Ep 303: Why The Best Business Minds Make The Most Amount Of Money with Liam Donnelly

What is it that the best business minds do to make the most amount of money? Hi, I'm Joe Krause. I'm the host of the Buying Online Businesses podcast and today I'm speaking with Liam Donnelly. He started his first online business 11 years ago. Since then, he's had many failures, like competing toe-to-toe with Alex Hormozi coaching gyms from 2018 to 2020, but he also has a few successes.

His go-to humble brag is that he achieved the four-minute mile of doing 100K. in cash profit in a single day. And his new company, Archway Media, is a social media content company where Liam strongly believes that social media content marketing is more in demand as business owners realize that the modern day landscape of branding and building a business for client attraction has changed completely.

So he strongly believes that his company is one of the best in the world at business social media content and his own content and growth of Archway will be an ever evolving case study. So watch this space. Now, Liam and I got started working together actually back in 2017 and we've known each other since then. We've had multiple discussions. He is such a brilliant mind and he strategic thinking is definitely his genius zone. And he and I caught up, we caught up in Bali and he started a new business. I'm a part of the new business jumping in as a member.

And in this podcast episode, Liam and I just wanted to chat with him about business. Like I want to chat about the failures that he's made, the successes he's made, what he's learned, how his brain actually works, how he's built massive businesses, tens of millions of dollars worth of businesses, how he's failed in business and what mistakes he's learned.

We talk about a few key ingredients that make very, very profitable business models and why some businesses make so much money even though the founders aren't the smartest. We talk about acquiring those types of businesses and growing those types of businesses. We talk about masterminds, we talk about communities, we talk about growing ourselves as people and also how we can do that with our businesses with the least amount of stress possible.

Now, Lean is such a brilliant business mind. If you are wanting to scale your business and tap into the mind of brilliant business people, listen to this podcast, you are not going to be disappointed. Enjoy.

Liam, welcome to the pod.

Thanks for having me.

Long time listener, first on caller.

Yeah, that's right. Mate, long time.

Talk about long time. I guess I should just give a bit of a background for people listening. Launched buying online businesses in 2017, right? And as after I got home from like a year and a half surfing on sensor on South America and I got home and I spoke to my cousin, Jordy, I like, I need to, I want to get a mentor to help me know, launch this thing and grow it.

And I got Ryan, Ryan on bet board, Ryan Magis helped me grow it and we crushed it. We did really, really good. And his sales guy, him and I sort of connected and he sold me into Ryan's 20 grand program. Within a couple of months, I started posting results, know, 40, 50 grand a month and stuff. And the sales guy, Kai, he called me up and was like, dude, I want to come and work for you. And I was like, I can't.

Like I can't hire you dude. I've only got enough leads for myself. He's like, get more leads, hire a marketing manager, hire a marketing mentor. I was like, who do I hire? And then I spoke to Jordy again, my cousin Jordy, and then spoke to you and started working with you straight away. And that was mid 2017, right? So seven years ago, yeah, it helped with Bob. And from then things have evolved and changed. What got you to from, I know your background in terms of your online coaching, personal training business, I guess it was a, what do call it? Personal training?

Yeah, online fatlosscoaching.com, very original URL. Yeah. But like we had to describe what it is because no one knew what it was. people didn't understand it. Online coaching, what do you mean? How is that possible? Like it was just because there were no membership sites or anything. Like we were delivering all the programs via email and like it was, yeah. Yeah. basic business. So when did you start that online? And so just for context, you started this with your brother, right?

Jordy, who is also in Bali. I hear him and I chat a lot and we're be surfing a lot more regularly now. And you ran that with your brother and then sort of like as time went on, you sort of handed that over to my cousin. My cousin started working, who's also named Jordan, started working for you guys.

Yeah, it's pretty confusing. Every time I explain this, it's so confusing. Why did you start it and when? Super simple, I was a physio and I graduated physiotherapy and landed my dream job basically straight out of uni down near Bells Beach, which if you're a surfer, like it's a really famous surf beach.

And I literally worked across the road from my house, which was like five metres from the beach. Like I'd kind of nailed it straight away when it's meant to take you like 30, 40 years to like get to where you want to be with your career. And I thought that that would be awesome. But then it turned out that I was like really dissatisfied. And the reason is that I hated the fact that I was restricted by a calendar.

And surfing is such an interesting sport, right? Because you don't actually get to choose when to surf. Like you're really forced by mother nature to surf when the tide and the wind and the swell direction and everything lines up. And so just because you have a day off or just because you have a morning off, doesn't mean you can be like, I'm going to go surfing on my morning off because that morning off there might actually be no waves at all. It actually might just be absolutely terrible.

And so this would happen to me consistently. And I would be at work when the waves are absolutely pumping and there's like professional surfers have flown in town to like surf these waves and I'm just stuck here 500 meters from the pumping waves stuck in a building. I think the straw that broke the camel's back was I had a mate of mine who ran an online business and he was one of the only people I knew that did it and he rang me up and said we've got this epic surf trip booked, we'd love you to come and I couldn't come because I couldn't get the leave with work and I had all this money in the bank from saving up and working hard and I just had this moment I'm like what is the point of working?

I'm working so hard to save all this money and I can't do the things that I love to do. And so that's when I just thought I have to figure this out. And I think I Googled something like how to make money on the internet or something into Google. And that's what started it all. yeah, I think I'd like to say like I created my dream business and blah, it's just so not true. Like I think the first year it was so scary quitting my job and then I probably quit my job too early, but I was just, I was so impatient. I couldn't stay.

Like all I was thinking on was online business all day, every day whilst I was at work. And then I tried to start a business and I think I started an affiliate marketing because I think that's probably the first thing that popped up in Google. And then I was like, I can do an online physio thing. And I had tried so much stuff and in classic like one entrepreneur fashion, I didn't stick with any of it long enough.

And I just jumped from thing to thing. And I ended up, yeah, basically running out of savings and having to move back in with my mom and dad, which was like really. embarrassing and humbling experience, especially because I'd started telling everyone that I was going to build this online business and I was so excited. Yeah. And then I had to do like the really crappy and I think I don't know if every entrepreneur goes through this, but I know it's pretty common, but you know, catching up with old mates from school and that sort of stuff. And they went down a different path, maybe like the corporate path and they were earning like insane money in banking and stuff. And they were looking at me like, yeah, I'm like, you're living a life, you're working online, like how's it all going?

And inside I was in so much pain because I couldn't make it work. And like I was getting a bit of sales here and there, but then money was coming out as fast as it was coming in and just, I was just like flailing, more drowning. And I had to lie. I was always, I didn't have to lie, but I just always defaulted to lying. I was always just like, yeah, it's going really good and like really busy. And just, I was embarrassed about it. Isn't it so crazy that most 90 % or more business owners are in that position.

And well, I know it now because I've coached a lot of them. But I didn't know it at the time because you just look on social media and looks like everyone's killing it. Well, I was just about to say that, right? It's like, it's very easy to project, portray that your life is just perfect all the time. And even my friends would be like, like you and I, we do have a dream life for most people, let's be honest. But they don't know the difference between you now and you then your life, your business life then.

Same with me when I was like in 2017, started working with you, my head off, like working my arse off, running around like a headless chook compared to now. It looks like I'm still the same level of success, right? On the outside, but life, like as you start to evolve in business, I guess, if you work on yourself, then it's very different. Isn't that scary to think that most people are lying and they're lying to themselves as well, which is the worst.

Yeah. And I think you and I probably did the same thing, which was like, we have to get out of our comfort zone here and change something because my dad always says the definition of insanity is doing the same thing over and over again and expecting a different result. I'm sure he didn't make up that quote, but he just loves saying it. But yeah, during that time, my brother and I were fed up with it. And the latest thing that we're trying was an online personal training business because Jordy was a exercise physiologist and I was a physiotherapist.

So I was like, okay, this makes sense. We have some expertise in this realm we can do online programs and he found one guy in Australia who's the first guy we heard of doing online personal training and we jumped on a call with him and he offered to help us and he did actually help us initially and we actually started getting a little bit of results and then he got another call with him and he was basically like, if you want coaching from me, it's $35,000.

Was that Lin Tren? TJ. TJ. Yeah, yeah, yeah. And we didn't have 35 but we need to put down a 10 % deposit.

And actually, Jordy was my brother, like we were both so young, but Jordy was four years younger than me. And he still had a piggy bank from like, when he was like 16. And so we actually went to the physical bank, took his little piggy bank, cracked it open to get like the last couple of thousand dollars for the deposit for this $35,000 coaching program. That was so scary. Yeah. That's ballsy move, hey? That's a very ballsy move. But I think we just realized, and maybe you were the same at that point when you were starting.

Well, because you were just like, need to do something different and I need to get around better people. And you just, what's your other choice? Like just keep doing what you're doing and just kind of try and figure out yourself. Like it ended up being the best decision I'd ever made. And it's not because, you probably looking back, think the same thing about working with me. It's like when you pay $35,000 or something, you're like, got this imagination, like it's going to be the most greatest thing ever.

Everything's going to be perfect. And it never is, but it still is a great decision because out of the 10 things that you thought were gonna happen, none of them didn't happen, but one of them did. And that one thing was still definitely worth the 35 grand. And like, that's how I look back at that coaching with PJ. It was definitely not what I expected. And I wish I went into it wanting a lot more. But then I look back and I go, that set me out for the rest of my career and rest of my future.

Also, I think it's the same thing for me is the first time I spent 15 grand on coaching, I got results before that I was doing all these free seminars, like going to these free seminars where they'd pitch stuff from stage, right? Until I found somebody who's like, I'm gonna spend them 15 grand. And then changed it, like it got me into a different stratosphere.

It got me into a different level. And then I just started getting coaching, because it got me results. just started, then I was like, I worked with Ryan and then I worked with you and I just kept paying. And at the start, like to drop 20 grand and to drop 30 grand, I dropped 50 grand in just like two months, three months.

20 grand. Yeah, it was back then, right? Like 50 grand came easy. It was like 20 grand for Ryan, 30 grand for you. And it was just, that was a 12 month thing. And, but the beauty about that is that when it is a fair chunk of change for you, you're gonna get the, holds you accountable, like nothing else, like more than your coach at the time, right?

Yeah. So I wanted to ask you, let's run through like some of the businesses you've done. So you've done the online coaching on Ryan.

I lost all my money or the ones that actually made some money? Both. So two biggest failures, I guess, and what did you learn from them? And then what are the two biggest wins and what did you learn from them? And don't feel like you need to rattle this off fast. We can digest. Yeah. Yeah. Well, the first one comes to mind was me and one of my best mates decided in 2020 that we would launch a mobile massage clinic. Remember this one? Well, even clinic, just a mobile massage business. We're going to franchise it and everything.

Pollers were marketers and the easiest clients we got results for were massage therapists. Like we were getting people bookings for like a dollar. So like a dollar from Facebook ads and then they would come in for a $60 massage. So was like 60 to one return on investment. Ridiculous. And we were just sick of, and our clients were always complaining like that it wasn't good enough and stuff. we were like, we've come from different industries where like the ROI on ads is so hard to come by. And this was so easy. And so we got stuff that we'll just…

We'll just do our own. I'm a physiotherapist. know how to do mobile massage. I didn't obviously. Anyway, it was a bit to do with timing as well because when we finally launched COVID hit and so obviously couldn't do in-person massages with lockdowns and stuff. But we also didn't realize this, but we invested over a hundred grand into it. And one day we woke up and my phone just started ringing off the hook. had therapists all around Queensland just in their cars, driving around to people.

Like it was going really good. was in the first two and a bit months of launching. How many therapists did you have? 11, I think. Whoa, okay. Yeah. Yeah. We scout and that was not a mistake. We scale way too fast because we're so excited. We're like, need to get 100 therapists. Like we're looking at revenue numbers. Like we're just scale, scale, scale. We can fill them. But then yeah, bang on nine o'clock. So I think first session was eight o'clock. People would massage for an hour and bang on nine o'clock.

My phone started ringing off the hook. And it was like all the therapists who were trying to charge their clients couldn't process the funds. And I was like, what is going on? And then like, checked our account and like all of that money in our bank account had like been bounced because long story short, we had this issue with private health rebates. So in Australia, like people, whole private health insurance can get discounts on massages.

And that was like the crux of our business was like 60 % of our business was from private health insurance holders. Turns out, you're not allowed to bill mobile massage through private health, even though everyone in Australia does it. And so we just assumed that it was legal, but it's actually not legal. And there was like a loophole that we could get around it. But our plan for this business was to like scale it up and franchise it and then sell the business. And we can't sell the business with a loophole.

So we just had to make it as a hard decision then and there, even though we would like heavily funded the business, like losing money, like on the front end, because we knew we'd make it back in the back end. We just had to make a decision within a couple of days, just completely shut it down and lose all that money. And so it was like a very humbling experience because I thought I was like, I've been in business for like 10 years now, so I thought I was a big shop business guy.

What helped you get to that decision? to, cause it's a tough one to cut your losses. was it, cause eventually throughout this conversation, I want to sort of help portray how wise of a thinker you are. And I don't know how to get there yet, but. Well, obviously it wasn't very wise with this decision. Well, I mean, just like you and I have had so many like long conversations, like you're in Bali a couple of weeks ago or a month ago or so and just like the conversations that we had when we got time and space to just ponder things like things that like the amount of time that you've had to ponder life and like the stories that you shared about how you've like changed your philosophies throughout what you've done. I wanted to dig into some of that sort of stuff for people because your number one like your unique ability and your genius zone is definitely thinking like strategic thinking, right?

So yeah, how did you get to the point where you're like, damn, like what were the things that you thought about to help you make that decision to walk away from it after you spent all this money and this time building it? Well mainly like we had 11 therapists and two virtual receptionists who like salary wise like we're losing like 15k a week. a week right. When we had massages booked in and they were bringing in revenue it was fine but no one could charge their clients. So like all of a sudden we were just hemorrhaging money.

Not only that we're spending thousands of dollars a day on Facebook ads like thousands a day to book all these mousiders. But to answer your question about like how to make that hard decision, we only get so many businesses we can build in our lifetime. Unless you're an entrepreneur like me back in my early career where you're starting like a new business every six months. But to actually build some proper businesses, you have maybe one or two a decade. so it's like how many years could we progress this to recoup whatever investments we could get?

It's not good thinking on it. Tim Ferrars has a really famous story about this where he had an investment property and he just wanted to get rid of it. And his mates convinced him, no, you just need to rent it out. Like you're losing money on it for no reason. Just rent it out. He was losing like a hundred grand a year on it because it was sitting there vacant and he could have had renters in there. And he said that he listened to them. And it was one of the biggest regrets that he's ever made because there ended up being a lot of, and this doesn't always happen because I've got investment property.

Sometimes it runs smoothly, but the point was it caused him a lot of headache and time more than he realized just to keep those tenants in there and communicate with the property managers and that sort of thing. And so he has this quote, which is you don't have to make the money the way you lost the money. And he says that he could just lose that hundred grand a year and just take that time per year that he would have spent talking to property managers, managing tenants, paperwork, and did it somewhere else like a podcast or a workshop or something that you really enjoyed and then made that up instantly.

Not everyone can be in the situation that Tim Ferriss is, but I think it's a really helpful way of thinking about decisions. Absolutely. I think a lot of people do, people come up with their thought process in very different ways, right? And it can be based on those things our parents might teach us and it can be based on maybe podcasts and stuff like that. I don't know about you, but I'm very protective of what I like to believe and like to scrutinize my beliefs as well. Definitely question everything.

Question everything. especially- Where did that belief come from? Is it true? Like what evidence do I have to say that this is true? Like what if the opposite was true? Like all of these questions are just so valuable. Yeah. So it can just completely open up your mind to different possibilities. I remember one time, I think I was talking to you and maybe you and your brother.

We were talking about, I think I mentioned, I'll take you like what you can achieve in one year versus three years. What was that quote again? Bill Gates has got a famous quote. I think it's Bill Gates who says, people overestimate what they can achieve in a year, but underestimate what they can achieve in 10. Yeah. Yeah. I always believe that, but I hadn't been in business for 10 years. And now that I have been in business for 11 years, 12 years, man, it's true.

Yeah. Yeah. But like earlier on, but pretty sure I knew you before you were in business for 10 years. Maybe it was like, year five or six or something, and we started working together. But you were questioning this one. And I think just because it's Bill Gates, and I also have listened to like other people that are like crazy billionaires like Mark Cuban and Dan Pena in the &A space, talk and say certain things.

And what I actually like to do is I like to hear what they say and try and prove it wrong, or disbelieve it and try and prove it wrong. And if I can't even happen to try and prove it wrong, but like, just question like, well, what if the opposite was true? Like, what would that look like? What actions would I take? How would I think differently about the situation? Exactly. Yeah. How could you think differently and what would that process look like if you were to go down that process of like how you could do it differently?

And what I'm trying to say is that I think so many of us, especially when I first started, I was just like absorbing so much information and I'm like, I know nothing. All you guys out there online doing the podcast and the YouTube videos, you guys know fucking everything. Like, and I would just do anything and everything. People that had like seen how to achieve more success than me. I'll just do it. Like I'll just blindly do it. Then it actually created sort of thought processes and how I thought about things that may actually take me further away from my goal. Right. Have you noticed that with coaching is like people, the way people think is conditioned.

And it's got them so far, but it prevents them from getting to the next level. most entrepreneurs have like two, the initial roadblocks that stop them to getting to where they want to be. It's always kind of the same two things. And one of them is way more common, which is I just don't know what to do. It's just like paralysis by analysis and like I'm consuming everything and I'm doing nothing.

And that was me for like the first couple of years. And there's an element of that every new business I go into, like I'm starting a new business now and it's still elements of it. But I think with you, you just described the opposite of that, which is like you just took blind action anyway. And what happens is you way surpassed the initial guys way faster, right?

And so I think you, I remember you've been in Ryan's program and like you were the star student because like 90 % of them were just getting no results and you were just crushing it because you just had this blind, like I will pay anyone ahead of me any money and I'll just swallow my pride and just do whatever they say and not question it. And it's a really effective strategy initially.

Obviously you get to a point where it's like, okay, this is kind of counterintuitive, especially when in our space, like the internet marketing world where like every guru, every core seller has, whether it's conscious or subconscious, ulterior motive to get you to believe that their strategy or their way of doing things is the best way.

And so then when you kind of listening to everybody, you kind of pulled in all of these different directions because you're like, this guy is a millionaire and he knows what he's talking about. And he's saying you have to do Instagram reels. And this guy's over here saying, don't do organic, only doing ads. Then kind of like pulls you everywhere when eventually you realize that it all works. know, it actually doesn't matter what you do, but yeah, you have to find kind of your way of going about it that works for you.

Yeah, absolutely. What I like to teach is inside out philosophy of like what works for your business, what's working really well for your business and do more of that and less of what's not working until it gets to a certain point where scalability.

With that one area doesn't make sense. And then the next route is a complete test. Say for example, it's like podcasting and you put a bunch of money into podcasting and promoting and stuff like that. And you get to a certain level where it's not really the more money you put in, it doesn't equal more dollars. Cause you'd like maxed out on that. And then you go, can't need to test something else. Like do I, what is that? It's a completely new test. And I want to circle back to what you said like that, that just like blind faith of just do what the, your mentor says it works until it doesn't and then something different.

Yeah. What have you found is the typical point of like just that high achiever, high action. It works until it doesn't like, like, have you seen a common theme when you're coaching where? Yeah, it's been less from my coaching and more from the businesses that I've built myself is that I've realized the bottleneck is almost always the business model. Whoa. I wish someone had have told me this 10 years ago, but I think you're so excited to get into online entrepreneurship and online business that you just think well any kind of online business is a better business model than a plumber like you were or a physio like me, right?

And so you don't really think about it. I didn't think about it. And then as you progress. know what a business model is. I didn't know what a business model was. was just like, business model. Well, let's define terms. Like what's a business model? A business model is really like the way the client, the business attracts converts and then delivers customers. And so there's like three or four main levers that a business can pull like traffic conversion, price and retention, right? That's the first two to do with CAC, the other two are to do with LTV and that's a CAC to LTV ratio, which is kind of like the golden ratio in business. understanding all that every business exists in some point with those four levers and some are built much smarter than others.

Like for example, gyms and personal training and like fitness, it's really common to have like a churn of 20 plus percent per month for memberships. But what I didn't realize is that it, that means at the end of every year, like if you've got a thousand people in your gym members, you're going to be replacing nearly 900 of them every year and have to find 900 new customers every year. And so all of a sudden, like you realize, okay, this business has its perks because marketing for gyms and conversion is a little bit more simple because it's like, okay, well people want to look better and so lose weight and get a bigger booty or whatever the trend is. But the hard part about the business model is this idea of churn and LTV and then balancing that cost to acquire a client and the LTV.

And then you've got other businesses like I've worked with financial advisors and they will take a percentage of someone's superannuation here in Australia, which is like their retirement fund and then manage that for them and manage it for like 40, 30, 40 years. And so the churn rate in that industry is like really low.

Same with accounting, Not always with accounting, because if you have a bad accountant, you'll try and find another one. But if you find a good one, you probably stay with them for decades, right? And so the LTV, the lifetime value that you'll pay your accountant is actually quite large, and their churn is actually quite small. And so every business has advantages and disadvantages. And what I've learned is that everyone should actually take way more time, like an absurd amount more time, thinking about this stuff before getting into business because I think we just choose a business like what I chose with the massage business or person training.

I'll just choose this business. This is good business. I'll just get into it. It'll work. Whereas now I know, well, actually because we only can start so many businesses in our lifetime and because any business that is going to be big and very profitable is going to take time, like a matter of years, if not decades. So realistically, we only have about three or four choice shots of this, like realistically until we die.

Surely we want to be really, really sure that the business model is set up for the best success possible because I've seen like people way dumber than me and like I don't consider myself like that's not a guy but way dumber than me making way more money than me because they've entered a niche or an industry or business model that's just way easier and makes way more logical sense and the cost to acquire a customer is super low and the LTV is super high so the customers never leave they don't have to work that hard to keep them happy and like this stuff is just everything. Really it really is when you think about acquiring online business as well.

I think about the same, like you only get so many businesses in your lifetime, say it's like three over three decades. You're going to keep each business for a decade. Maybe it's six over three decades and you keep them for five years each. When you acquire them, that means you want to be very particular with how you acquire them, what types you want to acquire them, and then acquiring them based on business model alone, which is why I like to teach people at different stages of your life cycle of understanding business and how much work you want to do in a business. Choose a certain business model that's going to allow you to have that based on certain risk as well, right?

And we didn't make this up. This is why SaaS companies sell for absurd multiples. Yeah. Right. And social media companies as well, like Instagram and WhatsApp and stuff selling for billions of dollars. It's because the most successful business operators, like private equity firms and huge hedge funds, understand this concept. And so they understand that LTV and the stickiness of the customers and the users of these apps are everything.

And so they can acquire these companies that aren't even making money like Uber for billions of dollars. Because they know that the model works and the model is everything. so you don't just have with, and that's makes sense why these billion dollars companies become billion dollar companies is because they find a model plus they add in somebody that's not making dumb decisions, adding in somebody that's insanely smart or is the CEO, has been the CEO of a startup that's gone from 10 mil to 150 or 300 mil or 1.5 billion or whatever it is.

I wanted to ask you around, how did you get from like massage? Because so many things we haven't talked about that you have done, like let's just rattle them off quickly. So you've done the physio, you a physio and then you done the online fat loss coaching business. And then you went in work for TJ, right? And then- Yeah, so there's a bit of an in-between time there and that's where when I was doing the online fat loss coaching with my brother.

I just had so many people start to message me or message both of us. But Jordy was kind of like the face and the fitness guy behind it. And I was like pushing all the marketing buttons behind the scenes and they were asking me like, how are you doing this? Like you're running ads and you got landing pages and order responders. And so that's when I just started consulting other people. I didn't know it was called consulting at the time, but I was just helping them out and yeah.

And that started to go really well. And I actually realized that I really liked it. And I think because you mentioned before that my strength is strategic thinking and problem solving. So I was actually able to be really helpful with people without making like minimalistic decisions because people would come to me and they have a whole business and it's just shit everywhere.

And like my business is like this as well, but I'm really good at just being really focused and saying, well 80 20 rule, which is I'm obsessed with like what's what 20 % of actions that we can fix 80 % of this business knowing that we'll never fix the last 20%. Yeah, absolutely. I want to come back and keep the linear fashion of the business as go, as you've been going through. But my clients have been coined of the coaching work that I do with them. They coin it business therapy because they come to a call with just all of these ideas and just shit everywhere in the business. And I just go, all right, cool. I always reset it back to what are the 200.

Two or three things that you need to do. And then they finish the call and they're like, that's makes so much more sense. It's easy. Now they only focus on a couple of things and get results versus, cause that's what it is, right? Is there so much fucking noise around, like listen to this podcast and this business made X amount of money doing this strategy. I've got to build this into my business. And then listen to a reel that's for like 30 seconds. this person did this. I got to start doing Instagram reels and stuff.

You're like, you're selling like, plumbing equipment, don't be doing Instagram reels, business. Like, what do you mean? It's crazy. Yeah. So, so you started consulting. I'm now coaching business. Basically, TJ messaged me out of nowhere. So TJ was our first mentor. And so this was years later, it was like five or six years after we'd finished our mentorship with him and he was going really well. He had think 20 something gyms around Australia and also had a entrepreneurship membership community.

And I think he had like hundreds of entrepreneurs in this community that do all these big events every year or multiple times a year and meet up and he was running the show there. And I also had that really high end mastermind, which was similar to the $35,000 one that I initially bought. And he messaged me basically said, I'm trying to find like another me and my wife, Liv and I think that you're the best person for this because I've just got too much going on. And so come in and help with the business coaching and consulting.

And so, yeah, I came in into that and they were really focused on gyms as well because he had so much success running his gyms, right? Starting from nothing and opening all these gyms. And this is like my name drop story, claim to fame. But Alex Hormozi, who most people should know because he's one of the best business creators on the internet at the moment, he has a book called 100 Million Dollar Offers because he's made 100 million dollars.

And the front cover quote is how to make offers so good people feel stupid saying no. And to Hormozi's credit, he actually, when you open the book, he actually gives that kudos, that quote, a reference to TJ, my old mentor, my business partner. And so he tells a story inside the book that when he was starting his gym, he paid $5,000 to fly to Las Vegas and attend a seminar from this gym guru who was running all these gyms and running a seminar. And it was TJ that was running the seminar. And little did I know this is like only just before I joined this business with TJ.

And so TJ told Homozi that quote at that seminar and Homozi then like took that to heart and obviously used that as the front cover of his book. But I think it's awesome that because TJ and Homozi are friends and Homozi does give credit to TJ there. But what's fascinating is that when I joined TJ with his business, he was like, we've got one main competitor and it's this kid, Alex Homozi, who came to our seminar last year or whenever it was.

And man, like I hated him because he was like, just relentless. Dominating and just, it seemed like every two steps forward that we made, he was making like 20 steps forward. And yeah, within like a few years, he just completely annihilated us. What was he doing differently? At the time, I thought he was cheating and like being dishonest because he's like, you paint this enemy in your head. Yeah, yeah. So something he did really well, which was, I don't know how specific you want to go, this is like getting to specific ad copyright, but he did.

This bait and switch thing, which was like, he would advertise free six week challenge or free 12 week challenge for a gym. Free always converts better than a paid, especially when it comes to Facebook marketing, like click through rates or everything. So free always gets high click through rates. Facebook rewards you with lower cost per click, which means cheaper traffic to your website, which means your website can have a similar conversion rate. But if you have traffic for a 10th of the cost, you're getting 10th of the cost of leads.

Put it another way, you're getting 10 times more people coming into your gym for a trial for the same ad spend as paid, right? But what he would do, and this is where it was so elite, is everything was so meticulously detailed. He had like a seminar structure, every slide, every word, everything written out. So when people would come in for the free six week challenge, he would sit everyone down in the gym and he would get everything one of these clients to do this, sit them down for a big seminar. And then he would go through in the seminar, word for word, exactly why they need to join.

And by the way, it's not free. It's actually $500 or $1,000 but he did such a good job of motivating them through that 30 minute seminar that by the end everyone just bought anyway. I think specifically it was like it's $500 or $1,000, but if you complete the six weeks, you get your money back. So technically it is free. And so that's how I was able to get away with it. One of the time I was like this guy, he's lying to people. Like he's winning with dishonor and stuff. I had all of this, we're talking about living in beliefs and mindsets before, right? Like I was really letting that affect me.

But I think that was one of the reasons is because his offer was just so much better and he was able to fill gyms just so much faster because of this bait and switch thing that we just couldn't compete. We were getting our clients good results, but like everything with coaching, like you have a hierarchy of your very best clients and the worst clients and they have everyone in between. He just had so many people at the top there because it was just a plug and play system. It was just like run these ads, do this seminar, use these slides, say these exact words.

And then Ironically, like it worked a lot better in America than Australia, because I think in Australia, we hate kind of like a seminar style. Yeah. You know, we tall poppy syndrome. We just don't like any of that stuff. And so we had a lot of his gyms come across to us who weren't happy with gym launch. And we're like, gosh, this is our market and we'll serve this market. And then this is what comes down to thinking about business models, that sort of thing. It's like, I think at one point, Homozi had like five or 6,000 gyms like on his books or something like that.

I think there's only that amount of gyms total in Australia. And so just like, just by like sheer mathematics, like we were never going to be able to compete because we were going after such a smaller market. yeah, it's like big mistakes, not to throw TJ under the bus at all or anything like that, but he running into financial issues with his gyms at the same time. mean, COVID hit. And so essentially like the whole, business kind of crumbled and we agreed to part ways. You know, it was a really interesting learning experience, but yeah, I have my time again. definitely would have done a few things differently, but at same time, like it was very successful business.

Like I remember in that business, it was the first time we did a hundred thousand dollars in a week. I remember being at the pub with two of my mates and getting the Slack notification from one of our sales guys on the Friday afternoon. And that was like, bang, we just did a hundred K for the week. Like that's awesome. Millions of dollars per year, multiple millions, being able to travel to like different parts of the world to run events. was, was, it was awesome.

And we made a massive difference in the lives of the G-Mone as it were, that were in the program. Yeah, absolutely. I remember you and I had sort of stopped working together, but we were still on and off texting and chatting a lot during that period. It's funny to think about, like you said, with business models, there's one other thing there is the demand, the supply and demand of your certain product or service and location. It's like totally addressable market and then market share, right?

Yeah, correct.

Right. Again, like this is what basic business stuff, but then I think when I first started business, I didn't think about that because I was just like, if I could just get 10 clients, I would be stoked. Yeah, sure. It's like, you don't know what you don't know. It's not even a consideration. And then the opposite, you don't want to go after like huge total addressable market and be like, only need 0.001 % of the market share. that's bad thinking as well.

Yeah. But from the gym example, we were never going to sign 4,000 gyms because we would need basically every single gym in Australia to sign up with us and that was just not gonna happen. It's like with Bob when you and I working together, we were only running ads to Australians and only running ads to tradies in Australia. That's right, because that was your story and how you resonated. Yeah, so I hate to think we did half a mil in our first year in business, right? When we got you on board and I would hate to...

And how much ads then was that from memory? I think it was like 10 grand a month or something or was it less? It was probably close to that, and then for everybody listening, wasn't like half a mil profits, like the ads and then the booking guys and the sales guys. I was doing fulfillment. So after like nine months, my books were full. Like I couldn't work any more hours. So that's the model situation that we're talking about. situation you ran into that bottleneck. And I got really, I don't think you knew, but I got glandular fever during that time because I was working too much. I don't even know. I just worked through it, but I would hate to think, imagine if I offered one-to-one coaching, like I don't offer one-to-one coaching anymore.

But imagine if I offered one-to-one coaching to an American market for that. Like it would have been, my books would have been full in like a month and I would have ran into that problem a lot faster. Yeah. But just because different demographic, different demand, the demand, like the thing in my business is like Americans, most people listening to this American. So I gotta be careful what I say, but why I love Americans is because the attitude is just, they're to make it work.

They're going to go away and get it done. Much like I was when I was younger in my process and same with you just go and get it done. Australians are super duper skeptical about online stuff. Super scarce. I don't know about now still, but very, very different. And same with like you've got a specific type of product and you're just marketing to one location and you notice you're getting results somewhere else far better results.

I like to think about opportunity cost in business as well. Yeah, definitely. Cause there's only so many things you can do. But then on that, you know, what's really fascinating is there's part of me that's also full circle on it in the sense that if you're running, like, for example, I'm watching this new business. seriously considered running, starting a new Facebook page and just calling it something like Sunshine Coast entrepreneurs or Sunshine Coast business growth or something like that. And localizing it to Sunshine Coast.

Because if you think about it logically, when someone's scrolling their newsfeed and they come across one of your videos and the video is like a classic hook, like a listicle of five things you need to be doing in your business to increase your profits or something lame like that. I mean, they're all the same, right? But if you see that from someone, Liam Donnelly or John Smith or Susan Smith, you're like, why would I listen to this person?

They're just the same as everybody else. But then if something came up in my newsfeed that said, live here on the Sunshine Coast, but if you live in the Gold Coast or if you live in New York or California or something like, or even more like minute. So Chattanooga, Tennessee. Yeah. Chattanooga entrepreneurs.

Here's how to increase business this month. If I'm in Chattanooga, I might actually check this out. Like who is this guy? Definitely. I'm actually always looking to network with local entrepreneurs as well. so yeah, the point of the story is that again, just because it's higher total addressable market elsewhere isn't always the right idea. Actually, and to bring this back, this is a great point because Hormozzi did a video about this a month ago. And this was another reason why he crushed us is that we were accepting a range of different gyms and gym models and online personal trainers into our coaching program.

And what that did was add operational complexity, not every single ad worked the same for same gyms. Like some gyms were focused like more on pilates and some gyms were focused more on bodybuilding and not on fat loss. so like fat loss ads weren't working for the bodybuilding gyms and then they were paying us the same amount. And so we had to come up with new ads, which coming up with new ads is really difficult. A big testing phase, you have to waste a fair bit of money to get it started sometimes and not always, but.

And so what he did really well at gym launch was he was really specific with the clientele. He was like, you have to be this gym, you have to be selling this service, you have to be in fat loss, you have to have the majority of your clientele female, you have to have like, and basically if you didn't fit that, parameters, he wouldn't let you in. That means his copy is so perfect. was literally plug and play.

And so we were spending, we had so many staff dedicated to trying to help people with their copy and trying to improve stuff and test stuff. And it takes a long time to test new markets and not a long time, but when, you're only in a program for 12 weeks, testing ad copy for four to six of those weeks is pretty damning. But he was getting gyms coming in, plug and play.

And so yeah, he did a video on it recently, which was really good, but again, another mistake that we made looking back. But it's hard to turn away money because when you've got people desperate to pay you and they don't quite fit, it's tempting because you're like, we definitely can help these guys. It's going to be a little more work. I think we can do it. But then when you have like 100 people that and they all have a little bit more work. Yeah, it's a 40 hours a week. All of sudden, like that extra hour times 100 is an extra 100 hours a week.

The way I like to think about the compounding effect is in like negative compounding and the positive compounding. So for Alex is you've got, it works for this vertical and this specific type of gym. So his ads get them in the door and they can use the exact same ads. then he only has to have one person testing at like testing as soon as like one ad stops working, they're already testing a bunch of ads on the backend for themselves. They can just push to all the clients when a better one works.

And so it compounds, so it only gets cheaper and cheaper and cheaper for him to acquire more customers. And it only gets more and more expensive for you guys to acquire more customers with different verticals and different niches because then you've got more operational expenses and a lag time for that. And also the more time you spend on marketing and promotion, generally the more sales you make and generally the more money that you make.

And so the more operational complexity that you have, generally the less time you spend on marketing and sales. And therefore you start to make less money. And it kind of starts this flywheel of like, okay, well now we're making less money. We've still got all these staff and expenses and we've got this big office. Okay, we need to some sales in the door. All right, let's agree to like these three more sales that we probably shouldn't have. And then that creates the negative spiral starts spinning up even more because we've taken on three clients that are way more complex than we should have taken on.

We're spending even more time with these new three clients because we're like, shit, we've just taken them on. We don't want them to cancel. We really want them to make sure that we over deliver and they keep paying. So we're to spend even more time with them. So we spend even less time managing the sales team, managing the ads, managing the leads, like testing new ads. So our volume of leads in our conversion of sales goes down even more. So then it puts even more pressure on cashflow. Like it's just this vicious cycle and it happens so often, but I never had the hindsight to like look back on that and go, wow.

Yeah. There's lot to be said for just keeping things simple. Absolutely. Just minimalistic thinking, not thinking about ideologies in your business for sure. So we won't have time to continue like linearly through all the businesses that you've been a part of. It's probably better to talk about the failures than the successes anyway, because you learn more. Which we've covered so many. I will say, okay, best business models by far is like putting all that sort of stuff together. So using leverage with regards to marketing and advertising. So content like which you figured out with podcasts, but I'm a big fan of podcasts, anything where there's, you can record once and it can be distributed multiple times.

And that's why I think I'm even more bullish than ever on YouTube, even though it feels like everyone was so late to YouTube, YouTube is so done. But it's still one of the only social media platforms where it can evergreen distribute your long form content. And so you can put an hour long effort into creating a YouTube video or even like 10 hours to create a 10 minute YouTube video or something like that.

But then that one YouTube video can then bring you traffic and clients for years to come, whereas no other social media platform does that. Well, you just look at MrBeast and that's why he can spend that much money and that much time creating a specific video that he's you read his leaked memo recently? I haven't. Definitely worth reading. So there's a leaked memo that came out, like an internal memo. I think it's called like, congratulations, you work here, here's how to think like MrBeast or something like it. And it's just like a PDF that he's just written for like all his staff.

But it gives you really good insight into every like a lot of the common themes that we've talked about here Where he's constantly thinking about operational complexity is constantly thinking about flywheels and compounding effects And we can just look at him and go yeah, he's just a youtuber that blows stuff up. He's actually a genius There's a reason why he's almost a billionaire or if not a billionaire already. He's got to be close.

Yeah, also I would just want to like note for people like there's working like what we're talking about now is how to grow your business and you don't grow your business by working in the business. You grow up by working on the business and the best way to grow your business and or life is not just working on it, but thinking about how to work on it as well. One of your mates and also was a business partner of mine for a little bit, Charlie Valor, who I'm sure a bunch of people on the pod have heard him be on the pod before talk about the book, The Road Less Stupid by Steve Cunningham.

Yeah. And thinking time, so critical. After our discussions, I know that you've spent so much time and you do spend so much time thinking. That's where you get the best ROI, right? Is you thinking and doing strategic thinking. Now, I wanna talk about this business that you're launching. You mentioned it to me when you're in Bali and you're like, do you wanna be a part of it? And I was like, fuck yeah, of course. Why start this business? And how long ago did you decide that you wanted to start something like it? It's been a combination of a lot of things, but think from the shift from coaching to community, because I've run a lot of coaching businesses in a lot of different natures and a commonality in a lot of them comes up, which is this operational complexity and the fact that coaching is scalable sometimes, but then other times it's more difficult to scale.

Then, realizing the power of community and the fact that if we go back to my first $35,000 mentorship, it wasn't just a mentorship that was worth it. But it was actually being part of a group of people that also paid $35,000 to be in that room. Yeah. There's a unique type of person that is willing to drop that. I mean, look at my brother smashing our piggy bank from our birthday month to get in there. And so the discussions that you have and just the way that you're forced to level up. One of my favorite anecdotes of MJ, Michael Jordan is the Breakfast Club, how every MBA team would start training at 9 a.m. every morning or approximately. I don't know how much of this story I'm going to get accurate, but it's a good story.

Yeah, exactly. But he started this thing called the Breakfast Club. And the start was just him. He was the only member of the Breakfast Club. And he would get to the gym to the basketball court at 5am and train for four hours before the rest of the team got there. And then slowly but surely he would get people to be like, you're in the Breakfast Club now, you don't get a choice like you have to be there at 5am. And eventually add the whole team starting at 5am before any of the coaches or anyone got there.

But it's just something powerful about collective groups, all contributing to each other and trying to get each other to be, to be better. And they created a dynasty. And part of that is because they had one of the best basketball players of all time. But part of it is also because of that comradery in that community that they have. And I've seen parallels across so many different industries and niches with this. the new business is based around that and the other cheat code that we just talked about, which is content because leveraging business is everything because leverage does reduce operational complexity, does allow you to scale, you know, and there's no better way to do that than content.

I'm a big fan of paid ads. Like I've been a paid ads guy my whole life. And I think there's definitely an important element to that. I think go on to the days where you would just like run ads, make sales calls and get them in, especially for something like community. Cause I think people want to join a community because of other reasons, not because of salesperson sold them in.

Yeah, there's no rush to, there shouldn't be a rush to join a community and shouldn't rush anywhere to stay somewhere for a long period of time. Well, sometimes there is a rush. Like for me personally, I sometimes rush because I'm just like, I'm not where I want to be. I need to be around people that are ahead of me and are working on the same thing towards me. And I'm rushing to get into that community. And every time I've done that, it's worked really well for me personally. Yeah. So you're building a community for somebody that wants to be a part of the community. Why explain why they would want to be a part of the community? What's the pitch, pitch everyone on your podcast.

Yeah. So like why should somebody know about this as a business owner? classic scarcity fashion, you actually can't join it yet. So even if you want it to be a part of it, you can't. Yeah. How many, I think it's like four of us in there, right? Yeah. So I'm going to create a founding 300. So 300 members, 300 founders. And then once we have those 300, we'll close the doors off. But what I'm doing to compensate for that is I am doing coaching before opening up the community, but the coaching is going to be free.

And that's kind of be like my point of differentiation. So if you're listening to this and you want to stand out online to actually get heard, get more attention, you know, get more leads, make it easier to make sales because you're utilizing scalable tasks and leveraged opportunities like content and marketing. I'm happy to coach you one-on-one for free as part of launching this business. And the whole point of the coaching is that you see the way I think my philosophies and you want to be around it more.

And then you want to be you want to pay to be part of a community ongoing of other people like minded like you. And one of the other things about this model as well is like, this is what I mean you were talking about is we always like we spent 20 grand or 30 grand to be part of these communities and made minimum a hundred grand from it. Right. But then why didn't we renew? And I always found that funny. Like, why didn't I renew? Like I paid 40 grand to be here and I made a hundred grand, but why didn't I pay another 40 grand? Because it's like parting with that money is hard.

Even if your business is going well. And so I thought, well, what if I could create the same effects? If I could make it, if members could come in and make an extra hundred grand a year, but they only paid five grand for the same. Now I come and this is where LTV comes into it. We talked about this before. LTV 30 grand per year is five years or six years at five grand, but I'm pretty convinced that I can create a community for 10 or 20 years.

Yeah. the retention, like we talked about the retention as well. Right. So you can, and this is where the scalability of a community gets really, really good. Really interesting. It's not just good for the business owner, but also good for the community because you only get better fresh blood in and that there you get re-inspired with different bursts of different people doing different things. And it just gets the community only builds upon itself and gets better and better and better. And the ROI just keeps coming. In social media companies like Facebook and Instagram and TikTok, they talk about the flywheel of a new user. And I really love this kind of thinking with the community versus the coaching business model, because every time in a coaching business, every time you accept a new client, a new coaching client, it detracts from the value of the other members, because you now have X amount of less hours to spend because you've got an extra person in to coach.

Whereas a community where an extra person comes in, it's actually a value add to the community because there's another brain, there's another unique person with unique experiences and unique way of thinking. And as long as you vet the members well, so you do have a group of people all like-minded and willing to challenge each other and willing to progress their thinking. Every time you add new people, the community just gets better and the value of being in that community just gets stronger. And so it's actually the complete opposite. And you talked about this, Jaryd, like the compounding interests, either positively or negatively. That's where I was like, this is what I want to be doing.

Because compounding interest in a positive way of community is just infinitely better, but it's much slower. And that's why people don't like doing it because it's harder to sell people into a community where there's no coaching or accountability because people want results fast. So I'm in a lucky situation where our online triathlon coaching business with my brother and our dad is going really well.

And we don't actually need this new business to take off straight away. And if that's another lesson, I wish I could have told myself like there's something insanely magnetic about being able to market and sell when you don't need people to actually sign up. Absolutely. Like when you're doing it because you're basically doing it out of love, you know, and passion, passion, excitement, excitement, like people know that it's the opposite of when you're going for a money grab. People can sense and feel that energy. But when you're just doing it because it's something that you want to do with or without others and you don't need money to do it. It's magnetic. So the complete opposite. I'm pretty excited to be a part of it. Watch it grow.

Yeah, I'm in there guys in the community and I value mastermind. Look, I shouldn't call it a mastermind, but there will be, I'm sure there's going to be some great discussions with great heads in there. That's all we will be focusing on. That's why I'm there. What kind of discussions can we have to get ourselves to the next level? And sometimes it's not just business, but next level in life and in happiness and that's what business is a vehicle for anyway, isn't it? That's what I believe it is for. Absolutely. That's why I help people acquire businesses so they can spend more time doing what they love with the people they love.

It's number one goal. Yeah. Yeah. Liam, thanks for coming on. Where can we send people to check this out? Or if they want to chat to you, like you said, you can offer free coaching. What does that look like? I've started a brand new Instagram account. I've never actually been on Instagram.

I've always been a paid ads guy as, as we talked about, a new Instagram account. mean, I've got my other businesses. I've got social accounts, Trivalor Instagram has got 10,000 followers. I was able to build my word three Twitter to 14,000 followers and launch a business off that. But yeah, brand new Instagram account, Liam Donnelly X, at Liam Donnelly X, because Liam Donnelly is taken.

But yeah, just DM me the word Jaryd or DM me the word free to inquire about that free coaching. How many people do you have listening to this podcast on average? Thousands. Yeah. All right. I obviously can't take thousands of people. I'm only doing this because I want to prove a point that there's so much more power and community than coaching.

And so I'm willing to offer these one-on-one coaching sessions. like you'll get multiple one-on-one hour long coaching sessions with me as part of this launch. So if you want to be part of it, like this is an awesome situation.

Absolutely. Absolutely.

This will be going out to tens of thousands of people. We're almost at 10,000. Obviously if I don't get back to you straight away, it's because I've got a lot of DMs.

Yeah. And you're not the only podcast I'm doing as well, Jaryd. So, but I love the Bob community and I think what you've built is really special and full of like-minded people that I think I like being around.

So perfect opportunity to collaborate. Awesome, Liam. Thanks so much. Everybody who's listening, thanks for listening. And yeah, check out Liam Donnelly X on the gram. On Instagram. Awesome, man.

All right. Speak to you soon, Bye, mate.