Want to learn how a million dollar business survived a huge crisis?

This is going to be the third and last article in the 3 part series named “How to build a million dollar business”.

In the previous two articles we went through the beginning of RSD (Real Social Dynamics) and the tactics and strategies used by RSD to build their empire.

You can find those articles in the links below –

Part 1 – Beginning of RSD

Part 2 – Tactics and strategies used to build RSD

In Part 3, we will go through how RSD was almost killed during the 2008 recession. Due to the recession RSD’s revenue dropped considerably and the company was running at a $6000 per day negative cash flow.

Times of crisis like this are when a company’s true strength is tested and this is also when 90% companies perish. The rest 10% companies who figure out how to adapt will come out stronger than it was previously.

Apple had to go through a similar phase when it was almost bankrupt. Steve Jobs had to make some rigorous changes in the operation of Apple in order to survive and the rest is history.

You will see how Nick Kho (Cofounder of RSD)  had to go through a similar phase during the recession and how he adapted and made rigorous changes which got RSD out of danger in as little as 3 months.

Charlie Munger had taught us that smart people should learn from history. I hope that you will learn a thing or two from this blog post which will help you to solve problems in your business if it ever occur.

So without further ado, let’s jump right into it.




Before we get into this article I want to mention a story from Greek Mythology, a story that I originally read in the book Antifragile by Nassim Nicholas Taleb.

Hydra is a serpentine water monster from Greek mythology.


It possessed many heads, the exact number varies according to different sources. What made Hydra special was its power to regenerate. For every head chopped off, the Hydra would regrow two heads. The more you try to kill Hydra, the more it got stronger.

The story of the Hydra is an analogy to what happened to RSD during the recession. Read through this article to find out more 🙂


When recession hit, people no longer wanted to travel to Los Angeles for bootcamp because their disposable income dropped.

This hit RSD hard. All of a sudden RSD went from having a lot of money to losing around $40,000 every week. Nick Kho had half a million dollar in credit card debt and he had no idea how he will make the money to pay this off.

He had to get rid of his BMW and started living in his 1997 Toyota Avalon in the backseat.

He had to sneak into hotels to use free wifi. He used hotel gym and shower for free and stole food because he could not afford to buy anything. He mostly ate fruits such a strawberries, bananas and apples.

He sold everything he owned because he wanted money to run the company

His business partner Tyler threatened to quit.


To make matters worse, RSD website was banned for 3 years from Google advertising because of a splash page which was used to collect emails. Nick had no idea that such splash pages were not allowed in Google advertising.

Most companies will say that Google advertising is how they get 90% of their business.


Nick decided to spend the last bit of money he had to figure a way out of this crisis. He hired a consultant from Deloitte as a final attempt to save his company.

Nick sadly calls this period of his life as the “Sad days of doom”.



Nick built a new business system, a model that changed everything.

When he was travelling to meet the Deloitte consultant he saw a map of the world behind an airline magazine.


Since he could not use Google Adwords anymore he had to go back entirely to word of mouth advertising.

RSD had a website with 30 million visitors each year. He decided to fly to every single city on the map with a population of 2 million English speaking people and organize a free seminar. Their content was so good that Nick was convinced that a percentage of the people will sign up.

So he did exactly that! He flew around the world for next 1.5 years to spread and market RSD!

For some reason this reminds me of Tyler Durden in the movie Fight Club.


Tyler traveled all around United States to spread the Fight Club. We all watch movies, but Nick had the audacity to attempt things that you see in movies and implement into his business life 🙂

For every seminar 40-400 people showed up. His seminars were action packed and he made sure that people who came for the seminar approached at least 3 girls before they left.  By the end of the seminar he sold his products and nearly 20% converted.

Nick had an intense schedule during those days. He got an intern to drive his car and travelled to different cities every day. In each city he gave 4 hour seminars. He also found time to work out and stay healthy. This is how his schedule looked like –


He did this for 1.5 years. He even met his wife in the very last day of this seminar 🙂

These seminars are now called “RSD Free Tours”. Here is a picture of how Nick organized seminars in a spreadsheet.



RSD also had a massive overhaul.  They reduced their expenses a lot. All executives in company were allowed to work for just one day out of 5 days, and anyone who worked for 3 months will get their full time job back. People who did were the most loyal guys in the company and Nick is glad that he made that change.

Owen Cook (RSD cofounder also known as RSD Tyler) and Nick Kho reversed roles. He started instructing and Tyler started doing business administration and they did that for 1.5 years.

They also made much stricter protocols in business.


To be a great role model for business Nick stopped partying and all he did was workout and run marathons every single month.

He used to work all the time. While travelling in train, airplanes .etc

He did speaking engagements 1-3 times every single day. He wanted to become a great role model so that no one will complain about working too much because he was working harder than everybody. As a result Nick never got any complaints.

Within a few months after doing the free tour and making all these changes RSD was completely out of debt and became an extremely profitable, growing company.


Every month RSD organized a mastermind group, which is where CEOs in non-competing industries shared advices and networked with each other.

He invested more money than ever to mastermind groups

You will find a list of mastermind groups that is recommended by Nick Kho in the picture below.


In order to be in some of these clubs you have to make over a million dollars an year. It’s also very expensive but it’s definitely worth it.


In 2012-2013 RSD made an awesome innovative design to catch up with the new website trends.

Just taking old school sales letters that worked and converting it into new website design increased sales by 150%. This is something he learned from Vishen Lakhiani who created IDE (Innovative Design Experience) and Mind Valley (A mastermind group).

Your website should match your sales copy because it shows how you represent your company. Everything should be congruent whether it is your personal life, business life or websites.


This is a bonus business tip. RSD makes instructors post regular free content as articles or videos in YouTube.

If you are not an expert in your field, find experts, build a website that has great traffic and inspire people who are experts to post in your website.



Most important thing about any business is to make sure that you have happy clients.

Over deliver value again and again.

These people will not just be your clients but your friends. Create a brotherhood not just in your company but around your clients.


Have you heard the phrase that “You have to burn the boats”?

The phrase comes from the Vikings. Before they invaded a new area they burnt their boats.


Because none of their men could retreat anymore. Now you are in a situation where you have to go all the way. In business that’s the exact same thing that you have to do to be successful.


To explain the concept that “Field Experience is King”, Nick Kho tells a story.

He was once having dinner with Richard Branson and he got a ticket to go fly a fighter jet.


In the day of the event, Nick was given training for 30 minutes on flying a fighter plane. He heard the lecturer talk about flying airplanes for 30 minutes but nothing registered in his mind.

But after the training Nick was asked to enter a fighter plane. The pilot gave instructions that if anything happens press the eject button and they will shoot out. Soon they were in a dogfight and he was asked to fly the fighter plane and shoot the other guy down (Using radar shooting system).

Nick completely forgot what he learned in the 30 minute training session previously and he had no idea what to do. So the pilot started instructing him.

He was told to pull the stick forward, and he did that and the plane went down.

Then he was asked to pull it up and the plane went up super fast.

He was soon doing barrel rolls and loop-the-loop and was shooting opponents.

At the end of that he actually shot down the other plane. Smoke comes out and radar shows that he killed him. End of story 🙂

What did you learn from the above story?

Nick could have sat on that room not for 30 minutes but for 30 years but he will not know how to fly a fighter plane. But in 30 minutes of actually flying a plane he learned not just to fly but also how to engage in a dogfight!

The same applies to business. You have to go out there and put things to the test.


You have to actually go out and DO things to learn.

Field experience is king.


This is a bonus lesson that Nick mentioned in the video that strictly does not apply to business. But I found it to be very interesting so I added it into my notes.

Are you expressing completely? Are you being 100% real?

People don’t express completely because you try to be what society want to look at.

RSD did an exercise to get this point across. They asked their students to draw 2 pictures –

1) First picture should express what you think you really are deep down inside you.

2) Second picture should express how you believe that people see you.

The above exercise will show what you think you are and how you are trying to appear to the society. Interestingly, one student drew a picture that looked like this –


It shows a cave. Coming out of the cave is a dragon. Surrounding the island are human head on crosses. There are sharks in the water, sky is full of vultures and the weather sucks. This was how the student saw himself.

Then the student asked Nick whether he can get girls if this is what he really is.

And Nick said – “Yeah, of course! It is not about how you dress but how you communicate who you are with interesting rhythm. Rhythms of communication.”

And you can do that in your personal or business life.

Remember, you are awesome 🙂


Here is the next step.

Go through all the articles of “How to build a million dollar business” if you haven’t already. Here are the links –

Part 1 – Beginning of RSD

Part 2 – Tactics and Strategies that grew RSD

Part 3 – Becoming the hydra (This article)

To see amazing sales copies that you can model for your business visit RSD STORE and see any products of RSD.

See RSDNATION to see how RSD market stuff and make your own version of what they are doing in your niche.


I hope you found this article interesting.

What did you learn by reading my notes and watching the video?

I will tell you what I did after watching this video. I started this website to increase my reach and I am posting everyday, I am on a 100 day transformation journey before New Year, I started working over 14 hours a day (Temporarily until New Year) and I applied various tricks given in this video to my business (Such as modeling existing sales letters which is mentioned in Part 2).

What changes did you make? You can do a bunch of cool things like copying RSD hiring model in your business, increasing free content release and so many other things! Let me know in the comments below 🙂

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