HOW TO BUILD A MILLION DOLLAR BUSINESS PART 2– TACTICS AND STRATEGIES
In today’s episode I am going to break down a particular business video that inspired me to build StartupStrong.
This is Part 2 of 3.
We are going to break down the following video.
I am going to break down the video into three highly-detailed articles, this is Part 2. Check out the other parts below:
In this article you will learn the strategies and tactics used by RSD to increase its sales over the years, how they hire staff, who mentors them and a bunch of other important stuff. You can apply the pieces of information that you learn in this article into your business today.
Table of Contents
- HOW TO BUILD A MILLION DOLLAR BUSINESS PART 2– TACTICS AND STRATEGIES
- IN-DEPTH KNOWLEDGE
- 1 SALES AND MARKETING
- 1.1 MODEL SALES LETTERS, LANDING PAGES .ETC FROM OTHER SUCCESSFUL INTERNET MARKETERS
- 1.2 PRODUCT LAUNCH FORMULA
- 1.3 IMPROVE YOUR SALES COPY
- 1.4 CREATING CONTENT
- 1.5 EMAIL NEWSLETTERS
- 1.6 ONLINE AFFILIATES
- 1.7 CONDUCT WEEKLY WEBINARS AND CONFERENCES
- 1.8 CREATE COMIC STRIPS OF YOUR BUSINESS
- 1.9 CREATE VIDEO GAME BEFORE PRODUCT LAUNCH
- 1.10 FUNNY BEFORE AND AFTER SHOTS OF THEIR STAFF / INSTRUCTORS
- 1.11 RETARGETING
- 1.12 CONTENT SYNDICATION
- 1.13 GOOGLE ADWORDS
- 1.14 MANAGE YOUR OWN DISCUSSION BOARDS
- 2 PERFORMANCE MEASUREMENT
- 2.1 MAKE A KPI (KEY PERFORMANCE INDICATOR)
- 2.2 WEEKLY GOAL TRACKING
- 2.3 PERSONAL LIFE TRACKING
- 3 EXECUTION
- 3.1 FIRST WEBSITE OF RSD HAD ONLY A SINGLE PAGE
- 3.2 POSTED ARTICLES ONLINE FOR 4 – 8 HOURS OR MORE EVERYDAY FOR SEVERAL MONTHS TO GET CLIENTS
- 4 BUSINESS TEAM DEVELOPMENT
- 4.1 HIRING
- 4.2 BUSINESS TEAM
- 4.3 HUNTERS VS GATHERERS
- 4.4 CORPORATE CULTURE
- 5 HOW TO OPERATE A GLOBAL BUSINESS FROM A VIRTUAL OFFICE
- 6 TECHNOLOGIES USED TO OPERATE A GLOBAL BUSINESS FROM A VIRTUAL OFFICE
- 7 MENTORS
- 7.1 FATHER
- 7.2 TONY HSIEH
- 7.3 VISHEN LAKHIANI FROM MINDVALLEY
- 7.4 TORIN PAVIA FROM ARBITECH
- 7.5 ANOTHER IMPORTANT PERSON IS YOUR SIGNIFICANT OTHER
- 8 SUCCESS TIPS
- 8.1 SAY YES TO EVERYTHING
- 8.2 ALWAYS STAY IN CONTACT WITH PEOPLE
- 8.3 WORK REALLY HARD
- 8.4 KNOW YOUR CUSTOMER INSIDE AND OUT
- 8.5 THREE SIMPLE FOCUSES YOU NEED (APART FROM HEALTH, WHICH IS THE FOUNDATION)
- 8.6 TWO IMPORTANT FACTORS FOR SUCCESS
- 8.7 THINK OUTSIDE THE BOX – CONSIDER BUSINESS AS A GIANT EXPERIMENTATION LABORATORY
- WHAT NEXT ?
Following sections are covered in the notes. We will go through them one by one.
- Sales and Marketing
- Performance Measurement
- Business team development
- How to operate a global business from a virtual office
- Technologies used to operate a global business from a virtual office
- Success Tips
1 SALES AND MARKETING
I will write down EVERY SINGLE sales and marketing information that was explained by Nick Kho in the video. You do not have to use everything at once, you can just start with one thing. And always come back to this page to refer more tactics in the future.
1.1 MODEL SALES LETTERS, LANDING PAGES .ETC FROM OTHER SUCCESSFUL INTERNET MARKETERS
Field tested action gives field tested results.
Instead of inventing your own landing pages, sales letters, banner ads or marketing ideas you can model existing marketing campaigns with proven results.
For example, RSD modeled Corey Rudls sales letters.
This was a guy whose emails were super amazing. Nick took Corey Rudls email sequences, pricing systems and everything and substituted his own content instead of Corey Rudls content. He used that because it was a very effective sequence and gave amazing results. RSDs first online product named Foundations made $100,000 on first day in sales using these techniques.
As a side note, Corey Rudls died in a race car accident and his company is not good anymore. Also many other internet marketers of the time (such as Tai Lopez) also began Internet marketing modeling Corey Rudls business.
Here is something that you can do –
- When you subscribe to great newsletters by successful internet marketers and entrepreneurs model them for yourself
- Replace existing content with your content and use it almost exactly to get the exact same results
1.2 PRODUCT LAUNCH FORMULA
Here are the steps that RSD uses to launch a new product –
STEP 1– You want to develop a massive following of fans by releasing massive amounts of free content. RSD released a product when each instructor had 100,000 fans.
STEP 2 – Start a 30 Day countdown to the launch. Show this on all your websites. Show it on the homepage, on banner ads and to your email list. Promote the product that is about to come out throughout the 30 days.
STEP 3 – Release high quality videos and content every 1-3 days. Keep promoting the product by releasing new content, getting people captivated and interested, having them even make comments about how the product should look like and what it contains,
STEP 4 – Launch sales letter for product with 2 weeks bonus period so that when the product is released you get two additional bonuses that gives twice as much value as the product itself. Bonus period tripled day 1 sales for RSD. Send emails to promote the bonus period offers to your email list (RSD had a 500k email list) throughout the 2 week period.
1.3 IMPROVE YOUR SALES COPY
RSD improved their sales copy by adding infield videos so that their viewers can see things that will elicit their emotion. They posted outrageous field reports. You have to shock your potential clients with your sales copy.
RSD made great sales copy and really optimized it. They were spending 7500$ a week to meet famous copywriters. Every single sales copy was optimized to be about 30 pages with amazing features and benefits.
Sales letters of RSD were so interesting that even if it was 30 pages long an average person would read them 8-10 times when surveyed before they actually bought the product. Because it was so much fun, the sales letter is like reading a book that you cannot put down.
1.4 CREATING CONTENT
You can post on discussion boards. Nick Kho spent 4-8 hours a day, sometimes more posting on 10 various Discussion boards initially when he started out to get people interested in his business.
Also you can release a ton of content for free, always increase the free line. This will make it possible for your business to create a fan base, generate email leads and reduce advertising expenses drastically.
RSD asks his staff/instructors to post new videos every week. Creating content is super important for any businesses.
1.5 EMAIL NEWSLETTERS
You can use different email newsletters for different email sequences.
RSD used to market every 3 days to their email list with 15 pages of email content giving advice and linking back to their sales letter which made people join their program.
1.6 ONLINE AFFILIATES
RSD have over 1000 online affiliates who market and links to their products. You can do the same.
1.7 CONDUCT WEEKLY WEBINARS AND CONFERENCES
RSD conducted regular weekly webinars and conferences that are attended by 1000s of people.
1.8 CREATE COMIC STRIPS OF YOUR BUSINESS
RSD did this and got great results. See if it fits your industry.
1.9 CREATE VIDEO GAME BEFORE PRODUCT LAUNCH
RSD did this before a product launch to attract more people and got great results. See if it fits your industry.
1.10 FUNNY BEFORE AND AFTER SHOTS OF THEIR STAFF / INSTRUCTORS
Like I mentioned before, RSD provide bootcamps that are taught by instructors to help you succeed with women.They posted before and after shots of these instructors to show their transformation from being a geek to being more social and attractive.
See if before and after shots fit your industry. It might fit businesses such as fitness and skincare.
Your ads will be shown in other websites and people will think you are everywhere.
1.12 CONTENT SYNDICATION
Someone can take out article and post in other peoples websites.
1.13 GOOGLE ADWORDS
You can use Google Adwords to get sales by creating text and banner paid advertisements. RSD spent $6000 a day on Google Adwords in 2004 but they were making more money than that, so it was worth it.
But RSD completely stopped using Google Adwords these days, except for retargeting ads. Instead they created a big following by creating amazing content.
1.14 MANAGE YOUR OWN DISCUSSION BOARDS
Having your own discussion boards is a great way to connect with your audience. You can also conduct group chats.
2 PERFORMANCE MEASUREMENT
What you measure will improve. These are techniques that you can use to measure performance of your business so that you tweak and improve it.
2.1 MAKE A KPI (KEY PERFORMANCE INDICATOR)
KPI stands for key performance indicators. It is super important to make sure you or your employees execute on the things that actually matter. You can use KPI to keep priorities of your business in mind.
Here are the steps to make your own KPI
- Ask every executive in every department in your team to create 10 financial or goal tracking mechanisms that you want to track. These can be assets minus liability, revenue, netprofits .etc.
- Ask them to rank it in order of importance. That way you can keep priorities in mind.
- Then keep a weight attached to it so that things that are most important is weighed the most.
- Whatever % of the goal you are at, multiply by that weight, add them up in excel and come up with a score. This is called the KPI score.
KPI score will allow you to keep goals and priorities in mind in every single department of your company.
2.2 WEEKLY GOAL TRACKING
This is so necessary especially when you have a virtual office. This is how you will track that people in your company around the world are accomplishing what they need to be accomplishing in time.
Here are a few things to keep in mind –
- Set a Stretch Goal, Medium Goal and Minimum Goal. This will make sure that they dont get downtrodden.
- If they at least hit the minimum goal celebrate it. If they hit the medium or stretch goal, reward them.
- Make sure that you don’t bonus incentivize people for hitting the goals. Make sure that is some fun tangible item which is not about the money. Increase peoples pay only if they get new roles and responsibilities and are increasing profits.
2.3 PERSONAL LIFE TRACKING
Tracking your personal life is important to make sure that your business life is not affecting your personal life.Most successful business people will track not just business but also family and personal life. This is not an uncommon thing but it is for most of the world. It is not uncommon for people who run large companies and have the stress and pressures of being a CEO.
The way to do this is by making a personal KPI tracking report. For example you can track –
- How often you go to gym
- How often you go in date night and one-on-one excursion with your significant other
- How much time you spend with your friends every week
- How often you travel Vs not travel.
You have to be really fast at execution to be successful in business. I will write a few examples that demonstrate the execution skills of Nick Kho and RSD.
3.1 FIRST WEBSITE OF RSD HAD ONLY A SINGLE PAGE
The first website of RSD was built in 2002. It was modeled after Nick Kho’s first pickup approach. He saw a girl sitting alone in a bar, so he drew a picture on a napkin and approached her and said “I saw you over here. And I thought you are so beautiful so I decided to draw some art for you”. And gave her a picture that looks like this.
The interaction went very well. He was so inspired by that he made a free website in 2002 in geocities.com and it only contained this one picture that he drew. And he wrote that he is traveling the world to pickup girls and I would like to meet you if you want to talk. And he met several people like that.
3.2 POSTED ARTICLES ONLINE FOR 4 – 8 HOURS OR MORE EVERYDAY FOR SEVERAL MONTHS TO GET CLIENTS
Nick Kho spent 4-8 hours a day, sometimes more posting on 10 various Discussion boards.
In order to close sales he did the following –
- He searched in the discussion boards to target people in his city
- Then he private messaged them to meetup with him and asked for email and phone number.
- 90% of those people met up with him and 90% of those people signed up for his program which back then was $600.
This resulted in a single coaching initially in San Diego which was successful. That success program led to another program. Then another program and so on. Soon sales started ramping up.
You have to be hustlers to close sales when people walk in to have lunch with you. “By the way, if you actually want to go out with me you have to give me some money.” People were kinda shocked but It was easier because people already read 1000s of articles online about the success of their programs.
4 BUSINESS TEAM DEVELOPMENT
In order to manage a company of this size Nick Kho could not do it himself and he definitely could not hire enough people to do it all. But RSD still has 1000+ employees working for them.
And they do it by a barter system. Basically they trade services for work. They do this by having a 3 tier hiring system –
- Volunteers – 1000+ volunteers work for RSD around the world. These people are not paid.
- Interns – 100+ internes work for RSD for 10-20 hours a week for free.
- Full time and part time people who are paid.
We will go in detail how each of these people are hired –
- VOLUNTEERS AND INTERNS – HIRED BY “ANTI TOPGRADING” SYSTEM
TOPGRADING is a book that talks about only hiring A level players through a very rigorous interview. These A level players are also very expensive. But RSD goes completely opposite to that and they hire almost everyone who is willing to volunteer any ounce of time.
Volunteers and Interns will get a little responsibility, a little more after that and so on. There are people doing work for RSD for a year and a half, 2 years or whatever completely for free for the love and passion of the company.
They can get a job if they outperform everyone else. 1 out of 30 people who volunteer to work for RSD gets a job.
- EXECUTIVE TEAM – ONLY HIRES THE BEST!
You are the average of the 5 people who you associate with the most.
For instructors RSD have a rigorous training program to make sure they hire the best. They may travel around with other instructors for 6 months and at the end of it only half of those guys will get the job. The other half will stay in present position. In addition to that to reach the training program they might have to work additionally for 6 months, a year or even 3 years.
4.2 BUSINESS TEAM
RSD has an awesome business team and contains people who are awesome and highly talented. You can see a list of the departments and organization chart of RSD below –
Instructors are the brand image of the company. The instructor team is asked to make videos, articles .etc to manage and market their own brand.
Company is organized in cross functional teams. None of the departments were working separately. Every department in company had to work cross-functional with every other department so that they know how business ebbs and flows. For example – Sales work with operations, sales work with marketing .etc.
4.3 HUNTERS VS GATHERERS
A lot of people make the mistake of hiring people who are gatherers and not hunters. In this world you can hire two kinds of people –
- Hunters –They close deals, increase the amount of money your company is making, not just in terms of revenue but profits as well.
- Gatherers – These people are supposed to be making money but they are not. They are doing paper work and they are useful as well.
But you have to hire more hunters in your company. In fact, anyone who is not a hunter needs to be hunter. Every single person in RSD is trained a little bit in the sales process or the sales funnel for that reason.
4.4 CORPORATE CULTURE
RSDs corporate culture is more like a brotherhood.
- Only people who Nick wanted to hang out with and had trust and respect were there in the team.
- They had executive retreats every 6 months where for 1 or 2 weeks they rent a mansion in South of France, Greece . Italy etc.
- Report of Awesomeness – Everyone who worked for the company will share personal stories, KPIs, contact information with the community, update photos .etc. in a monthly report so that everyone learns what’s going in others’ lives.
- You can have weekly game shows and stuff like that.
5 HOW TO OPERATE A GLOBAL BUSINESS FROM A VIRTUAL OFFICE
Nick Kho got rid of the physical office in Project Hollywood mansion and started working in a virtual office model because he used to micromanage everybody in a military style, yelling all the time and that made him totally unhappy. Virtual office suited him a lot better.
There are several myths about operating a global business from a virtual office. We will cover each of these myths below –
MYTH #1 – Biz Entity for each country. If you are trying to start a global business you do not have to incorporate in several different countries. RSD did that for a few countries and realized it is completely unnecessary.
MYTH #2 – Must understand culture. You do not need to know everything about the culture only some cultural difference. Most cities in world are westernized.
MYTH #3 – Local banking required. You do not need local banking unless currency exchange price is a problem.
MYTH #4 – Understand foreign languages – You do not need to understand foreign languages, only English will be enough.
MYTH #5 – You need a physical office – He ran his whole company via skype, google docs and other web technlogies. A physical office is not required.
MYTH #6 – You need employees – No need to have any employees to help you out. Every single person in the company including himself is a contractor as a result there is no regulation if you want to terminate somebody. You dont need employees unless you have a physical office with 9-5 jobs where people work and make money. But if you are processing all the money over the internet people can be treated as vendors. This way the vendors make more money themeselves by writing off the money that you pay them.
MYTH#7 – Need a lot of legal works – You dont need a lot of legal work (trademarks, copyrights, contracts, incorporations). Instead of hiring an attorney you can use their templates and make them review it. Its very easy.
MYTH #8 – Need Startup Capital or Investors to jumpstart your biz – No need of investors or startup capital to jumpstart biz. Nick started with a bunch of debt and did not need VC money to grow his company.
MYTH #9 – Outsource your marketing – You dont need to do that. Nick went to seminars for internet marketing and read a lot of free pdfs on internet. He also had a great mentor named A course named “Insiders secret to internet marketing” (900 page) was Nicks bible, it basically teaches you everything you need to know. Even Harvard and top university have free programs.
6 TECHNOLOGIES USED TO OPERATE A GLOBAL BUSINESS FROM A VIRTUAL OFFICE
1) Skype – Used to organize calls, send quick messages, communicate with people working everywhere in the world
2) http://www.xe.com/ucc for currency conversion so that you know you the proper currency rates in the airport.
3) Timezoneconverter.com to know what time time to call customers. So that you can call them from 9AM to 9PM.
4) Skyskanner.net or Expedia.com to get best rates on travel. Especially if you are travelling a lot.
5) Eurorail pass – You can get a 21 days pass to travel to 21 countries in Europe.
7) Global phone plans – You can use same phone number no matter what city you are in.
8) Google maps
9) Points.com – You can syndicate all your points into one place
10) Vonage.com – Great phone service. Helps to route all calls to different people around the world.
11) Managed all sales by using a custom software due to their specific requirement. You can use Infusionsoft and Office autopilot.
His father was his first mentor. He was born in the poorest part of Philippines.
His father formed his own mastermind group of his schoolmates and they are in touch even now (In time of this video, Papas father was 66). All these people worked 16 hour days in school and became the richest people in the Philippines. One person became President of country, one because government of the region he lived, one became President of Heineken .etc.
His father was a hardcore pusher and had a strong work ethic. His father always challenged him for everything even from the little things such as how much food he can eat. Mom would challenge to prove dad wrong. Nick was challenge to get better grades.
When Nick was in boarding school father used to fly from California to New Jersey just to study with him whole night. And Nick took the same mentality into business with a hard work ethic. Because you have to hustle, every single inch counts.
7.2 TONY HSIEH
Tony Hsieh made a company called LinkExchange in 1996 and sold it for $265 million to Microsoft. He used that money to start a company called Zappos that sold shoes which was sold for over a billion dollars to Amazon.
Things Tony taught him are –
- Inspired Nick to build KPI reports so that all employees think cohesively – Tony asked all the executives in RSD come to his office and asked them to think 5 words that represents what he wants his company to represent. None of them had the same 5 words. This inspired Nick to ask his employees to write KPI reports and develop cohesive thoughts.
- Gave Zappos tour to RSD – Zappos has one of the 3 most amazing company offices in the world. RSD was given a tour of the office to learn how companies should be built.
- Importance of Education – He asked all people in his company to read through several books. This is the book list given by Tony –
Nick did not explain lessons taught by other mentors in the video, he just mentioned names.
7.3 VISHEN LAKHIANI FROM MINDVALLEY
Here is a video of Vishen Lakhiani that will teach you a great method of meditation.
7.4 TORIN PAVIA FROM ARBITECH
Nick Kho did not explain the guidance given by Torin Pavia in this video.
7.5 ANOTHER IMPORTANT PERSON IS YOUR SIGNIFICANT OTHER
Choose your significant other wisely 🙂
8 SUCCESS TIPS
8.1 SAY YES TO EVERYTHING
At one time Nick decided to say yes to every opportunity. If someone invites him to go somewhere he would do it at least for 30 minutes. This was to always expand learning about new things and as a result he developed an awesome social life.
8.2 ALWAYS STAY IN CONTACT WITH PEOPLE
He always stayed in contact with people, emailing, texting and informing what’s going on his life to everyone. And he organized his smartphone to do so.
8.3 WORK REALLY HARD
During the initial days of RSD Nick used to work on his computer, lie down in bed, wake up and get back to the computer working 80-100 hour weeks. He had a strong work ethic and made sure that he kept executing.
He executed 10 times rigorously during times of recession when RSD almost got killed. We will go through that in detail in next article.
8.4 KNOW YOUR CUSTOMER INSIDE AND OUT
Nick did the customer support himself to get to know his customer. He knows his customer inside and out. He used to work on his computer, make phone calls and close deals himself.
Nowadays you can use technologies like ww.rapleaf.com in order to get to know the customer by seeing demographics, age .etc.
Nowadays you also get to know them by doing live programs/webinars quite often.
8.5 THREE SIMPLE FOCUSES YOU NEED (APART FROM HEALTH, WHICH IS THE FOUNDATION)
- Emotional – You have to be optimistic and you need to believe that you have what it takes to accomplish what you need to accomplish. Example Tony Sheih said that the first thing he had to do before he became a billionaire is to tell himself that “I am going to be a billionaire”.
- Intellectual – Always want to learn. Nick travels so much every week for some kind of educational event. He spends 1000s of dollars on education of himself, his team and people who are close to him.
- Financial – He was able to start RSD with no money. He actually started with a bunch of credit card debt. All you need is super awesome talented people. If you have the right people in play the money will follow.
8.6 TWO IMPORTANT FACTORS FOR SUCCESS
Speed of execution is the main determinate whether you will be successful or not.
8.7 THINK OUTSIDE THE BOX – CONSIDER BUSINESS AS A GIANT EXPERIMENTATION LABORATORY
A scientist might mix two chemicals and it explodes. Then he might mix some other chemicals and it creates something. So the scientist records both these things.
In business it’s the same thing. And pretty much everything it’s the same thing.
Nick has friends who made a global sensational phenomenon called the Summit Series and uses these principals to blow shit up. It’s a private organization.
WHAT NEXT ?
I know that this article was a bit too long to digest completely. And you don’t have to digest everything really.
Information shared in StartupStrong is taken directly from the thoughts and experiences of wildly successful entrepreneurs, and applying even a few of them should give you great results.
You just read Part 2 of a series of 3 articles.
Do let me know if you have any doubts in the comments below. Take care.