10 Steps to a $15 Trillion Free Zone Economy

Dan Sullivan [00:00:00]: There can't be competition among three people. There can only be competition between two people. Okay, so what the three way collaboration does, it sanitizes the creative effort, because nobody can say, hey, hey, hey, hey, hey. Mike Koenigs [00:00:17]: If you start by creating kias, you're never going to be trusted to make a Rolls Royce. But you can start with a Rolls Royce, and you can always work your way down, but chances are you won't. Dan Sullivan [00:00:27]: The moment you create a collaboration like this, you're in the free zone. Nobody from the outside can comprehend what you're doing or thinking about. Mike Koenigs [00:00:35]: I generally like to do collaborations where the end customer pays for the innovation. In 2017, Dan Sullivan made a bold statement, and that is he created the free zone. The big idea behind the free zone is he wanted to create a $15 trillion economy inside a strategic coach. By the time he celebrated his hundredth birthday. Well, he just celebrated his 80th birthday. There's 20 years left. And the big question that I'm going to be asking Dan today is, what are the downsides of collaboration, and what have you learned about collaborating, and what would you have done differently when it came to figuring out collaboration 30 years ago? So, Dan, take it away. First of all, anything you want to add about the free zone and the $15 trillion economy? Dan Sullivan [00:01:41]: Well, Mike, I think the first thing is that the word collaboration has really changed. Meaning, because if you're a World War Two movie buff, in the second World War, collaboration is what got you shot. What it meant was that you were you. You were collaborating with the enemy, and that got you shot. I don't care which side of the fight you were on. If you helped out the enemy, you were considered a collaborator. So one of the downsides, then, of collaboration in the wrong circumstances, it gets you a shot. So I think getting killed is definitely. Mike Koenigs [00:02:19]: That's the big oops. Dan Sullivan [00:02:20]: Yeah, but the other thing is, the word has really changed, meaning as we've gotten into a network economy. I think that we're talking a lot about collaboration today because we've switched from a pyramid economy where you had large pyramidal bureaucratic organizations, to now you have network economy, where you have nodes, and everything is doing. And now it's much easier now to combine talents like we're doing on this capability amplifier. Mike, we're collaborating with talents. We put together a podcast, and we each have a capability, but we're amplifying it by collaborating with each other in conversation and picking different topics. So my sense is that it's the change in the structure of the economy that has put collaboration into one, a more positive light. But the other thing is, it's now possible to put capabilities together electronically in a way that you could never do in, you know, where you were separated by distance and somebody was talented in Cleveland, another person was talented in Chicago, but they couldn't really collaborate. Now they can. Dan Sullivan [00:03:39]: And so I think that's one of the big things that's really happened. And I think the COVID period really speeded this up. Mike Koenigs [00:03:47]: Yeah, I would agree. I think when I started strategic coach and even when you and I started the podcast together, and I got deeper in from the ten x program into free zone, and I'd hear you talk about collaborating, the notion of a non competitive mindset where we're going to make something together that's ten x bigger, that's it's a non obvious way to think, and also it's expansive. And I also think that when you take into account that with technology, even with AI, or like when we're recording conversations, then we can instantly summarize them and create a plan and then prototype something quickly. The notion of collaborating, where before it would be like, let's get together, let's talk, and we'll talk, and then we'll make a plan, and then we might delegate. The time to result is dramatically shortened. Even in the past 18 months, it's massive. Now, when you look at 3d printing, you could print something you could be talking about a couple hours ago. Now, you could build an AI that could prototype something that produces a thinking results or a marketing result in minutes. Mike Koenigs [00:05:20]: So I'm just thinking through what you talked about and saying, okay, what have I learned and how have I used it since? It's like, I know for my own teams, our ability to produce with people has dramatically shifted because we can talk about a different idea, a different mindset, and that alone makes collaboration better. And then when we have tools also, it advances even quicker. I hope that made sense. Dan Sullivan [00:05:50]: Yeah. One of the things you asked me before we went on to kind of take a look at what I'm seeing in the trend towards collaboration. Well, first of all, I've learned some things have to be in place before you can even start a collaboration. And one is, I believe you can only do it with entrepreneurs. Mike Koenigs [00:06:11]: Okay. Dan Sullivan [00:06:12]: I don't think that people who have jobs can really collaborate, okay. Because they're not getting paid for the new thing. They're not getting paid new. The other thing is the entrepreneurs have to be cash confident. Each of them has to be confident. So if you have, what does that mean? Cash confidence means that they don't need the money right away. If they're going to create something new, they know how to make money their own way, they know how to make money. They have lots of money. Dan Sullivan [00:06:43]: And so I think collaboration requires one. You have to be an entrepreneur, but you have to be a cash confident entrepreneur. You don't need a short term payoff for inventing something new. So that would be two things that I would say right off the bat, Jeff? Mike Koenigs [00:06:59]: Okay. And I'll tell you something. I don't know exactly if it's a question or a statement, but I'll try both. So I get a lot of requests to do collaborations, and right away what I'm asking myself is how fast can I iterate and prototype this thing and bring it to generating revenue. And I generally like to do collaborations where the end customer pays for the innovation. So all of what you just said is true, which is, okay, I'm collaborating with another entrepreneur or cash confident, but if I don't see a fast payoff, I usually don't do it just because there's so many other opportunities and I treat my time the same way. So again, I'm going to give you one mindset, and then if this is flawed thinking, I want you to deconstruct it. But, like, here's how I treat my time now, and it's not for everything, but most things, but especially with AI, I give myself ten minutes with something new, I go, okay, my time is worth $10,000 per hour. Mike Koenigs [00:08:19]: I always act that way, I treat it that way. So I'm going to risk $2,000 to try out an idea and prototype something, and then I'll make a decision if it's going to be a value creator for a client or a partner or my own business. Otherwise I'm going to dump it fast. In other words, I'll only take so many gambles and risks. Help me out with the short term payoff versus the mindset I just shared with you. Where do you think the flaws are? Dan Sullivan [00:08:51]: Or the. So another box that you have to check before I get involved in a collaboration is that we have to have the same end user in mind. In other words, oh, yeah, and it's our favorite end user. So I have a talent and you have a talent. So, Mike, we have the same end user in mind with capability amplifier. It's entrepreneurs who are watching these programs. Mike Koenigs [00:09:23]: Yep. Dan Sullivan [00:09:24]: I don't think it's the CEO at a bank that's watching these entrepreneurs. So it's somebody who's entrepreneurial and likes the vibes that are coming from you and me about entrepreneurship. And so what we're doing is we're taking a capability here that you have and a capability here that I have. We're putting them together to create a new third thing. So the fourth box is you're creating a new third thing that you couldn't have created it without my capability. I couldn't have created it without your capability. And we're creating it for what I call a hero target. We want to be a hero to a person. Dan Sullivan [00:10:08]: It's the same person. So I would never do a collaboration that didn't directly benefit the entrepreneurs and strategic coach. I wouldn't be interested. I wouldn't be interested. My heart wouldn't be in it. Mike Koenigs [00:10:21]: Hey, Koenigs, I'm going to get you right back to the podcast, but I wanted to give you a free gift. This is my best selling book, AI Accelerator. It is a step by step guide that'll help you use AI to get your time back. Also learn how to use AI, but more importantly, help you get your teams to use it so you can give them their time back and also get them focused on more valuable activities. So this book has examples. It's got step by step videos and all kinds of things that you can start using right now. You can get that copy by just going to Mike koenigs.com freeai. There, you just fill out a brief form. Mike Koenigs [00:11:01]: I'll send you not only the PDF of the book, but I'll also give you an audio version of the book as well. So go to Mike koenigs.com freeai and let's go back to the podcast. Mike Koenigs [00:11:16]: 100% agree, mission critical. And it's absolutely easy to get abs total alignment there. So I'm going to stack on top of what you just said, which is where I always, I've been saying this one line for a long time. If you start by creating Kias, you're never going to be trusted to make a Rolls Royce. But you can start with a Rolls Royce and you can always work your way down, but chances are you won't. Okay? And I'm a firm believer in like, if all of what you said is true, so that you and I were entrepreneurs and we recognize each other as such, we're cash confident, meaning we don't have to make money right now, but our goal is to create enough value that it does. Right. We don't need a short term payoff. Mike Koenigs [00:12:10]: But I also think that we both know that the combination of what we're doing is going to create value that will be paid for if we have the same user in mind, the same customer. It's so easy for us to have a collaborative conversation and say, okay, we're going to create a product today for, let's say, a guy named Garrett. We know a guy named Garrett and hes a perfect fit client. And maybe wed identify three to five more just like him. And thered be a resource, a tool that we know could open up his ability to acquire five times as many things as hes currently doing right now. So we could invent something, prototype it, and because we know that customer, we could test it out being, hey, would you be interested in this? I say yes, right, so we could invent the pitch in a day. Dan Sullivan [00:13:24]: Well, the other thing is that the type of person I'd like to do for it would join us on the creative team. And they would pay for the creativity because it's actually precisely, yeah, so there's a fifth box here is that you make the end use customer part of the creative team right from the beginning. We're going to create something brand new for you. It's never been created before. It's directly related to what we know about what you need. And the two of us are getting together and we would like you to tell us whether we're on cue or off cue as we're doing this. So we're going to build you in right from the beginning as someone we have in mind. And if it's at a certain point, you tell us how much you would pay for this. Dan Sullivan [00:14:17]: Okay? Okay. And there's all sorts of ways that can go after that. Okay. But they know who they are and they know who people like them are, and they know what they're looking for. So they're going to tell us, right. They're going to help us fashion what the final thing looks like, and maybe we're going to do a deal with them, but we won't do a deal with the next ten people they introduce us to. Mike Koenigs [00:14:44]: Yeah. Dan Sullivan [00:14:45]: Yeah. And the big thing here, not only are we cash confident that we don't need the cash right away, we actually don't need the cash long range. It's just a more interesting way to make cash. Mike Koenigs [00:15:01]: Well, it's in the past. Let's see, what day is it today? As of the time we're recording this, Tuesday. So in the past nine days, I've had two people sign up to work. I mean, this really is our business model. It's like, let's talk about your best future self, and we're going to invent it together. The only difference would be, like, in your. In my case, we'd be the collaborators creating a new product. My current model is you're the client, you are the product, and we're making a new product. Mike Koenigs [00:15:44]: But I love, frankly, love the idea of the multiplying effect of, you know, two collaborators creating for the end client. Dan Sullivan [00:15:55]: And I actually think it's three more and more. That's another thing I've learned. I think it's actually three, and each of them keeps the other two honest. Mike Koenigs [00:16:05]: So three collaborators are ideal. Dan Sullivan [00:16:09]: For a hero target. Yeah. You're putting three capabilities together. Yeah. And we have a tool in coach the triple play where you can do that. Yeah, yeah. And you've seen the triple play, the living triple plays in the last two workshops. Yeah. Dan Sullivan [00:16:23]: Where you each have a thing, and then you get together and chat, and they each do a triple play, and then they come back and talk about the triple. Mike Koenigs [00:16:31]: And then when we AI fight it, we could prototype the business in 40 minutes. So. Yeah, I. I think that is so I. You know, I knew we were. When we were doing the triple play with three people, I knew we were doing it. But this is the first you've shared. The ideal collaboration is with three. Dan Sullivan [00:16:59]: Yeah, I don't think it's. I think it's three. And because there can't be competition among three people, there can only be competition between two people. Okay. So what the three way collaboration does, it sanitizes the creative effort, because nobody can say, hey, guys, let's do it this way. It's very interesting, and I've discovered that recently that three just works better. There's. There's easily double the thrill when you add another person to the original idea. Dan Sullivan [00:17:45]: I don't know what it is. It's very energetically satisfying when you have three people to do it. Yeah. And the big thing is that I think we had a room of 48, you know, 48 people. So we had 16 threes. And I just asked the AI program perplexity. I said, out of a group of 48 people, how many combinations of 16 can you get? And I was like, nine or 10,009 or 10,000. My sense is that this is a new economic forum on the planet. Dan Sullivan [00:18:27]: It's strictly entrepreneurial. You have to be cash confident entrepreneurs. You have to have the same target end user who you want to invite into the creative department. Creative. So it's got a whole series of checks to it that I didn't know, about seven years ago when we started the free zone, but you are in the free zone. When you are, the moment you create a collaboration like this, you're in the free zone. Nobody from the outside can comprehend what you're doing or thinking about. Mike Koenigs [00:19:01]: Well, especially in the instance where we worked. So, again, just for anyone who's trying to visualize this, the basic ideas, you had us all write our unique abilities on separate pieces of paper. We also added our Colby score, which k o l B E, which tells us quite a bit about how we think, how we interact, and how our. Dan Sullivan [00:19:27]: Brain operates, how you take action to get results. Mike Koenigs [00:19:30]: And so in the instance where we were with, and I even have it, I actually have it present. So look at this, Dan, I'm going to bring up a little visual. And here goes. So this was when we did the presentation. This was my unique ability. We had Brian Laskin and David reiling, and we wrote these down. And then when we AI ified them, we asked AI to combine our unique abilities and talents and to come up with ideas, and we were able to come up with 60 that eventually turned into a script and a video and a business model. And I think, getting back to what you're saying, the idea of three people at once, the dynamic is. Mike Koenigs [00:20:36]: So if you're just going playing back and forth. I remember if one of us got stumped, we're stumped. But it's hard to stump three people, especially if it's three people with an AI, to keep things moving along, because we can research and ask an infinite number of questions. Dan Sullivan [00:20:53]: But again, you're bringing in a particular aspect of why collaboration is becoming more prominent now. It's because the technology is now available to show very fast proof that the collaboration is working. Mike Koenigs [00:21:11]: Yes. Dan Sullivan [00:21:12]: Yeah. I think the speed with which you. I mean, you're ahead of anyone else I've ever met. The ability that you can to package a new idea and put it into presentation form is unmatched right now. But I think that you'll explore, I suspect, as a result of our podcast and the work that we're doing in coach, in the free zone program, that you're going to start exploring with having other partners, equal partners, in other words, people who are cash confident, they're entrepreneurs, and they're on the same wavelength for creating value for their. For their client. I think it'll be very interesting to see what you do with this, plus all the, you know, the AI skills that you have to bring to it. I think it's a very interesting. Dan Sullivan [00:22:04]: I think what you're doing is really creating a new form for us in the free zone. You're creating an entirely new form, what you do with this. So my sense is, by 2044, when I'm 100, if we just grow naturally the way coach has been growing for the last 35 years, we'll have 10,000 in the program and by that time the entire program will be the free zone program. And you have layers of, you know, school skill acquisition or tool acquisition as you go, but easily, if you put these type of collaborations together among 10,000 people, you could have easily 50 and it's 15 trillion in IP value. So this patent value, the cash flow will be larger than that. Yeah. But, you know, it's just really interesting to me where this is going. And, you know, at the seven year mark of free zone, I couldn't have imagined where we are today. Dan Sullivan [00:23:17]: And I have a suspicion 20 years in the future, I can't imagine now where we'll be then. Mike Koenigs [00:23:22]: I agree. So I'm going to read off the big takeaways from this conversation here and see if there's anything else you'd add, because there's seven so far. I added a 7th one. So number one, these are the things that have to be in place, only do collaborations with entrepreneurs. Two, entrepreneurs have to be cash confident. Number three, they don't need a short term payoff. Number four, they need to be selling to the same end user. In other words, the customer needs to be the same. Mike Koenigs [00:23:55]: Number five, the customer would pay for the creativity, in other words, the end user. Then you had a little nuanced add on, which is at some point you want to ask them, what would you pay for this? And then the ideal collaboration is with three, because the two keep everyone honest, there's no competition amongst three and there's double the thrill. And then I added a 7th, which is experiment with AI to multiply the effects and the speed of, of the creation and the outcome and the presentation. Dan Sullivan [00:24:35]: Yeah, yeah, yeah. I've learned a lot from this because I just keep experimenting. This works, this doesn't work and everything else, but you start developing some touch points. If these things aren't true, it's probably not going to work. Yeah, yeah. And, you know, I really learned a. Because I've had a whole series of collaborations which I learned from, but they didn't really work as a collaboration, you know, I mean, you know, you go through a lot of eggs before you get a really good omelet, you know, and. Yeah, and, yeah. Dan Sullivan [00:25:16]: So it's been, it's been really interesting. But I think you just, when you're trying out new stuff, you just have to go. There's no shortcut to it. You just have to go through the experiences. You got to internalize the kind of people who are good collaborators. But the big thing for them is that they have to be sort of carefree in terms of cash. Mike Koenigs [00:25:45]: Hey, this is Mike Koenigs. We'll get right back to the podcast in a moment, but first I want to give you one of my favorite books. It is called your next act, actually my 16th, number one bestselling book. And I wrote it because I was in a situation where I wanted to reinvent myself. And I've talked to tons of founders just like you who've either sold their businesses and want to create their next act, or, you know, you're selling to an audience that, let's say, isn't at the level you want to be selling to. You want to sell a more expensive product to a better customer, or you've realized that having a strong personal brand will multiply and amplify the value of everything you touch for the rest of your life. That's what your next act is all about. And inside it, there are videos and guides that will help you elevate your packaging, positioning, messaging, get attention, build the all important platform that you need to elevate your status and your prices so you can get it@mikekoenigs.com. Mike Koenigs [00:26:45]: free there. Go pick up your copy of your next act. I'll let you go back to the podcast now. Mike Koenigs [00:26:52]: And I think if I just added an 8th one on, there is, and we've got three things about the cash, but it's experiential iteration is what you said. This is something that just requires a willingness to, it's not even fail. It's so much. I think that experiential iteration involves, you're going to have to make a lot of little pivots and none of those. That doesn't mean fail, because I think you can have a very successful product the first time, but you're going to have lots of little failure points, but you're correcting for it, especially if you've got three really good collaborators. Dan Sullivan [00:27:37]: Yeah, and I would say just to expand on one of the points, the end user is 50% of the creative team. You can only get to 50%. The end user provides 50% of the information you need for successful creation of a new thing. Mike Koenigs [00:28:01]: That's pretty heavy. I put that as number six now. So now we've got nine points for free zone 2025 or the downsides and upsides of collaboration. We'll have to decide which of these titles works best. Dan Sullivan [00:28:18]: All right, well, we're going to send this out to all the clients when Gord gets it all packaged. Mike Koenigs [00:28:26]: Awesome. Okay, I'll coordinate with gord. And don't go away, but we'll wrap this episode up. So this was definitely a great learning experience for both of us this time. I'm so glad this one came up. I'm super excited. And great job, Dan. Lots of excellent points here. Mike Koenigs [00:28:48]: Great learning experience, and I'm going to use it right away. So anything you want to say to wrap this one up? Dan Sullivan [00:28:54]: No, I would just say that I think that for the right kind of entrepreneur, this is a very, very exciting future. And I would say the other thing is that the entrepreneur, and maybe this is number ten, they have to be a growth minded entrepreneur. There's no end point. They have no endpoint to their entrepreneurial career. There's no retirement. There's no getting to a certain status point or anything. They're just in it for their entrepreneur, just for growth. Mike Koenigs [00:29:27]: Endpoint in sight. Okay, we got ten. Great job. Well done. All right, you got a bunch of gold stars to today. Dan Sullivan, thanks for watching. Thanks for listening. We'll see you in the next episode.