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Thiel Foundation Interview with Jay Abraham

Bryan: We ended up starting music five minutes late. Part of the reason is that, it was
really important for Jennifer and I that there would be a quorum here especially
to hear Jay, because Jason is going to be speaking this morning. Its one of the
things that weve been looking forward to most he promises me, because he
spent about four or five hours actually considering what hes going to say in this
hour, he says its either going to be phenomenally profound or phenomenal train
wreck (laughing). He promises it wont be in between. Well see which way that
goes.

Jennifer: Without further adieu, we have for you Jay Abraham (clapping).

Jay: I want to start by saying that you guys made me fat, but you didnt do it on
purpose. You made me fat because I came here from being on vacation eating,
eat a lot of Burritos and drinking a lot of margaritas in Mexico. I swore last night I
was going to work out like man I brought this big heavy suitcase with pushup
bars and all kinds of things and instead I spent five hours thinking about how
impacted I was by you guys yesterday and how impressive you are and how you
can probably transform the world in so many wonderful ways and thinking what
can I do to really add value in the hour or now probably the 59 minutes that we
have together. And I'm drinking wine and eating and not working out.

I woke up and I couldnt get my pants that I was going to wear today, its your
fault (laughing), but Im telling you it not to be funny, but its not about the that
that you made me fat its the why because the why is what everything is all
about. Its the why, why we do things. What I was asked to talk about was
negotiate. In watching you all and seeing the remarkable access that you have to
such profound people, I thought maybe I could come at your remaining tenure in
this wonderful program with some different contacts and some different
perspectives that came from different walks of life.

I called my wife last night and I said, "Oh my god, I never felt as intimidated in
my life by trying to listen to this super intelligent people." I said, "The language
pattern in the nomenclature was well above my pay grade, but it was so
impressive to listen to you." Ive had a very light introduction to you. I got the
context to what you do. If youll tolerate it, Im going to come at about five or six
universal principles, forces, factors, dynamics, immutable laws that I think might
help you harness your profoundly impressive intellects in ways that will help you
accelerate and expand and enhance and advance your agendas.

If I can do it right, but somebody let me know when Im 15 minutes, Im sure you
will, 15 minutes before the end and Ill try to tie it together. Its good to be
random. Its good to be random because I may polarize you and you may hate
my guts and never want to see me again; you may not like what I say.

Im going to try to haunt and integrate you with some universal factors and
distinctions that really apply to everything, not just to negotiation or this or that,
but Im going to do very short compression, little vignettes on it. Im going to
hopefully tie it all together. Bear with me because I have two really bad
problems, one I dont use a PowerPoint and second is Ive got double carpal
tunnel and I cant read what I write.

The first thing I want to talk to you about is understanding whatever your
objective is and Im going to use the question in negotiating because Bryan said
thats what you all want and I said okay. Personally, I guess I should tell you what
I do what, why I do it, and how I do it in my normal life so you can appreciate the
good and you can discount the bad.

What I do in life really is reframe everything for others. I started out as a


business transient. I was like you guys but not until I just got married early and I
had lots of different jobs and in lots of industries. I realized that after about 10
being a transient, the people in one industry dont have a clue of people on
another industry think, strategically, tactically, business model wise, revenue
marketing.

If you could borrow elements from one industry or multiple ones and apply them
to industries that didnt know them it was like giving somebody omnipotent
power and I was able to do that for many, many, many industries. They would
sky rock and not because I was that bright, but because their thought process in
that industry was so linear.

The first thing I want to teach you is a concept called Funnel Vision. Its very hard
perhaps for a lot of you because youre so bright and so focused but
Funnel Vision is the process of really borrowing its well, well-transcendent of a
concept of best practice. Its trying to understand everything other than what
you do. Its easy to understand what you do because you guys are so bright, but
how can you understand everything you dont do because when you try to come
up with breakthroughs, if you look at the science behind it, breakthroughs come
from understanding intimately what youre doing, but looking at it from a
context thats non-linear.

Some of the people I've been influenced by, I have been influenced by lots of
people, their expert times quantum levels in what they do but they spend
enormous amount of time trying to understand everything else, because theyre
looking how they can borrow elements, implications, different ways of thinking.
What I do is take people that have products, services, IP, and I try to give them
preeminence. I try to give them a distinction. I try to give them value perceptions
in the eyes of the market place that are beyond and much more exalted than
anybody else.

I do it by not really caring very much directly about the company from a focus
standpoint, but caring almost entirely about the end-user from the benefit
standpoint.

Im making that point for a very, very important basis. Im going to talk to you
about being preeminent. We talked to you about how being preeminent gives
you the power and the access to anything and everything you want in life and
now the world becomes a 3D movie and youre unlimited in your options and the
world becomes a bus stop to you.

The first element of preeminent is a Shift of Focus. You guys are so impressive,
this is going to perhaps sound a little mandating, but most people in business,
most people in life, most people in any work environment are pretty fixated with
either what they do, who they do it for meeting the company or the product or
service or their profession. If you can shift and fall in love figuratively, not
literally of course, with the people youre benefitting and really empathically
understand what its like to be in their shoes and what it would be like projecting
forward to have the benefit of what your product service company will do for
them, it will give you a power of communication, and a power of impact, and a
power of certainty, and a power of just an aura when youre trying to recruit and
negotiate that will be profound.

Im going to get into it for a few minutes because Im going to give you a
distillation of what we think its like to be preeminent. Im going to explain in
little tangential portions how that can apply to negotiate, how that can apply to
recruiting, how that can apply to securing funding and things like that.

The first element of being preeminent is you want to be seen as the most trusted
advisor or authority in what youre doing to the other side. Its a little hard when
youre aging and now you get your intellects, you got to also recognize and
acknowledge and disclaim what you dont know, that requires humility and that
requires an understanding that youre trying to get to an end game; its not
negatively manipulative.

Anybody here play billiards, not pocket billiards but the other kind? I dont
either, but I love to watch it. I love to watch it because every shot is designed to
be strategic. Every shot is designed to get to another place and protect the other
side. Back to what I do, this is going to be a very confusing remaining 58 or
57 minutes but its interesting.

Ive been exposed to 465 industries. Ive been exposed to multitude of different
ways of thinking of looking at a situation. People come to me not for help with
their methodology or their technology or their IP, but I have to learn about it
before I can re-articulate it to the market. Ive to see what they dont see. Ive
got to see how it can be re-verbalized to the market in a powerful way.

Ive gotten the ability to look at a half billion dollars worth of variability studies
for the worlds largest company that does variable testing, and about a half
billion dollars worth of very complex psychological and sociological studies per
company that is the biggest litigation consulting firm in the world. They have to
be able to either, it depends on which side theyre on show more or less
suffering to the world.

I have to understand things like that. The first thing besides leadership and you
need to do to be preeminent, is not just demonstrate but really embrace
empathy. Empathy is a very superficially bandaged around word. Empathy
means the ability to appreciate to respect, to understand, to grasp what its like
to be in the other persons shoes, thats got a very universal ark.

The other person can be a perspective investor. The other person can be a
potential person youre trying to recruit as a co-founder. A person can be
somebody whos IP youre trying to tie up. It can be a corporation youre trying
to engineer a strategic alliance with or a vertical market partnership with. It can
be the people youre trying to hire full-time or part-time. If youre on a limited
budget, it can be the vendors or the service providers or the intellectual capital
providers that are being asked to forfeit other opportunity cost. The client can
be the person youre trying to sell to.

You cant empathize if you dont take the time to transcend from your world to
theirs. The key to be preeminent is being externally focused, really grasping what
its like to be the you, not the you, the person aspiring towards the outcome, but
the person on the on the receiving end. When you understand intimately that
you can own the world ethically because most people dont and ironically and
bizarrely and Im telling you this as, its a courtesy at your young life.

Most people with your profoundly impressive intelligence gets so caught up with
yourselves and your goal that you do and understand the other side, the more
you show the other side, that you respect, you understand, you appreciate, you
grasp and that what you are conveying is purposely constructed, construed,
presented, it depends on the application, to address that what you understand it
bonds you to them, it distinguishes it to them, it shows them that youre not just
somebody whos throwing mud on the wall; you put enormous thought into why
how and that.

This is a superior alternative to the random other things they have that they
could choose, or they could buy, or they could go to work for, they could say yes
or no to; Im trying to tie it up. The key to being preeminent is helping people
make focus. You can sometimes, and the more intelligent you are, and the more
immersed you are in your own activity, sometimes you can go right to the
bottom line. Even very intelligent people need stair steps think, then maybe you
know how a tugboat gets its big, big cord over the bow of a 10 or 20-story tall
tanker truck to pull it. You guys are analytical, but its not very easy to shoot a
rope this wide over 10, 20 stories is, how do they do it?

Theres a little tiny cord they shoot right at the top, its attached to little bigger
one, to a bigger one, and to a bigger one, sometimes having to slow down to
stair steps think the Panama Canal when youre trying to take people through a
process. Always dont think about it from your side, think about it from there.
When you think about it from there, you got to think about and Im trying to get
universal principles because their side means a lot of things.

If youre trying to recruit money and I dont know venture capitals I really dont,
but Ive helped people raise in either billions of dollars and smaller segments or
the equivalent. The equivalent sometimes is the same because the question is if
you have the money, what would you do with it?

Ill give you a good example. I was in China one time and a young man came up
to me at a seminar and said, "Were little startup company and the bank wont
loan us any money. How do we grow?" And I said, "If you have the money, what
would you do with it?" "I'm in the motorcycle manufacturing business, I would
open up a plant in Asia somewhere else [inaudible 00:15:11] Beijing, and then I
would hire a sales force, then I would get distributors, and I would sell
motorcycles." I said, "Why not just find somebody in a complimentary market
that already has the manufacturing, a second shift that are not using
distribution, sales force, a complimentary retail field, distribution retail network,
and make a deal where you use their second and third shift."

I came back and the guy had no money, but all he had to do, he found a lawn
mower company in Malaysia that had a second shift and it had sales people in 10
countries, they had distribution lawn mower shops. You just have to give them
the dies and underwrite the sample models and they got to 10 or 20 million
dollars in six months.

You got to realize a couple of things; the other side is what youre focused on
always no matter what the objective is. The ability to demonstrate that you
really grasp their needs, their fears, their hopes, not just once that were felt
before you came into their lives, but the ones youre going to stimulate when
you start your either dialogue preposition offering that is enormous power.

Depending on who youre communicating with, again negotiating is a very high


ark. It can mean lots of things. If you try to negotiate to find a perspective co-
founder for example, which you have to show Im going to give you, I dont
know and again Bryan, Jennifer were very honest with you, Im a marketing and
strategies savant who doesnt turn his computer on. Its rather embarrassing for
me to be up here telling you that, but its true so discount the stuff you already
know.

What Ive learned about investors and investors are a generic category, but the
same factors apply to everybody. What they really want even though it may or
may not be verbalized, first thing they want to know is that the preposition is
really sound and has a lot of merit and has a higher probability of working the
knot. If you can prove that youve gotten brownie points.

You cant do that just by zeal and enthusiasm. You prove it by looking at the
market from slices and dices nobody else does. You prove it by getting, if you
cant get pre-validation from the market, you get pre-validation from buyers. If I
do this, would you buy that? If I did this would you be interested in that?

The second is that you are a capable risk, that you either have to wear-with-all
yourself to go the distance or you have to wear-with-all to secure and manage
that and you got to be able to prove that. The third, is whats going to happen if
it doesnt work? That you have a plan B or a hedge because as admirable and as
impressive as every vision is, if you look at the statistics and Ive looked at the
statistics a very large percentage you have to, you guys called pivot shift so
whats plan B?

People bring me in because, unfortunately or fortunately, Im trained not to be a


wet blanket, not to be dower but to recognize every fork in the road, everything
that can go wrong, every nuance that nobody else looks at, and how to factor
that psychologically, transactionally, market wise everything that can go wrong
and figure how to either hedge for it, how to preempt it, how to turn it into a
positive.

When you learn to think that way, you outthink and you out-compete your
competition. Believe me you have competition, no matter whether youre trying
to raise money, recruit somebody. But theres another side to it, because Ive
listened yesterday and Im giving you random thoughts. Ill try to tell you
together, is you have competition but most people in life dont begin to access
the profound realm of opportunity that exists. Im going to give you a silly
reference and then Ill tie it to you.

Ive helped so many people when I was younger, not your age though a little
older. Ive helped a lot of information, people, Tony Robbins used to be a client
of mine. I was at one of his programs once and a person came up on stage and
he used to do what he called Interventions. The guy said, Tony Ive tried
everything to make more money. Tony is 7 foot 8 or something, he says,
"Everything?" "Everything." "Tell me the last 50 areas youve looked at and the
actions youve taken in the last six months."

The guys aid, "Well I haven't done 50." He said, "Tell me the last 25." "Well, I
haven't done 25." "What have you done?" He said, "Ive been looking at the jobs
online and Ive applied for three or four distributorships and gotten turned
down." The key is with your intelligence, you got the ability to accomplish about
anything you want with or without capital if you understand that whatever it is
you want, is always the solution for somebody else whos bigger problem. We
are rewarded in life in direct proportion to the quantity and quality and
consistency of problems we solve for others, but you cant solve problems for
others if you dont first realize who the others are and what their problems are.

This is where it gets very, its not tricky, its actually exciting to be most people
dont even know what their problems are; theyve never verbalized. The first
person that verbalizes, articulates, and clearly conveys in a lucid sense what the
problem is youre trying to solve, your lord, I got to give you reference examples
and theyre not going to be from your world, but hopefully theyll be relative
enough that you can understand it.

I was talking a couple of weeks ago to somebody you guys might know Bryan and
Jennifer; shes a very successful speaker in the corporate circle. She has an
intellectual property thats incredible, but shes got a little tiny infrastructure and
she is very well-paid, but shes at a crossroad because her option of growth is
either to create a lower level membership site that will appeal though not the
market she wants or take every dollar shes making in an unleveraged personal
services and put it back into business and try growing infrastructure.

She said I dont see options and I said big option. I said, theres nine million
trading companies out there that have infrastructure, they have sales forces,
theyve done whatever their IP is, some of IP, I happened to know I dont think
hed be upset; the guy who did the Seven Habits and you guys might be too
young, but Seven Habits of Highly Effective People was the killer methodology du
jour in the 80s and 90s.

Franklin Covey, a public company, bought it and they built out a huge public
trading firm and they got offices everywhere. Guess what after doing Seven
Habits and Son of Seven Habits and Seven Habits 3D and Seven Habits Revisited
and the prequel to Seven Habits, the market goes but Franklin Covey has a big
problem. Franklin Covey has infrastructure. Franklin Covey has distribution.
Franklin Covey has affinity with direct access to corporations that love them but
dont want to buy anymore because they bought everything in their license.

What does Franklin Covey do? Normally Franklin Covey tries to figure out
themselves, but if somebody like the person Im talking about, realizes that they
are the solution to Franklin Coveys problem, they can go to Franklin Covey. They
can get Franklin Covey to do a deal when they take their IP through it. The
question is whose problem are you the bigger solution to it? That answer
depends on what facet of negotiating youre talking about, raising money,
securing a co-founder, finding providers, getting pre-purchases from people.

Its not a challenge, its a wonderful opportunity. You guys have an intellect
which honest to God just daunts and impresses the whatever out of me. What
you don't have You've got extraordinary experiential maturity for your age, for
your age but youre 19, 20, 21, how do you bring your understanding up to the
level of your intellect? Theres a lot of ways.

First way is you avail yourself massively of the mentors who are freely trying to
do this. I got excited and I called my wife and said, "What a chance to impact
people." Because back to empathy, if you want to be preeminent you think in
terms not of transactions and linear; you think in terms of the leverage and
impact what youre doing can have on as many lives as it can affect.

Those lives have many different gradations, the lives of the end-users, the lives
of the families you can employ, the impact you can have in saving, protecting,
enriching, depends on whether youre a noble, causal or youre just fun, or
helping people. You start living in that emotional life and you make that as
meaningful apart of your life and your communication as the technical part, as
the cool science because thats there was a book that came out and it was
written about storytelling. The whole key to it was that the bridge to
transactionalizing relationships is not PowerPoint, its emotionalization.

Im not particularly religious, but any of you that are, you know that the
foundation of all religions are parables or the equivalent. If you study
neuroscience, you know that metaphors, similes, analogies are the way you
make points. When I was making notes yesterday about you guys, everything I
kept saying was quantify. How do you denominate, how do you compare, how
do you correlate what youre doing and the impact that it's going to have
tangibly and intangibly on any gradient, emotionally or otherwise so that people
can understand the impact, understand the value?

Im back to being preeminent and Ill come back. Most people dont know, in the
things youre doing, most people dont always know that what focus is until
theyve made it. You got to help people get clear focus, because focus and clarity
give understanding and understanding give people power. Power is what allows
people to say yes. They clearly grasp the vision. They clearly trust the visionary.

One of the things thats very important and Im sure many of your mentors have
probably talked about it from a more organized manner, because Im a generalist
on lots of things depending on the need of the situation, but what you really
need to master, not that youre not, but my observation is that you would
benefit from doing this more is the ability to get people to almost, that you want
them to feel theyre on a crusade. You want them to feel they are part of
something so profound in what theyre doing because if it isnt, why should they
be involved? If it isnt, why should I be your co-founder and not his?

If it isnt why should I want to put my resources behind you whether its capital
or defer being paid for producing something. You want to be able to feel theyre
on a mission. I told you its all about you, the perspective buyer, you the
perspective investor and you cant really empathize about me if you dont take
the time to understand me.

Again, Im trying to give you this big ark and give you some little different take
than most people talk about. How do you learn about me? It depends. Number
one, one of the things I think you could do if you want it to. I will tell you what I
did in my life I wasnt as privilege as you. I got married 18, I have two kids at 20,
and I worked all night at just crappy jobs so that I could spend all day sitting in
peoples offices who were very successful at Mesa and from Indianapolis. I was
so non-threatening. They would let me watch them while they do business and
after doing business, Id ask them each time what just happened, whats the
lesson, what can I learn, what should I observe?

I did that for three years to try to understand what I didnt know. Im not
suggesting you do that, but Im suggesting that everyday besides your
progression whatever your project is or your progression to try and to figure out
your project, you make it a point to secure the connection with three people;
three people in your industry, three people that people know, and you got on
the phone, you introduce yourself, and you ask and you tell them what youre
doing, and you ask them for their biggest piece of advice, and you ask them who
would be the best connection and you kept advancing that. You wouldnt believe
what it could give you, because Im trying to understand where you guys are at.

I mean I have only had a very meager introduction to you, its my fault, not yours
I didnt ask, I didnt really do what Im saying, Im hypocrisy persona, but because
I didnt try to really grasp as much as about you. Im in a disadvantage and youre
the recipient. Im sorry for that.

The key is what Im trying to deal with somebody. I want to know what theyre
doing, what theyre not doing, what their competition is doing, I want to know
their mindset, I want to know what theyve done. I dont want to know it to
manipulate them, I want to know it because I want to resonate with them and
show them that I took the time and I grasp where there at and I can verbalize it
better.
One of the things that I think is very, very important in empathy is listening. I was
watching you guys. I dont know if you understand it, but you can own the world
if you can master Socratic interview. I have time to give you a short course and
you provide a book on it because Socratic interview is the way to always get the
pay-dirt, but the way to start is asking question that are extremely focused; not
being as interested in yourself right now as the other side and learning about
them, and when they answer a question demonstrating that you heard what
they said. You demonstrate that you heard what they said by reiterating a part of
that and then asking a deeper question.

I found that if youre not in a hurry, you can get the pay-dirt every time and Ill
tell you a quick story, not to bore you because its quite profound. One day I was
in Sydney, Australia doing a seminar. I flew and I was tired but I couldnt sleep
and I was upstairs in the concierge suite drinking, Bryan wont want to hear, but I
was drinking. There was one man in the corner and I believe that people with the
most wonderful source of emotional human expansion and your human this is
everything you got.

I walked over the man. I told him one thing about myself that I was in Sydney on
business. Just for the record this was 25 years ago and there were 800 people in
a room the next day paying me $5,000 a piece to listen to me pontificate for a
few minutes and that was a lot of money at the time, but I just told them I was
was there on business.

The remaining 15 minutes we spent, I asked him about himself and I found out
he was travelling the world, based in Germany. He worked for a Schering
corporation. He was involved in population control programs all over the world. I
asked him what in the heck a population control program looked like, how you
made a cold call, how in the world you sold it, how do you priced it?

Once, if and after you sold it, how in the world you got the population they want
to be controlled? Then I asked how he got into, what his background was and I
asked him about Germany and what was like living there and his kids and then I
asked him a profound question with a Rolodex that big, what are you going to do
when you grow up. I kept asking him questions that I thought were, to me I want
to learn, I listen because Ive done enough things that I can piece things
together. Im drinking about five more minutes and I started feeling the effect. I
got up to excuse myself but he was there at a very high security meeting of Third
World Health Ministers from all over the world. Hes stopped me, Im saying this
about me, Im saying it about the power of being interested and listening.

He said, I got to tell you, youre the most interesting man Ive ever met, swear to
God. Hadnt told him a thing about myself (laughing). But I listened and I asked
about himself, I asked clarification, I tried to project as I was hearing him what it
meant. If you guys want to own the world take a little bit of your very impressive
intelligence and focus it external and you guys will get such profound leverage.
Now speaking of leverage, totally off course but that's okay. I learned in my life
the power of upside leverage. And the danger and the unnecessary impact of
downside leverage, one of the things I did when I was younger and I was doing,
Alex, I think about it and you looked at me because Im way out of you guys your
age group, I said one of the people I worked with about 500 different experts,
nothing came to me for help with their expertise, they came to me to command
maximum market positioning, premium pricing, figure out all kinds of derivatives
of it, but I had to learn what it was all about for first.

One of the people I helped earlier in my life was the Deming organization. The
Deming organization those who have had history of our country right after
World War II, Japan was terrible, I had a reputation of schlocky manufacturing,
terrible. There was a mathematical PhD guy named W. Edwards Deming who
they laughed at here because all these kinds of some process improvement and
he went to Japan.

His little concept was figure out all the different impact factors that go on in a
dynamic, see if they can be measured, quantified, and improved and for example
get a line of 20 different people and 20 different lines and the same thing hed
figured out what was relevant. He figured out, certain people had a lower
breakdown, certain spent less time on preventive maintenance, certain people
had higher quality, certain people did different things.

He figured it out who they were and he figured it out whether they were the
8020 rule, whether they were five or six times better or just marginally he found
the better ones and he tried to quantify transactionally, strategically, action
wise, what they did, and teach it to everybody. If you improve 10 different
factors, you guys are the science majors, you get geometry work, its rather
profound, you triple, quadruple the performance.

He made Japanese people, the worlds leading manufacturing light, but I took
that experiences, started applying it to all of the impact factors that can apply to
revenue and theyre profound and most people dont look at it. Im telling you
this because there are tons of impact factors in everything youre doing. There
are studies I mean how fascinating you are believe it or not, you can have a
positive or a negative impact.

How powerful your preposition, ideal in a myriad of areas. Weve tested for
example, one time we tested 33 ways at a very large furniture chain literally met
people at the front door and we found one approach that tripled the number of
sales and conversion; same time, same effort. I learned the concept of
optimization.
Optimization is getting maximum performance from time effort opportunity,
market, access, communication, impact, opportunity cost. You cant do that until
you first try to understand, not the totality, but the scope of opportunities of
options, of possibilities available. You guys cant do that in a vacuum.

You can do that if you start studying two things, everything else outside so you
can look at different possibilities and you start meeting people and asking them
for perspective. Asking them for perspective can be a lot of things. It can mean
anytime you have a meeting. If it doesnt go well, you dont stop with it. You ask
them what would it take to do this, what would they suggest you do different if
youre coming back?

Number three, who would they suggest you talk to if not they. I got started in a
very, very mundane area. I got started trying to get radio stations to agree to let
me run advertisement without paying for it, thats pretty hard 25 years ago. I
had a company that no money, great product but no money.

We realized one thing. We realized the value of the repeat sale. We realized
lifetime value. We had a $3 product that was analgesic back then and 90% of
people had bought repurchase 12 times a year for life and it treated arthritis and
bursitis. It was very interesting but I had no money. No management. I had to
persuade radio stations to give me premium radio time, television time,
magazines and all they said we dont do that.

I could say okay thank you and you guys would never see me again because it
was my first starter. I can say okay I came because I know you could do it, if you
did it, you would have no value to me. I had anticipated and pre-anticipate the
dynamics of what was going to happen and figure out to overcome every factor.

Im telling you that because theres a very big implication. Most people, you guys
Im sure will find this, when you decide youre trying to reach people for any
reason, you got to try on the phone probably rather than email, maybe well try
an email to secure conversation that hopefully will lead to a meeting telephonic
or otherwise. I would dare say not trying to hallucinate but 90% of your phone
calls end up in voicemail.

Most people are surprised when they get voicemail. If you expect to get
voicemail and you figured thats the outcome youre going to get 90% of the
time and your strategies, what Im going to say thats going to make them more
compelled to call me back right away in a positive sense and be eager to talk to
me, youd be a lot better off than just not knowing what youre going to say but I
mean proactive, critical thinking is a very powerful thing to how much more
time do I have in my random talk here? (Woman responds) Okay, Im going to
give a couple more on this and Im going to back to the notes that I wrote this
morning because this is something I think has universal appeal we can talk about
negotiating with people.

These are things I dont think other mentors might share with you because
theyre coming from a different world. Some of you, all of you I guess are going
to get hopefully funding or the equivalent resources. You might get it from
conventional resources, you might get it from unconventional resources, always
try to figure out first of all who needs this more that I need it. Is it defensive, is it
offensive, does it address a problem, does an extension, is it something thats a
natural adjunct to the market they serve, is it a natural way to repurpose people
they dont have any or facilities or capacities or resources? That requires you to
develop a broader, a constructive understanding of all that could impact your
success. I marked a couple of things that I thought were good because I dont
want to get too deep in this.

One of the keys to being preeminent is taking people on a very clear journey that
demonstrate two things, one you have a clear vision of what is going to be like
when your product service company is operating and your product and services
at work in the market or in the world and what is going to be like with clear
visions that you can articulate that show that its very clear to you.

Second you want to show people if youre asking for money or asking for
commitment or asking for resources that you understand at a level even they
may not what can go wrong. For example, when I would help people raise
money with ideas that may or may not be well-funded, the first thing we would
do is try to get as much documentation to show a market.

Second thing we would do is try to figure out how to get indication that there
would be a market by either going to market doing surveys, getting pre-
commitments from people, if we do this thing, we do that. The third thing we
would do is wherever possible, I would secure a prestigious advisory, the board
of advisors. By that I mean I get people with prestige or at least with a current or
a former job function that connoted and explicitly or implicitly convey that they
believe in what youre doing. A lot of them will say, I dont want to get involved
unless you raise money.

What you want to do is get a letter for them saying, if you raise money, I will get
involved. Thats a lot more powerful than saying I hope to get a bunch of exciting
people, if I raise the money and you can do that. The next thing is may be
breaking your preposition into tranches, because I have found I dont know your
world. I dont know venture capitalist. I know lots of other kinds of investors and
theyre always scared.

Theyre scared of great sounding concepts, theyre scared of too technical or too
zealous of people. If you can show them that youve thought through the steps
and they probably wouldnt give you all the money anyhow in one fell swoop.
Rather than asking for it, turning the table and saying I wouldnt take all the
money first let me prove this then let me prove that and using milestones and
benchmarking as the demonstration that you really get it is very, very powerful.

Im noticing people are looking like youre getting a little bored with being
preeminent, but I can promise you preeminence is honest to God the pathway to
accelerate everything else. The other pathway is understanding the dynamics of
trust. Most people dont understand that the ability to create trust is probably
the highest leveraged soft skill that you could master. Im going to give you a
couple of the foundations very quickly courtesy of a colleague of mine, Steven
and Mark Covey the son of the one at the Seven Habits.

They did all these studies and they found that companies that are masterful in
trust building, their stock is three times more whatever the factor they looked at.
They accomplished their goals three times faster. Its a very, very, very great
clinicals behind it. Most people dont think, I mean Im trustworthy but trust, its
a characteristic that you convey to the market. Ive got a list real quickly of the
trust building factors.

Let me just find them for a minute and well go through them and then Im going
to give you five more things and then Im going to either leave because I dont
want to go too deep with you, but I want to talk about strategic alliances
partnerships and things weve done over the years that have generated billions
of dollars by figuring out how to capitalize on other peoples infrastructure,
resources, human capital, etcetera. Im also totally disoriented.

He thinks theres 13 behavioral habits of a high trust leader. I think I told you
that leadership is anything you do and leadership isnt just what happens when
youre the CEO. Leadership is what you do in any interaction with anyone else
because your goal is to add value, demonstrate understanding, respect, and
competency and when you lead people they will follow it, they trust your ability,
your capacity and your intention. The first thing is straight talk.

Straight talk, all of these are going to sound various simplicity, but it was like that
the young man who was up here saying we have no problems at our age. You
guys are blessed, God your brains are extraordinary, your understanding is
extraordinary, 95% of the young adults your age have monumental problems in
this country and its even worse in other countries, 95% of their parents have
major problems because they dont know what to do with their kids. Theyre
hoping and praying while theyre still alive and theyre still in there, the parents
and their peak income earning years, they can help figure out what to do with
their kid. This is a big thing.
Straight talk means being able to communicate with clarity to others in a way
that resonates to them not to you, its not about you its about them if you want
I mean the most selfless things youll ever, I mean the selfless thing youll ever
do is be selfless, always being externally focus in connecting with others is going
to give you ownership of the world, demonstrate concern. This is simplicity care
but at the same thing I feel what its like to be in your shoes. I understand.

You can even be very explicit instead of implicit. If I were trying to get a co-
founder and I didnt have a lot but a great idea, the first thing Id say lets look at
the factors you want. I dont have a lot of capital, why should you trust me over
your current job or your option. I would have very compelling reasons why.

The reasons why by the way is a phrase you should indelibly embed in your mind
because reasons why, are the guiding force to everything in life. Why do people
do something? There is a reason why, it can be explicit, it can explicit, it can be
verbalize, non-verbalize, but everything in life needs to be connected to the
reason why and the more logical it is, it is compelling the more emotional you
attach the logic, it moves people.

I got to tell you a story because its very compelling. Do you know the story of
Damocles and Pericles, you guys know it? Nobody knows it? Its a famous story
from Greek mythology. Apparently Rome was attacking Greece and everyones
trying to get, everybody rallied to fight. I cant remember which was but I think
Damocles was the famous orator in Greece. They brought him in and for three
hours he waxed poetic about why we should fight and does some that.

It was probably one of the most remarkable speech has ever recorded and at the
end never one said what an extraordinary speech. Then, there was this little
farmer named Pericles whose family have been in Greece for Eyons and they
loved, they love the freedom, the beauty of the wonder myth, the environment,
they had passion in their heart, they wanted to see not just their childrens
children but the childrens children, all the townsfolk keep growing and enjoying
the purity and the freedom and this poor man had terrible education, terrible
innovations about confronting an audience.

He got up and hes very broken language, but he has very heartfelt language, he
made the case as a father, as a 12-third, the 120 of generation Grecian and he
talked about their children and their future kids and their lifestyle. When he was
done they all said, lets march and what you want to be able to do is get people
to say to you in whatever application you want to take it, lets march and Im
probably going to stop. Questions?

(Clapping)
One more thing, I got to tell you, I again this is a right-handed compliment not a
left. You guys are so impressive, but you have no idea, theres a phrase I think its
in Germany youve fallen and your ass just fell into bad butter. You guys dont
know the assets or the access available to you and not just directly but the
connections and to use the two years youve got or the remaining years on your
fellowship to gain access information, knowledge, clarity is probably one of the
most priceless privileges you will have.

I used to be in the seminar business. I never wanted to be in it. We need to go


around the world and I was fortunate, lucky, gifted at the time before the
internet. We would think $4 million dollars of seminar and I took it for granted
then the internet came and you dont realize sometimes what you got until its
gone. I hope, my hope for you because I want to leave with the hopefulness
because helpfulness is foundational to all of being preeminent. My hopefulness
is that everyone of you figures out your project, everyone of your project gets
funded, that everyone of your projects it gets funded and successful, that
everyone of your projects it gets funded and successful, goes public, that
everyone of them is worth $20 billion but statistical probability in a world that
says 19 out of 20 wont do that gives you a lot of motivation to use your
opportunity to its post advantage while youre here. Thank you, gentlemen and
women.

(Clapping)

Speaker 3: May I have one of the couple questions.

Jay: Im sorry sure.

Speaker 2: Are you willing to

Jay: I just dont want to intrude.

Alex: We can obviously try to start again to the heads of did the people try and talk to
you and figure out what their motives are but how do we, whats the best way
you found to downplay or age and experience in the first email, the first call to
try to get their attention?

Jay: You have an advantage. You guys have an extraordinary advantage. You can use
self-effacing, the truth does set you free. You write somebody and if its okay to
use their relationship with the fellowship, just say Im only 19, but Im one of 20
people so like that out of 2000, so like that out of probably 200,000, I have going
to say this, I forgot to tell you this.

People take everything for granted because our world has gotten so almost
superficial. I was going to tell you that I was on vacation, I had about 50 people I
was supposed to talk to on Saturday and Sunday that I cancelled. I flew here and
I stayed up all night trying to think about what to say to you, which I didnt say
everything I wanted. I wanted to tell you that not for you to go, wow, Jay thank
you but you have to appreciate what goes into something or you cant
appreciate the persons message.

If the message has no impact, it is worthless so its not just the message, its why
should I believe the messenger. Alex you just say to them look, you virtually start
with a context so they will appreciate that your youth is why youre writing it. In
my field, I probably have a knowledge-based that is eerie in the rest of my world
understanding I dont which is why Im writing. You tell it truthfully and one of
the gentleman, the one who was talking about the doctors who wouldnt give
you what you wanted, you got to know what you want.

You got to ask for it, you got to be ballsy enough to articulate it, but humble
enough to resonate with him. You could say Im going to ask you something, you
may have say its going to sound brash, but I wouldnt be asking if it wasnt
important to me. It means a lot it will probably more to me, but I hope it will
mean a lot to you because I think and you show him how their investment, its
an investment of time effort, opportunity, perspective could transform your life.

Its a great capitalist, admitting on the phone, 10 minutes on the phone and
meeting and you play with it. Understand what Ive said. You guys understand
empirical testing in science. Its no different new with interaction. I come from
the direct response field. Ive seen one way of articulating someone I used to do
consults, I used to, I was looking for good clients youd say yehey Ill talk to you
free.

Then, I said because I used to charge two grand an hour, then I started charging
five grand an hour. I would say Ill buy you $1250 of my time. Its a lot better
than say we can talk free for 15 minutes. I got 10 times more people and their
attention and their you test. You guys all the time you guys have and all the
things youre doing for your project, allocate an hour of your day or every other
day to build relational capital because relational capital will serve you guys so
well if youre successful and will serve you even better if your success ends up
being a little bit more deferred than you think. Other questions? Yes.

Speaker 4: Would you mind repeating what you said right before the last thing

Jay: I dont remember the last thing.

Speaker 4: You said something about Ill buy you 12

Jay: Oh, I just say Ill buy you instead of I mean I have offered, I one time when I
was first trying to do something with people, I would offer to buy their time
because if he makes $2 million an hour I divide it by and say Ill pay you $500 but
when I was doing consulting, very aggressively I would always be willing to talk
freely to somebody for 15 minutes to explore their but then I changed the
position.

The point I was making was not Ill buy you 1250, its by testing one articulation,
one overture, one way of verbalizing it over another, you can impact positively
or negatively your result enormously. By the way theres a great book it was
done in 1952 and it was on marketing, its called Reality and Advertising. Its
older and archaic but Rosser Reeves he was former CEO of J. Walter Thompson,
when they were at their absolute peak, they found that certain advertising
marketing, not just was neutral, but negatively impacting. This woman I was
talking about who does fascination, she found that certain personality and
certain approaches dont just neutral they will negatively impact somebody.

Theres a lot more at stake for you to harness and harvest the magnificent of
your brains and your brilliance, you got to also slow down a little bit and go
outside of your scientific realm outside of your deep, deep understanding of
whatever youre doing and redirect your brilliance to understanding others. I
mean its arrogant, its improbable that the first time you do anything.

I mean you guys because of your intellect may have started doing geometry
when you were six, but most people when they try anything new, they dont do
well at it. I used to be very much into gymnastics, I broke all my shoulders but I
used to do a handstand in the middle of the room for an hour and one day I
thought I also do 800 pushups so that I should be able to do what a couple
hundred pounds on barbells. I couldn't even lift the thing because it's different
muscles.

When you try to do any of the things I just talked about you are engaging a
different heart of your very profound and impressive intellects. Dont use it for
the biggest deal youre going to go after first, use it for something that is really,
its expendable. If you guys screw up which you will, but if you do well, think
about what you did, what you said, if you didnt do well, then basically debrief
yourself or have somebody do it because your greatness will be, I mean I could
give you a 10-hour thesis on all the kinds of leverage and area in business
marketing, all kinds of things that you guys dont even think about yet, but the
biggest lesson on leverage I will give you is the leverage and your ability to
connect and communicate with others to get you cant get what you want
unless you can give others what they want. You cant give them what they want
if you dont understand what it is. Other questions? Yes.

Speaker 4: Thank you very much I think and personally I felt really emotionally moved by
your speech and I appreciate the effort and the opportunity cost it for you to get
here and speak to us.
Jay: Thats gracious, thank you.

Speaker 4: I want to return to the story you told about sitting down with a man for 15
minutes before your speech where you asked him Socratic questions. In my
experience listening tends to give you understanding of the person, but it
doesnt give the other person understanding of yourself as much as if youre able
to also explain your background. I want to explore attention between

Jay: Yes, good point.

Speaker 4: Talking about yourself and listening to others.

Jay: Great point. What I have found and again you guys have one dynamic that I
concede openly as way out of my wheelhouse and thats dealing with venture
capitals and the like. I have founded every other arena the first thing you need is
to win the trust and the respect of others and then you can insinuate what they
need to know about you.

You can then move because you are now leading the conversation. You could say
I think its probably good now if I tell you a little bit about me and my vision, why
I think its good, why I think it makes sense, what I have done already to verify
that there is a market, how I think I can minimize the downside maximize, but if
you start with that before they trust you or they feel connected with you.

I mean I used a Socratic interview not manipulate. Manipulate is lot of words


that have the wrong connotation, manipulate, cunning theyre not negative
words, they just have the bad rap. Manipulating the dynamic of a our world is
about communication whether its verbal or not so I would say you still better off
to understand them and the more but not patronize, not just look them up on,
link in or something and spew a bunch of silly patronizing superficial verbiage,
but demonstrate that you grasp the implications of whatever impacts them
whether its a capital resource, an endorsement resource, a deferred payment,
vendor resource, a co-founder resource or recruiting resource.

I think the more I feel like I can relate to you that I get you because you really get
me, then and again I dont disagree, but I still think you start by winning me over
and then moving the conversation and that has to do with the again I could
take leadership I mean unfortunately I was trying to give you guys a whack on
the side of the head, in a context that other people werent going to address. I
could take any of these and you guys should. I mean my offer to you guys is one
of three things.

One never see you again, two, if you want to avail yourself of me Bryan knows
Im bored on what I do in my real life. The reason I said it would be fun to deal
with you is you would be impressive, anybody can be and I have very unusual
aggregated skill set. Ive done things all over the world and bunches of different
industries and bunches of different aspects that deal with all kinds of things
transcendent of just marketing and strategy, but theyre all related to
understanding that human beings and all the factors and the critical thinking and
all the implications, yes sure.

Speaker 1: Jay I want to underscore that something made you said originally also hinted out
on this answer to you about that issue. I was, I dont know if you guys know, you
probably do, but I started coaching CEOs when I was about 27. It was right
before the First Dotcom-Bubble Burst in 2000 and in general Silicon Valley CEOs
thought they have it figured it out.

I didnt know the first thing about venture capital I had run a service business
and not raised any money; I was an idiot in 1999 for not raising money and a
genius in 2001 for the same reason (laughing). I would ask questions of the CEO I
had about 30 seconds for them not to tell me, "Get the hell out of my office
what are you going to tell me?" But I have to ask questions that were interested
in them but the sophistication of my question indicated that I understood their
domain.

I understood their landscape. I dont have to talk all about me at all to win them
over. I just had to ask really good questions. If you think about people in your
field who ask you a technical question, you can tell immediately whether they
get it or not by the kind of questions theyre asking about your project. Ask the
kind of questions

Jay: Great point.

Speaker 1: That indicates to them that you get them.

Jay: Theres another thing that I was going to say and I thank you I forgot it was on
one of my notes but I couldnt read it. I had a couple of different jobs that
accidentally taught me this lesson. The first one was when I started I didnt know
what to do and I just go to people randomly looking but I have a funny Ill tell
you the story because it was hilarious, it shows how idiotically adolescent I was.

In the old days, now everything is more open but most businesses would have a
receptionist and they will have a little glass window with an even smaller little
glass window that they could talk through. I had a business card made up that
was that big and it said something like You See Sales and I would go there with
the card at my side and Id say can I spend, I'd call ahead and find out who the
owner was. Can I see whatever What's your first name? Sam. Can I see Sam.

"Well whats your name?" "Jay Abraham." "Who are you with?" I'd look around
and say, "Nobody." They said, "Do you have a card," and Id say, "Yes," and it
wouldnt fit in the hole. (laughing) They'd look at me and they would always take
the card into and I always got an interview. They said look and I would say I was
hilarious, I dont know but it sound, its going to sound discriminatory I think but
I would say I was a poor young up and coming, Jewish boy from the Midwest
without an education trying to get by in an ever so, ever so difficult world (sniffs)
while suffering one of the most inflamed sinus conditions of my entire young life
and Im just looking for some guidance.

It worked pretty well (laughing), but then I had another job that was even more
intriguing. I worked for a company that was one of the largest generators of
leads/prospects for investors, business publications, subscribers and we had so
many prestigious clients and I was the newbie but I would get on the phone and
talk to the Executive Vice President of Marketing or Selling back then Meryl
Lynch or John Nuveen and these are companies that probably aren't even in
business Well, Meryl Lynch is but Nuveen and et cetera.

I realized I didnt know squats so I asked questions. When I was done I was going
to say that theyre both histories. If nothing good happen with the big card, but I
got an interview I would ask probative questions that secured for me language
patterns and understanding and I go across the street figuratively to the generic
competitor and I can talk very intelligently because I knew what I was talking
about.

I always would recruit people for jobs that didnt always exist and ask questions
about how they would do things when I represent it so I learned about things
when I was in the lead generating after awhile you had the buzz words. If youre
in the business, assumption is a very fascinating power particularly if you
understand all the implications of leadership. If youre ballsy enough to get on
the phone with me and you are a leader and you have the right language
patterns and theyre not superficial and you can convey to me that you grasp
how they impact me at my business, I will respect you.

Its a fun game again Im not trying, Im trying to honor you guys with your
extraordinary intellects, you guys are able to take this to the moon and the way I
would do it because you guys when you got this 400 IQs in this room all of you. If
I were you, I would, if you really like anything I said I would each of you try to
separately figure out how you would apply that and then Id share it all with each
other because the fractal dynamic would be geometric. Anyhow, anything else,
yes?

Speaker 5: Just to illustrate the point that you just made, Im going to share a little bit with
you. Im a mom mostly. I have been for 23 years now, but somewhere in my
momming career I had to go back to work. My sister who had worked for
Genentech got herself into recruiting. She was in the HR department at
Genentech and out of that she decided that she was going to start her own
recruitment business.

After she had gotten that rolling, she invited me, a mom, who dropped out of
college two years into it because I became a mom. I said well I dont know
anything about biotech obviously and I dont know how to do this and she was
like oh really its just about your ability to pick up terms and phrases and
articulate yourself. You can see that Im fairly articulate so I gave it a stub and it
turned out that I was really good at it because what I would do is I would get a
job description and then I would get an apartment and then I would start making
phone calls into these departments where I would use the language that came
into job description.

It made it possible for those words, that language made it possible for me to
communicate with people about things I have absolutely no idea about
whatsoever. In a way that made it sound like I actually did and in a way that
made it possible for those people to want to keep talking to me so that then I
could steal them away from their current company and put them in a different
one (laughing) and it worked out really well, thats a little illustration its really
just getting curious and then theres a languaging. If you can pick up little bits
and pieces its easy.

Jay: That leverage on one last note, then I would get off here, but the number you
guys understand mathematics, the numbers will work for you in particularly if
you spend time to carefully understand the dynamics behind the
communication. You debrief yourself or you carefully, you analyze or quantify
whatever the impact of what happened, you can make, I mean you just cant
believe what youll be able to accomplish if you put a little bit of your time into
this kind of soft areas besides the other areas that youre focused on. Anyhow
thank you all.

(Clapping)

Speaker 1: One more question, sorry.

Jay: Oh yes sure.

Speaker 1: Just one more question to follow.

Jay: Certainly.

Speaker 6: Im really curious about the time you got that free advertising on the radio, we
all love things for free like what are like the actual steps look like

Jay: Yes, sure. Let me give you the concept. It was very cool because we turned it
into, we started we took a $20,000 companies, its going to sound silly in your
world now with billion dollar valuations, but I didnt come from that. We took
the 20,000 in our company with almost no buyers, built 500,000 direct buyers, in
18 months, got 40 or so million dollars of free advertising, sold it to a public
pharmaceutical company in 24 months, and it became, you may say its called
Icy Hot and if you know what Icy Hot its it was an analgesic balm that went
back to the and Ill you the story.

The guy worked for was brilliant. He would find this online, patent medicines
that were started by very dynamic people who are the equivalent of you guys in
the pre-techno age and then the second and third, and then the second and
third generation wouldnt want it and they would be dying out. He would buy
them on an earn-at including their factory and equipment, we talked about
leverage and he realized that because their business was like that, nobody knew
replacement value known and was buying anything else.

He would pre-sell the equipment and the building before he closed in double
escrow so he would end up making money on the transaction. He had a very big
business that basically it was all chemical, it didnt matter, were just changing,
cleaning the mixing pots, and cleaning out the tubing that carried it. He would
then put it through different distributions. We were the first people before we
had you guys wont even know theres band one, band two, band, do you know
what that was, it was watch before long distance, you have to buy a band like a
contiguous state hilarious.

I had IBM I used to be the only person understood the power of customized,
personalized letters when IBMs were automatic typewriters had a tape that was
read by a photo electric reader to show you how old I am but anyhow. Here was
the problem, we had no money, we had this product. We were just going to sell
it conventionally, a little bit we stopped manufacturing for awhile and we got
these letters from little old men and women heartfelt saying I cant go to church
on Sunday, I cant get up from my chair without Icy Hot.

We decide you want to go but then we have to figure out how do we with no
money. I got appointed to figure out. The first thing I did was I called a bunch of
people and I was very nave and I said you dont take performance-based
advertising do you? They said no and I said thank you [inaudible 01:12:01] and
was deflated. Then, I met people and started invest again. I said okay who has
access to the radio station, who has access its a big question by the way, who
else already has

Im sorry to say this because Ive done days and days on relational capital, who
has access to the same decision maker and would be in a great position to
benefit you because youre not at all competitive, they might have already
popped their cork and so whatever they got to sell but they worked the
enormous amount of time building goodwill and relational capital.
I started identifying who already had those relationships, it turned out to be the
representatives in the radio business, there were regional, national reps for
different stations, different groups, there were syndicators that sold in, there
were jingle companies that sold jingles to the stations, there were technical
people, there were consultants that would teach you on air personalities, there
were sales trainers. I found all of them.

At first, I will tell you a fascinating level of story. At first, I thought I'd hit the
mother-load with the first one and I gave them thats why when you negotiate
with anybody for anything you got, I didnt say this, you cant give away the
story. You have everything be conditional performance-based and almost the
equivalent of if you can do it phantom-type equities and things or get
exclusivities until you figure out where they really can perform.

We picked up this representative group and they were going to get the world
and they got us 50 stations. I want to go backwards and then they stopped and I
realized that everyone's got there little core and that was it. I stopped trying to
do exclusive. We took it away and we ended up having 10 different distribution
sources. Some of them would overlap and our deal was whoever gets, gets it,
because I might talk to you and Im not influential enough he might talk to you
and after you've talked to talk to him and go, "Crap okay Im going to do it."

Now we got influence but thats not the big problem. We found out that radio
station, television station and magazines they all have, just like cruise lines, they
have underutilized assets. Back before deregulation and now its even worse
than that but before deregulation the radio station had 12 to 15 minutes, at TV
some number of minutes per hour. If they dont use it, this hour its gone
forever. Its evaporating. Its a diminishing asset.

If they use it incrementally, its all found money particularly if their overhead is
born by everything else they do. We found out that they did affirmatively do
different kinds called P-I-P-O paid on per inquiry or per order share of it. We try
to figure out, theyve got always people offering them how can we be
transcendent, how can I stand up? I did a bunch of things.

First thing I did was I said okay, whats wrong with this picture, why would they
not, not what they want it, why would they not want it. Why would they not
want it? They wouldnt want it because its a pet mess. They wouldnt want it
because a lot of people who sell stuff on performance have the money sent to
them, they dont deliver, the station gets all the flack, its not worth it.

Number three, why wouldnt they want it? They wouldnt want it because they
only get a small share of the sale. Number four, why would they want it? They
would want it because they didnt think it would sell. The first thing I said was its
sold back then for we did it different I'll give you an easy price point of $3.
We went to them and said look heres the deal you keep the $3.

We just want the order and we want to get it fast enough that we can fulfill
because we want the reorder and if we wont get the reorder, think about it
logically. We wont get the reorder for product doesnt at least deliver if not over
deliver. Number two we dont deliver. I dont mean product delivery meaning
fast, I mean the result. Third, its appearing as an alternative. Were banking and
investing on the future.

You can have all the front money and we used to pay a premium of 15% above
that to the third party that provided it with this and Im going to give you the
financing in a minute too so that was first thing.

Second I said but you as a station or you as the magazine or you as the general
manager the radio TV station, you probably worried what happens if we dont
deliver. We wont even allow you to promote until weve sent you two-dozen
jars to have right there to protect you. We dont think anyones going to ever ask
for it but if they ask for it because there are some glitch in delivery, wed rather
make it two jars and love you and us than not.

Third, was we were fine basically letting them keep the money because we
didnt care, none of them wanted to but we offered it to them. Well, you keep
the money or well send it back it didnt matter. Then, we run the commercials in
three or four representative of different markets where we could show metrics.
We could say, look heres what it is and heres what it isnt. Then, we were able
depending on its yield were willing to adjust compensation more.

Why were we because every time we give away $3.45 we were accruing I think
our cost was back then it was 45 cents in the mail for the gloop or the glop, the
jar, it was third class mail it costs us 45 cents including imputed labor to ship it.
We were charging $3, we had about 80% repeat, ad infinitum, literally for years
and years. Every time we give away $3.45 we were accruing 80 or 90% of 27 or
28 dollars a year but it got better because when wed send out the first jar, we
would add to it an offering of all kinds of other products and about 50% would
buy three or four of those and we had about 50% that would buy multiples. We
were cash flow positive in month one, does that help?

Speaker 6: Thats awesome.

Jay: Okay thanks.

(Clapping)

Speaker 1: Thank you so much Jay for coming.


Jay: My pleasure.

Speaker 1: Yes.

Jay: Thank you for inviting.

Speaker 2: We love you Jay. Yes thank you. That was great.

Speaker 1: It didn't look like a train wreck from back there so I think we delivered.

Speaker 2: Yes I think we delivered it here. Thank you, Jay.

Speaker 1: It reminds of just like that last story. Some of you know, many of you may not
but Adam Pagdon who spoke two days ago here for the 2012 fellows, he has a
pseudonym. He is known by another name of David DeAngelo. One of his first
big businesses was selling dating advice particularly to man as David DeAngelo.
Anyone ever heard David DeAngelo, okay great.

Hes also David DeAngelo and he makes about 20 million dollars a year on the
dating advice business still. Most of his leads come from companies like
Match.Com. You go to Match.Com, youre looking for a date, theres an ad that
says, hey if you want to get better and looking for a date, if you want to how to
fill out your profile, click here thats how a lot of those lists coming.

If he pays Match.Com, about 300% of the first sale, its gone up from 15 cents on
top to 300%. Again because they know down to the hundred of percentage what
the lifetime value of the customer is. Therefore what they can afford to pay for it
and thats why market where most of his competitors are really starving. He
does phenomenally well. Its just the power of knowing what the lifetime value is
and therefore knowing what you can offer as you said transcending the crowd
and becoming someone that can offer you something no one else can.