Every Business Model, Explained

How did Jeff Bezos and Elon Musk get so rich? They didn't just invent good products and services. They picked the right business model. A business model basically answers 3 questions. How do you create your product or service? Number 2, how do you deliver it to your clients? And number 3, how do you actually charge money? It's the creation engine, delivery engine, and revenue engine. 2 people can have the exact same skills and the exact same idea, and one of them struggles for years and the other one goes and gets rich. And the only thing that's different is the business model that they choose. Now, I love studying business models. It's kind of like this mini obsession of mine. And maybe it's because changing business models was how I started to make some real money. My first business was a biotech software company, and I was struggling to make money, making $300 a month. And we had the wrong business model. My partners and I were in the direct-to-consumer business model, where we were selling directly to our clients from our website. Then I looked at how Bill Gates built Microsoft, and it was selling through partnerships. So Microsoft took off when it partnered with IBM so that every IBM computer shipped with Microsoft software on it. So I tried changing my business model and selling through partnerships and got my first check for $13,500. I thought I was rich. And I continued selling through partnerships. And a couple of years later, we got acquired. So I wanted to make this video because so many people have a great idea for business. Just they have the wrong business model. I almost quit on my business partners. I actually did quit for one day and then I came back to work the next day. And the thing that changed for me was changing my business model. I didn't know enough back then to articulate what the problem was at the time. I was just trying to survive, but changing my business model saved me from having to go back and get a job. So if you understand the different ways a business can make money, you can pick the one that fits your skills, fits your life, and the amount of money that you actually want to make. Pick the wrong business model and you can work just as hard for years and make a lot less money without Knowing why. So there are 9 basic business models that explain how 99% of companies make money. And I'm going to cover each of them in this video, along with the pros and cons, as well as examples of each to help you decide which one is best for you. Now, if you've been here before, drop a hashtag #Believe in the comments below so I can feature you here in a future video. And if you're new, welcome to Believe Nation, the only channel that helps you believe in yourself daily, one video at a time.

Believe.

Part 1, the creation engine. So let's start with the creation engine. This is how your business builds value. You have 3 main options to choose from: physical products, digital and ideas, and time and experiences. So physical products, you make or you pull items out of the physical world. We can start with manufacturing. So you take raw materials and turn them into physical products. You build it, you box it, you get it ready to sell. Some well-known examples, you can look at Lego making plastic bricks, Tesla selling electric cars, or local baker who's making fresh bread daily. Right? They're making something. Then there's agriculture and extraction. Here you're pulling raw materials out of the earth. So think about Chiquita growing bananas or ExxonMobil pumping oil, or De Beers mining diamonds. So pros of physical products, you have total control over your quality, right? Once your operation is running smoothly, you can produce items pretty cheaply. It's much easier to build a famous brand because people can naturally, you know, hold the product, hold the product, you know, in their hands. And you also face less competition because it's incredibly hard for a beginner to build a massive mine or a farm or a factory. The world will always need these basic materials. The cons of a physical product is it takes a massive amount of upfront money to buy the land and the machines and the warehouse space. If your customers stop buying, you're stuck with thousands of unsold items that are sitting in your garage or on shelves, and it's very hard to change your product quickly once all the heavy machines are set up. You also don't always control your prices, and you're at the complete mercy of bad weather or global market crashes. Number 2, digital and ideas. So you build things once and they scale easily without having to make physical copies. So think software and code. You write digital programs to solve a problem. The magic here is that you build it once and you don't have to pay to make more copies. Examples, uh, Microsoft building Windows, Adobe making Photoshop, and indie developers coding mobile games. There's also media and content. So here you create videos or articles or audio that hold people's attention, like right here, right? The actual value is the audience that you build. So examples, MrBeast on YouTube, New York Times, the Morning Brew daily newsletter. Then there's intellectual property and research. So you're spending time and money inventing something completely new, and then you secure the legal rights to it. So think about Pfizer inventing a new medicine or Qualcomm patenting a cell phone technology, universities researching new battery chemicals. And then there's data aggregation. So you collect, organize, and analyze massive amounts of information. Then you sell the access to those insights because other companies couldn't easily gather the data themselves. So think about Equifax with the financial credit scores or Nielsen tracking TV ratings or Zillow collecting local real estate prices. So pros and cons of digital ideas. You get massive profit margins because making a second copy doesn't cost any money. You also don't have to worry about shipping physical boxes to reach the entire world instantly. Many of these ideas have a very low cost to start, which is great. Sometimes just a laptop or a cell phone. You can build deep trust with millions of people or secure a legal monopoly with your patents. And as your audience or database grows, it becomes almost impossible for brand new competitors to catch up to you. The cons of digital and ideas is it takes a massive amount of time, money, research to build the first working version or grow an audience from scratch. There's a huge risk of failure if your invention doesn't actually work in the real world. You are at the complete mercy of tech platforms, meaning a sudden algorithm change can wipe out your viewers overnight. You have to constantly upgrade your code to fix bugs or fight off competitors that are coming. You also face big legal risk if your hackers steal your data and your reputation can be destroyed in a single day. And number 3 is time and experiences. So here you're trading human effort or you're creating real-world moments for people. So think services and labor, right? So you use your human time, your energy, you have specialized skills, you're working for somebody else, you're not selling a physical item, you're selling your effort. So think digital marketing agency running ad campaigns, think McKinsey Consulting for large corporations, think a local plumber fixing pipes, it's all service-based business. The experiences and events is you're designing a specific environment or temporary moment that people pay or want to be part of. So think about an exclusive mastermind for YouTube that we run or a music festival like Coachella, or local escape room. So let's talk about the pros of this kind of business model. It's usually pretty easy to start because you just need your own skills, you have very low overhead costs and you get paid immediately after you finish a job. You can also charge premium prices for high-end events and get great profit margins on top of it. Creating real-life memories also builds a pretty strong emotional connection with you and your clients. The cons of selling time and experience is you only have 24 hours in a day, so it's hard to scale without hiring a big team. If you get sick or you want to take a break, you stop making money. Creating live moments is also highly stressful to organize and pull off. You face heavy upfront costs to book venues and you're completely vulnerable to bad weather or travel delays ruining the entire day. So that's the creation engine, what we're actually building to sell. Now let's move to part 2, which is the delivery engine. This is how the thing you sell actually reaches your customer. And again, you have 3 main options to choose from: direct-to-consumer, selling through partnerships, and a hands-off operation. This is the one that saved my company when I went from selling direct-to-consumer to using partnerships to sell like Microsoft did. So let's kick it off. 1, direct-to-consumer. So here you control the whole process and sell your thing direct to the final buyer. Think retail, So retail, you sell products directly to buyers in a physical store, right? Walmart selling everyday goods. Apple has their retail store selling iPhones and local boutiques selling clothes. You can think e-commerce. You sell items directly to the buyer on your own website. You don't use a middleman in between. So think about Gymshark selling their fitness gear. Think about Warby Parker selling their glasses online or independent Shopify stores. Then there's direct sales. So you send out a team to talk to customers face to face. You could think about Avon selling cosmetics or Cutco selling knives or a local business selling home security systems, door knocking door to door. So some pros of direct-to-consumer: customers can touch, they can see, they can try the product before they buy, which builds massive trust. You get immediate face-to-face feedback and can build a deep personal relationship with the buyer. You get to keep higher profit margins because no other store takes a cut in between. You collect all the customer data directly so you understand their habits and can market to them again later. And you control the exact message. You don't have to compete for shelf space in a crowded retail store with lots of competitors. Cons of going direct to the consumer: You have to pay very high overhead costs, typically for rent and electricity and store employees. You're limited to only selling to people who live close to your exact location. For online businesses, it's incredibly hard to get people to visit a brand new website from scratch. You have to spend a lot of money on digital ads and you have to handle all of the complex logistics of shipping and returns yourself. And it's also very expensive to hire, train, and manage a massive sales team, which makes it hard to scale quickly. Second option is selling through partnerships, right? So here we use other people and businesses to reach the buyer for you. The first option is wholesale. So you sell your products in bulk to another business, they'll sell the item to the final customer. So think about a local farm selling apples to a grocery store, a clothing brand selling shirts to Macy's, a toymaker selling to Target. Option 1 is affiliate. So you pay promoters a commission to find customers for you. You don't spend money on ads until they make a sale. So think Amazon Associates, a software company paying tech bloggers for reviews, a fitness brand paying Instagram influencers, right? Affiliate model. Second model is franchise. So you build a successful local store, And then you let other people pay to copy your exact business blueprint. So Subway sandwich shops, McDonald's restaurants, UPS stores. The pros of selling through partners is you can move massive amounts of product all at once and open hundreds of new locations extremely fast without spending your own money to build them. You can collect a steady stream of cash from ongoing fees as well, and it's usually low risk because you only pay when you actually get a guaranteed sale. You get to reach brand new audiences who already trust the person promoting your product, and you also don't have to deal with each individual customer complaints and daily marketing or running a physical storefront. The cons of selling through partners is you make less profit per item because the retail store or the promoter needs to take a cut themselves. You lose direct contact with the final buyer, so you miss out on their direct feedback, and you have very little control over exactly how the promoters talk about your brand online. You have to constantly monitor every single owner to make sure that they don't ruin your reputation with bad service. It also takes a lot of expensive legal work and complex paperwork to manage. And then number 3 is hands-off operation. So you make money without making or touching the actual products yourself. So here, think dropshipping. You can market your items online, then a third party stores and ships a product directly to the buyer. So you aren't moving boxes around. Examples: Wayfair, right? Niche Shopify clothing brands, online stores using print-on-demand suppliers. Next, you can think marketplaces. So you build a digital platform to connect buyers and sellers. It's helpful because you aren't making the products yourself. So think Amazon or Airbnb, Uber, these are much bigger companies now. Pros of hands-off operations is you don't need much money to start because you don't have to buy any inventory upfront. You can test new ideas quickly without risking your cash. You can run the entire business from a laptop anywhere in the world if you want to. You can grow massively without paying for physical warehouses and making your own items. You just collect the fee on every single transaction that gets made. And once your site gets popular, buyers naturally attract more sellers to. The cons of the hands-off operations is your profit margins are usually pretty small. You have zero control over shipping times or the physical quality of the product. If a supplier messes up an order, the angry customer, they're going to blame you. Starting is incredibly difficult because you have this chicken and egg problem. You have to convince buyers to show up before you have sellers and sellers to show up before you have buyers. It's also pretty expensive to build the website technology if you want to do it Also, if you want to take real action after this video, I made a free worksheet just for you. It covers the top lessons from today, gives you space to write your biggest takeaways, and helps you build a simple action plan. It's 100% free. Just click the link in the description below to go grab it, and I'll see you there. And now part 3 is the revenue engine. So it's a lot of information. Part 1, we covered the creation engine, which is how do you create your product or service? Then we just covered part 2, which was the delivery engine. How do you deliver what you actually sell to clients? Now it's time for part 3 of the business model, which is the Revenue engine. This is how you actually collect the cash. So again, 3 main options. There's single purchases, ongoing and rental fees, and third-party and platform revenue. So let's get started. Single purchases. Here you're selling a product and the customer pays directly for it. So think about a one-time sale. You charge a single price, the buyer keeps the item that they bought forever. So you buy a pair of Nike shoes, you pay for a meal at a local restaurant, you're buying a physical book. That's an example of one-off purchases. Then you can think about razors and blades. Here you sell the cheap base product and then you you make high profits on the required refills. So think about Gillette selling cheap razors and then expensive blade refills, Keurig selling coffee machines and then selling expensive pods, HP selling printers and then expensive ink. Okay, pros of the single purchase business model. It's the simplest way to do business and everyone understands exactly how it works. You get all the cash upfront in one big chunk, which makes it easy to pay your bills. Once a customer buys a base product, they're locked into your ecosystem. You get a steady, predictable stream of money as they keep coming back for the refills that they need. The cons of the single purchases are you start at zero every single month. You have to constantly find brand new customers or convince old customers to buy something else to keep making money. You usually lose money on the first sale because you price the base item so low. And if a competitor figures out how to make cheap knockoff refills, your entire business model can fall apart. Second option is ongoing and rental fees. So here you charge customers over time to use your service or your product or your space. Think subscription. So you charge a recurring fee every month or year for access. So Netflix, gym membership, A monthly coffee bean delivery box. There's freemium. You give away the basic product for free, but you charge money to unlock the pro features. So think Spotify or Zoom video calls, mobile games with paid upgrades. Then there's leasing and renting. So you buy an expensive asset and you charge people to use it for a short time. So think about enterprise rent-a-car, an apartment landlord, heavy machinery rentals for construction. And then there's usage-based. So you don't charge a flat rate. You charge the customer exactly for what they actually consume. So think about your home water bill, Amazon Web Services charging for cloud computing services, an Uber ride charging per mile. So pros of ongoing and rental fees: you get a highly predictable cash flow, so you know exactly how much money is coming in next month. It's very easy to get massive amounts of people to try your product because there's pretty low risk. The free users naturally share the product and act as your marketing team for you if it's good, and you make money over and over on the exact same item. Over time, you make much more money than the item originally cost you to buy. Customers also love paying just for what they use because they think it's perfectly fair, making it very easy for new customers to start with you. The cons of the ongoing rental fee revenue model is it's hard to get someone to commit to recurring billing. You have to constantly add value every single month or they'll cancel their account. Only a tiny percentage of free users will ever actually pay you. Your paying customers have to generate enough cash to cover the massive costs of running your free version for everyone else. You have to spend huge amounts of cash upfront to buy physical assets. In some cases, you have to pay for constant repairs. And cleaning and maintenance. If you have a usage-based model, your cash flow is completely unpredictable. If your customers have a slow month, your revenue instantly crashes. And then the third revenue model is third-party and platform money. So here you use your audience, your rights, or platform to get paid by another business or take a cut of their sales. So think advertising. You build an audience for free and you charge sponsors to show ads to those people. Think about Google search ads, TV networks running commercials, YouTube channels selling video sponsorships. There's also licensing here. You own the legal rights to an idea or a character, and you charge other businesses as a fee to use it. So think about Microsoft charging IBM to use their operating system, or Disney letting a toy company make Marvel action figures, or a sports team putting their logo on hats. There's a transaction fee model. You connect buyers and sellers and you take a cut of the final sale. So think about Airbnb taking a percentage of a house booking, or eBay charging a fee for online auctions, and Visa taking a cut of every credit card swipe that happens. So pros of third-party and platform money: the product is free for the user, so you can grow your audience incredibly quickly. Quickly. Once you reach a massive scale, advertisers will pay you huge amounts of money to reach your viewers. You don't have to build anything or ship anything or manage physical products. It's pure profit, and the partner company takes all the risk of actually making the items. You don't have to hold any inventory or risk buying products that won't sell, and your revenue grows automatically as the total volume of sales goes up on your platform. The cons of third-party and platform money are you need millions of views to make real money. If you show too many ads, your audience will get annoyed and they will leave your platform forever. You give up control over how your brand is used in the real world. If your partner company makes a cheap or bad product, it ruins your own reputation. And it's very hard to build trust between strangers. If a bad seller scams a buyer, you have to spend a lot of time and money fixing the problem so people don't leave. Pick a model that fits your life. So we covered a lot of different options here. And it's easy to look at all these business models and get completely overwhelmed by everything. Just remember, it comes down to 3 basic ideas: how you create value, how you deliver that value to clients, and how you get paid. That's it. You also don't need to have multiple business models. We just went through all the pros and cons of each. So pick the one that best aligns with the kind of business you want to build and life that you want to lead. You can save this video, go back and watch it again if you need to hear it again, that is okay. So for your creation engine, figure out if you're going to sell physical products, digital and ideas, or time and experiences. For your delivery engine, figure out if you're going to sell direct-to-consumer, through partners, or have a hands-off operation. And then for your revenue engine, figure out if you're going to have a single purchase, ongoing sales and rental fees, or third-party and platform revenue. Those are the 9 main business model decisions behind almost every company in And now you know them too. So think about the kind of company that you are trying to create and start building it this week. A business model shift just might save your company like it did for me. And congratulations, you're one video closer to who you're meant to be. Believe. Now let's learn all of money explained. Nobody ever taught you money, and that's why it causes so much stress in your life. Our school systems teach us nothing about money. Nothing. It's pathetic. Money's just numbers in and numbers out, isn't it? See, that's what people get thrown off, I think. I think that's the root of a lot of financial problems for amateurs and professionals. When the Finra Foundation quizzed more than 25,000 American adults on 7 basic money questions, only 27% of them could get 5 of them right. If you want to be rich—

forget rich—

if you just want to have basic financial security, you have to pay yourself first. There's 3 basic parts to a financial statement: income statement, balance sheet, statement of cash flow. You can teach a monkey that, but our schools don't teach that. Understanding how money works decides what you can say yes to, what you get to walk away from, and how much of your life actually belongs to you.

Most of us don't speak the language of finance, and I think that's on purpose.

I think people in finance do not want you to know the In 1992, Daymond John was living with his mom in Queens. He didn't have investors, no degree in business. He had $40 to his name. His mother had taught him how to sew, so he spent that $40 on fabric and made a few dozen tie-top hats.

I go to the store, get $40 worth of fabric. I come home, I give my mother the, the, the stuff to sew the hats, and she says, I'm not sewing this, you're sewing this. I said, oh crap, now I gotta work at this? I sell the hats and then all of a sudden I have all these hats and only one head.

So he took them to a street corner and sold every single one of them in a day for $800.

That's when I went out and sold those hats outside on that Good Friday, and I sold $800 worth of hats in 1 hour.

The hats worked, so he expanded into shirts and jerseys.

Then I would start going to the Black Expos where there was like a basic flea market on the road, and I would try to sell shirts there.

His mom believed in it enough to mortgage the house they lived in for $100,000. And he turned half the house into a factory.

She said, this is all we have, uh, why don't I go out and I take a loan on the house, and, you know, you manufacture, deliver the clothes, and put the money back in.

Then he took samples to the Magic Apparel Show in Las Vegas and walked out with $300,000 in orders.

I went to the Magic Trade Show, the trade show of the fashion industry, and I wrote $300,000 worth of orders.

But here's how that business actually works. The stores don't hand you money at the show. They order Then they pay you 30, 60, 90 days after you deliver. Meanwhile, you buy the fabric upfront and you have to pay the people who are sewing it. So Damon had $300,000 of orders and nothing coming in for months. The $100,000 from the house went into the fabric and the employees. He got around $75,000 of the orders made, and 4 months later that money was gone and the store still hadn't paid him yet. So he went to a bank. They said no. No. He went to another bank, they said no. He went to 27 banks and every single one of them turned him down.

I went to 27 banks, I got turned down.

The orders kept coming in the whole time until he had about $1 million of them sitting there and he couldn't fulfill them. His mother took what was left of their money and put an ad in the newspaper. It said, $1 million in orders need financing. 33 people called.

And then Mom again comes rescue and says, I have an idea. She takes out an ad in the newspaper for, uh, says something like, million dollars in orders, need financing. And 33 people call that ad.

One of them was a textile division of Samsung who wanted to test the urban market.

One was, uh, Samsung's textile division.

They agreed to pay to get his orders made, but they had one condition: he had to do $5 million in sales within 3 years. He did $30 million in 3 months, and by 1998, FUBU was doing over $350 million a year in worldwide sales. Orders aren't money. You can have a lot of sales and still have nothing in your bank account. Now a lot of people think, okay, this doesn't apply to me because I may not have a business or I'm not making enough money yet for any of this to matter. You're thinking money stuff starts once there's money, but you don't need a business for any of this. If you get paid and you pay bills, you're already making these decisions every month. You're just making them without knowing the rules of money. And it costs you real money. If you're carrying a credit card balance at 20%, that's costing you today whether or not you ever learn about what compound interest is. All progress begins with telling the truth. So here's the truth: you're not bad with money. You were just never taught about it, and you can learn it. So here's how money actually works start to finish. Money is a skill, not a personality. So you've probably said at some point, I'm just not a numbers person. Only 27% of adults got 5 of 7 basic money questions right. That's not about who Who's good with numbers. It's about what nobody actually teaches you. So being leads to doing. If you decide you're the person who understands money, you'll start opening the bank app instead of avoiding it. You'll start reading the statements instead of just the total. You've been waiting until you feel ready to look at your money. It doesn't work that way. It works the other way around. You look at it and then it stops being scary every time. So once a week for 20 minutes, you look at 3 things: what came in, what went out, and what is actually left. That's it. Don't worry yet about budgeting or giant spreadsheets with 400 rows. Just looking on purpose every week until it stops scaring you. And you know when the best time to start is? Right now. How about right now? Open the app while I keep talking. The number in there is the number whether you look at it or not. Looking doesn't cost you anything. Learn your 3 numbers before anything else. Almost every money disaster comes from mixing up revenue, profit, and cash flow. So revenue is what comes in, profit is what's left over, and mixing those 2 up is how somebody with a busy business ends up with an empty bank account. The third one is cash flow, and this is about timing, and this is the one that actually kills a lot of businesses. You can run a profitable business and still go broke because the money you're owed arrives later than the bills you have to pay. Let's look at a real example. Let's look at a dance studio. On the year, the business was profitable. Looks great, but I pulled in his last 3 months, month by month. October was negative $5,300. November was positive $2,500. December was negative $900. So across the quarter, he was down $3,700 while believing he was doing fine. His fixed costs were about $20,000 a month. Before anything else happened, $11,000 of rent, $2,000 of insurance, instructor pay, software, cleaning. So the only question that matters is how much he has to bring in that month to cover it. $20,000 keeps the door open. So he set his target at $25,000. So there's something left at the end. Now he's not guessing anymore. He has a number to target. You have that number too, whether you're running a company or just your household. Add up what has to go out every month, no matter what. That's the floor. Once you know that, you know exactly what the month has to bring in. And if that number scares you, that's exactly why you need to know what it is. You can't cut a cost that you've never written down. So put every expense on one page before you decide anything. Then take what's actually in the account and divide that by your monthly floor. So if you've got $30,000 sitting there and you need $10,000 a month, you have 3 months. That's your runway. With runway, you can say no. Without it, you say yes to anything because you need the cash. Somebody with 6 months of runway can walk away from a bad client. Somebody with 3 weeks says yes to everything, including the work that's going to make the next 3 weeks worse for you. If your runway is under 3 months, That's the number to fix before anything else in this video. Your income problem is usually a price problem. If you want more money and you're an owner, the fastest change isn't cutting your expenses. It's what you charge. And I'll show you my own numbers. So this isn't just some theory. So my mastermind is $50,000 a year. My growth strategy coaching program is $15,000 for 4 months. If somebody can't do that, we have smaller versions that people can join. I said those in that order on purpose. It's called price anchoring. When the first number somebody hears is $50,000 and the $15,000 sounds reasonable and ones after that sound like a bargain. If I started with the lowest price first, nobody would ever pay me more than that. And when you do raise your price, raise it on the next new client, not the ones you already have. You get the new number without a single awkward conversation with existing clients. And you don't get paid for the hours, you get paid for the result. Somebody selling 6 coaching sessions is selling time. Somebody selling, I'm going to add $200,000 to your revenue this year, is selling an outcome. And an outcome can be worth 10 times the price. Price of the time. Selling to a smaller number of people at a serious price is also just easier to run. Low-ticket offers at $50 a month needs thousands of customers, a marketing machine, and a support team. That's real business, but it's a much harder one to build first. Make a list of 50 people. So here's what I'd do if I had to rebuild my income starting Monday with no ads and no audience. I'd write down 50 names, not 5,000 followers, 50 specific people who could each spend $50,000 with me in a year or Send me 3 people who will. Real names, real companies, real people who already have the money and a problem that I know how to solve. Then I wouldn't pitch a single one of them. I'd start a show and invite them on as a guest. An invite is the easiest yes in business because you're offering somebody 45 minutes to talk about their own work. You're leading with a give instead of an ask. And after the recording, when the relationship is warm and real, you offer them a second opinion on something they're working on at no cost. You look at it, you tell them the truth, you give them your actual thinking from your expert opinion, and some of those turn into Clients. Some send you three clients each. One of my clients works with home service businesses doing ten million or more, where a normal client is worth forty thousand to a hundred thousand dollars a year, and one platform-level deal is worth a million dollars a year. At that size, you don't need fifty wins; you need two. And if you don't have a business yet, this still works. Write down fifty people who could hire you, who could promote you, or who could hand you the opportunity that changes your entire year. You're not asking any of them for anything upfront. You're making yourself useful. useful to 50 people who could hire you one conversation at a time. Your 50 will look different than mine.

Cool.

Write it anyway. It's the single highest value document in your business, and it costs you an afternoon of work. Start with 10 names tonight. 10 is enough to tell you whether this list is something that can be real or not, or whether you've been just guessing about who your customer actually is. Pay yourself like an owner. So a job pays you, takes a tax, and hands you what's left Right? A company earns, pays its costs, and then you choose how the money reaches you. That choice is worth a lot of money. So in Canada where I am, money left inside a corporation is taxed at roughly 19 to 20%, while a big personal salary can hit at around 50%. So pulling out every dollar the second it comes in is one of the most expensive habits an owner can have. I pay myself a small steady salary so I have a clean personal record for things like the mortgage, and the rest stays inside working in the business. There are legitimate costs a business can carry too. If you work from home, A share of the mortgage interest, the utilities, the internet can be a business expense because that's generally where the work happens. It usually gets worked out by space. So if your office is 1 room out of 8, that's about 12% of your house. So about 12% of those bills is a business cost. Keep the receipts, let your accountant run the actual numbers. Your country's rules are going to be different than mine, and I am not your accountant. So take this to a good one, but go with the right question. Don't walk in asking, how do I just pay less tax? Walk in asking how to structure what you pay yourself. That's now an owner's question and mindset, and it's worth thousands or tens of thousands a year. Buy your time back. Eliminate, automate, delegate. So buying your time back is how you make more money. So do it in this order: eliminate, automate, delegate. Eliminate first because it's free. So go through your week and find what nobody actually needs. So I used to write up minutes after every mastermind meeting. It took me real time. And one day I I realized nobody was reading them, not one person. So I stopped. And what happened? Nothing happened. Nobody cared. You've got something in your week right now that nobody is reading either. So write down everything that you did last week. The parts that nobody would miss are the parts that you cut out. Automate is second. So anything repeatable that follows the same steps every time should be handled by software or AI instead of you and can be done at 11 PM. Delegate last and start much smaller than you think. You can hire somebody for an hour a day. That, that's it. That's how I started. It's cheap enough that it won't hurt If it goes badly, and it teaches you the real skill. The skill isn't hiring, it's handing work off and then letting somebody do it their way. So do it in that order. You'll want to jump straight to delegate, and then you're paying somebody to do work that you should have deleted or should be handed off to automation. And there's a number underneath all of this that you can actually calculate. Take what you want to earn in a year and then divide it by about 2,000 working hours. So if you want $200,000, your time is worth roughly $100 an hour. Now look at what you filled your last week. If you spent 6 hours on something you could hand off, for $25 an hour, you spent $600 of your own time to avoid paying $150. So you lost $450 and it felt like you were being strategic and careful. Then make the rest of it boring. So once you're earning money and keeping money, growing it should be the most boring part. For the first 10 years, compounding barely does anything. Then it does almost everything. So take $10,000 growing at 5% a year. After 10 years, it's worth about $16,000. Give it 30 years, It's worth $43,000. The $10,000 earned around $6,000 in its first decade and around $27,000 in the last 20 years. The extra 20 years did that, not a bigger return. That's why waiting is so costly. The last 20 years are where the money actually grows. If you wait to start, those are the years that you're giving up. Put it in an index fund that holds the whole market and just leave it there. You don't have to go and research individual stocks, not because you couldn't learn, but because those hours are hours you're not putting into your own business or career. And that's what actually Changes your income. And leaving it all in cash isn't actually safe. Prices in America are roughly 22.5% higher than before 2020. So money sitting still has been losing real value this entire time. One more thing, compounding works against you too, and it works a lot faster. So credit card rates are sitting around 20%, and new card offers are often higher than that. Compounding works on debt as well, and at 20%, it grows faster than any investment you're going to own. There is no investment you're going to find that reliably beats paying off a balance at 20%. So if you have a balance on your credit card, clear before you invest a dollar. It's the best guaranteed return you'll ever get. You can learn this faster than you think. Nobody taught you any of this, and it isn't your fault. What you do now, though, is, is up to you. Daymond John didn't have a finance degree when he took those hats out to that street corner. He learned it the hard way. And the worst of it came after the mortgage money ran out with about $1 million in orders that he just couldn't fill and 27 banks saying no. No, a bird sitting on a tree isn't afraid of the branch breaking because her trust isn't in the branch, it's in her wings. So if you have the ability, then you have the responsibility, and you have the ability. Now let's learn the worst business deals in history explained like you're 5. Some of the smartest people on the planet running billion-dollar companies make catastrophically bad decisions all the time, and it's almost always for one boring little reason. Most people don't You got to leave your home.

You got to leave your comfort.

Everybody can do 10 times more than you think you can. And before you get to 10x, you'll end up changing the goal to 10 times more. Study after study shows that 70 to 90% of major mergers and deals actually fail, according to Harvard Business Review, which means even the so-called experts get it wrong far more often than they get it right.

I find it really powerful. I found power I'm in yes culture. My whole game is yes, comma. I'm not a great person to ask the no thing. I think there's people that are more disciplined at no. I just like the value of yes. And then if I'm a week, an hour, a year in and I've realized it's not right, I leave.

And here's why it matters to you. Because the exact same blind spot that cost these giants billions of dollars is quietly costing you opportunities in your own life and business right now too. If you want to be successful, learn from the other people's mistakes. Let me tell you the greatest example of this in all of history, I think. Picture the year 2000. There's a tiny, struggling little company called Netflix that mails DVDs to people in little red envelopes. It's losing money and its young founder, Reed Hastings, is nervous about the future. So Reed flies to Dallas to meet the absolute giant of his industry, Did you go to Blockbuster or did they come to you?

No, we tried going to Blockbuster for months. We tried reaching out to them, but this was at this ultimate— I mean, listen, we were doing $5 million a year. They were doing $6 billion a year. It took months and finally we got the call. That's when Blockbuster calls and goes, we'd like to see you tomorrow in Dallas.

Back then, Blockbuster was a monster. It had 9,000 stores. It pulled in $6 billion a year and it made a fortune charging people to rent movies. People late fees on their rentals. Reed walks into that meeting and makes Blockbuster a simple offer.

We make our pitch, we go, we'll combine forces, um, you'll run the stores, we'll run the online business, we'll build a blended model which our research has shown is a game changer, and everything will work out.

He asked them to buy his little company Netflix for $50 million and let his team run their brand new online business for them. And here's the moment that changed everything. The Blockbuster executives basically laughed him out of the room. $50 million for some tiny website that mails DVDs around? No thanks.

And then they asked the big question, you know, how much? We figured we're $50 million in the hole, so $50 million. And there's this silence in the room, and I'm looking at, uh, Blockbuster execs trying to piece together what the reaction is, and it finally dawns on me they're trying to suppress laughter.

They were making way too much money on late fees to care about some silly little internet idea, so they said no, and Reed flew home stung. Now here's how the story ends. Blockbuster, the giant, kept right on doing exactly what was already working, all the way up until the world quietly changed. In 2010, Blockbuster filed for bankruptcy. Gone. And that tiny little company they laughed at, Netflix, the one they could have owned for just $50 million, is now worth hundreds of billions of dollars. One single word, no, ended up costing Blockbuster absolutely everything. And the scary part is they didn't say no because they were stupid. They said no because they were comfortable. Now you might be sitting there thinking, this has nothing to do with me. You could be thinking, Evan, these are giant corporations with billions of dollars on And I'm just a regular person. I'm an entrepreneur. What does Blockbuster's mistake have to do with my business or my life right now? I think all progress begins with telling the truth. Blockbuster didn't fail because of money or size. It failed because of a mindset, and it's the exact same mindset that is quietly ruining a lot of people's decisions every day too. It's the fear of letting go of what feels comfortable. It's the little voice, the whispers that say, don't risk the safe thing for the unknown. Known thing. You feel it every time you stay in the job that you've already outgrown, or you sit on the idea that you're too scared to actually start. So in the next few minutes, let me walk you through the simple patterns hiding behind history's worst business deals so you can spot them coming and never make the same mistake in your company. The most expensive word in business is no. Here's the first pattern, and once you see it, you'll start seeing it absolutely everywhere. The most expensive word in all of business is the tiny word No. Blockbuster said no to Netflix, but they are nowhere near alone. Back in 1999, a search engine called Excite had the chance to buy a little startup named Google for just $750,000. They said no. The greatest interest came from Excite and actually came from Vinod. You were the investor in Excite, and we spent a while talking to them and talking to you, Vinod.

Yeah.

You remember that. In the end, I don't think the management team there was quite as excited about it.

No pun intended.

Google is now worth trillions of dollars. Yahoo had the chance to buy Facebook for one billion back in 2006. Then they got greedy and tried to lower the price at the very last second, and a young Mark Zuckerberg just walked right out of the room.

Zuckerberg's decision not to sell Facebook to early bidders has become legend in Silicon Valley after he rejected. After it rejected a bid from Viacom, Yahoo offered to buy Facebook for $1 billion in the summer of 2006. But when Yahoo stock fell more than 20% after a disappointing earnings report that July, Yahoo reduced its offer and Facebook again walked away from a deal.

Facebook is now worth over $1 trillion too. Do you see the pattern forming? Every single one of those nos came from a smart, wildly successful company. They weren't dumb people. They simply couldn't see the future because they were too busy protecting their comfortable present. So here is the takeaway: the next time a scary opportunity shows up, the kind that makes your stomach turn and flip over a little bit, don't reflexively just say no just to feel safe again. Stop and pause. Ask yourself if you're saying no because the thing is truly wrong for you, or just because it feels new and unfamiliar. Because saying no to the right thing is quietly the most expensive mistake a human being can make. Good is the enemy of great. Here's the second pattern, and it's a sneaky one that hides in plain sight often. Good is the enemy of great. So think about it. Blockbuster was not struggling at all when it said no to Netflix. It was absolutely thriving. It had 9,000 stores and billions in revenue rolling in. And that right there was the whole problem. When something in your life is going badly, you fix it fast because the pain forces You too. But when something is going fine, you protect it, you cling to it, and you quietly stop reaching for what could be next. That comfortable, good enough kind of success is exactly what lulled Blockbuster to sleep while a tiny little Netflix quietly built the entire future. And the same silent killer could be running loose in your business, your life too, right now. It's the decent enough job that's good enough, so you never chase the great one. It's the relationship, the fine little routine, the comfortable plateau that you've settled onto. Good feels safe and it's warm, but good is exactly where greatness quietly goes to die. So look really hard at your own life right now and ask, where am I settling for good and calling it finished? That cozy little spot you don't ever want to leave might be the exact thing that is holding you back from something truly incredible. Ego writes the checks that bankrupt you. Pattern number 3 is maybe the deadliest of all, and it all comes down to pure ego. Smart Smart people make genuinely terrible choices because they are flat-out terrified to walk away from a process that already made them rich. I call this moment the death of an ego, and almost nobody is brave enough to go through it. So look at Kodak. All the way back in 1975, a young Kodak engineer invented the world's very first digital camera. Kodak engineer Steven Sasson invented the prototype that would eventually become the digital camera. Kodak literally held the entire future of photography in their own two hands. But the executives took that invention and buried it. Why on earth would they do that? Because they were making an absolute fortune selling film, and a digital camera that needs no film would kill their golden goose. In the mid-'70s, 1976, Kodak owned 95% of the film market and 85% of the camera market in the United States. Their ego and their past success completely blinded them to what was coming, and by the time they finally tried to catch up to everybody else, it was way too late, and Kodak filed for bankruptcy in 2012. With the failure to successfully pivot to digital complete, on January 19th, 2012, Kodak filed for bankruptcy. They didn't lose because they lacked the technology— they literally invented it. They lost because they couldn't let go of who they used to be. So ask yourself honestly, what old way of doing things are you still clinging to just because it worked for you once before? Sometimes the exact thing that got you here is the same thing keeping you from getting there to the next spot. The tiny decision you regret for the rest of your life. Here's a pattern that's much smaller, but somehow even more painful. Sometimes one tiny fear-based decision ends up haunting you forever. So meet Ronald Wayne. Most people have never heard his name. But he was actually the 3rd co-founder of Apple sitting right alongside Steve Jobs and Steve Wozniak back in 1976. Ronald owned a full 10% of Apple. Think about that. But only 12 days in, he got scared. The young company felt risky. He was worried about the debt, and he just wanted out. So he sold his entire 10% stake back to Jobs and Wozniak for a grand total of $800. That very same stake today could be worth tens of billions of dollars. $800. He didn't lose it in some complicated deal or some giant market crash. He simply gave it away in a moment of panic. of panic right when things got a little scary. And that's an important lesson. The most painful regrets in life usually aren't the big dramatic gambles that didn't pan out. They're the moments you bailed on something that you believed in the second it got a little uncomfortable. So before you walk away from something that you know deep down has real potential, stop and ask if you're leaving for a genuinely smart reason or just because the fear got way too loud for a minute. Bet on people, not just on numbers. Now here's a pattern that runs in the complete opposite direction. The quiet secret of the people who actually win big: they bet on people, not just on spreadsheets. So picture two different investors looking at the very same young, broke, totally unproven founder named Jack Ma, the man who would build Alibaba. One investor, a famous Wall Street firm, looked only at the shaky numbers, got nervous, and ended up selling their early stake way too soon. They missed out on billions of dollars. But another investor, a man named Masayoshi Son, met Jack Ma for just a few short minutes and said yes almost instantly. He wasn't betting on the messy numbers because the business looked shaky on paper. He later said he could simply see that Jack's eyes were shining, and he chose to bet on the person. That one decision to back a human being instead of a spreadsheet became one of the greatest Investments in all of history. So the lesson: numbers can only tell you what has already happened, but people show you what's actually possible. When you're deciding who to trust, who to partner with, or even when to finally bet on yourself, don't just stare at the safe, provable numbers on the page. Learn to see the fire in a person's eyes, especially your own. Don't choke the golden goose. So here's a pattern: when you finally do win on some. Something great, don't smother the very thing that made it special in the first place. In 1994, Quaker Oats bought the quirky little drink Snapple for a massive $1.7 billion. Snapple was fun, it was weird, people loved it. So what did Quaker do with it? They stripped out all the fun and they treated it like a boring grocery store product and alienated the exact customers who loved it the most. And just 27 months later, they sold Snapple for $300 million. They lost $1.4 billion, which works out to losing more than $1 million for every single day they owned it. MySpace did the same kind of thing to itself after News Corp bought it for $580 million. They crammed it so full of ads that users fled to a cleaner, simpler Facebook, and MySpace later sold for $35 million. So the takeaway, when something in your life is genuinely working, whether it's a business, a relationship, a daily routine, the worst thing you can do is start changing it before you truly understand why it works. When you finally get your hands on something great, your first job is not to fix it. Your job is to protect the magic that made it great to begin with. Overthinking is its own decision. Pattern number 5 is one you might be doing at this very moment, and I'm guilty of too— overthinking. While you sit there gathering just a little bit more information, waiting for the perfect moment, and running the same numbers for the 100th time, the opportunity often will stand up and walk out the door. So here's a question that I, I want you to burn into your brain forever: what's the real opportunity cost of you overthinking yet another chance? Yahoo didn't just say no to buying Google one single time. They hesitated, they debated, they tried to squeeze out a slightly better price. And while they were busy overthinking it all, Google quietly became completely unstoppable. Waiting felt to them. It was actually the opposite of safe. Choosing not to decide is still a decision, and it's almost always the worst one available. You will basically never have all the information that you want. That, that perfect moment you're waiting for is a complete myth. The only way to know 100% is when it's already happened. So you know when the actual best time to act on a real opportunity is? Now. How about right now? The longer you sit and analyze and stall, the more those Blockbuster and Yahoo-style moments show up in your life. Done and moving forward beats perfect and frozen every single time. Never hand your future to a rival. Here's one of the sneakiest patterns of them all. Sometimes a company literally hands its entire future straight to a rival without even realizing that it's happening. And the greatest example I think is Xerox. So back in the 1970s, Xerox built a secret research lab, and inside that lab they invented the actual future of computing— the mouse in your hand and the graphical screen that you're literally looking at right this second. They had it first, but Xerox was completely obsessed with selling photocopiers, so they never saw what they were truly sitting on. They even invited a young Steve Jobs in for a friendly tour, and Jobs walked right back out of the door with the blueprint for the personal computer. Xerox handed Apple the future on a silver platter, and Apple ran with it to become one of the most valuable companies on the entire planet. So the lesson here, and it's a big one, never give away the one thing that's going to define your future. It's totally fine to get help with the small stuff, but the core idea or skills that decides whether you win or lose— guard that one thing and build it yourself. Don't trade your future away just because you're too busy protecting your comfortable present. Decide from your future, not from your fear. This is a fun last pattern, and it quietly ties all the other ones together. The worst deals in all of history were made from a place of fear, never from vision. Blockbuster, Kodak, Yahoo, all of them— they decided out of fear of losing what they already had instead of excitement for what still could become. So the simple tool that you can apply in your business, your life: when you're staring down a big scary choice, don't Ask the fear-based questions. What could I possibly lose here? Instead, imagine yourself at 80 years old, sitting in a chair and looking back over your entire life. Then ask, will I deeply regret not doing this? And if the honest answer is yes, then you absolutely have to do it. Personally, I would generally rather know and fail than spend my whole life wondering what if. And that is exactly how the people who change the world make the decisions instead of the comfortable. Giants who get left behind in the dust. Because if you have the ability to see a better future for yourself, then you have the responsibility to actually move towards it. And being the kind of person who decides from vision is precisely what leads to actually building the life you really want. You can see the patterns now so you'll never repeat them. Here's what I really want you to walk away from this video today with: every single one of these billion-dollar disasters came down to the same thing: fear, ego, and comfort beating out courage and vision. And now you can see those patterns hopefully coming from a mile away, which means you never have to become the next Blockbuster in your own life. You are already ahead of the giants. To learn the 20 forgotten businesses that could make you rich, check the video right there next to me. I think you'll love it. Continue to believe, and I'll see you there. The businesses that actually make people rich are almost never the ones that people brag about at parties. According to the U.S. Small Business Administration, administration, the typical self-employed family in America has a median net worth of $380,000.