Codie Sanchez, a powerhouse influencer and expert in the world of business acquisition & growth for the everyday entrepreneur. Codie went from her unique background in traditional finance roles to becoming a prominent online figure who teaches people how to buy businesses like laundromats. In this episode of the Marketing Secrets podcast, we dive deep into her journey, exploring how she is dominating Instagram and YouTube with her innovative marketing strategies.

We delve into the intricacies of her business model, discussing how Codie leverages her expertise to educate others on buying and managing small businesses. She shares her transition from a corporate environment to the entrepreneurial world, offering valuable insights into the mindset and tactics required to thrive in both arenas. This episode is packed with actionable advice, whether you're interested in acquiring businesses or scaling your online presence.

Key Highlights:

Hear Codie Sanchez’s remarkable experience and discover how you can apply these strategies to elevate your own business endeavors!

And my mission is to create more financially free humans, because I think that's selfishly better for me, my kids, our world, but also just better for everybody listening. And so now we're experimenting with some stuff like watch us do this live using none of our unfair advantages. 

Codie Sanchez:
I think people like to these days say that buying businesses or running businesses only for the few and people are making it sound too easy and it can't really work like that. I'm like, I don't know. Those people that are telling you that, are they independently employed? Because my bet is they are, so they're just saying, "I can do it, but you can't." I've never liked that. I think almost anybody can own or run a business if you're willing to do the hard work. It's not rocket science, it's just hard.

Russell Brunson:
Yeah. In the last decade, I went from being a startup entrepreneur to selling over a billion dollars in my own products and services online. This show's going to show you how to start, grow, and scale a business online. My name is Russell Brunson and welcome to the Marketing Secrets podcast. What's up everybody? This is Russell. Welcome back to the Marketing Secret Show. I'm here today with a special guest. We just finished the interview. She's someone who I have been stalking online for the last three years. She came from a non-traditional business marketing background, came into this world and has been doing some really, really cool things. And this interview is really cool. We talk about specifically what she actually does for a business, which is teaching people how to buy businesses like laundromats and things like that.

We talk a lot about that and that whole business, but also we start talking about the marketing side. How has she turned what she's doing into a business, and how did she grow so big on Instagram and YouTube and all the platforms and everything and building her own email newsletter and a whole bunch of other really cool conversations. So I hope you enjoy it. I hope you love it. I had a lot of fun with it and it's cool because you're going to learn both sides, both here's how to go, but if you want to buy actual buy businesses or if you want to learn how to market your info product businesses, you'll get a ton of value, both sides of it. So that said, let's jump to the interview with Codie Sanchez. What's up everybody? This is Russell Brunson. I'm here today with my friend, Codie Sanchez. Codie, how are you doing?

Codie:
So good. Thanks for having me.

Russell:
I'm excited you're in Boise, by the way. How cool is that?

Codie:
You guys have been hiding the city. It's beautiful.

Russell:
We don't want people to know about it.

Codie:
Yeah, it's awful.

Russell:
We made it so there's no direct flight, so people have to work to get here

Codie:
That is actually true.

Russell:
But if you get here, this.

Codie:
Yeah, I was walking along a stream today. There were baby geese while I was on a conference call. It was magical.

Russell:
Oh, yeah. I was saying, I grew up in Utah and then I came up here to wrestle and then I fell in love this place. This is really cool and different. So anyway, I'm glad that you got to make it out here and hang out for a little bit.

Codie:
Thanks, man.

Russell:
Okay. I want to start this interview selfishly, if you're cool with that, the very beginning, because this makes me feel good about myself. And then we're going to dive. I have a million questions for you. The very first time I messaged you was on Instagram December 26th.

Codie:
I remember.

Russell:
It was the day after Christmas. I don't even know why, 2022 somehow, something, and I messaged you and I saw you had messaged me. You'd messaged me October that year and I'm going to read it because this is really cool. You said, "Random." And the reason I'm saying this, I keep telling people the way I teach webinars and selling, it works for anything and people don't believe me and your message validate it for me. So you said, "Random. We actually used a riff of your webinar structure to pitch to pensions in our investment fund and it worked." So first off, can you tell me about that story? Because I got to know.

Codie:
That's wild. Yeah, that was back before I was on the internet. I don't know how I came across you. It must have been on Instagram, so that's where I messaged you. But at the time I sold investment products and managed a company that had separately managed accounts, exchange traded funds in what's called mingled funds that are mere portfolios, two big pensions and sovereign wealth funds in Latin America. I was running around Latin America trying to get them to give us money for us to invest. We weren't having that much success with one market. I think it was Chile. I talked to other salespeople and nothing was really working.

And then for some reason I came across your Instagram and I must have seen one of your funnels and then clicked through it. You had a full presentation at that time, I think, that was out there publicly, maybe it still is, that you became known for. Was it like the perfect webinar or something?

Russell:
Yeah, perfect webinar.

Codie:
Okay. So the perfect webinar. I just was like, this is so weird for investment world. Nobody had ever talked like this. I had no idea what priming was. I didn't know about doing a close that had whatever the value stack or all that in it. I never heard about anything like that. And yet, because we created custom investment products, I was like, we could do all of this. Instead of doing what typically we do in the investment world, which is here's all the things that are happening in the world, you don't want to be in China now, you want to be in Europe, you want to be in small caps, not large caps, we want to protect your downside risk.

And it's all, what is that, right brain? It's very analytical and there's no emotional pleas and there's no real knowing your target audience except their portfolio. When I saw your thing, I was like, huh, well, it's not working how we're doing it? What if we try this? I did it and we closed a big pension fund. I think that was one of our first, they're called FAPs. It was one of our first pensions in Chile. How wild.

Russell:
That's so cool.

Codie:
I know.

Russell:
It's funny. I had someone today who literally was on a call I was on, and they're like, "So I'm doing a funnel, but it's B2B, so I can't use the perfect webinar because these people don't buy emotionally. What should we do instead?" And I was like, literally, humans are humans. I don't care what you say. Yes, there's different versions, different things, but human psychology works. Doesn't matter what you're selling. And so anyway.

Codie:
It's so true.

Russell:
I'd be so happy to see that.

Codie:
Well, and every time I forget that, because I'm very analytical, we don't have the desired end state that I want. When I forget it with my team, when I'm leading them in a meeting and I just go, "Here's the numbers. Here's what I need to have happen, et cetera." And then I'm like, "Why aren't you guys doing this?" And I realized, wow, psychology is the undercurrent to getting somebody closer to the action you want them to take.

Russell:
Yeah, for sure. Okay, so next question is, how did you go from doing all of that to now you are on the internet talking about all sorts of things? How was that transition and what did your family think about that?

Codie:
Oh, yeah. My parents were not thrilled. I remember my mom at the time, because I had a few grad degrees and I had worked at some big companies in finance, so it was prestigious, more sophisticated. Even though I wasn't a huge deal at the time, I was a partner at some private equity firms, they weren't great ones, the next step would've probably been trying to go and do my own independent private equity fund. I basically looked at all of the people who were more successful than me in my sphere and thought, I want nothing to do with this. I couldn't see myself in any of them. I had been through four or five companies. So I was like, all right, I'm at Vanguard, let's see what they could do. Did that for a year and a half, two years. And then I was like, nah, no, I don't see myself here. And then I did it at Goldman, let's call it a year and a half, two years, didn't see myself in it. Then I did at State Street, same thing.

So I thought it was the firm. Every single time I thought it was the company or maybe it was the exact position there. So if I do it in Latin America, if I do it in high yield bonds instead. And then finally I got to a company called First Trust, which I think I wasn't a culture fit for, but had a completely different subset of people. And I was like, God, I don't see myself here either. I don't want any of this. I don't want multiple divorces. I don't really care about the big fancy cars. I don't want to go to the country club every weekend. So what am I doing? And that happened right about at the same time that for some reason people like you are infecting me on the internet.

Russell:
I'm infecting you?

Codie:
You're infecting me with your internet thinking. And I thought, wait, the way we're selling investments is 19th century, basically. We're having these meetings, we're taking them out to nice dinners. We're not even doing PowerPoints, I would have printed brief materials every time that we would walk through. And then we'd have a long sales cycle. And I was like, I think that the internet could help with this, and I think we should probably create some newsletters and maybe we should have some funnels. Maybe we should drip on these people in some way, shape or form. I don't know if they do it now because I've been out of that game for seven years, but that was not a thing.

In fact, it was so not a thing that I got in a fight with one of my partners at the company because he was like, "It will never be done this way. You will never raise money this way. You'll never get deal flow this way. And in fact, people will think less of you, so we're not doing it. If you want to do it that way, then you have to do it in another firm." And I was like, bye, Felicia. Anyway, I'm really good friends with two of those partners still. They're great guys, but they just wanted to do it differently, which is totally reasonable. I thought, okay, I'm going to go try to do something on the internet because I think there's this opportunity here in finance and investing, and I think I can get great deal flow and I can teach a bunch of people alongside me to do it, too. And that teaching can lead to more deals and more investors and at the same time help everybody else. And so that's how it happened.

Russell:
Interesting. How many years ago was that transition?

Codie:
That would've been, well, fully was 2020.

Russell:
Okay.

Codie:
I left the first firm, the one where I got in a fight and was like, we should do this on the internet, that was First Trust whenever I left First Trust. So let's call it maybe two years before that. So something like five or six years ago.

Russell:
Okay. Very cool. Now I want to understand this, because I have some people who come into our world and they've got something they're good at and they're trying to transition into this I'm going to be out there in front of people talking about it. And that transition point's really hard. I'm curious for you, did you start... I'm going to start posting on Instagram, I'm going to create a course? What was the mechanism where you're shifting from this to that world? What was the first thing that you actually did?

Codie:
The first thing I did was a newsletter. I wasn't looking to monetize online at that time. I just wanted to increase optionality. I was like, if I have more optionality because I have more attention and eyeballs, then I'll be able to achieve more things, which I think is true by and large. The more attention that you can drive, the more options you have to determine what to do with that attention. That was the first step. Plus I think newsletters, they're the least scary, at least to me. It goes into somebody's inbox. You don't have to look at their reaction to the inbox.

Russell:
It's not publicly everywhere.

Codie:
There's no comments really on them. It's long form. It gives you the ability to actually finish your thoughts more than a 30 second view. You also don't have to get really good at video quickly. It's more forgiving as a format. So for all those reasons, I thought, okay, well, let's start here. I also like writing. Newsletters, I think, are an incredible place to start for that reason. And so much so that we've made some investments in that. We invest in a company called Beehive, because I think more and more people will do this. Obviously, your company's a testament to that. And then from there, I started on Instagram, but solely because I liked the platform and I knew it.

Russell:
Were you using Instagram to get people to join the newsletter, or was that the initial plan?

Codie:
Yeah. I had to think back to exactly what we did. I think we have an article. If you go to contrarianthinking.co, there's an article on how I've got my first 30,000 and 10,000 subscribers. I tried to catalog it from day one to day 30 just to see what I could do. I know we started with Instagram and LinkedIn aggressively because I was a corporate person, so I'm like, oh, I guess all my friends are on LinkedIn. Those two things grew us a lot. And then we were very old school. Back in the day I would hack Facebook groups that have a lot of people in them with really good high value content. And then if they liked it, I'd say, "If you guys want, I can drop a link to where the full article is." But the full article would be my newsletter. And that's how I did it originally.

Russell:
Yeah. That's cool. So were you still working time that you started that?

Codie:
Oh, yeah.

Russell:
Because weren't monetizing initially. When did you pull the switch.

Codie:
The trigger. Yeah. Ever since I was at State Street, which would've been more than 10 years ago, I've always... In finance, you're always allowed to do something called club deals typically. And club deals are like, you can go and buy real estate or invest in small companies together or buy businesses together. As long as it's not conflicts of interest or individual stocks, you're usually fine. I had done club deals for a long time, so I had income from buying some of these businesses, buying part of the businesses, buying GPs of asset management companies. So I had that going.

And then I had always been a little bit of a dabbler, like a lot of people are. People talk badly about wantrepreneurs. I think some people just have longer runways. And so I was that. For a year I tried a little fashion stylist marketplace. I tried a international consulting business. I tried a couple of different GPs of funds. And eventually in 2020 is where I took the full plunge. But really before that, I probably have been two years as a partner in a firm messing around with stuff, and probably three years before that trying different things that seemed interesting to me. I could never fully make the jump.

Russell:
That's cool. It's interesting to me because I think a lot of people seem like they wait on the sidelines until their big thing is going to come. They're waiting. They'd be like, "I'm waiting for my ClickFunnels to show up." I'm like, the reason why ClickFunnels showed up for me is because I launched 120 funnels prior to ClickFunnels in a million different things, trying to figure out what was going to work.

Codie:
Exactly.

Russell:
And then they're like, "I actually like the funnel thing the best. Let me talk about the byproduct of me doing this thing." But it's fascinating. I agree with that, where you're trying things to figure out what's the thing you're going to resonate with and what actually starts working so you can double down and keep going deeper on it. Right?

Codie:
Totally. You have been sold a complete fallacy if you think that the first thing that you do is going to be the final thing that you do. That's just not how life works. I think a lot of people on the internet these days, they have survivorship bias. They succeeded in what they were doing. And oftentimes that was a case where they jumped all in because they already had that relentless pursuit. Often that's what success demands. Those people look like they are more common, and thus it is more common to win like that. But I actually think it's more common for the hyper outperformers to win like that, to go all in and to take a big risk. But for the average person, they don't want the life of a hyper performer. It's incredibly difficult.

Russell:
It's very stressful.

Codie:
It's very stressful. I mean, you can run a couple six figure business, a million dollar business, and it can be really cool and lifestyle driven. And then I think complexity just increases. And with complexity comes a lot of drama. You got to ask yourself what you want. What do you really want? Are you doing it just because other humans have it and you think you want it?

Russell:
Yeah, for sure. I'm actually curious. Right now, your message is dialed in, what you're talking about, your new book coming out, all this stuff. You figured all this stuff out, right? When you first started with the newsletter, did you know that's the direction you were going? Or how long did it take for you to figure out, okay, this is my message, this is what I'm talking about, so you can really double down on it?

Codie:
Oh, yeah. There were multiple iterations. The first... I think probably three. At first, my idea was I thought people lost their minds in 2020, and I thought we stopped questioning everything. We assumed trust the science, believe in the experts. We forgot the definition of science, and we forgot that experts are just people who have some expertise in something. It does not mean they're all knowing, including myself and you. I was annoyed by that. As a former journalist I was like, I think let's make a newsletter that just basically lets us talk to each other and say, hey, here's what I see happening in the world. Do you see this, too? What am I getting wrong? Let's have a conversation about this. That's what I started with at first. I called it contrarian thinking because I thought we needed more of that. We needed more people to think critically. And then I realized that everybody thinks that they are a critical thinker.

Russell:
When they are not.

Codie:
Yeah, exactly. And so I was like, oh, people don't really want to learn how to be a better thinker in many cases. They want to learn how to adapt the world to their desire. I was like, well, so what's a way for me to get people to think critically and to get people to have skin in the game? Which I think is the main way you'll have success in life is if you surround yourself with people who are incentive aligned to want the same thing that you do, and you actually clearly know what you want. I was like, well, what does everybody want? I mean, it's the core. You guys know this in psychology. People want love. People want relevancy. People want money. People want health. People want sex. I was like, well, I don't know much about sex or love or how to make people feel relevant, but I know a lot about money.

I was like, well, why don't we start with money? Because if people understand money, then they can understand ownership. If they understand ownership, then they have skin in the game. And that was my thought process, and that's where we really dialed in our messaging. I was like, well, what makes me able to see some of the things that are happening in the world right now and slightly push back? Well, it's because I have financial freedom, so I'm not scared to lose my job. It's because I understand how to look at numbers and math because I understand running a P&L. And it's that I understand that there are repercussions to actions because a balance sheet is a zero sum game, you're either winning or losing, there's no shades of gray. So because of that, I thought this would be really useful for a lot of people in our world to have financial freedom to understand these things. And then I bet they would build it instead of burn it down.

Russell:
Very cool.

Codie:
That was the idea.

Russell:
It's interesting. I think about my business. I'm teaching people how to do funnels and grow online, but the result's similar, financial freedom, it's freedom from everything so they can make their own choices, they can be their own people, but they're different vehicles. You're showing people how to invest in boring businesses versus I'm like build a funnel. And it's interesting. Because with your finance background, you weren't investing in those types of businesses before, right? Did it transition afterwards? These are types of businesses you were buying?

Codie:
Yeah. The last fund that I had was in the cannabis space. We ended up doing a lot of warehouse deals, logistics, distribution deals, because we were trying to not touch the plant in some instances. So in some ways they were boring businesses, but with a little bit of a rocket fuel behind them because it was cannabis.

Prior to that, we had just started investing in small businesses ourselves. First I thought about multifamily, did a couple of those deals, played with real estate. I basically saw because of what I was doing in finance beforehand that there's not a real big difference between a billion dollar deal, $00 million deal, a $10 million deal and a million dollar deal. A lot of the documents are the same, a lot of the headaches the same. I saw these big deals, and my idea was essentially just could I do this on a smaller scale? But I hadn't actually ever done any laundromat or car wash deals in my funds ever. But I see businesses as just widget factories. It's all the same game. You have sales, you have marketing, you have operations, you have administrative, you have some sort of distribution. And if you have those components, almost all businesses run really similarly. Because of that, I guess I could see the connecting of the dots.

Russell:
I asked you earlier, but how many of these types of businesses do you own now?

Codie:
26.

Russell:
26? What was the very first one?

Codie:
Well, the very, very first one was a cross border consulting firm essentially, because I was working in Latin America. And the second one was a styling marketplace. And then the third one was a laundromat. The laundromat is the one that for some reason people really took off and started to understand and think was interesting.

Russell:
It's a real thing in someone's head.

Codie:
I think so. I think it's also, we've all been in them. We understand them. I call these the gateway drug businesses. You can understand how laundromat works. You understand how a carwash works. It's close enough to feel like real estate where there's defined boxes. I think it's less intimidating for people to start with those types of businesses. But I'm really big on it can turn thinking. We teach people a lot about how to find your perfect deal, and that's critical, I think. A lot of people ask, "What business should I buy?" And it's like, that's not the right question. It's not the right question. And let's spend 30 minutes to an hour figuring out the right business for you, and it'll change your life in a way that just buying whatever business will not.

Russell:
Yeah. Will you walk me through the details of what a laundromat business would look like? How much does it cost? How much does it make? Just to have some idea?

Codie:
Laundromats really are not the best business if you want to make a ton of money. They're a good business if you don't want to work on the laundromat a ton, and if you don't want to spend a ton of money. And by a ton, it's all relative. So let's say that the average laundromat probably costs about $300,000, maybe 300, $500,000. You can find them cheaper, you can find them more expensive.

You're probably never going to find a laundromat that's less than, I don't know, 50K and is worth more than 5 million bucks. So somewhere between 50K and 5 million valuation is the laundromat.
The revenue on the individual laundromats, hard to get over a million bucks in a laundromat. I'd say you're closer to doing a couple hundred thousand dollars a year. And profits on small business is anywhere from 15 to 35%. So they're like little baby bonds. If you want a business that just pays you in small increments but is never going to take off in a huge direction, but thus has less volatility, it's going to move a lot less, these might be interesting.

Russell:
Yeah, okay. It's interesting. It is like real estate only the cash flow is better on this than on the house.

Codie:
That's right. That's right. They're very similar. They take a little bit more work on the front end and managing the business, and they typically make more cashflow.

Russell:
And you don't get somebody... I tried real estate once. I bought a whole bunch of houses. I went to an event, someone spoke about real estate. I was like, ah, I'm all in. I bought four houses. And then it was horrible. I had to rehab them, put a renter in there, and then the renter... Anyway, someone sent me a clip, he was on the news. He had done all these crazy things in my house. My house is on the news. I was like, I'm going to get sued for what this guy's doing. It was really bad. So we evicted him. And then he took a sledgehammer and took out all the sheet rock in the entire house and stole the pipes.

Codie:
Whoa.

Russell:
And then left. And I was like, that was horrible. You know what I mean?

Codie:
I'm never doing this again.

Russell:
I'm sure that never happened. Yeah. Everyone's like, "Why don't you invest real estate?" I'm like, "Are you kidding me? I would rather die than do that." But I'm assuming the tenant's not going to leave with A sledgehammer and take your walls out and your pipes. So that probably sounds a lot better.

Codie:
Yeah, that's true. No, I mean, every business is a barely concealed series of disasters, I think, no matter the size. And doing business is hard. I think people who want to get into this and hear the words passive income, skip, skip, skip. It's not passive. The only passive income is if you have money in the stock market or in funds with somebody else, and you get distributions on your cash. But that's it. So I think, yeah, laundromats probably nothing like that is going to happen as much, but you could have a machine that breaks that costs $20,000.

Russell:
There's your profit for the year or whatever.

Codie:
Right, exactly. So there's always going to be some things that go wrong in this. But here's the flip side. I think people like to these days say that buying businesses or running businesses are only for the few, and people are making it sound too easy and you can't really work like that. I'm like, I don't know. Those people that are telling you that, are they independently employed? Because my bet is they are. So they're just saying, "I can do it, but you can't." And I've never liked that. I think almost anybody can own or run a business if you're willing to do the hard work. It's not rocket science, it's just hard.

Russell:
Yeah. Are you buying business in your hometown or are you buying them all over the place?

Codie:
We've changed a lot. Historically, I bought them all over the place. I've lived all over the country and a little bit in Latin America. But going forward, we divested a lot of businesses and now we're buying businesses that are either located in just my community or where my parents are, or we're buying businesses that I call media accelerated businesses. So these are businesses where we can actually plug them into our ecosystem and make them grow.

It's similar to what you've done here. The cool part about when you own small businesses is you own a part of your town, and you can be this ecosystem in your community. It's really beautiful, and I think more people should experience it. And when you own a bunch of businesses all over the country, I don't think you can have that same thing. So I am much more interested these days in businesses where I can own them locally and I can touch them with my family in cities that I care about. And in other places I can help other people own those businesses, or we could have a franchise model that runs those businesses so people can get ownership of their community as opposed to one person owning everything, not good.

Russell:
Yeah, that's cool. Now, I'm trying to shift back to the info side of the business. So for me, when I got started, I was trying to teach people about funnels before we called them funnels, we call them sales processes. It was way more boring. But I would teach people, nobody cared for a long time. And then I told my story about my potato gun DV, and that was the story that everyone's like, "Oh." It became a real thing. I've told that story 8 million times and I hate it, and I never want to tell it again, but that was the thing. I see people at the airport, they're like, "You're the potato gun guy." And I'm like, that's what I'm known for. But for you, the laundromat was the story that propelled the message? Was that the first one? Are there other ones?

Codie:
For sure. Yeah, yeah. I'm still the laundromat chick, which is hysterical to me. Yes. And I do think what happens in life, I think for most people, is you get a series of trigger point moments where you can either decide to lean in or not take the jump. And I've had a few of those in my career. I had one in cannabis where I saw an opportunity in the space, I put some serious money on the table, we jumped and we did well. And for a while there, it was like Codie, the pot dealer, basically online. Parents were also thrilled. And then for a while it was in finance focused in Latin America. It was like, oh, Codie, who sells ETFs exchange traded funds and investment vehicles in Latin America. And then it became the laundromat chick. So I will say, there's been multiple iterations, none of them touching. I don't know, this one might stick, though.

Russell:
Yeah. Especially with a new book coming out and all the things talking about this stuff.

Codie:
Yeah, the laundromat's in there.

Russell:
Yeah. So cool. So for you then, I want to talk more about as you start transitioning, now you're doing this, you're selling advertising, I think, initially in the newsletter. Is that right? The next monetization point. And then was it courses? How did this start becoming a bigger and bigger business for you?

Codie:
I don't think I sold ads or sponsorships for a year plus. In the beginning it was free. It was free for about maybe at six months or a year. And then I created a community. I valued myself really high. So I was like, how about 97 bucks? And huge mistake in retrospect.

Russell:
A month or one time?

Codie:
Think it was one time, it was basically three pennies. I started a community, which was important to me to figure out, can I even help people? Do I know what I'm talking about really? Can this translate? Somebody who just does for a living and then goes to try to teach other people, I wasn't sure if that would work. I started with a really inexpensive community. And then I'd realized, oh man, a broad, open, really expensive community is not great. So I think I sunsetted that probably after a year or something like that.

And then we built a course that was about how to buy businesses. The idea was an M&A course. And then we built a real community around that and having barriers to entry and a form to fill out to make sure people are the right fit. Now I think the goal is, we're actually working on accreditation for one of the courses, because I think there's a huge problem in the education system today with how we learn finance and how we learn mergers and acquisitions, which is we don't. But if you look at the Fortune 100 list, or if you look at the Forbes 100 list, what you'll see is that a bunch of people on there, the richest people in the world, get there through acquisition. They get there through either buying parts of companies. They get there through buying entire companies. You don't actually have to be the next Elon Musk coming up with crazy ideas in order to make a ton of wealth for yourself.

I've been talking to a few universities about, "How can we integrate this into what you do?" Because I think the university system will continue for a while, even though probably not to the same degree. I want people to be able to have a resource that actually teaches them how to do it at a smaller level. When I learned it, they taught me Google and Amazon acquisition examples. That's totally useless.

Russell:
Yeah. I remember in college, my finance classes, how to do finances for these huge firms, they never taught me how to do my own taxes. I was like, this is so dumb. You know what I mean?

Codie:
That's exactly right.

Russell:
It was a similar thing, yeah.

Codie:
I almost think it's worse than dumb now. If you think about it, what is the highest tax code in the US? It's for employees, right? They are incentivized to have more people work for other people as opposed to have ownership. They're much more incentivized for people to have earned income than to have any sort of investment income. And the people who are lobbying our government entity are largely large institutions that need more humans to feed them as employees and that want to do most of the investing. And they'd rather just we gave them our money in exchange traded funds or investment vehicle. I saw it all from behind the scenes. And then they use our money at a lower interest rate in order to go and buy our homes, which is what Blackstone and BlackRock do right now.

I think that's really perverse. Whether there's orchestration or not, you have the university system that wants to protect itself and its tax rebates. You have the institutional investment complex, which wants to almost own everything and is a voracious beast with both money and assets. And then you have the tax system of the US government, which really wants to collect as many taxes as humanly possible in order to continue to increase its power.

I think the way we push back on all of that is we own our own things, and there is no better tax break than having, at least... I tell my employees, how crazy is it that if my employees want to be 1099 instead of W2, they literally can't, that would be illegal for me. The only way they can do that is if they have their own agency and run something else. I talk to my employees about, "How do we get you real estate that you have on the side? How do we make sure that you're putting your money in investments so that you can have some write-offs against W2?" And I think it's really wrong that the government makes that so hard.

Russell:
So interesting. I never thought about that way. That's crazy, though.

Codie:
Yeah. Well, what California has done, think about the messaging. It's brilliant maliciously. They're like the big bad corporation wants to have a bunch of people who are not W2s, and thus they don't have to give you healthcare, which is true. So because of that, we're going to say, no 10 99s allowed in California. You go, great, thank you. And then you look a little closer and you're like, wait a second. They just basically doubled my tax rate because I have no write-off capability now. And they're asking me to say thank you to them in the highest income state, the highest earned income state in the country?

Russell:
But you get your healthcare paid for.

Codie:
But you get your healthcare paid for. And if you're good at earning, which is really what we should incentivize more of, is we should say, yeah, healthcare should be secondary as we teach more people how to create more value in the world and thus earn more. That's another reason why I think ownership is so important.

Russell:
Yeah. So cool. Man.

Codie:
Yeah. I don't think you don't have to not be an employee, to be clear, because it does suck to own a business many times. But I do think that you should have some component of your portfolio and what you do that has ownership, that can carry on if you get sick and you can't work anymore, for instance.

Russell:
Yeah, for sure. At least having a plan. Not an exit plan, but a plan of the money rolls from here to here. I remember reading Rich Dad, Poor Dad back in the day, the whole, what's this, cashflow quadrant. How you move earned into the business to the investing, having a plan of moving the pieces as you're going along.

Codie:
Yeah, exactly. At our company, we have... It's why I like having a portfolio. Let's see, I have now three members of the media team now have a percentage of some of our portfolio companies. And usually people think about it as equity in the main company. But the problem with that is you've had this business for 22 years, you're not selling. So they don't really want equity in ClickFunnels. They want to get paid more, and they want some ability to have long-term equity in something that you do. As we incubate more companies and buy more companies, they earn the right to invest their money in those companies. They don't just get given equity, they get a chance to earn it.

Russell:
That's really cool.

Codie:
Yeah. It's actually how the rich guys in private equity do it. They all do earned in club deals. That's how I started. So that's what we're doing.

Russell:
That's awesome. Okay. Next questions for you. I can't believe you've only been doing this three years, three or four years, which is crazy. I watch your social on all the platforms and you're shockingly good on all of them. I'm not going to lie, I'm so jealous. How does she flawless execution on every platform you're doing? I'm just curious how you view social media, what your team looks like. Because, yeah, you're one of the best I've seen. I've seen people like, I'm good on this thing. You're good across the board on every platform. I'm like, I don't understand it.

Codie:
Thank you.

Russell:
So I'm really jealous.

Codie:
Well, you could do it, too.

Russell:
I want to understand it. I've been trying. We're trying. We're getting better on all the things, but it's like... Anyway, so we're still trying to learn and master it, and it's fun watching how you do it.

Codie:
Well, we have a core belief, which it's always a who problem, not a how problem. I didn't know social media when I started, obviously, so I just went out and tried to find the best whos that I humanly could. And the best whos... whos... whos-

Russell:
Whos.

Codie:
... in this space often aren't that expensive. That's where I actually started is I was like, all right, I'm not a 21-year-old on TikTok, so I probably am not going to understand the algorithm better than they do. How can I reach out to some of the biggest creators on TikTok that I can tell they don't make much money and just pay them for a couple consulting hours? I would reach out on all the varying platforms. We have a mechanism now, we actually need to redo it again, for having consultants for each platform. And they're not traditional consultants. They're like, I found this 21-year-old that's killing it on TikTok. Let's go talk to them. I found another one on YouTube that's killing it. Let's talk to them. We have some professional consultants we work with, but I think that's the best way to start in every business.

It's really what you and I do, right? It's like if you want to go buy a business, you're going to go to Codie Sanchez. She's the best at how to buy small businesses. If you want to learn ClickFunnels, you're going to go to Russell Brunson, right? So we've institutionalized that. I think for social media that hasn't happened yet, but there will be people who are just incredible at social media. And that's how we started is finding those.

And then the second thing I did is I really run it like an investment firm. We have a scorecard for everything we do. We track weekly growth. We understand daily first 30 seconds and let's call it 10 or 15 minutes per platform of how a piece of content is going to perform. We obsess on each platform. If you're on social media, you need to treat each platform a little bit like a different woman. So you have TikTok, who's your 17-year-old cousin, who's kind of funny, kind of lazy TikTok. Then you have Twitter, it's your angry middle aged man who hasn't accomplished what he wants yet in life in his mom's basement. And then you have YouTube, which is actually an interesting segment, it's much more bifurcated. But let's say aspirational mid-20s to mid-30s for the segment that I want, but could go all the way down to, I bet, your kids, like you said, watch it, nine to 20 if you want to go there.

And then Instagram largely middle-aged moms, right? Not perfect. Obviously there are lots of other people on all those platforms, but we think about it that way because Instagram is, it's like an aesthetic. It wants to look a certain way. They want to be able to feel real and a little bit behind the scenes with you. Whereas Twitter is a little bit more cerebral. You have to be smarter. You also have to be a little ruder, a little edgier. We do treat each platform like a different human.

Russell:
That's really cool.

Codie:
Yeah.

Russell:
That's awesome. And then do you have someone running each platform individually or is it one team that is doing all of them? How do you structure?

Codie:
If you're thinking about social media today, there's a couple of things that I would say. First of all, I always like to have a head. This is the 202 version. Here's what I actually have today, which is I have a head for everything. I have a head overall, and the head oversees the other heads, which are platform specific. I actually break them down into written content versus visual content so there's two teams, and they have some influence back and forth between the two. But somebody who's good at Twitter and LinkedIn, that makes sense. Somebody who's good at Instagram and TikTok, that makes sense. And then probably somebody who's good at YouTube, which is long form storytelling. And then there are people underneath them, contractors.

But when I started, it really started with a great number two. I think if you can find a few people to pay by the hour to learn, and then you can find one good human who can look you in the face when you think it seems ridiculous for you to be dancing in a TikTok video at 37, you can work through that with them. That's where I think you start versus where you will eventually get.

Russell:
Very cool. Everyone's got different processes. Oliver was here yesterday and every Friday he goes and films two YouTube videos, and that produces all content for everything else. Do you have something like that? Do you do film days? Do you structure differently? Is your team writing stuff for you ahead of time or you do it yourself?

Codie:
We try to document, not create, as much as humanly possible. So today, I'm in Boise. I gave a speech, a ConvertKit. I am here speaking with you. We stopped by the Capitol to film a little something. I had to be chatting with some people in the back, so they were taking some videos and images of it. So we're just documenting what's happening in my life. Because what we found is, you can either make your day into content or you can make your day about having to make content. And I just prefer efficiency. Wherever humanly possible, I want my team or myself to look at things that are happening on the internet and go, here's a frame. So the frame is, there's a trending song and they say some words, and then a bunch of videos of you looking cool mashed up.

And then we go, okay, we're going to go to Boise. Let's see. I bet we can do something somewhere to that trending sound, and then there'll just be a bunch of clips of me looking cool somewhere. It's a little bit of, I think, preparation beats post-production any day. And what a lot of people get wrong is they try to fix everything after they have it. For instance, you could film everything that happens around you all the time, or you could be really maniacal on your shot list and say, we're going here. Codie's coming into the office. What are the three viral videos we want to film with Codie that are going to be short form? What are the components of that? I want to forget that I just asked you that question. You're going to have a little checklist for it. And we're going to film those rapid fire.

And then when we're together, when we're doing this podcast, I'm going to keep a sheet and every time they laugh really hard, I'm going to make a mark because there might be a clip there. And every time Codie says something ridiculous, I'm going to make a mark because there might be a clip there. So I'm going to be really intentional with it and I'm going to try to pre-produce as much as humanly possible. Again, it goes back to if you can think an investor, you can be a creator, because an investor can't fix a deal that's bad in post. It's like all the money's made on the front end. I think that's the same thing with content.

Russell:
Interesting.

Codie:
Yeah.

Russell:
That's really cool.

Codie:
And I'm happy to share whatever you want that would be helpful to you.

Russell:
Show me all the things, all the people.

Codie:
Whatever you want.

Russell:
No, that's really cool. So you spoke at ConvertKit this morning, I wasn't able to make it, but some of my team was there and they came back telling me some of the stuff you're talking about. So I'm curious, the first thing they said you talked about today was just the death of advertising, how that's shifting. In my company, we are predominantly advertisers. We're learning the social game and trying to... I'm seeing similar trends, so I'm trying to like, okay, how do we increase this so that when this is dropping we're not in trouble over time? So I'm curious, anyway, your thoughts on that and what you're seeing, because you're more analytical than me. What's actually happening? I feel it. I'm a feeler, but I'm an analytical person. So I'm curious on that.

Codie:
Once you've done something for a long period of time, I think you become a data analysis machine by default. It's like the same way that you can just you know when you take a bat and you hit a ball in baseball that you hit it right if you hit 1,000 balls. You know, you don't need anybody to tell you. You're like, I know.

Russell:
The angle of your elbow was... Yeah,

Codie:
Yeah. You're like, I know exactly what just happened right there. So I think gut is really important, and it's just if you don't have gut yet, you need data. If you don't have enough repetitions, you don't know what goods looks like. And so we default a lot to repetitions. But yeah, if you look at the numbers, today more than ever the advertising business is in trouble. We've seen a continuous decline in advertising total revenue since basically going back to the '60s, but accelerated really from '90 to now.

Historically, things like newspapers were great because people really didn't have another mechanism except to go through the news sources. But we're seeing advertising revenue really drop across the board in favor of people realize their most precious commodity is time, and thus subscriptions were born. I think that will continue and it'll happen in different ways. Everything goes in a cycle, so maybe it will come back into vogue again. But for right now, that's what we're seeing. Now, you guys using ads to drive revenue to you, I think, is a different story. It's just do your ads feel like ads or do your ads feel like content?

Russell:
Yeah, much more content now.

Codie:
Yeah.

Russell:
Yeah. We used to spend a lot more polished ads, like script writers, highly produced, all that kind of stuff. And now it's the ones on my phone would outperform. You know what I mean? Meanwhile, I'm walking outside talking excited do better than other stuff.

Codie:
100%. So I think that's the future. It's that tornado strategy of can you get somebody, your desired client who is in the center of the storm, and all around them you have a tornado of varying very native content that feels like just something that's taking their attention, not something that's getting shoved down their throat, and eventually they get swept up in it. And I think that is the future for content creators.

Russell:
Do you guys do paid ads very much? Or are you guys mostly all organic?

Codie:
We are mostly organic. We're starting to get into the paid thing. We'll definitely need two for the two companies we're launching this year. But it's actually a little bit of a detriment to only do organic. The problem if you only do organic is you don't know how to value your audience. You're not very sophisticated. And it means that you can get really lazy with acquisition. Just you're just like, they're free. They come to see me. And the only thing we know for sure is that eventually nobody will care about you. And so it's not a repeatable model. I think advertising is actually better long term, but the pairing of the two of them is really, really powerful. We need to get more intelligent on ads for that reason.

Russell:
Yeah, it's interesting. I'm going to mastermind with Brendon Burchard, and he's got two groups he's brought this, the direct response marketers like me who are in the room, and then there's the viral guys like Jay Shetty and Prince EA and all those guys. And it's funny because everyone's fighting back and forth. "What I'm doing is right." "What I'm doing is right." And I sit in the back and I was like, I think they're both right. How do we get both of these things actually working? You know what I mean?

But I think in most situations, everyone's got to hammer what they're really good. For me, it's a funnel, but paid ads. I know how to play that game a million times. It's the tool I know how to use, so I always default to that. But then it's like there's other hammers that do things. It's good to learn. I think having the diversity of both of them. At least my experience for the last couple of years is just how much ad costs have increased dramatically. It's getting harder to break even. Even for me, and I've got deep funnels, big backends, all those kind of things, and it's getting harder and harder for me to compete. So I think at the smaller scale, it's like if people aren't offsetting some of that with the free audience, then it's going to be hard to really compete. You know what I mean?

Codie:
Yeah, I think that's true. It'll be interesting to see if that changes now that so much VC money isn't going into advertising. Because we have a venture capital fund, so we were looking at where most of venture capital dollars go. It's about 40 cents of every dollar that a venture capitalist gives to a company goes to four companies, which you could guess what they are. It's Google, Facebook, Amazon, Apple, right?

Russell:
Uh-huh.

Codie:
Because of those four companies as their acquirers, the actual companies are only left with about 60 cents. So when you had this massive amount of money from venture capital piling into the advertising space, it makes sense that it was so expensive. I wonder as the market comes down and there's not so much money sloshing around, if that won't normalize.

Russell:
Oh, that'd be cool.

Codie:
I mean, seems to make sense. Hasn't happened yet, but the VC falloff will be a little bit more longer of a tail because they raise capital for 10 years on average. So we'll just have to see. And then obviously we've been money printing for a long time, so there's a lot of fake money sloshing around that makes it hard. But if you can survive during this, can you imagine what you are going to be able to do? If you can operate in this market right now with only one leg of the stool, AKA ads and funnels, maybe that's two legs of the stool, but without organic, without, I don't know, I'm not talking about you, but other people, without a crazy affiliate strategy, without brick and mortar traffic, if you can just operate with one or two legs, if you can add a few more, how strong and stable is the company going to be?

Russell:
Yeah, for sure. Diversification, that's the key, right?

Codie:
Yeah. Hard to do.

Russell:
Media diversification in the online business.

Codie:
Yeah. Not even a month ago, I had my Instagram, quote unquote, permanently disabled for 24 hours or something like that. So you could imagine if you made all your money on Instagram, yeah, that would be detrimental for your business. We had one of our businesses, Stripe, shut down. They just stopped processing payment for them and kept 60 or 90 days of cash. For most small businesses that would bankrupt them. Small businesses keep on average 30 days of cash on hand. I think that diversification is so important.

Russell:
Man, 15 years ago I had that problem with our business. We had nine merchant accounts, but they were all at the same bank and then we're higher risk, we were in continuity and backend higher risk thing, and they shut us down one day and lost all our merchant accounts. And the same time it happened in the industry as a whole. I think it was three or 400 people that we knew had all got their account shut on the exact same day. So no banks were letting any of us come back in. It took us six months to get another merchant account, which in that time I'm firing people, letting people... Just to try to stay afloat.

And then we get a merchant account. And then we had customers that want to buy stuff, so I remember we did this big launch and blew up the merchant account and the banks freaked out, "You can't process a quarter million dollars in a day." I'm like, "We just did." "It's illegal." So they shut it down, froze the money, kept it for six months. I'm like, I need that money to pay. And it was a couple of years of that. It was brutal. And that was my first time I ever understood how bad one is, just having one backup. Now it's like, all right, we have Stripe and we have this and we have this and we have all these things and merching. But also in email auto responders. For emails, if your IPs get blacklisted, what happens? If Instagram dies or YouTube... There's so many variables that, as someone who went through one of those one time, I'm very paranoid about it and obviously trying to figure those things out.

Codie:
For sure. Yeah. I think a lot of people underestimate how critical cash is to a business.

Russell:
Yeah.

Codie:
When people say cash is king, you can only really understand that if you've almost lost it all.

Russell:
It dries up. Yeah, the lifeblood. And you're just like, oh.

Codie:
Yeah, 100%. That's the other thing I think people don't realize about people who have money and run businesses. They say that the average owner in the US has 90% of their wealth tied up in their business. So even if you have a business that's doing, I don't know, 10, 20, 50, 100 million dollars in revenue, it's really not until you get up past $20 million that that cash is more free for the founder of the business. Anything 20 million and below on average, it's not always 90, but it's close to 60, 70% of their wealth is tied up in their business.

If you think about it that way, you don't have a lot of a cushion. The SBA did just increase some cool credit limit stuff for small businesses and allow for partial investing and funding. I think people are starting to realize how critical it is. But these big companies, like Stripe, when they shut off these small businesses I don't think they realize the impact.

Russell:
Death blow, yeah.

Codie:
It's a death blow. It's nothing to a huge company and they have to protect risk, too. When you have somebody's lifeline in your hand to their business, I think you have to treat that with a lot of honor and respect.

Russell:
Yeah. It's scary, too. Obviously, we process as a platform $3 billion a year through Stripe. We see all the time where people are getting shut down, they're coming to us, "What do we do?" I'm like, "I don't know. I don't know." So we're trying to give people backups and all sorts of stuff, but it's a scary thing. Especially if you have a continuity program built into it where they shut that down and it's just that's gone. You know what I mean?

Codie:
100%. Yeah.

Russell:
Anyway. Yeah. Okay, last question I got for you. From your speech today as well. Ben on my team is telling me about it. You were talking about when you're creating YouTube content videos traditionally, again, I might get this wrong, but just like you sitting there teaching is one thing, but not doing nearly as well as the actual showing the thing. I'd love to hear your thoughts on that or just explain that to me and to everybody.

Codie:
So we have a framework in order to make content that really goes viral. And that is three parts. It's called tell, show, do. So old school way of doing content was you tell. So we would sit here and we would go, "Here's what I know. Let me tell you about it. Believe me. Yes." Those are what podcasts are. That's what most YouTube videos are. It's what's called a talking head. That's the first type of content.

Then our second level is called show. So that's like, "Hey, we're going to build a funnel live. Let me show you." And you're walking them through it, right? Here's how I build it. Here's how this happens. Or, "We're going to break down a trucking business live. Let me show you. Here's how we do it."

And then there's do, which is, "I right now will show you me creating a funnel, blasting it out to brand new people and making $1,000. I'm going to show you by doing it live." And the doing has the highest level of trust, because since also the '60s the trust index in America has gone down precipitously. So nobody believes anything anymore for many reasons that are understandable. But because of that, if you just tell, but you never show or do, you have a much lower trust index score. This is something I had to learn the hard way because sometimes on the internet there are lots of people who are not good people in every aspect. And that's certainly true on the internet, too. But in the beginning I bet it's hard for people to even imagine Russell Brunson spent $12 million on books. Right? They'd go, "You're a liar. I don't believe you." And then you'd go, "Here's the books. Here's a receipt for this and here's this."

You wouldn't think that you have to prove it because you just have done it. You're not really trying to prove anything to anybody. But you need to today. It's the same thing with anybody who's on the internet is you got to prove to people that you're doing the thing that you say that you're doing. I didn't realize that for a while so we weren't really talking that much about our individual businesses. I thought that was egotistical, honestly. I was like, I don't want to tell them how much money I made on this deal and how much money this business is doing. That feels kind of gross. And then I realized, oh, if I don't do that, then they can't, one, see what's possible and, two, actually see us showing and doing. So that's our framework.

Russell:
Interesting. I can see you buy a business going through that process, but are you going back to 26 business and they're showing case studies as these things are happening?

Codie:
Really depends on how far you want to go. I've always been thoughtful about how much I share for businesses that didn't ask for media attention. So if I have operators, I have operators for all these businesses, if they don't want to be on the internet, which most people do not actually want to be on the internet, then I'm not going to do that to them. But there are some of our operators who are like, "No, that's fine. Let's do a tour of The Fold." One of our laundromat companies that we were investors in. Let's do a tour of that and we can show them and we can talk about the business. Let's do a tour of Ladder, this other fitness company that we invested in, and let's show them what it looks like to use this app and we'll talk to the founder and we'll show when we sent the money in and whatever. It really comes up to the level that you want to do it.

The thing that is happening more and more for us in the beginning, or now than in the beginning, is much more doing. The other thing that happens after you become pretty successful is people will no longer think that they can do it just because you did it. They're like, "Well, that's you. And I can't." And my mission is to create more financially free humans, because I think that's selfishly better for me, my kids, our world, but also just better for everybody listening. And so now we're experimenting with some stuff like watch us do this live using none of our unfair advantages.

Russell:
Our superpowers, yeah.

Codie:
Yeah. It's not saying I can do this. It's like, I don't know, let's try. And maybe I realized, oh my God, this is way harder than I thought, this was a terrible idea. And then we share that. But at least it gives people an ability to actually see it for themselves.

Russell:
Yeah. That's really cool.

Codie:
Trying.

Russell:
Very cool. Man. Thanks for hanging out with me here in Boise. Last thing I love, I know you got your first book coming out and I know how much effort goes into a book and I love books. I'm obsessed with them. I know it doesn't come out until December. You want to talk anything about it or get people excited about why they should buy it here the second it comes out?

Codie:
Yeah. Should we tell them where the pre-orders are?

Russell:
Yeah.

Codie:
Well, this is quiet. We're not going out publicly to everybody yet. But because you're a buddy, I think by the time that this comes out pre-orders should be available. It's called Main Street Millionaire, and it's about all the things we talked about today. If you want to learn how to buy a business, if you want to learn why it matters that you get ownership, if you want to learn deal making and negotiation, it's all about how buying ordinary businesses can create extraordinary wealth.

It's been a labor of love. I think I've been writing it for three years and I've been editing it. My husband's been going crazy with how much I'm working on the thing. But I feel like it's the book I wish I had when I first started taking action, even after being in finance. I want to know only what I need to know, nothing extra. I want it to be really simple and straightforward so that I can understand how to take it into action immediately as opposed to a bunch of theory. I hope that's what we created.

Russell:
Yeah. I'm excited.

Codie:
Thanks.

Russell:
So where's the pre-ordered?

Codie:
I think you just go to Amazon.

Russell:
Amazon? Okay.

Codie:
Let's do Amazon right now.

Russell:
Very cool. I'm so excited.

Codie:
Thanks. You're the man.

Russell:
I'm so excited for it. You're going to love it.

Codie:
Well, I appreciate you supporting it.

Russell:
Have the book out for me. Of all the things I did, the book was the one that had the most lasting impact of all things that in the last 20 years doing this. So yeah, I'm excited for that for you. You're going to love it.

Codie:
Yeah. It's my biggest joy is writing. I love it more than anything. You're a copywriter, too. You love books, too. I think little 12-year-old Codie would be like, what?

Russell:
You're writing books?

Codie:
You wrote books? A publisher actually paid you to do this? This is super cool. So it's a little bit of a childhood fantasy come true for sure.

Russell:
Yeah. And now the goal is get New York Times. They said that in people's perception that being a New York Times bestselling author is higher than an Olympian in human perspective. So I was like-

Codie:
That's hysterical.

Russell:
... that's really cool.

Codie:
So next time I see Michael Phelps or something, I'll be be like, listen, bud. Actually, that is if we get it. But yeah, I think I better not count my chickens.

Russell:
Yeah. Either way, you'll get it eventually. So it's awesome. So anyway, thanks for coming here and spending time with me. I really appreciate it.

Codie:
I appreciate you.

Russell:
It's fun watching you everywhere on all the platforms. Everyone go watch her and see everything she's doing and get the book when it comes out.

Codie:
You're the man.

Russell:
Thank you.

Codie:
Thanks, Russell.

Russell:
Yep.