Steve Miles asked about my acquisition of Dan Kennedy's company, how do I evaluate these companies? ... and more!

In the hard drive tonight, I could go find something, I could put up a sales page. And by tomorrow, I could make 100 grand just pulling this, dusting off his intellectual property and reintroducing it to his existing audience to make money. But then I could also turn it into a front end funnel, I could buy Facebook ads and profitably get new customers, which then I could push into the continuity...

Russell Brunson: What's up, everybody? Good morning, good afternoon, good evening, wherever you are in the world. Hopefully, you are having a great day today. I want to welcome you back to The Marketing Secrets Podcast. Today's episode, we're going to do another Q&A. Great questions coming in, by the way. Please keep sending them. If you go to marketingsecrets.com, you can submit your question, and I'm trying to answer as many of these as I can. And I think these episodes been really valuable. So if you're liking these, please let me know. Take screenshots of these, post them in Instagram, Facebook, TikTok, wherever you are, and tag me and let me know which ones you like and I'll keep doing more of these. And again, if you want me to answer your question, come on over to marketingsecrets.com and submit your question. Okay. With that said, I'm going to jump on today's question from Steve. You had a question about my acquisition of Magnetic Marketing.

Steve Miles: This is Steve Miles. This was right after you announced you were buying Dan Kennedy's company. How do you evaluate these companies? Do you have some matrix? Because some of us entrepreneurs have no experience in buying these companies. And right now, I got an opportunity where I could buy a defunct company that's really not making any money. It's just got a whole bunch of assets they've built over the last four or five years and aren't doing anything with it. And previous owners have moved on. I know that's hard to answer. But for companies that are making money, how are you evaluating them? What multiples? Or how are you doing it? Really appreciate an answer. Thank you, man.

Russell: All right, Steve. So a couple things. Number one is I look at businesses probably differently than a traditional investor would, right? Traditional investor's looking for the multiples and this and that and that kind of stuff. I'm not looking for them. I'm looking for deals, looking for things that make sense, right? The first thing that I'm a big, big, big believer in is the only real asset you have inside of a business is the customer list, right? So that's the first question I ask is, is there a list? Is the list good? Is it big? Is it small? Is it buyers? Is it just subscribers? That's the first criteria point I'm looking for is that. Number two is now, how active are they? When was the last email sent to them? How many opens? How many click-through rates?

If I was buying a company, I might even have them promote something, just so I can see the open and click-through rates. Ideally, they promote me as an affiliate, so I can make some money from the transaction, but also see if people respond to what I'm selling. But just to get idea of the health of the list. Because if you have a big list, but haven't been emailed in six months and you start emailing them, your open and click-through rate is going to be close to nothing, right? So it may or may not be worth it. But that's the first question I'm asking. Number two question is trying to see how this fits into my business as a whole, right? Me buying Magnetic Marketing is not to buy Magnetic Marketing as its own entity just to have over here, right? It's part of my overall business structure.

People who buy Dan Kennedy's products and services will also need ClickFunnels, right? ClickFunnels is my core business. So the question is, if I'm spending time and energy and effort over here promoting this product, the service, whatever, and people come from there, will people come from there into my core product? Will they buy ClickFunnels later, right? That is the most important criteria point. In fact, some of you guys know I bought a green drink company and a bone broth company, and those are very disconnected because they're not related. Those are more fun side things I'm doing just to stimulate my mind in because I'm enjoying it. But they're not good investments as far as they're growing my core business, right? So I would recommend for almost everybody to don't do that unless you have the ability to waste money and just throw it away. Because it's a hobby for me, not a core business, whereas ClickFunnels is my core business.

Magnetic Marketing, buying it, acquiring it from Dan strategically is part of it. Because first off, they had a customer list. Number two, he had continuity. So he had members who were paying monthly to be part of it. And number three, this entire customer list would potentially buy ClickFunnels. They are a direct market to message match. The match is there. So even if the company was losing money, if I promoted that list my own product, ClickFunnels, I would make money from that, right? So that's how I look at this. That's the most important thing. So number one, is the list alive? How big is the list? What's it look like? Number two, will people on the list potentially buy my core product or service? So that's a big thing. Number three then for me is I did a podcast episode called The Rembrandt in the Attic. And if you haven't listened to that, go back and listen to it.

I'm looking for the Rembrandt in the attic. For me, Dan Kennedy, when I bought that company, he had 40 years of intellectual property. There's hard drives with courses and lectures and trainings and all sorts of stuff that he's done that nobody's seen forever, right? I'm trying to do a deal right now with the Napoleon Hill Foundation because Napoleon Hill had so much stuff that never got published. It's just sitting there that I'm like, "Oh, these are Rembrandts in the attic. I can take these things. I can turn them into really good front end offers. I can turn these things into good continuity upsells. I can turn these things into other stuff." So I'm looking for these assets that are undervalued, that I know the value of, but nobody else might know it, right?

There's a couple other influencers in our space who have retired, who they don't have a list anymore. They don't have customers. But I do know that their intellectual property that I know that I could sell those products and acquire customers profitably, and then introduce them to ClickFunnels later down the line, right? And so with that, for example, Dan Kennedy's stuff, we went through it, I found a whole bunch of cool things. And from cool things that he hadn't offered in a long time, we plugged those into the MIFGE offer. If you go to nobsletter.com, you can go and you see that, right? It's the offer that we give people to get them to become a subscriber of the No BS Newsletter, right? But then also, one of the hard drive files I found when we bought the company was there's a seven-year window of time where Dan Kennedy had sent in faxes to just his Diamond members, right?

So the 300 people who were Diamond during that window got a fax every single week, and no one else has ever seen it. And I was reading the faxes and they were insanely good. So what did I do? I took that Rembrandt in the attic, we took it, we put it into a book format, we published it. And then if you go to diamondupgrade.com, you can see it right now. We give away that book when somebody upgrades to the Diamond level, which is going from $97 a month to $297 a month, right? And right now, we're getting huge amounts of people upgrading to that, right? So that intellectual property I found, I knew how I could leverage that somewhere else. So it comes back to your skillset. What is your skillset, right? For me, I have a skillset of taking intellectual property that's got a really cool story behind it. I can tell that story in a way that gets people to buy it. I can turn it into a funnel. I can get people. I can acquire customers profitably, right?

So those are the other things that are important to me. So again, it's not really a matrix I think a VC company would have when they're trying to build out, when they're trying to buy a company. But for me, those are the things. Do they have a customer list? Is the customer list still alive, right? Will these customers potentially buy my core product and service, so I can make money even if the core business that I'm buying doesn't actually ever make me any money? Right? And then from there, it's looking at the other intangible, or not intangible. They are tangible, the tangible assets, the diamonds that are rough, the Rembrandts in the attic, the intellectual property. What is there that I know I could turn into money, right? With Dan Kennedy's stuff, I could go through it.

In the hard drive tonight, I could go find something, I could put up a sales page. And by tomorrow, I could make 100 grand just pulling this, dusting off his intellectual property and reintroducing it to his existing audience to make money. But then I could also turn it into a front end funnel, I could buy Facebook ads and profitably get new customers, which then I could push into the continuity, or put them into ClickFunnels, or both, and moving on from there. So anyway, that's the thought, that's the goal, that's the game plan. So I hope that helps a little bit as you were looking at potentially acquiring. The one thing I would add on this is just understanding that the time we're living in right now, acquisitions are interesting, especially for someone like you talked about who their email list is dead. The company's dead. There's no other buyer for that, right? They're not going to come back and like, "I need a 3X multiple."

Based on what? You have no company. You have no business. There's no one else in the world that's going to buy that for you, right? So you can right now negotiate things for insanely cheap or have them finance it from the profits. With the Dan Kennedy deal, we got a really, really good deal on the company. We did the initial launch, which paid for the company. So within three months of us buying the company, it was paid off. And then everything after, that's pure profit, right? So a lot of deals like that, we could have structured and I didn't, but we probably could have structured it saying, "Hey, here's the thing, we're going to finance it. My first payment's going to come in six months from now. And then have that six months to go and make the money to then cover it later." Right?

When we acquired LadyBoss, it was half and half. We paid half money upfront, and then we're doing the launch, and then we're financing the rest, I think, over a year or something like that. But those are some of the ways that we're looking at those things. So anyway, I hope that helps. It's really exciting, exciting way to grow is by looking at these acquisitions. And also, it's just... Anyway, personally for me, I really enjoy it. I think I have more fun republishing Dan Kennedy's stuff than I do my own, which is fun. So anyway, hope this helps. And then hopefully helps others, you guys who are listening and thinking about as well. If it does, that's awesome. So also, if you guys have any other questions you want me to try to answer on the show, again, go to marketingsecrets.com, go submit your question, and I'd love to try to answer it live. Thanks so much, guys, for being part of this. I hope you enjoyed this episode. And I will talk to you soon.