How to Get an Online Coaching Business to $1M/Month

[00:00:00]So, I do what you do, but for the Chinese entrepreneur nerds.

[00:00:04]I had 75 members join in within the first week or so, charging $1,000 each. And my >> One time, monthly, one time?

[00:00:13]>> I'm doing a founding members stage, so it's one sale for life. And then we do $1,000 >> So, one time lifetime. Okay. Got it.

[00:00:20]>> I got two questions. The first one is I really want to hit the 1 million monthly rev targets on school as soon as I can.

[00:00:28]What do I need to do?

[00:00:29]>> You're right now at 75k total, correct?

[00:00:32]>> Yes.

[00:00:32]>> Okay. This is a bit of a, you know, okay.

[00:00:35]Um Okay. So, what did you do to get your first set of customers?

[00:00:42]>> I have a book club. I have about 20,000 subscribers and I summarized your three books in Chinese.

[00:00:50]And uh >> [clears throat] >> So, what am I doing? I have to be like, write another book. I don't have to make some money.

[00:01:00]Dude. [laughter] So, >> I like how all the money comes from >> [clears throat] >> Okay.

[00:01:13]What What is What is the consistent value that you provide to people in the community?

[00:01:18]>> So, I've I've done this for many years and I've made No, not summarizing your book.

[00:01:24]>> Okay.

[00:01:25]>> [laughter] >> He's like, I take your content, too.

[00:01:28]That's why >> Yeah, I've I've been a small time KOL in Australia for the Chinese community.

[00:01:36]>> KOL?

[00:01:37]>> Key opinion leaders.

[00:01:39]>> Okay, got it. So, >> YouTube.

[00:01:41]>> Okay.

[00:01:41]>> Um and so, I have a group of audience and I've made some okay money doing content.

[00:01:46]>> Who's the audience?

[00:01:48]>> Overseas Chinese entrepreneurs who are starting or are making some money.

[00:01:53]>> Okay, got it.

[00:01:55]So, So, the thing with memberships, so this is going to be Who here has in recurring revenue business?

[00:02:00]Okay, well then this will I'm going to go a little deeper on this cuz >> [clears throat] >> it's probably valuable for a handful of you. So, in order to make a recurring revenue business actually recurring, so one of the big mistakes in the education business, which is fundamentally what you're in right now, um is that people will take something that is inherently valuable and try to bill for it like it's consumable.

[00:02:25]So, education has super high one-time value.

[00:02:31]Right? The day before you know how to advertise, advertising is unbelievably valuable. The day after you know how to advertise, why would I pay for something I already know how to do? It goes from huge to zero.

[00:02:43]That is the problem with education in general, which is that everybody who has an education business wants to build continuity. Continuity is very hard to build if you purely have education as the primary value proposition.

[00:02:53]In a school community or any kind of recurring revenue business, you need to create or at least demonstrate consumable value. And so I'll give you a couple examples of this.

[00:03:03]So, there's a a super low churn community that does 3D printing in school. What they do is they find the highest the hottest trending items and then they create the 3D blueprint I don't know how this stuff works, but like whatever 3D blueprints and then every week they upload those blueprints to their their community. And so because it's trending, it's new, it's consumable. You consume this week's things and next week's the trends are different, right?

[00:03:28]News in and of itself, news is consumable. Last week's news is no longer valuable, this week's news is, which is why news subscriptions do work, right?

[00:03:36]Um Different example, there was a real estate business that was on there that did wholesaling stuff. And what they did was they would find um all the hot deals in an area and they would pre-vet them and then they would do it with with calculations or whatever and say these are all the hot list, and so every week in every local market, people in their community would go see the building, and if they liked it, they already knew it was kind of pre-vetted, and so that creates this consistent thing that gets consumed, and then next week there'll be new deals and some of those deals are gone. And so, what you have to do, like GymLaunch, we made new ads that we tested every single month that we would then give to the gym owners. So, rather than them spending money, wasting money on production, editing, and then the most expensive part, testing ads that don't work, we would already pre-film, test, whatever, and then we'd hand them only the winners, and then they'd be able to take winning ads and then run them. But, what do you need next month? More winning ads. And so, that's what gave GymLaunch the super high margins that it had, um, and kept it sticky, cuz it was media functionally rather than quote education. And so, we sold the box, which is like, this is the GymLaunch system, this is how you run the gym, this is the price point, the sales process. Once you teach that part, once you know the sales process, you know the script and you know the bundles, you have the white label stuff, [snorts] you got it. It's it's zero value now.

[00:04:50]So, what we do is we want to sell, excuse me, we want to sell like if you have inputs, you've got black box, and then you've got output being money, right?

[00:05:04]This is your one-time thing that's very valuable, but you can only charge for it once.

[00:05:10]This is much smaller, but you charge for it on a recurring basis.

[00:05:15]You sell the inputs to the machine.

[00:05:21]So, with your business, you'll probably have to like, unless [snorts] you're niched down, which is why niching is so valuable, because you can actually create the machine and then sell the inputs. Like, I couldn't make ads for a hundred different businesses because they're all different, right? I can't test a hundred different businesses.

[00:05:40]And so, if you have a super, uh, super new or beginner network, you teach them one, two, or three different business models that work, and then you sell the inputs same way.

[00:05:51]If you have medium and larger business owners, it has to be about something different, which is probably going to be network, it's going to be access, um it's going to be, you know, group negotiated discounts that you can do on behalf of everyone, and that is typically valued much less than something that's one time that's going to immediately kind of make them more.

[00:06:09]And so, sometimes, I think this is where a lot of entrepreneurs who are in this space make mistakes is that there needs to be often times a very big discrepancy between what you charge that one time versus the true willingness to pay for the small recurring revenue component of the business. That's okay, provided it's sticky.

[00:06:25]Right? Cuz if you charge, you know, $10,000 up front, and then it's $500 a month after that, it probably would be relatively sticky if someone's willing to pay 10 and it's $500 a month um thereafter, as long as the $500 a month was still like the 10,000 buys you some time cuz like I don't want to cancel this $50 a month, um but as long as the ongoing value surpasses the five usually by three or four X, then then you're good to go. So, I would really just back into like, how can I provide value to all these people?

[00:06:50]And ideally, in what way can I make it so that each additional member does not detract or dilute the value of the the community, but actually adds value.

[00:06:57]Functionally, that's what a network effect is.

[00:06:59]Does that help?

[00:07:00]>> Thank you. [snorts] >> Second question, What >> [laughter] >> what would it take me to become your global Chinese partner to help share your message with 15 million overseas Chinese entrepreneurs?

[00:07:14]>> Um you'd have to have credibility.

[00:07:20]Real talk. So, it's basically like the reason that I took the content that I have that's been able to perform really well is because I had the backdrop of Vaynermedia.

[00:07:28]Right? [snorts] And so, I, you know, The Ask Gary Vee brand was built off of a, you know, hundred million dollar network prior to this.

[00:07:37]And so, it wasn't like, "Hey, you know, coach is coaching coaches coaching coaches about whatever, right?" It was like, I've already done this thing and that's my proof that I don't need to do this. I will do this cuz I like it and I have other missions in my life, but that proof is the backdrop that everything stands on. And so, that is what if I were to partner with someone, I would want them to be bulletproof from a proof perspective in terms of what they had done to prove that they were cuz anyone can repeat the words. I mean, shoot.

[00:08:05]Literally anyone can repeat the words.

[00:08:08]The the idea that like why does why does my content outperform yours? It's because of because the messenger is 80 or 90% of the context within which the message is received. And so, Elon can tweet, "I'm on a toilet right now." and it'll get 200 million views because Elon's the richest man in the world.

[00:08:28]Right? And so, that backdrop is so embedded in the message that they're inextricable. And so, obviously there's core components of value, but the why should I believe you is always the big glaring Vegas lights above everyone's head. Why should I Why should I Cuz you think about why why is authority compelling, right?

[00:08:45]Authority is compelling because it actually decreases risk.

[00:08:48]And so, we listen to an authority because we don't have to process or spend nearly the mental effort to to deduce whether this is true or not or to what degree I think this is risky to follow.

[00:08:59]So, for example, if Warren Buffett makes gives some sort of investing advice, most people would just say, "Warren Buffett's one of the richest men in the world. He's arguably the best investor of our generation. Therefore, I will just listen to him." And so, it's actually a more efficient way to consume information is to follow authoritative sources because it takes less cognitive load.

[00:09:18]That being said, being high agency as a person, you should separate those things. People aren't in general, but if you are a high agency person, you should be able to separate messenger from message. No one does that. And so, for me, I would rather have, you know, to use Napoleon's quote, I'd rather have lucky generals.

[00:09:34]Uh and so, if I were to do the something like that, I'd rather somebody have a big uh um a big proof point that they can sit on that then all of the content then makes sense within that context.

[00:09:46]>> Thank you so much.

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