Will Lower Rates Spark a Marketing Boom?, Hormozi’s $105.5M Funnel & Why Everyone Hates Course Sellers

0:28We're going to start. of interest rates and how it affects marketing so he just spoke at the jackson hole event and i think there's actually a crypto event going on over there as well and um so neil had this topic here on if we will see a bull run in marketing with lower rates i think that's a good place to start so neil what do you think because i'll tell you what neil i was actually holding to deploy a little bit um because i thought he was gonna come in a little um more on the pessimistic side right because everyone's monitoring to see what he's going to say. But I opened up CoinMarketCap and everything jumped.

1:04I was like, oh. And then I looked at his language. I was looking at Twitter. I asked Grok what he said. And it looks like he's saying that, hey, it looks like we're in a good place. We're going to stop maybe looking at that 2 % inflation target. And it looks like we're going to have some cuts coming, right? At least you said September. So what did you hear? Yeah, so the summary is they got to look at the data. but based on the data, they're open to cutting if it needs to be cutting. And he was more positive about that versus the past. And the September's job data should end up coming out before they make their decision on whether to hold the rates steady or cut.

1:46And when I say the September jobs data is technically jobs data for August that you end up getting in September because there's a little bit of a lag before you can get the jobs data. Now, here's what's interesting because we work with both enterprises and SMBs, and I know you do too. The rates don't have as big of an impact on the enterprise corporations as they do for SMBs. What we've really seen in this market because rates are high and borrowing is tougher, and I know Besant said in Q3 or Q4, we're going to start seeing more deregulation, whatever that may be. We'll have to just wait to see it.

2:24we think this is going to cause marketing to grow for agencies who are focusing on SMBs more than enterprise. Because borrowing is cheaper, credit card rates will hopefully become cheaper. And then people spend more on ads like Meta and stuff like that. And it causes people to make more revenue. And, you know, it all goes in a circle. Have you heard of Besson's 333 plan? By the way, guys, don't I sound amazing? Send me a DM if you think I sound amazing and Neil sounds like crap. So Neil, have you heard of the Vescent 333 plan? I have not heard of the 333 plan, but I'm guessing it's related to like how they're making money, like cutting tariffs and all that kind of stuff.

3:04Yeah, you're on the right track. So Vescent's target is 3 % real GDP growth. That's number one. The second one is 3 % budget deficit to GDP ratio. Right now, our budget deficit to GDP ratio is not good. And also, he wants 3 million barrels per day increase in U.S. oil production. So I don't know about the last one because this is an AI overview on the 333. But I do think if we can get 3 % real GDP growth and get the budget deficit in a better spot, he's really counting on the AI boom cycle. So that remains to be seen, and I think he's counting a lot more business productivity. But what I will say is, you know, those of you that going back to the interest rates real quick, there's a difference between dovish versus hawkish stance when it comes to interest rates.

3:51So dovish means a dovish stance means favoring lower interest rates. Right. Whereas a hawkish stance means you're favoring higher interest rates. And and actually Powell has been pretty hawkish for the last few years or so. And rightfully so. Maybe a little too long. But what does he call what he gets? He gets called too late, Powell. sometimes, right? But dovish stance, he's kind of moved into this dovish mode. And that is grounds for this is why crypto jumped this morning, right? So I was just looking at Bitcoin, it was down to 112 or so. And then this after he spoke, it went up to 116. And then I think Ethereum jumped like eight, 9 % or so from 41, 4200 to 4600 or so.

4:33So I don't know, like the economy seems shaky to me But the markets don't speak for the economy. Yeah, but I know we're on a marketing podcast. That's the most entertaining thing I hear from crypto people. A lot of them are saying, oh, it's not correlated to the economy or anything like that. Crypto is different than the US dollar and markets and all that kind of stuff. And I'm like, yes, but a lot of the crypto holders are institutions. And when the market's great, crypto is great. When things start going really bad, And it affects crypto prices negatively as well. Yep. So look, when interest rates come down, that means borrowing is easier.

5:11That means people are more, they're more aggressive with their spending habits, right? And you look at that, by the way, I've never seen the real estate market. I don't know if you have locked up like it has been for the last couple of years. And it's because of interest rates. Everything is driven by interest rates. It's a cycle. It comes up, comes down, comes up, comes down. The economy is supposed to be like that. It's supposed to be driven in cycles. We just haven't had one in a while because we've created this, we had this money printing. artificial boom period for a very long time. But no, going into this, and this is another similar topic that I have on the sheet, talking about how marketing is growing for S &Bs because of the rate cuts, I genuinely believe it'll start helping.

5:52Enterprise companies are starting to, independent agencies are starting to do better, but I think it has nothing to do with the economy when it comes to enterprise. Why is that? Because we're seeing two trends right now. Did you see the Dentsu earnings call? No. Right? Their CEO in Japan. He didn't explicitly say, but he's hinting. Dentsu is one of the big ad agency holdcos out there. They own like Merkle, iProspect, Kara, and the list goes on and on. And they're talking about how, in essence, I've known this for a while because I got hit up by Dentsu for, you know, they ended up selling Mute6, but they hit us up for that.

6:37But the reason I know the Dentsu side is, you know, there's rumor mills. You just know some people are working. And Dentsu, the rumor mill is looking to divest everything outside of Japan. So the whole Dentsu Aegis Network, if you want to talk about Americas or Europe or APAC excluding Japan, they're looking to divest the whole business. And then the other rumor is WPP, which their stock has been in the shitter for a while, is looking to divest WPP or Group M. And the rumor is potentially Accenture may end up buying it. So when you're seeing this turmoil with these holdcos and these ad agencies, and there's a few big ones like Omnicom, Bensu, WPP, Publicis, IPG, although IPG is merging.

7:27right? Supposedly the merger will go through. But when you look at these and these, some of these players are doing 15, 20-ish billion. And these companies like Denses and stuff make announcements, we're cutting 8 % of staff or 10 % or whatever it may be, right? I don't have the top number off the top of my head, but I think it was 8%. It starts, you know, creating alarm signals for the clients. So what we're seeing in the enterprise end is people worried about the holding companies. A lot of them have a ton of debt or they have other issues and they're starting to shift the budget to independent agencies.

8:03Now that doesn't mean the marketing industry is picking up. That just means money is shifting from one pot to another, but the pots that they're shifting away from are really massive. Yeah. So, I mean, what's the key takeaway here for the audience? If you're an independent agency and you do good work and you're focusing on enterprise, you should see things pick up, but it's not necessarily the economy. Don't think of it as a false signal. Maybe some of it will be, but it's more so because the holding companies are having issues and we're hearing it from customers left and right. They're starting to migrate away from the holding companies or look for alternatives.

8:39Yeah. So my take on this, I mean, putting a long-term view on it. And so short-term, yeah, I agree. I don't think there's much more I have to add there, but I don't know if this holding company model works out in the long-term where you're gobbling up other because they're throwing people at the problem, right? And I just think of the world that we're moving to, it's just you and I know a lot of people that have been net cutting people, unfortunately, but they're getting a lot more efficiencies from other areas in the business, right? And so that's just how it's going to be. And I think long, long term, by the way, I don't know if you and I talked about this yesterday, but people are worried about jobs and everything.

9:14But when you think about it, the jobs that happened before when most people were farmers, eventually those jobs got taken away. Everyone's freaking out about that, right? Or even back in the day when the printing press came out, everyone's freaking out about that. It's like, oh my God, we can't read newspapers, right? And then people started freaking out about, oh, they're going to lose their factory jobs. But these are jobs that people actually don't really want to do. And that's going to allow people to work on more creative things over time. So sure, there might be some short-term job displacement, but in the long term, I think everyone's going to be okay.

9:40They're going to want to work on things that they want to work on. That's long, long term. And I think long term, the holding company model, I think it's worked that well for these companies in the past. I just don't think that's a game that is worth playing for the long term based on how much more efficiencies we're going to gain. So the thing I want to call out too, you call out the economy for a second. Remember we talked about the restaurant performance index? You mentioned that. I forgot what the restaurant performance index is, but I'm assuming that's related to how well restaurants are performing.

10:10Exactly. So here, I'll just share this with you real quick. So restaurant performance index, can you see this? Okay, yeah. Okay. So whenever the restaurant performance index edges downward, so it was negative 0.1%, and when it's negative like this, you can see here in 2020, those of you that can't see this right now, it dropped a lot, right? It dropped down 4 % or so, and this is during COVID, and then when there's a recession over here, it dropped quite a bit, right? So whenever it drops quite a bit, when it starts edging down consistently, this is something you want to pay attention to because people just aren't going to restaurants as much anymore.

10:45Now, in this case, it's not that bad. Look, it edges down here and there in 2016, 2013 and all that. But if it starts really going down consistently, then we know there's an issue. Like, look, look, in 2023, this looks like maybe 2023 going into 2024, it came down a little bit too. And this is when you and I felt the B2B recession. Yeah. But it's going up based on that chart. And then it went down a little bit and now it's starting to go back up. So hopefully it keeps going up. Yep. Warren Buffett likes looking at railroad data. So what I have on the screen right here is this association of American railroads.

11:16And so you can look at rail traffic data and you can see 2025s in a darker blue line and then you have 2024 in the lighter blue one. And right now it's still kind of trending above 2024. So if it starts to look really bad, it trends downwards. These are things that you can look at. So you can look at the restaurant performance index and then you can look at railroad data. Neil and I, this is not financial advice. You know, this is just what I like looking at because I hear it from the pros. Anything you want to add? Look, eventually things have to start turning around. The question is when. And it's too hard to time market.

11:51Just the way Eric and I look at business and marketing is double down and invest in the things that you know are great for the long term. And in the short run, you're going to take a lot of licks and it's going to be very painful. But that's how you come ahead of your competition. And this is why Eric and I are really happy none of us are private equity backed because a lot of the private equity companies have done very little acquisitions. They haven't really invested much in growth. All they've done is cut, cut, cut. And the reasons, the main reason they've done the cut, cut, cut model is because they put a lot of debt on the business when the private equity firms bought it.

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14:39That's framer.com, promo code MS, framer.com, promo code MS. Rules and restrictions may apply. So that makes them be very conservative with their investments and their future outlook because the last thing they want to do is miss any of their debt payments. Think of it like a mortgage payment, right? You can only default for so long. But on the flip side, Eric and I, the last few years, I don't know your numbers, but I can speak for myself, and I'm going to ask you, our profit has gone down because we've reinvested so much. I'm assuming you're in a similar cap. Oh, bless you. We've had to because we were in trouble a while back.

15:20Yeah, but your revenue overall is larger, correct? And our revenue has been growing overall. Some years, it's a little bit choppy or growth slowed down, but still we're pretty much growing overall. But our profit is down, even though our revenues are much higher than they were years ago. And the reason being is we reinvested. And we invested in things like international expansion. And I always get the number wrong because I always tell people we're like in 20-something countries. but i was on a presentation with nick the other day and he's like yeah we have offices in 28 countries and people on the ground in 35 it was something like that that he said it could be a little bit off um but that was expensive that wasn't millions of dollars it was tens and tens of millions of dollars right um and that's just money out of my pocket and you look at eric he built carrot and carrot wasn't cheap i don't know how much you spent on that but it must be arm and a leg by now yeah arm and a leg on carrot arm and a leg on talent especially right now So, you know what Jeff Bezos said?

16:21Remember what he said? He's like, whatever you see with Amazon right now, it took us three years to get here. And whatever we're building right now, we're already on to the next three years. And that's how we're looking at it. And you bring up private equity, too. There's a quote that sticks with me. I think it was Naval Ravikant that said this. But if someone can tell you what to do, you don't own it, right? So if you're private equity backed and they own 51 % or so, and they're telling you what to do, and they're telling you, you need to make these cuts over here. And you need to do this stuff over here.

16:44And you need to play our playbook. You're not getting it. And it's fine if you're okay with that. But I think in general for you and me, it's not the way. Yeah, our personalities don't work with someone telling us what to do like that. By the way, there's one more quote I want to leave people with too, kind of going back to investing for a second and we'll jump back to marketing. But Howard Marks, remember Howard Marks, the investor, Oak Tree Capital. So he, I'm paraphrasing here, but the best time to invest is when you don't want to. So when the news cycle is terrible, when all the numbers are looking bad, when everyone is pessimistic, that is the best time to invest.

17:21And most people, 99 % of people won't do that. So you can apply that to business as well. You can apply that to not just financial investments that you make but time investments that you make and things like that. So just wanted to throw that in there. You know he lives right by you, right? Does he? Uh-huh. Where does he live? Homeby Hills. Oh, I didn't know that. I just know they have an office in downtown LA and I have some friends I thought it was Century City, no? Maybe both I don't know, yeah. But I know he has a home in Homeby Hills and his partner did as well but his partner sold the home maybe to him or someone else but yeah, they're right there by Beverly Hills, Bel Air and all that area Yeah, dude, I got a good one here so why people hate course sellers, so here, let me just start this off, I was reading this on Twitter the other day, so So this guy, Chris Hoffman, he was actually a YPR and he was at the YPR Miami event, the marketing summit.

18:15So this guy, Lee McCabe, works in private equity. He posted this on LinkedIn. So Lee McCabe says, it's not private equity. It's a Ponzi scheme of aspiration. Okay, so it's not private equity. It's a Ponzi scheme of aspiration. There's a whole ecosystem now built on one promise. You can buy a business with no money down and become financially free in 12 months. It sounds like M &A, it sounds like private equity, but it behaves like a multi-level marketing scheme because here's what's really happening. The people selling you the dream aren't acquiring HVAC companies or running$5 million revenue businesses.

18:50They're running content businesses and you are the product. The playbook is painfully predictable. Number one, record a podcast episode explaining how anyone can buy a business, quote unquote. Number two, show a stage screenshot of an LOI or closing dinner. Number three, offer a$10 ,000 mastermind or cohort-based course. Number four, rinse and repeat until someone asks for audited results. It's not illegal, it's just clever marketing. And it works because the audience wants it to be true. And these are liars lying to people who wanna be lied to. They're not targeting operators, they're targeting dreamers.

19:23People who don't actually want to run a business, they want to escape their job. They want the feeling of momentum, the illusion of progress. And the$3 ,000 course is the price of hope. They're selling dreams and dopamine hits to 99 % of people who will never take action, but will spend$3 ,000 to feel like they're closer to the life they'll never build. I'll just end it with this piece real quick. So one of our mutual friends said this. I remember I was sitting in a room with some executives. We're talking about, we're launching a course, right? For Jim Rohn, right? And the guy said it in front of the room.

19:51He's like, guys, guys, we are not selling progress. We are selling perceived progress. And I was like, man, I don't want to sell perceived progress. But when he said it, everyone started laughing. I was like, yeah, that doesn't feel good, right? And this is what Lee is saying here. And I just remember, I've talked to this guy before. But anyway, what do you think about this? I'm with it. I totally agree. I do think a small percentage of the people who take courses get tons of value and it improves their lives. I think 97, 98, 99 plus percent of people who take the courses get very little value and it really hurts them.

20:30Because they just spent all this money and they got nothing. And I think some of these course providers have gone above and beyond. I've heard of people that no joke will tell you, go here to sign up for a credit card. They'll give you a$10 ,000 limit. What's your credit? And all this kind of stuff. They help them sign up. And then they go charge their card for$10 ,000 when they can't afford it. And I look at that and I was like, this is just terrible business. And I know someone who went through that model. And I told them, you shouldn't end up going. This is a terrible business. And they got tons of charger backs.

21:06And they were like, oh, because of this. And I'm like, no, you're only selling a crap ton of courses because you're promising people they will become rich. And the reality is, you can't guarantee someone's going to be rich. You can't guarantee job placement. You can't guarantee you're going to make six figures. Let's say your course is on teaching sales, because I see a lot of those online. if you went and you ran ads and you said i'm going to teach you sales for three years you need to stop going to clubs and partying you need to stop having fun you need to focus on everything i'm teaching you your first few jobs are going to suck and i'm going to teach you how to get better at sales and you also need to have a natural personality to do well in sales or if you don't you can still do well but maybe you won't do as well selling most things maybe you need to sell technical products or whatever it may be.

21:57And if you meet these requirements and you do this for three years and you put in a lot of work, you're not going to make a lot of cash, but you're four, five, six, you'll start seeing the light at the tunnel. And then you can start making two, three, 400 grand. I'm going to teach you management skills and all this. Your sales are going to suck because no one wants to put in all that work and lose money for years. And that's a true, real reality, even in marketing. Eric, how long have you been doing this for? 16 years yeah i'm on 24 yeah so we've both been doing this a long time and i i would say the biggest reason that both you and i are doing decently well i'm not saying eric's doing poorly i'm doing poorly i'm not saying either of us are doing great but let's just call us average we're not creating these lovable type companies where we're getting to 100 million in revenue in less than a year right we're not that successful not trying to talk trash eric but you know i'm assuming you agree that's the reality.

22:53Yeah, I agree. The only reason we do decently well is because we've been persistent for so many years and we've taken so many licks and it's painful. But that's the true reality of entrepreneurship and being a marketer. Like you got ups and downs and dealing with algorithms and stuff that goes great for you some periods and stuff that goes terrible for you. And you don't remember the great moments. You just complain about the moments that suck. Yeah, so here's my take on it. So I do find value in courses. I know Neil's probably never paid for a course in his life, but early in my career, even when I was broke, I don't know if it's still active anymore, but I used to go to this website called thevault.bz and I used to download like these$2 ,000,$3 ,000 courses, right?

23:35And in some cases, I would even shell out my own money. As a couple of years went by, I would pay for courses and I would even pay for masterminds back in the day. I remember there's the War Room Mastermind, right? And I would pay for peer groups and things like that. I got value from them. But the reason why people hate course sellers, in my opinion, is I think 99 % of course sellers, they are selling the dream and they're not actually selling something that's going to give you the outcome that they're promising. And that's why people hate them, right? And so I think, look, if it's legit, and it's adding value, again, I certainly got a lot of value from the courses that I've been through.

24:11You just got to make sure that you filter correctly, right? And I think someone we can call out here in a good way is when you look at Alex Hermozzi, he did his$105.5 million webinar about a week ago or so. So over the weekend, Guinness World Record, congratulations to him. I think he sold 3 million books over the weekend. So I think I saw somewhere it was reported that he basically said when it was all said and done, he made$105.5 million on the webinar. Right. And a lot of people were poo pooing him on on Twitter, just saying, oh, turns out he's a course grifter. Turns out he's this and that.

24:46But the reality is I've I've I've read Alex's books. I've seen his stuff before. He's actually he's been there, done that on the business side, both him and Layla. Right. Amazing job. And the courses that he has are he largely gives away for free. And then he has an educational component, too. Right. And then, you know, he has the other stuff with private equity and all that. So I think in that scenario that that's like, OK, that's someone that you can go to. Plus, a lot of his good stuff is available for free. Now, I actually wanted to spend some time, Neil, for us talking about just unpacking his webinar and then talking about his upsell funnel.

25:19So I actually looked at a couple of things, and then you maybe can react to it because I'm assuming you're occupied with other things. You sent me the YouTube video link when it was live, but I watched a little bit about it, and that was it. So, cause I'm not, and it's nothing that I'm not saying his content's bad or anything. His content's probably amazing for the webinar. It's just more so I'm not the target audience. Correct. I just, in my opinion, I'm watching it one, cause I'm bored too. I want to see how he's marketed it. Right. Cause sometimes they'll give me ideas. So sometimes if I watch you do something, you might do something a certain way.