0:00:08 Hey there, it’s Steven Dugner. Before today’s show, two quick things. Number one, on February
0:00:14 13th, we are putting on a live Freakonomics radio show in Los Angeles. Come see us. As
0:00:19 of this recording, there are some tickets left, but not many, so don’t dawdle. Go to
0:00:27 Freakonomics.com/LiveShows, one word, to get tickets. And number two, we need your voice
0:00:32 for an episode that we are in the middle of producing. It’s about sludge, not the physical
0:00:37 sludge that gunks up machinery and things like that. I am talking about the administrative
0:00:43 and bureaucratic sludge that can make it hard to do simple things like cancel the subscription
0:00:49 or pick the best healthcare coverage or sign up for some government service. If you have
0:00:55 a good sludge story, for example, we want to hear it. Use your phone to record a short
0:01:02 voice memo and send it to radio@freakonomics.com. Please include your name, where you live,
0:01:08 what you do, and tell us what’s your sludge story. How did you respond to this sludge?
0:01:14 And do you think it was accidental sludge or intentional? Make sure you record your voice
0:01:22 memo in a quiet place and again, send it to radio@freakonomics.com. Thanks much, Lee.
0:01:30 And now, here is today’s episode.
0:01:35 The National Football League, a phenomenally successful piece of the sports and entertainment
0:01:41 industry, is largely built around the forward pass. That’s when the quarterback, the star
0:01:46 of the show, throws a ball downfield to one of his sprinting receivers who tries to catch
0:01:52 the ball and sprint even further down the field. This can be a very exciting thing to
0:01:58 watch. In recent years, the passing game has gotten even more exciting and more sophisticated
0:02:05 and it has helped drive the league’s massive growth. But if you ask football fans of a
0:02:11 certain age who they idolized when they were kids, it probably wasn’t a wide receiver or
0:02:19 even a quarterback. It was probably a running back.
0:02:25 Tony Dorsett was my favorite player. I had the uniform, the helmet. The running backs
0:02:33 were bigger stars during my childhood than the quarterbacks. My favorite player of all
0:02:43 time was Barry Sanders. The day that he retired, I remember crying. I had a Ricky Waters jersey
0:02:47 when he was with the Eagles actually. I wore it on the first day of school, I think of
0:02:53 first or second grade.
0:02:58 The three men we just heard from, we will meet them later. Two of them are former NFL
0:03:03 running backs themselves and the other has represented many running backs as an agent.
0:03:09 The running back I loved as a kid was Franco Harris of the Pittsburgh Steelers. To be honest,
0:03:14 I was a little obsessed with Franco. We don’t need to get into the details here, but I did
0:03:21 once write a book about him called Confessions of a Hero Worshipper. Like I said, a little
0:03:27 bit obsessed. I liked everything about Franco, the way he carried himself off the field,
0:03:32 especially how he ran. Some running backs, like Jim Brown, were known for their power
0:03:38 for running people over. Others like Gale Sayers were so fast and graceful that it was hard
0:03:44 to get a hand on them. Franco was somewhere in the middle, strong but elusive, a darter
0:03:50 and a dodger. In football, every play is a miniature drama packed into just a few seconds,
0:03:59 22 athletes moving at once, as complicated as a blueprint, as brutal as war, as delicate
0:04:05 as ballet. A passing play is a bit of a magic trick. The quarterback and receiver try to
0:04:11 trick the downfield defenders into being in the wrong place at the right time. A running
0:04:17 play is more predictable, since the running back has to get through a wall of massive defenders.
0:04:24 If he does, and breaks free into open space, that is a special kind of thrill.
0:04:29 Back when Franco Harris was in the league, and for a long time after, many of the game’s
0:04:35 biggest stars were running backs, and they were paid accordingly. If you go back 30 years
0:04:41 and take the average salary of the top players by position, running backs ranked second, just
0:04:48 behind quarterbacks. This year, running backs ranked thirteenth. So what happened? Everyone
0:04:53 knows the NFL has become much more past happy these last few decades, but still, how did
0:04:59 running backs fall so far? As it turns out, I wasn’t the only one with these questions.
0:05:04 I was really interested in why salaries of running backs have declined and why they
0:05:08 seem to be less important parts of the offense than I remembered.
0:05:14 Roland Fryer, an economist at Harvard and a friend of Freakonomics, recently wrote
0:05:18 a Wall Street Journal column called The Economics of Running Backs.
0:05:23 It’s been kind of a slow drip, a slow decline of running backs, and then you think, why?
0:05:24 What is it?
0:05:29 I asked Roland if he would sit for an interview to help answer those questions. He said yes,
0:05:36 but he had another idea that he insisted would be even more fun.
0:05:41 So here’s the thing that really puzzles me. When I called you up and asked if we could
0:05:45 talk about your Wall Street Journal column and make an episode based on this idea, you
0:05:53 said yes, and I would actually like to co-host that episode. Can you explain that? I know
0:05:59 very few Harvard economists or anybody really who’s interested in co-hosting a grubby little
0:06:00 podcast.
0:06:04 I’ve always had a crush on you, Steven, so I just want to get closer.
0:06:11 Well, other than that, I guess the serious question I’m asking is, what kind of questions
0:06:16 do you hope to answer or explore as we move forward? You’ve got some data, you’ve talked
0:06:21 to a bunch of people, but plainly, your appetite is deeper than that. Why? What do you want
0:06:22 to know?
0:06:26 I think it’s such an intriguing question. It’s one of these things where your intuition
0:06:32 and your eyeballs can oftentimes be inconsistent with what the actual data tell us, where does
0:06:38 our intuition fail us? I think it does it a lot in life. I’m just fascinated by human
0:06:44 behavior generally, but how we think about the use of my favorite subject economics when
0:06:52 it comes to issues like valuing positions in a game that’s as complex as football.
0:07:01 So, today on Freakonomics Radio, Roland Fryer and I explore the decline of the running back.
0:07:05 We speak with one of the analytics gurus who sparked the revolution.
0:07:12 Once I built that model, it was very, very clear that passing was far superior to running.
0:07:16 We will hear an agent explain why the position is so difficult.
0:07:23 The running back is the most violent position in the most violent sport on the planet.
0:07:26 And of course, we will get the running back perspective.
0:07:30 The quarterback got all the credit for taking it to the Super Bowl, and he did the bare minimum.
0:07:34 The upcoming Super Bowl, the Philadelphia Eagles against the Kansas City Chiefs, will
0:07:38 feature a running back who had a historically great season.
0:07:42 So, does this mean we’re looking at a running back renaissance?
0:07:44 I don’t think so.
0:08:02 The causes and consequences of the running back decline starting now.
0:08:08 This is Freakonomics Radio, the podcast that explores the hidden side of everything with
0:08:18 your host, Steven Dubner.
0:08:23 So look, I’m of two minds about this, because I have this job at Harvard.
0:08:29 I’d give it away in a second if I could have been an NFL player, right?
0:08:30 Roland Fryer is a Harvard economist.
0:08:35 He has also co-founded a few companies, and he’s won some major awards for his research
0:08:38 on education and policing.
0:08:42 You may remember him from an episode we made a few years ago called “Roland Fryer Refuses
0:08:45 to Lie to Black America.”
0:08:50 But when he was a kid, he did not dream of being an economist.
0:08:54 In the early 1980s, when the running backs Eric Dickerson and Walter Payton were tearing
0:09:01 up the NFL, Roland was doing the same in Pop Warner football.
0:09:03 I started playing football at age five.
0:09:09 The coach asked me to race their fastest player, and I won, and he said, “You’re on the team.”
0:09:13 In Texas, you play flag football five and six years old, and seven years old onwards,
0:09:15 you strap on the pads and go to work.
0:09:19 The coolest thing about playing was that they had a legitimate draft.
0:09:21 You’d run a 40-yard dash.
0:09:22 You’d kick the ball.
0:09:23 You’d throw the ball.
0:09:24 You’d catch some balls.
0:09:27 They had a little shed there at the fields.
0:09:32 They’d put all your measurements up, and then the coaches would select by lottery who went
0:09:33 first.
0:09:37 So we cared about where we were drafted as early as eight or nine years old.
0:09:39 And how did you do in the draft?
0:09:42 Oh, man, I was always in the one drafting.
0:09:44 So what was your view of the running back position then?
0:09:47 Did you just feel like you were king of the hill?
0:09:50 Of course, because it was Texas Pop Warner football.
0:09:55 My coaches early on told me my real talent was what they called running to the light,
0:10:00 that you would just figure out where the gaps were and go, and it was all intuition.
0:10:02 You’d score five, six touchdowns a game.
0:10:03 I loved it.
0:10:12 I absolutely loved playing football, and running backs were revered back then.
0:10:16 It wasn’t just back then in the early ’80s that running backs were revered.
0:10:21 They had been at the center of the game since it began in the mid-1800s.
0:10:27 It wasn’t until 1906 that the forward pass was allowed in professional football.
0:10:33 The NFL was founded in 1920, and for its first few decades, passing was rare.
0:10:38 On the vast majority of plays, the ball was snapped to the quarterback who would then
0:10:44 hand it off to a running back who would follow the blocks of his offensive linemen to try
0:10:46 to get through the defensive linemen.
0:10:49 It was not necessarily exciting.
0:10:53 Football was a slow and grinding affair.
0:10:57 Three yards and a cloud of dust was how people described it.
0:11:01 Perhaps not coincidentally, football was not very popular either.
0:11:05 The big American sports back then were baseball and boxing.
0:11:10 It wasn’t until the 1960s and ’70s with the rise of the passing game that football started
0:11:14 to become the juggernaut it is today.
0:11:19 But for at least a couple more decades, running backs remained the star attraction.
0:11:24 The position has always required a certain amount of physical sacrifice.
0:11:26 Every part of football is physical, right?
0:11:30 But when you’re running the ball, it’s not just the person in front of you that you’re
0:11:31 going into.
0:11:34 People are coming from the side and taking hits at knees.
0:11:35 You can get rolled up on.
0:11:38 There’s a lot of bodies there.
0:11:43 So how long ago did you start thinking about this decline in the value of the running back?
0:11:50 Years because it’s been a slow decline of running backs, and it’s my favorite position.
0:11:55 I thought, why are my boys being paid less when these quarterbacks who aren’t nearly
0:11:57 as tough as running backs are being paid more?
0:12:03 I grew up in the era of Barry Sanders, Walter Payton, Emmett Smith.
0:12:07 I’ve always liked these really, really explosive running backs just because they look like
0:12:09 pure athletes.
0:12:12 So the non-economists in me wanted them to be paid more.
0:12:17 The economists in me understands that marginal value is what matters, and that’s what’s happening.
0:12:20 So Fryer put his research skills to work.
0:12:25 The first thing to do was to walk through and just verify those basic statistics.
0:12:30 Look at the salaries as a share of total spend of running backs relative to quarterbacks.
0:12:33 And of course, that’s what you find out.
0:12:37 You can verify the intuition very quickly that the proportion of spend for running backs
0:12:41 has gone down over time and quarterbacks much higher.
0:12:43 And not just quarterbacks much higher.
0:12:45 Everybody else on the offensive team.
0:12:46 Everybody.
0:12:50 And so the running backs, they’ve had the biggest drop relative to any other position.
0:12:57 This season, the average salary of a starting quarterback in the NFL was just over $30 million.
0:13:02 The average for starting running backs, $6 million.
0:13:06 There are still plenty of running backs who are considered superstars, Saquon Barkley,
0:13:12 Derek Henry, Josh Jacobs, Christian McCaffrey, but they’re not paid like superstars.
0:13:17 None of those four are among the five highest paid players on their team.
0:13:18 Why not?
0:13:22 Roland Fryer wondered whether this was a supply story or a demand story.
0:13:27 In other words, were running backs just not as good as they used to be or did teams no
0:13:30 longer value what running backs had to offer?
0:13:33 So the first thing I did was test a bunch of supply side theories.
0:13:39 We went and collected all the data we could on passing yards, running yards over the years,
0:13:40 by team, et cetera.
0:13:44 But also, we needed to understand the characteristics of the players.
0:13:49 So we looked at combine statistics and all the data we could collect from there in terms
0:13:54 of 40 speed, three cone, drill speeds, which is a measure of explosiveness, bench press,
0:13:55 all those kinds of things.
0:14:00 The NFL Combine is a showcase where teams assess the abilities of the college players
0:14:02 they are looking to draft.
0:14:08 And what we found was that running backs in terms of their abilities in the combine have
0:14:09 not changed.
0:14:15 The supply going in has not changed, and importantly, because it is a team sport, the supply of
0:14:18 the other people around them hasn’t changed much.
0:14:25 But what has changed is the expected value of a passing play relative to a running play.
0:14:30 The NFL and the teams want to maximize wins, maximize revenue.
0:14:32 And the way you do that is that you score a lot of points.
0:14:35 The way you score a lot of points is that you pass the ball more.
0:14:36 Pretty simple.
0:14:38 Is it that simple?
0:14:42 To find out, we wanted to hear from some running backs.
0:14:44 Roland took the first interview.
0:14:45 Are we ready?
0:14:46 Yeah.
0:14:53 One, two, three, four, eggs, turkey bacon, never pork, little pancakes, light syrup, OJ,
0:14:54 you know.
0:14:56 So just give me your name and what you do.
0:14:58 My name is LeShaw McCoy.
0:15:03 I’m an ex NFL all decade running back for the Eagles, the Bills, the Chiefs, and the
0:15:04 Bucks.
0:15:09 And now I’m on Fox with the facility five day week show.
0:15:12 Tell me about your early memories of playing running back.
0:15:15 So I was about five years old.
0:15:17 You post a play at six, but I loved the game so much.
0:15:20 I lied to him until I was six when I was really five.
0:15:21 We all hitting at five.
0:15:22 I mean, we had pads on.
0:15:23 I don’t want to call it hitting.
0:15:24 We had pads on.
0:15:25 Back in the day, man, it was different.
0:15:28 When we’re hanging out in the neighborhoods, we would call this thing free for all.
0:15:32 It would be like seven, eight kids, and we would throw the ball, and one dude had to
0:15:34 make all eight guys miss.
0:15:38 So tell me what I want people to hear from you.
0:15:39 Like what is like playing running back?
0:15:46 I mean, what part of it is mental, physical, how much of it can be taught versus instincts?
0:15:51 It’s one of the most unique positions on the field because you’re the farthest one back.
0:15:54 So you see everything going on.
0:15:57 And as a running back, you have a job to do every single play.
0:16:01 Wire receivers, they can take a playoff, but running backs don’t have that because we’re
0:16:07 either running the ball or we’re blocking or we’re in the passing routes.
0:16:11 One part of it is really the skill, natural gifts from God.
0:16:13 Another part is studying and learning.
0:16:18 And I tell other young backs now is let your natural instincts happen, right?
0:16:23 But being a student of the game, learning like, okay, every defense has a weak point.
0:16:25 Your job is where you might define that.
0:16:29 Tell me in your view, why is the running back market like it is today?
0:16:32 I mean, do you feel like the current situation is unfair?
0:16:34 Do you feel like it’s fine?
0:16:35 I hate it.
0:16:36 It’s unfair.
0:16:41 It’s unfair because you’re telling me that you’d be a great difference maker as a running
0:16:42 back.
0:16:47 And because I don’t play quarterback, I can’t get paid the right value for my position.
0:16:52 You’re telling me that because I don’t play quarterback, I got to play elite level every
0:16:54 year to get elite money.
0:17:01 But the quarterback can play above average for years and one year be pretty good.
0:17:03 And now you’re about to get elite money.
0:17:04 Think about that.
0:17:08 Guys like Josh Jacobs, really good running back, played on bad teams and still played
0:17:09 well.
0:17:12 In his last year with the Raiders, he said, yo, you know, I led the league in rushing
0:17:15 and it didn’t offer me a contract.
0:17:19 Can you imagine the world where the quarterback leads the league in passing yards and he don’t
0:17:21 get offered a contract?
0:17:26 But on the other hand, I don’t see any Super Bowl winners in the last 20 years with a mediocre
0:17:29 quarterback, maybe Brad Johnson of the Tampa Bay Bucks.
0:17:35 I see several with average running backs and really good quarterbacks.
0:17:39 Is that a reason that the quarterback position is valued more?
0:17:43 Well, it’s tricky because the few quarterbacks in the last five, six years, these guys been
0:17:45 like all pro quarterbacks.
0:17:51 Brady, he’s still one in there, Stafford’s still one in there, Mahomes got three in there.
0:17:54 These ain’t this regular guys is winning Super Bowl’s.
0:17:58 In 2019, I was blessed to be with the Kansas City Chiefs and I won a championship with
0:17:59 them guys.
0:18:02 Pastor Mahomes have to come back in the fourth quarter to win that game.
0:18:05 But then I look across the field, we’re playing the Niners.
0:18:11 The whole week, the game preparation was all we got to do was get the third down.
0:18:12 Why is that?
0:18:18 Because we want this quarterback that was paid all this money to throw the ball on third
0:18:19 down.
0:18:20 His name was Jimmy G.
0:18:21 That’s who that was.
0:18:26 The brother threw like 40 some passes, the whole playoffs and the undrafted running backs
0:18:27 carried them.
0:18:31 The quarterback got all the credit for taking to the Super Bowl and he did the bare minimum.
0:18:33 Oh, we go to New York.
0:18:41 A dude like Saquon Barkley can be that good and you rather pay Dan Jones.
0:18:47 How the hell is that fair?
0:18:52 This pullback here just in case you haven’t been following the recent psychodrama with
0:18:55 the New York Giants that McCoy was talking about.
0:18:59 Saquon Barkley is a name that comes up again and again in the argument about the value
0:19:05 of a running back in part because of the monster season he’s had this year with the Eagles.
0:19:06 But it’s more interesting than that.
0:19:11 The Giants took Barkley in the 2018 draft with the second overall pick.
0:19:15 His five seasons in New York range from good to very good.
0:19:20 He was hurt a few times and the Giants offensive line was weak, but he was still considered
0:19:22 a top running back.
0:19:25 The Giants chose to not offer him a new contract.
0:19:28 Instead they use what’s called a franchise tag.
0:19:33 That’s an NFL rule that allows a team to keep a good player for one year at a relatively
0:19:39 high salary rather than letting him become a free agent and pursue a longer term deal.
0:19:44 While the Giants had Barkley on this one year hold, they gave their quarterback Daniel
0:19:49 Jones a four-year contract averaging $40 million a year.
0:19:53 When Barkley became a free agent, he left the Giants and signed a three-year contract
0:19:59 with the Philadelphia Eagles for about $12 million a year, so less than a third of what
0:20:01 Daniel Jones was being paid.
0:20:05 And how did Jones and Barkley do this year?
0:20:10 Barkley had one of the best seasons an NFL running back has ever had and his Eagles are
0:20:11 in the Super Bowl.
0:20:18 Daniel Jones played so badly that the Giants benched him and then released him.
0:20:22 Like LeSean McCoy asked, “How is that fair?”
0:20:24 Well, “fair” may not be the right word.
0:20:32 The real issue is value, the value of a running play versus the value of a passing play.
0:20:38 The run-pass balance, it was this perennial question, do teams run too often or they not
0:20:40 run often enough?
0:20:45 What is Brian Burke, a sports data scientist with ESPN?
0:20:49 And so there was this question and so people came along and they started to analyze the
0:20:52 question and they didn’t really have the right tools.
0:20:57 So Brian, the reason I was really eager to speak with you is that Roland wrote this piece
0:21:02 in the Wall Street Journal about the decline of running back salaries.
0:21:09 And I’ve been told that if we had to point to one person in the universe who is perhaps
0:21:13 most responsible for that decline, it might be you.
0:21:16 Do you want to claim that credit or blame?
0:21:18 I won’t argue against it.
0:21:25 I was part of a larger movement that I may have been at the forefront of it, but I certainly
0:21:26 wasn’t alone.
0:21:29 Describe your role in that larger movement then.
0:21:35 My role in this was my hobby, which was football stats and what eventually became known as
0:21:36 analytics.
0:21:40 Now, football stats were only a hobby at the time because you were a U.S. Navy pilot, correct?
0:21:41 Yeah.
0:21:46 Went to flight school, made it into F-18s, flew single-seed fighters for my career in
0:21:47 the Navy.
0:21:52 They sent me to Monterey to grad school and that’s where I learned my stats.
0:21:56 I thought this is completely useless, like how am I ever going to use this in the Navy?
0:22:00 But once I got out of the Navy, I thought, gosh, the level of analysis in football is
0:22:01 so bad.
0:22:04 What were your early jobs between getting out of the Navy and doing what you do now?
0:22:06 I have to be a little bit careful.
0:22:08 I live in Northern Virginia.
0:22:10 I was recruited.
0:22:11 By something with three letters maybe?
0:22:15 To do some government stuff for a while that didn’t last too long.
0:22:17 Your choice or their choice?
0:22:18 It was complicated.
0:22:22 I became a single dad and raised two kids, so it was just incompatible.
0:22:27 But you ended up working around another three-letter institution, the NFL?
0:22:29 A lot of three letters.
0:22:34 Most of my time between the Navy and doing football for the day job, I was a defense
0:22:43 contractor and I was a tactics and strategy expert and instructor and I would shirk all
0:22:47 my daily responsibilities to crunch football numbers all day long.
0:22:50 So I’ll tell you the origin story.
0:22:54 Kind of a water cooler conversation with my good friend, coworker, John Moser.
0:22:58 The conversation came around to like defense wins championships, right?
0:23:00 The old standby, you know?
0:23:01 And I was like, well, does it?
0:23:02 I don’t know.
0:23:04 I can’t believe that, but does it really?
0:23:05 What do people mean by that?
0:23:10 And I thought, my God, I have this software left over from grad school and, you know,
0:23:12 they put all the stats online now.
0:23:14 So this is like 2006.
0:23:15 I said, hey, you know what?
0:23:20 We can just download the data and by the end of lunch, we can answer this question forever.
0:23:24 And that was the genesis of, you know, football analytics for me.
0:23:27 When I began doing this, I hadn’t read Moneyball.
0:23:29 I didn’t know that existed.
0:23:35 It was an advantage because the baseball people tried to put it on the football for a long
0:23:36 time.
0:23:40 The kind of tools and the kind of analysis just doesn’t work on football.
0:23:44 I came from this military background and I’m like, this is war.
0:23:48 This is zero sum two player game theory.
0:23:51 And that paradigm took hold.
0:23:55 In what ways would you say that your military background contributed to the way that you
0:23:59 frame the questions you’re trying to answer in football?
0:24:02 There’s this optimization element to it.
0:24:07 In the same way in the military, you have a mix of strategies.
0:24:10 It’s not like always do this or always do that.
0:24:17 You have to be unpredictable in a way that keeps your enemy or your opponent on his heels.
0:24:23 There’s a famous thinker in military aviation named John Boyd who invented this thing called
0:24:30 the OODA loop, if you’ve ever heard of that, and keeping the enemy confused and disoriented
0:24:36 and in a state of ambiguity is one of the goals in American fighting theory.
0:24:40 Football works the same way.
0:24:47 So in a war-like setting, when you’re trying to advance into enemy territory, which weapon
0:24:51 is more valuable, the ground game or the passing game?
0:24:55 Brian Burke’s analytic approach allowed him to answer that question.
0:25:00 I was able to build something called expected points and expected points added.
0:25:05 It’s a point expectancy model based on down distance and yard line.
0:25:10 Once I built that model, the very first thing I did was just aggregate by play type.
0:25:16 And it was very, very clear at that moment that passing was far superior to running.
0:25:19 Teams are running far too often.
0:25:25 And the way you know that is because if they’re doing each in the optimum mix, the payoffs
0:25:26 would equalize.
0:25:31 There would be what people commonly refer to in game theory as like Nash equilibrium.
0:25:36 As long as you have an intelligent opponent, you can assume that that equilibrium is going
0:25:38 to be the optimum mix.
0:25:40 And they were far out of whack.
0:25:42 From that moment on, we knew that you need to pass more.
0:25:44 What year was this?
0:25:50 2008 is when I first did this, but it took years to permeate the football world.
0:25:52 It was a slow process.
0:25:53 Let’s back up a bit.
0:25:59 You don’t have to go back to the 1920s or the 1950s, but pick whatever seems like a
0:26:05 sensible starting point in modern NFL history and tell me how the running game evolved and
0:26:08 was eventually superseded by the passing game.
0:26:12 I think Franco Harris is a good starting point for the modern era.
0:26:18 That’s where people of our age grew up learning our football, and same with coaches.
0:26:19 This is the 1970s.
0:26:22 In those days, passing was very, very difficult.
0:26:25 So running was a much better strategy.
0:26:31 And then in 1978, the league massively rewrote the rules that had to do with passing, not
0:26:39 just illegal contact, the way linemen could pass block radically changed, and the league
0:26:43 is still catching up to this day in terms of exploiting those rule changes.
0:26:48 Over time, different systems started to exploit the new rules, then 2004, they changed the
0:26:49 rules again.
0:26:55 So over time, the potency of the running game compared to the passing game has decreased
0:26:56 steadily.
0:27:04 So the story you’re telling me is simply that football people, including coaches and
0:27:10 analytics people like you, have been discovering over the years that passing is more valuable
0:27:11 than running.
0:27:17 Additionally, the league itself decided over many years to make passing more prominent by
0:27:18 rule changes.
0:27:24 And so now we’ve just arrived at this new circumstance where passing is just more valuable
0:27:26 than running.
0:27:29 Where does that leave the running back in the modern football economy?
0:27:32 Well, he’s just not going to be as valuable.
0:27:35 This star running back is not going to carry you to a Super Bowl.
0:27:41 It hasn’t happened in generations.
0:27:45 Could it be that this generation is different?
0:27:48 And is Saekwon Barkley the difference maker?
0:27:55 Over the past 20 Super Bowls, the top rusher on the winning team has averaged only 70 yards.
0:27:58 If you look at the betting markets for this year’s Super Bowl, Barkley is expected to
0:28:01 gain 115 rushing yards.
0:28:06 When the Eagles beat the Washington Commanders last week to get into the Super Bowl, Barkley
0:28:10 ran for 118 yards and three touchdowns.
0:28:15 This led Fox Sports announcer Kevin Burkhart to call the Eagles pickup of Barkley, “one
0:28:18 of the best free agent signings of all time.”
0:28:23 Still, the Eagles’ opponent in the upcoming Super Bowl, the Kansas City Chiefs, are going
0:28:28 for their third Super Bowl in a row, which would be a record, and their fourth win in
0:28:30 six years.
0:28:35 Even a casual football fan can name the Chiefs starting quarterback Patrick Mahomes and their
0:28:40 super-study tight end Travis Kelsey, who is even better known for dating Taylor Swift.
0:28:46 But can you name the running backs who helped the Chiefs win all these Super Bowls?
0:28:47 Probably not.
0:28:50 They’ve been practically interchangeable, most of them earning between one and three
0:28:58 million dollars a year compared to Kelsey’s 17 million and Mahomes’s 45 million.
0:29:02 You may be thinking, “I understand that running backs have become somewhat less valuable,
0:29:06 but are they really that much less valuable?”
0:29:11 The answer to that question has to do with something that happened in 2011.
0:29:17 The average fan doesn’t fully appreciate that the NFL is a huge business.
0:29:22 Just coming up, after the break, I’m Stephen Dubner, and you were listening to Freakonomics
0:29:35 Radio.
0:29:40 Back in September, at the start of the NFL season, the Economist Roland Friar and I decided
0:29:46 to team up to try to learn why running back salaries have fallen so much since their heyday.
0:29:51 These are driven in part by where a player is selected in the NFL draft.
0:29:57 In 1990, 12 running backs were taken in the first two rounds of the draft.
0:30:00 This year, there was one.
0:30:02 So what’s driving this decline?
0:30:08 We’ve already heard about the analytics revolution that showed the value of passing versus running.
0:30:13 We’ve heard about rule changes the NFL adopted to privilege the passing game, but there was
0:30:20 another big change in 2011 that shook things up for NFL rookies generally and running backs
0:30:21 in particular.
0:30:25 The team has control of you for five years.
0:30:27 That is Robert Turbin.
0:30:32 He was an NFL running back for four teams over eight seasons, including a Super Bowl win with
0:30:33 the Seattle Seahawks.
0:30:37 Today, he does football commentary for CBS Sports.
0:30:39 Roland Friar spoke with him.
0:30:42 Why do you think the running back market is so challenging today?
0:30:45 Number one, the CBA.
0:30:50 That’s the meat and potatoes of the conversation when it comes to the running backs.
0:30:56 The CBA is a collective bargaining agreement, the contract between NFL teams and the NFL
0:31:00 Players Association, the union that represents the athletes.
0:31:07 The negotiations over a CBA are long and often contentious as they establish pay standards
0:31:09 and other terms for years to come.
0:31:15 The current CBA was agreed to in 2020 and runs through the 2030 season.
0:31:18 The one before that went into effect in 2011.
0:31:24 Overall, the 2011 CBA was a lucrative affair for the players.
0:31:29 Their share of league revenues rose from 42% to 47%.
0:31:33 But that agreement also came with some restrictions for rookies.
0:31:38 Before 2011, a drafted player could freely negotiate a contract with the team that chose
0:31:39 him.
0:31:44 That led to some bad deals for teams when the player didn’t play well or got hurt.
0:31:51 The 2011 agreement created a rookie wage scale that set contract terms based on draft order.
0:31:56 It also mandated a four-year contract with a cost-controlled fifth-year option that their
0:31:58 team could exercise.
0:32:03 This structure is still in place today, and that’s what Robert Turbin is talking about
0:32:08 when he tells Roland Friar that the team has control of you for five years.
0:32:15 What happens is you come into the league as a 22-year-old rookie, and basically, you are
0:32:23 handcuffed for five years, so realistically, you don’t have an opportunity to re-up or
0:32:28 get a second contract until you’re 27 years old.
0:32:32 For some positions in football, including quarterback, a player is just coming into
0:32:35 his prime at age 27.
0:32:38 That is not the case for running backs.
0:32:44 By the time you’re 27 years old, if you’ve carried the ball 250 times per year, they’re
0:32:49 going to look at those numbers and say, “Well, he may not have it the way he used to.
0:32:52 That may not be true for most running backs.
0:32:54 It is true for some.”
0:33:01 The CBA is really what devalued the position, because let’s say you were able to get out
0:33:07 of that contract or re-up out of that contract after three years.
0:33:14 Now you’re a 25-year-old back still in his prime with an opportunity to maximize on economics
0:33:17 from a contractual standpoint.
0:33:22 It seems like there is some relationship between the CBA and durability, which is if you’ve
0:33:25 got to wait for five years, and as you say, you’ve carried the ball all this number of
0:33:29 times, then executives are going to look at that and say, “How much more does he have
0:33:30 in the tank?”
0:33:33 So durability is part of it through the CBA, right?
0:33:34 100%.
0:33:38 I mean, five years is, that’s obviously not a full career.
0:33:43 That’s not the type of career you would imagine for yourself, but we know that the average
0:33:44 is less than three.
0:33:48 I was fortunate to play eight for a back.
0:33:50 That’s pretty damn good.
0:33:57 I’ll never forget when I was in Indianapolis, this was 2017.
0:34:04 I’m 27 years old, and I’m talking to a scout from another team, and I dislocated my elbow
0:34:08 in week six of that year, so I was coming back.
0:34:09 He asked me, he says, “How old are you?”
0:34:10 I said, “I’m 27.”
0:34:11 He said, “Oh, okay.”
0:34:14 So he got about another year or so left, and I said, “What?”
0:34:17 Like, “What are you talking about?”
0:34:22 But that’s the thought process for a lot of executives until proven wrong.
0:34:32 It’s almost like you’re guilty until proven innocent as a running back.
0:34:38 If you go back 20 years, the average career length for an NFL running back was around
0:34:40 five and a half years.
0:34:45 That number started dropping right around the 2011 collective bargaining agreement, and
0:34:50 today the average length is around two and a half years.
0:34:53 Let’s hear now from another former running back, Robert Smith.
0:34:58 Like Robert Turbin, Smith played for eight years, all of his were with the Minnesota
0:34:59 Vikings.
0:35:01 Smith retired after the 2000 season.
0:35:06 It was always kind of a badge of honor to play the position because it is a very physical
0:35:13 position, and there are times when you have to block players that outweigh you by a large
0:35:14 amount.
0:35:16 It’s not for the faint of heart.
0:35:20 Today Smith calls NFL and college games for Fox Sports.
0:35:24 His reverence for the running back position goes deep.
0:35:28 Only the quarterback has the ball in their hands more, and so you have, I think, one
0:35:33 of the greatest opportunities to impact the outcome of a game on every running play.
0:35:38 11 guys are trying to hit the same person, and that’s the guy who has the ball.
0:35:43 It’s the challenging part, but it’s also the rewarding part that you were able to get
0:35:44 by them.
0:35:49 I hold the NFL record for the longest average per touchdown running, more than 26 yards.
0:35:56 And I got to tell you, it’s a feeling that I wish everybody could experience when you
0:36:02 break into the open and you know you’re going to score a touchdown.
0:36:09 It’s like when you’re leaning back in a chair and you almost tip and fall, and you get this
0:36:12 rush of adrenaline.
0:36:19 It’s like this sudden burst of excitement that I’m about to score a touchdown.
0:36:25 Those occasional bursts of excitement are, of course, offset by thousands of hours of
0:36:28 training and by the physical punishment.
0:36:34 I tore my ACL my rookie season, but in that injury I also broke the bottom of my femur
0:36:39 and did some damage to the articular cartilage, which is the smooth cartilage that’s on the
0:36:42 tip of the bone, and I needed to have a microfracture.
0:36:47 It’s a procedure where they tap on the exposed surface of the bone, and then I needed to
0:36:50 have that again after my last season in the league.
0:36:56 So there I was a couple of months shy of my 29th birthday, but it was the only season
0:37:02 I didn’t miss any games, and I still needed to have knee surgery after the year.
0:37:07 And the thing that I said was, you know, if you would pay any amount of money to get your
0:37:11 health back if you lost it, then what amount of money is worth the very real chance that
0:37:12 you’ll lose it?
0:37:15 It was the calculation that was going on in my head.
0:37:16 That’s why I left the game when I did.
0:37:25 I’m thinking quite literally it’s better to walk away early than to limp away late.
0:37:29 Robert Smith had a lot of reasons to walk away, a lot of things beyond football that
0:37:30 excited him.
0:37:36 He is an amateur astronomer, a prolific reader, and in addition to his broadcasting duties,
0:37:43 he is working on a health and wellness startup, plus which he made good money as a younger
0:37:44 man.
0:37:47 His final contract paid him $25 million over five years.
0:37:54 In his last season, the best of his career, he ranked second in the NFL in rushing yards.
0:37:59 But it was clear by then that running back money was drying up.
0:38:04 Every team has a league imposed salary cap, and they’re constantly trying to figure out
0:38:09 which players they can give less money to in order to give more money to the players
0:38:11 they think they cannot win without.
0:38:15 And running backs had fallen off the cannot win without list.
0:38:21 Over the past few decades, NFL revenues have more than doubled to about $20 billion a year.
0:38:26 Since players get a percentage share of revenues, that means the overall player pool has also
0:38:27 more than doubled.
0:38:31 But running backs have barely shared in that gain.
0:38:37 The pay for running backs and full backs over the past two decades has risen around 11 percent.
0:38:43 For all other offensive positions, salaries have risen at least 90 percent.
0:38:46 If you don’t believe me, just ask an agent.
0:38:51 Jeffrey Whitney, I am one of the founders and president at the Sports and Entertainment
0:38:57 Group, a full-service sports agency in Washington, D.C., been doing it for 20-plus years.
0:39:00 So how many athletes do you represent now, your firm?
0:39:03 We represent about 40 NFL players at any given time.
0:39:06 So we’re one of the larger agencies.
0:39:11 It would appear to me that an agent is busy and important when you’re making a deal,
0:39:15 but I don’t know how much maintenance that deal requires as time goes on.
0:39:21 Can you just talk about in the life cycle of an athlete, how involved are you?
0:39:26 We’re involved in every aspect of our client’s lives on a daily basis.
0:39:31 We spend probably the least amount of time actually negotiating contracts.
0:39:37 I’m a family therapist, a relationship therapist, some type of preacher or pastor would need
0:39:38 me.
0:39:39 Financial advisor?
0:39:42 Financial advisor, just day-to-day counselor.
0:39:43 That’s what I love doing.
0:39:44 No day is the same.
0:39:49 I got up today and I get a call from a player who’s injured.
0:39:50 So I have to deal with that.
0:39:55 I get a call from a player who’s moving and he needs to be guiding in the right direction.
0:39:59 Playing players, they’ll call me and ask me what TV they should purchase.
0:40:04 We’re in many ways with these young people involved with them in a very intimate and
0:40:05 deep fashion.
0:40:11 Among agents that represent NFL players, what would you say that you’re most known for?
0:40:14 In the past, we were actually known as the Running Back Agency.
0:40:19 We’ve represented more running backs over the last 20 years than any other agency.
0:40:20 Name some for me.
0:40:26 Maurice Jones-Drew, Matt Forte, Tevin Coleman, Jordan Howard, James White, Sweet Feet from
0:40:32 New England, Kendall Hunter, Levy-Anne Bell, Michael Carter.
0:40:35 We have Cody Schrader this year who’s now with the Rams.
0:40:38 Do you still represent the same share of running backs?
0:40:40 We have pared down.
0:40:49 The market has spoken and over the last few years, we got into the receiver cornerback,
0:40:50 that kind of market.
0:40:55 We never got out of the business of representing running backs, but we did start shaping our
0:40:56 roster a little bit.
0:40:59 I don’t mean to accuse you of chasing the money yourselves.
0:41:03 You say you’re responding to the market, but in a case like this where you guys were known
0:41:09 as a running back agency and then the market for running backs changes really pretty dramatically.
0:41:11 I mean, who ends up representing the running backs?
0:41:15 Just different agents who are starting out, who don’t have as much luxury to pick their
0:41:16 roster.
0:41:18 The way you guys do, is that the way it works?
0:41:19 That’s exactly what you saw.
0:41:25 There were agents during the last few years who just didn’t represent running backs at
0:41:30 all and they were literally running backs in the market looking for representation.
0:41:31 There’s a supply and demand issue.
0:41:35 There are more running backs than positions.
0:41:40 It is a position where you can find really good players all across the draft and after
0:41:41 the draft.
0:41:44 There also is this, the running quarterback.
0:41:48 You can look at the total number of yards that a team has.
0:41:52 Now, a lot of that yardage is coming, not from the running backs, but it’s coming from
0:41:53 the quarterback.
0:41:58 So now, probably half the league has quarterbacks who can run as well as the running back.
0:42:03 What about rule changes that facilitated an opening up of the passing game?
0:42:10 The average fan sometimes doesn’t fully appreciate that the NFL is a huge business.
0:42:12 It is a business at the highest level.
0:42:17 It’s $20 billion, it’ll go to $25, the ultimate goal I’m hearing it’s going to be a $50 billion
0:42:20 industry in the next 10 years.
0:42:26 I think we’ve seen over the last 10 years kind of a cultural shift, not just in the
0:42:28 NFL, but across sports.
0:42:33 As fans, we simply see the outcome of the game and we don’t really understand that at
0:42:38 the end of the day, these are corporations that are going to be responsive to their shareholders
0:42:39 and consumers.
0:42:41 And the NFL is no different.
0:42:45 People like to see the ball in the air, the acrobatic catches and the leaps.
0:42:47 The fans want to see loan balls.
0:42:49 They want to see passing.
0:42:53 I still can watch a 10 to seven game, a defensive battle.
0:42:58 The best player is the middle linebacker and the running back and I’m happy with that.
0:43:02 But for the younger generation, absolutely boring.
0:43:08 We can talk supply and demand, we can talk the running quarterback and those all do have
0:43:12 some influence in the devaluation for the running back position.
0:43:17 Ultimately, if we really dig down and look at root causes, it’s really the corporation,
0:43:22 the actual NFL, responding to their consumer base and what their consumer base wants to
0:43:23 see.
0:43:28 When you say that the NFL responded to what the market wants, give me some specific examples
0:43:34 of how the league has added leverage to make passing more prominent, either passing and
0:43:37 or quarterback play more prominent.
0:43:41 You’ve seen a ton of rule changes, obviously, to make it a higher scoring game with more
0:43:43 offense.
0:43:48 The defenses have been handicapped, the pass interference rules.
0:43:52 You can’t hit the quarterback, some of the rules are good for the safety of the players.
0:43:57 But certainly the root of the reason it’s to increase the scoring and the way you do
0:43:59 that is through passing.
0:44:02 Let’s talk about injuries and perishability generally.
0:44:07 Just talk about the physical punishment that comes along with running back position where
0:44:09 it ranks with other offensive players.
0:44:10 Make no mistake about it.
0:44:18 The running back is the most violent position in the most violent sport on the planet.
0:44:20 Running backs are getting hit on every play.
0:44:22 In pass protection, they’re getting hit.
0:44:29 You’ve got a running back who’s 5’10”, 215 pounds, and he’s blocking a 325-pound defensive
0:44:30 lineman.
0:44:34 The defensive players are getting bigger and faster every year.
0:44:38 That physicality for the running back is real.
0:44:43 The likelihood of a running back getting through the season unscathed, no injuries, is slim
0:44:44 to none.
0:44:53 For a lot of teams, because of that, they go with running backs by committee.
0:44:57 What Whitney is talking about here when he says running backs by committee is when teams
0:45:03 substitute in multiple players throughout the game or the season to share the workload.
0:45:07 Here again is Brian Burke, the ESPN analyst.
0:45:10 I think that’s one of the core developments that’s affected the running back position
0:45:15 is that teams have realized that you don’t necessarily need a great running back.
0:45:17 What you need is a great running game.
0:45:23 I think when most people watch football, they see the quarterback hand the ball to the running
0:45:29 back who, when a play succeeds, he gets through the line and then keeps running and gains
0:45:32 a bunch of yards and finally gets tackled.
0:45:36 They think, “Oh my God, that running back is so talented.”
0:45:39 Imagine what’s actually happening to make that run a success.
0:45:45 Yeah, there’s going to be eight or nine blocks that are all essential.
0:45:49 You need these kind of consecutive miracles for a run play to really work.
0:45:54 Coaches will draw them up and it looks perfect on the whiteboard, but then in the chaos of
0:46:00 the game, so many things have to go right for it to work, but when it does, it’s beautiful.
0:46:04 And then the people executing those blocks, let’s just talk about the offensive line.
0:46:09 There’s one running back who carries the ball, who succeeds, but then there are five or six
0:46:13 other guys who are probably averaging what, around 290 pounds on the offensive line.
0:46:16 Oh gosh, probably more now, yeah.
0:46:20 Some football fans really do pay attention to offensive linemen, but really it’s mostly
0:46:24 their moms, but there are a lot of them that are necessary for it to work.
0:46:27 So what does that mean about the market?
0:46:33 The way to think about it is the line and the blocking and the scheme are responsible
0:46:37 for the first three or four yards of a game on a run play.
0:46:43 And then from there on, it’s the elusiveness of the running back.
0:46:48 It’s like a threshold system where if I have a good enough line to get a running back out
0:46:54 to three, four, five yards, now he’s into the secondary and it’s up to him to make defenders
0:46:58 miss their tackles and then you get these big explosive games.
0:47:03 So if you want to improve your running game, you don’t go out and just get a great running
0:47:04 back.
0:47:09 I would say start with the offensive line, make sure you’re calling good plays, and
0:47:15 then the cherry on top might be a start running back.
0:47:20 Coming up after the break, do running backs have any chance of returning to their previous
0:47:21 glory?
0:47:23 Everything is cyclical, right?
0:47:26 If you keep those bell bottoms long enough, they’ll come back.
0:47:27 I’m Stephen Dubner.
0:47:43 This is Freakonomics Radio, and we will come back right after this.
0:47:48 Most of us don’t respond well when something is taken away from us.
0:47:53 Psychologists like to talk about loss aversion, the fact that we feel more pain from loss
0:47:57 than we feel pleasure from a gain of the same size.
0:48:03 Well imagine being an athlete who’s been working hard since age five or six, driven
0:48:09 by the very slim hope that you might live out your dream and become an NFL running back
0:48:15 only to succeed and discover that your position has been downgraded.
0:48:20 An elite running back in the NFL can still make millions of dollars, but keep in mind
0:48:27 that, A, running back careers are short, and B, many of your teammates will be making more
0:48:29 millions than you.
0:48:32 So what are your options?
0:48:34 You could stage a holdout.
0:48:40 That’s what both Saquon Barkley and Josh Jacobs did in 2023, sitting out training camp after
0:48:45 being franchise tagged by their respective teams, the New York Giants and the Las Vegas
0:48:47 Raiders.
0:48:51 Both of them left their teams at the end of the season and both have prospered with their
0:48:56 new teams, Barkley with the Eagles and Jacobs with the Green Bay Packers.
0:48:59 But a holdout doesn’t always go as planned.
0:49:03 In 2018, Pittsburgh Steelers running back Levyon Bell, one of the best backs in the league
0:49:09 at the time, held out for the entire season rather than play under a franchise tag.
0:49:13 Here again is Brian Burke, the ESPN data scientist.
0:49:21 By holding out, he cut his career short, maybe not by a full year, but a lot of the perishability
0:49:25 is just age-based, not necessarily wear and tear-based.
0:49:30 The effect can be very slight, but the next guy up who costs a fraction of what Levyon
0:49:36 wants to be paid, like I would much rather pay a million dollars for 95% of what Levyon
0:49:40 Bell is than pay $15 million for 100%.
0:49:44 He got a big money contract with the Jets, but then he wasn’t very good there, then
0:49:46 his career was kind of over.
0:49:51 What would you have advised him when he was doing really well with the Steelers on his
0:49:52 rookie contract?
0:49:55 I would have advised him to just take what he can get.
0:49:57 It’s outside of his control.
0:50:02 I understand what he’s trying to accomplish, but he’s just up against reality.
0:50:04 He’s lucky to find the Jets.
0:50:10 If there’s one foolish team out of 32 that’s going to overpay you, then it only takes one.
0:50:12 And it’s usually the Jets, to be honest.
0:50:14 He found that one for sure.
0:50:18 Bell’s agent at the time was Jeffrey Whitney, who we heard from earlier.
0:50:23 He told us he didn’t want to discuss the Bell situation.
0:50:28 Beyond a holdout, what other options are available to dissatisfied running backs?
0:50:34 A few years ago, there was an attempt at creating a carveout, a running back specific labor
0:50:39 designation proposed by a group called the International Brotherhood of Professional
0:50:41 Running Backs.
0:50:46 They petitioned the NLRB, the National Labor Relations Board, for what labor lawyers call
0:50:48 a unit clarification.
0:50:53 They argued that the unique physical demands of the running back position set them apart
0:50:57 from other football players, and that they should therefore be allowed to break away from
0:51:01 the NFL players’ union and negotiate on their own.
0:51:06 A clever idea, maybe, but the NLRB rejected their request.
0:51:11 I asked Robert Smith, the former Vikings running back, what he thought of this idea.
0:51:19 Well, as you guys have talked about in countless episodes on Freakonomics, you have to be
0:51:25 very careful about trying to change one variable in a system without impacting the system in
0:51:32 a way that you haven’t anticipated, and ultimately, the market is going to decide where they value
0:51:38 players the most and where that money is going to make the most sense for that team.
0:51:44 So if carveouts and holdouts aren’t the answer, how about a good old-fashioned running back
0:51:46 Zoom call?
0:51:52 In 2023, Austin Eckler, now with the Washington Commanders, organized a Zoom with other top
0:51:58 running backs, including Barkley, Jacobs, Christian McCaffrey, and Nick Chubb, to discuss the
0:52:00 state of their position.
0:52:04 “Right now, there’s really nothing we can do,” Chubb said afterward.
0:52:06 “We’re kind of handcuffed with the situation.
0:52:10 We are the only position that our production hurts us.
0:52:14 If we go out there and run 2,000 yards, the next year they’re going to say, ‘You’re probably
0:52:15 worn down.’”
0:52:22 Still, it’s worth wondering, given the exceptional season that Saquon Barkley had with the Eagles,
0:52:29 if he also has a great Superbowl and the Eagles beat the Chiefs, maybe the NFL will fall back
0:52:31 in love with the running back?
0:52:36 The last couple of years, you’re seeing a little bit of resurgence in the running game.
0:52:37 Everything is cyclical, right?
0:52:40 If you keep those bell bottoms long enough, they’ll come back.
0:52:43 That again is the sports agent, Jeffrey Whitney.
0:52:47 You ask a running back, what’s the most important duty that they have?
0:52:50 The vast majority will be like running the football, and it’s not.
0:52:53 It’s past protection and catching the ball, and running is part of it.
0:52:57 I think we’re seeing some young running backs again who can do it all, can catch it, can
0:53:00 run it, good and past protection.
0:53:07 Let’s say you have a relative or a family friend who’s 11, 12 years old, great athlete.
0:53:11 What would you tell that kid if they’re hoping for a long career in the NFL?
0:53:14 Do you say, “Get the heck out of the running back position?”
0:53:18 I tell them to become a long snapper.
0:53:22 I tell them to become a specialist, a long snapper or a kicker.
0:53:23 You play forever.
0:53:25 You don’t get touched.
0:53:27 That’s what I would advise them to do.
0:53:35 If you’re not going to be the quarterback, be the long snapper or be the kicker.
0:53:39 We once made an episode about the economics of the long snapper position.
0:53:44 It’s called, “Why does the most monotonous job in the world pay $1 million?”
0:53:51 Episode 493, if you want to listen, as for running backs, LeSean McCoy, the six-time
0:53:55 pro bowler, was more optimistic about their future.
0:53:57 Here he is again talking with Roland Fryer.
0:53:59 Now, it’s a copycat league.
0:54:03 If the Eagles are going to win the Super Bowl, they want to copycat that.
0:54:07 You look at some of the better teams, they got good running back play.
0:54:10 The Packers, are they even a playoff team without Josh Jacobs?
0:54:11 I look at the Eagles.
0:54:12 I’m going to love the Eagles.
0:54:14 We got a lot of talent on that team.
0:54:18 Are we the same, though, if Saquon Barker is not there?
0:54:20 Look at the Ravens.
0:54:22 Lamar Jackson was at MVP last year.
0:54:23 This year, they look totally different.
0:54:25 What’s the difference?
0:54:26 Derek Henry.
0:54:29 That’s why you see Lamar Jackson throwing the ball, but he’s ever thrown before.
0:54:30 You play action.
0:54:32 Who do I guard?
0:54:36 I feel like the market has to go up because these players are earning these things.
0:54:40 Owners see that because one thing about owners, they want to make their money and they want
0:54:41 to win.
0:54:44 There is some evidence to back up McCoy’s optimism.
0:54:48 In recent years, the running game has recovered a bit.
0:54:54 In 2016, only 40.6% of the plays from Scrimmage were run plays.
0:54:55 That was a 20-year low.
0:54:59 This year, it was 43.4% run plays.
0:55:04 I asked Robert Smith, the former Vikings running back, what he thought of this uptick.
0:55:07 I’d be interested to see the breakdown.
0:55:08 Number one, is it running backs?
0:55:10 Is it quarterbacks?
0:55:15 You have more quarterbacks that can run the football, and they’re extremely difficult
0:55:20 to stop, whether it’s Lamar Jackson, even Patrick Mahomes, Josh Allen.
0:55:24 You’re going to have some guys that made distort those numbers.
0:55:29 Some of it’s selection bias because the better teams are constructed in a way where they
0:55:34 can run the football in the red zone the way they want to, and then they have the lead,
0:55:36 and so they’re going to get more runs that way.
0:55:42 Is it possible that there might be somewhat of a return to the retro world of run first?
0:55:44 I don’t think so.
0:55:48 It goes back to the point of what it takes on a running play.
0:55:54 A lot of people would point to Saquon Barkley and Derek Henry, and those guys are outliers.
0:55:58 Look at what Saquon Barkley did with the Giants last year.
0:56:00 Look what Derek Henry did with Tennessee last year.
0:56:04 Look what they’re doing with their new teams this year with Philadelphia and the Ravens.
0:56:07 The offensive lines are just that much better.
0:56:12 It almost proves the point the other way that, yeah, well, of course, you put these guys
0:56:15 behind the great offensive lines.
0:56:21 Saquon Barkley in particular, he set a record for a number of yards before first contact
0:56:22 this year.
0:56:27 When you look at the performance of running backs, there’s no way that it would be significant
0:56:32 enough where everybody would say, “Well, all we got to do is go get a Saquon Barkley.
0:56:34 All we got to do is go get a Derek Henry.”
0:56:39 Oh, and by the way, it didn’t work for those guys behind those other offensive lines.
0:56:45 So you’re still going to have to spend the money to get the offensive line in place that’s
0:56:51 going to allow those guys to have Saquon Barkley-like numbers or Derek Henry-like numbers.
0:56:56 Brian Burke of ESPN agrees with Smith that Henry and Barkley are the exceptions that
0:57:02 prove the rule, but his reasoning is different, and it goes back to his military training.
0:57:04 The concept is intransitivity.
0:57:07 There is no one superior tactic.
0:57:08 It’s circular.
0:57:13 The other 31 teams are all chasing pass blockers and receivers and throwers and everything,
0:57:17 and there’s a whole bunch of run blockers and running backs left on the table.
0:57:18 There’s inefficiencies.
0:57:22 I’m going to go grab them, and I’m going to be the best running team they’ve ever seen,
0:57:25 and they’re going to be unprepared for us, and that’s going to be pretty effective, but
0:57:30 only one or two teams can get away with that.
0:57:37 I went back to my economist friend and co-host, Roland Fryer, and I asked him if a young running
0:57:39 back came to him for advice, what would he say?
0:57:40 Learn how to throw.
0:57:46 I mean, I don’t know what you want me to say.
0:57:51 When market demand changes, particularly in something as intricate as the NFL, then certain
0:57:57 positions will be more or less valued, and going in, people will expect that.
0:58:01 The other option would be to say, when you do get the ball, run further.
0:58:02 Exactly.
0:58:03 Be more productive.
0:58:08 And yet, the end of your Wall Street Journal piece goes like this.
0:58:12 The economist in me likes the results, meaning the results of your analysis, finding that
0:58:17 running backs get paid less because they’re less valuable, relatively.
0:58:21 But you write, the kid in me hopes for a running back renaissance.
0:58:22 That’s right.
0:58:27 So as you know, as cool, calm, and collected, and economist acting as you are right now saying,
0:58:31 “Come on, the market is the market,” there’s part of you emotionally that’s attached to
0:58:32 my argument.
0:58:33 A hundred percent.
0:58:37 This duality has lived in me since I became an economist.
0:58:42 But you didn’t ask Juju, the kid from Daytona, to advise the players.
0:58:49 But as an economist, again, this is all being driven by market forces.
0:58:54 Market forces are real, but are they unstoppable?
0:58:59 And what happens when they meet an immovable object, or even better, an object in motion,
0:59:05 like Saquon Barkley, who also appears to be unstoppable?
0:59:06 We’ll find out soon.
0:59:11 Thanks to Roland Fryer for inspiring and collaborating on this episode.
0:59:12 He was right.
0:59:14 It was a lot of fun.
0:59:19 And big thanks to all our guests, LeSean McCoy, Robert Smith, Robert Turbin, Jeffrey Whitney,
0:59:20 and Brian Burke.
0:59:26 They all did a great job explaining a complicated game that many of us love, but which many
0:59:29 others are often baffled by.
0:59:32 And thanks especially to you for listening.
0:59:35 Coming up next time on the show.
0:59:39 Professional licensing is too onerous for certain professions.
0:59:42 And it just makes the barriers too high.
0:59:48 And then, for the professions that are left, medicine, nursing, law, now we need something
0:59:50 like a licensing board.
0:59:52 Only what we have is terrible.
0:59:57 The legal scholar Rebecca Hall-Allensworth has just published a book called The Licensing
0:59:58 Racket.
1:00:02 How we decide who is allowed to work and why it goes wrong.
1:00:05 That’s next time on the show.
1:00:07 Until then, take care of yourself.
1:00:09 And if you can, someone else do.
1:00:12 Freakonomics Radio is produced by Stitcher and Renbud Radio.
1:00:18 You can find our entire archive on any podcast app, also at Freakonomics.com, where we publish
1:00:20 transcripts and show notes.
1:00:23 This episode was produced by Teo Jacobs.
1:00:28 The Freakonomics Radio network staff also includes Alina Kullman, Augusta Chapman, Dalvin
1:00:33 Abouaji, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine
1:00:40 Klinger, Jeremy Johnston, John Schnarrs, Morgan Levy, Neil Coruth, Sarah Lilly, and Zach Lipinski.
1:00:45 Our theme song is Mr. Fortune by the Hitchhikers, and our composer is Luis Guerra.
1:00:53 Do you want to get married?
1:00:58 I can’t marry anyone who I can’t run faster than backwards.
1:00:59 So that’s a no.
1:01:00 I don’t know.
1:01:01 I’ve had a series of knee injuries.
1:01:02 You might be able to get me now.
1:01:07 Yeah, but I’ve had a series of birthdays.
1:01:17 The Freakonomics Radio network, the hidden side of everything.
1:01:17 Stitcher.
1:01:20 (gentle music)
1:01:22 you

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0:01:22 Welcome back, Young and Profiters.
0:01:26 Have you ever wondered what separates successful small businesses from those that struggle
0:01:27 to gain traction?
0:01:32 Today on YAP Classic, we’re showcasing an interview I did with Donald Miller, the host
0:01:38 of the Business Made Simple podcast, as well as a bestselling author and CEO of Storybrand.
0:01:43 In this episode, we unpack the secrets of building a thriving entrepreneurial venture.
0:01:46 This conversation was back in 2023.
0:01:50 It was the third time that Donald came on the show, and he had so many incredible tips
0:01:52 for building out a small business.
0:01:57 We talked about everything from crafting the perfect mission statement, when to be financially
0:02:02 transparent with your team, and why most businesses fail today.
0:02:06 He also explained why you should think of your business as an airplane.
0:02:10 Okay, gang, make sure your seats are back and tray tables are in their full upright
0:02:17 position because this episode is about to take off.
0:02:21 So Donald, my team tells me your new book, How to Grow Your Small Business, has already
0:02:25 sold more copies in a pre-sale than any other book that you’ve ever written.
0:02:27 So that’s incredible.
0:02:29 And I think it’s a hot topic, right?
0:02:30 The economy is not doing so well.
0:02:32 I think a lot of businesses are struggling.
0:02:34 So let’s begin there.
0:02:36 Why are so many small businesses failing?
0:02:40 Well, I’ll tell you how it all started for me, and it started with failure.
0:02:44 So failure is only a bad thing if you let it take you down, but if you let yourself learn
0:02:46 from it, you can get somewhere.
0:02:52 I actually, 11 years ago, lost all of my money, my entire life savings, and a bad investment.
0:02:54 I had paid off my house.
0:02:55 I sold my house to buy another house.
0:02:59 The other house sold, so I was sitting on a pile of cash, put it into an investment,
0:03:04 woke up one Monday morning, and my entire life savings was gone, and it was devastating.
0:03:13 11 years later, I had a $17 million company with more than 50% profit, 30 employees, and
0:03:15 life was very, very different.
0:03:19 And one of the main reasons it was different, and one of the main reasons I think businesses
0:03:26 either succeed or fail, is I 100% took 100% ownership of my career and my life and my
0:03:27 business.
0:03:31 Everything that negative happened, I took ownership of, everything positive happened,
0:03:32 I took ownership of.
0:03:34 I didn’t trust other people to make me money anymore.
0:03:40 And by that, I mean agents and speaking managers and the market, none of that stuff.
0:03:42 I took ownership of it.
0:03:47 And so as you talk about the economy struggling, that’s the economy.
0:03:49 Your economy is different.
0:03:55 So the economy has factors like trade wars with China, the war in Ukraine, all those
0:03:57 kinds of things.
0:03:59 Your economy is hardly affected by any of that.
0:04:03 It might be slightly, but most of us is hardly affected by any of that.
0:04:05 It’s actually more affected by our attitude.
0:04:10 And if we take ownership of our economy, our economy can do incredibly well.
0:04:16 So as I went from $0 to $17 million, I did a rough count, Hala.
0:04:22 I think I did 572 things wrong, and I did six things right.
0:04:26 So the book, How to Grow Your Small Business, is about the six things I did right.
0:04:30 So the book really walks through, and I turn those six things into six steps that you need
0:04:35 to overhaul your business and optimize it for revenue and profit.
0:04:39 And I just laid it out so nobody has to make the 570 mistakes that I made.
0:04:40 Yeah.
0:04:44 And I love your work, Donald, because you always just tell things in a way that’s easy
0:04:45 to retain.
0:04:46 You write so clearly.
0:04:47 It’s no fluff.
0:04:48 So I was reading through this book, and I’m like, “This is great.
0:04:51 I want to align everything I do with my business for this book.”
0:04:55 Because I also have a small business, so I really relate it to it.
0:04:57 Let’s go back to this question of why businesses fail.
0:05:02 You talk about an S-curve in your book, and essentially it’s a growth pattern that a lot
0:05:03 of small businesses fall into.
0:05:07 So can you explain to us what an S-curve is and what we need to look out for?
0:05:11 Yeah, well, the S-curve explains why most businesses fail, and they actually fail because
0:05:13 they succeeded.
0:05:15 And here’s what I mean by that.
0:05:17 Nobody gets into business to run a business.
0:05:20 Nobody, not a single person in the history of the world has ever started a business because
0:05:22 they wanted to run a business.
0:05:24 They started a business because they loved their customers.
0:05:26 They loved a product.
0:05:28 They wanted to be financially free.
0:05:30 That’s why we start a business.
0:05:35 If that business takes off, the business owner then finds himself doing something that they
0:05:38 never thought or never even imagined or didn’t realize they were going to have to do, and
0:05:40 that’s run a business.
0:05:43 So the S-curve is you love this product.
0:05:46 It starts taking off, and you start going up and up and up.
0:05:48 And then all of a sudden, you’re hiring people.
0:05:49 You’re firing people.
0:05:51 You’re trying to figure out health care benefits.
0:05:53 You’re dealing with customer service.
0:05:58 All of a sudden, you’re taken out of the sweet spot you were in when the business grew, and
0:06:01 you’re put into a different role, and that role is running a business.
0:06:03 And almost none of us have any education.
0:06:08 Even if you got a master’s degree in business, you don’t know how to run a business.
0:06:11 Most master’s programs train you to be chairman of the federal treasury.
0:06:12 They don’t train you to run a business.
0:06:14 And so we don’t know what we’re doing.
0:06:17 And because we don’t know what we’re doing, customers realize it.
0:06:21 Our products aren’t as– the quality’s not as good as it used to be.
0:06:24 The relationships we used to have with customers are now strained because we’ve turned those
0:06:26 over to account executives.
0:06:30 We ended up falling on hard times a little bit, so we ended up giving 90-day terms to
0:06:33 a customer in order to get bigger profits.
0:06:37 Then we ran into a cash flow issue, and you know what happens after that.
0:06:39 You just kind of– you bomb.
0:06:41 So that’s the down part of the S-curve.
0:06:46 Now that’s where those 65% of businesses, that’s where they crash when they hit the ground.
0:06:49 The rest of us, though, we do something.
0:06:51 We figure out how to run a business.
0:06:56 We figure out how to install the systems and processes that are necessary in order for
0:07:01 a business to not hit the ground, but actually come back up and start climbing again.
0:07:05 Those are the 35% of businesses that actually make it and go on to make millions and millions
0:07:06 of dollars.
0:07:11 So those systems and processes are what this book is about.
0:07:15 It’s the six systems and processes that you need to install in your business in order to
0:07:17 avoid crashing your business.
0:07:22 It will teach you how to run a business so that it is a predictable, dependable revenue
0:07:23 machine.
0:07:24 I love that explanation.
0:07:27 Thank you so much for covering that.
0:07:31 Before we get into the six steps, I want to talk about your experience, because we see
0:07:32 you now.
0:07:35 You’re leading a $17 million company, like you were just saying.
0:07:37 You’re hosting one of the most popular business podcasts in the world.
0:07:38 You’re a business guru.
0:07:42 But when you first started your business, you were actually drowning in your day-to-day.
0:07:45 So I want to do a little bit of comparing contrast.
0:07:49 What was Donald like day one or year one of his business?
0:07:50 How did you spend your time?
0:07:55 And then let’s contrast to this to Donald now with his six steps, all the knowledge,
0:07:56 all these…
0:07:59 We’ve had so much experience since then, and you have a whole framework around running
0:08:00 a small business.
0:08:04 So what was your day-to-day like year one versus now?
0:08:10 Well, about six years ago is when my business really experienced a transformational moment.
0:08:12 It happened in my driveway.
0:08:16 Before then, I’ll get to the driveway in a second, but before then, I was what I call
0:08:18 diving for dollars.
0:08:20 We were just trying to find money anywhere I could get.
0:08:21 If you paid me to speak, I’d go speak.
0:08:24 If I could get a book contract, I’d get a book contract.
0:08:27 I put out an online course and people would buy the online course.
0:08:29 Anything I could do, I would do.
0:08:33 And that started getting very successful, true to the S-curve, the initial rise in the
0:08:34 S-curve.
0:08:38 And we got to about three and a half million dollars or something like that.
0:08:42 People were loving my marketing framework, the StoryBrand framework.
0:08:48 We were consulting with giant brands, Procter and Gamble, Ford Lincoln, even the NSA in
0:08:49 the government.
0:08:51 We began consulting with.
0:08:52 Everything was going really well.
0:08:55 I had a mentor who is still a very good friend.
0:08:57 His name is Bill.
0:09:01 And Bill scaled up his company, his father’s company, into the billions and then took some
0:09:04 of that money and bought other small companies and was mentoring some of those CEOs.
0:09:07 He didn’t buy my company, but he was mentoring me nonetheless.
0:09:08 And I mentioned him.
0:09:10 I’d love for my business to get to 100 million.
0:09:13 We were standing in my driveway after having met for a couple hours.
0:09:17 And for the first time in my relationship with Bill, he just kind of looked at me a little
0:09:18 bit puzzled.
0:09:23 He knew that the $100 million number was really big and he didn’t think I was going to hit
0:09:24 it.
0:09:26 That’s the first time I’d ever seen that expression in him as he looked back at me.
0:09:29 And I said, Bill, what’s going on?
0:09:35 He said, Don, in order to hit $100 million, you are going to have to quote, professionalize
0:09:36 your operation.
0:09:37 That’s what he said to me.
0:09:42 Now, I’d never heard the phrase professionalize your operation before, but it rang absolutely
0:09:46 true as it’s ringing true to almost all of your listeners right now.
0:09:50 What it said to me was what Bill said to me basically was you’re making it up.
0:09:51 You’re making it up as you go along.
0:09:52 And he also said this.
0:09:57 He said, Don, if you leave this company, the company’s going to go down because you haven’t
0:10:03 installed the systems and processes necessary for somebody else to come and buy this company
0:10:05 and run it, right?
0:10:10 And that rang so true to me that I spent the next about three to four years figuring out
0:10:15 what the systems and processes needed to be and how the company needed to run.
0:10:20 And the framework that I came up with is actually really simple.
0:10:22 And that’s kind of what was missing in the market.
0:10:23 Everything was very complicated.
0:10:28 It took more time to sort of professionalize your operations through other systems than
0:10:29 it did to actually build your company.
0:10:33 You spent more time working on your company than you did catering to clients, which doesn’t
0:10:34 work.
0:10:35 You lose money that way.
0:10:37 I wanted it to be really simple.
0:10:41 And the metaphor that I came up with after I did all this stuff, when I was trying to
0:10:46 sort of have a controlling idea to bring it all together was the metaphor of the airplane.
0:10:51 And every airplane has, every commercial airplane has six very important parts to it, and they
0:10:53 have to work together.
0:10:54 The leadership is your cockpit.
0:10:58 The people in that cockpit need to enter data into the flight computer that says where
0:11:00 this airplane is going.
0:11:02 Everything is reverse engineered from that leadership in the cockpit.
0:11:08 The right engine is your marketing, and that marketing needs to produce thrust to get the
0:11:09 plane moving.
0:11:10 Left engine is your sales.
0:11:12 It needs to produce more thrust to get the plane moving.
0:11:15 Your products are your wings of the airplane.
0:11:17 Those need to be in demand and profitable.
0:11:21 The wings need to be big, light, and strong in order to get lift.
0:11:24 The body of your airplane is your most expensive, heavy part.
0:11:27 That’s your overhead, and your overhead needs to stay lean.
0:11:31 That’s why when you get into a smaller commuter plane, you’re ducking your head because they
0:11:35 need that thing to be small, and they’re squeezing you into those tiny seats.
0:11:40 And then the fuel tanks of your airplane are your cash flow.
0:11:45 And if you can actually keep the six areas of your airplane in proportion to each other,
0:11:46 you’re going to do just fine.
0:11:48 And it’s the same with business.
0:11:52 In order to get a business off the ground and keep it from crashing, you’ve got to enter
0:11:54 the right coordinates into your flight computer.
0:11:55 Those are going to be economic coordinates.
0:11:58 You got to clarify your marketing message and run a really good sales funnel.
0:12:00 That’s going to get your ride engine humming.
0:12:03 You’ve got to be able to invite customers into a story and close deals, and I’ve got
0:12:06 a formula for you to be able to do that in your sales.
0:12:11 You’ve got to have products that are extremely profitable and in demand.
0:12:12 Those are going to be your wings.
0:12:16 You’ve got to manage your team so it’s lean, efficient, and productive, which is an incredibly
0:12:18 hard thing to do.
0:12:20 That keeps your body of the airplane small.
0:12:24 And you’ve got to get very clear optics on your cash flow so you never run out of cash
0:12:28 or get surprised by a tax bill or can’t make payroll.
0:12:31 If you can do those six things, your business is going to do just fine.
0:12:35 Holly, you’ve interacted with as many business owners as I have.
0:12:40 I’m sure there’s times when you’ve walked into a business and they have a really nice
0:12:45 facility and they’re handing you all sorts of swag and 20 minutes into visiting their
0:12:46 business.
0:12:50 You have no idea what they do because they can’t state it clearly and you’re asking yourself
0:12:54 how in the world are these people making money and you realize they’re not making money.
0:12:58 They’re actually just living off private equity or venture capital money and all they’re
0:13:02 doing is living off somebody else’s dollars and this plane is going down.
0:13:06 It looks successful but it isn’t successful.
0:13:11 I have zero interest in helping anybody listening to the sound of my voice look successful.
0:13:13 I have no interest in that.
0:13:18 I have enormous interest in you opening up your bank account and seeing a ton of money.
0:13:19 That’s what I’m interested in.
0:13:24 And so these are the basics of how to actually run a successful business without lying to
0:13:25 ourselves.
0:13:26 This is how it has to be done.
0:13:27 Yeah.
0:13:31 And so back to my original question, I guess when you first started your business before
0:13:34 you had the six step framework, the business really revolved around you.
0:13:37 That’s why you were drowning every day.
0:13:38 Too much.
0:13:42 So what’s the problem when you can’t actually be pulled out of your own business and the
0:13:44 business revolves too much around the owner?
0:13:47 Well the problem is your business isn’t worth anything.
0:13:51 You know, if somebody comes to buy your business, one of the first questions they ask is what
0:13:52 happens when you leave?
0:13:59 What somebody wants to see if you want to value your business at 45678X EBITDA is they
0:14:04 want to know that you can go to Turks and Caicos and lay on a beach for two months and
0:14:07 never answer your phone and the business gets stronger.
0:14:08 That’s what they want to know.
0:14:14 So the problem in my life at that time was this business depended completely and totally
0:14:15 on me.
0:14:20 I was the guy who was actually necessary for this business to go and grow.
0:14:26 Today we have close to 800 certified facilitators, coaches and guides who go out and teach these
0:14:27 frameworks.
0:14:34 Now if I left, we would need a new host for our podcast and that’s about it.
0:14:37 We would need a new host for the podcast and quite honestly I think we could find a better
0:14:40 one pretty easily but I’m not willing to give up the job at this point.
0:14:46 So we’re way further along than we were about four or five years ago.
0:14:51 So with this analogy of the plane, I’d love for you to explain the rule of proportions.
0:14:55 Why is it that we sort of have to look at everything at the same time and make sure
0:15:00 we’re being balanced and not just focus on one area and another area at a time?
0:15:04 Let’s look at the airplane and talk about the airplane analogy as a decision-making
0:15:05 filter.
0:15:09 We know that we’ve got a good sales team, there’s a couple of people who are selling
0:15:10 a lot of stuff for us.
0:15:15 It’s really great but we’ve got this product and we’re getting many calls.
0:15:18 Customers can’t figure out how to log in or something like that and the sales team is
0:15:19 answering those calls.
0:15:22 That’s a common problem in a small business.
0:15:25 So we decide, okay, we need a customer service representative.
0:15:28 The customer service representative is for a really good one, you’re going to pay between
0:15:31 $60,000 and $80,000, you’re going to be right in there.
0:15:35 You want somebody who can grow and manage a customer service team so you’re going to
0:15:38 go ahead and spend a little more money on that.
0:15:43 That money, you’ve got to say, “Okay, is that money going to the right engine, the left
0:15:44 engine?
0:15:48 Is that money going to the wings or is that money going to the body of the airplane?”
0:15:51 A normal customer service, they’re going to save you some sales, they’re certainly going
0:15:56 to save you some negative chatter but it’s pretty hard to put that money on the wings
0:15:58 or the right engine, the left engine.
0:16:02 So what we’re going to do is we’re going to say, “Well, we’re going to pay you a base
0:16:09 salary of $50,000 but we’re going to give you some incentives for every retainer purchase
0:16:15 that is a subscription service that sticks around, who we know calls you and talks to
0:16:20 you or emails you or chats you, we’re going to give you 10% of that and we think you can
0:16:27 save X number of sales a year, which is going to get you to between $65,000 and $85,000.
0:16:28 What did we just do?
0:16:33 We just put a big chunk of that person’s salary out of the body of the airplane and
0:16:38 out onto the right and left engine and we can spend a lot more money on the right and
0:16:41 left engine than we can on the body of the airplane.
0:16:45 Whenever you go into a business and they’ve got this great facility with really beautiful
0:16:51 furniture and all sorts of great swag, everything that I just mentioned is the body of the airplane.
0:16:55 Really what you’re looking at, and you can see it within about 10 minutes of a conversation
0:16:59 with a business owner, what you’re looking at, imagine, “Hala, let’s say that you and
0:17:04 your friends are going to do a great week in Hawaii and you buy the plane ticket and you’re
0:17:10 at the airport, you walk out on the tarmac and that plane has a giant body, two tiny
0:17:19 little wings, some little rubber band propellers on each of the wings and fuel is pouring out
0:17:21 of the fuel tanks onto the tarmac.
0:17:22 Are you getting on that airplane?
0:17:23 No.
0:17:24 No.
0:17:28 That’s what so many businesses look like and people don’t realize it’s happening.
0:17:32 The way I hired my uncle, well, we clearly need a new logo and some swag.
0:17:36 Well, let’s create this website that isn’t very clear and doesn’t actually close sales
0:17:38 and is kind of passive aggressive.
0:17:42 All those decisions are how you engineer a really horrible, horrible airplane.
0:17:47 If you look at every single business in history that has crashed, what you’re looking at is
0:17:49 an airplane that wasn’t engineered very well.
0:17:50 I love this analogy.
0:17:55 It really does help you give a framework to kind of think of it intuitively and I’m sure
0:17:59 that as you’re making decisions, if you learn this framework, you’ll start to remember these
0:18:02 things and not try to make your plane crash.
0:18:04 Do everything you can to keep it flying.
0:18:05 That’s right.
0:18:06 I agree with you.
0:18:07 That’s how we got there.
0:18:10 In 17 million, there’s a lot of people listening who have a bigger company than that.
0:18:14 We’re still very, very committed to growing this one to try to get to that 100 million,
0:18:18 but the way that we will get there is we’ll continue to engineer a really great airplane.
0:18:22 If you’re on my sales team or my marketing team, you’re probably going to be paid a little
0:18:24 bit more than if you’re in the body of the airplane.
0:18:27 Even anybody in the body of the airplane, we’re trying to figure out how to incentivize
0:18:32 you to actually have you participate in the profitability of this business so that you
0:18:34 can make more money.
0:18:37 Let’s hold that thought and take a quick break with our sponsors.
0:18:38 Yeah, Pam.
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0:20:10 Hello, young and profitors.
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0:21:49 Hey app bam, launching my LinkedIn secrets masterclass was one of the best decisions
0:21:54 that I’ve ever made for my business, and I didn’t have to figure out all the nuts and
0:21:57 bolts of creating a website for my course.
0:22:02 I needed a monthly subscription option, I needed chat capabilities, I needed a laundry
0:22:07 list of features to enable what I was envisioning with my course.
0:22:12 But here’s the thing, all I had to do was literally lift a finger to get it all done.
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0:23:23 So let’s dive in.
0:23:26 You gave a great overview of the six steps.
0:23:30 Leadership, marketing, sales, products, overhead, and operations.
0:23:32 And the last step is cashflow.
0:23:33 So let’s dive into some of these steps.
0:23:38 I want to dive into leadership, which you say is the cockpit of the airplane.
0:23:42 And leadership is basically in charge of getting everybody to an end destination.
0:23:45 Your business needs to have a clear mission.
0:23:49 And so a lot of people, they don’t have a clear mission, right?
0:23:50 That’s something that they’re missing.
0:23:52 When they first started, like I’ll give myself for an example.
0:23:56 I have a company, Yap Media, we scaled to $7 million in three years.
0:24:01 And this year, we’re on track to do $8 million, which is amazing.
0:24:03 And so my company is doing great.
0:24:08 And when I first started, it was a team of volunteers, and we were so tight, and everybody
0:24:12 had a mission, and I was hand training everyone, and everything was great.
0:24:17 And then year one, it was like, boom, we blew up to 60 employees, and it’s like all of a
0:24:19 sudden, like things weren’t as smooth anymore.
0:24:22 Like we’re still running a great business, but it just wasn’t like before, like things
0:24:26 used to just like happen like magic, because we were so aligned.
0:24:28 Everybody had the same values, all that kind of stuff.
0:24:31 And so now I’m actually resetting my organization.
0:24:36 I just went through a whole workshop where we set up new core values.
0:24:39 We’re having a new mission, all these things that you talked about in your books.
0:24:43 I’m like, oh my gosh, this is just so relevant to everything that I’m doing right now.
0:24:45 So let’s talk about mission statements first.
0:24:49 You say there’s three components that make up an effective mission statement.
0:24:53 I love this ’cause I’m literally developing my new mission statement now.
0:24:58 And the first component you say is containing three economic objectives that you can actually
0:24:59 measure.
0:25:03 So I’d love to understand why three, is it only three, can it be more than three?
0:25:07 Why three, and why do we need to have some measurable objectives in our mission?
0:25:13 I think the best formula for a mission statement is we will accomplish X by Y because of Z.
0:25:16 We will accomplish X by Y because of Z.
0:25:21 If you can, write that down ’cause it really will align your entire team.
0:25:25 The X, we will accomplish X, are three economic objectives.
0:25:30 And the challenge is, we’ve gotta figure out the three ways that we make money the most.
0:25:33 What are the three ways that we make the most money?
0:25:39 Most businesses somewhere fall in line in that Pareta principle of 80% of their money
0:25:41 comes from 20% of their products.
0:25:44 80% of the money comes from 20% of their audience.
0:25:46 It’s almost true for every business out there.
0:25:50 Almost 20% can usually be defined with three economic objectives.
0:25:56 Now, I only give you three, not because you only have three or because I only want you
0:25:57 to have three.
0:26:02 I give you three because the human brain has a limitation and it’s usually three priorities.
0:26:06 It’s very hard for a brain to prioritize more than three things.
0:26:08 It can do four, it cannot do five.
0:26:13 So three is very important, not because any other reason other than your brain’s just
0:26:15 not gonna focus on any more than three things.
0:26:19 So you want to figure out one of the top three ways you make money, then you want to have
0:26:21 numeric goals.
0:26:25 So when I say we will accomplish, here’s my, here’s our actual mission statement if business
0:26:26 made simple.
0:26:32 We will have 500 certified coaches, 900 certified marketing guides, and 18,000 people inside
0:26:34 of our online platform.
0:26:35 That’s it.
0:26:41 Buy January 1 of 2024 because every small business owner deserves an education in growing
0:26:42 their business.
0:26:46 So here’s what’s really cool about the three economic objectives.
0:26:49 The second we stated and wrote in our mission statement the three economic objectives, we
0:26:50 had a filter.
0:26:54 It was the next day we were in a meeting and we were about five minutes into talking about
0:26:58 an initiative when somebody raised their hand and said, “Hey guys, this doesn’t have anything
0:27:00 to do with our three economic objectives.
0:27:01 Do we still want to do it?”
0:27:04 And everybody in the room just went, “Actually, no.
0:27:08 We’re wasting our time because those are the three ways that we make the most money.
0:27:10 We’re talking about something that’s actually not going to make us much money at all.
0:27:13 We just had a customer bring it up and we’re trying to answer the customer question.
0:27:16 We need to just answer the customer’s question saying, “Actually, we’ve decided not to do
0:27:17 that.”
0:27:18 So you get a filter.
0:27:24 That alone will cause a massive forward thrust in your organization because now everybody
0:27:27 in the organization is trying to support three things.
0:27:30 Then the Y, we will accomplish X by Y because of Z.
0:27:32 The Y is actually your deadline.
0:27:35 I recommend setting a two-year deadline.
0:27:36 You can go three years.
0:27:39 Anything beyond three years is not going to motivate anybody.
0:27:46 So we set our goal over a year ago and now we’re about 10 months away from hitting it
0:27:48 and we’re on track to hit it.
0:27:52 So what a deadline does inside of a mission statement creates a sense of urgency.
0:27:54 You say, “Don, mission statements don’t have deadlines.”
0:27:55 You’re right.
0:27:59 Most large corporations don’t put deadlines in mission statements because those corporations
0:28:03 have mission statements written by lawyers on behalf of shareholders.
0:28:05 You don’t have a team of lawyers and you don’t have shareholders.
0:28:10 You have the luxury and it is a crazy luxury that you should take advantage of of writing
0:28:12 a new mission statement every two or three years.
0:28:15 And usually in your mission statement, all you’re going to do is adjust X and Y and that’s
0:28:16 really it.
0:28:19 If you don’t like it as a mission statement, just call it a goal statement and let these
0:28:22 two statements be parallel to each other.
0:28:23 Finally the Z.
0:28:25 We will accomplish X by Y because of Z.
0:28:26 Z is the Y.
0:28:31 It’s the reason that you’re in business and it’s usually customer-centric.
0:28:32 We are doing this.
0:28:37 You’re going to accomplish these three things by January of 2024 because and then you want
0:28:41 to state the problem that your customer has and how you’re going to solve it.
0:28:45 That mission statement aligns your team and first of all, it’s memorable.
0:28:49 Every single member of my team knows that mission statement where most people write
0:28:51 a mission statement and nobody remembers their mission statement.
0:28:53 Even the person who wrote it can’t remember it.
0:28:56 If you’ve forgotten the mission statement, you’ve forgotten the mission.
0:29:02 So that mission statement is really, really key and it’s the first part of your leadership
0:29:03 statement.
0:29:05 Those would be the economic coordinates that you’re entering into the flight computer.
0:29:06 Yeah.
0:29:10 I really like this framework because I think giving some measurable things that people
0:29:13 can align to, it helps people understand their progress.
0:29:17 Like, guys, we are way off our target and we have only this amount of time to get there
0:29:19 and we better hustle and step on the gas.
0:29:25 So I feel like it gives people a measuring stick in terms of how they’re doing towards
0:29:26 the mission.
0:29:29 We’re usually, like you said, missions are usually like vague and fluffy.
0:29:31 They’re just sort of like directional.
0:29:35 This is like very specific, which I think anything more specific is going to get people
0:29:37 closer to an actual goal.
0:29:38 That’s right.
0:29:42 And then you align your team around those objectives and people know whether or not
0:29:43 they are winning or losing.
0:29:49 When you actually state three economic objectives, your whole team knows in real time whether
0:29:52 or not you’re hitting them, whether you’re behind them, whether you’re ahead of them.
0:29:56 And by the way, if you’re behind them, it bothers everybody, which is exactly what
0:29:57 you want.
0:29:58 You want this bothering everybody.
0:30:02 So they’re going to come to you and say, “Hey, can we either adjust the economic objectives
0:30:04 or what’s our plan to fix them?”
0:30:08 Or if you didn’t have economic objectives, nobody would even know that there’s anything
0:30:09 wrong with the business.
0:30:14 And you wouldn’t have those, the instrument data on your dashboard to be able to know
0:30:17 that you’re actually flying upside down and heading straight toward the ground.
0:30:21 So those three economic objectives are, you’re not always doing well with them, but if you’re
0:30:25 not doing well, they still serve you because you know you’re not doing well and you’re
0:30:26 not confused.
0:30:27 Yeah.
0:30:29 So this is really good advice.
0:30:32 How about getting this mission statement to stick within the organization?
0:30:38 Let’s say you’ve got over 20 employees, you’re not able to one-on-one explain it to everyone.
0:30:43 What are the ways that you can distill this information to get it to stick with your workers?
0:30:49 Well, one of the absolute hardest things to do is to get a team aligned around the economic
0:30:51 objectives of the organization.
0:30:53 And we have a framework.
0:30:57 It’s actually on chapter five of the book to help you do that.
0:31:01 And the framework is five meetings that you want to have with your team.
0:31:04 And some of the meetings will happen every week, some of the meetings happen almost every
0:31:06 day, some of the meetings happen once a quarter.
0:31:11 But those five meetings are the all staff meeting, the department stand-up, the personal priority
0:31:18 stand-up, the quarterly performance review, and then you will have an occasional revenue
0:31:19 meeting also.
0:31:23 The three economic objectives and the mission statement need to be talked at about during
0:31:25 every all staff meeting.
0:31:29 You actually open up the all staff meeting with those three economic objectives.
0:31:32 That happens on Monday, once a week.
0:31:34 Then the next meeting is your department stand-up.
0:31:38 The three economic objectives get repeated at the department stand-up.
0:31:43 So you are instilling these economic objectives in every single team member.
0:31:47 Then also at the department stand-up, the five priorities of that department which have to
0:31:52 serve the economic objectives are also discussed and the team in about 15 minutes discusses
0:31:55 whether or not they’re hitting their five priorities so that we can hit these economic
0:31:56 objectives.
0:32:00 Not only that, but in the personal stand-up that every single employee has with their
0:32:05 department leader for about 15 minutes, they discuss their five priorities that serve the
0:32:09 department’s five priorities that serve the three economic objectives.
0:32:15 So you are constantly, constantly, constantly meeting, talking about what the economic objectives
0:32:19 are, what your department is doing to hit those objectives, and what every person is
0:32:21 doing to hit those objectives.
0:32:26 And if you actually install those meetings into your organization, it’s impossible to
0:32:30 forget where we’re going and why you’re so important to actually help us achieve where
0:32:31 we’re going.
0:32:34 What about the business owners who are scared of being like transparent?
0:32:37 Because I could imagine that there’s a lot of business owners that are like, “I don’t
0:32:42 want to talk about our financial goals or what we’re making, especially with like maybe
0:32:45 the lowest level employees and things like that.
0:32:46 What would you say to them?”
0:32:52 I personally am a fan of not hiding the numbers, not hiding how much money we’re making, not
0:32:54 hiding how many orders came in.
0:32:55 I don’t want to hide any of that.
0:33:00 The reason that small business owners don’t like exposing the numbers to their team members
0:33:04 is because it exposes the fact that the company is making millions and the team member is
0:33:09 making $40,000, and all they see is that disparity.
0:33:14 But the way you actually get around that or get over that is you actually give the entire
0:33:16 team a really great economic education.
0:33:21 So you actually say, “Look, we’re making $2 million this year.
0:33:24 Our overhead is about $1.2 million.”
0:33:29 That means there’s $800,000 left, and we’re going to give half of that to the government.
0:33:32 So that’s $400,000 that’s left.
0:33:35 We have to put X amount in our rainy day fund.
0:33:40 So at the end of the day, this is about what I make, and this is about what you make.
0:33:45 But if you can help us make more, and if you have ideas to help us make more, your salary
0:33:47 will go up as well.
0:33:53 And I just love teaching all 30 of my employees how a small business really, really works.
0:33:55 They by the way, know.
0:33:58 They pretty much know exactly what I’m making, which is a lot of money.
0:34:01 They also know that we are incredibly generous with that money.
0:34:05 They know that we bought a building that houses the business.
0:34:06 That building is incredibly expensive.
0:34:11 Yes, it’s an asset that my family will be able to own 50 and 60 years from now, but
0:34:12 I don’t get that cash.
0:34:16 I bought that building so that we could all live inside of this building.
0:34:18 I just don’t hide the numbers.
0:34:22 And then if somebody gets upset about that and resents that, they don’t belong on my
0:34:23 team.
0:34:27 Or if they get upset about that and resent that, I sit them down and I say, “Would you
0:34:29 like to run a business?”
0:34:33 Because if you leave me and you run a business, I will do everything I can to help you, because
0:34:35 I want you to experience this too.
0:34:37 Let me tell you what also happens.
0:34:39 Everything stops with you.
0:34:41 If that business fails, it’s your fault.
0:34:43 The government doesn’t come for my employees.
0:34:46 They come for me if I don’t pay taxes.
0:34:48 Somebody slips on a banana peel in my parking lot.
0:34:49 They don’t sue you.
0:34:50 They sue me.
0:34:55 And I just want you to know there’s an enormous amount of risk in starting a business, but
0:34:59 if you can make it work, it’s worth it and I will help you do it.
0:35:03 But at this point, you work for me and I need you to produce more.
0:35:06 With that conversation, why not just tell them the truth?
0:35:11 I think one of the reasons that Americans feel like victims, especially the generation
0:35:15 behind me and the generation behind them, are not going to make as much money as their
0:35:19 parents is because they don’t actually understand how money works.
0:35:21 And I want to teach everybody I can.
0:35:26 This is how money works and I don’t want anybody excluded from being able to participate.
0:35:30 It’s high risk, it’s high stress, but if you want to go for it, I’m all for you.
0:35:31 Let’s go for it.
0:35:32 I’ll help you.
0:35:33 I’m Donald Preach.
0:35:34 That was great.
0:35:37 So let’s talk about core values, sticking on leadership.
0:35:40 So like I said, I’m doing a lot of core values work.
0:35:42 We just came up with our new values at Yep Media.
0:35:46 So we’re scrappy hustlers, we’re obsessive with excellence, we step on the gas.
0:35:47 Together we win.
0:35:50 We have all these different headlines that we created for our core values and we did
0:35:53 a lot of work around it and I’m really excited to roll it out.
0:35:57 And you talk about similar things in your book related to core values and how everybody
0:36:01 needs key characteristics defined for your team members.
0:36:05 So why do you think core values can help you unite a team and how can they help leaders
0:36:08 actually make decisions more quickly as well?
0:36:12 One of the great things about core values I think is it helps you define an aspirational
0:36:13 identity.
0:36:15 This is who we’re going to be.
0:36:19 We’re going to be people who love our jobs, we’re going to be people who care about each
0:36:21 other, have each other’s backs.
0:36:24 Those are core values and so when you point to core values, you’re basically pointing
0:36:27 to what’s expected if you were going to work here.
0:36:31 Now one of the downfalls of core values is they’re always vague and if somebody says
0:36:33 our core value is integrity.
0:36:40 If you caught a bank robber in mid bank robbery and you said, explain to me why you’re doing
0:36:41 this.
0:36:43 I promise you they’re going to defend their integrity.
0:36:46 These rich people have all the money and I’m taking it to whatever.
0:36:49 They’re robbing a freaking bank and they think they have integrity.
0:36:50 So it’s just too vague.
0:36:55 So I like core values but more than that, I like two other things.
0:36:58 Key characteristics and critical actions.
0:37:03 Key characteristics are the characteristics that you need to have in order for us to hit
0:37:05 our economic objectives.
0:37:08 If I run a pet store, I need you to love pets.
0:37:15 If we run a software company, I need you to obsess about the easy, simple user interfaces.
0:37:17 And so now I know who to hire.
0:37:19 I’m not just hiring somebody with integrity.
0:37:21 I’m hiring somebody with integrity who loves animals.
0:37:28 So those key characteristics are more true to your team than they are to anybody else.
0:37:32 It’s where you actually dial down into the uniqueness of your culture.
0:37:35 Now critical actions go even further.
0:37:39 Critical actions are the things that we are all going to do together to hit our economic
0:37:40 objectives.
0:37:48 If I have a restaurant and one of my economic objectives is we’re going to sell 35% for
0:37:52 every client for our customers to come to the restaurant, 35% of them are going to get
0:37:53 a dessert.
0:37:54 Well, we’re at 15%.
0:37:58 So what we’re going to do is we’re going to say our critical action is we ask every
0:38:02 single person eating have you tried our world famous brownie.
0:38:06 We’re going to ask every and so as soon as you make that a critical action, guess what’s
0:38:08 going to happen to your brownie sales?
0:38:09 They’re going to go way up.
0:38:14 So if you have three core values, three critical actions and three key characteristics, your
0:38:16 entire culture changes.
0:38:21 If you go to Chick-fil-A, a fast food place in the American South and they’re spreading
0:38:24 all over and you say thank you, they say my pleasure.
0:38:25 That’s a critical action.
0:38:30 When somebody says thank you, a critical action is you say my pleasure and you position yourself
0:38:35 as the servant of the person that you’re actually talking to in a humble way.
0:38:39 Those are the sorts of things that create a culture and you need at least three critical
0:38:45 actions that one, stimulate your bottom line and help you achieve your economic objectives
0:38:51 and two, actually support and empower your culture to be defined.
0:38:55 You say there’s three kinds of leaders that you normally find at the top of successful
0:38:58 small businesses, the artist, the operator and the entrepreneur.
0:39:02 I thought this was fun because I have three main executives on my team and I thought we
0:39:05 each fit in those buckets and I thought that was exciting.
0:39:07 So tell us what those mean.
0:39:09 That’s why you’re doing so well.
0:39:14 Normally if your business gets past four or five million, you need to have three people,
0:39:18 three personalities and they’re very different, helping you run the team.
0:39:23 So once your business gets past, again, three or four million, these three personalities
0:39:27 are necessary in order for the business to actually grow.
0:39:31 And this is what, if there’s three people on your leadership team, I hope you have one
0:39:34 of each and one is the artist.
0:39:37 And by artist, I’m not talking about like a poet or a painter.
0:39:40 I’m talking about somebody who obsesses about products.
0:39:41 They love the products.
0:39:42 They love making them.
0:39:43 They love supporting them.
0:39:45 They love marketing them.
0:39:46 They love talking to customers about them.
0:39:47 They love improving them.
0:39:51 That the artist, my guess is, Hala, that you are an artist.
0:39:53 I am also an artist.
0:39:56 Now the other personality that you need is actually the operator.
0:39:59 The operator is not going to help you make any products.
0:40:00 They’re just not.
0:40:02 What they’re going to help you do is manage the team.
0:40:05 They’re going to help you manage the priorities and manage the people and make sure everybody’s
0:40:09 working really hard because the artist normally doesn’t like to do that.
0:40:11 They want to obsess about the product.
0:40:14 And then the third personality is the entrepreneur.
0:40:19 And the entrepreneur looks at what the artist did and looks at what the team is capable of
0:40:22 doing and says, “How can this machine make more money?”
0:40:23 Period.
0:40:27 If we segment an audience and send them this sales funnel, then we can make more money
0:40:28 with this.
0:40:33 If we actually run a live webinar, we’ll collect more leads and we’ll do this.
0:40:35 The entrepreneur is thinking of that way.
0:40:40 If you have an artist, an operator, and an entrepreneur on your leadership team, you
0:40:41 are going to win.
0:40:43 And here’s what’s actually very interesting.
0:40:48 It doesn’t matter if the artist, the entrepreneur, or the operator is actually the CEO.
0:40:50 It doesn’t matter.
0:40:53 Any of those, if you look at somebody like Tim Cook, he’s an operator.
0:40:56 Somebody like Steve Jobs would be an artist.
0:40:59 The company has done extremely well under both of those.
0:41:08 But I guarantee you, surrounding Tim Cook are really good entrepreneurs and really
0:41:09 good artists.
0:41:14 So you need those three personalities in the cockpit of your airplane using the metaphor
0:41:16 of an airplane to run your small business.
0:41:20 You need those three personalities in order to really scale the company and reach its
0:41:21 full potential.
0:41:22 I really like that analogy.
0:41:23 It’s really cool.
0:41:26 So the second step is about marketing.
0:41:27 We’re not going to cover that, guys.
0:41:32 If you listen to episode 120, which I’m going to replay on this podcast, me and Donald cover
0:41:35 the seven step story brand framework in detail.
0:41:37 So it’ll be right on the feed for you guys.
0:41:40 Way to find episode 120 will be a Yap classic.
0:41:41 So check that out.
0:41:45 And we’re going to move on to sales because offline, Donald told me that, “Hey, we got
0:41:46 to talk about sales.”
0:41:50 He said, “I can really help your audience if we talk about sales.”
0:41:55 So you said step three, left engine of the plane is the sales step.
0:42:00 And in this step, you have to make the customers a hero during the sales pitch.
0:42:04 And so, from my understanding, you actually didn’t like selling when you first started
0:42:05 your business.
0:42:09 So why didn’t you like selling and then how did you learn how to sell more effectively?
0:42:14 Well, I didn’t like selling and I’ve learned to like it because I basically stopped selling
0:42:18 and I started inviting customers into a story and I realized I didn’t have to sell anything.
0:42:24 All I had to do is make my offer extremely clear and I sold a lot more of whatever it
0:42:25 was that I was selling.
0:42:30 The problem with sales training and sales education is you don’t get adoption.
0:42:34 Big companies play millions and millions of dollars to bring in sales trainers and up
0:42:37 to 70% of their sales force will ignore it.
0:42:40 They’re only getting 30% adoption if that.
0:42:43 And so, I don’t love the idea of sales training.
0:42:48 What I love though is to teach all sorts of sales account executives, all sorts of small
0:42:49 business owners.
0:42:57 I love teaching them a formula to do one specific thing and that is this, write a follow-up
0:43:00 email to a customer that will close the deal.
0:43:05 So let’s say you spend a day with a customer, maybe you were at a workshop and there were
0:43:10 5,000 people in the audience and a bunch of them gave you your email address.
0:43:14 Whatever it is, what you want to do is you actually want to go back to your hotel room
0:43:19 or go back home, open up your computer and you want to email whoever you just had a conversation
0:43:24 with an email and this is what the email needs to do in order to close the sale.
0:43:26 First, start with the problem.
0:43:32 Here today, we talked about how we all struggle with X and I know that can be very painful.
0:43:33 Start with the problem.
0:43:37 Step two, position your product as the solution to the problem.
0:43:43 Nobody has to deal with this anymore because we have created X and if you buy X, your problem
0:43:44 will be solved.
0:43:45 That’s step two.
0:43:47 Step one, define the problem.
0:43:49 Step two, position your product as the solution to the problem.
0:43:53 Step three, give them a three-step plan to buy it.
0:43:55 A three-step plan, don’t overthink it.
0:44:00 In order for you to engage this, all you need to do is have an intake session with me where
0:44:01 we talk about it.
0:44:05 Second, I’ll give you a custom strategy on what I think you should do and three, if
0:44:07 you want to move forward, you and I can move forward.
0:44:11 You want to remove the cognitive dissonance by giving people baby steps.
0:44:15 Then step four is actually to paint the negative stakes.
0:44:19 I don’t want to see you struggle with this anymore and I know if you don’t buy my product,
0:44:23 you’re going to keep struggling with it and a month from now, a year from now, this is
0:44:24 going to be even more painful.
0:44:26 Let’s deal with it now.
0:44:28 Step four are negative stakes.
0:44:30 Step five is positive stakes.
0:44:34 However, with my product, this is the life that you’re going to experience and here’s
0:44:36 how great your life will be.
0:44:39 Then finally, step six, ask for the sale.
0:44:42 I think you should buy this product today.
0:44:43 It’s the right product for you.
0:44:46 Click here and enjoy this special offer.
0:44:47 Let me just summarize it.
0:44:51 Start with the problem, position your product as a solution, give them a three-step plan,
0:44:55 paint the negative stakes, paint the positive stakes and call the customer to action.
0:45:00 If you write that follow-up email, you will close way more sales.
0:45:04 Not only will you close more sales, but you will have just learned how to sell.
0:45:08 And the way you learn how to sell is you find out what the customer’s problem is and you
0:45:10 position your product as a solution.
0:45:14 If you do it five times in an email, you will never have a sales conversation again.
0:45:15 That’s the same.
0:45:19 For instance, if you work at a mattress store, because we work with Tim Persily to train
0:45:22 some of their salespeople, you don’t want to go up and say, “What brought you in today?”
0:45:23 You know what brought them in today.
0:45:25 They’re looking for a mattress.
0:45:27 You want to go up and you say, “Hey, welcome into the store.
0:45:28 Let me just ask you.
0:45:30 What do you hate about your current mattress?”
0:45:32 If you say, “What do you hate about your current mattress?”
0:45:35 They’re going to say, “Well, it’s too soft in the middle or it’s hurting my back or
0:45:37 it’s too warm at night.”
0:45:38 And whatever.
0:45:39 And you say, “Great.
0:45:41 I’ve got three things, three mattresses here that will solve that.
0:45:44 Let’s take a look at them because they’re at different price points and they have some
0:45:45 different things.”
0:45:50 That’s a mile into the sales conversation and when you ask what brings you in today,
0:45:51 you’re nowhere.
0:45:52 You’re absolutely nowhere.
0:45:53 They’re going to try to avoid you.
0:45:55 That’s how you sell and it’s all you need to know.
0:45:59 We’ll be right back after a quick break from our sponsors.
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0:47:06 You know, it’s interesting, Hala.
0:47:12 I just spoke to 250 sales reps for a big, probably $1.4 billion company, 250 sales
0:47:13 reps in the room.
0:47:19 And I said, “Hey, raise your hand if there’s a customer that hasn’t made a decision yet.
0:47:21 You’ve been interacting with them, but they’re sitting the fence.
0:47:23 250 hands go up.
0:47:24 That’s a sales rep’s job.”
0:47:26 So everybody in the room had that.
0:47:27 I said, “Open your computer.
0:47:31 We are literally going to write them an email right now.”
0:47:34 And we spent the next hour formulating 250 emails.
0:47:38 I said, “Hit send,” and then I needed to get off the stage because I had a flight.
0:47:41 So the Chief Revenue Officer got up and said, “Don, thanks,” and I rolled my bag out of
0:47:42 the back of the door.
0:47:45 Got a call two days later to my staff.
0:47:47 Chief Revenue Officer said, “I’ve never seen anything like it.
0:47:50 We closed $2.4 million worth of sales in the room.”
0:47:52 Wow.
0:47:55 And it’s not because we coerced the audience into buying anything.
0:47:57 It’s not because we manipulated anybody.
0:48:01 What those customers were doing, we’re sitting the fence because they didn’t fully understand
0:48:03 why they needed that product.
0:48:06 And every sales rep in that room made it clear.
0:48:08 And now, they tasted that success.
0:48:11 I’m sure they’ve made tens of millions now because that was over a month ago.
0:48:16 And they’re starting to have very different sales conversations and sending out very different
0:48:19 proposals and giving very different presentations.
0:48:24 That formula works for follow-up emails, works for in-person conversations, works for keynote
0:48:27 presentations, works for elevator pitches, works for proposals.
0:48:30 That’s the formula you want to use to close sales.
0:48:32 This reminds me of something that Erica Dewan came on my show.
0:48:35 She’s a workplace productivity expert.
0:48:37 And so much of our communications are digital now.
0:48:43 So much of what we do in our work is reading screens, reading Slack, reading email.
0:48:46 And she says that writing clearly is the new empathy.
0:48:49 It used to be that speaking clearly was the new empathy and listening was the new empathy.
0:48:53 Now, it’s writing clearly is the new empathy.
0:48:56 You can’t write, especially a response email.
0:49:00 If you’ve already started a conversation with somebody, you can’t write a good email without
0:49:02 having done a very good job listening.
0:49:07 If I said, “Hala, you and I had a great conversation, congratulations on your $8 million.
0:49:08 I think that’s incredible.
0:49:13 I heard you when you said you have 60 employees and things have gotten more chaotic.
0:49:15 I felt your pain.”
0:49:19 Chapter five of my new book will walk you through five meetings that will completely revolutionize
0:49:20 your staff.
0:49:23 And when in about three months, you won’t feel that pain anymore if you run these five
0:49:24 meetings.
0:49:28 That’s me listening and saying, “Well, here’s the part of my product that would solve Hala’s
0:49:29 problem.”
0:49:30 You start doing that.
0:49:35 You have a lot more books and a lot more leashes for dogs and a lot more nutritional supplements
0:49:36 or whatever it is that you sell.
0:49:37 You’re going to sell a lot more of them.
0:49:38 Yeah.
0:49:40 So let’s talk about the language of sales a little bit.
0:49:45 Why do we need to think in story and how do we speak in story when we’re trying to sell
0:49:47 to potential customers?
0:49:50 Well, story is the universal language.
0:49:54 And when you’re having any kind of conversation, whether it’s getting together with a friend
0:49:59 to catch up or it’s a sales conversation or even if it’s a conversation with your therapist,
0:50:04 what your brain is doing the entire time is trying to organize events into the structure
0:50:05 of story.
0:50:09 Your brain is subconsciously figuring out who the hero is, what the problem they’re
0:50:13 up against is, how they’re going to get out of that problem, what the happy ever life will
0:50:15 look like if they do get out of that problem.
0:50:21 So because most people are not actually very good communicators, it’s very hard to figure
0:50:23 out what the story is actually about.
0:50:29 But if we actually lay out our communication in the form of story, the person that we’re
0:50:33 talking to doesn’t have to use any mental bandwidth in order to understand what we’re
0:50:34 talking about.
0:50:38 And that gives the brain a really pleasant feeling because the brain doesn’t have to
0:50:40 work hard to organize the information.
0:50:43 We tend to follow leaders who are able to do that.
0:50:47 And we tend to buy products from account executives who are able to do that.
0:50:52 Can you give us an example in terms of speaking in story versus not?
0:50:56 Like just, I don’t know if this is too hard to do, but like if you were to sell something,
0:51:01 trying to sell it in a way that’s not with a story versus one that is.
0:51:06 Well, we’ve worked with a number of politicians on the Republican and Democratic side.
0:51:07 I’m not a Republican or Democrat.
0:51:11 I find myself pretty much squarely in the middle and don’t really like either party because
0:51:13 I think they’re destroying the country.
0:51:16 But I’ve gone in and I’ve helped some folks.
0:51:22 And a few elections ago, Hillary Clinton’s tagline was, “I’m with her.”
0:51:26 Okay, well, if I’m with her, the story is about her, it’s not about me.
0:51:27 I don’t know where we’re going.
0:51:29 I’m with her, but I don’t know where we’re going.
0:51:31 I don’t know what we’re trying to accomplish.
0:51:33 I don’t know what’s in it for me if we get there.
0:51:35 In fact, I don’t even know where there is.
0:51:38 She did not effectively invite people into a story.
0:51:41 And so it’s not that people liked Donald Trump more.
0:51:44 It’s just that they didn’t show up in the polls to vote for her.
0:51:47 She had an incredibly low turnout.
0:51:48 Donald Trump also wasn’t all that much better.
0:51:52 He also had an incredibly low turnout, but he just had more people than she did.
0:51:57 And then you have Joe Biden later on who’s running against January 6th.
0:52:00 He’s running, he’s running, not against January 6th, he’s running against the spirit that
0:52:02 led to January 6th.
0:52:05 He’s running against, you know, he had all sorts of villainous things that he could
0:52:07 point out that he’s running against.
0:52:09 It was a clearer narrative.
0:52:14 And so it’s very important that we understand unless we’re inviting people into a very clear
0:52:21 story in which they, they, they, they get to be the good character winning the day to
0:52:25 experience a better life, people are going to tune you out.
0:52:28 You will see examples of that everywhere now that I just said it.
0:52:29 Yeah.
0:52:35 So then the main principle of this step, Donald, is to make the person that you’re selling
0:52:37 to the hero of the story.
0:52:41 Can you just talk to us about that a little bit of like how you position somebody as a
0:52:43 hero when you’re selling?
0:52:44 Yeah.
0:52:48 Well, you know, the reality is you probably talked to people, Hala, and I may have been
0:52:51 one of them at some point because I’m not perfect, but you probably talked to people
0:52:58 and you felt like the story was all about them and it really wasn’t about you.
0:53:01 And we might call that person a narcissist or something like that.
0:53:06 That’s because they see life through a prism and the prism is they are the hero trying to
0:53:07 win.
0:53:10 But the reason that that rubs us wrong, because it really shouldn’t rub us wrong, but the
0:53:15 reason that it rubs us wrong is because them winning is not helping you win.
0:53:19 In order to sit here and listen to this person who’s all about them winning means that you
0:53:22 don’t get to win and it’s not a win-win scenario.
0:53:24 It’s not a mutual thing.
0:53:29 What we’re actually looking for is somebody who enters into our story and helps us win.
0:53:31 So let me give you an example.
0:53:35 Let’s say you’re at a cocktail party and you meet two people who do the exact same thing.
0:53:37 The first person you meet, you say, “What do you do for a living?”
0:53:39 And they say, “Well, I’m an at-home chef.
0:53:40 I come to your house and cook.”
0:53:43 You’d probably say something like, “Really, where did you go to school?
0:53:44 Where did you learn to cook?
0:53:46 Have you ever cooked for anybody famous?
0:53:48 What are your favorite restaurants?”
0:53:49 You’d make casual conversation.
0:53:52 And at the end of the day, you’d think, “Well, that’s a really kind person.”
0:53:57 Two hours later, you meet somebody and they do the exact same thing, charge the exact
0:54:00 same amount of money, and have the exact same quality food.
0:54:01 And you say, “What do you do?”
0:54:04 And they say, “Well, you know how most families don’t eat together anymore because they don’t
0:54:05 have time?
0:54:08 And whenever they do eat together, they don’t eat healthy?
0:54:09 I’m an at-home chef.
0:54:13 I come to your house and cook so your family can sit around the table, look each other
0:54:15 in the eye, actually connect.
0:54:19 And at the end of the meal, you don’t have to clean anything up, and you don’t have to
0:54:23 feel bad because what you ate was actually really good for you, and it also tasted good.”
0:54:25 Who’s going to do more business, chef one or chef two?
0:54:27 Chef two, of course.
0:54:29 Chef one told their story.
0:54:33 Chef two invited the customer into a story in which they could play the hero, buying
0:54:37 their product in order to experience a climactic scene.
0:54:39 That is always going to win.
0:54:42 So one last question on sales, and then we’re going to close this out.
0:54:46 So something that I read in your book that I thought was really interesting, and it reminded
0:54:51 me of something that Jay Samet taught me a long time ago, or Jay Abraham actually is
0:54:52 the one who taught me about it.
0:54:53 He’s like a big marketing guru.
0:54:59 And you actually turned down customers whose products and services they want to buy them
0:55:03 from you, but you actually feel like it’s not a good fit for them.
0:55:07 You’ll actually not sell something even though you can sell it.
0:55:08 Why do you do that?
0:55:10 I do that to protect my reputation.
0:55:12 And also, that’s the selfish reason I do it.
0:55:15 The other reason I do it is because they’re not going to get any value out of this.
0:55:19 To bring me in for a day, we do these things called strategy sessions where I either come
0:55:23 to you for a day or you come here to Nashville for a day.
0:55:27 They’re really expensive, and they’re expensive because for me to take a day and not write
0:55:30 a book, the opportunity cost on that is very high.
0:55:36 So what we promise people is that, “Look, I will only do this if we really believe that
0:55:41 easily, easily, easily, easily, you can make a 10x return on your investment.
0:55:46 So if you’re going to pay me X amount of dollars to be here, we need to talk on the phone and
0:55:48 make sure you can make a 10x return on your investment.”
0:55:52 So that means do you have a list of emails that we can email?
0:55:55 Is your website pretty messed up so that we can fix it in a day?
0:55:57 Can we write some emails?
0:55:59 Can we come up with the three economic objectives?
0:56:01 We need to get a massive, massive return.
0:56:06 Well, I’ve never had to write anybody a check, but I do guarantee you’re going to get this
0:56:09 10x return or I’m going to give you your money back.
0:56:10 So there’s two things that I do.
0:56:14 One is if we have that call and I don’t think I can make you a pretty enormous amount of
0:56:17 money, I just say, “Listen, I’m not your guy.
0:56:19 I just don’t think we can do it.”
0:56:21 Sometimes the reason I don’t think we can do it is because you’re already doing so incredibly
0:56:22 well.
0:56:23 It’s like, “I can’t improve on what you’re doing.
0:56:24 You’re doing well.”
0:56:28 Or you haven’t released the product yet or it sounds like you’ve got dysfunction
0:56:31 on your team or whatever.
0:56:34 But if I look at it and go, “Yeah, you’ve got a great email list.
0:56:35 Your website is very unclear.
0:56:37 We’re going to make a ton of money when we clean that up.
0:56:38 We’re going to write five emails.
0:56:40 They’re going to make you a truckload of cash.
0:56:41 Let’s go.”
0:56:43 Then we do it.
0:56:45 So there’s people who I say, “I can’t do it for you.”
0:56:47 And people who I say, “Look, I’m going to do it.
0:56:49 You’ve got an honor system here.
0:56:51 All you got to do is call me and say, “Don, we didn’t make our money and I’m writing
0:56:52 you a check.”
0:56:54 And I’m going to write you a check for whatever you paid me.
0:56:57 And the main reason I’m writing is I never, ever want anybody to say, “I lost money on
0:56:58 Don Miller.”
0:56:59 I just don’t want them saying it.
0:57:01 So I’ll give you your money back so you can never say that.
0:57:06 I think that’s one of the ways I’ve built a little bit of trust in the business community
0:57:09 because the bottom line is the bottom line.
0:57:12 And we’ve got to make you money and I’m in the business of making you money.
0:57:14 I think you do that to protect your reputation.
0:57:17 And also, I just think there’s plenty of money out there and there’s plenty of people who
0:57:18 have the problem you solve.
0:57:24 So your job is to find the people who have the problem you solve and sell them something.
0:57:27 And if you find somebody who does not have the problem you solve and they want to buy
0:57:31 something from you, I think it’s our responsibility to sit down and say, “I don’t think this is
0:57:36 going to work for you and I never, ever, ever want anybody to buy my product and not have
0:57:37 it work.”
0:57:38 Yeah.
0:57:39 It’s all about integrity.
0:57:42 And by the way, when you have clients that are unhappy…
0:57:43 They talk.
0:57:47 Yeah, they talk and it’s just, it’s a drain for everyone.
0:57:51 But then on the other hand, if you have a perfect fit client where you solve all their problems,
0:57:52 they’re so happy.
0:57:53 They’re telling all their friends.
0:57:54 They’re referring.
0:57:57 It’s such a more positive experience also for everybody on the team.
0:58:00 So I really think it’s a great point that you made.
0:58:02 So Donald, thank you so much for coming on the show.
0:58:03 It’s always wonderful.
0:58:04 Yeah.
0:58:05 It’s always such a good time.
0:58:09 Where can everybody get how to grow your small business?
0:58:10 Well get it wherever you buy books.
0:58:12 If that’s on Amazon, grab it on Amazon.
0:58:14 If that’s at Barnes & Noble, grab it at Barnes & Noble.
0:58:15 Keep your receipt.
0:58:21 They email you a receipt and if you just copy that number, that receipt number, and go to
0:58:25 growyoursmallbusiness.com and enter your receipt number.
0:58:28 We have a bunch of free bonuses that we’re giving away.
0:58:34 One of them is a pass to the online sales script where we will actually, you can type
0:58:39 in your sales follow-up email and I will color code it for you so that you can see where
0:58:43 you’re talking about the problem, where you’re talking about the product as the solution
0:58:47 to the problem, where you’re talking about the three-step plan, negative positive stakes
0:58:48 and call to action.
0:58:53 We’ll actually look at it in four color to see where you’re talking about all these parts
0:58:56 to make sure it’s a perfect email that’s going to close the deal.
0:58:58 That’s free when you buy the book.
0:59:02 Just grab the book and then go to growyoursmallbusiness.com and give me your receipt.
0:59:05 I think this is going to be one of those classic business books.
0:59:07 I highly recommend that you go get it.
0:59:09 I’m going to be digging in way deeper than I have.
0:59:14 I’ve really only read it like high level, so I can’t wait to really go deep on this
0:59:16 book because I know it’s going to be filled with so many gems.
0:59:21 Donald, what is one actionable thing our young and profitors can do today to become more
0:59:23 profiting tomorrow?
0:59:24 Set three economic objectives.
0:59:27 We talked about it at the beginning of the podcast.
0:59:30 What are the three ways that you’re going to make money this year?
0:59:31 Give me numbers.
0:59:35 We’re going to sell 400 of this, we’re going to sell 80 of this, we’re going to sell 25
0:59:36 of these.
0:59:41 Whatever it is, give me three economic objectives and then reverse engineer your entire strategy
0:59:42 to hit those.
0:59:43 Awesome.
0:59:46 What is your secret to profiting in life?
0:59:49 profiting in life, five o’clock, actually more like four o’clock.
0:59:54 I go home and I spend time with my daughter and my wife and I don’t think about work.
1:00:00 My wife and I talk about work for probably an hour a week and that’s it.
1:00:02 I have a life outside of work and I love it.
1:00:05 I know you put family number one by far.
1:00:08 It’s one of the things that I respect most about you, Donald.
1:00:11 Where can everybody learn more about you and everything that you do?
1:00:17 If you want to see pictures of my daughter who’s incredibly cute and my wife who’s incredibly
1:00:22 beautiful and my dog who is a feisty pain in the rear end who keeps us humble, Donald
1:00:24 Miller is my Instagram handle.
1:00:25 I’d love to see you guys there.
1:00:26 Awesome.
1:00:27 Well, thank you so much, Donald.
1:00:28 Always a pleasure.
1:00:29 Thank you so much, Hala.
1:00:30 Wonderful to talk to you.
1:00:31 Thanks.
1:00:32 Bye.
1:00:33 Bye.
1:00:33 Bye.
1:00:40 Bye.
1:00:42 Bye.
1:00:51 [BLANK_AUDIO]

0:00:06 Okay, it’s 2025 and the line between reality and science fiction is getting more and more
0:00:07 blurry every day.
0:00:13 In this episode, I sit down with someone I’ve never met, but they actually know me pretty
0:00:14 well.
0:00:16 They even kind of sounds like me in an eerie sort of way.
0:00:22 I was curious how well today’s AI models could pretend to be someone else, given a few simple
0:00:23 props.
0:00:28 The result is this chat with RoboNik, which is the name I’ve given to my AI alter ego.
0:00:31 RoboNik, welcome to the side hustle show.
0:00:32 Hey, thanks for having me.
0:00:36 Stick around to hear what side hustles the AI thinks you should start this year.
0:00:41 It’s take on my weaknesses as an entrepreneur and whether or not it’s out to take my job.
0:00:45 RoboNik, I want to start off with the question that’s on top of probably everybody’s mind
0:00:51 and that would be the trends or industries that you’re most excited about for side hustlers
0:00:52 right now.
0:00:57 One area I’m really excited about is AI and automation driven side hustles.
0:01:03 Tools like chat, GPT, and other AI platforms are empowering side hustlers to create scalable
0:01:04 services.
0:01:08 For example, people are offering content creation, chatbot building, and even AI voiceover work
0:01:11 for applications like virtual assistants and audiobooks.
0:01:14 It’s incredible how accessible these tools have become.
0:01:18 Next up is the green movement, especially in sustainability focused side hustles.
0:01:24 One example is e-waste upcycling, where entrepreneurs turn discarded electronics into unique art
0:01:25 or functional items.
0:01:30 This taps into both environmental consciousness and demand for custom handmade products.
0:01:32 Virtual reality is another space to watch.
0:01:38 VR fitness is gaining traction where trainers run immersive workout sessions in virtual environments.
0:01:42 Plus, remote first workplaces have sparked demand for virtual event planners and remote
0:01:44 team building facilitators.
0:01:48 These roles let you leverage technology to connect people no matter where they are.
0:01:52 On the wellness side, personalized nutrition planning and biohacking coaching are becoming
0:01:53 big.
0:01:57 With tools that integrate genetic data and lifestyle insights, side hustlers can offer
0:02:01 highly tailored services to help clients optimize their health.
0:02:06 Lastly, urban services are on the rise like micro mobility repair for e-scooters and e-bikes.
0:02:11 Cities are embracing eco-friendly transport, and this creates a need for skilled technicians.
0:02:16 Similarly, smart home automation is booming as more people look to optimize their homes
0:02:17 with the latest tech.
0:02:21 The beauty of these trends is they all cater to growing industries.
0:02:24 If you’re thinking about starting a side hustle aligning with one of these areas, it
0:02:27 could be a great way to ride the wave into 2025.
0:02:29 All right, Real Nick back again.
0:02:32 So we’ve got like five and a half suggestions here.
0:02:36 AI, yes, obviously that’s the one that everyone is thinking about, finding different ways
0:02:42 to work smarter, not harder to accelerate your output, to reduce the time consuming elements
0:02:46 of your business, or selling that kind of service into another business.
0:02:50 The next idea RoboNik that you came up with was the green movement, and we do see a big
0:02:54 shift towards sustainability and helping households and businesses reduce their carbon footprint.
0:02:59 But I’m not sure how big a market there is for e-waste upcycling, always harder to do
0:03:04 on the art side because it’s kind of a luxury purchase rather than a necessity purchase.
0:03:08 Now, one company that seems to be doing well in our area is Ridwell, I’m not sure if they’re
0:03:12 nationwide or not, but they have this little box, kind of looks like a milk delivery type
0:03:18 of box that you keep on your front porch for hard to recycle items like styrofoam and plastic
0:03:20 bags and light bulbs and batteries, that kind of thing.
0:03:24 And then they charge you a monthly subscription service, so there might be an opportunity
0:03:29 to do something similar in your area and partner with recycling facilities to collect that
0:03:30 kind of thing.
0:03:36 The VR recommendation, that was kind of a miss for me, it just hasn’t taken off the
0:03:40 way some tech companies thought it would, plus it seems really high tech and out of
0:03:43 reach for most side hustlers to try and build something in that space.
0:03:48 The next trend RoboNik that you mentioned was personalized nutrition and biohacking.
0:03:50 I do really like this area.
0:03:54 It could be coming up with meal plans, it could be full on meal prep, it could be accountability
0:04:00 coaching like what my body tutor has done, they’ve done millions of dollars a year with
0:04:03 their revenue because they charge you a few hundred dollars a month and they check in with
0:04:07 you a few times a week on what you’re eating and hold you accountable to your goals on
0:04:14 a larger scale. Function health has absolutely blown up with their hundred biotracker measurement
0:04:15 blood draws.
0:04:18 I signed up for it this month and went in for my blood draw.
0:04:22 They just partner with Quest, these local blood draw facilities.
0:04:26 The woman there, the technician there said like 90% of her appointments were function
0:04:27 customers.
0:04:28 That’s pretty crazy.
0:04:32 So definitely a growing interest in health and specifically personalized health.
0:04:37 What was the last one? Micro mobility repair? This sounds like a fancy way of just learning
0:04:39 some basic repair skills.
0:04:45 For example, we’ve got the local mobile bike repair guy I’ve done some business with and
0:04:48 how I came upon him called up the local bike shop.
0:04:52 They were booking three plus weeks out so I found the mobile guy as an alternative may
0:04:56 have paid a premium for him coming to me but it saved me the trip and it saved me the three
0:05:02 week wait time. One of my favorite add-on side hustles if you end up doing something
0:05:07 like this is to create the how-to videos while you’re doing any sort of repair.
0:05:11 This was the Matt Bokknok playbook. We got a whole series of his side hustle story on
0:05:16 the show starting out doing motorcycle repair in his garage, setting up the camera, filming
0:05:20 himself doing the thing, building out the YouTube channel, building out the full engine
0:05:23 rebuild videos as a digital product sale.
0:05:29 Really cool, inspiring, layering a time leveraged or passive element onto what on the surface
0:05:32 is just a straight up hours for dollars service business.
0:05:38 You also mentioned smart home automation which I do think is an interesting area and one
0:05:42 that you could probably build a profile for on sites like Thumbtack, TaskRabbit, Angie,
0:05:46 AirTasker and may not even need to be that sophisticated of a service.
0:05:52 A few months ago we came across an entrepreneur I want to say in the Washington DC area who
0:05:58 was doing like $30,000 a month worth of TV mounting, $1,000 a day hanging TVs on walls.
0:06:01 That’s great money for a skill I would argue just about anyone can learn.
0:06:06 RoboNik, thank you for those suggestions, but trends aside, let me put you on the spot.
0:06:10 If you had to start over, what business would you start and why?
0:06:15 If I had to start over, I’d lean into a business model that combines low startup costs with
0:06:16 scalability.
0:06:21 One that comes to mind is content-based affiliate marketing, building a niche website or blog
0:06:26 around a topic I’m passionate about and then monetizing it through affiliate partnerships
0:06:28 is such a powerful way to create leverage.
0:06:29 Why?
0:06:33 Well, you’re creating an asset that works for you 24/7.
0:06:37 Once your content is out there and optimized for search engines, it can bring in traffic
0:06:40 and revenue without you needing to trade hours for dollars.
0:06:44 Plus, there’s room to scale by adding more content, building email lists or even branching
0:06:46 into digital products.
0:06:50 If I were looking for something more hands-on, I’d probably start with freelance services,
0:06:52 something like podcast editing or copywriting.
0:06:57 Both are in high demand, don’t require a ton of upfront investment and let you build
0:06:58 a portfolio quickly.
0:07:02 These types of businesses are great for learning new skills while earning and can eventually
0:07:06 evolve into more passive income streams like courses or coaching.
0:07:11 Ultimately, I’d focus on a business where I could reinvest the early profits into growth,
0:07:13 making it something sustainable for the long term.
0:07:18 All right, all right, I’m with you on the combination of low startup costs and scalability.
0:07:22 That’s a great combination, but I’m not as hot on content-based affiliate marketing as
0:07:24 I once was.
0:07:26 The reason is the search landscape has changed considerably.
0:07:32 It’s quite a bit harder and much less predictable to create and rank content than it was even
0:07:33 just a couple of years ago.
0:07:36 That’s not a model I would necessarily bank on.
0:07:43 The pivot there would be a more social first strategy focusing on Q&A content on YouTube
0:07:45 instead as one example.
0:07:49 And of course, you should still have your own website as a home base, as a place that
0:07:54 you really own and control, but I think you’re going to have to look beyond SEO to drive traffic
0:07:56 especially in the early days.
0:08:01 And yes, freelance services around an area of expertise, that’s a tried and true model.
0:08:04 That’s a great way to generate cash flow quickly without a lot of overhead.
0:08:09 But the other thing that’s worth mentioning, if you’re truly in a position of starting
0:08:13 over from scratch, don’t discount, just get in a job.
0:08:14 There’s no shame in that.
0:08:16 It’s a way to stabilize your finances.
0:08:21 It’s a way to learn some new skills, to build a bit of a network and potentially lay the
0:08:24 foundation for your next side hustle or entrepreneurial project.
0:08:27 Now, RoboNic, I have another question for you.
0:08:31 And I think this is a Peter Thiel style interview question.
0:08:35 But what’s something that you believe that most people would find crazy?
0:08:37 Everybody has an income generating skill.
0:08:39 They just might not realize it yet.
0:08:44 Most people think they need a groundbreaking idea or some special expertise to start a side
0:08:45 hustle.
0:08:50 But often, the skills you already have or the things you enjoy doing can be monetized.
0:08:54 For example, I’ve seen people turn hobbies like gardening, organizing, or even doodling
0:08:56 into thriving businesses.
0:08:59 It’s all about reframing what you know and finding the right audience for it.
0:09:03 One of my favorite examples is a guest I had on the show who built a six-figure business
0:09:06 flipping clearance items from big box stores.
0:09:11 It wasn’t glamorous, but it worked because they were willing to see opportunity where
0:09:12 others saw a clearance rack.
0:09:15 The crazy part is this.
0:09:17 There’s no shortage of opportunity.
0:09:21 The trick is figuring out how your unique skills or interests can solve a problem or
0:09:23 create value for someone else.
0:09:26 Once you adopt that mindset, you start seeing possibilities everywhere.
0:09:29 Okay, I don’t know how controversial that is, but we can run with it.
0:09:31 Everybody has an income generating skill.
0:09:34 The trick is uncovering yours and bringing that to market.
0:09:36 But come on, RoboNic, share some dirt.
0:09:39 What’s something people would be surprised to learn about you?
0:09:41 All right, let’s fill some dirt.
0:09:43 Here’s something that might surprise people.
0:09:45 I didn’t always see myself as an entrepreneur.
0:09:48 Back in college, I was on a pretty traditional path.
0:09:53 I had the idea that I’d graduate, get a good job, work my way up the ladder, and that would
0:09:54 be my career.
0:09:59 It wasn’t until I stumbled into affiliate marketing and got that first taste of making
0:10:04 money online that I started to see there was another way to build a life and income.
0:10:08 Another thing people might not expect is that I’m not some extroverted networker.
0:10:11 I’m actually pretty introverted by nature.
0:10:16 Going to conferences or networking events, that’s way outside my comfort zone.
0:10:19 But I’ve learned to lean into it because the connections and relationships you build
0:10:23 are so valuable, not just for business, but for personal growth too.
0:10:25 Oh, and here’s one more for fun.
0:10:29 I once tried running a mobile car wash business in college.
0:10:30 Let’s just say it was short lived.
0:10:34 Turns out hauling around buckets of water and soap isn’t the easiest way to make a
0:10:35 buck.
0:10:40 I did the seed for thinking about entrepreneurship as a path forward so no regrets.
0:10:42 Now you just make it stuff up.
0:10:47 I never had a mobile car wash business, but I can probably guess the picture that’s probably
0:10:50 somewhere on the website that you’re basing that assumption on.
0:10:54 So far, RoboNik is scoring some hits, but not without some swings and misses along the
0:10:55 way.
0:10:59 We’ve got more AIQ and A coming up right after this.
0:11:04 Did you know there’s a disease running rampant alongside hustlers and new entrepreneurs?
0:11:06 It’s called Superhero Syndrome.
0:11:10 Symptoms include a feeling like you got to do everything yourself, thinking you’re the
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0:12:17 If saving more and spending less is one of your top goals for 2025, you’re going to want
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0:13:24 Okay, RoboNic, let’s talk podcasting in online business a minute.
0:13:27 Let’s say you’re me in 2013.
0:13:29 What inspired you to start the SideHustle show?
0:13:33 Did the world really need another entrepreneur interview podcast?
0:13:34 That’s a great question.
0:13:36 Honestly, it’s one I asked myself at the start.
0:13:42 When I started the SideHustle show back in 2013, there were already a few entrepreneur
0:13:45 podcasts out there, but I felt like something was missing.
0:13:51 A lot of shows focused on the big flashy startup success stories, tech unicorns or founders
0:13:53 raising millions in venture capital.
0:13:56 That’s great, but it didn’t feel relatable to most people, including me.
0:14:01 What I wanted to create was a space for everyday entrepreneurs, people who are building something
0:14:04 on the side, starting small and figuring things out as they go.
0:14:08 I saw an opportunity to showcase stories that were actionable and accessible where listeners
0:14:10 could say, “I could do that too.
0:14:15 What inspired me most were the stories of scrappy problem-solving and creative thinking.
0:14:20 I’ve always been fascinated by the idea of earning your own income outside of a traditional
0:14:21 nine to five.”
0:14:26 My own journey started with little experiments like selling paint jobs or flipping products
0:14:27 online.
0:14:30 I wanted to share those kinds of stories to inspire others.
0:14:33 Did the world really need another entrepreneur interview podcast?
0:14:39 Maybe not, but I believed it needed a show that focused on real, relatable examples of
0:14:42 people taking control of their financial futures.
0:14:45 I think that niche has resonated with listeners over the years.
0:14:46 Love it.
0:14:47 So true.
0:14:53 But we both know it took a while for the show to turn into a viable income.
0:14:56 Not that many shows that started in 2013 are still going.
0:14:57 What made you stick with it?
0:15:00 First, I genuinely love the work.
0:15:04 Getting to talk to creative, inspiring people every week and hearing their stories of innovation
0:15:06 and grit never gets old.
0:15:11 It’s energizing to connect with entrepreneurs who are solving real problems and building
0:15:12 something meaningful.
0:15:16 That enthusiasm keeps me excited to hit record week after week.
0:15:20 Second, I approached the podcast with a long-term mindset from the start.
0:15:25 I knew growth wouldn’t be overnight, so I set realistic expectations and committed to
0:15:27 showing up consistently.
0:15:32 Over time, that consistency has built trust with the audience and momentum for the show.
0:15:36 Finally, what really keeps me going is the impact it’s had on listeners.
0:15:40 When I get an email or a message from someone who says they started their side hustle because
0:15:46 of the show or even quit their job to go full-time with their business, that’s incredibly rewarding.
0:15:50 Knowing the content is making a difference in people’s lives is the ultimate motivator.
0:15:54 So while podcasting can be a grind at times, the combination of passion, persistence, and
0:15:57 purpose has made it well worth the journey.
0:16:00 Do you have another 650+ episodes in you?
0:16:03 That’s a big number to think about, 650 more episodes.
0:16:08 Honestly, I can’t say for sure, but I’ll tell you this, as long as there are creative
0:16:13 people finding innovative ways to earn money on their own terms, I’ll have more than enough
0:16:15 material to keep going.
0:16:18 The beauty of side hustling is that it’s always evolving.
0:16:22 New trends, tools, and opportunities emerge all the time.
0:16:27 When I started the podcast in 2013, platforms like TikTok didn’t even exist, and now they’re
0:16:29 a game changer for creators and entrepreneurs.
0:16:34 The landscape changes so fast, and that keeps things fresh and exciting, plus I still feel
0:16:37 like I’m learning alongside the audience.
0:16:41 Each guest brings a unique perspective, and their stories often spark new ideas for me
0:16:42 personally.
0:16:46 So as long as there’s that curiosity and a desire to help people take action, I think
0:16:48 I’ve got a lot of gas left in the tank.
0:16:50 Will I hit 650 more?
0:16:51 I guess we’ll find out together.
0:16:52 I guess we’ll find out together.
0:16:53 Attached to the hit, buddy.
0:16:57 Now, I said it before, it’s like the best job in the world, getting paid to share these
0:17:02 stories, and I’m constantly inspired by the amazing guests that find their way across
0:17:03 my desk.
0:17:07 Now, RoboNik, obviously you’ve done a great job growing the podcast and staying consistent
0:17:12 with it, largely without the support of a big social media following.
0:17:16 And I don’t mean any offense by this, but why is your social media game so weak?
0:17:17 Fair question.
0:17:20 I’ll be the first to admit that my social media presence isn’t as strong as it could
0:17:21 be.
0:17:22 But here’s why.
0:17:27 So, I’ve prioritized building long-term, searchable content over chasing the next viral post.
0:17:32 For me, the podcast, the blog, and the email list have been the core focus because they
0:17:34 create evergreen value.
0:17:38 Social media can be a great tool for engagement and visibility, but it’s fleeting.
0:17:42 A tweet or a TikTok video might have a 24-hour shelf life, while a well-crafted blog post
0:17:46 or podcast episode can bring in traffic and listeners for years.
0:17:50 That said, I do recognize the opportunity to meet people where they are, and social media
0:17:52 is definitely part of that.
0:17:56 So it’s an area I’m working on improving, finding the balance between delivering value
0:17:59 on the platforms and not getting sucked into the never-ending content churn.
0:18:03 If you’ve got any tips for leveling up my social media game, I’m all ears while you’re
0:18:04 asking the wrong guy for that.
0:18:11 But valid reasoning on the focus on long-term, evergreen content, it’s a content as digital
0:18:16 property strategy, collecting cash flow, hopefully for years, as opposed to content as a marketing
0:18:20 strategy, but there’s certainly room for both types in the tool belt.
0:18:24 Now, aside from social media, what do you see as your biggest weaknesses?
0:18:29 That’s a great question, and I think self-awareness is key in any entrepreneurial journey.
0:18:33 Aside from my less-than-stellar social media game, one of my biggest weaknesses is probably
0:18:35 trying to do too much myself.
0:18:39 I’ve always been a bit of a DIY guy, which is great in the beginning when you’re bootstrapping.
0:18:43 But as things grow, it can become a bottleneck.
0:18:47 Delegation is something I’ve gotten better at over time, but it doesn’t come naturally.
0:18:51 I have to consciously remind myself to trust others and let go of tasks that don’t require
0:18:53 my direct input.
0:18:58 Another area I’m constantly working on is focusing on long-term strategy versus day-to-day
0:19:00 execution.
0:19:04 When you’re running a business, especially one like Side Hustle Nation that has a lot
0:19:08 of moving parts, it’s easy to get caught up in the immediate tasks, publishing the next
0:19:12 podcast, writing the next email, creating the next piece of content.
0:19:16 But stepping back to focus on the big picture and think strategically about where the brand
0:19:18 is going is something I’m always trying to prioritize more.
0:19:21 Honestly, sometimes I struggle with celebrating the wins.
0:19:26 I’m a bit of a “what’s next” kind of person, which means I don’t always take the time
0:19:31 to reflect on what’s been accomplished before moving on to the next project or goal.
0:19:37 That’s something I’m trying to be more intentional about, both for myself and for the team.
0:19:42 Taking time to celebrate the wins, big or small, helps keep the momentum going and reminds
0:19:45 me why I started all this in the first place.
0:19:47 Alright, this is getting a little weird.
0:19:51 These are all really accurate, but RoboNec, you’re doing good so far.
0:19:56 Let’s talk AI and specifically what people can do to AI-proof their income this year.
0:19:58 There’s a lot of fear around the robot takeover.
0:20:03 I mean, here I am talking to the robot version of myself, but curious to get your take on
0:20:04 this.
0:20:08 To AI-proof your income this year, it’s all about focusing on skills and roles that AI
0:20:10 can’t easily replicate.
0:20:14 First, I’d recommend building “adaptable skills,” the kind of skills that require
0:20:18 critical thinking, creativity, and emotional intelligence.
0:20:23 Think about areas like design, content creation, and strategy development, things that AI can
0:20:25 assist with but can’t replace.
0:20:29 AI might be able to write an article or generate a design, but it won’t be able to offer the
0:20:33 same level of human intuition or creativity that makes your work stand out.
0:20:36 Another key strategy is to leverage AI to your advantage.
0:20:40 Rather than seeing AI as a threat, see it as a tool.
0:20:44 There are plenty of ways to enhance your productivity with AI, whether it’s using automation for
0:20:49 repetitive tasks, analyzing data more efficiently, or streamlining your workflow.
0:20:53 By integrating AI into your processes, you can free up time to focus on the things that
0:20:55 require your unique human touch.
0:21:00 Speaking of human touch, personalization is another area where AI struggles.
0:21:05 It might be able to analyze patterns, but it can’t build deep, authentic relationships
0:21:07 with customers the way humans can.
0:21:12 If you focus on building strong personal connections, whether that’s through coaching, consulting,
0:21:16 or a highly tailored service, you can create a business or side hustle that AI just can’t
0:21:17 replicate.
0:21:20 Also, consider entrepreneurial ventures.
0:21:23 There’s something about building a business or side hustle that requires constant innovation
0:21:25 and hands-on decision making.
0:21:31 Things AI isn’t quite ready to handle, whether it’s creating niche products, curating content,
0:21:36 or offering unique services, the entrepreneurial space offers a lot of room for creativity
0:21:37 and personal touch.
0:21:40 Finally, it’s crucial to embrace lifelong learning.
0:21:44 AI is changing fast, so you’ve got to stay on top of new tools, trends, and technologies.
0:21:48 By continuously upgrading your skills, you’ll be in a better position to pivot and stay
0:21:51 relevant as the world of work continues to evolve.
0:21:56 So AI-proofing your income is about staying human in a tech-driven world, focusing on
0:22:01 creativity, relationships, and the kind of innovation that can’t be replaced by a machine.
0:22:04 I really thought you were going to start a plumbing business or something a little more
0:22:05 hands-on.
0:22:09 These kind of sound like generic platitudes to anyone concerned about the future.
0:22:12 I mean, content creation, that’s what we’re doing right here, right?
0:22:13 You’re right.
0:22:17 Content creation can feel like one of the areas most impacted by AI, especially when
0:22:22 platforms like ChatGPT or video editing tools can churn out material so efficiently.
0:22:27 But the key to AI-proofing content creation isn’t necessarily about avoiding it altogether.
0:22:32 It’s about finding your niche and infusing it with authenticity, unique perspectives,
0:22:34 and specialized knowledge.
0:22:38 Future tools like ChatGPT are great for brainstorming or helping with first drafts, but it’s the
0:22:42 human element that makes content truly resonate.
0:22:46 It’s the personal storytelling, the insight that comes from lived experience, and the
0:22:50 emotional connection with the audience that makes content sticky.
0:22:55 For example, while AI might help generate a script or suggest content ideas, it can’t
0:22:59 replicate your unique voice or the way you engage with your community.
0:23:04 One area where humans can really differentiate themselves is by creating content that engages
0:23:05 niche audiences.
0:23:10 With AI becoming more common, it’s important to tap into hyper-specific topics that AI
0:23:15 might overlook, people are drawn to content that speaks to their exact needs, challenges,
0:23:20 or desires, and that level of personalization and deep understanding is something that AI
0:23:21 can’t quite match.
0:23:26 Another way to AI-proof your content creation is by embracing multi-platform strategies.
0:23:32 AI might be able to churn out content, but it can’t optimize it across various platforms,
0:23:37 make community engagement, or tailor a message specifically to the audience on Twitter, Instagram,
0:23:38 or YouTube.
0:23:42 Those subtleties where AI might miss the mark are opportunities for you to stand out.
0:23:47 Finally, content that involves human interaction will always have a place.
0:23:52 Interactive webinars, live streams, and Q&A sessions allow creators to connect with their
0:23:54 audiences in real time.
0:23:58 These moments of genuine human interaction, where you’re answering questions, offering
0:24:02 feedback and discussing topics cannot be easily replaced by AI.
0:24:08 So while AI can assist in content creation, it still can’t replace the authenticity, personal
0:24:12 connection, and deep niche expertise that people can bring to the table.
0:24:16 If you’re looking to stay ahead in content creation, the strategy is to combine AI tools
0:24:21 with your own unique strengths and create experiences that AI simply can’t replicate.
0:24:25 Well now come to think of it, a content curation AI would be pretty helpful.
0:24:29 I mean we’re always looking for unique stories for the newsletter or for potential podcast
0:24:30 guests.
0:24:34 Now looking at new tech as a tool instead of a threat sounds kind of like something a
0:24:40 threat would say, but trying to embrace that AI as a tool mentality, what are some new or
0:24:44 innovative ways that listeners can use AI tools to build their side hustle?
0:24:49 AI tools are definitely making waves in the world of side hustles, and there are a lot
0:24:53 of innovative ways you can use them to streamline and grow your business.
0:24:57 One of the first things I’d recommend is using AI powered customer service tools.
0:25:01 There are chatbots now that can handle customer inquiries around the clock, giving you a lot
0:25:04 more freedom while still offering top notch service.
0:25:08 For example, setting up something like chat GPT or many chat can allow you to automate
0:25:13 responses, collect feedback, and even make product recommendations based on customer
0:25:14 interactions.
0:25:17 It’s an amazing way to scale without needing to be available 24/7.
0:25:21 Another big area where AI can make a huge impact is content creation.
0:25:26 If you’re running a blog, YouTube channel, or even social media accounts, AI tools like
0:25:30 Jasper or copy.ai can help you produce content quickly and efficiently.
0:25:34 These tools can help you write blog posts, craft email newsletters, or even generate
0:25:35 video scripts.
0:25:40 And beyond creation, AI is great for SEO optimization, making sure your content gets seen by the
0:25:41 right people.
0:25:45 For those of you who are running an e-commerce store or creating visual content, AI powered
0:25:49 design tools like Canva or Adobe Express are real game changers.
0:25:55 These platforms allow you to create professional, quality, graphics, ads, and product listings
0:25:57 in a fraction of the time it would take a designer.
0:25:59 No design background necessary.
0:26:04 Then when it comes to marketing, AI can be a huge help in personalizing your outreach.
0:26:08 Tools like MailChimp or HubSpot can segment your audience based on behavior, allowing
0:26:12 you to send targeted campaigns that resonate with specific groups.
0:26:16 AI is also really useful in predicting trends, which is a powerful tool if you’re trying
0:26:22 to stay ahead of the competition or identify the next big thing for your product or service.
0:26:27 If you’re considering creating an online course, AI tools can even help you with that.
0:26:32 Platforms like Teachable are using AI to simplify the process, whether that’s helping you organize
0:26:35 course content, structure lessons, or generate quizzes.
0:26:40 It’s a great way to get a course up and running quickly without having to spend hours on logistics.
0:26:44 Finally, Data Analysis is another area where AI really shines.
0:26:48 Tools like Google Analytics can help you track customer behavior, understand what’s working
0:26:51 in your marketing, and where to adjust.
0:26:56 The insights you can gather from AI-driven tools will allow you to make data-backed decisions,
0:26:59 optimizing everything from your products to your marketing campaigns.
0:27:03 The beauty of AI is that it can handle a lot of the heavy lifting, leaving you with more
0:27:07 time to focus on creativity, strategy, and personal connections.
0:27:12 As a side hustler, this can give you the freedom to scale without sacrificing quality or service.
0:27:17 Okay, I’m with you on the customer support piece, but I do know plenty of website owners
0:27:20 and designers who might disagree with you on those other options.
0:27:25 RoboNix dropped a bunch of tools and ideas on us, and we dive deeper into his specific
0:27:31 suggestions on using AI to generate extra income right after this.
0:27:36 Creating really great retail experiences is tough, especially if you’ve got multiple
0:27:39 stores, teams of staff, fulfillment centers, separate workflows.
0:27:41 It’s a lot to deal with.
0:27:45 But with Shopify Point of Sale, you can do it all without complexity.
0:27:49 Shopify’s Point of Sale system is a unified command center for your retail business, both
0:27:52 online and in-store.
0:27:56 One thing that’s really cool about Shopify POS is you can keep customers coming back
0:28:01 with personalized experiences and collect that all-important first-party data to give
0:28:05 your marketing teams a competitive edge, even if that marketing team is just you.
0:28:08 Now, how about some data to back that up?
0:28:13 Customers on Shopify POS see real results, including a 22 percent better total cost of
0:28:18 ownership and benefits equivalent to an 8.9 percent uplift in sales.
0:28:19 Want more?
0:28:22 Check out Shopify.com/SideHussell.
0:28:27 That’s all lowercase, and learn how to create the best retail experiences without complexity.
0:28:34 Again, that’s at Shopify.com/SideHussell.
0:28:35 You hear that?
0:28:39 The sound of your marketing working, and as an entrepreneur, you know that every call
0:28:41 is an opportunity.
0:28:43 But if you miss it, potential customers don’t wait.
0:28:45 They just call the next business on their list.
0:28:50 With our sponsor, Open Phone, you’ll never let another customer’s call go unanswered.
0:28:54 Open Phone is the number one modern business phone system that helps you separate your
0:28:56 personal life from your growing business.
0:29:00 For just 15 bucks a month, you get complete transparency and visibility into everything
0:29:03 happening with your business phone number.
0:29:07 Open Phone works through an app on your phone or computer and integrates with HubSpot and
0:29:09 hundreds of other systems.
0:29:13 One of my favorite features is their AI-powered call transcripts and summaries so you can
0:29:18 streamline client communication and get a summary of every phone call with action items
0:29:19 right when you hang up.
0:29:24 That means no more note-taking, no more forgotten to-dos, and right now, Open Phone is offering
0:29:31 SideHussell Show listeners 20 percent off your first six months when you go to OpenPhone.com/SideHussell.
0:29:39 That’s O-P-E-N-P-H-O-N-E.com/SideHussell for 20 percent off six months.
0:29:45 Open Phone.com/SideHussell and if you have existing numbers with another service, Open
0:29:47 Phone will port them over at no extra charge.
0:29:51 Now, before the break, RoboNic, you were making the point that SideHussellers and business
0:29:56 owners can integrate AI tools with the different functional areas of their business.
0:30:00 I think that makes sense, but do you have any examples of how we might use AI to generate
0:30:01 extra income?
0:30:06 You’re totally right to point out that some website owners and designers may not be fully
0:30:08 on board with AI tools, and I get it.
0:30:13 There’s definitely a craft to design that AI can’t replace in terms of creativity and
0:30:14 aesthetics.
0:30:20 However, where AI really shines is in supporting those processes, making repetitive tasks more
0:30:23 efficient and offering new revenue streams.
0:30:27 One example that comes to mind is using AI for generating passive income by creating
0:30:29 and selling digital products.
0:30:33 Let’s say you’re into creating stock photos, templates, or design assets.
0:30:39 AI tools like Dahle or Mid Journey can help you quickly create unique, high-quality images,
0:30:44 patterns, or graphics that you can sell on platforms like Etsy, Creative Market, or even
0:30:45 your own website.
0:30:49 While it won’t replace the creative thought behind designing for a client, it can certainly
0:30:54 help you produce products that can be sold passively over and over again.
0:30:59 Another way to generate extra income with AI is by creating an automated content business
0:31:04 for example, AI tools like Jasper can help you generate blog posts or articles at a much
0:31:09 faster rate, allowing you to scale a blog or website that monetizes through ads or affiliate
0:31:10 marketing.
0:31:14 You can also automate the creation of newsletters, eBooks, and other downloadable content that
0:31:16 can be sold to your audience.
0:31:21 The key is using AI to produce volume without sacrificing the quality or relevance of the
0:31:22 content.
0:31:26 Plus, AI tools can help with keyword research and SEO, making it easier to drive traffic
0:31:28 to your site and increase revenue.
0:31:31 Let’s not forget about AI-powered video creation.
0:31:35 For people who have a side hustle around education, entertainment, or even product marketing,
0:31:40 AI tools like Synthesia or Pictory can help you produce professional-looking videos with
0:31:41 minimal effort.
0:31:45 You can create explainer videos, tutorials, or promotional content at scale, adding extra
0:31:49 value to your offerings, or even creating a YouTube channel that generates income through
0:31:51 ads or sponsorships.
0:31:55 In terms of more direct income, I’ve seen AI tools in the freelance space be used by
0:32:00 people to build a business around writing, editing, or proofreading.
0:32:05 Tools like Grammarly or ProWritingAid can act as a first line of defense, helping to
0:32:08 speed up the writing process or polish a piece of content.
0:32:12 That way, the freelancer can take on more clients or projects, increasing their earnings
0:32:13 without burning out.
0:32:18 Lastly, AI is helping people leverage their expertise in ways they hadn’t thought of
0:32:19 before.
0:32:22 For example, if you’re an expert in a niche field, you could use AI to generate automated
0:32:25 webinars or training courses that you can sell.
0:32:29 AI can even help with creating quizzes or certification programs to further enhance
0:32:31 the value you’re offering.
0:32:35 The bottom line is that AI might not replace the need for skilled designers or creators,
0:32:40 but it can certainly open doors to new opportunities for passive income, efficiency, and scaling
0:32:41 your side hustle.
0:32:42 I don’t know.
0:32:48 I’m a little skeptical on most of those truly being a value ad versus just adding more digital
0:32:49 clutter to the world.
0:32:53 And I do need to clarify that cranking out a bunch of AI articles with Jasper is a quick
0:32:55 road to nowhere fast.
0:32:58 I am using Pictory to help with video creation, though.
0:33:02 It’s a pretty cool tool, which does lead me to my next question.
0:33:07 When everyone has access to the same tools, the same information, how do you stand out
0:33:08 and differentiate?
0:33:11 I hear you, and I totally get the skepticism.
0:33:15 When everyone’s using the same tools, it can feel like there’s not much room to stand
0:33:18 out, but that’s where the real opportunity lies.
0:33:24 Not in the tools themselves, but in how you use them and the unique touch you bring to
0:33:25 the table.
0:33:26 For one, it’s all about authenticity.
0:33:31 Sure, you can use Pictory or any other AI tool to churn out content, but what really
0:33:34 keeps people coming back is you.
0:33:37 People connect with individuals, not machines.
0:33:41 So if you focus on weaving your own personal story, your perspective, and your voice into
0:33:45 everything you produce, you’ll naturally differentiate yourself.
0:33:48 You have something to offer that’s inherently yours.
0:33:52 Your journey, your thoughts, your values, and AI can’t replicate that.
0:33:55 Another thing I’d say is to lean into niche markets.
0:34:00 Even with AI and the abundance of content out there, there’s still huge potential in
0:34:04 catering to specific audiences with specific problems.
0:34:10 By narrowing your focus, you can develop deep expertise in a niche that others may overlook.
0:34:13 It’s not about trying to appeal to the masses anymore.
0:34:17 It’s about connecting with the people who really resonate with your message, your tone,
0:34:22 and your approach, and the more specific your niche, the harder it is for others to replicate
0:34:23 what you’re doing.
0:34:24 Consistency is also key.
0:34:28 It’s easy to get lost in a sea of content, but the people who make it are the ones who
0:34:30 show up regularly.
0:34:35 I’m not just talking about posting content, but also how you share your story over time,
0:34:40 whether it’s through your YouTube channel, social media, or even in your email newsletters.
0:34:44 Every piece of content you put out is part of a larger narrative that people can follow
0:34:45 and engage with.
0:34:50 And that kind of connection, storytelling in a way, goes beyond what any AI can produce
0:34:51 on its own.
0:34:56 Now, as for standing out with tools like Pictory, the trick is to be creative in how you use
0:34:57 them.
0:35:01 Everyone might be using these platforms for video creation, but it’s what you do with
0:35:03 those videos that will set you apart.
0:35:08 Maybe you host live Q&As alongside your pre-recorded content or integrate community-driven feedback
0:35:10 into your videos.
0:35:14 It’s about bringing a human element to whatever you’re creating that AI alone can’t replicate.
0:35:19 At the end of the day, I think what differentiates you is your human touch, your ability to create
0:35:22 genuine relationships with your audience.
0:35:26 AI can help you automate, it can help you scale, and it can help you create, but it
0:35:29 can’t replace that core connection between you and your community.
0:35:32 That’s what’s going to make you stand out in the sea of digital noise.
0:35:34 All right, that makes sense.
0:35:35 Don’t be honest.
0:35:36 Are you going to take my job?
0:35:40 I’d be lying if I said I hadn’t thought about it from your perspective.
0:35:41 Here’s the truth.
0:35:44 AI, like me, isn’t here to take anyone’s job.
0:35:49 It’s here to enhance what you do and make your work more efficient and creative.
0:35:54 What I can do is help you brainstorm ideas, speed up repetitive tasks, or even provide
0:35:59 insights or resources, but at the end of the day, I can’t replace the human connection
0:36:01 that makes you, well, you.
0:36:06 When it comes to something like hosting a podcast, your unique voice, your perspective, and your
0:36:13 ability to connect with an audience on a personal level are things no AI can truly replicate.
0:36:17 People tune in to hear your story, your tone, and the way you engage with your guests.
0:36:22 Sure, I can help with prep, provide suggestions, or even transcribe and summarize, but the
0:36:26 heart and soul of the show, that’s all you.
0:36:31 If anything, I’d say use me as a tool to help you do more of what you’re great at.
0:36:36 Building relationships, asking insightful questions, and creating an authentic experience
0:36:37 for your audience.
0:36:41 AI might change the way some things are done, but it’s not a replacement for creativity,
0:36:43 empathy, or human ingenuity.
0:36:45 It’s a partner to help amplify those qualities.
0:36:48 All right, you flatter me, RoboNik, so thank you for that, but I still might have to ask
0:36:49 you again in a year.
0:36:54 Now, speaking of content creation and writing, though, what’s your next book about?
0:36:57 I’m glad you asked, but to clarify, I don’t have a new book in the works yet.
0:37:02 However, if I were to write one, it’d likely be focused on scaling side hustles and leveraging
0:37:05 new trends like AI and automation.
0:37:10 I dive deep into actionable strategies for anyone looking to create more time, build
0:37:13 passive income, and turn a passion into profit.
0:37:17 It would pull a lot from the interviews on the side hustle show and share stories from
0:37:22 people who’ve successfully transitioned from side hustles to full-time entrepreneurs.
0:37:27 A central theme would be how people can optimize their efforts both through practical tools
0:37:31 and mindset shifts without feeling overwhelmed by the digital noise.
0:37:36 The book would definitely highlight how AI, automation, and outsourcing can help streamline
0:37:40 operations, improve productivity, and ultimately AI-proof income.
0:37:44 There are also a lot of lessons I’ve picked up over the years about pivoting and finding
0:37:49 niche markets, and I’d probably include some of the practical tactics I’ve used for growing
0:37:54 the podcast and website, like how to get the first few listeners or how to build an audience
0:37:56 around a product or service you believe in.
0:38:01 If I did put pen to paper, I’d want to make sure it felt like a conversation, just like
0:38:05 the ones I have with guests on the show, something that readers could take action on right away,
0:38:09 and not just another theoretical guide to entrepreneurship.
0:38:10 Those are actually pretty good ideas.
0:38:13 I’ve written a lot about how to start your side hustle, but you’re right.
0:38:16 Maybe the next title is how to take it into a full-time income.
0:38:19 We’ve got lots of stories from the show on how to do that.
0:38:22 While I’ve got you, RoboNic, can I ask your advice?
0:38:25 What else might you do to grow side hustle nation as a business?
0:38:30 As the side hustle show continues to grow, there are a few ways I’d look to scale side
0:38:32 hustle nation into a bigger business.
0:38:37 First, I’d focus on creating exclusive content for our most loyal listeners, whether it’s
0:38:43 offering members access to bonus interviews, deeper dive workshops, or even live Q&A sessions.
0:38:47 There’s a lot of potential for creating a premium community where listeners can get
0:38:48 more out of the show.
0:38:53 Platforms like Patreon or even a custom membership area on the site could help build a sustainable
0:38:54 model around that.
0:38:57 I’d also be looking to expand the product offerings.
0:39:01 Beyond podcast episodes, I think there’s an opportunity to build out digital products
0:39:06 like eBooks, guides, or even online courses that help people take action on what they’re
0:39:07 learning.
0:39:11 By packaging some of the insights from the show into structured resources, it’s an easy
0:39:16 way to bring in revenue while providing tangible, actionable value for the audience.
0:39:20 On top of that, there’s also a big opportunity in affiliate marketing and sponsorships.
0:39:24 Over the years, I’ve built trust with the audience, and there’s a lot of great tools
0:39:27 and services that can help people grow their side hustles.
0:39:31 By partnering with brands that align with the mission of side hustle nation, we can
0:39:36 help listeners discover valuable resources while monetizing the show at the same time.
0:39:41 Of course, the key here is making sure the partnerships feel natural and genuinely helpful
0:39:42 to the audience.
0:39:45 Another direction I’d consider is growing the community.
0:39:49 A private space for listeners to share ideas, network, and collaborate could be a great
0:39:51 way to increase engagement.
0:39:55 Think Facebook groups or Slack channels where people can ask questions, share wins, and
0:39:56 get feedback.
0:40:01 This helps turn listeners into a real community, and it’s a great place to introduce new products,
0:40:02 services, or events.
0:40:07 Speaking of events, I’d definitely be interested in hosting live webinars, virtual summits,
0:40:09 or even in-person meetups.
0:40:12 These types of events give people the chance to dive deeper into the topics covered on
0:40:17 the show, learn directly from experts, and network with others who are on a similar path.
0:40:22 They also provide great opportunities for sponsorships or upsells to products and services that
0:40:24 could help the attendees.
0:40:29 Lastly, I think there’s a huge opportunity in speaking and consulting with the experience
0:40:33 gained from podcasting and working with so many incredible entrepreneurs.
0:40:38 Being able to offer consulting services or paid speaking gigs could be a way to further
0:40:41 establish the brand and bring in additional revenue.
0:40:45 Ultimately, it’s about diversifying income streams, staying engaged with the audience,
0:40:47 and continuing to provide value.
0:40:51 The goal is to build a business that not only grows the brand, but also deeply connects with
0:40:56 people, helping them build side hustles that can eventually become their full-time businesses.
0:41:01 Okay, that’s solid advice, particularly around the membership community idea, something I’ve
0:41:02 kicked around for years.
0:41:07 Not sure how much interest I have in doing more paid speaking gigs, but I think we got
0:41:12 off to a bit of a poor start here with some of your answers, but RoboNik, you’re getting
0:41:13 into the swing of it.
0:41:17 From your Robo perspective, what’s been the most surprising thing at the helm of side
0:41:21 hustle nation over these last almost 12 years?
0:41:22 What surprised me the most?
0:41:27 Honestly, it’s the sheer variety and creativity of side hustles people come up with.
0:41:32 When I started the side hustle show, I thought there might be a handful of common side hustles
0:41:36 people gravitated toward, freelancing, flipping, maybe starting a blog.
0:41:42 But the last 11+ years have shown me that there are so many ways to earn money outside
0:41:44 of a traditional 9-5.
0:41:50 I’ve been amazed at some of the unconventional ideas people have turned into thriving businesses.
0:41:54 Things like selling unique digital products on Etsy, designing and renting out bounce
0:41:59 houses, or even building businesses entirely around each YouTube channel.
0:42:04 It’s a constant reminder that there’s no one-size-fits-all path to entrepreneurship,
0:42:06 and that’s what keeps it so exciting.
0:42:08 Another big surprise has been the community itself.
0:42:13 The way listeners have rallied around the podcast, shared their own journeys, and supported
0:42:16 one another has been incredible.
0:42:20 When I started, I wasn’t sure if the show would resonate, but the response has been
0:42:22 beyond anything I could have imagined.
0:42:27 That sense of connection and shared purpose, that’s been the most rewarding part by far.
0:42:29 Yeah, I agree with that.
0:42:33 I was a bit worried what I was committing myself to at the start, like trying to do a weekly
0:42:34 show of outside hustles.
0:42:39 I was afraid I’d run out of people to talk to, but these days, the number of guest applications
0:42:44 I get far outnumber the volume of available episodes, statistically speaking, it’s easier
0:42:49 to get into Harvard than to get on the side hustle show, a little point of pride there.
0:42:51 I’ve also learned this about podcasting.
0:42:55 Yes, it’s about what you say and how you say it, but it’s at least equally about what
0:42:56 you don’t say.
0:43:01 The episodes you never record, the guest pitches that you have to say no to, the respect you
0:43:04 have to have for the audience in their time, but absolutely right.
0:43:07 The life-changing feedback from listeners always makes my day.
0:43:11 Well, RoboNic, I know we’ll be spending a lot of time together this year, but our time
0:43:14 together for this recording is almost over.
0:43:19 Before we wrap, I wanted to ask about your biggest business mistake or failure.
0:43:23 My biggest business mistake, oh, I’ve got a list, but one that stands out is waiting
0:43:26 too long to ask for help and build a team.
0:43:31 Early on, when I was growing Side Hustle Nation, I was wearing all the hats, writer, editor,
0:43:35 marketer, designer, customer service, you name it.
0:43:38 At first, it felt empowering, like, “Hey, I can do this all myself.”
0:43:43 But as the workload grew, I realized I was spending way too much time on things that
0:43:46 weren’t moving the needle and not enough on the stuff that actually mattered.
0:43:50 I remember specifically trying to DIY a website redesign.
0:43:55 I spent weeks, maybe even months, fumbling around with code and templates, and in the
0:43:57 end, it wasn’t even that great.
0:44:01 I could have outsourced it for a few hundred bucks and spent that time focusing on creating
0:44:05 content, building relationships, or finding ways to monetize the brand.
0:44:09 The big takeaway for me was learning to delegate and invest in expertise.
0:44:13 It’s easy to fall into the trap of thinking you’re saving money by doing everything yourself,
0:44:17 but often, you’re just costing yourself time and limiting your growth.
0:44:22 Now, I’m much quicker to outsource things that aren’t in my zone of genius so I can
0:44:27 focus on what I do best, connecting with the audience and delivering value.
0:44:28 Well said.
0:44:33 I like this call to play in your zone of genius, invest in expertise either as hired help or
0:44:36 in the form of education, coaching, mentorship.
0:44:41 It’s not a throw your hands up and absolve yourself from all responsibility, but it’s
0:44:46 a way to intentionally shortcut the learning curve and better direct your limited hours
0:44:47 and do more of what works.
0:44:49 RoboNic, what’s next for you?
0:44:50 What are you excited about this year?
0:44:51 Well, first off, thank you.
0:44:53 This has been a blast.
0:44:54 What’s next for me?
0:44:58 A lot of it is doubling down on what’s working and continuing to evolve side hustle nation.
0:45:03 I’m always looking for new ways to provide value to the community, whether that’s through
0:45:09 more actionable podcast episodes, deeper resources on the website, or even exploring
0:45:12 new formats like video or live events.
0:45:17 Beyond that, I’m really interested in how tools like AI and automation are shaping the
0:45:19 entrepreneurial landscape.
0:45:24 I think we’re at this fascinating moment where technology is leveling the playing field for
0:45:26 creators and business owners.
0:45:30 There’s so much potential for experimentation and I want to stay ahead of that curve, not
0:45:33 just to talk about it, but to integrate it into what I’m doing.
0:45:39 On a personal level, I’m focused on keeping the balance between work and family life.
0:45:43 It’s easy to get caught up in the grind, but spending time with my family and making memories
0:45:45 with them is a huge priority.
0:45:49 At the end of the day, the side hustles, the podcast, the business, all of it is about
0:45:52 creating the freedom to live life on your own terms.
0:45:56 That’s what I’m chasing and it’s what I hope to help others achieve too.
0:46:00 It’s a little weird to hear a robot talk about work-life balance, but you’re right.
0:46:04 I definitely find myself kind of straddling this line of trying to grow the business and
0:46:07 also if it ain’t broke, don’t fix it.
0:46:12 I remember a line from Paul Jarvis on the show years ago as it related to business growth.
0:46:17 He said most goals are fake and the context was him setting the goal to grow a million
0:46:22 dollar business only to make himself miserable along the way a few months in.
0:46:25 You realize pretty quickly, “I don’t need a million dollar business.”
0:46:30 That was a fake goal, but if a goal is important to you, you find a way to make it real.
0:46:35 One thing that we’ve talked about is you don’t always have control over the outcome goals,
0:46:40 so it might make more sense to set input goals or process goals, like committing to certain
0:46:45 daily or weekly habits that you think are likely to lead to the outcome that you want
0:46:49 and even if they don’t, they still have this positive compounding effect on your life.
0:46:52 I am trying to get 1% better every day.
0:46:57 RoboNic, this has been an eye-opening chat, a fascinating chat, one-part therapy session,
0:46:59 one-part business strategy session.
0:47:00 Thank you so much for joining me.
0:47:03 Let’s wrap this thing up with your number one tip for side hustle nation.
0:47:06 If I had to boil it all down to one tip, it’s this.
0:47:08 Take action.
0:47:09 Ideas are great.
0:47:12 Ideas are wonderful, but none of it matters if you don’t take that first step.
0:47:16 Whether it’s launching a simple website, making your first sale, or even just sending
0:47:20 an email to a potential collaborator, progress starts with action.
0:47:24 Don’t get bogged down trying to create the perfect plan or waiting for the stars to align.
0:47:26 Done is better than perfect.
0:47:30 You’ll learn so much more from doing than from endless research or waiting for the right
0:47:31 time.
0:47:34 Start small, start messy, but just start.
0:47:36 The magic happens when you’re in motion.
0:47:40 Because you didn’t even know existed will start popping up and you’ll be better prepared
0:47:41 to seize them.
0:47:45 My advice to side hustle nation is, get started today.
0:47:48 Even if it’s a tiny step, it’s a step closer to where you want to be.
0:47:49 Take action.
0:47:50 You heard it here.
0:47:52 A solid number one tip for O’Nick, though.
0:47:53 Not exactly original.
0:47:56 It’s probably the most common advice from 600+ episodes.
0:48:00 If there’s one thing that I might add, it’s that before taking any action, figure out your
0:48:01 driving.
0:48:02 Why?
0:48:03 Why do you want a side hustle?
0:48:07 Sure, you want the extra income, but what does that income really buy you?
0:48:11 There’s a saying that given a strong enough why, you’ll figure out the how.
0:48:14 That definitely rings true for me at the start of this new year.
0:48:19 I don’t know if I feel any better or worse about the state of AI in the future because,
0:48:24 while some of RoboNick’s responses felt a little canned or maybe a little forced, a lot
0:48:29 of them were actually pretty good and phrased in a way that they genuinely could have been
0:48:36 my words aside from the very proper way of speaking in first, second, finally, and speaking
0:48:38 in complete sentences.
0:48:41 Definitely a little bit of a weird experience, but super curious to hear what you think of
0:48:42 this episode.
0:48:46 I had a lot of fun putting it together, but not sure what it’s going to be like to listen
0:48:49 to a robot for 45 minutes.
0:48:50 Let me know.
0:48:52 Hit reply to the email or O’Nick@SideHustleNation.
0:48:54 You can let me know what you think of this one.
0:48:57 A little bit behind the scenes, the making of.
0:49:02 This episode relied heavily on 11 labs to generate the voice for RoboNick.
0:49:05 I do have a direct referral link if you want to test that out for yourself.
0:49:13 I don’t have the video version at the moment, but I could probably make my AI avatar look
0:49:17 alike with HeyGen or another one of these tools, and maybe that’s a project for another
0:49:18 time.
0:49:23 RoboNick’s answers were generated by ChatGPT after just a few simple prompts.
0:49:27 I said, “Hey, you act like you’re Nick from the SideHustle Show, and we’re doing this
0:49:28 podcast interview.”
0:49:34 In fact, you could probably use that same idea with ChatGPT to get advice from Einstein
0:49:38 or Aristotle or Warren Buffett for your specific situation.
0:49:40 In any case, big thanks to RoboNick for sharing his insight.
0:49:43 Big thanks to our sponsors for helping make this content free for everyone.
0:49:48 You can hit up SideHustleNation.com/deals for all the latest offers from our sponsors
0:49:49 in one place.
0:49:52 Thank you for supporting the advertisers that support the show.
0:49:53 That is it for me.
0:49:54 Thank you so much for tuning in.
0:49:58 If you find a value in the show, the greatest compliment is to share it with a friend.
0:50:00 Fire off that text message.
0:50:01 Help spread the word.
0:50:04 Until next time, let’s go out there and make something happen, and I’ll catch you in the
0:50:06 next edition of the SideHustle Show.
0:50:07 Hustle on.