Derek: If I went… so, in hindsight as 20/20 right? But the biggest mistake I made was in the end of 2007, I was making a killing online. I was killing it with my celebrities site, I have a fashion site, I had a make-up site, I got really depressed though because I didn’t wear make-up. You know I only wore a dress once in college and I really hated celebrity gossip. So what did I do?
At that exact moment, I was depressed. All my friends were working in corporate America, I decided to walk away from my web business, I got a job at a Fortune 100 financial company.
Derek: I earned in a year what I basically earned in like two months online. And I did that because I didn’t know better. And I thought that the answer was to become professional. So that was probably my biggest mistake because I went into the corporate world.
I lasted there for two years and don’t get me wrong. I was in the dream corporate position. I was in the finance company, I reported to a VP that reported to a C-level executive.
There I was, 23 years old at the time, yeah, well, 23 turning 24. And I had already had the opportunity to give a presentation on several occasions to, like, the Vice Chairman, C-level executives. I was great place for a corporation. I got promoted. I got hired December 2007, I got promoted in, like, six months.
Most people waited two years for their first promotion, I got it in six months. So I was in like the dream spot but I still think this is my biggest mistake because I could have done so much more had I just changed my path in the Internet business world.
James: Well, I suggest that it gives you great context to be able to help people who are in that situation as I was on a great job 300,000 a year running Mercedes-Benz dealership and I quit that to build my own business. And a lot of people ask me about that journey, about the mindset of starting a second business while you have the first job and I think that could really serve your audience if you share that story.
Derek: I think one day I will. The reason why I haven’t, because even though I started working for that company, I kind of outsourced my entire web business at the time. So I was still earning money. I wasn’t earning as much.
It kind of spiraled out of control because I wasn’t doing anything for it. But I think more than anything, you’re right. It does help me get perspective and it also helps me understand because between me and you, after two and a half, I was like there for about two,two and a half years, I watched my income go down every year because I was just earning so much more money online than they could have ever paid me.
And then I realized, I looked at my boss, who was 10 years older than me exactly, and she was earning you know, significantly more money than I was and I looked at her boss who was about 15 years older than her. And I looked at what he was doing. He was a C-level exec. And I knew how much money he was making, you know, about.
And I thought to myself, I have to wait 25 years to get to that level? And then I started looking at my income, I looked at my boss’ income. I said, you know what I’m really good at this. Maybe I could do it in 10 years.
Then I started thinking about that 10 years to get to that level? I was already at that level with my web business! So, I wanted to restart the web business. But here’s what’s so funny: There I was, I graduated college making more money than I knew what to do with it.
I had a proven track record of success but it took me like five months to pull the trigger on actually quitting my job and pursuing the web business.
Derek: Because by the… I noticed something that I would never have noticed had I worked for corporate America. Corporate America has a weird ability to sap your confidence from you to be an entrepreneur. Because corporate America tries to make you fit in a round peg to a round hole. And that’s what you’re learning how to do.
It’s all about politics. It’s all about getting ads. It’s all about doing good work. But being an entrepreneur is the exact opposite of that.
And doing corporate America for awhile, you have to just reframe your thoughts and that took me awhile to pull the trigger again before I quit.
James: Oh well, congratulations. And you know I think you’re probably a better person for that. You can’t have light without shade, my grandma used to teach me.
Derek: That’s a great quote. I might have to requote your grandma at another time.
James: Yeah. She was legendary. Alright so one thing I’ve noticed. You’ve done this really well. You don’t make money or revenue or dollars or get rich the real core of your offering which is kind of a normal thing that people are doing online. How did you manage to avoid that temptation?
Derek: Well you know I always thought about this for a second. Well actually, it’s rooted in psychology right? If you talk about how much money you make, like a lot of these other Internet clowns, it actually makes people want it, yes? But it also helps make people resent you for it, secretly.
And it might be motivating, it might help you get the sale. But I also hear that refund rates for some of these other guys in the Internet space are like 20 or 30 percent.
James: I’ve actually seen some of the… over 50 percent.
Derek: Yeah, so they got super high refund rates, they’ve got now, mind you, I’m a sales guy. I know high refund rates is good because… not good..but it’s also evident that you’re selling people on buying your product. A high refund rate in the 15 percent or 20 percent range is not bad. It means you’re converting the maximum amount of sales into your product. Right, so that’s great.
James: Well, I don’t know. My refund rate is less than one percent and I’m quite comfortable with that.
Derek: No I know. So there’s like two different mindsets right? But if you look at a refund rate of 1 percent, that means every person who bought your product was the exact right fit for your product.
James: And I think that too. In my marketing, I don’t use a lot of hype or manipulation or… I could use a lot more pressure or sales techniques. I don’t but I love my customers and they stick with me forever and they get results. I think I stand out for all of those reasons and that’s why after you have a certain amount of money, there’s no real need to put pressure on people and get that discomfort happening.
Derek: Exactly. So that’s one example. Like you want to basically, you want the exact right customer that’s the perfect customer always. Now I’m of a little bit of a different mindset. I don’t use hype but I do want the perfect customer.
Three Types of People
Derek: The person who’s going to get results is probably going to do really well but I’m also of the mind that there are these other, there’s three types of people: There’s people who are going to love you forever; there’s people who are going to hate you forever. Then there’s a third type of person; a person I like to call the sideliners. These sideliners might make up 80% of the people who follow you.
These are the people who don’t know if they should love you or if they should hate you yet. I want to turn those sideliners into people who love me or into people who hate me. And I know to do that, your refund rate will go up a little bit higher.
James: So you want to polarize some people?
Derek: Yes. So I want to get people into the course of the sale knowing that I want to help them and if I don’t help them, no problem. Take advantage of the refund rate, no hard feelings. If you think that you end up hating me for this, you know what, that’s fine. I’ve got thousands of people who love me.
But I want to turn those people in the sideline over. And I think I want to focus on those people because I remember corporate America. I remember how hard it was for me to quit something even though I knew it was the right decision for me, and at that very moment I was personally a sideliner. You know what I mean?
And I needed that kick in the ass to make me into someone else. You know what I mean? So I want to give those people, because I believe it’s the right thing to do to help people help themselves, and I can’t do that without making sideliners turn into super fans as they would say.
James: Cool! Well you get to use your story after all.
Derek: Yeah, right?
James: Yeah. You’re a natural salesman, Derek. Alright, so, if you were recording this podcast, what sort of call to action would you ask your listeners to do? If you were me, since I’ve got the expert of brashness of decisive calls to action because we’re going to wrap up this podcast now so, firstly I want to say, thank you so much for getting on the call. I know you have a busy schedule and I appreciate you taking the time out to share this with listeners.
I also want to say to my listeners that I have done the Blog That Converts course and it was good and I think that that would be useful for you if you’re interested in building up an authority like Derek has, because as he just mentioned, he’s only been doing this for a couple of years, in this space in particular.
James: So Derek, what sort of advice would you have or suggestion would you have for this particular post?
Derek: Yeah, so if you were in the position where you would like to build a super raving fan base of people who actually want to buy what you sell, talk about you, etc., I’ve got a free email series that I can make available to your listeners and they could access that by going HERE and you’ll get put in to a nice email sequence where you’re going to learn how and why you should build an audience. You should also learn the psychology behind why people fail.
You’re going to learn a proven strategy that you can start using immediately to start growing your audience and a whole lot more. So that’s what I would do for people who are still here listening.
James: Nice! But I’m sure it would be everybody of course. Thank you, Derek. It’s been wonderful having you on the call. And there you go, listener, Derek is offering you some gold there. Hopefully we’ll have a follow-up call sometime in the future and find out what you’re up to because I’m sure it’s going to be fascinating in the future for you, Derek.
Derek: Thank you so much. Thanks for having me.
James: You’re welcome. Thank you.
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