Now, when you are in a situation like that, what you spend most of your time doing is obsessing about what’s not working yet, right James?
James: Well, that’s right. Unless you have, you know, these days there’s a lot more tools with the Lean Startup movement at minimum viable products and build-measure-learn loops. But back then, I’d never heard of those things.
Perry: Yeah, so I’m sitting there and I’m like, well how do I do this? How do I get traffic to my website? What do I do? And it was only because I had that space, that I was doing experiments, and I had time to discover something like Google Adwords and go figure out what that meant and how it worked.
James: I think what you’re describing now is very common, where consultants get trapped; they basically change from an employer to being their own boss in a shitty job, where they’re paid by the hour.
James: And my first tip for people in that scenario has always been, to do one for you, one for me, right? One client job for one personal job, so that at least you can stop becoming your own customer.
And I love how you put it, building intellectual property, ‘cause the info products is good, but what you did that was so masterful was you built reputation, you became published, and you’d have to be the world’s foremost authority on Google Adwords to this day because of the work that you’ve done, even though that’s not fully what you’re doing anymore.
Perry: Yeah, and there’s another story I want to tell you about because I want you to understand all of this is very 80/20 OK? And so, like there’s a 20% of what you do that actually works, and it actually pays your bills and all of that, OK?
And what most people do is they spend a hundred percent of their time doing what works. Well, what you should be doing is you should be spending 20% or maybe 50% of your time doing what works, and you should be not deliberately not doing a bunch of other stuff, and then, you should be deliberately doing something else.
From which the new opportunity is going to come from. So maybe it’s exploiting the high end of what you’re already doing and reaching to a higher level, or maybe it’s going into a completely different area, but what my point is, opportunities do not come unless you make space for them.
Perry on building his reputation
Now, I want to tell another story about deliberately building reputation and it’s kind of funny. So, way back when, I think that was 2006, my round table group have a mastermind together, we all kind of decided that we believed we all deserved to have our own Wikipedia page.
We didn’t really know much about Wikipedia, but what we did know is that you can’t make your own bio, so we all put names in a hat, and drew names and made them for each other.
So somebody made me a Wikipedia page, and like two days later… And by the way, by this time, I am the Adwords hotshot, and like everybody, if I go to an Internet marketing conference, everybody knows who I am, which was, it was kind of a shocking thing by the way, for all that to happen, it was quite an adjustment.
But anyway, you know, something like, all these Internet marketers they all knew who I am.
So, Wikipedia page goes up, two days later, there’s this message at the top of the page that says, “This appears to be a vanity entry about a non-notable person. Please add references or this page will be deleted, according to Wikipedia’s guidelines.”
I’m like, oh, references. So let’s come up with something. There wasn’t any, like none! Like nothing that a traditional publisher or an academic source that we consider legit. I had affiliate links, that’s what I had. I was like; oh you go speak at these weird seminars that nobody’s ever heard of, like so what? I was a complete nobody.
And the Wikipedia page got deleted. And I’m like hmmm, you know, I probably need to fix this. And the funny thing is, at the time, I was making, I had this little e-book called “The Definitive Guide To Google Adwords” that was probably selling about $40,000 or $50,000 a month of this e-book, you know.
And when you’re doing that, it’s really easy to just convince yourself that you’re like a total stud and that you’re invincible.
And Jonathan Mizel has this great joke about he goes to the affiliate summit and he’ll see all these guys and they’re like 19 years old and they’re walking around and they got Rolex and they think they’re like really hot stuff, and he goes, “Dude, you know, 6 months from now, that guy is going to be living in his grandmother’s basement.”
James: If he’s not already in a sleeping bag under a desk. These guys have to work really hard all day so they can make money at night.
James: My friend Dane Hunt says that one.
Perry: Well they do. And it’s very volatile, you know, kind of really tenuous Internet businesses. And so, the long story short is I made a calculated decision. I said, well you know, Adwords is below the radar right now, but it’s going to be above the radar pretty soon.
So I got an agent and I went and I wrote “The Ultimate Guide to Google Adwords” and I got a contract with Entrepreneur Press, and I deliberately cannibalized this business.
I go from selling an e-book that’s like 49 or 97 bucks, and it’s all margin, to I’ve got a bookstore book and it’s 25 bucks list price and it’s actually $18 on Amazon and I make 10% on the wholesale price, which means I make a buck, so I go from making 100 bucks to making 1 buck, on essentially the same book.
But, what do I buy? I buy credibility; I buy premium position in bookstores, and on Amazon. And eventually, I do have a Wikipedia page, and I am somebody. And somebody can go, oh, he’s cited in all these books. But I had to go above the radar for that.
And I did cannibalize the whole business. And I had to reinvent the whole back into my business so I still had a business when the other business went away. Do you see how this is 80/20 thinking all the way through?
James: You’ve really defined the goal and it was to build a proper business, and it means that you have to do things a little differently instead of putting up the hammock at the side of the beach on the surf safari, you have to like foundations and hire an engineer and get concrete, and it takes longer and it’s more difficult.
And a lot of people won’t build on solid foundations ‘cause it’s too much hard work, but you did that, and when you look back it does seem like a long time ago.
This has been, it’s planting those seeds and building that orchard, you can pick that fruit anytime you want now, and now you’ve expanded into other things, like the 80/20 market of the general business market, but you’re also now toying around with Facebook advertising.
James: And do you think that’s going to be as big, bigger, or are they done in parallel? What’s your philosophy on these two?
Google vs. Facebook
Perry: Well so, I think Google and Facebook are, you can say, apples and oranges. It’s almost like apples and swordfish or something. I mean it’s like, they are… when we first started researching Facebook, I was like, okay, this is a pay-;per-click system and it’s basically just like Adwords it’s just different. And it was like, no.
Actually, it’s like a completely different universe. So I don’t think one replaces the other. But what I would say is Facebook is not just a toy anymore, it’s actually, it’s the hottest thing going, if you are in a somewhat consumer-friendly business.
Now if you’re in like some really geeky business to business kind of thing, Facebook may not work for you, and we have a little quiz, isfbforme.com, where you can actually find out if you should even bother with Facebook or not.
But Facebook is definitely a force to be reckoned with. Google is scared of them, seriously, they make Facebook.. Facebook makes Google very nervous.
About 6 months ago, I put out a press release, and I predicted that Facebook would triple in the next 2 years, and I stand by that. I think by summer of 2015, they’ll be in the vicinity of $20 billion a year.
It’s a really interesting way of slicing the world, and the reason why Facebook up until a year ago, Facebook was a dog; maybe 10% or 15% of the advertisers get it to work, the rest of them, good luck.
James: Well that is funny because I was talking to Keith Kranc just a few days ago. I’ve got a whole podcast about Facebook advertising with him.
I looked up my account and I was advertising with them back in 2007 or something, like a long time ago, and it was very experimental back then for me. So they’re going to change a lot more I imagine. What’s likely to come down the pipeline?
Where is Facebook headed?
Perry: Yeah. So, the first major progress came when they started buying big data, and mixing it in with their targeting options. So, you know, used to be, you could only target what people reported in their profiles and the things that they like and stuff like that.
Now, you could target people based on their income and value their home and a bunch of things, and now, you’re also starting to be able to target based on recent buying activity.
I mean I don’t know exactly where they’re getting the info, I mean that’s beyond the scope of this conversation but, people bought something related to boats in the last two weeks on their credit card or something, they may actually be targetable as such on Facebook.
And so, Google targets people based on what they are interested in, and based on their online behavior, like what Web pages are up. Facebook advertises to people based on who they are, which is not what Google does. So Google is interest-targeted and Facebook is identity-targeted.
Well, in the grand scheme of things, all the growth in the economy is going to be in the who you are category, more than it’s going to be in the what you’re interested in or what you can articulate category. Because I think in a lot of ways, the world has already configured itself to deliver people whatever they’re searching for. Like people figure that out.
It was new and exotic 10 years ago and I was part of that, now it’s not. Now it’s like, what can you interest me in that I have never seen before, that I would never even think to go looking for, but as soon as I stick my toe in it, I’m going to get sucked in and it’s going to be a magic carpet ride?
That’s what people want, that’s actually why people sit there on their phone and they open Facebook ‘cause they are looking for something surprising.
James: So this is like a Steve Jobs effect?
James: Do you want predictive advertising that shows people what they don’t know to ask for.
Perry: Well yeah, that’s the name of the game.
James: You know it seems to me that feature being able to upload an email is very powerful because there’s a good chance that that cohort, the other people who are in your system, have already explored some of those areas but not everyone in that cohort or that group has actually found that yet. So what’s the pattern here?
Perry: That’s right. And so, if you could look forward, and you can say, what would just knock these people’s socks off? Then you may have your next tip. So, there’s people getting wealthy all the time, and more and more, it’s about the anticipation of what people are going to want, more than it’s about asking them.
Of course most people aren’t even asking. You’re never going to do wrong by asking, but of course, people wouldn’t have asked Henry Ford for a car, they would’ve asked him for a better covered wagon.
James: Yeah. And I was actually researching that one a little bit too. The oft-attributed saying that they’d ask for a better horse. The family and the historian said they can’t actually find where he said that.
Perry: Oh really?
James: And by the way, the Henry Ford documentary is one of the most fascinating documentaries I’ve ever watched. What an interesting man.
Perry: Which one? I imagine there’s more than one.
A little about Henry Ford
James: Yeah there’d be a few, but it was pretty plainly named. It was very long but one of the things that I really remember was he actually had this call of building a factory that could build a thousand cars a day, and then, when he had built it, he hated it.
And he basically was very sad. But he was forcing people to live a certain way. He even had people go around and inspect the house, and make it part of their pay, and everything else. Really domineering guy, fascinating, and pretty much bullied his son Edzel, pretty much to his death, like just a hard man. Fascinating story.
Now, continue on with your story, I’ve got a couple more questions. I’m not sure if you get these or not, but on your journey to becoming more reputable enough to be put into Wikipedia, it appears you’ve done a lot of co-authorships.
What could you share with us about that process? About having co-authors, where are they now, and was it good for them and good for you, and did you need a partner? What was your strategy around that?
Perry on co-authoring
Perry: Well in every case, it was, somebody else is better at part of this than I am. It’s kind of interesting that the only book I’ve published that doesn’t have a co-author so far is the 80/20 book.
James: And that one, that leverage is very heavily off Richard Koch right?
Perry: Yes, it does. And he wrote the foreword and you know, I might even co-author books with him in the future. We’ve become good friends and I think the guy is just amazing. He’s more amazing than I realized he was, even before just from reading his books, ‘cause I went to hang out with him for a couple of days in Portugal a few months ago.