How to Simplify Your Marketing Strategy So It Actually Works with Russell Lundstrom

Welcome to the Speakeasy Mastermind Podcast, where the real conversations happen behind closed doors with the boldest entrepreneurs, creators, and growth minds in the game. No fluff, no filters, just the raw strategies, personal stories, and mental models that move the needle. I'm Eric Berman. Now let's get into it. Welcome to this week's Inside the Speakeasy Mastermind Podcast. I am so stoked to take you out to one of my favorite places, Denver. To meet somebody who's become a good friend of mine over the last few years. I've actually been able to rub elbows with him at Flight Club High-End Marketing Mastermind. And every time I sit down with this man, I am just totally mesmerized. Well, every time he's around, people are surrounding him because he's always dropping some amazing nuggets and people are usually tackling him because he is known as the marketech. And he's out there taking the chaos that a lot of us entrepreneurs have and able to take his amazing 5-step process to get clarity and build out the marketing plan formula to see us all succeed. Welcome to the stage. Welcome, Russell Lunscher. How you doing? I'm good.

I'm going to have to get rid of some of this blushing now. Geez.

You like that? All right, good. Well, come on. I know it's hard to level ourselves up, but dude, I mean, you really are the man out there and it is, it does happen. I mean, we see at Flight Club and for those that haven't been to a Flight Club event, we have the biggest wins tables and shares and you're always dropping some great nuggets and it's always good to see.

I said, I just care. I've got this founding philosophy that entrepreneurs are the heart, mind, and soul of the world. And if you look around your office, everything you have, I mean, even this coffee cup I'm drinking out of, it's because some lunatic had some crazy idea and went and mortgaged their house and made it a reality. And so without entrepreneurs, I truly honestly believe like we'd be living in caves.

I mean, to that point, I mean, you and I were sitting in the quote green room before we started and we were even talking about how pumped you are with the client you're working on, which is the school out by where you live in Denver here, where this school, which is really bringing entrepreneurialism to kids as early as what, kindergarten to 8th grade. I mean, teaching entrepreneurialism.

Yeah. Yeah. It's amazing to see what these kids can do. And in today's world, you know, with 5 coding and all this, they're teaching them, you know, 3rd graders. Creating their own software tools to help them with their studies and their works, you know, using things like Lovable and N8N, and it's just mind-blowing.

It's already happening in the schools at that age?

Yeah. Oh my God.

I'm like excited and scared all at once for my two little ones. Like, is school really going to be the way it was back in the day? I just can't imagine. It's got to be—

No, that's the position we're at now with AI is no one can even imagine what the world's going to look like 5 years from now. And so how do you, if you're providing an education at any level, elementary level or high school or college, what the heck do you teach them that's going to let them flourish 10 years from now when it's a completely uncertain world?

That's right. That's right. And I feel like these teachers, I mean, if they don't adopt and they're just old school, these kids are just going to be like, dude, what are you talking about? I'm just on AI this morning and your stuff doesn't even make sense. And like, there's gonna be a lot of pressure on them to keep it going. I would think.

Yeah. I mean, my, both my boys are in high school now and it's a public high school. Not that there's anything bad with that, but the general thought around AI is it's just an elaborate cheat code. And instead of empowering the kids to use it to get smarter and better, they actually frown upon them using it for the most part.

Oh, I'd say, well, that's definitely going to, that's definitely going to change. We all know that. Well, let's go back in time a little bit because you obviously didn't just magically snap your fingers and get to the place you are today. You know, you kind of had that journey and I imagine you've been, I could see the bruises and that we all have. I mean, let's go back in time. I mean, where did you kind of grow up and how did you tell me a little bit through your entrepreneurial journey?

So, I mean, it's the classic American story. My father was an immigrant and came over here with $100 in his pocket. So he had, I mean, he came through Ellis Island, the whole nine yards. And so for him, the idea that you could go somewhere and create a life that you can dream of and there's nothing in your way. That was like the highest, most important value he had. And so we were raised with this idea of being entrepreneurs. And if you, you want something better, go make it better. And I mean, I just always was that kid from— I remember creating hand-drawn comic books in, gosh, probably elementary school and selling them. And, and back then, right, like selling candy, used to get busted for selling candy in school. Which on a side note, this Aspen Academy I'm working with, they don't bust you. They actually come in and say, hey, how do we help you? Can we print flyers? Can we help you with your packaging? That sort of stuff.

But anyway, it's like, wait a second, come to the principal's office. No, good job on trying to like figure out a better way of doing something. Listen.

Yeah. They help the entrepreneur. A lot of it was out of pure ignorance and, you know, just being stubborn. But I mean, by the time I was 21, I had probably started 3 or 4 different businesses, clothing businesses.

So you're 21 before that, where'd you grow up?

I'm Denver. I'm a native.

Okay. So I know you're there now.

My whole life. I lived in San Diego out with you around the end of the dot-com blowup.

Yep.

And then I came back here in '02.

Yep. Okay. So you're out in Denver, 21. You're just, you're, I mean, how did you all of a sudden, what, you just were that kid that said, I'm going to go try it?

I think the typical entrepreneur thing, it was, you know, we, I was going to say, I feel like I'm very lucky to have been born in '69 because I've been kind of running this front wave of all this amazing invention, right? Like I remember I started, you know, I remember the invention of the skateboard. I remember the invention of the snowboard, like those didn't exist, right? I've been there and seen it. And, you know, like the kind of first official business I had was we had some of the first snowboards ever made, Burton Backhills, and we were competing and you know, driving to all these ski areas around Colorado and we literally had jeans and there was nothing. And a friend of mine, the guy I was competing with, his mom was a seamstress. And so we had her make these fleece, nice fleece drawstring pants and everybody wanted them. And so we're like, all right, let's make these really comfy fleece pants and sell them. And so we started Freeball Boarding Gear and probably like a lot of kid entrepreneurs, you know, I, it lasted a few years. It was kind kind of successful. And then I went to college and just totally forgot about it, you know, and just let it die. And, but then, you know, the invention of the internet, we did kind of the first, I started a website called Fat Chen with a buddy of mine. And the idea was to cultivate graffiti was just becoming a thing. And no one knew how to build websites back then. I did. And so we were like, let's go to all these graffiti artists and offer them the ability to put online galleries up for their art, and then we'll print t-shirts on their favorite art pieces and what people vote on. And it was kind of, you know, a t-shirt business. And when you're first, you get lucky. You know, we had Shepard Fairey before he was famous as one of our artists, and we're selling his stuff. And so it's just, it's been a long journey of stories like that where I didn't have a true vision starting out. You know, it's not like I woke up one morning and said, hey, I'm going to do this. It kind of evolved into things. And opportunities. And, you know, now in hindsight, like you said, the bruises, the arrows in my back, I've got more than I care to admit to. I mean, I think we just launched another business 3 weeks ago, and I think this is my 36th startup. Come on. It sounds good. I say I'm embarrassed, but there's a lot of bad ideas in there too. You know, my sister and I started a hedge fund in 2007 that probably wasn't a good idea.

Well, I mean, what are you finding? If you look back at the ones that were successful and not, I mean, is there a formula of what maybe if you look back in time and all of us entrepreneurs, because I think we all have that issue of saying yes to too many things, going down that rabbit hole. What's, and I want to get into some of your really cool marketing formulas, but let's talk about an entrepreneurial formula. Like right now, if you were to give advice to your 21-year-old self or even your 30-year-old self about which project to pick, what would you be saying?

Well, you said it. I don't know about the project itself, but I think, you know, if I were to go back in time and talk to my 21-year-old self, I'd say just pick one thing and focus and get rid of all the squirrels. You know, we live in a world of— we have more abundance and more opportunity than ever before. I mean, it's almost to the point where there's so much opportunity, it's a detriment. And so Which also kind of goes in, and we'll touch on this later, but it goes into the marketing world too. We have, there's just too many marketing opportunities. But if I had one thing to give myself advice around, it would be like, go narrow, go focused, and get one customer before you're worrying about getting 100 customers and just stick to one solid thing.

You know what's funny is like, I hear that all the time and I still suffer from that disease. And I think it's going to get worse. Like I was actually at a marketing conference this last couple of days. And I remember I just heard somebody said, oh yeah, with no code, you know, it's so easy to, to build things. Just go out and build 10 things immediately. It's so fast and one will stick. So it's like, that's the exact opposite mentality. Like just go throw a bunch of shit against the wall and not really focus anything. And maybe you'll get lucky on one of them because it's so easy to spin off a company now these days.

But I don't agree with that at all. I think focus is where it's at.

I kind of, I still need help on that. It's like, I don't know which one to go. You know, it's always, it's just tough for apps. So back to all your stories, what was maybe one of your biggest successes you had at the companies you started? And then I want to talk about how you got to here today, what you're doing.

I've had a few exits and, you know, been lucky in a few businesses. We still still have a couple of businesses running 13 years later. I mean, that's a huge success. But I do believe you don't learn from your wins, you learn from your failures. It's the challenges and the failures that I think have gotten me to this point, not the wins.

I was gonna say, I heard somewhere else, it's like the faster to lose, the better, you know, the faster we get our losses and figure that out and pick ourselves up. It's almost like the success we are kind of thing. Yeah.

I think it was Mother Teresa that said, you know, failure isn't, or Maybe not Mother Teresa, some Brit, but failure is a necessary ingredient to success. If you're not having failure, you will not be successful.

That's right. That's right. And you can't be afraid to walk into something to fail. And that's where I think that's where it separates. And again, I heard that somewhere recently. That's what separates a lot of the entrepreneurs from everybody else is not having fear at all. I'm saying I'm, it's okay. It's part of the process versus being afraid to take that Forward. So I know you've done a lot, you've done a lot of work with different entrepreneurs. You've got this incredible framework because you, you got that mind to help take that chaos, put some amazing order. You just mentioned there's so many things to focus on. Talk to me a little about what you're doing as the marketech, your marketing plan formulas. I know you've literally helped hundreds of businesses out there. Talk me through your process a little bit.

Yeah. So, you know, it's all stemming from my own needs, right? So I've started all these businesses. I'm almost always in the marketing role. And they're all bootstrap startups. We've only once have I raised money. And it was the kind of thing like when you have really limited resources and you have unlimited opportunities to deploy those resources, how do you make the decisions on what's the highest utility for those resources to help you build? And it was in 2019, I was actually in a room with 7 other entrepreneurs. I don't know if you've ever had this where You're working on a whiteboard and I call it like a whiteboard epiphany and you're writing up there and all of a sudden you're like, holy crap, how come no one's ever seen this before? And that's what happened. And I was lucky when my first child was born to be able to sell. I had a translation agency and I sold that and it gave me enough money to, I mean, it wasn't like an exit to let me retire, but it was enough to let me stay home and be Mr. Mom for 5 years. And during that time, in order to keep my sanity and have, you know, grown-up conversations every once in a while, I would go out to lunch with all the local business owners. And, you know, over and over again, all I kept hearing was like, hey, we hired XYZ marketing agency, or we tried XYZ marketing strategy and we spent $50,000 on it and it didn't work. And that bugged me, right? Because like, I want to see everyone be successful. And I couldn't help but think. And then on this whiteboard is where I was like, you know what, it's— this is just like building a house. You know, if you think about it, if you talk to my wife, she's had this vision for her house her whole life. She can tell you how many bedrooms, how many bathrooms, what color paint, what's on the walls. Like, it is clear detail. And if we ever get the opportunity one day to build that house, right, we get the land, we go to the bank, we get the financing. What's the first thing you have to do when you're building a house?

Architect?

Well, you go and you hire an architect because the architect would sit down with my wife and go, what kind of house do you want to build? How much money do you have? What are the materials? Is this even possible? Are we building a colonial or are we building a, you know, an adobe house? Right. So you have to take that vision and you put it on paper. That's the blueprints, right? And then you go hire the general contractor and the plumbers and electricians and drywallers and all those people. Well, in the business world, it's exactly the same. You have these entrepreneurs, they can see their vision clearly. But the problem is, is in the business world, there's this role of architect doesn't exist. And the business owners just go hire the general contractors or even worse, they're hiring the plumbers.

Yep.

And saying, hey, here's a bunch of money, go build my house. And there's no blueprint. There's no like, well, what resources do we have? Is it facing northeast, south, or west? None of that. And so, and that's where the market tech came from. It's like we need a marketing, the role of a marketing architect, someone who can come in and sit down with you as the founder and go, look, what do you want to build? What are your resources? And then what's the process by which we go and get those things and then deploy them in the highest utility to achieve your vision?

Right.

That's this thing I created called the marketing plan formula is the process for doing that.

I love it. I can imagine even just, even at those conversations, you're asking questions that people haven't even thought about. A lot of them like, I don't know what my budget is. I haven't thought about that. I just want to like be profitable. I just want to like—

You ask 10 entrepreneurs, what's your marketing budget? And you'll get 10 looks, you know, blank stares. Right. Or what they're going to do is they're going to say something like, well, it's 10% of our revenue or some flat percentage. And that's exactly not how to do it. Interesting.

I mean, I love the analogy. It's so simple and it makes sense. And as you said it, I'm like, my head is spinning. Like, oh my God, that's so easy to follow. You're right. I mean, would you ever have an, like you said, the house, here's your architect, what's your budget? I could do so many things with this market, this plan that you're giving me. You know, I could spend $10 million. I could spend $1 million. What, you know, what do you want me to do here?

It's not just time, but it's also money and resources. What human resources do you have?

Yeah.

And the one that people don't think about are what are the opportunity costs? That's an expense. So walk me through some examples of that. Like, what are you seeing there and there from the Well, I'll pick on the most obvious one and I'm going to be very generalized here, but you know, if you're a startup, I don't believe you should be investing in SEO. SEO is a long game. It takes a lot of money. It takes a lot of resources. It takes a lot of content to get ranked and it's not going to happen overnight. And the thing is, is that's where I see almost all entrepreneurs start is like, oh, we got to do SEO and optimize the website. And so if you're looking and So yeah, there's a lot of direct resources going into that. You got to create the content, you got to get the distribution, you got to get the backlinks, you got to do all the stuff that SEO entails. But if you think about that, if that's a 7, 8, 9 month process, if you're lucky, what's the opportunity cost of if you had used those resources in different ways?

Yeah.

They're way more efficient, you know, just doing direct Facebook ads or something like that. Way less expensive, way more direct, and they're going to get you you know, a startup entrepreneur, even a bigger entrepreneur, $10, $20, $30 million, they need customers today and tomorrow, not 7 months from now. That's right.

Yeah. They need a customer now. They need the feedback now. They got to get that going and iterate the product. That totally makes sense. Walk me through the process. So you, or I was just saying, walk me through the process. You just get with an entrepreneur and say, hey, we need timeout. We got to build your blueprint. We got to build you. We got to market.

Let's do it. So like we want to make sure that anyone watching this is walking away with something of value, right? So, The first thing we talked about, and again, I'll reference back to the house building analogy, but I'm a huge proponent of like, you got to start with the vision and the mission, and those have to be clear. And usually the entrepreneur has it up in their head, but they've never taken the time to write it down. And I don't mean just a, you know, a vision statement, you know, like the hang in there stuff that ends up in the drawer and doesn't do anyone any good. If you haven't done this yet, Cameron Herald has a great book called Vivid Vision. Like, that's what it should be. When I sit down with clients and write a vision, it's 20, 30 pages. We're going through what does your culture look like, what's your employees look like, what does your office look like, what are the rules of engagement. Those are your values, right? Like, what's acceptable and what's not. And you just need to get all this out. Like, how many times have you worked with a founder or entrepreneur or manager that says, you know, about an employee, why don't they get it? They just don't see it.

Yeah.

Right. Well, the reason is, is that vision's up in your head. You got to get it out and be able to give it to somebody so they can figure out what the hell kind of house you want to build.

Well, what I experienced— sorry to cut you off, but to me it's like— and I'm agreeing with what you're saying, it's brilliant. I think it— to me, it's more than just writing it down and giving an employee. It is also about ways to ensure employees are engaging in that. Having conversations around it. Otherwise it just— it just, yeah, you know, just there and gone. And yeah.

So yeah. And if we're coming in, you know, if I'm coming in as a CMO or a market tech, I need to know that stuff because if you tell me you're building a business and you have a vision to create a lifestyle business where you want to work off a laptop on a beach somewhere and just get checks in your mailbox, that's one marketing plan. If you tell me you want to go and build a business to sell to private equity in 2, 3 years, That's an entirely different marketing plan. Right. A third example, if you want to build a business, a legacy business that you're passing down to your children, there's yet another marketing plan. Right. They're different. And if I don't have that high-level vision stuff, I'm going to, chances are, go down the wrong road and build you the wrong business.

Yep. That's right. And again, I'm just going to reiterate what you said because I've been caught doing this so many times. It's just, we also tend to think, oh, I'll just spew it out. And everybody's kind of nodding their head and I think they get it and I just move on. I'm like, well, I just told you guys a vision 3 months ago. How do you not remember what we talked about? It's like what they say, the 7 times you're going to need to see an ad before you get it. It's almost the same thing, right? You just got to keep saying it and refining it and saying it again until everybody totally gets it.

Well, and there's a lot of confusion too around the difference between vision and mission. People use them interchangeably and they're not.

Yep.

Easy way to think about it is vision is, it's a terrible analogy, but the vision is to win the war. And the mission are those individual missions that make up how you win the war. We got to capture this marina, we got to capture this hill, we got to take over this airfield. The missions individually are, when put together, end up winning the war. So the vision is the bigger one, the mission are the littler ones.

Yep.

And the missions can be shorter term, 1, 3, 5 year missions that add up to the vision.

Love it.

Yep. So once you have that clear, I want to walk you through how do you now that idea of like, okay, we have limited resources, how do we figure out what the heck is the best way to use those resources? Like, what are the best marketing strategies? What channels? All this stuff, right? So I came up with, again, on this whiteboard, I came up with this thing I call the master marketing equation. Okay. And, you know, not too smart, so I got to make things really dumb so I can understand them. And it's kind of like, I appreciate— I'm not the best at math, but I appreciate algebra in that if you have in an algebraic equation, you have variables, and if you can solve for those variables, the math works, right? So the Master Marketing Equation is kind of like an algebraic equation. It's— you can write this down. I call it MME equals RM plus RP plus RTP, and that's the equation. So we have 3 variables. Now, and I swear, the longer I use this, the more powerful it is. Like, don't underestimate how powerful this is. The variables, I'm going to talk about and define those for you, but if we back out a second and just say, what is marketing? Right? Marketing is not a science. It's not the kind of thing where I can come to you and say, hey, look, if you pay me, I guarantee you I'm going to do these things and guarantee you I'm going to get these results.

Right.

It's not how marketing works because it's human behavior. So all we can do is we can stack the odds of probability in our favor. Right, right. And so if I'm going to say this sentence and you tell me if you agree, this is good marketing or not good marketing. If you show the right message to the right person at the right time and place, chances are you're going to have marketing that works, right? That's right. Yeah. Well, those are your three variables. So RM is right message. RP is right person. RTP is right time and place. That's your marketing strategies. Now, the nuance to this, the important step to this is realizing that the two of the three variables are 100% dependent on one variable. So, the right message in the right time and place are 100% dependent on the right person. Yeah. Because if you're, say you're a B2B SaaS company and you're selling software to other businesses, you might have an RP that is a CTO, or it could be the CEO, right? Because you're selling software. And now if you think about it, the CTO in their day-to-day world, they're trying to achieve different objectives and have different problems that they want to solve. Than the CEO.

Of course. Yeah.

Entirely different messaging. So you have to start with RP and it can only be one person. You can't come in and every entrepreneur is an optimist and wants to say, you know, like everybody's a customer. Well, they're not. You have to narrow it down and get it super duper focused on who is your RP. Now, how do you do this? If you're, again, let's use the B2B SaaS example and you've been in business, let's say you're doing about $3 million in revenue and you're doing pretty good. Actually, let's do better than that. I have a real example where I was working with a business broker and they sell other businesses, but they specifically sold businesses that were under $5 million in revenue and usually like local businesses, you know, the gas stations, laundromats, car washes, things like that. And he had 14 salespeople literally just going out and knocking on doors and it was working. He was pretty successful, but it's hugely inefficient.

Right.

And so we came in and we said, all right, look, you've been in business a few years. Let's go in and print out your customer list, all the deals that you've done over the last 12 months. Okay. And then, but we have that in a spreadsheet. And then in the next column, we said, what's your total revenue on those deals? And then almost all businesses have cost of goods sold. So we have to go in, the key column is profit. How much money did you actually make? For each one of those deals. And we listed them all out and then sorted them in size. And everyone's heard of the 80/20 rule, and it's true in almost every business, but 80% of his profits came from 20% of his deals. Right. Well, if you're going to invest in marketing, it makes sense to go, well, I want more of those and less of these deals at the bottom where they might have been huge revenue, But we made no money.

Right.

Right. Or they're a total pain in the ass. I don't ever want a client like that again.

And that's the kind of, that is such an important, good point that I don't want people to, you know, miss is the vanity of, I got a huge deal, big money, and they forget and they think it's going to be so good for the company, but they forget it has little profit on it. Oftentimes it's actually worse because you're spending a lot of research back to your opportunity costs that you said earlier. Damn, what could you have done without that? But keep going.

I mean, you cut you off or you're running in circles trying to service them and kiss their ass because they're a huge line item on your revenue and it's sucking up all your resources and energy and it's a huge waste of time. Totally. Okay. So to go back to the story of this broker, we found his 80/20 and it wasn't exactly 80/20. I mean, you'll have 90/10, 70/30 or whatever it looks like. But for him, we looked at the clients and we said, wow, would you, would you look at that? Every single one of those businesses. And remember, he's selling across the board all different types of businesses. He's selling, his most profitable customers were home services companies. They were companies that painted, did roofs, put windows in, home services. Wow. Okay. Now what can we do with this? Now we can go and we can, the first step in all of marketing is create a list. We can go, and this was in Denver, What are the top 50 roofing companies in Denver? What are the top 50 painting companies? What are the top 50 window companies? Now, his salespeople had lists instead of just randomly knocking on doors, start working down the lists, right? So it gave them focus. So that was the first advantage. And then the second piece of this is imagine like when we get to the messaging part, you're focused in now. So now he could say, and then, and then you can look at all the demographic information. Okay, what was the average size of the most profitable customers? What were they doing? What problems were they looking to solve? How long were they in business? We could refine this criteria down to get super duper specific. Right. Right. And so now, and that helps with the messaging part. So we were able to identify the RP. It was in his specific case, it was usually a home services business that they've been in business for at least 10 years. I think they were doing at least $1 million to $3 million in revenue. And the owners were the founders and they were looking to sell because they'd been doing it for a long time and they just wanted to something, do something else. Yeah, very, very, very clear. Right. So that's our RP variable for him. And the thing is, you're using data to make your decisions, right? Like, we're not guessing anymore. We know these are the most profitable customers right now. As the founder, you're like, all right, now I've got confidence that If we go after these and own this space, I'm going to be more profitable. So we get to the messaging side. Now imagine this, and because we literally did this, I pulled up his 5 business broker competitors and looked at their homepage. What do you think they all said? We're the best. We can get you the most money. Broker B, we're the best. We can get you the most money. We've been doing this 20 years, blah, blah, blah. Then we get to my friend's business. What does his say? Nothing like that.

Oh, okay.

No.

I'm also digital.

Fine. But the change is, yeah, the change. Now we say, look, we specialize in home services companies.

That's right.

We know your business inside and out. We know how to make it more valuable. We know what levers to pull. We know how to, you know, increase your multiple. Not only that, but we have a buyer network of people with money looking to buy your business today. So if I own a roofing company and I want to sell, I've been doing it for 20 years and I go to Broker A and we're the best, we can get you the most money. I go B and we're the best, we can get the most money. And then I go to my friends and they specialize and they got a network of buyers and they know how to drive value. Who the hell do you think I'm going to do business with?

That's right. That's right.

It's an easy decision.

Yep.

Right. So if you— that's step one, you identify the 80/20, who are your most profitable customers?

Yep.

And this can be for e-commerce, B2B, it doesn't matter. You do the same process. Yep. Right? Like I own a supplement business and we can go and look at what's our top selling product. And there's always an 80/20 in there.

And just to kind of speak from my own experience, I did that as an agency as well and went from, hey, we're just a general agency that, you know, full service, blah, blah, blah, to, you know, hey, we focus on thought leaders. And that was a, all of a sudden we did that, everything just changed because it was like, we went from just being blah, like everybody else to one niche. I think the fear. And just to share the entrepreneurial fear I had and others may have is, but wait, we still can help. And I have clients that are not that, and I don't want to exclude those clients that are not in this 80/20. And there's such a fear of doing that. And I know exactly what you're going to say is that's where we all screw up because it goes back to the focus. And guess what? We still get some of those customers anyway because of the word of mouth factor. And so, but I just don't necessarily lead with that.

Right. Right. And think about deployment of resources, right? Like you're— you own the business, you have to cut the checks. And so you want to have confidence in your decision-making. So let's see, let the numbers tell us where you should actually be deciding to invest, right? So then you do that. So you identify that 20% that drives 80% of profits, and now you can go, well, okay, what is— now we got to work on the RM variable and say, What is the messaging? And really at the end of the day, it's the only reason anyone buys anything is because they have a problem they're looking to solve from like literally anything. You know, if you buy a bagel, it's because you're hungry. If you buy a car, you need to get from here to there. Like you're buying because of a problem. So if you think about the messaging is what is the problem that your RP has now that you can help them solve? That is what your messaging is. Right. I don't think about it in terms of you, you might be able to solve the whole problem, but I like to think of it in terms of like, what's the Monday morning problem? Because that's what's going to get their attention. When they're driving to work on Monday morning, what are they sitting and fretting about and worried about and kept them awake all night that if you picked up the phone and said, hey, if you have this problem, I can help you with it, they're going to be like, oh, tell me more.

Right.

Right. Doesn't need to be the whole solution. Can just be that Monday morning problem. Right. But anyway, that's the messaging component. Do the customer research. And again, I'm old enough, you know, I predate— I hate to say this— I predate fax machines, right? So I come from the old direct mail era.

I'm right there with you. You only got 2 years on me, so I'm with you.

Yeah. Well, like, if you're doing a direct mail piece, you better damn well believe, you know, you get one shot.

2 seconds, half a fraction of a second. Yeah.

And so you've done your homework, you know what the person is, you've spent the time, money, and effort to get the best list possible. And you know what the messaging is and you've paid the copywriter to write you the best message possible. Then you go do the mailing, you get one shot. Well, what's happened in the world is, you know, social media and advertising. Within 15 minutes, I can run an ad on Hulu on my TV. These days.

Wow.

Right? Facebook ad. And now with AI, Facebook's trying to make it so that you don't need to know anything. You just put your credit card in, they'll create the ad, they'll create the copy, they'll create the image. Everyone has skipped over that customer research part. Got it. You know, what's that old saying? If you're going to chop down a tree in 4 hours, you better sharpen your ax for 3.5 hours. Yep. That's the point here is do your customer research and that solves your RM variable. Now the RTP variable is, that's your marketing strategies. What's the right time and place to show that message to the right person? Got it. And again, if you're selling to a CTO, think about this, that CTO, they're trying to solve a problem. Where do they go to solve that problem? It's probably totally different than where the CEO goes. They read different books, they watch different YouTube channels, they hang out with different people, they're on different email lists. It's an entirely different thing. So again, that's why the RP is the 100% variable where these two are totally dependent on it. Your TP then, all you have to do is when you're doing your customer research is say, hey man, when you were trying to solve that problem, where did you go to solve it? You know, who did you talk to? What do you read? What YouTube channels? What influencers do you follow? And let your customer tell you. And that's where you go and you get your message in those places and in front of those people.

Got it. What about the T? I get the TMP, or is it sort of related?

Like time, time and place, right? Like we have in the summer, again, going back to roofing, we have door-to-door salesmen all the time selling roofing. We do need a new roof. They have the right message, but they show up at dinner.

Got it.

It's like, sorry, man, I'm not talking to you now. I'm having dinner. So time and place matters.

Right.

Right. If you're a B2B SaaS company, should you have a Pinterest page? Probably not.

Yeah.

Should you be investing in Snapchat? Probably not.

Right.

You know, the time and place matters. That's your marketing strategies.

Right. Right. Amazing. And then it's just a matter of saying, okay, and so part of your work is just going in there and really dissecting those areas and helping them all that.

Yeah. I'm a big believer in that I don't know anything, but I'll ask and whatever they tell me, I'll believe them and I'll go with that. Right? Let your market tell you where to go.

That's great. How do you help people figure out— I want to go back and thank you for that. That was brilliant. And I know everybody listening is like, okay, they're all thinking of their RM plus RP plus RTP. Hopefully everybody's getting that, writing it down and taking action on that. You know, going back to the budget question, What kind of advice do you have for the people you're working with on like, I don't know, what should I spend? $10,000, $20,000? I mean, you're probably going to say, well, it goes back to the RTP based on the RM and RP.

In the master marketing equation, there's 3 variables, but to complete your marketing plan, there's 2 other variables. And those are your offer, right? What is it you're offering your customer? And which implies how much does it cost to provide that offer? That's what you're delivering in your RM variable. And then the last variable is your USP, your unique selling proposition. What makes your offer different from every other offer out there, right? When you're going into a business and you're working with them on budgeting, with a startup, it's hard because they don't have any historical data. I don't like guessing. I like using data. But if you're working with a preexisting business, I would start with what is the lifetime value of a customer? And I want to measure both the dollars and time in that equation. And if you, again, a real-world example, I own a supplement business and we did this back in the day. And in supplements, you get the first sale, but then they have a subscription where they buy over time, right? And so, we're making a little bit of money over months. And we looked at this and we did, it's a bell curve and we did the math and we figured out, okay, look, we have a lifetime value of a customer in dollars of about $225 in profit, not revenue. And it takes about 9 months to realize that profit. Right. Right. So now when we create our marketing budgets, we can go in and say, all right, technically, or at a theoretical level, we can spend up to $225 to acquire a customer. And if we get a customer at $225, we're break even. If it costs us more than $225, we're losing money. And if it's less than $225, we're making money.

Right.

Right. So your marketing budget should come out of how much profit are you getting on a lifetime customer?

Right. Probably baking in what margin you want to have at the end of the day. Right. So if you said 20—

And exactly that. Yeah. And that's where it reflects back up to even your vision.

Yeah.

Because if you do all this math and you start looking at it and you're like, well, shoot, man, you know, we're currently getting customers for $225. $22 and we're making $2 a customer and we're thinking we're going to go sell this thing for $10 million, that's a heck of a lot of customers. You know, there's a whole system of checks and balances that come out of this that test your vision back down into the marketing and everything tests and creates checks and balances when you start using numbers and thinking through like this.

I love it. So going back to your formula, maybe a two-part question. What do you say is by far, almost lay up every time, the biggest area that we're missing as entrepreneurs is really, I guess, is it really all three? Because they haven't figured out their P, their Ms are off?

No, it's doing customer research by far.

Got it.

Every entrepreneur I've worked with thinks, oh, I know my customer and I know why they're buying my product. And they don't talk to their customers and then they wonder why their marketing doesn't work.

Got it. So their P, ultimately their P is off because they think they know their P and they don't.

They aren't doing the customer research.

And then do you have a, based on all this is great stuff, based on this, what is your sort of, I call it, you know, the FITD, the foot in the door strategy for landing new accounts? Is it, do you have a method of saying, hey, I'm going to start by, you know, let me come in and do an analysis on something to get the customer? How are you leveraging all these, this amazingness for you to get clients?

Let's phrase it in like, if I owned a business, what would I do? The foot in the door. It depends on how desperately and how quickly you need customers.

Yeah.

Do you have time to do the proper research or do you need to just get out there and hustle and make some money? If you have a little bit of leeway and a little bit of runway to go do some research, I would, a couple of different things. Do the basic research, like at least do that 80/20 and find out who's your ideal customer, who's your most profitable customer. That's like the first step. If you can get that done, that'll allow you to create the lists. Because even if, like we just, I said we launched a new business a couple weeks ago. It's a coaching, it's a coaching certification business. And so we're selling this certification to health coaches. Well, health coaches, they know health. None of them know how to go out and do marketing and grow a business. Right. And they need 1 client before they can get 10 clients. Well, the way you start doing that is you got to create a list. Like if you just start shotgunning all your friends, you know, that's the whole network marketing world and why everyone has a bad idea of network marketing. It's not for everyone. The marketing needs to attract the right customers and actually repel the wrong ones.

Right. That's great.

If you have a list, even if you're a startup, brand, brand new, you know, I would create my list and I would then the next piece. So we talked about the offer. I would figure out what is the problem I'm trying to solve for them. I would put together an offer they can't say no to, because if you have an offer they can't say no to, it's hard to say no to. You've heard the $10,000 Ferrari. I think Brown talks about it. Todd Brown has that analogy. Ever hear that? Let's say you would, like, we're friends and I come to you and I say, man, Eric, remember that Ferrari I bought last year? It's cherry of a car, right? And but I've got myself into a pickle where I need to sell it. I've got all the maintenance, you know me, like I've put 3,000 miles on the thing. It's, we've been driving it together. It's a real Ferrari, but I need $10,000 today. Great.

No problem. Here you go.

Could you come up with that?

Yeah.

I mean, you could be the brokest person on the planet and you'll find 10 grand to buy a Ferrari. So when you're creating your offer, think about it like a $10,000 Ferrari. What can you put into it? In terms of value that makes it so someone literally feels dumb saying no to that. Right, right.

Love it.

And then once you have that created, the next step is I'm a huge fan of Joel Erway's power offer, which is basically go direct to the source. If you think about marketing like golf, if you're playing golf and you're on the tee box and it's a par 5, you hit the ball, what are your chances of getting a hole in one? Near zero, right? Yeah, it's probably going to take 2 or 3 putts, but if I'm standing on the green and I'm 2 inches from the hole, what are my chances of success? High. Marketing's the same way where you have customers who, they're on the tee box, man. They're just beginning their search. They don't even have a full conceptual idea of the problem they're trying to solve. They need to make 1,000 decisions before they decide to buy.

Right.

But for every business out there, there's also that guy who's like, their problem is so great and they're so clear, they're actively searching for a solution that if you just show up and say, hey, I can solve that for you, they're like, where do I write the check? So Joel Urway's power offer is going after that person that's ready to write the check today. It's a much, much smaller audience, but you basically come in and you state the problem. Hey, if this is you and you have this problem, I have the solution. Here's my credibility. You want to talk?

They got a big Monday morning problem, as you say, which is great. So last final question before we wrap, because you're so into the, all the stuff you're doing, let's talk about AI for last topic. You know, in the world we're all playing with so many changes, what's maybe one thing that you're looking at as entrepreneurs that maybe, uh, something that gets you excited and something you said we all got to be very careful about?

Uh, the careful is easy is it's really easy to go to AI and say, write me an avatar profile.

Right.

On some theoretical levels, because the LLMs have been trained on all of human knowledge, it can do that to some degree and certainly help you refine your research and really pinpoint and clarify the ideas around the problems. But don't skip over just talking to your customers like a real human being. When you do that, I've got the whole process. It's all on my YouTube, but like if you're doing a phone interview, record the damn thing. And now take the transcript of that recording and put it into the AI and have the AI use that person's words to help you, right? Like the highest compliment you can pay me as a marketer and advertiser is when you respond to my ad, you say, gosh, it's like you're reading my mind, right? Then I know I've nailed it. Well, the only way I can do that is if I use your words that are in your mind.

Back. Yep.

So that's like the cautionary thing with AI is don't let AI do your thinking for you. The amazing part of AI is the more I learn about it, the more I can't comprehend how our world's going to change. We create tons of agents and bots and vibe coding. I just yesterday in an hour made a Facebook management tool that we can brainstorm ideas and then it connects with our ad manager and it keeps track of stats and results and audiences, and then we can 80/20 those. And it's like, it took me an hour on Lovable. Like, it's ridiculous what you can do now. So they, again, it's a world of limitless opportunity that we have with AI, and you just need to be judicious in how you use it. Like, it does really good copywriting. Claude's the best at that, I think. But you need to train it right, and you need to know good copying from good copy from bad copy so you can judge the output from the AI.

I think if I'm taking away what you're saying, which I kind of agree to, is I think on one hand, the efficiencies it's allowing us is fantastic, but it also can get us into a shitty habit of being like, okay, I'm going to be lazy and go on the next thing. That thing is done. Let me go on to the next project and not take that extra step to do some of the things you're doing to really make sure you're doing the right thing.

You're thinking. Yeah.

Well, very cool. Is there anything, uh, I didn't ask that I should ask?

Gosh, I don't know. You know, just keep going. The world needs you is what my message would be to anyone listening to this, whether you own a company or dream of starting a company or work for a company. Like, you're doing good for the world, I assume, and the world needs whatever it is the heck you're doing. So like, as hard as it is and as challenging as it is, because you got to have a screw loose to start your own business, don't give up. Like, it's important. What you're doing, whatever that is.

I love it. Well, I appreciate that. And for those listening, want to come out if you want to come out to Denver, come visit Russell and the Speakeasy Mastermind Denver chapter, or just hang out and find them through the links below when we post this information. And amazing, as you could tell from the conversations we have, to get in his brain and see the way he thinks. And hopefully everybody's gotten some great nuggets as I have from this conversation. So thanks so much for coming inside the podcast today.

Yeah, I said it was my pleasure and Gosh, if we just helped one person, that was worth it, right?

So I appreciate that. Thank you so much for all that and your big heart. So thanks. And that's a wrap from the Speakeasy Podcast. If something sparked for you, don't keep it to yourself. Share it, review it, and pass it to the one person who needs to hear this right now. Want in on the Real Mastermind? Tap the link in the show notes to apply. Until next time, keep scaling, stay sharp, And don't be the smartest one in the room.