What's going everyone welcome back to the game. Today I want to talk about Scalable Value. Sounds like two very big kitschy terms, you know, scale and value. But I'm going to bring it down to the dirt for you. So I had the value equation, which is something that I wrote a long time ago inside of the offers book which I originally got from my gym days. I'm just trying to think like what are the components that make anything valuable in general? And one of the things that's come up more recently because I deal with a lot of newer business owners.
And what I wanted to share my rant that I had there with you, which is oftentimes I see entrepreneurs put the car before the horse and I'll explain what I mean by that. They will focus on trying to make something scalable before they try and focus on making it valuable. And so I see that I'm going to be able to do something that I want to do.
And so I see this kind of like in the gym world when you know a guy would come in and say, Hey, you know, I don't want to get too jacked right because then I'm have to change my clothes and I'm like, Well, why don't we just start with you looking like you work out? Like why don't we just start with that right. And so basically it's like, Oh, if I lose weight, then I have to change my clothes. It's so backwards in terms of thinking right that they're basically saying like, I don't want to make any sales because if I make a thousand, then I'll have problems. It's like, duh, but you don't even have a sale yet.
I think that scale should honestly be completely removed from your vocabulary, especially if you're starting out, but I think what I've seen at least for me is that I've been willing to do things that are unscatable for significantly longer than most people do it. I'll tell you a tactical story about this. So when I was running my gyms, I would do these weigh in. I would sell like, you know, call it 50 people who would do a challenge with us.
And that'd be, you know, a couple of weeks of sales or whatever. And then I would have a Saturday where I would get everyone in for the nutrition consult. And I would do 48 101's. And that sounds absurd, right? 48 101's. And so I would do two every 30 minutes for 12 hours. So I do 48 of them back to back to back. And I had higher average revenue per member than anybody else in all the gym, you know, groups that I was in.
What I would sell there was I'd be selling supplements that already sell services. And so I would meet them 101 for nutrition and tell them supplements. It was an onboarding. Everybody else who competing against me is like, ah, that's such a waste of time. Like, I don't want to spend a full, you know, spend a day doing one of ones like, I just get them in a room and then I just pitch them.
But the thing is that like they would close, you know, 30% maybe 50% on binds of product. And they would average call it 50 bucks ahead in supplements. But I would average like $250 had. And so I was averaging five times more than them. And it was because I was just willing to meet with people one on one over and over and over again.
And don't be wrong. Those days were exhausted. Like at the end of the day, it was like going through a gauntlet. But when I zoomed out, I thought to myself like, well, that business owner worked for the day. And I worked for the day. And I made more money than him. And so it's like, we have this a version to doing like repeated tasks, but it's like that repetition.
And I didn't even think about it then, but like that repetition is also what made me so good at sales. And when I talk about the 4,111 sales, I was like, I don't even count the supplement sales. I have no idea how many I was a lot is a lot, a lot of like if I counted those it would be absurd amount, right.
What if you're like doing math and be double, but it's it was a lot. And it was in such rapid succession that I got such fast feedback loops on what I needed to say and how needed to pause and all that stuff that I got really good. And so I had a different business owner who came out for one of our scaling workshops and I'll tell you what they did. I kind of told him the story. So he had a business where he would do these kind of like events.
And they would sell they did like a million dollars at their event. So it worked out great. And after they did that event, they were like, man, that's a lot of work. And so then they went back to kind of like they're like, how do we automate this? And so they try to like, you know, make it a recording and do all the stuff.
And you know, the row as drop, so return on. It's been dropped precipitously went, wait, wait, wait, wait, when I was talking to him, I said, well, you got more than 10 to 1 when you ran your event. Why don't you do one every month? And he's like, man, it would just be a lot of work. And I was like, well, I mean, yeah, but you'd also make 10 million dollars.
So I mean, no, but like maybe 10 Xing my income feels like a pretty good idea, you know, like worth it, right? But he was like, okay, I have to convince my founder of do it. You know, the co founder of doing this because you know, his co founder was kind of like the more public face. He was kind of the more the integrator.
So then we, you know, we went through that of like, okay, how do we parse it out? So, you know, this personally has to show up and then you can do everything else. And so we walk through it, simply asking like, what would be the most absurd version of this? And then rather than saying, okay, well, I can't do that because it's a lot of work just being like, no, what if I did do it?
Like, what if we did meet one on one with every single customer? And the thing is is that that repetition ends up paying so many more dividends because like you get the immediate reward of like, you'll definitely make more money for sure. But on top of that, you'll gain way more skill. I think that this consistent approach to unskilled ability has been one of the things that has allowed me to move forward faster along the kind of business journey.
And they even talk about this in the world of like software like why comment there's tons of clips about Sam Altman and Paul Graham talking to why comment here founders, these are the companies that become the most scalable businesses in the world. And they talk about doing the unskailable thing. They talk about handing it in the supermarket and just trying to get people to use your app. And it's like, well, it's not scalable. It's like, yeah, but it's not valuable yet.
One of the things that I was telling some of these new business owners is like, they're trying to have a lead magnet to get people to engage right to get engaged leads. Their lead magnet is they're trying to just put like a PDF together. And they're like, well, you know, you have a PDF. I'm like, yeah, but I also have a really long history of, of positive products that I've put out.
If you have two international best selling books, then yeah, when you have another written format that comes out, people tend to want that because they associate or approximate whatever the lead magnet is with the other thing that they bought or consumed. And so that makes sense, right? But what I told them and what so few of them actually do, I said, why don't you just give away five hours of your time, 101. And so many of them are like, oh, but that's so much work. I'm like, bro, you're broke.
The alternative is nothing. You make no money. And so it's like, why can't only take on 10? I'm like, well, you have zero. And they're like, what do I do after 10? I'm like, we will solve that with the resources you gain from making money. Here's the 201 version of this is that when you do things that are unscathable, you tend to also be able to get you can charge significantly more.
You have premium pricing, get way more profit from doing that. And guess what all that extra profit and information allows you to do. Invest into making it more scalable because you'll also be able to parse out the components of your unscathable thing that are the most valuable. And then say, okay, well, these components, I probably can automate. They take me just as much time as the most valuable part, but they're not as valuable.
So they take they cost the same time, but don't value it as high. Well, cool. Then I will automate that. And so then what you're doing is basically focusing on the biggest point of leverage where you get the greatest return for the effort they put in. And then trying to scale that part or trying to scale everything else except for that. And so that gives you this huge multiplier and the remaining effort that you put in.
I think you just got to roll your sleeves up. I still do this, though. I want to like give more examples around this, but it's like, I want to beat this in. If your lead magnet isn't that good, consider adding more unskillable value. Consider adding more personal touch. Consider adding more personalization to the stuff that you sell.
Like if I said, hey, like let's say you're a beginner website designer developer, right? You can try and think of all of these amazing things that you could do for someone. But if you just said, I will give you five hours and I will improve your website. A lot of people will just take you up on that because what happens because I was thinking about this. Why is that unskillable value more valuable.
And so if I look at the value equation, I think it's actually all top side. So for variables, dream outcome, perceived like achievement time. So speed, how fast it happens and then effort and sacrifice. Well, if you provide unskillable one on one attention to somebody, a prospect. Guess what happens? Well, the likelihood that they get what they want because it's one on one goes way up. The amount that they have to work goes way down because it's you doing the work.
And the amount of time delay becomes coming irrelevant because they're receiving the value in real time with you. So it's this unbelievably valuable product. I mean, it is a product.
So if you're doing this web development and you're doing this and you're providing this unskillable value. One of the other things that it allows you to do, especially if you're starting out is that you get all of this face time with your customers. And so Paul Graham said this and I repeated a lot, which is that you can solve every problem in your business by simply talking to your customers.
And so if like your marketing is not working, talk to your customers. If your product is not delivering talk to your customers. Like those are the core value, like you have to let them know about it. Then you have to deliver it. If you want a great way to figure out what to sell, talk to people one on one and do it for free. And then ask at the end, hey, if we were to work together and I charge this much, what would that look like to you?
And then you can have them tell you the offer to sell them. Here's the big one. So this is the big, this is the big pain point, which is, well, shoot, I'm going to get all these tire kickers, all these people who don't really want to do this, who are going to take me up and waste my time. Well, guess what you can do when you give an amazing offer, you can add friction, you can add qualifiers. And so I'm not saying give five hours, three hours, do a full project for any prospect.
I'm saying only do it for qualified prospects. Imagine right now the most perfect prospect that you can imagine, right? It checks all the boxes, right? Well, you can make your free thing only available to those people. And so someone can still absolutely have to qualify for your free thing. And so people have this misconception that because it's free, I have to give it to everyone.
But the thing is, it's free to them. It's not necessarily free to you because you have hard costs associated with your unscathed value. I'm only going to make this investment for qualified lead. And so when you marry those two things together, all of a sudden you have unscathed value, but only being delivered to the people who have the highest likelihood of purchasing. And whose feedback you value the most and who will tell you the offer that will have the highest like you converting them.
And so you can do this when you're starting up new product lines. So this is, this is for the larger business owners, for the listener podcast. You can use this strategy or technique when you're trying to create new lead magnets for new audience or new avatar.
If you're again trying to expand or just get into or just improve your advertising, being willing to do work that you know has to happen in space and time and then disappears is the work that oftentimes in my experience has resulted in the deep learnings that set me apart or set my business apart.
From other people in the marketplace that weren't willing to do it. And I'm always amazed by this. It's like if you knew that you could beat all of your competition because you have information advantage, why would you not do it and not only that get paid more for doing it. I don't get it. And so I think that number one. I try to reverse engineer from what absolutely insane would be and then trim down.
So in the offers book, I talk about the trim and stack process, but I think most people trim too much or trim the wrong stuff because what happens is and this is where people this where people mess up is that when you trim the unscatable thing, you also trim the unscatable price.
But price adjusts with value, you know, I told you example in the book like yeah, you could theoretically fly out to your to your prospects house right and like reorient their kitchen and go grocery shopping with them. It's like well, of course you wouldn't do that. Well, would you do it for a million dollars. Probably.
We basically sell out of our own wallet and cut things that a prospect would otherwise deem very valuable, but we don't break down into the actual dollars and sense what it would cost us. So it's like let's use that crazy example you fly out because you're an online trainer and you sell this, you know, this, this own boarding process, which is absurd.
By the way, if you do want to own boarding, guess what happens you get more of the four hours, if you don't know what the four hours are, I'll make another podcast about these four, but number one, you want to review number two, you want referrals number three, you want retention number four, you want resells.
Every customer, you want those four things, those are the actions you want them to take. And so when you own words, one, one, one, you increase the link that all four of those things occur. But let's play it out. You're like, I can't, I can't do that. Okay, well, if you charged 25,000 a year, would you do it? Well, shoot, okay, well, how much does a flight cost to their house? Okay, you planted ahead, you know, say, say round trip, it cost you a thousand bucks.
You know, you don't need to stay at the the ritz, right? Just stay there for a day. And you can even fly in and fly out. Now even have you come at first thing in the morning, leave, leave in the evening. You don't even have to stay at hotel. That maybe you're knocked down to 500 and it cost you a day and it cost you $500. If you sell five of these a month, well, then you have a million dollar business. And it's almost all profit. And your cost on that is a day and $500.
So if you could get three times more of those sales and the added cost per customer was a day and $500, you'd probably do it. But no one just takes that like there's so many people, just don't take like the wood. Okay, what would it actually take? And then what would that actually cost?
And then this is America, you can pick your price. Just pick a price where you'd be stoked to do it at. And I think that a lot of people don't they're not willing to start with us unscathed will value. And I think it's the best place to start.
Here's why this is also cool is that if you've if you've heard of the Tesla model, right? Where Elon started with the roadster, the most expensive car, which most people can afford. Then you moved on the S down, down market, which is a hundred thousand or a car.
And then you moved down to the model three and then you moved on to the Y, right? He kept going kind of down market, right? And so that whole that whole process, that whole that whole concept basically allows you to borrow the brand credibility of the premium product ahead. And so if you only take on customers that pay you $25,000 a year in order to help them completely transform their lives. Then when you do come out with a more scalable version, there's a reason for it that makes sense.
And say, hey, I'm completely packed at my highest level. I can't do this level of service. But what I can show you is all the stuff that I do with them, but I'll do it with you rather than doing it for you.
It's reverse of what is typically taught, but it's in my opinion one of the better ways to do because you're going to get way more intimate knowledge of all the problems that someone's going to experience doing it hands on with them so that you then can do a more helped or consultant consultative version, which then eventually turns into the do it yourself or even more scalable version.
And so what you want to do is you want to do the unskilled value so that you can make the best scalable value later. Here's my my parting question for you is, think about the most insane thing that you think everyone would jump out specifically the most qualified versions of your customers, the best ICPs or the best avatar you have.
Then actually write down how much you think it would cost you in time and money to do that thing. And then a, either charge for that and pick a price that you would do it out where it makes sense or be choose to give it away for free only for the people who are absolutely insane.
And I think that if you actually walk through this process with your team, you guys can listen to this together, whatever there's an unlock there where there's unbelievable amounts of money that are just sitting waiting for you. The amount of personal trainers, physical therapists, car practice, dentists, whatever.
Roofers, who there is a version of a product that way more people would want, but no one just does the math because they immediately write it off. And that money is just sitting there waiting to be made for someone who's willing to do just a little bit more work.