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What is the 80/20 principle all about? How do you apply it and outsmart your competitors on Facebook and Google? Learn all these things from an internet marketing legend.
Perry Marshall
In this episode:
02:06 – How James learned about Google Adwords
02:55 – No to these type of sites
03:59 – How Perry was able to predict the future
06:38 – Discovering this formula was the key to success
08:27 – The encounter that completely turned Perry’s life around
11:32 – Perry Marshall’s 80/20 book
12:20 – Success requires this ingredient
13:51 – Success comes down to this 4%
17:17 – The divinely-thrown touchdown pass
18:45 – Build this into your business
19:30 – How you should apply the 80/20
20:28 – How to avoid a Wikipedia slap
25:57 – What is the difference between Google and Facebook?
27:11 – The fearless prediction for Facebook
28:11 – Interest-targeted vs Identity-targeted and why it matters
32:07 – What did Henry Ford hate?
33:13 – Perry on co-authoring
40:40 – How to get powerful results from face-to-face
42:40 – Figuring out the million dollar idea
44:35 – How James connects with his customers
45:23 – The story behind the Swiss army knife concept
48:15 – Mapping the emotional landscape for results
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Tweetables:
Fuel your business with the 80/20 principle. [Click To Tweet].
Give yourself permission to succeed. [Click To Tweet].
You only need 4% to succeed. [Click To Tweet].
Guide to Google Adwords Map. [Click To Tweet].
It’s an emotional thing. [Click To Tweet].
Transcription:
James: James Schramko here, welcome back to SuperFastBusiness.com. Today’s guest is an absolute legend in the Internet marketing space, primarily because of his founding work with Google Adwords platform. And I’d love to welcome Perry Marshall to the call.
Perry: James, it is great to have you here, and it’s great to have met you in person a few weeks ago. It’s great to have you on the back of my 80/20 book, which my marketing guy, Jack Borne hooked us up, and it’s a pleasure to know you and meet you like a systems guy, an 80/20 guy. Kindred spirits!
James: We are, and we’ve had so many friends in common, especially a lot of the people who have come from your training. One of my friends, Mike Rhodes is a real… I guess he’s a mentee and student of your staff, and he’s going on to do some amazing things with his own practice.
Jack’s a tremendous guy. He’s been wonderful, discussions there with him, and he’s gotten off and developed solutions in interesting market as well.
And, I think we met very briefly at a Jay Abraham event, but it was a short event, and it was a high-caliber event, where we’re all focusing very much on our own solutions.
Perry: Oh yes, that’s right, that’s right. I remember that. So, yeah, it’s very nice to meet you. And you know, you’re making it happen Down Under, and kind of a legend down there.
How James learned about Google Adwords
James: Well, I want to take you back a little bit to a few years ago. Very early on in my Internet marketing cycle, I remember giving a list to somebody to the city, from an Internet marketing conference, my first Internet marketing conference that I went to.
And he was telling me about his business model, and that was buying traffic on Google, and then selling things, and he was making more profit from the things he was selling than what it costs to advertise, and he was just doing that. That was his whole business model.
And I asked him more about that, and he produced a folder, and it had “The Definitive Guide to Adwords” by Perry Marshall, it has this red silver cover I think. I then went and explored your website, and I saw your approach.
I think it’s the first time I learned about a white paper, and just how clean and simple your websites were, they were kind of really white with just text, and they were logical.
And I connected with that a lot more than I could the huge, red, screaming headlines, and the cheesy, hypey stuff. So it was really the first time I saw someone marketing more in a way that I could resonate with.
So I definitely have to credit you with being an early influence on the way that I felt my consulting side of the business might look many years ago.
Perry: Wow! Well, you know some of that was just me being irritated at how everybody else thought marketing was supposed to be done. People seem to think that if you scream at people loud enough, they’ll start to believe you.Well, this makes no sense to me. Why don’t you say something believable? That might be a good start, right?
James: Yeah. It’s like, it was such a contrast, so well done for being different. Now, I’d love to talk about how you’ve managed to pick such a giant piggyback, because Google has really gotten on to get a lot stronger since you started out.
Did you see this coming or did you just pick an advertising platform, and as it was developed, you were just there at the time and you thought, this makes sense?
How Perry was able to predict the future
Perry: Well you know, it’s a great question. First of all, I could not honestly say that I foresaw where Google was going. The closest I could say to that was when I went to my first Internet marketing seminar, which was Ken McCarthy’s and John Keel’s book on pay-per-click, which is where I learned about pay-per-click.
I had noticed how eBay, maybe a year or two before they had really secured their position, as the number one auction site. And I remembered how like Yahoo and some other guys had really made a valued effort to unseat them, and they couldn’t do it because of the network effect.
They’d get more buyers which will get them more sellers, which gets them more buyers, which gets them more sellers. So the winner is going to really take all, right?
And so at the time, the search engines were still all bleeding money. And I remember asking John the question, I said, “So is there a similar phenomenon as we’ve had with eBay, where one search engine is just going to nationally dominate”? And he goes, “I don’t know.”
But my gut told me that one search engine was going to dominate. What I couldn’t foresee at the time was all of the bells and whistles that would eventually come along with the search engine.
Like I couldn’t foresee YouTube or Google Maps, like all those other stuff. I don’t know whether Gmail even existed or not then. I couldn’t have really picked that.
All I can tell you is that, I saw that they had created the most amazing direct marketing machine ever. I figured that out a week later. Like wow, oh my goodness, look at what you can do with this.
Discovering 80/20
The other thing, you know you said it would be okay to do rabbit trails, there is one other thing though, which I actually think was pretty important. And so, it was a year later.
What it was was I had learned about the 80/20 principle, I had read Richard Koch’s book. Now I already knew about 80/20, but he pointed out something that I had never understood before, which is the 80/20 as fractal. That there’s this infinite repeating pattern, that there’s an 80/20 inside every 80/20 that keeps going.
And he just kind of mentioned this. But I had latched onto it, and my mindset on fire. And I was already obsessing about this. And I remember this one particular day, and it was a Friday.
I was sitting there and I was going, this is a Calculus formula, ‘cause I’m an engineer. Like I solve these things, how would you figure this out, I can’t figure this out. I don’t know how to solve it. And I was obsessing about this all day long.
And the other thing I was obsessing about all day long, was I had… I won’t go into the details, but I had just scored my first Internet marketer home run, and I had made quite a bit of money that week, and it was a caveman discoverer’s fire moment.
You ever had one of those? Oh my word, wow! I just made more money in an hour than I usually make in a month. That will change your perspective on things.
And what I was thinking about was, wow! My brother-in-law’s got this project in Mozambique, and they got the school, and they got this feeding program and these people are really poor, and I’d like to go there someday, and I wonder what I could do to help that. And I was thinking about those two things all day long.
The great vision
After dinner my wife goes, “Hey, you know, they’re having this music thing at church, if you want to go I’ll watch the kids,” and I’m like well OK.
So I go to this thing and they’re playing music, I am totally in la-la-land. I’m just standing there and staring at the space and I’m thinking about Calculus, and I’m thinking about Mozambique, and all of a sudden, I looked up and this woman is making a beeline for me.
It’s this black lady, I’ve never seen her before, I don’t know who she is, she walks right up to me, and she sticks out her hand, and she shakes my hand, and she goes, “Hi, my name is Vivian, and the Lord gave me a word for you.”
I’m like what?! This is weird. “The Lord told me that you’re very very good at Math, and you’re in some kind of an equation, or some kind of a formula, or some kind of an invention. You’re going to figure it out. Just keep working on it, you’re going to figure it out!”
And I just looked at her, like, how many people are working on a Math problem right now? OK, I mean it was spooky. And she turns to walk away.
And then she wheels back around and then she told me something else too, “You want to support missions and God is going to bless your business so you can support missions, like Mozambique, feeding programs, orphans, kids.” Wow!
James: So you had a very strong drive at raising it right then.
Perry: Yes I did! And I just stared at this lady with my mouth open. And I was almost on the verge of tears because she read my mind. It was like wow!
I mean, I could have may be, possibly, shrugged off the first thing as a coincidence maybe, but getting both of those right at the same time, and I go, “If only you knew.” And she gives me this big smile, she points her finger up in the air, she goes, “He knows!” And she just walked away, just like that.
James: Wow! And I guess being an engineer that must be even more difficult to reconcile.
Perry: Just strip my gears. Well, you know, I call in memos from the head office, they are much more common for me now than they were then. But I would say that was like my first one. And like wow! That totally got my attention. And it affected me in several ways.
First of all, she told me, keep working at it, you’re going to figure it out. Well it actually took me 3 years. I figured it out 3 years later. And I’m glad she told me that, because I’m really not sure I would have pursued it.
I would have been content to just kind of have a picture in my head, and have this general idea, and all about 80/20, but apparently, it was important for me to get down to the Math of it. So I did, and the Math is actually the backbone of my 80/20 book.
Perry Marshall’s 80/20 book
Now it’s a marketing book that’s written for regular, ordinary people. So you don’t hear me like talking about Calculus very much in there. But there’s actually a whole mathematical backbone behind it.
And, the 80/20 curve, there’s a lot of things in Statistics that are kind of like it, but there’s none that are exactly alike it, and none of them are easy, as easy to use for a marketer as the 80/20 curves, and it’s at 8020curve.com.
And I figured it was really important, I know that it was. It’s actually become a major strategy behind everything that I’ve done in my business for the last 10 years. So that was one thing.
Another thing that it did for me, was it was a kind of permission for me to succeed. Anybody who does what you and I figures out after a while, that how successful people are actually has less to do with what you teach them, and it has more to do with how receptive they are in their heart and in their mind, to change from being failing a lot to being successful.
James: I think that’s where the 80/20 has been a good to help people reduce down the amount of choices that are possible, the routes that they could take, and to make it much clearer and more obvious what needs to get done.
And I think people build their self-belief, their confidence increases when they start seeing results quickly because they’re doing the right thing, which is a Peter Drucker philosophy.
When I was reading your book, the really important point that came for me also was the fact that it was fractal. And I immediately started calculating.
Alright, let’s just take this 20% for a minute here. What’s 80% of that 20%? It’s probably 64, and what’s 20% of that 20, it’s probably 4.
So I thought, wow, 4% of the stuff that I’m doing is probably getting me 64% of the results. There’s a lot of stuff I’m doing that’s really not that important in the overall scheme of things.
I actually themed one of my events called FastWebFormula4 around this 4% idea, and my role as a presenter for my own topics was to only talk about the things that I felt represented the 4%.
So I covered things like leverage, profit and systems that my most successful students have nailed. And it’s flowed right across into my mastermind at SilverCircle.
Each week, all I’m looking for from my students is, what’s that one thing that’s going to shift their business more than anything else. And it always is identified in advance, in a 12 weekly stretch, and we’re just focusing on that 4%.
So what I found is, that even if someone doesn’t believe themselves that they can do it in the beginning, ‘cause it’s very common that people put out official limiters on their performance by just focusing on this 4%, and you used a word that I like, obsessive.
If they could just obsessively focus on the 4%, and even just let a lot of things right, they’re still going to get a result even if they don’t have a vision from the Lord.
The start of a good business
Perry: Yeah, right, right. And so, that was like, that was a permission to succeed. And then, they started asking a few about Adwords. So that was March of 2003. And a couple of years went by, and my business hit the hockey stick and I went crazy. And I went crazy because of Google Adwords.
And a couple of years later, I was like, wow, she was right; my business really did get blessed. And I went back and I looked at all the emails that they had happened that week, ‘cause I had a haunch I might find something interesting and I did.
I found that Tuesday of that same week, Ken McCarthy, he had asked me, who should I have speak at my seminar on Adwords and I said, you should get Andrew Goodman. And he went and asked Andrew, and Andrew turned him down, and Ken came back to me on Tuesday of that same week just before the Friday where I met the lady named Vivian.
And Ken said Andrew turned me down; I think you should do this, and a soon as he said that, I knew what that meant. That meant that I was in the, basically the Adwords booktape and seminar business.
And that all happened right there. I couldn’t have foreseen where Google was going. But I believed that it was providential. And so, I couldn’t have done that.
I think it was like, the divinely-thrown touchdown pass. Now the thing about touchdown passes is, you have to be prepared when they come to you.
You have to know how to catch, you have to know how to run, you have to know what the plan is, you have to know what the game is. And I had done that.
Another thing that I also think is really important was, I had deliberately carved out space. So I had a year and a half before that, I had escaped the work cube and I started consulting firm and I was doing this project work for clients.
And I need a very deliberate conscious choice, and the choice was, I am not going to fill up my time with consulting projects.
I am going to spend half of my time on consulting projects, I’m going to make enough to live on, and I’m going to spend the rest of my time building equity, which I wanted to create info products and I wanted to sell my intellectual property, and I left all this other space open for doing that.
