Jon Congdon Shares Insights to Product Development and Project Management

I'm dean jackson, he's joe polish, and this is the I love marketing podcast. Hey everybody, it's Dean Jackson and no Joe Polish with me on the intro here. But that's for a very important reason. One of the things that I love about Joe is just the broad, broad array of people that he knows and that he gets to introduce me to him. A lot of people really enjoyed the interview that Joe did with Tony Horton on I Love Marketing. Who is the guy from the P90X infomercials that you've seen everywhere unless you've been hiding under a rock. Well, a few years ago, Joe got to have an interview with John Condon, who is the president of Beachbody, the company that actually puts out the P90X. The man behind the man, so to speak. And it's an incredible interview and I think you're really going to enjoy it. So enough of me. I'll let you get right to Joe. Let us know what you think. You know, leave a comment on Ilove marketing.com or spread the word on your Facebook or your Twitter or anywhere that social media is accepted. And we'll talk to you next time with a great episode with Joe and I together. Enjoy.

Hello, this is Joe Polish, president of Piranha Marketing, founder of the Genius Network. And today I'm going to be doing a fantastic conversation with a very sharp entrepreneur, the president of Product Partners, John Congdon. How are you doing, John?

Can you hear me? Great. How are you, Joe? Yep. Awesome.

All right, well, you guys are doing a lot of great stuff, including P90X, which unless someone's completely disinterested in physical fitness and exercise, has certainly seen the infomercial. And I know many people here are using it, especially many of my subscribers, because I did an awesome interview with Tony Horton recently. And now I'm going to interview you, the guy that founded the company with your partner Carl.

And I'm going to read your bio.

Real quickly just so people have a background of who you are. Okay, so John Congdon, he's the co.

Founder of Product Partners.

Congdon is instrumental in shaping and expanding the mission, vision and growth of the company. He's involved in product development as well as management of product marketing, e commerce and business operations. He also oversees media distribution channels to increase the Beachbody market both nationally and internationally. And Product Partners, New Beauty, Vertical Congnex. Commitment to creating well tested, effective products have helped the company build a reputation for quality merchandise that delivers real results. He was a test group participant for the Power90 and P90X fitness programs and drives the international fitness company Wide Fitness Challenges as well. After launching his career at Procter and Gamble, Congdon then traveled the world on Walkabout and worked as a science teacher for over three years before launching his own marketing and operations consulting firm. In 1996, he joined Guthrie Reinkner, a leading infomercial marketer. Then he met Carl Daikeler, and the two collaborated on multiple national marketing campaigns before founding product partners in 1998. In 2005, Congdon was a finalist for Ernst & Young's Entrepreneur of the Year Award. Along with Daikeler, he holds seats on two boards, including his second term on the Electronic Retailing Association ERA board of directors based in Washington, D.C. and in 2009, he testified in front of the Senate Subcommittee on Consumer affairs as representative of the marketing industry. Congdon graduated from the University of California, Los Angeles, and holds a degree in political science with an emphasis in American Constitutional Law and International relations. So he got a pretty expansive background. And what didn't I mention that's important to know about you before I start asking you a bunch of questions about.

Business? You know, I guess that pretty well covers it from a general point of view other than the fact that I guess if I were still out there hunting and pecking for a regular job and it wasn't my own boss, I probably wouldn't be so upfront about the fact that I disappeared for a couple years wandering around the world because most standard people don't like to hire people who don't have, who have a big blank hole in their resume. But when people ask me frankly why I think I'm pretty good at my job, I usually say that that couple of years wandering around the world is probably as big a piece of why I think I'm a pretty good entrepreneur as anything else. Just because you need to have a diverse background, but you need to have just seen different things than just getting out of college and getting a job and plodding along, which I think does not inspire an entrepreneurial.

Attitude. Well, you know, let me ask you, what was your motivation for doing that? Were you in some place mentally of frustration, irritation, or were you just like really inspired to run around the.

World? Yeah, you know, I was just one of those people who didn't know exactly what they wanted to be at a super young age. And I finally had to sort of embrace that and go, you know, maybe I need to wander around a little bit and check things out and then just let life take its course. And I think that more patient approach probably was probably about the best thing for me. I know other people who have known what they wanted to do since they were 12 years old. And that's amazing. I mean, that's a great thing. And most of my friends who knew what they wanted to do when they were 18 or 15 or 20 ended up doing it and being very successful. But that doesn't mean there's anything wrong with not knowing what you want to do, which was the position that I was.

In. Well, you know, let me ask you. And then let me preface this by saying that those of you that have not heard of P90X, I would highly encourage you to listen to my interview with Tony Horton who is their talent and amazing. He's an amazing.

Guy. I know he.

Is. Yeah, he's funny too. And I did this fantastic Genius network interview with him. You can listen to it if you go to geniusnetwork.com P90X which stands for actually Power 90 Extreme. But anyway, that's just one of the many things that Product Partners does. And John runs a multi, multi million dollar company that helps hundreds of thousands of people, millions at this point with his partner Carl. And you got how many employees? Let me get some of the makeup. I want to get some of the.

Basics. We've got about 270 full time.

Employees. Gotcha. And.

You'Re. Give or take because it's always moving around. We're still hiring. We're definitely a company. We're lucky that in this environment we're one of the companies that's hiring. Yeah.

Yeah. And you know, I was down at your headquarters recently in California, Santa Monica and I've been into, you know, I've done a lot of work as you know, in the fitness field with people like Bill Phillips and various other individuals over the years. And I've gone into a lot of organizations that sell nutritional products and health and fitness related things. I've, you know, I've been working out in gyms for, you know, many, many. One thing that really struck me, which I don't think I ever told you about was I was very impressed with the physical fitness levels of what most of the people in your organization and company appeared to be. It's just a company where you can tell people exercise people work out, people take care of themselves. And you're one of the companies that actually produces things that are sold on infomercials where you really want the people to use the product. It's not someone that sells a piece of crap exercise machine that they hang clothes on and it falls Apart, if you ever actually use it. I mean, you sell products, products that you want and intend people to use them, and people actually do. So it's pretty fascinating. And if people have never heard of you or Carl, which many times, they see people like Tony Horton and the stars that you have behind the infomercial, they don't see the people behind the scenes. And I first met you at Rock the Kasbah, Richard Branson's annual charity event. And you're a tall guy and you're in great physical shape, and people can see you on the beachbody website. They may not notice it's even you, but you actually. You eat your own dog. Food is the key. You know, you work out, you exercise, and you also run a very, very successful business. And so going back to you wandering around the world, when did you become successful? You said you didn't know what you wanted to do when you were. When did this take.

Place? First of all, I sort of define successful differently than a lot of people might. I think that. But looking back on it, it certainly. I needed to change something because I was stressed out about money. I wouldn't have labeled myself as unsuccessful before I started making money. I really didn't start making the kind of money that you do as an entrepreneur, obviously, until I was truly an entrepreneur and had done it for a while, and then started product partners with Carl. So, you know, I mean, in my mid and early 30s, and I used to hang out with a pretty ambitious group of guys. I was probably the poorest guy of all of them, but I lived a relatively rich life and did things that I wanted to do and traveled the world. And so I felt like I had under my belt some experience that a lot of the guys out there, a lot of the people out there didn't necessarily have. And that was a big tool of mine when I did sort of get on the business, back on the business path. But it was really in my early mid-30s that I decided that it was time to get into business and to start driving myself forward and be slightly more financially motivated than I had been up to.

Then. Was there a big life experience that caused you to see things from a different perspective, or what do you think it.

Was? I usually tell people that one of the reasons why I think I'm pretty good at what I do is that I get the joke, and it's sort of the cosmic joke that just nothing is really that important. So, you know, you can get really stressed out over the small stuff and the big stuff, but at the End of the day, it turns out that it's kind of all small stuff. But if you're living your life in a happy way and keeping yourself mentally and physically fit, you've got about all it takes to have a great life. So if you understand the way the world works and you've seen some of the places that you do see, if you travel around the world, I saw some really impoverished areas of Central America and South America and some other places when I was traveling around. But I also in those same areas, saw that people were living happy lives. Then you sort of get the joke, you get that. But while you're sitting there trapped in your sort of myopic day to day life that you can get, you can think that things are more important than they are. And if you realize that they're not that important, then you are better at making very critical.

Decisions. I love that. That is fantastic. That's a fantastic piece of advice. I even wrote that down. Get the joke. That's something that people can put on a post it note and even remind them. I think there's some great wisdom there. So you then ventured into this infomercial business. One thing I because we're both in the quote unquote direct response marketing field, I'd first like to ask you about marketing and then ask you how you actually got into infomercial marketing. What is your definition of marketing? You're running a gigantic company and you do a great job at.

Marketing. It's funny that you say that, because I don't know that I've ever really had to define it. But in our world, certainly especially in the response world, we're into marketing, that moves the needle. So it drives somebody to either change an opinion or take an action. And generally speaking, in our world, we're really about getting the consumer to take an action. So that's either going and checking out the product and buying it, or just buying it. And if we're good marketers. I first started my career at Procter and Gamble, which is just a huge company. And sort of the job that everybody wants at Procter and Gamble when they're young is to get into brand management. But brand management there has to do with moving the needle in teeny percentage points to get somebody's impression of a brand more positive. So when they're walking down the aisle in a store, they might be inexplicably moved to feel better about one brand of cooking oil over another brand of cooking oil. And in our world, we need bigger reaction than that. We need to have a bigger impact than that. That's why so much direct response advertising tends to be more obvious and for some people, too obvious. And I think one of the things that we've done a good job at is we've done a good job at not being completely cheesy in the way that we try to get somebody to buy our product. But marketing, that's, you know, sorry, so go back to my definition of marketing is getting somebody to change an opinion or take an action because of what you've put in front of.

Them. No, you're right. I like what you said about not being too cheesy. I mean, you understand my perspective here. Tell me if this is inaccurate from your point of view. My perspective is that you very clearly, as a company, an organization, realize that even the greatest product in the world is not going to sell itself. I mean, you've got to make the case. You've got to show social proof. You offer powerful options and guarantees for people to buy. You show results and you persuade. My way of using hype is hype used ethically is massive enthusiasm for what it is you're selling. Hype used unethically is lying or misleading or over exaggerating it. Take.

P90X. It's a hard.

Workout. I mean, it's not the sit on your couch and lose weight method of weight loss. I mean, people are going to work, they're going to sweat and you tell them that right off the show, but you do it in such a manner that still makes a compelling offer.

Yeah. And with that product in particular, if we were going to market it ethically, we need to do that, but then we need to inspire somebody to want to work hard, but to get what they get out of working hard. So we could have marketed that product unethically by saying that it was easy and by minimizing the amount of time that you need to spend every day working out, using the program. But instead we chose to sort of take it head on, but then show what happens to people and talk about what you could achieve when you exercise the way you do with P90X and the changes that occur in you. And if we could portray the changes that occur in people, which I think we've succeeded in doing, then what we do is we get people saying, damn right, I'm going to kick my own butt doing that product. But they know they're going to kick their own butt doing the.

Product. Right, right. Well, you could have been involved. And we'll go back to how you got into Infomercials you said a couple things that just sparked my ADD brain to think about other things to ask you about. You have a skill set where you could pretty much apply your marketing and selling abilities to pretty much anything. But you chose health and fitness. And I think obviously because of the category is one thing from a business standpoint, but also you're a gu that, you know, I mean, you have your, I've seen you with your shirt off. You know, you're all over the website, you're on videos that people can watch. @beachbody.com, you're in great physical shape. So obviously you're walking the walk and talking the talk. You as the, you know, you and Carl, both, as founders of product partners, live the life and use the products that you sell to people. Why do you place such an emphasis on physical fitness and.

Health? Well, the short answer is I believe in it. I believe it extends life. I believe it makes you sharper. I believe it creates balance in your life and that anybody who routinely exercises and takes care of themselves and watches what they put in their mouths is going to sleep better, perform better at work, and live a longer, happier life. So once you believe that, it's pretty easy to make some time in your own life to do it. There's guys like Tony who are obviously way beyond what what I do physically on a daily basis or what Carl does. He's way beyond where we are as busy entrepreneurs. We still need to consciously make time to work out. And it's not like I get up in the morning jumping for joy at the prospect of spending the next hour working out. A lot of mornings, I'd much rather just stay in bed there, kick back, and maybe watch a half hour of ESPN with a cup of coffee in my hand, and then start my day. But I do know what it does for me, and I do believe that it helps me in all my other areas of my life. So that's the easy part as far as putting it high priority in my own life. But the other thing is I'm financially incentivized to be in good shape. I am somebody that our customers, if they get to know us and get involved with the company even more. I'm out there. I'm behind the scenes in a general way, but I'm very visible to a lot of our customers. If I were being hypocritical about what I'm marketing and the way I live my life, then pretty quickly that might get out and that really could decrease our earning.

Power. You're right. And I know a lot of doctors and a lot of people that are on the health field that are not really in good physical shape at all, that don't eat good diets, that just don't practice at all what they preach. One of the main reasons I sought you guys out, which I very much made clear in my interview with Tony Horton, was I use your products. I have a genuine interest in what you guys are doing. I love sharing it with the world. Even for the last year, with a lot of my coaching members and stuff, a lot of them use P90X. And there's been a lot of discussion about that. And even at an event I recently held in the mornings, people in my group were doing P90X, literally in a very large area of a Hilton hotel, which I thought was hysterical. And they videotaped some of this stuff. But you have products that are. I mean, right before we started recording. Do you mind sharing a little bit about the conversation that was on TV about Jerry.

Stack? Oh, yeah. Well, he just came out of retirement, and he was being interviewed on NBA tv, and they asked him, you know, why he looked so good or what he had stayed. What he had done to stay in shape or get in shape for his comeback. And he just said. He said P90X. And then Kenny the Jet, I think, was the guy that was interviewing him. He's like, oh, yeah, that stuff works. And they began to go back and forth about the product and talk about it for a couple of minutes. And I didn't even know that Jerry Stackhouse had bought the program. So, you know, what we love about that is we're 100%. When a celebrity says they do P90X or athletes say they do P90X, it's not because we paid them or did some, you know, put together some contract with them. In fact, most of the time, we didn't even know that they were a customer. It's 100% organic endorsements that we see out there for P90X. And it's getting to be very well known in all on the professional circuit or people that are getting in shape for the next season or are getting back in shape because they got an injury and they can't work out with their team. We're just seeing it literally everywhere. We're obviously beyond excited about that and really glad that we didn't do a bunch of big paid contracts when we were trying to launch that.

Product. Yeah, absolutely. When we were talking earlier, before we started recording, you made this comment. You said, P90X, your exercise programs what you're selling on TV, it's. It's transcended the marketplace in which you launched it in. And that was the infomercial.

World. That was the infomercial world. I just don't know of another infomercial product that's ever gotten to this point of public consciousness and now is sort of taking on a life of its own. And there's a cache to it, which I can't say that I'm totally surprised, because I've always known that it's a great product. But given the fact that we launched it in the infomercial medium, I am very happy that it's gotten to where it is so that we really have transcended the marketplace it was launched in because it's become a cultural.

Phenomenon. I mean, how did you get into infomercials? Why did you choose that.

Medium? Frankly, I was working at Guffy Ranker before Carl and I decided to start this company. So I was already involved in the industry, and I knew what a brand that's driven by a successful infomercial campaign can do. Plus, my partner Carl came from that world or has been in that world ever since he graduated from college in 1986. So he's got 25 years experience. I've got 15 years experience. Now, the thing about infomercials is, if something takes off, you can take a brand from $0 in revenue to multiple tens of million dollars a year in revenue in less than a year. And there's not many other arenas in which you can launch a product where you can go from zero to 60 that.

Fast. You're right. I mean, a lot of my clients are obviously in the infomercial business. And you can get very wealthy very quickly, or you can lose an enormous amount of money very quickly if.

You don't know what the hell you're.

Doing. Or you can go to jail if you're an idiot and you're unethical and you sell garbage. And so in that arena, I imagine for you and your category, it's extraordinarily competitive. I mean, you're in an industry that's filled with marketing hype. How do you manage to be as effective as you guys are, still deliver enormously valuable programs that actually require people to work hard while using your products and services and not be blown out of the water by other savvy competitors out.

There? We made a choice to do that. Obviously, we've been faced a few times in the history of our company with ways to do things differently, where we might have Made more money. And we've certainly, especially in the first five to six years of our company, we left a lot of money on the table because we wanted to do things right and we wanted to make sure that we wanted that we were selling things that worked and that we could hold our heads high. But now I think that's coming around to really pay off for us. So I think in the long run, we're going to end up being a better company. We're certainly a better company for it, but we're also creating more value and setting ourselves up for more success down the road because of the way we've chosen to do things. Every day you're faced with decisions relative to how you want to operate your company. I mean, literally every single day, especially as you grow. And a lot of those decisions are hard. But for us, it was made easier by the fact that we both wanted to run that kind of a company. But it was also made easier because we made ourselves very transparent to our customers early in the evolution of the company through message boards and other online communities. And so we were interacting with our customers on a daily basis that were having success with our programs, but we also knew things that they didn't like about us and about our programs. And so the volume was loud inside the offices relative to what our customers were experiencing. And so we've always been very reactive to that. And we knew that if we tried to sell something that didn't work after we sold something that worked to our database, that we were going to hear it loud and clear from our customers. And not only that, the next time we launch something, they were going to be unlikely to buy the next thing from us. And we knew that lifetime value of a customer was really where it was going to be moving forward. So we just tried to build our company based on that. If we kept putting good products out, that our own consumers would be more likely to buy more stuff, but not only that, they'd be more likely to tell their friends to buy stuff from.

Us. Yeah. And now you actually have a large company that has influenced and helped lots of people, literally hundreds of thousands of millions. Like I mentioned earlier, that does that. And that's the reward for that sort of harvesting, as you will, of what you did in the very beginning. I mean, one of my favorite lines is, be nice to the people you meet on the way up, because they're going to be the same people you meet on the way down. And you.

Are. I always like that one.

Too. Yeah, I mean, it's great. Knock on wood, everyone can make mistakes. I just have always lived my business career where believing that money earned ethically as a byproduct of value creation and be nice to people because, you know, at this point in my career of having started my marketing business back in 1994, there are people, you know in the beginning that you run into 10 years later, you run into them 15 years later. And if you're an idiot or you do business, you know, the whole cliche, you lie down with dogs, you wake up with fleas, it's absolutely true. And there's a, I think there's a discipline to not get greedy to, you know, people show up with easy money. How do you deal with people when you just have a gut feeling that they're not good people or, you know, even, you know, about the reputation, but there's a lot of money involved and you, you know, you just reject it anyway because any criteria that kind of goes through your head when you're in the decision making process of what to go into that you can maybe.

Share, you know, I don't think there's any other than what you've already stated. I don't think there's a real magic bullet in there. If in your gut you think you're getting a little bit of a feeling about somebody, then I've always felt like walking away is a better thing to do than taking a chance on that. I've certainly met people like that. It comes to who you do business with as a partner with your company and also who you hire. Carl and I have sort of a credo on that is we don't really want to hire anybody that we don't want to hang out with at our holiday party. And I think that kind of goes for the vendors that we work with too. We've done a great job at choosing our vendors based on whether or not we like them as people. We want whatever they're going to be offering to us as a service to be viable. We want to understand and believe in what their business model is and believe that it can do our business good. But sometimes you have a choice of three or four vendors that all qualify in that regard and you have to just go on, hey, who do I like? By the way, that's paid off for us. And obviously it's not like we've made every decision perfectly. In the history of our company, we've experienced a lot of failure, many failures and large failures and, and we've definitely chosen the wrong partner a few times. And we've also Made bad hires, but generally speaking, I think we've done pretty.

Well. You and Carl. How many years have you and Carl been working together.

Now? We met in 96, so, yeah.

14. Okay. You guys appear to really have a great partnership, and I'm sure there are times where you just don't agree or see things eye to eye. But any tips on working successfully with other people, be it partners, employees, vendors, than what you've already.

Mentioned? Yeah, well, first of all, I mean, we've had disagreements, minor in nature, and things have even gotten heated a few times. But when it comes to the way he and I work together, one of our key things is we always remember that the reason the person is disagreeing with you is not to be disagreeable, but because they want what's best for the company just like you do. So if you can remember that and you can keep that perspective, it can help you when things get a little bit heated. But also, we have some core values here at the company, and one of them is always to be totally forthright and treat each other with respect. And that starts with Carl and I and the way that we operate. And when we follow those core values, then we find ourselves operating much more effectively as a partnership. And when we forget that, that's when we tend to get in a little bit of trouble. So, you know, we've done a good job with that because our relationship as partners is as strong as ever and as friends is as strong as ever. So I know a lot of people who went into business together who started out great and didn't end up that way. And there are certainly a lot of examples of people who have been lucky like Carl and I have, and I'm glad to be the latter.

Category. Well, you're taller than Carl, so if you had to.

Get. Yeah, but actually he's my boss, so if things got really nasty, then I'd be out the door and he'd still be there. He's CEO, majority shareholder. So I guess I have to really restrain myself if I really get.

Pissed. If you were getting a fight with him, you think you could take.

Him? I'm not going to comment on that. I do have £80 on him, so maybe not.

That. How do you guys seek out talent? Hire people, pay people that are working for you? I mean, any methodologies that you can share with a.

Hiring. Yeah, well, let's start with the last question first, because that's an easy one. We like to operate in the higher range of salaries for people that we hire. I think you get what you pay for. I don't think we pay stupidly high salaries to anybody, but we're a very fast paced, energetic, and maybe even sometimes stressful environment to work in. And we expect a very high level of contribution from everybody we hire, no matter what the level. So, you know, if the average for a certain category of worker is 140,000, but the range is 120,000 to 170, we're much more likely to be close to 170,000 in what we're paying somebody than not. And in fact, you know, so that's one thing we tend to pay on the higher scale, but the other thing is I have a philosophy generally. And again, we don't have a perfect hiring record, but we do pretty well. And that is, I like to hire optimists. So if someone's faced with a problem, they know they can solve it. Rather than somebody being faced with a problem and wondering, oh, you know, what's going wrong? Or woe is me, or we're never going to solve this thing. We tend to do very well, especially at higher levels, but at all levels of the company in hiring people that are optimistic. That's a really general thing to say, but I've found it's been really effective. And even in the last year, by mistake, I thought I was hiring an optimist and it turned out I was hiring a pessimist and the person didn't make it through the.

Year. How do you identify that in the interview.

Process? First of all, again, you kind of got to go on general stuff. I don't know of a standardized test that you can give to people to figure out whether they're an optimist or not. But I'm interested in one if there is, if it's accurate. But the other thing is, I've realized over time, and I learned this the hard way, that when you're hiring somebody who has had a few different jobs over the years, and then you ask them about each of those companies, if they keep talking about the companies as if the company was stupid in the decisions they made and they weren't wise about this and they didn't do this right. And that's why each of the companies they've worked for has not succeeded in some way. And if it's always completely externalized, that means that the person is probably a pessimist. It's the world affecting them. Interested in somebody who can talk about something that might have worked out and talk about their complicity in that than I am with somebody who says it was the company and they never did anything right. I think externalizing things and saying that everything around me wasn't working is probably about the biggest tip off of somebody having a generally pessimistic attitude as anything else I've ever seen. I like.

It. That's great. And I totally agree with that. Because intrinsically motivated individuals are the ones that, that do take responsibility, that don't have a victim mentality or an entitlement attitude. And those are the people that tend to be.

Optimistic. Absolutely. And that's why I don't know who that might be listening to this thing. Conducts annual reviews. But generally speaking, your best employees are always your easiest reviews because they're the ones if they have to rate themselves on a one to five scale, even if they're doing a great job, they're probably giving themselves a two or a three because they want to do better than they're doing. Whereas your other folks, your toughest reviews, are the ones who you think are operating at a 2 or 3 but are giving themselves.

Fives. You made an interesting comment. You said it's a fast paced, sometimes even stressful environment. And I don't know if you've ever read Ogilvy on Advertising by David.

Ogilvy. I have.

Not. Yeah, it's just a great marketing book. And one of the things he said, because David Ogilvy created one of the largest ad agencies in the world and at the time he was alive, it was actually a great ad agency that did lots of direct response stuff because he was a full blown direct response guy. And he said that the field of advertising breeds anxiety. And if you hire people that don't operate well in that environment, they're just not going to do well. So make sure. It's kind of funny because you said that and that's true because in the field of marketing and advertising, there's a lot going on. It's a very creative world. And to have people that don't really mesh in that sort of environment is a recipe for disaster. And also another thing you said about paying people on the higher level, I think that just fits in the philosophy of what product partners does and is you produce great products. They're not the cheapest in the marketplace, but they're absolutely the very best and you tend to treat it the same way. So I think there's a lot of lessons that people can learn from that when they're trying to do things to cut.

Corners. Yeah, I would.

Agree. So what are your thoughts on people that knock you off, try to compete with you in evil sort of ways, that sort of stuff. How do you compete with vicious competitors, unethical competitors, people that try to present themselves like what you guys are doing, but they're really.

Not? You know, we've certainly faced it a couple of times. We don't have a huge problem with it because yes, I guess that's sort of a, that is a knock on wood sort of statement. But you know, you take P90X or insanity or some of their programs as an example. It takes us a long time to create them. We test them on real people using large test groups. We have a lot of experience in the components that go into a program that can really help somebody achieve whatever their goals might be in a certain period of time. And because we do all of that hard work on the front end, we tend to be harder to knock off than other people. But you can make an infomercial and claim just about anything you want. So where we have faced competition is not necessarily people that are knocking off our products, but they're using the infomercial medium to market something that's more than what their product can deliver. So they haven't knocked us off at the product sense, but they may be knocking us off at the infomercial level or claiming that something will happen that can't happen. And we have been hurt by that in the past. And one of the ways that we've taken it on is by my getting very involved in the Electronic Retailing association, which is sort of the governing body or the trade association for infomercial marketers, and also getting involved with government affairs and being very outspoken on issues of fair advertising and the claims that people make in infomercials. And we've also been a big proponent of self regulatory program in the era, which is a way that marketers can basically say, hey, I think this guy's making false claims and turn a show in and then the person either will comply with the changes that are asked for from the self regulatory board or they don't comply and then their file gets handed over to the ftc. So we've had to take it, we've had to be very almost aggressive with the way that we try to preemptively get involved and make sure that the bad guys out there, that we don't make it easy for them, but you know, it doesn't always work. And in 2002 we had power 90 in the top 25 and swim in six in the top 25. As a matter of fact, I think both of those shows were in the top 10 at the same time, which was the first time we had ever done that. And then all of a sudden a slew of these electronic ab belts that you strapped to your body that through electronic impulses can fire muscle movement. And there were like three or four or even five infomercials that all came out at the same time. The first one was doing so well that four knockoffs came out immediately. And even one of the knockoffs was from the same company that already had one on the. And it almost put us out of business because they were able to pay such high rates because their claims were so ridiculous, which is basically strap this thing on, eat chips on the couch while watching your favorite TV program and get a six pack. You know, I mean, it was just completely false advertising. And these guys were able to pay, you know, probably in some cases twice as much as we could afford to acquire a customer. So twice as much money for the media. And we were in big trouble by the end of that year because we had been knocked completely out of the top 25. And these guys were taking all the revenue dollars off of the T. But not only that, they were tripling consumer skepticism toward the infomercial format. So it was a really bad year for the infomercial.

Industry. You know, how do those. I mean, a lot of these people are like a fungus. I mean, they just don't go away. I mean, and it amazes me. I cannot put myself in the mindset of someone that could actually go out there and sell something that they knowingly know is complete and utter garbage, but they do it anyway. It's the criminal mind sort of thing. But why you see it today, you see so many advertisements that are a total joke and they still exist. I mean, what's the solution to that sort of.

Stuff? Well, again, we're sort of, we're making a dent. So you feel like you see a lot out there, but it's way better than it was five years ago and infinitely better than it was 10 or 15 years ago. So the self regulatory program has helped a lot. Actually. The FTC and what they're trying to do in some ways has been really helpful. They may have overstepped what they're trying to achieve in some ways because we're concerned with that. Some of the things they're trying to do may actually end up affecting the good marketers. But we are 100% in support of their desire to stop people who are making false claims with their products. So they've been helpful. The self regulatory Program has probably been the most helpful, the strengthening of our governing body, era, and I think the gradual change of that organization, because in its early days, you know, there were some of these same guys that you wanted to knock off the air, were very prominent in the association in the early days. And so really making sure that the association realized that if they were going to be legitimate, they needed to stop members of their own organization from doing these things. And so ERA has gotten much stronger and much better because they stand by what they claim they are, and that is, they want to be proud of their members. And so we've really been able to move the bar a long way with that. And, you know, I first joined the board of ERA five years ago, and I feel like we've come a long way since then also by making sure that the marketers that are doing a good job and selling products that work that they can be proud of are the companies that are getting more prominent, not the other guys, you.

Know. And like you had gone and testified, I mentioned in the Bio that in 2009, in front of the Senate subcommittee on Consumer affairs, as a representative of the marketing industry, so you've actually put yourself out there as kind of like the poster child of, you know, what to do and what not to do sort of thing. And obviously, you have a vested interest in your own company in order for doing that, but you're also doing a tremendous service to ethical marketers in general. And I know that requires an enormous amount of work on your part. Any suggestions you could give for entrepreneurs out there on things that would make an impact that they should do in order to kind of support the greater good of all of the marketers that are actually selling and delivering good.

Things. Yeah. The only thing I can really say is everybody wins. If you level the playing field and make sure that you're marketing good products that consumers are going to believe in. And when you're tempted to take a shortcut, not only are you putting your earnings and your company and your reputation at risk, but you're actually hurting the marketplace. So obviously, it's not a perfect world, and obviously there are always people out there that are going to take the shortcuts, but if the general attitude out there is that we're supportive of the good marketers and that we're thinking on behalf of the consumers, there's a lot of money to be made, just as much money as if everybody's cutting corners. But if everybody's cutting corners, then it makes it so everybody has to cut corners. So you're not doing yourself any favors. And so whenever you're faced with a decision, if everybody else is making the wrong decision, you're really setting everything back. And it's tough times out there. So the temptations are greater than ever. For people who aren't making money because the consumer is tighter with their wallet than they used to be, the temptation is greater than ever to cut a couple of corners or claim that your product can do a little bit more than it used to. But everybody pays a high price for.

That. Yeah, absolutely. Now let me go back to kind of something I mentioned. You're in incredible physical shape yourself. You're in your late 40s at the time that we're doing this interview. You run a company that's approaching half a billion dollars of revenue and you maintain great health and you're obviously motivated for doing so, not only because you're interested in it, but you have a deep interest in physical fitness, but also playing the part. So that requires you to really be good at managing your time and what you say yes to and what you say no to. So what is a typical day for you? If there even is such a thing as a typical day? I mean, how do you decide what you're going to spend your time and attention.

On? That's a good question. Well, first of all, I wake up and I work out. That's the first thing I do. Because by the end of the day, if it's a typical day, it's been relatively fast paced. Despite the way that you want to control your day, things just tend to intervene. And by the end of the day I can be pretty tired. It's easy for me to play mental games with myself and talk me out of a workout at the end of the day. At the beginning of the day, if I just wake up and work out right away, then it's done. I feel great. I've done something to improve my health or maintain my health out of the gate and that's out of the way. And then the rest of the day. The other thing that I try not to do is get into the office and get on email right away because I think that email is a massive time waster. So the first thing I try to do is I try to front load my day with the meetings where the decisions I need to make are the most important or the issues I face are the most difficult because I believe that I'm at my sharpest and I make the best decisions probably between 8 or 9am up until about lunchtime. And I try not to pack too many meetings into the beginning of the day just because those are where the good decisions are made. I try to space them out and make sure that I'm, you know, maybe facing four or five key issues. So four or five key meetings in the morning and then I leave the back half of the day. The other thing I do is I try to eat a light lunch because I don't like to be weighed down. So I got to weave the fitness and the eating into this thing. I try to make sure that I have a relatively light breakfast and then I have a snack mid morning and then a relatively light lunch. And that way I don't have the peaks and valleys which can sort of affect your day. I come into the office on a high because I worked out out and then I face those important decisions and do my most important work in the morning, try to spend as little time on email as possible, maybe take a look mid morning and answer critical stuff. And then in the afternoon I sort of let. That's where some of these meetings that are less important come funneling in. And I do some of that stuff. But I always leave a one and a half, two hour period of time, maybe not one block, but a couple blocks in the day just to where nothing is scheduled. So it's important for me to have at least an hour a day where nothing's scheduled and I get to do sort of whatever I want. And then the day winds down. I try not to have meetings at the end of the day. I probably have a couple things I need to work on on my own at the end of the day. And then I try to get out of the office at a reasonable time because I end up jumping online later on at night and getting other work done anyway. So I like to get out of the office, have dinner, relax a little bit, and then probably log on one more time. And then I try to get to bed at a reasonable hour and it all starts over the next.

Awesome. Awesome.

Yeah. Was that a little long winded? Sorry about that. No, no, that was.

Fantastic. I love hearing how people actually spend their time. And I like what you said about working out. We did meet at Rock the Kasbah at Richard Branson's thing. And I've spent a lot of time with Richard. I spent 10 days on Necker island so far with him and lunch and dinner with him pretty much every day while we're out there. And. And one of the things that Richard made this comment was that one of the most important things to be successful in Business is exercise. And he said that, you know, he goes, it doesn't take time. It actually creates, you know, two, three, four hours of productive time a day just by putting in an hour a day in.

Exercise. That's what he.

Said. And he actually swam around Neckarok island every morning. I mean, he did that every morning. He would start his day that way. So when it comes to entrepreneurs listening to us right now, I think there's a huge link between success in business and success in life and actually physically taking care of.

Yourself. Well, I couldn't agree more. And I know how he probably got to his extra hours of productivity, but just one stat alone that's enough to get you to work out an hour every day is actually, if you work out 45 minutes a day, you probably get the equivalent of an hour and a half better sleep every night, but you actually need an hour less. So if you think you need eight hours every night, but you don't work out very much, if you get to the point where you're regular exercising and you're fit, you probably, you get to where you actually only need seven. And when you're awake, you're much more productive. So you actually, the hour that you spend for sure, you gain back and sleep immediately, not to mention the gains you get in your mental alertness and acuity and how productive you.

Are. There you go. I mean, if you don't take time out for it now, you're going to take time out for it later with poor health also. So you might as well make it part of the lifestyle. Alright, just got a couple more questions for you. If you were talking to a young person who's getting ready to forge a career into the world of, say, running their own business, being an entrepreneur, that sort of stuff, what would be your advice to.

Them? It depends on where they are. But first of all, one step back. And I think that a lot of people that tend to be entrepreneurial, they're probably the kind of people who naturally did very well in school. They didn't necessarily get all A's, but they naturally did very well. Which means that all their life they've been told that they have lots of options. In fact, they may have even spent a lot of their lives being told by teachers that they were underachievers, that they could have gotten straight A's, but they got some B's or even C's sometimes. And others may have been straight A students. But the point is they've got a lot of options because of sort of, let's call it a natural amount of talent that they were talent and ability to interact with others in this world. There's something that happens with that kind of person which can be very dangerous relative to getting going in your career. And that is the person with a lot of options tends to be frightened to choose one because they feel like they're turning down all the other options. So my first word of advice for anybody is it's not what you choose. It's that you choose something and aggressively move toward it because it's not the last thing you're ever going to get to do in your life. And we tend to think that way. Oh my God, I've got to choose the right thing. I've got to choose the perfect thing. And then it's paralysis by analysis. So that's probably the most important advice I could give to anybody. But now if they've made a decision and they are moving in that direction, then the number one thing is you just have to have some guts about what you do. You have to operate as if you believe you're to succeed, not out of fear of failure. And we've seen it. Anybody who's ever played a sport who's had a lead and suddenly has changed from having a lead to wanting to protect their lead has known that playing a game because you're protecting your lead means you're probably going to lose the game. And the reason you got in the lead in the first place is because you were playing. You were just playing with guts. And if you're an entrepreneur, you've got to start the game that way. And then you've got to make sure that you don't, too early in the life of your company, switch your strategy into protecting your.

Lead. The whole play to win versus.

Playing to lose, sort of play to win versus play to lose or to.

Tie. So in a situation where you actually are winning or you encounter colossal failure, some personal disaster, you've had your confidence stripped from you. I mean, how do you. Because you certainly have had that in your life. I mean, how do you overcome that adversity and obstacles and get yourself back on.

Top? Well, I hate to be so cliche, but it's the ultimate cliche. But you've just got to get back in there because. But first take a minute to find out what you learned from your failure. Because we truly believe in failure here. And when we have failed, we have always come back stronger the next year. So you got to figure out what it is you did wrong and learn from it. It doesn't mean that you got to stop doing what you're doing. It just means that you've got to figure out what to do better the next time. And sometimes it's just bad luck also, that can present failure. Or in the case of the year that we almost went out of business, it's because those ad belts came out and that was bad luck and was also some bad people. But had we known or had an inkling that that was coming, we could have done things to prevent something. You know, I mean, again, I don't think there's a magic bullet other than the fact that you got to keep trying. There are lots of people out there that have tried to become entrepreneurs and failed immediately and then just bailed. And guess what? They never became successful entrepreneurs. You're.

Right. And it kind of goes back to what you said about having guts and just, you know, some people have the juice and others don't. I really think, though, that, you know, the people that would even be listening to us talking right now are genuinely interested in the wisdom of other people. And I think one of the greatest ways to learn as an entrepreneur is to look at what other people are doing successfully and see what you can learn from them. And you can.

Learn. Exactly. If I could now, just really quickly in a business sense, because I want to answer with something slightly more specific that has helped us succeed, because I've spoken in real generalities, your last couple of questions. Specifically speaking, though, you have to have the patience to get very involved with your business and what your key drivers are. So generalities aside, we are metrics junkies here at Product Partners, and everything that I can look at, where I can analyze and where I can watch what levers are moving, whether it's the percentage of calls that we receive that turn into orders or the percentage of people that land on our webpages that turn into orders, and then the percentage of people who order who then are interested in the other things that we offer them that might help them succeed at the program, or whether or not I'm finding another way to analyze how many of the calls that were attempted to be placed even landed at our telemarketing company. We're always looking at those things, and we are like rabid dogs when it comes to those metrics, the way we measure them, and constantly trying to improve based on that stuff. If you're not into metrics and you don't genuinely enjoy analysis or have somebody that likes analysis who's on your team, then you're not improving and somebody who's competing with you is going to beat.

You. That's great advice. It really is. So if you can't measure it, you can't manage it. If you don't measure it, you have no clue what's actually working. And I love the term metrics. Junkies. Jonathan, I mean, obviously, great stuff here. Thank you so much for taking the time out of your schedule to do this. I just want to ask you, what are your goals over the next few years with product partners, beachbody.com, that sort of stuff? Where are you.

Headed? Well, first of all, we haven't talked about it today in the interview, but we started a beauty vertical which is called Breakthrough in Beauty, which will operate from the same philosophy that Beachbody has. And again, it dovetails into our overall goals and strategy, which is we're going to create things that are good for people, that help people live a happy, more fulfilling life. So I'm very focused on building that business. We're very focused on getting better and better at the way we operate in the online world and expanding that. There are huge changes coming, and we think it's going to be a huge part of our business. In fact, we may end up acquiring as many customers through our online efforts as we do in our infomercial, using the infomercial medium. So that's a huge priority for us. Obviously, we're looking to qualify grow our company as far as revenue is concerned in regards to our profit. We've heavily invested in infrastructure and in IT over the last few years. And so now we're really concentrating on capturing the fruits of that labor and that investment. Carl and I have both chosen not to take very much money at all out of the company, and we instead have driven almost everything right back into the growth of the company. And to a degree, we'll probably always be heavy reinvestors compared to a lot of other people who like to take money off the table just because we want to grow the company so aggressively. So we're hoping to get the company over a billion dollars in revenue at some point in the next two to three years. It sounds a little bit random, but we like to be aggressive in the way we grow things. And again, while we're aggressively growing, we still have our standards by which we operate our company. So that's a big, you know, that is a very aggressive goal, but one that we think is achievable. The final thing is the real way we're going to get there is we have actually a network marketing part of our company. Which is our team Beachbody Coaches Network. And that gives opportunities to people that have been our customers that have experienced incredible success to start their own home based business and sell our products. And we have a couple products that are only available over there on the network side of the business. One of them is Shay Collaboration, which is a great daily shake, which we're finding out is really helping people with their general overall health. So if they're taking Shakeology and doing one of our fitness programs, they're probably experiencing great things as far as their personal health. And they're becoming walking billboards who are more than willing to talk to other people about how they change their lives. And then they might actually might want to make a buck or two by doing that rather than just giving us the sales. So that network business is a big part of the growth of the company and how we hope to get to a billion dollars with a two years.

Awesome. Well, I want to just end this by saying not only thank you. Also I would highly encourage anyone that's listening to this. If you do not have P90X, I use it almost daily. All of the products that I've ever gotten from beachbody.com from you guys are phenomenal. They're so well put together. And I would highly encourage you to get a copy of P90X, utilize it or Power90 depending on wherever you're at. Fitness wise, just go to beachbody.com it will change your life if you actually use it in so many good ways. Any other ways that people can get ahold of you or find out what you're doing? Any other websites that you would.

Recommend? John, Other ways to find us? Yeah, it's just, you know, just the web. But if you're, if you really want to check into the efficacy of what we do or anything like that, then you know, we're all over YouTube if you really want to see what the products do. But if you go to beachbuyer.com, you can pretty much find anything that.

You. Awesome, awesome. Any famous last words? I mean, I really appreciate you taking the time.

Here. I appreciate being on it also. I don't know that I have any famous last words other than the fact that I really appreciate what you do and the fact that you're so good at connecting people. I know that's going to end up being great for us as we grow and it's a value that any entrepreneur should latch onto.