The REAL Reason Your Business Isn't Growing

Summary

The 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

00:00

🚀 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.

05:01

📈 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.

Keywords

💡Entrepreneurs

Entrepreneurs are individuals who create new businesses, bearing the risks and rewards of their ventures. In the context of the video, entrepreneurs are seeking to expand their businesses and are often looking for investment. The script discusses the common mistake of entrepreneurs wanting to start new product lines when they have saturated their current market, which is a theme around growth and expansion.

💡Acquisition.com

Acquisition.com is presumably a platform for entrepreneurs to seek investment opportunities. The script mentions it as a place where entrepreneurs with a certain profit level can apply for investment consideration, indicating its role in the business growth process.

💡Market Saturation

Market saturation refers to a state where a product or service has reached the maximum potential share of the market it can realistically achieve. The video script uses this term to describe a situation where an entrepreneur has maximized their potential within their current market and is considering new ventures instead of deepening their current market penetration.

💡Profitability

Profitability is the ability to generate profit from business activities. In the script, it is mentioned in the context of the minimum profit an entrepreneur should have for investment consideration. It also discusses the balance between ad spend and profitability, indicating the importance of maintaining profitable business operations.

💡Facebook Ads

Facebook Ads are a form of online advertising on the Facebook platform. The script mentions them as a method of customer acquisition that an entrepreneur has maximized, and now they are looking for new ways to grow their business beyond this advertising medium.

💡Market Expansion

Market expansion is the process of growing a business by entering new markets or increasing market share in existing ones. The video discusses various frameworks for thinking about market expansion, including moving up, down, adjacent, broader, or narrower within the market pyramid.

💡Market Niche

A market niche is a focused segment of the market that an enterprise targets. The script talks about the importance of not being capped by one's mindset in a market niche and provides strategies for expanding within or beyond the niche to continue business growth.

💡Marketing Methods

Marketing methods are the strategies and tactics used to promote a product or service. The video script outlines various methods such as paid ads, content creation, outreach, referrals, and affiliates, and discusses how these methods can be leveraged to acquire customers.

💡Platform

In the context of the video, a platform refers to the medium or channel through which marketing methods are executed, such as Facebook, Instagram, YouTube, or Google. The script discusses the importance of understanding and utilizing different platforms for marketing efforts.

💡Media

Media, in this context, refers to the types of content or communication channels used within a platform, such as Instagram stories, posts, or reels. The script emphasizes the importance of considering the volume and type of media used to reach customers effectively.

💡Pyramid of Markets

The Pyramid of Markets is a conceptual framework introduced in the script that outlines five directions a business can take to expand in any marketplace. It includes moving up market, down market, adjacent markets, broader markets, and narrower markets, providing a strategic approach to market growth.

💡Value Proposition

A value proposition is the promise of value a product or service offers to customers. The script discusses the importance of understanding who you provide the most value to and using this understanding to focus business efforts, which is central to the theme of targeted market growth.

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 [ __ ]