07 | College Gave The Wrong Business Model - Avoid it Using Funnels and Marketing - a podcast by Braeden Parsons

Hey, welcome to Funnels or Die! So I'm in the car again. I wanted to talk about a conversation I had with my friend. He wanted to start a business but first get a 200,000 loan. This isn't unusual. College teaches you to come up with an idea, you get some money, a loan, or seed money, or something along those lines, and if you want to go start a business then you're gonna lose money up front. Then maybe after like 10 years, you start becoming profitable. Then once you hit a plateau, your profits hit a plateau you're told to go and sell your business, you're told to go sell your baby. That's what Steve Larson says anyways because it is, you've worked on it for 10 years and now you're told to go sell it because your sales plateaued. I have a hard time with this, especially because us as funnel builders, we know that that break even is a million dollar scenario.

If you have an up front funnel, you're selling something for really cheap, let's say a free plus shipping funnel, then all your upsells afterwards are supposed to make you break even, so you get your customers for free. That's the whole idea behind that is you're getting people through the door and then you lead them up your value ladder so you can sell them more extensive stuff later on. That's how these businesses, these funnel people building funnels are making so much money without having to follow the J-Curve at all. They're not having to take a loan out or anything along those lines. They're not having to lose profit and then hopefully become profitable within you know, 10 years or something crazy like that.

See, what they're doing is they're completely skipping this process altogether. Their whole goal is to break even and I kind of wanted to talk about that today because this is like a new situation for sure. I know Russell, he tells a story that I really love where he had these, what are they called? I'm just going to call them investors. I know I'm probably using the wrong term, but they were going to give him a loan basically to get more people into ClickFunnels, which is a software, and he was talking to this guy and he said, Russell was saying that he pays $120 per Click Funnel trial and the guy was all pumped up. He was like, wow, if I give you $100 million then we can get this many ClickFunnels trials to Click Funnels. Russell said that he turned those ads off and the guy was like, what the heck? Why'd you turn those ads off? That's really good because in the software space, $120 isn't bad per trial, especially when he's charging $100 per month with Click Funnels, you know, at the minimum.

He said, this money's coming out of my own pocket. I can't afford to pay $120 per trial. What he did instead is he built a funnel around it. He does his free plus shipping book, then he has all his upsells, and then the person has the opportunity to give him $1,000 within this funnel because of his upsells over that, actually. I think the average cart value is what it's called, is about $2,000 or more, which is pretty, pretty amazing.

You're obviously going to make money off of that because you're giving them so many opportunities to give you money. What he was doing actually is he was making, I think it was around $40 for every single, per every ClickFunnels trial after doing that funnel, that front end funnel. The guy had trouble wrapping his head around this. He was like, wait, how are you doing that? That doesn't make any sense, so Russell had to explain it multiple times to him and he stops for a second and he's like, if this is true then you're changing the business model as we know it. I believe that's what he said. Russell has like, I know that's why we're doing what we do. That's why we're so passionate about what we do.

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