Alex (10:10)
Okay, got it. So the thing with membership, who here is a recurring revenue business? Well then this will. I'm going to go a little deeper on this because it's probably valuable for him, for you, in order to make a recurring revenue business actually recurring. One of the big mistakes in the education business, which is the way you're in right now, is that people will take something that is inherently valuable and try to bill for it like it's consumable. So education has super high one time value, right? The day before you know how to advertise, Advertising is unbelievably valuable. The day after you know how to advertise. Why would I pay for something I already know how to do? It goes from huge to zero. That is the problem with education in general. Everybody who has an education business wants to build continuity. Continuity is very hard to build. If you purely have education as the primary value proposition in a school community or any kind of recurring revenue business, you need to create or at least demonstrate consumable value. I'll give you a couple examples of this. So there is a super low churn community that does 3D printing in school. What they do is they find the hottest trending items and then they create the 3D blueprint. I don't know how this stuff works, but like what are the 3D blueprints? And then every week they upload those blueprints to their community. And so because it's trending, it's new, it's consumable. You consume this week's things and next week's. The trends are different. Right? News in and of itself is consumable. Last week's news is no longer valuable. This week's news is. Which is why new subscriptions do work. Right. Different example, there's a real estate business that did wholesale. They would find all the hot deals in an area, pre vet them, do their calculation and say These are all the hot list. And so every week at every local market, people in their community would see the building. If they liked it, they already knew, pre vetted. So that creates this consistent thing that gets consumed. And then next week there'll be new deals and some of those deals are gone. Like Gym Launch, we made new ads that we tested every single month that we would then give to the gym owners. So rather than spending money, wasting money on production and testing ads that don't work, we would pre film test and hand them only the winners. It would just take winning ads and run them. But what do you need next month? More winning ads. And so that's what gave Gym Launch the super high margins that it had and kept it sticky because it was media functionally rather than education. And so we sold the box which is like this is the gym launch system. This is how you run the gym. This is the price point, the sales process. Once you know the sales process, you know the scripting of the bundles, you have the white label stuff, you got it. It's zero value now. So what we do is we want to set like if you have inputs, you've got black box and then you've got output being money, right? This is your one time thing that's very valuable. You can only charge for it once. This is much smaller. You charge for it on a recurring basis. You sell the inputs to the machine. So with your business you'll probably have to niche down which is why niching is so valuable because you can actually create the machine and then sell the inputs. Like I couldn't make ads for 100 different businesses because they're all different. I can't test 100 different businesses. If you have a super new or beginner network, you teach them one, two or three different business models that would work and then you sell the inputs. Same way if you have medium and larger business owners, it has to be about something different, which is probably going to be network, it's going to be access group negotiated discounts that you can do on behalf of everyone. And that is going to be valued much less than something that's one time that's going to immediately make them more. Sometimes I think this is where a lot of entrepreneurs make mistakes is that there needs to be a very big discrepancy between what you charge that one time versus the true willingness to pay for the small recurring revenue component of the business. That's okay, provided it's sticky, right? Because if you charge $10,000 up front and then $500 a month after that, it probably would be relatively sticky if someone's willing to pay 10 and it's $500 a month. As long as the $500 a month was still like 10,000 buys you some time. But as long as the ongoing value surpasses the 5, usually by 3 or 4x, then you're good to go. So I would really just back into, how can I provide value to all these people? And ideally, in what way can I make it so that each additional member does not detract or dilute the value the community, but actually adds value functionally? That sort of network effect. Is that help?
