Ep 22: Understanding the Seasons of Business Models and Personal Brands with Michael Hyatt
ANNOUNCER: Welcome to the Influential Personal Brand Podcast. This is the place where you’ll learn cutting edge personal brand strategies from today’s most recognizable influencers. We’re going to teach you how to build a rock-solid reputation and then how to turn that reputation into revenue.
[0:00:27.2] RV: I’m your lead host Rory Vaden. Co-founder of Brand Builders Group, Hall of Fame speaker and New York Times bestselling author of Take the Stairs.
There are certain people in my life that I just feel honored to be associated with, just lucky to know. Michael Hyatt is certainly one of those people. I happened to speak at an event on a cruise ship and he was trapped there with me for six days and he couldn’t get away and I managed to get to know him and build a little relationship several years ago and I certainly consider him a mentor. If you haven’t heard of him, I don’t really know how you could be in the personal branding space and not know who he is.
But he is the former CEO of Thomas Nelson. He is the New York Times, Wall Street Journal, USA Today bestselling author of several books, one of which was Platform which made a huge personal impact in me and my direction. He’s written several others, Living Forward, Your Best Year Ever, Free to Focus, most recently.
He is both a tremendous personal brand, but also a real leader. He scaled a company, a 250-million-dollar publishing company with 700 employees, that’s Thomas Nelson. The Michael Hyatt team, like their company, now is on the Inc. 5,000 list. He’s a real leader, real CEO, real businessman, also real family man, he’s been married for over 40 years to Gale who – she’s awesome so it’s understandable.
He’s got five amazing daughters, nine grandchildren and he volunteered to come help me out as a personal favor. It’s not easy to get his time these days, he’s so busy so Michael, thank you for the honor of being here, my friend.
[0:02:09.6] MH: Absolutely Rory, thank you for those kind words, amazing.
[0:02:13.2] RV: You know, if you say publishing, it’s hard to create a list of people that would be more experienced in all different angles than you and I think so many of the people watching, I mean, I think almost every one of our clients like a book enters into the conversation at some point and so my first question for you, I figured was an easy one. Can you just tell us the secret of writing a bestselling book?
[0:02:40.6] MH: Well, take about 80% luck, and you know, have the right idea at the right time. No, seriously, I think part of it can certainly enhance your chances of writing a bestselling book but I think the most important thing on writing a bestselling book or creating a platform or a brand that has significance in the world is having something important and helpful to say.
I think you know, Zig Ziglar said, you know, if you help enough people, then you can get what you want and I think it’s the same thing with writing a book. Just write the most helpful, useful book you can. Be authentic, be transparent, be encouraging and that’s basically all I’ve tried to do and I’ve tried to find a topic that was hot and something that I could with integrity speak out of my experience but that’s pretty much what I’ve done.
[0:03:28.0] RV: Talk to me a little bit about the – you have the platform, like that’s – a part of the factor here is you have like the integrity of the idea but then you have the size of the author’s platform. Which one matters more? Do they matter the same? Can you do it with – do you have to have both, one not the other? What’s the balance there between platform and you know, premise.
[0:03:50.5] MH: Yeah, the way I say it is that content is king but platform is queen. It really takes both of those together, you know, if you want to create a kingdom and rule well. The reason I wrote the book Platform initially was because for years, in the publishing business, I had bene on the publishing side of turning away authors with great ideas, sometimes even fully written manuscripts that were fantastic but because they didn’t have a platform, there was very little for us as a publishing company to leverage.
But, when an author came to us with a great idea, great content, and they had some platform, didn’t have to be best but they had to at least proof of concept that there was an audience that was buying into their content and their framework and to whatever it is that they were selling, that was something we could leverage and kind of take to the next level. I think they’re equally important
[0:04:43.2] RV: Do you think that traditional publishing like, you know, that’s kind of the question today is years ago, was like traditional publishing was the way to go and then self-publishing and now I feel like it kind of teeters kind of back and forth.
A lot of our clients ask this question. How do I know if I should use a traditional publisher, you know? Do I really need one? Should I self-publish? Like what’s your take on that in the current day era?
[0:05:05.3] MH: Well, my opinion has vacillated over the years. In the initial – I mean, I was in the publishing business for 35 years. Initially, there was only traditional publishing, then there was self-publishing or we, you know, call it in those days, vanity publishing, which is kind of pejorative but that’s how we looked at it and it wasn’t very well respected because the books looked terrible. They usually weren’t well written or well edited and you could just tell it’s a self-published book. All that changed, started changing about 10 years ago and so self-publishing got more sophisticated, there were these hybrid publishers that would help you do some of it.
Now you’ve got all kinds of options out there but I’ve kind of come full circle. Here’s my theory right now. If you want to write a book, just the credential yourself and there’s no better way to credential yourself or to get authority in a space than to write a book. I personally think, it’s more important than a PHD, it’s more important than tons of experience. If you have a published book, that, in this culture, that kind of says you’ve arrived and you’re an expert in your category. If that’s all you’re trying to do then I think self-publishing is fine.
It becomes kind of a glorified, very nice business card that could pave the way as you go out and try to do other things whether it’s booking speaking or writing additional books or whatever.
If on the other hand you want to take a run at the bestseller list, and if publishing books is not your primary thing, like let’s just say that you’re primarily a speaker or you’re a consultant or you got some other gig that’s the main thing, your main revenue model, then I would absolutely use a traditional publisher because self-publishing is a ton, and I mean a ton, of work.
Now, Michael Hyatt and Company today, we do one traditional publishing published book every year, so I write one book every year but then we also do a couple of self-published books just for our tribe. I can tell you from looking on the inside in, having to do it on myself, it’s a ton of work.
If I didn’t have the platform I do that I could sell to, man, it would be – I don’t know that it would be worth it.
[0:07:14.6] RV: That’s super insightful. On the business model question, that’s a good one, that’s another thing I wanted to ask you about is, of all my friends and colleagues, I think you’ve tried more business models than anyone. I think, you know, you’ve done live events, you’ve done speaking, you’ve done consulting, you’ve done coaching, you’ve had memberships, you’ve done video courses, you’ve done affiliate launches like you’ve done online summits like this.
Is there a favorite business model that you have or you know, I think a lot of people kind of, it’s like, “Oh masterminds is the thing,” or, “No, a membership is the thing.” Or, “Really, it should be video courses are where it’s at.” Can you just give us just maybe some of the highs and lows of each of those and maybe like the ones you like or maybe what were some of the most surprising things you learned from the various different business models that you’ve tried?
[0:08:06.5] MH: Well, you know, I never really thought of myself as having tried so many but you’re right. Frankly, a lot of them haven’t worked. So I’ve done stuff that’s worked and stuff that hasn’t worked but one of the things I’ve always tried to cultivate is sort of an experimental mindset. Whenever I approach anything, a business launch or whatever. I approach it as an experiment, you know, “Hey, let’s just try it and see if it works.”
One of my colossal failures is that after we launched Best Year Ever, Five Days to Your Best Year Ever, that was a huge success, we had like 35,000 people go through that course over five years and it was a big revenue engine for our company.
We said, “Hey, let’s create Best Year Ever for leaders.” Because we thought, leaders are going to eat this up. I literally recorded all the videos and they were killer, you know? I was even impressed with them. These were amazing. We built a beautiful sales page and so we got all the emails written, everything. We launched it and it was crickets, we literally on the first 24 hours after the launch, we had one order. I was pulling my hair out.
I said to my team, “What’s wrong with the tech? This has got to be a technological failure. There’s no way that we could just get one order. We could have come up with that if we had a strategy.” Sure enough, that was it, nobody wanted the course.
So we try stuff and the stuff that that works you hear about, the stuff that doesn’t work, you know, we don’t typically publicize that. You don’t hear about that, but I would say that one business model that I’ve had that I’ve believed in for a long time is multiple streams of income.
You know, whatever horse you’re on right now, eventually probably is going to – you’re going to reach a saturation point or you’re going to – you’re going to get all the low hanging fruit and then it’s going to get more expensive and more difficult and so we’ve just tried to be in a lot of different things, kind of all in the same vertical space now and the goal setting and productivity space. But part of the reason, I’m kid of rambling here, so stop me.
But one of the things we’ve realized is that kind of when the market’s zigging, we want to zag. We got into online courses I think pretty early, we certainly weren’t the first but we were among the first people that got in to online courses and that was huge. It was ginormous margins. Then all of a sudden, people started doing courses on courses. How to create courses and then everybody and their brother created online courses and the market was very dense, very saturated.
We said, “We think that people are desperate for live experiences that even though they’ve got all this virtual capability, people want to be face to face and have real human encounters.” So we started our live events and that went crazy. Then we created our paper planners, the Full Focus Planner. That thing is –
[0:10:59.1] RV: I forgot about that one, I didn’t mention. There was that one and then also, you had the book, like the box, you were shipping boxes for a while.
[0:11:06.2] MH: Yeah. The planner business is actually our biggest business, that’s like, you know, almost an eight figure business now, all by itself. And the cool thing about that is it doesn’t really depend so much on my brand so it’s kind of got some autonomy and independence but again, you know, everybody was saying – in fact, people still say to me on Facebook, they say “Hey, we’ve got digital cast management, we got digital counters, why do we need a paper planner?”
As it turns out, people are very distracted in the digital environment, the thing that paper planner does is give them focus. Again,just kind of multiple streams of income and how can we best serve our audience? What does our audience need and how can we best serve them?
[0:11:48.2] RV: Year, I love that experimental approach and you certainly have to be like willing to lose some money here and there in the spirit of learning it out, lose some hours.
[0:12:00.5] MH: I’ll tell you the other thing too, you have to be willing to kill stuff when it needs to die. I mean, in my view, everything has a season but I’ll tell you a funny story. We had all these brands, you know, Best Year Ever, Free to Focus, Full Focus Planner, Leaderbox, all this stuff. Last December, we’re all sitting in a strategic planning and we brought in outside consultant.
He asked us this question that ultimately rocked our world. He said, could you explain to me the customer journey? Where do people start with you and then what’s the first step? Where do they go from there and how they go all the way through your product suite?
We kind of all looked at each other and we said, “We don’t know. We don’t have a clue. Here’s some ways you can get into it but we don’t really know.” We went through an unbelievable 24 hour periods where we killed or sunsetted Best Year Ever and Free to Focus and said, “They’re too confusing,” and so we mapped out a customer journey but we had to be willing to – it’s kind of like cleaning your closet. If you want new clothes, sometimes the first thing you have to do is get rid of the old clothes.
We had to clear out the old to make room for the new and that I think as a business owner, a lot of times it takes courage because those were – represented multimillion dollar businesses but we also realized that we couldn’t go to the next level unless we’re willing to kind of retire those and make room for the new things.
[0:13:24.2] RV: Yeah, it’s like killing the sacred cows kind of a thing. That’s not easy, especially like you have so much invested into those to just kind of go, “Okay, we’re done with that, we’re going to move on.” Like, not an easy decision I can imagine.
[0:13:39.0] MH: It’s not and it’s – I think one of the values of having a team is you know having other smart people in the room and people with wisdom that can kind of check and keep me from doing frankly as a business owner, something impulsive, but we can kind of check one another and ask if that’s the course in that kind of scenario play it and make sure it’s going to work.
[0:14:00.7] RV: All right, I apologize for bouncing around on all these different topics, although I’m not really sorry –
[0:14:06.8] MH: Sorry, not sorry.
[0:14:08.3] RV: One of the other things I wanted to ask you about is paid traffic versus organic traffic. You have built a huge platform and your community is so loyal. How much – should it be all organic? Is a real audience won that is built organic, you know? Is it paid, just like, “Hey, you got to pay the money to get in front of eye balls.” What’s the balance of paid versus organic?
[0:14:33.5] MH: If you had asked me about when Platform came out in 2012, if you’d asked me that question then, I would say, “I never pay for traffic.” Everything I had up until that point was organic. I built it from 2004 when I started to blog and I had about 100,000 unique visitors at that time on my blog and I thought, “You know, that’s enough,” you know?
It had a mailing list of about the same size of about 100,000, I thought that’s enough. Frankly, it would have been but in today’s environment, particularly when social media is really restricting the access that you get to for free, I don’t think it could be done without paid. Having said that, I think you got to have a very clear model of what you’re buying when you’re paying for traffic because I ultimately want to get them to the same place that I’m going to get organic traffic to and that is that I want it to be self-perpetuating, ongoing traffic that I can retain because they get exposed to the content and then they’re locked in because they enjoyed the content and feel like it’s helpful.
So, you know, I was telling you before we came on that last year, we spent about a million two on Facebook ads and believe me, we watched the return on investment like that, I wouldn’t be spending that kind of money if I wasn’t getting a huge return on that investment but it’s totally worth it. You just got to be smart about it.
[0:16:02.0] RV: Yeah, I feel like more and more, it’s like – it’s not necessarily the person with the best content that wins, but it’s the one with the most sophisticated systems of knowing what dollars they’re spending, what audiences they’re going after, what’s the lifetime, what are the conversions, the lifetime value of that customer. It’s interesting, one of my favorite interview questions I used to ask people was what is something you’ve changed your mind on recently and it seems like both this and the traditional self-publishing, it seems like you kind of have teetered a little bit so that’s interesting to see that perspective.
[0:16:36.1] MH: Yeah, I really believe in paid advertising now and just you know, to quickly kind of outline our strategy, I’m happy to share it. Typically, we run ads for free opt ins. You know, it’s usually an assessment or an ebook or a summit like this. Assessments have been very good for us because people seem to have unbelievable curiosity to find out more about themselves. It’s their favorite topic, right? We offer a lot of assessments and in those assessments, we typically try to convert them after the assessment to a webinar and a webinar is where I can begin to have a relationship with somebody but they get to kind of sample the brew. So for an hour on my webinars, I typically give them a good solid content and then I pivot. And it depends on the product. We are either pivoting trying to close to a discovery call like our high end coaching programs or actually trying to sell the product.
So we have done both of those very successfully. So that is how we think of paid advertising. We want to slowly escalate it where people get more involved with this after they tried that free thing and had a good experience.
[0:17:39.3] RV: Yeah and what would you consider, like on that kind of a thing, that kind of webinar, if it was a free call, what kind of percentages would somebody roughly estimate to go – if I am doing a good – if I have a great webinar and a good clear process for inviting a free call like 10%, 5%, 20%?
[0:17:59.9] MH: Yeah, I would say for us it usually runs – 10% would be on the low side especially for a free call but up to 35 sometimes 50%, but we usually offer something that we call a discovery call but people are wise to that. You know people don’t want to just call to get sold. So there has to be the promise of something else. So typically for us, I could tell you on our high end program business accelerator, which is like a coaching program, we do a discovery call there. But we invite them to take an assessment there.
We don’t usually use an assessment to get those people into the webinar but we use something called the Business Health Assessment. So we invite them to take the Business Health Assessment, get on the discovery call, and we will identify for them the three top priorities that as a business they need to focus on if they want to scale as rapidly as possible.
[0:18:48.4] RV: Got you, okay and then, you know if you are doing like a course, a thousand, two thousand dollars is more like if you can get five or 10% out of it then that’s pretty fine.
[0:18:56.4] MH: Yeah, totally.
[0:18:56.9] RV: Yeah, so on that note, again, this is like a bunch of pepper questions, automated webinars versus live webinars, is there a dramatic difference always to sometimes one you’d prefer more than the other?
[0:19:11.7] MH: I have done them both. I have to say that live webinars for us are always more effective and you know the biggest challenge today because there has been a proliferation of webinars too is to get for people to show up because the replays don’t convert like the live thing does even if it is on automated webinar. When they show up, they are much more likely to buy than if they’re just going to watch the replay. They have good intentions I mean I do it all the time myself.
You know to get somebody’s information, I sign up and then I get busy and I never go watch them. Yeah, I say you have to do both but I feel strongly about what am I about to say. I think you’ve got to be honest. I don’t think you have to trumpet the fact that it is an automated webinar, that it is not live, but I think you’ve got to be very careful with your language so that you don’t misrepresent it as live
And I remember several years ago, I stumbled upon some webinar software. I can mention the name but I won’t but that basically simulates a live webinar including feeding fake questions into the chat and to me that just lacks integrity and even if people don’t quite know what is going on they know something is off.
[0:20:23.5] RV: Yeah, I appreciate you saying that I agree a 100%. Do you think that a live webinar is going to covert twice as good as a recorded version of it or is it even less than that?
[0:20:35.3] MH: You know I don’t track that data in my role like I used to but all I can say is that I know it records – that it does better but here is the thing, there is no reason why you can’t do both. So do the live webinar and record it. Again, be careful with your language so that you are not implying that it is live. So when it is in the automated format, you don’t want to give the wrong impression but yeah, I mean that is what we do.
And a lot of times what we’ll do is that when we begin – like any kind of launch that we do, we’ll do live webinars for a week and I will typically do five, one day after another and – but we will also, and this is a good dress rehearsal for me, we’ll do the recorded one first and the great thing about that is putting in the recorded one in the can and having it almost perfect is then if there is a technical glitch in one of the live webinars, we’ve got that one that we can just shove in and run in its place and that’s happened to us before.
[0:21:31.9] RV: Oh wow that is interesting. Usually I only hear about the opposite like run it live several times and then take that but that is cool plus you get to have the practice run through with that like all of the live jitters and stuff. Okay, next one: email frequency. Too much versus too little. How much is too much and how little is too little? Is like the people that want to hear from you are going to stay tuned and you send them as much as you can? Do you have a thought on that? Has it changed over the years? I am very, very curious.
[0:22:08.0] MH: Let me just say I have overdone it. You know I have mailed way too much and of course, all the experts and I am not one, but all the experts would tell you that you can’t mail too much and the more you mail, the more people will buy, but I think at some point if you are not adding value I just think you got to listen to your audience and you’re going to get complacent. I mean if you mail it once a week there are going to be some people in your audience are going to think it’s too much, right?
[0:22:36.0] RV: That is a really good perspective. It doesn’t matter how much or how little you send like you are going to get complaints.
[0:22:42.0] MH: That is right but there is a point in which you reach critical mass where you are getting complaints from longtime customers and they saying, “Look, I love your stuff. I bought everything but you are killing me, you know, dial it back.” So I just subscribed to an email list about two weeks ago. The guy was literally mailing twice a day. Twice and sometimes three times a day and I just said, “Look, I love you but I don’t even see my kids three times a day” you know? So I don’t want to hear from you –
[0:23:10.8] RV: I’m sorry about all of those emails Michael. I didn’t realize there were three coming to you every day.
[0:23:18.1] MH: I just think if there is one guy that I never get tired of hearing from and maybe it is just me but it is Jeff Walker. Now Jeff mails a lot but he is so good with his copy that I almost always read them and I have never been tempted to unsubscribe but he is like the one exemption that probably proves the rule. You know unless you are super ninja copywriter, just be very careful
And I think one of the things that we’ve moved to in our business now is that we are sending out an email that has content that only appears in the newsletter but it is content driven not marketing driven and we feel like if we are adding value and I talk about this actually in my book Platform, I call it the 20 to one rule, which is pretty funny in retrospect because what I said is you got to make 20 deposits before you could make a withdrawal. Well today, I would probably say it is more like three to one. If you could make three deposits before you make an ask that is probably a good ratio but the point is you got to make more deposits than withdrawals otherwise, you over draw the account, does that make sense?
[0:24:21.8] RV: Yeah that is like the jab-jab-jab right hook, right? I guess that is like three to one but really it sounds like the rule is just listen to your audience and just respect the audience, listen, take their feedback. I mean that is another good one. That wasn’t on my list here to ask you but just like writing your own copy versus having someone else write your copy. When do you make that transition? How do you do that?
[0:24:48.6] MH: I think as a business owner or as a brand builder, you got to ask yourself what is the best and highest use of you? And so at the very beginning I did everything. You know, I wrote the sales pages, I edited the podcast, I posted it. I created all the content for the courses, everything, but at some point, I say, “Okay, what is the best and highest use of me?”
And in Free to Focus I talk about this being your desires on activities and the things that you are passionate about, things that you are particularly good at. So I don’t write any email copy. In fact this might be shocking but I don’t even review it today. What we have done is we trained a small group of writers to write in my voice, to kind of deconstruct how I speak. We literally have a written style guide on this, how I speak, things that I typically say, things I would never say, just the elements and style with regard to my voice and so yeah, where I spend my time these days is I am writing, every morning creating new content.
That is best and highest use of me. So at least for an hour a day I am writing 500 to 750 words a day and that becomes the pantry from which my team draws for all kinds of stuff, whether it be products or books or whatever.
[0:26:05.0] RV: How much do you read?
[0:26:07.0] MH: Less than I used to but still a fair amount. I read probably two or three books a month. The reason that I read less than I used to is because I listen to so many podcasts today and I find that unfortunately, this is the dirty little secret of publishing is that so many books should have been an essay and in order to give it enough bulk to be able to sell at retail they fill it up with a lot of filler.
And so the thing that I like about podcasts, not all podcasts, like some of the most popular podcast make me crazy because they take forever to get to the point. They just talk and talk and talk and they ramble and there is no takeaway but having said that, I generally can get out of a podcast content that really rocks my world much faster than I can most books. There is definitely some exemptions to that.
[0:27:00.2] RV: Okay, I know we are running up on our time here. I got one more question but before I do that, where should people go if they are not yet following you? If they want to follow you, htey want to catch up with Michael Hyatt and see how you’re doing, what you are doing in like the new era of the Michael Hyatt personal brand?
[0:27:18.6] MH: Yeah, well you can find everything at michaelhyatt.com. If you scroll all the way to the bottom of the page, you will find all of our other brands. So there is everything from our store there to the Full Focus Planner to the Business Accelerator Program, Leader Books which is our monthly book club for leaders. All of this stuff has links there and I would encourage people to listen to the podcast. That is still the thing that I think is the best effort that we make.
And in terms of branding and in terms of reach, I just think there is no return like what you get on the podcast and our podcast I do with my oldest daughter, Megan Hyatt-Miller who is our COO of our company and it is called Lead to Win. That is on iTunes or wherever you listen to podcasts but you can find the links on michaelhyatt.com.
[0:28:00.4] RV: Okay, so last one for you Michael. As you said, this is maybe going back to some of your earlier days certainly as a publisher, you had to turn down a lot of authors, you turned down a lot of dreamers. In recent years, it’s been more like you have been coaching them. And you have seen people trying to struggle and trying to battle the fight and then you comment to where today, it is like there is so much noise. There is a lot of competition in webinars and podcast and books and everything.
I think that there is a part of this these days that is just dealing with heartbreak and just dealing with some of that setback. What would be your advice is there is somebody out there that is just feeling like, “Oh my gosh, you know I can’t get a publisher. I can’t get an agent. No one is listening to my podcast. No one is reading my articles. No one is opening my emails.” What would you say to that person?
[0:28:50.5] MH: Congratulations, you’re normal. You know, I really think and I think this is important for people to hear. I think that’s in a way, God’s way of testing us to see if we are really committed to this thing that we said we are committed to. So my first book was rejected by 29 publishers before the 30th one said yes. I was ready to throw in the towel by my agent wouldn’t let me. My book Living Forward, which is about four books back was rejected by about the same number of publishers.
I already had a New York Times bestseller. I already had a huge platform and that book, nobody believed in it. Everybody rejected it. And now it’s gone on to sell about almost 200,000 copies. But nobody wanted to touch it for reasons I still don’t understand. I get that that gets discouraging and I almost gave up there too. I thought, “Geez, maybe there is a better use of my time, maybe God, the universe, whatever is trying to say something to me this isn’t the right timing or its the wrong message.”
And I think it is one of the most important books I have ever written, I am glad I persevered it. In fact, if it hadn’t been for Gail cheering me on I think I would have given up but I think that’s normal. And I think – I have bad days every week where I want to quit, you know? And for some reason, I just keep chugging along and trying to believe the best of what is happening but it is just normal. Rejection, the world doesn’t owe me a living and the marketplace doesn’t owe me anything.
And so it is up to me to create enough value that people can see it and want to participate in it. So I think the best advice I’ve ever gotten, the thing that I try to practice when I get discouraged is forget about the platform, forget about trying to write a bestseller, forget about trying to be famous. How can I help my clients? What are their needs? How can I encourage them? How can I be useful to them? And if you do that consistently enough I really think it would come back.
[0:30:50.8] RV: Amen. There you have words of wisdom from one of the most experienced people in several different aspects and components of the space. Michael, thank you so much for making time for all of us and for putting out as much amazing content as you do. I mean, your team is amazing, your family. We love you, we believe in you and we are honored to know you.
[0:31:13.4] MH: Thanks Rory, I appreciate you and AJ too.
[END OF INTERVIEW]
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Ep 21: How To Produce A Winning Infomercial with Kevin Harrington | Recap Episode
On today’s recap episode, we break down the core lessons and extract the golden nuggets from our interview with the original “shark,” Kevin Harrington. Kevin is a true American legend in the world of business, investing, marketing and sales. He is the original “shark” on the hit TV show Shark Tank, the creator of the […]
Ep 20: How To Produce A Winning Infomercial with Kevin Harrington
Speaker 1: (00:01)
I am so excited to introduce you to this is one of those people where it’s like if you ever sat next to him on the airplane, you would have hit the Jackpot and the lottery and you, you might not realize you were sitting next to. But Kevin Harrington is a man that people literally try to strategize how they can get close to, um, he has become a celebrity in the world of entrepreneurs and inventors. You probably recognize him. He was one of the original sharks, the original shark, the first shark. Uh, I believe that was selected to shark tank, which has now been super successful. He is also one of the founders of, of infomercials and as seen on TV, like he’s one of the pioneers of that whole movement. He actually is the cofounder of entrepreneurs organization, which my wife and I are members of.
Speaker 1: (00:50)
I’ve spoken at several of their events, um, around the, uh, around the globe, around the country in my case. But it’s an international organization. And, uh, he has seen over 50,000 pitches, um, launched more than 500 products, generating $5 billion in sales. Um, he also is the creator of the secrets of closing the sale masterclass, which is inspired by Zig Ziglar. So He, uh, Zig Ziglar wrote a book, secrets of closing the sale. It’s just been rereleased with him and Kevin Harrington. Um, obviously zig has been passed away for seven, eight years now, but a was a mentor to me personally and also, um, to Kevin. So Kevin, thanks for being here. Uh, thanks for making time, Rory. Thank you. Great. Great to be here and thanks. It was a very nice introduction. I appreciate that. Thank you. What man? Like, you know, it’s one thing to talk about personal branding and brand builders group.
Speaker 1: (01:46)
That’s what we do, right? We help people build and monetize their personal brand. But really what we study is reputation and reputation as is. How do you build a reputation, how do you become trusted? And of all the people that I know that know the most people, I think you’re near the top, like of, of every like super influential person that I know you already know them and I know that your Rolodex goes far, far beyond that. So, and yet, you know, you’ve been in the world of sales and marketing for years and years and years and sometimes reputations go south in those industries. Uh, when you’re an investor and an entrepreneur, you know, those, sometimes those deals go south. There’s a lot of conflict and there’s fallout and you know, when you get to be your level of celebrity and notoriety, I know that, you know, people sue you for no reason and you know, so what is your philosophy on reputation in general? Like if we just start there, like you have been able to keep such a solid reputation over the years, how do you think you’ve been able to do that? I appreciate that. I think, and I’m going to go all the way back to the beginning because
Speaker 2: (02:59)
I think you need a foundation of, um, of, first of all, I think my foundation that I built my business on is, is respect for entrepreneurs, number one. And so, um, when you watch shark tank, there’s Mr. Wonderful. Uh, and, and I, and I always ask people, do you know why he calls himself Mr Wonderful? Because nobody else will. Okay. He calls himself that because nobody else feels that he may be. Mr. Wonderful. And actually I joke this, this is all kind of joking about O’Leary, Kevin O’Leary, but we used to on the show, we’d say he was the bad Kevin. I’m the good Kevin now. Like why, you know, I’ll take that they, you know, I wasn’t the one that came up with that the rest of the sharks were and, and it’s because when somebody would come out and make a pit, I wasn’t there to tear them down and rip them apart and tell them how stupid their idea was.
Speaker 2: (04:02)
I wanted to empower them even if I wasn’t going to invest. Because entrepreneurs are in a delicate situation. They, they’re fighting against coming home to their family, to their wives, to friends and talking about how they’re giving up their job. They’re investing their life savings into their idea. This is not an easy task. This is, this is a tough situation and you know, to, to have a full time job but be spending money on patents and on this and on that and going on shark tank to try to get, you know, an investment from a shark. This is what it’s all about. And I think today there’s more places to go to get funding. You can do crowd funding and yeah, you can go on shark tank, but that’s very difficult to get on. But I think going back to day one, when I got started, I was knocking on doors when I was 15 years old driving a bicycle cause I didn’t even have a drivers license getting the door slammed in my face.
Speaker 2: (05:01)
And, and so I learned the hard way. I learned my father was a bartender, saved up enough money to open up his first bar, Harrington’s Irish pub. And I started working in his bars and restaurants when I was 11 years old, 40 hours a week. So I, I, you know, worked hard, had to prove myself, had to pay my own way through high school, through college. So I looked at entrepreneurs as people like myself. I was in the trenches building and hustling to become successful. So when they come to me now asking for help and advice, I put myself on their level saying, what would I have to do if I were in their shoes pitching me now the investor that is risen above the, the, the ashes sometimes because that’s, you know, in the 500 products plus that I’ve done more than 300 of them bombed and they lost all my money. So, uh, you know, it’s, it’s not so easy every day. And I, and I say Winston Churchill had, it’s a great Chang success is being able to go from failure to failure without the loss of enthusiasm. Okay. So, uh, you know, it took me awhile to figure out, hey, I just failed. I’ve got to learn from that and, and, and go to the next step. But that’s what I do.
Speaker 1: (06:28)
I’ve gotten to know you. Uh, you know, we spent a bit of time together here the last couple of years, which has been awesome. And I think when I look at you as an investor, as a shark, I remember thinking after the first time I spent, you know, like a full day with you, it occurred to me, yet you’re not a, you’re not a shark at all. I remember you saying that you, you don’t even try to negotiate for a good deal. You negotiate for a deal that’s good for you and for your other partner because your, I remember you saying that, you know, your philosophy was not, where can I get the best deal? It’s one where everybody has a fair deal and everyone is motivated, um, you know, to, to, to win. And that spoke a lot to me. It was a very profound thing where I was like, wow, what, what a different way to approach negotiating. And I think, you know, in terms of your reputation and you know, over time, I think that’s what people are probably drawn to because they know that you’re, you’re fair. You, you’re, you’re fair.
Speaker 2: (07:29)
And I think I appreciate that. I think, um, when I go back to the early days, I met a gentleman named Arnold Morris. At the Philadelphia home show and he was slicing through Coca-Cola cans with the Ginsu knife and mufflers and things. And I cut a deal with him and put him on TV. Now Arnold said to me, Kevin, um, and he had his signed contract for the good shoe and the, and the knife sales, but he said, I’ve got other people that this is amazing what we’re doing. If I bring you other deals, can I get compensated? I said, absolutely. We put an addendum to the contract. He brought Billy Mays and he brought Sandy Mason and Wally Nash of some of those you may recognize and some you might not, but we did hundreds of millions and billions in sales that came from these projects that Arnold Morris brought. But he got compensated on all of it.
Speaker 2: (08:23)
And so on his, literally his deathbed, the week that he was passing away, he kind of knew it was coming close and he reached out and his wife said, Arnold needs to talk to you. And I said, oh my God. And she says, Yap, he’s getting very close. She’s, he had a stroke and this and that. And she’s, and I said, well, what does he want to talk to me about? And I’m absolutely, I’d love to talk to him. She said, he’s got a deal. He wants to pitch you. Okay. I’m like, you know, here is, I mean this amazing because he had to get this last feel out of his system before he could pass. I mean it was unbelievable that the, the way it went down, but you know, Arnold was an amazing man, did great things for many people, but these insults, so people say to me, you know, how do you keep getting all these new products?
Speaker 2: (09:18)
I said, I’m getting these products from people I’ve been dealing with for 30 35 years in 2025 years, 10 and 15 years. And people I dealt with two months ago. So it’s, it’s the roll of decks factor. As you mentioned, Rory, this is what creates a lot of magic for all of us. As you know, I call it the Golden Rolodex. And this is part of becoming, you know, it as you’re branding yourself and you know, get back to the concept of personal branding and things. Creating a golden Rolodex is, is, is an important step in that process.
Speaker 1: (09:52)
Yeah. Well, and, and so one of the other things I wanted to ask you about just, you know, as I think about what can I ask Kevin that I can’t ask anyone else is you’ve sold more on TV than anybody. I mean, I don’t know anyone. It would be only a few people in the world that you could even say has been involved with selling as much on TV. So I’m interested
Speaker 2: (10:14)
a couple that are up there in the same ranks, but I, I know, I never want to say I’m the top guy because there’s some pretty successful guys out there, but I’m right there in the top five for sure on a global basis.
Speaker 1: (10:28)
Moved a lot of product on TV. So one, I’m interested in understanding TV, like in terms of, you know, a lot of people that are building a personal brand. TV is like this holy grail of like, oh my gosh, if I could get on TV, it’s like Tony Robbins is on TV and Dean Grasiozi is on TV. You know, like you said, like Billy Mays and, and all of these like people who become these celebrity workout people, they, they do infomercials. So one is how does that business work? Like how does that happen? How does someone get their clothing line on QVC? Or how do they get their, you know, Dean Grasiozi has a book, right? He does an infomart. Like how would a person go about doing that if they said, you know what, I think I’ve got a program I could sell on TV. Like how do you do that?
Speaker 2: (11:17)
So, so let’s, let’s, I’ll step back a second. Cause it, it’s there, there’s a couple of different angles there. You said, how do you get on QVC? How do you get on TV like infomercial? So two different scenarios. But the bottom line is this TV has been very powerful for many, many years. For me. I started back in the early eighties when I was watching a just got cable TV and I’m watching discovery channel. It was actually channel 30 of the 30 channel package. And so I went to all the channels, ESPN and 24 hours sports and movies and HBO and MTV Music. I got to ESPN sports, I think I mentioned. Um, I got to discovery channel and there was nothing on the channel. There was actually just bars on the screen. So I called the cable company and they said, we as a cable company delivered to you what we get from discovery and they only deliver us an 18 hour a day block.
Speaker 2: (12:17)
Six hours a day is nothing cause they’re a startup channel. They can’t program 24 hours a day. So I went down how to deal bought that six hour block from discovery, not only locally, but I did an international deal. And so for a number of years I had exclusive rights to discovery channel a six hours a day. Okay. Now I was putting in my, I was putting Tony Little Jacqueline Lane, George Foreman, you know, all these different types of products, fitness juicers, you know, kitchen gadgets, whatever, right? And so we had an amazing success for many years putting people on TV. But the way it works is this, there’s all this sort of like downtime with all the TV networks and cable networks. There’s only a handful of places that won’t sell infomercial time, CNN, and, and I think, let’s see, CNN and ESPN, those are the two that you will never see a 30 minute infomercial on.
Speaker 2: (13:20)
But Discovery Channel lifetime, all the other channels of Bravo, we buy tons of time from all of them. So what you do is you buy a block, a 30 minutes slot, maybe you pay 5,000 for it, two thousand ten thousand whatever the number is. In the early days I watched it isn’t maybe 2000 to 10,000 is that a reasonable number for, that’s for cable broadcast. You can buy, for example, in Nashville, Tennessee, you could buy 30 minutes on broadcast television. On Saturday morning, we’ll probably gave $100, right? 30 minutes on Nash on, on, uh, that would hit all of Nashville. Okay. I’m in Tampa, Florida. I can buy time here for as little as $500 for 30 minutes slot. And, and you can even go to cable. The cable guys have some of their own local cable options for even less, maybe $200. So, so now you, by that time you produce the video that sells the product and now that when that airs, it’s, it’s got to generate more than the cost of the time in sales to make money, obviously.
Speaker 2: (14:36)
So you mentioned Dean Grasiozi, he goes, he goes into Tampa, Florida and says to his media buyers buy $20,000 worth of ads. And he’s expecting, now he’s selling his book, but he’s also driving people to a seminar. So his is a little bit different. Hey, buy my book, come to the seminar there. You know, his liquidation comes when people show up at the seminar and he sees how much, you know, sales he’s making from there. But that’s, that is his model is buy infomercial time, drive people to a seminar, upsell them into masterminds. But the fitness people that you see, like the Tony Little’s, when we’re selling the gazelle, for example, we spend 10,000 and media, we want to sell 20 to $30,000 worth of puzzles during that slot. That’s, that’s how it works. You look for at least a two time multiple of sales to the cost of the media. So if you spend 10 grand the media, you want to see 20 plus thousand in sales coming from that time. By
Speaker 1: (15:48)
amazing though, I am all over the country. Now. When you say the media, is that like buying the commercials to promote the show or that’s just buying like the 30 minutes?
Speaker 2: (15:57)
That’s just fine. The 30 minute block, you don’t need commercials to promote an infomercial. It’s a standalone sales piece. So yeah. So Saturday morning, let’s say we, we bought that $800 slot in Nashville on a broadcast station on Saturday morning. People are up there just going from channel to channel to channel on their cable box or the TV and they, oh, wait a minute, let me see what this guy, Dean Grasiozi Phil was talking about. Oh yeah. Well that’s pretty interesting. So they tune in, they get hooked, and this is why you need a good pitch or you need a good presentation in that infomercial because you’ve got to be able to hook them, grab them, and now they’re listening and now they’re going to take action. Hopefully. So you bought that time for $800 in Nashville. You’re hoping to get 1600 to $2,400 in credit card orders from that time. Bye.
Speaker 1: (16:53)
That is so amazing. I mean, it’s so interesting to me because it’s like this is the original webinar funnel. It’s just like buy traffic, drive people to a a one hour Webinar, do a presentation, deliver some value, make an offer, get it to buy. It also blows my mind where he’d go, why are infomercials always late at night? The reason infomercials are always late at night is because one night Kevin Harrington was sitting in his hotel looking at the discovery channel and found out that there were six hours in the middle of the night that nobody else bought and you went and bought it and that that became the homicide. That was the downtime. So can you talk about the, the, um, talk about the pitch a little bit for like, because you know what, there’s, there’s a difference between like selling to a person. You know, in our former life that was something that we used to do.
Speaker 1: (17:44)
We used to teach people to, you know, our, the, our former company used to do like one-on-one sales coaching. That’s very different than selling on a Webinar or selling from a stage or selling on an infomercial where you’re selling one to many. Um, so what do you think are some of the key principles there? Because the other thing, particularly with TV is I have to think like people are flipping their coming and going, so they may not be sitting watching the 30 minute block. They may only be there for like two or three or five minutes. I mean so exactly how do you construct that? Like what? Let’s say you went and bought the $800 cause that’s reasonable. Yeah. So now I have $800 how much do I need to spend on producing the show? Like the 30 minutes and, and what, what I put in that 30 minutes that I can use to like, you know, market my, my book or my Info, my video course or my seminar.
Speaker 2: (18:41)
So great question. Now you have to understand that you’re, you’re, when we talk about producing the show, you’re not producing it just for that $800 by you’re producing it to build a media schedule that might be two three, 400,000 a week in media. That’s generating. See that’s if you’re, let’s say you’re spending 200,000 a week on $800 time slots like Nashville time slot, right? So now you’re, you’re running hundreds of spots that each one is monitored and needs to perform at a two to three to one ratio, sales to media costs. Okay. So, so you say upfront, Dean, I talked to Dean about his show that he did with Larry King for example. I said to Dean, how long did it take you to shoot that show? And he said, Kevin, he said, you won’t believe this, but I shot that show live in 30 minutes.
Speaker 2: (19:44)
And I said, what do you mean? He said, well, I sat down, I, you know, I, I, Larry King is a professional, he’s been doing interviews all his life. I’m a professional. We talked a little bit first before we rolled the whole day. I gave him a couple of questions if he wanted to ask, but we just went live and boom, we got it. He said, we did some more footage just to have some more, but I mean that was sort of a live to tape. Turn the cameras on and film it now he had to do editing because he had testimonials. So he had the one day shoot filming with Larry. Then he had testimonials, then he had editing, but then he also had one other big costs. What was it? A fee? The Larry King. Okay. So Larry King, he’s probably, and this isn’t coming from Dean, so I don’t want to make, I don’t want to say, oh, Dean told me this, but if I had to guess, Larry probably gets anywhere from 75,000 to 100 grand to shoot that show.
Speaker 2: (20:44)
Plus he gets a percentage of you show. So what do you note now? What did Dean’s spend? He shot one day at Larry’s office. He shot a dozen testimonials. He shot, he had to do the editing. You have to pay Larry some money. He probably spent all in somewhere between 150 and $200,000 to shoot that infomercial. And that was a pretty easy one to shoot. So, uh, but he, he knows that the credible Biddle credibility of Larry is going to take this thing to a pretty good point. And, and so he’s now crushing it. He’s, I mean, I’ve seen his schedules in my local market where he’s running on three simultaneously at the same time, at two o’clock in the morning. Now let’s see, what am I doing watching it two o’clock in the morning. I as a business, I’m in the business I have to tune in.
Speaker 2: (21:44)
But I get logs from monitoring services of when these are errands. So I don’t have to actually be there live at 2:00 AM. But I get along from a company that says, okay, dean ran his show 122 times last week and here’s where it ran. I can get that information so I know where he’s running about how much he’s spending. Cause I know what those slots are worth. So if I can do a report and say, okay, Dean ran 122 times, he spent 350,000 in media last week. Okay. I mean that tells sophisticated the industry is and, and by the way, this is how people then decide whether they’re going to knock somebody off. Okay. They, they cheat somebody out there running a lot of media. They know what’s working because it’s bringing in, nobody’s running 350,000 in media. If it isn’t bringing back a return on investment, you don’t mean you find out on 10,080 or whether it’s working, you don’t roll it out to three 50 unless you’re getting that return on investment. Uh Huh.
Speaker 1: (22:51)
So, and, and, and this is like, who are you? Oh, you said you’re, you’re either calling a media buyer and you know, at that scale, but if you’re doing local, you’re just going to go to your like local cable channel or like you just,
Speaker 2: (23:04)
yes. Yeah. I mean, so like it, it’s, it’s no problem. Me Or you like I could call my local Tampa TV stations, you can call your local national stations, whatever. Um, you know, we can, we can all make a couple of phone calls. It’s on the rollout when like when I said Dean’s doing three 50 a week. When we did the Gazelle with Tony Little, that was a over a million a week in media span, generating over 2 million in sales a week. But that was hundreds and hundreds of slots. If you’re spending $1 million at 8,000 for some 800 for others, somebody has to monitor that and they have to buy it. Then there’s a traffic department that it goes through because you’ve got to, you buy it, then you send the tape, you’ve got to have an 800 number that’s tagged to that specific station so that when the sales come in, you know what 800 numbers tracked to that station. There’s all kinds of things happening behind the scenes, so there are media agencies that are in the business of buying media to the tune of if it’s 300,000 a week, 500,000 a week, $1 million a week, whatever it may be. Right? So that’s the important thing.
Speaker 1: (24:24)
The essence is really fascinating. I, I’ve never understood like the monetary, but even even going, okay at two to one ad spend, basically on revenue. You could do the same thing with Google ads or Facebook ads and you know, whatever is say, okay if I’m going to, I’m going to put $50 in in terms of Facebook ads, I need to make sure that $100 comes out before I go and spend 10 grand on Facebook ads. And so you’re looking for a two to one to three to one ratio. Um, so what about the content itself? Okay, so what needs to happen in that 30 minutes? Because again, I don’t the medium of that different, I mean it did TV. Yeah, maybe it’s not TV, maybe it’s a Webinar, maybe it’s on stage, but like what goes into the content?
Speaker 2: (25:08)
So, so now in the old days, and I, and I, cause there have been a few changes in the industry for 35 years. Infomercials worked pretty well, but there’s been a little bit of a disruption because there’s a lot of people that have cut the cord from cable and aren’t, you know, aren’t watching TV. There’s been a decline in DVD viewership has been pretty substantial. It’s a 50% decline in TV viewership in the last 10 years. And so the question is, where did these viewers go? Well, you just mentioned it. Facebook, Instagram, they’re, they’d gone to digital outlets, right? Google, youtube, et cetera. So, so now [inaudible] and there’s also another issue. 30 minutes is, is a long time. And let me explain the structure of a 30 minute show. There’s three 10 minute pods in a 30 minute show. Each one of the pods has a three step selling system that I’m going to call the teas, the please and the seeds all within each 10 minutes he’s police sees he’s police sees these please seat you, tease them with an attention getting problem. You please them with solutions to the problem, benefits to the product or service, magical transformations, some kind of demonstration maybe. But magical transformation is a very powerful please. You see a before and an after, right? And then you see like by having a irresistible offer, so t’s with attention getting problem please by solving the problem with magical transformations and cs creating an irresistible offer. And you do that three times in each 10 minute segment of the 30 minute show. So that’s kind of the blueprint for producing an infomercial.
Speaker 1: (27:07)
Wow, I love that. And so it’s really just a 10 minute it really, all you’re doing is creating a 10 minute and then you’re just repeating
Speaker 2: (27:14)
the same. You don’t actually, you, there are some people that actually just do one 10 minute repeated three times. I don’t like to do that because if people sense that, but the formula, yeah, so I mean what we’ll do is you can tease please and seeds, but you just use different testimonials and you know, it might be the, it’s going to be the same seeds, the same irresistible offer in all three closes, but you don’t necessarily have the same content teasing and pleasing along the way.
Speaker 1: (27:49)
Wow. That is so interesting. I mean, that’s such a simple process, but it also very sophisticated in terms of knowing the, knowing the dollars in which markets are producing. And, and it just, it blows my mind though, how like this is, even though people might not say it, this was the genesis of webinar funnels a and video. Any, you know, any, any modality of selling on camera? Like this was where that started.
Speaker 2: (28:16)
I’m going to give you a good example of something that we learned quite a bit on. Uh, a guy came in my office one day to do a, he had a fishing lure and he’d been watching Tony Little and George Foreman and Jacqueline Lane and all these great things we’re doing. And he, he puts this lawyer in front of me. He says, Hey, this is the most amazing lure you’re gonna want to do this. And I said, why is it so amazing? And he said, I have a pad and said, all the words hit the water drop straight down. Mine hits the water and it’s reverse rig to swim away like a wounded fish. And so I said, I’d love to see that in operation. We went out and showed how it was swimming away and fish were attacking this floor. We had this big hog draw, 20 foot long fish paint that we cast the lure in and saw some amazing demonstrations, catching fish that lures, we’re going straight down regular lawyers dish when just watching them drop, the flying lore went in and they’re chasing it around and biting it and catching fish.
Speaker 2: (29:14)
So, um, when we first tested the show, we ran on a lot of cable networks and the media buyers called back and said, the show didn’t work. I don’t think fishing’s going to be a good category. Um, it’s not successful. And I said, let me get some demographics. I want to see where the orders came from. You know, fishing is, you know, may be, it’s not some universal, we found La and New York, it didn’t have any traction, but in Missouri, in Ohio and Michigan and various areas where there was lakes, it was crushing it. So people aren’t in New York City going out and fishing every weekend. But in Kansas City, they would love to go fishing on the weekends, the lakes and places around. So now we stopped running cable. We went back in. So our cable for, you know, 10 grand in media is generating 5,000 in sales.
Speaker 2: (30:09)
But when we went and targeted local markets like Nashville, Cincinnati, Duluth, Minnesota, we were doing five to one on our buys because we were crushing it in these local markets. So we decided we’ve got to stay away from the coastal communities. This is not fishing lore because first of all, this young lords are generally kind of fresh water and, and, and in the, in, in New York and La, they’re on the ocean. We don’t even have a product yet for that. But in the central parts of the United States, we crushed it. This product went on to do 500 million lures at a dollar a piece, 20 to a pack, 20 bucks for 20 lures, $500 million in sales because we tracked it and focused on buying time where it works.
Speaker 1: (31:02)
Wow. Um, Kevin, I could talk to you all day about lots of stuff. Uh, we are out of time. Uh, where did, should people go? I know you have, you know, the secrets of closing the sale book was Zig Ziglar just came out. Uh, you have your secrets of closing the sale master class, which, you know, maybe we’ll put a link to or we’ll, you know, we’ll audience when you open that class up where else, but where should people go to connect with you and you know, if they want to stay in touch.
Speaker 2: (31:28)
Yeah. My, my website’s a great place because we have some free reports and some free books and chapters and things. It’s Kevin Harrington. Dot. TV and Harrington spelled h a. R. R. I. N. G. T. O. N. So Kevin Harrington. Dot. TV is my website and I’m got a lot of good content there and you can see some videos and see some things we’ve done over the years. But we also, I’m actively still looking for great products, great relationships. I sit on several, uh, board of directors of public companies and, um, I love doing that and, and helping, uh, you know, I invest money, I help raise money. Definitely am available for, for entrepreneurs looking to take their business, their idea, their service to the next level. It’s a good place to start. Kevin Harrington. Dot. TV.
Speaker 1: (32:20)
I love it. So last little thing. At some point in your journey, uh, you must’ve bumped up against some walls. I, I know that it’s been several times, right? Uh, and it’s, uh, it’s a long way between the guy who was on shark tank and you know, that kid that was knocking on doors and there were gotta be several setbacks. And, and my guess is there’s somebody listening
Speaker 2: (32:40)
right now who is trying to build a reputation either as an entrepreneur or an influencer, and they’re probably in one of those darker times. What would you, what would you say to that person right now? So it’s a great question. 25 years ago, I was sitting with $100 million business. We’re doing 2 million a week in sales. We had 10 products. And one day I was thought I was on top of the world, walked into my office on a Monday morning and my CFO said, I got terrible news. The bank just grabbed $2 million out of our account to apply as a reserve against future returns and chargebacks. Um, and, and I said they allowed to do that and said in the contract they have every right to increase the reserve and just grabbed the money out of our account. Okay. I’m like, wow, I can’t believe that actually signed that.
Speaker 2: (33:33)
But when you get those big thick documents, when you get a merchant account somewhere in there, it, you know, they basically tell you no more and grab the monies that are coming through for processing. And so we were technically out of business at that point. I went from, you know, being the king of, of infomercials, you know, to potentially being at the bottom of the barrel. And because that 2 million was my working capital, I didn’t have 10 million sitting in the bank. Okay. I was a young entrepreneur. I had, that was my cashflow. That was my payroll. That was my media dollars, my inventory dollars. Basically, we couldn’t make payroll that week then. And the bank, you know, whether they knew what they were doing or not, they didn’t care at the time. Now we figured out a way to get around some of this. We, we, we, we, we, we pulled a lot of great advisors to the table because they technically put us out of business and it was a very demoralizing time of my life and we had to do some massive things, you know, to make that all happen and save the company.
Speaker 2: (34:39)
But we ended up pulling out of it, coming out smelling like a rose. But the only thing I can say is this, is that I all my life, um, have looked to mentors and folks to be part of my team. And because in the early, early days, I tried to do it all myself. I realized I can’t do it all with Michelle. I, I’m not the operations guy, the finance guy, the guru of finance. But I brought in Gurus of finance. So, um, one of my guys went up against the bank and knew how to kind of get them to come to the table. We ended up getting 1.6 million of that 2 million back. So we did give him 400,000 but we saved the day, got some money back. We’re eight, but took 30 days to pull all this off. So, uh, the bottom line is, is that this is kind of what I do now for entrepreneurs.
Speaker 2: (35:37)
I’m a mentor, I’m a coach, I’m a consultant, I’m an advisor, I joined boards, I joined advisory boards that the right kind of opportunities. I’m out there looking for great companies to be an advisor to because sometimes I’ve seen people make the same mistakes with things that I was confronted with in the past. And I can show people, entrepreneurs how to deal with these things without letting it take you down. So bottom line is you, you’re not, you know, Kinda need to know that there’s a good group of people out there that may be available for you to be mentors in your business. And I, you know, just like I started off talking about how Zig Ziglar was a mentor to you, Rory, to me. Um, absolutely. I’ve had Richard Branson helped me with some digital things. At one point, I went to Necker island, hung out with him for a couple of days. My father mentored me. Mark Burnett mentors me. Yes, I’m, I’m a successful entrepreneur. I’m an original shark from shark tank, but I’m a product of many other mentors that have helped me become what I am. And I think that’s, uh, I’m the first to say that I couldn’t have done it all my on my own. And I, and I, I look to outside resources to help me manage my entities and my businesses and hopefully folks that are out there can, can learn from that too.
Speaker 1: (37:03)
I love that. That is so cool. I think, uh, that’s been the big surprise for a j and I with brand builders group. It’s turned into such a community of people supporting each other and getting to learn from people like you. It’s just incredible. So thank you for your inspiration and your story and your friendship and, uh, we wish you the best.
Speaker 2: (37:23)
You Bet. Take care of buddy. Good being here today. Thanks.