(00:08): Hello and welcome to another episode of the Duct Tape Marketing Podcast. This is John Chance. My guest today is Jim Vaselopulos. He is a C level business advisor with a proven record as a leader, strategist, rainmaker, and new business development expert. He’s the founder of Rafti Advisors, LLC, where he helps early stage companies get off on the right foot growth stage companies push through plateaus and mature organizations with strategic shifts and complex challenges. He’s also the author of Clarity, business Wisdom to Work Less and Achieve More. So Jim, welcome to the show. Yeah, thank you for having me, John. Appreciate it. So I do with that very Greek name. You did great. You did great. A lot of people just don’t even give an attempt, so I really appreciate it. Most people go by Jim V, you look at my name, it’s spelled very, A lot of conson is crushed together, so I know a lot of people struggle with it, so I make an attempt to get everybody’s names.

(01:09): So I’m always curious about names being of names, business names. So Rafti advisors, what’s the rafti? Well, seeing as I’m Greek rafti is, or Rafti actually in Greek is a small town in the mountains of Peloponnesian, Greece where my dad was from and where I hearken from my relatives. And that pays homage to my heritage and from which I gained a lot of the, I think, wisdom that is ever present in the book I just wrote. Awesome. Well, I’m glad I asked that. Alright, so give us a little lot of times when people write a book, they’ve had a long journey that brought them to that point. Give us a little bit of your business background that led you to where you are, but maybe also give a sense of what kind of experience you were able to gain that, let’s face it, allowed you to write a book to tell people how to do stuff.

(02:00): Yeah, I mean, I’m one of those guys that probably needed to learn lessons the hard way and I think sometimes that’s the best way to learn. But I’m writing a book, so not everyone has to learn the hard way, but I’ve been very fortunate to have a lot of great mentors and people along the way guiding me, nudging me, giving me advice. I was always just very mindful of those moments that you could almost recognize in your life that were kind of pivotal. I just wanted to capture all that. I had a pretty successful corporate career, started as an entrepreneur pretty early in my life, in my early twenties, and then I’ll tell you, it’s been wonderful, but it hasn’t been something I did alone. It was always with the help of other people and I wanted to kind of credit many of those folks that were known benefactors of mine and some of them that I call in the book momentary benefactors, people who played an outsized role, they didn’t even realize it, and I think that’s important in life.

(03:00): That’s interesting. A lot of entrepreneurs, I’ve read thousands of books, certainly when I was getting started, I leaned very heavily on people like Peter Drucker and Seth Godin, who’s become a good friend, and I always tell people that they were mentors to me. They didn’t know it at the time. Certainly Peter Drucker was not even alive, but I think probably most entrepreneurs have that collection of people that we sometimes just forget really played a role. Yeah, I mean I think it’s important to be intentional and one of the great joys actually, and I just sent a batch out of books today, mailing them to some of these folks, just I wanted ’em to have a copy of say, listen with a nice little note inside saying, you really helped me and you may not realize it, but you had an outsized impact on my trajectory.

(03:47): And I think that level of gratitude and is important to having a good life where you feel fulfilled and it also moves the needle forward and makes everyone else in your sphere feel maybe an inch taller as well so that they feel like, Hey, I didn’t realize I had done something good. That’s always a nice thing to do. I’ve written a number of books and I occasionally hear from people that have little stories, big stories about the impact. And I will say that you’re right. Sometimes you write these books and you think, is anybody even reading these things? And then you hear a story from somebody and it made a difference. That’s why I do this. Yeah, exactly. Break down both parts or a number of parts of your introduction, but going to the book, it’s interesting clarity a, I think if you went to business owners, I know that I do it all the time.

(04:34): I don’t think a single one of, well, I shouldn’t say most, would not say my greatest challenge is I don’t have clarity. They know something’s wrong, they can’t figure it out. They’re doing what they’ve thought is the right thing to do. That word clarity, have you come to discover that when you can get people to understand that they realize that is the most significant thing missing? It’s one of those things that I think as you said, people don’t go looking for it, but they typically are looking for something they don’t know what it is and they feel confused or burdened or just overweight with just all kinds of stimuli that are coming at them. And really it was my clients that told me that’s what they valued in the beginning. I thought they would’ve said like, oh Jim, you’re wise and we value your wisdom.

(05:24): But they really didn’t value the wisdom. They valued the results of the wisdom, which was clarity. They said, I feel like less encumbered. I feel like I know what to do next. I feel like some of the worries I had are muted or at least put on the side because I know that which matters most right now is in my sights and I’m going to go after it. And so clarity was the word that came up time and time again for my clients and I thought, wow, that really is what people value. And if I’m going to write a book, let’s put that right front and center. This is what people value. So why do you suppose that it quite often, most often takes a third party from the outside to come in and give you clarity? I mean, why is business owner the person that’s in it day to day, not able to see that’s the missing piece?

(06:14): Well, I mean because human, I think it’s really hard to kind of sit through your own head trash sometimes. And we have so many filters that we put between us and reality. I mean, the first part of the book talks about from a business sense of what goes on with business problems you’re trying to deal with, but really as you get deeper into it, it gets very much more into the kinds of things that distract us, how easily distracted we are with assumptions and is let astray by our emotions and to try and understand how to peel back those layers of the onion. It’s always easier to see a fault in someone else’s golf swing or in their tennis stroke, but it’s hard to see it for yourself. And so these are the kinds of things that getting objective partners, and it doesn’t always need to be someone who has more experience than you.

(07:06): I will tell you I work with a lot of entrepreneurs and business leaders who are, I believe far more accomplished than I ever was, but they’re human and so it’s easier for me to see something going on than for them to see it themselves. And so I think there’s a partnership there between a player and coach that can be productive when people lean into that relationship. I’ve had examples over the years where I’ve had a 10 or 12-year-old look at a website that we had designed for somebody and we thought was perfect, and they’re like, well, how do I make it do this? And you’re like, all these experts looked at it and they didn’t have that question. I think you’re right. Sometimes it just takes somebody who’s not involved in a way that could show you something. You work with businesses in numerous stages and I’m curious, do you find that they come to you with very similar characteristics?

(07:56): So the startup phase has similar characteristics, somebody who’s plateaued as you talked about, they’ve got the same challenges, almost all of ’em, somebody who’s now a mature business. Talk to me a little bit about what you see as the characteristics at each stage, because I’m guessing also there’s a level of lack of clarity that maybe changes at each stage. Yeah, I think one of the dirty little secrets having been a consultant for many years is that most businesses actually face very similar problems across the board, even spanning industries and sizes, et cetera. I mean, they’re very similar. No one wants to hear that, but that’s the truth. If I were to say though, some things that tend to be more, I’d say popular with smaller companies, I think a lot of times smaller companies get sequencing wrong. They know all the things they need to do, they tend to do ’em in the wrong order.

(08:47): They might obsess about operations and efficiency when they really should be focused on sales. And it’s not that both aren’t important, it’s just one might not be as important yet. And so I think that plagues smaller businesses in bigger businesses. I think you get in a lot of time management issues around delegation and accountability and trying to come up with systems that allow you to manage the broad scope of things because it’s too big for any one individual to try and get their arms around. And it maybe was easier 30 years ago when we had a lot of layers of middle management, but now that we’ve got pretty flat organizations, those problems become a lot more severe, more quickly. And so just getting the structure right on how you’re going after things and sometimes that just is getting a focus on what to do much about that from a management standpoint, it’s about saying no, management isn’t about approving things.

(09:45): Management is about saying like, Hey, this is what we should not do. Or if I approved, this is the implicit no, that goes with it. So let’s make it an explicit no. Yeah. And now a word from our sponsor. Work better now. Work better now provides outstanding talent from Latin America, hand matched to your business with over 40 roles across various industries, including marketing, there are a reliable partner for consistently finding the perfect fit for your business. Simply tell them what you need and they’ll handle the rest. We have two work better now, professionals on our team, a marketing assistant and a marketing coordinator, and we’ve been blown away by their abilities, responsiveness and professionalism. They’ve really become an essential part of our growing team. And to top it off, each dedicated and full-time work better now. Professional is 2350 per month and there are no contracts to schedule a 15 minute consultation with a work better now rep and see how they’ll support your business growth goals, visit work better now.com, mention the referral code DTM podcast and you’re going to get $150 off for your first three months.

(10:54): That’s work better now.com. And don’t forget that DTM podcast code. That’s interesting. I often tell people that all the time that half the job I do in developing strategy for people is selling ’em what not to do because I do think that’s a real challenge for most businesses. They’ve got everything. Everybody’s telling them they need this idea and this idea, and it’s really easy to get scattered. We fall into this trap where we say, oh, this is a good idea or this is bad idea. Most of the ideas tend to be pretty good. I mean, it’s just a matter of it’s not good now. And I think putting things in the context of time, we can’t do it all, can’t do ’em all. This is a good one. This is probably the best one to do now with the limited resources we’ve got, whether it’s time, money, people and then say, it’s not that the other ideas were bad, it’s just not yet.

(11:45): And so when it comes to strategy, strategy is about the sequencing of all the tactics, all the initiatives we want to put together, and I think we frequently kick people to the curb with their ideas and have them think their idea was bad. It might be a perfectly great idea, just not yet. You talk about in the book the idea of business symptoms being like or medical symptoms. Talk a little bit about how they are the same and maybe how they’re different. I often talk about a business comes to us and they have symptoms of not having a good strategy and they’re trying to cure the symptoms. Talk a little bit about your view of that. The reason I compare ’em to medical symptoms is because I want people to kind of internalize this in a way that makes sense to them. And so accountability is a huge problem most businesses face.

(12:33): And I kind of talk about how it’s kind of like having a fever, it’s really common, but just because you have accountability. I mean you might treat a fever with aspirin, but there’s a root cause behind that. There’s a reason, there’s a fever. The fever isn’t the problem, the problem is an infection or something else. And so we always have to dig deeper. And what I like to help people realize is that the symptoms are always outcomes. An outcome is if you have misalignment isn’t the problem. That’s an outcome of other issues. And so you want to be really careful with that being too busy or having conflict with the organization. Those are outcomes. Even culture, probably the most controversial symptom I have in my book is an outcome because I always talk about that like the immune system of your body. It’s not that you have a bad culture or a good culture.

(13:25): You’ve got a culture that is sometimes weak and sometimes strong, and the culture is really a manifestation of the actions you take on a daily basis. It’s an outcome. What are the things driving those actions? Well, that starts getting you closer to the ground truth and where you can really have an impact solving a problem. And I love that analogy because there are definitely a lot of businesses out there that are just trying to treat tactics or treat what they see as a problem with the tactic, the tactic of the week, and that they really just end up creating another problem. A lot of times you talk about making time your friend probably the greatest challenge. Certainly small businesses face how I’m sure listeners are waiting. How do you make time your friend part of it’s focus saying no to things, being very intentional about stuff.

(14:13): I think one of the other great ways to make time your friend is to really understand, take the time to think through what matters most. There’s so many things we do that we don’t need to do. Okay. And you just need to really think about that, make a little bit of time to evaluate what you’re doing on a daily basis, on a weekly basis, on a monthly basis and just say, did that move the needle? Why do I keep doing that? Who’s telling me I have to do that? Is there a reason? Is there a discussion? I can have to stop doing that. And in my career, I was able to do things that formally or took me 40 to 60 hours a week to get done and get that down to four to six hours a week. And everyone says, oh, that’s crazy. But I really just applied some of the same thinking that Tim Ferriss had in his book, the Four Hour Work Week.

(15:02): And I just said he always just threw the rule book out the window and just said, let me question everything. And that’s really a good practice. Then I think there are a couple other little things I’d add to that mentality. One of them is timing, sequencing, timing in patience. Really those are really powerful things that can make time your friend knowing the right order to do things and then timing the same amount of energy goes in hitting a foul ball versus a home run. It’s just a matter of hitting the ball at the right time. And so understanding your timing and knowing what the right time is and are you spending a little bit of extra time here and there to really figure that out. Because when you figure that out and you start Hint home runs all the time, well guess what? Work gets really easy and then you build up more time to learn and improve.

(15:50): So it’s like this self-fulfilling prophecy if you just spend a little bit of a time trying to figure out the right timing for things, the right triggers for things. And that is a process I really call conscious competence, which is do you know why you do things? Do you know why this particular phrase or this particular process works so well at this time? And if you know the right things to do at the right time, work gets easier, time becomes your friend, and you get to invest way more time getting even better at it. So the promise of the book really shows up in the subtitle, work less, achieve more. How do you get to that point where you actually can experience that as a reality? So literal this really busy world, we’ve all got a million things coming at us and whether it’s from the internet, tv, our clients, our email, I think it gets down to stripping away layers of the onion and getting to that which matters most is so you can have the most impact with the least amount of work.

(16:47): So I’m inherently a super lazy guy. I’ve had a lot of success in my life, but I’m always going to take the leap path of least resistance. So I’m like water, I’m going to find the easiest way to get through something. And so the outside layer is don’t focus your time on symptoms, recognize symptoms, peel them back, understand where the problems are. Once you understand the problems, peel those back and understand what’s clouding your perception of those problems. Because it’s the little things that cloud our ability to kind of see the world clearly and cleanly that slow us down. And so you peel that away. Then I kind of add in this kind of emotional aspect of trying to see other things that affect our demeanor, our temper, our perspective. Then you get into sequencing, timing and patients. I have a clear view, but now I can order things and organize them in the right way so that I can have the most impact and start hitting home runs instead of foul balls.

(17:42): And then as we get further into the book, it says, and here is the process you use and it’s really this conscious competence and working with other people to help them feel empowered to get to a point where you’re getting a lot done, you’re working a lot less and you’re achieving your goals much more because you’re not wasting a lot of time on stuff that doesn’t matter or move the needle and it can be done. And I just wanted to share that with folks because I mean, literally at the end of my professional career before I got into coaching and advising, I was doing the work that other people were taking 60 hours to do in less than a day. And it got to the point where it was annoying people. They’re like, well, how do you do that? And I said, well, this is the recipe.

(18:28): This is how you do it. Awesome. Well, Jim, I appreciate you taking a few moments to stop by the Duct Tape Marketing Podcast. Is there someplace you’d invite people to connect with you and obviously pick up a book or find, I got a terrible last name. It’s hard to find on LinkedIn and everywhere else, so I tried to make it easy for everyone. Business wisdom.com. If you go to business wisdom.com, you can connect with me on LinkedIn and you can see information about the book and about my business and everything you need is right there. Awesome. Well, I appreciate it again for you taking a few moments and hopefully we’ll run into you on these days out there on the road.

John (00:08): Hello, welcome to another episode of the Duct Tape Marketing Podcast. This is John Jantz, and I’m going to do a solo show. It’s been a while since I’ve done one. So there’s a couple topics I want to get off my chest, so might do a couple shows in a row. Who knows? This first topic I want to talk about today is a trend, I guess definitely a trend that I’m seeing, and it applies to anybody in the marketing consulting agency world as well as frankly to anyone who owns a business in terms of how to get your marketing done, how to think about your marketing more strategically, and that’s the trend of what I will call the fractional CMO Chief Marketing Officer. This idea of fractional whatever titles, accountants, fractional management consultants, fractional hiring consultants. I think that this idea has really taken on a life of its own recently, probably like so many things here in the beginning of 2023, very influenced by the pandemic, but what I’ve seen is many, many business owners over the years really are looking for a marketing agency, a marketing consultant, somebody to get the tactical things done.

(01:25): They quite frankly, rarely hire unless they’re from a marketing background. They rarely hire strategic marketing folks internally because quite frankly, when you bring somebody in at a really high level to do marketing in your business as an employee, and you’re the owner of that business and don’t feel like you know that much about marketing or how to direct really a strategic marketing, dare I say, CMO type of role in your business, it can be a little intimidating. And I’ve experienced that over the years. A lot of times I’ve been hired, my firm’s been hired because there’s something easier about saying, Hey, this isn’t working out. It’s not an employee, it’s a vendor almost. And so they can part ways, but I think what’s happened over the last few years is people have dramatically increased their understanding and desire to really start with strategy. I mean, it’s been my mantra for 20 years strategy before tactics, but I think people are finally getting it right.

(02:23): And so this idea that they would hire a C-suite type of role where the implication is that that person’s going to be strategic, that person’s not going to write copy necessarily or do social media posts. They’re going to really develop the grand plan for how you’re going to go from where you’re today to where you want to be, certainly from a marketing standpoint, but they’re going to get involved in the dollars and cents of it, the objectives overall for the organization, maybe a little deeper relationship than you would think of your traditional marketing agency, but we are finding that both business owners are really embracing this idea of hiring us or somebody as a fractional CMO. And certainly a lot of consultants, agencies, coach implementers I’m finding are really drawn to this idea of maybe having a handful of clients that they are very deeply involved with and have a seat at the table for making or helping make big decisions, and obviously orchestrating the tactics, the implementation, maybe in some cases the team that’s already been assembled.

(03:31): So just the textbook definition, what is a fraction CMO? It’s a marketing strategist brought into an organization on a part-time basis to help set strategic direction and orchestrate marketing implementation using internal and external resources. So I spent the last 10 minutes just talking about what I just described there, but again, this role, this idea really has a lot of, I think a lot of appeal to business owners because it is a necessary piece that I think that you can acquire, or at least the idea you can acquire for much less. I mean, look at Google Trends if you ever do that. The term fractional CMO is definitely on the rise, and I think a lot of it has to do with, I think people are tired of the tactic of the week of no real direction. Everybody says they want customers, but a lot of the CEOs, business owners that I talk to, what they really need is some clarity first and the confidence that they’re making the right decisions and some control over their marketing.

(04:31): And I think that that’s a big part of what you get by at least taking this strategy approach and by bringing in somebody that is very strategic to help you get those customers. And the role of a typical CMO in an organization is strategic planning, brand management, obviously the marketing campaigns, analyzing data, helping develop and use a budget, and maybe even managing team players. And frankly, what most people do is they hire somebody just to do marketing campaigns and all those other things are left by the wayside. The reason I think this model works and why business owners should be really addressing it, looking at it, understanding it better, and certainly agency folks or consultants ought to be positioning themselves this way because typical, or I should say the average salary for a chief marketing officer according to salary.com, this last year was between 208,300 75,000.

(05:29): And that really doesn’t include any kind of implementation or other people that you might hire to actually supplement that. The typical average fractional CMO probably costs somebody 60 to $75,000 a year, plus a lot of the implementation now is done on demand. It doesn’t necessarily mean that you are going to hire those people as full-time people. Your CMO fractional CMO is going to bring them in as needed from a consultant or an agency standpoint. If you do the math on what the average is working with five or six clients, that can be at the top, the absolute top of the CMO chain. So it really works for both parties as far as I’m concerned. And so what the typical sort of agency project-based path looks like. You put out free content as a marketer, you get a sales meeting as a business owner, you then ask for a proposal project gets worked on, or maybe a handful of projects get worked on, and then everybody starts over again.

(06:33): And I think the fractional CMO approach is more that the very first thing you do for 30, 60 days is that you’re going to actually develop strategy first. And what that’s going to mean is you’re going to really drill into the ideal client. Who is the ideal client you should be attracting? What is the core difference that your business makes out there in the market? And it’s not what you sell, it’s the problems that you solve for your ideal customers. What is your customer journey look like? What should it look like? What could it look like? What’s a content or editorial content approach going to look like? What are the near term priorities that you need to be looking at? I mean, those stopping and taking the time to develop that allows you to then month by month, look at, look, here’s what we’re doing this quarter, the next quarter, the next quarter, because we’re going to evolve our marketing.

(07:22): It’s going to grow. We’re not going to simply just throw another tactic at everything and see if it works. Some of these concepts, the idea of developing strategy, in fact, we have a set, I’ve done a strategy as I’ve described it here, probably in the neighborhood of a thousand times with businesses. I have taught hundreds of agencies and consultants how to do our product, if you will, called strategy first. It’s really how we start every engagement. And as far as I’m concerned, if you are buying marketing services, you should actually be engaging somebody who is going to demand that you do strategy first. And as a consultant agency, that ought to be the way that in my mind, that you lead with every engagement strategy has become more important, quite frankly than ever. It is the way that you not only differentiate your business, it is the way that you actually charge a premium for what you do because you are able to understand how to guide the perfect customer journey.

(08:26): You’ve heard me talk about things like the marketing hourglass for years, our approach to the customer journey that has seven stages, no, like trust, try, buy, repeat, and refer. Just understanding what you need to move people through those stages that are essentially marketing, sales, and service or success is how you build long-term growth intentionally focusing on those stages. This is a tool that I’ve seen it change dramatically change businesses in the way they view marketing. But then secondly, this approach to marketing, hiring a fractional CMO who is going to become a senior, you’re not going to pay them as such. They’re not going to be their on-premise every day, but you can view them as a senior strategic hire in your organization. Even if you have people doing various marketing tasks, is an absolute game changer for most of the businesses that really can address or engage or embrace this idea.

(09:27): So that’s all I had for today. I wanted to introduce this idea of the fractional CMO. Whether you are a business owner who doesn’t understand why marketing’s not working the way it should, or you are a coach or a consultant who doesn’t understand why you’re always getting beat up on price and getting tired of just doing the tactics that are demanded of you lead with strategy and that will change completely change the relationship you have with your clients. So if you’re either one of those, a business owner or somebody who is in marketing consulting world and you want to see how this fractional CMO model could change your business, just visit duct tape marketing.com. You’ll see at the very top there, you pick your flavor. I’m a business owner, or I’m an agency that wants to license this fractional CMO approach. We’d love to talk with either one of you. Have an amazing day, week, month, quarter whenever you’re listening to this, and thanks for tuning in to the Duct Tape Marketing Podcast.

John (00:52): Hello and welcome to another episode of the Duct Tape Marketing Podcast. This is John Jantsch. My guest today is Russell Henneberry. He is a digital marketing consultant, speaker and co-author of Digital Marketing for Dummies. He’s the founder of the clikk an email newsletter about digital marketing. Russell also consults and trains employees of companies through his digital advisor program. So Russ, thanks and welcome to the show.

Russell (01:20): Hey, thanks for having me on.

John (01:22): It’s an honor. So do you go by Russell or Russ or Depends on who you’re talking to.

Russell (01:26): It doesn’t matter, but most people call me Russ, but Russ.

John (01:29): Okay. There are

Russell (01:30): Several people.

John (01:30): I just jumped right into it. Alright. I mentioned that you have a successful newsletter called The Click, so I thought we’d talk about newsletters. Newsletters have been around for ages. I’ve been putting one out at least for 20 years myself. How have, and I know that you’ve studied, we are alluding to some of the old timers before we got on the air here, how have you seen newsletters evolve? Because I think they were in sort of phase one of digital marketing. They were kind of a standard tool, but then social media came along and other stuff came along. They fell out of favor. Now they seem to be really back in favor. What do you see happening in the space in general?

Russell (02:10): Well, what I see right now is a return to email newsletters. They’re hot right now, and I think of email as this intersection of content marketing and sort of direct response promotion. Email is still a great place to make and probably the best place to make a direct call to action, which is sort of frowned upon most of the time in social. But when you can take the email and turn it into content so you’re not just continuously pounding your email list with promotions, you can get this sort of best of both worlds where you get that engagement that you get from content marketing plus the bonus big bonus of being able to make direct calls to action.

John (02:58): Yeah, I mean I started mine to share, educate, build, trust, all those things. But let’s face it, it was a way to build an email list. I literally remember people 20 years ago saying, oh, I got your newsletter. I’m so excited. I that was before we got tons and tons of email every day. So in terms of how, I mean I think I look at your newsletter, I subscribe to your newsletter and it is pretty classic format in terms of education. There’s not any new crazy technology necessarily that’s showcased there, but I know it works. I mean, just looking at some of your statistics, I know it works for you, but before we go into that, LinkedIn has newsletters now there are people putting newsletters behind paywalls. Do you see those as approaches that will be with us for a long time because it’s very curated content or do you think the classic approach that you take is still valid today, obviously?

Russell (04:00): Yeah, absolutely. And I’ve looked at moving my newsletter over to things like substack or moving into LinkedIn and publishing there. Personally, I want to be able to control that technology because I want to be able to do some other things with it, and I’m not afraid to mess around with that technology. But I think the barrier to entry into starting a newsletter because of things like substack and then the competitor, their beehive is also something to look at. If you’re looking at starting a newsletter, the guy who I believe was in charge of list growth at Marketing Brew or Morning Brew started beehive. So there’s some really great out of the box options there. I like to have more control over everything, so I end up with sort of that patchwork of tools. But yeah, I mean, getting into the newsletter business is easier than ever today.

John (04:51): Yeah, so getting subscribers is one piece of it, but then keeping them, because it’s worth reading is obviously a huge part of this. What’s your editorial strategy? I’m curious, how do you decide? I’m sure you don’t wake up on Monday and go, here’s what I’m going to write about.

Russell (05:11): Yeah, well, so the content marketing side of the editorial strategy, I’m always in all the top of funnel content and sort of mid funnel content that I produce. I’m looking to either educate, inspire, or entertain, and I do try to get a little bit witty inside of there, and I have some editors that do a pretty good job of helping me not tell too many dad jokes in there. But yeah, I mean my goal when I talk to my editors when I think about my own stuff is that I want to give you something educational, but I want to do it with a spoonful of sugar and that’s that entertainment don’t take myself too seriously angle. I think we see a lot of that because competing against other publishers like say Digiday or Adage or something like that, that are probably a little bit more buttoned up. And so if you like my style, then you’re going to read my stuff and you’re going to anticipate my stuff coming into your inbox.

John (06:12): So you didn’t say it as directly to this, but I mean I think certainly a best practice would be have a voice of some sort that’s going to either repel people or attract people.

Russell (06:23): Right. Yeah, I think a good way to think about this is an exercise you can do when you’re looking for a voice is you can say to yourself, I want to be the blank of blank. So if you know what niche that you’re in, let’s say you’re going to be creating a gardening newsletter, you might say, I want to be the

John (06:43): Seinfeld of gardening newsletter,

Russell (06:45): Jerry Seinfeld of gardening or whatever, of gardening. And that can help you start to box out what maybe you’re looking for from a voice perspective.

John (06:53): Yeah. What would Jerry say? So you threw out the terms top of funnel, middle of the funnel. Maybe explain how you differentiate your content based on maybe where somebody is in a potential buying situation.

Russell (07:08): Yeah. Well, and we were talking about this before you hit record. We were talking about newsletters are a great way to build trust and they’re a great way to connect with people. You’re right there in their inbox and you do that consistently over time. You’re going to build that know and trust, but it’s still making a really high ticket offer. It’s tough to do in an email. So I’m typically looking to get people to engage with my content and then I’m going to ask them to do, so. For example, last week I ran an article and then I said, if you’d like me to shoot you a little video to expand on this and show you some examples, click this link and I’ll tag you in my system or whatever. And so then I shot a Loom video and I sent that out just to people that were tagged and had asked for it. And then inside that video, I make a call to action for a service or a product or a horse or whatever that I’m looking to do, but I only want to do that with people that are really engaged strongest parts of my list. It’s sort of that whole, don’t ask somebody to marry you on the first date type thing. Where we want to kind of build up that know and trust with people over time.

John (08:20): And you make a great point because I think a lot of people they have, you just said a high ticket item, let’s guess at a price $9,700 thing. And the idea that somebody’s going to read a newsletter mean if they’ve been following you for years, they’ve decided time’s, right? But the idea that somebody’s going to click on a button and buy something like that, it really needs to be much more of a dance to get their, doesn’t it?

Russell (08:42): For sure. Whenever I’m talking to anybody in my consulting work about what they’re selling, I try to immediately put it in one of two buckets. I’m putting it in, I can close this deal on a webpage bucket or I put it in, I got to get this person on the phone bucket. And if it’s a phone bucket, which if you’re hitting that 10 K mark, that’s phone bucket for me, you’re going to need to get somebody on the phone. There’s going to need to be a sales process and so forth. You might be able to close that online depending, but probably not. And so those kinds of calls to action are difficult to make in a newsletter. And so what I like to do with that is you’re trying to nurture people towards a phone consultation, and that takes a lot of touch points

John (09:27): Unless you over promise something you can’t actually deliver.

Russell (09:32): There’s always that.

John (09:34): So we’re waiting into monetization. How do you think, actually, let me back up before I ask that question. I want to ask a broader question. Was there a point in time where you said, I’m going to go all in on newsletter, this is how it’s going to fit my business model? Or did it start more as, yeah, this is a normal standard digital marketing tactic?

Russell (09:56): So I kind of did go all in. So we are email first. So I like to think when I’m thinking content marketing, I think about where’s the genesis of this content going to be? And I think podcast, by the way, are a wonderful place to create original content and that’s where it’s born. And then you can hand that out to writers, for example, and have them chop that up into pieces and go out to social with it and cut the video up and different things like that. And my newsletter is that for me, so I produce original content only there in that newsletter, and then that stuff is then chopped up and cut up and put into different places. So the reason I did that is because I was spending a lot of time thinking, well, how am I going to get this person from social media onto my email list and how am I going to get this person from listening to this over here?

(10:43): And I’m from this YouTube video and from my website, and I said, well, why don’t I just start there? Why don’t I just start with them on the email list and focus all the attention there and then I can move them out from there. So just like you could do with a podcast, just like you could do with a YouTube channel is just where are you producing that original material? And then you can then kind go and do what you want with it from there. And a lot of times you can hire somebody to go do a lot of it from there.

John (11:10): So again, now as I alluded to monetization, maybe I’ll just let you much as you’re comfortable sharing about all the ways you think about monetizing, and I know there are some very direct ways that you do it, but I’d love to hear your theory on that.

Russell (11:27): Well, I like to keep it diversified because things go up and down. So for example, I sell advertising and it’s very easy to sell advertising in the fourth quarter because everybody’s fleeing Facebook and Google for cheaper clicks elsewhere because of all the retail ads are cranking up prices and things like that. For me, advertising can be kind of seasonal. So I also sell trainings and courses. I use it to fill my consulting work. If I need a consulting client, I’m going to start working towards that through that list. And so yeah, it’s advertising, it’s consulting, and some info products like courses and so forth.

John (12:14): So if I’m a potential advertiser, I’m guessing top of funnel ads, like list building ads, give away a great resource ebook, lead magnet kind of ads are really what work in a newsletter like yours. They,

Russell (12:28): I think it’s, when I speak to advertisers, I advise them to try to move people from my list onto theirs because people that are reading my newsletter have shown that they use email as a source of information. So it’s smart for them, in my opinion, to use a lead magnet offer or a webinar offer or something like that can move them into that person’s email list because that person is an email reader. But we do get a lot of advertisers that know we want to go straight for free trial or we want to go straight into an offer or something like that. And we’ll do that too, but absolutely love the, and we see great response from people that give out a solid high value lead magnet to my list.

John (14:57): Let’s talk about metrics. Again, going back to when I started, I remember 83, 80 4% open rates. Those days don’t exist for anybody today, but what are some of the metrics that, not just that you should be tracking, but that show you’re doing things right?

Russell (15:18): Well, so when you start to get involved in buying traffic to get subscribers, it becomes pretty important that you’re buying subscribers that are opening because especially if you’re selling ads, because think about it, you might be measuring, for example, your cost per lead and it might be let’s say at a satisfactory $4 per lead, but then you’re finding that these leads are only opening at 30%. Well, are they really only $4 leads when you’re only getting three out of 10 to open? So it really is important to be watching the quality of the subscribers that you’re getting and whether they’re opening, and it might be worth paying six or $8 for a subscriber that will open. And so I do love the idea when you’re running a newsletter of advertising and other newsletters, because again, that person’s shown the propensity to read newsletters and use email as a source of information. So yeah, I mean, it’s the classic ones. Open rates, click rates, cost per lead if you’re buying traffic. I also look at sort of the virality. How can I take any subscriber that maybe I’ve bought right at $4, $6 or whatever and turn that into 1.5 subscribers so I can get them to spread the word and get me. And that cuts. If I can get one every one person to bring somebody else, then I cuts my lead costs in half. And there’s some cool tools out there that can be used to do that

John (16:48): Referral tool. Yeah,

Russell (16:51): Up viral is a cool one that works really well to get people to share and using a unique link and then you can reward them with more content, things like that.

John (17:02): Let’s talk about list building then. Obviously a lot of your success, a lot of your ability to sell ads, a lot of your ability to have reach is that you’re getting subscribers. So what’s kind of your approach or what approach might you recommend to somebody to build a list?

Russell (17:21): Well, so when I started out, I said I want to build a list that advertisers will find attractive. So that’s kind of where my brain started. So that comes down to your ad targeting that you’re going to use when you buy traffic. So I was looking to build a list of people that are doing marketing work for other people. So they’re either agency workers or freelancers, because software companies and service companies oftentimes find these people very valuable, A software company especially where they can roll, if they can get an agency to adopt their tool and roll it to all their clients, that’s a big client for them. So we set out to build that list and that’s on this list, and it’s all comes down to your targeting. And that particular subscriber might cost you more. You might be able to go find other people that would want to read the same content for cheaper, but is that what your advertisers want? And I think if you’re going to sell advertising, you need to be thinking about building a valuable list, not just any old list.

John (18:26): Yeah, yeah, yeah, absolutely. Well, and also if the diversification you want to sell to that list, they should be people that are obviously interested in what you’re selling. So you do recommend buying subscribers, so to speak, or buying at least traffic that you hope to turn into subscribers?

Russell (18:43): Yeah, I mean, if you want to advertise, I think you need to hit that 10 K subscriber mark before they start getting interested. You got to remember that you’re dealing with advertisers that could just go into Facebook and access a limitless, nearly limitless group of people. So there’s an unlimited scale, in other words, inside these other platforms. And so you got to have at least some scale in order for them to take a look. So I do like the idea if you’ve got your advertising packages in place and you’re able to do it, but I don’t recommend that you start there. So with advertisers, your monetization model, I would encourage people to, especially if you’re just getting started to sell services or information products, until you can get to that because you’re going to want to, unless you’re funded and you’ve got a giant dumpster of cash that you want to burn, you’re probably going to need to be r oi if you’re buying traffic and you need to be r oi it a little bit faster. And so you can’t just sit here and build up until you hit 10 K and then start selling advertising. So I would recommend that you sell either even physical products, but physical products or info products or services until you hit that 10 K mark. Then you can add that, start adding in that advertising revenue.

John (20:00): So over the years, I actually sell sponsorships. It’s just kind of a package with our podcast and things like that. But I’ve always felt like, well, now I have a personal relationship with my subscribers. They really see it as me, and a lot of that is on the trust that I don’t try to shove stupid stuff down their throat. So do you sometimes find yourself really having to, we’ve turned away sponsors because we’re like, no, and I mean, they’re obvious ones, but even sometimes where we just don’t feel like that’s a very good tool or a very good resource, we’ll say No. So do you feel like you have a different relationship as an advertiser because of the relationship with your readers?

Russell (20:43): Well, I turn people down all the time, and it’s because it’s just, I’m the end decision maker on all that. But I can see how larger publications must have a battle between editorial and monetization, right? Because you do get people that want to just put your stuff in front and you could just take their money and put it in front of people. But I know that’s not the good long-term strategy for my business, is not to just shove things on their throat. And I can always, if I don’t have an ad to run that, I just run my own stuff. This is sponsored by this course or this whatever, this event that I’m going to or whatever.

John (21:22): Yeah. All right. So I’m going to end on the question that we could have spent the whole time talking about, but I’ve been throwing this into pretty much any conversation, especially about content, but ai, how has that impacted your thoughts about producing content?

Russell (21:42): Well, obviously things are shifting daily with this, so check the date on this podcast because it depends. But what I’m seeing now is every tool that I use is overlaying on top of chat GPT. And so I am using AI every day. The way I use it for content creation is typically for things that would’ve maybe taken me a half hour. For example, I, I won’t go into why, but I needed to have the details of Dwight Eisenhower’s career for a little article I was writing, and I just popped it into chat, GPTI was like, give me a bulleted list of Dwight, and it was done. And because it wasn’t completely crucial, that was even correct, a hundred percent, I just popped it in there. I didn’t even check the information. It all looked pretty, right. So I popped it in there, and if somebody would’ve come back and said, actually, he didn’t start the highway program or something, he did this, I would’ve been like, well, that wasn’t really the point of the article, but I’m using it for stuff like that.

(22:50): I do come down on the side right now that if you are, you’re not creating content that’s better than what CHATT PT can put out. You shouldn’t be creating content. You’re probably not getting any traction anyway. It does lack voice now. I mean, you can get some pretty incredible stuff out of it, but still, in fact, at the top of my newsletter, what I’ve been doing, just to be sort of cheeky, is today I just finished it up and I said, this newsletter was written by a human with real arms and legs and everything. And I do see a world where it’s going to have value for you to state that you’ve chosen to continue to write or produce your content yourself. I think there’ll be other places where people are going to be tolerant of what, I don’t care if that’s a bot that wrote that, or a person, but other places where we are going to find a lot of value in the fact that someone is writing this is a real human with experiences and memories and thoughts and all those things.

John (23:52): Yeah. Well, I’ve definitely am telling people that if you can’t ignore it or you won’t be able to compete, but we’re definitely a long way. In fact, I don’t even think it’s artificial intelligence. I’ve been kind of jokingly switching it around and calling it ia. It’s informed automation is what I really think it is. And just as your example, I mean, imagine if you were trying to come up with a killer headline and you had three or four people sitting around and you all brainstormed it. Well, that’s the way that I use Chad GPT is, it’s like, make this headline better. Give me 10 ideas. And it’s like, there might be one word that I go, yes, that’s the word, but that’s really how I use it almost as a research assistant.

Russell (24:31): Yeah, I mean, it’s open on my desktop right now, and I can’t see myself going away from using it anytime soon. It’s here to stay, so it can’t be ignored. But you and I have both been doing this a long time, so we’ve seen people try to take things like this and look for a shortcut built. I’m sure there’s people building giant content filled websites with AI content in them, and I’ve been doing it long enough to know that in the long run, it’s not going to be a sustainable business model.

John (25:05): Well, and what I love is the Make Seven Figures as an AI consultant courses that are being sold right now, too.

Russell (25:13): Yeah, they’re everywhere,

John (25:16): But such is life. Right. Well, Russ, thanks so much for dropping by and kind of sharing some of your knowledge on the newsletter. The Click we’ll have how to subscribe in the show notes, but certainly anywhere you want to invite people to connect with you,

Russell (25:31): Well, yeah, just come over to the newsletter, the click, CLIK k.com and the subscribe and say hello. You can always reply. I read all the replies to my emails, and then if you want to connect me on social media, I’m Russ Henneberry on LinkedIn.

John (25:46): Awesome. Well, again, thanks for taking a moment out of your day to share with our listeners, and hopefully we’ll run into you one of these days out there on the road.

Russell (25:53): Yeah, it’s been my pleasure. Thank you.

Speaker 1 (00:57): Hello, and welcome to another episode of the Duct Tape Marketing Podcast. This is John Jantsch. My guest today is Amanda Holmes. She is the CEO of Chet Holmes International, which is worked with over 250,000 businesses worldwide. At age 24. She inherited her father’s multimillion dollar enterprise, which specializes in helping companies double their sales. A lot of their work’s based on the bestselling book, the Ultimate Sales Machine, of which they have a new edition coming out. Amanda’s name will be all over the new edition as well. And she has merged her father’s proven process with her own forward-thinking Ideas to connect the old school sales process with hybrid, online and offline, instant gratification and short attention span that we see in consumers today. So Amanda, welcome back to the show.

Speaker 2 (01:47): Thank you so much, John. It means so much to me that you interviewed my father and then you interviewed me so many years ago, and here we are again. It means a lot. Not a lot of people interviewed my father either.

Speaker 1 (02:00): I was going to say, I might be one of the few podcasters who has interviewed you both.

Speaker 2 (02:06): Yes, I have never heard it from anybody else, and I’ve done hundreds of interviews, so you are the only one.

Speaker 1 (02:12): That’s funny. That was about 29, 20 0 9, 20 10, something like that maybe. And podcasting was in its infancy at the time, but somehow I’ve stuck with it.

(02:24): So we also have another shared connection. My daughter has actually worked for me for about 12 years. She is our chief operating officer, so I really kind of have to go there. You didn’t work in the business as a family member, you really brought, came into the business. I would have to think in some ways that was a pretty tall order. In fact, I think you were studying music in college and not necessarily preparing for a career as a CEO. Right. I guess I was going to ask you what’s like working with family, but that’s not really, it wasn’t really your experience. So what was it like really? And I know you’ve told this story many times, what was it like basically being thrust into an ongoing organization, but as a family member?

Speaker 2 (03:11): Yes. Well, it was hard because me and my father were very close. I was actually born on his birthday. We shared the same birthday February 13th, and it was as if just the stars aligned. And so losing him was like losing air. It was like I didn’t know where up was or down was. I couldn’t eat. I couldn’t sleep. So getting all of that while at the same time, I can remember just days after his funeral. And the only reason why I remember that, because all that time is such a blur, but I just remember all of these flowers around my room from his funeral, and I was sitting there and they had just sent me the PL of all the companies, and it was the first time I’d ever seen it, and it just felt like this p and l was never ending. I kept scrolling and scrolling and I just broke down.

(04:01): I was like, how is this possible that, so my father battled with cancer for a year and a half before he passed, and he spent 352 nights in the hospital, and never once did he spend it alone. So it was me, my mom, and my brother. We rotated spending all nighters with him. So I spent easily a hundred all-nighters with my father in the hospital. Never once did he say, Hey, Amanda, let me explain to you what my businesses are. Let me explain to you who runs them. Let me tell you about where I’d like this to go. We never had that dialogue, and there was time, and I speak on that because I think it’s critical that more parents take responsibility for the fact that there are other people that if you leave this world without a plan, you’re hindering them. So I do talk on that every once in a while.

(04:57): So it was utterly shocking and it really is. I look back and I think it’s a miracle that we’re here today based on the fact that I knew nothing. I was trying to get over the loss of my father while couple hundred staff, this crazy enterprise, but here we are. I stepped in and it took me two years to step in because it just looked like, this is crazy talk. I don’t know why I ever would. But then over time I fell in love with our clients. I recognized that there was something that was really beautiful about what my father had built, and it could be carried on. It just needed that heart in the center of it to make it all work. And yeah, I increased our leads by 1176% the first year I stepped in and doubled our coaching clients multiple years in a row, and this year we’re up over 300%, and that’s without the book releasing just yet. So it’s a lot of wonderful things. My father had a great system and a great framework for how to grow organizations, and I had to learn it from his books and his training programs instead of him explaining it to me. But nonetheless, I think I am probably one of his greatest success stories just because of that. Right.

Speaker 1 (06:13): What was hard for you? I mean, you obviously made some changes. What was hard for you to change? I mean, not necessarily resistance, but just really hard for you to even wrap your head around changing.

Speaker 2 (06:27): So we had never processed an order online. My father was very strict around every sale should come from a salesperson having a conversation either over the phone or in person. So I could remember the first time that I put some pricing online and I took a moment and it was like, I’m so sorry, dad. I know you said this, but times have changed and I have to do it. I have to put some of our stuff online. So that was a big turning point in learning how to do digital marketing was critical in selling things online. And then also a huge change was for me, the people that I surround myself with, a lot of them were very different than who my father surrounded himself with. So I find that the culture that he thrived in is different than the culture that I thrive in and making that distinction, because at first it was anybody that my father respected, ultimately they would say, well, your father said I was the best in the planet on this.

(07:30): And I’d go, okay. And I’d put them up on this pedestal of who was the best, right? Because my father said he was the best, even though I started realizing that everyone said that my father said they were the best. So then I started reading through his emails to try and figure out what he really thought of them. That was the way that I would find out. And then the next level was okay, just because my father said he was the best, now I have to discern, is this somebody that I can work with? And there were quite a few of them that did not work with me very well. And that’s okay. It’s just a little bit of a different modus operandi, but still the strategies are the same. So it was interesting to see that culture shift.

Speaker 1 (08:10): So shifting gears a little bit to maybe a more positive, less of a challenge, what’s been the most fun for you?

Speaker 2 (08:17): The marketing and sales part. Oh my gosh. Oh, you’ll appreciate this, John. So I just, I’m in this whole book tour thing going on right now. I just went to all these different trade shows. I spoke at HubSpot’s inbound. That’s where I saw that you’re in HubSpot Network. Congratulations on that. That’s awesome. So I went there with a four foot billboard strapped to my back. I was looking for a way for people that my father teaches, the first thing you need in a trade show is to get noticed. And I was googling like, oh, maybe we’ll do a backpack and we’ll design a backpack or something. And then I found, I typed in human billboard and this huge thing, it’s a backpack that straps and it lights up. It glows a billboard sign. So I’ve been walking through all these trade shows with this four foot billboard on my back. I call her Bessie now because I’m very fond of her. And on the last day of trafficking conversion, actually they shut me down because I was creating such a buzz and generating so many sales that the sponsors, the booths were getting jealous. But that’s been a blast, and just being really creative about ways to get attention and then converting that attention into sales and leads and sales, that’s a ton of fun for me.

Speaker 1 (09:39): Would you say that your, and I know this is going to sound sort of stereotypical, but would you say that your music background, your arts background, has brought a level of creativity that maybe didn’t exist?

Speaker 2 (09:51): Absolutely. So the new addition of the book, the foreword, instead of saying, dear Reader, I instead said, dear dad. And that was something that Julia Neeson, my book coach at the time, had suggested I do. And when I wrote it, everyone that read that majority of grown men that read it would cry reading it, and they thought out of every page, every sentence, I made sure that it was some way to double sales. But that letter to my dad, everyone said, lead with that because that’s going to touch more people than just doubling sales techniques. And I put that into a video, actually, and that’s been what I’ve been using to promote the book. So to me, that video is a music video. I wrote the lyrics, even though I’m not singing them, they’re written. But everything that I had as a songwriter, I put into that video. To me, that’s the single that came out with this new edition of the book, which is kind of funny to think about, but man, it is hitting people in a completely different way that I never expected, and it was the most nerve wracking thing on the planet to put that thing out. I really thought that. I didn’t think that people would like it, but everybody kept saying, I love it. I love it. You should put that out. And it’s been such a loving response. So yeah, that songwriter in me, I think helped

Speaker 1 (11:16): Describe who CHI, Chad Holmes International works with. Who’s your typical client?

Speaker 2 (11:22): Yes. Okay. I’ll answer that by asking you a question, and you probably know the answer to this. What percentage of businesses do you think make it to a million in annual sales?

Speaker 1 (11:32): I don’t know the exact answer other than it’s relatively small. The numbers, yeah, you have to guess. I’m going to say 9%.

Speaker 2 (11:40): Okay, that’s close. It’s close. 5% of companies make it to a million of that 0.08%, make it to 5 million of that 1.5%, make it to 10 million so it gets a little bit better. Then 0.004%, make it to a hundred million and beyond. So what we teach is how to get from a million to five, from 5 million to 10, from 10 million to a hundred million and beyond, because it’s actually not about our product or service, which majority of entrepreneurs think, yes, if I just tweak this a little bit more, then I’ll get more. Right? If that was true, wouldn’t be the number one grossing hamburger joint in the world. Right? It’s a terrible burger skills it takes to grow the business and skills can be developed. So we assist entrepreneurs to grow from that one to five, from five to 10, from 10 to a hundred million and beyond.

Speaker 1 (12:34): One of the core concepts, I have actually not seen what you’ve done in the second edition yet, but certainly in the first edition, and I know it’s a core concept of your coaching, is this concept of the Dream 100. I wonder if you could describe that. I know that’s a big E for you.

Speaker 2 (12:49): Yes. It’s the fastest, least expensive way to double sales. This one strategy has doubled the sales of more companies than any other. My father invented it working for billionaire, Charlie Munger, co-chairman of Berkshire Hathaway. So he doubled the sales of nine different companies for Charlie all within 12 to 15 months, and several of them multiple years consecutively. So he realized that he had a system for doubling sales, and it went something like this. So he was given a list of 2200 potential prospects, and they said, okay, go cold. Call these 2200. But when he did some research, he realized that only 167 of them purchased 95% of the space. So instead of going after 2200, he led an intensive Dream 100 to just those 167. Now, it being in their face, in their place, in their space, what can we do to provide the most value for them?

(13:41): For him, back then it was direct mail, cold calling and faxing. So twice a month, he was doing direct mail. Four times a month he was cold calling and following up with a fax in an email every once in a while. And he did that for months. For the first four months, he got nothing and talked around the office, what is this? Why is this expert in sales? And he hasn’t generated a thing. But in the sixth month, he closed the largest contract that the industry had ever seen, and then subsequently after that doubled and doubled and doubled. Now. So by definition, there’s always a smaller number of better buyers than there are all buyers. That means that marketing and selling to them is cheaper than marketing and selling to all buyers. And I’ve even, as I look at this, and what you’ll see in the new edition is so many people get, they see the Dream 100 and they go, oh my gosh, how do I do direct mail?

(14:31): How can I make this work with direct mail? And how do I get a hundred people on my list? You’re missing the point if you’re super focused on just those two things, because we have so many marketing mediums in our use today, I show how I used a dream. One, I focused on one potential dream client, and I followed up with them every single day using social media. Every time they post something on social, I’d comment with something of value. Every time they posted another thing, I’d add another piece of value and another comment, and another, for every single day, for three months, I commented on every single thing that this person said, and three months in, they came back to me and said, Hey, I’d like to buy 650 books of the Ultimate Sales Machine. I’m still reaping the benefits of that three months of pigheaded discipline and determination.

(15:19): Today, they bought another thousand books. Actually, it was the CEO of ClickFunnels. So Dave Woodward I did this with. So the point is, it’s about picking who’s one person that could completely change your world, and then can you multiply that even by, you could have four, you could have 10. I’m calling it the Target 12. It doesn’t have to be a hundred, right? The whole point is just to get laser focused and follow up with pigheaded discipline and determination, whichever medium that may be. If you want to use direct mail, that’s great because it will land doing direct mail. But if you want to do it on Instagram dms, that’s where I did it to get that client right. It could be on LinkedIn, it could be on voice drops, on cell phones, or

Speaker 1 (16:03): All of them. Or all of them. Or all of them, right?

Speaker 2 (16:06): Yeah. If you only have a hundred, right? And if you’re doing Facebook ads to them, if you are sending them text messages, if you’re arriving at their door, they’re like, you are everywhere. It’s like, yeah, I’m only everywhere to the select 10, select a hundred. So they’re just amazed, right?

Speaker 1 (16:21): Yeah. And I think what’s so important about that lesson is you can now afford to spend money and time and energy that is going to just swamp what anybody else is doing to that same person, because they’re spraying it 10,000 people at a time.

Speaker 2 (16:39): Absolutely. We had a client, so I’ve created these bootcamps, and a client went through the bootcamp. They went after four people that had already said no to their services. It was a hard, no, I’m definitely not interested. And then he led with an education to those four. After he gave the presentation of an education, he closed $8.4 million worth of sales in just six weeks. Six weeks, and the average sales rep would sell 8 million in an entire year. He did it in six weeks. He targeted his dream. He only needed four, dream four to generate 8.4 million.

Speaker 1 (17:17): So one of the challenges, you kind of alluded to this, we’re so focused on digital right now, you have yourselves firmly in what you’re calling old school processes, but they really, in some ways, some of the old school processes are working better than ever. They

Speaker 2 (17:36): Absolutely, I mean, take what I just did at trade shows, it’s shocking how many people at trade shows have no idea how to have a face-to-face conversation. I’d walk up to a booth and 90% of them had no idea how to start asking questions. I’d ask, what do you do? And they have no idea. They look starstruck. Like What? You’re talking to me in real life? I don’t know what to do. It’s so bizarre how we’ve lost the frameworks and the basic foundational principles. Everyone thought, oh, a billboard. Yeah, that’s brilliant. But then I also had a QR code there so that I could collect people that were taking pictures. Anyways, the first few days they were taking pictures of me. They thought it was hysterical, but then they didn’t realize that now I’m converting them because they’re clicking on that I’m getting their email, and then they’re buying.

(18:25): So it’s blending of the two. My funnel online got me the sales, but me walking around with a four foot billboard on my back in a trade show got the attention and the press, and now I’ve taken video that I got from influencers in the space that were recording me. They thought it was hilarious. And I’m using that in my ads and I’m repurposing it. So there’s so many different ways that I think in person too. I was just at a mastermind with Grant Cardone two weeks ago, and there were 80 people in the room, all of which would’ve loved to talk to Grant Cardone. He walked out of the room and nobody followed him. And I’m looking around the room going, are you kidding me? That’s a billionaire. I’d love to talk to Grant Cardone. Why not? So I run out there and I start to have a dialogue with him. It’s as if we only can communicate through a text or in a social media aspect. He was right there live and breathing, and I handed him the book and I said, you should watch Dear Dad. It’ll make you cry. I’ll send you a book. And he’s like, I will definitely cry from that. I’m sure I will. I love that. Thank you,

Speaker 1 (19:26): Amanda. Thanks for dropping by the Duct Tape Marketing Podcast. Tell people where they can find all the work that you’re doing and certainly get a copy of the new book or the revised, updated, fully updated book.

Speaker 2 (19:37): Yes. Ultimate sales machine.com is where everybody can pick up the book. It’ll give you a bunch of extra bonuses that you wouldn’t get on Amazon. And then if you want to online, I’m a lot of different places, but I spend more of my time on Instagram. My name Amanda Holmes was taken, so I’d use my salsa name Manita Holmes, so you can find me on Instagram at Amanita

Speaker 1 (19:59): Homes. Alright, awesome. Well, great having you back on the show again, and hopefully we’ll run into you again. One of these days out there on the road.

John (00:07): Hello, and welcome to another episode of the Duct Tape Marketing Podcast. This is John Jantsch. My guest today is Kenneth Wenger. He’s an author, research scholar at Toronto Metropolitan University and CTO of Squint AI Inc. His research interests lie in the intersection of humans and machines, ensuring that we build a future based on the responsible use of technology. We’re going to talk about his book today is The Algorithm Plotting Against Us, a Lay Person’s Guide to the Concepts, math and Pitfalls of ai. So Ken, welcome to the show.

Ken (00:44): Hi, John. Thank you very much. Thank you for having me.

John (00:46): So we are going to talk about the book, but I’m just curious, what does Squint AI do?

Ken (00:51): That’s a great question. So Squint AI is a company that we created to do some research and develop a platform that enables us to do AI in a more responsible way. So I’m sure we’re going to get into this, but I touch upon it in the book in many cases as well, where we talk about ai, ethical use of ai, some of the downfalls of ai. And so what we’re doing with Squint is we’re trying to figure out how do we try to create an environment that enables us to use AI in a way that lets us understand when these algorithms are not performing at their best, when they’re making mistakes and so on.

John (01:35): So the title of your book is The Algorithm Plotting Against This? It’s a bit of a provocative question. I mean, obviously I’m sure there are people out there that are saying no and some are saying, well, absolutely. So why ask the question then?

Ken (01:53): Well, because I actually feel like that’s a question that’s being asked by many different people actually with different meaning. So it’s almost the same as the question of is AI posing an existential threat? It’s a question that means different things to different people. So I wanted to get into that in the book and try to do two things. First, offer people the tools to be able to understand that question for themselves and first figure out where they stand in that debate, and then second, also provide my opinion along the way.

John (02:26): And I probably didn’t ask that question as elegantly as I’d like to. I actually think it’s great that you asked the question because ultimately what we’re trying to do is let people come to their own decisions rather than saying, this is true of ai, or this is not true of ai. Right?

Ken (02:40): That’s right, that’s right. And again, especially because it’s a nuanced problem and it means different things to different people.

John (02:48): So this is a really hard question, but I’m going to ask you where are we really in the continuum of ai? I mean, people who have been on this topic for many years realize it’s been built many things that we use every day and take for granted. Obviously chat, GPT brought on a whole nother spectrum of people that now at least have a talking vocabulary of what it is. But I remember I’ve, I’ve had my own business 30 years. I mean, we didn’t have the web, we didn’t have websites, we didn’t have mobile devices that certainly now play a part, but I remember as each of those came along, people were like, oh, we’re doomed. It’s over. So currently there’s a lot of that type of language surrounding ai, but where do you think we really are in the continuum of the evolution?

Ken (03:37): That’s a great question because I think we are actually very early on. I think we’ve made remarkable progress in a very short period of time, but I think it’s still, we’re at the very early stages. If you think of ai, where we are right now, we were a decade ago, we’ve made some progress, but I think fundamentally at a scientific level, we’ve only started to scratch the surface. I’ll give you some examples. So initially, the first models that were great at really giving us some proof that this new way of posing questions, neural networks, essentially they’re very complex equations. If you use GPUs to run these complex equations, then we can actually solve pretty complex problems. That’s something we realized around 2012 and then after around 2017, so between 2012 and 2017, progress was very linear. New models were created, the new ideas were proposed, but things scaled and progressed very linearly.

(04:39): But after 2017, with the introduction of the model that’s called the Transformer, which is the base architecture behind chat, GPT and all these large language models, we had another kind of realization. That’s when we realized that if you take those models and you scale them up and you scale them up in terms of the size of the model and the size of the dataset that we used to train them, they get exponentially better. That’s when we got to the point where we are today where we realized that just by scaling them, again, we haven’t done anything fundamentally different since 2017. All we’ve done is increase the size of the model, increase the size of the dataset, and they’re getting exponentially better.

John (05:18): So multiplication rather than addition?

Ken (05:22): Well, yes, exactly. Yeah. So the progress has been exponential, not only in linear trajectory, but I again, the fact that we haven’t changed much fundamentally in these models, that’s going to taper off very soon. It’s my expectation. And now where are we on the timeline, which was your original question. I think if you think about what the models are doing today, they’re doing very element. They’re doing very simple statistics. Essentially the idea of these models being called artificial intelligence, I think it’s a bit of a misnomer. I agree, and it leads to some of the questions that people have because there isn’t much deep intelligence going on. It’s just statistical modeling and very simple at that. And then where we are going from here and what I hope the future is, that’s when we start. I think the things are going to change dramatically when we start getting models that are able not just to do simple statistics, but are able to understand the context of what it is they’re trying to achieve and are able to understand the right answer as well as the wrong answer. So for example, they’re able to know when they’re talking about things they know and when they’re kind of skirting around this gray area of things they don’t really know about. Does that make sense? Yeah,

John (06:43): Absolutely. I mean, I totally agree with you on artificial intelligence. I’ve actually been calling it ia. I think it’s more of informed automation is kind of how I look at it, at least in my work. Do you see a day where prompts asking questions, that’s kind of the street use, if you will, of AI for a lot of people. Do you see a day where it starts asking you questions back? Why would you want to know that? Or what are you trying to achieve by asking this question?

Ken (07:10): Yeah, so the simple answer is yes, I definitely do, and I think that’s part of what achieving a higher level intelligence would be like. It’s when they’re not just doing your bidding, it’s not just a tool, but they kind of have their own purpose that they’re trying to achieve. And so that’s when you would see things like questions essentially arise from the system is when they have a goal they want to get at and then they figure out a plan to get to that goal. That’s when you can see emergence of things like questions to you. I don’t think we’re there yet, but I think it’s certainly possible.

John (07:44): But that’s the sci-fi version too, right? I mean where people start saying the movies, it’s like, no, Ken, you don’t get to know that information yet. I’ll decide when you can know that.

Ken (07:56): Well, you’re right. The way you asked the question was more like, is it possible in principle? I think absolutely, yes. Do we want that? I mean, I don’t know. I guess that’s part of it depends on what use case we’re thinking about, but from a first principle’s perspective, yeah, it is certainly possible to get a model to do

John (08:17): That. So I do think there are scores and scores of people. There are only understanding of AI as I go to this place where it has a box and I type in a question and it spits out an answer. Since you have both layperson and math in the title, could you give us the layperson’s version of how it does that?

Ken (08:37): Yeah, absolutely. Well, at least I’ll try. Lemme put it that way. A few moments ago when I mentioned that these models, essentially what they are, they’re very simple statistical models. That itself, that phrase itself a little bit, it’s controversial because at the end of the day, we don’t what kind of intelligence we have. So if you think about our intelligence, we don’t know whether at some level we are also a statistical model. However, what I mean by AI today in large language models like chat, GPT being simple statistical models, what I mean by that is that they’re performing a very simple task. So if you think of G pt, what they’re doing is they are trying essentially to predict the next best word in a sequence. That’s all they’re doing. And the way they’re doing that is that they calculate what are called probability distribution.

(09:35): So basically for any word in a prompt or in a corpus of text, they calculate the probability that word belongs in that sequence, and then they choose the next word with the highest probability of being correct there. Now, that is a very simple model in the following sense. If you think about how we communicate, we are having a conversation right now. I think when you ask me a question, I pause and I think about what I’m about to say. So I have a model of the world and I have a purpose in that conversation. I come up with the idea of what I want to respond, and then I use my ability to produce words and to sound them out to communicate that with you. It might be possible that I have a system in my brain that works very similar to a large language model in the sense that as soon as I start saying words, the next word that I’m about to say is one that is most likely to be correct, given the words that I just said. It’s very possible. That’s true. However, what’s different is that at least I already have a plan of what I’m about to say in some latent space. I have already encoded in some form what I want to get across, how I say it, that the ability to produce those words might be very similar to a large language model, but the difference is that a large language model is trying to figure out what it’s going to say as well as coming up with those words at the same time.

(11:08): Does that make sense? So it’s a bit like they’re rambling and sometimes if they talk for too long, they ramble in a nonsense territory because they don’t know what they’re going to say until they say it. So that’s a very fundamental difference. Yeah,

John (11:24): I have certainly seen some output that is pretty interesting along those lines. But as I heard you talk about that, I mean, in a lot of ways that’s what we’re doing is we’re querying a database of what we’ve been taught are the words that we know in addition to the concepts that we’ve studied and are able to articulate. I mean, in some ways we’re querying that to me, prompting or me asking you a question as well, I mean it works similar. Would you say

Ken (11:51): The aspect of prompting question and then answering it, it’s similar, but what is different is the concept that you’re trying to describe. So again, when you ask me a question, I think about it and I come up with, so again, I have a world model that works so far for me to get me through life, and that world model lets me understand different concepts in different ways. And when I’m about to answer your question, I think about it, I formulate a response, and then I figure out a way to communicate that with you. That step is missing from what these language models are doing. They’re getting a prompt, but there is no step in which they are formulating a response with some goal, some purpose. They are essentially getting a text and they’re trying to generate a sequence of words that are being figured out as they’re being produced, right? There’s no ultimate plan. So that’s a very fundamental difference. I

John (12:57): Do want to come to what the future holds, but I want to dwell on a couple things that you dive into in the book. What are the, other than the fear that the media spreads, what are the real and obvious pitfalls of relying on ai?

Ken (13:18): I think the biggest issue and the real motivator for me when I started writing the book is

(13:28): That it is a powerful tool for two reasons. It’s very easy to use, seemingly. You can spend a weekend learning python, you can write a few lines and you can transform, you can analyze, you can parse data that you couldn’t before just by using a library. So you don’t really have to understand what you’re doing and you can get some result that looks useful, but hidden in that process. The fact that you can take data, a large amounts of data, modify it in some way and get a response, get some result without understanding what’s happening in the middle, has huge repercussions for misunderstanding the results that you’re getting. And then if you’re using these tools in the world in a way that can affect other people. For example, let’s say you work in a financial institution and you come up with a model to figure out who you should give some approval for credit for a credit line and who you shouldn’t.

(14:41): Now, right now, banks have their own models, but if you take the AI out of it, traditionally those models are taught through by statisticians, and they may get things wrong once in a while, but at least they have a big picture of what it means to analyze data, biasing the data, what are the repercussions of bias in the data? How do you get rid of all these things or things that a good statisticians should be trained to do? But now, if you remove the statisticians, because anybody can use a model to analyze data and get some prediction, then what happens is you end up denying and approving credit lines for people with repercussions that could be driven by very negative bias in the data. It could affect a certain section of the population negatively. Maybe there’s some people that can’t get a credit line anymore just because they live in a particular neighborhood, or there’s many reasons why this could be a problem.

John (15:37): But wasn’t that a factor previously? I mean, certainly neighborhoods are considered as part of the, even in the analog models, I think.

Ken (15:46): Yeah, absolutely. So like I said, we always had a problem with bias, right, in the data, but traditionally, you would hope, so two things would happen. First, you would hope that whoever comes up with a model, just because it’s a complex problem, they have to have some statistical training, right? And an ethical statistician would have to consider how to deal with the bias in the data. So that’s number one. Number two, the problem that we have right now is that first of all, you don’t need to have that decision. You can just use a model without understanding what’s happening. And then what’s worse is that with these models, we can’t actually understand how the, or it’s very difficult traditionally to understand how the model arrived at a prediction. So if you get denied either a credit line or as I talk about in the book bail, for example, in a court case, it’s very difficult to argue, well, why was I denied this thing? And then if you go through the process of auditing it again with the traditional approach where you have a statistician, you can always ask us, so how did you model this? Why was this person denied this particular case in an audit with a neural network, for example, that becomes a lot more complicated.

John (17:00): So what you’re saying, one of the initial problems is that people are relying on the output, the data. I mean, even I use it in a very simple way. I run a marketing company and we use it a lot of times to give us copy ideas, give us headline ideas for things. So I don’t really feel like there’s any real danger in there other than maybe sounding like everybody else in your copy. But you’re saying that as people start relying on these to make decisions that are supposed to be informed, a lot of times predictions are wrong.

Ken (17:37): And so the answer is yes. Now, there is two reasons for that. And by the way, let me just go back to say that there are use cases where, of course, you have to think about this as a spectrum. There are cases where the repercussions of getting something wrong is worse than other cases. So as you say, if you’re trying to generate some copy and if it’s nonsensical, then you just go ahead and change it. And at the end of the day, you’re probably going to review it anyway. So that is probably a lower cost, the cost of a mistake that will be lower than in the case of using a model in a judicial process, for example. Now, with respect to the fact that this model sometimes make mistakes, the reason for that is that the way these models actually work is that, and the part that can be deceiving is that they tend to work really well for areas in the data that they understand very well.

(18:36): So if you think of a dataset, right? So they’re trained using a dataset or most of the data in that dataset, they’re going to be able to model it really well. And so that’s why you get models that perform, let’s say, 90% accurate on a particular dataset. The problem is that for the 10% where they’re not able to model really well, the mistakes there are remarkable and in a way that a human would not be able to make those mistakes. So what happens in those cases that first of all, when we’re training these models that we get, we say, well, we get 10% error rate in this particular dataset. The one issue is that when you take that into production, you don’t know that the incidence rate of those errors are going to be the same in the real world. You may end up being in a situation where you get those data points that lead to errors at a much higher rate than you did in your dataset, just one problem.

(19:30): The second problem is that if your use case, if your production application, it’s such where a mistake could be costly, like let’s say in a medical use case or in self-driving, when you have to go back and explain why you got something wrong, why the model got something wrong, and it is just so bizarrely different from what a human would get wrong, that’s one of the fundamental reasons why we don’t have these systems being deployed across safety critical domains today. And by the way, that’s one of the fundamental reasons why we created Squint, is to tackle specifically those problems, is to figure out how can we create a set of models or a system that’s able to understand specifically when models are getting things right and when they’re getting things wrong at runtime. Because I really think it’s one of the fundamental reasons why we haven’t advanced as much as we should have at this point. When models work really well, when they’re able to model the data, well then they work great. But for the cases where they can’t model that section of the data, the mistakes are just unbelievable. It’s things that humans would never make, those kinds of things.

John (20:40): Yeah, and obviously that’s certainly going to, that has to be solved before anybody’s going to trust sending a man’s spacecraft guided by AI or something, right? I mean, when human life is at risk, you’ve got to have trust. And so if you can’t trust that decision-making, that’s certainly going to keep people from employing the technology, I suppose,

Ken (21:04): Or using them, for example, to help in, as I was saying, in medical domains, for example, cancer diagnosis. If you want a model to be able to detect certain types of cancer given let’s say biopsy scans, you want to be able to trust the model. Now, any model, it’s going to make mistakes. Nothing is ever perfect, but you want two things to happen. First, you want to be able to minimize the types of mistakes that the model can make, and you need to have some indication that the quality of the prediction of the model isn’t great. You don’t have that. And second, once a mistake happens, you have to be able to defend that the reason the mistake happened is because the quality of the data was such that even a human couldn’t do better. We can’t have models make mistakes that a human doctor would look at and say, well, this is clearly incorrect.

John (21:54): Yeah, yeah, absolutely. Well, Ken, I want to thank you for taking a moment to stop by the Duct Tape Marketing Podcast. You want to tell people where they can connect with you if you’d like, and then obviously where they can pick up a copy of is the Algorithm Plotting Against Us?

Ken (22:09): Absolutely. Thank you very much, first of all, for having me. It was a great conversation. So yeah, you can reach me on LinkedIn and for the copy, for a copy of the book, you can get it both from Amazon as well as from our publisher website. It’s called the working fires.org.

John (22:22): Awesome. Well, again, thanks for stopping by. Great conversation. Hopefully maybe we’ll run into you one of these days out there on the road. Thank you.