Building a Digital Marketing Empire: Matt Molenar Part 2

0:00So I was able to become partners with Damon and John. and one of the things that he said the last time we were together was, I thought, really kind of inspiring and cool. He said, look, and he's a very humble guy and a good guy. He said, man, he said, I've only got one hit. I sold FUBU. I got one hit. He's got all these people are coming to me asking me for advice and everything, you know, because I'm on TV and I'm famous and everything, you know, and I did good. You know, I was a good businessman and I think I'm a good businessman, but I've only had one hit. You know, most people only have one.

0:32So that's a, that's kind of a cool thing to think about is like, you only need one. If you can have multiple, that's great. But, but most people only have one. How much more successful would you be if you had lunch once a week with insanely successful entrepreneurs who shared their biggest secrets on how they think and achieve success? Grab your seat at the table because this is Business Lunch with Roland Frazier and Ryan Dice.

1:04Welcome to another episode of Business Lunch. And today's a snackable episode with Roland where he's going to get into some more tactical strategies that you can start using to live a rich and happy life. If this is the first snackable episode you're hearing, I'd encourage you to go back and listen to some of the other episodes that Roland has put out. And if you want to get notified every time we release a new episode, go to the new businesslunchpodcast.com website, and we'll send you detailed notes along with every episode. That's businesslunchpodcast.com, www.businesslunchpodcast.com, and you can sign up for the free email newsletter where you'll be able to get all the highlights and resources from the episodes.

1:40One of the things I love learning about are what people, and the story behind what people consider to be transformational moments in a career, especially a successful career like yourself. You mentioned earlier how you were kind of getting started and you went to traffic conversion, you were doing some things. And then all of a sudden you were like, oh, and I'm business partners with Ryan Dice now. And so, but there were probably moments in that journey that you could identify. It was like, this happened and it changed everything. And it doesn't have to be that storyline, although I'm interested, but maybe even any other moments like that in your career where it was like this moment, this is where everything changed again.

2:25And now I'm up. So many times, so many times. Um, but since you liked that one, I'll tell you that one. So, um, I, as I said, I bought that product that was, uh, the Mr. X product, uh, something traffic wholesale, wholesale traffic system, WTS. Right. So I bought the wholesale traffic system. I think it was two grand. Uh, I was like, these guys are great. I can use this. I started using it for AdWords. It worked. It was fantastic. I was like, they're the real deal. They had this event called Trafficking Conversion Summit. I went to the first one. I took notes until my hand cramped because they were terrible at doing events and had no breaks and went for like 12 hours a day.

3:06But I was like, this is amazing. And I'm very big on taking notes. I knew that there was a paid channel of access that they had created to get closer to them through this War Room Mastermind that they offered. And so I ended up not that time, but the next time joining the War Room Mastermind with the specific intention of, I want to get to know these people. And I'll tell you, I go back all the way, if you know who Gary Halbert was, to did the same thing with him, did the same thing with Dan Kennedy. It's like, I'll, how do you, how have you person that I want to get connected with created a channel for me to get to do that without me trying to run it, do an end run without me begging, without me hitting you up at the end of a speech that you did with 40 other people that want your time.

3:54And you, you're just want to get out of there. I want to know how do I pay you money to through a paid channel of access you've created where you'll have reciprocity going to want to try to connect and talk with me. So with Dice and Belcher, it was War Room. So I joined War Room. It was, I think, a$20 ,000 investment at the time. And I didn't go and join thinking, oh, my God, I've got to get my$20 ,000 back. I was like, this is the paid channel of access that they created. I want to be business partners with these people. So I went to the first mastermind, and I knew in advance that they had this thing called Wicked Smart, where the entire group submits their stuff, not ideas, but things they'd actually done that had huge success.

4:46And I was like, I have to win Wicked Smart. That's how I stand out. So I was like, what the crap do I do to win Wicked Smart? I have no idea. And I just ask all of my friends, what are the biggest challenges that you've got in marketing? and they included getting ranked, figuring out how to get your Facebook friends into an email, how to get the emails so that you could do it. And I think something with LinkedIn. So I was like, okay, I'm gonna solve these three problems. And I, up until like the night before the first meeting worked on this, we're talking about like maybe five weeks of, man, I gotta solve this.

5:30And I talked to all the smartest people and I tried and I tried and tried. Oh, it was getting them from Skype. That was it. It was getting all the Skype things that you had, I think.

5:41Maybe Skype was how I did it. But anyway, I figured out how to do it. I figured out how to do all three of them. And it was kind of cool. So I went in with not one, but three wicked smart submissions for things that the people in the group that I had reached out to and other people told me were their biggest problems. So I'm going in with I feel like a little bit of an advantage and I'm like I gotta I gotta win this because if I win this they'll want to talk to me because even though I'm in this paid group and there's only 20 some people there. I still got to compete with those 20 people for the attention and I'm not you know a shaken howdy guy I'm not like hey how you doing Roland Frazier let me you know I'm much much more non direct than that.

6:22So we go and do Wicked Smart. I present my three things. Ryan stands up and says, are you guys getting this? Do you hear what this is? We've got to take notes on that after Perry comes over to me and says, hey, man, we're having dinner with just a couple of people. And I'd like for you to come and I want you to sit next to me. So that was the strategy of how do I intentionally insinuate myself into this? And after that, it was three years of just helping everybody in that group without an expectation of anything in return. I helped people with big problems that they had. And I had good skills from being an accountant and being an attorney and also a marketing person.

7:06And I had done infomercials before and stuff like that. So I had my particular set of skills, as Liam Neeson would say, that I could bring to the table. And when Ryan and Perry had, they had a CEO that they had hired that had the ability to get a third of the company roughly. And it didn't work out with that CEO. I kind of helped them transition through that. And when it happened, they were like, you know what? There's a third of the company that's available that we had already kind of written off. and you've been so helpful all along. We'd like for you to come in and be a partner in the business.

7:43And so that was how I evolved into that. So it was a three-year overnight success of becoming partners with them. But historically, like with Damon John, with William Shatner, with all of the people that I can think of that I didn't know that I wanted to get to know and do business with and become partners, I just found what's the paid channel for access. And I would pay Gary Halbert, I would pay to do that. And then that would get me connected in a way that I could then show value, not take value, but show value. And then, I mean, really with every relationship like that, that I've ever wanted, I've been able to become partners with that person.

8:27That's, that's fantastic. Again, aligns with my personal message and secret to success, which is giving to others from your heart, serving others first. And then the most selfish, manipulative thing you can do, help other people with no expectations. How cool is that? Perfect. Perfect. Any other transformational moment stories that are a must share that pop into your mind? Yeah, I mean, so I would say the, like, I won't go all the way back, but a few would be when I was representing Tony Robbins as an attorney, helping with Guthy Rinker infomercial contracts and Simon & Schuster publishing contracts and things like that.

9:17I was able to get connected to Bill Guthy and Greg Renker. And that was really my first heavy direct response that I can remember connection because they were doing infomercials. And I was like, infomercials are amazing. I don't know anything about them, but I know I would like to figure out how to do it. I don't have any product for it. I don't know anything about TV, but I'm pretty good at business. So what do they need? Well, it turns out that what they, I don't know if they needed it, but what they were happy to have was somebody that would raise money because most infomercials aren't successful, you know, maybe one out of 10 for them, maybe one out of five.

10:01But so there's a lot of wasted money. And at the time, infomercials were, you know, anywhere from$200 ,000 to a million dollars to produce. So it was a lot of money that was just kind of nothing happening with. And I was like, well, I'm pretty good at putting deals together. Why don't you let me and a couple of people that I know be funding sources? We'll put together syndications, raise money, do packs of five infomercials at a time, since one out of five is generally successful. We'll play those odds. And then the one that's successful will more than pay for the ones that aren't. You guys get to try five things.

10:37You run your play. And then we split up the profits. And I think we ended up doing 16 together. We did like one test one and then three packs of five and had lots of hits and made lots and lots of money and then spread out to others. That was a big moment for me, seeing that I could take the value of what I had and take it to somebody that was already wildly successful and have them interested because I had an angle that helped them with a problem that they had. I had a client at the law firm that was doing direct mail and I watched how they were doing it. They were doing property tax reassessments in California all through direct mail, making millions of dollars.

11:19And I was like, your business is not efficient. You could definitely do about six things better. And I bet make a whole lot more money. Rather than paying me legal fees to do that, why don't we do a deal and we'll split the profits on what we make doing the things that I say will make you more money. So we did that. And after nine months, we split 50, 50, a million, eight. So I got$900 ,000 and was sold on direct mail, which I still am to this day. So like, like it was a channel by channel kind of thing. I think that got me into doing that stuff. But those were definitely pivotal moments. I had through a manufacturing company that made machines that I got connected with and ended up owning part of, I decided that I wanted to get connected to Wall Street.

12:16So I went out, reached out to a whole bunch of investment bankers, found one that would listen to me, went to New York, made a deal, brought in a management team to run this company that we had with the idea of doing a leverage buyout with it and blowing it up into a pretty significant deal. That investment banker took me under his wing, showed me how LBOs worked and all of the stuff in New York. And that led to a real deep understanding of how to do no money, you know, or other people's money financing transactions. Buying diamonds in New York, when I was a diamond buyer, I would go, not New York, Israel, I would fly to Israel, go to the diamond boars, have all of the diamond guys line up with their diamonds and sit there and haggle with them.

13:06And, and I, that really taught me I could could go international, B, I could go direct and cut out the middle people. And also that just like, you can kind of get into any industry at the deepest level relatively quickly, if you are intentional about it, and you can bring value. And for those guys, it was like, they were trying to find people that were wholesalers in the United States. And then they didn't know who the people were, who to trust. Now they just come over themselves. But at the time they didn't. And so I could bridge that gap and add tremendous value. And, you know, and that was a, that was a thing.

13:47So like, I think about the things that were big levels up in understanding and in money, uh, and relationships and network. It's consistently, you know, it just, it happens consistently. And, and, and each of those things by taking good care of those people leads to more deals, right. That lead to more deals that lead to more deals and that they're bigger and bigger. And so then you go from hundreds of thousands to millions to tens of millions to hundreds of millions, you know, and I haven't done a billion dollar deal yet, but I've got two that I'm working on right now. So, you know, ask me maybe 18 months from now.

14:22That's, that's really, I think the, you know, the way that it's happened for me. so you've you've mentioned all these different industries do you consider yourself in the or focused on the digital marketing industry now or is this just a tool yeah i'm i'm industry agnostic so i own real estate brokerages with a thousand agents i own uh real restaurant franchises with hundreds of franchises uh i own uh real estate i you know To me, it doesn't matter. It's just what's a good company? Because the business is about the same. I don't think that you, what I did find, especially with my New York connection, I don't believe that management is industry agnostic.

15:12But I do believe that business is like strategy. That's what I should say. I believe strategy is industry agnostic for the most part, or at least 80 to 90%. I don't believe that to be the case with management because I have tried hiring people from other industries to come into places that they then failed miserably because they didn't understand the culture or the particularities of the environment that they were in. So you mentioned a couple of big projects that you're working on over the next 18 months. What do you have coming next? So like, where do you see yourself in one year, five year, 10 year?

15:53What's the future? My big projects right now are mostly like the place that I see the most opportunity that I'm not doing just for fun or because I like it, but it's to me, the biggest opportunities are in rolling up companies. So we have a strategy for rolling up companies. Right now, we've aggregated just under$100 million in profit and EBITDA in the real estate brokerage industry. We're doing the same thing in home services and in like medispas. And if I look at the strategy that we've got is basically stock for stock swaps of people who can't sell the business that they've got. Like in real estate, a real estate brokerage typically sells for about five times profit.

16:44in the publicly traded world, the average trading PE ratio is between 35 and 45. So there's a pretty big delta between the 5x that you can get if you're small, and the, let's call it average 40x that you can get if you're big. And so we're giving the smaller people the option. And when I say smaller, we're talking 1 to 5 million in profit. So it's not tiny, but 1 to 5 million, We're giving those people the chance to not pay all that costs or not give it away to the middle people that are just financial engineers. And so we're aggregating those people, letting them come in to a holding company where they exchange ownership in their companies for ownership in the holding company.

17:33There's no cash required for us to do that. So we're acquiring those companies. And then we give them 70 % of the upside. So they get their 5X as a base, but then they get 70 % of the 25 or 30X bonus that they get. So they're picking up a pretty significant rake on that. But for us, for putting the deal together, we charge 30%. So if I can get 30 % of a 30 multiple that's up, right, then I'm getting a nine multiple on all of this profit that we've put together. So look at 100 million in that deal. And let's say that it trades at below the 40X that only trades at a 30. It'll trade higher. Then my 100 million at 30X becomes 3 billion.

18:25And I get 30 % of that or my group gets 30 % of that for doing that. Then we're going to pick up 900 million on that. And I'm in for like, say, 20 % to 25 % in those deals. You know, that's significant. I don't have to do very many of those to hit, you know, the next level that I would like to hit. And so I'm looking at where's the greatest leverage with the optimal amount of effort that isn't full of friction and that I also enjoy. That's some pretty high level stuff, Roland. It's fun though, right? It sounds amazing. It does sound like fun. And I love that you refer to it as fun. The cool thing that maybe for your readers too is, so I was able to become partners with Damon John.

19:18And one of the things that he said the last time we were together was, I thought really kind of inspiring and cool. He said, look, and he's a very humble guy, a good guy. He said, man, he said, I've only got one hit. I sold FUBU. I got one hit. He's got all these people are coming to me asking me for advice and everything, you know, because I'm on TV and I'm famous and everything, you know, and I did good. You know, I was a good businessman and I think I'm a good businessman, but I only have one hit. You know, most people only have one. So that's a that's kind of a cool thing to think about is like you only need one.

19:54If you can have multiple, that's great. But but most people only have one. And so putting the time and the effort in to do the things that you're going to be showing them how to do to try to get that one thing that is the hit that elevates you and then creates more opportunities is all you really have to do. If you just put that focus and time in getting that one hit, you don't really need more than that. It's cool if you can have more. You know, it's like you look at Mark Cuban, he had the hit with selling, I think, a domain name and then, you know, a couple of other things. And then he bought the maps for a couple hundred million.

20:34And now he's selling part of it for, I think, three billion, you know. OK, well, the more you play, the more you get elevated and the more of the money is and everything. But the deals are the same. You know, the deals are the same. You're just dealing with bigger stuff. Um, the people are smart, but they're not like levels of magnitude, at least that I've met so far, levels of magnitude smarter than what you are doing when you're doing your own deals. So it's just that the numbers are bigger. Your connections are better. Your network is better. The opportunities are better because you get presented with those.

21:13I get to invest in companies that the public can't invest in in Silicon Valley because I got close to a guy before I even knew who they were, whose brother is Naval Ravikant, who is a big investor up in Silicon Valley and an early person in Twitter and Uber and Bitcoin and all those things. And so when his brother decided to do a fund, I was like, I can help you with that. I had no idea. And he's like, now we have investments in crazy things that you can't get into that go up insane in value. And the only reason I get that is A, because I was a nice guy, to this guy who I met who looked like an Indian staff guru guy when I met him because he had this long flowing white hair.

21:59I remember the first time I met him was in a room and he was friends with Ryan Dice and he and I ended up becoming really good friends. But I walked in the room and he's like his back was to me. It's just this like really dark skinned guy with long flowing white hair. And I'm like, all you need is a white robe and a staff and you can summon the orcs. You know, it's and so we're we end up getting to be friends. And then it turns out, you know, he's connected that way. And I think that's like digitally or physically just continuing to connect. Most of the big things that happened didn't happen because I was a better digital marketer.

22:36It happened because I was given connections to network with people who were doing big things that I could partner with. Digital marketing would be a part of that. but they weren't like, we're not at our dinners saying, so man, what color button should I use on this landing page? And are you guys using ClickFunnels or Cartra? Which one? You know, that's not what we're talking. We're talking about, Hey, we were thinking about their, their, their value-based for customer. Hey man, this is a really cool thing. We found a lot of people doing. If you guys come up with anything to, to do that, you know, Oh, we got this thing, you know, that might go with this other thing.

23:12We should, maybe we could do a deal and work together. And then that becomes the big, big value. And the weeds of it are handled by the people who are the technicians. So I think that's like, one of the things I talk about is you've got, Gerber talks about, don't work in the business, work on it. Well, the technicians are the people that are working in it, whether the technician is a brilliant software programmer or a floor sweeper, right? The onnits are still just the managers, right? The products or services that they're thinking about are the products and widgets that they're doing. But when you work above the business, above the business is when you think of the business itself as the product or service.

23:56That's where all the people that I'm talking to are now. And I'm not saying that to say, you know, look at me, I'm up here. I'm saying my observation, success leaves clues. My observation is that the most successful people in terms of finance and network are that way because they are not thinking about how do I sell more of these glasses? They're thinking about how do I build enterprise value in this business that will be a direct result of how do I add compounded value to the audience that I serve? And who can I connect with that will help me get those things happening, right? Not what color is the button, not what manager should I hire?

24:39It's got to be above the business. That's so valuable. If every business owner can start to at least balance technician with that working above the business on the business like that, the potential that that gives them to rise to that next level, which is what everybody's after, is enormous. It is. That is really fantastic. And you've already done this, but just to kind of land us back in the reality of small business land, any other suggestions, tips, ideas, closing ideas that you might want to share to wrap us up?

25:24so i mean i i would say my biggest insight that i feel i've had in the last couple of years is really about exiting because i got focused on the ability to earn a lifetime of income in a day you know so like when you get paid when you sell your company and you got a 16x on the profit you just got paid 16 years of profits. If you do that multiple times, if you end up doing it a few times a year, you're making 30, 50. I've started thinking like, how many years of income am I making with this deal? How many years of income can I make in every year? Can I make 100 years? I have. Can I make 200 years?

26:06I have. It's like, that's crazy. And then you think about, well, now we compound 100 years times 100 years times 100 years times 100 years, times 100 years. And you can be thousand, you can be millennia ahead of where you could be if you weren't thinking in those terms. And then the way that what that caused me to think was number one, I don't really want to own any business forever, because I can compound unless I'm out of ideas, because I can compound kind of infinitely, all of these businesses and sell multiple businesses a year, if I can sell one a month, one a week, you know, what about that?

26:42And then it made me think about exits in a deeper in a deeper way. So for everybody, to me, there are five exits that are going on in your business. The first exit is that you're going from the doer to delegator. That's an exiting of the line. When you're on the line doing the thing face-to-face in the weeds with the people, that's the first exit you need to make. And you're going from technician to manager. And then the next one is to go from really from delegator to leader. So you're going from a manager to a leader as a CEO. You don't really deal with management so much of the weed like resources of the company.

27:31you are really much more charged with liaising with the board, creating a vision for the company, and then having the right people on the bus to execute the vision that you've got. Then the next exit is exiting from leadership to governance, so that you're going out of that CEO position and onto the board. And you might occupy multiple of these positions. Like when you're first starting as a small business, you kind of have them all, right? But then you're gradually like moving up and up and up. And then from the board, you become a investor, you exit the board, you exit the org chart when you exit the CEO position, by the way, which to me, I want to always be off the org chart.