30M vs 500 Views: The One Change That Made All The Difference

All right, Neil, did you know— do you know the difference between a 30 million view video versus a 500 view video?

No.

Okay, so basically there was this guy that, um, he basically interned for me for a little bit, okay? And he went off on his own and he started a couple of Instagram pages. One has 600K followers, the other one has about 700K or so. And each of these gets millions of views, right? And he has sponsorships paying him. So like less than a year into it, he's making $1 million a year and he's probably only 21 years old or so. And he told me— so we did a little catch-up call. I just wanted to see how he was doing. You know, he reached out and he said, you know, he'd launched this brand new concept. And this concept, when it launched, he put a lot of time and effort into it. It only got 500 views on a video, right?

Wow.

So this one video, basically what happened was that they jumped right into— what are you looking at right now? Why are you smiling?

Because I was responding to you. My mic was so far away.

Oh, so anyway, okay, the video that had just 500 views, it only had— it jumped straight into the video. There was no text, right? So the change that made it 30 million views versus 500 views is they just added text overlay. That's it. That's the only thing. So they added captions? Not even captions. It's just like basically leading into what it is, like a little title about what they're going to watch. And that's the only difference. Other than that, everything else is the same.

So that means they pretty much hooked them in through text.

Yeah, it was a text hook. That's all. Like, it just reinforces again the difference. What is the percentage on that? 30 million versus 500? It's like, doesn't even compute.

Yeah, it doesn't even compete.

Yeah. So I think that's— it's the one change that made all the difference. I think that's one thing from a marketing standpoint, the hook matters.

What was the video on in the first place?

I can't reveal it because I would give him away. And it's because more people are catching— he doesn't want me to reveal it. I was like, can I reveal it? He's like, no, I can't reveal it. Because he wants— he's basically coming up with these different formats where, let's say, you know, he finds like random old people, older people on the street and asks them about like, you know, how they're in love, like how they're still in love, like what's their secret, right? That might be like one concept.

I think I've seen this person on Twitter.

It's not that one. It's not— that's not his. I'm just— I used that one on purpose. That's not his.

Okay.

But another one might be like, you know, going to find random people traveling and then like, you know, somehow getting their story, right? Point is like he's creating all these different concepts right now. He's just going to keep creating concepts and he's going to sell ads to people. And I'm like, you know, I think that's great. It's all about the story. It's about your concept, but you have to own your audience at the end of the day because he's even worried about this. He's so worried that these social platforms are fleeting. The reach is going to be fleeting. I'm like, yeah, it is very fleeting. So, you have to make sure that you can build an audience, ideally build a community. Hopefully get to the point where you're selling your own products and services because you don't want to be at the beck and whim of these advertisers because they're going to be able to control what you are and aren't able to say. So yeah, I thought that was interesting.

That's crazy, dude. You know what's funny? I posted something on Twitter today.

Is it really funny though?

No, but it's related to this. You always— funny enough, you always say that, and I always say it's funny when it really isn't funny. I posted something on Twitter today talking about how You know, everyone talks about social media and views and getting followers and how if you're not on social media, you're missing out.

Did you tweet that today or yesterday?

I literally tweeted that out today, like a few hours ago. And I was talking about if you're not on social media, you're not missing out. You can still build a big company because there's this company called AmerisourceBergen, although they changed their name. What's their name now? Their name now is Sensora. Have you heard of Sensora?

Sensora, 4,270. Sensora, right?

Sensora.

Sensora.

I haven't— Sencora. Sorry, Sencora. They only have 4,000 Instagram followers, but yet they do over $200 billion in revenue. Fortive has like less than 2,000 followers. They do over $6 billion in revenue. Danaher has less than— what does Danaher have? Danaher has 6,000 followers, $23 billion in revenue. Like the point I was getting at, dude, is People talk about social media. It's like if you're not on there, it's the holy grail. You're missing out. You're going to get crushed and all this kind of stuff. So many big companies have been built off of channels that aren't social media. Partnerships, integration, distribution deals where someone else sells your products and white labels it. Dude, I was working for a company as a consultant. They were based in Austin, Texas. PE shop bought them out. And never heard of them. It was a security software company. And I was like, okay, how do you guys get customers? And I think it was called GFI, maybe software, hardware, GFI Security or something like that. GFI, gfi.com. All right. So it was some software or something related to security. And I was curious on how they generated all their revenue, decent-sized business. You want to guess how they generated all the revenue? 100% of the revenue.

Sales?

Yes, but they didn't do sales, nor do they have a sales team. They just partnered with other people who have sales teams. Channel partnerships.

Yep.

And they sold it and they got a kickback. That was it.

You know what's interesting? So in, in our YPO chapter, there are people that do zero marketing. When you look at them, when you tell them about marketing, they just look at you like you're dumb, right? Or like they're just confused, right? Because one person I know in our chapter, their business sells like nuclear waste, right? Don't need marketing for that. And then you have another one that's like more of like an events company. Everything's word of mouth. They will never Like it's word of mouth marketing at the end of the day, right?

Yep.

And so just because you and I were talking about the newest things all the time, we're kind of incentivized to talk about the newest things. But it just goes to show you that, yeah, you don't need social media or the latest marketing stuff to build a multi-hundred million dollar or billion dollar company. All right everyone, quick message from the Agency Owners Association. So this is the peer group for agency owners that Neil and I both put together. This is for people that are doing 6 figures, 7 figures, 8 figures, even 9 figures as well. And we're all here to help you grow your agency faster. In this group, we share leads, We share learnings with each other. It's a community where people can ask questions, their most burning questions, personally, professionally. We'll share templates, reports, things like that. We're constantly adding more value to the group. I will tell you that the price is continuing to increase. The good news is that there's no long-term commitment, so you can just learn more by going to marketingschool.io/agency. Once again, that's marketingschool.io/agency to learn more, and we hope to see you inside.

I have a friend Matt in Vegas, and him and I were chilling. And he's just like, yeah, I took over this business in Europe. You know, it's a pain. I got to fly there. Matt's an amazing guy. He has his own private jet as well. So you can assume, you know, he's done well. What do you mean as well?

You have one too?

No, no, I don't have one. As in, I know other people who have them, but I don't have a private jet. So, you know, he has a private jet. He does well. And he's in traditional business where they do like manufacturing and stuff like that. So a powder coating for rims and all this kind of thing, cell phones, yada, yada, yada, you name it. So he's like, yeah, there's this big corporation that had this division that does, you know, $30, $40 million a year, and it was losing money for them. So he's just like, I did a deal with them where they just gave me the business and I just give them, I think it was like 10 or 20% royalties on revenue in the first year. And then the second year it goes down and then it really goes out.

And nothing.

No, it doesn't go down to nothing. I think it drops out to like 10%.

This is the former owners that gave him the business.

Yeah, but it's a big publicly traded company. So this division was losing them money.

Oh, they gave him a division and then he just wrapped it into another company.

Yes. And that division was losing them money. Did no marketing, nothing whatsoever. I was like, how do you get your customers? Like word of mouth. There's not tons of them left in the world that do this specific type of manufacturing. I was like, okay, cool. So I was like, So how are you going to pay them? He's like, oh, they're just bloated. I run the same thing with like 60%, you know, profit margins. I was like, oh, so I was like, they're 10, 20, 15%, whatever the number is they had to give royalties. Now he's like, no, I'm still keeping the majority of it. And I don't have to pay anything for the business. I was like, good for you.

That's a good deal.

That's a great deal.

So he cut a lot of people, a lot of expenses. Yes.

And here's the trick. When you're taking over the business from someone else and you're cutting, you have them cut. You don't take those people with you. You want to know why? Because then you aren't footing the bill for severance.

So wait, so you have the company pre-cut before you, before you come in?

Or they leave them on their payroll.

Yeah.

And it's up to them if they want to cut or not. And they can figure out severance with those people or not.

All the employees?

The employees he did not want.

Oh, so he said, look, I'm going to figure it out on my own after, but you, so you keep the payroll.

No, no.

Okay.

So let's say this business had 100 employees. I'm making up a number. He was saying, I want these 60 people. I'll take them.

Oh, so he picked the A players. He handpicked.

He handpicked. Not necessarily A players. He wanted the people who are actually doing the work and that were profitable. He picked all— and in this scenario, you are correct. It would not be A players. He said, you keep all the people that don't do crap. I don't need a $500,000 CFO when I already have a CFO. I don't need a, you know, $600,000 COO and a $400,000 VP of operations. These are like overlaps.

But he didn't say it like that. He didn't say like—

Yeah, he didn't say all that. Instead, he's just like, give me these 60 people, I'll take them. You can keep these 40 and do whatever you want. You want to keep them, put them in another division, fire them, up to you. They're like, okay, sounds good. So when they lay them off, a portion of those people, they got to pay them severance.

He doesn't have to pay severance. That's— hey, people might be like, hey, that's crude. But hey, part of it is that that's business too. And Neil and I aren't saying you should go around, you should be excited about cutting people. We're just saying, hey, sometimes when you buy a new company, what part of due diligence is doing— just meeting people and seeing who is absolutely essential versus who isn't. And sometimes, unfortunately, people are gonna have to be cut. And you should be giving severance. It's just a matter of who should be footing the bill.

Yes. That's the question. And funny enough, with that organization, they kept a lot of those people and just put them in other divisions.

Yeah.

And, you know, they looked at him like, wow, you're so profitable. But also for that other company, it was one of their smallest divisions. And they're like, yeah, we didn't care for it. It was just too small for us.

That's like that book that we read from Brad Jacobs, How to Make a Few Billion Dollars, right? He does hardcore diligence. It's at least 15 of the top people or more and 90-minute meetings each.

Yes.

Like it takes due diligence to make it all happen.

Takes tons of diligence to make it happen.

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Dude, it's funny. On a side note, I do think marketing is important. We do talk about the sexy channels, right? Remember we were talking about AirChat?

Yeah.

And now no one on the web talks about AirChat. Have you seen their Google Trends for AirChat?

No.

Dude, it's ridiculous. google.com/trends. Is AirChat one word or two words?

One word.

AirChat. Okay, so to give you an idea, oh, this trend line is just horrific. It went from pretty much being no one searching for it to 100 because Google Trends only goes to 100. It's still not done and it's declining. It's already down to a 15. It's had an 85% drop in less than a month and it's probably on its way close to zero.

That's what happens. You know, both times we've talked about these audio social apps, when we talked about Clubhouse back in the day, did a Clubhouse. I was like, it's the next big thing, Neil. It's the next big thing. And then Neil's like, I don't think it's going anywhere. And then unfortunately didn't go anywhere. In this case, I think it's a novel feature. I don't think it's going to go very far or go super viral. But again, that might not be the intention because they did— they didn't raise money. From my knowledge, I don't think they raised money. So anyway, that's it for today, everyone. Please don't forget to rate, review, subscribe. Marketingschool.io/agency. We're going to show you all how we build this community. And if you have an agency, we're going to help you build your agency faster. So that being said, we'll see you tomorrow.