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May 18, 2018
Everybody has the same 24 hours. Some people might have a little better IQ, but it’s all about how much better you use your time, your opportunity, your access, your dollars, and your intellectual capital. Jay Abraham of The Abraham Group is a preeminent business executive coach who has influenced tens of thousands of businesses and has generated billions of dollars of revenue. Jay shares that over the course of his career, instead of going vertical, he’s gone horizontal. He’s gone from industry to industry learning and borrowing and carrying forward the knowledge of different strategies, business models, distribution models, marketing approaches, value creation, ancillaries, and all these ideas and approaches. Jay shares working strategically, getting educated, and staying relevant have been the most important things that have helped him stay on top of his game.
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Listen to the podcast here:
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Working Strategically: Making Better Use Of Your Time with Jay Abraham
We have a very special guest. We have none other than the Jay Abraham. In case you’ve been living under a rock for the last several decades, Jay has been the preeminent business executive coach, guru, whatever term you want to apply that is laudatory, it applies to Jay. He’s influenced tens of thousands of businesses. He’s generated billions and billions of dollars of revenue. Folks like Mark Cuban, Daymond John, Gary Vaynerchuk, Tim Ferriss, Stephen R. Covey, Harvey Mackay, literally the thought leaders and luminaries of our time, all refer to Jay as their mentor. Jay, thank you so much for joining us.
It’s my pleasure. I’m honored to have a forum to your audience.
I started hearing about Jay 35 years ago and I know he was around long before that. Just not to date him or talk about how many years you’ve been doing this, but it’s been quite a few.
I was talking to somebody about supernovas and I’m not criticizing anybody, but I said if you asked me who the real estate guy was, the options guy, the biz op guy, the personal development, other than Tony, the health guy or woman in the ’70s, ’80s, ’90s and 2000s, they’re not the same as now. People don’t realize that we all have the Andy Warhol, the fifteen minutes. You and I have endured. We’re probably unique animals in a world of basically a very short-lived phenomena.
That’s maybe a good place to start with this, Jay, because one of the things that I have enjoyed myself is morphing and surviving. I spent and still have a little bit of dabbling in this world of As Seen on TV, but TV viewership dropped by 50%. I’ve had to make a run. As I say, follow the eyeballs has been one of my mantras now, “They used to be on TV and now it’s expensive to get to those, but now you can get them on Facebook and Instagram and YouTube and all that. What has been would you say one of the core drivers for you as you’re still out there moving and shaking with a lot of the new players out there? You’re a genius and creative. Is that what’s kept you alive through all of the iterations of distribution?
I’ll tell you what I think my ability to give benefit, whatever, my source energy is I started out being hopelessly curious and never staying in one in one industry. Over the course of my career, I’ve done over a thousand industries. When you keep going to new industries and you learn and you borrow and you carried forward the knowledge of all these different strategies, business models, distribution models, marketing approaches, value creation, ancillaries, it’s like the one-eyed in the land of the blind. Most people in a given industry plus or minus 20% 30%, they’re all doing the same thing. They’re all following the herd and they’re only going to be incrementally better. What I always found was ideas and approaches common as dirt from three or four other industries that aren’t known in an industry, if you combine them into hybrids, which has been my gift and you introduced them in an industry that doesn’t do it that way, it kills it. I didn’t go vertical, I went horizontal.
I started in real commerce. I got very deep in information marketing. I did Entrepreneur Magazine then I did 30 or 40 financial newsletters and then I morphed into more frankly a brick and mortar businesses and then I went into training and when I did training, I never just taught. Every time I taught, I would ask the audience to come to the mic and share actual elements they were doing of those, whether they learned them for me or not. I got educated and I would learn 90 or 100 different ways people were doing it and I had a mind that would absorb it. I kept traveling and pushing myself because I realized that to stay relevant, you have to have advantage and the advantage can be technological. I’m not technologically sophisticated, but I probably understand very frankly, business building with low-risk and investment better than a majority of people. Let’s not say everybody, but a majority of people.
Working Strategically: Breakthrough makes up for a lot of breakdowns as long as you don’t piss away too much money.
You mentioned how when you get involved with so many industries, you learn something from each one and it helps in the overall picture. I joined the Board of a company. Li Ka-shing who’s a very wealthy guy over in Asia, worth about $30 billion, he’s had two of his people from Horizon Ventures on this board and it’s like all of a sudden, you’re networking inside that umbrella then. You joined me, “How would you like to be on Facebook’s Board of Directors?” There’s an advantage to being involved with certain industries and more industries and more boards and all of that. As long as you’ve got to be careful not to get an overload. That’s important on my side. I’ve actually jumped off a few boards recently because it wasn’t doing enough for me and I wasn’t able to contribute enough to them and just said, “Let me just bow out. Thank you.” Sometimes I just have to just say, “I don’t want any more equity or whatever.” There’s not enough of an upside from that time.
This is not arrogant, it’s clinical. I’ve helped about 300 of the world’s top experts. I’m very blessed to have done it, but none of them came to me for help with their methodology. They came for help to articulate it better, value it better, comparatively contrast, denominate it better, but I had to learn it first. That is outrageous education, this compressed education. One of the things I did was the Deming Organization and most of the people under 50 wouldn’t even know who Deming was, but he’s a father of process improvement, optimization. Highest and best use theory outside of real estate. Most people don’t understand that everybody has the same 24 hours. Some people might have a little better IQ, but it’s all about how much better you use your time, your opportunity, your access, your dollars, your intellectual capital. Most people don’t have a broad enough context of optionality or possibility or alternative to know how to use higher, better, safer. I’ve been very blessed to see so damn many alternatives. Most people don’t have the spectrum of understanding of higher performance possibilities.
I have to just ask because I’ve done stuff pretty much I consider almost everywhere in the world, I’ve never been to Vietnam. What’s happening down there?
It’s growing, it’s exploding. There’s a lot of wealth. A lot of the Chinese is moving over there. I tend to attract a very interesting entrepreneur, not as many corporate, but the people that are attracted to me are driven inherently to try to create value, but they don’t know what it means. I’ve been very popular in Asia, China, I’m popular. In Japan, I’m popular, Singapore, Malaysia, now Vietnam but for a reason. Their educational system is rote training, so it’s memorization. I say, “What’s ten divided by five plus twelve divided by twenty times 100 plus 26.” They don’t have critical thinking. They don’t have the strategic thinking, they have linear thinking. If you say this is to this as this is to what they don’t know, but when you connect the dots they come alive. It’s very promising market. I’ll tell you what the most touching thing about it, it’s a little weird. We have our Vietnam War Memorial. It’s quite profound when you go there, they have theirs and it’s equally as profound. When you travel outside your industry, that’s my gig. It opens your mind when you travel outside the country, you see so many different realities. What I find in Asia is they’re hungry. A lot of our entrepreneurs, they’re more aspirant than their performance. In Asia, three families will live in an apartment. They’ll work 22 hours. The only negative is they don’t work strategically. They will outwork us because I think they have greater drive than a lot of us do. Frankly. You may disagree.
I agree. I speak a lot of places. They have a higher level of respect for people like you and me. I’m sure when you get done speaking, you probably get mobbed by the crowds over there.
I’m very popular, let’s put it that way.
It’s very respectful. They just have a way about them that I find very, very friendly and willing to listen. They love the American success to come over to their market.
When you understand this, politically there’s a lot of a delicacy but if you look at mindset, when you are addressing a mind that wants to absorb and is trying intensely to grasp and wants very badly to do something with it versus an audience that is wanting unintentionally intellectual entertainment, it’s very different. It’s harder because it’s through translation. If you can engage and if you can connect, it’s very satisfying. I’ve done Italy, I’ve done Paris and I’ve done all over the world and as long as your intent is correct and it’s to transfer, not just ideas but transactional knowledge that can be actuated and you care about them and you regard them, and you respect them, they have their dignity and relevancy, they love you.
[Tweet “The key is you always want to be able to come back and market another day.”]
Jay, what are some of the mistakes you see entrepreneurs are making now that your strategies could help them avoid or profit it from?
First of all, most of them have single-source revenue. It doesn’t matter what it is, they put all their eggs in one basket instead of utilizing the leverage. I worked all my life on the geometry of a business. Trying to figure out not how to grow it incrementally because that’s slow and arduous, but how to grow it internally, at least for profit status standpoint. I don’t care much about revenue but revenue can be a driver. I think most people first of all have a single source, they’re tactical, not strategic. They don’t focus on falling in love with the impact they can make with the purchaser, with the client. They don’t understand what value creation means to the other side. They don’t try to relate in language and actions so that the market resonates with them. They don’t understand how to delineate, how to demonstrate, how to convey advantage. They don’t understand how expensive it is to acquire a buyer and how many other ways they can monetize it irrespective of what their main business is. They don’t utilize their marketing effectively. They don’t use their relationships well. I could go on and on. Kevin, do you disagree?
No, I loved it. People ask me what are some of my biggest mistakes. You just named several. As a young entrepreneur, I’ll go back to one of the biggest things, problems I made. I had eight or nine products on the air at one time. We were doing about $100 million. We had diversified income, but all of it going through one merchant account. We had one product that had a big problem and so the returns and the chargebacks were massive on this one item. The bank grabbed $2 million out of my bank account that day. They determined that I’ve blown some fuse internally that I’d gone over 1% chargeback or something. I’m missing $2 million out of my bank account, which was all the cash that I had.
I had the same thing. We were the biggest account for my bank when I was in the publishing business. One of our team members let a friend of theirs run a weight loss deal that I didn’t even know about through our credit card. It was $20,000 but it was terrible complaints and they froze all our money for six months. People don’t realize that. I don’t care how successful you appear to be on the outside, if your cashflow stops flowing, everything stops. I learned how to diversify strategically and I think if you do so, the key is you always want to be able to come back and market another day, don’t you think?
In this world, it’s a little different than it used to be. You can ship all over the world. In the old days, I remember just even inside Europe, we had to get clearance to ship from the UK into Germany and to go through customs. It was crazy some of the stuff that we had to learn over those days. It’s fun to hang out and talk some of the old stuff. I want to go back. Do you remember what was one of your first big grand slams, one of your first big hits back in the day?
I had two that are notable because there are very good lessons behind them. The first one I had was Icy Hot the product is in stores. We had no marketing capital, but we learned that every time we’ve got ten first time buyers at $3, we’ve got eight people to buy every month forever until there was a cure for arthritis and that was not it. Half of the eight would buy at least another product every month and that wasn’t it. Half of the four would buy twice a year bulk, and what happened was every time we’ve got ten buyers, we made $50 net per client per year forever. With that, I was able to go to a thousand radio stations, television stations, publications, media, and do PO, per order, and we were the first ones that gave away more than 100% and they thought we were crazy.
We let them keep all the money and we gave them another $0.45 and we could have given $0.40, but we created 500,000 buyers. In the first year, we’ve got $27 million of no cost advertising, which would have been about $150 million. We forced retail distribution. There are two interesting stories. It became a consumer product instead of a mail order product. It was purchased for I think, $60 million by GD Searle that was purchased, purchased by someone else. GD Searle was a big Chicago pharmaceutical company, but here’s what was hilarious. Their mindset was purely consumer. All we had to do was sign a non-compete to arthritis. They didn’t want the distribution channel. They didn’t want the thousand TV radio stations. They didn’t want the 500,000 buyers that we’re generating all and we just went into another geriatric product line and started all over again. That was big one.
Entrepreneur Magazine was the second big one. When we started nobody even knew what entrepreneur meant. We had to send out mailings that had the Webster’s dictionary explanation, the phonetic pronunciation, but what made it successful? It started out, it wasn’t a magazine. It was a $100 a month membership-based organization that you’ve got tchotchke. You’ve got a plaque, you’ve got a card, you’ve got some discounts. What you’ve got was a magazine-formatted publication every month that had about a 22 to 30-page overview of an emerging small business opportunity. Tune-up shops, yogurt shops and it would give you all the perspectives, who to go to the franchise, do it yourself, risk, investment, yield, asset value. Every month when the issue was outdated, it would just go into archive. I took all the archives. We added boilerplate, we turned them into startup manuals. We sold 300,000 of them the first year for $39 and then we took them and we reconstituted them by category. Low-investment, food service, automotive, asset building and that’s what made that thing go. We grew at about a 900% in a year. Those were my two big starts.
Working Strategically: Success is being able to go from failure to failure without the loss of enthusiasm.
Was that in the Chase Revel days? Do you remember Chase?
That was Chase Revel. He was the guy that did it and he was hilarious.
He was a bank robber, remember? Didn’t he have a history? He walked into a bank with a note. I remember the early days of Chase Revel.
He had a PR guy that had been the Participant, guy for Capitol Records for the Beatles. The guy got all these cities, the mayors would give him the key because it was entrepreneurship, the key to the city. Then after he got great visibility, somebody did an investigation and turned out that wasn’t even his name and he had a storied background.
Is he still alive by the way?
I heard he was living on a big yacht in Boca. I haven’t talked to him for ten years. He started out with a very simple headline, “Who’s Really Making a Bundle?” Then we created another one, “Confessions of a Hard-Nosed Millionaire.”
I don’t tell the story very often, but the reason I know about Chase is when he sold the magazine or I don’t know if went into bankruptcy or something.
It did. It went into eleven.
The news guys called me.
I wasn’t there by the way, I grew it. What happened was they doubled and redoubled their overhead because they decided they were a New York Publishing Company.
They were in Sepulveda Boulevard in Los Angeles I went in there. They put me on the cover.
It was upstairs, remember that?
I walked in there. They were doing a story on me and I’m seeing people buy these manuals. I was in the franchising business, “We should set one of these up everywhere so I got the rights to joint venture with Entrepreneur to start the business stores.” We opened up 30 of them on a licensing basis around the country.
At the time that was a great idea.
It was. We had 30 Entrepreneur Magazine start a business stores around the country that I own equity in with Entrepreneur.
Then they changed the model and whoever bought it, you’ve got to give him credit because it’s endured and it has a position in the marketplace. In the beginning it was a hybrid. I’m doing this with embarrassment. I would go to some of his trade shows and they were a little bit indiscriminate. They would have people trying to sell distributorships on a chicken and that would read fortunes. A live chicken in a booth and I go, “Oh my God.” Here’s what was cool. He used to do a conferences and conventions where it was per event. You paid $39 to go to a different event. We started recording them and combining them and turning all those sessions into products. People don’t realize how valuable redeploying an asset is. There’s more money and letting somebody else sink the capital and then getting control of the reuse rights.
Those manuals, I think 70% of the manuals were boilerplate and then they had the tailored portion to the specific industry. It was amazing business because that’s how they were.
For the genre it was incredible. I’ll tell you what was hard. You’ll laugh about this. I have two stories and then you can go anywhere you want or we can stop. When I started, I had two different requirements. I had to create members all the time to serve as the overhead of producing the manuals. Then we would make all our money selling the catalogs. I remember when I first got there, it was hilarious. They told me they had some huge number of members. Chase was out of the office for a couple of weeks that I had that the subscription person coming. The numbers were about half. I was a little shocked because I’d moved from a good job in Santa Barbara.
[Tweet “If you don’t keep expanding and uncovering opportunities or new paths, you’ll never find breakthroughs.”]
Secondly, I looked at what they were selling and this is where a strategic critical thinking comes in. This is what people really don’t understand if they’re in the catalog business. They were selling certain things in a catalog. They would allocate the same relative space to everything not looking at what was selling ten times more, nor would they even put the high sellers upfront. I look at it and I thought, “This little square, that’s three quarters away in the back is generating 80% of your revenue. Why in God’s name would you put it first and give it two pages?” They go, “We never thought about that.”
That was the early days of marketing. I’ve known you a lot of years, but we’ve got to get on a podcast and realized we’d go back to we were both partners of some sorts in Entrepreneur Magazine. We got about three or four minutes left, are you now into the world of digital?
Yes, and no. I’m not very good technologically, but I help a lot of technology people because I know if you tell me what it’s supposed to do, I can do it. I’m a senior adviser to the Kairos Society. They usually have eight out of 30 on the Forbes 30 Under 30. I help a bunch of startups and help a bunch of technology companies. I helped the company that Google turns to when they have a $500,000 to $1 million a month client. They want them to spend more by getting more ROI. The company that does all the technical stuff, I help them not with the technical stuff, but with articulating their value to the market. We give greater things away because most people can’t afford me and I’m not a big product seller anymore. I’m very involved in real commerce of all kinds all over the world.
We could probably do a podcast a week with Jay Abraham. Finish up, Seth, with last questions. I love talking to Jay. I’m sure I’ll see at a conference coming up.
I hope so. We hope we get a chance to spend some time together because we do have a lot of historic commonality we don’t even realize.
Jay, thank you so much for your time. We know how valuable that is. We’re incredibly grateful for your participation. For our audience who are fascinated as we are with all things Jay Abraham, where is the place that you want us to send them to where they consume the most content of Jay?
The best thing is we have a great URL. It’s Abraham.com/50Shades. There’s no opt-in and doesn’t sell anything. It’s got 800 hours of better content very frankly than most people sell. It’s how I can be a benefactor to entrepreneurs who can’t afford me. It’s pretty cool stuff and we don’t try to monetize it. It helped a lot of people and you give that out. It’s great. I enjoyed both of you and Kevin just says a remark, I’ve admired your work and your diversity and your passion and your breakthrough thinking for as many years as I have been doing it. You stay relevant and you stay on the cutting edge, you stay vibrant and you stay committed hopelessly to uncovering things. That’s what turns us on, don’t you?
Sometimes it’s hopeless but you’ve got to keep plugging. I watched a movie and this has been a line that I’ve used for years. It was Winston Churchill said that, “Success is being able to go from failure to failure without the loss of enthusiasm.” That sums up my life.
Here’s what people don’t realize. If you don’t keep expanding and uncovering opportunities or new paths, you’ll never find breakthroughs. Breakthrough makes up for a lot of breakdowns as long as you don’t piss away too much money. It’s a pleasure catching up with you again. It’s my honor.
Thank you. See you soon.
Links mentioned:
About Jay Abraham
tAs Founder and CEO of Abraham Group, Inc. (Los Angeles, California), Jay has spent his entire career solving problems and fixing businesses. He has significantly increased the bottom lines of over 10,000 clients in more than 400 industries, and over 7,200 sub industries, worldwide. Jay has dealt with virtually every type of business. He has studied, and solved, almost every type of business question, challenge and opportunity.
Jay has an uncanny ability to increase business income, wealth and success. He uncovers hidden assets, overlooked opportunities and undervalued possibilities. This skill set has captured the attention and respect of CEOs, best-selling authors, entrepreneurs and marketing experts. Jay’s clients range from business royalty to small business owners. But they all have one thing in common – virtually all of them have profited greatly from Jay’s expertise. Many clients acknowledge that Jay’s efforts and ideas have lead to millions of dollars of profit increase.
