EFP 139: Entrepreneurship & The End Of Jobs
There’s something going on with this entrepreneurial movement we’ve got going on right now.
It’s easy to write-off or dismiss as hype – especially when you look at the mad dash for cash that goes on with the venture backed startups in Silicon Valley.
But once you dig a little deeper you start to see signs that the movement may have some teeth…and might be here to stay.
What Will the Entrepreneur Transition Mean?
This week we sit down with our buddy Taylor Pearson from TaylorPearson.me to discuss what this entrepreneurial movement might mean for both college students and other entrepreneurs looking to ride the wave. I’ve long been a fan of Taylor’s blog and was excited to jump on a call with him to hash through some of these exciting points – all of which he’s publishing a book about, “The End Of Jobs”. He’s giving away a free copy (plus a bunch of other books) and, having read half of it already, I’d highly recommend it as a great read.
Whether you’re a young entrepreneur trying to figure out your best career path or an old-hand looking to better understand the movement today, this is a great episode for you.
Check Out This Week’s Episode:
Direct Download – Right Click, Save As
Topics Discussed This Week:
- Is Entrepreneurship More Valuable Than Ever?
- Is Entrepreneurship More Accessible Than Ever?
- How Can We Use This To Our Advantage?
- Writing the book, “The End Of Jobs”
- Ron Davison @ The Fourth Economy
- Taylor Pearson
- Tropical MBA
- Listing # 40235 on eCommerce Site in the Apparel Niche
- Seth Godin the Linchpin Book
- Crunch Base
- Rob Walling @ Startups for the Rest of Us
- Richard Koch @ 80/20 Principle Book
- Richard Koch @ The Star Principle
- Paul Graham @ Doing Things That Don’t Scale
- Jake Hower @ Fuzedapp
- Maverick Book by Ricardo Semler
- End of Jobs Book by Taylor Pearson
- Taylor Pearson Free Books
- Empire Flippers Valuation Tool
Spread the Love:
“Improving your entrepreneurial chops is in high demand.” – Justin – Tweet This!
“Your first million is the hardest.” – Taylor – Tweet This!
“Someone with actual experience on the ground is a much more interesting hire.” – Justin – Tweet This!
“Figure out someone that knows what they’re doing and work for them.” – Taylor – Tweet This!
“What you’re doing with your life is a very emotional decision.” – Taylor – Tweet This!
So – what did you take away from this episode? What are your thoughts on where this entrepreneurial movement is going? Let us know in the comments!
Justin: Welcome to the Empire Podcast, episode 139. Ron Davison argues in his book, The Fourth Economy, that we’re moving from an information economy to an entrepreneurial economy. This week we sit down with our friend, Taylor Pearson, who extends this point and points to entrepreneurship as the new scarce resource. We discuss how improving your entrepreneurial chops is in high demand. You can find the show notes and all links discussed in this episode at EmpireFlippers.com/jobs. All right, let’s do this.
Speaker 2: Sick of listening to entrepreneurial advice from guys with day jobs? Want to hear about the real successes and failures that come with building an online empire? You are not alone. From San Diego to Tokyo, New York to Bangkok, join thousands of entrepreneurs and investors who are prioritizing wealth and personal freedom over the oppression of an office cubicle. Check out the Empire Podcast.
Now your hosts, Justin and Joe.
Justin: I know we’re a little on the fringe when we talk about things like being location independent, and about the expat entrepreneurial movement, and living and traveling overseas, but I don’t think that’s the case with entrepreneurship in general. There seems to be something more going on with entrepreneurship than just kind of a fringe movement. Wouldn’t you say Joe?
Joe: Yeah. I mean, absolutely. I think that this is something, kind of the new wave of how people make money online, and in life. I mean, I think that a lot of the recession of 2008 had a lot to do with this. It’s interesting to look at it as kind of a new world order.
Justin: A new world order. That’s aggressive. You’re going to join that group, I see.
Joe: Okay, well maybe not so tinfoil hat. I’m not saying the illuminati is leading us to online businesses, but you know what I’m saying.
Justin: Yeah man. I think there are a bunch of things going on here. I mean the first is that the educational systems are broken. The systems that we used to send kids to college to, to learn and to join the economy and do well, it’s still there, but it’s not nearly as much of a differentiator, because everyone’s going to college. Everyone’s graduating from college, so it doesn’t really make you special, and those skills aren’t nearly as in high demand, or that knowledge I think is not in high demand.
The other thing is that it’s easier than ever to start your online business. I wrote a post on the Flippa blog, that was talking about how easy it is. You take a laptop, you buy a domain name, get a hosting account set up and you’re good to go. Took a little grief for that. Some people were like, “Well it’s not that easy.” No, it takes a few skills, but in terms of cost and getting set up, it’s really easy to start an online business. I think that’s changing things. That’s different than it was 15, 20, 30 years ago for sure.
The other thing is that the internet has broadened the scope of interests or niches. Where before I think there were less niches, less industries to be focused on. Now you can really specialize. If you look at things like Amazon’s book service. There used to be like a couple of particular industries, or particular niches that books would be in. You go in the bookstore, and you’d see that. Now you can buy a book on absolutely anything because the cost of storing them is minimal. People have I think a much more wider variety of interests, and that opens up a lot of business opportunities for the solo entrepreneur.
Joe: Yeah, well that’s a hell of a point. You put a lot of information in that Justin. I will say let’s start with educational institutions are broken. I mean, yes, I think in terms of the skills that they provide, they can be provided cheaper elsewhere, and probably faster. In terms of socialization and interacting with your peers, I still think there’s some value there. I’m not sure how much that translates into running your own business, but there’s definitely some value. I don’t think it’s worth $100,000 worth of debt, or maybe more, but it’s something that you definitely have to think about.
Justin: Joe, think about this. When you were in your 20’s though, you easily made friends. That’s just kind of that period of time in your life where it’s easy to make friends. What’s better about going to college and dealing with all the people there, instead of, let’s say rolling up to Saigon or Chiang Mai or whatever, and meeting with all these other expat entrepreneurs that are a few to even quite a few steps ahead of you, and learning with them? I don’t understand what the big difference is there. I mean, I understand if you’re going to law school and you’re going to a top tier law school, and the connections you’re going to make that are going to help you later in your career. Maybe that would be an exception, but for your average guy or gal, I just don’t see how that makes sense.
Joe: Yeah. No, when you compare it that way, sure, it definitely doesn’t seem like a college level education holds any weight. When you compare it to what most people would be doing instead, which is just working from their mom’s basement, or having some sort of minimum wage job and trying and failing to build a business online. I think some level of college probably holds value for them.
That said, maybe it’s a hard comparison to make.
Justin: You should have interviewed Taylor, man, because we get into this a little bit, and we’re on the same page. You’re kind of the one that disagrees a little bit. It’s interesting, I’m going to put it in this way, that you’re holding on a bit to kind of the past. You still believe, you’re like, “Well no, there’s still value there. No, but it’s still …” Like even though it’s becoming more and more mitigated, you’re like, “Well, but what about the kids that were going to work at Mcdonalds otherwise, and they should go to college.”
Yeah, I see what you’re trying to do there, but I don’t know man. I’m not buying it. I think we’re entering a new age, and I think universities are left out. What do you think about the idea that the internet has broadened the scope of many different interests and niches, and there’s a lot more opportunities to get involved in very specific niches today than there were 20, 30 years ago?
Joe: Yeah, that’s the second part of your point. I think that is the real value here. When you talk about broadening, I mean really what you mean is the niches, very specific niches now have more popularity. Whereas your local community, or even people you could communicate with relatively closely. Maybe there wasn’t enough people to market to. Now, because of the internet, you have the ability to market to almost the entire world. That means that very specific niches could be literally millions of people.
Justin: Yeah, and that comes in really good I think opportunities for entrepreneurs. Also, bad things. You get like the hate groups, like the six people that believe the earth is flat, or whatever, can get together online and talk about, and form a little cabal or community. The hate groups. The anti race, anti this person, anti that person groups can easily find each other and kind of gain strength and power in their connections. There’s a dark side to it as well i think, but I think overall it’s going to work out really well for all of us as entrepreneurs.
One thing that Taylor talks a little bit about, and we’re going to get into this in the interview, is that employees are becoming much more of a commodity. Whereas entrepreneurial skills and chops are the scarcity, they’re the things that are in demand today.
Joe: Yeah, I mean, absolutely. I think that I’ve learned this in just living in the Philippines, that hiring employees, once you get past the nervousness of the first time, and maybe your first time managing people, it absolutely becomes more of a commodity. Because you see that the base level skills are out there, it’s easy to find, and it’s easy to hire.
Justin: Well Taylor is actually writing a book about all this, it’s called, The End of Jobs. He’s a previous Tropical MBA apprentice, or employee, and he was kind of thrust into this. He joined them, flew out to Thailand, and right after they were doing an event. In the book he mentions us a couple of times. Like we just kind of rolled into a bar, and were hanging out with Dana and some other people, and chatting business, and he was like, “Well who, all these people and they’ve got all these things going on. They’ve got a whole language system going on. I don’t even know what this is all about.”
To see him today, where he’s writing really interesting pieces on entrepreneurship. It’s interesting. I’m about halfway through his book, and it’s part love letter to like college grads, trying to get them to consider entrepreneurship as a real viable option. It’s part position piece that extends from the predictions that Ron Davison made in The Fourth Economy about the future of jobs, and our global economy overall. I think it’s really interesting. I think our listeners are going to get some value out of this book.
Joe: Yeah. I think for me the storyline of how he injected himself into this community, and learned the lingo, and went on to build his own business. That’s very interesting.
Justin: It’s kind of like, and who would have known that Taylor had this great writing ability in him? It’s kind of like, I forget the guy’s name, but the great author that entered the pickup space in like the game. It’s like Taylor entered this kind of world, and is now a part of it, and is then going back and trying to write about it. I think it’s fascinating.
All right man, before we get into the heart of this week’s episode, let’s do our feature listing of the week. What you got for us buddy?
Joe: We’re talking about listing 40235. It’s actually our almost first seven digit listing. It’s listed at $955,000 right now. We’re talking about an eCommerce business created back in May of 2014 in the apparels niche. It depends almost exclusively on paid traffic, and it does make a very good net income of just under $32,000 a month. This is a significant business. This is something that absolutely you could run full time, from anywhere. This kind of thing could not only replace your job, it could be your life. It could be your entire business.
Justin: This comes with contractors, it comes with employees, so there is processes in place to run this. Yeah man, there’s no way you’re going to get up to, I think it’s like 600, 700,000 page views a month in a little over a year with just organic traffic. There’s definitely some page stuff going on.
One thing I’ll mention about this, and I can’t get too specific unless you’re digging this as a serious option for you to purchase. It has a very passionate niche. The people that are involved in this niche are very passionate. It’s to the point of being a hobby or almost an obsession. I think those are great niches to get into, and I think that’s one of the reasons they’ve seen so much success in such a short period of time. I really like this business. I think it’s really interesting. I think there’s a ton of opportunity. If you look at the trajectory it’s on in a short period of time, I think this could turn into a full on nicely branded eCommerce business in the long term. I think it’s really interesting.
Joe: Yeah. I mean, and the seller is willing to do a significant amount of training, introduce them to all of the suppliers. Guarantee them the same terms, or better. Like you said Justin, all the contractors would stay on board. All the paid advertising, that kind of stuff is handled. Really in terms of the owner, there’s not too much for the owner to do from day to day, week to week, month to month. Obviously if you have a business this big, you should still be overseeing the grand vision, but the day to day operations are controlled by employees.
Justin: The sellers in this one are willing to meet up in person to actually discuss it and to kind of go through it. That is something they’re willing to do. If you’re interested in this one, it is listing 40235, and we’ll put a link to this in the show notes.
All right buddy, let’s dig into the heart of this week’s episode.
Speaker 2: Now for the heart of this week’s episode.
Justin: I’m really excited today to be talking to Taylor Pearson from TaylorPearson.me. He’s a excellent blogger. I’ve read a lot of his blog posts. A big fan of his since he was an intern, or apprentice, over with the Tropical MBA guys. He’s got a book coming out that we’re going to talk about, and we’re going to talk about kind of why he’s writing the book. Taylor, thanks so much for being on the show man. Appreciate it.
Taylor Pearson: Thanks for having me on Justin. I’m excited to be here.
Justin: Yeah buddy. Before we even started this, we were talking about like what we can talk about for the show, and what we can get into. One of the topics that near and dear to your heart is entrepreneurship, right? How valuable entrepreneurship is today. One of the topics you brought up was the question, is entrepreneurship more valuable than ever? We talked a little bit about like how, with website brokerage, one of our challenges is bringing on sellers. It’s finding sellers to sell their sites, and getting them to give that up and sell it someone else. What are your thoughts on how valuable entrepreneurship is today?
Taylor Pearson: Yeah. I thought of this specifically with brokers. I was talking with another website broker maybe six or nine months ago, and kept coming back to every broker always has a choke point around sellers. Everyone says, “Oh, I’ve got more than enough buyers. Anytime I put something up, I can almost always find a buyer, but it’s really hard for me to find sellers.”
If you look at even like really big businesses, Google just acquired Nest, which is the thermostat company. They let you kind of it’s a cool thermostat where you can set your thing. There was speculation that basically they paid $3.2 billion not for the thermostat company or the technology, but to acquire the CEO of the company. That this guy was so talented that it was worth just paying $3.2 billion to get him to come work at Google.
This started making me think about from the framework of entrepreneurship as a resource. We can kind of dig into this a little more as we go further along, but thinking about entrepreneurship as a resource, and looking at business brokers, you start to get this sense of the scarce thing in the market isn’t capital, in a sense. There are buyers with capital looking for these businesses, but there aren’t enough people that know how to build these businesses. Like that’s the scarce resource.
Justin: Yeah, it’s interesting. Do you think it’s the entrepreneur or the business itself? Because that’s a question, right? I see with an [Akwell 00:13:20] hire why it might be valuable to bring someone on, and a CEO may be wroth 3.2 billion, although that sounds a little aggressive. What about the business itself? How inextricable is the business from the entrepreneur, and can you do that, do you think?
Taylor Pearson: Yeah, that’s a good question. What I see is they have the saying, “Your first million is the hardest.” There’s some other book like your first billion is the hardest. That seems to be true, like once you figure out how to make a million dollars, or once you figure out how to make a billion dollars, it’s not that hard to go make another million or make another billion. That the entrepreneur is the scarce resource.
Whereas like, if you take over, and I suspect, you can tell me your sides, but people that buy a business and take it over, you can run a good business into the ground.
Justin: Yeah, so definitely some buyers will take a site, or a business that they’ve purchased, and just not know how to run with it. Not have any kind of plan, and either let it sit, or make some bad decisions with it and it does worse. I think the ones that do better is when the person selling the site, the person who’s run it, has systems in place that kind of put some of themselves, put some of the entrepreneur into the business, and the person taking it over can run with that. They already have a system in place they know works, and then they can start to add their own, for lack of a better word, flair to the business, and test different traffic strategies or monetization strategies, in addition to what’s already working.
Taylor Pearson: Another story I’ve heard kind of that’s interesting for me in this perspective, is people that have essentially started and failed businesses. I was reading a post a guy put up in a private forum a few months ago, and basically he took out I think around 40 grand in credit card debt, and started four or five eCommerce sites at the same time. Tried to do this really aggressive, really big eCommerce play. Basically ran out of cash. Spent a bunch of money on development, and had all this stuff set up, and by the time he got to, “I need to market these things.” He didn’t have any money left.
What was really interesting was he took that failure and took it around to a bunch of eCommerce companies and said, “Look, this is what I did. I bought these five domains, and these are the eCommerce shopping carts I used. This is how I was going to do the marketing, and this is what I got started on.” He was able to basically double his salary. The six month experiment in failed entrepreneurship or a failed business, gave him a skillset and gave him value in the marketplace that he was able to turn around into a much better job effectively, and something he could leverage further up.
Justin: Well that’s way more interesting for me as an entrepreneur, is to hire someone who’s gone through those trials. Who’s like shown me what they’ve done, rather than just come in with some education credentials. Like they’ve been in the market. They’ve been putting the blood, sweat and tears into making something work. Even if it didn’t work, they’ve got the experience there that shows them what didn’t work, but they did something.
You talk about this in your book a bit, where you have these guys, who would you rather hire? Someone with a Harvard MBA, or someone who came in and did this, did this, and tested this, and built this in their business. Someone with that actual experience on the ground is a much more interesting hire to me.
Taylor Pearson: Yeah, and I think we’re starting to see this develop. The idea of entrepreneurship as a resource is still very new and very novel. Whereas like it’s very normal for us to think of knowledge as a resource. Like if you have an MBA, or whatever, a college degree, or some kind of certification, you have this piece of paper and you can take it and say, “I’ve acquired this knowledge, and this is a resource.” Societally we look at that and say, “That’s a good investment.” You’ve invested in this knowledge degree.
That wasn’t always the case. If you go back to the early 20th century, you can see all these marketing campaigns where basically college administrators are trying to convince people that it makes sense to go acquire knowledge. That you shouldn’t just start working at 16. You should invest in your education, and you can use that education to get a better job, and over the lifetime of your career, you’ll have higher earnings. Now we have all these studies about if you get a college degree, you’ll earn a million more dollars over your career, or a million and a half more dollars over your career. We’ve adopted to this paradigm of knowledge is a resource.
The paradigm we haven’t adopted to is that entrepreneurship is a resource. I think you can kind of draw a parallel back to knowledge. The time to invest in knowledge was early in the knowledge economy. If you went and you got a college degree in the 1940s, or the 1950s, or the 1930s, or early in the 20th century, those are the people that did really, really well in the knowledge economy. That they kind of grew with this big expansion of the knowledge economy in the US. Now a lot of those people, as we kind of continue to follow those same scripts of like I’m going to go get credentialed, and I’m going to get a degree. It’s not quite so clear that for the next 50 years that’s going to be as valuable as it has been for the past 50 or the past 100 years.
Justin: Yeah. Getting started at the beginning of the knowledge economy, in terms of getting an education, that totally makes sense to me. It’s funny you mentioned the studies that show if you get this degree you’re bound to make this many more dollars more per year. That’s some like De Beers level a diamond is forever kind of marketing. This is like the longer term, you need to go to college, you’re going to make this much more money. That’s crazy to me, and I can see how universities have milked that for heading into maybe the tail end of the knowledge economy into the entrepreneurship period.
What do you think about, as an entrepreneur, can you be an entrepreneur if you’re buying into someone else’s business, or do you think you have to go through the beginning of starting a business from scratch?
Taylor Pearson: I would define entrepreneurship, I think the best definition I’ve ever read is the way Seth Godin uses it in Linchpin. It’s someone that goes out and like creates and connects. Let’s say you buy a business. If you just kind of hold and sit on that business, and you don’t do anything to develop the asset, I wouldn’t really consider that entrepreneurial. I mean, maybe that’s an investor mindset. You’ve like bought this asset and you’re just sitting on it.
The entrepreneurial work would be you’re going and you’re creating new systems. You set up a new marketing campaign, or you reconfigure operations so that it’s more efficient and you have higher margins. If it’s a lead generation website, maybe you go out and you find, you’re selling those leads to one company, and you find another company that’ll pay twice as much for those same leads. It’s like that new creation and connection is the part of it that’s entrepreneurial.
If you start that from scratch, or whether you buy into it and then do it, I don’t really see a distinction in that sense.
Justin: What a match too, and we’ve been talking about this for a while, but our investor program. Because there are the people that just want to be the investors. They don’t want to be entrepreneurial with these sites, but they have the cash and they’d like to make a return on that. What an opportunity for entrepreneurs with some hustle that say, “Look, I want to get in and get my hands dirty. I want to test different monetization methods and do all this.” Maybe they don’t have the capital to do that. With a little bit of connection, some elbow grease, and some work on those sites, they can set up the connections, get the money from the investors, and just set up the program where they can start running and managing a portfolio of sites on their own.
Taylor Pearson: Yeah. I think that model is really interesting. Actually I don’t know many people that have done that, I guess in the website space. Like you see that, you know if Charlie Munger and Warren Buffett buy a business, then they have like the GM that manages the business. I think it would be really cool to see that model become more prevalent at not quite so huge a scale.
Justin: Yeah, it’s happening now. We just started, we got our first investor on board, and we’re acquiring the sites for them. We’re going to have a portfolio manager that basically runs that. Then we’re bringing more on, and we might put them together in a package, and then have another portfolio manager that runs their package of sites. This is something that we’re doing in our company, but I think that it’s totally not limited to us. There are plenty of other people that could get into that space too. I think it’s really exciting.
It’s amazing when you start to realize how much money is out there for opportunities to take advantage of if they make those connections, if they actually reach out and find it. It’s out there. Like you said, it’s just making the connections, and talking to the right people, and making deals happen.
Taylor Pearson: One thing I did actually is I subscribed to the Crunch Space emails, Crunch Space reports on like funding rounds. It’s kind of just a psychological hack, but it’s like amazing to see how much capital is out there looking for entrepreneurial talent. In the big pie, I want to say like venture funding is .4% of GDP, or .3% of GDP. I mean, it’s millions of dollars a day, like hundreds of millions of dollars a day that are getting funded into these. This is like a tiny, tiny sliver of just the US’ GDP. So much capital is available.
Justin: Going back to how valuable an entrepreneur is, and you mentioned that guy that had failed and ended up getting a job for double the salary. Joe and I had a similar situation where we had run a mortgage company, and that mortgage company had failed miserably. We had to go out and find jobs, and we ended up working for a local SEO company as like lower, mid level management to start, and we worked our way up.
think one of the reasons we were able to do that is we felt like we didn’t have to wear nearly as many hats with this new organization. The accounting was taken care of. Sales was taken care of. We were simply running the operations and we were like, “Oh, we have the freedom to kind of run with it as if it were our own company.” That’s how we treated it, was let’s pretend this is our own company, how would we do it? We didn’t have to take care of every single thing in the company. We had a more limited scope than, well everything as an entrepreneur. I think by bringing that entrepreneurial mindset to a company, we were able to take it much further than we would have as just a cog in the wheel.
Taylor Pearson: Yeah, and I think that’s, we can talk about this more, but the apprenticeship model. That wasn’t really an apprenticeship, but it sounds like, I mean since it was like-
Justin: It was kind of. We had mentors. We had people that gave us some freedom. We took the other freedom that we had, in terms of like directions and things that we wanted to get done, and building out budgets. It was kind of an apprenticeship model, although they didn’t frame it that way.
Taylor Pearson: I guess that’s what’s interesting. I was talking a little bit about there were these paths established in the knowledge economy, right? Those are normal now. Like if you wanted to become a doctor in the early 20th century, it wasn’t quite clear how that happened. You kind of went to this school, and you had to know someone, and there weren’t that many doctors. Now that’s very clear. You have to go to a certain quality undergraduate school, and you have to take certain classes and get a certain GPA. You have to get a certain score on the MCAT. It’s all very clear, like you know what the script is.
Then these like entrepreneurial scripts are kind of starting to emerge too. Like in our community apprenticeships, that’s very much my story. I didn’t know anyone entrepreneurial growing up. I didn’t identify as an entrepreneur as a kid, but I was looking around and I said, “This looks like a really cool opportunity. How do I get into this?” The answer I found was apprenticeships. You go figure out someone that knows what they’re doing and work for them.
Justin: You were originally looking at a very defined script, right? You wanted to be an attorney, you wanted to be a lawyer, which is something that I wanted to be at one point too. Then you broke from that. What was it? Was there anything in particular, or was it just more the appeal of entrepreneurship, the appeal of being an apprentice with the Tropical MBA guys that drove you? Do you see the big picture more in hindsight, or did you kind of see where things were going at the time?
Taylor Pearson: I definitely didn’t see the big picture at the time. It wasn’t like clear to me how everything was going to play out in any way. I think I felt this certain sense of opportunity. I talked with, one of the people I interviewed for the book was Rob Walling from Startups for the Rest of Us. He described it better than I had described it before, which is he was working in this like kind of big, corporate company. I think his dad had been either the president or like an executive vice president, and he had this kind of path up into potentially the CEO position of this very large, very substantial company.
He said he felt this sense of opportunity with entrepreneurship. Now running what’s technically a much smaller company than like the multi hundred person company he was working in beforehand, feels this ability to express this opportunity. I think I felt the same thing. There was this sense of opportunity, and I like wasn’t quite sure how to grasp it or what the way to get it was, but I was really sure it wasn’t in a law office in Memphis, Tennessee.
Justin: Yeah, that seems like, and this is not the right way to put it, but like indentured servitude. Where you do, you borrow so much money, and you work very long hours in a very specific niche just to kind of pay it back. Just to kind of get back to even. I think that’s rough. Even though that script is well defined, I think there’s, and this is what you talk about, why there’s so much more value in taking kind of the less defined path, and having to figure it out. Because most people don’t do that, they’d rather take the one that’s already kind of laid out for them and is clear and easy to read.
Taylor Pearson: I think too, at least for me another aspect of it is looking at it now, like the thing I wish I had known five years ago was a lot of times entrepreneurship gets framed up in very emotional terms. I kind of just did that, right? Like this sense of opportunity. Rightly so, it’s what you’re doing with your life is a very emotional decision.
The story that doesn’t get told as much is it’s increasingly a smarter decision. If you became a lawyer in the 1950s, it was just a much better deal. Education was, even inflation adjusted, much less expensive. Your projected earnings were much, much higher. People were recruiting lawyers, there were great career opportunities for lawyers. You could say the same thing about doctors. Most people will go, “My family’s all in healthcare. My father and sister are both doctors.” They’ll tell anyone now that’s looking at becoming a doctor, if you love it and it’s what you want to do with your life, great. If you’re doing this because you think it’s like a great job for the money, that’s not true anymore.
Justin: I’ve seen a Reddit thread recently, and had conversations with friends, and we’ve gone down this path where you’re saying, “God, if I knew what I know now five years ago …” Or, “If I could have seen this coming three years ago, or five years ago, or ten years ago, I would have jumped on that bandwagon.” You talk about this in the book too a bit, you talk about exponential growth, and you talk about kind of where technology is going. I think it’s an interesting question to ask. Five years from now we’ll look back and say, “God, in 2015 I wish I would have known that was happening.” Is that something you consider when you look at niches, when you look at industries, when you look at things to get involved in?
Taylor Pearson: I definitely think about like the growth of the market. One book, or kind of one framework, that’s had a big influence on me in the last couple of years is the 80/20 principle, and Richard Koch, who also wrote a book called The Star Principle. Basically kind of lays out the math of like, don’t enter a market unless you can be first or second in the market, and if that market’s not growing 10% year over year. Those are the basic ground rules he lays out.
Basically what he shows you is, if you’re in a growth market and you’re a leader in that growth market, you can be the biggest dunce and you can still make money. If you look leading up to 2008 in real estate, I’m sure you saw this, there were tons of people that had no idea what they were doing, that were making money hand over fist because the market was just growing so fast.
Justin: Yeah. You know, Seth Godin talks about this a bit too. It’s like, if you can be number one, if you’re maybe number two, but definitely number one, you’re getting the spoils, like it’s totally worth it. That’s one of the reasons so many people in our industry talk about nicheing down. Really what they’re just saying is, niche down to the point where you can become number one in your market, not easily, but with more ease than … Don’t try and be, if I can just get 1% of this market, I’m golden. Don’t do that. Go into a market and make sure it’s small enough to where you can be number one.
You look at search engine results, number one gets like 30% to 40% of the clicks when someone’s searched for a particular key term, and number two, number three, number four, are much, much further down the list. There’s real value in being number one. Lots of really smart people, smarter than you or I, say the same thing.
Let’s talk about the accessibility of entrepreneurship, and how that’s changed over the last five, ten and 20 years. A lot of what we’re doing right now would not be possible 20 years ago at all.
Taylor Pearson: No, it wouldn’t. Thinking about how possible it was 20 years ago is kind of interesting and informative from the perspective of thinking about what’s going to happen going forward. To make any hard predictions is difficult, but to see trends is pretty easy. Like I think when Henry Ford started Ford Motors there were like 383 car companies or something, and they ended up just being Ford, GM and Chrysler I think was the other big one. It’s not hard to see trends, it can be hard to take advantage of them.
You see the way this trend is moving, that it’s cliché at this point, the internet has changed everything, but it has, and it’s changed it in a sense that if you look at cloud computing, or access to the cloud 10 years ago. I remember that was like a selling point at a web agency at one point, it was like, “Oh, we can do it in the cloud.” That’s just taken for granted at this point.
Kind of the big picture way that I think about that and I talk about in the book is there’s three big factors which are the democratization of production, the cost of making something. If you want to start a eCommerce, you want to start a physical product business 20 years ago, you had to go rent a store on main street. If you wanted to manufacture, you either had to manufacture in the US where costs were high, or if you wanted to manufacture in China, that was something that only multinational corporations were able to do because you had to fly to China. There was no Alibaba. The language proficiency in China wasn’t as good. Very few people spoke English, so you were going to have to work through lots and lots of middlemen before you get to the original factory.
It was really hard to make a physical product, and now it’s gotten much, much easier. You see all these people selling on Amazon now is very popular. You can go on Alibaba, you can source factories directly. The English level in China is much better than it was 20 years ago. 20 years ago was the fax age, so you were faxing back and forth schematics, and now it’s like you email them a PDF and you pull it up on Skype and you can look at it. That’s how fast things have moved in 20 years.
Justin: Yeah. I mean, you have the drop shipping model, where you no longer have to spend enormous amounts of money or time bringing all these physical products into your store on main street. There are people that will just ship it for you in your company’s name. You’ve got guys like the elevator life, another guy’s in China trying to make those connections and set those connections up for you to make it relatively easy for you to be an entrepreneur. That’s just amazing. We’re not in the physical product space, but I’ve seen some of the changes there that are just I think mind blowing.
One of the questions I have for you is, with the internet, what has happened is it’s no longer, like media is a great example of this, it’s no longer in the hands of just a couple of companies that are feeding you the news, or whatever media entertainment you want to consume. It is all over the place. If I want to follow someone’s YouTube channel, I can do that. If I want to listen to any independent podcasts, I can do that. That’s amazing. Do you think we’re going to see a collapse of that again at some point, or do you think that there’s more and more options that become available?
Because there has been, as things kind of, like there’s 200 car manufacturers and that consolidates into a few. Do you think we’re going to see the same thing online, where there is some consolidation, or do you think it will branch out even further?
Taylor Pearson: My answer to that question is I don’t really feel qualified to answer that question, in terms of like making predictions about the future of online media.
Justin: Come on, you don’t know Taylor? What’s going on man? You’re supposed to know that man. You wrote the book on this. What’s the deal?
Taylor Pearson: The more interesting thing to me at least is that 50 years ago it used to take NBC to produce a video, and now it doesn’t. It takes you and an iPhone and YouTube. That’s true in books, and that’s true in podcasts, and that’s true across all forms of media. Not you know someone at NBC, the barrier to entry is a $30 mic on Amazon.
Justin: Not sucking.
Taylor Pearson: Yeah, right. It’s like, how did you build a big audience with this podcast? You just got in and did the work. The barrier was like the people that get in and do the work. That’s never been true before.
Justin: It just has to be good. It has to be good, and it has to stand out and all that purple cow and everything. It has to be good. Like in the past they could do a focus group and have a show, and they would continue running it until the advertisers told them they had to stop. I think today you just won’t get any attention. If you launch something that’s not good, no one will care.
Taylor Pearson: Yeah, I agree. I think in a sense the other resource I’ve kind of thought about is, like you could almost think about shipping as a skillset. That people that learn to ship, in the sense that they’re creating work, they’re producing products, they’re putting out, like those people eventually make it happen. I’ve heard, a couple people have written this blog post over the past few years where they like look back at all the people they started with five years ago, and they look at all the people that are still doing well now. The one common thread you can trace is they just kept doing the work over and over. Eventually they figured out the niche, and they figured out the angle, and they figured out the branding and everything else. The one common thread was they just did the work.
Justin: Yeah. Going back to the consolidation, one of the reasons I was asking that is I think it’s interesting in the website Brokerspaces. We are kind of branched out, so there are a bunch of brokers and it’s not consolidated, it’s kind of fragmented. I’m wondering, looking forward for us in our long term kind of opportunities, will it consolidate or will it continue to fragment? If it fragments, how can we bring those people in? How can we bring some of the smaller brokers into our ecosphere? How can we take advantage of this moving forward? That’s one of the reasons I was wondering for your thoughts on that.
Talking about the main street having to ship all these massive products over and take huge risks. You don’t have to take those huge risks anymore. I wrote a guest post on Flippa a long time ago talking about living the dream, building your business from the beach or whatever. I talked about some of the problems with that, and how it’s not realistic in some regard.
You really, like with a domain name, with a hosting account, you can get started with a website and start talking, start having conversations and start making connections and building a business online. That is just, it’s amazing, and people can do this part-time. They don’t have to jump ship. They don’t have to quit their jobs and go all into this, invest their life savings. They can kind of test the waters first.
Taylor Pearson: Yeah, and I think there’s three scripts that are sort of emerging. Like we saw, we were talking about scripts emerging for the knowledge economy. One is apprenticeships, which we mentioned. You can go find someone and work for them, someone that has an entrepreneurial business where you can go and you can learn the skills.
The other one that I talk about is stair stepping. This was a framework from Rob Walling again, from Startups For the Rest of Us. When he looked back at his career, kind of what he did was he became more entrepreneurial. He like acquired entrepreneurship over the course of his career. He left his corporate job to start consulting, and then while he was consulting he started starting these small product based businesses.
I think his first business was like a duck boat ebook, something like that. He was making like 300 bucks a month, but he figured out like, okay, well how does products work? How do I do customer service for a product? He started figuring out all these skillsets, and then he had I think a beach towel eCommerce business for a little while. Then eventually he had DotNetInvoice, and he had HitTail, and now he has Drip, and he’s slowly moved kind of up the value chain from kind of very niche ebook, to an eCommerce store, into one off software, into recurring software, into recurring software in a more competitive space.
That’s something anyone can do. Like you can start on the side and you get, I actually got started, we could tell this story. I got started making ads. Since I was reading your blog back in like late 2011, 2012, listening to y’all talk about how you make AdSense sites. I didn’t know what was going on. I was like, well this is cool. I sent you guys an email like, “Hey Justin, do you think I should make AdSense? Could this be smart?” You basically sent me this reply like, “Yeah, just do something. Like if you do anything, you’ll figure it out.” I was like, okay.
I made some AdSense sites, and I was selling, I was in the kitchen décor niche. That was like where I found all the keywords, it was like kitchen cabinets, and kitchen tiles. Yeah, I figured out how to use Odesk, and outsource and all this stuff. That was kind of my first step, and that was actually how I got into my apprenticeship, was I cold called a bunch of marketing agencies and I said, “Look, I’ve got this network of websites and I’m selling advertising on them. And I understand how SEO works, and I understand how WordPress works.” Kind of like demonstrated that like, I’ve got this entrepreneurial skillset, and I’ve got some applicable skills, and it was really easy to get that job at that point.
Justin: That’s so interesting. Before we got on this call, the last couple of weeks or so, you forwarded, or we found that email that you had sent, and we were chatting about it. Yeah, really funny man, but it’s so true though. Just to get started, you’re going to start to learn some skills. You’re going to make mistakes. You’re going to do some keyword research and donk it up. You’re going to find the wrong keywords, but you’re going to figure it out, and that’s going to help build on those building blocks that are required to be an entrepreneur.
I like Rob Walling’s step approach. He talked about that at DC Bangkok last year, and I thought it was really interesting. I wonder, I’d like to talk to him actually about what his thoughts are and why you can’t go straight to a SAS product or something without testing through the other steps, without taking the other steps.
I mean, there are people, there are exceptions to the rule that do that. I kind of agree that some people have this idea in their head that, I’m going to get started, I’m going to start this amazing business and it’s going to be the next blah, blah, blah, and I’m going to charge people 150 bucks a month and they’re going to pay it happily, and my lifetime value is going to be $4000 a customer. Then they fail. I think there is some value in kind of taking a step by step approach and starting off a little easier, things that are easier to digest and working your way up.
Taylor Pearson: What Rob actually did is he did what you’re offering, which is he bought a business. I know HitTail was a business that he purchased doing, they did SEO keyword research, and he bought that business because I guess he had, I guess different conversation, but more cashflow from consulting that it didn’t make sense for him to start something. He’d keep doing the consulting and instead use that cash to buy HitTail and scale that up.
Justin: Yeah. I remember HitTail almost died with all the changes that were going on with analytics. Like they took a big hit there, and I think that they got that fixed, got that worked out, and then obviously he’s working on Drip now, and Drip seems to be a success.
Let’s get into, Taylor, how we can use some of these to our advantage. We talked about how entrepreneurship is valuable, both the skillset and the mindset. Then we talked about how entrepreneurship is accessible. What do we do with this?
Taylor Pearson: Yeah. I think the first thing to point out is kind of what we just talked about, which is like there are these scripts, and looking for those opportunities. Like, how can you stair step? What’s the next step on your entrepreneurial path or entrepreneurial journey? Relative to where you are, what would be kind of a step forward? If you’re just getting started, how do you go, whatever, make some AdSense sites, or get started testing paid traffic? Figuring out, like seeing it as a resource, as something you can acquire, and like a progression you can go through.
The other thing that I think is interesting is kind of this idea of platforms and building off of platforms. I know one of the things you’ve mentioned in your recent income reports is y’all were talking about, I think your main source of traffic now is BizBuySell.
Justin: It’s one of our, not our main referral source. I think it was for a particular month or something, which was nice and surprising, but yeah.
Taylor Pearson: Okay. Yeah, but drafting off of these bigger platforms. Like we were talking about markets expanding and contracting. Like as markets expand, there’s always an opportunity to take a chunk of that market and niche it down. Like the big version of this is Craigslist and Airbnb.
Craigslist got bigger, and bigger, and bigger, and so what Airbnb kind of did was it took the housing market on Craigslist and said, “Okay, Craigslist isn’t delivering very well on this housing.” Like if you ever tried to find an apartment on Craigslist, it’s like a nightmare. You’ve got to scroll through and open like 18 listings, and then you’ve got to send the cold email to everyone. It’s like not a very user friendly experience. It’s like, okay, we’re just going to do housing way better than Craigslist is doing it.
In like 1990 that doesn’t work because there’s no internet, and Craigslist was maybe started in the early 1990s. Once that ecosystem developed, that market became so big that you could take a chunk of that market and that chunk became really huge and was growing. Kind of like the website brokerage market. Obviously there wasn’t a website broker market 20 years ago.
It’s been growing, and growing, and growing, and now there’s like all these opportunities, which is kind of the opportunity you guys identified, was there was this space between Flippa and super high end brokerage sites that no one was filling, that the market had expanded. Like that space was kind of new, and because you were in there and you were in Flippa, you saw that opportunity. In any market that’s true. The market’s getting bigger, and bigger, and bigger, and so you can niche down within these growing markets, and you can be a number one player in a growing market.
Justin: That’s true. Like Flippa was a niche off of Ebay. It said, “Look, we can do the buying and selling of websites better than Ebay is.” They kind of took that and ran with it. Then in the growing market, as you’re saying, there have become gaps. As there’s a delineation between starter sites and like established, full on, online businesses. There was kind of this gray area between sites that have started that are earning money but aren’t quite a full on business with a bunch of employees and stuff. As Flippa grew, as the industry grew, that gap grew wider, and that’s something that we stepped in to fill.
You’re right. I think as the industry grows, those delineations become less clear and they become these gray areas, a great way for you to kind of inject yourself and capture that section of the market.
Taylor Pearson: That’s something, especially as you’re, y’all were able to do that because we talked about, before the call I know y’all have mentioned on the podcast you got on the phone with 100 people, a bunch of buyers on your list over the last few weeks. That’s something Flippa can’t do. No one’s sending out a broadcast to Flippa’s email list saying, “Hey, if anyone wants to talk to the phone, we’re here. Y’all just give us a call.” You’re able to over serve that market compared to what they were. Just like they over served the website market compared to what Ebay was able to do.
Justin: Absolutely. I love that Paul Graham wrote an article called Doing Things that Don’t Scale. I try to apply that whenever we can. We’re a small enough company where we can get away with doing things that larger organizations aren’t able to do. I think that’s a huge advantage if you’re entering a market, if you’re a small player, and like serving your market better.
I remember, I’m still impressed by this, I’m talking about years later, but Shopify sent me like an email that says, “Hey, just wanted to thank you for signing up. Hey, I’m a real person.” There was like an image of a guy holding up a sign with my name on it. He was one of the customer service reps there at Shopify. It just, it was like this simple little thing that they did that blew my mind.
I remember, I know Jake over at Fuse, he runs Fuse App or whatever, when he had email subscribers he would send them like a 10 or 15 minute quick video, thanking them for subscribing, naming them personally. Doing these things that like just no one else could do. That’s something you remember. When you sign up for someone’s email list and they send you a little mini video specific, aside from maybe thinking it’s a little creepy, you’re thinking it’s awesome, right? I mean this guy like gives a shit.
Taylor Pearson: Yeah. I’ve seen people do that really effectively. Both consultants and people with more expensive products. Just like if a customer has a customer service question, they’ll actually record a video, and just like answer their question on video. Yeah, I’ve seen like PPC consultants who are just like, “Yeah, I’m going to go through your Google Analytics account.” They’ll just like break it down for you like, “Okay, here’s what’s going on.” That stuff makes a huge impression.
Justin: One of the other ways I think we can use all this to our advantage is in buying up location independent businesses. I mean, the ability to run a business from anywhere and serve a market that’s anywhere, is way more open than your traditional brick and mortar on main street. Not just is it more open for you, does it offer you more freedom and flexibility, there’s also more appeal. Like those businesses are worth more because, first off there’s a broader audience that could purchase and run them. It’s also more interesting to them because people value freedom, time, mobility, flexibility. Those are currencies I think that get translated into a sales price.
Taylor Pearson: What’s interesting to me, even more so than the kind of location independence aspect of it, is the upside aspect of it. Like if you go buy a Domino’s franchise, or you go buy into a cleaning franchise, the upside is very limited. You can only scale like a Domino’s location up to a certain point. Whereas, that’s not necessarily true with internet businesses. That those skills are, A, I think they’re more valuable because, like as a franchisee you’re basically just following a rule book. Domino’s gives you the playbook, and then you go implement the playbook. In that sense it’s kind of this like middle between a job and entrepreneurship in some ways. Whereas like with the internet business-
Justin: That totally makes sense to me. You’re totally right. They give you the path. Whenever there is a clear path and they give you the path to follow, there’s always going to be less for you. Now, an individual could do really, really well with it, or they could do really, really badly, but I think it’s like limiting your upside, and maybe your downside too. Yeah, you’re right, it is like a hybrid between a job and being an entrepreneur.
Taylor Pearson: The skills you acquire, and the assets you acquire with internet business, or like these non-franchise businesses, these online businesses, they have more potential upside. I’ve talked to lots of people who are buying these businesses, and yeah, they’re making money off these businesses and they’re growing these businesses, but the real long time upside they see is now they have this skillset and they’ve built out a team where they can like buy and scale these businesses faster and faster and faster. That’s not necessarily something you can do with a Domino’s. There’s more capital required. There’s limited upside. Whereas like when you control everything, you control the brand, you control all the assets related with the business, you have unlimited upside.
Justin: Yeah, that’s interesting that you mention that Taylor, because there are people, we have people in our audience, and buyers, that will buy up individual businesses. If they’re just portfolio buyers, they don’t particularly care, they want to make sure they can run it moving forward, but they don’t care too much about the industry or whatever.
I think there’s another interesting approach where, let’s say you’re buying up eCommerce businesses, and they’re in a round about this particular industry. Instead of maintaining that brand, you’re swallowing it up. You’re starting to suck them into your own brand, and you’re building brand awareness through your one brand. Rather than having like 50 different brands under 50 different companies, you’re swallowing them all into the one main beast. There’s real capital building up there, in that one brand that you’re building out, if that makes any sense.
Taylor Pearson: Yeah, it does. I’ve seen it work on both like the front facing and the back facing. What’s interesting to me about your business, is because you’ve got an audience and a podcast, and you’ve got this trust you’ve established with your audience, if you wanted to offer other back end products, you could expand the product line if you wanted to. You’ve got equity, good will built up with the audience.
Justin: Gotcha. One of the other things I think we can do to use this to our advantage is there are huge opportunities in secondary markets around entrepreneurship itself. There may be ways to show college kids the entrepreneurial path. I know that the Tropical MBA guys had a university professor on recently that brought their podcast into his class. Some of the people in his class were asking questions, and they were getting answers on the show.
I actually reached out to him and we’ve emailed back and forth a few times to kind of find out about that. I think that there’s opportunities for people to reach that market and show them these other paths. I think that’s something you’re looking to do with the book, and then with your blog clearly, is like show them there are other paths and ways they can go about getting started as an entrepreneur, rather than just being an employer.
I think in our industry there’s a big opportunity looking at the baby boomers that are either selling their brick and mortar businesses, or looking for online businesses that they could potentially invest in, own and grow. I think that if you’re able to speak their language, the baby boomer’s language, I think there’s huge opportunity and upside there, in kind of like showing the entrepreneurial path. I’m not talking about like selling the dream or anything like that, but like actually helping to I think translate this new entrepreneurial community, or the new path that we’re on today.
Taylor Pearson: Yeah. I think this gets like, there’s a lot of people in the internet marketing space, they give that approach a bad name because they’ve done what you said, they’ve like sold the dream, and it’s kind of like the snake oil salesman. That’s been going on for decades.
I’m re-reading Maverick by Ricardo Semler. He talks about that. Like they developed this new, innovative approach for management and production of their factories in Brazil, and then they had a team that became consultants, and they went around and they taught other multinational companies about how do you set up this management production process. That’s the same opportunity is, like you said, available in these secondary markets. Like you’ve developed this skillset around buying internet businesses, and that’s something you can take to baby boomers who want that skillset.
Justin: Yeah, I think so. I’ve kind of realized I’m not the best person to speak to those people, I’ve figured out. For whatever reason, like the way I talk and what I talk about doesn’t really translate as well. I know other people that do, and are able to work with them and help them kind of figure out how to buy these businesses, how to run these businesses. I think there’s going to be a ton of opportunity.
Think about like the informational economy, or in the ’40s and ’50s, the people talking about going to university, the people that made it easier to do that, made it easier to pay for it. Things like that. They were making just a ton of money and they had a ton of opportunity in helping people down that path. I think some of the things you’re doing, some of the things we’re doing, and other people in our space, and then over the next 20 years you’re going to see some real leaders emerge. I think there’s just a lot of opportunity.
Let’s talk together about the book a little bit. Now that title’s kind of interesting. I thought about this, The End of Jobs, which it’s kind of like, it’s not as bad, but like SEO is dead, or this is dead. I think you make a pretty compelling argument on why jobs are at least dying.
The other thing I thought of when I heard that is I was like, Steve Jobs? Is there a play there? What’s going on there man?
Taylor Pearson: A lot of people ask me about that, and to be honest with you, I basically had deadlines set up for the book and I like locked into the headline and they were like, “Well what about Steve Jobs?” I was like, too late. The deadline has been crossed.
Taylor Pearson: I figured either way they’re in the target market. If you’re into Steve Jobs, you’re probably interested in entrepreneurship, so it’s a win/win.
Justin: Talk to me a little bit about your process for writing. I know I’ve talked to other writers who have written books, and it is sitting down every day and just trying to knock it out can be miserable. If anyone’s ever read The War of Art, I think it describes it pretty clearly. What’s your process for writing? Do you sit down every day? Is it like when the mood strikes you?
Taylor Pearson: Mine is every day. I will say I’m pretty unbreakable about that. Five days a week. I can’t do it every day. I’ve tried that, and I’ve absolutely burnt out. Wake up first thing in the morning I kind of have a morning ritual I go through. I’ll wake up, I’ll read for a little bit, and I like to actually read books similar to what I’m writing.
I kind of like prime myself with good writers or good storytellers. Then do a little exercise, have coffee and sit down and write. What I do is I just like have a minimum target that I have to hit. I’ll set out a deadline for the book, like I need to get through chapter three today, and then whatever it takes. Sometimes the end of chapter three is pretty crummy, but at least get it on paper. I think every writer says this, but you just put out a terrible first draft. Yeah, I apologize already to my alpha readers who read the first draft.
Justin: I’m going to be selfish a bit and just unpack this a bit more, because I’m really interested in it. I’m going to dig into this. By the way, I really appreciate your writing. I’m a huge fan of your blog. I think in our community I just, I really, really love your writing.
I love the idea of sitting down and reading someone else that’s close to the space, or someone that you really respect, that you love their writing and it’s close to what you’re writing about already. You don’t read like just for entertainment or necessarily to learn, it’s almost like you want to get into the flow. Is that, like you’re kind of talking about it, you’re thinking about it, and you’re reading the words as they’re written, and it helps you, right?
Taylor Pearson: I do. I have a kind of three step framework for how I approach writing anything. That’s like books or articles, or even emails. I think of it in drafts of draft one is a thinker, draft two is writer, and draft three is marketer. I stole this from Neil Strauss, and have kind of adapted it a little bit.
Draft one is thinker, which is I’m usually starting that out and often I’ll write it as like a personal letter. Like I’ll literally start with like, “Hey Justin.” If you’re my ideal target reader for this piece, I’ll start off with, “Hey Justin.” As if I’m writing an informal email to you. “I was thinking about this thing the other day, about like entrepreneurship and how it’s cool, da, da, da, da, da.” It’s literally it reads like an email, it’s very informal.
All I’m trying to figure out there is what the ideas are and what the structure of argument is. I don’t think about the words. I don’t think about the writing. I think I used the word so, or I think, or very, like it’s very poorly written. I’ll get through that draft and that’s my thinker draft. Then I’ll move to a writing draft.
Justin: Nobody reads a thinker draft, right?
Taylor Pearson: Nobody reads the thinker draft. Yeah, it’s like this very immature email style. It gets the ideas on paper, and that’s like the first thing I’m going for. Then I’ll move into a writer draft. That’s where I’m actually trying to clarify the writing. I’ll sit down and I’ll write 10 to 20 headlines. Just like brainstorm out headlines till I get to a good headline. I’ll spend a lot of time working on the introduction or the hook, whether that’s the introduction or hook of the chapter or of the article.
Like really get, like James Altucher is particularly good at this. He has like very catchy, very compelling hooks, or first paragraphs. I spend a lot of time on like the headline and the hook, because if you read the headline of an article and read the first paragraph, you’re probably going to read the rest of the article, right?
Justin: You’re in.
Taylor Pearson: I know if I can do those two pieces well, I’ve got a good chance at the rest of the article. Then I’ll go through and I’ll clean up the writing and I’ll start to add narrative to it. Instead of just like a bunch of ideas, I want it to be a story. You understand the ideas through some sort of story, and some kind of clear narrative going through the piece.
Then the third draft I’ll come in and I’ll think about the marketing. If that’s an article or that’s a book, I’m thinking about like, who am I referencing? How can I bring people with audiences or interesting stories into this piece so I can leverage them in the marketing? Like in the book I’m going through right now and I’m putting in references to, well you know if you like this, I have further resource on the website. You can come check out this spreadsheet, or this worksheet, or something, like trying to drive people to a squeeze page and an email opt in page.
I don’t have to think about any of that stuff, because I compartmentalize it, like I’m not worried about the story so much in the thinker draft. I’m not worried about the marketing in the writing draft. I’m just focused on the one objective for each draft.
Justin: That’s helpful for me too. I’m going to try it out. Because I’ve been told by other people, I like to pick up little bits and pieces, and they say, “Oh, just sit down and start writing.” Then I write and it’s horseshit. I’m like, “This is hor- … Like no, I can’t use this.” I’ll totally scrap it, but I like the idea of kind of this informal letter approach to kind of just get started, rather than … Just to see if you can flesh out any ideas at all. I think that’s interesting.
Tell me a little bit about your launch marketing strategy. I know a bit because you were talking about it in the Dynamite Circle, and you’ve talked about it a little bit on your blog, but can you lay it out here for us?
Taylor Pearson: Yeah. What I’m going to do is when this interview is going live, there’s going to be a free giveaway for a book, so that’s the first part of my marketing strategy. A big part of the reason I wanted to write this book, and what’s been really influential to me over the last three to five years, have been the books I’ve read have made a big impact. I went back and I found kind of my favorite, most impactful books. I picked 67. It was very difficult to narrow it down to 67, which still seems like a lot. I’m going to be giving away all those books, and that’s kind of the first part of the marketing strategy.
I’m structuring all the guest posts, all the podcasting and all of the one on one outreach. I like went through and got all my Gmail contacts from like the past two years, and I’m going to write them all a personal note. I’m sending all that out during the free giveaway. The idea behind that is it’s a much more compelling offer to someone to say like, “Hey, go talk about my book.” Is kind of, nah. “Hey, I’m giving away all these free books, and I’d love for you to enter, and if you share it with someone, you’ll get extra entries.”
That’s kind of the first component, is giving people a really interesting, compelling offer. Also, a offer that’s relevant to the book. Like if you like to read a bunch of books, there’s a good chance you’ll like to read another book.
Justin: Your launch strategy revolves around free, which I love free information. I love, I know that information generally wants to be free. It won’t be free forever, but that’s part of your launch strategy. Why did you go with free, and why was it important, especially based on what you’re writing in the book?
Taylor Pearson: I think free really, part of it is just where my personal platform is right now. Like I think free is a really good way to get things moving. In the sense that it’s hard to get attention sort of standing out in a crowded marketplace. Being able to give something away for free that other people aren’t necessarily willing to do, most people won’t sit down and write a book and then give it away for free, let’s you stand out. That’s a part of it.
Then I think the other part of it that really pushed me over the line was this is a story that I think it impacted me deeply. Like reading your blog three years ago was, it made a big impact on my life. How do you build all these AdSense sites? How do you do all this? Because you gave all that information away for free, it made a big impact on me. It’s certainly something I tried to repay in some sense over the years. I’ve seen that happen over and over, that people that are generous with their time, with what they give away, receive that back kind of in spades in orders of magnitude. I believe that’s true of the book as well, that I kind of want to give it away, and I think it’s going to come back in much bigger proportion than what I give out.
Justin: Well Taylor, it makes me feel absolutely amazing that we had an impact on you, and then we’re seeing this kind of approach play through, through you and through what you’re doing with your book. I’m sure this book is going to be a winner. What do you want the readers to take away? Someone who finishes this, who is the ideal reader of this, and what do they walk away with?
Taylor Pearson: The book is really written for me five years ago, in the sense that it’s people that are looking around at entrepreneurship and kind of interested, or people that have gotten started with it and they’re trying to figure it out. I think the thing I want people to take away is it’s not just an emotional decision. It is a logical decision.
I remember I was making like spreadsheets and trying to figure everything out. I think there is kind of a certain mentality where you have to understand what’s going on before you can jump in. I was definitely that way. I kind of had to understand what was going on, and so I wrote it to kind of articulate what that was. I think there’s all this like, now is the moment, now you can do it, rah, rah, stuff. No one’s really explaining like why is today the best day to become an entrepreneur? Like structurally, why is that true for macroeconomic reasons? I believe it is, and so that’s what I want people to take away from it.
Then also like going through I talk about how I got my apprenticeship, how I think other people can approach apprenticeships. How companies can institute apprenticeship programs. The process I’ve used for hiring apprentices in the past, the stair step marketing. What are some of these paths into entrepreneurship.
Justin: I think that’s helpful too, if we can help other entrepreneurs and companies that are already established or growing, help them understand the apprenticeship model, and help them kind of expand. I think it helps open the door for some of these people that are looking to get into it.
Taylor man, I’m a big fan of your blog over at TaylorPearson.me. I’ve already read almost five chapters of your book, The End of Jobs, and I’ll be finishing this up. Man, it’s a really good read. I really appreciate your writing it, and you sharing some of your stories with our listeners on the podcast. Man, I really appreciate it.
Taylor Pearson: Yeah. Thanks for having me on. For anyone that’s interested, I am giving away all those books I mentioned. There’s going to be 67 books, it’s 1300 bucks worth of hardcover books on entrepreneurship. If you’re interested, you can check over at my site, TaylorPearson.me/winbooks, W-I-N books. There will be a giveaway going on.
Justin: Awesome man. I’ll put a link in the show notes. Appreciate it.
Taylor Pearson: Sweet. Thanks for having me on Justin.
Speaker 2: You’ve been listening to the Empire Podcast. Now some news and updates.
Justin: All right Joe, so let’s get into some news and updates. First up, the gang has split up man. We were all in Davao City in the Philippines, working together, getting the new guy Kenny up to speed. Working with Andrew and Mike, and we’re all split up. I’m in Kuala Lumpur right now. You and Mike are in Cebu. Andrew just went off to Korea, he’s back in Vietnam. Then we’ve got Kenny in Bangkok. We split the group and we’re back to working remotely.
Joe: Yeah, it’s a little sad. I mean, I think we got a lot of work done in those five weeks that we were together in Davao. I think it’s something that we need to do more on a regular basis, even if it does cost us a bit of money. I think that the value is definitely there. I hope that we can keep up the same level of work while remote, because I think that’s what this business needs.
Justin: Yeah, I think, there is a plan to meet up in Bali as kind of a getaway, but that’ll be more I think play than work. What we’ve found though is that there’s real value in getting your team together. This is especially important if you’re dealing with remote workers and you have a team that works remotely.
Our plan is at this point to continue to meet up, get everyone together probably three to four times a year. We can do this in different locations, exotic locations. We can do it in Bouquets, we can do it in Manila, we can do it in Vietnam, because we’re all generally in Southeast Asia, so we can bring people together and work for a couple of weeks in one location. It gives us time to kind of get to know each other a bit better, and get to hang out a bit and spend some time together, which I think is needed in a company.
Joe: Absolutely. I mean, that’s the reason why office workers have a little bit of an advantage over remote workers. I think you can overcome that by kind of compressing that stuff into a short time period, and then having your remote work again.
Justin: Maybe that’s one advantage they have. I don’t know, I’d say there’s a lot of disadvantages. I wouldn’t say that net there’s a big advantage to working together locally. I mean, there are definitely some advantages, but I don’t know man, I’m a fan of the remote work. I think it definitely works for our business.
Joe: It definitely works for our business, and I think that overall there’s so much more advantage than having to confine people to one space, absolutely. I do think that if we were 100% remote all the time and never saw each other, we wouldn’t be where we are today.
Justin: That’s a good point. Let’s talk about our valuation tool. Any buyers or potential buyers may notice on our marketplace that our valuations have been changing, and that’s based on the multiples that we’re using. We’re going to be tying our multiples more closely to the valuation tool and matching up with the valuation tool. That trend is going to continue throughout the year. You’re going to see variations in the multiples used, and that’s basically because we’re using the valuation tool to now actually list, and price, and sell the sites that we list.
Joe: Yeah. I mean, in short, multiples are going up and I think prices are going to go up. That closely reflects what businesses are worth. If a business, like the large one we have listed that was the featured listing of the week this week, that has an email list, has a paid advertising funnel, has a lot of suppliers figured out on the back end. That does have more value I think than your standard sort of content level business.
Justin: We’ve got another issue that’s come up since we’re no longer taking credit cards and PayPal payments for the smaller sites. We have the double wire problem, right? This is pretty rare, but we’ve had it in a couple of instances. Once there was actually I think three wires. Where we say, they want to buy the site, and we say, “Okay, no problem. Wire the money.” We have two, or in one case even three wires come in. Obviously that’s problematic, that can be frustrating for a potential buyer, where they found out they were the second wire that came in.
We refund those wires, we send it right back to them, but what we’re getting from some depositors or potential buyers are saying, “Look, I don’t want to deal with that. Can you just hold the money for me? Can you hold this wire for me, and then I’m sure that I’ll find a site in the next week, or couple of weeks, and then we can apply that payment to that purchase.” I think that helps a bit. It makes the sites move a bit quicker. It’s a little problematic. I’m not sure how we handle this on a larger scale, but right now we have a few people that want to do that, and that seems to be working out pretty well.
Joe: Yeah. You know, I hate having to hold people’s money like that, but it’s really the best solution that we’ve come up with this issue. I mean, if we owned a car lot and we had a new Porsche on the lot that a lot of people wanted, it would be a first come first served sort of policy. You couldn’t just call us on the phone and say, “I’ll take the Porsche and I’ll be in later.” It’s kind of a similar sort of issue.
Justin: Yeah. I mean, if we did something where if they say they want it they get seven days, or whatever, to actually send the wire or whatever, and we lock it up for other people, that’s problematic because these listings get momentum. It gets this momentum, there’s all these people asking about it, we say, “No, we think it’s sold.” People are going to turn their attention elsewhere. It would be an easy way for you to say, “Yes, I want it, I’m sending it.” Then a week later you go, “Okay, now that you don’t have any interest, let’s start negotiating, I want to try and get the price down.” Something like that, and that’s just not in our seller’s interest.
Honestly this is a problem, but it’s more of a problem for our buyers, and our buyers being disappointed. It’s not a problem from the seller’s perspective. Oh, I’ve got multiple people trying to send money in for the site and they’re buying it like hotcakes. Yeah, not a problem for them.
Joe: Yeah, absolutely. In the end we do represent the sellers. Obviously we want good deals for buyers as well, but yeah, we have to do what we can to represent the sellers. The way to do that is to not consider the site sold until the money is in the bank.
Justin: All right buddy, let’s do some listener shouts, also known as the indulgent ego boosting social proof segment. First up we’ve got a five star iTunes review from Tom in Seattle. Tom says, “Very informative perspective. Justin and Joe always provide an informative look in their business, and they pull back the curtain on the digital nomad lifestyle. They also bring on a lot of great guests who bring a lot of value themselves. Their interview with Dan Pena ranks as one of my favorites. Keep up the great work guys. I wish I could have joined you on your last internship.”
Thanks so much Tom. I really enjoyed talking to Dan Pena too. That guy is a character, but he’s also super sharp and has a ton of business experience, so it was great to have him on the program.
Joe: Yeah. Thanks a lot Tom.
Justin: We got a nice mention on Twitter from Alyssa [Doucet 01:10:01] who said, “Boom, massive value bomb from the Empire Flippers. I went to 30 plus pros to share how they would improve a site that makes them money.”
We actually did a guest post recently where we got a whole bunch of other people there as site buyers and sellers, they’re SEOs, they’re other experts in their fields, to come on and answer two questions. Number one, what do you look for if you’re looking to buy a site in terms of SEO? Number two, what are some quick wins you think you could implement after purchase to really grow the site out? We got some really interesting answers. Some of them kind of aligned, and some of them didn’t, so if you want to check out that guest post, we’ll have a link to that in the show notes as well.
Joe: Yeah. I know you did a lot of work getting that post up Justin, so good work there. It seems like people took it well.
Justin: I got another mention. This was an interesting one from Carrie on Twitter, in response to that same guest post. She said, “From the image it looks like the biggest tip is you must be male.” I was like, ooh, so I looked at the image and I was like, yeah. These 30 plus experts are all guys.
I started thinking about this a little bit Joe. You know, most of our podcast audience is male. I would say most buyers and sellers typically are male, but that’s actually not good for us. I mean I’d like more people in the buying and selling industry, that would be better for our business. That’s just not generally the case, it’s mostly guys. Although, I’ll add the caveat that our biggest sale to date actually went to a woman, or our biggest buyer was a woman. There’s that, but typically it tends to be buyers and sellers. I don’t know if that’s because we’re more targeted toward a male demographic, and that we’re not inclusive enough, or if it just it is that way.
It would honestly be better for us if there were more women in the space. I’m not sure what to do about that problem. It’s not something that I want to get out there and like raise the banner for. That’s not my main issue. At the same time, I’d like to make more money.
Joe: I’m definitely open to suggestions from anyone like Carrie, or someone else who has any ideas on how we could be more inclusive. I would say if you look around the industry at the other major brokers in the field, they’re almost entirely male as well. The people that I speak to on the phone on a daily, weekly, monthly basis, generally I would say 90% plus are male. I don’t exclude women, or do anything differently, I just think that unfortunately, for whatever reason, business tends to be more male oriented and more CEOs are probably male. A bigger number of businesses are run by men unfortunately, and that’s just where we are in our business today, but I’m very receptive and open to how to change that.
Justin: That’s changing I think in kind of the traditional or larger institutions in the US, but I think for whatever reason those changes haven’t hit the online space. I think that, yeah, I think that it should. I think it would be interesting if it did. It would definitely be more opportunity. More buyers and sellers in the space I think is beneficial for the industry, but it’s particularly beneficial for Empire Flippers, so it’s something that I’m definitely open to promoting.
All right, let’s talk about Zendesk buddy. We had 15 tickets in the last seven days. we had 12 positive and three negative. One of the more interesting ones was actually a positive ticket with some critical feedback, so I wanted to read this one out. I’m not going to mention the name because of the criticism.
It basically said, “The payment that is paid to view this website should be refunded automatically if the website interest is sold. I had to explicitly remind you to do the refund once I saw the website is not available anymore.” Basically what he’s saying is that he paid a deposit, noticed that the site got marked sold, and then had to contact us to request a deposit. Now, in his case he actually did do that, but most of the time within I’d say two to three days of marking the site sold, all the depositors have been refunded. Even though he contacted us in that interim, that’s not typical Joe.
Joe: Yeah, definitely not typical. Like we’ve said in other podcasts, we’ve had multiple people review this kind of stuff. Not only our agents, not only myself, but we have a bookkeeper as well, to make sure that all deposits get refunded when a site is sold. Actually even the buyer of the site gets his deposit refunded, and then he has to provide us the full amount via wire. We don’t hold onto deposits in any shape, way or form.
It might be a few days until we get all the accounting in place, but I appreciate you giving us some feedback there. How to make it automatic, I imagine there’s a way to do that from a technology side where if our agents marked it sold, then everybody would automatically get a refund via PayPal or Stripe API, stuff like that. Just we have so many other things to put money into and develop that it would be a little lower on the totem pole I think.
Justin: You might ask, “Well look, it takes five minutes to log in and refund, why can’t you just do it right away?” Well, I understand, but we have a whole bunch of sites listed, we’ve got a whole bunch of people buying and a whole bunch of depositors. Someone may have bought that site and there’s a whole lot of work that needs to be done in contacting the buyer, contacting the seller, making sure that the site migration starts, and then getting back to the eight, six, 20 depositors and making sure they’re all refunded. We track everything, so we have a bunch of spreadsheets that need to be tagged and marked. It’s important that we do that because it allows for all the redundancies and checks that we have to make sure that all of that’s being handled.
Yes, and I’ve actually noticed Joe recently that a lot of times our bad feedback, or negative feedback, comes from sellers that were looking to sell their site and we denied them. That makes sense, they’re frustrated because they weren’t able to sell on the Empire Flippers platform, and we denied their listing, we’re not letting them list with us. That makes sense why they’d be upset about that. What I am noticing though is a trend for buyers that either sent the wire second, or they were really interested in buying the site and didn’t get the opportunity to. I see this, more buyers are getting frustrated that they’re not able to purchase the sites they want. I think that may be a bit of the case going on here, is that he wasn’t able to buy the site that he really wanted.
Joe: Yeah. I mean, there has to be a technological solution for this. It’s something to do with ACH, but foreign buyers are always going to have a couple of days delay until their money hits our account. Maybe it’s something we need to put on the chalkboard and think about possible solutions for.
Justin: Yeah buddy, we’ll take a look.
That’s it for episode 139 of the Empire Podcast. Thanks for sticking with us. We’ll be back next week with another show. You can find the show notes for this episode and more at EmpireFlippers.com/jobs, and make sure to follow us on Twitter @empireflippers. See you next week.
Joe: Bye bye everybody.
Speaker 2: Hope you enjoyed this episode of the Empire Podcast, with Justin and Joe. Hit up EmpireFlippers.com for more. That’s EmpireFlippers.com. Thanks for listening.