivity and also my stuff on investing. So my basic thing is I'll give you very simply invest in no load index fund. As far as stocks are concerned, it's going to be almost impossible to beat no load index funds. An index fund is a stock market fund that basically follows the stock market. The stock market has traditionally returned about 99.5%.

As a publisher of probably 500 investment newsletters, I can tell you that there are guys that beat the market, but there are not too many guys that beat the market over 20 or 30 or 40 years. Unless you just really love trading stocks and you want to spend full time doing that. You'd be better off putting that part of your portfolio to rest by investing in index funds. And the great book on that called the Little Book of Common Sense Investing by John C. Vogel, who's the head of an index fund. No surprise there. That will give you all the information you need on that. The other thing is that I love debt instruments. I love investing in. I used to love investing in municipal bonds when they were yielding 5%, but I do all kinds of.

Debt investing, like tax liens, and I do direct private mortgages. If you can get a collateralized return of 5 to 8%, that's fantastic today. And you can get it if you, if you know where to look. And I, and. But my, my single biggest area of investing has been real estate. Now I started out with, I think, a $10,000 investment in real estate. My real estate portfolio now is, you know, it's well over $50 million. And I've never, I've never done anything that I can even remember. It was just basically taking the cash flow from their first $10,000. But remember, this is over 30 years, but just reinvesting it in other deals. And then gradually you start off with tiny little single family crappy homes. But as years passed, you can sell off the less expensive and buy multifamily and eventually you can buy larger apartment buildings and so on, beginning good yield through much less work. And so real estate is really, to me, it's the single best thing that you can do as a secondary, you know, after, after your main business. It's the. Because you really can get return because of the leverage of real estate of 12 to 15, sometimes even more percent a year. And of all the real estate that I've done, the very best was investing in buildings that I then rented to the businesses that I had, because there you can decide how much rent you want to charge. So I think that's my basics. And I love debt. I love real estate even more. I put stock, my stock stuff on. I like it, but I put it on automatic either through an index fund. I have my own Warren Buffett type portfolio that I developed for myself. I do sell puts, but I only sell puts for Fortune 500 type companies. So I'm looking to make, you know, 8% a year, not more.

Yeah, I'm with you. I do the exact same thing. I just do it with calls instead of puts because I understand them more, but same basic strategy. Well, Mark, this has been hugely valuable for me and I'm sure for the rest of the fast laners, I Feel very proud to bring your message to our community after the impact you've had on me and so many other business owners. Keep on changing the world, buddy. And thanks for hanging out with us on Freedom Fast Lane.

Thank you, Ryan. It's a pleasure and congratulations to you and all your people because the work they're doing, their first 0 to 10 million is that's the work that gets people working and improves our economy and improves the world. So bravo.

Thanks, Mark.

So let's. So let's do a quick recap. Stage one is all about figuring out what you're selling and how you're selling it. That might be putting products on Amazon or it might be writing a video sales letter or it might be creating a direct mail campaign, but it's all about figuring out what the message is behind the product that you're selling. Stage two is all about developing backend products so you can market more to your existing customers and also creating at least one one other solid front end customer acquisition funnel. Now that might be another sales letter. It might be another brand of products on Amazon. I really enjoyed how he talked about having multiple product brands under the same company but with different varieties or different flavors on them so that you captured the majority of the market in that niche. Mark then went into stage three, which was about hiring people for structure. So going from 10 million to 50 million was all about building the structure to be able to support further growth. And that's when we start bringing in other product lines and really starting to scale. And 50 to 100 million was about keeping the hunger, about incentivizing people to grow. I think this total structure is really the framework for how I am preparing my businesses moving forward. You've heard me talk a little bit about how I am structuring my businesses and how I am planning to grow over the next few years. And Mark kind of solidified that for me that I'm on the right track in thinking about how I am going about this. I still feel like I'm building this plane as it's flying. I still feel like I am pursuing my dreams in spite of myself. But it is good to see that someone with the track record and the resume of Mark also has has that feeling. But his formula has worked for thousands of entrepreneurs and I'm using those strategies in my businesses and I would encourage you to use them in yours. If you found value out of today's episode, please subscribe over@freedomfastlane.com iTunes and I appreciate you listening. Thanks for supporting the show and we'll see you on the next episode.