How to get customers to pay forever

If you understand the steps that I'm about to share with you in this video, you will be able to step by step, create a fortune. If you don't know who I am, I crossed $100 million net worth when I was 32. We have a portfolio@acquisite.com that is $200 million a year. Took me way too long to learn how fortunes are built. If you imagine the amount of people that you have sold in your lifetime in whatever business you have, whatever it is, side hustles, gigs, anything, and you were to instead add up all of them together and then they continue to pay you month over month over month at whatever price you sell stuff at. How much bigger would your business be if it were mine? A lot bigger. My first big business was called Gym Launch. Gym Launch to date has 5,000 brick and mortar gyms that have purchased the licensing from it. If I had 5,000 of those gyms still paying right now, that company would be worth over a billion dollars. That company is probably worth now close to about 100 million. So I've missed out on about $900 million during my career just from that one company alone because it took me so long to learn what I'm about to share with you. The big problem that most people have when they are starting their business is that they are in the selling business, not in the reorder business. They don't have recurring revenue. They have one time sales. When you see these merch drops and these things where people are just selling crap and they get the one time purchase and no one buys again, the reason they can't make money is because they have no compounding vehicle. What that means is that if I sell somebody today, I want to get credit for that person that I sold today in a year. Because what happens is if you don't have that, then you're always selling for tomorrow, you're always selling for the paycheck this month, you're always selling to pay rent rather than benefiting from a sale you made 10 years ago and having that person still pay you today. Because the thing is that you need to harness time. The people who understand wealth understand time. If time is a liability against you, it means you are thinking like a poor person. For the wealthy, time becomes an asset because the longer you wait, the more you win. If you imagine a business as a wall of glue and you're blowing people at it, if you never even increase the amount of people you sell, let's just say you sell one person a 10 years, you could have 500 customers every month who pay you. And if you have any price point that is reasonable, that is a lot of money. That is a fortune. And the reason people don't have that happen is because they don't get it and they're only thinking about the short sale for tomorrow. The easiest question that I like to ask when we're analyzing one of the businesses that we're thinking about purchasing, Is there a way that we can get someone to buy this and never stop paying for it? Is there a way that we can make this so good? The moment their card changes or they get a new credit card, they call us ahead of time because they don't want to stop receiving value. If your phone gets changed to your phone carrier and your credit card goes out, what do you do? You call your phone carrier and you replace it because the value is there. If your credit card goes out, what do you call Netflix? You're going to make sure that your car goes through. If your utilities go out because your car doesn't go through, you fucking pay it. If your rent doesn't go through, you make sure that it's paid on time. Because these are things you cannot live without. The goal is to figure out a way to make our value so high that people don't want to stop paying. You want to be in the reorder, not the order business. There are recurring revenue businesses and, and reoccurring revenue. So this applies whether you have a subscription business or you have a one time purchase business. The point is that people come back. Facebook is a massive company. They do not have a recurring revenue model. They have a reoccurring revenue model. Meaning I go to the Facebook store today I buy some eyeballs and tomorrow I might go back again and buy more eyeballs. I don't have a subscription, but I reorder over and over and over again. The question that I ask the portfolio companies and when we're trying to grow them early on and really get the product to be exceptional, is if tomorrow you could not market anything, you could not get any new customers whatsoever, and the only thing you had were the customers you have today. And any new customer that you get could only come from referral and word of mouth. Of the people you have right now, how differently would you treat them? How different would their experience be? And how much better would your product be if the only way you could get new customers was them sending new business your way? When you start thinking like that, you start thinking like the wealthy, not like the poor who are always in a Rush for the next sale, the next paycheck. Because the reality is you don't get customers to make sales. You make sales to get customers. It's an important distinction. We only transact in order to create the relationship so that we can have revenue again and again and again. You want that customer to exist like a node of revenue in your business that pumps money your way month after month after month. So the big issue is that the stuff that most people sell sucks. They're constantly focused on promotion. They're constantly trying to find the next customer because they haven't confronted. The real issue is that you're just not that good. And that's okay. But the problem is that you're not focusing on the hard work, which is getting better. There are three steps that you look at when you're actually trying to scale a business. You want to go to zero to a million, make a couple million bucks a year. You can just promote and sell shit all day long and never build real wealth. For me, I want to build a fortune. And the only way to build a fortune is to get people to never stop paying. If that is our goal, we only need to learn how to promote as much as we just need people to start trying our product. The point of making the first sales is to get customers. The point of those first customers is to give you feedback. And you keep getting feedback and not even caring too much about how hard you're marketing. Because the goal is to get the product and service better and better and better. And this is why most people can't scale, because they start selling a little bit and say, oh, I should promote even more. But the problem is they never fix the product. They keep selling more and more shit. And then what happens is if you sell 100 people this month, you have to sell 100 people next month just to maintain. And then the month after that. If you up to 200 new sales a month, then the next month you have to sell 200 just to maintain. But if you have 10 customers a month and they never leave you, in five years you have 600 customers a month that are paying you only with 10 new customers a month, when you get customers who do not leave you, you can afford any marketing. You can afford to outspend everyone. There's a company that we're about to make a huge investment in, and right now their lifetime value per customer compared to their competition is 10x. And their cost to acquire customer is the same as their competition. Who's going to win in a bidding auction for who can buy the next customer on Facebook or YouTube or pay for the eyeballs between them and their competitors. They'll win every time. Because when you get that right, everything else is easy. Step one is you promote just to get people to become customers. Promote it so that you get the first C, which is consumption. The second piece is, is that actual improvement loop. What happens is when their business gets hard, when they hit a plateau, when people can't grow anymore, they do one of two things. They start marketing more, which is crazy because it means more people find out about the stuff that you sell that sucks, or they create another product. If people don't consume your product, people don't consume your service. It's not that they're numb nuts. It means that you suck. Means you have created such a difficult experience for someone to interact with. You made it so difficult for someone to onboard that they never even experienced the benefit. The amount of people that I hear, especially in the, in the Internet space, you were like, oh, these people don't work hard. They never follow through. Does Amazon complain about all the service tickets they get? No, because they fixed the products. They spent the time to keep solving problem after problem after problem until there were almost no problems left with the product. Taking full responsibility and saying, you know what? We can make this better. And the way you do that is through surveying the customers to figure out what you can do better, Looking at their client experience, looking at the results, seeing if you can make it happen faster, seeing if you can make it happen easier, making sure that you've added so much value that there's no one else that they can compare your product to. You keep doing the feedback loop on those customers until you get a product where people are referring business to you to add the cherry and sprinkle on top. You make it harder to leave. And if you're in a B2B situation, you want to add in collateral or controlling the money flow. If you work with Stripe, they probably process your money. They control the money flow. They don't worry about decline cards because they collect your money for you up front. The person who controls the money has leverage. And then once you crack that, once you say, I'm only going to sell so that I make sales to get customers, I'm going to continue to improve and iterate the same product over and over and over again until the point where I have so many people who are coming to me because of how good it is. Then I'll put gas on it and spend as much money as I can on the Marketing. Because now I can outspend everyone in the same Marketplace. I'm making 10 times, 100 times more than my competitors. Because when people buy from me, they don't want to stop. But most people do it in reverse. They sell as many as they possibly can, burn all the goodwill they have, and then come out with another product, put a lot to hype around it, sell a bunch of them, and then do it again and again. But they cannot build a compounding vehicle of enterprise value. Because if every single launch, if every single customer that they had sold for the last 10 years were still paying them today, they would have more money than know what to do with. It's not about the price in an absolute term. It's all relative to the value that someone receives. So if someone's price is here and the value delivers here, you can make this price whatever you want. If this price is a million and they get 10 million of value, they will pay you for it. Price is what you pay, value is what you get. What we want is a customer surplus. We want an insane deal. We want a bargain that people do call ahead of time to make sure that they never stop getting billed. The game is saying, hey, I've got a $500,000 house. I'll sell it to you for 50 grand. And I learned how to build it for 10. Even if you provide more value upfront and it's less profitable, that's okay. Because then through the iterations that you have of getting better, you get more and more efficient, and you can drive down your costs while also increasing the value and maintaining your brand and reputation. This lesson took me seven years to really internalize. Because when I looked back at my own customer list and I saw 5,000 locations on there, I was like, I would have $1 billion business if I had taken more time upfront to figure out how to never lose people.