Hey everyone, in this episode, I share the mic with Ramit Sethi—personal finance genius, and creator of I Will Teach You to Be Rich and Growth Lab.
Listen as we discuss the process behind his $5-million week, why if you want to become great at marketing you need to get off the Internet, how he grew his blog audience to 1M readers per month and turned it into a revenue-generating business, and why good information is nothing if you don’t deliver it to people in a way they want to receive it.
Download podcast transcript [PDF] here: How Bestselling Author Ramit Sethi Generated $5M in 6 Days TRANSCRIPT
- 01:06 – Eric introduces Ramit to the program
- 01:31 – Ramit shares his story
- 01:47 – Personal finance isn’t what gets him going—identifying the difference between what we should do versus what we actually do is
- 02:53 – How Ramit got into cooking
- 03:10 – He got sick of eating take-out every night in New York
- 03:28 – All the people Ramit admires take food seriously
- 04:09 – Nothing changed Ramit’s perspective on business more than food
- 04:51 – How Ramit built up his initial audience
- 05:05 – Losing half his scholarship money in the stock market
- 05:25 – Everyone complains about money, but nobody is willing to learn
- 05:48 – Good information is nothing if you don’t deliver it to people in a way they want to receive it
- 07:09 – Ramit’s audience is over 1M readers per month
- 07:35 – Ramit had zero commenters for the first six months—it was a dark, scary time
- 08:10 – In the grand scheme, you will never think about the time you put in, you will think about the value you’ve created
- 08:39 – Writing evergreen content is easy in theory had in execution
- 10:08 – Consistency and distribution are key
- 10:40 – How Ramit snuck into making contacts with the NYTimes and WSJ
- 11:29 – Be willing to write for free
- 12:15 – Your motivation needs to be found, it won’t fall into your lap
- 12:30 – Growth Lab
- 13:10 – Zero-to-Launch
- 13:28 – Nothing is available to buy—there’s a waiting list and it’s all at a premium
- 15:45 – When you don’t know how to teach something you’re afraid to sell it
- 16:42 – Developing a way to teach online business
- 17:03 – Most people pick the wrong audience and the wrong product
- 18:28 – People respond differently depending upon the communication medium being used
- 18:55 – Survey buyers versus non-buyers
- 19:45 – Ramit’s favorite Psychology Books
- Mindless Eating
- Age of Propaganda
- The Social Animal
- 20:30 – If you want to get GREAT at marketing—get off the internet and get into the real world
- 21:00 – Engage in magazines, newspapers, and TV—those are windows into pop culture and your local community
- 22:36 – People fixate on numbers, but what they should fixate on is the process
- 23:30 – People are drawn to how much money they make and it’s stupid—results are deeper than money
- 24:20 – How to make a million dollars over 5 years
- 24:54 – It’s just math
- 26:00 – Entrepreneurs have a bad habit of surrounding themselves with cheap people
- 26:09 – Most entrepreneurs offer discounts way too easily
- 26:40 – If you really built the best product, would you be willing to discount it?—no way
- 26:48 – Cheap people overshadow the people who are willing to pay for value
- 27:27 – Surround yourself with people willing to pay for value
- 27:48 – The Ultimate Guide to Starting Your Business
- 28:15 – Ramit is not in the business of value, he’s in the business of PREMIUM
- 29:05 – Giving away material for free is another perk of a premium business
- 31:23 – The premium product sales funnel
- 31:35 – The higher up you go, the more highly refined your sales funnel
- 32:50 – Be careful about what you promise, and back it up with guarantees
- 33:15 – Many premium funnels push the sale too quick
- 34:05 – What are some crunch tactics you can give people RIGHT away
- 34:43 – “We can talk about money when the time is right, for now, I’d just like to see if this is a good fit”
- 35:35 – Don’t try to be 40 before you’re 40—don’t try to put your business at a higher-stage than it’s ready to be at—make the most of the stage you’re in, learn as much as you can
- 36:23 – Allow your employees to contribute ideas
- 37:17 – The first hire Ramit made was a virtual assistant
- 37:30 – You’re going to SUCK at making your first few hires
- 37:57 – Treat it as a skill
- 38:00 – Biggest mistake people make? Waiting too long to hire
- 38:27 – Build the skill of hiring
- 38:48 – Holding employees accountable
- 40:05 – Case studies around Growth Lab
- 41:41 – Ramit’s ONE big struggle
- 41:53 – Failing in his first attempt to sell something
- 42:42 – You’ve got to learn how to sidestep the negative feedback
- 43:48 – Make sure you have the right product and the right audience
- 45:28 – Delegation has been a problem for Ramit, but he’s gotten better at it in the last year
- 45:53 – Successful entrepreneurs are naturally control freaks so it takes time for them to learn how to let go
- 46:29 – A team is much smarter than one person
- 46:45 – If you could go back in time and give your 25 year-old self ONE piece of advice, what would it be?
- 46:58 – DUDE!—learn how to dress better.
- 47:25 – There’s more to life than the quantifiable—find the symbolism
- 48:15 – Subtle things matter
3 Key Points:
- The true benefit of living a rich life is in the simple things—“yes, I will take a taxi,” “sure, let’s go out to dinner tonight,” etc.
- There ARE people who will pay for value—it takes time and persistence, but they’re there.
- Growth over the long-term is never an accident.
Resources From This Interview:
- I Will Teach You to Be Rich
- Growth Lab
- Must-read books:
- Mindless Eating: Why We Eat More Than We Think by Brian Wansink
- Age of Propaganda: The Everyday Use and Abuse of Persuasion by Anthony Pratkanis and Elliot Aronson
- The Social Animal by Elliot Aronson
- Real-World Blueprint for a $5-Million Week
- GrowthLab’s Ultimate Guide to Starting an Online Business
- Twitter: @Ramit
- Instagram: @Ramit
- Email: [email protected]
- Email: [email protected]
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Full Transcript of The Episode
Speaker: Do you want to impact the world and still turn a profit? Then you're in the right place. Welcome to Growth Everywhere. This is the show where you'll find real conversations with real entrepreneurs. They'll share everything from their biggest struggle to the exact strategies they use on a daily basis.
If you're ready for a value-packed interview, listen on. Here's your host, Eric Siu.
Eric Siu: Before we jump into today's interview, if you guys could leave a review and a rating and also subscribe as well, that would be a huge help to the podcast. If you actually enjoyed the content and you'd like to hear more of it, please support us by leaving us a review and subscribe to the podcast as well. Thanks so much.
All right, everybody. Today, we have a special guest, Ramit Sethi who is the best-selling author, founder of 'I Will Teach You To Be Rich' and GrowthLab.
Ramit has been featured on ABC News, CNN, and 'The Wall Street Journal', and has taught thousands to manage their personal finances including myself and how to become rich. With GrowthLab, he teaches people how to start and grow online businesses. Ramit, how's it going?
Ramit Sethi: It's going great. Thanks for having me.
Eric Siu: Yeah. Thanks for being here. Why don't you tell us a little bit about yourself and what you do?
Ramit Sethi: Sure. I'll tell you right now, I don't wake up in the morning and get excited about teaching somebody how to balance their asset allocation, so personal finance isn't what gets me going. What gets me going is understanding the difference between what we claim we want to do and what we actually do. My background is in psychology. I wanted to understand why we say certain things but we do other things, and that led me to the world of money which everybody says "Oh, I know I should keep a budget or I know I should save more", but we don't.
I used my site, 'I Will Teach You To Be Rich' as a experimental laboratory. I started testing different approaches with lots of different people, ended up coming with an automation system. Part of psychology is not depending on willpower, but actually just setting up systems so that things happen by default, and eventually, we've now built a business up and we've expanded into many different parts of living a rich life, everything from starting a business to negotiating your salary, all the way to cooking. That's what we're doing on 'I Will Teach You To Be Rich' and for business GrowthLab.
Eric Siu: Got it. That's crazy. Let's talk about cooking for a second. How did you get into cooking?
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Ramit Sethi: I'll tell you, I grew up ... I'm from a pretty big Indian family, so my mom would cook for us every night, and just I love good food. That's what we did. We all ate together every night and we love it. Moved to New York, and I was basically eating take-out all the time.
It's actually pretty normal for people here. I mean, there are a lot of people who don't even turn their ovens on ever, but after a while, you get sick of it, plus, you just start looking not that good and you really don't feel good. What I realized was all the people that I admire, food is one of the things that they take really seriously. Like it's not an afterthought. It's actually something that they are very, very strategic about. The great irony is I used to read these interviews with CEOs, and they would always say "What's your morning routine?" Right?
That's the first question they always ask. All these CEOs, the first thing they always say is "I get a good workout and I have egg whites" or whatever they have, and I would skip over that answer because I was like, "No. I want to know what productivity software they use. What's their opt-in strategy". The truth is I skipped over it because I wasn't ready, but when I finally got ready and I improved the way that I did fitness and food, I just saw what a massive transformation it made.
It actually probably changed my view of business more than almost anything else, is the way that I train and eat. Ultimately, we decided to actually take that to our readers and our students, so we hired a full-time food coach in-house. We developed a course over a couple of years. We tested it with tons of people, and now, we have people who are like they completely changed how they look and how they feel just from the food they eat.
Eric Siu: Interesting. Okay. I want to come back to that in a second. I just want to ... Just that question just came out of nowhere, but I've seen your stuff for seven to eight years I think when I first graduated from college.
I just started reading 'I Will Teach You To Be Rich', and that's how I got introduced to you. How did you build up that initial audience with 'I Will Teach You To Be Rich', and then I think you parlayed that into a 'New York Times' bestseller as well? How did you go about doing that?
Ramit Sethi: I started off learning about the material, so I had taken my college scholarship money, that first check and I had put it into stock market around 1999, 2000, and I lost half of it right away. That was a good impetus for me to learn how this stuff actually worked, so I spent a lot of time actually learning the subject of personal finance. Eventually, I had a pretty good handle on it and I tried to teach my friends. I was trying to do this at Stanford very informally with my classmates, and everyone complains about money, "Oh, I got this overdraft fee or this credit card fee", and I would say, "Hey, come take my class. It's free. It's one hour. I'll teach it to you in the lounge or in the dining hall".
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Everybody said "That sounds awesome", and then nobody would come. That was the first inkling I had that you might have good information, but if people don't want to hear it, at least in the form you're giving it to them in, that's the end of the ball game. I spent a year and a half doing that. It was pretty frustrating. I would go to the dining hall, waiting for them to show up. They just wouldn't show up.
It was really frustrating because here I am doing this for free, and I have information that they need, and they just didn't show up. Ultimately, I was frustrated. I basically said "I'm going to start a blog for these lazy college kids", started the blog, and I didn't really know anything about marketing. I didn't have an email list for years. I didn't put any ads up.
I didn't make a cent, but I just wanted to write really good stuff, so I would write stuff and I would spend about 50% of the time telling other people about it. I would link to other blogs. I made friends with them, et cetera, and over time, I learned how to work with the press, so 'The Wall Street Journal' would link to me ... They did it the first time about six months in, and slowly started building this stuff up, ultimately realized that by the time I had about ... I was about 150-200,000 readers a month, I realized that I had pretty much answered most of the questions on money, and that my system had become pretty refined. That's when I decided to write a book.
Eric Siu: How big is that audience just for the ... People love numbers here.
Ramit Sethi: It's over a million readers a month.
Eric Siu: I think the key takeaway here, I always ask a lot of founders "How did you acquire your first, let's just say a hundred readers or a thousand readers or whatever?", and it seems like it was a lot of hand-to-hand combat and a lot of grinding it out. Right?
Ramit Sethi: I mean, if you go and look at the early post from August, 2004, there are zero comments. Zero. Those posts are still up. There are basically zero comments for the first six months of the site. Nobody commented.
That's a very dark time because you look around at all these other sites, they're way bigger, and nowadays, people are even more sophisticated. They have social accounts that you can see how many followers they have, email lists, et cetera. What I decided to do was to focus on quality, and I tried to write the best stuff I could. Many of those posts would take me 10, 12 hours to write, but in the grand scheme, you're never going to think about how much time you put in. You are going to think about the value you've created and the value you've captured. If I had just tried to do top 10 lists for the first two years, I definitely would not be here talking to you.
Eric Siu: Got it. Okay. It sounds like it's the evergreen content that pays dividends down the road. It's the same thing that Tim Ferriss or Neil Patel are doing out there, and
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that's the gist of it. Right?
Ramit Sethi: Definitely. Remember, it's easy to say "Really hard to do". Anyone can say right evergreen content, but go look at most blogs and just be really objective about it. "Would you want to come back to this site two times a week or three times a week?", and ask yourself that when you're writing your own material to your own list. Would you actually want to read this?
I remember when I was in college, I was in this class. It was MS&E, Management Science and Engineering class, and we had to go up and present on some strategy presentation. It was a group presentation, so each group would go up there and everyone would have the most boring presentation. Just horribly boring. "In this Porter's five forces, blah, blah." So boring.
Everyone around the room was basically putting their head down on the desk, trying to fall asleep, but the great irony was when the next group got called up, they did exactly the same thing. It's so interesting that we know when something isn't good because we've seen it. We've all seen blog posts that are clearly just meant to capture SEO traffic or they're just not good, and yet when it comes to us writing it, we do the exact same thing. I would caution you it's really hard, but the road to that path is hard, but once you get there and once you learn it, you'll actually start to enjoy it a lot.
Eric Siu: Right. It's funny. I was just looking at my traffic the other day. This just confirms that the audience does take time. The first year was just this really pathetic line that was barely moving for a year and a half, and I think they say the journey is typically 18 to 24 months to really start to see the [needle 00:10:14] move, and that's what it really takes. You can be writing all this great evergreen content initially, but if you're not going out there constantly doing it and constantly focusing on distribution too, you're not going to get anywhere.
Ramit Sethi: Definitely. Let me share something about distribution as well. Back then in 2004 when I launched this site, newspapers didn't put their reporter's contact information because I guess they didn't want nutjobs emailing them. I decided to become one of those nutjobs, and I would write a good article. Not all of my articles, but maybe once a month, I would think that one of my articles was especially good.
I would dig and dig and find the email address of reporters at 'The New York Times', 'The Wall Street Journal', et cetera, and I specifically found people that were writing about personal finance ... Not just finance, but personal finance as close to young people as I could find, and I would email them. I would say "Hey, I'm a student of Stanford. I wrote this thing. Thought you might find it interesting", and usually, they would never reply.
Then, another time I would say, "Hey, you guys ..." I was so cocky. I said, "Wall Street Journal, you guys are great, but you really don't write for young people. You
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need somebody like me. Don't worry. I'll do it for free".
I mean, the audacity to say that is crazy, and they didn't reply to that either, but eventually, an editor saw it, and then one day, I think it was December of that year or however many months in, I got a phone call from a reporter there. She said, "We want to cover you". They were writing an article about financial bloggers. That was the first recognition that somebody was actually really paying attention to this. I have to say, it got me going.
It helped me feel more motivated, and once ... I remembered that day because I got 9,000 unique visitors, and the traffic stayed relatively steady for a while. I guess what I'm saying to everyone is you can find motivation in a new reader, a new subscriber, or 'The Wall Street Journal'. Find what your motivation is, but remember, no one is going to come and find you themselves. You need to go out and tell people about it.
Eric Siu: I love it. Okay. 'I Will Teach You To Be Rich', about a million readers a month right now. What are the numbers around GrowthLab before we start jumping into that?
Ramit Sethi: GrowthLab is steadily growing. We launched that a little while ago, and what we decided to do was to write really high quality content as opposed to just a bunch of short stuff. If you go to that site, you're going to find everything from "How do I get initial traffic?", all the way down to very detailed price conversion analysis, "How did this reader used multiple tiers to increase their average order value by 36%?" I mean, super detailed stuff with real revenue numbers. That site continues to grow.
GrowthLab has a number of products we developed like Zero to Launch which some people might have heard of. That's a product on growing an online business. We have a copywriting product and we have a coaching product as well.
Eric Siu: Got it. How much are those products?
Ramit Sethi: They range. Once you get on the waiting list, it's interesting. If you go to the site, you cannot buy anything from us no matter which of our sites you go to, but if you go on it, our goal is to build a relationship with you. Our prices are premium. Many of our products are 10 to a hundred times what the competition charges, $2,000, sometimes more, sometimes a little bit less. We do that because we would rather not play in a $50 sandbox.
We don't have an interest in it. We're really not that good at creating $50 products, and frankly, I'd rather spend three or four years building and testing product before we come out of it, and I'd rather charge a premium price point for a premium product.
Eric Siu: Got it. We can talk about that in a second, but I do want to go into the impetus behind GrowthLab. What got you to start it?
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Ramit Sethi: People had been telling us for years they wanted to create an online business. A quick history of the products that we created. After I went on book tour, I asked people in all these different cities, "What do you wish that I wrote more about?" A lot of people said "I want to know how to earn more money" which was a huge ... It was actually a huge surprise to me, and went back and we started doing a little research, and we created our first information product of any sizable scale.
It was called 'Earn 1K'. That product is still around, still doing really well. It helps people start a freelancing career. Freelancing or consulting. Here's a couple of interesting data points on that.
When we first launched it, it was $497, 1497, and I think 2497. That launch produced about $600,000 in revenue which was really big for us. All these interesting dynamics happened like certain percentages of certain audiences bought way more than others, price points changed, all kinds of stuff. We ended up spending a long time adding to that product, doing a lot of testing, et cetera. Over time, we expanded it into the career space, psychology, and on and on, but over and over, we heard people saying "I want to know how to create an online business", so the dream is your business runs for you while you're sleeping, while you're traveling. You can scale your passion and help millions of people very much like what some successful people have done.
We kept on saying no because we didn't know how to teach it. We knew how to teach freelancing. I know how to teach interviewing, salary negotiation, all that stuff, but online business is really hard. Anyone listening knows this because how many sites have you read where they're telling you "You need SEO", "You need webinars", "You need social media", "You need this", and you're just like, "What? I'm totally overwhelmed". Yeah, it's too much stuff.
By the way, when somebody tells you "You need this Twitter thing", that person is just selling a Twitter product. They've not really built a sustainable business, so we resisted for many, many, many years. I actually told people "No. I'm not going to build that right now because we don't know how to do it". As our business went along, we were doing more split tests, we were getting more sophisticated, we were building products not just in the area of building products, but in many, many different domains, price points, packaging, all that stuff, finally, we developed a way to teach people how to create an online business.
I'll tell you the interesting part. The hardest part is not pricing or packaging. For most people, the hardest part is coming up with a profitable idea and testing it. It's the psychology side of it, because anyone can teach you how to price a product or how to run an A/B test, but most people when they create an online product or an online business, they pick the wrong audience. They pick the wrong product.
If you're even a millimeter off, it's the difference between making 200 bucks or a million dollars. That's why it pays to do your research. That's why we spend so many years of research for our products. That's what led us to launch GrowthLab
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because we were seeing so much demand from entrepreneurship, we decided to go deep on it, and that's what GrowthLab is about.
Eric Siu: Got it. Love it. Just jumping back into how you survey your audience and find out what they really want, I know you've done a really good job of that in the past, so what's your process for surveying and finding out what people really want?
Ramit Sethi: This is one of those things I could talk about forever, but I found nobody really cares. I care. A few people on my team care, but it's more fun to talk about A/B testing, this and that than "Let's do some real research". The research we do is pretty extensive. If anyone here is on my email list, you will know that at the bottom of many, if not, most emails, I say "Please reply".
I read every email, and that is true. All of those emails. There's hundreds and hundreds of thousands of people on our email list. They come right to my inbox. That's one way, and I think that's really important for people to know.
People will respond differently if you ask them a question on Twitter, versus you ask them a question on SurveyMonkey, versus in email. An email is much more intimate. It's much more private. You will get really honest answers, and you can engage, so there may be people listening who have written me and I wrote them back. I read every email.
I reply to a lot. That's a great way to really learn what's on the mind of your readers. Other ways we do it, we definitely collect surveys. We survey buyers. We survey non-buyers. We will ask questions that aren't just about our products, but we'll just ask questions like, "When you wake up in the morning, tell us what you do in the first hour, or if you could wave a magic wand and change anything about between five PM and midnight, what would it be?"
We survey them about their clothes. We survey them about everything. We take that on our product team. We'll develop it and see if we think there's a profitable area there that we actually know something about. There are plenty of areas by the way that we could be making millions of dollars if we created a product, but we don't think we know anything better than the market, so we intentionally decide not to get into those areas.
Eric Siu: Love it. Okay. I feel like you have to have a favorite psychology book. Do you have any recommendations here?
Ramit Sethi: Totally. I love so many of them. Let me give you a couple. One of them is called 'Mindless Eating'. It's really approachable and easy to read.
It's by a Cornell professor. It's about why we eat, the things we do and the way we do. This is a great introductory book for people to understand how people behave. See, most people think they eat because they're hungry. Wrong.
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They eat for so many other reasons, the color of the food, the size of the bowl, or the mere fact that it's two feet closer to you than that other bowl. Love that. Next one is 'Age of Propaganda'. That's an awesome book. That one is by Elliot Aronson.
Again, it's research-driven. It's about why people behave the way they do. Love that one. Then, there's 'The Social Animal' also by Elliot Aronson. I mean, there's a million books.
The key thing that I always emphasize to people, if you want to get really good at this, get out of the internet marketing world. Okay. Stop reading about only improving conversion rates, and you need to be able to talk to normal, real people. For example, if you ask people at a bar, "What do you like to do for fun?", versus if you ask people at a retirement home or you ask people at a different cocktail party, you're going to get different answers. You need to know that.
You should be reading different magazines. We have a person on our team, and I was encouraging her to read 'Cosmo'. She didn't read it. When you talk about 'Cosmo Magazine', a lot of people think, "That's just stupid". It's not stupid.
There's actually a lot of great insights in that magazine and in all popular culture. I think that if you want to get really good at understanding how people think, you got to make sure that you're not just myopically reading about internet marketing. You got to be in the community.
Eric Siu: I totally agree with that. I mean, that's something that hit a point right there. My background started in the internet marketing world, but I mean, if you're only stuck in that world, you're only going to ... Here's the thing. I have a few different lists that I follow on Twitter right now, and the internet marketing list that I follow by far are the biggest complainers and the people that they're just spinning their wheels, kind of stuck, but the people that have gotten out of that, they're reading different things, they're learning about different areas, whether it's like you can talk about augmented reality, you can talk about AI, all this other stuff.
Those people, even if they're reading magazines like 'Cosmo' or whatever, that's more interesting because they see the world in a different way, so I totally agree with that and that's something that's been bugging me for a while, so thanks for touching on that.
Ramit Sethi: Yeah. Hundred percent.
Eric Siu: Let's talk about the journey to a '$5-Million Week'. You wrote an in depth blog post on this. I think maybe this was on Tim Ferriss' blog?
Ramit Sethi: Yeah. That's right.
Eric Siu: Okay. Talk about that.
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Ramit Sethi: What I wanted to show people was the thinking and the strategy, and also the tactics that go into a five million dollar week, "Why did we choose that? Why do we choose to talk about that?", because there's a lot of people who talk about, "I made a million dollars on my launch". What happens is people fixate on the number. What they don't really understand is the process behind it, and my goal was I want everyone to focus on the quality of the products. I'm going to give you an example.
I was emailing with this guy just the other day, and he was asking me, "How do I fix this problem I have?" He has this product, and he sold $17,000 I think. Something like that. He was like, "Should I do ...?" He listed off all these marketing tactics.
"Should I do webinars? Should I change my copy, add testimonials, et cetera?" I said, "That's good. You should talk about a pricing plan and this and that, but what about the product itself?" He had touched on everything except the product quality, and he wasn't too receptive to that.
He said, "I built something that I think is really good. We did some research, and it seems to be good". I thought to myself, "It's so interesting that in this world, people, they are drawn to the money and they brag". If you listen to anyone, they brag about how much money they make and how little time they spend. We detest that.
We don't brag about how much money we make. We brag about our students' results. That's why we put their full names front and center everywhere. We link to their sites. We welcome you to check it out, and that's what we focus on and the quality of the products. We wrote this thing on Tim Ferriss' site to show people this is what it takes to play in the big leagues, and this is the amount of work and our philosophy on quality.
Eric Siu: Got it. I'm looking at this chart right here. You guys should probably read that blog post. We'll link to it in the show notes, but it says:
A question I would have for you is you talked about not playing in the $50 sandbox. What's the story behind that?
Ramit Sethi: Okay. I showed that chart and the math behind how to make a million dollars over five years, and we showed three simple examples, a $50 product, a $500 product, and a $2,000 product. I showed that for a couple of reasons. Number one, we have a phrase "It's not magic. It's just math".
If you want to make a million dollars, that number can seem so large, and it's like
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that's impossible. Right? I need to be some genius to do it. Actually no. Here's the math behind it.
It's not magic. It's just math. If you take something like a $50 product times three sales a day, times five years, that's $270,000. You can also change those inputs. You can do a $50 product or a hundred dollar product.
You can do three sales a day or one sale a day. You can play with it. That's up to you. You're the CEO of your business. What I also wanted to show people was that don't try to be 40 before you're 40. A lot of people want to jump out with this $2,000 product right out of the gate.
I don't agree with that. To learn how to build and sell a $2,000 product is very hard. We started at that price point. I sold a five dollar eBook. That was the first thing I ever sold, and then moved up the value chain, and we've sold products that are over $20,000. Each step we took required something totally different, a different way of selling it, a different way of communicating it, a different product itself.
Now, as to your question about playing in the $50 sandbox, one of the things I find is that most entrepreneurs surround themselves with cheap people, people who don't want to pay. I'm willing to bet anything that if you're listening to this right now and you've tried to sell something, you've heard people say, "That's too expensive. That's ridiculous. $200? Absurd. Maybe if it was $20, I would consider it".
Most entrepreneurs, you know what they do when they hear that? They instantly lean back on their heels, and then they offer a discount. Here's my question to you. If you truly had created the world's best product in whatever area, running, jump rope, personal finance, would you really discount it 50%? No way.
The problem is that when you surround yourself with cheap people, you never know that there's an entire group of people who are willing to pay for value. For example, in all the popular press, if you read 'The New York Times' about millennials, what do they say about millennials? Crushing student debt, no possibility of retirement, no future, and yet, we have thousands and thousands of millennials who are spending $2,000 plus per product and they love it, and they keep coming back. Even though they could ask for a full refund, they keep coming back. Why is that?
If you never surround yourself with people who are willing to pay for value, if you've never eaten at a restaurant that's more than $30, if you've never bought a shirt that's more than a Hanes t-shirt, then why would you ever expect someone to buy that from you?
Eric Siu: Right. Makes total sense. I think I'm looking at this right here. There's also ... It seems like you have a calculator too, so I'm sure we'll drop this in the show notes too, but this is 'The Ultimate Guide to Starting an Online Business'.
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Love that headline. Your audience, how do you filter out the people that are 'cheap' versus the people that are willing to pay? How do you go about doing that?
Ramit Sethi: There's a few ways. First of all, that's what my market is. I do want to say that if you're creating a business based around saving people money, that's totally fine. Walmart is an absolutely amazing business. Absolutely amazing. McDonalds, good value, but that's not the business that I'm in.
The business I decided I wanted to be in was to be in a premium business. Now, if you're in a premium business, that means you can do certain things. It also means you can't do certain things. It means that you can afford to invest heavily in product development, in customer service. For example, if you buy any of our products, whether it's 200 bucks or $20,000, you're going to get a phone call from a live trained rep, someone amazing.
They're going to check in. "How are you? Were you able to log in?", et cetera. You can't do that if you have a five or $10 product. It means that we can afford to spend more time helping our paying students, but I also wanted a way to qualify people, and so what I decided to do was we give away 98% of our material for free.
If people say "That's ridiculous. Oh my God. This is crazy", I say "No problem. Please use the free material. There's more than enough there. There's 12 plus years. You'll be able to save and earn $5,000 plus easily. Do that, and when the time is right, come back".
Most people, what you'll find ... What do you think, Eric? What do you think most people do when you tell them that?
Eric Siu: They're going to be tire kickers. They're just going to read it and probably not buy.
Ramit Sethi: Yeah. They're going to read it and not even do anything. Why? Because they're not looking to actually make a change in their life. They're looking to get something for free. Here's the great irony, and I tested this and you should too.
If they say "$200. That's crazy. Maybe for 20, I would consider it", try it. Say "Okay. I'll give it to you for 20". Just see what happens.
I am almost willing to guarantee you that they won't take you up on it, and if they do, they will refund. How do I know? Because I tried it myself in the early days. Those are people you do not want, and as an entrepreneur, you have to be really careful not to be misled by those people. You have to know that there are actually fish in the sea in the premium audience who are willing to pay.
The way we qualify them is number one, we write material that is serious. It's long. It's detailed. It's not top five ways to make a bajillion dollars. If you sign up for our list, the 'Iwillteachyoutoberich.com', it's like very detailed material.
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That's going to qualify people out right away. Our price points are higher. Our product's requirements are higher. It's not like a five-day eBook. This is a multi-week course.
It's very challenging, but if they can do that and if they're committed, they're going to get pretty amazing results. Those list of people you see on GrowthLab, all their pictures and videos, that's how we get results like that as we select the right students and we give them the best material.
Eric Siu: Love it. This is seriously no joke. I mean, if you go to 'Growthlab.com' and you look at ... First of all, the design is great, but then, you look at the content itself, it actually is when Ramit says great content, you think about the best long-form content you read. It's probably at that level or even better than that, so great job there.
I just want to know, when it comes to selling a $2,000 product, I think there's a difference in terms of what the sales funnel looks like. What does that look like? Are people opting in, and then how long before they convert? What does the whole thing look like?
Ramit Sethi: Okay. Definitely a sales funnel will look different for a $2,000 product versus a $50 product. For a $50 product, oftentimes, you don't even need a phone. Send them straight to a sales page, and you can test that, absolutely. The higher and higher you go, the more and more complexity and sophistication you're going to need.
Why? Because people are not in the habit of spending or investing $2,000 on a digital product. To tell you the truth, most people have not invested $10 in themselves in the last year. They haven't even bought a single book, so you're now asking them to drop $2,000? You need to understand their emotional experience.
First of all, are you offering them something they actually want that got them to opt in? Okay. Good. Are you engaging them with your funnel? Is it engaging whether it's through emails or photos or videos or whatever?
How do you measure that? Are you making them an offer that they actually care about? For example, we created a product called 'Find Your Dream Job'. Now, I would have loved to promise them a six-figure job. I would have loved it because I can get people a six-figure job, but we did our research and we discovered that the earnings of our target market, if they had been 80K, we could have got them a six-figure job. No problem, but they weren't 80K. They were a bit lower.
It's going to be tough for me to promise you getting a six-figure job if you're making let's say 60K. That's not a realistic promise, so you have to be very careful about what you promise, and are you giving them something they want? Then finally, are you backing it up with proof, guarantees, all of those things? As a general rule of thumb, if you're selling a $1,000 plus information product, your funnel is going to
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be at least a week or two long at least. I usually don't see funnels that are too long.
I usually see funnels that get to the sale too quick and they don't offer any value. Even if you go through any of our funnels and don't buy a thing, you're still going to learn more than oftentimes going through someone else's full premium product.
Eric Siu: Got it. You're typically driving people to a webinar, and your webinars are typically longer, one to two hours or longer?
Ramit Sethi: Sometimes we do webinars. Sometimes not. It depends. Sometimes we do them live. Webinars again, we want to provide value.
We want to provide something new, lots of examples and lots of crunchy stuff. For example, we did a webinar on dream jobs, and I showed them exactly what to say in a salary negotiation. Even if you choose not to buy, you walked away saying, "Wow. I know the exact words to say in a salary negotiation". That's pretty amazing.
I would ask everyone of you "What are some crunchy tactics that you can give people right away, even if they decide not to join, they walk away saying 'Wow. That was amazing', but then again, how do you make it even more amazing to join?"
Eric Siu: Funny story. I actually had one person use your tactic on me when he was trying to get hired. I'll give everyone a little tactical bit here if you're looking for a job. When they ask you how much you're looking for, what do you typically say? "I'd like to know the full responsibilities of everything before I give you an answer". Is that how it is?
Ramit Sethi: Are you asking me what normal people say or what my [students 00:34:38] ...
Eric Siu: I'm asking what your script was.
Ramit Sethi: It's very simple. It goes, "I'm sure we can talk about money when the time is right. I'm sure we can work that out. For now, I just want to see if there's a fit on both sides of the team".
Eric Siu: Yeah. That's what that guy used on me. Son of a bitch. It's good, right? That was good. That was good.
I was like, "That was very good. That's from Ramit", and I told him straight out, but it was cool. What I want to talk about too is your team, because it seems like everything that you do is very pristine. We talk about the content. We talk about the design.
Just everything is pretty locked down, so I have to assume that you have a great team around that. Let's talk about the build up of your team and how you go about
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Ramit Sethi: The team is everything. Again, it's one of those things that I ignored as I was starting to grow, just like I ignored that CEO advice until I was truly ready to internalize it. I think part of being an entrepreneur is that old phrase "Don't try to be 40 before you're 40". Know the stage that you're currently at and soak up every piece of material for that stage and maybe the next stage, but if someone had tried to give me management advice when I had one product and I was basically doing everything myself, it would have been pointless. We take our team building really seriously, so our team is a hundred percent remote.
Everyone works mostly around the U.S.. We have a few international people. We all meet as a company once a year. I fly everybody in, and we have a great time. Last year, we went to Portland, got box seats. We did indoor skydiving, all kinds of stuff.
The year before, we went to Vegas. We've set the teams up functionally, so we have different functions like you would imagine, technology, growth, et cetera. Part of the thing that we've had to learn is how to communicate across time zones, et cetera. Also, part of it is allowing people to know how to experiment and grow a company, like this company is not just the Ramit show. We've actually tried to deRamitify the business because there's so much more going on in helping millions of people lead a rich life than one guy sitting by the fireplace writing a blog post. That's how we thought about growing the team. By the way, we're hiring on 'I Willteachyoutoberich/careers'.
Eric Siu: Love it. Okay. How do you go about hiring great people? What criteria do you look for? What are some good questions you ask?
Ramit Sethi: In the early days, it's different than as you grow the business. In the early days, I had a few contractors who were helping me just do anything. They were Jacks of all trades. They would do HTML, shopping cart, helping me proofread, stuff like that. I found those people from asking friends.
The first hire I made was a virtual assistant. I strongly recommend that. My tip to everyone when it comes to hiring is you are going to suck at hiring for your first one hire, two, three, four, five plus. I have friends who were starting to make pretty serious revenue from their business, and they're like, "Okay. I'm ready to hire. How do I find the perfect marketing manager?", and I just smile because hiring is a skill.
You can find these people through your network is the best. You can look on Craigslist. You can put ads up or from your own community. Interviewing, very, very challenging. There are lots of interviewing books.
I would strongly recommend you treat it as a skill. Don't just hope that it works out. The most common mistake I see is people wait too long to hire, and that you know they're waiting too long because they're overwhelmed. They're burned out. They're wasting time on stuff that they shouldn't be spending time on.
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They're losing deals. They finally decide to hire. They get really rash about it. They bring someone in. They don't give them clear skills. Of course the person burns out, leaves, or they get fired, and then the entrepreneur says, "I knew this wasn't going to work. I have to do it myself".
No. That's not right. You just haven't built the skill of hiring, so you can. You can use a 21-day period where you tell them exactly what you expect. Make sure that they ramp up, and on and on and on.
Eric Siu: Got it. Okay. One more question around the team. You've got a 100% virtual team. How do you hold people accountable?
Ramit Sethi: Wow. What a great question. We're always, always looking for ways to improve it, so I definitely do not want to seem like we are the best. We're students of this, as well as practitioners. What we try to do is we try to set company-wide goals.
We have a vision, who are we, who are we not. We break it down to the team level, and then managers will assign team-wide goals or individual goals. We'll review it. There's no magic in this stuff. The magic is in the execution, so we don't ... We basically ...
I want to treat everyone like a pro, unless they prove us otherwise, and that's what happens as you start to grow more. You're not going to hire generalists as much. You're going to be hiring very, very specific roles. For example right now, we're hiring a copywriter. We're hiring I think somebody in marketing automation. We're hiring a product developer to help us develop these products. They're very, very specific recruiting paths that we take for each of these, but that happens later as your business starts to grow.
Eric Siu: Love it. Okay. How big is the team right now?
Ramit Sethi: It's grown a bit. We don't really talk about size of that. We prefer to focus on our students' results.
Eric Siu: Got it. Let's talk about the students' results for a second. Any case studies you can reveal around GrowthLab?
Ramit Sethi: Oh my God. If you go to 'GrowthLab.com', like I said, there's a bunch of pictures. There's a few people ... I mean, I love all of these stories. One of my favorites is a guy named James.
All these have videos. James is a chemistry instructor, and you're like, "How do we turn chemistry instructor? That's boring. Does anyone care?" Actually, they love it.
We taught him how to take that and turn it into a really profitable business. He was able to spend time with his family because his business just keeps running
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automatically, so he's a great success story, and there's tons of others. There's Jennifer. There's Daria. There's Caitlin.
These are all different industries. They're not just internet marketing. They are style, food, all kinds of different stuff. That's what we really love is helping all different kinds of people start their business.
Eric Siu: Got it. What's one result you can speak to because people love numbers in the audience?
Ramit Sethi: We have people that have earned hundreds of thousands of dollars on a single launch. We have people that have quadrupled their income. We have people that their spouses don't have to work anymore. There's of course, they're on a yacht. They're living the life.
That's awesome too, but I think part of a rich life for a lot of people is like much more ordinary. For me, it's like I can take a taxi if I want to or I can buy an appetizer. That's a very simple part of a rich life for me, and if you look at any of these case studies or any of the students, you'll see that they have some powerful and simple ways that they live a rich life.
Eric Siu: Love it. Talk about one big struggle you faced while growing either 'I Will Teach You To Be Rich' or GrowthLab.
Ramit Sethi: One big struggle. Woah. There's so many. I think probably the most powerful and worst one I faced was the first time I tried to sell something. This was a $4.95 eBook.
I had been writing on my site for free for years, decided to create an eBook and see if anyone would buy it, and the first day that I sold it, I got all these horrible comments from people. These were loyal readers of mine who said, "What a sell out. Oh, I guess it's 'I Will Teach Ramit To Be Rich'." I consider that probably one of the most pivotal moments in my career because, I mean I can't even describe how horrible that felt and I was ... I sat there and I was like, "So, this is what it's going to be like if I ever sell something which I actually put a lot of time and love into? I'm going to get people complaining and going after my motives?"
I think that's a pivotal decision that entrepreneurs make when they create something and they hear this negative feedback. I took a few days and I felt really bad. It didn't go away, but I decided, "You know what? I'm going to keep going", because I was looking at my sales numbers and I was looking at the metrics. Here's the crazy part.
Those complainers, they didn't buy. The people who did buy did not leave comments like that. The people who bought were way more engaged. They sent me way more positive emails. They were just overall higher quality. That's when I learned there was something going on here and I decided to go into it.
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It took a lot to say "I'm not going to be afraid of a bunch of a loud minority. I'm actually going to try to crack the code here on selling stuff". Here's the great irony. When we sold 'Earn 1K' which I told you generated about 600K, we still had a lot of people complaining about price a lot. Later, years later, we sold a much more advanced course. It was around $10,000.
We had less than five complaints about price. Not five percent, but five. What that tells you is number one, make sure you have the right market, you have the right audience. I had to get rid of some freeloaders and cheapskates. Number two, we also learned how to communicate that better.
If you're selling something for a high price point, you need to be able to communicate why it's worth that. You can't just charge whatever you want. The market will tell you, and you can also tell the market. That was definitely a huge challenge and for any entrepreneur going through that today, I would say just if you give up, that's the ball game, but if you decide to crack the code on it, trust me, there are people who will pay for value. Trust me.
Eric Siu: Got it. It sounds like persistence, lots of testing, and ignoring the haters.
Ramit Sethi: Absolutely. All the above. Remember, we've been doing this for 12 years, so I don't want anybody to think there's overnight successes. I see so many case studies and examples, "Oh, I made a million dollars on this launch". Okay.
First of all, that's impressive. No doubt. Awesome job. I got to give props to somebody who generates a million dollars the next year. Okay?
Even just to keep it steady is hard enough to actually grow. Growth over the long term is never an accident. Let me say that again. I want everybody to hear it. Consistent growth is never an accident. Be very careful about who you choose to study.
I think you should learn from the best. Be very careful about people who are just merely giving you tactics like "Do this split testing". I mean, it's cool to know. I love hearing about split test results too, but the biggest results in our business come from the larger decisions like "We're going to serve a premium customer".
Eric Siu: Great. Okay. Just a few more questions because I know we're running out of time here. What's one big change you've made in the last year that has really significantly impacted your business?
Ramit Sethi: Delegating better. I'm a classic entrepreneur. I have the problem of being a control freak.
Eric Siu: I can imagine.
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Ramit Sethi: Yeah. I mean, if you're a successful entrepreneur, odds are very good that you're a control freak. When we had our Portland offsite recently, one of the things we talked about was delegating and giving people the empowerment and authority to make their own decisions, and really, that's the reason we hired them. We're not trying to hire a bunch of monkeys to do what we say. We're trying to hire really smart people to come up with their own ideas.
In order to do that, it's pretty complex. You have to be willing to accept losses in the short-term. You have to be willing for things to go different directions that you might think are the right directions, but I actually found that a team is much smarter than any one person, and it is such a relief now to be able to turn to my team and say "What do you think we should do?", and they give me advice that's much more sophisticated than I could ever come up with on my own. That's when you know you are in a winning position.
Eric Siu: Great. Okay. What's one piece of advice you'd give to your let's just say 21-year old self?
Ramit Sethi: Oh man. Oh my God. Learn how to dress better. The dressing thing is kind of a joke, but it's kind of not. Okay.
21-year old guys, Indian guys in particular like Asian guys, people who are focused on their studies, they have a very black and white view on the world, and typically, if it's quantifiable, it's valuable, and if it's not, it's pointless. You can see this if you go to a 21-year old guy's apartment. He probably has nothing on the wall, and if he does, he has one poster. No border. No nothing. No frame. Just a poster hanging on a wall with a tack.
That's the lack of symbolism, a lack of understanding that there's more to life than just the quantifiable. For example, when I would go to a friend's party, I just would never think to bring a gift like a bottle of wine or something because I was like, "Why does he need wine? He's already going to have a ton of alcohol". What I realized was is their symbolism. There's something deeper than "Does he actually need it? Is it black or white?"
I wish I could go back in time and tell my 21-year old self "Don't just think everything is logical. There's value in things beyond near quantifiable logic". That means the way you dress matters. It doesn't just matter what's on the outside. The way you look, the way you carry yourself, the way you dress matters.
The way your apartment looks matters. All of those things subtle things really matter, and it's taken me a long time to figure that out. Some people, it comes much more naturally too, but I wish I could go back in time and learn that earlier on.
Eric Siu: Wow. That's deep, and that's something that certainly has me thinking right now, so I think that's a good place to close and I know you have something to give to the
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audience too. Remit, what's the best way to find you online and what do you have to give?
Ramit Sethi: Okay. One of our goals is to create free material that's better than anyone else's paid stuff. I love it, and so I would suggest for people who want to know how to start and grow their business, let us prove it to you. Go check out one of our free ultimate guides. It's called 'The Ultimate Guide To Online Business'.
'GrowthLab.com/ge'. 'GrowthLab.com/ge' for Growth Everywhere. Check it out. There's a whole bunch of material there on split testing, on strategies to grow your business, on marketing, strategies that we use, and I think everyone will find it extremely useful no matter what scale your business is at.
Eric Siu: Love it. Okay. I'm assuming '[email protected]' is another way for people to reach you as well?
Ramit Sethi: Yeah. They can tweet me '@Ramit'. You can email me '[email protected]', and I'm on Instagram '@Ramit' also.
Eric Siu: Awesome. Ramit, thanks so much for doing this.
Ramit Sethi: My pleasure. Thanks a lot.
Male: Thanks for listening to this episode of Growth Everywhere. If you loved what you heard, be sure to head back to 'Growtheverywhere.com' for today's show notes and a ton of additional resources, but before you go, hit the 'Subscribe' button to avoid missing out on next week's value-packed interview. Enjoy the rest of your week, and remember to take action and continue growing.