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.
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
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].
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.
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.
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.
James: That must be amazing. For me, that was what the Jay Abraham experience was. It was to meet someone who I’d really studied, and to develop that character more.
But of course, a lot of the other people that I’ve learned from are no longer alive, so to be able to have that opportunity to meet a living inspiration. In your world, it must have been surreal?
Perry: Well yeah. But the thing of it was, well actually, the guy was more impressive than I realized he was before I met him. So before I went to hang out with him, I didn’t really realized that he only works an hour a day. I knew he was worth a couple hundred million dollars, and that’s impressive.
But I didn’t realize he was doing it working an hour a day. I also didn’t realize that he hadn’t written six books, he had written 20. And some of them far are completely out of the business topic.
So he’s actually really got the mind of a professor and a researcher and not just a business guy. And I really admired that. It gave me this whole other picture of what kind of reality that I want to go create.
I think a lot of us need to see something before we can really latch on to it. We need to see it somewhere. I mean humans are imitators, I mean we just are.
You were asking me about the co-authors thing, well, I can understand fairly quickly that my forte is not in knowing all of the nuances of like a software platform.
My job is not to be the expert on every little wrinkle and bell and whistle in the Google Adwords interface, because that’s actually not an incredibly valuable job anyway.
And I’m not trying to put down my co-authors, that’s why I have co-authors though. It’s like, somebody has to know these stuff, but actually, my job is putting the whole picture together, and setting the values and the culture of my entire audience and what we’re trying to for our customers.
Like, from the very first coaching that we started doing with Adwords, I would tell people in the very beginning, I would say, if you’re getting all your traffic from Google Adwords one year from today, I have not done my job because Adwords is not the point of this at all.
The point of this is Adwords is a place where you can get traffic, so that you can fix all your funnels, and you can build a sales machine, you can bake the best sales machine in your entire niche, so you can go get all the traffic, and you’d get traffic anywhere you want, and that is your job.
Like, I don’t give a… I don’t give a rat’s **** about Google. They’re just a big company. They don’t mean anything to me.
What means something to me is you have a business and you have a life, and you only have so many chances to get this right, and my job is to help you as best as possibly as I can get this right, so you can move on and have a successful business and do the things that you’re created to do.
That’s my job. And so, the co-author thing, it makes perfect sense because some people are great at… they want to sit there and play with the platform, and poke it, and see how it pokes back. And I get a bunch of people in my audience that are really good, and the best ones, they turn into co-authors.
James: So what you’ve really done is champion your best students. You’ve actually given away your best, and these people have supported you and partnered with you, and lifted everything together rather than defect and steal and all the malicious things you hear out there.
Perry: Well yeah, and I also came to understand that one of the most important things that I do is build a community.
Building a community
James: We’re on the same page there. That’s pretty much my entire business model is, lifetime community. And support them with services and products, and free content like interviews that can help them be successful. And I found it’s a really worthwhile thing, I guess that’s my Mozambique, if you like.
Perry: Yeah. Well you know James, it’s true. I think a lot of times people don’t realize, especially when they’re new in something, you know, they get a new profession or, I remember when I started going to internet marketing seminars and all these geeks, freaks, and misfits manage to crawl out of the woodwork and find their way there, and here we all were, sitting at the bar.
I didn’t really realize that, dude, do you realize that at least a fourth of these people are still going to be around 10 years from now, they’re going to be your friends and colleagues, and you better treat them really well? Not everybody looks at things that way.
James: Well you have an actual strategy around this. When we first caught up, you had, you firstly said hello before the event, which was very nice. And you had a dossier of all the speakers, and you’d circled the names and you were on a mission to locate them and say hello.
Which is (a) very strategic, (b) very clever, and I’m sure that, you know I’ve always been saying to my audience, go to live events, you’ve got to go to live events. That’s the lifeblood of an online business, it’s the connections you make, they’re long and lasting.
And it enables things like this for us to be able to have a conversation and talk about things. I’m sure that strategy went really well for you.
Perry: Well it did. I learned it from Larry Benet, who is like the king of networking. And you know, networking is this word that kind of, to most people, it means like going to some meeting and passing out business cards as fast as you can, which is…
James: Yeah. I actually had Larry on my show talking about this. He managed to network himself under this podcast, but also, he’s introduced me to a lot of other people, and I think he was also at that Jay Abraham event.
Perry: Yeah. And Larry, he really, really is a brilliant resourceful guy. And it’s true, like the best connections you make are the ones face to face in the bar, or wherever you’re hanging out and having a real conversation, you never get a full sense of who somebody is until you meet them.
And people need communities, like when the economic crash happened after 08, the only reason a lot of people kept their head above water was they had friends, or there’s big giant Google slap and all of it said, you’re nowhere to be found on the internet, and 90% of your customers just went away overnight.
Well, if you have friends, you could probably figure out some equitable way for them to send you some customers. And if you don’t have friends, well, you know, rest in peace.
James: Cool. Now, I want to touch on one other thing, and this is a topic around your bobsled runs. I have this memory of you having people to a house, at a very small mastermind sort of workshop. And there was another marketer doing something similar at about the same time, and I thought, well that’s a pretty cool idea.
And I actually ended up running 4 SilverCircle intensives at my house, and I think the earliest memory of that was the bobsled run. Can you tell us about the process, how did you arrive at that idea, and do you still do it?
The million dollar idea
Perry: Yeah. Well, it’s all back to 80/20. So, I was selling “The Definitive Guide to Google Adwords,” and for a long time I didn’t really have any expensive products and my friend Bill Harrison came to me, and he goes, Perry I got a million dollar idea for you, and he, in detail, he explained the idea of, OK so you have a coaching program, and you get some on one-on-one calls, some group calls, and you go through material, and you take him to a process, it lasts for so many weeks.
And so, I looked at that, I go well, so based on 80/20, if this number of people spends $100, how many of them would spend $2,000 or $5,000? And I came up with a number. And I’m like, well, this is how many we should sell if I do a good job with the promotion, and sure enough, that’s how many we sold.
So, I’m just climbing the ladder, 1/5 the people will spend four times the money is the rule, and so I did that. So then we got that all figured out, and I’m like, what’s next after that?
So I know that if X number of people would spend $2500, then Y number of people would spend $7500 or $10,000. I know this for a fact, it’s like live Physics. So, what would they pay that much money for?
And so I thought, well, what if I did like this two-day coaching thing at my house and everybody gets half a day to work on their business and everybody helps him, and so I came up with that.
And that’s how the four-man Intensive was born. And we still do them. I’m doing one in about two weeks. I do them every few months. And that is actually my single best way of completely, totally, and thoroughly understanding my customers.
James: Yeah, it’s like, I have a weekly call with SilverCircle, and it’s like paid CRM. I’m in tune with my top customers every week. I have a mastermind with my other community, the SuperFastBusiness membership, and they are my other customers.
I’m basically connecting with them every week live, and there’s no substitute. It is a little bit more work, but it’s still a one-to-many format where you can help more people, with the same one hour, I can help 30 or more people. And it’s a wonderful way to do that.
Well I was just going to say, we’ve covered a few things, one thing I didn’t cover that I did want to ask about, because Mike Rhodes has mentioned it before, and it’s quite a pivotal tool in your tool kit, is this concept of this Swiss army knife.
The story behind the Swiss army knife concept
Perry: Oh yeah, yeah. Let’s wrap up on that one, because….
James: You like how I’m just cherry picking all your greatest tips?
Perry: I appreciate it. I mean, I can tell that you pay a lot of attention, which I appreciate. So, the Swiss army knife was born out of realizing that everybody learned how to split tests of.
And then everybody was apparently just split testing the same narrow variations of ideas over and over and over again. And it was inspired by my studies of biological evolution. And evolution is a badly misunderstood topic.
If you go to a typical college, typical university, typical Science class, typical book in the bookstore, what it will tell you is that DNA has this random changes and things, and just out of the process of survival of the fittest, occasionally improvements show up.
Well that’s actually very, very misleading, because what cells actually do is they cut splice at it and rearrange their own DNA. And they appear to follow some kind of algorithm that is just probably makes Google look like a bunch of elementary school kids.
I mean it’s really astonishingly amazing. It’s the engineering, evolution is the engineering feet of the universe, it’s amazing.
Well, I started studying this and you know, there’s micro evolution, there’s macro evolution, I said, these organisms actually know how to make drastic changes based on what’s going on in the environment.
Somehow, this tree knows to grow these roots down to the ground, and have a second set of roots. And it has me on this journey and what I ended up with, was this systematic creativity method of creating new ads.
And so you go through this process and make this matrix, and you know how the ability to generate an infinite number of new ads that nobody has ever seen before.
It’s a little geeky for the typical marketer, but I do find that for advanced marketers, they just absolutely love it, and they rave about it.
You know the funnest thing I do in my life is just about inventing stuff like that. I just, wow, how did I get so fortunate to have a job where I can invent stuff and get paid for it? What a great thing.
James: Very cool, so could you give us an example of how it works?
Learning the process
Perry: Yes. So, we go through a brainstorm process, and what we do is we make a map of the customers’ emotions, and their emotional landscape.
What do they love, what do they hate, who’s their friend, who’s their enemy, and a whole bunch of other questions. And we build out a bunch of answers to each question. And then we create permutation.
So we go, alright, I’m going to write an ad about a best friend and an enemy, and then I’m going to write another ad about the thing they love and the thing they hate, and I’m going to write another ad about a positive force in their life and a negative force in their life, and then I’m going to do an ad about a positive force in their life and their worst enemy.
And, like I’m just giving you a tiny sliver, but when we do this, it always produces ads that you would have never thought of by yourself, and they’re different from anything your competitors are doing, and they’re relevant to your customers’ emotions.
Perry: And so, it’s such a powerful thing, and so you can beat any ad, you can beat any control, you can outsmart any competitor at least in terms of what they’re saying in their ads because you’re doing this.
I think it actually mimics what living things are doing, when they intentionally adapt to their environment. And it’s why if you go to the Galápagos Islands, it almost looks like the creatures there were custom-made just for there.
Well, it’s not because God beamed to the zebras onto the Savannah like Star Trek, it’s because God made the zebra with the innate ability to adapt, or made the first cell with the ability to adapt, and then you have this adaptation.
And so a lot of what we’re doing is trying to be half as good as what we do is nature is. And there’s a whole field called Biomimetics, which is how do you imitate living things and borrow the smarts that they already have.
I believe that the cell has answered every technological question that we are currently asking, if we just have the humility to go consult it and see how it does what it does.
Where to check out the 80/20 book
James: Nice. Well, I think there’s someone that’s always looking up. Now, you’ve got a page setup for your book, it’s sell8020.com, then it takes people to the right page, where they can check out the 80/20 book.I loved the book; I was very pleased to be able to read it a little bit before everyone else.
Perry: Thank you!
James: I got time to adjust to… It was one of the very, very best books that I read, and I read a lot of books, so it’s an absolute privilege to have you here talking about your stuff. And that was great to catch up again, and I hope we get to catch up many times more, ‘cause it’s a long game, isn’t it?
Perry: It’s a long game, and I am sure that we will. You know, I appreciate the logic and the way that what you do, it’s thought through, it’s organized, it’s systematic. And there’s creativity within those systems. It’s not rigid, it’s flourishing, so I appreciate that.
James: Awesome. So, we’ll have a discussion underneath this post and I’m sure there’ll be a few questions here and there. So, Perry Marshall, thank you so much for catching up, and we’ll speak soon.
Perry: Thank you James, take care!
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