Listen to the podcast here:
Risk, Survive, Repeat!
I’m going to start this off with a little bit of a side note. It’s not part of this episode. This episode is titled Risk, Survive, Repeat! It comes from some bathroom reading I was doing where I grabbed a Fast Company Magazine from November of 2011. It was in my closet. I want to slip something in because as you guys know, we are continually trying new things, risking, basically to the point of what this podcast is going to be about.
I got caught on a phone call with two very seasoned sales reps. One was in his 50s, one might have been in his mid-60s. They sell a very high-end product. Some of their clients are Remy Martin Cognac, Folio. It’s a high-end service. The name of their company I believe is RSM. I know they’re out of Kansas City I think. It’s like a branding marketing agency. They have a very unique product. Using cookies, they follow people of affluence and they basically know every move these folks are making. There’s a lot of companies that do this service. What is interesting is they get it to the point where if you give them a set of keywords that you think your potential clients are using, they can prove that you can drop your message right in midstream of their thought process of making a decision and then you do a four-part email drip to them.
It’s very pricey. We’re about to try it. I bring this up because a very seasoned sales rep would not allow me to make the statement, “While we don’t have any competition, we’re a Unicorn company.” This is a veteran sales rep and he just tried to push me back and say, “There is no such thing as a Unicorn company. Everybody has competition.” I said, “I don’t think you understand. I can tell you haven’t been to our website and studied who we are and what we do. There’s nobody that does what we do.” He goes, “I’ve got to call it BS. I’ve been doing this a long time. There is nobody that has no competition.” I said, “Let me just share something with you quickly.”
Continually try new things and take risks. Click To Tweet
Who do you know where people can give them money, we will take their money, go buy them a website that’s currently making money, and then has 130 employees in two different countries that we’ll get that site to make even more money? The way they get paid is 50% of the revenue in perpetuity. On top of that, they’re so sure of what they do. They will guarantee a double-digit plus return on that asset in perpetuity. If it fails, which sometimes it does, we have to go into our little pocketbook and buy that person another website making money and manage that into perpetuity. I said, “Do you know anybody that does that?” He said, “No, you are a Unicorn company.”
My point of this is he tried to back me into a corner. He was almost borderline rude. I was at the ready with my stump speech of clear conviction, concise, on what exactly we do. My question to you is if somebody challenges you with what you do, are you ashamed by what you do because you might be in sales or you might even be the founder of your company, but you’re the lead salesperson? Are you proud of what you do but you don’t know how to vocalize it on the fly? This is not what this podcast is about, but this is so fresh in my mind. I was steaming that this guy tried to back me into a corner and not allow me to claim that we’re pretty much a unique operation. I’ve got a funny feeling that a number of you reading to this blog don’t think you know that there is a part of what you do that is unique.
It is what makes you motor. It’s what drives you and wakes you up in the morning. If that’s the case and I’m going to assume it is for most of you, craft a statement, a sentence, a paragraph to where you can just deliver it cold in front of anybody and proudly. I want to get that out of the way because I want to get to what it is we’re talking about here. I’m going to make a claim. This is episode 370. Because of the nature of the topic of what I’m about to go into, I’m going to predict that this will be in the top ten most shared and most downloaded podcasts in the next even three to six months. This goes back years.
This is a topic that needs to be discussed. It needs to be implemented, it needs to be monitored and measured and it is so seldom done. It’s painful for me to even do this. I want to be a lot stronger than I’m going to be, but I’m just going to jump right in. The title of this podcast is Risk, Survive, Repeat!. The title of the article in Fast Company that inspired me, and this is November 2011, is Risk, Survive, Repeat! I want that to sink in. What they do is they give you twenty examples of major companies that took major risks in 2010 and 2011. Then you have to determine, were they winners or losers?
Currently, my number one most downloaded podcast happens to be my number one podcast, which you can find in the Today’s Growth Classics. It’s a different podcast, still on iTunes. It’s the number one. It’s called S-Curves. For most of you that follow this podcast, you know. An S-Curve is when your company is whole and healthy. Hopefully, not waiting until you’re about to go out of business, you asked the S-Curve question, “What else can this company make with our current talent and our current budget, which is sometimes nothing? What else can we make or produce or serve or service, nights and weekends with our same budget and our same people? Meaning without going out and getting a loan, what different industry or line of products or service can we go into with our same talent or marketing plan or whatever?” I’m not going to do that podcast justice. It’s twenty plus minutes. If you haven’t heard it, I beg you to hear it.
It’s why I’m on planet Earth. What I’m put here to do is to move the message of S-Curves. I wrote a book on that with Brian Tracy, Against the Grain, you can dig into that. The podcast summarizes the book. Fast Company magazine, November 2011. We’re at this point years ago. Risk, Survive, Repeat! I’m going to read some of these companies at the bottom of this article. Groupon took a risk, turned down $6 billion from Google. Most people would think they’re nuts. That one turned out to be positive. Two years later they went public, raised a lot more than $6 billion, and gave them the muscle to buy out their 280 competitors that sprung up overnight worldwide. You would think with all their trademarks and patents, nobody would be allowed to copy them.
That’s not how the world works. The world’s not nice. The world’s not fair. It’s a game of fast and first and they had to buy them out even though those 280 people should not have been allowed to compete with them, but that’s how it goes. How about this one? Nokia, they decided to not use the Android base platform in their phones and they instead chose Windows Mobile. How did that turn out? Does anybody have a Nokia phone? That’s not so good. Netflix decided to spin off their DVD by mail division, which was their whole company in the beginning. How did that work out? Amazing, because it allowed them to focus on streamlining video. Now they’re one of the biggest movie makers and TV producers in the world. That’s a research and development there. AOL, they gambled by paying $350 million for Huffington Post and bringing on Ariana Huffington as their CEO. How did that work out? Does anybody use the AOL search bar? It’s not so good.
You need a research and development department no matter how big or small you are if you want to survive in perpetuity. Click To Tweet
AT&T spent $40 billion on T-Mobile. How did that work out? Amazing, if anybody’s old enough to remember who AT&T used to be, they used to be the plug and play phone company with the gals that would pull something out and put it back into a dashboard so you can connect to call. They risked big-time spending $40 billion on T-Mobile, an up and coming cell phone carrier. Now AT&T is the largest cell phone carrier in the world. We’re going to say that one worked. It’s Risk, Survive, Repeat! What’s the underlying message so far in what I’m talking about, including in the beginning? It’s about risk taking obviously, but it’s about the underlying aspect of that.
How can people take risks that are calculated? To do that, you need an R&D department, a research and development department. No matter how big or small you are, if you want to survive in perpetuity, and this is coming from the founder of a company that has hit the Inc. 5,000 list five times. It should have been six, but in 2014 I forgot to fill out the paperwork because I was out of the country. That was our biggest growth year by the way. We’re basically doubling every year. Why? We risk, we survive, and repeat. The underpinning of an S-Curve is in the R&D department. I want to throw out some guidelines so that any company of any size can kickstart an R&D department. What did we do for ten years? It revolves around a series of four main questions.
First, before I get into the four questions, you have to understand there are three types of competitions. There is entropic competition, physical competition and present competition. They’re completely different. Those you can find detailed explanations in podcast episode number 20, 21 and 22 in the Today’s Growth Classics section in iTunes. It’s in a different podcast, right next to this one. We had to move those over because those were the most downloaded podcast and iTunes only allows you to have 300 episodes in one podcast. You can find those in the other podcast we have. Once you understand the three different types of competition, you can understand how there are different layers that go into assessing which direction the R&D department should go into.
I’ll give you an example. The big four, which I call Apple, Amazon, Google and Facebook, they are all doing R&D aggressively and they’re all conducting business in the exact same verticals. They are in mobile, they’re in communications and they are in advertising and marketing. When I say they’re in, they have businesses in and they have divisions making money in local advertising. They have divisions in retail, they have divisions in payments and finance, they have divisions in entertainment, and they have divisions just strictly in music, meaning the streaming aspect of it. They have divisions in gaming and this is now becoming gaming, meaning playing games and now they’re going into gaming, meaning gambling. They have publishing and media, and then cloud and then services. They’re all in the same industries. Why is that? The reason they’re all in the same is that they all understand the three different types of competition and they have to be, it’s not an option.
Once you have a handle on the three layers of competition, you can begin asking the big four questions and they go like this. Question number one, it’s called S-Curve, “Regardless of the industry, what other products do our customers currently consume? List no less than 50.” These are your current customers, not ten years ago when you were in something else. The people that are buying your product, what else are they buying? List at least 50, no less than 50. I’ve done this exercise with some folks and they’ve come up with 200, but do at least 50.
This is still under the same question number one, what of these 50 plus products are marketed the same way we currently market our own product? What are these 50 products that are currently marketed in the same way? Then, and we’re still under question number one, what product or service provider would allow us to be a marketing arrow in their quiver? Meaning we’re going to use their product line, but we’re just going to be the marketing engine for them and get a slice of it as an affiliate. While we begin in R&D department to settle on how we’re going to manufacture or deliver the product or service ourselves? How can we start making money in a new industry pumping somebody else’s product while we figure this game out and do it ourselves? Then finally, and this is still under question number one, what are the 50 plus products that are marketed in a way that we have never marketed before?
As an example, maybe there’s a product set that your customers are also consuming, but the way they’re getting it is direct sales. Meaning people cold calling and knocking on doors, and maybe you find that loathsome so you would shy away from that. May I suggest that that’s exactly the reason you might want to pursue that industry, because then when you do this whole exercise again in a year or two, you’ll be a master of direct sales. When you ask yourself, “What are their product lines that are marketed the same way?” Now, you’re marketing both online and offline. I think you get the point.
Let’s jump over to S-Curve question number two, “What companies, no matter how small, can we attempt to acquire for cash or an earn-out to penetrate the space we want to go into?” That’s question number two. S-Curve question number three, “If we can’t go out and buy a company, what person knows everything about everything in that space, could we get to come over from the dark side to the light side? Who could we grab to join our team to start a new division?”
S-Curve question number four, “If acquiring a key person isn’t possible, is an elite consultant available to jump start in internal division?” Remember the way S-Curves work, and you’ll understand this once you hear the S-Curve podcast, they’re not optional. Once you understand this, launching the S-Curve, once you dig into this, it’s simply not optional. It’s survival. It has to happen. It’s do it or die. I have at least twelve podcasts on this. I don’t want to just proclaim these as the questions. I want to show you how in the last ten years, this is how we got to where we are now and how we are a very fast growing eight-figure company within a year or two being a nine-figure a year company.
How are we doing this? We’re asking four questions. Some examples in the last only five years of us asking question number one, which is based on podcast number one, which we do this exercise every January 15th through 20th, every year, we have listed the 50 plus things. Now instead of just building and buying websites that are masterfully getting traffic from the Google search bar, i.e. the example of WebMD making $600 million a year from advertising and their number one traffic medium is from people searching, “How do I stop hair loss? How do I get rid of this itchy arm? My eyes are burning, what’s wrong with me?” Those searches go into Google. Google sends you to WebMD on page one.
When you get used to risking, you get used to risking properly. The worst thing that can happen when you're risk-averse is certain death. Click To Tweet
That’s what we mastered for six years. We knew if Google Algorithms happen, we better be getting traffic and making money in different ways. We asked the question, listed 50 plus items. Now we have dozens of sites that get traffic from Facebook, dozens of sites that make money from Amazon, dozens of sites, close to 100 now, in the eCommerce world, hundreds of sites making money through affiliates. That’s S-Curve question number one, those are our results. S-Curves question number two, what companies, no matter how small, could we attempt to acquire? A couple of a few years ago, we acquired a company called GPS. We had four employees in Romania. It now has 54 employees in Romania. That’s S-Curve question number two.
S-Curve question number three. There were some agencies we wanted to go after to acquire, but we just couldn’t. They were too big, too motoring. It wasn’t going to happen. S-Curve question number three says if acquiring a complete company is not an option, what CEO, COO, Founder, key director in the desired space we’re going into can be swayed to come over? As some of you know, on a couple of different occasions, Dave Conklin left his company, even one time the founder left his company, sold his stakes in his businesses to come to be the chief marketing officer for our company and Dave is a beast. He single-handedly built the site that became an Inc. 500 company. One of his websites started generating 1,200 leads a day. The guy is absolutely amazing.
What key person can you possibly sway to come over? We also just grabbed the ex-VP of Operations of a major agency in Chicago and now Dan Reno is here leading the charge for marketing. Who can you go after to bring over the intellectual property you need to run another division in your company? Finally, S-Curve number four. What if acquiring a key person just simply isn’t possible either? Is there an elite consultant that could come in and jump-start an internal division? Just recently we started a twelve-month campaign with none other than Stephan Spencer. For those of you that know Stephan, he wrote that monster book, The Art of SEO, which many agencies run their agency through. The guy’s just a walking gray matter. His clients prior to coming aboard with us were Volvo and Zappos. Stephan is amazing. We have learned so much with Stephan here for the last six months. We are in two different markets right now because of Stephan.
I ask you what does your current R&D department look like? If it doesn’t look like the one I just laid out, how difficult would it be to just overlap those four questions once a year? Now’s a great time. You don’t have to do it in January. Maybe now is officially your fiscal year for R&D. Why don’t you start a Q&A session either with yourself or with your major team? Get some risk going, get some trials going, get burnt, try something, get fried. When you get used to risking, you get used to risking properly because the worst thing that can happen is if you’re risk-averse, it’s certain death. I hope this helps. This is episode 370. Ken Courtright from Today’s Growth: Growing Business Today. Take care.