How Shake Shack is out-marketing Chick-fil-A, This Skool group makes $258,000mo, Meta opens up Quest OS to third-party hardware makers, What to do about the TikTok ban, The single most important event in the history of Facebook, & more

0:00Neil and I have an agency owners group called the Agency Owners Association. All you have to do, just go to marketingschool.io slash agency. Once again, it's marketingschool.io slash agency to learn more. And now back to the show. Did you know that Shake Shack is doing a promotion that's targeting Chick-fil-A? No. So here's what this image looks like. I'll show it to you. Shake Shack is offering free chicken sandwiches on Sunday. And so basically for Chick-fil-A, you eat chicken too. Yeah, I'm going to go get this. Chick-fil-A doesn't offer, they're not open on Sundays. That's why they're targeting them.

0:36But it's free. Do I have to order anything else or is it just free? No, the bet is that you're going to buy more stuff. And there's zero chance that you're just going to buy one. Is it one per person? Probably. Oh, I'm going to go this Sunday. Look, I just sold Neil with an ad. You can thank me later, Shake Shack. Their chicken sandwich is pretty good. During the pandemic, I'll reward myself every Sunday because I live right above a Shake Shack. and I'll get two chicken shacks, okay? And 10 nuggets. And that would be my gift. I love it when you said free. Yeah, well, yeah. You have to use the code, chicken sundae.

1:13Okay, one minute, one minute. Can you text me yet? It's chicken sundae, dude. I don't know, but I need to remember. I got to text people. Chicken sundae, chicken sundae, okay. Free chick, no, not chick flesh, free shake shack. Oh, yeah, free shake shack, chicken, chicken sundae is the code. Those of you listening are probably going to do the same thing now. The chicken shack is great. Now, I'm going to get this every Sunday. Is it only one time or you can go every Sunday? Dude, I don't know. I haven't done this yet. Yeah, that's a good deal. Neil and I were talking on the phone about this the other day, but I was just telling Neil some of the numbers of these school groups.

1:50So Sam Evans was fortunate enough to – he let me invest. It was cool. So I hope school continues to grow. But there's these school groups, SKOOL, for anyone wondering. Yes, thank you. And these are like communities, right? These are like private groups. You can use circle.so, you can use SKOOL. Alex Hermosey invested a significant check, it seems like, into school. And so there's these groups that are doing like$500K a month,$258K a month. And I showed Neil this one group. It has like 2 ,000 people in it paying$129. And this group is basically about how to get women and make money. And then there's another group for how to make money online for French people.

2:30And that group has 300 people in it and they charge$9.99 a month, right? So that group's basically doing like 300 grand a month. And so these groups are just communities at the end of the day. And people are longing for community. People are longing for connection because a lot of people are just working from home now, right? So I think this is interesting. That's why we created the Agency Owners Association group. If you go to markingschool.io slash agency, you can learn more about it. And we have our MRR is growing. It's now at 3K. See, last time I told you, it was like 2 ,200 or something, right?

2:59And so I was like, it's going to grow. It's going to compound slowly. Wait, so here's the disconnect. So every week we record this podcast and then Eric tells me, oh, we got this agency program. What is it called? Agency? Agency Owners Association. Agency Owners Association. He's like, it's growing. So I was like, okay, cool. I thought Eric was charging people like five grand a year or 10 grand a year or something. I don't know what he was charging. And we were just making some money or he was making some money. I was like, all right, whatever. And then he's like, oh, our MR keeps growing. And he keeps saying MR.

3:32I'm like, I don't know what the heck he's talking about. If you're doing in-person event, you're charging for the in-person event. Where the heck is the MR? So then the other day we were on the phone and he's just like, our MR is growing. It's at two grand. And then I asked him like, what do you mean MR? And he's just like, oh, we charge a monthly fee or annual fee? Monthly fee. Monthly fee. and it ends up breaking it down or do they pay up front or just monthly? It's just monthly 149. And I'm going to keep upping it to 200, 250 to 300. I'm going to keep upping it. Yeah. Or you could charge annually.

4:01You can't charge annually on it. They don't have that option. Oh, they don't have that option. They should have that option. They don't have that option. Yes, because then you can just... If you just discount 20%. Yeah, yeah, yeah. And when Eric was going through this process, I was like, oh, cool. He's like, it's reoccurring. And I was like, oh, now I get what you mean by MRR. At first, I just thought you were charging like 5, 10 grand and be like, cool, we're meeting up and we can discuss how to grow agencies and we bring a lot of them together and we all figure out how to grow each other's agencies.

4:26And by the way, I actually, we share some of our lead flow with people in the group. And so basically based on how you engage, you're qualified to get lead flow. And so we have a community manager that handles that, right? So we're trying to gamify a lot of it. And then the more value we add to the group, the more we'll charge for it. So join now while it's cheaper. But then what we'll also do on this podcast is because we can be very transparent about this, we'll just share how it's growing and what we're doing to grow it over time. And you guys can watch us build a community from scratch in public.

4:52And you can just take whatever it is that we're doing that you like. And hopefully you get to grow one too. Yep. Yep. All right. So what's the last topic? We have a couple more. All right. Go for it. You go. You go. You have so many blank spots. All right. So I don't know. Did you see that Meta opens up Quest OS to third-party hardware makers? I saw that in passing. Can you explain it? Yeah. So Meta has their devices for virtual reality. You guys may have seen them. And, you know, these are like, think of like Apple Vision Pro. I don't know how many people actually have the meta devices, but think of Apple Vision Pro.

5:27And what they're pretty much doing is licensing out their software. So then that way your operating system, think of like Microsoft Windows, but for anyone who is creating these virtual reality devices, hardware, or whatever it may be, you can run on Meta's OS system. I think it's a cool concept. I do think virtual reality is going to be big. Not yet. Like if you look at the vision pro, no one talks about the vision pro anymore. I got my niece and nephew a vision pro. You know how many times they use it? Like two. They use it more than two, but like ask me like every once in a while we use it.

6:05People slowly stop using them. He then has one, right? My brother-in-law, he barely uses it. You bought it for his kids. No, I bought one for his kids. He has one for himself. Yeah. I bet you he barely uses it. I haven't asked him, but I would bet a million bucks that he barely uses. He probably doesn't use it much. No. So then when you look at these devices, they're too big. They're too clunky. They're not really integrated in your daily life. So there's the Oculus, which is a little clunky, but their Ray-Bans are not. It's just sunglasses. And I saw a video the other day where there's a girl wearing a Ray-Ban.

6:35She's walking up to a monument, and she's like, a Ray-Ban or whatever. Tell me what this is. And then it identified the building that she's looking at. Yes, but the problem is people want the technology in the big device in the small Ray-Bans. Yes. And that's not there. And eventually it'll get there, just like everything gets there. Remember the computers we used to buy were huge and super heavy? Or the TV. Yeah, and now you have it here. Yeah, and the big boxes and stuff. But now it's all in here. So yeah, it'll happen. But that's the problem is people want the technology of the Vision Pro and Ray-Bans.

7:07And it's not there yet. And it'll take many, many years to get there. but eventually I think it will. It might be Meta that can get there. I mean, the stuff they're doing now, like open sourcing Lama and then the virtual reality stuff, they're pretty impressive in terms of their pacing right now. So we're just idiots for not buying when they're at 14. I think it was as low as 12, the PE. I had no idea, but I think it was less than 10 at one point. We should tell people what they should do about the TikTok ban. I think people should do nothing about the TikTok ban. Some US company will buy it. You don't have to worry.

7:39They have to divest in 12 months. I'm sure something will get figured out. Worst case scenario is they have to divest. The other scenario is they'll just settle in some way, shape, or form. Okay. TikTok is a Chinese company. All right? You're from China, correct? No, no, no. Taiwan and Hong Kong. Okay, my bad. But basically China. Okay. But you know the culture of a lot of people in China, correct? And I would say this is universal culture, by the way, but we'll just say China because it's a Chinese company. let's say TikTok is worth$100 billion. Easy to say somewhere around there. Yep. Do you think any person in China would let go of$100 billion?

8:18No. Yes. Do you think any person in the world would let go of$100 billion? No. Exactly. Either zero or$100 billion. You will take$100 billion or$80 billion or whatever it is. It doesn't matter if you're Chinese, American, Indian, you know, Mexican. It doesn't matter what nationality you are. No one's going to let that money go away. Someone will buy it, just like last time when Trump tried to ban it. And you had Oracle was trying to step up. I believe Walmart was trying to step up. And there's a few companies like, yeah, we'll buy it together. And you're going to see the same thing, but they'll pay more money because TikTok is bigger now.

8:49And when you look at it, it's not really a thing of, is it going to get banned? It's the question of, is it going to be Chinese owned? Oh, not going to be Chinese owned? Cool. Who's going to own it? It's going to be some American company because the US doesn't want someone else to own access to a lot of the data. And then instead, and then people like, oh, it won't be TikTok anymore. Probably still be TikTok and have a licensing deal or whatever. But instead, the US government will have next to choke here in America instead of next to choke somewhere in China where they can't really choke them.

9:21I think, look, yeah, yes. I think this will all get worked out. At the end of the day, I think TikTok has the best algorithm versus like Instagram Reels or YouTube Shorts. Because when you look at YouTube Shorts or Reels, it's just a lot of random stuff. TikTok does a good, like, no, I don't use TikTok that much. I don't know if you do. but I remember I would get sucked into a cycle when I used to look at it a little bit. It was pretty spot on and I can see why people would just use it on and on. It's too valuable to just let it go to zero. What's funny is the ideal buyer of it is a Google, a Microsoft, a Facebook.

9:53Remember what, Oracle? Yeah, Oracle. But these buyers will never be able to buy it because the government is going to say monopoly, antitrust or whatever they're going to call it. I don't know what it's actually called from a legal aspect, but they don't want Facebook to own more social networks. But it probably would be easier for them to just say, Facebook, you own it. If we're upset, Mark Zuckerberg, we have our neck to choke. Do you remember, do you know what the most, the single most important event is in the history of Facebook? Buying Instagram for probably a billion bucks or two billion.

10:30It's a good guess, but no. So here's what it is. and he talked about this on the podcast too, but Peter Thiel actually confirmed this. This is actually back in 2023. So the most important single event in the history of Facebook, this is from Peter Thiel, by the way, popular investor, was in July of 2006. We were about two years into the company's history and we received a$1 billion acquisition offer from Yahoo. The company had about 40 million in revenues, no profit. It was just a college site. The management team was a little bit nervous about a 22-year-old CEO. and there were about three of us on the board and two of us thought maybe we should take the offer.

11:05Now, let's just pause for a second. Would you take the offer at that age? I certainly would. I would have too. Okay, exactly. Because we're not as smart as Mark Zuckerberg. So let me continue on here. So Mark started the board. Actually, honestly, I would have taken an offer. I would have asked for$2 billion. Because at that time, Facebook was growing like a wildfire. And you saw what MySpace sold for. And I don't know if MySpace sold for after or before, but either way, MySpace was a piece of crap compared to Facebook. I would have tried to get$2 billion. My point is we probably could have asked for$10 billion, right?

11:35But the point is we would have settled around$1 billion to$10 billion, right? Yeah, I didn't even need$10 billion. I would have got$2 billion, but if you had a gun to my head, I probably would have taken the$1 billion even though I'm saying$2 billion. Exactly. So we would have tapped out, right? So Mark started the board meeting with saying, well, it's just going to take$10 billion. We just have a quick formal board meeting to turn this down. And we both said we should talk about it more. And we had a six-hour long discussion about pros and cons of doing it. It was like, Mark, you are 22 years old.

12:06You would make a quarter of a billion dollars. There are many things you could do with this money. And Zuckerberg said, I don't know what to do with a quarter billion of dollars. I mean, I guess I would start another social networking site. But since I already have one, why would I sell it? The key point that Mark made that convinced us not to sell was that there was a whole series of specific products that the company was going to be launching in the next six months. They were clearly not valued by the would-be acquirer. And we thought you would know we would probably be safe waiting and they shouldn't and they wouldn't go away that soon.

12:43And we could go on. Go ahead and do this. Sorry. Got a little jumbled there. The only one big thing was Mark believed in what he was working on. and if I think about the podcast that he was just on, he talked about this moment and he's like look, and we've talked about this too, it's like okay, you could sell, but what else would you be doing? It's like, well no, I would go back and do the same thing I'm having a lot of fun, I like the people that I work with, why would I stop? Like, what would I do with the money? Yeah, I had the same option as his, but for less money and I said no, and people were telling me, you're crazy this is a lot of money.

13:16We talked about this, like, what else are you going to do? Yeah, what else am I going to do? I love what I'm day. I'm like, it gives me purpose in life. So you don't want to sell? I'm like, no. Yeah. And so that was the single most important event because it would have been game over if you sold. But I have no investors. So I didn't have to have a six-hour board meeting. So the$1 billion, the 25 % would have gone in. So that's just some math for you guys, right? A lot of people talk about raising VC and all that, but you've raised before, right? I've raised some money. At the end of the day, well, you raised VC, so you had a board.

13:47You know what it feels like like there's a difference between bootstrapping and vc do you want to tell people this message is brought to you by leveling up founders and leveling up founders is an invite only event for founders it happens once a year usually during august and past attendees include people such as ali abdahl cody sanchez neil patel vanessa lao and the list goes on and on and ultimately it comes down to the quality of the group of the people we try to keep the group high caliber that's why it's invite only so if you are a founder at the top of your game you can go to levelingup.com slash founders to learn more about it.

14:19And then you can apply and we'll see you on the other side. Boost shopping is you do whatever you want. VC is you got a board who can help guide you and they can give you money to help grow faster. It's great. There's also drawbacks because if you have bad board members, they can derail the company and create issues or try to replace people. There's pros and cons. I think venture capital makes sense for a lot of businesses. If you're trying to build something really massive. You're swinging for the fences. Yes. Not just swinging for the fences, because these days there's cloud and AI. There's a lot of technology that makes it cheaper to create these businesses.

14:53But if you're creating something that requires a lot of money, like, hey, I want to build a chat GPT, go raise money. It's too hard to do that without someone else's money. But on the flip side, if you're in a big TAM, but you can build a nice size business without raising anyone else's money and it's not really needed, like you don't need tons of capital, you should bootstrap. I prefer bootstrapping, but I don't like dealing with authority and someone telling me how to run a company. If you've ever built a website, you know how tough it can be to keep a strong design while ensuring site performance is fast.

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17:29you also don't like dealing with uh you also don't like dealing with people management too yes and i also don't like doing board meetings or any of that it's not my style yeah and every time we've had private equity offers i always tell them i'm not interested a lot of times they want to meet up in person and i meet them in person i get my free meal like this sunday i'm gonna go to what do they feed you uh last time was a four seasons meal nice i was at a restaurant there i was like all right this is cool um actually no the last one was in marina del rey they brought food to the office it was really good and most of these guys are pretty sharp they're pretty sharp yeah i didn't care i was just getting to know them they weren't necessarily trying to do a deal with me i wasn't trying to do a deal with them i'm like let me just go get my free food but i prefer it when they come to me and we do a free meal yeah it's more convenient yeah yeah like pick a restaurant in beverly hills i think all right but either way i'm a cheap date because i don't really eat fancy food from the menu you don't eat a lot no you don't drink and you don't eat a lot.

18:24So you're cheap. Yeah. Yeah. This will be the final thing we can talk about. Do you know about the Amazon Oh By The Way offering? No. Okay. So back in the day when Amazon was moving into Prime Video. So keep in mind, they had Amazon Video On Demand. That didn't work out. They had Amazon Unboxed. That didn't work out. So when they, you know how Amazon Prime, you pay 80 bucks a year for it right now or whatever. They give you all the videos. Like, have you seen Fallout? Fantastic. Yeah. It's great. So good. You finished it. So good. Okay. So anyway, with Amazon Prime, they weren't like, oh, we're going to charge you more money for this.

18:57It's just like it's rolled into the cost, right? And the whole thing with this is like, you know, they're not, once they pay for like the hosting and everything else, like, you know, this marginal cost, like everything is just profit afterwards, right? They just need to acquire more users. And so Amazon, what they said back in the day was like, because they had to compete with Netflix, like, oh, by the way, like you guys get this free library of content from MGM and all the new content that we're producing is just included, right? And it's nice to see that. Netflix did that back in the day too.

19:23So when they had the DVD subscriptions or the DVD where they stripped you to DVDs, there's a lot of cost tied in with that, a lot of variable costs. Eventually, so when they launched streaming, they're like, oh, by the way, you guys get streaming too. Eventually, streaming overtook their DVD rental business very quickly and Netflix became Netflix. But it takes, again, guts to be able to make that bet and look into the future and do it on, an oh-by-the-way type offering. Because trying to charge people a separate thing, there's more resistance to it. Yeah, and the cool thing that Netflix did, and Amazon tries to do this as well, they continually try to kill their own business and try to reinvent themselves.

20:02I think that takes a lot of guts. It's hard to do. But when you're doing that, it's really hard to be like, oh, you got to pay for all this. They test it out, and if it gets traction, then they figure out pricing later time by increasing things or adjusting things or removing options. But that model's worked out really well. Like Mark Cuban likes to say, how do I kick my own ass? That's what people should be thinking about all the time. So that is it for today. Go to marketingschool.io slash agency to learn more about the Agency Owners Association. Please don't forget to rate, review, subscribe.

20:30We meet in person for this. We've got Brad from recordeditpodcast.com. And yeah, we'll catch you in the next episode.