Transcription
As you know, I just came back from LA where I was at the school event and where I took a total of four pages of notes from the conversation that Sam Ovens and Alex Hermosi had, and I consolidated them to the notes that are really top of mind for me based on what Hermosi shared. Okay.
So the first thing that was really amazing was to see that he actually also has a school community now, and he had some initial fears around that. And it was very cool to hear, you know, that there were concerns and objections on his end as well. So his initial fears were around the recurring amount of work and the reputational risk, interestingly. And now he shared he was on the fourth uh billing cycle that was two days ago, and their turn rate is 2.5% for a multiple thousand a month offer, which is amazing. And what he shared in there as well, what I want to talk you through in this video, is his idea of churn being a structural problem. He also shared the promise perspective, and that we need to be extremely mindful on who we let provide value in our community.
What also was top of mind for him was that he did sell without a sales team, and he wants to keep selling community without a sales team, which is so exciting because we do have low ticket and high ticket on school. And so far, almost all of the high ticket communities I've seen utilize a sales team, and it was very refreshing to get his view on it. So, as he shared, the things that he does to make his school successful, they're hard in the beginning, but now they're really scalable. So that was kind of the main take: he's glad now that he has a community. He was concerned in the beginning, mostly about the recurring amount of work and about his reputation, but because of the way he set it up, things are going really well right now, and he thinks community is a super highly scalable offer.
Now, the other thing that I want to talk you through is his thoughts around scalability. So he shared that he basically obsesses about making his offer scalable across the following dimensions: attract, convert, and deliver. So each of these components need to be infinitely scalable.
Now, the first part that he talked through was how he thinks about making attraction infinitely scalable, and that is through media. So what he talked here about was to optimize for time on brand before the purchase decision. So people need a certain amount of info to make a decision. The more qualified they are, the less information they need. So if you think about it, the brand serves as a proxy for information prior to the purchase, right? So I don't know if you're in the boat. I'm in the boat. I bought the 5K offer. I bought it because it's Alex. I didn't even care about what it was. I got [snorts] so much value up front. Kind of also knew how important the launch is for him. And I was like, this is my moment to say thank you for all of the free value I received. I also have personally received a lot of value. It's been on my podcast as a guest. I've learned so much from him, right? The school opportunity is there. So, I was like, no matter what it is, I'm going to buy it. And and I also know it's going to be so worth the money, right? And I knew this because his brand and what he has delivered for media at scale has been my proxy for the value that I expected from him.
And so he also changed a little bit. So and he also said that he will further focus on media and further focus on organic first. Although I know that they're doing really great with ads, because he said five years ago, about 10% of people you would have talked to in the space would have said that they're organic first, and now it's about 80%. And you know, having witnessed his launch also from an ad perspective, his ads basically were retargeting ads, which is so crazy, right? He has built such a large organic audience. And I think what people also need to understand, the numbers that they see on YouTube or on Instagram that are his followers, that's actually a much smaller percentage than his actual audience. A lot more people know who he is than people who follow him. So his actual organic audience is massive, and Meta knows it. So when our sales campaigns were going out, they were murdering because they were just basically reaching his warm audience. And if you've been in the space at least for any amount of time, you know that retargeting campaigns are typically the most profitable ones. So it was making sense that this was so successful because basically all that his advertising is is a retargeting engine.
And so that really, you know, made me think, um, and that's also why he invests so much in media, because media, organic media in general, is becoming more aggressive. And his vision is to be the Disney of business with different shows that are also independent from himself, right? So thinking of scalability, right now he's key man for his media, and that has a risk in itself, and it has a limit in itself based on how much content he can produce in his current formats on his current channels. So basically, what he does now is he live streams the recordings of his YouTube videos, and he adds the questions in between that help to enhance the content itself. And so that is what he does with the live streams as well, and then the live streams are chopped up. Thank you so much for joining into the separate videos.
So what's the big advantage of that is that in general, he also said that the market always finds truth, and that production quality is almost commoditized at this point. So it's not setting you apart anymore. And so he goes towards more authentic and interactive content. So that's a check with the change of the strategy. He also produces another high lever piece, right? So he goes live for four hours of content, check, like all-in-ones, and he has this interactive component as well, actually making the content better. So all of these are wins, and on top of that, it's a delivery that he enjoys more, and with that, it becomes more sustainable for him. With that, it's also a check.
I remember another thing that he mentioned, and it wasn't in the live event, but it was probably in one of the videos where somebody shared with him, I think it was the Super Bowl, and the TV personalities were walking in, and you know, the audience would woo, you know, go wild a little bit. Then the YouTubers would come in, um, and they would, the audience would go even wilder, right, than the TV personalities. So they would be like, whoa. And then the streamers came in, and the audience would go nuts, like 10 times as loud as they were when the YouTubers came in. So in that moment, he also realized that the biggest audience connection is happening through the live streams, and we also see the market going into this direction. So it's also something that he's already adapting to. And I found this so helpful, and I could see the benefits of all points immediately, so that I also decided that I want to restructure my live streams into that, because there's so many benefits. And I believe that as he continuously doing that, he will also influence others in the space, and we will actually see more people switching to live stream chopped up into videos, moving a little bit more away from the polished, really, really well-scripted videos. So that's what he is doing to scale more infinite in the attraction. It's mostly media. It's scaling his media through his own delivery, as well as through other formats, potentially even other people. It was very interesting that he shared that, and also that he's going all in on organic. That also made me think.
So there was another thing that he shared. The second point was the conversion. To make conversion more scalable, he actually wanted to get rid of his sales team. And what he shared there hit me so badly because he was like, the fact that he's so good at growing sales teams actually hindered his growth because he was overreliant on it. And when he said that, after he talked about media and how 80% of people going for organic first and they're basically becoming the retargeting for it, I was like, damn it, I'm so good at offer and ads that I limit my growth on brand because I de-prioritize it, right? So, I showed you guys my challenge tracker before, and you can see here that I started, you know, in all of the areas, including YouTube, and then I de-prioritized YouTube because my ads were going so freaking well, right? So I only zoomed in on the ads. But that's helping me in the short term, of course. But what it does long term for me is it prevents me from actually building out the media arc of my business so that my ads are actually just retargeting ads, so that they actually have a lever on the CPMs and on the profitability. Right? So ads are and offers are inherently an arbitrage opportunity. The only real lasting advantage you can have is brand lift. So I need to focus on brand lift a lot more, which is also why, you know, I immediately adopted the live streaming strategy and want to make that work for my business. So YouTube consistency is not an it's not an optional for me anymore. And I realized that he had the same issue with sales teams, right? So it's like, you're so good at it that it actually creates a constraint for you long term for where you want to go.
So what he also said is that he doesn't want to say that sales teams are bad. Just like I don't want to say growing with ads is bad, right? But he says that, uh, it's the money now button for your business, but you also want to have more money later thinking. So while we can push the money now button, we also want to make sure to say we're putting our long-term effort where it also brings long-term the most leverage. And so he put the constraint on himself for the community to grow his school without a sales team. And he said they have yet to figure out how that works. But of course, as he will figure it out, like he always does, he will also share it with people.
Now, he said there's significant advantages to not having a sales team. So when you have a sales team, the reason why it's the money now button is because your sales people pull people that are not ready for the purchase to the purchase. So people convert that actually have lower intent and that are less of a good fit for your community, which then ultimately produces churn. Right? So that was one of the things that made me understand how he thinks about churn as a structural issue. So if we have a sales team that pulls more people that are actually not fully fully ready yet, that like the intent has not grown within them to the purchase, the likelihood of them churning is higher. Makes sense. I think there's also a reputational risk with that, right? Because if you have, you can brief your sales team, but for example, if they're very aggressive with the sales, because that's also their incentive structure, that ultimately can harm your reputation. And we see a lot of, or I've seen people on school as well, that have a great offer, but they have terrible feedback on on Reddit, for example, because their sales teams are so freaking aggressive, right? And they might not even know about that, and they might not be in control of that, at least before the damage is done. So it reduces the reputational risk to not have that. And then also, the advantage of no sales team makes the conversion smaller, but you also have more capacity to drive people to see your offer. So ultimately, it is an offer-driven game if you don't have the sales team. So the less you have a sales team, and the less you have a brand, the stronger your offer needs to be. Right? And the stronger your brand, the weaker your offer can be, and the less you need a sales team, which then makes it understandable that his biggest focus is media, right? Because it literally is the one thing that solves all other problems.
Now, he also said that the culture is moving away from people wanting to have sales calls, and that people, at least the ones that are qualified, actually want to buy now, right? So we see people purchasing cars online without needing to talk to a person. So the more qualified somebody is, the less information they need. And again, brand serves as a proxy for that. So that's his goal for the conversion is to basically build his brand and the value of the offer to a point where he can, and the traffic to a point where he doesn't need a sales team. And that was also one of the things that he said is he has so much traffic that even if he has lower conversion rates, it still would work. So again, traffic is also top of mind for him there.
Now, delivery, and I thought that was so interesting. Um, he said that the goal is that you are not the one providing value in a community, right? That makes sense. But I almost fell off my chair when he said that his onboarding video was telling people very aggressively to not ask questions in the community. And I was like, what? Are you allowed to do this? Like, what is this? You know, were people not freaking out about this? It's like, you only give value. If you give value to sell someone, we're gonna kick you out, and you better not ask questions, right? So even Kirby was like, "Oh, this was very, very aggressive when I saw it the first time." But here's the thing, it worked. And now they have a really high quality community where he can perfectly deliver on his promise of one high-quality workshop a month by him, and the other value is created really by the community because he seeded the culture in this way. And this is also why he says that churn is a structural problem, because you have to get the community right to actually make it valuable in itself, and you have to get your personal brand right so that even if you promise very little, that has such a high perceived and actual quality that people are super happy with you promising nothing, right? And then delivering something that's good, right? Because that's actually, he did say one workshop plus access to the community. He gave one workshop plus access to the community, and you know, also some, you know, over-delivering, but none of that is promised. And with that, the price to value discrepancy is so high that his churn, even at the high price point, is 2.5 a month, right? And again, it kind of goes back to really, really focusing on building your brand and media, because I, and maybe that's a limiting belief on my end, but I don't think people would have taken it from a lot of people, or maybe, you know, I personally would have not had the guts to be to someone when they come in my community, be like, don't you dare ask questions. But because it's Hermozi, and he provided so much value, and we trust him, right? And we know that he means it good for us, we're like, okay, sir, yes, sir, right? So this influence is also an expression for how he has been doing media and how he has cultivated his brand. So that really made me understand that right now, the biggest thing I need to focus on is just making sure to get better and document the journey and carry it out to organic media, so that I ultimately also can build containers and infinitely scalable systems like this, because I've become the person, and it actually all starts with really mastering the media. But to master the media, you also have to be the person interesting enough. And ads, you know, can grow, can help you grow to that point where you do have where you've been in a position where you've made all of those relevant experiences, but you also need to translate into content.
So that was my takeaway, or my biggest takeaways from there. And yeah, I really love to see how he thinks this through, and I love it so much that he has a school community now. Uh, because you can see that, you know, now he's kind of talking about the same things that we as community owners are talking about. And before he had his community, he was in the year of the games, we're talking about sales teams a lot. Now he has a community, and he's like, "Well, sales teams suck. I might want to figure out how to do it without a sales team." And everyone will benefit from it because they, they will see, you know, the learnings and hear about the learnings that he has and can translate them to their [clears throat] businesses. So very, very exciting stuff.