The Road Less Stupid: Keith Cunningham’s Advice if You’re Struggling in Business!

So you've made literally hundreds of millions of dollars and you've lost the tune of that. I mean, and so there is. I mean, you've.

I would rather not talk about the loss.

Okay. What I want, I will though dig into with you though, is. Is in. In the pain of it all. That's where it seems that you've got getting yourself on, say, the road less stupid.

You've.

You've made, admittedly some very stupid, arrogant mistakes early on, and you, like what it did to you mentally and psychologically nearly crushed you. And you told the story how you overcame that and it became one of the greatest things ever. I'd love to have you like, how did you learn all of this? What did you need to do in order to get the business knowledge and wisdom that you have done an incredible job of condensing in this really amazing book.

Thank you.

Yeah.

I think. Right in the middle of this disaster, Dan and I were talking backstage when he was coming off, and I was getting ready to come on and I said, I have also had a divorce and a bankruptcy. I feel very fortunate on the sequencing of mine because my. My bankruptcy came about a year before my divorce, So that sequencing was really important. I would have hated to gotten divorced five years before I went bankrupt. Look, I was giving an interview. I don't know if I talked about this when we were together few months ago or not. I was giving an interview in Ireland for a radio station that was trying to promote an event that was going to happen the next day in which I was going to be the speaker and the radio interview host. Right before I went live during a commercial break, looked at me and said, look, I've read about you. I know who you are. I know your background. Is there anything you don't want me to talk about? And I said, yes. I said, don't ask me how it feels to lose $100 million. I can tell you it feels horrible. Right? I mean, so don't ask me about that. He said, no, no problem. We go live on the interview and the first thing this guy says is, I'm sitting here with Keith Cun, the man that lost $100 million. He said, Keith, how does it feel to lose $100 million? And I this. So I'm now stuck because I'm live. I said, let me tell you how I view this. I view life like a university. And in university there are courses, and courses have tuition. I just took a course in the university of life and the tuition was $100 million. First of all. There's very few people who get to take this course. I mean, it's kind of expensive. And so that's part one. Part two is the key is not how much it costs. The key is, did I get my money's worth? Did I take this course? Pass fail, where I went in to do the least I possibly could, or did I take this course and I want to make an A because I never again want to have to take this course. It's far too expensive. I think a key is for me, Joe, and I see this over and over again in my own life and other people's lives, is the mistakes or the failures are not nouns. They're verbs. They don't define who I am. The question is not, did I make a mistake? The question is, can I admit it and did I learn something? I love what Buckminster Fuller said. Who's one of my heroes? Bucky said, a mistake is not a sin unless it's not admitted. The only way it can be a problem is if I don't admit it and then learn from it. And so in the book the Road Less Stupid, I have a chapter on the log of lessons learned, and those are lessons that I had to learn the hard way. And part of what I do, part of what you do, part of what Dan does, what all the teachers, what all the mentors in this room are doing, is they're allowing other people to stand on their shoulders. I'm standing on someone's shoulders you're standing on. That's the exercise you just did, and it's very powerful. Who is the first domino? Whose shoulders are you standing on? And the idea is, is there a way for other people to learn from my mistakes? And if I can do that, I will have had a successful life.

Hey, I hope you're enjoying this video. And I want to let you know that I have a new book that's come out, and if you'd like to get it absolutely free, there's a link below in the description. Or you can wait till the end of this video, or you can simply go to Joe's freebook.com and you can get a copy there. So you. You're the highest rated, I think now, the only speaker of Business Mastery. Tony Robbins, Big Business Mastery Event. Correct? Or does he have other.

We've been told. We've been told that people like us.

Yeah. I mean, yeah, you're definitely the highest rated speaker of Business Mastery. And you have you read a lot. You're a voracious reader, and you see A lot of people dispensing advice out in the world through books that people, business owners, entrepreneurs follow that you disagree with. And so I'm going to ask you, which will sound kind of like a silly question, especially since you said, you know, I don't believe in bathrobes. When people ask you, you know, what's the secret to business success? What would you say to that? Because people always want to know, what's the secret? And from a marketing term, I know it works. If I said, here's three rules I want everyone to write down, or if I said, here's three secrets I want everyone to write down, everyone would literally get out their pen when you say the word secrets. So people are pursuing it. And I think what you do such a great job in the road less stupid of is dismantling so many myths and so much bullshit that exists that people are being taught about business. And you're a guy that actually has made a lot of money and is very good with it and has gone through so what? You know, when someone says, oh, what's the secret? What. What is the thing? They're always looking for the easy way to do it. How would you respond to that?

So I think the first thing I would say is, there are no secrets. There's just stuff you haven't learned yet. There's not a secret. There's no magic pill. There's no little formula that's locked away in a vault someplace that says, oh, God, if you can just learn this one little thing, this is. And nobody else can learn it because it is a secret. I think that's. I think that promotes the wrong kind of work ethic. I think it promotes the wrong kind of execution. I think that that's the magic pill, tooth fairy, financial tooth fairy kind of mentality. And I strongly disagree with that mentality. I do think there are some things that successful business people do. I think successful business people, some of them make a little list. And it's not intended to be all inclusive. It's intended to maybe spark a conversation or a thought. I think successful people have extreme clarity about where they are, the reality of their current situation, which is point A, and they have clarity about point B. They have clarity about what they want, where they're going. And, and my experience is that most, most business people and most business advisors orient towards the second one. It's all about getting clarity on what you want, which I'm in favor of. But I think the only reason Google Maps works is because you tell Google Maps where you want to go, and it knows where you are. And if you don't, if Google Maps didn't know where you were and you told it where you wanted to go, the likelihood of you getting from where you are to where you want to go rounds to zero. So the idea is, where are you, what do you want, and what's the obstacle or the problem that's in the way? I think the hardest work I do in my thinking time is what's the problem? Not the symptom, what's the core root obstacle? Because if I'm going to get from where I am to what I want, there's something that's blocking, and I need to know what that is. I need some clarity around that. Because if I don't have clarity on the obstacle, I have zero probability of building a machine that will help me solve the problem. And building the machine requires allocation of resources. So there's a bunch of things in this little sequence. I just said there's clarity about where I am, clarity about what I want, clarity about the obstacle that's in the way, some thinking about what's the machine, which is priorities. So priorities think. Successful people are really good at identifying the correct priorities and then. And then allocating the resources to execute on those priorities. I'll say it this way, I'm gonna put it on a bumper sticker. A shift in priorities without a simultaneous shift in allocation of resources is wishful thinking. And wishful thinking is at the root of every failed business. They thought the idea was if they could just get clear on what they want, that somehow what they want would manifest. And I'm going to quickly say, I totally agree with Dan and what he just talked about. I think getting clarity about what it is you want is important, but I think because that allows you to filter. But I also think somebody's got to pick up the business end of the shovel and consistently execute. I'm not a believer in the magic pill.

So.

Can I say something, because this is an interesting point, because, you know, Dan says as entrepreneurs, you know, just their creativity, you know, make it up and make it real. Now, the making it up part and making it real, all kinds of shit goes squirrely right along the way. And what you're saying with the execution and even like the impact filter, which is a thinking process, in order to get clear on the importance selling yourself on it, what's the success criteria and piecing it together. I mean, think of the amount of suffering of these idealistic, aspirational desires that are missing all of the Roles, the key elements and the priorities done in a certain way to actually achieve something, which is why there's so much business success. And I think what you're doing here is getting people to slow down enough with thinking time so they're not so reckless as they're trying to drive. Because so many entrepreneurs are just, they're driven, but their drivenness is driving them in the walls. It's driving them into poor health, it's driving them into insanity and a tremendous amount of driving off cliffs all the time.

I think that's it. I think this need for speed, I think this need for significance, I think this need for. My friend Alex Mandozian, who is someplace in here, has said it very eloquently. Few things are worse than running the wrong direction enthusiastically. And I think there's a lot of truth to that. I think we tend to substitute passion and what we're excited about. I will tell you, whatever your passion is, it's either something you think you can be successful at or you are successful. At the instant it becomes unsuccessful, your passion goes to zero and you start looking at, looking for the next cool thing.

Hey, I hope you're enjoying this video and I want to let you know that I have a new book that's come out and if you'd like to get it absolutely free, there's a link below in the description or you can wait till the end of this video or you can Simply go to joe'sfreebook.com and you can get a copy there.

So the passion is not, it's just excitement about what I think I could be successful at or what I am successful at. But if you sucked at it, I promise it would no longer be your passion. So I tend to gravitate. I'm probably, and there's a great example right now in the press, this guy, son, I don't know how to say his first name. Maharashi Son, who is the guy who put together the hundred billion dollar fund that invested in Uber and wework and a dog walking service and has blown through $100 billion in two years. In two years. And it's probably gone. The bulk of it is. And I contrast him with somebody like a Warren Buffett who's been, he's been at it 60, 70 years and has built something that, that has withstood the test of time. And I compare that to what other people are doing and it seems like there's a lot of people that are optimizing for a one hit and it may turn out Good. But I'm not sure if it's sustainable because there's a lack of business skills and tools. I'll say it this way, business success requires business skills and tools. Much like ping pong success requires ping pong skills and tools. And if you want to win a gold medal at ping pong, somebody better have ping pong skills and tools. And the same thing is true with business. If you want a gold medal in business, somebody better have some business skills and tools and bring more to the table than simply an excitement about the idea. Somebody's got to execute something. And most failures have to do with either. We haven't identified the problem. We're excited about something but don't know what to go do. We've built a cross crappy team or a team of munchkins, a team of people that you know are C players and that can sabotage. There's so many ingredients and just being thoughtful about what's really required and what's really the problem, I think is the key to saying, how do I keep this thing going? The environment's always changing. The environment is the only thing that's the only thing that's always changing. So a good idea today could be a bad idea tomorrow and vice versa. So I think one of our jobs as business owners is to be thoughtful about good. How are things changing? Either the competition, the economy, the White House, Brexit, North Korea, interest rates, price of oil, the competition, consumers. I'm changing and so what I can do today is vastly different than what I could do 25 years ago.

You have in the book, you have three questions to evaluate, like an investment risk. What's the downside? What's the upside? Can you live with the downside? How should everyone here think about stupid risk, intelligent risk, or however you would describe risk? Because I mean, we get paid, I think, relative to what we are willing to take on, relative to the risk, which could be misconstrued as let's make crazy ass judgments.

Good. Risk doesn't cease to exist just because you ignore it. One of the smartest investor, one of the smartest investors in the world today, who Warren Buffett stops what he's doing to read what this man has to say. This is the only guy that Warren says when Howard Marks talks, I listen. Howard Marks has written a book. You should own this book and you should read it soon. Probably after you read the Road Less Stupid. But then again, I'm biased. If my kids asked me which one they should read first, I'd point them to Howard Marks. So read Howard Marks first. Howard Marks runs a company called Oak Tree Oaktree Financial, and he's written a book called the Most Important Thing. The Most Important thing. He says three. He says a lot of brilliant things. Three that I'm going to mention. Number one, the less risk you perceive, the more risk there is, which is completely counterintuitive to the way most of us think. If I perceive that there's no risk of having an automobile accident between my home and the grocery store, then I won't put on my seatbelt. I'll text while I'm driving. I'll be talking on the phone and watching a video.

And.

As a result of perceiving there's no risk, risk skyrocketed. The way you lose money is by perceiving there's no risk. I'm a natural. I've got all this money. These are smart people. If it doesn't work out, I still got a lot more. I mean, what could go wrong? And so we begin to think in terms of. We say stupid stuff. Everybody in here has done it. I've done it. We say stupid stuff like, the greater the risk, the greater the reward. This is intergalactically stupid. This is unbelievably ignorant. The greater the risk, the greater the probability of a loss. But we say, oh, yeah. I mean, it's risky, but I mean, the reward, my God, the upside is so huge. We've done this. You and I were talking about this. Warren Buffett was playing golf. This is a true story. Warren Buffett and Bill Gates are playing golf. They're best friends with two other guys. They get to a par three, which is the only kind of hole you can legitimately make a hole in one on. They get to a par three. And one of Warren's playing partners, Right as Warren was about to hit his tee shot, the playing partner said, warren, let's have a bet on this hole. Warren said, okay, what's the bet? The guy said, $2. I bet you $2 that you don't hit a hole in one. And Warren said, well, like, what if I. No, it's $20. I'll bet you $20. And Warren said, okay, $20. I gotta give you $20 if I don't hit a hole in one. And Warren said, if I do hit a hole in one, how much will you give me? Guy said, I'll give you $20,000, which is 1,000 to 1 odds. That's what that is. So if Warren loses, if Warren doesn't hit a hole in one, he has to give his playing partner 20 bucks. But if he does hit a hole in one, then his playing partner's got to give him 20,000. And Warren looked at this and said, no bet. And the guy said, why? Warren said, well, I mean, the odds of me hitting a hole in one are not 1,100, it's 10,001. If I stood up here and hit 10,000 golf balls, there might be one that goes in the hole. But if I only hit 1,000 golf balls, the likelihood of one going in the hole never going to happen. So I'm not going to take the bet. And the guy looked at Warren and said, Warren, it's $20. Last year you made $5.6 billion. It's 20 bucks. And Warren said, I know. Stupid in small things, stupid in big things. Write that down. Write that down. Write that down. What's sabotaging us is the small things sometimes. So this idea of risk doesn't cease to exist, that the less risk we perceive, the more risk there is. Howard Marks in his book said a house that can withstand a hurricane is indistinguishable from a house that cannot withstand a hurricane until after the hurricane. And what we want to be doing is building houses, financial empires that can withstand a hurricane. I mean, for crying out loud, if you know that the economy does this and nobody can predict it. I mean, you know, there's the soothsayers out there, the economy. Somebody told me one time the reason God made economists is to make astrologers look good, right? The whole idea that somebody can predict what's about to happen, I mean, they can smell, you know, but nobody knows how big or severe or anything like that. They just know it goes in cycles. And what I want to do as a business owner is build a world class defense to go with my world class offense. As CEOs, as leaders, as owners, what most of us have done is built world class offenses. And so we're always going long. We're always. I'm probably the only one here that did this, but when I was a kid, the guys would get in the front. I'm talking about a kid like 7, 8 years, 10 years old. And we'd be playing football and in the front yard and there'd be a quarterback and he'd draw in his hand, he'd say, all right, now you do this and you do that and everybody look at me and say, Keith, you go long, right? That means you just run. And we're just gonna heave the ball down there. It's gonna be a Hail Mary, and maybe we'll get lucky. And that's how oftentimes we run our businesses is relying on hope and luck. My dad told me years ago, keith, you can rely on the rabbit's foot if you want, but it didn't do much for the rabbit. And that's kind of true. Right? You have to kind of think about, where am I relying on hope and luck as opposed to being thoughtful. And being thoughtful would say, is there something that could go wrong? And asking that question and building a defense so that you can live to survive another day. Which I didn't do when I was 40, which is why I lost all that money. It was all offense, plus it was arrogant, plus it was hubris. I had an exhaust pipe in my mouth, and I was just inhaling my own fumes. I told somebody one time, I was 40 years. I was 38 years old. I told somebody one time I was being interviewed, and they said, keith, how would you describe yourself? And I said, that shows you how screwed up I was. Okay. I'm not proud to say this. I said, I'm a little bit like Haley's Comet. A guy like me only comes around about once every 70 or 80 years. That's how good I am at business. And that was right before nose down into the dirt. Right. All right, here's a final thought on risk. It's better to ensure survival under negative outcomes than it is to predict success under favorable ones.

Say that again.

It's better to ensure survival under negative outcomes than it is to predict success under favorable ones. And so this way of thinking. You mentioned it a second ago. The three questions. What's the upside? And we tend to be experts at the upside because we're optimistic and we can see the opportunity. What's the upside? What's the downside? Which we tend to not be that good at. We rarely ask that question. And if we do, we kind of minimize it. It's kind of like what most of us do with our competition. Most of us with our competition, minimize. Yeah, I got some competition, but nobody's really doing. I mean, I'm different. I mean, I've got. That is about the craziest thing. Let me ask you a question. I'm opening another tab. Let me ask you a question. Let me ask you a question. How much money could you charge for your product or service if you had no competition? How many customers would you have if you had no competition? I already know your answers. If you had no competition, you could charge whatever you wanted. And you'd have all the customers. So what dictates, what dictates your revenue is your competition and how you position and message against your competition. I think that the same thing is true with risk. The downside. How do I need to think about the downside and be realistic with it? And if the downside happen, then can I live with it? And one of the most powerful tools I've found in this is called a pre mortem. A pre. Mortem. You know what a post mortem is? A post mortem is, you know, somebody dies, they crack them open, they look around, say, how'd they die? Well, their heart stopped, they stopped breathing, blah, blah, blah. That's how they died. A pre mortem says, I'm about to make a decision. I'm going to project myself one year into the future. And by projecting myself one year in the future, I'm going to look back over the course of the last year, and this decision I'm just about to make has turned into a dumpster fire. This thing is a train wreck. It is a mess. So one year into the future, I'm now thinking, as I'm looking back, it's a mess. A pre mortem says, what are all the things that went wrong that caused this thing to turn out to be screwed up? If you will exercise this muscle, which is defense on pre mortems, on identifying and evaluating, minimizing risk. It's questioning assumptions, losing some of the optimism. My God, we're optimistic. We're irrationally optimistic about the initiatives and ideas that we have. And I think one of the best ways to play defense, honestly, is with what you're doing with this and some of the work I'm doing with the boards that we have, which gives business owners an opportunity to have people around them that will give them advice and tell them no. Yeah. Ask yourself the question, how many people do you have right now, right now, that can tell you no, That that will question your assumptions, that will push you back on some of the ideas. Most of us don't have people around us that will do that. In fact, the vast majority of business owners don't have that. And so it's why they say leadership is so lonely. And it is because we don't have people around us that will push you. Look at the most successful, most successful businesses on the planet. Every one of them has a board, and every one of those boards meets once a quarter. There's a reason for that. That board is not there to inject the CEO with adrenaline. That board is there to say, whoa, cowboy, slow down just a little bit, just a little bit. Let's think this thing through. What are the second order consequences? What could go wrong? Do we have a plan that ensures success or at the very least ensures survival, or are we going all in?

You've had the experience of meeting, I'm sure, just thousands of entrepreneurs over time and also helping to create them. Is there any consistent mistake that you see entrepreneurs make in business that they could possibly avoid?

I think that if you don't protect the downside and you sort of treat your business a bit like going into a gambling, gambling, gambling casino and, you know, sort of keeping on, doubling up to, you know, hoping that you're going to get out of a problem, you know, then, then you're asking for trouble. And eight out of 10 businesses do go bust and quite often it's because people haven't thought of the, you know, the downside consequences of what they're doing. So without being too conservative, it is important, I think, to always think, you know, if I do this, what's the worst that can happen? Can I afford the worst? You know, for instance, right now, you know, some of our airlines have protected against oil. Oil going up now. A lot of, A lot of people within our airlines said we're looking at it can't possibly go any higher. We've got a recession on, you know, so do we really have to protect? The wiser people at Virgin said, yes, you know, we should protect against the worst happening, you know, so it was, it was good and sensible that they protected against the downside.

I see that too, Richard.

I mean, just as a great example.

Is like Virgin Mobile, as we'd say in the uk, but Virgin Mobile and like, just instead of buying, like building all the communication, all the, all the infrastructure it would take, you literally leased, I think, Sprints lines. And so there's very little downside and very big upside. If it worked for you, we have.

A strong brand and therefore we're able to avoid the enormous infrastructure costs of sometimes of building new businesses, we can piggyback on other people infrastructure using our brand and, you know, we'll put in the brand, we get 50% of the company, we'll use our marketing skills and other people put in the infrastructure. And that in itself also, as you say, protects the downside.

You know, with all the decisions that you have coming across your desk, wherever you're at your beach, I guess it could be, yeah, exactly. How do you make really tough decisions on a daily basis? Because you're Just you've got to be. You've got so many requests and demands of your time and people that want your attention in the world and like, what's the Richard Branson methodology of, I guess, time management, priority management, really thinking it through. I mean, how do you, how do you do all of this?

Well, you know, we spoke about delegation and I think the first thing is to make sure that everything is running without you. So, you know, if, you know, when I'm swimming around the island every day, you know, if a shark comes and decides that I look tasty and I disappear, that, you know, everything will continue to run and you know, it may not run in exactly the same way, but it will continue to run and Virgin will continue to grow. The fact that everything is running, we've got fantastic team of people on a global basis, it means that literally I can, you know, work out how I want to spend my day. And I think, I think it's absolutely essential for all of us that we stay fit and healthy because, you know, if we're not fit and healthy, not going to achieve anything. So, you know, so, you know, I will swim around the island every day or I'll, you know, go kite surfing or I'll play tennis or I'll, you know, I'll do something to make sure that the body is healthy and the endorphins are running and, and then I can throw myself into work. And I suspect at least 50% of my time is sort of setting up not for profit organizations in the world to tackle some of, some of the bigger problems of the world. And, you know, the other 50%, I suspect, is diving in and out on, you know, some of our businesses around the world, you know, maybe doing a bit of firefighting when things are going wrong or, you know, giving them a push, you know, when things are going right.

So I have a question that's a little more personal in nature. I'm wondering when you first started and yes, when you first started and you were getting everything going, did you find it challenging at all to have like any kind of balance? And because I know you love your kids so much and you love your wife so much, you know, when you're getting something going, you invest a lot of time in the ramp up stage. Did you ever deal with that sense of guilt of like, oh man, I have to put the phone down or oh God, I have to just shut it off, you know what I mean, and spend time with my family?

Well, I've done something which is slightly unusual and I think you Know, possibly it's the advantage of owning your own company and that is. I've always worked from home, so I've never worked from an office. When I say never, not pretty well, never. I mean, you know. Right, right. In the early days, you know, I'd pop in a lot to our record record company and I originally worked in a houseboat. The kids would be crawling around on the floor, I'd be having meetings with people, might even be changing a nappy. So the kids literally grew up with me as we were building the virgin empire. And then when the kids holiday time came, you know, we would pack the bags and I would just move my office to Necker island. And you know, so I would always be around my family. I suspect, you know, we're closer than, you know, closer than a lot of families because of that, you know. Yes, I would be, you know, spend quite a lot of time on the phone and you know, I'd be busy. But we were around each other. Now I think the, if there's any lessons to be learned from that for other people, I mean, I, you know, I do think that with modern communication one shouldn't have to get stuck in an office. You know, the more one can get out and about, the better. If you've got companies, go and you know, go and live, Live your companies, live, you know, spend a lot of time with your people and spend as much time with your family as you can. And, and I think getting that, getting that balance is absolutely critical. And making sure that you bring up great kids who are happy and loving and you found that time for them is critical because they are going to be the next generation.

What is your unique ability? I mean, what makes you Richard Branson? People consider you charismatic, friendly, funny. I don't want to say good looking. Yeah, yeah, yeah, that pretty much sums it up, yeah. No, I mean, what makes you effective? I mean, people look up to you as one of the most recognized, successful, fun entrepreneurs on the planet. I mean, what makes you, you.

I think the sort of fun side is, is perhaps natural. I mean, I think, you know, I've always enjoyed having fun and making sure other people have fun around me. You know, whether it's, you know, building a UFO and flying it over London on April Fool's Day. You know, many, you know, I was, I was quite, quite young when I did that and caused that absolute panic with the, the police force and the army coming out and so on, you know, but I think it's sort of, it's natural. I think other people can, you know, who are maybe not naturally that way inclined. I think they can train themselves to enjoy life more than they perhaps are, and they may be taking themselves too seriously. I think they can, you know, if they made it, make a real effort. They can also find the fun side in them. And I think you can train yourself out of. I mean, I was an awful public speaker when I was young and, you know, and the amount of ERs and UMS, I mean, I can now feel them coming back again. You know, somebody once did an interview with me and they cut out all my ERs and UMS. My ERs and UMS were longer than the actual words that were there. And so I think you can. I think you can train yourself, train yourself out of, you know, difficulties. Somebody said to me, the way to, you know, the way to overcome fear of public speaking is just think of yourself. You're in a living room having a chat with some friends and, and, and, yeah, and that helped me a lot. So I just, from then on, I just have a chat with friends and, and it seems to seem to manage all right. But, but let's move on to another question I can't remember.

Well, no, no, I want to go a little deeper with that one, just for a minute, though, because, I mean, you do some things that other human beings don't do and it makes you really effective. And I've often wondered, have you ever identified that or do you really not know? I mean, do you know what makes you powerful and influential and persuasive and causes people to want to surround themselves with you and get behind your causes and, and become a client of your businesses? I mean, what's the Richard Branson secret sauce? I mean, do you really know?

Well, look, I think you are only as good as the reputation you've built over many years, and I hope you know that I've managed to build a good reputation and therefore, hopefully people can, you know, can trust, trust me. So, you know, if you, if you look back over Richard Branson's life, there's the exciting side. You know, they're trying to, you know, be the first to fly around the world in a balloon or, you know, the fastest across the Atlantic and boats and so on, and I think that that sort of slightly sort of sexier side of my life, you know, the fun adventurer side, has also helped the brand and helped make the brand a bit more interesting than say, you know, British Airways, where the chairman, you know, hasn't put his life on the line too often. And then, and then there's the actual companies themselves. The fact that I think we have made it made quite a big difference to people's lives in, you know, whether it's, you know, if you fly on a plane or travel on a train or, you know, or listen to music, etc. I think in a lot of different areas we've made differences to people's lives. And so I think there is some substance there, you know, hopefully then, you know, it's down to personality, whether you, whether you're good at dealing with people, whether people want to actually spend time with you and you know, whether you genuinely care about people. And I'm just extremely lucky. I love people, love spending time with people, love learning from people and hopefully I'm a as good a listener, you know, which I think as a good leader has got to be a great listener, not wanting to listen to themselves all the time.

The thing I wanted to ask you about mistakes is that not only in the beginning, love to hear any ideas that you have and mistakes that you think people make so that they can avoid them. But also when you went through the crash, you had built up something very successful and then it falls apart. And then how do you not only deal with franchisors and different individuals whenever like, things just start crumbling down around, you know, a business that you have developed and that employs people and that sort of stuff. I mean, how.

Well, we'd sold Hydrodog Australia before the crash, that actually cashed us up to go into property developing, which we'd never done before. But that's what you tend to do when you make a bucket load of cash. You want to go into a huge big hundred million dollar Ramada resort and get twice mates. So anyway, that's the biggest stake. Never go outside of what you know. If it's taken you seven years to learn a craft, don't jump straight into something brand new you know nothing about. And that was the biggest mistake that we made is that we went way outside of our comfort zone. We were just, we had property developers and we had project managers and we're thinking, shit, they're going to do all the work and we'll just sort of sit back. But totally lost control of what we're doing. Still good with people, but we didn't understand the business. And that's really something. If I can reiterate to anybody, when you get that success, jump in something that's parallel to it or even something that you even enjoy doing more of a hobby that you could become better at and do it for Another seven years, or however long it takes. I mean, with jumping into what we're doing with the tour, we've never done that before. We've been finding our feet, but we still know our business structure of all these years, of what we've done, right? That's helping us. Now I'm washing dogs again. I'm getting in there and actually washing dogs with the kids. It's a lot of fun. I'm thinking, shit, I'm going back to where it all started from. But I think the biggest mistakes is definitely that's the first one. The second one is getting into business with the wrong people. That is the number one problem. And I look at it like this. It's almost dancing with the devil. You know, this person's got money. Your gut tells you that he's the wrong person to do business with, but you're like, if I don't get the money, the business is not going to work. I need the money. So people chase the money in the beginning, and I guess if you're young enough, you don't understand that principle. You think, I'll just get the money and I'll deal with that personality later. No, it doesn't work like that. If they want a return on their investment or they're a really hard business partner to deal with, then all of a sudden the conflict starts and you lose your passion and you don't want to do it anymore and shit falls down. So you've got to pick the right partner. My real big thing is this, and it's just a very quick story. When I met this lovely lady over here, first time, she met all my friends and she's gone. Great guy. Oh, what are you doing with him? Not sure. He's just following you after your money.

How do you know?

How do you know this stuff? I wouldn't even know for a million years how to read people art. So after we had kids, it went through the roof. Whatever happens from a woman, from having intuition to knowing everything about everybody after they have kids is just some sort of chemical brilliance that takes place. But you get away with nothing. I'm telling you. So I thought, I want a piece of this. So I started to ask embarrassing questions, putting myself in compromising positions, just really being painful most of the times. And Rachel will tell you there's some crazy stories out there of just. I want the information on why you are that particular way. So I read a book. Can't even remember what it was. It was about four types of personalities. I ended up having 21. So I'd have these little baskets. Talk about massive memory. Or my memory got so good I'd put someone's memory in that basket and end up with about 21 of them. So over that period of time, I'd sit down and talk to someone and sort of say something.

How did you know that it was.

Well, I just spoke to a bloke like you down the road last week. So I started to get a little bit of influence. And there was a lot to do with that real understanding of people's way of thinking. I can't explain it, but it worked for me.

So basically what you're saying is you just understood and studied how to gauge and learn people and show signs of whatever, how they.

So sometimes you get one of those people like us that you've never sort of. You don't know what basket to put in.

Yeah, they're just so strange.

Yeah, you just don't. Anyway. Yeah, big basket. So it started to work for me and people were really interacting with me. Cause obviously I love being around people. So the personality starts and a couple of drinks, this sort of personality goes, you know, times 10. And everyone sort of wants to, you know, get engaged. And then just starting to work out how it is. And you have much more of a centered conversation because you're talking to them now rather than just having a conversation. So those relationships that started to build like that then became like, for example, someone like Kevin Harrington. Have you ever seen him in a networking event? He would just talk to every single person in the whole wide room. He's just incredible. But he seriously has a huge wall around him of getting to him personally like everyone does. But it's hard to get in and to be that close to a guy like that. It's all happened because there was a personal interest in someone that I really cared enough about. But I actually have a little bit of knowledge. It's been 20 years now since it started. And I really feel that I can know people well enough to engage and be present. And I think that's the biggest thing if you're present with someone. And I guess Rachel can also back this up. Living in the moment for me is really important. When we broke down in Lordsburg, which is in the middle of nowhere. I don't know if you know where Lordsburg is.

I've been there before because I went to college in New Mexico for a couple years. Never got a degree in anything. And I used to live in Demi, New Mexico. Las Cruces, New Mexico.

That's where we went to La Cruces. We had to drive two hours backwards for where the RV actually got fixed.

Wow.

So on that day, it could have been, we're meeting you the next morning. It could have been a diabolical situation. So I just put myself in the moment. And Austin ended up jumping into his first semi trailer, turned the truck on, and he's sitting in the front seat, and the guy was so great, and he was showing Austin how to do things, and the girls were working on the trucks. It turned into an awesome day. It was one of the best days in the middle of nowhere, doing nothing. But if I wasn't present and being in the moment, it would have been a disastrous day. It would have been such a shitty day, it would have been unreal. I think that's the key, being really personal but also being present. When you're having a conversation with somebody, just be there. Then that does Magnitude these days, because everyone's always busy outside, people think they can multitask. They say, no, I'm listening. I'm listening to you.

Oh, I stop talking to people when they're on their cell phones or whatever, because I want to let them finish what it is they're doing. Because even if I try to continue to talk to them, they're like, no, I can hear what you're saying. All you can hear is mumbling, but you're not comprehending anything. That's right.

We're on the same page of that 100%.

Because I know for myself if someone's trying to talk to me and I'm trying to. I'm like, I can't pay attention to two things. But you're right, though. I mean, becoming skilled in communication and studying that is incredibly useful. Becoming a communication expert, I think is important. Coming from the world of marketing. Marketing is pretty much what you say and who you say it to. It's all about communication. It's all about making a connection. And people ask me all the time, how do you do it? Well, like anything else, you learn it. I mean, anything worth doing well is worth doing poorly in the beginning. Now, if you keep doing it poorly, you're probably not set out to do that. So I'm not a big believer in get strong at the things you're weak at. Because like my friend Dan Sullivan says, if you spend your life strengthening your weaknesses, at the end of your life, you have a lot of really strong weaknesses. So I'm a real big. Yeah, I'm a real big believer in, like, whatever you have a propensity to get good at do that. But learning how to interact with other humans is critical as getting through life. Learning how to sell, learning how, you know, I mean, those are all the most important skills. The technical skills of something are far easier to learn than just, you know, becoming a communications expert.

I think the secret is that you gotta love it and you gotta really love people. Cause there's too many people that don't like people very much. I mean, I'm telling you, I'm in a world right now where people love their dogs more than they love people. And I get it, because I didn't understand to begin with. Every single person that comes in to get their dog washed tells us about their rescue story, and they're passionate about it. Oh, he's a rescue?

Oh, yeah.

Let me tell you. We found him on the side of the road and he had one ear bitten off. And, you know, look, everyone's passionately engaged. And I've learned that it's the unconditional love that the dogs are giving these people, that whatever their family upbringing or relationships are with their colleagues at work, whatever, they don't get the unconditional love. But this little dog that they've got, they get the unconditional love. So they're putting everything and all their energy into that. Tolerating the rest of society is what I really feel is going on with this particular area.

The beauty of marketing is in the.

Real world, it's called failure.

And the marketing world is called testing. Testing.

You know me, that's how I rationalized my bankruptcies and divorce a long time ago. Just extreme market research.

Exactly. Well, Dr. Jackson, what would you like to ask doctors a little bit about marketing? You know, I think when one of the things. And I'm gonna get some wine. What you're able to do with Strategic Coach and why Joe and I are part of this is. You mentioned what, what Charlie Tremendous Jones said is your. Your income, your life, who you are really is one of the factors, is the kind of people that you hang out with. And I know that that one of the most incredible benefits of being part of Strategic Coach, when Joe and I go, is the people that are in the room, the people that are there, are just like, it's a tremendous growth opportunity because everybody is a successful entrepreneur. Not just a successful entrepreneur. They're the top of the top of the successful entrepreneurs. And it's just a real growth experience just to even expand your network like that.

Yeah.

And I think that, you know, just to bring out another quality that I think really distinguishes the entrepreneurs. There's a real humility. You know, there's a guy named Bill Joy in Silicon Valley. He's got this famous law, which is called Joy's Law. And Joy's Law is that no matter how smart you are, there's somebody out there who's smarter.

Right, right.

And you have to recognize that. And I think that when you come into Strategic Coach, you recognize that you're smart in one way, and that's really gotten you where you are. But what gets you even further is the willingness that just as you're smart in a particular area, there's lots of other people who are very, very smart, just as smart as you are in their areas. And that just expands you because you realize, well, first of all, I don't have to be smart enough their area. I can just take advantage of what they're doing.

Okay, so now let's talk about smart marketing, and let's talk about the whole concept of marketing. Me and Dean have spent at least, gosh, probably 20 years, almost 20 years. For me, it's been, I think I'm better than you because I think I've.

Got a year on here.

What do you think?

I don't know.

But we've invested a tremendous amount of time learning and mastering direct response marketing, and we love it because it's a way to replicate yourself. I think marketing is the ultimate leverage. And I'd like to ask you, Dan, what does marketing mean to you? What is it to you? You're certainly a great marketer, and I'd love to get your take on it.

Well, I mean, you know, again, I'm going to have to take a second seat here because what we had, you know, when you met us in Strategic Coach is we were a great sales organization. I started this in 74, 1974, and we were always a great sales organization. In other words, put us in front of someone and we can probably get them to sign a check, and not only one check, but we can probably keep them for a long time. So we were good at selling. But what I learned really from you was the fact is that, yeah, but how do you get in front of the person? And is that costing you more and more every year, or is there a way that that can actually cost you less every year? So the real secret ultimately to be a great salesperson is that you have to be a great marketer first. And great marketing means is constantly increasing your ability to catch other people's attention, their interest, and do it at a lower and lower Cost every year. And I mean, that's, you know, and if you can't do that, then, I mean, everything comes down to the cost of the actual acquisition of someone who's going to write a check to you.

Yeah, absolutely. And by the way, jumping at any point in time. Well, I think what you were saying, because we talk about this concept of the before unit, and one of the great ways to think about it is to think if you could buy, if it was like a vending machine where you could identify what your ideal, who your ideal customer is, who your ideal client is, and you could push a button, put in the amount of money that you can knowingly pay to get one of those and do that as often as you can. That's what really your before unit is about, is about building that vending machine that you put whatever the amount that you can spend to acquire a customer, if it's a hundred dollars, $1,000, $5,000, if you can reliably push that button and have your ideal client end up in your workshops or in your.

Yeah. And I mean, we've, you know, again, it's who I'm hanging, hanging out with recently. Just to your point, Dean, you know, we did a little comparison. And I mean, this was just like, you know, you've been operating in one world and you think you have it figured out and then you discover some people who have a whole new methodology. But about a year and a half ago, we went over to webinars, you know, which we had never done. You know, we had always been been live speech. Usually at trade shows where you ship your team there, you have to pay for air flight, you have to pay for hotels, you have to pay for booth space. And you know, that had been a tried and true. We were going to the trade shows and then we introduced this new methodology of webinars and we just did a little comparison of the last 50 people that we acquired at a trade show.

And they.

And the last 50 people we acquired at a webinar. And we said, how much did one cost and how much did the other cost? And the cost of acquisition of trade show was $1,200 per client. Now, the lifetime value of 1 of our client is $25,000. So we could sort of justify it. But the 50 that we got from the webinar was $12 per person. So you got $12,000 on one side and 12 on the other side sitting there and we say which one? We go, where does our future lie? You know, and that's the interesting Thing about, you know, Dean, the world that you're living in and Joe, the world that you're constantly pushing with, you know, with all the piranha marketing technologies that you've created, is, you know, there's much, much, much better ways of doing this, you know, and we live in a wonderful age. You know, I mean, I'm just really happy to be alive in the 21st century, especially the last 10 years, just because of the technologies that are now empowering entrepreneurs in a way that they used to only be available to large corporations.

Let me ask you about that, because, I mean, for everything I know about you, you're a very generous, giving guy. And of course, you have to make hard business decisions and stuff because you have a. I mean, depending on how detailed you want to get, you have a million things that you could attend to. What was it about how you approached him that you believe caused him to give you that time? Because there's certainly some people that are opportunists, but they approach someone in a way that doesn't engender them wanting to help them. It actually makes them want to run away. Do you know what that is about you?

Yeah. So I know that both on how I approached him and then how others have approached me, good and bad. And so when I approached Fred, I was just, wow, really impressed with what you've built in a sincere way. And wasn't trying to flatter him or manipulate. I just was really, wow, I couldn't believe I got to meet him. And I said, you know, I've got some questions, and I'd really love to run them by you. And I think he could tell that I was sincere and that I had real questions, and he maybe saw a little bit of himself in me or something or a little bit of me in him when he was a kid or. And it just. It seemed to work. And so people reach out to me all the time, and I always try and say yes to someone who sends me an email, as long as it feels real and there isn't a hidden agenda. And nothing's more frustrating than when you get on a phone call and you find that right away it was just to pitch you on something.

Yeah.

But if somebody really wants help and needs help, I think entrepreneurs, it's just like an unwritten rule to help those that need help in the same space. Because we all got help.

Yeah. And we know how hard it is.

Yeah, yeah, yeah, yeah.

And when I say hard. Let me reframe that or at least talk about hard, because I said this funny thing, I even mentioned it yesterday when I was doing another interview where I said it at an event once. I said, if I would have known how difficult it would have been to be successful, I would have stuck with being a loser. There's a lot of work involved in it. And I say in a funny way, look, I love my business, I love my life. There's definitely difficulties and challenges. Now is a better time than I've ever had. But, man, there are some days, weeks, years that were just hard. I mean, just gut wrenching difficult. And, you know, there's. Because your book is called Willing to Fail, you have frame of how you think about this stuff. So do you enjoy hard or how do you think about the term hard? Because you. We hear a lot of people advising, work hard, do a lot of hard work. And, you know, and there's this work smart, not work hard. In a lot of ways, it's work hard on smart things. You know, I mean, that's. But not all the time, because you can totally burn out, too. And you've probably. I'm sure you've hit burnout stages. Of course. Yeah. So I'd love to hear you talk about what hard means to you and how you operate within it.

Yeah. I love what I do. So many times it doesn't feel hard. Even when things go wrong, it's still like, oh, cool, we got a challenge to overcome here. And you want things to go as planned. You want your sales targets to happen. Let me tell you a story about how I think I would define hard. So putting together the book with Roy Williams, we're sitting down and we're trying to. I was trying to come up with the title. I just felt like that's the first. That's the starting point of a book. What's the title? Right? He said, no, no, no, no. We're gonna put together the manuscript, we're gonna close the book. The title will pop out. And I said, roy, I'm a branding guy.

Wow.

One day painting Shaq Shine 1-800-got junk like, I start with brands. He said, it doesn't work like that in books. So he said, we'll close it off, and I promise you the title will jump out. So after rereading the book, the title jumped out, wtf? Willing to Fail. Because I realized it was failure Learn, Succeed. Failure, Learn, Succeed, Fail. And so reframing for me, those failures aren't hard. Those failures are gifts. I mean, on Christmas, doesn't everyone love opening presents? I'm like, I got another gift. Here. And while some people might go, yeah, it's easy to say you've built a 400 plus million dollar business. No, I've always felt that way. I've always felt that there is a gift in every failure. I just need to recognize and learn what could be better that will come from that failure as a result of that learning. And so the number one thing I'll do, and yes, I'm human. Yes, I get days where I'm depressed and I'm in bed for three days and don't know what to do because of a failure. But when I'm ready, I take out a sheet of paper and I write down what's the one thing better than where I am now that can come from this seeming failure? And I'll write stuff down and I commit to just writing one thing. Sometimes it's 10 things. But I've never been let down. Every failure has led me to a better place.

Yeah, yeah. You're either winning or you're learning. And if you know how to learn from the failures, then you still win ultimately, if it doesn't. Yeah, yeah.

And I mean, have you've met more entrepreneurs I can imagine, than anyone on the planet. Have you ever met an entrepreneur that hasn't failed over and over and over?

Yeah, no, it doesn't happen.

I mean, have you ever met an athlete that hasn't failed over, like it's life, you know.

You know what's interesting about failure, there's some celebration of failure that I think gets improperly celebrated, meaning no one likes to fail, no one wants to fail. And I think getting up and saying, hey, you know, we're just going to go at it and we're going to fail. There's a lot of people that just screw that up. There's other people that just know it's just part of the process, you know, in the same way that if you're going to go through a difficult workout, you're going to exert effort. And failure on the path of success is just part of the path of success. And it's the road. It's part of the road. What's the difference between being willing to fail versus being reckless or unprepared or having just a terrible, undoable business model and someone's enthusiasm is far more exhibited than any form of intelligence.

Yeah. I mean, when I'm saying be willing to fail, it's not being reckless. So let me give you an analogy for a second. That's real life. One of my daughters, four years ago, she comes out of ski school. We're all a family of skiers. And she comes out of ski school, she's like, I hate this. It's not for me. This sucks. And I go, why don't you like it? She goes, because I keep falling and it hurts. And I said, no, no, you don't understand. Falling is how you get better. You fall, you reflect on why you fell and what you'll do differently, and then you get better. No one becomes a great skier by not falling. So the next day, she goes to ski school, she comes back, she goes, guess what? I fell today. And big smile on her face. And I was like, that's awesome. A, because it taught me that, like, my wisdom actually sunk, but B, that she understood that that's a process.

Yeah.

And so I think people just have to recognize it's as much of a part of success as getting anything right. In fact, it's probably a bigger part.

Yeah.

You know, we in life, we watch sports and we celebrate, you know, the NBA championships. But if you think of this year, our team, the Toronto Raptors, gets there. It was all the mistakes that led up to it that I hope those players remembered and celebrated in their minds. When I look back, when we hit our goals, the stories that stand out that we talk about over and over weren't the, like, wow, this was easy, right? It was the pain, it was the trauma, it was the, oh, my gosh, do you remember when we didn't have this?

Yeah.

And that makes life sweet.

Totally. You know, and when I sit and ask entrepreneurs to think of the greatest breakthroughs they've had, 99% of the time, those things came out of pain. It's turning shit into fertilizer. I mean, it really. It's taking something that's adverse and being able to transform it.

Yep.

And when you're in that fertilizer, or, sorry, in the shit, you don't understand necessarily that something great is going to come from that, but you have to be open to that possibility and have a little bit of faith. And I don't mean that in a religious type way, but just, like, just have some trust that, you know what, that is going to bring you to a better place. Just allow it and be okay with that. And, you know, I think when you talk to entrepreneurs, and even if I think of my own breakthroughs, I don't think I was aware of the breakthrough the day that that bad thing happened.

Right.

It was time that went by where I started to reflect and think, oh, you know what? It was that moment that taught me this.

Yeah.

First thing, I'm overdressed.

Yeah.

Okay, so I got a PowerPoint, but I'm not going to use it because I think I can give you better if you'll let me be the one person that uses his stupid notes. And I got more notes than 10 minutes, so I'll just stop when it dings. So, but you can put my. You can put my go backwards. Yes. Yeah, that's it. So just that's the topic on thinking different, because I'm known for thinking different than anybody else. And I'm going to try to give you the why as Joe's thing and I'll give you as much contextualization. So I'm going to start with a couple of things I wrote last night because I think it'll be better than this PowerPoint. So the real question is why people fail to recognize the obvious. A guy I think at Cornell did something really interesting and I read it a couple years ago and it was bizarre. And I want to quote it because he said most incompetent people don't know they're incompetent. And one of the reasons, it's very interesting, one of the reasons ignorant people tend to be blissfully self assured. Think about that. Blissfully self assured is because the skills required for competency are often the same skills necessary to recognize competency. So this is really interesting. So the incompetent think about this and this is going to get into what I'm going to say. The incompetent suffer doubly because first of all, they reach erroneous conclusions that make them delighted and they make really bad choices. But their incompetence robs them of the ability to even recognize reality. And the key here is I want to give you a different reality. I want to give you a different reality. But I'm going to give you another quote because I love quotes. So Socrates says, a life unexamined is a life not worth living. I believe a business that isn't constantly re examined is a business not worth living. Okay, so now we're going to get into this good stuff. And I did it the other night. So all that stuff I threw out the door. Bear with me. I'm known for being this guy. I can look at strategy, marketing, business models, positioning, preemption, all that stuff from a different point of view. And I want to tell you the why and the how and then what it means to you, because it's irrelevant if I'm that good and you don't know how to do it. I'm not that good. I've just been exposed to so damn many higher, better, easier, faster, safer ways to do stuff than most people have ever been exposed to. And I want to explain a little bit of my history, how I give you context for yourself. So I am hopelessly curious. I just love learning about everything I don't know about and my career. I have no education. My career started because I was fortunate that I sort of self selected. I was attracted and bear with me because I've done 86 hours spontaneously. But I want to make sure I give you this to people who always could look at a situation from a different slant. They seem to know how to untangle Gordian knots that no one else in their industry even figured out was a deterrent. You know, I realized that most entrepreneurs are confounded and they're impeded by knots puzzles, status quo thinking, acceptance, challenging business dilemmas they don't even know they're struggling with.

Seriously.

Okay, so if you don't know you're struggling with, you can't solve it. So I've developed a really fascinating way of looking at life and it's because of the influence of confluence. And by that I mean I hope I'm saying it right. I've had such a diversity of experience and I thought that I share a little bit about the generalities and I'll tell you some of the experiences and what I learned from it and give you a context for yourself. So the one thing, and I was thinking about this for the first time because Joe said do this and I'm running because I got now six minutes left is the people that I was exposed to were always felt like they were leading a revolution, a crusade. It was not about being. It was very much like Dean said, I'll be very fast. But they had undefatigable enjoyment for what they did. Not just what they did industry wise, but who they were doing it for, meaning their clients, the impact they were having on their business. And I realized that most entrepreneurs are restricted, limited, they're stuck and don't even know it. And I'm going to share with you now some of the ways that I got to develop what I call divergent thinking. Funnel vision versus tunnel vision. So I'm going to go through all the things I experienced for the first third of my life quickly and tell you what I learned from and then give you the so when I was 17, I read the book Tom Sawyer, loved it. I had a job painting fire hydrants. I got paid 50 cents apiece. I thought what would happen if I gave a bunch of 14 year olds the paint and the fire and told him how much fun it was and gave him a quarter. And I made about $4,000 a week while I read biographies. When I was 18, I worked for a commercial financial company that financed farm equipment. I learned that farm equipment is not financed like record. It's not every month, it's by the seasons of harvest and you structure the deal depending upon the way they harvest. There was one crop yield, two crop yield, three crop yields. When I was a little older, I worked for a charge card different than a credit card. A charge card is really wealthy people who get, who charge stuff and pay for it at the end of the month. Most of them were always late. You had to be able to motivate finesse, diplomatically compel them to pay their bill in the moments of a transaction when they would call in and they would be either over limit. And it taught you incredible ways to deal with influence and implication without ever offending anybody. I was working for a company that was a big, big, big, big, big investment financial company in Indianapolis. And the young scion loved me. Everyone liked me because I was young and interesting when I was 18 and the guy took me aside and said, you've got to always be a trend spotter. You've got to be ahead of it rather than behind it. They invested in, now a lot of you young people, they invested in gas stations that were self serve before it was legal to be self serve. They invested in cable TV before anybody had cable tv. I worked for Hertz Truck Leasing and they taught me there's no money in leasing trucks. There's incredible triple profit if you throw into it maintenance for three years. And there's an incredible difference if you get three or four extra mills at fractions of a cent per mile for a truck that goes a million miles a year on a three year lease. I'm just going through it. I worked in the association business and most small groups can't afford their own association. I met a guy, I was always attracted these nonlinear thinkers. This guy was very smart. He'd go to associations that couldn't afford, 35 years ago, an association. He charged half the price of them doing their own, but he would have five of them. He'd make twice or thrice what everybody else made. He would repurpose the salespeople, the staff, the organization, the lobbyists. Very, very, very interesting. And I'm going to bring all this stuff home very quickly. I worked in the radio business. And I learned you could have something very desirable and you can make people buy a lot of undesirable things, packages. I learned that you could create buying power at will because time costs nothing. But you can trade it for cars and you can trade it for furniture, you can trade it for restaurants. I learned that you can repurpose one station and have an AM&F. And I learned that you can package more exciting things together like trips and get people to spend hundreds of thousands of dollars. I learned that you can go to people who don't advertise and give them something exciting that's non threatening, like one spot a week on the Cincinnati Bengals and they'll buy it. Very interesting. I sold electric shavers. Nobody wants to buy electric shavers. Retailers don't care about electric shavers. They only sell electric shavers at Father's day and Christmas. So you got to give them something else exciting. So I had to find a way to make no co op marketing dollars. Co op is what you earn when you buy it go a long way. So I'd buy billboards at the end of the year for retailers and nobody ever buys the billboards at the end of the year so you can buy them for 5 cents on the dollar. I'd buy millions of dollars of billboards for about $10,000 and give that to people in if they bought shavers. And I realized all the psychology of all these things. I was in the consignment business. I realized that somebody else's distress is always somebody else's opportunity. I found a guy that had $10 million, I'm dating myself of eight track stereo tapes in a warehouse and I put it in the equivalent of seven elevens and I made $5,000 a week just by the connection. I found a guy that had a million dollars worth of curio items and I put it in all kinds of stuff, specialty shops in Indianapolis and made thousands of dollars a week just for making the connection. I worked for a company called JW Gibson and everyone else bought growth companies. He bought loser companies. Companies are on the way down. Third generations. He bought them for three reasons. One, the third fourth generation didn't have a clue what all the equipment was worth, what the building was worth. He would buy it, resell all the equipment, all the building, make a profit before he ever closed. He bought chemical businesses that always could be integrated into his master business that had enormous capacity. He could duplicate all the services and he had distribution that could grow it. And he taught that to me. It was really interesting. We were the first people to do. I mean, so we did Watts telemarketing. Seems antiquated now. We were in it before anyone ever did it. We were in it when IBM had photoelectric paper readers where you had automatic. And we used to learn how to send letter upon letter with every scenario. And that sequencing and unrelenting value communication is like a positive Chinese water torture. I worked for icot and we had no money, but I learned incremental cost. I learned allowable cost. I learned how to overcome preemptively all the negatives. I learned how a lot of littles can be worth a lot. We had a thousand. Was that the ding? Okay, I'm going to quote. I'm just going to quote. Yeah. The trick is you got to learn what you don't know and you got to observe what it means to you and you got to look at things different. I'll quote from. I like the old Apple commercial. Here's to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs and the square holes. The ones who see things differently. They're not fond of rules and have no respect for the status quo. You can quote them, disagree with them, glorify, vilify them. About the only thing you can't do is ignore them, because they change things. They push the human race forward. And while some may seem as crazy and wild ones, we see them as geniuses. How else can you stare at an empty canvas and see a work of art? Or sit in silence and hear a song that's never been written? Or gaze at a red planet and see a laboratory on wheels? Because the people who are crazy enough to think they can change the world are the ones who do. Thank you.

Let me start from an individual level. If someone is beaten down, I mean, a lot of my clients are entrepreneurs, so they're trying to run businesses. They have many hats that they're wearing. The only way that they make any money or pay their bills is they produce a result. And so they're very much, you know, on the go quite a bit. How, you know, what would be some advice that you have or ways to look at failures? Like, how have you handled failures in your life? How do you handle criticism, that sort of stuff? Because I think a lot of people just feel really beaten down and they're not operating from a sense of confidence, right?

Absolutely.

What would you say to those people?

Well, first of all, it's very important for all of us to realize that failure is part of success. It's not the opposite of success. My mother used to come call it a stepping stone to success. So we need to change our approach to failure, and that means that we'll be more likely to take risks to try for things that may not work. I mean, I know when I launched the Huffington Post, trust me, there weren't a lot of people who thought it would succeed. And on day one, our reviews were terrible. I've learned one of them by heart. It said, the Huffington Post is an unsurvivable failure.

Wow.

It is the movie equivalent of Ishtar, Heaven's Gate, and one other horrible movie that I can't remember right now. One more, I'll let you know which it is. But anyway, all rolled into one, it said. So that's when it's important not to internalize criticism, because if you have a vision for something, just keep going and you're not going to get the world applauding on day one. And for me, that was a big lesson.

Those are great points. You know, if you got a vision, keep going in day one, it's not always going to be a success. I mean, just knowing that is such an important point.

Exactly. And perseverance is key, and course correcting is key. You know, I always like to listen to what people are saying, and if there's some useful criticism, absolutely, take it. But if it's just naysaying, do you.

Know how to esteem yourself by yourself? Now, I'm sure, of course, I'm sort of asking you questions I already know the answer to because I read Thrive. But basically, when you're feeling down, when you're feeling like, oh, I'm, you know, I may need, I need some help, do you typically reach out to other people or do you just go quiet inside and meditate? Or you probably do a combination of both. But how do you handle sort of situations where Arianna Huffington. Things are feeling a little out of control or a little overwhelming?

Both. I think that being able to go inside and meditate is just, I mean, when we say meditate, you know, if you may want to pray or have some other contemplative practice or you may want to go fly fishing, I don't know. You know, it's whatever it is in your life that helps you disconnect from everything that you are doing and reconnect with yourself, whatever that activity is for you, it's good to just practice so that in moments when you are down, in moments when things are hard, you can go to it and you know it's there. Right you know, you may not know that on day one. It's like learning to play tennis, you know, on day one it may not be good.

Yes.

You know, in my case it never got good. But anyway, that's another story. But if you keep practicing, then suddenly it's easier to get into that place and be there. And that's an incredible source of strength and serenity at the same time. I believe in having a little tribe, even if it's a tribe of one of people who love you and you love them and they're always in your corner and they're there with you whether you're succeeding or failing. And that's very important. I mean, I have my little tribe and I can go to them when I'm down and we can laugh and they can make me remember. Often the people who are in our tribe just remind us of things that we forget because in some place we all know these things. You know, you resonate with thrive because you know that.

Yeah, yeah.

If you didn't know it, it would be Chinese, right? Or Greek as they say. And so we need these people to remind us when we forget what matters and that we are bigger than our problems. And then we remind them when they're down.

I gotta tell you a story because I was talking to a person in a 12 step group. He was not my sponsor. He was a sponsor of many people in 12 step groups. And I've done quite a few interviews with people on addiction. And he said that the reason that I'm a sponsor is because I tell my sponsees things that I know at some point I'm going to forget and I'm going to need to call them so they can feed back to me what I've been telling them. And I was like, wow, that's the whole point of people sponsoring each other in 12 step groups? Is that helping with the mutual suffering? Truth be told, how hardcore of a world is this? I mean, are these, I mean, it doesn't sound like these are like the nicest angels that are floating around wanting to do good deals. I mean, what level of. I mean, look, in every industry there's con artists and then there's people that are ethical. So I mean, what sort of game are we playing here?

Well, it's a game where I just came from watching a video of somebody that did not get paid for their business and went bankrupt because they went into a process with no advisors and they took the wrong advice and unfortunately they're now bankrupt because a private equity group. Well, let me Take a step back. So if you run a strategic process like we just described and you have more than one player as a strategic buyer, and in John Ratliff's case, we had a buyer out of the Philippines because the strategic buyer in John's case, who is out of the United States told us and they shouldn't have, but they told us they were very afraid of a strategic buyer coming in from the Philippines. So we contacted a friend in the industry in the Philippines, said, spread the word you're coming in. So that a competitive view would be taken by the strategic that we wanted to work with. The art of the deal. I'm going to go positive first. The art of the deal is getting the strategic buyers to fall in love with the business, to understand the integrated value, to open the kimono, what the integrated value is so that you can leverage up your value in their eyes and they're willing to pay it because they're going to make more money owning it. And we've done deals at what people consider crazy multiples. 60 times EBITDA, I can give you the whole story, 56 times EBITDA, you know, a profit. But the way we get there is making sure it's a win for the buyer, but then keeping them honest by having a competitive soft auction between several of them. So that is a healthy positive process, A negative process where you will have all these negative things come out. Can be a financial buyer and there's all different types of financial buyers, but the way you know this is a financial buyer is they're using other people's money, they're motivated. They'll call it a 2 in 20 model, which I can get into if you like. But the bottom line is they're motivated by any money, any dollars they don't pay you. They get in that model if it's at the right level. 20 cents of that's a huge motivation. And their interest is in maximizing dollars as an outcome, not a strategic fit. And right now the leadership of that group is private equity. And they make great money for their investors. And the people working it make great money. And so if you're an investor, you want to invest there potentially. But if you're a seller, selling to them is an opposite objective. They want to maximize profit by buying low, to sell high to a strategic. And you as a seller, you as a seller want to maximize value by selling high. So they want to buy low and you want to sell high. That creates tension and a whole playbook of private equity on how to achieve a Lower purchase price from a seller when the seller wants to sell high.

Yeah, yeah. So when are the times that someone would sell to private equity that there's no either?

No.

Is it because they have no other alternative or, or there are some situations of private equity and I say all this out of ignorance.

No, they're great questions.

Yeah, I'm not in any means.

So we have sold to private equity when the strategics are either not understanding the value proposition or through a soft auction are creating such a high level price that the private equity guys, depending on their motivation, feel like they need to match that because they really feel like they. But without a competitive process with strategics involved, you can't get private equity to make a high offer. This year we just closed with a private equity group after running a process just like that with a whole bunch of strategies. And the clients came to. I'll give you the numbers and not the names. They came to us, they said we don't. Well, I met them through referral. We don't need you, we have a $40 million offer. I said, okay, well who's it from? Well, this private equity firm, we said, I said look, I'll give you my right hand if that's the value of your business, because it's not. Think about the private equity guy's motivation. And I'm not disrespecting private equity, it's their place in the market. But they want to buy low, add value where they can and sell high. And they want you to continue to run the business for 20% of the second bite of the apple. What we're suggesting is people should keep their whole apple and not just a second bite of the apple and sell that whole beautiful apple to somebody that will appreciate that and will. And we'll pay a high price for that. Now that private equity firm who offered the 40 million, the client, there were two brothers. We have a video, happy to show our listeners if they're interested. And they got 108 million from that same private equity firm, 100% cash up front. And they're very happy. And the way that that worked was. And I won't name the firms because it's of kind confidential and by the way, strategic selling processes, you can keep everything confidential. If you sell a private equity, it's their job to get out in the marketplace and check whether what you know, what the future of your business is going to be so it can get back to your employees and it can get back to your customers. And that's one of the other Benefits of selling two strategics and having an advisor that will help you sell two strategics is it's more confidential because it can really hurt your business if your employees find out about it in the middle of the process and you haven't involved them in it. And we can talk about that or if your competitors find out about that and tell your clients. So you want to be sure. Process.

So it is a very interesting game and process to go through with when and how do you actually mention it and stuff like that. I don't even know what the stats are. But how many businesses go under or get worse after they've been sold compared to how many get better?

Oh, well, that's a whole other subject that we're not involved in. But integration of a business and planning integration of a business after it's purchased is really critically important for the buyer. We're working for the sellers for the most part. But if we are working as a buyer with clients to help them build up, we do something called a roll up to sell Joe. So if you want to be the guy in your industry that buys all your competitors, we'll go and find an international strategic buyer. The last one we did was with a Japanese buyer that said I want to come into the American market and we want to buy a bigger deal than you have. So how about you roll up and you can use our currency. Roll up all these into roll up means buy your competitors into a platform so you're rolling them in and then we'll sell here. So we'll take the sell side mandate now and help them roll up. And in that case we're helping them as a buyer. And when you're a buyer, you want to have 100 day integration plan, you want to have the executive team clearly in place. You want to know exactly who you're going to keep and who's going to go before you do that purchase so that it's very smooth in the integration that does not happen, unfortunately enough. So I would encourage people that are buying businesses to have an integration plan, have an integration team, have the clarity of ownership and the clarity of outcomes before they close on a deal.

No, that's really valuable because I cannot tell you like I've come across quite a few people that they build up their dream baby and then it becomes a mature, you know, sometimes a teenager, sometimes an adult, and then it gets handed off to someone else and they just screw it up.

Yeah, yeah, yeah. So I just want to tell you my passion for this comes from that experience and knowing that if we can free people's time, treasure and talent up, that they can live their life more fully. They can potentially contribute to charity or create a foundation or they can go and live their dreams. They can become a guru in their industry. They can do things that fulfill them before they leave this.

Yeah, yeah, that's great. Okay, so some of the questions I have here, what are some of the most important lessons you've learned about buying and exiting companies?

You want to just like people ask me about climbing Everest and the seven Summits. You want to be completely. So I give speeches on what are the parallels. And you want to set a high goal first of all, which is a parallel with climbing. You want to be completely prepared before you start. You want to get the best in Climance guides in our world. It's M and A advisors in the world that will tell you they're the best in the world at the specific jobs.

M and A Mergers and acquisitions. I don't know if we. Maybe you said that in the beginning, I can't remember. But just in case, M and A means mergers and acquisitions.

And that's the same word from each perspective. Just to have some fun with that perspective for a second. If you're a merger, it's because you've been bought and you're saying I've merged. If you're an acquisition, you're the buyer and you say I'm acquiring. So it's the same thing from two different perspectives. So Joe, preparing is really important and the way that people prepare and the more prepared they are, the better advised they are, the better outcome they're going to have. Okay.

Okay. Awesome. And now I'll ask you this. What are the biggest mistakes entrepreneurs make when selling their company and getting their company ready for sale?

The worst one is taking their eye off the operating ball. So if you're going to sell your business, keep your eye on that ball of continuing to increase your sales, to manage your expenses, to increase the strength of your management team. Dan Sullivan's who make sure you have all of your who's in place so that you are. I just had a conversation with somebody today where it was the opposite of this, that you are not viewed as integral to the business. You as the owner of the business want to be viewed as being not required for the day to day operations of the business. And today I was having a call with somebody who said we don't want to buy that because he's too involved in the business and we can't put somebody else in. And if we give him the hundred million he's looking for, he's likely going to leave. So you want to be prepared. You want to make sure that you keep your eye on that ball, that you continue operating your business as if you're not going to sell it so that the performance continues to go up because if it drops off, the buyers won't stay in the race.

Yeah, no, that's great.

Great.

What's the difference in mindset and approach between building a company to run versus building a company to sell?

Well, I used to believe that I was running my company when I was an entrepreneurial operator and I wasn't going to sell it. And that is a fallacy. As hard as it is, we all have to realize that one day we're going to sell our business because we're not going to live for forever. With that in mind and with all the experience I have now and having been an operator and somebody that advises others, and we have a whole team, by the way. We're a global business in 24 cities around the world. So we bring international buyers, not just strategic buyers, to the table. But with all that learning, I now know it's really important to always think about how do I set my company up so that it's successful operating, but it's also successful as a potential sales.

Let me ask you some business questions. Well, no, these are actually all tied together. How did you deal with failure? And what advice could you give to entrepreneurs going through difficulties or struggling? Because certainly you've had a shit ton of that.

Okay, I'm going to try to explain this because I had a download about this a couple months ago, one of those downloads. It's one of those things that sounds so simple, yet it's so profound. I know, and I haven't quite the magnitude. Okay, so I saw success and failure, what we consider success and failure, like as a yin and yang, you know, like this energy. And what I saw was that at the same rate you fail. So the amount of failure that you put into, let's just say failure is the black part of the yin and yang. It's the yang part. And the success is the white. That the amount of energy that you put into that failure is the amount of energy that you can have in success. And I suddenly saw why. My life, I'm like, my God, most my life was failure of what people consider. Right? So now I've had the success that's so big. And then I thought back to like a concert violinist, think about how much failure there is. And how, how many years? That's the 10,000 hours. Those 10,000 hours aren't 10,000 hours of success. Right. So there's something energetically that I haven't quite figured out. But do you guys understand what I'm talking about? So I think that we should all be aiming for failure all the time. Lots of it. Lots and lots and lots and lots of failure. Because you're going. I believe that we have a natural propensity to learn and that we're not going to. It's just like oh fire. We naturally know not to do things and that is going to actually increase the magnitude of your success.

Yeah, that makes good point. This thought's coming to me about. I'm trying to. I have a friend who actually talked about how we measure success in let's say love relationships more so over not being depth but duration. Like if you've been married for 50 years, well it could have been 50 years of total misery. But if you were married for 50 years you're like ah, it's a successful couple versus maybe you're only in a relationship for one year but that one year had enormous depth and growth and things like that. Or you've been in business for 20 years but you fucking hate it. You don't let you know. I mean everything about it's been miserable versus you had a certain period of time where you just, you know, you were winning and you were connected and that sort of thing. So I think depth and just squeezing the much juice out of life in all areas is a far more to me admirable than just long drawn out duration.

I think that's great. We have a saying that we just have to win more than we fail. Because I want my team to fail. I want them to because we don't take those long shots. You know, I want to take the long shots and I know, you know, you know, I'm debt free, I don't have any loans so we're all self funded. So I make sure it doesn't hurt the organism. But I want them taking these risks because the only way, you know, and it might not work. And what's the worst thing that happened?

You know I think here's like, I think the entrepreneurs that get rewarded the most in life is relative to their ability to take those risks and put themselves. And this could be totally taken out of context where it's like oh, that means be crazy. Because when people hear the word risk they sometimes think oh, that just means do crazy shit and be willing to lose it. All when you can point to those sort of stories. I mean, I remember in a meeting with Elon Musk, there was about 20 of us there, and Peter Diamandis had set it up at SpaceX. And one of the guys had asked Elon, how did you have. How did you become successful? And he said, I'm willing to endure more pain than anyone that I know. That's what he said. And he also said that he was borrowing money from friends and sleeping on couches, and he bet everything that he had, and had that rocket not flown, he would have just been done. But he was willing to do that. And, you know, and I don't know if that's necessarily a smart thing, you know, because, you know, there's. Now looking back, everyone's like, of course, you know, and it's super admirable, but for every one of those things, there's so much human wreckage. And so. Yeah, but the thing with risk, though, is your thing on failure. No, the thing on failure, though, what you're saying, here's what I'm getting at, is that every time you're willing to put yourself out there, you're being building that muscle. And by doing that, you develop an endurance and a stamina that cannot come any other way. You can't just think yourself into successful entrepreneurship. You have to just do shit. You don't build a great reputation by talking about what you're going to do. You build a great reputation by doing shit that ends up leading to a great business or a great whatever.

Yes. And I would say, and maybe, hopefully, that idea was so alive within him. And that's what I tell entrepreneurs, like, wait till the idea's alive. Like, we will literally go eight months without making a video. And we've had hundreds of millions of views. That seems like a long time in marketing. You would think content, you have to have all this strategic content. But we wait until that idea is so delicious that you can feel the energy and you can feel the aliveness, and then we go towards that campaign. So that's the way we operate. And so hopefully it is worth the risk. So for me, if everything failed tomorrow, which I've been in that situation before, like, I'm happy, right? There was nothing that I didn't go for that I wanted to go for, maybe love. Okay, so we already talked about that, so let's take that one off there. But as far as business, there's nothing that I really haven't shot for in our business. So that's what I want everybody to feel hey, we went for it. Because to me, the worst thing is when you didn't go for it, you held back, and then you sold out. And that shit, it doesn't feel good. I gotta tell you, it sucks really bad.

Yeah, well, you're either winning or you're learning. That's one thing I learned from Tony. And I remember telling that back to Tony when he was going through some media shit that he was dealing with, and it's like, yep, you're either winning or you're learning. He's like, yeah, okay. I hope you found that video awesome and useful. So if you want to get a free copy of my book, I want you to click here. And if you want to watch some more videos that will be useful and awesome, click here. Go ahead. You're over here.

Do it now.

Come on.

Thank you. Watch them.