Secret #1: How To Outspend EVERYONE Profitably

Is it possible to start a business without raising money?

In today’s episode, Russell explains how you can outspend all your competitors without needing to take a single dollar from venture capitalists. Here a few cool secrets you’ll learn today:

  • Why taking money from venture capitalists is like cheating
  • How to build a business without accepting money from VC’s
  • Why Russell changed the name of his podcast

Full Episode Transcript Expand Transcript

What’s up everybody, I want to welcome you to today, the very first day of the official Marketing Secrets podcast. I am so insanely excited. This is something I’ve honestly wanted to change this for a long time. So for those who are just tuning in for the first time ever, for the last I don’t even know now, 4 or 5 years, my podcast has been called Marketing In Your Car which I record while I’m in my car. And it’s been really, really nice and I’ve always kind of liked it. I had the idea almost 15 years ago probably, when I bought the domain. Maybe less, maybe 12 I don’t know.

And then that’s when podcasts first came out, and then I didn’t launch the podcast and then a few years later, I finally did launch the podcast and I was like alright. Oh, and I had a friend Paul Callagan, who’s like one of the podcast dudes. He had this guy write a jingle for me, it was kind of a cheesy jingle, if you listen to episodes one through a hundred or so, you heard it over and over again.

But I was launching it so I was like, I’m just going to do it and we’re going to use that because, why not. I got nothing else. So that’s how the whole thing began and the first hundred episodes had that cheesy song. And it was while I was in my car driving to the office every single day. And then in that time, a lot of stuff happened. We had this idea for Clickfunnels, we launched it, and I documented a lot of that story behind the scenes, which is kind of fun. How we basically went from zero to ten million to 30 million to, I don’t even know what we’re up to now, but it’s a lot. I think this year we’ll pass 100 million dollars collected through Clickfunnels, since it began 2 ½ years ago. Which is pretty exciting for me and for everybody.

And you guys have been, had a chance to kind of see that whole progression and documentation of that, which is cool. And then, again after that episode 100 everyone kept telling me how much they hated the theme song. But I didn’t have another one, so I really quickly changed it, just by myself, which was kind of annoying. I changed it just to make it better, but it was still kind of, I didn’t really love it. So episode 100 to maybe 250 was another one. And then, by that time we were launching Funnel Hacker TV, which is our online reality, which if you’re not listening go to and you can watch all the episodes. It’s something I’m really proud of.

Anyway, so I tried to match the theme song to that one, and it kind of was okay, but wasn’t as good. Anyway, I’ve had a long time desire to change it. Even though, right now we’re in the top ten podcast in business all the time, and it’s called Marketing In Your Car, I still have people that are like, “oh You’re that marketing in your car thing.” I’m like, “Yeah, it’s bigger than that. It’s awesome.”

So anyway, a little while ago, John Reese, I saw on Facebook he was selling, and I was like, oh that is it. That is the name of the podcast. I can’t rebrand it to something stupid. If I’m going to rebrand it it’s got to be something amazing and when I saw that I was like that’s it. We were able to get the domain name, and now we’re branding it.

Last  week I wrote a pitch for the intro and then I loved and then Steven, and then we recorded it in our sound booth, and Steven went and did all this audio editing. And I had Brandon make some video trailers and bumpers for it. And now it’s all done and they turned out really, really cool. In fact, you guys probably heard it today, if you’re listening. If you’re on YouTube, we’re also posting these on YouTube, and in fact, I’m videotaping this right. I’ve actually on my rear view mirror, I’ve hooked my camera. It’s kind of Jimmy rigged, hooked on there. So now I’m going to have a video and audio version of each one, just because I thought it would be kind of cool.  So that’s what we’re doing.

Anyway, it’s turned out really good and I’m proud of it. Now a couple of things as you listen to the intro, you’ll notice one thing, I kind of made fun of, as I often do, people that take on money in their business. That’s what I actually wanted to talk about on today’s secret number one.

So I’ve been listening to a lot of Gary Vaynerchuk lately and it’s interesting because he’s always talking about all these businesses and entrepreneurs and taking capital. What to do and what not to do. And then last night it was funny because he actually even said himself, “I never took on money in my businesses, I made money.” And it’s funny. I’ve had other people who tried to convince me to take on money and then as I talked to them later they are like, “Well I would never do it for my own company.” I’m like, “Exactly.”

The interesting thing is that I feel like people that take on money are cheating. I potentially am going to be doing a keynote at a big famous university later on this year. I’m not sure yet, it hasn’t been finalized. I’m going to kind of hold off the details until it is. But I already started writing the presentation because I got so excited. In fact, if I write a book number 4, which I think I might, this will be the topic of the book, probably. Unless I change it, I don’t know. Some of you guys might be thinking, “Book number 4 Russell? You only have two books right now.” So we’ve got Dotcom Secrets, book number one. Expert Secrets, which the launch ended last night, we are almost 50,000 books sold, we’ll probably pass that today, which is insane.

Especially when you put it in perspective, like New York Times, most people sell about 10,000 copies to get on the New York Times Bestsellers list. We’ve sold about 50,000 but we’re not on the New York Times list, why? Because they’re punks, to be completely honest. Their reporting stuff is all jacked up. I tried to get on the list with Dotcom Secrets, and we sold 3 more times than we needed to and we still couldn’t get on the list. So they’re against people like me, people who like to sell books. Weird. New York Times Bestsellers. Whatever.

In fact, if you go to, the first post I’m kind of documenting my journey from zero to a million books there. And I tell the story about New York Times there. I digress, so book number three, if I decide to write a third book, which I will. I think this will be a trilogy and then the series will be done. But we have obviously, Dotcom Secrets, Expert Secrets, and then I recently bought traffic from John Reese, and that will probably be the third book in the trilogy and then it will be done.

And then from a separate standpoint, I want to write a book about this. Again, this will be the keynote speech I give at this famous university if I am able to. The title is going to be Stop Cheating. Stop Cheating! And it’s going to be like how we went from zero to 100 million dollars in 2….again, I don’t know exactly what the date is going to be because we haven’t crossed it yet. 2 years, 200 days and 9 hours, whatever it is. To 100 million dollars without taking on venture capitalist, or venture cash.

Because I think that taking on cash is cheating. Think about this, if you were in a body building competition and everyone was competing, working their butts off, and you came in and shot up steroids into your arms and veins and everything and went out there, they would disqualify you for cheating. If you were in the Olympics and everyone is competing as athletes, they’re all working hard, lifting weights, training, and you come in and you’re built up on steroids and you’re doing blood doping and all these other things, guess what they’re going to do? They’re going to kick you out for cheating.

So that is the equivalent of what I feel taking venture capitalists. You’re an entrepreneur. You’re out there trying to build a company and if you go and you just get a bunch of cash, then guess what you didn’t do, you didn’t freaking build a company. You cheated. Somebody gave you steroids. That’s not real, it’s not legitimate, it’s all fake. And I want you guys to understand that. It’s a big deal. It’s like, I have friends who play the lotto, for some reason here in Idaho they have the lottery, and I have friends who play the lottery. They think it’s the cool thing. They’re like, “Someday I’ll win the lotto and then I’ll be rich and famous like you.” I’m like, “You will never be rich and famous. Do you want to know why? Because if you win the lottery, you cheated. No one cares, that story’s not interesting. You didn’t earn it, you didn’t deserve it. Just because you got it, does not mean it’s actually yours. You cheated.”

So that’s like, that’s cheating. So the same way you don’t win the lotto, the same way you don’t do steroids, the same way you don’t do all these kind of things, is the same way you shouldn’t be taking on venture capital cash for your company. You should build a freaking company. You should bootstrap, do it the right way. There’s my rant for the day. And anyone who is trying to think otherwise is just stupid. A couple reasons why.

Number one, you’re taking on money, so that means you’re cheating. So anything you actually accomplish doesn’t really count. Number two, if you decide to take on money, it’s not real. I look at some of my competitors, one of them took on 43 million bucks in funding, the other took on 100 million in funding or something like that. If you look at both of them right now. The people who took on 43 million, the venture capitalists, what do they want? They’re not just giving you money because they think it’s a cool thing to do, they want their money back and a bunch more. We had a bunch of VC’s try to give us money and they all want like a 10x turn if 5 to 8 years. So if they gave you 43 million, they want 430 million dollars back. That’s insane. That is insane.

I don’t even know what to do. So as soon as they write you that check, it’s sitting in your pocket and you have to stress about that, knowing you owe someone 430 million dollars, until you pay that back. Anyway, it’s ridiculous. It’s the stupidest way I’ve ever heard to grow a business. The reaper always comes. Just like in, someday it’s going to catch up to you, it always does, it’s karma.

So if you’re trying to cheat to grow a company, that’s it. That’s why I talk about it in the intro of this podcast. I want people understanding, we build companies smart, intelligently. That’s the whole reason we have funnels. The first venture capitalists, who tried to give us money, they must not listen to the podcast because I tease them a lot. But anyway, we have I think 5 or 6 now that have come and tried to give money for Clickfunnels, that are, all of them say the same things, “You guys are like a unicorn. We don’t understand it. We just want to give you guys, and be a piece of that.” And I keep trying to get, I keep trying to understand. “If you give me 50 million bucks, what do I have to give back?” and they’re like, “Oh well, you know. We’re going to do this…” and I’m like, “I know what you’re going to give me, what do I have to give back. This is a debt. You’re not giving me 50 million bucks to be nice.” And they’re like, “Well, we expect 10x on our money on the next 8 to 10 years, whatever that is.” I’m like, “Okay, so I now owe you 500 million dollars. The second I cash that check, every night I’m stressing and thinking about how much money I owe you. I don’t know about you ,but that’s not a game I want to play.”

So anyway, I’m sitting at lunch with these guys, trying to figure things out and one of the questions was, “How much money does it cost for you to acquire a customer?” which is a very good question. That’s what they all want to know, it’s a good question for all of us. If you watch Shark Tank they always ask what’s your cost to acquire a customer. So I kind of smile as I’m explaining because they’re not going to get it. In fact, I did an episode on marketing in your car a while ago called how to confuse the VC’s and that’s what the episode is all about. I was like, “Okay, well. We’re spending about 120 dollars to get a free trial in Clickfunnels.” And they’re like, “That’s a number we can work with. It falls in the acceptable whatever. If we give you 50 million dollars, then you can acquire blah customers.” Whatever it is. I was like, “Okay, well, that’s cool and all, but we actually turned off those ads.” And they’re like, “Why did you turn it off?” and I was like, “Let me explain how funnels work.” Which is our world. We understand, they don’t.

I showed them. I said, “Look, right now we create front end funnels, things that get somebody into our world. It indoctrinates them into the things they need to understand to be able to actually use our tool and then we offer them the tool. And we’re actually profitable acquiring that customer upfront.” For example, the Expert Secrets book launch. We just sold almost 50,000 copies of the book in the last 30 days. From those 50,000 copies, we ended up…I don’t know the exact numbers, but it was 1.4 almost 1.05 million dollars collected, cash into our pocket. You get 50,000 new buyers and like 120,000 opt ins.

I got all those leads, we got cash into our pocket, and now this week we’re doing training and stuff to introduce them into Clickfunnels, so these 50,000 new buyers, we’ll be like, “Here’s this new thing called Clickfunnels.” But I already got 1.5 million dollars in cash to collect those customers. I didn’t pay 1.5 million to get them. If I was going to spend, or if I was going to try to acquire 50,000 customers at let’s just say $10 a piece, is that right? Yeah, it costs me half a million dollars, but instead we got paid 1.5 million dollars to collect those customers. Now we have them, and that’s just the customers, that’s not counting the opt ins, 120,000 new opt ins came in. Those are people that we can also sell them Clickfunnels. Just because they didn’t buy the book doesn’t mean they’re not going to buy Clickfunnels or other products and services.

So we got paid up front, and I tried to explain, “The way it works in our business is we have these front end offers, somebody comes through and they buy the thing and we’re profitable. So it costs us 10-12 dollars to acquire a book customer, but on average we make, I think the average cart value, before affiliates went crazy and jacked up our average cart value, but when it was stable, we averaged about $34 per book. So $12 in, $34 out. So we were making $22 cash on every single customer that we brought into our world. That cash went into our pocket and we’ve got a customer to introduce to Clickfunnels.”

And I explained that to them 4 or 5 times and the guys like, “I don’t get it.” And after 4 or 5 times, I think the light bulb went off in his head and he said, “If that’s true, if that really happens, that would change business today as we know it.” I kind of smiled, I said, “I know, that’s what we’re doing. That’s what we’re talking about. That’s why we’re a unicorn. Not because I’m smarter than anyone else, but because I understand front end funnels.” If you read the first Dotcom Secrets book, that’s all I talked about. The person who can spend the most money to acquire a customer wins. Done, that’s it.

I can spend more money than Lead Pages to acquire a customer. I can spend more money than Infusionsoft, I can spend more money than all my competitors. Any money you make, look at as a competitor, I can out spend every single one of them. Every one of them. There’s not one person in my market that can outspend me. That’s why we’re destroying everybody else right now. Do you understand that? That is the key.

So understanding front end funnels is the key to mastering this. So read the Dotcom Secrets book, it will help you to understand this whole concept of whoever can spend the most money to acquire a customer wins. If you know that, then you gotta know a couple of things. How does a funnel work? How does a value ladder work? How do all these pieces tie in together? After you understand those pieces you’re like, “Okay, cool. So I have a front end funnel that brings in customers profitably. Then I’ve got a value ladder that sends them u p through the different things I’m trying to do, ultimately to whatever my main goal is. After I have ascended people up to my main goal, then the second book, which is almost a prequel, but the Expert Secrets book is how you communicate with that audience?

How do you tell stories? How do you sell? How do you convert? How do you do all those pieces? How do you make it so all of these pages in the funnel actually work? Because there’s a whole bunch of people with crappy funnels out there that aren’t profitable. There are so many people who are like, kind of understanding our world a little bit. I’m seeing some of these companies trying things out, putting up opt in funnels and things and some of them are so painful.

I just saw one from one of our confusing competitors and it was like “Download our free white paper about blah, blah.” And then the opt in form had like 30 fields. I’m just like, you guys are so stupid. Nobody wants a white paper. That’s not sexy. Guess what’s sexy? Free book, free script. You’ve got to find something and crank up the sexy on it if you want people to give you money for it. It’s not……

That’s what Expert Secrets is about. How do you position yourself in the right way? How do you make things desirable? How do you create desire and belief in somebody’s mind? Those are all the pieces you have to understand. So it’s funny, while they call Clickfunnels a unicorn, it’s nothing magic you guys. It’s the stuff we talk about in the book. You have the books, they’re there. Dotcom Secrets, Expert Secrets, that’s the stuff. If you’ve been listening to this podcast over the last couple of years, or if you got in just today, that’s fine. Go back and listen. All these things are foundational principles we’re tying in there. But it’s all stuff you can do.

So if I can say anything else, it’s this. Don’t cheat. You don’t need to cheat. You can be successful without taking on venture capitalists, without taking on money, without taking on funding, without needing any of that crap. You don’t need to have a 100,000 dollars to start your company, all you have to have is a brain between your ears, the ability to read two books, read them both, and understand some core principles and create a good offer. That’s it.

It’s really not that hard. And I don’t know what else I can do. I’ve been trying for years to make this simpler and simpler and simpler. Between the Dotcom Secrets and the Expert Secrets books it’s simple. I want you guys to understand that. And hopefully this gives you guys some ideas and tools to be able to use.

Alright, with that said, I’m at the office now. This podcast is probably a little longer than normal, usually they are like 5 – 10 minutes long. I have no idea how long I’ve done this one. The plan moving forward with Marketing Secrets podcast is this, each day I’m going to give you guys a secret. One marketing secret that you can use and if you understand though, it all ways lays down on the same foundation of episode number one here. The foundation is simple. Whoever can spend the most money to acquire a customer wins.

That is how you beat your competitors. That is how you beat the venture capitalists. That’s how you can grow your company. That’s the foundation of everything. When you understand that, it becomes easy. And yeah, you can go out there and you can do social media and build a big following and all those things organically but it takes time, it takes effort, stamina, it takes a lot of those kind of things.

It’s funny, because I have been geeking out on Gary Vaynerchuk recently, I really enjoy him. I like him a lot. He’s got some really, really good things. I think that what he does in his business is probably than what he says. I think that right now he’s the best in the world at conversation domination. How you dominate all different platforms and be relevant in all of them. I love watching him and studying and doing that.

We’re modeling a lot of that from him, but he’s got this one, one of his books is Jab, Jab, Jab, Right Hook and it’s all about, you can be jabbing, jabbing, jabbing and eventually you’re going to do a big right hook. I kind of agree with that. I agree putting out content, I’m doing those things as well, but the same time for that to really work, you’ve got to be really, really good. It takes a long time and consistent effort, over and over again. For a lot of us, that’s hard to do.

Someone asked me about that, “Russell, you’re philosophy is so different from Gary’s. He’s talking about jab, jab, jab right hook.” And I said, “Well, the difference is that I’m a wrestler. Have you ever seen a wrestler and a boxer in a fight? I’ve never seen a boxer win, ever. The boxers always lose to the wrestlers and Jiu Jitsu guys. In wrestling and jiu jitsu what do we do different? We look at the guy and instead of jabbing, jabbing, jabbing and waiting for the hook and right hooking. We look at him and look for vulnerability boom, we power double, take them down and choke them out.” I’d much rather have power double, take him down and choke him out than jab, jab, jab, right hook. There’s times to jab and things like that, those things are good, but I want you to understand this concept of winning and scaling and growth quickly.

It is about the concept I mentioned ten times. Whoever can spend the most money to acquire a customer wins. How do you do that? You don’t do that by jabbing forever. For a lot of you guys who are going to try to build an Instagram following of 100,000 people, that’s going to take time and energy and money. In fact, my Instagram kind of got shut down this morning, so even after you do all the work, it can disappear anyway, which is insane.

So it comes down to focusing on creating a really good funnel you can drive paid money into, acquire a customer for free or profitably, or at least break even and then send them up the value ladder. That’s the game, you guys. That’s the game we’re playing. With that said, I’m at the office, I’m going to go get to work. I hope you guys enjoyed Marketing Secrets number one. If you liked this podcast, please go rate it in iTunes, please tell your friends, family members, everyone you know. Share it. Appreciate you guys and we’ll talk to you again tomorrow. Bye everybody.

  • Will Chou

    Thanks Russell. Maybe one day you’ll notice me

  • Will Chou

    That Jab versus Wrestler hook at the end was an amazing analogy Brunson

    • Russell Brunson

      Hey @disqus_TrcdVfuUCT:disqus – i notice you 🙂 just crazy busy over here.. ha ha.

      • Will Chou

        WOOO!!! I’m screenshotting this and keeping it lol

  • Mike Maitland

    Such a great thing you are sharing with the world!

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Secret #53 – Beware Of All Platforms… Except This One

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Secret #50 – The Secret Closing Technique I Learned From One Of The Top Copywriters In Singapore

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Secret #48 – What Really Happened Behind The Scenes Of Our Biggest Webinar Ever

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Secret #47 – The Big Secret, Making AND Keeping Commitments

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Secret #46 – And THAT’S The Day You Became An Entrepreneur…

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Secret #43 – Before States And After States And The Power Of Contrast

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Secret #42 – Listen, Do, Succeed

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Secret #39: How We Went From $0 To $100,000,000 Using Growth Hacking And Sales Funnels (Without Taking On Any Outside Money)

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Secret #38: “99 Yards Doth Not A Touchdown Make”

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Secret #37: Why Does The Fuel You Eat Actually Matter For An Entrepreneur?

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Secret #36: The REAL Secret To Going From 7 To 8 Figures

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Secret #34: Payoff Your House First…

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Secret #33: STOP STOPPING!

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Funnel Hacker Onboarding #3 – What’s Your Offer?

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Funnel Hacker Onboarding #2 – What’s Your Micro Value Ladder?

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Funnel Hacker Onboarding #1 – Why Funnels?

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Secret #32: I Get Knocked Down But I Get Up Again…

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Secret #31: The Four Levels Of Value

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Secret #30: 68% Of Your Visitors Never Even See Your Funnel…

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Secret #29: The Secrets Of “Validation”

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Secret #28: What Are The Rules You Filter Your Opportunities Through?

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Secret #27: DON’T Become A Person Of Success…

The harder you try to get it, the more success escapes you.

Secret #26: Creating Your Perfect Listener Or Customer Avatar

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Secret #25: Road Trip Rant: It’s Time To Get Real About HOW To Have Success…

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Secret #24: How To Grow From 10 To 100 Employees

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Secret #23: Two Marketing Tricks From Some Old School Marketers

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Secret #22: Beware These Two Things…

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Secret #21: Does Being An Expert Really Help Grow Your Company?

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Secret #20: You’re One Funnel Away – Part 2

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Secret #20: You’re One Funnel Away – Part 1

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Secret #19: Your Own Personal Coaching Session With Russell

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Secret #18: How To Make It Rain

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Secret #17: Why Are Vacations So Hard For Entrepreneurs?

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Secret #16: Confusing Activity with Achievement

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Secret #15: A Marketing Secret We Learned At Krispy Kreme Doughnuts

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Secret #13: How To Succeed When You Have No Resources

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Secret #12: The #1 Way To Know If You’re Going To Succeed Or Fail Before You Even Start

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Secret #11: Using Your Unique Abilities And Others To Get Crap Done Fast

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Secret #10: Conversation Domination And The Dream 100

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Secret #5: You Gotta Have Faith… Marketing Faith

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Secret #4: Planting Seeds Of Doubt

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Secret #3: The What And How

The secret from going from zero to a million dollars is all about identifying what it is you're selling and how you're selling it.

Secret #2: How to Turn 3,000 Email Clicks into 300,000 Visitors

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The beginning of my journey from

$0 - $100,000,000

in revenue WITHOUT any venture captial

Who is Russell Brunson?

Over the past 10 years, Russell has built a following of over a million entrepreneurs, sold hundreds of thousands of copies of his books, popularized the concept of sales funnels, and co-founded a software company called ClickFunnels that helps tens of thousands of entrepreneurs quickly get their message out to the marketplace.