Why you MUST sell expensive products first

There's a strategy that you can use as a creator that helped Elon Musk make Tesla the number one electric car company. This strategy will help you make a lot more money in the early days of your business. I interviewed my friend Brian Harris, founder of Growth Tools, about Tesla's Hershey Kiss strategy that will help you make more money early in your business with the right kind of client. After watching this, you'll realize that you have to sell the expensive things first.

Brian, there's a random email that you sent out a couple couple years ago, may have even been more than a couple of years, talking about this Hershey Kiss business strategy, monetization strategy. And it was just an email. I can't even find where you might have posted it somewhere. And I have shared that with so many people, with accreditation, of course. But like, talk to us about the Hershey Kiss strategy and why you think it's so effective for monetization, for business. And this is applicable like even past creator businesses, which I found really interesting.

Well, original source goes back to Tim Urban and Waybill.

Okay, there we go.

So Hershkitz's business model— most online creators, teachers, people that teach a thing, have a course, membership, software, something— have grown up in the era of the ascension business model, the ascension ladder. Best I know, Brian Dice, digital marketer, popularized it years ago. And the core concept is you start with a very cheap item, a $9 PDF something equivalent, you work your way up to a $97 thing and a $997 thing and then a $10,000 thing and $100,000. You work your way up from a cheap thing to an expensive thing. And that's one model that can work, I guess.

Sure. Takes a lot of sales at $9.

Right. And all the things I've ever seen work in business, which is most things, most things work. Like if you see the case studies and the headlines, it's like most of that's actually true. The one thing I personally have never seen work completely is that. I've actually never seen it one time. I've seen plenty of people sell low-ticket things as Legion for the real thing, all that. But the actual ascension model in full production working, I've yet to see it work one time. And that's just a sample size of one, me. Years ago, I was reading a blog post by Tim Urban on Wait But Why. I think it was his blog post about Tesla. So if you just Google Wait But Why Tesla, he diagrammed out how Elon builds his businesses. And it was literally the exact opposite of the Ascension Ladder. It was the Descension Ladder. So if you map it out, it kind of looks like a Hershey Kiss. You start at the very top of the model, the kind of the thin part of the Hershey Kiss. You don't start at the bottom of the market. You start at the top of the market and you work your way down. So you start with like the first, one of the first Teslas ever sold, maybe the first one was to George Clooney and it was a $250,000 Tesla Roadster. The car was fine, cool parts, kind of clunky a little bit.. But when you're selling stuff to people that have money, it's easier to sell a $250,000 car than it is a $25 PDF to somebody that's broke. They just have two different hats on. The high-end buyer has the ROI hat. They're not thinking, how much does it cost? They're thinking, how can I pay more to get more ROI? Like investing. Nobody thinks when you're in pure investing world, how can I invest less? No, you're asking the question, how can I get a higher return, thus invest more? But when you sell to the bottom of the market, you're selling to people who only think about cost. And that's it. Their only goal is to spend less. Not more. By doing the Elon model, the Hershey Kiss model, when you start at the very top of the market, you're starting with people that have money, and it is easier to sell things to people that have money than people that don't have money, right?

Wild concept. I can see it.

But you can sell 10 copies of a $10,000 coaching package or agency package or whatever you have. You need 10 people at 10 grand, you have a 6-figure business. 10 humans total, that's it. You don't need more than that. 10 times $10,000 is $100,000. You need 100 people at $10,000 and you have a million-dollar business. And it is substantially easier to get 100 people that have money that really want to solve the problem that you help them solve to pay you $10,000 than to get 1,000 or 10,000 people to pay you, you know, way less. The Hershey Kiss business model is the opposite of the ascension ladder. It starts at the top. Do what Tesla did. Do what Elon's done with every one of his businesses. Start at the ultra-high end of the market. Create a profitable business that brings in customers, not even a lot of them, and they're easy customers because those people are way easier to work with typically. And then what Elon did next was introduce the Model S and the Model X. The X is the one with the Falcon wing door thing, the Millennium Falcon, Back to the Future doors. I think I butchered what those things actually were.

Anyway, the DeLorean doors. DeLorean.

That's it. Yeah, that's Star Wars. I was on the wrong show completely. Anyway, and then after like a decade of doing that, then they went to their entry-level offer, the $35,000 Model S and Model 3. Those are the ones— or Model 3. Those are the ones you see driving around everywhere. But it took nearly two decades to get to that. Now, I think a key is— and the Tesla example is really interesting because every car company for the past 100 years that's attempted to start up went bankrupt, all of them except Elon. And the difference was Elon didn't try to start with a $35,000 entry-level car. He did the opposite of everyone. He went to the top and worked his way down versus doing what nearly everyone in every industry does, which is start at the very bottom at cheap people, the littlest amount of money I could possibly charge them, And it practically never works, ever. I've never seen an example one time in 12 years and coaching thousands of people, not one example of that actually working. So Hershey Gets Business Model is do the easier thing. Start at the high end of the market, work your way down. It's so much easier to get to cash flow and get to profit and get to stable. And it just requires— like, this is the reason I like it— it requires substantially less skill. You do not have to be an amazing marketer or salesperson to get 10 people to take a $10K. But you must be an A+ funnel hacker, growth hacker, or whatever new hacker word they've come up with in order to sell and do the ascension ladder thing. You better be an amazing lead gen, amazing landing page writer, amazing copywriter, amazing offer creator if you're going to get and get that thing to work. But to sell 10 copies of a $10,000 thing to the high end of the market, the people that are problem aware, like, that's not hard at all. And you don't even need that many units sold to make a substantial difference. So that's the Hershey's business model in a lot of words.

Yeah, I love it. I think the way that I see this happen often, and I'd love to hear your thoughts on it as well, is like if you're going to descend starting at the top with masterminds, coaching, high-end services, then what you learn— coaching, consulting, going through the process with those people— then better informs what you could do in a group coaching model. And the things that you learn in those two elements can then really inform a very effective— plus with lots of testimonials and social proof— the type of cohort course or self-guided course that you could take people through, which all the way down you could eventually have like some kind of ebook or some kind of starter series. But everything has been like built from the top with your best customers, with people who are going to give you the most money. And, and like it was around the time that I read this that just that light bulb moment of like, oh, it's weirdly easier to sell one person on a $10,000 thing than it is to try and sell 100 people on a $100 thing. You know, especially for someone who, like a lot of people watching this, like you might be really new. 100 sales, I don't even have any 100 email subscribers. And like you and I both know this, like even if you had 100 email subscribers, you're not converting 100 buyers out of that. But you could probably find one that will pay you way more than everyone else combined.

Well, one of the cool things about doing the Hershey Kiss model, like if your business does not need to be over $5 million a year. And many people will be like, I can't even comprehend that. So good, that's you. You don't even need a second thing. Yep. You don't need to make a group coaching, you don't need a course, you don't need a book. Like, you just actually don't need any of that stuff. It's way— and my filters, by the way, this is just brand filters. This is why I get to that. My goal is like the hardest to screw up thing possible that's kind of fun that I enjoy that actually works. So like when I'm looking for what's the business model and what's the marketing model, those are my main filters. Like what's really hard to screw up? I can be like C+ at marketing and it still works. It's fun to do. Like, it draws on what I like and enjoy, and like, it actually works. If your goal is a six-figure business, you need 10 clients at $10,000. That's it. You don't need an email list for that. You don't need to build an audience. That is a total waste of time. Instead, just borrow other people's audiences. Like, they're already— they already exist. Just go to the honey holes. Like, you can go fishing by like ignoring all fishing advice that's ever been given in every fishing chart and understanding where fish are, and you'll never catch fish. Or you could have the local expert just tell you where the fish are and what bait to throw in and do that, and you'll catch fish Literally, like there's a guy that lives 2 blocks from me. He fishes all the time with his kids. My kids want to fish. I don't really care about fishing. So when we take them out, I want them to catch stuff. So I just say, hey Dustin, where should I fish and what should I use? And I do that. And literally every time we catch fish. If your volume of client is low, go build an audience, I guess it's fine. But like, it's not, it should not be where your primary focus is. Instead, go to the honey holes, go to the people that already have those people corralled and go fish there and borrow their audience instead. Get them to promote you instead. And that just is way quicker. You'll accidentally build an audience in the process. Creator shouldn't be the name. It should be, I have decided to enslave myself to content production, creator. Like, that's what I actually—

Yeah, it's a little close to home, but continue.

And I think it's primarily done not intentionally. It's primarily done because people like me in the past had courses about how an audience is everything. And there's great things with an audience, don't get me wrong here, but most people do not need to focus on that. Like, I found this— I'm 6 years in, have an email list of 50,000 people. And I'm like, well, how do I get people to buy from me? I thought my business was writing blog posts and growing my list. That's not true. That's called a nonprofit that happens to produce content. If you're in business, it means you have a product that people pay you money for. Yeah, at the bare minimum. Most, most creators think of their business as their content, and that's not, that's not what it is. Their business is the product they sell. Like, what's the service you provide? That's the thing. And most people, the most efficient path I've ever found— again, I'm a decade in, there's people that have been in longer than me— the most efficient path I found is go high end and don't focus on building an audience, focus on borrowing an audience, and you will get there 10 times quicker than anybody else. And it'll be easier, and you won't be enslaved to the content hamster wheel to death in the process. Produce content, that's fine. I love content. I love writing and all that stuff. But like, at the end of the day, what you need are clients. And what's the most efficient path to that? And it's not trying to build an email list from scratch, or build a podcast from scratch, or build an Instagram account from scratch. It's almost never that. I know so many people that have gigantic accounts and have no clue how to actually make money at all.

Right. Yep. Know some of those people too.

If you start with how can my Instagram be big or how am I gonna email list be big, it's the wrong starting point. Like it's literally not the point of it at all. What if you could do it without that? But if you need 1,000 client and 1,000 new people a month to pay $50 for your thing, well like you're gonna need a lot of volume and you better get in that game. But like that's a game, man, that is getting harder to win by the day. And you don't even need to play it.