From Selling Scribbles at 4 to Leading Multi-Million Dollar Businesses | Ep. 238 with Charles Gaudet Founder of Predictable Profits

0:03Well, I'm super excited today, Charles, because you and I've known each other for a very long time. Yesterday, we were having an incredibly deep conversation. I know I'm going to learn a lot, but I want to understand something you've said before, that you love a bad economy. That scares a lot of people. And I know a lot of people are really worried right now for the future. Why do you love that? Well, the interesting thing is that there's really no such thing as a bad economy. We have a good economy and we have a bad economy by classical standards. But really, ultimately, it's just a different economy.

0:37and a different economy requires different strategies. They're still buyers. But what happens in a quote unquote bad economy is that business owners do what they're taught to do in business school, right? They lay off employees, they cut down expenses, they reduce their marketing costs, they go on the corner and they just sit and they wait for the economy to pass. So meanwhile, what that does for the strategic entrepreneur that's really leaning in, it makes it one of the easiest, greatest times in the world to capture more market share. Because while your competitors are playing hide and seek, you're out there earning more business.

1:17And so if you pay attention to the companies, really great companies, you'll find that so many of them have actually been born in these quote unquote bad economies. So that's, people think I've got two heads and I say I love a bad economy. But it takes more strategic thinking. You deal in a very discerning market environment right now. People are more careful with the money that they spend. In a good economy, mistakes go unnoticed. In a quote-unquote bad economy, mistakes get punished. So if you're not making any mistakes, you're going to win incredibly well during this time. So yeah, that's why I love it.

1:55You also mentioned that now people need to see your brand dozens and dozens of times. I can't remember the number, but I know you could tell me. What has changed and why is that? It almost seems many people would think like, how could somebody even see me that many times before they make a decision? The four magic words that if anybody says this to you and you get on the phone, you just you know off the right off the bat, it's going to change the game. If they say to you, I see you everywhere. I see you everywhere is a four magic words that just changes things. Right. So it's called the laws of effective frequency.

2:31I didn't make that up. was actually something that was designed many, many years ago. And what they found is that when you look to create demand, the very first time somebody sees a brand impression, they're like, eh, interesting. But then the more they see it over and over and over again, suddenly it begins to create more and more of that demand until they're finally like, I need to buy this stuff. And so it's 20 brand impressions. Now people think that's great, but I don't have deep pockets like an Apple or so forth. but you don't need deep pockets. If you do something as simple as retargeting, depending on the platforms that you use, it could be$10 a day per platform for every 10 ,000 people that you have in your market that you're retargeting.

3:16So it doesn't have to be expensive. But you can use platforms like AdRoll, GDN, Meta. Everybody has this opportunity to retarget. And then it's like surrounding the dragon. Everywhere they go, they get up in the morning, they see your logo. They're standing in line at Starbucks to check in their phone, they see your logo. They go to bed at night, they look at their phone, they see your logo. It's for the same reason, I have a text from you actually, where you sent me a message and you said, Charlie, I am seeing you everywhere. And then you followed with, you must be crushing it. And that is just the natural perception that we believe to be true.

3:55When you see the company's a logo and you see the founder brand or whatnot over and over and over again, you see them so often, you just get this natural belief that I see them all the time so that they must be crushing it. So in companies, for example, when they're trying to target or prospect people, if you're trying to prospect enterprise or whatnot, a lot of cold email fails because they're trying to hit a cold prospect. They're trying to hit somebody that they've never seen before. so you can actually preheat these people ahead of time show your logo your brand over and over and over again to the point where it's like they can't get away from you then there's a few other elements of social selling you built in so that by the time they look at your brand that you reach out to them they're like oh i've seen this company everywhere they must be crushing it yes i'm more than happy to have a conversation i see you everywhere and you must be crushing it i like that by the way that needs to be in a shirt.

4:53Tell me about how you brand yourself, because I think you've done a lot of amazing things when it comes to branding yourself. And I do see you everywhere. So what was the change for you where you said, like, this is so important that I'm really going to go all in on this? You know, I've been doing that. So I've been an entrepreneur all my life, but I've been, you know, predictable profits. I started 15 years ago. One of the blessings of the work that I do is I get to work with some of the brightest people in the world, seven, eight, even a few nine-figured CEOs. And so over time, we begin to see the difference between what's working and what's not working.

5:34What do we see as a common themes for those who are the most successful versus those that tend to be struggling quite a bit? And one of the common themes among those that are the most successful is that they carry two brands. They have the company brand, and then they have a founder spread. And when you look at the data, what you'll find is that when you run both of them together, they do better. It's not a one plus one equals two. It's like a 1.33 plus 1.33 equals like 2.66. It's something along those lines, right? So it's significantly more effective than just one plus one equals two. And then when you look at the founder's brand, the founder's brand generally brings in more leads at a lower cost than the company brand.

6:21It's why when you look at companies like State Farm, as example, Jake, who's a fictional character from State Farm, will actually have more followers than State Farm itself. You know, Richard Branson has got more followers than, you know, his Virgin companies, right? It's people want to follow the founder, learn more about the founder and the principles and the theories and the concepts and everything else. And then when they're in that real buying mode, then they'll switch over and they'll begin to follow the company. So a founder's brand is an essential part of the customer journey. And it allows you to occupy more of that headspace.

7:03And when somebody in that in that category, so whatever that category might be, you know, if somebody is looking for a business coach, I want to occupy that headspace. They see me and they see predictable profits over and over and over again. And it creates affinity. So let's think about it for a minute. A lot of people have this real strong affinity with Apple products. And it's a strong affinity because they know who started Apple and they're a big fan of the journey and they resemble with the journey. But if I said to you, you know, Dan, if you saw if you were at ExxonMobil and you saw gas across the street, that was five cents cheaper.

7:48Would you have any issues going across the street five cents cheaper to get gas? Yeah. And that's because most people don't even know who founded ExxonMobil. And so we couldn't even care less. There's zero affinity. If we see something cheaper, we're going to go somewhere cheaper. But when you can resonate and emotionally connect with the brand, in many cases, the only way you can emotionally connect with the brand is if you can put a person or a figure behind it. That's why Geico created the Gecko, because you don't know who founded Geico, but a lot of people still have an emotional connection to the Gecko.

8:28And it still creates, you know, it still does its trick, maybe not effective as a founder's brand, but in the insurance world, that's doing its trick. or flow or progressive, right? You just need a plan. Every time I see somebody named Jake, I can't help but think of Jake from State Farm. They did a phenomenal job. So when you look at your life and then your journey to going way back, you said you're an entrepreneur for basically your entire life. What were some of the things that you did in the beginning rolling up to predictable profits? Some of the different companies that I did? yeah companies maybe maybe failures that you had along those lines also what's the first thing that you sold for me i think it was like expired chocolate i sold artwork to my neighbors so this is at four years old i would create artwork and i'd run in my neighbor's house and i'd sell it and it was it probably one of the most important lessons that i ever learned was actually when i was that little because you know i'm this little kid big eyes the whole deal i'm running around I'm saying, you know, 25 cents or 50 cents, you know, and people would just go in their pocket and pull out the money and they'd give it to me and send me on my way.

9:41But then there was Mrs. Hersey and I went to Mrs. Hersey's house and I showed her my artwork and she says, is this really your best stuff? And I was honest with her because I was putting things out at volume. It was like scribble, stick it in the bag, scribble, stick it in the bag, you know, because everybody else that I met with would buy it. Except Mrs. Hersey was like, is this really your best stuff? And I was like, no, it isn't. And she said, then why are you trying to charge me 25 cents for something that actually isn't your best stuff? And I didn't have an answer. And I started getting embarrassed.

10:16And I still, to this day, you know, 40 something years later, I can still remember feeling like the blood rushing into my face and my feeling the heartbeat, you know, in my cheeks because I'm like really, really embarrassed right now. And she said, what do you think this is really worth? and I'm like I don't know and she said most three cents and so she pulled out three pennies and she offered me three pennies and that was the last house I went to when I was trying to sell my artwork and then I committed from that point because I was so embarrassed that I would never sell scribbles again and so that created the the tempo for everything else when I was in college I started a consulting company that led to eventually creating one of the world's first pet health insurance companies.

11:04We are nominated by Ernst & Young as having one of the nation's best seed stage companies. That worked out really, really great. We raised some seed money, and then we are going ahead to raise a big multimillion-dollar raise. I just finished negotiating a lease earlier that morning. We are expanding our team. We're sitting in the boardroom.com crash happens. investor walked in to tell us to our face. He had to pull the plug. There was no money. So we ended up having to renegotiate out of the leases and close the business that same day. You can imagine the emotions going from I finally made it to now I've, you know, I've lost it.

11:44And so what do you do? That shortly thereafter, I believe that I said, thank you. You play the best hand with the cards that you've been dealt. So at some point, you've got to audit the cards that you've been dealt. Where are the opportunities that currently exist in my world. And my dad, he was a hard money lender and that was his role. And so I said, all right, my dad's a hard money lender. That's his job. He was going to negotiate a piece of property. I asked if I could sit in on the negotiation. When he said, when I did the negotiation, the guy didn't close the deal just then. I get in the car and I said, if somebody else made you that deal, would you take it?

12:23And he goes, it's the first one to the table that will do it. So I said, all right, I'm in. Um, and so I bought my first track of land. It was raw land. I knew nothing about construction at the time. Um, but I, I'm like, uh, you know, I'm 20 something years old. Who cares if I lose it all? I have plenty of time to make it back up again. Um, but I bought a track of land. I went to Barnes and Nobles to buy a book on how to, you know, do real estate development. And I'm reading the book. I'm driving into other, uh, developments, trying to see who the contractors that you're using from the people that I knew had a good reputation.

12:58And I'd call them and they'd come in. And before you know it, now I'm buying, you know, another track of land. And so I built roads and neighborhoods and so forth. That did really well. You know, I went from several million dollars in debt to paying double digit interest rates because it was hard money long to then, you know, progressively founding my first multimillion dollar company. And then I did a whole bunch of other things in the mix. I mean, I've, I took several million dollars and I did a proprietary stock trading company where I built algorithms, ran millions of dollars in the market.

13:33At one point we had Tony Robbins mentor that said, let's fund, let's create a hedge fund and commit to several hundred million in, in race. 2008 happened and that squashed that idea. I feel like most, I've interviewed maybe a thousand people at this point. And I have to say, I still don't think that everyone is really cut out to be an entrepreneur. It's not that they can't be because anyone can be. And it's even easier now than ever to just start. But that doesn't mean that you can really, really successfully live it day in, day out, full time. but I would say resiliency almost seems to be or grit might be some things that really come up because like you said there's like ups and downs like nobody really goes through barely and whatever goes through without this ups but big ups and big downs it's often like manic in its sense how do you feel about that in terms of like the people that you because I know you get to come in contact with incredibly successful people does this relate to how they are you have to be a little crazy if if you want me to be honest.

14:41Yet you have to be a little crazy because it's, you know, you're basically, if you put this on LinkedIn and you're like, hey, I'm looking for somebody that is going to put their life savings on the line to get up early before everybody else to work longer hours than any other person for less of a salary than you'll be paying out to other people for the first few years with a hope and a prayer that you're going to then hit it big. Like you'd have nobody applying for the job, right? And that's the way the most entrepreneurs end up, you know, going through this journey. I've almost hit bankruptcy three times before my life.

15:25When somebody says they hit rock bottom, I now know what rock bottom is. But when somebody said it before, like usually it's like they have a bad day. I hit rock bottom. Now, when somebody says they have rock bottom, I look at them and I'm like, unless you get to a point where you no longer want to be here on this earth, you have not hit rock bottom. And I got to that point one time where I'm, I was literally driving in the car and I said a silent prayer that somebody, cause I was, I was too chicken to do it myself, that somebody would just hit me head on because I couldn't handle the pain anymore.

16:05It was that extreme when there was just so much stress, there was so much debt, there was so much everything. I just didn't see that there was going to be any way out. But I had a mentor of mine tell me one thing that I'll never forget. And he said, you will be the closest that you will ever be to breakthrough success the very moment that you want to quit more than anything else in the world. And I found that to be true, not on just one occasion, but also on multiple occasions. It's the hard, hard, hard, hard, hard moments that if you can persist through this, that you'll go ahead and you'll find that breakthrough success.

16:48But entrepreneurship is a lonely game. You're fortunate in that you have Kate and that Kate is there to support you and have your back and everything else. and I do find that it's really important for the entrepreneur that wants to do really really well that they have to have a support system if it's not a mentor group if it's not a supporting spouse or family member or or friends you need that in the moments when you really doubt yourself because you're going to do that the moments where you doubt yourself where they're like come on man you've got this you've got this one more day one more day one more day i i believe in you and that's what we'll get you through it that's how we met right through a group i mean i made so many friends to these groups because we get each other like you're telling me something i can i'm like well i can relate to many of those things i've been there i don't think you're crazy where somebody like you said if you were to tell someone who's been working a corporate job for a long time they'd be like why don't you just go get a job i've heard that many times too like as things start to be unsuccessful people just like just go get a job like who cares and you you and i know like we can't just go get a job it doesn't matter that way um i know something that's been really important to you has been fitness by the way you're looking super fit now and i was like because you're by the beach now i get it like it's uh you know it's it's the opposite of bulking season now, I guess.

18:21So for you, how has that played into, you know, business, entrepreneurship? Has that helped? Does that do anything for you? Is it, is it a mental clarity? Is it making you feel good? Is it legacy? What is fitness to you? So I often talk about as an entrepreneur, you're an intellectual athlete, right? And I say that because when you wake up in the morning, you need to be on point and ready to go and make decisions fast. And so if you're one of those entrepreneurs that you sleep in, you're sluggish, you're got brain fogs, you can't really set any appointments until, you know, 11, 12 o 'clock, then you have to have six cups of coffee in order to be somewhat functional.

19:07And then you're just exhausted by the end of the day, you know, you're ready to crash and so forth, you're unable to make really effective decisions. You get paid in direct proportion to your ability to use your mind and think. And so when you put health as a top priority, that then allows you to wake up in the morning, be on point, sustain that energy throughout the day, make some great decisions. And all in all, it makes you a better entrepreneur. And then just as important as training, which is you actually sitting there every day working as a recovery. So what do you do when you're not working?

19:45You have to have rules disconnect, not going to check my emails when I shut down my computer, won't check my emails on the weekends. You know, I'm going to go to bed early, get my sleep, really prioritize that. And, you know, that's it's actually here's a secret. I don't think I've ever I've told you this. It's actually formally going going to be launched next week. But here's another company that we actually just launched. This is next week. And it's with my health guy. And so I work with one of the top health guys on the planet named Reagan Archibald. I hired him because I said, I want you to optimize my mind.

20:20I get paid in direct proportion of the mind. I want you to optimize this. Make me superhuman. And so it was over a year of trying to formulate something that would allow me to optimize my mind in a way that didn't violate any of my health rules because I really want to make things put healthy things into my body and we formulated founders fuel and then through that I I gave it to somebody and they were like damn like what is this like I want it and a few other people wanted it and we're like well you know we'll uh bottle it up and we'll put it out there and it's sort of like if it makes a hundred million, then awesome.

20:57If I end up with a few thousand bottles, you know, in my, in my house, that's okay too, because ultimately it was for me anyway. Well, I need, I need the founders fuel. Yeah. How do I get founders fuel? Cause I really need to get it. So founders fuel.co when it does release, but when it releases, I'll send you a message, you know, and I'll let you know. Founders fuel.co. Yeah. It's like you said, if you're sluggish, if I don't sleep, if I don't have clarity, I'm like dead. Like I can't make decisions. It's really bad. I have a decision fatigue issue and it really, really impedes everything I do.

21:36And I see a direct relation. Like if I meditate at night and I put something on, I wake up the next day. I can be really successful. It's really it's like night and day difference that if I get bad sleep and I can't focus. I'm like sitting here, you know, useless all day. And, you know, we only get paid if we get paid. Right. So we're not doing something or performing, then we don't get that paycheck. But Charles, this has been amazing. So many quotes. I love the book. What is your book called? And how can I buy your book online? Predictableprofits.com. The book is the Predictable Profits Playbook.

22:16You can get it on Amazon or you could get it free plus shipping on the website. If you go to predictableprofits.com under resources, you'll see book and you can get it free plus shipping over there. Love it. I did read it, though. It was a bit ago. I loved it. But no, Charles, it's been amazing. I'm glad that we were able to connect again. I don't think I've ever really gotten to talk to you about your history, everything. So I was excited to do this just because every time we talk, I learn something new. So I want to make sure that you and I connect more often and I need to get the fuel that you have.

22:48But thank you for joining us today on Founders Story. Hey, together we're better, bud.