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520 - Jay Abraham Q&A Interview - Part 1 of 4

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520 - Jay Abraham Q&A Interview - Part 1 of 4

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Episode Recap:

On today's episode, you get to hear the first part of a recent interview Russell did with Jay Abraham.

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Best Quote:

I believe business is one of the best personal development environments in the world because you have to learn so many skill sets. You have to learn how to create a product, how to write copy, which is persuasion. You have to learn how to manage a team, how to hire a team, how to find people, how to scale, how to... There's so many things you have to learn along the journey.

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Transcript:

Russell Brunson: Hey, what's up everybody? This is Russell, and I want to welcome you to some special episodes of the Marketing Secrets Podcast. Some of you guys know that who are the big two marketing legends in our space? If anyone knows, if you're sitting down, who would you see if you could see the ultimate fighting? A smack down of the greatest marketers of all time, who would they be? I think arguably you have to say that the greatest are Dan Kennedy and Jay Abraham. I love those guys, I've learned so much from them, I've studied them, they're amazing.

Obviously over the last year, I've had a chance to really get to know Dan Kennedy a lot more. Jay, I don't know quite as well and recently Jay actually had me on a coaching call with one of his clients, and it was really cool because obviously I've learned from Jay a ton, but this time he went and interviewed me, asked me questions. The interview was about 90 minutes long and I asked him afterwards, "This was really good. Can we use this? Can I share it with my people?"

Luckily for me and for you, he said yes. So, this is going to be broken up into four different episodes, and you're going to have a chance to hear Jay Abraham ask me questions, and I get to respond. It was so much fun, it's such a huge honor. I hope you guys get a lot of value from it. You'll see it's interesting, Jay does the interview, he'll ask me three or four questions and then tell me to answer whichever one I want to, so it was kind of an interesting interview that way. From that came some really cool things, so anyway over the next four episodes we're going to break up this interview and this first one, some of the questions that I have a chance to answer from Jay are things like, where did I get my entrepreneurial drive? I talk about my very first infomercial I ever saw, I talk about bridging old school marketing into digital marketing. We talk about potato guns, and Google slaps, and upsells, and a whole bunch of other really cool things. We talked about building leadership teams, and A players versus B players.

We talked about D.I.S.C. tests and personality profiles, how to hire the right people. This is just the first 22 minutes, so anyway, it was a really fun interview. I hope you enjoy the first of four episodes here on the Marketing Secrets Podcast with Jay Abraham interviewing me about business, and life, and a whole bunch of other stuff in between.

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Jay Abraham: This is a privilege for me. I'm going to, with your permission Russell and Hero, I'm going to take it down a number of paths because I think Russell's career and his ability and his knowledge and expertise lends itself to not just sharing expert ideas but sharing a mindset and showing you how to take your business from wherever it is to a higher level, think bigger, scale and do things. Russell, I'm going to explain this, but everybody, I'm ADD. I'm going to explain it and also have a parenthetical comment to Russell, is that I believe entrepreneurship is seen by a lot of people when you're young, when you're 15, 16... I used to buy and sell bicycles. I did all kinds of things. Russell, you were an entrepreneur from what? 16?

Russell: Yeah. Maybe before that, actually. Started really young.

Jay: What I found interesting about your career was that you applied and studied almost every business opportunity offer out there, on TV, in the magazines, direct mail, to see what they were doing and how they did it. You want to explain real quickly even going back what the drive on that was?

Russell: Yeah. I was probably 14 or 15 years old and my dad was watching late night TV one night. Usually he made me go to bed, but that night he didn't. I remember when the news got over and then some of the TV shows, then an infomercial came on and I'd never seen that before. It was a guy, Don Lapre, selling how to make money with little tiny classified ads. As a 14 year old, my eyes got this big. I was like, "I can't believe this is possible." I remember it was $40 to call on the phone and buy the kit. I begged my dad for money and he told me, no, I had to go earn it. I mowed lawns for the next four weeks, $10 a week, mowing lawns, saving up my $40.

Russell: I remember I wrote down the phone number and after I had my $40, I called the number that night and I put it in and I ordered the how to make money kit and it came to me. That was the first thing I'd ever bought in my entire life, it was the first any kind of marketing I'd ever seen. I remember getting the kit in the mail and reading it and getting so excited. I was a 14-year old kid. I had no money to actually buy ads or even place classified ads or anything but I was hooked. I started learning and started finding... Here in the States, there's a magazine called the Small Business Opportunity Magazine.

Russell: I got that magazine and I called every single 1-800 number and ordered their info kits. I started getting direct mail every single day. As a 14, 15 year old kid, I was getting stacks of direct mail. I'd read the sales letters. I got obsessed with it. That was how I first started learning this. I saw people doing it to me and it got me so excited. Then fast forward later in my life is when I started thinking, "Oh, I could do this with my products and my services and shift and transition to that."

Jay: To put it in perspective, everybody listening and watching, Russell was on the very precipice in the beginning of when digital marketing really exploded. He was on the cutting edge. I'm going to pre-assume that a lot of the direct response methods that he learned in the mail order methods, which are direct response, he was able to adapt and adopt to all the things he started doing online. Is that a reasonable assumption?

Russell: Yes. In fact, I remember bridging that connection. I was like, "Email is just like direct mail." I remember thinking, back then, blogs, blogs were just like the newspaper and podcasts were like radio. I was making these connections and I was like, "Oh, I can do the same things too but I don't have to put a stamp on an email. This is going to be cheaper. I could actually do it while I was in college." But yeah, completely just modeled what I saw over here and used it over on the online platforms.

Jay: Now, I'm going to ask another... Thank you. I'm ADD. If I don't acknowledge, I heard it. Bear with me because I've never had the privilege of interviewing you and I'm doing it as an advocate but I'm also a fan. One of the things I think is very important and I used to do it at my expensive seminars, I would actually walk people through the progression, the hierarchy of experiences that I encountered to get to wherever I was at that period of time so they would understand the lessons I learned and how they would apply to anyone either directly or through adaptation. If you'll let me, can we go through some of the... Let's consider you a supersonic jet taking off to 40,000 or 50,000 feet altitude but you're going through these different phases of progression. You mind going through some of them with us?

Russell: Yeah. From the very beginning?

Jay: Oh, whatever you think would help. We have entrepreneurs of all kind but many of them use digital marketing, social media marketing. You understand a lot of things. I'm going to bring you very quickly to sharing some techniques because your knowledge is probably well ahead of theirs and it can be a great gift, but also I think appreciating what brings somebody to where they are makes people embrace what they share with a lot more authenticity and a lot more belief. That's just my belief.

Russell: For sure. I'd seen those things when I was a kid. The first time I ever decided I'm going to make my own product, I'm going to sell something, it was actually... I don't know if you guys have this where you're from, but I'm from Boise, Idaho, which is potato capital of America. One thing we do for fun is we make potato guns. I remember at the time I was in college, I was wrestling in my university. In fact, I just got back from a wrestling tournament where... I was a wrestling tournament this weekend. I still wrestle, I got a cut open eye because of it. But I was wrestling for my university and I just married my wife. I was trying to figure out how to help support her and pay some bills.

Russell: That's when I had this idea, I was like, "We're making potato guns. I wonder if anybody else would want to buy information on how to make a potato gun. That was the big idea I first had. I started doing some research and I found out at the time there were about 18,000 people a month searching for information on potato guns. That was going to be my first idea. I remember my friend and I went and we got a video camera and recorded ourselves going and buying the PVC sprinkler pipes and cutting them and gluing together and then making an actual gun. If you've ever seen them before, they're seven or eight feet tall and you jam a potato on one end of them and then you spray hairspray in the back and you put a cap on the end and you click a button and it makes a spark which shoots the potato out a hundred yards, a lot of fun.

Russell: We went and made one and we filmed ourselves making it. Then we put that onto a DVD and that became my very first product I ever created. Back then, 20 years ago, when I did this, the only really advertising platform that was on the internet was Google. I went to Google and I started buying basic Google Ads. I spent about $5 or $10 a day in Google Ads. From that I'd sell one or two DVDs. I'd spend $10 and maybe make $30 or $40. As a college kid, that was great. I'm making $20 a day net profit every single day. It was really, really cool. Then for those who have been following digital marketing for the last 20 years, the very first... They call it the Google Slap, the first Google Slap came. What they did is they changed their algorithm and they increased the pricing.

Russell: Overnight, I went from spending $10 a day to make $40 a day to, I started spending $50 or $60 a day to make $40 a day. Within a week of that, I was like, "This is not working. I'm losing money. I got to figure something out." I turned all the ads off and I thought, "Okay, digital market doesn't work. It's too expensive." Then I had a friend who had similar business to mine and he told me, he said, "The problem right now is that you're just selling one product." He said, "You got to think more like McDonald's. McDonald's has upsells." He said, "When you go through the drive through and you order a Big Mac, they always say, "Do you want fries and a Coke?"" He said, "You need to add an upsell. Then you can make more revenue from every person who buys your DVD."

Russell: I was like, "Well, I'm selling a potato gun DVD. What can my upsell be?" He said, "Well, what do people need immediately after they buy your DVD?" You sell them something, you solve the problem. I'd sold them a kit on how to make a potato gun. The next problem they had is they had to go drive and buy the pipes and the glue and all the things they would need. He said, "Well, then make the kit, create a kit and sell the kit for an upsell." I actually found a partner who was making potato guns and we partnered together. For $200, he would ship them out a potato gun kit. Then we came back and I turned my ads back on. It still cost me $50 to sell a $30 DVD. I was losing money.

Russell: But then one out of three people would buy that upsell and all of a sudden I was in profit. That was the very first... We didn't even know what to call back then. Nowadays, we call it a funnel. But it was the very first time I'd ever created something like that. I remember, I was just like, "I think we figured something out. This is a big deal." Obviously, the potato gun market is really, really small, but I was like, "Could we do this in other markets?" I found people who had... I had a friend who had a speed reading course and I said, "Okay. Well, you're selling speed reading course. Just create an upsell and a downsell." We did that, his business and it blew up.

Russell: We tried it with a dentist who had a thing and we created it and made upsells, downsells and their business blew up. We started applying these principles to tons of different businesses. All of them had little tweaks and changes we needed to make to make it work in their industries. But that's how this concept and this principle of funnels was born, at least for me. For the next decade in my life, I was just doing that for my own businesses, for other people's businesses. I was doing some consulting where I would go into a business and I would just go and apply these principles, these funnels. We'd watch these businesses explode. Then about eight or nine years ago is when we had the idea to build software.

Russell: I think some of you guys are familiar with our company ClickFunnels, which is software that makes this funnel process simple. But that's how it happened. It was us trying to figure out how do we solve our own problem, then we solved it. Then eventually, we started creating software to really simplify it for other entrepreneurs as well.

Jay: You're being very humble, but you also are known for your mastery of all kinds of digital marketing and techniques. You also have been very masterful at growing or scaling. Let's take both of those topics and break them into a discussion. I want to ask a simple question and I think will help everybody because very few people know mentally they don't have the mental construct, they don't have the strategy, they don't even have the self-belief to go from little to bigger, to bigger, to expand. Can you talk a little bit about the mindset?

Russell: Yes. It's funny because I've had friends who told me like, "Oh, I wish that I could just have my own ClickFunnels company." To put it in perspective and I don't know the size of businesses here, but we have 400 plus employees. We're almost a $200 million company. It's big. It's heavy. I always laugh. I said, "If somebody would've given me this, it would've crushed me initially." I believe business is one of the best personal development environments in the world because you have to learn so many skill sets. You have to learn how to create a product, how to write copy, which is persuasion. You have to learn how to manage a team, how to hire a team, how to find people, how to scale, how to...

Russell: There's so many things you have to learn along the journey. I think that what's interesting though is that luckily we don't just... Something doesn't enhance a $200 million in your business in day one. You have this chance where you try and you start growing and it coalesce around you, but then you increase your capacity and you get a little better. Then you try again. Actually, one interesting thing, I don't know if you ever knew this story, ClickFunnels was about a year old and actually I got a text message from you. You invited me to go speak at an event out in-

Jay: In London.

Russell: In London, yeah. What's crazy is ClickFunnels had been around for about a year. At that time, we had outgrown our infrastructure and the software kept having these glitches and things were happening. I jumped in a plane and with my family, we were disconnected for however long the flight is. When I landed and I connected my phone back up, there were thousands of text messages from all of our customers and people ClickFunnels had been down for four or five hours. I didn't know what to do. I was so scared. I'm like, "What do we do?" This is my first time being a CEO. I'd never had this kind of opportunity, let alone all these other people where their businesses relied on mine. My business was down, their businesses were down. It was interesting because people, in that situation, aren't very nice. They were angry at me and it was hard.

Russell: I think by default, what I wanted to do is I wanted to just ignore it or blame somebody else or do something. I sat in my hotel with my family. I was like, "Hey kids, you got to sit over here for a few minutes. I got to figure this out." We were sitting there, I was like, "I can't hide this. I need to come out." It's not okay that we're down. I'm upset. They're upset, rightfully so. I remember I did a Facebook Live from the hotel room in London, going to our entire audience, all of our customers, all of everybody. I said, "This is what happened, and it's not okay. It's not acceptable. My business is down. Your business is down and you trusted us. I took ownership even though I was so scared to do that.

Russell: I took ownership of it. I told them what was happening. I kept updating them and over the next couple hours, we finally got the platform back live. They were able to transition and get things stable. It's been great since then. It was a scary moment. It was my first time ever having this pressure of everything. It's like, "How do I do this?" I wanted to run and hide but I was like, "No, I have to step into it. I have to be vulnerable. I have to share what's actually happening." What's crazy to me still to this day, I was expecting that we'd have thousands of customers cancel or leave during this window. We didn't see any decrease in cancellations.

Russell: In fact, after I came forward and I was vulnerable and I told people what was wrong and I apologized, people rallied behind us. They were part of our team and it just transitioned to everything. That was the first time as a leader, I had a chance to feel that. It was like, "Okay. Moving forward, this is what we need to be. We need to be vulnerable as a company. We need to show... We have problems, we don't hide them. We talk about them. We put them out there." It transformed the entire culture of our customers, our company and everything. Those things happen all the time as you know, as you're…

Jay: It's a great story. I didn't know it. Did you end up at least having a good experience after that?

Russell: Yes. My kids loved London. Thank you for setting that up. We had a great time!

Jay: It was holiday time. I thought it would be really beautiful there.

Russell: It was. Yeah, it was Christmas time. It was right before Christmas. Yep.

Jay: That's fun. Let me ask you this and I'm going to get to your specific business acumen, but you introduce something that... My observation, because I've been involved in the Japanese entrepreneur market for 20 years and I believe that the idea of leadership is something that could be really profound if you'd share whatever you've learned about leading as you scale and about hiring great people and about enabling them to be great colleagues, collaborators, maybe non-equity or equity partners. But just some random thoughts that you think have had a profound difference and an impact on your success and will continue to have that impact, just to share, not just management, but again, leadership, cultural beliefs, things like that that I think would really be a godsend. It'd be very helpful for a lot of these people.

Russell: Yeah. I can think of two or three that might be helpful. When we first started hiring people... That's not something that's natural to me and I was very, very scared. I think by default, well, at least for me, I think a lot of entrepreneurs I know, the first thing is they're trying to get a deal on people. "Well, how can I lower my labor cost?" We started that way for the first probably week or two. It got really, really hard. We couldn't get the right people. They couldn't stick. They couldn't figure things out. Then we had this thought like, "What if instead of hiring people that we can afford, what if we hired the best people in the world in as many positions as possible?"

Russell: I remember my business partner, who's the developer who built ClickFunnels, he found an article that said something like an A player's worth, I think it was 2,000 times more than a B player. I was like, "I don't know if it is or not, but if that's true, it means one A player's worth 2,000 B players." I was like, "How about this? What if we find four or five really good A players who are just topnotch, the best in their industry and bring them in and then have them manage each their own divisions? What would that look like?" It was scary at first because to do that, you mentioned equity. A lot of times, we couldn't get an A player to come in for just a salary and we couldn't afford their salaries anyway.

Russell: We said, "Okay. Well, I don't have the best in the world and we're going to give them a little equity or give them some profit share, something in there." But by doing that, we were able to recruit our first handful, our first men. Seven or eight, nine people that we brought in were all rock stars. Each of them, there were people that I didn't have to micromanage. They all had a vision of what they wanted to do individually in each of their departments. They were then able to go and create and do their things while I was able to do my thing, which was so good because I'm not someone who's great at management. If I would've had to shift and learn and become master at managing people, I don't think I would've had nearly as much success as we have but because we brought the right people initially, it changed everything.

Russell: That's one that was big. The second one that I learned probably four or five years in our ClickFunnels journey was when we used to hire people, I would get a resume from somebody. I like to get a video resume. I was like, "Make a video, send it to me and I can see if I like your energy and if you're a good fit." I'd get a hundred applications. I'd watch all the videos. I'm like, "Hey, these are the five or six people I think I'd really like to work with." I had a coach that I worked with and I sent her a bunch of these videos. I said, "These people I want to hire, what do you think?" She looked at them all she said, "These people are all just like you. These are not the right people for the roles."

Russell: She said, "What I would recommend doing is step back and instead of hiring based on how well you get along with somebody, you should hire off of personality." Which I've never understood that at all. She said, "I want you to do a test. I want you to go back to all these hundred applications we got and make them all take a personality profile, either DiSC or Myers-Briggs, or whatever." There's different personality profiling. I did the DiSC test, which is one that we hire off of nowadays. Had them take the DiSC test. I actually learned from Tony originally. Tony was one that got me into DiSC. We gave them the DiSC profile, they took it all. Then we said, "Okay, for this specific role, what is the personality profile that we need for this person to be successful?"

Russell: We figured out exactly what that personality looked like. Then we went back through all the resumes and we only pulled out the people whose personality matched what we needed for the role. What was interesting is that none of the people that I had selected earlier made the fit. My coach told me, she said, "Of course, they didn't." She's like, "You pick people who are just like you." She's like, "You don't want somebody just like you in your company. They're good at sales. They're charismatic. Those people sold you on a video but they're going to be horrible at the job." She's like, "The person that's going to be ideal is going to be from a DiSC..." If you guys know DiSC, you understand that for the role, I need an SC, not a Di. Anyway, we ended up doing that.

Russell: We got the SCs in there and none of them want to do a video interview. They were all awkward and they've all been rock stars who've been with us now for four or five years and changed everything. We started coming back and instead of just hiring based on resumes or who we like the most, we figured out for each role, what is the perfect personality profile of this person? Then we apply. The first we get is the personality profile is if they match, then we go to resumes and interviews and things like that.

Jay: That's great. Tell everybody because they're not familiar at all with the DiSC and what an SC is. Just tell them but before you do that, also just for your information, I'll give you a little minutia, little factoids, Tom Phillips and Bob king, who were the collaborators in Phillips Publishing back before Agora was big, they had a philosophy, hire the best and cry only once. I love that.

Russell: That's so good.

Jay: It's true. Also, you're right. Whether the multiple's 2,000 times better, 200, 20, you get so much... Most people don't realize, Russell, that the biggest under performance we get in business is not really just our marketing. It's not our advertising. It's not our lead conversion. It's not our failure to get greater lifetime value. It's we don't get optimal performance out of our team. Part of it is we don't hire correctly. The other part is we don't train and develop correctly. You could talk towards any of those or none of those.

Russell: I 100% agree. I remember we did that. Before I was trying, "How do we pay less taxes?" I was like, "Instead, I'm going to change my mindset to like, I want to have 10 people on my team who max out the tax bracket." That now becomes a goal and a vision. Also, it's like, "How do I pay people more? And then they start working harder." It changed everything as opposed to, "How do I pay less? How do I not pay..." It was like, "No, I'm going to get 10 people. We're going to max out the tax bracket in all 10 of them, meaning that they're all going to be paid a million bucks a year or more." You get a handful of people making that much. They have ownership. They're more likely to show up. They're going to do more and take so much pressure off of you having to be the visionary of every single thing. For me, that changed everything. I love the cry once instead of crying a lot.

Jay: They're more motivated to see you grow and prosper than even you are.

Russell: Oh, for sure. It's nice because... Again, when I was in London, everything went down. I'm in the airplane and they're up there pulling all nighters getting everything up because they're invested in it as well. It wasn't just like, "Well, this is Russell's company. When he lands, we'll figure it out." They're like, "No, we got to figure this out." They were just as invested as I was. Man, it's so nice to have... If I'm going to go to war, I want to team people who are invested with me, not just me being out there and hopefully the people are going to back me up.

Jay: Love it. It's great.

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