Hey everyone this is Russell again. Welcome to the next episode of Marketing Secrets. This is part two of the One Funnel Away presentation.
I hope you enjoyed yesterday’s episode. If you did like it I hope you have shared it and told people to go listen to it. Today is going to be the exciting conclusion of Russell’s bankruptcy and failure stories. I hope you enjoy it, it should be a lot of fun. Listen to it online at marketingsecrets.com, you can watch it, there’s a video there, you can share and see the actual presentation there as well. I hope this helps you, hope it gives you faith and hope in what you’re doing, what you’re creating and where you are trying to go with your business and people’s lives you are going to serve. With that said, enjoy my failures, I hope you guys have a good time with it, see you guys soon. Bye.
Now the pros and the cons of this. The pros, this is really, really awesome. As a beginning entrepreneur I was like, we nailed, lets scale this thing. I probably shouldn’t have done some of this stuff, but we got excited. If this worked here, we should hire more people. We started this and we went from this little thing with 5 or 6 of us to 2 years later we had about a 100 people operation, where this is the model we were doing. Cd’s calling them on the phone, selling coaching, having continuity and it grew really big.
During that time there were some really positive things that came from it, some negative things, some ups and downs, and I’ll share a lot of those things. One cool thing is that while this was happening and it was going really well, my name got out there, so I got a chance to go speak a lot, which is cool. I’d seen a lot of other people speak from stage, and this is where I’ve told you guys this story, anyone who’s gone from Perfect Webinar, I spent about 2 1/2 , 3 years on the road going to seminars, standing in front of a bunch of people like this, talking and trying to sell something and nothing happening, it’s a really horrible feeling. Has anyone done that before?
My first presentation was on a stage like this, probably had 300 people in the room. I did the presentation and tried to do what speakers do and close, hope everyone runs to the back. Nobody budged and then the guy forgot to turn the music on and it was crickets and I was just awkwardly walking off the stage, and then running. I was so embarrassed, when you have those events that are multi-speaker events and all the speakers are selling and everyone is bragging about their numbers, I knew that I didn’t want them to ask me my numbers, because not one person signed up, so I hid in my hotel room. I remember ordering coconut shrimp and Haagen Dazs Ice cream for every meal for the next two days, while I hid in the room eating it and watching movies because I didn’t want to go back downstairs. It was really bad and awesome at the same time, because coconut shrimp and Haagen Dazs is awesome.
But I did that and learned how not to sell and then I started learning from some amazing speakers and people, learning the process and how it works. All the stuff we talk about in the Perfect webinar, all the stuff we talked about day one, about creating belief and breaking belief patterns. All those things I learned on the road in front of people on stage. It was scary, but it was such a good time for me to learn it and understand that part of the process.
As we started to grow, I wanna make sure I cover all the cool things, we had a bunch of different offers we came out with. One of the ones that was more successful for us was a front end offer like this, called Micro Continuity. How many of you guys remember Micro Continuity? This is awesome. So this is the one, it’s probably 8 years ago now. We put it on an MP3 player from Hong Kong, it had 6 hours of this training and that was the funnel we put through.
We kept creating front end funnels to get people into this program and it worked awesome. We grew the company from nothing to 3 or 4 million dollars a year and it was doing awesome. At the time I started looking at other people in my industry. Hopefully one of you guys will get a good idea from this one. I had this funnel, we talk about the value ladder, I had this really cool value ladder here and I was ascending people up and I realized that I was the only person in the market that had a real value ladder. Everyone else was kind of doing stuff down here and that was it. I was the only person selling really expensive stuff.
So I started calling my friends. I called Mike Filsame, “Hey man, all of our customers, we call them and sell them these $5000 things, and lots of people buy that. You should do that.” And he’s like, “I don’t want a call center.” And I was like, “Do you want us to call your customers and sell it?” and he’s like, “Yeah.” So we hooked up with Mike and became his backend. I called up Frank Kern and same thing, we became his backend for a little while. We started calling up a whole bunch of people and then we started becoming the backend. So all these people had frontend funnels and we became the backend for a lot of them. That’s how we took the company from 3 or 4 million dollars to 10 million dollars and it became really big.
I was going to say big and fun, but I don’t think it became that at all. It became really big. We had 100 employees, we had 60 people on phones in a big, huge call center. We had 20 people doing coaching for all the things we were selling and then had about 20 people driving leads and customers and stuff like that. It got really big, and I don’t know if you guys notice this, but I’m really good and selling and stuff, but really bad at the management of stuff. I was not good at managing all these people and it kind of started getting too big.
This is about the time, I was telling you guys, if you read the Dotcom Secrets book, I started waking up and was like, “I do not like what I created.” I got so excited that I started building this thing and then one day I woke up and was like, huh, do I really want to do this?
I think half the conversations I have with inner circle members when they first come in is this, “Do you really want to build this business? Yes, that would work, but sometimes it’s horrible when you get there. Think it through. What do I actually want to do? Who do I want to become? Who do I want to be when I grow up?”
Luckily during that time, it was probably one of the most painful times in my life, but looking back now, it was probably one of the most important times in my life. We had this huge operation and everything was working and then one day in January, literally 11:30 in the morning, one of my sales guys came in and said, “I’m trying to run a credit card and it’s not working. I’m not sure what’s wrong.” I’m like, “That’s weird. Try one of the other merchant accounts, maybe there’s something there.” then someone else came in, “Hey all the continuity orders are failing, I’m not sure why.” Three or four people came in and I’m like, “What’s happening?” I logged into the backend system and not….at 11:37 or something like that, every sale stopped. No sales.
I was like, what is happening. I was freaking out so I called our merchant account company and there’s a busy signal. I call again, busy. Call again, busy. I can’t get a hold of anybody and all the sudden I start hearing from friends. “Dude, everything got shut down. Are you still able to process?” I’m like, “No, what’s happening.” “I don’t know, I don’t know.”
And soon I found out that it wasn’t me, I eventually found out that it was 3 or 400 people at the same time. Anyone who was doing any kind of continuity stuff, the merchant accounts basically came in and said, “Look, we think what you guys are doing might be illegal and we’re shutting all of you guys down and you’re guilty until proven innocent.” I was like, “What? I’ve got 100 people that I’m feeding. 100 people and their families, it turns into 100’s of people. You can’t just stop processing.” Finally after an hour I get through to somebody and the lady on the phone says, “Yep, we shut you down. Good luck ever getting another merchant account ever again. I gotta go.” Boom and hung up on me.
I was like, “What?” at the time I thought I had diversity. We had 9 merchant accounts, all through one company, different merchant accounts but all through one bank. I found out that is the equivalent of having one. Which is why I’m a big believer now in having multiple merchant accounts in multiple different banks, which is a lesson hopefully for everybody. If you don’t know Alex Rowe yet, I don’t know if Alex is in here. But meet Alex, he’s the man who can get you hooked up with lots of merchant accounts. He’s done that for us, he’s amazing.
But it was bad, finally we got a hold of these guys and I’m trying to figure some things out. Basically they said, “You’ve got to prove that you are a good guy.” So we went through, it took us two weeks for them to go through all our stuff, look at our documentation, look at all of our stuff. Two weeks, and they came back and said, “You’re right. You’re doing everything clean, everything is above board. We’ll turn your merchant accounts back on and you’re good to go.” I’m like, “Sweet.” And during that time, when there’s that kind of instability, sales guys are freaking out, they can’t handle any kind of instability, they’re leaving like crazy. People are walking out the door.
I was freaking out, we had all this payroll and no money coming in, so I’m paying it out of my own pocket, everything to just keep things afloat. Going through this process it’s getting scarier and scarier and finally the merchant accounts are back on, you’re a good guy. So you guys, we gotta do a launch really quick to make a bunch of money. So we put together this huge launch and push it out to our customer list and in a weekend we made $250,000, and I was like, “Thank you.” That’s so great. Monday we should get the money, we can pay payroll, I’m telling everyone, “Tell your wives and kids we’ll have money soon. It’s coming I promise. It’s in the bank, going to be here any day now.” And the money didn’t come. Monday it didn’t come, Tuesday it didn’t come, Wednesday it didn’t come. By Thursday I’m calling, “Where’s our money? We need this money.”
The guy looks at the account, “It’s definitely in there.” I’m like, “When’s it coming to our bank?” He’s like, “Well it’s not going to come to your bank.” And I’m like, “Why not?” and he’s like, “You’re on 100% reserve so we keep 100% of your money.” I was like, “What? That’s not good for me or for anybody. How am I supposed to be in business? I got people to pay.” He’s like, “That’s just how it works. The good news is that it looks like you are a legitimate company. No one’s charging back or refunding this money that we’ve collected so far, so what we’ll do is drop you down to 10% reserve.” I’m like, “Ah, thank heavens.” He’s like, “But the $250,000 you collected in the last week, we’re keeping that for the next 6 months as collateral to make sure nothing bad happens.”
I’m like, are you kidding me. We gotta create another funnel. So we make another thing, push it out there, make some money. We start paying payroll for whatever we can but everything’s collapsing around me. That started in January and that started happening at the same time we’re trying to find other merchant accounts at other banks. And all these other banks are like, “Oh yeah, we’re cool. Come in, we’ll give you a merchant account. This is how it works, you gotta make $100,000 a month.” I’m like, “Cool, we’re going to do that in like 2 days. I’m going to need 4 merchant accounts. We can make money. We just need you to give it to us after we make it.”
They’re like, “We’re cool, we’re good at that, don’t worry.” So okay, cool. We get a merchant account, get it all setup, drove a bunch of traffic, and twice we made over the $100,000 a month we were allowed within a day, day and a half, and they froze our accounts and said, “You made too much money too fast. We’re freezing your accounts. We’ll give this money back to you in 6 months.” I’m like, “6 months? Please stop doing this to me.” We ended up with 4 or 500,000 dollars locked up in merchant accounts and it kept getting worse and worse throughout this whole year. It was the hardest year of my life. It kept going down.
Every single day I’m laying off friends and family members and people who I loved and cared about and I’m coming in, “I don’t know what to do man. I’m so sorry. I gotta let you go.” It was such a dark time in my life with thing after thing after thing. I wish I could say from there it got better. That was an entire year, the next January started and one of our friends was doing an event in Vegas, I’m like, “I’m going to go out there and see what everyone…. I gotta re figure out my whole business. Everything’s completely collapsed.”
At the time, by the way, we were in this big, huge office we had rented, that we were leasing. I think it was 20,000 square feet because we all the call center and stuff. I went to the landlord and I’m like, “Hey man, I can’t afford to pay you anymore.” And he’s like, “Okay, well we’ve got a 3 year contract. If you don’t pay me, I’m going to sue you and you’re probably going to end up in jail.” Are you kidding me dude, I’m trying. He would not work with me at all, I had all this fear behind that.
So I’m in Vegas a year later, trying to ask friends what’s happening, what they’re doing in their business, and they’re trying to tell me their stories. I’m like, this is, I don’t even know what to do. That night I got an email on my phone from my dad, I opened the email and it was a shot in a gut. Probably the worst second in my life, that I read that. The email said, “Hey Russell. I’m so sorry.” My dad was doing my books at the time, but we had a bookkeeper in the office, and the bookkeeper was trying her best, but she didn’t know. She knew we were struggling and she didn’t want to stress me out, so she didn’t tell me how much we were struggling. It turns out what she had been doing is she had been paying the bills she could, and the one’s she couldn’t she was trying to not pay them and delay them. And to hide it from my dad and everyone else she was saying in Quickbooks that she paid bills, but then not actually paying them. So it looked like it was clear.
But he had gone through and audited it and found out that she hadn’t paid payroll taxes in almost a year. In the email my dad said, “Just so you know payroll taxes aren’t something where they fine you. If you don’t pay payroll taxes you’re going to go to jail. It’s over $150,000 you owe in payroll taxes.” I was like, that’s the end. It had been an entire year. Every penny I had ever earned was gone. All my people in my teams, it had all fallen apart. I’m sitting there like, “I don’t know what to do.”
The next morning I got on a flight from Vegas back to Boise. I get there and walk in and the call center is empty, all the guys are gone. There’s two people that are left and they said, “Just so you know, the call center across the road just recruited us and we all left. We’re out, see ya.” They walked out. I was like, “I owe the government $150,000, I have no one to help me sell. I don’t know what to do.” I want to quit, so bad I want to quit. But if I quit I go to jail. I also sold coaching to a lot of people I cared about, if I quit all these people that bought coaching from me, I can’t help them. That’s not right. That’s not the right thing to do. I don’t know what to do.
So I went to a bankruptcy lawyer, “How does this work man? I don’t know what to do. I gotta figure this out.” I kind of explained the whole process, told him about my lease. “The landlord says he’ll come after me, the government’s going to come after me. I don’t know what to do.” And he’s like, “The best thing to do is, I should come with you to your landlord and explain that you’re going into bankruptcy and maybe they’ll be nice to you.” So I’m like, “Alright.” He’s like, “Do you have any money?” I’m like, “No.” and he’s like, “What do you got in your pocket?” I was like, “100 bucks.” And he’s like, “Cool, give me $100 and I’ll come and I’ll tell the landlord you’re going bankrupt.” I’m like, “Alright man, here you go.”
So he comes with me, which is actually the best $100 I ever spent. He comes with me to the landlord and he’s like, “Russell’s screwed man, he’s going through bankruptcy. He just hired me. He can’t pay you. You can come after him, but he’s done.” It was this old man, he’s like, “He’s done. The Government’s coming after him. You’re screwed, don’t even try.” And basically convinced our landlord that it was a useless cause. So the landlord was like, “Alright, be out by Friday.”
And we had a big space with office cubicles and phones and craziness. So I’m like, “Okay, we’ll be out by Friday.” But 90% of my team was gone at this point. From 100 employees down to about 7 or 8. The few people that stuck by me, people like Brent Coppieters, love that guy to death. Brent and John and some of the people back then, Brent had taken a pay cut, a 50% pay cut and never…..amazing people.
So the few of us that were left, we were packing up stuff, we put up ads on Craiglist, we got tons of computer and crap, things we’d spent hundreds of thousands of dollars for, we were selling for hundreds of dollars just to get out of it. We made I don’t know, maybe 5 or 6 grand on all of our crap, getting rid of it. We had a huge dumpster, just throwing away everything we had ever created because we had to downsize. Trying to figure out how to get into a smaller building and how do we keep the people we have to have to be able to fulfill on coaching. We have to cut everything else that we have.
So we were downsizing everything, going out and the night we were moving, that Friday we were supposed to be out at midnight or whatever it was, I was sitting in the office, the desks were gone, everything was gone, all I had left was my laptop. I was sitting there, I had my socks on, I had some levi’s and I had no money. I was like, “We have to make some money or else we can’t even move into…I don’t know how to do anything.”
So I sent out an email to my list I had at the time, got a bunch of people to register for a webinar. I was sitting there in a chair with my laptop on my lap, doing a webinar, praying that something would happen. And that webinar saved us. That webinar made $150,000 in sales over the next 3 or 4 days, which gave me the money I needed to pay everyone to not leave, get a new office, get us moved in and get us stability so we could actually breath for a few minutes and figure out the next step, what do we want to be when we grow up.
So we downsized from 20,000 square feet to 2,000 square feet. And we had this really cool moment where we’re like, “What do we want to do when we grow up? What do we want to be?” And as painful as that process was, it was one of the coolest things ever because we didn’t have to keep going on this path. We could pick anything. That’s when I started thinking about, who’s our dream customer? Who do we really want to serve? What fires us up? What gets us excited?
And we started thinking through that and during this process, we started creating again and having fun. What should we do? I had a friend at the time who he had this website that was making him 2 or 3 thousand dollars a month and he got in some trouble, and I had a couple things making a little money at the time and he’s like, “I need to get rid of this site. Can you pay me some money?” So I paid him $20,000, he gave me this little website. This little machine that you zap and it gets rid of cold sores, and on autopilot it was making 2 or 4 thousand dollars a month and I was like, “Oh this is so cool.” So we had this little thing and I was like, “That little business just kind of runs. What if we had another one.”
So we started creating other ones. We had one in the couponing market, we set it up and had a guru in there, it started running and making money. Then we’re like, “What’s another one?” we did one with weight loss, and another. And in a year’s time we launched 12 different companies, each making different amounts of money. During that time is when we launched Neurocel, our supplement company, all these things were happening and it was starting to get exciting again. We were creating we were doing, doing the business instead of teaching the business, which was so much fun for us to do, to learn and see why this stuff works in this market, but not this market.
One of the things that would drive me crazy about teachers in my industry is that they come in and act like the marketing techniques that work in one space work everywhere. And I learned during that two or three period of time that that’s not true. Everything’s different. There’s intricacies in couponing versus business versus weight loss versus diet versus supplements. There’s differences and I came to respect that because we had a chance to do it in so many different businesses and different things.
We spent the next two or three years creating stuff and during that process, one of the really cool things is I go to Flipa.com all the time and try to find cool websites we could buy and turn to businesses. And there’s a website called championsound.com that was for sale. And it was this cool little email, text message auto responder for bands. I was like, “I’m going to buy that and we’re going to take it and niche it for every market. We’ll make email auto responders and text message auto responders for dentists, or chiropractors.” I was so excited.
It was 20 grand, we didn’t have that much money but I was like this is the future of our company. We have to do it. So we ended up buying this website from these guys off Flipa. We get the website and we’re trying to transfer it to our servers after we paid them the 20 thousand dollars. And as they’re trying to transfer it, they’re like, “You can’t have the Linux server, you need the Ruby server.” I’m like, “What does that mean?” They’re like, “It means that this is not coded in PHP, it’s coded in Ruby on Rails. You have to have a different kind of server.”I’m like, “What does that mean?” “It means you have to go over here and pay $800 a month for a new server.”
Are you kidding me, I don’t have $800 a month for a server. But we bought this thing, so we did and they installed it. Then it didn’t really work. I didn’t know what to do. None of my tech guys had ever used Ruby on Rails so I went to Odesk to hire some guys and they couldn’t fix it. I tried 5 or 6 guys and finally I was like, I wasted 20 grand. I was so upset and frustrated because I didn’t have that money.
On the way out of the office one day I was like, “I wonder if anyone on my list knows Ruby on Rails?” shot in the dark, I have no idea. So I send the email out to my little list at the time. Subject line was like, “Ruby on Rails, looking for a partner. If you know Ruby on Rails, I’m looking for a partner.” I said basically the story I just told you guys, “bought this thing, can’t make it work, if you know Ruby on Rails, become my partner, we’ll make a bunch of money with this thing together.” Sent the email out.
About an hour later I get an email from this guy in Georgia named Todd Dickerson, and Todd’s like, “Hey man, I know Ruby.” I’m like, “You do?” I looked at his picture and I was like, “You don’t look like a nerd. I don’t think you do.” And then I went to Facebook and I Facebook friended him, it was actually six years ago last week. I Facebook Friended him and he’s got a beautiful wife, he’s got a daughter. I’m like I don’t think he’s a coder. I don’t know if I believe that. He’s like, “Yeah man, shoot me the login, I’ll fix it.” I was like, “Whatever I have had 8 guys try to fix it for the last 4 or 5 months and nobody can do it. Whatever, here’s the login.” So he logs in and an hour later he’s like, “Okay, done. It’s fixed.” I was like, “What?” and he’s like, “Yeah, I got it fixed. I just did blah blah blah. And it worked.”
I’m like, “Dude, how did you do that?” and he’s like, “I just love Ruby on Rails. I’m amazing.” He didn’t say that, he’s super humble. But I was like, this guy’s amazing. I’m like, “I have all these other things. Want to help me with these other things?” So Todd came and we started working on this other project. We had an idea for an auto webinar, Todd built out the software behind the scenes, which was Clickfunnels verson 0.0, pre-everything. He built this auto webinar software because Mike Filsame had been talking about auto webinars. Rick Shephard had put in a webinar report. A couple of guys had started talking about auto webinars but nobody had done one. No one was really doing them.
So Todd custom built this whole platform so we could do them, we launched an auto webinar through that and in that auto webinar we made a million dollars in 90 days. The first thing I did from that million dollars is took the money and paid off the IRS and I was like, I’m free. I’m not going to jail. The IRS is paid off, the fines are paid off. That auto webinar literally saved me, literally gave me freedom. Up to that point every night when I went to bed at night I was like they could come knock on my door. I have not paid payroll tax in that long. And that webinar freed us.
We kept doing thing after thing, and what’s funny with Todd and Dylan used to design half of these things, just the contract, he’d design these pages and Todd would take them and code them up and make these funnels. He did funnel after funnel after funnel. We probably had 15 different companies, within those company 2 or 3 funnels. We probably had 40 funnels we built over, thing after thing after thing. And the last funnel we actually built the old school way was the Neurocel funnel. That’s one of the ones that blew up big and made tons of sales, we were having a bunch of fun with it and about that time is when Todd was like, “We should really create something so I don’t have to keep creating websites for you every single day.”
And that was where the idea came for Clickfunnels. So we started that project in front of a whiteboard, like we talked about yesterday. We mapped this whole thing, and Todd went to work to build Clickfunnels and we partnered with Dylan to build the editor and the UI. And then fast forward 7 or 8 months later, we came and we were like this thing is going to change the world. I was so excited. I was like, “We’re going to do a free trial.” And I think the very first month our goal was to get 10,000 members the first month. I’m like, this is going to be the greatest thing in the world.
So we put it out there we created the first funnel, had all the stuff in there, there was a free trial, we had a bunch of people lined up to promote it, we launched it, there were crickets. People came and then left. I was like, “Dude, do you not understand what I’m giving you? I made that page you’re looking at, it’s really good.” Nobody got it, why don’t they get it? There’s something wrong with my messaging. So we changed the funnel again, launched it again, a few of you guys signed up and that was it. They hit it and then they left. We tried again and again. We rebuilt that funnel not once or twice or three times or four times or five times. It was six times it took us before the Clickfunnels funnel worked.
The sixth time was because one of my friends, Mike Filsame invited me out to his event and he’s like, “Hey Russell, I want you to come and sell Clickfunnels, I think it’s awesome.” I was like, “Dude, Mike, nobody’s buying Clickfunnels. We gotta figure out our next deal or figure out something because it’s not working.” He’s like, “No, my people need it, you need to come speak on it. You gotta sell it for $1000.” I’m like, “It’s a free trial and nobody even wants it.”
So Mike’s event was happening that weekend, I was literally sitting in my office watching the event streaming and as I was sitting there I started writing my webinar and I had my slides open, I was following the Perfect Webinar script that I had been working on for ten years. I started filling in the blanks, started making this webinar, true to the Perfect Webinar Script. I literally was watching it, adding the things in while watching Mike’s event happen. That day I finished the slides, next morning I jumped in a plane and flew there. Got to California, put the slides up on the thing, okay here we go.
I started it and the title slide was “My weirdness funnel is currently make $17,947 per day”, talking about the Neurocel funnel and how you can knock it off in less than ten minutes. Showed the first slide, started going through and when we got to the end, got to the stack and the close, we did it and 30% of the room jumped up and ran to the back, jumping over the tables, fighting to get back there. I was like, we did it. That was the message, that was the key. Now I know how to sell Clickfunnels.
We took that message, went back and as a lot of you guys know, especially inner circle members, we started doing webinars every single day, sometimes two a day. One time I did three in a day, which was really hard. Over and over again, I did that webinar live over 70 times over the next year and a half and we went from being a startup with no members to after the end of last year we had over 10,000 members, after this year we have over 30,000 members and it’s continued to grow and grow and grow. And it was that one funnel that changed everything for me.
So this process, for all of us you guys, is an up and a down. It’s always happening and all of you guys are somewhere in this wave right now. Some of you guys are at the top riding it, some of you guys are at the bottom going to crash. Some of you guys are somewhere in between. Always going up and down, but if nothing else at this event, I want you guys to all understand that no matter where you are, there’s hope. It might not be this funnel. I can’t tell you how many funnels flopped. I guarantee I have failed at more funnels than anyone else in this room because we tried over and over and over again. Because of that we found out what worked. The only way to do that is to do it over and over and over again.
It’s a lot easier now, I promise you it’s a lot easier than what we used to do. Poor Todd and Dylan had to custom code every single thing, every single time. Now you can test things really fast. The first time I met Trey, first call he said, “Russell, I’m going to launch a funnel a week, every single week.” And I watched as he launched a funnel, and another funnel and another funnel, he had some marginal success, a little success, more success, more success. I saw him launch a funnel last year, one funnel and within 90 days became the biggest selling funnel in the history of the world.
I was talking to some of the guys at affiliate summit. They said there’s never been a funnel that’s made more money in a shorter period of time than one of Trey’s funnels. I’m not privy to share all his numbers and stats, but it was insane. And it came from doing a funnel a week until he hits the one that just explodes. You don’t know what that’s going to be. It’s important, that’s why this tool is so important. Because you can do that, you can test and try over and over and over again.