Learning From Others

Learning From Others

Your weekly podcast where respected entrepreneurs share their accomplishments as well as their hard times to help you start or grow your business or project more successfully.

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Chris Michael Harris: Entrepreneurship Reality
Feb 14 2022
Chris Michael Harris: Entrepreneurship Reality
Today's guest had a massive success with his very first business. But opportunity can come at a cost. Listen as he shares with you the awesome journey of entrepreneurship with a realistic view of what to expect with rapid growth. Please welcome Chris Michael Harris. 02.03.54 How Startup U Podcast Started06.45.35 Entrepreneurial Journey19.31.68 About the Learning Curve32.35.59 Website's Name33.10.78 A Favor: The Two Things You Must Do Contact Info:   Today's guest had a massive success with his very first business, but opportunity can come at a cost. Listen, as he shares with you, the awesome journey of entrepreneurship with a realistic view of what to expect with rapid growth, please welcome Chris Michael Harris, you are ready to grow your business, and I love helping entrepreneurs find success. So let's do this. I'm Damon Burton, Forbes contributor, author of the search engine optimization book, outrank and president of SEO National. I've been featured on Forbes, entrepreneur and hundreds of websites and podcasts for helping big businesses grow bigger and make more money by showing up higher on search engines, including shark tank, featured businesses, NBA teams, and Inc 5,000 companies. I'm bringing my successful network to you here@learningfromothers.com. Whether success to you means financial freedom, freedom of time or freedom of the soul. We're in this together. Welcome to the learning from others podcast. Ready to show up higher on search engines for words that you can monetize, but without paying for ads, download your free copy of my SEO book outrank. If you visit www.freeseobook.com today. Chris, Michael Harris, welcome learning from others. Good to meet you. Hey man. Great to meet you. Hey, so before we hit record, he said, uh, you know, you recognized a couple other people we've chatted with and, uh, I think that's kind of something interesting that you find when you kind of dive into the podcast world, regardless of which side of the mic you're on. I think it's called that you can run into. there's so much opportunity and there's so many people out there, but you kind of realize it's, uh, it's its own little world too. Yeah. Especially when you like really niche down to entrepreneurship, you see a lot of the same names and faces kind of popping up. It's interesting. Cause like we have our own little world, but yet we have the people that kind of continue to pop up in that world. So yeah, it was interesting to see a lot of the folks in there that I write. Yeah, I appreciate you jumping on. So, you know, the drill two questions, question number one is who are you and why are we listening to today? All right, well, I am the founder of StartUpU, you and the host of StartUpU podcast started UTV, uh, and that all kind of came to be because I had early success with my first venture when my, uh, my brother and I decided to launch a little side hustle. And that evolved into a multi-million dollar company within the next 36 months. By the time I was in my mid twenties and realized throughout that process, wow. They didn't teach me like how to do this. And despite the fact that I was at a very notable school university of Georgia go dogs by the way, national champions and right now, um, yeah, I just feel like there was so little application, both in life and formal education, not to disparage those, but that actually applied to running a business, especially when it was growing as quickly as we can. From year one to year two 48,000 to $500,000. I mean, it's ramping growth, right? Not no funding whatsoever. And so I kind of had this vision of what I would do after that, that business. And it really revolved around education. It really evolved around, I can't build every single business, but I can help people and indirectly create a lot of businesses. Uh, and so that's what we've kind of started to work on with startup you, and as we continue to serve people in the online space, both in all animals. Uh, that's the, there's a big vision as far as what we can accomplish doing that. Well, I want to dig into that entrepreneurial journey. Uh, but not until I ask you a question number two, which is why do you suck at dude? I suck so bad at feeling like I don't have to insert myself into bloody everything. Uh, I, I I'm just so some of us are just so type a, we just can't freaking take a chill pill. And sometimes I get myself in trouble and get a little distracted, uh, probably is the best way to say it by just literally feeling like I have to like, not just do something, but like I joke with a buddy of mine this morning literally is why it's so relevant. I'm like, I feel like I have to assemble the damn Avengers with everything, with everything I'm doing in my life. Like, I can't let anybody take the lead. Like I have to be, you know, the driving force of it and it drives me nuts. So I'm really bad about that. So it's in business. Business and business, personal family, everybody's health around me. I mean, it's just like, don't take me to the grocery store. I'll tell you everything you want to know about human health and wellness and optimization and what you should eat. Shouldn't eat. And it's like, bro, some people just trying to eat and enjoy their food. They don't want you analyze their label for them. And that's what I do. I'm I am a food Nazi for sure. Did you realize this? Was it? When did you become aware of this problem? My whole life. So, so you've known about it. There wasn't like a tipping point where you're like, oh, damn, I need that. I think, I think there's a more recent revelation in terms of how problematic it was. Like. Like a more of a, this is actually a detriment it's not serving you kind of thing. Right. And I think also there was a lot of underlying frustrations that have been there for a long time, but not necessarily cognizant to me to address it as a real problem that it is right. It's kinda looked at it as like me being the overachiever and everything that I do. And I kind of like staked my claim on that. Like, yeah. But then as you get older and wiser, and I think entrepreneurship really does that to you, you kind of realized that you need to pick and choose your spots a little bit more strategically and the best that's what they do, right? The best of the best. That's what they do. And so I'm, I'm I always tell us, I have acquired a lot of knowledge now. I'm like, let's acquire some wisdom. Let's get that. Like John C. Maxwell wisdom going on, like that's my that's kind of the season of life that I'm in. Yeah. Let's I mean, I think this is where it's digging into a little bit more, um, you're right. Like you learn, uh, you learn a lot, but then you also learn that not everybody cares and the part that's, the part that's frustrating for me is, um, is when people ask, you know, when, when they go, Chris, I know you've accomplished a lot of things. How did you do it? Or Chris? I know you've been through this, you know, gave me some pointers and then. You feel compelled to help them because when you find success, if you want to bring other stuff with you, but the part for me that's frustrating is when you're in that scenario, when somebody asks for it and then they don't take action on it drives me insane. Yep. Totally agree. All right. So let's talk about the first venture. Um, w what did you say? The figures where you do. Yeah. So we went from launch from college department to we at one point to within 36 months, no funding. It was a, it was a residential moving service for college students during the transitional summer months and evolved into doing furniture installation for college apartments. So we kind of did a, we were kind of on both sides. We had a commercial on a residential division. And how long ago did this? Let's see, that was, I finished. So 11 was when it was a side hustle. 12 was full time. 13 was half mil, 14 was 1.2. So it was a good, yeah. Okay. Has that jaded you having success the first round of you run into, you know, cause I think that's where we're going to want to talk about next is like the entrepreneurial journey and um, I'm not, I'm not a big fan of saying that. So entrepreneurial success was locked, right? Because I think the majority of people work really hard at it, but having such a great success, um, round number one, you know, did you walk into venture number 2, 3, 4, or whatever point, and then look back and go, this one wasn't as successful or as quickly successful. So what's different this time question. Um, so it was definitely a fail forward situation. Let me be crystal clear about that because I think a lot of people here. Revenue numbers. And they immediately think like, oh man, like he's just a hot shot. Maverick business owner, entrepreneur, like just with kit. And it's like, no, no, no. I got my ass kicked. I did, um, I got, I just, I accelerated the process and we were very blessed to be in the right place. Right time. But don't dismiss. We worked very hard to achieve what we did, right. There was just a, but to dismiss how hard I suffered, how much and how hard I struggled and suffered throughout that process, uh, there was a starvation period, but then there was like a keeping up with growth struggle. And I was in really bad shape for a long time. Like my 2014 brutal. I spent 95% of my time managing cashflow because now we're working with big companies that installation work. I told you about those manufacturers that were giving us those. They're passing their, their revenue lag on to us, right? Like their cashflow management was we had to deal with because we're the last link in the chain, there was the actual manufacturer of the product. And there was the furniture supplier who we worked with. And then there was us and all of them were trying to manage their cashflow. Well guess why? At one point I was at $443,000 in 2014, when I made one, two. It's kind of hard to make payroll when you don't have, when you're not that liquid at that point when you're still so young and the banks at that point, I think they've gone a little bit better now. They won't give you a line of credit or even a credit card until you're, well-established in the world until you're a big boy and you've shown that you can manage things, but it's kinda like when you, when you first start driving a car, they don't trust you. Insurance companies don't trust you yet until you've got a proven track record. It's no different than that. Even if you show rampant. And I've got some pretty funny stories around that with the banks and stuff like that. But I really sabotage my personal credit to get that business off the ground. So like getting even a credit card, two, three years later, even though I had the proven revenues, my, my personal credit hadn't recovered. And so it was a really tough kind of situation to kind of get out of that or whatever. But, so I want to make sure that's known because I think a lot of people hear these stories and people don't, people don't tell you what it took to do that they just tell you the sunny day scenario in revenue is only one part of the growth equation. So make sure people know. Um, not you, I'm not, I'm not getting the instruction by the way. I'm just saying people listening, please. Sorry. I'm not like I was I apologize. Um, but what I realized thereafter, there are a couple of things. One don't take growth for granted. It's it's it lightening sometimes as cotton a bottle. However, the way that you maximize the probability to catch lightning in a bottle, there is a formulaic process you go through, not again. But there is a more formulaic process that you go through. Um, I think a lot of people lean into their business venture with a gut, feel about what they're doing. Maybe it's a cute and clever idea that they have, but they don't really analyze the market. They don't analyze the, the, the need in the market. Who's underserved. And, and so what I've done is try to take a more scientific approach. I call it the science of. Um, and I already bought the URL to write the book by the way. So I was thinking about doing that. I already beat you to the punch, uh, but I, but I really have kind of tried to craft the science of startups, taking all the intangibles or as many as we possibly can. Right. The failure rate in entrepreneurship is so high. I was just reading a statistic. They showed that 70% of businesses that are started will not be around in day. And I would presume that that number is actually quite higher because there's a lot of businesses that start, they never actually register as a business. And so they're just kind of, there's no statistic around that per se. Um, but anyways, if we can somehow kind of massage a little bit further to increase the likelihood of success in relation to what it is right now, that's kind of what my goal has been and learning through. Having other ventures that I thought were just like amazing ideas. Like I was involved with the neuro marketing company. Uh, we were actually using four different layers of biometric tools to actually sense a person's response to a marketing stimuli. So not that sounded like really complicated. It's really not basically we're, we're analyzing, we're analyzing brainwaves, we're analyzing what's called galvanic skin response. So we can, we can sense like how you're actually responding to something with the intensity that you're responding to it. So we were testing this on McDonald's with their, where their kiosks. Yeah, it's all in person, right? So you have somebody go in and have all these gadgets attached to them. And what it's doing is we have, we can measure how much they, well, first, if they like something or if they did it, or if they were confused. So if they went, try to order off a kiosk, McDonald's was concerned. People are not gonna to use this because it's going to be complicated, confusing versus ordering from an actual person when you go into a McDonald's. Right. So this would effectively allow you to come in order. They could cut down on that expense and like, they would just run more autonomously. The store would, right. I was like, this is a home run is a slam. Completely flopped on his face. And there was a large clever flopped on his face. Um, and there was a reason for that because we didn't analyze the market. We didn't analyze that first. We ran into this cute idea. We didn't know. I was like, is this something people actually really want that's better than the current solution that's out there. And the answer was no. And so we got nowhere with it, even though I thought it was like, this is a billion dollar idea. Oh my God. I'm so excited about it. Got it. So the, the research FOC or the kiosk as a whole flop, the kiosk is still a thing that's happening, which is actually kinda interesting, kind of a gross anecdote here, but they were testing it in Europe and they found that like every single one of them had fecal matter on it, which is disgusting. It's okay. So this is funny conversation because. I agree with kiosk that they're going to continue to proceed. But even me, I would consider myself a relatively smart person. And especially where I go through the methodical internal dialogue where I'm like, oh, what's the marketing scenario behind them using kiosks. And you know, what do the AB tests and things like that. And I still run into. User experience issues with those. And so it's interesting to see that such a, you know, cause I knew that, uh, somebody did some research and some process went behind it, but it's amazing something so simplistic in nature, which is just take your order. Um, yeah, no. So decide now, but you know, this whole comment is definitely not to go down. Discussion of COVID, but what's interesting is with all these plexiglass things and all that everywhere, that's the first thing that I think of is now it just as this wall that captures everything and it just sits there. Everything's now touch and do it yourself and walls. And I just, every time I see it, I just think of how much stuff is just there. It's great. Um, all right. Um, I want to talk about, go back to credit. So you talked about, um, you know, growth and managing payroll and things like that. And liquidity did you have to, because I think a lot of entrepreneurs don't realize how, just like you said, everybody looks at the sunny, the sunny side of growth and they don't realize the pain and managing cashflow. And then specifically you mentioned in credit. You can grow too fast to where it shoots you in the foot. And then I'm curious if you had it, you had briefly commented in passing on personal credit. So did you have to personally guarantee a lot of the credit lines to support the business? Well, so that, that's what I'm, that's what I could not get even get approved for because I, so I went to bank of America when I was starting this business. And we had like, uh, you know, we had done it as a summer kind of side gig in college and had proven think we made like $12,000 and, you know, whatever, like it was north of 10 grand, right. So we'd already proven we can make money. So I go to bank of America where I banked and the, the regional vice president of small business division at bank of America was like, Hey, Nobody's given out credit cards or loans to small businesses to startups, there's just not. So go use your, your personal credit. And then when you're making some money, then come back and talk to us. So that's what I did. So I put all this stuff on credit cards. Growth took longer than I expected, which I know that sounds really counterintuitive. Cause they just say we grew so fast, but there was a period where like growth this when people realize growth requires. Like just because you say you made $500,000 in revenue doesn't mean you took $500,000 home. I think some people have that. So bastardized this such a distorted view, it's like Elon Musk is worth blah, blah, blah. It's like Elon Musk company is valued at that, but he's not personally walking around with that kind of liquidity, nor is Jeff Bezos. Right? Like, so there's a huge distortion between business revenue, generation, the amount of capital that that's required to continue growing that firm because every step, especially when you're growing. Now you're having to acquire all of the things quickly to facilitate and keep up with that growth. Meaning you're bringing on things you're not taking affordable steps necessarily. So you have to keep up with this massive rampant growth revenue wise. Your profitability is going to suffer because of it more than likely because you're not going to be efficient because you don't have the resources you need yet. Plus now you're bringing in resources like expanding your insurance. Well, guess what? I'm in the involuntary insurance market at that point. Cause I'm a brand new company. My rate for insurance just work comp alone was 33. Meaning every single a hundred dollars I spent in payroll, I'm spending $33 on top of that in work comp, I paid, I paid bloody Liberty mutual way more money than I ever paid myself in that business way more money. So people don't know those things, they don't analyze it, which is why we have such a vanity metric around revenue. And by the time I got to the point where I wanted that credit card, a low margin business, they see that despite the rev. Now I assaulted my personal credit to try to get that business off the ground. And you know, it, even, it took six, eight months to really get good traction, six, eight months of not paying your credit cards, maxed out, hurts your credit pretty bad. And that's exactly what happened so that there was a blemish and it was like, well, yeah, you got the revenues, man, but there's still not a lot to show that you're gonna be able to pay us back because you're not even paying, even pay yourself at this point. So, you know, we really have to Daymond John Thomas when he came on into my show and he said, take affordable steps. And I, that had never resonated with me when he said that I was like, that's what I didn't do. That's what I did not do that. I wish that I had done, there were many times throughout his journey. Um, him specifically in many others that they actually would take a quick pause. Yeah. But he closed down FUBU like three or four times. And because it just like it. Wasn't the race season, or need to go back to the drawing board or like you go, you know, make money elsewhere doing this, doing that. Now here's the deal. Don't get it twisted. I'm not telling you be a habitual professional learner. I'm not telling you up. Shut down. I need to go read a book up, shut down. You need to go take this course, listen to this podcast. That's not what I'm telling you. What I'm telling you is this though, you have to understand the law and respect the learning curve because it is a massive. And so if you've got to slow down and make sure that you've got good footing underneath you, or you've got to make sure that you've got good side hustles in place for, for a period of time, that you can always fall back on if you need to, or if you need to keep that job and do this business on the side, there's a period. You can do that and you need to be full-time in the business. But I would focus on this and somebody told me this and it changed my life forever. Revenue is about vanity profitability is about sanity. I would rather see somebody make a hundred grand and be extremely profitable than fly out of the gates and make a hundred, make half a million dollars. Like we. And have Lola low margins and very little to show for it. That's what I would rather see, like selling his name of the game. I'm not, I don't don't it don't get to, don't get it twisted. That's important, but make sure you're doing it in a healthy way that you can actually be. For a long period of time and it's not going to drive you insane and cause serious health complications like it did for me, like my health spiral, because I just, it was nonstop 20 hours a day, just stress, stress, stress, stress, stress. Um, and, and you have to respect at 25, 26 years old, which I was, I didn't know what I was doing. I'm learning all stuff on the. So you can only drink through a firehouse so much before stuff starts to break. And you're just like, man, I can't like this is it's too much. It's just too much. Yeah. I think, um, there's a couple of things that I want to touch on that. I agree with the, you know, the internet and social media as a whole, we all know it has its advantages and disadvantages. Um, and I think entrepreneurs should. Share their wins, but I think that they also don't properly expose their audience, their losses too. And so it just becomes as big highlight reel and. Um, what I'm referring to is you talking about, you know, the vanity metrics of revenue because they can, there's people out there left and right. That I know are out there bragging, you know, I did seven figures. I did whatever figures. Right. You know, they may have met, they may have grossed a million dollars. But they also spent $999,999 in ads to make that $1 in profit. So, um, and, and the other thing is about the learning curve and this is something I've been super passionate about. And, um, so I I've, I've had the same business for 15 years and I've intentionally. Not pushed myself aggressively and the way I kind kinda compare it is I I've dated the S the phase is right. And if I was to generalize what those phases were, it was like, okay, the first year, it was just cool to be. Self-employed like, who doesn't want to just set their own hours and work when they want, or work early work late, whatever. So I enjoyed that part of it. I dated that moment in time and took away what I liked. And didn't like, Business relationship. And then, then you move to the next phase. And for me, that was okay. Let's bring on some more team and start, um, delegating some of those responsibilities and do it so I can focus on the parts that I like. And then I grow to, you know, two to four people do that for a year or two. And then, then it's like, okay, now I understand how to manage people. Now I understand how to balance cashflow for payroll. Now I understand the personal side of business where. I have to take care of those guys, but those guys have to take care of their family too. And so you'll learn those more intimate things. And then after that, it's like, okay, let's grow. And then you go, you go from five people that 20, and that's a big difference actually going from five to 10 is a big difference than 10 to 20 is different than, than above 30 is that's a train wreck. And so then you have to go, okay, how do I manage this many people? And then you finally date all those phases and go, okay, nothing scary anymore. So now let's shoot for the moon. And like you said, you can do that. Slow and steady, but sanely. And I think that so many people just are like, let's go from zero to a hundred now. Yep. No, I, I think that's the perfect way to approach it. And something you said that I want to highlight is embracing that, dating that season, which I like you call it dating. Um, but, but embracing that season and learning what you need to learn for that. And I think that's a beautiful way to approach it. Um, and in some cases in that business in particular, we have one, two, I had to take a step back to do things that I should have been dating, as you would say. And the previous season that I had just skipped over. Right. Because you just try and keep up with, you're trying to keep up with sales. You can sell yourself to death. So I think the general thing, and I don't want to do, I don't want to discourage people. Like, obviously people are like, well, what about this other birds? And those guys that like, they were billionaire by 30 units, but I'm not, I'm not dismissing you from growth. There's a way to do it. Right. And there's a way to do it wrong. And it doesn't mean that you can't expedite the dating process. If you want to like consume everything you need for that. In a more rapid succession or more efficiently rather, there's probably a better way to say it. I think that's possible. But the thing that you can just here's okay. Let me give you the contrary. My viewpoint was this. If I make a million dollars, I can afford everything that I need to like, just kill it. Right? Like, so it was kind of like a, not skipped a step mentality, but like money will be the. And money does not money. Didn't give me knowledge money. Didn't give me no how money didn't give me systems and processes that could scale organically money. Didn't give me think there's so many things that money didn't give me that I needed to have as an entrepreneur, to be the best entrepreneur that I could be. Right. And so, so I think I love what you're saying and how long you decide to stay in that dating phase at each one of those seasons is totally up to you, but respect that they're there. So I totally agree with that. Yeah. You couldn't pay me enough money to be in mark Zuckerberg's position. I would not, but he's got going on. Sure. A billion dollars sounds amazing, but don't want it. Oh, they've got to, to a degree. If we're being honest, where they're at now with their crazy rise, they're kind of in emergency fix PR mode. Now, like the fact that Facebook is having to literally change their name to Metta after being what they've been, where at one point they had half of the population of the world on their planet. I think it's safe to say that's a dying platform. Now, fortunately for them they've acquired Instagram and WhatsApp and you know, basically their acquisition by, they can just buy where anything is social media they want to, but they're hedging, basically everything on metaverse they really are. Uh, and it should be very indicative of what's going on behind the scenes that they're like. We're going to have Facebook as a two dimensional thing that we keep while we all also launched Metta. The fact that they're kind of merging and Facebook will be no more and its current iteration. At some point I don't expect to happen overnight. That's very indicative. It's very indicative of where they're at and it's possible that they miss some things along that growth. For sure. Yeah. There's a lot more and you, and I don't know what those things are, but there's a lot more going on than just a, a PR position named James, for sure. Represent, um, you know, one of the things I wanna go back to the image was something about, um, the, the lifespan of a business and how many survived pests a certain amount of time. Um, I can't remember the existed, the, the exact statistics, but. Um, a really interesting slide that Tony Robins gave at funnel hacking live last year. And it was something like one I'm going to be off a little bit, but it was along the lines of less than 1% of businesses last 10 years. And so he went through this thing and it was like, all right, raise your hand. If you've been in business over a year and then stay or stand up, you know, and then stay standing if you've been two years, five years, 10 years. And it was just massive, 50% cuts. That's never, ever timeframe change. But what was interesting is then you layer that with another statistic, which was something like. The less than 1% of businesses ever make $1 million now, 1 million a year, 1 million ever, ever humidity compounding. Yeah. And so you, you take the combination of most business owners, five, 10 years, and most businesses don't even ever make a cumulative million dollars. And you're like, you're like 1% of 1%. And so back to you saying the unicorns of mark Zuckerberg and Elon Musk and things like that. Go kill it. Go be an entrepreneurial success, but have realistic expectations. Right? What you're walking into. You're basically, you're basically saying like, Hey mark Zuckerberg went, won the lottery. I can go in the lottery too. Um, in all of those situations, I'm not disparaging or taking anything away. Cause they're in a position they're in for a reason specifically somebody's Ilan. I mean, I have so much respect for that guy. It's unbelievable. Uh, but to think that that every, anybody that's just going to happen, there's so many things that have to go, right. And there's so much, um, There's so much that that requires you look at a guy like jobs. I think even in his book, I think he talked about this. Um, I think there's a lot of things he missed out on in his human experience in pursuit of that thing. Now here's the deal. If that's your conviction, if that's a God-given conviction that you have to do, the thing you're doing, then maybe that's what your purpose was in this world and that you have to pursue that. And that's what. You know, but, but don't, you have to do it for the right reasons. You can't do it because, Hey, I want to be rich, famous and have people talk about me, you know, in GQ magazine. Like that's not, you know, Forbes, that's not, that's not the reason you do it. I feel like the guys that do it, they have a deep conviction, a God-given conviction. And once you find that alignment, then it, things kind of happen organically because you're following something. And I always tell people this, I don't know how entrepreneurs, uh, and this isn't gonna get too preachy here, but I don't know how entrepreneur. Do it without a faith or belief in something bigger than themselves. I just don't, I don't like a purpose of some reason. Other like that vanity BS. It's not going to pick you up. It's not, when you find you're flat on your face and you're going to find your face all the time as an entrepreneur, like way more than you succeed, you're going to fail way more. Um, I don't know what picks you up cause the money right. In my experience, the money is not what picks me up. Money's nice, but it's not, when I'm down the money, I'm not like, oh, but let's, you know, thirsty for that. It will, for a period of time, it will for a period of time. But like over time, that's why some people would just fade it. What they're doing in my opinion is because that's the sole focus. Rich and having all the vanity stuff and stuff like that. But if it's a, if it's a conviction, if it's something that you feel like you were called to do that, you're serving people because you feel like that's the way that you were uniquely designed to serve people, those people being your customers. That's where I see the longterm sustainability. That's when I see people serving and not focused on the numbers because. I will lose the quality of how I'm serving people if I just focused on revenue growth. So they have that very disciplined. That's kind of the north node as I've experienced it. And that's what I've used as my north node. Am I serving to the degree that I can not staying stuck in a mat where that particular season of revenue, but like, how do I make sure that's the core of my equation? And that, that has always been, you know, this is, this is how I keep myself in line where I don't get scattered and lose sight of the sole focus of. Yeah, there's, I'm going to be willing to bet that you agree that you go through an evolutionary process as an entrepreneur where in the beginning. There's a big part of us that are in it for material benefits. You know, especially when we're younger, it's like, I want to conquer the world. I want all the money in the world. Uh, but then you go, but then as you said, you mature and then it, for me, it became, I no longer, I no longer want all the money in the world. I want just as little as, as much as possible to maintain a lifestyle. And then spend more time with my family, with my wife, with my kids. Right. You get those base needs. Yes. You need, you know, you, you want the nice house. You want those things that support general stability. Right. But then you get wiser in, in how you can make a more positive impact on the world far beyond just accumulating financial ends. No, but I think it's good. I'm glad, I'm glad this came up. Cause I think it's actually a good thing. And it's like the, the, the grand scheme of the beauty of. I'm glad that the younger folks, if you're in your twenties and that's what is driving you right now, go pursue it. We're not telling you to act wise for the sake of acting wise, you will learn, right? Just like I'm going to put my wise hat on today. No, no, no. What wisdom is accumulated through experience, go pursue those things. Go get that nice car, go have those nice things and come back and be like, yeah, wasn't really what I thought I was going to be. It didn't feel like I thought it was. 'cause I feel like that's more of like the catalyst of leading to, right. It's always, it's always a hindsight's 2020 thing. Like I can look back and say that now, but when I was in that same season, like you're talking about, it was like, yeah, I'm going to be feature, you know, 30, under 30. And like, I don't talk about it. Like I had all those aspirations and stuff like that, but it led me to having the wisdom that I have now that, that I feel like I'm, I'm a healthier human that can provide bigger contribution to the world because I arrived at that place faster. Would that have happened if I didn't pursue the vanities? Maybe not as fast it's anybody's guess. So I think you just have to embrace the season you're in. If you're like you listen to this and you're in your twenties or something, and you're like, I don't care about any of this noise. I don't care about higher powers. I just want to go make money, do, go for it, go for it. Cause you're going to end up here. I promise you and it's going to be, you're going to be better off for it. But, but then they learn. Yeah. I mean, cause we all know these things, but you don't embrace them until you experience it yourself. You know, my wife's nephew I've been mentoring him and he's he's 21 and mentoring him for about two years. And so when he was 19, it was, it was that it was like, Hey, I want to get a new car here. Here's a picture of it. What do you think? And I said, I'm gonna answer it two ways. One is me at your age. Go by. And then the other is me at my age saying that still go buy it, but you're going to quickly learn. It's not what makes you happy? Yeah, he had. Six months before he was like, I hate this car. I hate the gas behind it. I hate the insurance behind it. And what was funny is before he bought it, I said, who are you going to go race? Like, what are you, what are you getting this far? I go, it's not impressed women. You've had your high school sweetheart for years and you guys aren't going anywhere and they're still together. And so he quickly learns, you know, it, it wasn't for him, but. But I'm proud of him for still buying it to learn that it wasn't for him. Exactly. There's an interesting Jim Carrey quote. He said something like, you know, I hope that everybody finds fortunate and fame so they can realize it's not what makes them happy. And I think that says a lot, like we all know that, but there's a big difference between experiencing it and not, um, you know, maybe the last thing we'll talk about here is just a quick comment on there's a great book by Rand Fishkin called lost and founder. I have not, I know who he is though. I need to read that one. Yeah. And so, you know, most, so if you're not familiar with the audience, you're not familiar through Rand Fishkin is he started a company called Moz, had wild success. It was like the, the VC, um, darling baby story got a bunch of funding. Um, and then he talks in this book though about why that whole thing sucks, everything that was in the limelight or behind the scenes that sucked. And it talks about. He went to exit and how to buy an offer, I think was from HubSpot, offered the 28 million for the company. And he S and he held out for 40 and, um, they politely declined, and that was the peak of MAs. And it was just downhill from there. And so he gets, you know, he just, like you say, you paid Liberty mutual way more than you ever took. Um, he was a very public. He sends kind of exited, um, Mazda is that he was, he was the face of Mars for a long time. And so I really thought he was rich and with his funny mustache. Yeah. And so he gets all this publicity and, but in the book, I wish I would have taken that payout. I wish I would've done this. I wish I, would've not taken funding because I'm sorry, friends. I can't, I can barely, you know, I can barely afford my two bedroom studio in Seattle. I don't have money sitting around to lend you. I don't have all these things that everybody thinks I have everybody else made way more money than I did in that company then than myself. And so it's a really transparent book. It's, it's much along the lines of what we've talked about, where it's like, Hey, go do those big things, but understand this is a more accurate perspective of what you're going to go through. Yeah. All right, Chris Michael Harris. Thanks for the therapy session. I'll give you that the last few moments to tell our listeners how they can find out. Yeah. Everyone on social media ad. Hey CMH. Uh, obviously I mentioned StartUp U podcast started VTV so the podcasts have been around longer than YouTube. Uh, but definitely checked out there. We do. I think we have pretty similar audiences in terms of season of business that people are in. Um, so if you're interested in, in those kinds of discussions, very similar platform in a lot of senses. So, uh, that'd be great. heycmh.com. Uh, a lot of awesome free resources there as well. And my last ask of your audience would be this. It takes literally 22 seconds to do this. I promise you 22 seconds, whatever platform you're listening, whatever, wherever you get your podcasts, whatever apps you listen to podcasts on. Make sure you go and do my buddy here. A favor, do two things. I'll tell you why. And subscribe and leave a review. Those are the two most important things you can do to help a podcaster establish more reach because that tells the podcast platforms, wow, this is a show that's worth promoting. This is a show that people should know about. So if those two things it's like leaving a tip for your waiter or your waitress. So please do that for my friend here today to help his show, continue to reach more people and help them through their entrepreneurial journey. I appreciate that Chris Michael Harris, thanks for jumping on learning from others. heycmh.com. Damon Burton here. And thank you so much for listening to the learning from others podcast. I sincerely hope that today's guest helped you learn something since 2007, I've generated millions of dollars for businesses like yours. Ready to show up higher on search engines for words that you can monetize, but without paying for ads, download your free copy of my new SEO book outrank. If you visit www.freeseobook.com today.
Chris Michael Harris: Entrepreneurship Reality
Feb 14 2022
Chris Michael Harris: Entrepreneurship Reality
Today's guest had a massive success with his very first business. But opportunity can come at a cost. Listen as he shares with you the awesome journey of entrepreneurship with a realistic view of what to expect with rapid growth. Please welcome Chris Michael Harris. 02.03.54 How Startup U Podcast Started06.45.35 Entrepreneurial Journey19.31.68 About the Learning Curve32.35.59 Website's Name33.10.78 A Favor: The Two Things You Must Do Contact Info:   Today's guest had a massive success with his very first business, but opportunity can come at a cost. Listen, as he shares with you, the awesome journey of entrepreneurship with a realistic view of what to expect with rapid growth, please welcome Chris Michael Harris, you are ready to grow your business, and I love helping entrepreneurs find success. So let's do this. I'm Damon Burton, Forbes contributor, author of the search engine optimization book, outrank and president of SEO National. I've been featured on Forbes, entrepreneur and hundreds of websites and podcasts for helping big businesses grow bigger and make more money by showing up higher on search engines, including shark tank, featured businesses, NBA teams, and Inc 5,000 companies. I'm bringing my successful network to you here@learningfromothers.com. Whether success to you means financial freedom, freedom of time or freedom of the soul. We're in this together. Welcome to the learning from others podcast. Ready to show up higher on search engines for words that you can monetize, but without paying for ads, download your free copy of my SEO book outrank. If you visit www.freeseobook.com today. Chris, Michael Harris, welcome learning from others. Good to meet you. Hey man. Great to meet you. Hey, so before we hit record, he said, uh, you know, you recognized a couple other people we've chatted with and, uh, I think that's kind of something interesting that you find when you kind of dive into the podcast world, regardless of which side of the mic you're on. I think it's called that you can run into. there's so much opportunity and there's so many people out there, but you kind of realize it's, uh, it's its own little world too. Yeah. Especially when you like really niche down to entrepreneurship, you see a lot of the same names and faces kind of popping up. It's interesting. Cause like we have our own little world, but yet we have the people that kind of continue to pop up in that world. So yeah, it was interesting to see a lot of the folks in there that I write. Yeah, I appreciate you jumping on. So, you know, the drill two questions, question number one is who are you and why are we listening to today? All right, well, I am the founder of StartUpU, you and the host of StartUpU podcast started UTV, uh, and that all kind of came to be because I had early success with my first venture when my, uh, my brother and I decided to launch a little side hustle. And that evolved into a multi-million dollar company within the next 36 months. By the time I was in my mid twenties and realized throughout that process, wow. They didn't teach me like how to do this. And despite the fact that I was at a very notable school university of Georgia go dogs by the way, national champions and right now, um, yeah, I just feel like there was so little application, both in life and formal education, not to disparage those, but that actually applied to running a business, especially when it was growing as quickly as we can. From year one to year two 48,000 to $500,000. I mean, it's ramping growth, right? Not no funding whatsoever. And so I kind of had this vision of what I would do after that, that business. And it really revolved around education. It really evolved around, I can't build every single business, but I can help people and indirectly create a lot of businesses. Uh, and so that's what we've kind of started to work on with startup you, and as we continue to serve people in the online space, both in all animals. Uh, that's the, there's a big vision as far as what we can accomplish doing that. Well, I want to dig into that entrepreneurial journey. Uh, but not until I ask you a question number two, which is why do you suck at dude? I suck so bad at feeling like I don't have to insert myself into bloody everything. Uh, I, I I'm just so some of us are just so type a, we just can't freaking take a chill pill. And sometimes I get myself in trouble and get a little distracted, uh, probably is the best way to say it by just literally feeling like I have to like, not just do something, but like I joke with a buddy of mine this morning literally is why it's so relevant. I'm like, I feel like I have to assemble the damn Avengers with everything, with everything I'm doing in my life. Like, I can't let anybody take the lead. Like I have to be, you know, the driving force of it and it drives me nuts. So I'm really bad about that. So it's in business. Business and business, personal family, everybody's health around me. I mean, it's just like, don't take me to the grocery store. I'll tell you everything you want to know about human health and wellness and optimization and what you should eat. Shouldn't eat. And it's like, bro, some people just trying to eat and enjoy their food. They don't want you analyze their label for them. And that's what I do. I'm I am a food Nazi for sure. Did you realize this? Was it? When did you become aware of this problem? My whole life. So, so you've known about it. There wasn't like a tipping point where you're like, oh, damn, I need that. I think, I think there's a more recent revelation in terms of how problematic it was. Like. Like a more of a, this is actually a detriment it's not serving you kind of thing. Right. And I think also there was a lot of underlying frustrations that have been there for a long time, but not necessarily cognizant to me to address it as a real problem that it is right. It's kinda looked at it as like me being the overachiever and everything that I do. And I kind of like staked my claim on that. Like, yeah. But then as you get older and wiser, and I think entrepreneurship really does that to you, you kind of realized that you need to pick and choose your spots a little bit more strategically and the best that's what they do, right? The best of the best. That's what they do. And so I'm, I'm I always tell us, I have acquired a lot of knowledge now. I'm like, let's acquire some wisdom. Let's get that. Like John C. Maxwell wisdom going on, like that's my that's kind of the season of life that I'm in. Yeah. Let's I mean, I think this is where it's digging into a little bit more, um, you're right. Like you learn, uh, you learn a lot, but then you also learn that not everybody cares and the part that's, the part that's frustrating for me is, um, is when people ask, you know, when, when they go, Chris, I know you've accomplished a lot of things. How did you do it? Or Chris? I know you've been through this, you know, gave me some pointers and then. You feel compelled to help them because when you find success, if you want to bring other stuff with you, but the part for me that's frustrating is when you're in that scenario, when somebody asks for it and then they don't take action on it drives me insane. Yep. Totally agree. All right. So let's talk about the first venture. Um, w what did you say? The figures where you do. Yeah. So we went from launch from college department to we at one point to within 36 months, no funding. It was a, it was a residential moving service for college students during the transitional summer months and evolved into doing furniture installation for college apartments. So we kind of did a, we were kind of on both sides. We had a commercial on a residential division. And how long ago did this? Let's see, that was, I finished. So 11 was when it was a side hustle. 12 was full time. 13 was half mil, 14 was 1.2. So it was a good, yeah. Okay. Has that jaded you having success the first round of you run into, you know, cause I think that's where we're going to want to talk about next is like the entrepreneurial journey and um, I'm not, I'm not a big fan of saying that. So entrepreneurial success was locked, right? Because I think the majority of people work really hard at it, but having such a great success, um, round number one, you know, did you walk into venture number 2, 3, 4, or whatever point, and then look back and go, this one wasn't as successful or as quickly successful. So what's different this time question. Um, so it was definitely a fail forward situation. Let me be crystal clear about that because I think a lot of people here. Revenue numbers. And they immediately think like, oh man, like he's just a hot shot. Maverick business owner, entrepreneur, like just with kit. And it's like, no, no, no. I got my ass kicked. I did, um, I got, I just, I accelerated the process and we were very blessed to be in the right place. Right time. But don't dismiss. We worked very hard to achieve what we did, right. There was just a, but to dismiss how hard I suffered, how much and how hard I struggled and suffered throughout that process, uh, there was a starvation period, but then there was like a keeping up with growth struggle. And I was in really bad shape for a long time. Like my 2014 brutal. I spent 95% of my time managing cashflow because now we're working with big companies that installation work. I told you about those manufacturers that were giving us those. They're passing their, their revenue lag on to us, right? Like their cashflow management was we had to deal with because we're the last link in the chain, there was the actual manufacturer of the product. And there was the furniture supplier who we worked with. And then there was us and all of them were trying to manage their cashflow. Well guess why? At one point I was at $443,000 in 2014, when I made one, two. It's kind of hard to make payroll when you don't have, when you're not that liquid at that point when you're still so young and the banks at that point, I think they've gone a little bit better now. They won't give you a line of credit or even a credit card until you're, well-established in the world until you're a big boy and you've shown that you can manage things, but it's kinda like when you, when you first start driving a car, they don't trust you. Insurance companies don't trust you yet until you've got a proven track record. It's no different than that. Even if you show rampant. And I've got some pretty funny stories around that with the banks and stuff like that. But I really sabotage my personal credit to get that business off the ground. So like getting even a credit card, two, three years later, even though I had the proven revenues, my, my personal credit hadn't recovered. And so it was a really tough kind of situation to kind of get out of that or whatever. But, so I want to make sure that's known because I think a lot of people hear these stories and people don't, people don't tell you what it took to do that they just tell you the sunny day scenario in revenue is only one part of the growth equation. So make sure people know. Um, not you, I'm not, I'm not getting the instruction by the way. I'm just saying people listening, please. Sorry. I'm not like I was I apologize. Um, but what I realized thereafter, there are a couple of things. One don't take growth for granted. It's it's it lightening sometimes as cotton a bottle. However, the way that you maximize the probability to catch lightning in a bottle, there is a formulaic process you go through, not again. But there is a more formulaic process that you go through. Um, I think a lot of people lean into their business venture with a gut, feel about what they're doing. Maybe it's a cute and clever idea that they have, but they don't really analyze the market. They don't analyze the, the, the need in the market. Who's underserved. And, and so what I've done is try to take a more scientific approach. I call it the science of. Um, and I already bought the URL to write the book by the way. So I was thinking about doing that. I already beat you to the punch, uh, but I, but I really have kind of tried to craft the science of startups, taking all the intangibles or as many as we possibly can. Right. The failure rate in entrepreneurship is so high. I was just reading a statistic. They showed that 70% of businesses that are started will not be around in day. And I would presume that that number is actually quite higher because there's a lot of businesses that start, they never actually register as a business. And so they're just kind of, there's no statistic around that per se. Um, but anyways, if we can somehow kind of massage a little bit further to increase the likelihood of success in relation to what it is right now, that's kind of what my goal has been and learning through. Having other ventures that I thought were just like amazing ideas. Like I was involved with the neuro marketing company. Uh, we were actually using four different layers of biometric tools to actually sense a person's response to a marketing stimuli. So not that sounded like really complicated. It's really not basically we're, we're analyzing, we're analyzing brainwaves, we're analyzing what's called galvanic skin response. So we can, we can sense like how you're actually responding to something with the intensity that you're responding to it. So we were testing this on McDonald's with their, where their kiosks. Yeah, it's all in person, right? So you have somebody go in and have all these gadgets attached to them. And what it's doing is we have, we can measure how much they, well, first, if they like something or if they did it, or if they were confused. So if they went, try to order off a kiosk, McDonald's was concerned. People are not gonna to use this because it's going to be complicated, confusing versus ordering from an actual person when you go into a McDonald's. Right. So this would effectively allow you to come in order. They could cut down on that expense and like, they would just run more autonomously. The store would, right. I was like, this is a home run is a slam. Completely flopped on his face. And there was a large clever flopped on his face. Um, and there was a reason for that because we didn't analyze the market. We didn't analyze that first. We ran into this cute idea. We didn't know. I was like, is this something people actually really want that's better than the current solution that's out there. And the answer was no. And so we got nowhere with it, even though I thought it was like, this is a billion dollar idea. Oh my God. I'm so excited about it. Got it. So the, the research FOC or the kiosk as a whole flop, the kiosk is still a thing that's happening, which is actually kinda interesting, kind of a gross anecdote here, but they were testing it in Europe and they found that like every single one of them had fecal matter on it, which is disgusting. It's okay. So this is funny conversation because. I agree with kiosk that they're going to continue to proceed. But even me, I would consider myself a relatively smart person. And especially where I go through the methodical internal dialogue where I'm like, oh, what's the marketing scenario behind them using kiosks. And you know, what do the AB tests and things like that. And I still run into. User experience issues with those. And so it's interesting to see that such a, you know, cause I knew that, uh, somebody did some research and some process went behind it, but it's amazing something so simplistic in nature, which is just take your order. Um, yeah, no. So decide now, but you know, this whole comment is definitely not to go down. Discussion of COVID, but what's interesting is with all these plexiglass things and all that everywhere, that's the first thing that I think of is now it just as this wall that captures everything and it just sits there. Everything's now touch and do it yourself and walls. And I just, every time I see it, I just think of how much stuff is just there. It's great. Um, all right. Um, I want to talk about, go back to credit. So you talked about, um, you know, growth and managing payroll and things like that. And liquidity did you have to, because I think a lot of entrepreneurs don't realize how, just like you said, everybody looks at the sunny, the sunny side of growth and they don't realize the pain and managing cashflow. And then specifically you mentioned in credit. You can grow too fast to where it shoots you in the foot. And then I'm curious if you had it, you had briefly commented in passing on personal credit. So did you have to personally guarantee a lot of the credit lines to support the business? Well, so that, that's what I'm, that's what I could not get even get approved for because I, so I went to bank of America when I was starting this business. And we had like, uh, you know, we had done it as a summer kind of side gig in college and had proven think we made like $12,000 and, you know, whatever, like it was north of 10 grand, right. So we'd already proven we can make money. So I go to bank of America where I banked and the, the regional vice president of small business division at bank of America was like, Hey, Nobody's given out credit cards or loans to small businesses to startups, there's just not. So go use your, your personal credit. And then when you're making some money, then come back and talk to us. So that's what I did. So I put all this stuff on credit cards. Growth took longer than I expected, which I know that sounds really counterintuitive. Cause they just say we grew so fast, but there was a period where like growth this when people realize growth requires. Like just because you say you made $500,000 in revenue doesn't mean you took $500,000 home. I think some people have that. So bastardized this such a distorted view, it's like Elon Musk is worth blah, blah, blah. It's like Elon Musk company is valued at that, but he's not personally walking around with that kind of liquidity, nor is Jeff Bezos. Right? Like, so there's a huge distortion between business revenue, generation, the amount of capital that that's required to continue growing that firm because every step, especially when you're growing. Now you're having to acquire all of the things quickly to facilitate and keep up with that growth. Meaning you're bringing on things you're not taking affordable steps necessarily. So you have to keep up with this massive rampant growth revenue wise. Your profitability is going to suffer because of it more than likely because you're not going to be efficient because you don't have the resources you need yet. Plus now you're bringing in resources like expanding your insurance. Well, guess what? I'm in the involuntary insurance market at that point. Cause I'm a brand new company. My rate for insurance just work comp alone was 33. Meaning every single a hundred dollars I spent in payroll, I'm spending $33 on top of that in work comp, I paid, I paid bloody Liberty mutual way more money than I ever paid myself in that business way more money. So people don't know those things, they don't analyze it, which is why we have such a vanity metric around revenue. And by the time I got to the point where I wanted that credit card, a low margin business, they see that despite the rev. Now I assaulted my personal credit to try to get that business off the ground. And you know, it, even, it took six, eight months to really get good traction, six, eight months of not paying your credit cards, maxed out, hurts your credit pretty bad. And that's exactly what happened so that there was a blemish and it was like, well, yeah, you got the revenues, man, but there's still not a lot to show that you're gonna be able to pay us back because you're not even paying, even pay yourself at this point. So, you know, we really have to Daymond John Thomas when he came on into my show and he said, take affordable steps. And I, that had never resonated with me when he said that I was like, that's what I didn't do. That's what I did not do that. I wish that I had done, there were many times throughout his journey. Um, him specifically in many others that they actually would take a quick pause. Yeah. But he closed down FUBU like three or four times. And because it just like it. Wasn't the race season, or need to go back to the drawing board or like you go, you know, make money elsewhere doing this, doing that. Now here's the deal. Don't get it twisted. I'm not telling you be a habitual professional learner. I'm not telling you up. Shut down. I need to go read a book up, shut down. You need to go take this course, listen to this podcast. That's not what I'm telling you. What I'm telling you is this though, you have to understand the law and respect the learning curve because it is a massive. And so if you've got to slow down and make sure that you've got good footing underneath you, or you've got to make sure that you've got good side hustles in place for, for a period of time, that you can always fall back on if you need to, or if you need to keep that job and do this business on the side, there's a period. You can do that and you need to be full-time in the business. But I would focus on this and somebody told me this and it changed my life forever. Revenue is about vanity profitability is about sanity. I would rather see somebody make a hundred grand and be extremely profitable than fly out of the gates and make a hundred, make half a million dollars. Like we. And have Lola low margins and very little to show for it. That's what I would rather see, like selling his name of the game. I'm not, I don't don't it don't get to, don't get it twisted. That's important, but make sure you're doing it in a healthy way that you can actually be. For a long period of time and it's not going to drive you insane and cause serious health complications like it did for me, like my health spiral, because I just, it was nonstop 20 hours a day, just stress, stress, stress, stress, stress. Um, and, and you have to respect at 25, 26 years old, which I was, I didn't know what I was doing. I'm learning all stuff on the. So you can only drink through a firehouse so much before stuff starts to break. And you're just like, man, I can't like this is it's too much. It's just too much. Yeah. I think, um, there's a couple of things that I want to touch on that. I agree with the, you know, the internet and social media as a whole, we all know it has its advantages and disadvantages. Um, and I think entrepreneurs should. Share their wins, but I think that they also don't properly expose their audience, their losses too. And so it just becomes as big highlight reel and. Um, what I'm referring to is you talking about, you know, the vanity metrics of revenue because they can, there's people out there left and right. That I know are out there bragging, you know, I did seven figures. I did whatever figures. Right. You know, they may have met, they may have grossed a million dollars. But they also spent $999,999 in ads to make that $1 in profit. So, um, and, and the other thing is about the learning curve and this is something I've been super passionate about. And, um, so I I've, I've had the same business for 15 years and I've intentionally. Not pushed myself aggressively and the way I kind kinda compare it is I I've dated the S the phase is right. And if I was to generalize what those phases were, it was like, okay, the first year, it was just cool to be. Self-employed like, who doesn't want to just set their own hours and work when they want, or work early work late, whatever. So I enjoyed that part of it. I dated that moment in time and took away what I liked. And didn't like, Business relationship. And then, then you move to the next phase. And for me, that was okay. Let's bring on some more team and start, um, delegating some of those responsibilities and do it so I can focus on the parts that I like. And then I grow to, you know, two to four people do that for a year or two. And then, then it's like, okay, now I understand how to manage people. Now I understand how to balance cashflow for payroll. Now I understand the personal side of business where. I have to take care of those guys, but those guys have to take care of their family too. And so you'll learn those more intimate things. And then after that, it's like, okay, let's grow. And then you go, you go from five people that 20, and that's a big difference actually going from five to 10 is a big difference than 10 to 20 is different than, than above 30 is that's a train wreck. And so then you have to go, okay, how do I manage this many people? And then you finally date all those phases and go, okay, nothing scary anymore. So now let's shoot for the moon. And like you said, you can do that. Slow and steady, but sanely. And I think that so many people just are like, let's go from zero to a hundred now. Yep. No, I, I think that's the perfect way to approach it. And something you said that I want to highlight is embracing that, dating that season, which I like you call it dating. Um, but, but embracing that season and learning what you need to learn for that. And I think that's a beautiful way to approach it. Um, and in some cases in that business in particular, we have one, two, I had to take a step back to do things that I should have been dating, as you would say. And the previous season that I had just skipped over. Right. Because you just try and keep up with, you're trying to keep up with sales. You can sell yourself to death. So I think the general thing, and I don't want to do, I don't want to discourage people. Like, obviously people are like, well, what about this other birds? And those guys that like, they were billionaire by 30 units, but I'm not, I'm not dismissing you from growth. There's a way to do it. Right. And there's a way to do it wrong. And it doesn't mean that you can't expedite the dating process. If you want to like consume everything you need for that. In a more rapid succession or more efficiently rather, there's probably a better way to say it. I think that's possible. But the thing that you can just here's okay. Let me give you the contrary. My viewpoint was this. If I make a million dollars, I can afford everything that I need to like, just kill it. Right? Like, so it was kind of like a, not skipped a step mentality, but like money will be the. And money does not money. Didn't give me knowledge money. Didn't give me no how money didn't give me systems and processes that could scale organically money. Didn't give me think there's so many things that money didn't give me that I needed to have as an entrepreneur, to be the best entrepreneur that I could be. Right. And so, so I think I love what you're saying and how long you decide to stay in that dating phase at each one of those seasons is totally up to you, but respect that they're there. So I totally agree with that. Yeah. You couldn't pay me enough money to be in mark Zuckerberg's position. I would not, but he's got going on. Sure. A billion dollars sounds amazing, but don't want it. Oh, they've got to, to a degree. If we're being honest, where they're at now with their crazy rise, they're kind of in emergency fix PR mode. Now, like the fact that Facebook is having to literally change their name to Metta after being what they've been, where at one point they had half of the population of the world on their planet. I think it's safe to say that's a dying platform. Now, fortunately for them they've acquired Instagram and WhatsApp and you know, basically their acquisition by, they can just buy where anything is social media they want to, but they're hedging, basically everything on metaverse they really are. Uh, and it should be very indicative of what's going on behind the scenes that they're like. We're going to have Facebook as a two dimensional thing that we keep while we all also launched Metta. The fact that they're kind of merging and Facebook will be no more and its current iteration. At some point I don't expect to happen overnight. That's very indicative. It's very indicative of where they're at and it's possible that they miss some things along that growth. For sure. Yeah. There's a lot more and you, and I don't know what those things are, but there's a lot more going on than just a, a PR position named James, for sure. Represent, um, you know, one of the things I wanna go back to the image was something about, um, the, the lifespan of a business and how many survived pests a certain amount of time. Um, I can't remember the existed, the, the exact statistics, but. Um, a really interesting slide that Tony Robins gave at funnel hacking live last year. And it was something like one I'm going to be off a little bit, but it was along the lines of less than 1% of businesses last 10 years. And so he went through this thing and it was like, all right, raise your hand. If you've been in business over a year and then stay or stand up, you know, and then stay standing if you've been two years, five years, 10 years. And it was just massive, 50% cuts. That's never, ever timeframe change. But what was interesting is then you layer that with another statistic, which was something like. The less than 1% of businesses ever make $1 million now, 1 million a year, 1 million ever, ever humidity compounding. Yeah. And so you, you take the combination of most business owners, five, 10 years, and most businesses don't even ever make a cumulative million dollars. And you're like, you're like 1% of 1%. And so back to you saying the unicorns of mark Zuckerberg and Elon Musk and things like that. Go kill it. Go be an entrepreneurial success, but have realistic expectations. Right? What you're walking into. You're basically, you're basically saying like, Hey mark Zuckerberg went, won the lottery. I can go in the lottery too. Um, in all of those situations, I'm not disparaging or taking anything away. Cause they're in a position they're in for a reason specifically somebody's Ilan. I mean, I have so much respect for that guy. It's unbelievable. Uh, but to think that that every, anybody that's just going to happen, there's so many things that have to go, right. And there's so much, um, There's so much that that requires you look at a guy like jobs. I think even in his book, I think he talked about this. Um, I think there's a lot of things he missed out on in his human experience in pursuit of that thing. Now here's the deal. If that's your conviction, if that's a God-given conviction that you have to do, the thing you're doing, then maybe that's what your purpose was in this world and that you have to pursue that. And that's what. You know, but, but don't, you have to do it for the right reasons. You can't do it because, Hey, I want to be rich, famous and have people talk about me, you know, in GQ magazine. Like that's not, you know, Forbes, that's not, that's not the reason you do it. I feel like the guys that do it, they have a deep conviction, a God-given conviction. And once you find that alignment, then it, things kind of happen organically because you're following something. And I always tell people this, I don't know how entrepreneurs, uh, and this isn't gonna get too preachy here, but I don't know how entrepreneur. Do it without a faith or belief in something bigger than themselves. I just don't, I don't like a purpose of some reason. Other like that vanity BS. It's not going to pick you up. It's not, when you find you're flat on your face and you're going to find your face all the time as an entrepreneur, like way more than you succeed, you're going to fail way more. Um, I don't know what picks you up cause the money right. In my experience, the money is not what picks me up. Money's nice, but it's not, when I'm down the money, I'm not like, oh, but let's, you know, thirsty for that. It will, for a period of time, it will for a period of time. But like over time, that's why some people would just fade it. What they're doing in my opinion is because that's the sole focus. Rich and having all the vanity stuff and stuff like that. But if it's a, if it's a conviction, if it's something that you feel like you were called to do that, you're serving people because you feel like that's the way that you were uniquely designed to serve people, those people being your customers. That's where I see the longterm sustainability. That's when I see people serving and not focused on the numbers because. I will lose the quality of how I'm serving people if I just focused on revenue growth. So they have that very disciplined. That's kind of the north node as I've experienced it. And that's what I've used as my north node. Am I serving to the degree that I can not staying stuck in a mat where that particular season of revenue, but like, how do I make sure that's the core of my equation? And that, that has always been, you know, this is, this is how I keep myself in line where I don't get scattered and lose sight of the sole focus of. Yeah, there's, I'm going to be willing to bet that you agree that you go through an evolutionary process as an entrepreneur where in the beginning. There's a big part of us that are in it for material benefits. You know, especially when we're younger, it's like, I want to conquer the world. I want all the money in the world. Uh, but then you go, but then as you said, you mature and then it, for me, it became, I no longer, I no longer want all the money in the world. I want just as little as, as much as possible to maintain a lifestyle. And then spend more time with my family, with my wife, with my kids. Right. You get those base needs. Yes. You need, you know, you, you want the nice house. You want those things that support general stability. Right. But then you get wiser in, in how you can make a more positive impact on the world far beyond just accumulating financial ends. No, but I think it's good. I'm glad, I'm glad this came up. Cause I think it's actually a good thing. And it's like the, the, the grand scheme of the beauty of. I'm glad that the younger folks, if you're in your twenties and that's what is driving you right now, go pursue it. We're not telling you to act wise for the sake of acting wise, you will learn, right? Just like I'm going to put my wise hat on today. No, no, no. What wisdom is accumulated through experience, go pursue those things. Go get that nice car, go have those nice things and come back and be like, yeah, wasn't really what I thought I was going to be. It didn't feel like I thought it was. 'cause I feel like that's more of like the catalyst of leading to, right. It's always, it's always a hindsight's 2020 thing. Like I can look back and say that now, but when I was in that same season, like you're talking about, it was like, yeah, I'm going to be feature, you know, 30, under 30. And like, I don't talk about it. Like I had all those aspirations and stuff like that, but it led me to having the wisdom that I have now that, that I feel like I'm, I'm a healthier human that can provide bigger contribution to the world because I arrived at that place faster. Would that have happened if I didn't pursue the vanities? Maybe not as fast it's anybody's guess. So I think you just have to embrace the season you're in. If you're like you listen to this and you're in your twenties or something, and you're like, I don't care about any of this noise. I don't care about higher powers. I just want to go make money, do, go for it, go for it. Cause you're going to end up here. I promise you and it's going to be, you're going to be better off for it. But, but then they learn. Yeah. I mean, cause we all know these things, but you don't embrace them until you experience it yourself. You know, my wife's nephew I've been mentoring him and he's he's 21 and mentoring him for about two years. And so when he was 19, it was, it was that it was like, Hey, I want to get a new car here. Here's a picture of it. What do you think? And I said, I'm gonna answer it two ways. One is me at your age. Go by. And then the other is me at my age saying that still go buy it, but you're going to quickly learn. It's not what makes you happy? Yeah, he had. Six months before he was like, I hate this car. I hate the gas behind it. I hate the insurance behind it. And what was funny is before he bought it, I said, who are you going to go race? Like, what are you, what are you getting this far? I go, it's not impressed women. You've had your high school sweetheart for years and you guys aren't going anywhere and they're still together. And so he quickly learns, you know, it, it wasn't for him, but. But I'm proud of him for still buying it to learn that it wasn't for him. Exactly. There's an interesting Jim Carrey quote. He said something like, you know, I hope that everybody finds fortunate and fame so they can realize it's not what makes them happy. And I think that says a lot, like we all know that, but there's a big difference between experiencing it and not, um, you know, maybe the last thing we'll talk about here is just a quick comment on there's a great book by Rand Fishkin called lost and founder. I have not, I know who he is though. I need to read that one. Yeah. And so, you know, most, so if you're not familiar with the audience, you're not familiar through Rand Fishkin is he started a company called Moz, had wild success. It was like the, the VC, um, darling baby story got a bunch of funding. Um, and then he talks in this book though about why that whole thing sucks, everything that was in the limelight or behind the scenes that sucked. And it talks about. He went to exit and how to buy an offer, I think was from HubSpot, offered the 28 million for the company. And he S and he held out for 40 and, um, they politely declined, and that was the peak of MAs. And it was just downhill from there. And so he gets, you know, he just, like you say, you paid Liberty mutual way more than you ever took. Um, he was a very public. He sends kind of exited, um, Mazda is that he was, he was the face of Mars for a long time. And so I really thought he was rich and with his funny mustache. Yeah. And so he gets all this publicity and, but in the book, I wish I would have taken that payout. I wish I would've done this. I wish I, would've not taken funding because I'm sorry, friends. I can't, I can barely, you know, I can barely afford my two bedroom studio in Seattle. I don't have money sitting around to lend you. I don't have all these things that everybody thinks I have everybody else made way more money than I did in that company then than myself. And so it's a really transparent book. It's, it's much along the lines of what we've talked about, where it's like, Hey, go do those big things, but understand this is a more accurate perspective of what you're going to go through. Yeah. All right, Chris Michael Harris. Thanks for the therapy session. I'll give you that the last few moments to tell our listeners how they can find out. Yeah. Everyone on social media ad. Hey CMH. Uh, obviously I mentioned StartUp U podcast started VTV so the podcasts have been around longer than YouTube. Uh, but definitely checked out there. We do. I think we have pretty similar audiences in terms of season of business that people are in. Um, so if you're interested in, in those kinds of discussions, very similar platform in a lot of senses. So, uh, that'd be great. heycmh.com. Uh, a lot of awesome free resources there as well. And my last ask of your audience would be this. It takes literally 22 seconds to do this. I promise you 22 seconds, whatever platform you're listening, whatever, wherever you get your podcasts, whatever apps you listen to podcasts on. Make sure you go and do my buddy here. A favor, do two things. I'll tell you why. And subscribe and leave a review. Those are the two most important things you can do to help a podcaster establish more reach because that tells the podcast platforms, wow, this is a show that's worth promoting. This is a show that people should know about. So if those two things it's like leaving a tip for your waiter or your waitress. So please do that for my friend here today to help his show, continue to reach more people and help them through their entrepreneurial journey. I appreciate that Chris Michael Harris, thanks for jumping on learning from others. heycmh.com. Damon Burton here. And thank you so much for listening to the learning from others podcast. I sincerely hope that today's guest helped you learn something since 2007, I've generated millions of dollars for businesses like yours. Ready to show up higher on search engines for words that you can monetize, but without paying for ads, download your free copy of my new SEO book outrank. If you visit www.freeseobook.com today.
Bob Regnerus: The Love-Hate Relationship of Facebook Advertising
Jul 26 2021
Bob Regnerus: The Love-Hate Relationship of Facebook Advertising
Today's guest is a digital marketing expert, and author of five books, including the 4th Edition of the Ultimate Guide to Facebook Advertising. Since 1998, he has been helping his clients achieve their goals through digital media and storytelling, and he is eager to share his experience with you of not only the ups of Facebook advertising, but also what to watch out for. Please welcome Bob Regnerus. 00.00.53 Facebook Ads00.14.32 Ads Click-through Rate00.25.57 Published a Book Contact Info Bob Regnerus Facebook wizard. Thanks for jumping on learning from others. How are you? Hey, Damon. Good to be on man. Good. Look at you and your fancy background while the listeners can't see the fancy background, but you got a fancy background. I do I do it's yeah. It's a green screen with a nice blue background. So it leaves at least some of the cluttered office, uh, out of people's of you. So these backgrounds are getting fancy. I was actually on a call just a little bit before you and I jumping on and the person says, how do I get rid of the background? And I said, are you talking about you can't get rid of your background? He goes, no, no, no. That's not where I'm at. That was like, oh, that looks super real. Well, I love the ones where they're like on a beach or something. Yeah. Sit back in their chair and disappear into the ocean. That's always fun. Yeah. The stuff we never knew, we would learn in 2020, right? Yeah. All right, Bob. Well, why we listening to you today? What are we going? Hey, I want to talk about Facebook ads, but doing it for seven plus years, been in direct marketing for 22 years. So, um, let's, let's learn a little bit about how to make Facebook, Facebook ads work. Right. But not until I ask you a question number two, which is what do you suck at Bob? Um, well, I, I I'll give you two answers. Um, number one, I suck at it. So maybe that's just laziness, but like, thanks to this. My wife knows how to do it. Um, the other character I would say is, uh, I hate to lose, like, I'm a basketball coach, so like I'm just wired to win. So I'm a really poor loser, whether it's cards or I don't care if I like, if I lose a game or Rumi cube on my phone or something like I'm a sore loser. So I'll give you two floods. Do you legitimately suck at ironing? Like you burned stuff or you just don't like it. I can't do the process. Like I can't iron a collared shirt and make it look good. Like I can get a little bit of the creases out, but I actually create more creases when I do it. So like, thank goodness I got a spouse that like enjoys it. And, and also, you know what, I don't wear that many shirts that need to be ironed. So that's also, yeah. What, what, what type of age? Uh, basketball coach are we talking? High school, high school boys. So 15, 16 year old boy. Okay. All right. I'll let that one slide. I was going to say, are you like the aggressive seven-year-old coach? Oh no, I did. I've been coaching for 33 years. I started when I was 16 years old and I've done it every year since, um, I've coached anywhere up from five-year-olds up to 18 year olds. So boys, girls. Yeah, I am not a screaming idiot. Right? Well, let's talk, let's talk Facebook ads. So, um, why don't we, why don't we start with Facebook ads? 1 0 1. What is it? What's so amazing about it. Let's start with super basics. Yeah. I mean, Facebook obviously is, is where everybody is. Um, it, it's a media that people spend hours per day on. And so. One of our responsibilities as a, as a, as a business is to be in front of the people where they're at. And Facebook makes it really easy to do that. Obviously it's got its issues and we could dive into some of those, but Facebook remains one of the best places to reach your target audience in advertising today. Why is it such a good place to reach? Uh, what I like about it is you target people based on who they are. So you target at the kind of the user level versus keywords. Like if you doing Google ad words, right? Um, Google ad words, you're figuring out what people might type in to solve a problem into the search engine. With Facebook. What you're doing is you're interrupted. You're, you're basically interrupting them, looking at pictures of family, friends, and food, and you interrupt them with an ad. Um, but it's based on who they are and you figure out who your best prospect is, develop that list and target them. It's a really good way to advertise, I think, and you bring up a good point because I'm on the other side of the spectrum in the space of SEO. And, and I often talk about that same topic where it's not, you know, there's no one magic solution there's different, there's different, uh, advertising methods that are better or worse for different platforms, different platforms for different types of products and services. And you brought up one of the main things I talk about is. Um, you know, on search engines, it's based on buyer intent, like you said, what's the question, that's the problem they want to solve, and that can be good or bad for certain products or services. And then likewise on Facebook, it's, you're targeting a demographic you're targeting habits, your targeting patterns. And so that's better or worse for other types of products. Yeah. And similar to, you know, Google with Facebook, with, with their technology, with the other Facebook pixel, is they track behavior. Um, not only do they know what you put on your profile, the things you like, the things you read, they also know how you behave. So they know your buying behaviors. So they know the types of stuff you buy, the type of stuff you're in market for. Um, so, you know, Facebook's use of, what's called a lookalike audience where you, you give them a list of customers and create a model. Um, Really it's powerful from the standpoint of finding more people that are likely to buy from you. So like if you sell golf, like golf clubs and golf shoes, whatever, um, Facebook knows who's in market for that stuff. Uh, just the other day, I, um, I, I bought a driver, a new driver and. Was researching drivers. And guess what I saw in my Facebook feed for like the next two weeks, all kinds of golf stuff and not just golf clubs. Yeah. I got re-targeted for the golf club, but I got targeted by, uh, golf courses, offering packages for the holidays. Um, I got targeted for training videos. So like Facebook knows you're in market for stuff and, and yeah, but like, if I'm going to buy a driver, maybe I do want to buy new shoes and maybe I do want to get a lesson or something like that. So it's a really powerful mechanism if you want to, if you want to get in front of people and how does Facebook know all that stuff? Well, again, there's, there's a piece of code that's on basically every website it's called the pixel. And so what that's doing is it's not just tracking what's happening with your Facebook ads, it's tracking behavior of, of the user. So Facebook knows that let's say they, and you do a good job for your client. And, you know, they're getting a lot of organic traffic based on these keywords to a blog or an article or whatever. If there's a Facebook pixel on there. And, and I happened to land on one of those, those pages, it knows that I'm interested in that topic, right. So it's not just that. Oh, I clicked on a Facebook ad it's that Facebook knows that I visited that page. And maybe if I go visit another page that has a similar topic or similar, similar angle. Now I've created a pattern of behavior that the algorithm can pick up on. So it knows, oh, um, I might be interested in this particular health condition or something like that. So that's what makes it powerful is the technology behind the tracking that's on there. You know, Facebook is probably in Google for that matter too, is going to be up against privacy laws and things like that. And that technology will probably change, but essentially, I don't think it goes away in terms of being able to track behavior and for, for advertisers to be able to target those people directly based on the things that they're interested in right now in the moment. So I want to, you brought up privacy laws and technology. There's a couple things I want to ask you about your opinion on that here in a minute, but I kinda want. Go a little bit deeper on some of the basics for some listeners that might not understand. So it sounds like Facebook is a good tool for not only, um, you know, with, with SEO, the main driver, right. Is to, to bring awareness to theoretically a new audience. And so, but, but with Facebook you can do new audience and retargeting, so you can play on both sides of the coin, right? Yeah. So, um, I recently wrote a book, the ultimate guide to Facebook advertising, and I purposely put retargeting in, in chapter three because it's a quick win for anybody. So retargeting uses that pixel that I've been talking about basically to say, Hey, you know, I visited this particular site to research drivers and then other advertisers, you know, hooked onto that and showed me ads related to that. But also. Um, individual, like, uh, you know, I went to Dick's sporting goods website, you know, just for example, not PR, not endorsing them, of course, but I went to their site specifically to look at a, at a couple of different drivers. Well, what happened is within, you know, within a couple hours of going into Facebook, I saw ads from Dick's sporting goods. Showing me the same driver that I was looking at, right. Reminding me that I did that. So retargeting is just simply the technology of, of calling people back. You know, one of the, one of the things that's kind of alarming for people is that, um, you know, 99% of the traffic that visits your site, Doesn't buy or doesn't leave their email address or doesn't do anything. Uh, retargeting is the technology allows you to call them back. Um, you know, it hasn't really been around that long, but it really has transformed campaigns. So. W what are the things that we used to see before we really had retargeting in place was negative return on ad spend. So, you know, spend a dollar to make 25 cents for instance. But if you run a retargeting campaign, you know, we routinely see, spend a dollar, make nine, make 15, make 30, um, retargeting allows, uh, especially if you're a new, especially in the e-commerce space to basically pull people back in based on the products they looked at. You know, give them an offer, invite them to come back and they buy, um, one of the most powerful things we teach is like, if you have a simple add to cart retargeting mechanism, uh, as a Facebook ad. So somebody goes to your store, puts a product in their shopping cart and goes away. Um, according to, um, Banyard 69% of the people last year, um, put something into their cart and abandoned. So like that's huge, right? But just a simple retargeting ad to remind them that they had something in their cart and to call them back, um, is really powerful. And that's where you can get those 30, 40, 50 to one return on ad spend, uh, types of types of numbers. So it's a powerful, powerful technology. So it sounds like. The goal is to be profitable on the initial ad, but it sounds like that sometimes it makes sense to be willing to take a loss on the initial ad and then convert it on the follow-up very, very big. And, um, so it, it kinda depends on market Damon, but, um, let's just take like the supplement market, for instance. It's it's pretty routine that you're going to go negative a acquiring customer. So let's say, you know, you do a lot of these companies do free trials, well, or, you know, buy your first bottle of these supplement for a buck. What they're willing to do is go negative, uh, on the front end because they know that they're going to get, make, you know, make that money up on continuity. But it, it is a challenge, uh, to. I'll I'll say this, Damon, the most expensive traffic you're ever going to generate is cold traffic. Uh, they don't know who you are. They don't know about your brand. They don't know what services you provide or the products you have. So you really, you really have to have. What I call a good retargeting platform in place before you run any cold traffic, because retargeting traffic typically converts at a profit and it's usually a very healthy profit. And so you need that in place. So when you do your cold traffic and you, you maybe are negative on the front end of that cold traffic, the retargeting. Uh, campaigns actually make you profitable, like early on. So you might be losing money, let's say in the first seven days. And if they buy within that seven day period, then you go back into the black. Does that make sense? Yeah. Yeah. So how does, how does the bidding system work? Because I imagine it's not identical, but comparable in the concept. Facebook doesn't want to just give the ad space away to whoever throws the largest budget at it, because there could be some irrelevant ads. Is that true? Yeah, it's actually a big deal. So, you know, one of the things that happened a few years ago is Facebook quote unquote, ran out of space, meaning they couldn't have any more. Onto their platform. So they started doing some other things like the, the, they created Facebook stories. Um, they created, what's called the audience network where you can see ads shown on apps and games you play and things like that. But if we talk just about the newsfeed for a minute, that's where we traditionally see the ads roll by. So Facebook is not going to fill their newsfeed with all ads because that's a very poor user experience. Um, they, they have a very. Simple formula for each person and how many ads that they, that they want to see. So Damon, you may say, I never click on ads. Your Facebook newsfeed may have one ad for every 20 posts that you see. And maybe I'm a little bit more like, like maybe I click on ads to more. So they may be show me two ads, every 10 posts or something like that. Okay. Facebook knows. Your behavior, but what's happening is at any millisecond. There are there's, there's billions of auctions that happen every day. And there's, there's, there's hundreds of thousands that happen every millisecond. And so. There are a number of, of advertisers competing for my attention, competing for your attention. Um, all based on the targeting of the, those ads. So there's essentially a competition, every millisecond for my attention. And so there's really three components that go into whether or not you're going to win the auction. The first is very obvious, which is your budget. So if you have a larger budget, you have a greater chance of winning the auction and getting your ad shown. Um, so if you have a limited budget, you're not going to win as many auctions. Okay. But there's two components that really allow any advertiser to compete with somebody who's a big. First is the click-through rate of the ad. So Facebook does one thing. Um, when they, when, when they look to put your ad in front of somebody, they actually have, what's called an expected click through rate and they know your behavior. They know my behavior, they know the listers behaviors. They, they generally know before they even show the ad the first time about what that ads click-through rate is going to be. And so obviously the ad with the higher click through rate gets priority. And then there's a third component, which is the expected value of the ad, meaning it's what happens after the person clicks and goes to your website. So this is where the Facebook pixel comes into play. Damon it's it knows like what's the conversion rate of your page. It might know that your e-commerce store converse at 3%. And so it's going to actually calculate the value of, of that click. And so those three factors will contribute to whether or not your ads get shown and it contributes to whether or not you're going to get a discount for having a really good performing ad and a really good performing. Website also going to factor in a quote unquote penalty, if you have a poor performing ad in a poor performing website. So I'd like to say that the level that, that the playing field is leveled for an advertiser that can write really good ads and has a really highly converting landing page. And you can compete with Coca Cola and low. And target and Amazon and people that are spending, you know, millions of dollars a day, uh, on ads, we can compete with them and have a good cost for action, because we're really good at writing ads. And we're really good at converting people on our way. On the value that gets calculated based on a conversion happening does, is it based more on the conversion rate or the value of the conversion? The reason why I ask is does that, does it give priority to a higher ticket item? Um, it's overall value. And when, when it's considering value, it's not, it's not considering dollar value. I know that's probably one component of it, but what, what they're actually measuring is that the, that the user or at the individual users. Satisfied with the process from beginning end Facebook's number one goal is if they have three goals, the first goal is to have a really great user experience. Like if, if Facebook became a really crappy place to be like, they couldn't make any money. So they're always gonna, they're always gonna prioritize their users first. The second people they prioritize are their investors, right? They're a publicly traded company and they are, they are responsible to make a profit for their shareholders. So that's the second party that they, that they put in the priority list. Um, advertisers are a distant third. Okay. The, the advertiser, they need the advertisers for the revenue, but they're always going to put the priority of their shareholders and their users before us. Okay. But I'm saying that because when, when a user sees an ad. They enjoy the ad or an interest them and they click to the website and they take a desired action. So whether that's like, just grab an email address, um, or it's complete a purchase, if the users are doing that consistent consistently Facebook sees that as a positive user experience. Um, it's very similar to maybe what you experienced with Google with SEO is the bounce rate of a page. So if Google is the Texas, right. For their algorithm, if somebody searches for a patient, they land on it and it doesn't give them what they want. And they quickly jump back. That's going to lower the quality score of that page in the algorithm. Right. So similarly Facebook sees that and goes, wait a minute, people are clicking on the ad and they're not completing the action, which you know, is eventually going to be a purchase or an opt-in or something like that. And what it's going to do is go, it's like, this is not working. So it's going to start to do, it's going to start to charge us more for that ad. And then eventually it's going to stop actually giving impressions. If people aren't completing the action, it's not going to start. It's not going to give us priority on that ad anymore. And eventually it's going to stop showing. So I got, I want to shift gears a little bit and talk about technology and evolution and you talking about privacy laws. And so part of what I think comes to that territory is Google recently announced in Chrome, they're going to be getting rid of, um, cookies. So. Impact the potential on Facebook ads or has, has Facebook come out with an alternative to maintain the advertising platform? Yeah, I think 20, 21. And, and going into 2022, it's going to be a big shift for advertisers, uh, Facebook and Google. Uh, I, I can't talk to Google specifically, but Facebook has, what's called a conversion API, and that is going to be replaced. Excellent. Um, pixel's not going to go away, but it's gonna, it's going to be there as a fail safe. So people are going to have much more control over their information. I believe. Um, kind of going into 20, 21 and 2022. And so there's going to be old technology where the pixel and cookies will still work. But as people, like you said, if on newer versions of safari and Chrome, There's going to be default settings, which kind of block those things. So advertisers are going to have to shift and start to use the technology called conversion API to actually plug in directly from their website into Facebook. So. That's just starting to happen now, you know, we're recording this at the end of 2020, but I, I see probably the second quarter of 2021 that becoming a very prominent thing. And I would think by the time holiday shopping comes around in 2021, we're going to see most advertisers shifting to the API versus the cookies as being the most reliable way to track conversions and, uh, use that for retargeting purposes. Do you have a love, hate relationship with Facebook? Like I do with Google. Yeah, I do. Um, I, it's interesting. Isn't it like Facebook is what I teach. It's what I write about. It's how my clients make money, but I don't particularly enjoy spending a lot of time there. Um, personally, um, I'll, I'll check it maybe once a day, but I am definitely not one of their top users. But I also, you know, the love hate also comes in terms of some of the funky things that happen. Uh, this year has been a challenging year. Not because of COVID it's because Facebook's gotten really restrictive. Um, they've had a lot of instances this year where they've shut down ad accounts, rejected ads, um, and it's kind of arbitrary. It's, it's hard to put, put my finger on. So it's, it's created a challenge for me and my clients. A lot of times where. We're we're we're we're basically trying to prove that we're innocent. Um, it's, it's, it's, it's very opposite of her justice system here in the U S where it's innocent until proven guilty. Working with platform like Facebook and I'm sure Google's the same way, Damon, where you're, you're guilty until proven innocent. That's very frustrating and it's frustrating a lot of advertisers and quite frankly, it's, it's, it's that up in people's minds. Like if there's something that comes along, that's less restrictive, you're going to start to see money, move away from Google and Facebook to that new media. I'm not sure what it is. I don't think Tik TOK. I think Tik TOK will be. Uh, a good medium, but I don't see tick-tock in the long-term. Um, So like being so open that it's not going to be restrictive, like the other big ones. Yeah. Yeah. I'd agree. It's and I don't even get into Facebook advertising, but I, I have a lot of, you know, partners and friends in the space and, and you saying arbitrary is totally how I see it, even from my limited exposure, I hear a lot of, a lot of what my friends talk about how their ad accounts get shut down, left and right. And then I'll immediately see it followed up by an ad. Of like an implied graphic ad of a man holding an eggplant with whipped cream on top of it, talking about his Manliness. And it's like, come on, you know exactly what the ad is talking and that one passes, but then the one that's talking about selling grandma's cookies doesn't well, I had it if I had an interesting conversation with a Facebook engineer, um, a while ago, it's been a couple of years now. And one of the things he revealed is like, there's, there's, you know, we talk about artificial intelligence now. It's not like the matrix yet, but there, there are algorithms that are running that are, that are monitoring ad content and add images and all those things. And I think part of it is that. I don't think the engineers necessarily know what the program is doing quite frankly, like it's gotten away from them. So one of the things that they're, they're very sensitive about, and this, this probably comes down from Zurich, which is they're going to be overly aggressive at trying to protect people. All right. And we could have a whole political discussion, like, you know, there, you know, about censorship and things like that. But Facebook has become very sensitive because they've got the government looking at them and, and they're going to be much more sensitive and way conservative in terms of letting things slip through. So, um, they, they are, they are. Being very protective of their users. And in some cases, overly protective, um, you know, they feel like, you know, there's markets that are just really difficult. Um, the marketing space, number one, you know, with claims and things like that, very difficult, lot of, a lot of account shut down. Um, finance and, and money is a big deal. Uh, alternative health is a big deal. I know it's a huge deal in Google, um, but there's just certain market segments that, that are. Impossible to go and get through or to have any sustainable, um, success on. So it becomes a challenge, um, as an advertiser to like, if you're in some of these markets where there's more scrutiny, how to really get yourself seen, because not only does Facebook restrict and Google does. So it was Mo uh, most ad moderation, AI based Marcel than manual review. Nowadays it is, it is 100%, um, AI ma monitored, and then it's human review on the backend. So when you get an ad that is rejected or an account that has rejected, um, that is a machine doing that first and foremost. And then the re the review process puts you in a queue where you're getting reviewed by. So that's only, if you say, Hey, wait a second. I want somebody to review this. Yes. Yeah. Machine does the machine, does the shutting down 100% of the time. Um, and that's, that's a function too, of, of Facebook's workers working from home. So, you know, they've got workers all over the globe that are not in offices or in their homes, so they they're relying on the machine to do the monitoring. It used to be the other way around was the humans would review it before it would go on. But now it's, it's, it's all AI and you'll get shutdowns at any particular time. And then the only way to get your ad reviewed is to click the button request for review for a human to actually get in, get in queue for a human to review it. Well, you clearly know a lot about Facebook advertising and you had mentioned briefly about you had written a book. How long ago did you write this book? Yeah, it was just published in October of 2020, it's called the ultimate guide to Facebook advertising. It's in its fourth edition. Um, the last edition came out three years ago. Um, I'm a new author in this series. Uh, the, the previous kind of primary author wrote to two additions before that, but it's, it's really a complete rewrite. Uh, 2017 was the last publication of the, of the manual. So, um, there's about 90% new material. Book because so much has changed. Um, but what, what I really proud of is the, the book is not about the dials and switches as much as it's about strategy. Um, so, uh, even the previous versions contained a lot of strategies, so the books are still applicable. Um, you know, if you write up, if you write a book about a particular media. Immediately when you give it to the publisher, it's not a date. Um, so we had some of that too, where we, we actually submitted to the publisher six months prior to that. And we had to go in and make changes because Facebook changed their ad interface. So we wanted to make sure the screenshots were fresh, but yeah. But what we're really proud of is the, you know, the book itself is filled with strategies which are going to be good for 10, 20 years. Um, so I, I, I enjoy talking about Facebook. Uh, I work on Facebook accounts. I coach people. I have courses, I do training. Um, like I said, um, I'm a coach, so my basketball court is a place, but also the business court is a place I like to help people. Yeah. Well, cool. Congrats on writing the book. I published a book earlier this year as well, so I know what a task it is to come through and do that. So, um, well, why don't, I'll give you the floor for the last few moments. I appreciate you jumping on Bob. Um, tell our listeners how they can find out more about you. Yeah. Yeah, I have a website set up. I think it's pretty interesting. It's called ultimate fb.com. So not only does that have a link to it, Amazon where you get the book, but, um, I was fortunate to have some, uh, people that contributed to the book as well. Uh, people that you would know, like Ryan dice, Jeff Walker, Brian Kurtz Perry. Marshall, of course. Um, so I did some interviews with them. So when you go to ultimate fb.com, I've got 10 interviews in there. Um, so a really interesting conversation. Um, and not just kind of the basic stuff that you might hear. Um, I've known Ryan dice for number of years, Jeff Walker, a number of years. So we talked about things that maybe they normally don't talk about. Um, so, uh, I'd love for people to go there. And, uh, obviously, uh, I'm going to ask for an email address, but I'm not going to abuse the privilege, but, uh, yeah, I've got 10 interviews there plus a link to the book. Um, I'd really love for people to get the book. Um, as you know, When you write a book, Damon, he kind of put your heart and soul in that thing. And you just want people to read it early reviews are great. We actually sold out the first day had to reorder it at Amazon. So I'm pretty happy with it. And, uh, look forward to getting in people's hands. Yeah. Good for you. And that was ultimate fb.com. Yeah. All right. Cool, Bob thanks so much for jumping on learning from others. Awesome. Damon, good to be on.