The REAL Reason Your Business Isn't Growing
Summary
TLDRThe speaker emphasizes the importance of patience and strategic growth for entrepreneurs, highlighting common pitfalls such as prematurely diversifying into new product lines without fully exploiting existing market potential. They introduce three frameworks to assess and expand market reach, including marketing methods, platforms, and media volume. The video also discusses the 'Pyramid of Markets,' offering five directions for market expansion, and shares insights from a meetup with successful entrepreneurs, stressing the value of targeting bigger markets and the necessity of time in business growth.
Takeaways
- 🕒 Building a successful business takes time, and patience is crucial for growth.
- 💡 Entrepreneurs often make the mistake of diversifying too early without fully exploring their current market's potential.
- 🚀 To expand, consider three frameworks: marketing methods, platforms, and media volume within those platforms.
- 🔍 Evaluate your market based on four criteria: pain, findability, spending capacity, and growth potential.
- 🛠️ There are four immediate actions to increase leads: new methods, new platforms, multiple types of media, and increasing volume.
- 📈 The Pyramid of Markets suggests five directions for expansion: up-market, down-market, adjacent markets, broader markets, and narrower niches.
- 💼 Up-market means targeting fewer, higher-spending customers, such as enterprise sales or franchise owners.
- 👥 Down-market targets a larger number of smaller-scale customers, like individual hair stylists.
- 🔄 Adjacent markets are similar in nature but not exactly the same, opening up a new vertical to explore.
- 🌐 Broader markets encompass all adjacent markets, targeting a wider audience within the same industry.
- 🎯 Niching down can sometimes lead to higher profits by focusing on a specific segment that you serve best.
Q & A
What is the main challenge entrepreneurs face when they have saturated their market according to the speaker?
-The main challenge entrepreneurs face is that they often believe they need to start new product lines or businesses when they have saturated their market. However, the real issue is that they don't know how to get more customers within their current niche or space.
What are the three frameworks the speaker suggests for thinking through market expansion?
-The speaker does not explicitly list three frameworks in the transcript, but the general idea is to look at marketing methods, platforms, and media volume to expand within the current market before considering new ventures.
What are the four criteria the speaker suggests to evaluate when choosing a market?
-The four criteria are: 1) Are they in pain, i.e., is there a problem being solved? 2) Are they easy to find? 3) Do they have money to spend on the product or service? 4) Are they growing, meaning the market is expanding?
What does the speaker mean by 'big [__] takes time'?
-The speaker is implying that significant success or wealth accumulation ('big [__]' is a colloquial term for success or wealth) requires time and patience, as evidenced by the fact that there are not many self-made billionaires under 30.
What is the 'Pyramid of markets' the speaker introduces?
-The 'Pyramid of markets' refers to the five directions a business can expand in a marketplace: up market, down market, adjacent markets, broader markets, and narrower markets. Each direction has different implications for the business's target audience and revenue potential.
Why did the speaker decide to expand to health clubs in addition to micro gyms?
-The speaker decided to expand to health clubs because they found that they could provide significant value to health club owners, helping them to increase their bottom line substantially within a short period.
What is the potential downside of going down market according to the speaker?
-Going down market means targeting a larger number of customers who typically spend less. While there are more potential customers, the overall revenue may not increase proportionally, and the business may become less profitable.
What does the speaker suggest as the first step for a business that feels it has saturated its market?
-The speaker suggests examining and potentially increasing the marketing methods, platforms, and media volume to attract more customers. This includes running ads, making content, doing outreach, getting referrals, and using affiliates.
What is the importance of being specific about who a business serves best when considering market expansion?
-Being specific about the target audience allows a business to tailor its messaging, offer, and value delivery more effectively. This can lead to higher customer satisfaction and potentially increased revenue, even if the market size is smaller.
Why is it a mistake to add complexity to a business that has only made three million dollars in revenue?
-Adding complexity too early can divert resources and attention away from optimizing the current business model. It's better to focus on scaling up the existing operations and understanding the market deeply before expanding into new areas.
What is the speaker's advice for entrepreneurs who feel they have exhausted their current market?
-The speaker advises entrepreneurs to look at the market from an investor's perspective, considering the total size of the industry and the potential for growth within it, rather than feeling that their market is capped.
Outlines
🚀 Overcoming Entrepreneurial Plateaus
The speaker emphasizes the importance of patience and learning in entrepreneurship, especially when dealing with the first plateau of business growth. They discuss common mistakes made by entrepreneurs who, after reaching a profit ceiling, attempt to diversify their product lines or start new ventures without addressing the core issue of customer acquisition within their current market. The speaker introduces three frameworks to analyze and expand market reach, including marketing methods, platforms, and media volume. They also highlight the importance of mindset in overcoming perceived market saturation and suggest evaluating the market potential based on pain points, ease of finding customers, their ability to pay, and market growth.
📈 Expanding Market Reach: Strategies and Pyramid of Markets
This paragraph delves into strategies for expanding market reach when facing saturation. The speaker introduces the concept of the 'Pyramid of Markets,' outlining five directions for market expansion: up-market, down-market, adjacent markets, broader markets, and narrower niches. They share personal experiences from a meetup with successful entrepreneurs to illustrate the importance of targeting larger markets. The example of a licensing company's expansion from micro gyms to health clubs demonstrates how to apply these strategies. The speaker also advises on assessing market opportunities based on four criteria: solving a problem, ease of finding customers, their financial capacity, and market growth potential.
Mindmap
Keywords
💡Entrepreneurs
💡Acquisition.com
💡Market Saturation
💡Profitability
💡Facebook Ads
💡Market Expansion
💡Market Niche
💡Marketing Methods
💡Platform
💡Media
💡Pyramid of Markets
💡Value Proposition
Highlights
The importance of patience and time investment in business growth, emphasizing that success doesn't come overnight.
A common mistake made by entrepreneurs is expanding too quickly into new product lines without fully exploring their current market potential.
The speaker introduces three frameworks for thinking through business growth without saturating the current market.
The concept of 'method' in marketing, which includes various strategies like paid ads, content creation, and referrals.
The role of platforms in marketing, such as Facebook, email, and YouTube, and how they can be utilized for different media types.
The idea of market saturation and how to assess if the market is truly capped or if it's the entrepreneur's mindset that is limited.
Four criteria to evaluate a market's potential: pain, findability, spending capacity, and growth.
Strategies to increase customer acquisition within the current niche, such as new methods, platforms, media types, and volume.
The 'Pyramid of Markets' concept, explaining five directions for market expansion.
A personal anecdote from a meetup of successful entrepreneurs highlighting the importance of time in business success.
The decision-making process for market expansion, using the example of a licensing company moving from micro gyms to health clubs.
Exploring different market directions such as up-market, down-market, adjacent markets, broader markets, and niche markets.
The value of providing services to a specific market segment, like health club owners, and the impact on revenue.
The benefits of niching down in a market, even if it means serving fewer clients, to increase revenue per client.
The speaker's encouragement to entrepreneurs to look at their market potential from an investor's perspective, aiming for a larger share of a much bigger industry.
A call to action for entrepreneurs to implement the 'should dos' in their business growth strategy, such as improving lead follow-up and content creation.
Transcripts
big [ __ ] takes time and I had to learn
that like I want you to feel that
because it took me a long time to learn
so what I see happen all the time with
entrepreneurs especially when they
applied acquisition.com you know they've
got a million dollars in profit maybe
it's the bare minimum for for us to
consider for investment and they're like
here's my idea for how it expand and how
I want your help I want to start all
these new product lines because I've
already saturated my market because I'm
spending fifty thousand dollars in
Facebook ad and I can't spend any more
than I currently am otherwise I lose the
profitability of the ads so I'm going to
start selling more and different offers
and add massive complexity to my
business that only makes three million
dollars top line per year that is a
mistake and in this video I'm going to
walk through why and the reason this is
so important is because many people hit
this first plateau and then think oh I
should start a new business oh I should
start a new product line when really
they need to confront the problem ahead
which is they don't know how to get more
customers within their current Niche or
space your Market isn't capped your
mindset is capped what I'm going to do
is break down the three different
Frameworks I used to think through this
so that you are never capped in whatever
Market you go after number one from the
marketing perspective you have your
method which is the biggest thing you do
it's running paid ads it's making
content it's doing Outreach it's getting
referrals it's getting Affiliates those
are the methods that you do to get
customers underneath of that you've got
the platforms that you do that method on
you've got Facebook you've got phones
email Hulu YouTube You've Got Google
underneath the vet you've got the media
on the platform so if I'm on Instagram I
can go Instagram DMs I can go Instagram
stories I can go Instagram posts I can
go Instagram reels I have all these
different media within the platform one
level below that is how much volume am I
doing within that media am I posting one
story a day one story a week multiple
stories a day multiple posts a day so
like that chiropractor agency if there
are a hundred other agencies that market
to chiropractors and they're all
marketing on Facebook then you could
probably add up all of the ad spend of
every one of those agencies together and
that just gives you an idea of how much
there is available in terms of numbered
new clients per month that all of them
together are selling just on Facebook
ads rewind real quick if you're trying
to pick pick what Market you're going to
go in I talk about this in my book 100
million offers there's four things I
want to look at number one are they in
pain am I actually solving a problem for
someone number two are they easy to find
because I can't find them I can't sell
them right number three do they have the
money to spend in order to buy my thing
because if I'm trying to sell to broke
people it's probably not going to be a
good idea number four are they growing I
don't want to be selling their
newspapers I want to be selling to
something like old people that are
there's more of them every single day
that are retiring if I have a market
that checks all four of those boxes then
I know I'm at least in a good
opportunity now once I have that in
place and I looked at the four variables
that I talked about earlier can I do a
new method can I do it on a new platform
can I expand to multiple types of media
within the platform of curling can I
increase the volume that I'm currently
doing in the mediums that I have these
are the things you could do immediately
to get more customers get more leads
today let's say you've capped all of
those things which is probably not true
but let's say you did because we're
going into Fantasyland here I'm going to
introduce you to what I call the Pyramid
of markets there are five directions
that you can go in any Marketplace to
expand I'll tell you a story of when I
learned this I went to this Meetup of
eight entrepreneurs together we were
doing 500 million dollars a year in
Revenue this is like a multi-billion
dollar room which is kind of cool and I
was one of the smallest guys there I
think I was doing 30-ish million a year
at the time and they were talking about
their businesses I was like these guys
aren't smarter than me and I didn't feel
like they worked any harder than me I
was like why are they making so much
more money than me two main factors
number one almost all of them have been
in business longer than me big [ __ ]
takes time and I had to learn that like
I want you to feel that because it took
me a long time to learn all right
there's not many billionaires under 30
that made it themselves like 10. in the
whole [ __ ] world there's not a lot of
them and fact Checkers maybe it's 20.
it's not a lot the second lesson that I
learned is that all of them were going
after bigger markets than I was because
at a certain point you do saturate a
niche and I'm Gonna Give You context to
what that means so Jim Walsh is a
licensing company we specifically at the
time only focused on micro gyms now we
do health clubs and micro gyms because
they expanded The Market within that pie
there was only 50 000 micro gyms United
States lead already spoken with twenty
thousand of them we had absolutely have
really maximized every media every
channel we co-cola we run out some
Google run so YouTube we run some
Facebook we're on Instagram we make
content like we do all the stuff and we
have really done a good job of building
a market leading business there but
again it wasn't as big as theirs and
that's why we decided to open up another
Avenue now let me tell you about why we
decided to do health clubs so when we
looked at our adjacent markets we could
have gone down Market to personal
trainers we could have gone on Market to
health clubs we could have gone to
physical therapists or chiropractors
actually very similar or we could have
gone more narrow those are the
directions we could have gone in I asked
our our team one question I said of
these different potential Avenues or
avatars that we could pursue who do we
provide the most value to buy dollars
made it was no contest health club
Owners we are able to immediately make
them like tens of thousands of dollars
within the first like month by
restructuring some of the things that we
could do within their business and then
doubling or tripling their bottom line
by reorganizing their onboarding process
reorganizing their sales process how how
they handle retention and how they
handle upsells so if you deal with hair
salons maybe you sell Consulting
Services you sell to salon owners that's
your current market you can go in five
directions number one is you can go up
Market that means on the pyramid there
are fewer people on the higher part of
the market and they cost more but they
spend more typically higher quality
customers that's where you go into
Enterprise sales we're talking
franchisors as in people who have
hundreds of locations under one umbrella
or multi-location or chain owner that's
up market for salon owners down Market
the second Direction you can go is you
go to hair stylists you talk about
people who are renting chairs and doing
hair with their hands full time not
running the business there's 10 times
more of them the third Direction you can
go is you can go adjacent so what's
something that's similar in nature but
not exactly the same that would be like
a lash and nails place if I were a
chiropractor it might be Physical
Therapy like they're similar but
different you want similar business
characteristics similar Avatar in terms
of the owner similar types of customer
within the same larger industry when you
do that that you just open up another
vertical and you attack it the same way
you did your first one the fourth
Direction you can go is you actually go
broader now imagine a pyramid that's all
the way like this and it includes all
the adjacent pyramids within it which
would then just be Beauty so that
includes Med Spa owners flash owners
massage studio like all of that kind of
falls in the same psychographic they
serve the same customer so that would be
going broader if we wanted to really
open up the net the last Direction you
can go is the only one that makes your
Market smaller but it doesn't
necessarily mean you make less money you
could become narrower instead of just
being all salon owners it might be salon
owners who specialize in extensions or a
blow hair place you know they just do
the Brazilian Blowouts like they're just
doing that specific thing oftentimes
when you do Niche down sometimes you can
still make more money because if you're
not even close to tapping the methods
the platform the media or the total
amount of volume you need to do to reach
all of those people within that Niche
and so then when you Niche down become
more specific with your messaging your
offer and the value delivered because if
you can make this one specific Avatar 10
times more money than the broad Avatar
you should absolutely Niche down on that
and we've done this with companies and
doubled or tripled or sometimes 5x the
revenue business despite cutting down
who they Market to by like 85 percent by
getting really specific about who we
serve best big picture zooming all the
way back out if right now you're not
getting as many leads as you want and
you think that your Market is saturated
because of what you do you should be
looking the way an investor looks at the
marketplace and says this is a 60
billion dollar industry I have not even
one percent of this industry my whole
point here is you have your four initial
levers that you can immediately pull to
grow how many leads you're getting and
you probably haven't even done one of
them do one of them do another one of
them and then eventually try and do them
all usually there's this big checklist
that you probably already know as an
entrepreneur of what I call the should
Do's I know I should be calling my leads
faster I know I should be following up
better I know I should be making more
content I know I should start a cold
call thing I know I should be running
ads on more platforms but you're not and
if you're like man that's going to take
a long time welcome to the main point I
had originally which is it takes time to
build big [ __ ]
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