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Entrepreneurship Masterclass: How to Make $10k - $1M per Month - Daniel Priestley
Most popular guest on the podcast. Why? (00:00:00)
- Has built multiple companies worth over $10 million
- Lacks conventional skills like web development, video editing, and design
- Exceptional at organizing, writing, and speaking
Demystifying entrepreneurship (00:04:28)
- Entrepreneurship differs from trading as it isn't a zero-sum game
- In entrepreneurship, one can add value, unlike trading
- Success in entrepreneurship involves discovering unmet market needs and de-risking the venture
- Most market needs are met; finding a niche is challenging but there are steps to reduce risk
- Entrepreneurship feels alien to most due to education systems designed for the Industrial Age, intended to produce workers who fit into existing local economies
(Note: The text provided was not complete, therefore, the summary is based on the available sections.)
Why is entrepreneurship so alien to the way most of us were educated? (00:07:49)
- Traditional education aimed to create workers to fit into others' established businesses.
- Today's environment includes spatially distributed teams, niche markets, and a global customer base.
- Entrepreneurs focus on identifying problems and crafting solutions, while employees apply their skills to meet an employer's needs.
- Businesses integrate various components to meet customer expectations, contrasting with schools where students develop specific skills.
Entrepreneur vs solopreneur (00:12:52)
- Entrepreneurs aspire to make a profit, take risks, and manage resources beyond their control.
- Solopreneurs operate on their own, risking the business pausing when they are unavailable.
- As soon as solopreneurs succeed, they should consider hiring others to grow the business and focus on their most valuable work.
- Teams of fewer than ten people self-organize effectively, akin to a small dinner party.
Managing people (00:14:16)
- A group of three to eight people is a self-organizing team, minimizing the need for management.
0 to 10k a month (00:15:41)
- Beginners in entrepreneurship should have a concept that reflects a good business idea.
- Determine whether the desired business is a lifestyle business, for fun and flexibility, or a performance business, aiming for substantial growth and value.
CAOS framework - Concept (00:16:20)
- The CAOS framework, which includes Concept, Audience, Offer, Sales, is a starting point for building a business.
- The concept phase requires deciding between a lifestyle business or a performance business.
- Consider OMV: Origin story, Mission, and Vision to ensure the business aligns with personal background and strengths.
OMV - Origin story, mission and vision (00:18:16)
- Past empowerment moments around age 10-13 can influence future entrepreneurship.
- An example includes creating something independently, like learning to code and making websites without asking permission.
- The YouTube platform is an example of creating without permission, reflecting origin stories.
- Hardships or negative events can also be origin stories leading to empowerment, such as the fictional story of Batman realizing his independence after losing his parents.
- Entrepreneurial ventures can stem from translating negative situations into positive outcomes through business.
- The core of a business should be an origin story linked to a personal sense of empowerment, not purely financial motives.
- For those who cannot recall an origin story, entrepreneurship might not be the immediate path; working with entrepreneurs first is recommended.
- Vision includes future goals and impacts, while mission focuses on the high-value actions achievable right now.
Testing Business Ideas
- It's vital to combine passion, solving problems, and targeting those willing to pay for solutions.
- Find clients who have the financial capacity to address the problem you're solving.
- Generate ten business ideas, select the best three, and test them quickly and inexpensively.
- Seek ideas where demand exists; the challenge should be managing high interest, not creating it.
- Evaluate if the product delivers a good return on investment, aiming for a clear tenfold return.
- Initially, an idea should have a one-page description, followed by practical tests like introductory events or quizzes to gauge interest.
Example 1 (00:35:14)
- Preference for using WhatsApp groups to facilitate early access to events, like ticket releases.
- Real-life example: A friend, Max, set up a WhatsApp group for family office managers, organizing high-net-worth individuals' wealth.
- Max's group grew to 19 members, signaling the start of a profitable business.
- The group was formed by reaching out to potential members on LinkedIn.
Example 2 (00:36:20)
- WhatsApp groups can be a non-committal first step for potential customers to engage with a business idea.
- Example given of a fertility clinic that started a five-day WhatsApp group for fertility awareness, attracting hundreds of participants.
- Advice against starting food-related businesses like burger vans due to high capital needs, scaling difficulties, perishable products, and regulatory headaches.
- In contrast, software businesses can scale much more efficiently without proportional increases in resources.
What is a J-curve business? (00:38:26)
- A J-curve business involves initially losing money before starting to make a profit; identified by the “J” shaped cash flow graph.
- J-curve businesses require significant upfront investment, often without immediate returns.
- They typically sell lower-cost items to many customers, e.g., software subscriptions like productivity apps.
Sales Businesses vs Volume (J-Curve) Businesses
- Sales businesses involve making high-value sales, often above $1,000 each, and are not J-curve businesses.
- These businesses are generally service-based and include B2B (business to business) sales, solution sales, or outcomes.
- Examples include financial planners, accountants, bookkeepers, and business or life coaching packages.
- Sales businesses require a significant upfront purchase by clients followed by service delivery, providing more predictable revenue streams without massive initial costs.
Volume (J-Curve) Businesses Details
- J-curve or volume businesses need a mass sales strategy, typically for low-ticket items and require a large number of customers for profitability.
- Examples of J-curve businesses include food vans, coffee shops, and software products with recurring monthly fees.
- These require heavy investment and often incur ongoing costs to attract new customers, which makes it challenging to scale.
Pricing Strategy and Customer Selection
- Entrepreneurs should target customers who have significant money and are underserved.
- High ROI (return on investment) should dictate pricing strategy, which varies based on the buyer's perspective.
- For higher-income earners, services that save them time or enhance their earnings are considered more valuable.
- Affluent customers may perceive seemingly high-cost items or services as reasonably priced, based on their return or use.
Business Type Recommendations for Beginners
- Service businesses, with higher ticket items and fewer clients needed to reach financial goals, are recommended for beginners.
- Product businesses often entail substantial setup costs and fall into the J-curve category, making them less suitable for new entrepreneurs.
A - Audience (00:53:41)
- Shopify facilitates online and in-person sales for millions of businesses in over 175 countries.
- Used for selling physical and digital products as well as powering a new tech brand's online presence.
- Shopify integrates with fulfillment and delivery options, serving as an all-in-one commerce platform.
O - Offer (00:53:46)
- When creating a business, aim to provide services or products that can be sold for substantial amounts to a wealthy clientele, ensuring a model that can generate at least $10,000 a month.
- Proper businesses, as opposed to hobbies, follow a model that is scalable and can quickly reach revenue goals.
- The target is to offer something that saves clients time and frustration, and to offer it at a high enough price point, such as long-term, family-oriented guitar lessons at $200 a month with a 12-month commitment.
Sales Process and Customer Interaction [Example 3 & 4]
- Constructing an offer involves presenting with a slide deck, brochure, or webpage, ideally in person to gauge real-time reactions.
- Initial sales require personal interaction to adjust and improve the offer based on potential clients' feedback.
- For meaningful data on the product or service, at least 30 sales meetings should be conducted - this is the minimum for statistical significance.
- The early stage of a business should involve direct communication with potential customers, customizing the product to their preferences, and adapting payment options to facilitate their commitment.
- Evaluate customer interactions exhaustively, taking notes to refine the pitch, sales process, and the product itself, aiming for a targeted sales goal such as five $2,000 sales per month.
Business Ideation and Flexibility [Example 3 & 4]
- The entrepreneurial process includes narrowing down business ideas to those that have the potential for substantial monthly income.
- Real-life experience with clients drives the evolution of a business, even in modern tech-oriented enterprises.
- Ask credible contacts in the industry for collaboration if they possess relevant skills that align with your business strategy.
- Remain adaptable to change, preparing to shift the focus from an existing venture to a new one leveraging current skills and networks.
S - Sales (01:01:27)
- Entrepreneurs should be the organizing force, not the labor force, bringing together talented individuals to deliver services.
- They should focus on organizing and enrolling the right people, rather than doing the technical work themselves.
- Sales should not be feared; learning to guide clients from their current reality to their desired reality through professional sales is crucial.
- Offering monthly service packages and utilizing international teams for content creation can be an effective strategy.
LAPS - Leads, Appointments, Presentations, Sales (01:06:34)
- The sales process is akin to a doctor's approach in identifying problems, diagnosing, and offering treatment plans.
- A professional salesperson listens, understands, and guides customers towards solutions without being pushy.
- The LAPS system involves tracking leads, booking appointments, giving presentations, and ultimately making sales.
- Entrepreneurs should maintain a weekly LAPS rhythm to grow their sales.
Entrepreneurship vs day jobs (01:07:26)
- Sales involve creating a relationship where you understand the client's needs and recommend solutions.
- People have differing experiences with sales, not all are negative; professional sales are positively received.
- A day job offers certainty and comfort that entrepreneurship might not, but entrepreneurship has the potential for significant financial rewards.
- Generating $10,000 per month through entrepreneurship could match a basic job income-wise, considering additional overheads and effort.
Should we feel bad about being part of the capitalist system? (01:10:32)
- Entrepreneurship can be wild and stressful, yet it offers the potential for great rewards beyond financial stability.
- Finding satisfaction in a traditional job is just as valid as pursuing entrepreneurship.
- The primary goal is to add value and enjoy work, irrespective of the path chosen.
- Remaining curious, non-emotionally attached, and receptive to feedback can aid in the entrepreneurial journey of generating up to $10K per month.
10k-100k a month (01:13:59) & How to find the right people for your business? (01:14:50)
- Feelings of guilt associated with making money are common, but transactions are beneficial for both parties.
- Exchanging goods or services is based on mutual benefit, exemplified by the coffee shop transaction.
- Finding the right people for your business is crucial.
- Selling is not inherently bad unless the product is fraudulent, like "snake oil."
- It's important to ensure that your customers can afford and benefit from what they're buying.
- Selling a luxury item to someone who can afford it and has long desired it is not problematic.
- The issue arises when selling to someone under pressure or to someone who cannot afford it.
Remote vs in-person work (01:16:51)
- A small business making 10k a month likely consists of 2-4 team members, including roles for sales, customer service, and administration.
- Building a team can be done by finding "rebels and misfits" who are out of place in traditional jobs but have potential.
- Whether the work is remote or in-person, maintaining team vibes and active communication is key.
Freelance, part time or full time? How to pitch the job to people? What skills are you looking for? Establish yourself as a key person of influence (01:17:57)
- Hiring can be freelance, part-time, or full-time, depending on what suits the business.
- Initially, hiring less-skilled or inexperienced people who see the job as a step up can be beneficial.
- As the business grows, establishing oneself as a key person of influence is essential to attract a clientele and stand out in the market.
- Having a prominent public figure or a reputable personal brand can vastly increase a business's reach and success.
4 types of products (01:24:53)
- Different product types are not specified, but the importance of associating products with a key person of influence is emphasized.
- People are drawn to businesses with influential figures.
- Successful brands often have a key person of influence driving their growth, such as Richard Branson, Cristiano Ronaldo, and Jamie Oliver.
Example of web design agency (01:26:38)
- Being a key person of influence is critical for personal branding and business success.
- Public speaking, group work, and creating a differentiation for the business are vital tasks for a key person of influence.
- Content publishing across mediums like videos, articles, and books is necessary, with distributing a thousand copies of a book per year being a recommended strategy to scale the business.
- Diversification of product range falls under four categories: gifts, product for prospects, core offerings, and product for clients.
- The key person of influence should drive the expansion of the product ecosystem with strategic giveaways and services.
The Eiffel Tower metaphor (01:30:05)
- Establishing expertise in a niche market like web design for doctors or dentists can be accomplished through active participation in events, podcasts, and conferences.
- Specific strategies, such as writing a niche-focused book and giving it away, can help differentiate oneself from competitors.
- Offering a range of services from initial design packages to ongoing maintenance can create a blend of one-time and recurring revenue.
- Growing revenue can involve targeting different markets and expanding offerings, similar to the strategies of major brands like Nike.
- Personal brands should be like the Eiffel Tower, creating a surrounding ecosystem of products and services, attracting and monetizing through various channels.
- Not all businesses have a key person of influence, which is part of the reason for their limited growth.
Find someone to run your business (01:35:35)
- Selecting the right individual to run a business can leverage a key person of influence's brand popularity, allowing for expansion and the creation of multiple profitable entities.
- Influencers with substantial followings can diversify into various businesses and still achieve success due to the strength of their personal brand.
- Even small businesses can benefit from having a key person of influence, demonstrated by examples like a popular YouTuber linked to the coffee industry.
- An underlying theme is that a strong personal brand can facilitate business growth and the potential creation of a business empire.
What does running a business involve? (01:37:23)
- Key individuals should network with the market and establish themselves as authorities, without being the primary product salesperson.
- Influential figures should be visionary, handing off actual opportunities to their teams for execution.
- A business can often be run effectively by someone with skills similar to managing a pub or retail store, not necessarily a high-level COO.
- From $10k to $100k a month, business owners should start delegating management roles.
- Running a business involves overseeing basic operations such as weekly planning meetings, addressing customer complaints, handling payments and collections, and hiring.
Owning multiple businesses (01:41:51)
- For optimal performance, it’s crucial for the business owner to be outward-facing, maintaining relationships with the market.
- A thriving business allows the owner to focus on high-value activities such as partnerships, product creation, and personal branding (like speaking at conferences, writing books, or hosting podcasts).
- Regular team interactions can be minimal—some successful business owners may only check in quarterly while monitoring key business metrics.
- Trusting a competent team to run daily operations is vital, and this can be even easier with multiple businesses as it prevents micromanagement and allows focus on big-picture tasks.
- Owning several businesses can be less stressful than one, as diversification can lead to a balanced and objective approach to management.
Growing to 100k and above (01:45:45)
- Successful businesses like Google and Amazon comprise multiple internal businesses.
- Ownership of several businesses resembles property management; primarily monitoring performance without intensive daily involvement.
- Problems in single ventures are often addressed with the owner's direct effort, but with multiple businesses, delegation and separate resolution become necessary.
- Maintaining reputation and success is a primary concern for multi-business owners.
- The role of a business owner often evolves into being a coach and brand ambassador.
- Leveraging a personal brand can facilitate partnerships and equity stakes in multiple businesses.
- Business growth creates natural breakpoints; a team up to 12 functions as a single unit.
- With the 13th team member, distinct sub-teams form, which can disrupt cohesion.
- Sustainable growth beyond 12 people necessitates developing an executive team and specialized departments around the 40-person mark.
- To support an executive infrastructure, a business must have substantial assets, technologies, and intellectual properties.
- The "crossing the desert" phase occurs when a business is too big to be small, but too small to be big, creating management challenges.
- Entrepreneurs must decide to stay lean and manageable or to scale up significantly.
- Critical assets for modern business productivity are digital: intellectual property, media, software, and data.
- These assets facilitate service scalability with less dependency on incremental human capacity.
Getting from 100k to 1 million a month (01:59:40)
- For scalability, a model where customers pay $5K for an accelerator package and get matched with a vetted coach using software and credits is proposed.
- The model includes using IP, media, and technology for scaling, while maintaining a small core team.
- Partnerships with coaches who have over 10,000 subscribers and are trained in a specific methodology are considered.
- The importance of IP, media, and technology over relying solely on scaling with people is emphasized, as people eventually recognize their worth, making arbitrage difficult.
- For most businesses, scaling to $1 million a month typically requires an expansion to 40-50 employees with various teams and functions.
- However, businesses with millions of followers might be outliers and could reach high revenue thresholds with smaller teams.
- The use of software, AI, and entry into new markets can significantly aid scalability without proportional cost increases.
- Industries such as finance and technology scale well, with an example given of private equity firms with relatively small teams managing large assets.
- A proposed partnership and equity model involves leveraging influence for partnership opportunities, picking ventures carefully, and maintaining audience trust.
- Diversifying into ventures with a portfolio approach where one academy product pays the bills while scalability is pursued through partnerships with other companies.
- An influence-for-equity model where partnering with companies increases their value, and in turn, produces significant returns upon exit is suggested.
- Navigating from producing content to investing and buying and selling companies could be the next step for growth.
Entrepreneurship is a game worth playing (02:15:34)
- Entrepreneurship is viewed as a challenging yet rewarding game, akin to playing a sport at a professional level.
- Being a key person of influence is crucial in business, generating opportunities for others to follow up.
- Real businesses involve generating media, intellectual property, technology, and managing accounts, not just simple coding from home.
- The entrepreneurship journey has upsides such as potential large payoffs from business exits and the downsides like stress and complexity.
- Entrepreneurs are driven by a sense of game-playing and personal identity, and not merely the pursuit of money.
- The score in entrepreneurship, such as financial gain, acts as validation for creating value.
- Dealing with cancellations and client feedback is part of the entrepreneurial challenge and commitment to improvement.
- Life involves trade-offs, and personal decisions such as marriage and starting a family can impact the entrepreneurial spirit of freedom and autonomy.