The Consolidation

Foreign.

Hey fastlaners, this is Ryan Daniel Moran and welcome to Freedom Fastlane. Today we're going to be talking about this big scary word that I've been using called consolidation.

Now this was prompted by a very sensitive time in my life. Fast Laners. You see, for the first year and a half of running this podcast, I have maintained absolute perfect feedback on itunes. I've had hundreds of reviews and 100% of them have been 5 stars. Except I got my first ever 1 star review on iTunes, which is kind of like a rite of passage, but hurts my ego only very, very slightly. I'm not bitter. Fascinate. I'm not bitter at all.

Anyway, this review said, and it was actually a wonderful question that came up which prompted this topic. And it was a Basically the review said this podcast would have been great, but I'm too late to the party. I guess this stuff doesn't work anymore because this person listened to the episode where I call out the consolidation and I have said for almost a year now that consolidations happen in every market and that they'll probably be an Amazon consolidation come September of 2015. That was my deadline for major market consolidation. So this person was saying, I guess it's too late. None of the business strategies that are talked about on Freedom Fast Lane are relevant anymore, which is a perfectly reasonable question. So that prompts today's topic about consolidations. Now in order to address this, we need to clarify a couple things because I have called for consolidation for almost a year now. And look, if you are an Amazon marketer, you can see that consolidation is already happening. If you are an entrepreneur in any space, you can see that consolidation has probably happened several times throughout your career as an entrepreneur entrepreneur. Regardless of whatever industry you are in now. Consolidation is simply when the big players in a market capture the majority of the market share and make it more difficult for smaller fish to get a larger piece of the pie. That's what a consolidation is. A consolidation happens when there is a certain saturation point that happens in a channel or in a market and as a result, those who are biggest that own the most amount of market share capture enough to where their position is solidified and it is harder to take a market share away from those individuals when you are a new company. That's all a consolidation is. That's it. It just means that those who are established become more established and it becomes harder to compete. The only difference here is that there isn't a major wide open west anymore in the market. Now I'm going To use Amazon as the example since this is what's most relevant to many of you who listen to freedom Fast lane. But this is applicable to just about any market. And if you're old enough to remember old, old ways of Internet marketing, you'll see that consolidations have been happening forever. It, you know, it used to be possible where you could have a sales Page and Google AdWords and you could run Google AdWords traffic straight to a sales page, make hundreds of thousands of dollars. People did it for several years. They would put an ad up on Google AdWords. They'd have a pretty crappy sales page. The clicks were cheap, the traffic was huge. You could send it to a sales page that didn't convert all that well and still make a boatload of money. You didn't even have to be good at marketing and this would work well. What happened is that crappy products started to filter away because Amazon started to intentionally remove them from their advertising platform. They stopped. Google stopped allowing small advertisers to advertise with them. They focus more on bigger advertisers. That's a consolidation. That's when the biggest players step up their game and those who are small fish start to be removed. For those of you who are old and ancient enough to remember when search engine optimization was all the rage, it still is a very viable business model for some people. But eight years ago it was a major wide open west. You could put up whatever crap you wanted and get it to rank on Google and you would make boatloads of money. That happened for years. Now it is a different game. Google has adjusted, Google has adapted. Now everyone cries out the evils of Google when things, when things change like this. But this is simply consolidation. This is big people rising the top and those who serve their customers less start to fall, start to get pushed out. It doesn't mean that they're not profitable. It doesn't mean that there's no room to compete. It just means that smaller fish start to get swallowed by bigger ones. Now this is not a new concept. This is not an Internet exclusive concept. We all. I don't but a lot of people will cry the evils of companies like Walmart who put mom and pops out of business when the truth of the matter is that is a form of consolidation. Big companies win. The smaller ones who can't compete start to fall by the wayside. That's not evil, that's not bad. Now it's a different topic. We want to talk about some of big companies practices or how they Treat their employees, that's a different conversation. But when we look at simply market consolidation, it is when people who can compete win and those who can't compete start to get eaten by bigger fish. Even podcasting has consolidated. Six years ago, when my buddy Pat Flynn started his podcast, there was nobody else in the podcasting space. That's an exaggeration, but there's a lot less competition. And as a result, it was really easy to go to number one. And he has maintained his position in podcasting. He's kind of a podcasting champion at this point. Because he got in early, he solidified his place. I have another buddy, his name is Abel. He runs a health and fitness show. He started right before the consolidation of podcasting and as a result owns the market share. And everybody tried to copy that approach, but. But it was very difficult to compete with people who already had the market share on a channel. The same thing is happening with Amazon. Two years ago, you could throw up any old piece of poop and put it on Amazon and people would find you because nobody was trying to get reviews, nobody was managing their customers, nobody was trying to rank for keywords on Amazon. And. And now it's all the rage and there's going to be people entering the market and you have to have a consolidation. It has to happen. We're already seeing it happen because you used to be able to throw up any old piece of garbage with the right keywords and it would rank on Amazon. You can't do that anymore. You gotta work harder for it now. You have to actually have business in mind in order to succeed on a channel like Amazon. That is what a consolidation is. Everything consolidates. There is first the opportunity and the wide open west and everybody is scrambling. Then there is a consolidation. When bigger companies serve their customers well, people win and some people lose. That's a consolidation. And then you have a swing. A swing is when somebody is. When the market, the losers in the market, I mean, in the economic sense, they didn't become a major player in the market. They swing over to a different channel and there's a new Wide open West. And then that consolidates and then there's a swing and people swing back to another form. For example, Amazon had the big opportunity a year, two years ago. It was a wide open west. People find out about it. There is a major push into this wide open West. Now it's consolidating. Consolidation will probably reach maturity this fall. And now people are winning. Some people are falling off the wagon. And now what's Happening as predicted by the Freedom Fast Lane show in late 2014, there's now a swing back over to information products, which had their own consolidation several years ago. In fact, there is a major swing that happens between different types of entrepreneurship, specifically in Internet marketing, because it's so easy to swing between business models. It seems that every three years there is a big swing to physical products, then there's a swing back to information products. Then it swings back to physical products and back to information products. Why does this happen? It. It's simply market trends. It's market cycles between those who were consolidated out of a marketplace going to the next opportunity. So on something like Amazon Wide Open west, people find out, now they're starting to swing back to information products. There was just a launch this past month that broke Internet marketing records. It was all about information products. Has anything really changed about making information products? No. But the market is starting to swing in that direction and you'll probably see that increase over the next two years or so until there's a consolidation there. And then people come back to a different form of entrepreneurship. The same is true with any industry. There is a wide open West, a consolidation and then a swing back to a different channel or a different type of business, or there's a new opportunity, there's a new wide open west that happens. That's what undo. That's what undos, undoes. A consolidation is a swing back to some other form of business or marketing or a new channel. Now there is this idea that tends to happen when people enter into a market either during or after a consolidation. And that is when they say, man, I wish I had gotten in when it was easy. I wish that I had figured out search engine optimization back when it was easy. Man, remember how cool it was back when you could do this, back in the wide open west when this was possible. For example, I wish I had gotten into Amazon when it was a wide open west. And it was really easy to rank for everything. And it was really easy to make a bunch of sales in every single market. Now it's still fairly easy. It's getting more difficult because the market is consolidating, it's happening.

And it is true that it's easier to compete if you get in at the beginning of a market. And it's nice. It's kind of a fantasy land to say, I wish I had gotten in earlier so that I had an easier time competing. And yes, you can establish yourself faster and easier during the Wide Open west period, but that doesn't mean that it is impossible to compete. That doesn't mean that there's not opportunity. The opportunities are still there. You just have to think a little bit differently. You have to think about marketing, you have to think about customer service. You have to be more aggressive with the advertising of your company. That's why in some aspects, consolidations are really good for the consumer. At the very least, we'll talk about why it's good for entrepreneurs too. But for the consumer, it's very good because you have winners win, and they win as a result of price quality. Customer service consolidations are necessary because they're a healthy piece of the economy.

Now, what undoes, again, what undoes a consolidation is when something new appears, when a new channel opens up and people swing over to that. And that's when.

What'S interesting is when people swing over to the next opportunity, there's a period in which everybody is fighting for the is fighting for the opportunity on the new channel. And as that is happening, as the swing is moving over to a new channel, opportunities open up in the old channel. So to put this in more practical sense, for people who are Amazon entrepreneurs, consolidation is happening. A swing is starting to happen towards other, other channels and other ways of doing business. So as things swing away from that, Amazon has new opportunities start to open up that eventually will consolidate and then will swing over to something else. Here's another great example. My buddy, Ryan Dice kind of pioneered the video sales letter. And when he started doing video sales letters, they were so darn ugly. They were just PowerPoint presentations and they converted like crazy. They, they made bunches and bunches of money just doing this very simple. You probably saw them ugly video sales letters. And I was in his mastermind at the time when he was testing them, and he sent them out to our little mastermind and he, he said, start doing this now before everybody starts copying it. They're working like crazy. So our whole group did the ugly sales letter formula and it worked beautifully. And then that was the opportunity. That was a channel that was a form of marketing that worked wonderfully because it was new, it was fresh. And then everyone started doing it. And when everyone starts to do it, it starts to consolidate. The video sales letters start to get more professional, they start to get better written. Before you could put up any crappy video sales letter and it would work just fine, then it consolidated to where people got tired of seeing the same old thing. So more professional, better written sales letters started to pop up. And those were the ones that won. And old crappy Video sales letters stopped working as well. It didn't mean they that it was obsolete. It just means that they weren't as effective. It wasn't as easy to just throw up any old piece of junk and it do well. You had to be more tactical, you had to be more strategic. Then the swing happened. Video sales letters started to fade and now right now you see the swing moving towards textual sales letters and E commerce, more passive ways of selling, less aggressive forms of selling. That is one form of a consolidation. Now what will happen next is it will swing towards the next opportunity which will either be the old type of sales letters that everybody said was quote dead or you have a swing towards some other form of marketing. And when that swing happens towards the new opportunity, it will open up new opportunities in video sales letters as well. I know I'm belaboring the point as I always do here on Freedom fast lane, but how this applies to something like an Amazon business is that in order to compete you have to be more strategic. Now if you're a new company, even if you're an existing company, you're probably having to think more strategically. You can't just throw up any old products and sell a bunch of them anymore. You have to be more strategic about how you approach your customers, how you treat them, the quality of your products, the pricing of your products. That's how you compete during a consolidation. What this means for somebody who's an Amazon entrepreneur, since I know a lot of you are, is that you can't just tinker around anymore. You can't just run this as something you do in your underwear. Well, I guess I could be in my underwear right now, who knows? But the you, that was a terrible example. What I mean is that you can't treat this like just a side thing anymore. If you want to compete on a channel that has consolidated, you have to take it seriously. You have to run it like a real business. You have to think like a real company. You have to mature in the way that you approach a business owner. Otherwise you will get consolidated out. It doesn't mean that there's not opportunity. It doesn't mean that it's too late. It just means that the wide open west is closing until people swing to a new channel and then other opportunities will start to open up. And those opportunities could be things like a new marketplace. Do you remember ebay? Are you old enough to remember ebay? Well, on ebay there was a wide open west for a long time, then everybody came in it consolidated. People now swing over To Amazon. Now there are people who start ebay businesses to this day and do extremely well because people swung away from ebay towards Amazon. It opened up new opportunities for ebay sellers and all of a sudden you have more of a homeostasis, you have opportunity. There's not a wide open west, but there's opportunities that come up here and there. People take advantage of them, they do really well, but their business is ebay. That same thing will happen with Amazon is you will have people swing away from it. They will say, oh, that crap doesn't work anymore because they think it's not, quote, easy anymore. And they move over into a new channel which opens up new opportunities here on Amazon. And if you're going to do things properly, if you're going to run it like a real business. Now let's talk about why this is a good thing. Because when I talk about this, there are people who ask me all the time, they say, well, is there still opportunity there? Is there. You know, I'm really scared by your old podcast that say that things are consolidating and I'm like, everything consolidates just means you have to put on your big boy or girl pants and think like a bigger company. But let's talk about why consolidations are good for a moment. First of all, when consolidations happen, the purchasing value of your company goes up. Now why is this? Because when you have a wide open west and anybody can throw up a business really, really quickly, the value, the purchasing value on each of these is fairly low because it's really easy to just start a business. Why would you want to buy a business when there's a wide open west where you can build a business? When I bought and sold websites a few years ago, it was really cheap to buy a website that ranked in Google. If you ranked in Google, you would get about a 6 to 12 month valuation of your business. So if you made $2,000 a month, you might be able to sell that business for 12 to $24,000. That's super low. Now if you listen to the old podcast with Thomas Smail, you know that valuations have gone way up. Why? Because the market has consolidated. Because there are now fewer really profitable businesses to buy and they're more stable now. Which is another benefit to consolidation is that things become more stable. There aren't these big swings anymore. Things tend to be a little flatter.

You don't have these big swings up or these big collapses as often anymore. As a result, purchasing value goes up. So if you stick with it the value of the asset that you're building is going up in value. This is why I've predicted that there is going to be more of a marketplace for buying and selling Amazon and E commerce businesses for this exact reason. Right now, it's really cheap to buy a business like this because you really have no value. Because. Because we're just coming off the wide open west period. Now it's consolidating. It's a little bit more difficult to become a bigger player on a place like Amazon or any channel that you're trying to compete in. So the value of your company as a sellable asset is starting to go up and that is going to continue. So if you survive a consolidation, your value goes up. That's why it's good. Also, the competition for the top spot starts to go down. You have fewer players starting to enter the marketplace, so you have a fewer number of competitors to deal with. It makes it easier if you're a new company and you're determined to think like a big player. As we talked about on the previous podcast, thinking like a big company, if you have that mentality, it becomes easier to become a big player because you have fewer people trying to compete with you. At the same time, you will have to be more aggressive. Yes, it may take longer, yes. But if you have the mentality that you are going to get into this and you are going to go to the top and you are going to win, then you have fewer people trying to compete with you because more people see it as harder to get to the top. So if you're a seasoned entrepreneur or you are, you are ready to be aggressive, then it is actually easier for you to do really well. These accidental winners of people who have just thrown something up and did things really haphazardly, they start to disappear, they start to fade away. We see this happening right now on Amazon in the sense of when it was a wide open west, you saw all these crazy success stories of people who had done really nothing right, it seemed, who were going after big trends and hot supplements and whatever was selling a lot and they weren't even doing things well. And everybody was trying to model them exactly because they saw this cash going in. And then it consolidates, it gets harder. Those businesses crumble and a lot of people go with them because they weren't building things up in a sustainable way. And in that vein, it forces people to think beyond settling for the scraps. And if you want to compete, it forces you to think bigger, to think more strategically. And these are all good for you as an entrepreneur. They are good for the customer. It is why consolidations are a healthy and necessary part of market maturation. It's just like an economy.

An economy goes up for a while and. And then it has to consolidate. You have to have recessions. Recessions are a necessary part of healthy economies because that's when debt is liquidated. It is when people who are not competing well in a marketplace start to fade out. It's when you have some joblessness and then there is a swing over to other industries where, where it would then present other opportunities. Consolidations, recessions, pullbacks are all healthy, necessary pieces of growth. So the fact that there is consolidation should not scare you. It should just force you into action, of thinking a little bit more strategically, of thinking differently. Regardless of what industry you are in, there are times of immense opportunity, followed by a pullback, followed by an exit of people out of your marketplace, which opens up new opportunities, which creates more consolidations, which forces more people out, which opens up new opportunities. You see where I'm going with this? In order to really succeed on any channel, you have to have staying power. You have to be willing to bear out the consolidations and compete in spite of them and use them to your advantage. So how do you compete during a consolidation? First, think like a big company. Think. Ask yourself the question, how would I need to think in order to not only grow during this time, but to grow massively during this time? Second, develop rabid customers. If you can nurture your own customer base, if you take those who are buying from you now and you turn them into rabid buyers, into raving fans, then you become immune to consolidations. You become unconsolidate to bull. You can't go away because even if the apocalypse happens and what you think is your business goes away, but you have rabid customers who still want to buy from you, they will find a way to buy from you if you give them that opportunity. So it shields you against going away when you have really rabid customers who love you. We talk about this extensively during my Next level events. So if you are an entrepreneur and you're ready to go to the next level, one of the things that we talk about at extreme length is turning your customers into raving fans. That's at my Next Level events, which you can apply for at event.freedomfastlane.com and the third way that you can compete during a consolidation is to look for outside and new forms of advertising. Looking for advertising where most people are not looking, looking at okay, this is what my market is doing right now. This is what all the people who are trying to compete with me are going. How do we think beyond that? How do we think bigger than that? How do we go where no one else is going, where the next Wide Open west is and, and use that as fuel for our existing business? An interesting example is there's a presidential candidate right now who is using Snapchat as a way to connect with young voters because he sees that as a Wide open West. Not a lot of presidential candidates are there. I think zero besides him are there. So he is using that to promote his, his existing marketing strategy, his campaign. And as a result, probably the other candidates are going to come in and try to mimic his advertising because it's doing very, it's actually quite successful. He's developing quite a following on Snapchat with young audiences going after where the opportunity is. So think about outside advertising and where your competition is not going. They think they know where to go. They think your competition is going after the same places that everybody else is. So how do you think differently in order to maximize the business that you have to widen your customer base, develop more rabid customers and shield you against consolidations and, and pullbacks and increased competition. This is another thing that we talk about extensively at my next level events. So this is how you shield yourself from consolidations. First, if you're entering the market, come in with staying power in mind and thinking like a big company. Get clear about a strategy for developing rabid customers and consider how you can widen the net of the customers that you target for rather than going after the scraps that everybody else is trying to scramble for. Now at the end of April, I am going to be opening up spots for the tribe. The Tribe is my mentoring group for people who are starting physical products businesses and I had not planned on opening it again. I had not planned on opening the tribe again because of some changes that I wanted to take for long term planning of the group. But I've decided to open up Spots along with the reopening of Amazing Selling Machine which has been completely redone and will be open at the end of April. And I've decided to do this because the big changes that I wanted to make are not complete yet because I found out about my baby girl who's going to be joining us in June and that took some life restructuring and as a result the changes that I wanted to complete are not completed. So we're going to be doing one more round of 10 week coaching through my coaching group which is called the Tribe. It will be opening at the end of April. And I tell you everything that I tell you today because I do not want those who are just kicking the tires on this business to join that group.

The focus of what we talk about inside of the tribe is how do we think beyond everybody else? How do we advertise in places that everyone else is not looking at? That is how there have been so many incredible success stories inside of our coaching group. So if you are looking for pre consolidation results without the effort, without thinking differently, then I would not recommend joining because things are a little bit different now. We have to look at things differently when we're building this type of business. In order to compete and achieve the level, level of results that are possible, you have to be more strategic. You have to be smarter. Now this is the fifth time we've done this. So we have certain things dialed in to allow you to compete, but without them, I wouldn't even recommend going into this business right now. I would only recommend it if you are willing to think strategically. If you are willing to model what the really successful people are doing, which takes a certain level of thinking and effort that is beyond what most people are willing to do. That is why for most people, I wouldn't even recommend that they get into this business right now because things are consolidating. And if you think that if you can just throw up a product without being strategic about it, without having a long term vision and plan in place, you are going to get eaten up by everybody else. But if you are willing to have staying power and to grow this business over the long term and to even look at things like strategic acquisitions, meaning that you want to be around people who are looking to buy these types of businesses in the way that we grow them, then this may be something that you want to consider. But if you're not willing to do that, don't go into this business and certainly don't join through my group because I am. We think bigger, we think much bigger than just the traditional way of doing things and as a result we have amazing success. And I would rather you either join through somebody else or you not join at all than you ruin my statistics because my statistics are very, very strong and I'm more protective of that than anything else. That's my pitch for the day. I'll have more about the Tribe opening in future podcasts. But for now, thank you for listening to Freedom Fact Grasslane. If you are not subscribed to the podcast, but you've been listening and you found value in these. Let's make this official. Head over to itunes and subscribe. It will cost you nothing. In fact, it'll put money in your pocket because of all the strategies that we reveal here on the show. It also helps me rank higher in the itunes store, so we spread our message of freedom to a wider audience. So thank you for subscribing. Thank you for making this official, and I will see you on the next show.