Entrepreneurship Masterclass: How to Make $10k - $1M per Month - Daniel Priestley

Daniel Priestley 0:00 I've built multiple $10 million plus companies. I don't know how to do anything. I don't have any web development skills. I don't have video editing skills. I don't have design skills. I don't have any skills. [laughs] I can write, all right? I can write books, and I can speak, but that's it. I'm an organizing force. I'm the guy who just organizes it.

Ali Abdaal 0:18 What you're about to hear is a round two interview between me and the incredible Daniel Priestley. Now, Daniel is actually one of the most popular episodes that we have ever had of the podcast, and the first episode that we did, which was around a year ago, still continues to get thousands and thousands of views every single day. In this episode, we talk specifically about how to go from zero to 10K a month as an entrepreneur, and then we talk a bit about how to go from 10K to 100K a month, and then we talk a little bit about how to go from 100K a month to a million dollars a month as an entrepreneur.

Daniel Priestley 0:43 10 grand is not a lot to certain people. If you've already got a half-a-million-pound business, a half-a-million-dollar business, 10 grand's, "Okay, yeah, we can do that."

Ali Abdaal 0:49 And we're gonna be talking about a bunch of frameworks that you can learn and apply to whatever stage of the business career you're at. We're gonna talk about the four different types of products, including the Eiffel Tower metaphor. And throughout the episode, we riff on a bunch of different business ideas, and we apply the principles to these ideas kind of in real time so you can see how they apply in a real-world context.

Daniel Priestley 1:05 Anyone who can run a pub can run your business. A pub has drunk people, and people, like, hooking up and having relationships. A pub is, like, got razor-thin margins. You just do not need to be running your business. That's not what you're good at as a key person of influence. You should be out there doing the thing that only you can do.

Ali Abdaal 1:24 Oh, by the way, if you have a couple of minutes, I would love it if you could possibly fill in a little survey. We are surveying the audience, people who watch or listen to this podcast, and trying to figure out what are the things you vibe with, what are the things you don't, who are the sorts of guests that you like to see more of, and what sort of topics should we continue covering on the Deep Dive podcast? So if you've got a couple of minutes, it would mean a lot. There's a link in the video description or in the show notes. Would love it if you could help us out and help us make the podcast better for you guys. So yeah, check it out. Daniel, welcome back to the podcast.

Daniel Priestley 1:49 [laughs] It's good to be back.

Ali Abdaal 1:50 This is sick. Like, you are one of the high- most viewed episodes of all time.

Daniel Priestley 1:54 I can't believe it.

Ali Abdaal 1:54 And if we sort of exclude the people who are already, like m- like super celebrities, you are the most viewed episode of all time.

Daniel Priestley 2:01 I'm totally stoked about this. This is incredible.

Ali Abdaal 2:03 What do you think landed so much with people from the previous time you came on, uh, on the podcast?

Daniel Priestley 2:07 I, I think we just went through a, a journey, and we hit a whole bunch of bases. I'm hoping we can [laughs] deliver as much value today as well.

Ali Abdaal 2:13 Yeah.

Daniel Priestley 2:13 Um, and also, here's the other thing. I think everyone's interested in becoming an entrepreneur. Um, the world has changed so much in the last 10, 20 years, and the rules that many people grew up with have changed. Uh, the schooling system is preparing people for a world that doesn't really exist for, you know, as far as many people see. Um, there's a lot of people who are dissatisfied with the game of work-

Ali Abdaal 2:37 Mm

Daniel Priestley 2:37 ... um, because it doesn't pay enough, um, and the conditions aren't good enough, and it doesn't feel like it's giving you enough freedom and flexibility and, you know, something that's gonna be exciting and interesting and engaging. Uh, and a lot of people are turning to entrepreneurship, and they wanna know how to do it.

Ali Abdaal 2:53 Nice. So we're gonna be talking about how to do it, uh, in the, in this episode. Uh, we're gonna go over the entrepreneur journey, um, from zero to 10K a month, 10 to 100K a month, and then 100K to one million a month.

Daniel Priestley 3:05 No pressure.

Ali Abdaal 3:05 And we'll split up the, the podcast into these three chunks, and we'll try and just sort of blitz through as many of the frameworks and ways of... and the philosophies and the ways of thinking about it as we can-

Daniel Priestley 3:14 Love it

Ali Abdaal 3:14 ... so that people can at least know what the roadmap looks like, and then they can fill in the gaps with specific implementation based on other reading and other resources and things like that.

Daniel Priestley 3:23 He- here's the thing I wanna say up front. Um, a lot of people think that entrepreneurship is a really unpredictable road. They think that it's, uh, you know, dangerous and risky and all of those sorts of things. I've got an analogy that I think is worth saying right up front. Um, so as you know, I've got three little kids, a four-year-old, a five-year-old, and an eight-year-old, so we do lots and lots of Lego. So imagine you, you start with this Lego box, and you look at the front of the box, and on the front of the box is the picture of what it should look like at the end. And then you tip the Legos on the carpet. It's a big mess, and you go, "How do I get from that mess to that box?" And then there's a little set of instructions that says, "Do this, then this, then this," and it breaks it down just step by step by step. And then you don't have to really think. If you just simply do the steps, very rapidly it starts looking like the front of the box. Now, entrepreneurship is actually very similar to that. There are a series of steps, and you go step by step by step by step, and then it starts looking like the front of the box pretty quickly. So that's what I wanna cover today. I wanna, like, basically try and demystify it a little bit. I wanna take all the kind of weird, risky kind of

Daniel Priestley 4:28 misconceptions out of entrepreneurship.

Ali Abdaal 4:30 Okay. But sure- surely this is too good to be true. I've heard that, like, you know, entrepreneurship is a, is like, you know, 99% of startups fail or whatever that number is. I know so many people who've bought a course on day trading trying to make money online-

Daniel Priestley 4:42 Oh, yeah

Ali Abdaal 4:42 ... and, like, they're, they've just failed, and seems like the only people getting rich off of this are the people selling the courses.

Daniel Priestley 4:47 Yep.

Ali Abdaal 4:47 So what's, what's going on there?

Daniel Priestley 4:49 Okay, so great, great, uh, first frame. The first thing I'd say is entrepreneurship and trading are very, very different, right? So trading is a zero-sum game. You're buying and selling equities, or you're buying and selling a financial instrument, and these are zero-sum games. There's winners and losers, and there's nothing in between, or there's brokers in between. But you can't value add. You can't buy some s- shares or some currencies and value add those. You have to basically trade those and try and get in and get out at the right time. The reality is because it's a winner and loser sport, something like trading, um, you are not gonna beat the winners, right? So the people who are the best in the world, it, it, it would be as silly for, for me to go into the NBA and say that I'm going to try and score a few points against the professional basketballers. I could try for 10 years. I wouldn't score a point, not one, um, [laughs] because they're professionals. They're-

Ali Abdaal 5:41 Mm

Daniel Priestley 5:41 ... they're built for it, and they're, like, paid crazy amounts of money. So that's who you're up against when you're in the trading space. So entrepreneurship is not trading. That, that is definitely not the case. Um, when we go into the world of entrepreneurship, you can value add, and you can do all of those sorts of things. Why is it that, um, it's not, uh, more predictable for most people? Well, for starters, entrepreneurship You're figuring out what the market wants, and most market needs are already met. There's already businesses. There's millions of businesses.

Ali Abdaal 6:08 Yeah

Daniel Priestley 6:09 So most market needs are already met. Um, and people, it's like, "Yeah, I already have a company that makes great, um, cupcakes. I don't need another cupcake company."

Ali Abdaal 6:18 [laughs]

Daniel Priestley 6:18 Um, [laughs] so the, the thing is, is that we're trying to go through a process of discovery to find something that is an unmet need, something that the marketplace wants but doesn't actually have access to.

Ali Abdaal 6:28 Okay.

Daniel Priestley 6:28 And that is hard, right? So it's not that it's easy, but there are a series of steps that allow you to de-risk it and to demystify it and to not overcommit and not, you know, uh, take yourself into a position of, of being, uh, throwing money at something that's not gonna work.

Ali Abdaal 6:44 Hmm. Okay. That makes sense. Um, before we get into the, I guess, the, the entrepreneurial journey, um, you know, you've, you've written a book called How to Raise Entrepreneurial Kids.

Daniel Priestley 6:52 Mm-hmm.

Ali Abdaal 6:53 And you have some thoughts about the school system and kind of how, how we got here. I wonder if you can just sort of riff on that for a moment. Like, why is entrepreneurship so alien to the way that most of us were, were educated?

Daniel Priestley 7:05 Yeah, so entrepreneurship feels very counter to the way we were educated because the education system was created in the industrial age, when they had to create something called component labor. Component labor was creating, um, nicely machined parts that fit into somebody else's organization, someone else's machine. If you think about the world prior to the digital revolution, uh, you had local economies, and you basically graduated school and had to fit into a local economy. So some kids were gonna grow up and become local police officers, and some were gonna become local doctors and nurses, and some were gonna, gonna become, uh, local teachers, and some were gonna be butchers, bakers, and candlestick makers. So all the things that w- were in that local environment, and you essentially had to, uh, graduate school and then fit into

Daniel Priestley 7:49 a business that was already up and running and established in the local environment. So the model for schooling was to create component labor, people who fit nicely into other people's businesses. Where we're at right now is very different. So the world that we live in right now is, um, teams that are geographically spaced out, um, business opportunities that could be incredibly narrow and niche but a mile deep, customer base that's all over the world. Um, and you can... In that environment, you can actually be very different. You can be highly creative. You can be innovative. You can be, um, uh, exclusive. You can be specialized, uh, all of those sorts of things. So it's a very different environment in the digital age. The next thing that I would say that's different is that when you're an entrepreneur, you're looking at a problem that exists, and you're trying to come up with a solution that fits that problem. When you've come out of a school system, you're developing a skill set, and you're trying to find an employer that needs those skills.

Ali Abdaal 8:49 Ooh.

Daniel Priestley 8:49 So-

Ali Abdaal 8:50 Nice. [laughs]

Daniel Priestley 8:50 ... slightly different.

Ali Abdaal 8:51 Yeah.

Daniel Priestley 8:52 So when, when we think about, like, um, a Porsche 911, Porsche 911, they don't say, "What are we good at?" And they go, "Okay, we're really good at making the chassis of the car, but we don't do tires, and we don't do stereo systems. So we're just gonna sell the thing that we're good at." They say, "What does the customer want?" Well, the customer wants to be able to drive the car straight off the dealership and feel great about their purchase, and to do that, they need tires, [laughs] and they need a stereo system in the car. So what Porsche does is they ask, "What does the customer actually want? What's the experience they're looking for, and how do we bring together everything that's required for that to happen?" So they say, "Okay, let's get Pirelli tires on there, and let's get a Bose stereo system in there, and let's get two and a half thousand suppliers, and let's pull them, bring them all together." So what businesses do is they find a solution to what the customer wants. What employees do, and especially when you've come out of school, is they have skills, and they try and market the skills to an employer. So these are slightly different. They sound similar, but they're, they're quite different. Um, and that's why entrepreneurship feels a little bit different when you move from employment into entrepreneurship.

Ali Abdaal 10:01 Hmm. Nice. And how would you define entrepreneurship?

Daniel Priestley 10:04 So entrepreneurship is a couple of things. Number one, you are trying to do something that commercially is successful. You wanna make money, right? So let's not beat around the bush. Entrepreneur- A big part of entrepreneurship is you wanna make money. Um, you're doing something for commercial success. It's, it's not a charity. Um, you're trying to make a profit. Uh, the next thing is you're taking a risk, so, um, entrepreneurship has an element of risk. Um, and normally it's even, it's a risk for the entrepreneur. You're in some way risking your time without a certain outcome, or you're risking money, or you're risking someone else's money. Um, you're, you're, you're doing all of those sorts of things. Um, and, uh, the next thing you're doing is you're organizing the resources beyond your own control, right? So you're starting with limited resources, and then you're expanding your sphere of influence over re- resources. So when we think about those three things, if you weren't really taking a risk, you'd just be a leader or an asset manager. Um, if you weren't trying to make money, you might be a, um, change maker. You might be a positive force in the world, but you're not an entrepreneur, right? So it has to combine all of those elements.

Ali Abdaal 11:10 And when you say, uh... What, what was that thing you said, sort of organizing resources or doing without?

Daniel Priestley 11:15 So if you had all the resources, right? Let's say you're a trust fund kid, and you've got millions and millions of pounds already that... or dollars that you're starting with, and you've got all these people, and it's, it's all there. You're essentially, you're a leader. You're leading the money, or you're asset managing. An entrepreneur is normally someone who's accessing resources beyond their control, so they have to enroll other people to join their team. They have to enroll investors to put money in. They have to enroll customers to buy something that isn't really proven. So you're kind of influencing people outside of your current sphere.

Ali Abdaal 11:48 Hmm. And how would you define entrepreneur versus solopreneur? That's, you know, a thing that's become popular recently on Twitter-

Daniel Priestley 11:54 I don't know

Ali Abdaal 11:54 ... and, like, one-person businesses and things like that.

Daniel Priestley 11:56 Yeah. So you're still commercial. You're, you're, you're still taking a risk. You're not really organizing a lot of human labor. You're not organizing, um, people outside of your control. I'm not a big fan of solopreneur, and the reason for that is because... If you're a, quote-unquote, solopreneur, you're basically, if you go on holiday, the whole business goes on holiday. And you can imagine what it would be like if Microsoft said, "Everybody's on holiday this month. We're all going away [laughs] at the same time."

Ali Abdaal 12:22 Mm.

Daniel Priestley 12:23 Right? Microsoft would shut down, and it would... Like, the stock price would crash.

Ali Abdaal 12:26 Sure.

Daniel Priestley 12:27 So if you're a solopreneur and everyone goes away all at once, uh, which is you, um, then that's a very precarious position. And the truth is you never really switch off as a solopreneur. Um, so what you're trying to do is you're trying to, like, create something and sell something and deal with customers and all this sort of stuff all on your own, and i- uh, the truth is, as soon as it starts showing sign of working, why wouldn't you have a

Daniel Priestley 12:52 salesperson? Why wouldn't you have an assistant? Why wouldn't you have someone who's, you know, customer service role? Why wouldn't you start bringing together a few people to make this thing actually a proper business and to also specialize your own time, uh, on the most high-value thing that you do?

Ali Abdaal 13:07 Mm. I mean, people famously say, "Oh, I don't wanna manage people."

Daniel Priestley 13:11 Well, I think managing people is when you go past, in some cases, six or seven people. Uh, sometimes you can manage up to, like, 12. Um, but certainly once you go past 12, uh, you are i- into management teams and all that sort of stuff, and it's... it gets hairier and com- more complex.

Ali Abdaal 13:31 Mm.

Daniel Priestley 13:31 Um, let's just call it 10 people. So under 10 people, you normally find that you're a self-organizing team. Think about it like a dinner party. If you have six or seven people around for a dinner party, it really does self-organize. People just, like, get their own drinks, and they, like, bring things to the table, and everything kind of works, and it's kind of a flowing conversation. If you go over 10, 11, 12 people, 13 people, now it's kind of like you've... You're organizing people, and you really... The stress comes on, and it's like, "Guys, it's time to sit down to the table over here now," and, "Who's got the drinks?" and, "Who's doing this? Have we got enough food?" So suddenly it's like a... It's a much more complex production-

Ali Abdaal 14:10 Yeah

Daniel Priestley 14:10 ... to bring that many people together. So there's something magical that happens, which is a self-organizing

Daniel Priestley 14:16 little team, certainly three, four, five, six, seven, eight people. Eight people, you're definitely a self-organizing little team. There's not a lot of managing people-

Ali Abdaal 14:25 Mm

Daniel Priestley 14:26 ... um, in, in that.

Ali Abdaal 14:27 Okay. Nice. Cool. So, um, apologies for taking us on a little bit of a tangent down that route-

Daniel Priestley 14:30 I love tangents

Ali Abdaal 14:30 ... but I know that people, uh, you know, are interested in the whole solopreneur situation. Um, so zero to 10K a month, that's, like, our first step of the process. Um, and so I wonder if, you know, this is something we tried on a previous podcast, if we can sort of pretend to be coaching me as a beginner to entrepreneurship. I don't really know anything about entrepreneurship, but I like the idea.

Daniel Priestley 14:51 Sure.

Ali Abdaal 14:52 I've maybe listened to you on Deep Dive with Ali Abdaal, and I'm like, "Oh, this Daniel Priestley guy is... uh, you know, knows what he's talking about. I would like to engage his services as a coach." I know you don't really do one-on-one coaching anymore, but-

Daniel Priestley 15:01 Sure

Ali Abdaal 15:01 ... like, how, how would we approach that conversation if I were, say, working a full-time job as a junior doctor, t- two years out of med school, and I wanna start a business but, like, I don't, I don't really know what's next?

Daniel Priestley 15:16 So I love a good framework, and my framework for this would be CAOS. CAOS stands for concept, audience, offer, sales. So concept is we need to come up with something that is a good idea or a good concept. When people say, "Ali, what on earth are you doing? Why are you quitting your job to do this thing?" They're gonna say, "What are you... What is it you're gonna do? What are you gonna start?" So the first thing is you gotta have a good answer to that. So you gotta have a concept. [clears throat] So let's talk about concept. Um,

Daniel Priestley 15:41 and I wanna do this n- nice and quick but do it justice.

Ali Abdaal 15:44 Yeah.

Daniel Priestley 15:45 So the first thing that I wanna do with a concept is I wanna know, do you want a lifestyle business or a performance business, right? What are we building?

Ali Abdaal 15:52 What, what does that mean?

Daniel Priestley 15:52 [clears throat] So a lifestyle business is gonna be, are we keeping it small so that you can have fun, freedom, and flexibility? Is that the purpose? Do you wanna just travel and work and, um, and have a little, you know, gang of people that are w- you know, rebels and misfits, and we keep it small, and deliberately h- the whole purpose is fun, freedom, flexibility? And s- especially we don't want debt or investors.

Ali Abdaal 16:14 Mm.

Daniel Priestley 16:15 Right? So that would be a lifestyle business, lifestyle boutique. And, um, the second thing

Daniel Priestley 16:20 would be a performance business, which is we're building something to sell it. We wanna become big and valuable. We wanna be 50 million, 100 million-plus in valuation. We want 50 employees. We're happy to take on investors. We want investors. We want debt. Um, we want to build something that's gonna be valuable. So the first thing I'd wanna know is do you want a lifestyle business-

Ali Abdaal 16:37 Mm

Daniel Priestley 16:37 ... or do you want a performance business? I think of it like a property developer with a block of land. Do you wanna put your dream home on the block of land, or do you wanna build a 10-story building and sell it? Um, like a property development.

Ali Abdaal 16:49 Okay. I wanna make... If I could make 3K a month, that... and that, that, that will allow me to quit my job, and then I'll, I'll be happy.

Daniel Priestley 16:56 So it sounds like a lifestyle... the beginnings of a lifestyle boutique, right?

Ali Abdaal 16:59 Yeah. Sure. [laughs]

Daniel Priestley 16:59 So... And this is not a bad place to start. Normally, a performance business is something that you would do, um, if you've got really good guidance and, and, you know, you might have... it might be your second time through. So, um, that would be the first thing. The next thing I'm looking at is what we call OMV, origin, origin story, mission, and vision. So what is your background? And we need to do something that lines up with your background. There's no point where we don't have any passions or any, you know... Like, when you talked about trading before, I see people, they watch some trading videos online-

Ali Abdaal 17:30 Mm

Daniel Priestley 17:30 ... and then they're like, "Oh, I'm gonna be a trader." Why? "Oh, because so-and-so said that I could end up with a helicopter."

Ali Abdaal 17:36 [laughs]

Daniel Priestley 17:37 Okay, amazing. Um, and it's like, what about your background says trading? Nothing. You know, you've never done... You're not analytical. You're not [laughs] you don't have any of the kind of background that a trading firm would want to see in a, a trader that they hire. None of that's there. You've just seen something that you think makes money. So there's no origin story. Um, whereas let's look at you. You, you became a, you know, amazing YouTuber, but your background was teaching people.

Ali Abdaal 18:03 Mm.

Daniel Priestley 18:03 You were, um, helping... Y- you know, Cambridge, you were talking to people about how to, um... You had one of your first businesses teaching people how to, you know, study for exams. So there is actually a background there. You also h- were passionate about media.

Ali Abdaal 18:16 Mm.

Daniel Priestley 18:16 Um, and you were doing stuff in the media space. So you had a bit of origin story that was leading up to this.

Ali Abdaal 18:21 So what would that look like for someone who maybe... Like, I've s- I've spoken to a lot of people who would say, "Oh, but I don't have anything I'm passionate about. Like, I'm studying ... insert generic degree at insert generic university, and in the evenings I go home and watch Netflix and scroll social media and hang out with my friends. Like, uh, what, in, in that context, how, how do we approach talking to that person about this origin story?

Daniel Priestley 18:43 If I had time with that person-

Ali Abdaal 18:45 Hmm

Daniel Priestley 18:45 ... I would discover that around age 10 there were moments where there were the early moments of empowerment. Now, I've worked with enough entrepreneurs to discover that always around age 10 to 13, there was a moment where you discovered that you were actually independently powerful, separate to your parents.

Ali Abdaal 19:04 Hmm.

Daniel Priestley 19:04 Um, and you have a moment of like, wow, okay, you know what? I'm not just a dumb kid. I've actually... There's something going on here. So you might have stood up to a bully, you might have, um, taken ownership of something, you might have, you know, put together a little play, something like that. So there's always clues in that. Um, and psychologically, one thing I've found about entrepreneurs is that they're, at a very deep level, they're trying to get back to that feeling, that feeling of p- empowerment.

Ali Abdaal 19:33 Hmm.

Daniel Priestley 19:33 And it started early. So let me ask you the question, around age 10 to 13, do you remember a particular early memory where it was like, I had a moment of empowerment, I had a moment that feels like, wow, I'm, I'm on my own and I'm actually a powerful individual?

Ali Abdaal 19:48 Yeah, it was when I started to learn to code. [laughs]

Daniel Priestley 19:51 Coding?

Ali Abdaal 19:51 Yeah. And when I started making websites, and the, the joy... I'm, I, I can't believe I'm, I'm kind of getting emotional for like even just talking about it, just the joy of creating something without my mom's permission-

Daniel Priestley 20:01 [laughs]

Ali Abdaal 20:02 ... and like just making the thing.

Daniel Priestley 20:04 Yeah

Ali Abdaal 20:04 And then started like advertising my services on a freelancer website back, back in the day.

Daniel Priestley 20:07 So there's some elements here of technology, and there's some elements of putting stuff out to the world-

Ali Abdaal 20:12 Hmm

Daniel Priestley 20:12 ... like you're actually creating something and putting it out to the world. Um, and there's elements of like no permission, right? Now, if we go and fast-forward to YouTube, it's a no permission platform. You're creating something for the world and you're putting it out there in the world.

Ali Abdaal 20:25 Hmm.

Daniel Priestley 20:25 Um, so there's all these kind of echoes of that early memory.

Ali Abdaal 20:28 Hmm.

Daniel Priestley 20:29 Um, so what happens is that this ingrains in us pretty early, and everyone's got one, right? So we all have a moment. Sometimes it's a negative experience.

Ali Abdaal 20:39 Yeah.

Daniel Priestley 20:39 So sometimes, um, like the [laughs] a silly example, the origin story for Batman is he's a victim of crime, his parents are killed, and he realizes that he is on his own, right? He has to figure it out real fast on his own that he's now a 10-year-old kid who's orphaned, right? So that's his origin story, and he has to wake up one day and say, "I, I'm gonna work with this situation that I'm in," right? So that is his moment of empowerment. I know it's a fictional story, but it resonates and it's a story that's stood the test of time, but it's a good origin story example that everyone relates to.

Ali Abdaal 21:09 Yeah.

Daniel Priestley 21:10 So sometimes it's negative, as in like something bad happens and you have to just face it.

Ali Abdaal 21:14 Yep.

Daniel Priestley 21:15 And in many cases it's very positive. I had one, uh, I was 10 years old, um, and I hosted my own garage sale. So, um, we had some stuff in the house that was damaged. Uh, we had a little kitchen fire and it damaged some stuff, uh, and I decided to clean it and sell it. And one of the things was a microwave, and this guy comes up to me at the garage sale and he says, um, "How much for the microwave?" And I say, "$20." He says, "Can I talk to your dad?" I say, "Oh, okay. I must have done something wrong." So I go and get Dad, and Dad comes out and he says, um, "What, what's the problem?" And he says, "Well, your son says the microwave's $20, but will you take $15?" And Dad looks at him and he says, "Well, it's his business. You'll have to negotiate with him."

Ali Abdaal 21:57 Hmm.

Daniel Priestley 21:58 And I just in that moment just went, "Whoa." [laughs]

Ali Abdaal 22:00 Hmm.

Daniel Priestley 22:00 "It's my business? You'll have to negotiate with me?" So here's this adult, and he looks at me like embarrassed-

Ali Abdaal 22:07 Yeah

Daniel Priestley 22:07 ... and he says, "Oh, uh, can I give you 15?" And I'm like, "No, it's 20." [laughs] And so, so in that moment-

Ali Abdaal 22:16 Yeah

Daniel Priestley 22:16 ... I'm feeling incredibly like empowered, and I heard this word called business, and it's my business, and I started an entrepreneurial venture. I took something that was a negative, which was a little house fire or something got damaged, I cleaned it, I fixed it, I sold it, I made money. I ended up with a, a green, uh, bicycle and, um, Sega Master System.

Ali Abdaal 22:36 Hmm.

Daniel Priestley 22:37 So for me, this was like, whoa, you can take bad situations and through this thing called business-

Ali Abdaal 22:42 Hmm

Daniel Priestley 22:42 ... you can make it into good things. Um, so that was my moment of empowerment, and it's no surprise that I ended up as a serial entrepreneur.

Ali Abdaal 22:50 And so we're saying that the concept for your business should ideally be li- be linked to some sort of origin story?

Daniel Priestley 22:55 When you try and do things purely to make money, right, and money's a part of it, right? Money's a big part of it. When you try and do things purely to make money, it never works.

Ali Abdaal 23:05 Hmm.

Daniel Priestley 23:05 [laughs] It just doesn't work. Um, everyone who makes money, whether it's Warren Buffett or some amazing hedge fund manager-

Ali Abdaal 23:12 Yeah

Daniel Priestley 23:12 ... my goodness, it runs deep in their veins. There's something about it. They're not just, they're not just trying to make money. They're trying to get back to a certain feeling.

Ali Abdaal 23:20 Nice.

Daniel Priestley 23:20 There's something in there that's, uh, that needs to be unpacked.

Ali Abdaal 23:23 So what would you say for someone who's listening to this and thinking, "Damn, you know, 10 to 13, I d- I don't really have anything. I was just like hanging out with my friends, TBH"?

Daniel Priestley 23:30 You might be an NPC. [laughs]

Ali Abdaal 23:32 [laughs]

Daniel Priestley 23:34 Uh, uh, look, honestly, if you're really that stuck-

Ali Abdaal 23:37 Yeah

Daniel Priestley 23:37 ... entrepreneurship is an advanced strategy. You need to go and work for an entrepreneur. You need to go and do six months with this company, six months with this company. You need to go fishing around. Um, th- this is not... Like entrepreneurship is not some ticket to riches.

Ali Abdaal 23:50 Hmm.

Daniel Priestley 23:50 Entrepreneurship is a really good ticket to be stressed all the time, to sit up late thinking about your business, um, to get really freaked out about whether customers like stuff or not. Um, you know, entrepreneurship is, is an advanced move. It's something that you should do be- you, you should actually be an entrepreneur begrudgingly. You should go, "There's this thing that has to happen in the world. No one's doing it. I'm gonna do it."

Ali Abdaal 24:11 Yeah.

Daniel Priestley 24:12 Right? But it's not... You know, it's a bumpy road that ends smooth. It's not a smooth road that-

Ali Abdaal 24:17 It's not for everyone

Daniel Priestley 24:17 ... it's not for everyone. Um, and there are 6 million businesses already in the UK. There's 30 million plus in the, in the USA. Go join one. Go and join a team. Stop trying to get a job at Goldman Sachs where you're gonna be s- shoved in a corner and you're not gonna know how that business runs or what, you know, who makes the decisions or where things come from.

Ali Abdaal 24:35 Yep.

Daniel Priestley 24:36 Go work with a team of eight people Find out how they make the sales. Get to know how they generate leads. Get to know, you know, what do you do when a customer is upset at you, right? How do you handle a customer complaint? Go and work in a small business. Start working side by side with entrepreneurs, and if you can work for an entrepreneur for six months to two years, and you go, "Actually, I could do this, and I've got an idea," that's, that's the thing.

Ali Abdaal 25:02 Nice.

Daniel Priestley 25:02 So I'm not gonna try and tell someone, "If you're struggling with this, just keep pushing through." Maybe you're just not ready.

Ali Abdaal 25:09 This episode is very kindly brought to you by Huel. I've been using Huel, I've been a paying customer of Huel since 2017, since my fifth year of medical school when I first discovered it. And basically what it is, if you haven't heard of it, is that it is a meal in a shake. It's got the perfect balance of carbs and fiber and proteins and fat, and it contains 26 different vitamins and minerals. All you do is add water or milk to the powder. Usually I use water. You can shake it up or you can blend it. I prefer to blend. And then it becomes a fantastic option if you're like me and you're kind of busy, and so you don't really have time for breakfast or lunch. My favorite version is the Huel Black Edition. It's absolutely sick. 400 calories. 40 grams of protein for 400 calories. I'm trying to get hench, and it's actually pretty hard to find something that has such a high protein content for such a low-calorie trade-off. 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It's available on iPhone and Android, and you can check it out by typing in Trading 212 into your respective app store. So thank you so much, Trading 212, for sponsoring this episode. Okay, so let's say my, my origin story was age 10 to 13, I made, I, I made a few quid, uh, playing guitar, busking on the street, and people would give me money. And then I recorded a CD of cover songs, and I sold it for £5 here and there. And age 13 to 16, I was playing gigs in local bars and stuff and making a few quid there. Do- is that the po- a potential origin for a potentially entrepreneurial journey?

Daniel Priestley 29:00 It's certainly an origin story. There are, there are literal elements to that. There are also just emotional elements to that story. So there's performing in front of people, being the star of the show.

Ali Abdaal 29:10 Yeah.

Daniel Priestley 29:10 There's creating a physical product and being out there selling it. So there's those elements that, that can also play a role. It doesn't literally have to be that you have to be a musician, but it could be that you wanna work in that space. What we're trying to do, and we're really early on, right? So we're just having a look at, basically we're just having a look at origin, mission, and vision. So origin is what's your background. Vision is what would you love to see happen in the future. What do you s- w- what do you, you know, what do you see happening, like, um, lifestyle or performance business? You know, do you see yourself selling this business? Do you see... Like, what, what is the exciting element? What do you wanna do for the world?

Ali Abdaal 29:44 Mm-hmm.

Daniel Priestley 29:44 So all that's in the vision.

Ali Abdaal 29:45 Okay.

Daniel Priestley 29:45 And mission is what is the most high-value thing that you can do right now? So mission is, um, like in World War II, uh, the vision was to defeat the fascists, and the mission was to storm the beaches. So you can see that there's a big vision. This is the end result that we're looking for.

Ali Abdaal 30:06 Yeah.

Daniel Priestley 30:06 And today, today this is what has to be done, or this is the thing that is most important. So in business, a vision is where do we wanna get to, and a mission is what is our high-value thing? So f- for me, my mission is develop entrepreneurs who stand out, scale up, and make positive impacts in the world. And if I wake up and do that mission, then there's a pretty good chance I'm delivering high value.

Ali Abdaal 30:26 Hmm.

Daniel Priestley 30:28 Right? So that, we start with, we start with those basics. Let's make it more practical, right? It's all philosophical at this point.

Ali Abdaal 30:36 Yeah.

Daniel Priestley 30:36 So practically, you then wanna ideate. You wanna come up with 10 concepts. Um, you wanna look at what problems can you solve. Um- And who's willing to pay the most for those problems?

Ali Abdaal 30:46 Okay.

Daniel Priestley 30:47 So it's really important that we combine those other, other elements. A lot of people are very hung up on passion, but there's two other elements of a good concept, and that is that you're solving a problem in the world and that people are paying for that problem.

Ali Abdaal 30:58 Okay.

Daniel Priestley 30:58 So here's the unfortunate truth. When it comes to any problem in the world, there are people who throw their time at the problem in order to solve it, and there are people who've got loads of money and they wanna throw money at the problem to solve it. And if you wanna run a great business, you need to talk to people who've got money to throw at the problem. So-

Ali Abdaal 31:16 Yeah, this is the issue I often find with students, in that the only market they know is students, and students famously do not enjoy throwing money at a problem. They throw their time at problems.

Daniel Priestley 31:25 Yeah.

Ali Abdaal 31:25 And then they're like, "Oh, why am I, why is my business struggling?"

Daniel Priestley 31:27 Yeah.

Ali Abdaal 31:27 It's like, 'cause you're trying to appeal to students.

Daniel Priestley 31:29 Yeah, exactly.

Ali Abdaal 31:29 That's tricky. [laughs]

Daniel Priestley 31:30 [laughs] Exactly. You're trying to get market, uh, you, you're trying to appeal to a m- a market that loves to spend time on stuff. They're not, they got no money to throw at it.

Ali Abdaal 31:37 Right.

Daniel Priestley 31:38 Um, whereas if you simply had three clients who are multimillionaires and you were solving some sort of problem for them, uh, you know, you'd make loads of money.

Ali Abdaal 31:46 Hmm. How does one go about finding ideas? Is it a case of you lock yourself in a room with you and your buddies and you, like, think of some business ideas? Or what's the-

Daniel Priestley 31:56 You, you come up with-

Ali Abdaal 31:57 ... ultimate model?

Daniel Priestley 31:57 ... 10 ideas and you pick the best three.

Ali Abdaal 31:59 Okay. [laughs]

Daniel Priestley 32:01 Yep. And you go and, and then you test them, and you test them as fast and as cheap as you possibly can. So you're looking for an idea where you push the door and people respond, push the door and it opens.

Ali Abdaal 32:11 Mm-hmm.

Daniel Priestley 32:11 You're not, you're not trying... Like, I hate how people think entrepreneurship's really hard. It is really hard, but it's hard... The good types of businesses are hard because there's too much to do and not enough time. So, like, the, the hard problem that you want to have is there's too many people who want this, and I can't keep up with them.

Ali Abdaal 32:32 Yeah.

Daniel Priestley 32:32 Um, you know, I've got 40 people to call back today, and I don't have time to call back all 40 people.

Ali Abdaal 32:37 Hmm.

Daniel Priestley 32:37 That's the problem you want.

Ali Abdaal 32:39 That's the good kind of hard.

Daniel Priestley 32:40 Yes. You don't wanna have a problem that's like, oh, this is, like, no one's interested.

Ali Abdaal 32:45 Yeah. The bad... So I remember when I was, um, in my third year of uni, I was the president of the Pakistan Society, and we had a ball, um, like a charity ball every year, and it was such an absolute nightmare s- trying to sell tickets for this ball because we were selling £35 tickets to students who did not have any money, who-

Daniel Priestley 33:01 £35 is a lot.

Ali Abdaal 33:02 It was a lot of money. I was, I wanna, I was really, like, ugh. Like, it felt so, like, hard-

Daniel Priestley 33:08 Mm

Ali Abdaal 33:08 ... because it's like there was no demand for this. And it was like having to message, Facebook Message people that I knew at, at, at other universities to be like, "Guys, you're gonna love this event. It's really fun." And, like, in the back of my mind, I knew that, like, it's a lot of money. These guys don't have money. It's, it's not gonna be that good objectively. But, like, having to be a sort of snake oil salesman in that context.

Daniel Priestley 33:27 [laughs]

Ali Abdaal 33:28 Um, I hope no one from the PAC Society is listening to this. But I really felt like I was a snake oil salesman, and that gave me a real sense of ugh-

Daniel Priestley 33:34 Mm

Ali Abdaal 33:34 ... when it came to trying to sell that. Whereas when we opened the door for our YouTuber academy, suddenly, oh crap, we've got more, more demand than we even know what to do with.

Daniel Priestley 33:41 Yeah. One of the f- one of the great questions is, like, does this product deliver someone a return? Like, what's the return on investment for them? And if there's, if there's, like, a 10 to one, if you can think about a 10 to one return, it normally is gonna be a good... People are gonna pay for it.

Ali Abdaal 33:57 Yeah.

Daniel Priestley 33:57 So, um, YouTuber Academy clearly is worth 10 to one. Right? If I start a YouTube channel, um, and it succeeds, I'm going to earn money. I've got sponsorship opportunities. I'm gonna build a personal brand. It's gonna create digital assets that'll last forever. There's all these positives that could easily be defined as a 10 to one ratio. So whatever I spend, there's a great return, and it's nice and clear-

Ali Abdaal 34:21 Mm

Daniel Priestley 34:21 ... that there's a, there's a nice return. So, um, a lot of good products, you can actually explain how it returns. What, what is the return on this product? And there's a, there's a quite a clear imbalance.

Ali Abdaal 34:33 Hmm. Okay. So coming back to our i- idea thing, generating 10 ideas. So what does an idea look like at this stage? Is it like a, a three business plan, or is it, like, a tweet? Or, like, what makes a business idea a concept?

Daniel Priestley 34:48 So, yeah, it's probably a page of notes about the idea in the, in the early stages. So we're gonna talk about what's the product gonna look like, whom, whom might it be for, um, those sorts of things. But then pretty quickly we wanna test it.

Ali Abdaal 34:59 Okay.

Daniel Priestley 34:59 So I've got three ways that I like to test ideas. I like to run an intro event, um, which is purely and simply just an introduction to blank. Um, I like to run a quiz, which is, um, uh, "Are you ready to blank? Answer 10 questions and find out

Daniel Priestley 35:14 on ScoreApp."

Ali Abdaal 35:14 Sure.

Daniel Priestley 35:15 Um, and I like to do a WhatsApp group. So would you-

Ali Abdaal 35:18 WhatsApp group?

Daniel Priestley 35:19 Yeah, WhatsApp group is, like, um... So WhatsApp group is, like, um, for example, if I w- I was gonna do the, um, Pakistan ball, I would say, "We're thinking about doing a, um, a Pakistan ball. All the tickets will be released in this WhatsApp group. Would you like to join the free WhatsApp group, um, and get ac- early access to tickets?" So it's, like, just purely and simply if I can get people to join the WhatsApp group-

Ali Abdaal 35:42 Yep

Daniel Priestley 35:43 ... I'll give you a real life example. Uh, a friend of mine, Max, he wanted to create a product for, um, what's called a family office. A family office is a very high net worth family who employs people to manage their money full time, right?

Ali Abdaal 35:57 Nice. [laughs]

Daniel Priestley 35:57 So he wanted... Yeah, exactly. It's a, yeah, the people who've got so much money they need to have a full time money manager. So, um, he wanted to put together a group of people who do that, who are family office managers, and what he did is he started a WhatsApp group and he basically said, "I'm putting together a WhatsApp group for people whose families', um, family office manages hundreds of millions and, um, and

Daniel Priestley 36:20 it's a place for you to talk to other people who run family offices." So he put together a WhatsApp group and immediately he got about 19 people join, and that was the beginning of a very successful business. Um-

Ali Abdaal 36:29 How did he know these 19 people?

Daniel Priestley 36:30 He reached out to them, uh, on Link-

Ali Abdaal 36:32 Oh, he messaged them on-

Daniel Priestley 36:32 Yep, messaged them on LinkedIn. Um, "I'm launching a family office group. I've got this company who've already agreed to come and join."

Ali Abdaal 36:38 Yeah.

Daniel Priestley 36:38 "Would you, would you like access to the, my, um, my, my group?" Um, and people, "Sure." 'Cause he- here's the thing. It's like, well, I can always leave. Like, it's a WhatsApp group.

Ali Abdaal 36:49 Yeah.

Daniel Priestley 36:49 So who cares? But it's a really good first test.

Ali Abdaal 36:52 Hmm.

Daniel Priestley 36:53 Um, I know someone who did a clinic, uh, a fertility clinic, and they created a pop-up WhatsApp group, um, five days to better fertility awareness. Um, and it was basically a five-day pop-up group. Uh, join the group, and it's basically looking at research and, um, uh, what's called minor and macro markers or something like that. Um, and it basically helps people to have five days to better fertility understanding and fertility awareness, and I think 4- or 500 people joined it. So-

Ali Abdaal 37:24 Wow, okay

Daniel Priestley 37:25 ... yeah.

Ali Abdaal 37:26 Okay.

Daniel Priestley 37:26 So quizzes, WhatsApp groups, and events.

Ali Abdaal 37:28 Okay.

Daniel Priestley 37:28 Zoom events, free events, online things.

Ali Abdaal 37:31 So let's say my business idea was I want to... I, I really enjoy making burgers. I wanna make one of those burger vans and go into Cambridge town center and sell my burgers.

Daniel Priestley 37:41 Okay. For starters, please don't do food.

Ali Abdaal 37:43 Oh, okay. [laughs]

Daniel Priestley 37:44 It's one of the most capital intensive, hard to scale businesses. Um, it's normally a recipe to, to lose money. Um-

Ali Abdaal 37:50 Okay. So burger not good.

Daniel Priestley 37:51 Well, look, look, if you wanna use it as an example, we can use it as an example, but I would almost instantly rule it out-

Ali Abdaal 37:57 Okay

Daniel Priestley 37:57 ... because it's, it's capital intensive.

Ali Abdaal 37:58 Okay. I'm gonna throw some more examples at you and just tell me what's-

Daniel Priestley 38:00 Perishable, you're dealing with a perishable product.

Ali Abdaal 38:02 Yeah.

Daniel Priestley 38:03 Um-

Ali Abdaal 38:03 Allergies, uh, food safety requirements

Daniel Priestley 38:05 ... and, and also it doesn't really scale. Like, if you wanna serve twice as many people, you need twice as much employees and stock and floor space, and everything has to be twice as much.

Ali Abdaal 38:15 Okay.

Daniel Priestley 38:16 So, like, software, if I build software and I wanna serve 10 times as many people, I just onboard them.

Ali Abdaal 38:22 Yeah.

Daniel Priestley 38:22 They have a username and a password. If I wanna have 1,000 times more people,

Daniel Priestley 38:26 I just have a username and a password-

Ali Abdaal 38:28 Yeah

Daniel Priestley 38:28 ... and they just get access to the software. So, um, you know, that is a very different-

Ali Abdaal 38:33 Sure

Daniel Priestley 38:33 ... business to a burger.

Ali Abdaal 38:35 Okay. Business idea, I wanna make the ultimate productivity app. Notion and Things and Todoist, like, they're all, Evernote, they're all a bit, like, uh, they don't have... They're not quite right.

Daniel Priestley 38:44 Yep.

Ali Abdaal 38:44 I think me as a 26-year-old junior doctor, um, with a vague background in coding, you know what? I wanna build the best productivity app in the world.

Daniel Priestley 38:51 So don't do a productivity app, um- [laughs]

Ali Abdaal 38:55 [laughs]

Daniel Priestley 38:55 ... because there's a J curve. You're gonna-

Ali Abdaal 38:57 Ooh

Daniel Priestley 38:57 ... have to raise a bunch of money. It's gonna be a performance business, but you're gonna have to raise a bunch of money. You'll lose money before you make money. Anyway, you can... Here's how you start it.

Ali Abdaal 39:04 Yeah.

Daniel Priestley 39:05 You would start by doing a, first up, you would do a little event, and it would be an introduction to productivity hacks. Um, and it would be 30 people on a Zoom call.

Ali Abdaal 39:14 Yeah.

Daniel Priestley 39:14 And you would present four or five productivity hacks and see if you can get 30 people. Um, and that's, that's test number one. Test number two is, are you ready to be more productive? Take the scorecard. Um, answer 10 questions and find out if you could be improving your productivity, right?

Ali Abdaal 39:30 Yeah.

Daniel Priestley 39:30 So a three-minute, a three-minute productivity assessment, how's your personal productivity? Answer the score app scorecard, boom. Uh, now what happens then is if you can get 150 people to fill that in, that's a good sign. Doesn't cost you much to set that up.

Ali Abdaal 39:44 Hmm.

Daniel Priestley 39:45 So now you're actually getting validation. And then the third test is, um, productivity hacks WhatsApp group. Uh, I'm going to be doing a lot of research into productivity, um, improvements. Would you like to join the productivity work, um, WhatsApp group? Every day there'll be a productivity idea, and there'll be other people sharing their ideas, and you can share your ideas as well.

Ali Abdaal 40:07 That sounds pretty good, to be honest. [laughs]

Daniel Priestley 40:08 Those three things cost you nothing.

Ali Abdaal 40:10 Yeah.

Daniel Priestley 40:11 Right? A Zoom account is free or almost free.

Ali Abdaal 40:14 Yeah.

Daniel Priestley 40:14 Uh, a WhatsApp group is free. Um, and a score app account, you can have a free 30-day trial, and then it's, like, £29 a month. So we haven't spent £100 yet.

Ali Abdaal 40:24 Yeah.

Daniel Priestley 40:24 And we've hopefully tested the idea to see whether people are engaging. We're gonna reach out to people on Instagram. We're gonna reach out to people on LinkedIn. We're gonna, um, you know, drop in on, like, some communities that we're already part of.

Ali Abdaal 40:36 Ah.

Daniel Priestley 40:36 We're gonna tell some people that we already know. We're gonna kind of reach out to friends and friends of friends and just see if they want to engage with this thing.

Ali Abdaal 40:43 Okay, two things. Uh, first one, you mentioned J curve.

Daniel Priestley 40:46 Mm-hmm.

Ali Abdaal 40:46 Uh, for people who may not have gotten halfway through our previous episode, uh, what is a J-curve business, and why would you advise against doing this?

Daniel Priestley 40:53 So the J sh- the J stands for the shape of the cash flow. So it stands for losing money, losing money, losing money. Oh, not losing so much, not losing so much. Oh, we're making money. We're making money. We're making a lot of money, right? So that's the J. So there are certain businesses that are sales businesses that are not J, J curves, and then there are, um, businesses that are volume businesses that are typically J curves.

Ali Abdaal 41:15 Okay. Sales versus volume. What is the difference?

Daniel Priestley 41:17 So if it's a sales business, it's normally making a sale of over £1,000 or over $1,000 at the time. Um, so for example, if I pick up the phone and talk to you and say, um, uh, "Ali, I do studio setups, and, um, we actually come in and we do all the microphones and we do all the setup, and we actually set you up a whole podcast studio and video production studio, and we have a studio management service, and it's $7,000 to s- to, to, to do all of this stuff for you," y- you say yes. You sign an agreement, "Yes, I want that." And then I go away and actually bring all the stuff, and I get all the things that I promised you, and I can literally take that agreement and then go off and, and, uh, get the microphones and all that stuff that I need after you've signed. So I'm making a sale, and then I'm fulfilling the sale.

Ali Abdaal 42:06 Ah.

Daniel Priestley 42:06 And, and each sale is more than $1,000. S- so minimum-

Ali Abdaal 42:09 Why more than $1,000?

Daniel Priestley 42:11 Because the time and effort that it takes to make a sale, um, and then the time and effort to look after a client, it needs to be over $1,000.

Ali Abdaal 42:19 Ah, okay, 'cause this is where I definitely would've gone wrong back in the day when I was trying to build businesses in school and, and at university. I could not have even remotely imagined paying £1,000 for anything-

Daniel Priestley 42:28 Yeah

Ali Abdaal 42:28 ... except maybe, like, a MacBook, but I... And I would've gone for the student discount MacBook Air base version for 800 quid-

Daniel Priestley 42:33 Mm-hmm

Ali Abdaal 42:34 ... so as to not have to pay the £1,000. And therefore, all of my business ideas w- were around, like, okay, if I could do this thing for a tenner, this thing 50 quid, this thing for 100 quid, this thing for 120.

Daniel Priestley 42:43 Mm-hmm.

Ali Abdaal 42:43 Like, I'm sort of stuck in that price, pricing zone.

Daniel Priestley 42:45 Well, here's the thing. If you were to go get a job as a doctor, you'd be selling a package called a year of employment for £40,000.

Ali Abdaal 42:53 Yeah.

Daniel Priestley 42:53 Right? So you were selling something for £40,000, but [laughs] it was a, it was I have one client, the NHS, and I allocate my entire stock, my time, uh, to this one client.

Ali Abdaal 43:04 Hmm.

Daniel Priestley 43:04 So if you were to, um, have, uh- 20 clients who you do some sort of health intervention with, uh, and they all pay two grand each, well now you've got 40 grand, but it's split between 20 clients.

Ali Abdaal 43:19 Ah.

Daniel Priestley 43:19 Um, so [sighs] ideally, when we wanna do a non-J curve business, we've gotta be selling something that's meaty. We've gotta be normally selling B2B, as in business to business, so we're normally making some sort of a sale, and it's typically a solution sale. We're packaging up products, services, outcomes, and we're, we're selling that to a business that wants all those things. They're gonna sign up for it, they're gonna sign a little agreement, and then you're gonna go ahead and do all of that, and it's gonna add up to at least 1,000. And mind you, this could go all the way up to tens of thousands or millions. Um, so you could actually, you know, sell lots of stuff. Um, so those are sales businesses. I'll give you some examples. A financial planner normally sells financial planning and then delivers it. Um, an accountant normally sells, uh, an accounting package, um, and accounts management. Uh, bookkeepers sell a year's worth of bookkeeping as a rolling contract. Um, business coaches might sell a business coaching package or a life coaching package. Um, so all of those would be examples of, uh, businesses where you're not in a J curve. You're selling something up front, and then you'll co- you know, you, you know how much you're gonna earn-

Ali Abdaal 44:30 Yeah

Daniel Priestley 44:30 ... and yeah, the sale comes first.

Ali Abdaal 44:32 Interesting. And then the other type is volume businesses.

Daniel Priestley 44:35 Yeah, J curve businesses. This is where you have to [sighs] invest a lot of money into something that you're going to sell little bits at a time. So for example-

Ali Abdaal 44:44 Like a productivity app.

Daniel Priestley 44:44 Yeah, like-

Ali Abdaal 44:45 Yeah

Daniel Priestley 44:45 ... a productivity app. So if the productivity app is £6 a month-

Ali Abdaal 44:49 Yeah

Daniel Priestley 44:49 ... [sighs] you're gonna have to build... Like, let's be real, if you're gonna build an app, at the very basic it's gonna be 20 or 30 grand. Yeah?

Ali Abdaal 44:57 Yeah, yeah.

Daniel Priestley 44:58 Like super basic. And then-

Ali Abdaal 44:59 Most people I know who built apps, it- they've-

Daniel Priestley 45:01 300 to 600 grand

Ali Abdaal 45:01 ... ended up paying like, yeah, loads more. Yeah

Daniel Priestley 45:03 Yeah, so most software projects end up being hundreds of thousands to millions, e- especially if they take off. But, uh, granted, I do see people who start little businesses, software businesses, and them and a couple of people, they work on it and they build something for a few thousand, right? So fair enough, but you're building something that's a few thousand, and then you're trying to sell it for, like, six bucks a month, and you need, you know, well, you need like 1,000 people paying $6 a month and you've got 6,000 a month, and if there's two of you working on it, that's only three grand a month. You might as well have jobs. So [laughs]

Ali Abdaal 45:34 Yeah

Daniel Priestley 45:35 ... you've gotta get a lot of people, and the reality of getting thousands of people to sign up to this is it's probably a six or seven-person team, um, to manage thousands of people signing up.

Ali Abdaal 45:44 Mm.

Daniel Priestley 45:45 So you're perpetually in this kinda J curve where you're trying to get enough people to subscribe to this thing or pay for this thing. Um, and it's even, by the way, it's even worse if it's not subscription, if it's not recurring revenue. Like, I see people saying, "Oh, I'm gonna sell cupcakes." It's a one-off sale of $15 for a few, for a thing of cup- cupcakes.

Ali Abdaal 46:08 Yeah.

Daniel Priestley 46:09 And it's not repeat business. It's not on auto renew. Um, so somehow you have to make hundreds of sales every month just to simply keep your kitchen cooking.

Ali Abdaal 46:20 Okay, so this is a big, I think, I think this is a big firmware update for me as well, because I've never really thought of it in this way, and therefore I suspect people listening to this haven't thought of it in this way. I've been in th- uh, in the entrepreneurship game for, like, ages now, but, like, still when I think of a business, what I imagine is a productivity app or a cupcake store or a laundromat or a restaurant-

Daniel Priestley 46:38 Mm-hmm

Ali Abdaal 46:38 ... or a coffee shop or a, "I enjoy making burgers, let me go and set up a food van."

Daniel Priestley 46:42 Yeah.

Ali Abdaal 46:42 And 100% of these things that come to my mind when I think business are volume-based J curve businesses where I'm selling a low-ticket item and trying to sell lots of it.

Daniel Priestley 46:51 Hmm.

Ali Abdaal 46:52 Whereas when the things you were describing, financial planning and, like, uh, that, that ki- it's, it wouldn't, wouldn't even cross my mind. Those are businesses?

Daniel Priestley 47:00 Much better businesses.

Ali Abdaal 47:01 Yeah.

Daniel Priestley 47:02 Yeah, much better businesses. Like, if you have a $5,000 package and you can make four signups per week, that's a million dollars a year, and all you have to do is make four signups a week.

Ali Abdaal 47:13 Yeah. [laughs]

Daniel Priestley 47:14 So to make four signups a week, you might only need to talk to 20. Um, and a million dollars a year pays for quite a few staff.

Ali Abdaal 47:20 Yeah. [laughs]

Daniel Priestley 47:21 So let's say you've got this $5,000 package, and you have a salesperson and you've got a little ads budget, and the goal is we talk to 20 people per week and we make, out of 20 presentations, we make four sales. Great. You've just made 20 grand a week times 50 weeks of the year, you've got a million dollars.

Ali Abdaal 47:40 I've, I've, I've started having similar conversations with, y- you know, there's, there's, th- there are very p- various people I know now, either sort of former team members of mine or people who used to be in- in- interns here in our team who have gone away and they're like, "All right, cool. I wanna, I wanna make it as a freelancer." And I'm like, "All right, cool. What's, what's the goal?" Like, they're like, "Oh man, if I could make 2K a month, I'd be, I'd be, I'd, I'd be absolutely... I'd, I'd be flying."

Daniel Priestley 48:02 [laughs]

Ali Abdaal 48:03 And I'm like, "All right, cool." And they'll start off selling their time, like offering YouTube video editing as a service for like $100 per video.

Daniel Priestley 48:10 Mm-hmm.

Ali Abdaal 48:10 And it's like, "Cool, I need to do 20 videos a month to get my 2K." I'm like, hang on, hang on, hang on, hang on. [laughs] Like, imagine you were able to charge 2K a month for something.

Daniel Priestley 48:20 Hmm.

Ali Abdaal 48:21 How many clients do you need to make a 2K? Just the one.

Daniel Priestley 48:23 Just one client.

Ali Abdaal 48:24 So way easier to deal with one client. Imagine you wanna go 10K a month.

Daniel Priestley 48:28 Five clients.

Ali Abdaal 48:28 Five clients at 2K a month gets you to 10K a month.

Daniel Priestley 48:30 Yeah.

Ali Abdaal 48:30 How would that feel?

Daniel Priestley 48:31 And also, imagine you didn't sell them you.

Ali Abdaal 48:33 Hmm.

Daniel Priestley 48:33 Imagine you sold them your team-

Ali Abdaal 48:35 Yeah

Daniel Priestley 48:35 ... so that it's scalable. So you just run around, you know, signing up the clients, and then you've got an amazing team.

Ali Abdaal 48:42 Yeah. Yeah, I think the whole high-ticket, low-volume thing, you know, one of, uh, well, one of our friends was over yesterday, and he was in, he's trying to make, like, 5K a month and was selling his product for $40.

Daniel Priestley 48:52 That's a lot of sales.

Ali Abdaal 48:53 That's a lot of sales, yeah. And I was like-

Daniel Priestley 48:55 That's a, that's a J curve

Ali Abdaal 48:55 ... that's a J... Ex- ex- exactly. It's a J curve business. And he was kinda happy 'cause he was like, "Yeah, I'm getting a sale every few days through my Twitter and this kind of stuff." And I was like, "Okay, you know, imagine a l-" I mean, he's do- he's doing higher-ticket consulting-y stuff, which is, which, which takes up his time, but I was challenging him, like, what if you could sell a $300 product? How many sales of a $300 product would you need? To be financially free, as it were-

Daniel Priestley 49:19 Yeah

Ali Abdaal 49:19 ... from, from your rent. And he was like, "Shit, just if I could get 10 sales a month-

Daniel Priestley 49:22 Yeah, and here's the-

Ali Abdaal 49:23 ... then like, oh my God, wow"

Daniel Priestley 49:24 ... here, here's the other thing too. It's unfortunate, but a very small number of people have a lot of money.

Ali Abdaal 49:30 Mm.

Daniel Priestley 49:31 And they are massively underserved in most cases. So you, i- if you look at, if you look at, um, wealth, the top 10% of people over 55 have three quarters of the economy in wealth. So it's a very small percentage of older people who have all the wealth, basically. Like three quarters of it, 65%, is the top 10% of baby boomers. So it's all in, locked in that cookie jar. So you need to go to that cookie jar if [laughs] if you wanna go and do something that involves, like, proper money. Um, and then if you want to go to income, the top 1% of income earners earn 163,000 pound, in the UK, 163,000 pounds plus per, uh, per year, and then once you get in there, the average earnings of a top one percenter is 360,000 a year. So they're on about a grand a day, 360 days a year. Um, so you don't need many of those people, and they've got no time, and everything that they do is benchmarked against what they do to create that income. So, like let's say they're a surgeon. Any time they're not being a surgeon, like mowing their lawns or, you know, dropping kids at school, or any of that sort of stuff, they're losing money because they can be earning a lot of money in the thing that they're earning a lot of money at. So if you can figure out, how do I sell to people who've got that kind of money, that's helpful. Um, so a, a really good idea is to just start by thinking who has the highest return on investment? H- is a Ferrari an expensive car?

Ali Abdaal 51:09 Yes. [laughs]

Daniel Priestley 51:10 Depends who's asking.

Ali Abdaal 51:11 Okay.

Daniel Priestley 51:11 It depends who's s- looking at it.

Ali Abdaal 51:12 Sure.

Daniel Priestley 51:13 So to an average income earning person, a Ferrari's a very expensive car. To a billionaire it's just a toy, it's no big deal. Um, to an influencer who makes their money influencing young men and that's their, like it's just their marketing budget, right?

Ali Abdaal 51:26 Yeah.

Daniel Priestley 51:26 It's just part of marketing. Um, to someone who owns a luxury car company, uh, that rents the Ferrari out, it's CapEx. It's just a capital expense. So a Ferrari i- may or may not be an expensive car depending on who's buying it. So when you say, "What's expensive?" It really only comes down to who's buying it. If I said, "Setting up a home podcasting studio, is that expensive for 10 grand?" Well, if I'm selling it to a kid, yes. If I'm selling it to a famous YouTuber who can easily like leverage it, then it's probably not. So it's actually really down to who's buying. So you've gotta get good at figuring out who has the most to g- to, most to gain from what you can do. W- by the way, we're still at the really [laughs] beginnings.

Ali Abdaal 52:14 I know. Yeah. [laughs]

Daniel Priestley 52:15 I love doing it, but we're, we-

Ali Abdaal 52:16 Yeah, we'll-

Daniel Priestley 52:17 We, we have got a long way to go to get to a million-

Ali Abdaal 52:19 We, we have a long way to go. Yeah, we might have to do part three [laughs] of the podcast. Um, okay, hang on. So would it be fair to say that the non-J curve businesses, the ones that we, that make for better business ideas for a beginner, tend to be service businesses, and the J curve tend to be product businesses?

Daniel Priestley 52:36 Yeah. So j- the, the real J curve has set up costs, big set up costs. Restaurants have big set up costs. Software, big set up costs. Um, courses, not so much, but you're in competition with everyone else who's got a course, um, so you've gotta have a big brand to, to make sure that it gets cut through. Um, so-

Ali Abdaal 52:54 Yeah, I mean, I, I had the set up cost of three years of bui- building a YouTube channel-

Daniel Priestley 52:57 [laughs]

Ali Abdaal 52:57 ... before we made any money from courses.

Daniel Priestley 52:59 That was the J.

Ali Abdaal 53:00 Yeah.

Daniel Priestley 53:00 So, um, yeah, so there's those. I mean, if you're selling something like this, the, you need a whole professional kitchen. Um, so this, this would involve a commercial kitchen contract. They probably wouldn't even take you on as a client without a minimum 300, 400 grand worth of, um, commitment orders.

Ali Abdaal 53:17 Yeah.

Daniel Priestley 53:17 So, you know, a- anything that is a physical product is probably a J curve business.

Ali Abdaal 53:22 Mm.

Daniel Priestley 53:23 Um, anything that you've gotta do an initial order of tens of thousands and then try and move that-

Ali Abdaal 53:28 Yep

Daniel Priestley 53:28 ... um, they're all J curves.

Ali Abdaal 53:30 This episode is very kindly sponsored by Shopify. Shopify is great. Shopify is an easy to use all in one commerce platform that literally anyone can use to start and grow and scale a business

Ali Abdaal 53:41 from zero to, like, multi-billion dollars in revenue. Shopify lets you sell basically anything online

Ali Abdaal 53:46 or in person or across social media, and they power millions of businesses in over 175 countries. We've been using Shopify for the last several years, A, to sell our physical digital product planners in the Essentially product line, and we're using Shopify to build a tech brand that we're working on, the behind the scenes and the website and stuff as we speak. Again, everything powered by Shopify. And it's great. It just makes the whole system so easy. It plugs into the fulfillment options. It plugs into sort of the delivery options. It's just, like, so handy to have Shopify as this all in one platform to manage literally all aspect of our commerce business. So if you're considering starting or growing your commerce business, then head over to shopify.com/deepdive, and that URL will let you sign up for a totally free trial so you can try Shopify out and see if it vibes with you. So thank you so much, Shopify, for sponsoring this episode. So we're trying to think, narrowing, narrowing the focus down, I wanna come up with a business idea that I can charge more than 1,000 pounds or $1,000 for, ideally where the person I'm targeting has a lot of money.

Daniel Priestley 54:37 Yeah.

Ali Abdaal 54:37 And-

Daniel Priestley 54:37 Where 1,000 bucks is not a lot of money

Ali Abdaal 54:39 ... and where probably it's some kind of service that I will do for them.

Daniel Priestley 54:43 Yep.

Ali Abdaal 54:43 Yeah.

Daniel Priestley 54:43 It's something that they are frustrated, they, you know, uh, it's, it takes up their time, and their time is more valuable, or whoever's looking after them isn't doing a reliable job. Um, yeah.

Ali Abdaal 54:54 Ah, okay. So that really narrows things down, because when I was thinking, "Oh, you know, I used to play guitar back in my youth," I was like, "Okay, can I start a business as a guitar teacher, dot, dot, dot?"

Daniel Priestley 55:03 [laughs] Uh, yes, you can-

Ali Abdaal 55:05 [laughs]

Daniel Priestley 55:05 ... but it's not gonna be a massive... You're not gonna sell that for... You know, you might sell some courses. You could... Yeah, these are not the kind of businesses I get excited about, you know? These are, these are hobby, hobby businesses. Do you wanna talk about hobbies or proper businesses?

Ali Abdaal 55:20 I think let's go proper businesses, yeah.

Daniel Priestley 55:21 So proper businesses, we, we wanna get to 10,000 a month. We want... Here's what, here's what my rule would be Five sales of two grand. Is it, is it feasible that we can do five sales of two grand?

Ali Abdaal 55:32 Hmm.

Daniel Priestley 55:33 So if we're gonna do guitar lessons, and we're not-

Ali Abdaal 55:35 [laughs]

Daniel Priestley 55:36 ... um, it would have to be that y- we're signing up people for a commitment of 200 a month times 12 months, and we're doing, like, family guitar lessons, and we come around and we, we have a guitar teacher who comes into your house and does the thing, and it's 200 a month, and it's a minimum 12-month commitment. Okay, fine. Uh, now we're in two grand packages. Can we make five sales of that per month?

Ali Abdaal 55:54 Then delivering on that.

Daniel Priestley 55:56 Well, then, yeah, we need-

Ali Abdaal 55:56 Yeah

Daniel Priestley 55:57 ... need guitar teachers, right?

Ali Abdaal 55:58 It's not very scalable.

Daniel Priestley 55:59 We could be. I don't know how many guitar teachers are out there.

Ali Abdaal 56:02 Yeah.

Daniel Priestley 56:02 All right? But maybe. Um, so but that would be the only way that it would meet my criteria.

Ali Abdaal 56:06 Yeah.

Daniel Priestley 56:06 I have to see that I can make a good 10 grand a month. There has to be a clear model, a, a back of a napkin spreadsheet that just says, "Yeah, we, if we make this many sales, it's sensible that we-

Ali Abdaal 56:17 Yeah

Daniel Priestley 56:17 ... could get to 10 grand a month pretty quickly with, like, one or two people. Like me and an, me and a friend, we could get to 10 grand a month.

Ali Abdaal 56:24 Yeah. Damn. Okay.

Daniel Priestley 56:26 And it's good to be damn. It's good to go, "Oh, that rules a bunch of stuff out." Yes, it does.

Ali Abdaal 56:32 That rules out, like, n- 99.9%-

Daniel Priestley 56:34 Fan-

Ali Abdaal 56:34 ... of what I would consider a quick business idea. [laughs]

Daniel Priestley 56:36 Fantastic. Fantastic, because it's not gonna lead anywhere.

Ali Abdaal 56:40 Yeah.

Daniel Priestley 56:41 Yeah, 'cause r- remember, you started this. We wanna get to hundreds a month.

Ali Abdaal 56:44 Yeah.

Daniel Priestley 56:44 Hundreds, thousands a month.

Ali Abdaal 56:45 I mean, yeah, absolutely.

Daniel Priestley 56:46 Millions a month we said we were gonna get to in this podcast.

Ali Abdaal 56:49 My gosh. Okay, fine. So-

Daniel Priestley 56:51 [laughs]

Ali Abdaal 56:51 ... concept. [laughs]

Daniel Priestley 56:52 Concept.

Ali Abdaal 56:52 We're in the chaos model.

Daniel Priestley 56:53 Then-

Ali Abdaal 56:53 What is the chaos model?

Daniel Priestley 56:54 Okay, then we're doing audience, right? Concept, audience. So we said, um, uh, we said the WhatsApp group and the g- event and the quiz. Uh, the next thing is offer. So the offer is constructing an offer that is a couple of grand, and, um, the f- fourth thing is sales. So we kinda covered it.

Ali Abdaal 57:07 Hmm.

Daniel Priestley 57:08 So it's concept, audience, offer, sales. Um, the offer is where we present people with either a slide deck or a brochure, um, or sometimes a web page, but I really love to present it physically to people. I love to be sitting eyeball to eyeball when I present this because I wanna see how they actually react.

Ali Abdaal 57:25 Oh, wait, so you're saying I have to actually talk to people and sell them this thing?

Daniel Priestley 57:28 Hmm, yes.

Ali Abdaal 57:29 Nah, come on.

Daniel Priestley 57:30 Yeah.

Ali Abdaal 57:30 That's not, that's not my idea of what a business is. I thought I just sit in my bedroom and make something-

Daniel Priestley 57:33 [laughs]

Ali Abdaal 57:33 ... and then suddenly become a, become a millionaire.

Daniel Priestley 57:35 You, you, you eventually do, uh, but the, the... Yeah, when you're starting a business, you wanna get close enough to lick their face. You wanna be right up close to your customers. You wanna see exactly

Daniel Priestley 57:46 how they interact. So-

Ali Abdaal 57:47 Isn't that such an old school way of, like, thinking about business? Surely the world has changed. Surely I can just, like, make an app or something.

Daniel Priestley 57:53 Yeah.

Ali Abdaal 57:53 [laughs]

Daniel Priestley 57:54 Um, the best, the best tech entrepreneurs I know, they love to get hand, uh, hands, hand, really hand-on with a client, with a, with a potential client. So in the early days, we're talking about going in stages.

Ali Abdaal 58:06 Yeah.

Daniel Priestley 58:07 And stage one, we just wanna see, how does the person react? When I tell people, "This is what we've created for you. Would you like to sign up?" And they go, "Hmm, does it come in blue?" "Uh, yeah, we can make it in blue." "Oh, could I get it in extra large?" "Yeah, we could do it in extra large." "I need it to be spaced out over six payments. Can we

Daniel Priestley 58:26 do six payments?" "Yeah, we can do six payments." "Okay, cool. Yeah, I will sign up if it's blue and extra large in six payments." Fantastic. Um, so that's what we need to do, and they won't do that online. They won't actually... They won't drop you an email and say, "Well, if it was this and this and this, then I would've done it." They'll just go, "No, not for me." So you have to be... You have to do at least 30 sales meetings to get any, um, data whatsoever. You know, you know, um, 'cause you did statistics and, and science, um, statistical analysis, you need 30 samples, uh, as, like, a, the basics of statistical significance. Um, 150 is, like, a next level up. So I'm a big fan that you don't judge your product or service until you've sat down with 30 customers and see how 30 people respond.

Ali Abdaal 59:12 Damn. Okay. [laughs] I'm feeling my mind being blown right now, and e- even though I've done this business thing, business thing for a while, but, like, yeah, just never thought... Yeah.

Daniel Priestley 59:22 So, like, when I launched ScoreApp, I literally sat down with people.

Ali Abdaal 59:25 Hmm.

Daniel Priestley 59:25 Like, lots of people. I booked out a boardroom, and I just had, uh, appointment after appointment after appointment after appointment. I spent an hour with each person, sitting down and saying, "We're gonna create a scorecard. Here's what we need to do. Here's how we do it. This is the, this is the kind of process and the framework."

Ali Abdaal 59:40 Yeah.

Daniel Priestley 59:41 "What, what would it be?" And I wanted to see how they would interact with it. And we would also get on the phone and say, "Hey, we're launching these scorecards. Um, they're two grand each. Would you like to buy one?" "Oh, well, what does it do? How does it work?" "Well, here's what it does, and here's how it works, and we can build these." And in the early days, I actually sold them at two grand a pop, um, because I wanted to just see if people would pay a couple of grand for them.

Ali Abdaal 1:00:02 Hmm.

Daniel Priestley 1:00:02 Um, [laughs] and, and I had my team building them on WordPress. So we were sitting down with customers after customers after customers, and we refined it and refined it. Like a blacksmith sharpening and sharpening and sharpening, we were sharpening our pitch, and we were sharpening our sales process, and we were sharpening what the product looked like.

Ali Abdaal 1:00:18 Yeah.

Daniel Priestley 1:00:19 And we were just going chook, chook, chook, chook, chook. Right? So-

Ali Abdaal 1:00:21 Okay

Daniel Priestley 1:00:21 ... I did not judge until I had 30, 30 pages of notes. After every single one-to-one, take lots of notes. What did they like? What did they not like? What did they see of value? What did they not see of value? What did they get? What did they not get? So, like, all of that.

Ali Abdaal 1:00:36 Nice.

Daniel Priestley 1:00:37 What did they wanna do with it, and what were they excited... You know, what outcomes were they excited by?

Ali Abdaal 1:00:41 Yeah.

Daniel Priestley 1:00:41 So all of that.

Ali Abdaal 1:00:42 Okay, nice. Okay, so let's say I'm gonna make up a random offer. So let's say I lose m- everything on my YouTube channel. I get canceled overnight, but I still have the skills. I'm keeping in mind that my business ideas have to be something I can sell for ideally 2K, ideally five sales a month.

Daniel Priestley 1:00:59 Mm-hmm.

Ali Abdaal 1:01:00 I might be thinking either web design agency type situation-

Daniel Priestley 1:01:05 Mm-hmm

Ali Abdaal 1:01:05 ... potentially, but I've kind of been outside of that market for a while. Or I'd be thinking, uh, p- video content-

Daniel Priestley 1:01:13 Well, just, just quickly

Ali Abdaal 1:01:13 ... correct. Yeah.

Daniel Priestley 1:01:14 You've been outside of that market. Do you know someone who's credible? Web development. Do you know someone who's a web developer?

Ali Abdaal 1:01:21 Yeah.

Daniel Priestley 1:01:21 Yeah. Sell them.

Ali Abdaal 1:01:23 Hmm. Yeah, that could work.

Daniel Priestley 1:01:25 Right.

Ali Abdaal 1:01:25 Actually, in, in my head I was defaulting to, oh, I guess

Ali Abdaal 1:01:27 I'd have to do it myself-

Daniel Priestley 1:01:27 No

Ali Abdaal 1:01:27 ... so I need to learn quite a lot of stuff.

Daniel Priestley 1:01:28 No, you don't. You can find someone who's good at web development, and you can just go running around selling two grand packages-

Ali Abdaal 1:01:34 Yeah

Daniel Priestley 1:01:34 ... for them to build.

Ali Abdaal 1:01:36 Ooh. Okay, that could work too

Daniel Priestley 1:01:38 There you go. There's 10 grand a month

Ali Abdaal 1:01:40 What if I was like, uh, "Hey, I know how to use a camera, I know how to do video editing. Uh, therefore, if I do personal brand video content for startup founders who I know have money-

Daniel Priestley 1:01:50 Yeah, yeah

Ali Abdaal 1:01:51 ... or business owners like you who I know have money."

Daniel Priestley 1:01:53 Mm-hmm.

Ali Abdaal 1:01:53 And I could be like, "Dan, you have books. You wanna be on all the con- the social platforms."

Daniel Priestley 1:01:56 Mm-hmm.

Ali Abdaal 1:01:57 "I'll show up to your house once every month, and we'll film a bunch of stuff."

Daniel Priestley 1:02:00 Sign me up.

Ali Abdaal 1:02:00 "I'll just ask you the questions. I'll chop it up. Content for Instagram, Facebook, LinkedIn, et cetera, et cetera."

Daniel Priestley 1:02:05 Sign me up. Yeah.

Ali Abdaal 1:02:06 [laughs]

Daniel Priestley 1:02:07 Rock and roll.

Ali Abdaal 1:02:07 Yeah.

Daniel Priestley 1:02:08 Of course. So that's g-

Ali Abdaal 1:02:09 Yeah

Daniel Priestley 1:02:09 ... that's a great example, yeah. And, um, and you'd just sign me up, and, uh, y- you might say, "It's initially two grand and see if you like it, and then it's two grand a month after that."

Ali Abdaal 1:02:17 Yeah.

Daniel Priestley 1:02:17 Um, now you might say, uh, "By the way, I've got a whole team. I've got a amazing team of people. Uh, I've actually found, um... I've got lead, uh, content, uh, creators here in the UK. I've also got an international team so that we can do, um, an initial style guide and some signature content, and we can also do brute force content, you know, through our team in the Philippines, and then we've got a team in Ghana, and actually we send all the raw footage to them, and they create lots of videos, and we then put that on TikTok and all that sort of stuff. We see what sticks and bring it all together." I'm like, "Whoa, that sounds really great." So, yeah, that would be... Y- Like, I'm really big on the idea of the entrepreneur's job is to be the organizing force, not to do the work.

Ali Abdaal 1:03:00 Hmm.

Daniel Priestley 1:03:00 So, like, y- you keep getting into like, "Oh, I know how to edit videos."

Ali Abdaal 1:03:04 Yeah.

Daniel Priestley 1:03:04 It's like, it's like that's doing the work. Y- You're not being an entrepreneur. You're being a video editor. So the, the entrepreneur's job is to be the organizing force. You're the organizer. I don't know how to do anything. Like, j- just, just on that, I, I've built multiple $10 million-plus companies. I don't know how to do anything. Like, as in I don't have any web development skills, I don't have video editing skills, I don't have design skills. I don't have any skills [laughs] like, th- I, I can write, all right? I can write books, but, um... And I can speak, but that's it. I'm an organizing force. I'm the guy who just organizes it. I bring together talented people, uh, and I say, "Hey, you're good at video editing. You should join my team as a video editor."

Ali Abdaal 1:03:45 Yeah.

Daniel Priestley 1:03:45 "And you're good at designing. You should be a part of our team." So all I'm good at is enrolling people in stuff.

Ali Abdaal 1:03:51 So the sort of person who enjoys organizing people, who enjoyed, like, organizing university societies back in their university days and, like, organiz- bringing people together and, like, keeping people organized.

Daniel Priestley 1:04:01 The entrepreneur's job is to be the organizing force. It's not to do the work.

Ali Abdaal 1:04:05 Damn. [laughs] I still keep on thinking it's like, yeah, you know, what skill do I have? What, what skill can I offer?

Daniel Priestley 1:04:11 That's the schooling system.

Ali Abdaal 1:04:12 Yeah.

Daniel Priestley 1:04:12 That's the, that's the schooling system.

Ali Abdaal 1:04:14 Component labor.

Daniel Priestley 1:04:14 Yeah, you're component labor. You're like, "Which component do I fit in?" It's like, none. You're not in the business. You're the entrepreneur. You're building the business. Um-

Ali Abdaal 1:04:21 Damn

Daniel Priestley 1:04:21 ... your job is to get really clear about what the customer's trying to achieve-

Ali Abdaal 1:04:25 Yeah

Daniel Priestley 1:04:25 ... and then be the organizing force to fill that for them, um, and bring together all the people that you might need in order to do that. So that's your first 10 grand. Concept, audience, offer, sales. That's all you have to do. It's cheap to do. You can do it with Microsoft Word. You can do it with Apple Pages and-

Ali Abdaal 1:04:39 Yeah

Daniel Priestley 1:04:39 ... Keynotes.

Ali Abdaal 1:04:40 Okay.

Daniel Priestley 1:04:41 Yeah.

Ali Abdaal 1:04:41 Before we go on to the next stage, let's talk about sales.

Daniel Priestley 1:04:43 Yes.

Ali Abdaal 1:04:43 So sales, sa- sales are scary. Sales is a dirty word. I don't wanna be a salesman. Uh. I feel that, like, emotional, ugh, response at the, even the word sales. Uh, h- how, how do we, how do, how do I approach sales for my web design agency or for my... Assuming I'm not doing the work, I'm just going out there.

Daniel Priestley 1:05:03 So almost everyone's had a positive experience with a salesperson and a negative experience with a salesperson, but that could be true for any profession. I, I've had negative experiences with bookkeepers. I've had negative experiences with lawyers. I've had negative experience with doctors, fairly.

Ali Abdaal 1:05:18 Yeah.

Daniel Priestley 1:05:18 Um, there are good doctors and bad doctors. There's people who've got amazing bedside manner and people who are really not, um, that great. So when it comes to sales, the word that everyone says about a good salesperson is professional. They were professional. Um, they, they approached it professionally. So what does professional mean? It means that they ask great questions. They give you guided, uh, advice. They are not pushy, but they also do give guidance. Um, they've done their homework. They've done their research. They've got great product knowledge. They listen. They understand. They're trying to get on your side to figure out what it is you actually genuinely need, and they're making sensible recommendations.

Ali Abdaal 1:05:56 Hmm.

Daniel Priestley 1:05:56 So all of those things are professionalism. So sales is a science, and it's a very valuable skill that you can use in any profession. It, it doesn't matter what you are or what you do, a sales skill is a powerful skill because sales is listening, understanding, and then creating a good argument for the right solution and being able to marry up this is what you, this is what you're trying to achieve, this is what I think you need, and here's why, right? So you're creating a path of least resistance. Here's the mental model you should have with sales. There is the current reality that the person has. That is their current situation. There is their desired reality. That's what they want.

Daniel Priestley 1:06:34 And then there's the obstacles and criteria that are in the way, right? These are all the things that stop them from getting what they want. And then there's you, who says, "This is the path of least resistance. Here's what you need to do. You need to go and do this, this, this, this, and this, and that is gonna get you from your current reality to your desired reality." And it's a lot like being a doctor. So if you're a doctor, you're actually [laughs] ... It's so similar to sales. When you see someone who's not happy with their current reality, you ask them-

Ali Abdaal 1:07:00 Ask them a load of questions

Daniel Priestley 1:07:00 ... "What's going on?"

Ali Abdaal 1:07:01 Yeah. [laughs]

Daniel Priestley 1:07:01 Right? You ask them a load of questions.

Ali Abdaal 1:07:03 Yeah.

Daniel Priestley 1:07:03 And then you might say, "The first thing I wanna do is a diagnosis. I wanna do some sort of assessment."

Ali Abdaal 1:07:08 Yep.

Daniel Priestley 1:07:08 Right? So then you do an assessment, and then you say, "Okay, so I think I've got a treatment plan," which is just a path of least resistance-

Ali Abdaal 1:07:16 Yeah

Daniel Priestley 1:07:16 ... or a solution. "Oh, okay, what do I have to do?" "Well, you're gonna have to do some antibiotics, but you have to take these every day for seven days," okay? "What else do you need to do?" "Well, you need to do this thing

Daniel Priestley 1:07:26 with this thing." "Okay, great. What else do you me to do?" "Well, you have to stop doing this." "Okay, great." So that's the treatment plan. And essentially, you are recommending a treatment plan. So in there, you're, you're talking to them. You're asking a lot of questions. You're doing an assessment. You're figuring out where are they now, where do they wanna be, what's in the way, what's stopping them, and then you're advising them about a treatment plan, and that's sales. That is sales. That's great sales

Ali Abdaal 1:07:52 I guess when I think of sales, I think the combative, adversarial relationship that I go into a used car dealership with, thinking they're gonna try and get me to spend 10K-

Daniel Priestley 1:08:01 On a, on a serious note, have you actually ever had that?

Ali Abdaal 1:08:03 Uh-

Daniel Priestley 1:08:05 Like, have you actually ever had a used car salesman do that to you?

Ali Abdaal 1:08:08 No, I haven't, but I've, I-

Daniel Priestley 1:08:09 You're just imagining it

Ali Abdaal 1:08:10 ... I've, I've been, yeah, I've been imagining it and expecting it, like, and I've been to these dealerships

Ali Abdaal 1:08:13 with my mom, and she approaches it with that kind of, like-

Daniel Priestley 1:08:15 When you went and bought your Apple stuff-

Ali Abdaal 1:08:17 Yeah

Daniel Priestley 1:08:17 ... and the Apple genius came up and asked you-

Ali Abdaal 1:08:19 Yeah

Daniel Priestley 1:08:19 ... like, "What are you gonna use it for?"

Ali Abdaal 1:08:21 Mm.

Daniel Priestley 1:08:21 And, you know, what, like, "What do you do?" and all that sort of stuff, "Here's what I recommend"-

Ali Abdaal 1:08:25 Yeah

Daniel Priestley 1:08:25 ... was it a positive or a negative experience?

Ali Abdaal 1:08:27 Uh, it was a good experience, yeah. [laughs]

Daniel Priestley 1:08:28 Right. Do you know they do 40 minutes of sales training every day?

Ali Abdaal 1:08:31 What? 40 minutes a day?

Daniel Priestley 1:08:32 40 minutes a day.

Ali Abdaal 1:08:33 Oh, wow.

Daniel Priestley 1:08:33 It's like Peloton. They have a central sales trainer who does video uploads to the iPads. They do 40 minutes of sales training every day.

Ali Abdaal 1:08:40 Oh, wow.

Daniel Priestley 1:08:40 They do a combination of product knowledge, and they do, uh, rapport building, objection handling, and they actually make suggestions as to things you can buy right now today. That's part of their process. They want you to walk out of the store with something.

Ali Abdaal 1:08:54 Hmm.

Daniel Priestley 1:08:55 But it's positive. They're professional, right? They're not pushy. They are making recommendations.

Ali Abdaal 1:08:59 Yeah.

Daniel Priestley 1:09:00 They're trying to solve your problem. If you go in there and say, "I'm a professional speaker, and I like to give talks," they're gonna go, "Okay, so you use a lot of Keynote. Yep. Okay. Did you know that this thing here, this is, like, a touch bar, and it actually shows you your slides as you're going through, and you can see your slides when you're speaking, and you can jump to slides from slide?" And it's like, "Oh, that, I would use that all the time." "Yeah, that's, that's a really good thing that you might wanna use." "I want that." "Great. Let's pack it... Let's box it up."

Ali Abdaal 1:09:26 Okay.

Daniel Priestley 1:09:26 So they're doing 40 minutes of sales training a day, right? And it's a positive experience. Everyone likes ge- geniuses.

Ali Abdaal 1:09:33 Yeah.

Daniel Priestley 1:09:33 But they're salespeople.

Ali Abdaal 1:09:35 Okay. So it sounds like to go from zero to 10K, all we need to do is come up with some kind of concept that we can charge ideally 2K for-

Daniel Priestley 1:09:44 Yep

Ali Abdaal 1:09:44 ... and find a way to land five clients a month through a sales process.

Daniel Priestley 1:09:47 Through sales process. I will say one more thing about sales. You need to learn how to do LAPS, leads, appointments, presentations, sales. So you just keep a little spreadsheet. Who are your leads? Who are the people that might buy? Can you book an appointment to speak with them, right? Actually get their, their commitment to just focus.

Ali Abdaal 1:10:05 Yeah.

Daniel Priestley 1:10:05 Can you present them with a solution? Can you actually do a presentation or, or an actual conversation? Um, and then can you ask them whether they would like to go ahead or not?

Ali Abdaal 1:10:15 Mm.

Daniel Priestley 1:10:15 And those are the four steps, lead, appointment, presentation, sale. So great salespeople do a rhythm of weekly LAPS. They do leads, appointments, presentation, sales, and they just have a... A good, a good salesperson has a dashboard, digital or physical, and they just have a, a set of leads, appointments,

Daniel Priestley 1:10:32 presentations, and sales. So LAPS, LAPS, LAPS, LAPS, LAPS. And entrepreneurs need to do that as well when they're launching something.

Ali Abdaal 1:10:40 And I suspect 90% of people listening to this were previously like, "Oh, I wanna be an entrepreneur. It sounds easy," and now they're like, "You know what?"

Daniel Priestley 1:10:45 Now it's horrible. You've turned me off it.

Ali Abdaal 1:10:46 "You know what? The day job sounds pretty, sounds pretty compelling." [laughs]

Daniel Priestley 1:10:49 Let me be honest with you. The other day I was on the train. I bumped into a friend of mine who, uh, works in a big job, big, big corporate, and he's sitting on the train reading fiction, reading a fiction book. And I'm looking at this, and I'm going, "Wow."

Ali Abdaal 1:11:02 [laughs]

Daniel Priestley 1:11:03 Like, if I've got spare time, I am not reading a fiction book. I'm, like, trying to, you know, do some self-improvement, or I'm trying to read a book about business. But just the casual ex- you know, the casual, relaxed, I'm reading a fiction book, and I'm like, [gasps] "That must be what it, uh, that's what it must feel like to have a job." [laughs] Like, to have certainty. That, that level of certainty, it's lovely. What a delight.

Ali Abdaal 1:11:27 For your kids, would you feel a bit disappointed if they got a, quote, "real job"?

Daniel Priestley 1:11:32 Uh, not if they l- not if they loved it, no, not at all. Um, provided they're, you know, they're enjoying it, they're adding value. Um, like, entrepreneurship is, as I say, it's something you do reluctantly. You do it because you spot something in the world that you wanna bring to life. You wanna do this thing, and it's like you go in eyes wide open. But look, I will say this. The, the, the upside with entrepreneurs, wow, uh, wantr- uh, entrepreneurship is wild if you get it right. Like, so 10,000 a month is where you kind of like... 10,000 a month is where you're on par with a basic job.

Ali Abdaal 1:12:03 Hmm.

Daniel Priestley 1:12:04 'Cause you're gonna have a few overheads. So, you know, if you take a basic job and you say, okay, four or five grand a month, like NHS, uh, doctor, is that-

Ali Abdaal 1:12:12 Yeah. Yeah

Daniel Priestley 1:12:13 ... would they be on about five grand a month?

Ali Abdaal 1:12:14 Yeah, four or 5K-ish.

Daniel Priestley 1:12:16 So, you know, if you-

Ali Abdaal 1:12:17 3K, depending on what level, but yeah

Daniel Priestley 1:12:19 ... yeah, so essentially that 10 grand a month of sales minus an assistant, minus some costs of doing business, is gonna leave you with about four or five grand a month. Um, so if you can do that, you're on par with a job, but you've got extra work, extra stress, and if you stop, the whole thing stops. So you're, you're, you're kind of, like, just benchmarking. You know those games where there's, like, a, a shadow person-

Ali Abdaal 1:12:44 Yeah

Daniel Priestley 1:12:44 ... and you're trying to keep up with that shadow person? So at 10 grand a month, you're, you're kind of, like, neck and neck with your employed shadow person at that, at that stage.

Ali Abdaal 1:12:52 Nice. Um, any final tips or resources for the zero to 10K a month bracket before we move beyond 10K a month?

Daniel Priestley 1:12:59 Uh, final tips or resources. So concept, audience, offer, sales. Um, duh, I would just say just stay c- stay curious. Be... Embrace the critics. When someone says they don't like it, just ask why. Um, you know, if someone says, "Oh, I..." Like, "No, I'm not at all interested in that." "Oh, that's really, that's really curious. I'm so surprised because I imagined you would be interested in this." So just don't take anything personally. You're a scientist conducting experiments, and it's like, "Whoa, that worked. Well, that didn't work." But don't be emotionally invested in it. You, you have to start... The pr- the process has to begin with curiosity of, "This probably won't work. Let's see if it does." Uh, you know, a bunch of this, I think I've got a bunch of this right, but I've probably got a bunch wrong.

Ali Abdaal 1:13:44 Got it. And then final thing on this front, like- This sort of thing, and I th- I, I still have residual bits of this myself, sort of emotional feelings about money.

Daniel Priestley 1:13:56 Mm-hmm.

Ali Abdaal 1:13:56 And about how, like, selling

Ali Abdaal 1:13:59 something is kinda evil or bad, or you're a bad person for... Like, and then, and I've, I've still got r- these residual narratives in my mind and in my heart, and I know rationally that, like... Yeah.

Daniel Priestley 1:14:11 Capitalism-

Ali Abdaal 1:14:11 I, I imagine a lot of people are having this

Daniel Priestley 1:14:12 ... cap- capitalism and money is the most pure and brilliant transaction. It's the most incredible system. The, the marginal utility of a cup of coffee for a coffee shop owner is really low. They don't want that cup of coffee, right? The marginal utility of the coffee for the person who doesn't have a cup of coffee is high, and the marginal utility of their £2.50, or th- two, $3, is low. So everyone wins. Isn't that incredible? Like, think about that just for a moment. The coffee shop owner is so happy that you gave them $3 for the coffee.

Daniel Priestley 1:14:50 You're so happy that they have this coffee shop, and that y- they were just willing to give you this delicious coffee and for $3, and you're like, "I didn't want the $3, I didn't care. There's my $3. Yay, hot cup of coffee, fantastic." And, and then they're like, "Yay, I got $3. I didn't need that extra cup of coffee." So this is the beauty of business, that you essentially have two people who are super happy, super stoked. So this is what every transaction involves. Every single transaction that happens in the economy is two people who felt that they won. Two people felt that they walked away going, "That is so great. I, I paid for something that I was... I'm getting a great deal." And the person who sold it is like, "Yay, I made a sale. I love it." It, this is capitalism, and it's so amazing. It's the most incredible system.

Ali Abdaal 1:15:38 It sounds so obvious when you put it like that, but even hearing you say that, like, has sort of triggered some kind of surprise in me. I was like, "Oh, yeah."

Daniel Priestley 1:15:45 [laughs]

Ali Abdaal 1:15:45 "I've just never considered that."

Daniel Priestley 1:15:47 [laughs]

Ali Abdaal 1:15:47 I just sort of like float around thinking, "Oh, people just buy and sell stuff, and but if I'm selling something that's bad, and if someone's buying from me, then like, uh, uh-oh. Like, I better make sure, like, I'm, like, not selling them snake oil, and [laughs] uh, uh, and all of a the, the palpitations start."

Daniel Priestley 1:16:03 Yeah, so y- of course a pr- a pr- there's a couple of things. Snake oil doesn't work, and that's the problem with it.

Ali Abdaal 1:16:09 Yeah.

Daniel Priestley 1:16:09 Right? So, like, for example, trading courses. They don't work. [laughs] You're not gonna beat the traders. Uh, you're not gonna beat the professionals. So it is snake oil, 'cause it doesn't work. Um, if you sold a trading course to a professional trader to make them go from good to great, um, then it wouldn't be snake oil. Um, if you sell a Ferrari to someone who can afford a Ferrari, if someone sells their company for $100 million and they've always wanted a Ferrari, and it's their childhood dream to have a Ferrari, and they've got loads of money, and for them it's just a great thing, and they've always wanted it-

Ali Abdaal 1:16:36 Yeah

Daniel Priestley 1:16:37 ... that's, that's not a thing. If I pressured someone into getting a Ferrari, and they couldn't really afford it, and I signed them up to a payment plan that they couldn't really afford, that's a horrible thing. It's actually not the product that is the problem, it's picking who you're gonna sell to,

Daniel Priestley 1:16:51 making sure that they actually feel good about it. You know-

Ali Abdaal 1:16:53 Mm

Daniel Priestley 1:16:53 ... you wanna y- and anything can be mis-sold. A- anything can be s- really well sold to the right people. And if you're worried about it, then you're the type of person who's only gonna sell to the right people anyway. The only people who, who are bad in the economy are the ones who don't care. [laughs]

Ali Abdaal 1:17:07 Yeah.

Daniel Priestley 1:17:07 So the, by virtue of the fact that you're worried about this means you're one of the good actors.

Ali Abdaal 1:17:11 Hmm. At this point, our hypothetical business is doing 10K a month.

Daniel Priestley 1:17:15 Mm-hmm.

Ali Abdaal 1:17:16 What does our team look like at this point, and then how do we go to 100K a month?

Daniel Priestley 1:17:19 You're either two-

Ali Abdaal 1:17:19 'Cause that seems like bloody hell a millionaire now.

Daniel Priestley 1:17:21 Yeah, exactly. Uh, you're either two to four people at this point. So 10 grand a month is normally a two-person, three or four people. Um, so two to four people typically. Um, you normally would have a salesperson, you would have someone who's, like, customer service or fulfillment. Um, maybe you've got a bookkeeper or an administrator or an assistant. Um, so when I started, I ar- I arrived in 2006, 2007 to London, first thing I did is I hired an executive assistant, um, and a salesperson, and a event manager, because we were running events, so fulfillment. So I literally,

Daniel Priestley 1:17:57 week two, had three people on the team.

Ali Abdaal 1:18:00 How did you find these people?

Daniel Priestley 1:18:01 Uh, how did I find them? I-

Ali Abdaal 1:18:03 Or how would one find people these days if you wanted to hire?

Daniel Priestley 1:18:06 Ask. I'd, I'd... Literally, I'm launching a business and I'm looking for some people who can help.

Ali Abdaal 1:18:10 Yeah.

Daniel Priestley 1:18:10 Um, does anyone know anyone who's looking for something? Um-

Ali Abdaal 1:18:14 Yeah, just asking friends and family and stuff.

Daniel Priestley 1:18:15 Just asking around.

Ali Abdaal 1:18:16 Most people know someone who's looking for a job.

Daniel Priestley 1:18:17 You're looking for rebels and misfits. You're looking for the wrong people, not the right people.

Ali Abdaal 1:18:21 What do you mean?

Daniel Priestley 1:18:22 Like the neighbor's kid or some... You, you know, you go to McDonald's and you see this, like, like, happy, cheerful person who's, like, wiping down tables, and they're, like, in a good mood, and they're, like, wiping the tables down, and you go, "Awesome." Like, "What a positive attitude." Like, "You're awesome." Um, or you might, you know, just, um, someone might try and knock on your door and say, "Hey, we're in the neighborhood and we're, you know, cleaning cars." "Hey, actually, why don't you come and work with me?"

Ali Abdaal 1:18:48 Yeah. [laughs]

Daniel Priestley 1:18:48 Um, so you're looking for the wrong people, not the right people. There's no good people who are gonna quit their job at Microsoft and join your r- random startup.

Ali Abdaal 1:18:57 Yeah.

Daniel Priestley 1:18:57 Um, uni students, um, mums, uh, who, uh, who, like, have little kids and they're in daycare and they've got a few hours, or dads. Um, you could have, uh, someone who's got a disability and just doesn't fit within a corporate environment, needs flexibility.

Ali Abdaal 1:19:14 Mm. Yeah.

Daniel Priestley 1:19:14 Um, people who've got a really thick accent and they always get judged because their accent's, like, too thick and hard to understand, um, but they're actually really smart and great. Um, so someone who's got BA, BO, like really bad body odor. They really smell.

Ali Abdaal 1:19:29 [laughs] Um-

Daniel Priestley 1:19:32 Rebels and misfits.

Ali Abdaal 1:19:33 Okay.

Daniel Priestley 1:19:34 I'm d- I'm actually serious, by the way. There are, there are amazing people. I hired this one guy once, um, when I was launching a business back in, like, early days, and he was a very, very spotty, uh, 19-year-old, and he did have really bad BO. Um, he was a s- he was stinky, and he was amazing. He was absolutely awesome. Like, so great

Ali Abdaal 1:19:55 Damn, okay. Um, how-

Daniel Priestley 1:19:57 But why do you think he didn't have a job? Because he was smelly and spotty.

Ali Abdaal 1:20:01 Yeah.

Daniel Priestley 1:20:02 So he was a rebel and a misfit.

Ali Abdaal 1:20:03 Yeah. Uh, okay, but remote versus in person.

Daniel Priestley 1:20:08 I don't care. I care about team vibes.

Ali Abdaal 1:20:11 Okay.

Daniel Priestley 1:20:11 So team vibes is like, do we have a Monday morning meeting? Do we natter, right? Nattering is like where we like can't stop talking. Um, so if you look at my Slack channel today, everyone's nattering. " [gasps] Hey, we just did this. We just did that. Oh, by the way, did you hear that this happened? Oh, we just had this problem come in. We solved it like this." Um, like GIFs flying around.

Ali Abdaal 1:20:30 Mm.

Daniel Priestley 1:20:30 WhatsApp thing, you know, voice note, "Hey, I just had an idea. Oh, yeah, what if we did it like this? Hey, what if we, like, created, like, a corporate version that does this thing?"

Ali Abdaal 1:20:40 Mm.

Daniel Priestley 1:20:40 Right? So that's nattering, and it's the excitement that's happening. There's chemistry forming.

Ali Abdaal 1:20:44 Yeah.

Daniel Priestley 1:20:44 So you can have-

Ali Abdaal 1:20:44 And you can have that remotely as well?

Daniel Priestley 1:20:45 You can have that remotely, of course, yeah. Yeah, I mean, as, uh, ScoreApp doesn't have actually offices.

Ali Abdaal 1:20:51 Mm.

Daniel Priestley 1:20:51 We have quarterly meetings, uh, where we get the whole team together, and we have, um, Zoom calls where we get everyone together, and we have Slack channels and WhatsApp groups and, like, nattering and all that sort of stuff. We go out to dinners together to build chemistry.

Ali Abdaal 1:21:04 Yeah.

Daniel Priestley 1:21:05 But, uh, we are a multimillion-pound business, and we don't have offices and never have.

Ali Abdaal 1:21:09 Mm. And would you sort of freelancer, part-time, full-time? What's the-

Daniel Priestley 1:21:15 Whatever fits the business-

Ali Abdaal 1:21:16 Okay

Daniel Priestley 1:21:16 ... so long as they're passionate, so long as they're, like, in it. They're in on it. They're in on the joke.

Ali Abdaal 1:21:20 Yeah.

Daniel Priestley 1:21:21 They get it. We're, "Hey, we're doing this thing," you know?

Ali Abdaal 1:21:24 And how do you pitch them the job? Like, who's, who's gonna be like, "Hell yeah, I wanna sell financial planning services for 2K a pop," like [laughs] ?

Daniel Priestley 1:21:32 Well, um, normally it's someone who, for them, it's a step up. In the early days, you're getting rebels and misfits. So it's a step up for them. It's like, "Wow, really? You want me to quit my job at Starbucks and come and work with you? That would be amazing."

Ali Abdaal 1:21:44 Mm.

Daniel Priestley 1:21:44 Um, you know, "Oh, I'm a pub manager, and I'm getting, like, no money, and, and I have to work right through till 1:00 in the morning, and you want me to work just normal hours? That would be amazing."

Ali Abdaal 1:21:54 Okay, yeah.

Daniel Priestley 1:21:55 [laughs]

Ali Abdaal 1:21:56 And, like, how... Are you assessing for certain skills, or, like, is it mostly vibes, or like, what's, what's your philosophy here?

Daniel Priestley 1:22:02 They can breathe.

Ali Abdaal 1:22:02 [laughs]

Daniel Priestley 1:22:04 Uh, I'm the... In, in the early days, genuinely-

Ali Abdaal 1:22:07 Yeah

Daniel Priestley 1:22:07 ... I'm just looking for anyone I can rope in.

Ali Abdaal 1:22:09 Okay.

Daniel Priestley 1:22:09 Right? Now, mind you, I'm now an experienced entrepreneur with a lot behind me, so I can rope in some pretty good people.

Ali Abdaal 1:22:15 Yeah.

Daniel Priestley 1:22:16 Um, so my, the standard, you might see me roping in pretty amazing, talented, incredible people, but I've built up to that. But in the early days, it's literally anyone I can rope in. Can I rope in the neighb- neighbor's kid? Ca- like, as in teenager.

Ali Abdaal 1:22:29 Mm. [laughs]

Daniel Priestley 1:22:29 Um, [laughs] not, not like a-

Ali Abdaal 1:22:31 Not a seven-year-old

Daniel Priestley 1:22:31 ... not like a seven-year-old, no. Uh, lick those stamps.

Ali Abdaal 1:22:34 [laughs]

Daniel Priestley 1:22:34 Uh, send out that thing.

Ali Abdaal 1:22:35 [laughs]

Daniel Priestley 1:22:35 Um, uh, no, I'm talking about can I, like... Y- you know, the, the neighbor's kid's 17 years old and doesn't-

Ali Abdaal 1:22:41 Yeah

Daniel Priestley 1:22:41 ... have a job. Can I get them to do stuff on weekends?

Ali Abdaal 1:22:43 Yeah.

Daniel Priestley 1:22:44 Um, like I'm just trying to rope some people in in the early days.

Ali Abdaal 1:22:47 Cool. Right. So 10K a month, 10K to 100. At this point, we're, I'm... We're... Surely we've gotta stay high level. But so, but, like, what's the, what's the philosophy here? How do you go from 10 to 100?

Daniel Priestley 1:22:55 The philosophy is you must establish yourself as key person of influence. People have to fall in love with you as a personal brand, so you've gotta be this key person of influence. You need a team. Normally, you're building up to about eight people at this stage, and you have to have a front person. So this is-

Ali Abdaal 1:23:10 Right

Daniel Priestley 1:23:10 ... because that's what gets cut through. That's what gets you from 10 grand a month to 100 grand a month, having cut through. So the, the issue is, is that from 10 grand to a h- 100 grand a month, you can't really do one-to-one sales. You have to start engaging groups. Now, you could engage group through ads. You could engage groups through affiliates or, um, referrals or running events, um, or, um, a one-to-many presentations on podcasts-

Ali Abdaal 1:23:36 Yeah

Daniel Priestley 1:23:36 ... or something like that, but you've gotta start going to groups. To do groups, you need a front person.

Ali Abdaal 1:23:41 Mm.

Daniel Priestley 1:23:43 Um, so if we think about, like, um, if we think about a consulting firm that takes off, it's because the head consultant is freaking amazing, right, in some way. Um, so this is where you are standing out as key person of influence. So if we look at, uh, Richard Branson, millions of followers. Virgin only has, like, quarter of a million followers, quarter of a million to 400,000, uh, depending on which platform. Branson is, like, orders of magnitude more followed than Virgin. He's been directing us to Virgin for decades. We don't care. We like Branson.

Ali Abdaal 1:24:19 Mm.

Daniel Priestley 1:24:20 Um, Cristiano Ronaldo, 500 million followers on Instagram. Every single football club combined, less than 200 million. Now, these are 100-year-old institutions, and one player has double the, the follower count. Um, if we... I was just in Dubai. They had, like, a big billboard saying, "We're opening a restaurant, and it's gonna be Gordon Ramsay and, um, Heston Blumenthal," and it's, like, all these, like, super chefs. Now, they're not talking about the building. They're not talking about the food. They're not talking about the f- fit out. They're talking

Daniel Priestley 1:24:53 about the person, the key person of influence. You're gonna book this restaurant because Gordon Ramsay. Um-

Ali Abdaal 1:24:59 Mm

Daniel Priestley 1:25:00 ... so this is how humans work. We, we, we buy into people. People love people. Uh, and here's a thought experiment. If you had this little business and, um... Well, actually, a great thought experiment, if you-

Ali Abdaal 1:25:13 Yeah

Daniel Priestley 1:25:13 ... with your millions of followers, joined any business-

Ali Abdaal 1:25:16 Mm

Daniel Priestley 1:25:16 ... what would happen? It would blow up.

Ali Abdaal 1:25:18 [laughs] Yeah, yeah, I guess it would.

Daniel Priestley 1:25:21 Provided we're sensible.

Ali Abdaal 1:25:23 Yeah, yeah.

Daniel Priestley 1:25:23 Like, you know, like, take, like, take a yoga studio. If you said, "I'm now the face of the yoga studio, and I'm gonna direct everyone to that yoga studio"-

Ali Abdaal 1:25:32 Yeah

Daniel Priestley 1:25:32 ... right, well, y- it would probably double in size very rapidly.

Ali Abdaal 1:25:35 Mm.

Daniel Priestley 1:25:36 Um, if you, uh, like a clothing, a little clothing apparel brand that was just a business, just a, just a, like, a thing, boom, it would blow up.

Ali Abdaal 1:25:46 That much you do that? I should stop buying from like Lululemon. [laughs] Like they, they don't need me. [laughs]

Daniel Priestley 1:25:50 Yeah. Yeah, well, you should do a deal with them.

Ali Abdaal 1:25:52 [laughs]

Daniel Priestley 1:25:53 They should at least be sending you boxes of clothes.

Ali Abdaal 1:25:55 Really?

Daniel Priestley 1:25:55 Yes.

Ali Abdaal 1:25:56 Man, I buy 50 quid T-shirts every few, every few weeks. [laughs]

Daniel Priestley 1:25:58 Well, anyone who-

Ali Abdaal 1:25:59 So, yeah

Daniel Priestley 1:25:59 ... anyone who's at Lulu, get in touch, right?

Ali Abdaal 1:26:01 Yeah, if someone works at Lulu in the, let me know.

Daniel Priestley 1:26:02 Yeah, or, or anyone who's at Gymshark, you might wanna swoop on in.

Ali Abdaal 1:26:05 Yeah. Oh, exactly, yeah. [laughs]

Daniel Priestley 1:26:05 Right.

Ali Abdaal 1:26:06 Okay, yeah.

Daniel Priestley 1:26:07 So, so this is the personal brand experiment. Like, you could take any restaurant on this street, if Jamie Oliver suddenly said, "That's my restaurant," it would double in size straight away. So, uh, what happens is that the key person of influence... And by the way, if you go back to the origin story of most really well-known brands-

Ali Abdaal 1:26:23 Yeah

Daniel Priestley 1:26:23 ... they have a key person of influence. Ferrari.

Ali Abdaal 1:26:26 Yeah.

Daniel Priestley 1:26:26 Like, it's Mr. Ferrari.

Ali Abdaal 1:26:27 Mm.

Daniel Priestley 1:26:27 And he, he drove it for the first 50 years based on his personal brand.

Ali Abdaal 1:26:32 Mm.

Daniel Priestley 1:26:32 Um, Fender Stratocaster guitars, Mr. Fender was the guy driving that-

Ali Abdaal 1:26:37 Mm

Daniel Priestley 1:26:37 ... um,

Daniel Priestley 1:26:38 for those years. Now, they've, they end up as faceless brands, but not at the beginning.

Ali Abdaal 1:26:41 Yeah.

Daniel Priestley 1:26:42 Right? So Disney drove Disney.

Ali Abdaal 1:26:44 Yeah.

Daniel Priestley 1:26:44 Walt Disney drove Disney, and he was like Mr. Walt Disney.

Ali Abdaal 1:26:47 Yeah.

Daniel Priestley 1:26:47 And he was the personal brand. Steve Jobs carried Apple.

Ali Abdaal 1:26:51 Yeah.

Daniel Priestley 1:26:51 He competed with IBM, he competed with everyone, and everyone knew who he was. Um, Bill Gates did the same for Microsoft.

Ali Abdaal 1:26:58 Mm.

Daniel Priestley 1:26:59 So these personal brands, that's what people want. So you have to establish yourself as a key person of influence. So what does that mean? Number one, you're the one on stage pitching, you're the one, uh, doing group work, you're the one making differentiation for the, for the business. Number two is publishing. You've gotta publish content, videos, uh, articles, podcasts, uh, blogs, uh, social media content. So you gotta publish stuff. Uh, perfect scenario is a book. Um, putting a book out is a really good key person of influence move, and giving away 1,000 copies of the book away per year is a really great strategy for a key person of influence. Not thing, not something you do at the beginning 'cause it's too soon, something you do once you're growing, once you're already going. But now you're a, now you're a six to seven figure business, you start giving away 1,000 copies of the book, and that will actually scale you into all sorts of platforms. Um, so yeah, so that happens. Um, products, this is where the key person of influence expands the product range. So you need to go from a product to several products.

Ali Abdaal 1:28:04 Mm.

Daniel Priestley 1:28:05 Yeah?

Ali Abdaal 1:28:05 Yep.

Daniel Priestley 1:28:06 Um, there's four... By the way, there's four types-

Ali Abdaal 1:28:08 Mm

Daniel Priestley 1:28:08 ... four types of products. There's gifts, things you give away for free, product for prospects, things that are designed to start the relationship, core offerings, which is the main thing you do, and product for clients, which is the ongoing journey. Um, so those are the four types of products that you need to build. And a key per- key person of influence will build out the product ecosystem.

Ali Abdaal 1:28:26 So if we think of our YouTuber Academy, I'm obviously the key person of influence behind this YouTube channel. Um, bit of a J-curve business in that it took like two years to-

Daniel Priestley 1:28:34 Yep

Ali Abdaal 1:28:35 ... really get going, but then in year three when we launched our YouTube course, boom, we suddenly did like exactly 1.2 million revenue that year-

Daniel Priestley 1:28:41 Cool

Ali Abdaal 1:28:42 ... which is 100K a month.

Daniel Priestley 1:28:43 Yep.

Ali Abdaal 1:28:43 Um, and now our offerings are free is YouTube videos.

Daniel Priestley 1:28:47 Yep.

Ali Abdaal 1:28:47 How to grow a YouTube channel. Product for a prospect is our $1 course.

Daniel Priestley 1:28:50 Yep, perfect.

Ali Abdaal 1:28:51 Or our scorecard.

Daniel Priestley 1:28:52 Yep.

Ali Abdaal 1:28:52 Um, the core offering is our $1,000 course.

Daniel Priestley 1:28:54 Yep.

Ali Abdaal 1:28:55 And then our product for clients is our 5K a year service.

Daniel Priestley 1:28:57 Yeah, I would call that actually the same core offering. So the $1,000 is an entry level. It's kinda like, um, a BMW, you've got a 3 Series for, or a 2 Series for entry.

Ali Abdaal 1:29:07 Yeah.

Daniel Priestley 1:29:07 And then you've got a, you know, X5 or a 7 Series. But then the product for clients would be the ongoing journey after you've taken this.

Ali Abdaal 1:29:16 Yeah.

Daniel Priestley 1:29:16 So for example, um, if you had a productivity app, right?

Ali Abdaal 1:29:20 Mm, sure.

Daniel Priestley 1:29:20 Or if you had an ongoing support service-

Ali Abdaal 1:29:23 Yeah

Daniel Priestley 1:29:23 ... um, it's normally a subscription. So think Peloton bike, then Peloton monthly subscription.

Ali Abdaal 1:29:29 Yeah.

Daniel Priestley 1:29:30 Um, think iPhone, and then O2 selling you the minutes, or Vodafone selling you the minutes.

Ali Abdaal 1:29:34 Sure.

Daniel Priestley 1:29:34 Um, so the, the core product tends to be like a transformation. It's like something changed, and then the product for clients is like maintenance or improvement.

Ali Abdaal 1:29:45 Ah, okay.

Daniel Priestley 1:29:45 I buy a BMW, and then I get servicing, I get finance, I get insurance. That's the product for clients.

Ali Abdaal 1:29:51 So if we think of our web design agency, for example.

Daniel Priestley 1:29:55 Yeah.

Ali Abdaal 1:29:55 And so to go from we're, we're at 10K a month by doing five clients at 2K pop.

Daniel Priestley 1:30:01 Yep.

Ali Abdaal 1:30:01 Life is good. And then me as the web designer,

Ali Abdaal 1:30:05 as the, or as the, as the entrepreneur behind the web design agency-

Daniel Priestley 1:30:08 Yes, yes

Ali Abdaal 1:30:08 ... I need to become a key person of influence-

Daniel Priestley 1:30:09 Yeah, so now you're-

Ali Abdaal 1:30:10 ... in the web design world

Daniel Priestley 1:30:11 ... so now you're standing up on stages and you're saying, "Hey, look, we are specialists in working with dentists, and we sponsor all the dental practices, and we're on all the dental podcasts, and we do web strategy for dentists," right?

Ali Abdaal 1:30:21 Okay. Or I could do like, just like web strategy for doctors, 'cause previous-

Daniel Priestley 1:30:24 Yeah

Ali Abdaal 1:30:24 ... origin story, I used to be a doctor.

Daniel Priestley 1:30:26 But then-

Ali Abdaal 1:30:26 I decided web design was my thing.

Daniel Priestley 1:30:27 There you go.

Ali Abdaal 1:30:27 Okay, so...

Daniel Priestley 1:30:28 So we do online personal branding and web strategy for doctors, and, uh, we- you speak at conferences, you're on podcasts, you become a guest, you, you get out there and you evangelize this idea that every doctor needs a digital presence, a digital footprint.

Ali Abdaal 1:30:42 Yep.

Daniel Priestley 1:30:42 Um, you put out a book called Dr. Digital.

Ali Abdaal 1:30:45 [laughs]

Daniel Priestley 1:30:46 Um, Digital Doctor, and suddenly you give away 1,000 copies of Digital Doctor, and everyone's like, "Oh, that's a great strategy. Why didn't I think of that? I need a d- as a doctor, I should have a personal brand. That's what I need to have." So now they're like, "Yeah, that's great, Ali. I, I love that. I love the book that you, you did," right?

Ali Abdaal 1:31:01 Yeah.

Daniel Priestley 1:31:02 And-

Ali Abdaal 1:31:02 And that differentiates me from every other web design agency in the world.

Daniel Priestley 1:31:05 Everyone's coming to you for the web design. So you have a package, maybe it's five grand, um, because doctors can afford four or five grand.

Ali Abdaal 1:31:11 Yep.

Daniel Priestley 1:31:12 And then maybe the next thing is hosting or, um, a content management and maintenance, and that is 150 a month. So you spend five grand, uh, to get a digital footprint, digital presence, and then 150, 200 a month to maintain that or grow that or scale that, um, over time, and now you build out your little team, and now it's five grand plus the, uh, recurring revenue is starting to stack up. You're now making 10 sales a month, 20 sales a month. So you do, say, four sales a week, 16 sales times five grand, so now it's 80 grand a month. That's 12 months, that's a million.

Ali Abdaal 1:31:49 Uh, okay, so let's say I'm doing my 5K web design packages. At that point, the temptation would be, you know what? We're really good at doing web design for doctors. Why don't we also do web design for dentists?

Daniel Priestley 1:31:59 You could-

Ali Abdaal 1:31:59 And start targeting the dentists

Daniel Priestley 1:32:00 ... you could pivot.

Ali Abdaal 1:32:01 Yeah.

Daniel Priestley 1:32:01 Yeah. You could expand into an, into an additional market. So this is just campaigning. You're just, you're now campaigning for bigger markets. So this is exactly what Nike did with its shoes. Um, day one, they were blue ribbon shoes, and they only did track and field, and they, um, they had a key person of influence called Bill Bowerman. Bill Bowerman was the co-founder of Nike. So the, effectively, um, Phil Knight was the COO.

Ali Abdaal 1:32:25 Mm.

Daniel Priestley 1:32:25 Bill Bowerman was the visionary who wrote a book, uh, that sold a million copies called Jogging.

Ali Abdaal 1:32:30 Oh.

Daniel Priestley 1:32:31 And he kicked off the jogging revolution, and he was the co-founder of Nike, and basically you read the book called Jogging, and then you went to the blue ribbon shoes website. Oh, no, they didn't have a website. [laughs] What am I talking about?

Ali Abdaal 1:32:42 Yeah.

Daniel Priestley 1:32:42 You then heard about blue ribbon shoes-

Ali Abdaal 1:32:44 And mail order forms or something. Yeah

Daniel Priestley 1:32:45 ... and you bought the blue ribbon shoes. Yeah.

Ali Abdaal 1:32:46 Yeah.

Daniel Priestley 1:32:46 They probably had mail order in the book.

Ali Abdaal 1:32:48 Yeah.

Daniel Priestley 1:32:48 And, um, and they actually turned up to all these track and field events, and they did all of that. Now, when they wanted to grow the business, they said, "Hey, what else could we do? We could do basketball. Who could, who's, like, capturing people's attention with basketball? We need a key person of influence for that. Michael Jordan."

Ali Abdaal 1:33:03 Mm.

Daniel Priestley 1:33:03 So they said, "Let's sign this guy up." Um, and then they said, "Tennis. Oh, they, this guy called Andre Agassi, let's sign him up."

Ali Abdaal 1:33:10 Mm.

Daniel Priestley 1:33:11 Uh, so they basically campaigned for different verticals, uh, and each vertical's got a key person of influence, a face.

Ali Abdaal 1:33:18 What's the balance... Okay, so let's make it concrete with our YouTuber Academy, for example. Um, what's the balance between let me stay in my lane and just keep on making more products for my existing market of-

Daniel Priestley 1:33:30 Mm-hmm

Ali Abdaal 1:33:30 ... people wanting to start a YouTube channel versus, you know what? I'm kind of known for productivity. Let me start a productivity app.

Daniel Priestley 1:33:40 So people are willing to go on a journey with you, provided... It's okay to have a product ecosystem.

Ali Abdaal 1:33:46 Yeah.

Daniel Priestley 1:33:46 So I wanna, I want you to think about yourself. I know this will str- sound strange. Imagine you're like the Eiffel Tower.

Ali Abdaal 1:33:53 Okay. [laughs]

Daniel Priestley 1:33:53 But how does the Eiffel Tower make money? Actually, the real money's made in all the things around the Eiffel Tower. So when people go to hotels, restaurants, cafes, museums, galleries, that's all stuff that's around the Eiffel Tower. So people are attracted to the Eiffel Tower, but there's all the things around the Eiffel Tower that make all the money. The Ei- like, very few people go to Paris and drop all their money on, like, a trip up to the Eiffel Tower-

Ali Abdaal 1:34:16 Yeah

Daniel Priestley 1:34:16 ... and back, right?

Ali Abdaal 1:34:16 That's like, yeah, 15 quid or something. [laughs]

Daniel Priestley 1:34:18 No, they like to be around it. They like to see it.

Ali Abdaal 1:34:20 Yeah.

Daniel Priestley 1:34:20 They don't, you know, they don't actually expect to spend all that much money on it.

Ali Abdaal 1:34:24 Yeah.

Daniel Priestley 1:34:25 But this is what a personal brand should be like. A key person of influence should be the Eiffel Tower, and they should have a product ecosystem around them. Uh, me personally, uh, so I've got the books out, and I give talks, and I'm on a podcast. Um, but I actually have a publishing company called Rethink Press. I've got a, um, a awards business and a PR business called August. I've got, uh, a business that does capital fundraising. Um, uh, right? I've got a, a, an accelerator business called Dent. Um, so there's all these businesses that I've got. Um, I've got software business called Score App, and these are all the things that are, you know, kind of selling. Each one has its own product ecosystem. All these products, you know, they, they... If I'm out there talking, people are going, "Hey, what do you, what do you do? Um, let's get involved in it."

Ali Abdaal 1:35:17 Does every business have some kind of key person of influence?

Daniel Priestley 1:35:20 No, most businesses don't, which is why they don't take off. It's only a very narrow set of businesses that take off. There's millions of b- there's actually millions of businesses in the UK.

Ali Abdaal 1:35:30 Yeah.

Daniel Priestley 1:35:30 And there's tens of thousands that are really profitable.

Ali Abdaal 1:35:32 So, like, the local laundromat does not have a key person of influence

Ali Abdaal 1:35:35 behind it.

Daniel Priestley 1:35:35 No.

Ali Abdaal 1:35:36 The local coffee shop probably doesn't, unless it's James Hoffmann's coffee shop, because he's, like, the most famous coffee guy in the world from his YouTube channel, and now he's really rich. [laughs]

Daniel Priestley 1:35:43 Yeah.

Ali Abdaal 1:35:43 And his products are really good.

Daniel Priestley 1:35:44 Yeah.

Ali Abdaal 1:35:44 And he's building a roastery. He's got his coffee brand. He's got his gear. He's got his...

Daniel Priestley 1:35:48 Totally.

Ali Abdaal 1:35:48 Okay, yeah. He's a key p- person of influence-

Daniel Priestley 1:35:49 He's a key person of influence-

Ali Abdaal 1:35:50 ... in coffee

Daniel Priestley 1:35:50 ... and everything's booming around him.

Ali Abdaal 1:35:52 Yeah.

Daniel Priestley 1:35:53 Yeah.

Ali Abdaal 1:35:53 Ah, okay. So if Mr. Whose The Boss was to, were, were to start company, tech companies-

Daniel Priestley 1:35:57 Mr. Whose The Boss could have a dozen products, and they could all boom, and, uh, you know, he's got 15 million followers, so literally that is millions... That, that is thousands of businesses that could do millions of dollars.

Ali Abdaal 1:36:10 [laughs]

Daniel Priestley 1:36:11 Like, you're talking a massive empire, um, if, if, if he wants to. Uh, because, like, uh, you know, think about this. A center court at Wimbledon holds 16,000 people.

Ali Abdaal 1:36:26 It's quite a lot.

Daniel Priestley 1:36:27 You've got four and a half million.

Ali Abdaal 1:36:28 [laughs]

Daniel Priestley 1:36:29 16,000's a rounding error.

Ali Abdaal 1:36:30 Yeah.

Daniel Priestley 1:36:31 You know? Like, the, the, this is such a big following that you could have multiple businesses. Like, you only need a few thousand cl- customers to do a million, a seven-figure business. Um, so if you're a key person of influence for many millions of people, you can have multiple key p- you can have multiple businesses. I mean, I only have tens of thousands of followers, and I've got multiple seven-figure businesses.

Ali Abdaal 1:36:54 Hmm. Okay.

Daniel Priestley 1:36:57 So you could play much bigger. Uh, l- what, MrBeast, he's, like, turned down a billion dollars.

Ali Abdaal 1:37:03 Hmm.

Daniel Priestley 1:37:03 He's like, "I'm gonna be much bigger than that." He know, he, he, he's figuring it out, but he knows that he has the capacity to build a multi-billion dollar empire off the back of the MrBeast brand.

Ali Abdaal 1:37:14 Hmm. Okay. So my web design agency-

Daniel Priestley 1:37:17 [laughs]

Ali Abdaal 1:37:18 ... I become a key person of influence.

Daniel Priestley 1:37:20 Yep.

Ali Abdaal 1:37:21 Am I... Ah, b- but because

Ali Abdaal 1:37:23 I'm doing web design for doctors, I, I'm not bothering going to the web design conferences. I'm going to the doctor conferences.

Daniel Priestley 1:37:27 No, you're going to the customers. You're going to the market.

Ali Abdaal 1:37:29 Yeah.

Daniel Priestley 1:37:29 And you're speaking in front of them, and you're... And you discover that there's a little podcast they're all listening to, so you become a guest on there and talk about digital strategy for doctors.

Ali Abdaal 1:37:37 But I'm not, I'm not speaking and plugging my product.

Daniel Priestley 1:37:39 Well, you're the-

Ali Abdaal 1:37:40 Or-

Daniel Priestley 1:37:40 ... you're the Eiffel Tower.

Ali Abdaal 1:37:41 Yeah.

Daniel Priestley 1:37:41 So you're basically saying, "Hey, I wrote the book called, um, D- D- Dr. Digital, and, um, I'm a big believer in digital products for doctors, or digital brands for doctors, or, or personal brands for doctors."

Ali Abdaal 1:37:54 Yeah.

Daniel Priestley 1:37:54 And you're talking about this, and then they're saying, "Oh, like, how do we get this done?" And you say, "Well, I actually have an agency. You can get in touch with my agency manager who, who's gonna talk to you about that."

Ali Abdaal 1:38:03 Ah, okay.

Daniel Priestley 1:38:04 Yeah. "Go talk to Eric. Eric is gonna have a chat with you, and you can have this great chat, and Eric will tell you what to do next."

Ali Abdaal 1:38:12 Okay, nice.

Daniel Priestley 1:38:13 So-

Ali Abdaal 1:38:13 Yeah

Daniel Priestley 1:38:13 ... think about it a bit like this. You know in American football, the quarterback throws the ball to the other players and then they score the goals?

Ali Abdaal 1:38:22 Mm.

Daniel Priestley 1:38:22 But the quarterback is like the star of the show-

Ali Abdaal 1:38:24 Mm

Daniel Priestley 1:38:24 ... even though they're not actually scoring the goals. So the key person of influence has a team, and they're out there speaking, they're out there engaging with the marketplace, being a key person of influence. They're seeing opportunities and they're going, "Take that one team, have that one team, have that one team," right? So they're just throwing the opportunities like a combine harvester. Brr.

Ali Abdaal 1:38:42 [laughs]

Daniel Priestley 1:38:43 And all of these opportunities are going into the businesses-

Ali Abdaal 1:38:46 Yeah

Daniel Priestley 1:38:46 ... and then the businesses are thriving as a result.

Ali Abdaal 1:38:48 How does the key person of influence have time to run all these businesses if they're going out doing all this-

Daniel Priestley 1:38:52 They don't-

Ali Abdaal 1:38:52 ... writing, speaking

Daniel Priestley 1:38:53 ... run the businesses. The key person of influence has someone who runs the businesses. So here's something you should keep in mind. Um, have you ever been in a Starbucks?

Ali Abdaal 1:39:03 Yes. [laughs]

Daniel Priestley 1:39:03 A, a Starbucks is a multi-million dollar business.

Ali Abdaal 1:39:06 Yeah.

Daniel Priestley 1:39:06 It's typically run by someone who's 24 years old, right?

Ali Abdaal 1:39:10 As in the individual Starbucks shop?

Daniel Priestley 1:39:12 Yeah.

Ali Abdaal 1:39:13 Yeah, okay.

Daniel Priestley 1:39:14 And they're on like-

Ali Abdaal 1:39:15 But, well-

Daniel Priestley 1:39:15 They're on like 35 grand a year.

Ali Abdaal 1:39:16 Really?

Daniel Priestley 1:39:16 Yeah. They're on like three grand a month.

Ali Abdaal 1:39:18 Oh, wow.

Daniel Priestley 1:39:19 So it's not that hard to find someone who can run your business. So running a business, it's not Microsoft. You're not s-

Ali Abdaal 1:39:25 Yeah

Daniel Priestley 1:39:25 ... you're not running Google.

Ali Abdaal 1:39:26 Yeah.

Daniel Priestley 1:39:26 You don't need a chief operating officer.

Ali Abdaal 1:39:28 Yeah.

Daniel Priestley 1:39:28 You just need someone who's like able to run a bank branch, or a call center, or a McDonald's, or a like... Here's the thing. Anyone, anyone who can run a pub can run your business-

Ali Abdaal 1:39:39 Yeah

Daniel Priestley 1:39:39 ... because a pub has drunk people-

Ali Abdaal 1:39:41 [laughs]

Daniel Priestley 1:39:41 ... and people like hooking up and having relationships. A pub is like got razor thin margins. You just do not need to be running your business. That's not what you're good at as a key person of influence. You should be out there doing the thing that only you can do, and that is stirring up the beehive, getting people interested, getting people excited, building a marketplace, uh, connecting with your customers. The, the actual running of the business should be done by someone who can run a business, and anyone, anyone who can run a pub can run your business.

Ali Abdaal 1:40:11 So I'm running, I'm running the business myself from zero to 10K, and then at that point I'm like, right, I need to be spending my time doing more interesting things like-

Daniel Priestley 1:40:17 As you, as you're at 100 grand a month-

Ali Abdaal 1:40:19 Yeah

Daniel Priestley 1:40:19 ... uh, you'll now definitely, you definitely want to have a, like a manager. Um, and when I say ma- like I, I just don't want to overstate. Like a manager can be an executive assistant who pretty much runs the business. A manager can be just a, a, a general manager who, like ex-person who did HR.

Ali Abdaal 1:40:37 What does... What, what are the s- skills needed to run a business? Like what, what does it involve?

Daniel Priestley 1:40:44 Uh, so here's, here's what I like to think of.

Ali Abdaal 1:40:47 Yeah.

Daniel Priestley 1:40:47 Um, Monday morning meeting, getting the whole team together. Everyone's got a job to do. Everyone declares their three things to six things that they're gonna do for the week, um, as in the most important things. Not micromanaging, but-

Ali Abdaal 1:40:57 Yeah

Daniel Priestley 1:40:57 ... what are the three to six big things you're gonna do for the week? Um, and then, um, on Friday we talk about what did we get done, what didn't we get done.

Ali Abdaal 1:41:05 Mm.

Daniel Priestley 1:41:05 Um, we keep a dashboard. So we have a dashboard of like, did we make sales? Did we... Were there any customer complaints? Do we need to solve any problems? Um, so those kind of things happen. Um, and then essentially a general manager is like doing all the little problem-solving along the way. So for example, loading up payments and then the payments go out, and um, collections, or there's a customer who didn't pay and they needed an email saying you need to pay. Um, so that's a bit of financial control. Um, later on you might have a financial controller who just does that. Uh, general manager can do that. Um, scheduling, hiring, uh, if we need to hire someone new. If someone wants to go on holiday, who's gonna cover for them? Like all that stuff.

Ali Abdaal 1:41:47 Hm. Yeah, basically what Angus does. [laughs]

Daniel Priestley 1:41:51 Yeah.

Ali Abdaal 1:41:51 Yeah.

Daniel Priestley 1:41:51 And your... And, and most importantly, they know that their job is to keep you out on the front line.

Ali Abdaal 1:41:57 Yeah.

Daniel Priestley 1:41:57 You have to be out there with customers.

Ali Abdaal 1:41:59 When I'm a- when I'm away at a conference, the whole team is happy. [laughs]

Daniel Priestley 1:42:01 Oh, yeah. No, big time. Totally.

Ali Abdaal 1:42:03 Yeah.

Daniel Priestley 1:42:03 Because if... I, I don't... You didn't do a lot of... How long did you... How long were you a doctor?

Ali Abdaal 1:42:08 Like two years.

Daniel Priestley 1:42:09 Do you... It's a bit different 'cause there's not an owner, but like was there ever a big boss?

Ali Abdaal 1:42:15 Uh-

Daniel Priestley 1:42:15 Is there a big like hospital general manager or a hospital-

Ali Abdaal 1:42:18 There's like the hospital CEO, but like the doctors don't really interact with the management structure of the organization.

Daniel Priestley 1:42:23 Yeah, they're the techni-

Ali Abdaal 1:42:24 Yeah

Daniel Priestley 1:42:24 ... technicians. Is there anyone like who's like represents like the big scary regional manager or someone who... Point is-

Ali Abdaal 1:42:33 Yeah

Daniel Priestley 1:42:33 ... is that normally that's not your best day at work, when that person's buzzing around.

Ali Abdaal 1:42:38 Mm.

Daniel Priestley 1:42:38 Um, I, I had an experience for me personally where, uh, like I worked at McDonald's as a teenager.

Ali Abdaal 1:42:44 Yeah.

Daniel Priestley 1:42:45 And when the big boss was in town, and when the big boss was in the store, we all froze and we didn't work very well.

Ali Abdaal 1:42:50 Mm.

Daniel Priestley 1:42:50 Um, and I also worked around, uh, some people who were very well-known.

Ali Abdaal 1:42:55 Mm.

Daniel Priestley 1:42:55 Um, and when they were around, everyone froze. No one worked really well.

Ali Abdaal 1:42:58 Yeah.

Daniel Priestley 1:42:59 So less is more.

Ali Abdaal 1:43:01 Mm.

Daniel Priestley 1:43:01 When you hit a certain point, you're far better off just being out there being the s- you know, being the key person of influence, doing deals, raising profile, doing partnerships, finding opportunities, all the, all of that stuff, um, being in contact and connection with your customers in your marketplace, um, pitching, publishing, product creation, writing a book.

Ali Abdaal 1:43:22 Yeah.

Daniel Priestley 1:43:22 Um, all of that, doing a podcast. That is like your high-value superstar stuff, and then the team, you just need to check in with them. Like me personally, I kind of check in with my teams now every like 90 days. I keep an eye on the dashboard, like g- genuinely. There was a business I just sold for quite a lot of money, like millions. Um, I owned it for about four or five years, and um, I probably spoke to the managing director six times in that whole time.

Ali Abdaal 1:43:53 Bloody hell. [laughs]

Daniel Priestley 1:43:55 Yeah. Like, and, and never visited. Like n- di- didn't go on site. I own, I own several businesses that I've never been to. Like genuinely I've never been there. Um, as in they have an office I've never been.

Ali Abdaal 1:44:09 How the hell does that work? [laughs] It's like what?

Daniel Priestley 1:44:11 You... Well, I bought the business and we met, we met at a, uh, we met down the road here at this, uh, a local place down the road-

Ali Abdaal 1:44:17 Yeah

Daniel Priestley 1:44:17 ... and we did a deal, and I let them get on with it

Ali Abdaal 1:44:22 Why would you buy that business?

Daniel Priestley 1:44:23 [lips smack] Uh, because I can grow it.

Ali Abdaal 1:44:26 And how, and you grow it by virtue of-

Daniel Priestley 1:44:27 By being, by being a key person of influence

Ali Abdaal 1:44:28 ... b- because you're the Eiffel Tower.

Daniel Priestley 1:44:29 Yeah.

Ali Abdaal 1:44:30 So you can be the combine harvester- [laughs]

Daniel Priestley 1:44:31 Throw, throw stuff-

Ali Abdaal 1:44:32 ... throwing opportunity their way

Daniel Priestley 1:44:32 ... throw opportunities their way, but I don't need to know... Provided I know the person who's running that business can handle the opportunities-

Ali Abdaal 1:44:39 Yeah

Daniel Priestley 1:44:39 ... and can run the business, I don't need to know what happens beyond that point, right? I can see it on the, I can see it on the dashboards, I can see the P&L and the balance sheet.

Ali Abdaal 1:44:47 Yeah.

Daniel Priestley 1:44:47 Um, I can see the weekly meetings are happening. We can do quarterly, I can attend a quarterly alignment session if I want to.

Ali Abdaal 1:44:54 Yeah.

Daniel Priestley 1:44:55 Um, but so long as I have trust in my team, I don't need to be there very often. Um, I just need to be out and about-

Ali Abdaal 1:45:02 It's like-

Daniel Priestley 1:45:02 ... trying to, trying to drum up opportunity

Ali Abdaal 1:45:04 ... 'cause this idea of, like, you know, you, you own multiple businesses feels like a stressful place to be.

Daniel Priestley 1:45:11 It's really not.

Ali Abdaal 1:45:12 Okay. [laughs]

Daniel Priestley 1:45:12 It's actually really not. Um, in fact, I think it's easier to own multiple businesses than, uh, having, um, having just one, 'cause if you've got one, you obsess over it. And if you've-

Ali Abdaal 1:45:22 Yeah

Daniel Priestley 1:45:22 ... got multiple businesses, you only deal with the stuff that needs to be dealt with.

Ali Abdaal 1:45:25 Yeah, I obsess over my one business.

Daniel Priestley 1:45:27 Yeah. So if you, if you actually have multiple businesses-

Ali Abdaal 1:45:30 Yeah

Daniel Priestley 1:45:30 ... then the team... You, you only have... When you have multiple businesses, you only have one opportunity, which is to hire great people and let them get on with it.

Ali Abdaal 1:45:38 Yeah.

Daniel Priestley 1:45:39 'Cause if you're, if you're working on several different businesses at once... The other thing, too, is don't forget,

Daniel Priestley 1:45:45 a bigger business is multiple businesses. Like-

Ali Abdaal 1:45:47 Mm

Daniel Priestley 1:45:47 ... so when you think about, when you think about Google, it sounds like one thing from the outside.

Ali Abdaal 1:45:51 Mm.

Daniel Priestley 1:45:51 But it's, like, loads of things. Amazon is, like, loads of things.

Ali Abdaal 1:45:53 Mm.

Daniel Priestley 1:45:54 I mean, there's, like, h- there's hundreds of businesses in Amazon.

Ali Abdaal 1:45:56 Mm.

Daniel Priestley 1:45:57 There's the film production business-

Ali Abdaal 1:45:58 Mm

Daniel Priestley 1:45:58 ... like doing Amazon Prime. There's, like, the A- AWS business.

Ali Abdaal 1:46:03 Mm.

Daniel Priestley 1:46:03 Uh, there's different regions and territories. Um, there's like-

Ali Abdaal 1:46:07 Yeah

Daniel Priestley 1:46:07 ... there's in-house product team, there's a external engagement team, there's, like, the B- B2B thing, there's, uh, the fresh delivery grocery services.

Ali Abdaal 1:46:15 Yeah.

Daniel Priestley 1:46:16 So they're all product teams. So this is multiple, multiple businesses that are within a business, a much bigger business. So when I, when I own multiple businesses, it's just, essentially it's just a group, a group of companies.

Ali Abdaal 1:46:29 Yeah.

Daniel Priestley 1:46:29 And yeah, like each team is its own team.

Ali Abdaal 1:46:32 It's almost like if you, if you had multiple properties and the rent is coming in, you're just keeping an eye on the thing, on the numbers, making sure nothing seriously is going wrong.

Daniel Priestley 1:46:39 Pretty much.

Ali Abdaal 1:46:39 And then you don't need to worry about it too much.

Daniel Priestley 1:46:41 Yeah. And if you only have one business, you'll solve every problem by throwing your own time at it.

Ali Abdaal 1:46:45 Yeah.

Daniel Priestley 1:46:46 And you'll be ending up, like, doing things that are n- not your main thing that you do. And if you have multiple businesses, you're like, "Hmm, okay." I mean, the cool thing is when you get multiple businesses is you can actually say, "It would be easier for me to buy another business than fix this one, so-"

Ali Abdaal 1:47:02 [laughs]

Daniel Priestley 1:47:04 "... you guys, guys, sort it out." [laughs] Like, sort out, sort out the issue because, uh-

Ali Abdaal 1:47:10 And then are you not worried that, that if something goes wrong, that it will reflect badly on your brand?

Daniel Priestley 1:47:15 Um, yeah, to a degree, I am worried about that. Yep, I do wanna make sure that the businesses succeed for that reason.

Ali Abdaal 1:47:20 Mm.

Daniel Priestley 1:47:21 Yep, that's definitely a consideration. So I would... You know, that, and that's probably my primary worry, like reputation management if-

Ali Abdaal 1:47:28 Yeah

Daniel Priestley 1:47:29 ... if a business didn't succeed. I wanna make sure that they do succeed for that reason, yeah.

Ali Abdaal 1:47:33 Hmm. Sounds pretty fun.

Daniel Priestley 1:47:35 It is fun. Well, it's-

Ali Abdaal 1:47:36 Well-

Daniel Priestley 1:47:36 ... it has its moments. If, if multiple things go wrong at, at the same time-

Ali Abdaal 1:47:40 Yeah

Daniel Priestley 1:47:40 ... you can have a stressful couple of weeks.

Ali Abdaal 1:47:42 Yeah. I feel like this is not where I, I wanna be right now, but I can imagine-

Daniel Priestley 1:47:48 At some point

Ali Abdaal 1:47:48 ... at some point I'll be like, "You know what? I wanna be more of a coach to businesses-"

Daniel Priestley 1:47:51 Ooh

Ali Abdaal 1:47:51 ... and, like, just own multiple businesses and, like, stuff."

Daniel Priestley 1:47:54 Well, when you have multiple businesses, you are a coach to your own business. That-

Ali Abdaal 1:47:57 Yeah

Daniel Priestley 1:47:57 ... that is very much what you do. You're the brand and you're the coach. Um, here's what very much could happen for you. You've got such a big brand. You could have multiple businesses that you are an equity stakeholder in, and you play the key person of influence role.

Ali Abdaal 1:48:11 Yeah.

Daniel Priestley 1:48:11 So, like, literally look at this table. You could contact this drinks company and say, "Hey, I'll be the key person of influence with this in exchange for some equity and shares in the business. Hey, we'll, um, help promote these in exchange for some equity shares in the business." So you could have a, a portfolio of businesses that you become-

Ali Abdaal 1:48:28 Yeah

Daniel Priestley 1:48:28 ... a shareholder in, um, and that you evangelize those businesses, you open up opportunities. While you're roaming around having adventures, you're saying, "Hey, I just met someone in Dubai who's looking for a kombucha drinks company-"

Ali Abdaal 1:48:40 Yeah

Daniel Priestley 1:48:40 "... um, to, uh, to, to launch in the region. Um, let me, let me connect you both." Right? So you could actually very easily, because you've got such a great brand going, you could actually have multiple businesses, like, next month. And if anyone would like that, please contact me-

Ali Abdaal 1:48:56 [laughs]

Daniel Priestley 1:48:56 ... as Ali's agent. [laughs]

Ali Abdaal 1:48:59 Um, okay. We- at s- so we talked about 0 to 10K. We've talked about sort of 10 to 100. At what point does the team grow to an unmanageable level? And, like, what are, what are, what's going-

Daniel Priestley 1:49:14 12 people.

Ali Abdaal 1:49:15 12?

Daniel Priestley 1:49:15 13, 13 people. So 12 is manageable, 13's not. 13, 13's-

Ali Abdaal 1:49:20 [laughs] How did you land on that? Like, that's-

Daniel Priestley 1:49:22 It's the Last Supper.

Ali Abdaal 1:49:23 Oddly, oddly specific.

Daniel Priestley 1:49:24 Yeah. [laughs]

Ali Abdaal 1:49:24 Yeah. [laughs]

Daniel Priestley 1:49:24 There's, there's always, uh, you know, there's always this issue that with somehow magically 12, up to 12 people can just hold together. Everyone can just be having one conversation. The 13th person splits it in two or three teams. Suddenly you've got the sales team and you've got the ops team and you got the finance team. The 13th person f- just goes, breaks it all into, into three teams. So up until 12, you're just one team. We're just one family. It's the original crew. Um, and then, uh, the 13th person is ruining things for everyone. Uh, then it doesn't get good again until you're about 40 people plus. Um, so when you're about 40 people You've got what's called an executive team.

Ali Abdaal 1:50:07 Yep.

Daniel Priestley 1:50:08 An executive team is a CEO-

Ali Abdaal 1:50:10 Yep

Daniel Priestley 1:50:10 ... chief executive officer, COO, chief operations officer, CFO, finance, um, CMO, marketing, and CTO, technology. So you've got those as your typical five roles for running a bigger business.

Ali Abdaal 1:50:24 Yep.

Daniel Priestley 1:50:24 On top of that, you'll have a non-executive board member, non-executive director board member, and you'll probably have a coach, right, who's kind of getting... Or a chairperson.

Ali Abdaal 1:50:32 Yep.

Daniel Priestley 1:50:32 All right, so that'll be your s- almost seven people, um, who are running the business, right? So because that's such a big, heavy, weighty team, you need, like, 35, 40 people all performing with great assets and great technology and great intellectual property and all of that stuff to, to warrant that team. So the reason that you should stop at about 12 is because once you go past 12, you need leaders and managers and debt and investment and this and that, and there's J curves are unescapable and, like, all these, all th- like you're, you're now into a grown-up proper business.

Ali Abdaal 1:51:08 Yeah.

Daniel Priestley 1:51:08 Um, and then it's not gonna be viable until you get about 40, 50 people.

Ali Abdaal 1:51:14 Oh, okay.

Daniel Priestley 1:51:15 Yeah.

Ali Abdaal 1:51:16 We're at 15, including me.

Daniel Priestley 1:51:18 Yeah. So you, you-

Ali Abdaal 1:51:19 With a bunch of freelancers-

Daniel Priestley 1:51:21 We're at-

Ali Abdaal 1:51:21 ... that are, like, some semi full-time, semi part-time

Daniel Priestley 1:51:23 Out of curiosity, have you noticed that the team's starting to fracture off into, like, sub teams?

Ali Abdaal 1:51:30 Yeah.

Daniel Priestley 1:51:31 Yeah. So it probably happened around the 13th person.

Ali Abdaal 1:51:34 Oh.

Daniel Priestley 1:51:35 So, like, some people have got their little gang over here-

Ali Abdaal 1:51:38 Yeah, exactly

Daniel Priestley 1:51:38 ... and they're doing their thing, and then-

Ali Abdaal 1:51:39 Yeah, we've got, like, our money team, we've got our con- YouTube, uh, YouTube plus two editors team.

Daniel Priestley 1:51:43 Yeah.

Ali Abdaal 1:51:43 We've got our-

Daniel Priestley 1:51:44 And I bet they have their own little meetings.

Ali Abdaal 1:51:45 Yeah, they do. Yeah.

Daniel Priestley 1:51:46 Yep. So you're just on the verge. Now, it'll be masked in your organization because you're very profitable.

Ali Abdaal 1:51:53 Mm.

Daniel Priestley 1:51:53 You've got huge IP and media going on. Um, I've seen your videos where you disclose how much revenues and profit it's... you do, so you've got buffer. Most businesses don't have that kind of buffer. You're leveraging media out of this world. But if you were slightly less revenue, it would actually start to be noticeable-

Ali Abdaal 1:52:11 Mm

Daniel Priestley 1:52:11 ... that, wait a second, the overheads are high and the profit's going down, and the teams aren't coordinating themselves very well, and this team's running off on this direction, and this one's running east, and this one's running west.

Ali Abdaal 1:52:22 Yep.

Daniel Priestley 1:52:23 Yeah.

Ali Abdaal 1:52:24 Yeah, we ha- we have to do in-person full week-long meetings every six weeks to stay-

Daniel Priestley 1:52:30 Connected. Yeah

Ali Abdaal 1:52:30 ... stay connected and aligned and stuff.

Daniel Priestley 1:52:31 And do you remember back in, like, eight, nine, 10 people-

Ali Abdaal 1:52:34 Yeah

Daniel Priestley 1:52:34 ... where it just self-organized? Like, it just, like, we didn't have to do any of this stuff, and everyone... Like, we had a problem, so what did we do? We ordered Chinese food, and everyone ca- um, sat around a table, and we solved the problem by the time we finished dinner.

Ali Abdaal 1:52:47 Yeah-ish. I remember it was like that at three people when we were in person.

Daniel Priestley 1:52:52 Yeah.

Ali Abdaal 1:52:52 But then when we went to six and it became remote and different time zones-

Daniel Priestley 1:52:55 Mm-hmm

Ali Abdaal 1:52:56 ... and I didn't know anything about running a business, so it's just like, yeah, yeah.

Daniel Priestley 1:52:59 So, so even at about six or seven-

Ali Abdaal 1:53:01 Yeah

Daniel Priestley 1:53:02 ... I bet there were times where you just got on a Zoom call, everyone jumped on the Zoom call-

Ali Abdaal 1:53:06 Mm, yeah

Daniel Priestley 1:53:06 ... and an hour later, you'd solved the problem.

Ali Abdaal 1:53:08 Yeah.

Daniel Priestley 1:53:08 And, and everyone was, like, aware of it.

Ali Abdaal 1:53:09 Yeah.

Daniel Priestley 1:53:10 And I bet it's really hard to do that now.

Ali Abdaal 1:53:12 Yeah, it's really hard to do that now.

Daniel Priestley 1:53:13 Yeah. So you've-

Ali Abdaal 1:53:14 Yeah

Daniel Priestley 1:53:14 ... just entered this, like, too big to be small, too small to be big.

Ali Abdaal 1:53:17 Mm.

Daniel Priestley 1:53:17 We call this crossing the desert. It's like you're just in this, like, really frustrating time where you're not a big business, you're not a small business.

Ali Abdaal 1:53:23 Yeah.

Daniel Priestley 1:53:24 Um, so realistically, you can probably get away with it, uh, because, you know, you've got lots of IP to, uh, media to leverage. Um, for most people, the smart decision would be just to pull it back to 12 people, um, and just recognize that we're gonna grow the assets, we're gonna grow the media, we're gonna keep doing what we're really great at. We're gonna say no to some stuff.

Ali Abdaal 1:53:46 Mm.

Daniel Priestley 1:53:47 But ultimately, we're a 12-person business. Or you go, "You know what? We're gonna build a massive business. We're gonna get five major YouTubers, each with millions of followers. We're gonna create a YouTube cluster, uh, a, a constellation of YouTube stars, and we're gonna have a management, executive management team, and we're gonna bring together a whole bunch of, um, uh, products, and all of the YouTubers are gonna pick the products that they want to represent."

Ali Abdaal 1:54:13 Yeah.

Daniel Priestley 1:54:14 "And we're gonna, like, build up, build out these businesses, and it's gonna be, like, 40, 50-person team who hit the phones and create opportunities, and the YouTubers create the media cloud cover, and then we've got the sales team."

Ali Abdaal 1:54:24 Sounds like an absolute nightmare.

Daniel Priestley 1:54:25 Yeah.

Ali Abdaal 1:54:25 God, I cannot imagine anything worse than that. [laughs]

Daniel Priestley 1:54:27 I'm totally excited by it, right? So I would have, I would have my, like, executive team-

Ali Abdaal 1:54:31 Yeah

Daniel Priestley 1:54:31 ... and our sales team and our marketing team, and we would basically say, "All right, we've now got a collective 20 million followers on, on socials and now we're, like, we've got a dozen products, and we're gonna have our product teams and our sales teams, and we're gonna really kind of coordinate this thing into a, like, a 10 to $100 million business."

Ali Abdaal 1:54:50 Yeah, screw that. That's not the, that's not the one. [laughs]

Daniel Priestley 1:54:52 Yeah, 'cause it, it is. It's grown up, right?

Ali Abdaal 1:54:54 Yeah.

Daniel Priestley 1:54:54 It's, it's, it... And it's bo- it's boards, it's private equity backing.

Ali Abdaal 1:54:58 Yeah.

Daniel Priestley 1:54:59 It, it's outst- it's outside influence. It's outside companies that have to buy in and stay bought in. That's the problem. The problem is, is, like, right now, you can say no to stuff-

Ali Abdaal 1:55:08 Yeah

Daniel Priestley 1:55:08 ... if you want to say no to stuff. Once you get to a certain size, you have investors-

Ali Abdaal 1:55:12 Mm

Daniel Priestley 1:55:12 ... you have, um, debt, you have, um, partners, joint venture partners. Um, so you've got all these outside influences, and you have to manage expectations. And if you screw that up, they just leave.

Ali Abdaal 1:55:24 Yeah.

Daniel Priestley 1:55:24 And then you, then you've got 50 people, overheads, and-

Ali Abdaal 1:55:27 [laughs]

Daniel Priestley 1:55:27 ... and y- y- your business starts to spiral down.

Ali Abdaal 1:55:30 Yep.

Daniel Priestley 1:55:30 So yeah, you're... You, you have to basically be up for that.

Ali Abdaal 1:55:34 Ah. So if I'm not up for that, keep it small-

Daniel Priestley 1:55:38 Keep it small

Ali Abdaal 1:55:38 ... and manageable. Uh, you mentioned assets.

Daniel Priestley 1:55:40 Mm-hmm.

Ali Abdaal 1:55:41 What, what do you mean by assets?

Daniel Priestley 1:55:42 So, um, a business ultimately w- You know, you talk a lot about productivity.

Ali Abdaal 1:55:48 Mm.

Daniel Priestley 1:55:48 So productivity often is thought about the way humans behave. But actually, a huge amount of productivity is actually underlying assets. So-

Ali Abdaal 1:55:57 Okay. Like a tractor.

Daniel Priestley 1:55:59 Yeah.

Ali Abdaal 1:55:59 Okay, yeah.

Daniel Priestley 1:56:00 Like a tractor.

Ali Abdaal 1:56:01 Yeah.

Daniel Priestley 1:56:01 Like a, like a, a chainsaw.

Ali Abdaal 1:56:02 A tractor is an asset that-

Daniel Priestley 1:56:03 Yeah, so-

Ali Abdaal 1:56:03 ... boosts your productivity.

Daniel Priestley 1:56:04 Yeah. So if I've got a, um, if I've got a big lumberjack who's got a little ax, and I've got a- 17-year-old with a chainsaw [laughs]

Ali Abdaal 1:56:13 Yeah

Daniel Priestley 1:56:13 ... who cuts down the tree faster?

Ali Abdaal 1:56:15 Yeah

Daniel Priestley 1:56:15 Right? So, um, assets are, uh, the modern day assets are digital assets. They're either intellectual property, media or, or, um, software typically, and they are things that make everything run really, really well. Now, as a thought experiment, if I had two real estate salespeople, and both of them, like, optimize their diary, and they're, like, working super hard, and they're, like, get up and do their cold plunge in the morning-

Ali Abdaal 1:56:44 [laughs]

Daniel Priestley 1:56:44 ... and, like, you know-

Ali Abdaal 1:56:46 Yeah

Daniel Priestley 1:56:46 ... they've, they've got, like, their gadgets and all of that sort of stuff. They have a stand-up walking desk each, right?

Ali Abdaal 1:56:51 [laughs]

Daniel Priestley 1:56:52 All of that stuff is super optimized.

Ali Abdaal 1:56:53 Yeah.

Daniel Priestley 1:56:54 But one of them's working in Mayfair, and one of them is working in Blackpool.

Ali Abdaal 1:56:57 [laughs] Okay. Yeah.

Daniel Priestley 1:56:59 Do you get what I mean?

Ali Abdaal 1:57:00 Yeah.

Daniel Priestley 1:57:00 So, who's more productive? It's gonna look like the Mayfair salesperson sells hundreds of millions of dollars worth of real estate each-

Ali Abdaal 1:57:06 Yeah

Daniel Priestley 1:57:06 ... each year, and the Blackpool salesperson is likely to make a couple of million worth of sales each year, um, because ultimately, the underlying assets are very vastly different. Um, so this is the same with any business. The assets of the business really do most of the work. It's mostly the product... The productivity of the business is mostly media, intellectual property, and software. Um-

Ali Abdaal 1:57:27 Media, IP, and software.

Daniel Priestley 1:57:29 Yeah.

Ali Abdaal 1:57:30 Okay. Nice.

Daniel Priestley 1:57:31 Yeah. There's other assets, too, but those are the big ones these days. Data, um... They're intangibles, and this is the thing, most people don't even know what they are now.

Ali Abdaal 1:57:38 Mm.

Daniel Priestley 1:57:38 Um, here's a thought experiment. Um, a consulting firm is going along for 15 years, and then the top consultant writes a best-selling book. It, it becomes the top of the business charts, and they start speaking on four major conferences per year. What happens to the consulting firm?

Ali Abdaal 1:57:59 Boom.

Daniel Priestley 1:57:59 Boom.

Ali Abdaal 1:57:59 Yeah.

Daniel Priestley 1:58:00 Right? So it was the book and the consu- uh, like the book and the thing. Restaurant, going along for 15 years, wins a Michelin star.

Ali Abdaal 1:58:07 Mm. Yeah. Bang.

Daniel Priestley 1:58:09 Bang.

Ali Abdaal 1:58:09 Yeah. [laughs]

Daniel Priestley 1:58:10 Right?

Ali Abdaal 1:58:10 Yeah.

Daniel Priestley 1:58:10 So it's an intangible new asset that-

Ali Abdaal 1:58:12 Yeah

Daniel Priestley 1:58:12 ... has just been awarded. Um, so these are, these are the actual... Like, the really big productivity boosters are assets.

Ali Abdaal 1:58:19 Mm.

Daniel Priestley 1:58:19 It's the underlying assets, IP, media, and tech.

Ali Abdaal 1:58:21 Okay. So we have a problem right now because our 5K a year offering is quite heavy on customer support.

Daniel Priestley 1:58:28 Mm-hmm.

Ali Abdaal 1:58:29 Because it's, like, a 12 months of worth of customer support.

Daniel Priestley 1:58:32 Yeah.

Ali Abdaal 1:58:32 And we are finding that, like, if we wanted to add more clients to that, we would have to increase capacity.

Daniel Priestley 1:58:39 Mm-hmm.

Ali Abdaal 1:58:39 And the way we increase capacity is broadly by... We're, we're, we're attempting to do it by hiring a bunch of freelancers who are n- not technically part of the core team, that are part of, like-

Daniel Priestley 1:58:48 Mm-hmm

Ali Abdaal 1:58:48 ... the wider team.

Daniel Priestley 1:58:49 Mm-hmm.

Ali Abdaal 1:58:50 And we're trying really hard on your advice to avoid this desert territory where it's like-

Daniel Priestley 1:58:54 Yeah

Ali Abdaal 1:58:55 ... uh, we're creeping into... But it sounds like if I were to take this model-

Daniel Priestley 1:59:02 Yeah

Ali Abdaal 1:59:02 ... this model seriously, I'd be thinking...

Daniel Priestley 1:59:05 Intellectual property is a method of doing things. Normally, it looks like a poster or-

Ali Abdaal 1:59:09 Yeah

Daniel Priestley 1:59:09 ... um, it could be data.

Ali Abdaal 1:59:10 Yeah.

Daniel Priestley 1:59:10 It could be, um, a step-by-step or recipe.

Ali Abdaal 1:59:13 Yeah.

Daniel Priestley 1:59:14 M- media is we record the videos-

Ali Abdaal 1:59:16 Yeah

Daniel Priestley 1:59:16 ... on how to do it, and software is they just punch in the things, and then the AI does it-

Ali Abdaal 1:59:20 Yeah

Daniel Priestley 1:59:20 ... and the software does it-

Ali Abdaal 1:59:21 Yeah

Daniel Priestley 1:59:21 ... and it all, all gets done. Um, and then if you can't solve, solve it with IP, media, and tech, you have to solve it with people.

Ali Abdaal 1:59:28 Yeah. Okay. So our $1,000 product, which is a purely video course-

Daniel Priestley 1:59:32 Mm-hmm

Ali Abdaal 1:59:32 ... is me- is a media plus IP asset.

Daniel Priestley 1:59:34 Yep.

Ali Abdaal 1:59:34 And that's great. We can sell unlimited copies of that-

Daniel Priestley 1:59:37 Yeah

Ali Abdaal 1:59:37 ... and literally make 100 million off the back of that-

Daniel Priestley 1:59:38 Mm. [laughs]

Ali Abdaal 1:59:39 ... based on demand

Ali Abdaal 1:59:40 without having to hire any more people.

Daniel Priestley 1:59:41 Mm-hmm.

Ali Abdaal 1:59:42 But-

Daniel Priestley 1:59:42 Very scalable. Yeah

Ali Abdaal 1:59:43 ... for every X number of people we add to our accelerator package, which is our 5K offering-

Daniel Priestley 1:59:47 Mm-hmm

Ali Abdaal 1:59:47 ... we have to add more people, whether it's a freelancer or someone-

Daniel Priestley 1:59:50 Yeah

Ali Abdaal 1:59:50 ... on the team.

Daniel Priestley 1:59:50 There's different ways you could structure it.

Ali Abdaal 1:59:52 Yeah.

Daniel Priestley 1:59:52 So you could have a reservoir of coaches-

Ali Abdaal 1:59:55 Yeah

Daniel Priestley 1:59:55 ... um, who are all signed up and vetted.

Ali Abdaal 1:59:57 Yep.

Daniel Priestley 1:59:58 And then you have a software system that, um, they pay, people pay the five grand, and it includes a certain number of credits. And then the software, um, it- when they're ready for a coaching session one-to-one-

Ali Abdaal 2:00:09 Yeah

Daniel Priestley 2:00:09 ... they select their coach, they allocate the credit, and then they get, like, automatically matched. And-

Ali Abdaal 2:00:14 Yeah

Daniel Priestley 2:00:14 ... that just works. That would then be scalable.

Ali Abdaal 2:00:17 Yeah.

Daniel Priestley 2:00:17 You might then say, "Well, how do... D- is there enough coaches-"

Ali Abdaal 2:00:20 Mm.

Daniel Priestley 2:00:20 "... uh, available?" Probably. I mean, there's probably lots of people who have a 10,000 to... If you n- if you knew that the person who's coaching you at least had 10,000 subscribers-

Ali Abdaal 2:00:30 Yeah

Daniel Priestley 2:00:30 ... great.

Ali Abdaal 2:00:31 Yeah. Fair enough.

Daniel Priestley 2:00:31 There's, there's probably plenty of people who have gotten to 10,000, and they can coach people who are under 10,000.

Ali Abdaal 2:00:35 Mm.

Daniel Priestley 2:00:36 They only have to be a few steps ahead.

Ali Abdaal 2:00:37 Yeah.

Daniel Priestley 2:00:38 Um, and if they're using your IP media-

Ali Abdaal 2:00:40 Yeah

Daniel Priestley 2:00:40 ... yeah.

Ali Abdaal 2:00:40 My method.

Daniel Priestley 2:00:41 So that would be there. You could create an opportunity, which is to sign up as a YouTuber coach. Um, so you actually become a certified licensed coach.

Ali Abdaal 2:00:50 Yeah.

Daniel Priestley 2:00:51 But you have to have more than 10,000 subscribers-

Ali Abdaal 2:00:53 Mm

Daniel Priestley 2:00:53 ... in order to be qualified, uh, certified, and then that way they've, they've, they've already got that background, and then they train up in your methodology, your IP, and then you just m- m- matchmake.

Ali Abdaal 2:01:08 Mm.

Daniel Priestley 2:01:09 So that would be another way to solve it.

Ali Abdaal 2:01:11 Yeah. I've been feeling a bit like, uh, about this because when I'm... [laughs]

Daniel Priestley 2:01:15 People. Yeah.

Ali Abdaal 2:01:16 Yeah.

Daniel Priestley 2:01:16 People are hard.

Ali Abdaal 2:01:17 Whenev- whenever I have to work for-

Daniel Priestley 2:01:20 Mm

Ali Abdaal 2:01:20 ... money or hire for money, I'm like, "Ugh, there's, there's gotta be a better way of, like, building an asset that-

Daniel Priestley 2:01:25 Yeah

Ali Abdaal 2:01:26 ... makes money while I sleep-"

Daniel Priestley 2:01:27 Yeah

Ali Abdaal 2:01:27 ... kind of thing.

Daniel Priestley 2:01:28 Yep.

Ali Abdaal 2:01:28 Like, this 5K product does not make money while I sleep.

Daniel Priestley 2:01:30 Yeah.

Ali Abdaal 2:01:30 The 1K product does, and that's, like, really nice.

Daniel Priestley 2:01:31 Mm-hmm.

Ali Abdaal 2:01:32 Even though the 5K product is, like, five times as much, it's like, oh, we, we should have a higher priced offering and, and these-

Daniel Priestley 2:01:36 Yeah, or may- or maybe it's 10 grand.

Ali Abdaal 2:01:37 Yeah.

Daniel Priestley 2:01:38 You know?

Ali Abdaal 2:01:38 Yeah, true. Supply and demand.

Daniel Priestley 2:01:39 Yep. And also-

Ali Abdaal 2:01:40 Yeah

Daniel Priestley 2:01:41 ... uh, maybe, and depending on who it is-

Ali Abdaal 2:01:44 Yeah

Daniel Priestley 2:01:44 ... 10 grand's not a lot. 10 grand is not a lot to certain people.

Ali Abdaal 2:01:46 Yeah.

Daniel Priestley 2:01:47 You know, if you've already got a half a million pound business, a half a million dollar business, 10 grand's, okay, yeah, we can do that.

Ali Abdaal 2:01:52 Mm.

Daniel Priestley 2:01:52 Right? Maybe can, mm, can we do it in two payments? Yeah, sure. Great. Fine. Done. So, um, also, you can have one person on your team who's responsible for training and who's th- that's their whole job, is making sure that each of those clients gets a trainer.

Ali Abdaal 2:02:09 Mm.

Daniel Priestley 2:02:09 So that you, your core team still is 12, but one person's job is to manage these 30 people.

Ali Abdaal 2:02:15 Yeah. Yeah, that's currently sort of the model we have, where that one person is managing our, like, six other people.

Daniel Priestley 2:02:19 Yeah.

Ali Abdaal 2:02:19 Um-

Daniel Priestley 2:02:19 But recognize that-

Ali Abdaal 2:02:20 Yeah

Daniel Priestley 2:02:21 ... the real value is the IP, media, and tech.

Ali Abdaal 2:02:24 Yeah

Daniel Priestley 2:02:24 The people are always very... It's very hard to make money off people. Um, you essentially, you've gotta arbitrage people, and it's hard to arbitrage people. So what I mean by that is you've gotta pay them less than you charge them out.

Ali Abdaal 2:02:39 Yeah.

Daniel Priestley 2:02:40 So that is hard, because eventually people kind of figure out what they're worth, and they-

Ali Abdaal 2:02:44 Yeah

Daniel Priestley 2:02:44 ... go and do that. So-

Ali Abdaal 2:02:46 Yeah

Daniel Priestley 2:02:46 ... it's the, the real, the real upside is actually IP, media, and tech in most businesses.

Ali Abdaal 2:02:52 Nice. So how does one philosophically get from 100K to 1 million a month? We're not yet, we're, we're somewhere in between that threshold.

Daniel Priestley 2:03:01 Yeah, so this is where you go into this bigger business. You've now got an executive team, and you've got teams of teams.

Ali Abdaal 2:03:05 Ah, so it'd be hard to do that with our team of the 12, 13.

Daniel Priestley 2:03:10 You might be able to do it.

Ali Abdaal 2:03:11 Unless we, unless we really sweat the media assets and, like, really-

Daniel Priestley 2:03:14 Yeah

Ali Abdaal 2:03:14 ... yeah.

Daniel Priestley 2:03:14 You're not... You are an edge case, and the reason you're an edge case is millions of followers.

Ali Abdaal 2:03:19 Mm.

Daniel Priestley 2:03:19 Right? So that, that puts you in a, in a distinguished category that, yes, you possibly could, with 12 people, get to a million a month.

Ali Abdaal 2:03:27 Mm.

Daniel Priestley 2:03:28 For most businesses, the well-worn path is that you would have about 40 or 50 people at that stage.

Ali Abdaal 2:03:32 Mm.

Daniel Priestley 2:03:33 So you would have teams of teams. You'd either have functions, territories, products, or markets. So functions is, like, sales, ops, you know, finance. Uh, markets is, like, um, entrepreneurs, uh, government, corporate, education.

Ali Abdaal 2:03:50 Yeah.

Daniel Priestley 2:03:50 Right? Um, territories, Germany, France, Spain. Um, and then products would be iPad, iPhone. So you basically end up breaking your company into products, territories, functions-

Ali Abdaal 2:04:03 Yeah

Daniel Priestley 2:04:03 ... or markets, and you have teams of teams. So for example, let's say you had a city-based model that could do two million, um, per city with whatever it is you do. You open up five cities.

Ali Abdaal 2:04:16 Yeah.

Daniel Priestley 2:04:16 Now you, you know, you, you've got 10 million. Um, let's say you have a two-million-a-year product. You can... You kinda hit a ceiling with that product. You launch a second, third, fourth product. Um, so now you have-

Ali Abdaal 2:04:30 Yeah

Daniel Priestley 2:04:30 ... web development for dentists, web development for, uh, doctors, web development for physiotherapists, web development for chiropractors. So now you're like, da, da, da, da, da. So you're now breaking into-

Ali Abdaal 2:04:41 Yeah.

Daniel Priestley 2:04:42 Yeah.

Ali Abdaal 2:04:43 One thing that, that, like, uh, that continues to surprise me is that r- it seems like regardless of the business model, these numbers still sort of hold true.

Daniel Priestley 2:04:55 Mm.

Ali Abdaal 2:04:56 Like, it's not, uh, you know, it's not that hard to go to 10K a month. Uh, and y- it's, it's, it's easy enough to chart the path, the, the path there. And then the process to 100K a month is also, like... And it seems like at, like, each of these different thresholds, there's, like, new things that need to happen regardless of whether you have a coffee shop or whether you have a, an app or whether you have a YouTube channel or whether you have, like, a consulting business-

Daniel Priestley 2:05:17 Yes

Ali Abdaal 2:05:17 ... almost.

Daniel Priestley 2:05:18 Yes, there are businesses that are easier to scale.

Ali Abdaal 2:05:21 Yeah.

Daniel Priestley 2:05:22 So for example, Score App is an incredibly easy business to scale-

Ali Abdaal 2:05:26 Yeah

Daniel Priestley 2:05:26 ... because we've hit a threshold where the technology's amazing.

Ali Abdaal 2:05:29 Mm.

Daniel Priestley 2:05:29 It's plugged in with AI, and it does incredible things. Everyone who sees it has a jaw-dropping experience. They're like, "Wow." I mean, you saw it before-

Ali Abdaal 2:05:37 Yeah

Daniel Priestley 2:05:37 ... and you were like, "That's cool." Um, we're now at a position where we just need to go into new markets and territories. So we essentially just open up channels. If you wanted to onboard 10,000 new clients tomorrow, we could do it. You know, we just need usernames and passwords for them all. That's not true for coffee shops.

Ali Abdaal 2:05:57 Yeah.

Daniel Priestley 2:05:58 Um, so unfortunately... You know, we talked about the burger, the burger bar.

Ali Abdaal 2:06:02 Yeah.

Daniel Priestley 2:06:02 So you now need to have lots of... Uh, unfortunately, there are businesses that scale exponentially, and the costs stay relatively small. The costs don't scale exponentially.

Ali Abdaal 2:06:14 Yep.

Daniel Priestley 2:06:15 And then there are businesses that scale, and the costs scale with the scale.

Ali Abdaal 2:06:19 Yeah.

Daniel Priestley 2:06:20 And that is r- Like, every few years, there's someone who goes into childcare centers, and they, like... There's some- there's always some entrepreneur who goes into childcare centers and then goes bust, and it happens repeatedly again and again and again and again. I've seen it, like, four times in my career, someone who, like, gets 80 childcare centers and then goes bust. Um, and why? Because it's highly regulated. Uh, it's l- it's every three children needs a carer or four children needs a carer, and you need a certain amount of space per chil- child. So there's all these regulations. So there is no economy of scale. If you wanna have 80 childcare centers, the costs associated are almost 80 times what one is, so it's impossible to get ahead. Software, on the other hand, you spend half a million building software, and then it scales, and you have 10,000 clients, 50,000 clients.

Ali Abdaal 2:07:10 But it's not good as a first business because it's a J-curve.

Daniel Priestley 2:07:12 It's a hard business to get off the ground.

Ali Abdaal 2:07:15 Oh, okay.

Daniel Priestley 2:07:16 It's a hard first business, yeah. Yeah, it's a bit of a, bit of a black belt move but worth it in the end. If you can get, if you can end up in software, media, and tech, those are the, you know, those are the big, big kind of scalable ones.

Ali Abdaal 2:07:30 Yeah. Like, we're sort of in the process of building a productivity app-

Daniel Priestley 2:07:33 And, and also finance-

Ali Abdaal 2:07:34 ... at the moment

Daniel Priestley 2:07:34 ... finance scal- fi-

Ali Abdaal 2:07:35 Oh, yeah

Daniel Priestley 2:07:35 ... finance scales. So, um, doing-

Ali Abdaal 2:07:37 You should become an investment firm or...

Daniel Priestley 2:07:39 Yeah, raising a, raising a $10 million fund is not that much harder than raising a $100 million fund, and raising a billion-dollar fund is not that much harder than raising a $100 million fund. Um, so, you know, there are private equity firms that have 12 people that have a billion dollars worth of assets under management, you know? So finance scales, software scales, IP scales, media scales.

Ali Abdaal 2:08:01 Mm.

Daniel Priestley 2:08:01 Um, so in a perfect world, there are things that, there, there are things that scale much better than-

Ali Abdaal 2:08:06 Yeah

Daniel Priestley 2:08:06 ... than others.

Ali Abdaal 2:08:08 Okay. So if you were me, and we've got this team, 15 people, we don't really wanna go much more than that.

Daniel Priestley 2:08:14 Mm-hmm.

Ali Abdaal 2:08:14 And you're kind of f- f- fairly familiar with our... Uh, essentially, the only product we sell is this YouTuber-themed one, and I've got my productivity-themed book coming out six months from now. What would you be thinking? What sort of chess moves would you be thinking in this, in this board?

Daniel Priestley 2:08:27 Uh, I would be going with the ventures model So the ventures model would be that you have a portfolio approach. So you have a YouTuber Academy for income, and that pays everyone's bills. Um, and that's great, and it's, like, a good, uh, P&L model, profit and loss model. Um, but then the real upside scalability is the partnership. So you do partnerships with ventures. So for example, you find a company that's currently doing 20 million, and you apply your brand and your contacts and your connections, and then they go up to 100 million, and then you, you know, you exit. Um, so an influence for equity model would be amazing. Um, uh, a, um, you know, you're, you're extremely well connected. You've got millions of followers. They trust your judgment. So the... It, it depends upon you having good judgment. You have to be really looking at 30 opportunities before you pick one.

Ali Abdaal 2:09:18 Oh, okay. Yeah.

Daniel Priestley 2:09:19 Right? So that's your job, to pick who you partner with.

Ali Abdaal 2:09:21 Yeah.

Daniel Priestley 2:09:22 Um, you need to be really protective of your audience and say, "Hey, look, I'm not gonna send you a product if it's no good."

Ali Abdaal 2:09:27 Yeah.

Daniel Priestley 2:09:27 Like, if, if I recommend this drink, then trust me, it's a great drink.

Ali Abdaal 2:09:30 Yeah.

Daniel Priestley 2:09:30 Or if I recommend this, uh, app, it's a great app.

Ali Abdaal 2:09:33 Yeah.

Daniel Priestley 2:09:34 Um, so th- this would be the private equity portfolio approach-

Ali Abdaal 2:09:37 Yeah

Daniel Priestley 2:09:38 ... where you put a value on your eq- or you put a value on that partnership. Let's say you value that partnership at half a million, and you say, "Okay, our goal is to do three of those deals per year." Um, and we end up with a portfolio of equity. Um, you know, over the co- coming four or five years, we end up with a portfolio of 30 companies, and as they mature and exit, you know, that's another deal done. And now you, you end up... If you wanna advance that, you could actually have people who would invest alongside you. So you raise a deal-by-deal, um, finance-

Ali Abdaal 2:10:10 Hmm

Daniel Priestley 2:10:11 ... uh, or investment team. So you have your high net worth investors who come in, and, uh, you, you have a half a million worth of influence and a half a million worth of capital, and now you take a good, really substantial chunk with your investors. You charge your investors a two and 20 ride along, so 2% of their money plus 20% of their upside. Um, so for them to ride along with you, you, you do something like that. Anyway, that's-

Ali Abdaal 2:10:36 All of that kind of stuff.

Daniel Priestley 2:10:37 That's where I would take it.

Ali Abdaal 2:10:38 [laughs] That sounds like a total nightmare as well. [laughs]

Daniel Priestley 2:10:42 Well, I, I-

Ali Abdaal 2:10:42 I guess it's, it's just 'cause-

Daniel Priestley 2:10:43 Only 'cause I explained it fast.

Ali Abdaal 2:10:44 No. Yeah. I, I mean, so I was speaking to, um, uh, Sahil Bloom, who you might be familiar with.

Daniel Priestley 2:10:49 Mm-hmm.

Ali Abdaal 2:10:50 Um, he came out... He came over for dinner and a podcast episode of, like, last month, and he's running this model, and he's also buying up businesses and taking equity shares and stuff. And it's his background in investment banking and private equity. It's, it's just a no-brainer. He's like, "Yeah, of course I'm gonna buy this business-

Daniel Priestley 2:11:03 He knows how to do it. Yeah

Ali Abdaal 2:11:04 ... and get an operator to run it, and, like, you know, just get them to report dashboards to me." And I'm like, "Bloody hell, that sounds, sound like a lot of work." But if someone comes to me-

Daniel Priestley 2:11:12 Do you partner with him?

Ali Abdaal 2:11:13 He... Well, y- yeah, we're working on it. [laughs] We have, we have an agency that's launching-

Daniel Priestley 2:11:17 Yeah, there you go

Ali Abdaal 2:11:17 ... tomorrow, I think.

Daniel Priestley 2:11:17 Yep.

Ali Abdaal 2:11:18 Um, but if someone comes to me and says, "Oh, Ali, you know, I really wanna make an online course and it's really hard." And I'm like, "It's easy, just like bang, bang, bang," because it's, 'cause I've done that.

Daniel Priestley 2:11:25 Yeah, exactly.

Ali Abdaal 2:11:26 So, like-

Daniel Priestley 2:11:26 Everything's easy after you've done it.

Ali Abdaal 2:11:28 Yeah.

Daniel Priestley 2:11:28 Um, for me, having multiple business... I remember what it was like having one business, and I, I had this friend Jeremy, Jeremy Harbe, who's amazing, um, and he wrote a great book called Go Do Deals. Uh, Jeremy had multiple businesses. He had 13 companies at that time-

Ali Abdaal 2:11:43 Yeah

Daniel Priestley 2:11:43 ... and he had, like, a jet and, you know, like, houses around the world and all this sort of stuff. I just... How is it, how is it you have multiple companies? And he's like, "Honestly, it's easier than having one." I'm like, "That makes no sense."

Ali Abdaal 2:11:55 [laughs]

Daniel Priestley 2:11:55 And now I'm that dude.

Ali Abdaal 2:11:56 [laughs]

Daniel Priestley 2:11:59 So, um, yeah, you, you would be the same. I w- I imagine after you've done a few deals and you're like, "Actually, this totally... I'm, I'm an investor in this company, uh, you know, and here's how it works and here's the dashboards. I'm, I'm copied in on quarterly updates." Awesome. Um, and I bet you, like, do three or four of these and you're like, "We could do 30 of these. It would be super scalable."

Ali Abdaal 2:12:21 Hmm. Okay.

Daniel Priestley 2:12:22 And the whole investments alongside, if you... You would really only need one billionaire friend, right?

Ali Abdaal 2:12:30 Hmm.

Daniel Priestley 2:12:30 You probably got a billionaire friend, and you would just need that one person to say, "Yeah, I'll, I'll, like, allocate, you know, 10 million worth of capital towards these deals on a deal-by-deal," um, and I'm happy with the two and 20 deal, so, 'cause that's the standard deal. Um, so-

Ali Abdaal 2:12:46 Yeah

Daniel Priestley 2:12:46 ... yeah, I'll r- I'll ride along. Yeah.

Ali Abdaal 2:12:48 Yeah.

Daniel Priestley 2:12:48 Great. And, and it's, it's, you'd... It'd be hard to structure it the first time, and then it would be easy to replicate.

Ali Abdaal 2:12:54 Yeah. Damn.

Daniel Priestley 2:12:56 [laughs] That's, that's one, that's one avenue.

Ali Abdaal 2:12:59 Yeah.

Daniel Priestley 2:12:59 That's, that's one avenue you could go, go down.

Ali Abdaal 2:13:02 Interesting. Okay.

Daniel Priestley 2:13:04 So yeah, we got there. We actually-

Ali Abdaal 2:13:06 We got there

Daniel Priestley 2:13:06 ... got there to millions a month.

Ali Abdaal 2:13:07 Yeah.

Daniel Priestley 2:13:08 Yeah, like, 'cause you would actually have millions a month flowing through the businesses. Like, um, and if you wanted to, you could also build up to millions a month, but you don't want to. Um, so you consciously choose to stop, but if you had a portfolio, you'd be up to millions a month.

Ali Abdaal 2:13:22 Hmm.

Daniel Priestley 2:13:22 So we actually went f- we went through the journey. [laughs]

Ali Abdaal 2:13:25 Yeah. And the journey's not going anywhere, really. I mean, right now. We'll just keep... Well, uh, no. You know, we'll just keep building our assets. Building the assets is fun.

Daniel Priestley 2:13:34 Yes.

Ali Abdaal 2:13:34 Writing, writing books is fun. Making courses is fun. Making courses that require ongoing customer support is less fun right now-

Daniel Priestley 2:13:40 Mm-hmm

Ali Abdaal 2:13:40 ... because we haven't figured out a way to scale that in a way that doesn't add more people to our team.

Daniel Priestley 2:13:43 Mm-hmm.

Ali Abdaal 2:13:43 But certainly making courses and then having them on autopilot, making passive income while I sleep is really fun, and just keep doing that. And then, yeah.

Daniel Priestley 2:13:51 So-

Ali Abdaal 2:13:51 We've slowly started dabbling with the whole equity-

Daniel Priestley 2:13:53 Can, can I-

Ali Abdaal 2:13:53 Yeah.

Daniel Priestley 2:13:54 Yeah, let me, let me just sell you on the equity thing.

Ali Abdaal 2:13:56 Yeah, please.

Daniel Priestley 2:13:56 One last thing.

Ali Abdaal 2:13:57 Yeah.

Daniel Priestley 2:13:58 When a business sells, it normally sells for multiples of, like, years' worth of profit or years' worth of revenue.

Ali Abdaal 2:14:05 Sure.

Daniel Priestley 2:14:05 Right? So if it's possible-

Ali Abdaal 2:14:08 Yeah

Daniel Priestley 2:14:08 ... to build a course that does millions-

Ali Abdaal 2:14:10 Yep

Daniel Priestley 2:14:11 ... then theoretically, it's possible to partner with a business that does millions.

Ali Abdaal 2:14:15 Yep.

Daniel Priestley 2:14:15 And then when that business sells, it sells for, like... A, a very low value exit might be seven years or eight years' worth of profit in one transaction.

Ali Abdaal 2:14:24 Hmm.

Daniel Priestley 2:14:25 And if it's a software company, it's probably gonna sell for seven to 10 times the revenue. So if you could build a two million a year SaaS business, you might sell that for like, you know, 10 to 14, 15 million, uh, maybe 20 million.

Ali Abdaal 2:14:40 [laughs]

Daniel Priestley 2:14:42 So, like these things scale up a lot faster than courses.

Ali Abdaal 2:14:47 That's true.

Daniel Priestley 2:14:49 Um, if you look on the rich-

Ali Abdaal 2:14:50 But I'm blink- I'm blinkered to courses 'cause it's what I know, yeah.

Daniel Priestley 2:14:52 If, if you look at the rich list, there's not a lot of course creators.

Ali Abdaal 2:14:55 No.

Daniel Priestley 2:14:55 [laughs] But there's a lot of people who buy and sell companies.

Ali Abdaal 2:14:59 Yeah.

Daniel Priestley 2:15:00 So yeah, keep being, keep an open mind to it.

Ali Abdaal 2:15:02 Yeah.

Daniel Priestley 2:15:02 But you've got plenty of time up your sleeve.

Ali Abdaal 2:15:03 Yeah. Maybe that's the next, the next game, buying and selling companies. We'll see. That's what, uh, Cody Sanchez was trying to, well, was trying to sell me on as well. She's done like 26 different companies-

Daniel Priestley 2:15:13 Yeah-

Ali Abdaal 2:15:13 ... and stuff, yeah

Daniel Priestley 2:15:14 ... she's, she's doing that and, and she... Yeah, I mean, it's worth watching and seeing how, how she... And Alex Hormozi's doing that.

Ali Abdaal 2:15:19 Oh, yeah.

Daniel Priestley 2:15:19 Yep.

Ali Abdaal 2:15:20 Okay, 'cause there's no-

Daniel Priestley 2:15:20 Um, what do you think about that whole journey, and does it actually start sounding predictable? 'Cause at the beginning it's like, hey, like is this actually predictable? Like, does it sound like it's a predictable set of steps? 'Cause I'm so close to it. To me it-

Ali Abdaal 2:15:33 Yeah. It's,

Ali Abdaal 2:15:34 it's, it's weird because it, like this YouTube thing that I've built I feel isn't, isn't a real business. Is it... Or, or it's, it doesn't have the same characteristics that one of the... Like I've never had to, I've literally never in my life done a sales call.

Daniel Priestley 2:15:48 Yeah. What do you think a real business is?

Ali Abdaal 2:15:50 Uh, like, well, I don't know, just someone that does a real thing.

Daniel Priestley 2:15:54 [laughs] You do a real thing.

Ali Abdaal 2:15:57 No, but, uh, but I guess given that I've never done a sales call in my life, to me the idea of a sales call feels like, oh, that feels hard.

Daniel Priestley 2:16:04 You're doing the key person of influence role.

Ali Abdaal 2:16:06 Yeah.

Daniel Priestley 2:16:06 You're, you're creating the opportunity. Someone's doing the sales calls.

Ali Abdaal 2:16:08 Oh, yeah. That, that key person of inf- influence role-

Daniel Priestley 2:16:10 Yeah

Ali Abdaal 2:16:10 ... feels really easy. I'm just like-

Daniel Priestley 2:16:11 Yeah

Ali Abdaal 2:16:11 ... yeah, easy. Of course.

Daniel Priestley 2:16:12 Someone, someone's doing the sales calls.

Ali Abdaal 2:16:13 Yeah.

Daniel Priestley 2:16:14 So what you're doing is creating the space for those sales calls to happen.

Ali Abdaal 2:16:17 Yeah.

Daniel Priestley 2:16:17 Um, it's... Look, if you go to KPMG-

Ali Abdaal 2:16:20 Mm

Daniel Priestley 2:16:20 ... there's someone called a partner, and the partner opens up big relationships and then passes them down to the analysts-

Ali Abdaal 2:16:26 Yeah, sure

Daniel Priestley 2:16:26 ... and all that sort of stuff, and it's the same, it's the same deal.

Ali Abdaal 2:16:29 Yeah.

Daniel Priestley 2:16:29 You know, the Goldman Sachs guy, he's out there like signing up the company that wants to float and then passing it to the team to like pin it down-

Ali Abdaal 2:16:38 Yeah

Daniel Priestley 2:16:38 ... um, and do, do the thing. You are the key person of influence who creates a wake of opportunity-

Ali Abdaal 2:16:43 Mm

Daniel Priestley 2:16:43 ... and you've got a, a team who know how to monetize that opportunity. That's the relationship.

Ali Abdaal 2:16:47 Mm.

Daniel Priestley 2:16:47 That's the real business. So you're, you're doing the right thing.

Ali Abdaal 2:16:51 Mm.

Daniel Priestley 2:16:51 This is, this is [laughs] -

Ali Abdaal 2:16:52 Yeah, I guess so, yeah

Daniel Priestley 2:16:52 ... this is working.

Ali Abdaal 2:16:53 Yeah, it's working.

Daniel Priestley 2:16:54 Um, and you-

Ali Abdaal 2:16:55 It's pretty good

Daniel Priestley 2:16:55 ... you do have a, you've got a team.

Ali Abdaal 2:16:56 Yeah.

Daniel Priestley 2:16:57 You got a company. You've got like pro-

Ali Abdaal 2:16:59 We pay tax

Daniel Priestley 2:16:59 ... you pay tax.

Ali Abdaal 2:17:00 We, we... I look at our management accounts every month. [laughs]

Daniel Priestley 2:17:02 You generate media, intellectual property, technology.

Ali Abdaal 2:17:05 Yeah.

Daniel Priestley 2:17:06 Um, yeah. Like all of these things are proper business things.

Ali Abdaal 2:17:10 Damn.

Daniel Priestley 2:17:10 [laughs]

Ali Abdaal 2:17:11 But no, I think, I think breaking it down like this definitely does make it seem more predictable. It also makes it feel like, oh, okay, like, like, you know, that, that realization I had at, at the start was, that was like, ah, it's not as, it's not like an easy thing of just like, oh, just, just learn to code and build a software in your pajamas in your bedroom and suddenly you're making 10K a month.

Daniel Priestley 2:17:29 Yeah, it's hard. The whole thing is hard.

Ali Abdaal 2:17:31 Yeah.

Daniel Priestley 2:17:31 But that's, but, like the payback is huge.

Ali Abdaal 2:17:33 Yeah.

Daniel Priestley 2:17:34 Like millions, millions and millions. You, you sell a co- If you sell a company, you earn what most people earn in, in their entire career-

Ali Abdaal 2:17:41 Yeah

Daniel Priestley 2:17:41 ... in one hit. So like if you take someone who's on 50 grand times 40 years, what's that, two million?

Ali Abdaal 2:17:48 Yeah.

Daniel Priestley 2:17:49 So like-

Ali Abdaal 2:17:50 Pre-tax. Yeah

Daniel Priestley 2:17:50 ... yeah. And they, they pay tax.

Ali Abdaal 2:17:52 Yeah.

Daniel Priestley 2:17:52 Like that's a career. And you don't have to sell it... Like a, a two million exit is not a big exit.

Ali Abdaal 2:17:58 Yeah.

Daniel Priestley 2:17:59 Um, so the entrepreneurship game has upside.

Ali Abdaal 2:18:02 Mm.

Daniel Priestley 2:18:03 But the downside is stress. The downside is complexity.

Ali Abdaal 2:18:06 Mm.

Daniel Priestley 2:18:07 The downside is you see someone reading fiction and you think, "Wow-

Ali Abdaal 2:18:09 Mm

Daniel Priestley 2:18:09 ... I wish I could read." You know, you, you have bigger carrots and bigger sticks as an entrepreneur.

Ali Abdaal 2:18:15 Mm.

Daniel Priestley 2:18:15 You know what I mean? Like, uh, like everything that motivates humans is carrot and stick.

Ali Abdaal 2:18:19 Yeah.

Daniel Priestley 2:18:19 And the sticks are bigger and the carrots are bigger. So y- you know, that's the, that's the path. And it typically is that rough roads end smooth and smooth roads end rough. So people who have a really nice easy life typically struggle towards the end.

Ali Abdaal 2:18:35 Mm.

Daniel Priestley 2:18:36 Um, and people who put in the grit at the beginning typically get a breakthrough and then upside scalability. So, you know, you gotta pick, pick which hard you want.

Ali Abdaal 2:18:46 Yeah. Why don't you just read fiction? You've got enough money.

Daniel Priestley 2:18:50 [laughs] Um, because of the carrots and the sticks. At the moment I've got a software business-

Ali Abdaal 2:18:57 Yeah

Daniel Priestley 2:18:58 ... and the upside is 100 million plus, and I can't stop thinking about building a great company. I'm really excited by what we do. Um, it's a huge opportunity as a business, but it's also a fun business. We, we, we're building quizzes, right?

Ali Abdaal 2:19:12 Yeah.

Daniel Priestley 2:19:12 And we're using AI, and we're doing data.

Ali Abdaal 2:19:14 Yeah.

Daniel Priestley 2:19:14 And we've got this amazing team in, in, um, Ukraine who, if it wasn't for us, they would be enrolled in the army and they'd be on the frontline.

Ali Abdaal 2:19:21 Mm.

Daniel Priestley 2:19:21 And like, you know, it's amazing that we have this camaraderie with that team, and we have like the hopes and dreams of our, like team-

Ali Abdaal 2:19:30 Mm

Daniel Priestley 2:19:30 ... and, and like it's a game worth playing.

Ali Abdaal 2:19:32 Yeah.

Daniel Priestley 2:19:33 So if I was a professional athlete, yeah, look, maybe I would... Maybe Roger Federer