I Lost Everything Twice… Then Made $26M In 18 Months

Brink of oblivion to $26M in 18 months (0s)

• The speaker describes a period of rapid growth and subsequent financial hardship in his business. He initially made $100,000 in 21 days by turning around struggling gyms, but then lost all his money when a business partner absconded with the funds.
• He then attempted to launch a new gym with a partner, but encountered issues with payment processing, resulting in another financial setback.
• The speaker and his partner decided to pivot to an online fitness business, selling online training programs directly to consumers. This proved successful, generating $1,000 per day in revenue.
• The speaker then transitioned to a licensing model, teaching gym owners how to implement his successful strategies. This resulted in significant growth, with the business generating $6.8 million in revenue and $3 million in profit in the first year.
• The business continued to grow rapidly, reaching $26 million in revenue and $16 million in profit in the following year.
• The speaker notes that it took him several years to adjust to the level of wealth he was generating, and that the sale of the business did not result in a significant change in his lifestyle.

Crafting a killer offer (18m13s)

• Crafting a Killer Offer: The text discusses the importance of creating a compelling offer that is difficult for potential customers to refuse. This involves understanding the value equation, which consists of four key elements: dream outcome, perceived likelihood of achievement, time delay, and effort/sacrifice.
• Value Equation Breakdown: The dream outcome refers to the desired result the customer hopes to achieve. Perceived likelihood of achievement relates to the customer's confidence in achieving that outcome. Time delay refers to the time between purchase and result, while effort/sacrifice encompasses the actions the customer must take or forgo to achieve the desired outcome.
• Offer Optimization: By analyzing each element of the value equation, businesses can identify areas for improvement in their offers. This includes addressing customer concerns about risk, time commitment, and effort required. The text also highlights the use of bonuses, guarantees, and scarcity to enhance the offer's appeal.
• Sales Process Enhancement: A well-crafted offer can streamline the sales process by providing clear value propositions and addressing potential objections. This allows sales teams to focus on building relationships and closing deals without relying heavily on discounts.
• Real-World Example: The text provides an example of a successful offer used by a marketing agency. The agency offered to beat a client's top-performing ad in an A/B test, even funding the ad cost if they failed. This bold offer demonstrated confidence and resulted in a high response rate, ultimately leading to successful client acquisition.

Investing in Skool (28m14s)

• The speaker discusses the importance of operationalizing a business's offer to maximize its value. They use the example of an accounting firm that could offer a guarantee of increased revenue through back-tax audits, but would need to create a separate team to handle the process efficiently.
• The speaker emphasizes the importance of "shrinking time to value" in business, meaning delivering results to customers quickly to build trust and engagement. They mention their own publishing business, where they found a way to provide a positive outcome within seven days, leading to increased customer satisfaction.
• The speaker describes their investment strategy, which involves fewer, larger deals with higher ownership percentages. They believe this approach allows them to work more closely with the businesses they invest in, leading to greater returns.
• The speaker discusses their investment in Skool, a platform for online education. They explain that they were drawn to the deal because it aligned with their audience, who are primarily interested in starting businesses. They also saw potential for scalability and network effects within the platform.
• The speaker highlights the importance of brand endorsements in their investment strategy, emphasizing that they only promote a limited number of brands to avoid diluting their own brand image. They believe that the success of a brand endorsement depends on the percentage of audience conversion and the lifetime value of each customer.
• The speaker explains that they chose to invest in Skool because it offered a product that aligned with their audience's interests, was scalable, and had the potential for network effects. They also saw an opportunity to create a "hunting machine" within the platform, which would allow them to generate leads and drive growth.
• The speaker emphasizes the importance of timing in investments, noting that it's often too late to invest in established companies like Facebook. They believe that Skool was at the right stage of development, with a strong brand and a clear need for growth.
• The speaker describes the negotiation process with Skool's founder, Sam Ens, which took nine months to finalize. They believe the deal was mutually beneficial, with both parties making significant commitments to each other.
• The speaker expresses their confidence in Skool's future, citing its strong organic growth and viral potential. They believe that the investment was a perfect match for their audience and their own business goals.

Acquisition’s $250M/yr playbook (36m25s)

• The speaker discusses their preference for majority ownership in acquisitions, aiming for significant control and value creation. They have a minimum profit threshold for deals, currently around $5 million, and their portfolio generates $250 million annually.
• The speaker emphasizes the importance of building value within acquired companies rather than simply buying them. They have a high success rate in growing businesses, with an average founder return on equity of 13x after their investment.
• The speaker describes a specific acquisition where they invested a small amount of capital but significantly increased the company's value through operational improvements. This highlights the importance of founder returns as a key metric for success.
• The speaker acknowledges the appeal of starting businesses from scratch but emphasizes their enjoyment of the strategic decision-making and value creation involved in acquisitions. They also highlight the importance of allocating resources and attention to key bets, such as developing software components within acquired businesses.

“Here's what I would buy now” (52m46s)

• The speaker expresses interest in acquiring a large professional services business, specifically those providing essential services to other businesses, such as plumbing, payroll, accounting, and tax services.
• The speaker highlights their expertise in optimizing pricing, sales processes, and demand generation, which they believe would be valuable assets in managing such a business.
• The speaker acknowledges the potential pitfalls of becoming an advice-giver, emphasizing the importance of remaining a student and actively seeking knowledge.
• The speaker identifies their current areas of learning as fund-raising, capital raising, and understanding limited partners (LPs).
• The speaker acknowledges their lack of experience with debt financing and limited partners, but expresses a willingness to explore these areas in the future.
• The speaker emphasizes their current focus on executing their existing plan for growth and improvement, rather than seeking new ventures.
• The speaker identifies their primary weakness in the private equity space as their limited understanding of LPs and debt financing.
• The speaker recognizes the importance of maintaining focus and prioritizing their current goals, which is why they are selective about new opportunities.