Frank Kern - How To Turn Advertising Into Profit

Hey, how's it going? It's Olly here. Very warm welcome to the Ecommerce Freedom Podcast. So just before we dive in, I've got two special new resources for you. First resource is a PDF with 15 smash hit products on it, ready to go. Examples of products you can sell on Amazon. So you can use this for inspiration or you can just see, you know, what types of products do really, really, really well. I've even included revenue examples so you can see the amount of money that each product is likely to generate. The Amazon Marketplace. If you want to grab this free PDF, just go to ecommercefreedom.com and you'll see a link at the top of the page where you can grab the PDF. The second resource I want to give you is a free Amazon Accelerator call. The whole point of this call is for us to have a quick chat and we'll gather up a little bit of information about your situation and together we'll develop a plan for you to build an Amazon business that either works as a side hustle for you or could replace your your job and will take into account your situation, your experience, your background and give you a clear set of action steps to go ahead and build the business. If you want to book one of Those, go to ecommercefreedom.com go to the top of the page and click Amazon Accelerator Call. You fill out a quick form and you can book the call. Alright, thanks so much for joining me for another episode. This one's going to be good and enjoy it. Hey, how's it going? It's Ollie here. So this week I want to do something slightly different on the E Commerce Freedom podcast. I want to pay you an interview that did for my Marketing Bites podcast I ran about a year ago. This interview is with someone called Frank Kern, who's a really well respected guy in the online marketing world. Now, as you know, if you've been following my stuff, in E Commerce, marketing is a huge part of the business, right? In fact, you could have the best product in the world, right? You could have a thousand units of that product sitting in the Amazon warehouse if you don't understand how to market it properly. In other words, get it visible and get it to sell. It doesn't matter how good that product is, you'll never make any money. So marketing is so key. And that's why I wanted to show you this interview. So I've been following Frank's stuff for a long time. I've actually learned quite a lot of the techniques I use in My business from him and from his techniques. And in this interview, we talked about his life story, about his journey as an entrepreneur, and we just delved in some kind of bigger concepts about how to grow businesses online. If you are interested in growing a business in the digital age, with E commerce, with selling online, selling physical or digital products, whatever it is, this interview is essential listening. And I'm sure you're going to get so many aha moments. And also it's a lot of fun. It's really entertaining as well. So I'm going to play for you my interview with Frank Kern. Hope you enjoy it. Hey, Frank. Very, very warm welcome to the Marketing Bites podcast.

Thanks for having me. I think that might sound like I'm in a wind tunnel. My air conditioning is super loud right now, so sorry about that. We can pretend that I'm coming from an airplane or something. If it sounds more interesting, that would be cool.

I'm jealous that you have air conditioning because here in Stockholm it's absolutely boiling and I'm just sw. Oh man.

All right, well, yeah, I'll stop complaining then. Perfect.

So I'd really like to start from the beginning. I've heard a lot about your background. You started as an entrepreneur when you're relatively young. And I remember you saying that you learned quite a lot from your grandfather. So I was interested to start off by asking you what was the most important lesson that your grandfather gave you in the early stages as you were getting moving?

Well, he never really talked. So it was all by demonstration. And there were two. Number one was that expect nothing. So he had the saying that if it's going to be, it's up to me. Which is like one of the seven times that he ever really spoke or held a conversation. He was one of Those World War II era guys that just didn't really talk ever. Really, really adamant about that, that listen, you have to be responsible for everything or else nothing will come to you. It's either you or you're handing over your responsibility to someone else and prepare to pay the price for that. So that was number one. And number two was he was always really cool to everybody. And that's where the foundation of the whole results in advance approach and the intent based branding approach came from, which was watching him because he would work very. I don't even know if it was consciously, but he would work very hard to establish a really good relationship with everyone he came into and to contact with. And then when it came time for someone to do business with them, that relationship was so strong that there was very little salesmanship involved. I mean, he was a very charismatic person when he wanted to be, you know, but he never was like your typical salesperson or anything like that. But people would be gravitated towards him due to the relationship he created with them and then the reputation he built as a result of being so cool to everybody. So those were the two big takeaways.

That's fascinating. I can see how that's reflected in your career and the stuff that you teach. So he was an entrepreneur then?

He was. He jumped out of the school window in the eighth grade.

I think.

This. Well, he's passed away now, so have any way to verify the story? But I think that was. That was the grade he was in. 8th grade. He literally jumped out of the window.

No way.

Wow. Yeah. One of his earlier jobs at 13 years old was driving a log truck. You could imagine a 13 year old driving a logging truck. And he drove it from South Georgia to New York. He wrecked it over, you know, it's like, gosh, dude. I mean, when I was 13, I don't even remember what I was doing. Nothing of any importance, much less driving a log truck, you know, across the country. It's crazy.

Wow, that's unbelievable. So he gave you your first start. So what would you say was like the most pivotal moment, like in the beginning, when you were just getting moving as an entrepreneur, when you realized I could really actually make something happen if I had my own business?

It was when I realized that I was not cut out for civilian life, for lack of a better word. And I'll define civilian life by being, you know, having a nine to five or whatever. And there's absolutely nothing wrong with that at all. It just wasn't for me. I couldn't do it. I was terrible at it. And I looked at him and realized, you know, once I started thinking about actually making money and thinking about doing something other than being a, you know, a drunken rock and roll guitar player and everything, which is what most of my early life was spent doing, I realized that the only choice I had was to either become a civilian and just have a job or whatever, and I had no education of any kind and no qualifications, or to try to figure out how to start a business and basically be like my grandfather, you know, and make my own way.

And one of the first things you tried to do was selling credit card machines, is that right?

That was like the 20th thing that I tried to do. Oh, really? The first thing that I tried to do was buying and Selling cars. Because my grandfather was a car dealer. He was retired when I started really getting to know him. But his business history was he jumped out of the school window, joined the Marine Corps when I think he was 17. Fought in the Solomon Islands in World War II. Was wounded, I believe. He never spoke about him. I think he stepped on a landmine, and it gave him really bad eye injury, which was kind of awesome. He had to wear sunglasses all the time, even inside. So he always looked really cool. So that was good. But he came back from the war, married my grandmother, and they opened a. A gas station. And the gas station served gas and food. And he would pump the gas. My grandmother would cook the food. And they started buying old cars. Well, I mean, it was old back then anyway. So they would buy used cars and then it would sell them from the gas station. And he built that into, you know, just a little country car lot and then into multiple franchises of cars. BMW, Volkswagen, Subaru, like, you know, your typical usual major brand franchises of cars. And sold that and started investing in real estate. So when I was about 18 years old, or 19, I think I was living in Athens, Georgia, I was a failed musician. I never did make it as a musician. And I watched a movie or something. Made me make the decision of, you know, I'm going to go and talk to my grandfather and try to learn about business. So I drove down to Macon, which is where he lived and where I was born, and went to visit him in the hospital. He had just had back surgery, and he was in recovery from back surgery. And I started talking to him, and I remember just being amazed because he was doing math in his head like a human calculator, while recovering from back surgery on opiate narcotics. He wasn't a narcotic user by any means, but he was in the Freedom Hospital. He just had this horrible back surgery. And he said, if you want to learn business, I want you to. I want to give you 10,000 bucks as seed money, and I want you to hook up with your cousins, and I want them to show you how to buy cars at auction and sell them. And so I was like, really? Okay. Good lord. You know, man, dude, I'd never. I had no idea what I was doing, right? So he said, go try this. And I said, okay. And to me, 10,000 bucks was like a billion. So I hook up with these two cousins who are really, really cool. They're both also completely amaz insane. And I would go to help. I mean, like, this stuff is like straight out of a Movie man. So I would go to the Albany, Georgia dealers only used car auction, where you could buy like little beaters, you know, for 800 bucks and try to fix them up and sell them for, you know, fifteen hundred dollars or something. And I started doing that with a moderate amount of success. You know, sometimes I'd get a good one and I'd be able to sell it, make a couple hundred bucks, and then I get a bad one and I would lose the money because I had to fix, because I don't know any cars. And that was the very first attempt. I ended up not losing all of the money, thankfully, and made about enough to pay for beer in my little $200 a month apartment and things like that. And I'm forever grateful for the experience. You know, it was really something I learned very quickly that it's not easy out there, no matter what the business is.

It's fascinating that you had your grandfather give you so much confidence and like a springboard to actually dive into this stuff. So how did it transition then into online selling?

Well, so I stopped doing the car thing because I just, I wasn't good at it, you know, and thankfully didn't lose all the money that was very good. And ended up trying a bunch of other businesses. One of them, interestingly enough though, about the car thing, I actually sold a car to an honest to God serial killer. Obviously didn't know at the time, but it was this kid. I can't remember the guy's name, I'm totally blanking out. But he, I sold him this car. He had an old Camaro and traded the Camaro in with a little bit of money for this. No, I'm sorry. He had a giant super truck, like a monster truck that was all, you know, redneck thing. He traded that in for an old crappy Camaro. We did the trade and then like, I think it was eight months later, the guy murdered two college students at this campsite. Just shot them with a deer rifle. It was really, really crazy story and was like all over the news and CNN and stuff. This is father, it turns out, was an FBI agent. Like really crazy. So that's just a weird side note, but I had multiple failures between then and the time that I got into online sales. And what drove me to online sales was I was doing door to door credit card machine sales and was really tired of the personal rejection because I'm an introvert, like a really serious level 50 introvert. And was, you know, I was cold calling and people would throw me out of Their businesses, they didn't want to see me. And I finally went and I got online. This is before Google, so I can't remember what search engine I used and typed in how to sell credit card machines over the Internet and saw an ad for an info course by a guy named Corey rudle. It was 297 bucks. And I looked at the sales letter 7,000 times, you know, and eventually bought it. A week later I actually split the cost with a friend of mine. And that was the beginning of the whole thing. I got hooked from that point forward of seeing what was possible.

Wow. So soon after that. I think a lot of people have heard the story. You had some success, you sold a few products online, and then sooner or later you had some trouble with the ftc. Is that right?

It is indeed. Yeah. I got, actually got lucky with that whole thing, as strange as it sounds. So the brief version of that whole situation is I bought this course. It was excellent. It taught really good advice.

Is this off, Corey? Is that the one?

Yeah. And on one of the pages in the course, remember this is 1999, one of the pages in the course, it said something. So imagine like the course is 300 something pages. And so one paragraph, like one sentence of one paragraph of one page said something along the lines of it is physically theoretically possible for you to make money if you send spam. So instead of actually trying to do anything, I read that to be like, oh, I should probably send spam. So I went really deep in the rabbit hole of trying to figure out how to send spam. This is before it was illegal. The can spam thing wasn't done at that point. It's just that everybody hated it. So I started buying reprint rights to products about marketing. And I got a reprint rights to a bunch of really excellent products like these old direct mail seminars and stuff. So I'd send out spam and I'd say, hey, learn how to, you know, sell things. And then people would respond and then I would send them, I'd put them in an autoresponder and it would ultimately sell them this big box of direct mail seminar tapes, you know, then I'd sell it for 300 bucks or something like that. And I remember I lived in this little 1200 square foot house in the mountains of North Carolina, and I would physically mail people these big boxes of stuff that I would pack up in my house and everything. And that was working okay. But it was selling things via spam was about 9 million times harder than selling it the right way. And what would happen was I would sell this thing for 300 bucks, and then some people would love it, and some people would return it because they'd say, I really want to. These are things about direct mail, and I'm interested in selling things online. So right around that same time, fast forward to maybe 2001 or something, the ebook craze got pretty big in the marketing world. Really classic offer that you would see all over the place was that someone would create an ebook about marketing, and they would sell the ebook for 20 bucks or whatever. And if you bought it, you could also have the reprint rights to not only resell that ebook, but you could also grant other people the license to resell that ebook. It was called Master Reprint rights. So I was thinking, man, this is a pretty good offer because the ebooks are good. If people want to learn how to sell stuff, they can just resell these ebooks. So I put together a package of them. I think it was like five or six individual ebooks that I bought the reprint rights to. And I wrote the sales letter for it. And interestingly enough, I wrote the sales letter by hand. And I was in a class to get my real estate license. And I don't know why I was doing that. Whatever I was. And this long sales letter in that class, I go home, I type it up on the computer in Dreamweaver. I put the website up, and I send an email out to my list, which had been built by spam. You know, these are people who had gotten the spam. And then they said, yes, I'm interested. And then I put them on a real list. I sent the thing out to that list, and it sold like crazy. I remember making like 2000 bucks or something in my first day and absolutely freaking out because it was. There was nothing for me to ship. It was a $47 product. And I thought I was, like, set for life, you know.

So was this your first information product sale online? This was the first experience.

It was the first digitally delivered, deliverable one. Yeah. So the first thing I sold online was this, you know, like, old direct.

Mail tapes and stuff.

Yeah, because remember that, you know, we're going all the way back to 99 through 2001. So this is really. Everything was in its infancy. But, yeah, the thing that was the first thing that was actually downloadable was this product. And the product was good. People loved it, you know, and it was really cool. And where I went wrong with that was two parts. The first part is I said in my headline, my little business made x Amount of dollars. And you'd can too. And those three words, you can too, are the kiss of death, which I did not know at the time. A lot of people still don't know this, which is why I'm really happy to tell this story. If you say something like that, it's not illegal to say it, but you have to be able to substantiate it. And what substantiation means is you have to be able to show that the average person who buys whatever it is you're selling gets the result that you're implying. So if my thing said I sold $100,000 worth of stuff because I had my little spam business, I didn't really make much net, but I did about 100 grand in volume, I would have to be able to say that the average person who buys this little $47 thing is going to make 100,000 bucks. And I couldn't. And nor did I did I mean to imply that in any way. You know, I was just saying, hey, theoretically, you could too.

Yeah.

So that was mistake number one. That was the biggest one. Mistake number two was I gave people the right to resell that thing and to resell those rights as well and use my sales letter. So what ended up happening over a very brief amount of time is the product became very popular and people would buy it and they would just copy the sales letter. Exactly. And they would use my name and then they would send out spam with my name on it.

So you started a chain reaction. Yes.

Then one of the companies who would do that would then call their customers on the phone from a boiler room. And I don't think it was an actual boiler room, you know, but whatever, a phone room. And then they would sell them this expensive, quote, unquote, coaching stuff that the customers were unhappy with, and they wouldn't give refunds. So all of this is happening before I got sued by the Federal Trade Commission. I found out about that company, I called them, I send them a cease and desist letter. They stop. I eventually stopped selling that product because I was like, it was a little gimmicky, like, okay, you know, I'm kind of getting the hang of all of this stuff. I have a little bit more to offer than just selling this dumb little reprint rights thing. And long story short, in 2003, I get a lawsuit from the Federal Trade Commission because of that product. And what's really embarrassing, way more embarrassing than having me sued by the ftc, was the fact that I did not know that they existed prior to getting sued.

Wow.

So I was, like, completely ignorant of any sort of advertising guidelines or regulations whatsoever. You know, at this point. This. I sold something like $600,000 of that one product. I had other offers going. Everything was cool. No idea who the FTC was, no idea about legal compliance. I had our family's tax attorney review my advertising because I thought all lawyers were the same. You know, it's. Of course he didn't know what the heck he was looking for. He's like, I don't know. Looks okay to me. Oh, yeah. So FTC sues me. And so I'm like, man, this. This really sucks. I'm very, very nervous and very afraid right now. And I hired an attorney, actually two of them, and one of them used to work for the Federal Trade Commission. And, you know, I'll paraphrase here. He was basically like, fellas, what's the deal? And this is some guys in South Georgia. He's nobody, you know, what's the. What's going on? And they forwarded over all these consumer complaints. And it turns out the consumer complaints were about that company that was not using my name. And I thought at that moment, man, I was like, oh, thank God, you know, this isn't me. I can show them. It's not me. I can show them. I sent these guys a cease and desist letter over a year ago. I can help them get these guys. And we made that response. And I'll paraphrase again, but they were. Essentially, their position was, dude, we don't care. Your dumb ass made the product and made the original ad that they spammed. So it's your responsibility, which all ties back to what I learned from my grandfather. It's like, it's all your responsibility. Okay, I get it now. So that was really awful. And it was also the best thing that ever happened, because had that not happened, I would have never really become a student of direct response, and I would have never really taken it seriously. And I probably would have ended up being one of those get rich quick on the Internet people. And I really don't care for those folks, you know, So I hope anyone listening to this, if they haven't gone to sleep yet, gets the point of, you know, really understand the regulations when it comes to advertising and stuff, because what you don't know can and will hurt you.

That's fascinating. That's. Yeah, that's. That's really, really important. So I'm really curious to know, so after you had this experience, and I assumed, did they actually Come to your house. Like that must have been terrifying.

No, they didn't. It wasn't like in the movies because it's not a criminal thing. I mean, the FTC has sued everybody. You know, Amazon, I think, Apple, you know, I mean, just they, it's really easy to screw up with these guys because there's a lot of regulations and you have to make a conscious effort to actually learn them. You know, it's not that easy to figure out. So just a guy came to the house and handed me a bunch of papers and said bye. That was it. There were no storm troopers invading. Terrible. That was really bad. They were just like, hey, we're suing you because you did this wrong and you know, you're stupid. They worded it better, obviously and they were actually pretty nice reconsidering, you know, so they probably could have really killed me. And they didn't because I think they realized, oh, this is just a moron in the back lives of Georgia who has no idea what he's doing and we're gonna sue him anyway because he's an idiot, but we're not going to like salt the earth or anything with him, which I'm very grateful for.

Right, so it's more of a slap on the wrist.

No, I mean it was, you know, it was, it was civil. It wasn't like a, hey, you broke the law, we're sending you to jail. It was alright, there's a regulation here, you gotta, you know, you have to give all the money back that you got from selling this thing because it doesn't count. You know, you can't sell something if you don't follow these regulations and you did, so you have to give it back to the consumer.

Ah. So you literally had to pay everybody back.

I paid them and they paid everybody back.

Yeah. Wow. Okay, so after that then were you kind of a bit freaked out and thinking, you know, is this really the right path for me or were you just like, you know, now I'm gonna do it properly.

I was beyond freaked out because I thought they hated me. I was like, I have, you know, when you get sued by the Federal Trade Commission, it's not like friendly like, okay, hi, we're the Federal Trade Commission and we're going to see you today. It's, you know, they come in guns blazing because for, for all they know, you're a degenerate. You know, so they're like, hey, you are terrible and you've done all this stuff wrong and it's time to pay the piper. And even though they were, you know, they ended up being pretty cool to me. They're like, yeah man, whatever, just pay it back and don't do it again, dummy. You know, it still scared the hell out of me. So I was, I was afraid to sell anything marketing related at all. So I was like, maybe it'll make them mad, you know. So I went into a completely different direction and took everything I learned from all those things I had the reprint rights to. I actually listened to them and you know, followed the direction and created a totally different business in the pet market. And it worked and it was great.

So was this the parrot thing first or the dog thing?

It was the parrot thing first and that went okay. And then the dog thing exploded because it was such a bigger market down, you know. So I created, I created a product that was a one size fits all obedience training product for dogs. And then I created ads for every breed of dog in the world of which there are over 600. So that gave me a 600x reach over just one specific niche, you know. So I had 600 sets of ads, over 600 sets of dog breed related keywords, and 600 different autoresponder follow up messages and stuff. It was crazy and it worked great.

And I understand, was that your first million dollar a year business?

It was, you know, but still counting it.

Yeah, absolutely. It sounds so unbelievably complex for a million dollar business.

It was not. So I, for lack of a better word, invented this methodology that I called serialization, which was if you have a market that's broad, like dogs, for example, and that market is made up of a bunch of sub market like dog breeds for example, and you have a one size fits all product. The way my information on training, basic obedience training, you know, not like performance training, whatever, but basic obedience training for Chihuahua is going to be exactly the same basic obedience training you would use for a Cavalier King Charles spaniel or something. A dog's a dog in this particular context. So what I created was the system where I had some software built that I could feed a list of every breed of dog known to man into this machine basically. And it would find every keyword that was related to each of those breeds. And then it would go to Google AdWords and it would create an ad group for every dog breed. And it would say, before you train your schnauzer, read this free report. You know, three mistakes you make when you're trying to train your schnauzer. And the landing page would dynamically update with the word schnauzer based on what the URL was. So it'd be like dog stuff. That's not really the site. I can't remember the site, but it was like dogstuff.comschnauzer and so all of this was automated. So if you just replace like Doberman instead of Schnauzer, the website would say Doberman on it. And then when they opted in, all of the follow ups would be dynamically created based on what the original URL was. So it seems like I had build all these 600 something funnels when in reality I built one. And I use that software and that approach that I created to splinter it out into all of those various submarkets. So that's what gave me that reach there. And it was great. You know, I ran it all on Google Adwords and it was, I sold a $47 dog training offer and never had, never sold anything else, like an idiot. I mean it could have been a huge business. Yeah.

With the back end and stuff.

Yeah, yeah. But I just sold them the one thing for 47 bucks and that was it. And still made a profit. So I didn't make a million dollars on that. I probably netted like 3 or 400,000 or something from that business.

Great. So soon after this you decided, and I remember you describing it as being like a decision, you wanted to teach the marketing stuff again. Was that right? Did that happen shortly after the dog thing?

There were two things that happened in between that three actually. The first was people began to get wise. Like marketers began to get wise to the technology and the approach I was using. And as you know, Internet marketing is a very incestuous world. So I began, I got very nervous that people were going to rip off the idea and they were like someone would screw it up and they would create a software application or something that would model what I did and they would sell it for like $10 or something on the warrior forum or whatever, you know. So I decided to preemptively strike against that by holding a seminar where I would give people the software. I would teach them everything I knew about this particular type of marketing and I would charge a lot of money for it and I would limit it to 100 people ever learning it. And so I sold that. I went to, I had a list of about 8,000 people left over from pre FTC days that thankfully they liked me because the thing that I sold and I got in trouble for was actually was pretty good. They liked it, you know, so that was Great. I got lucky there that I still had a really good relationship with all those customers and I offered that seminar to them and that worked. So I did two events. One had 35 people and the other had 65 people. And it was 10,000 person or $10,000 ahead. And so that was the first time I ever like really made a million bucks. You know, that was mostly net. The events cost a little money. But it was. I was like, oh my gosh, this is great, you know. Yeah, they were all really happy and everything was awesome. I'd never done a seminar in my life, much less charged 10 grand for one. So I was very, very nervous. But it worked. So that was thing number one. Thing number two is I had just by random chance, my cousin Trey and I decided to reach out to an author named Neil Strauss, who we didn't know he was a New York Times best selling author who had written a book of dating advice for men. We reached out to him and said, hey, if you'll create a home study course for these guys, we'll help you market it and do everything for you if you'll split the money with us. And he miraculously said yes. So we did that and it worked. So that was thing number two. We sold 375 copies of his dating course. I think it was 3500 bucks per copy or something like that. So that was really good.

So how much was that total net? That was a big launch, right?

It was pretty successful. Yeah, it was one point something million bucks, you know, and there were costs involved in everything. So I can't remember what the net was. I think Trey and I might have shared around 400,000 in royalties from it, which was awesome because we'd never, you know, I'd never done anything like that before ever going, you know, this is in 2006, I think. So it was just three years prior to that. I had been sued by the ftc. I found it very humiliating. I was really embarrassed by it and still kind of weirded out by it. You know, you never want to get the American government mad at you. You know what I mean? Of course, a lot of people have these theories like, oh, the government's horrible and they hate everybody. And I didn't find that to be true. But you still don't want them to be mad at you. Like, Mike Tyson's probably a pretty nice guy, but you don't want to pick a fight with him. So I was all weirded out. It worked anyway. Neil was super cool to me, so that happened. So that, combined with that event, started giving me a lot of confidence that maybe I should teach some of this stuff because I'm pretty good at it. And what ended up going through my mind was, okay, here's a market that's growing, which is people wanting to learn how to sell things online. A lot of people who are teaching are good. There is a caveat that most of them have only sold how to make money online stuff. I started doing that, I got hammered by the feds, rightfully so, because I made stupid mistakes due to ignorance. And then I did seven figures in the dog business, and I did seven figures in this dating advice business. And the funny thing was, I knew nothing about dating, you know, so I'm horrible now. Neil was brilliant at it, but I was the guy writing the copy. My cousin and I were. Both of us were just completely pathetic in that department. So I was like, gosh, you know, maybe I should teach this stuff and go out there and just not make the same mistake twice and not make unsubstantiated income claims. Now that I know the stupid regulations, now that I actually know what not to do, I'll simply not do it and maybe everything will be cool. So that's when I decided to get back in the ring, so to speak.

So this led to a string of successful launches. Right? And you were known primarily as a guy that does huge launches. Is that a good summary at that time?

I think so, yeah. So I decided to, if I was going to do it and be an Internet marketing guy, I wanted to be the most famous and popular one ever. So I made that conscious decision and I built marketing to support that. So I was maybe the first. I don't remember because also during that entire era, I drank constantly and took a tremendous amount of drugs. So the whole experience is a little hazy, embarrassing. But I deliberately turned myself into a celebrity in that industry. You know, I made videos that felt like documentaries, videos that felt like movies, and did a lot of emotional anchoring and stuff in there, and it really, really worked well. So I didn't really try to take the positioning of a guy that did really huge launches that I can recall, but I did do really huge launches. So maybe it's embarrassing not to remember this, you know, but I really don't remember it because, A, it was about, you know, 12 years ago or something. B, I was blasted out of my mind the entire time, which is embarrassing, but true.

Fascinating. Yeah. I think a lot of people saw you as the lifestyle guy, the surfer dude who lays back and makes a ton of cash.

That's true. I really did live that lifestyle. Even more so I went on. So I lived at the beach, I surfed all the time, and it was a great lifestyle. What I do remember is the net wasn't as high as it is today because so much stuff was affiliate driven back then. And that's, in my opinion, a terrible business model because you pay more in affiliate commissions than you would if you actually did real advertising. So that was a huge lesson from all of that.

So this is exactly what I wanted to segue to now. So you focus on affiliates, launches, you with all the other guys who love doing launches, and then you transitioned from that to more of a focus on paid advertising. So how did this take place? When did you decide that that was the right thing to do?

I didn't enjoy being an Internet marketing guru, number one. I was like, you know, this is cool, but it seems like a lot of extraneous work. Like you, you build a product, you do a big product launch. The product launch methodology and product launch formula is brilliant. I mean, it really is. I don't think it should be the only thing in someone's arsenal, which it was for me at that time. So I would do all this work, I'd do a big launch and it would either be successful or not. And it would look like it was amazing because it would be several million dollars or whatever, but most of that would be paid in expense, overhead, commission and all of that kind of stuff. So if you do a million dollar launch, you might be left with a quarter million bucks in actual revenue and then the launch is over and you have to do it all again. It's like, this doesn't really make very much sense. And I started to feel like I shouldn't be teaching because what was I going to show people? Like, okay, well here's how to do a big launch and to get other people to endorse you. But what if they won't? Well, I had no. There was no real backup plan. It had been so long since I'd been doing ads because in my dog business it was all adwords driven. It had been so long since I did that I didn't feel like I was qualified to teach. That advertising I just didn't feel right about was really a double. It was a two pronged decision. Number one, it's just not smart business not to learn advertising. And number two, I didn't feel qualified to really give advice unless I had gotten good at turning complete strangers, not endorsed strangers from A joint venture arrangement, but a complete total strangers and customers. So that was the decision that makes.

A lot of sense. So what advice would you have for say, someone new who wants to place their first ad? What are the key skills that you need to learn in order to make paid advertising really work?

So this is a, this is an interesting topic, really. I would first of all tell them to think long term. The biggest mistake I made in running ads and the biggest mistake I see people making is they'll. So let's say they run a $500 test and they're, you know, if they don't get that $500 back plus a profit in like seven days or whatever, that it's the end of the world to them. That's number one is you got to, don't try to do that. I mean, if you do, it's great. But really think more long term in terms of lifetime customer value and overall return on your ad. Spend over a 90 day or six month period or whatever. Thing number one. Thing number two is embrace the risk. What's really interesting is I don't work with many beginners anymore, but when I did, I would see people that would happily go out and spend thousands of dollars on training and like, okay, whatever. And then to get them to risk $100 or $50 or whatever on an ad was like pulling teeth. And when it didn't work immediately, they would totally freak out. They'd be like, oh my God, I lost $50. It's like, well dude, you lost thousands of dollars on these trainings you did nothing with. So which would you rather play with? Just keep buying this information and do nothing with it or actually get the game. The definition of entrepreneur, I think is someone who actually takes risk in business. And that's what advertising is, it's risk. You try to mitigate against the risk by having good ad copy, of course, having a really good offer, having a good retargeting strategy, having a good email follow up strategy, a good sales process and all that. But it's still risk. The number one thing I would tell new people is be okay with risk. Don't be afraid to lose a little money. It's going to happen to everybody and just get in the game.

That makes sense. And also another mindset shift that you mentioned that you had or you wanted people to have is to not think like an Internet marketer, but think more like an investor. Can you expand a little bit on that?

Yeah, I would, I would avoid thinking like an Internet marketer in any circumstance.

They Have a terrible reputation, to be fair.

Well, it's, you know, and look, we deserve it. So it's our fault as a community. We've brought it on ourselves, you know, but that doesn't mean we have to keep doing it. So that's thing number one. But yeah, I mean business, like I quote, you know that show Eastbound and Down, the character Kenny Powers, he always says, yeah, I can play real sports. I'm not trying to be the best at exercising, you know, and that's the way I think anyone should look at business, period. It's like real, it's a real business. And the way business works is it's a long term play. And if you think about what it really is, any business is this. It is. You take money and you multiply it by leveraging assets. And in our case, those assets are ads, they're funnels, they're sales processes, and they are the products that we sell. So the formula is you put money into advertising and then you get more money than you put out as a result of deploying these assets that I mentioned. And so if you think about, well, I got to make my money back today, if I spend $1,000 on ass today, I got to get $2,000 back today. You're essentially trying to get 100% return on your investment in 24 hours. If you look at the most successful investors of all time, like Warren Buffett, for example, is really, really famous. I think his average annual return is 21%. Meaning if he took $1,000 and put it in, he would get $210 back after a year year in our business in advertising. First of all, that would really not be that great of a return on advertising investment. But it's still better than Warren freaking Buffett, you know, so it's like, if we can start thinking of, okay, I'm gonna build everything so I can put $1,000 in or whatever, $100,000 in, and within 90 days I'm going to get, you know, my 100, maybe I'll get $110,000 back. But now those customers are going to go on and over another 90 day period, they're going to buy another $100,000 worth of stuff. Well, that's 110% return over six months. Like if you did that on Wall street and real estate, whatever, you'd be on the COVID of every magazine. And that is not uncommon in a real business. In an advertising environment, when done correctly, it's hard to do. I don't want to make it. I don't want to minimize it, make it sound easy to get that type of return. But even put $1,000 in and over 90 days or six months, you double your money. It's not really that unusual. 50% is really common. That's nothing. It's all in the way you look at it. And if we look at it as Internet marketers, which is, oh, we gotta get rich right now, I gotta have a $20,000 every day or whatever. It's just short term thinking and it causes stress and overwhelm and it sucks. But the long term approach works great.

Yeah, that's fascinating. Every time I've tried to do sort of a short term gain promotion, it's almost always backfired. So yeah, it just makes so much sense. So a few years ago I noticed you had a shift. You kind of shifted from doing like a new promotion sort of every month and you know, selling, you know, doing a new launch or a new email series, selling different products and you transition to just focusing all of your energy on one product. And that's when you started the Inner Circle? I believe it was it August in 2016.

It was.

I think I joined on day one. And yeah, no, it's an awesome program. And so this must have transformed your whole entire business. And I've got a sneaking suspicion that through this transformation is when you started to develop the Stabilize Optimize Expand methodology. Is that right? Did those two things sort of happen together?

I didn't start thinking about Stabilize Optimize Expand until maybe it was six months to a year ago.

Ah, right.

Yeah, The Inner Circle was, was born out of, you know, sort of to tell the story mercifully quickly. I had, you know, I'd gotten out of the launch space, I started running ads, Everything was, was going okay, but I, you know, I kept on having to make new offers to my list and everything all the time. And it seemed like every month was the start of a new month. So if we had a good month last month, we're starting at zero this month and it's stressful. So I went back and I looked at all of the income analytics of everything I'd done since 2008 and I learned that one promotion that I thought was a loser. Actually over time, for about a three year period, it ended up making 3 million bucks. And that was a monthly program. And I had the revelation of, oh my God, what if I'd just been doing this the entire time? So I immediately relaunched it and focused all of our efforts on that from, I think it was May of 2016 and until January of 2018, we started to diversify a little bit. And that created the inner circle, which grew up to about a half a million dollars in revenue. And it was awesome. It was working with those clients over time that I realized there was this pattern and that people were trying to jump ahead. The stabilize, optimize, expand, comes from this idea that what happens is an entrepreneur will hustle and they'll be successful and they'll start making money and then they go try to do something else, come up with another offer or whatever, and they go straight into trying to expand the business, when in reality the business is even stable yet. Like they don't even really have a consistent and stable process to put a dollar in and get a dollar or $2 back out over a certain amount of time with any consistency. So our problems entrepreneurially come from when we try to jump that process. We don't actually build a stable system for acquiring customers at a profit. And then once we have it and we don't take the time to try to tweak it and make it really, really good, we go straight to, let's come up with another offer and start trying to run that. And that becomes very stressful and everything sucks. So that was, that was born out of just working with a large membership base every other week on these video conferences and trying to coach them through it.

Yeah, and you helped me with that. And one, I mean, before you introduced this methodology that was, I mean, you pretty much just described exactly what I was doing. I would have something that would work, it would be great. You know, you get a massive dopamine rush and then you instantly throw all the funnels away and just restart from scratch like you're building a new business almost every single month. And having this realization was. Yeah, it gave me a lot of clarity. So this, this kind of coincides with how to build like a stable business and how to actually just focus on one thing and get it really solid. So what would you say is like the main mindset differences between people who have, say, six figure businesses who are doing well, but what differentiates them from say a seven or eight figure business owner who's like really taking things to the next level, you know, building like what you might describe as a gazelle company and has a really, really stable, profitable business?

Is it all right if I'm like slightly inappropriate in this answer, I'd welcome it. Yeah. Because I don't want you to have explicit in your podcast. All right, so there's this movie Called Colors about the gangs of LA. It was, it came out in the 80s and I can't remember what happened in the movie, I just remember the end. So at the end, these two cops, after having successfully defeated the evil scourge of the street gangs, etcetera, they're talking to each other and there's an old cop and a young cop. And the young cop wants to go do something exciting or drastic or whatever. And the old cop looks at him and he tells him this story joke. And I'll try to clean up the joke a little bit. He goes, you know, it reminds me of this story about these two bulls. They're two bulls and they're sitting on top of this hill. And the young bull looks over to the old bull and he goes, hey, why don't we run down that hill and have our way with all of those cows that are down by that tree at the bottom of that hill? And the old cop looks at me, goes, I have a better idea. Why don't we walk down that hill and have our way with all of those cows down there? And the point of the joke is if you just walk and you take it easy, you can have everything. But if you sprint, you might get 1 and a 6 figure 2. 7. Like early 7 figure business, they're in sprint mode. That's when you're hustling. So when you see all these folks and they say, hey, you gotta hustle, you gotta grind and everything, they're right. That's what gets you to the seven figure mark. You never want to lose that hunger. But eventually you have to stop sprinting and you have to shift the motor from first gear into like fifth gear by starting to think about doing just a few things really, really well instead of doing everything. So that difference is really the biggest one. A bigger business will think, I'm in this for the longer term. I'm not going to try to get a huge. I'm not going to think in terms of how much money am I making today or this month or whatever. I'm starting to think annually. Five year pictures. And instead of doing 7 million things a day, I'm going to start building a team and focus on the areas that I'm really, really good.

That's a brilliant answer. So when it comes to thinking annually and thinking more long, what are sort of the key things that people should start to focus on? I mean, you mentioned team. Would you say like being financially literate and being able to read all your sort of scorecards is another important part.

Of it, yeah, absolutely. But it really is personal preference, right? So one thing that we have to be really conscious of is how easily influenced we are. So, yeah, I follow a lot of people on podcasts and social and if I'm not careful, I like their personal preferences become mine. So thing number one is to really understand what it is you want. And I like to think in terms of 20 year chunks. So like, where do you want to be 20 years from now? And then you take that and you break it down into five years, and then you take those five years and you break it down into annual, you take the annual, you break it down into quarterly, and then you take quarterly, break it down into weekly. And here's what's interesting. If you have a five year plan, right, and you start thinking in terms of weekly activities that you want to do to get to that goal. So again, there's a lot of reverse engineering involved here. And if you make 1% progress per week towards your five year goal, if you keep at that space or at that pace, you'll actually double the goal if everything remains constant because they're over 200 something weeks in a five year period. So 1% gain every week is actually 200 something percent progress, not 100%. So that's really the difference, you know, is, number one, you really understand where you want to be. Like, for you, like what really matters for you. The entrepreneur. Is it lifestyle? Is it legacy? Is it giant company? Is it monthly? Like, whatever it is, it's okay as long as it's what you want. And then you think of where you want to be in 20 years. And the reason why you want to do that is because it makes you think a lot bigger. And then you chunk that down into, okay, where do I want to be in five years with that 20 year goal in mind? And then with that five year goal in mind, where do I want to be over the next 12 months? And with that 12 month goal in mind, what do I want to do with this quarter or this quarter, this next 12 week period? And then with that in mind, what do I want to do this week? What are the big things to accomplish? And man, you follow that framework, as silly and basic as it sounds, just stick with the freaking plan, not deviate. You can end up doing way better than you thought because of the math that I just went through, which is pretty cool.

You know, it's funny because I think you may have touched on this stuff a little bit in one of the inner circle letters and I started thinking about my 20 year plan and I started breaking it down and part of it was actually to start this podcast and then that led to actually getting you on the podcast. So it's quite funny how things have actually come sort of full circle. So what I wanted to ask you then to kind of close is what's your 20 year goal?

Well, I'll put it in the professional context. I want to be David Ogilvy when I grow up. So I'm 46 now and my hero, you know, like of all the mentors I've ever had, with the exception of my grandfather, no one could ever take his place. But in terms of our business, which is the business of advertising and marketing, to me, David Ogilvie is my all time personal hero for a myriad of reasons. Number one being he made advertising very respectable. He and Leo Burnett and I'm blanking on the guy's name or Bill Bernbach, guys like that made that whole industry into something that was really, in my opinion, very noble and respectable industry. And so I would like to be the David Ogilvy of online advertising because everybody hates us right now and I don't think it's necessary. I think we can do a lot better. It's just changing the way we do things and changing some habits and practices. With that in mind, in 20 years, my plan is to have an agency that does the creative work and builds campaigns for successful businesses, not beginners or anything like that. Not that there's anything wrong with them. I'm just not very good in that environment. That's the plan, is to have that and have it be very successful.

That's fascinating. That's a very big, ambitious goal. I love it.

I saw this interview with a guy named Rob Dyrdek, who's awesome by the way. He's a TV star and an athlete and really, really smart guy. It was on Lewis Howe School of Greatness YouTube channel Rob and Rob talks about. It doesn't matter how big the goal is. If you can reverse engineer it to a believable plan, not believable to other people, but a conceivably believable plan in your own mind, then it becomes a doable and a realistic thing. I've really agreed with that. I've never heard it articulated that way until I saw his interview. But I don't think any goal is overly. Not that you were saying mine was overly ambitious, but I don't think anything is insurmountable as long as you can break it down to a believable and achievable plan.

Fantastic. It's inspiring stuff. Well, Frank, it's been absolutely fascinating hearing your story and everything else. And, yeah, big thank you for joining me on the podcast.

Thanks for having me, man. I appreciate it.