For Episode 132 of the Wealth On Any Income Podcast, Rennie is joined by Perry Marshall. Perry is one of the most expensive business strategists in the world. He is endorsed in FORBES and INC magazines and has written eight books. His reinvention of the Pareto Principle is published in Harvard Business Review, and his Google book laid the foundations for the $400M digital advertising industry.
For Episode 132 of the Wealth On Any Income Podcast, Rennie is joined by Perry Marshall. Perry is one of the most expensive business strategists in the world. He is endorsed in FORBES and INC magazines and has written eight books. His reinvention of the Pareto Principle is published in Harvard Business Review, and his Google book laid the foundations for the $400M digital advertising industry.
Perry has consulted in over 300 industries. At London’s Royal Society, he announced the world’s largest science research challenge, the $10 million Evolution 2.0 Prize. He has a degree in Engineering and lives with his family in Chicago.
Are you utilizing the 80/20 principle in your life and business?
In this episode, Rennie and Perry cover:
01:53 Why Perry believes the 80/20 is the most powerful thing that nobody properly explained to you.
05:00 The charity that Perry founded called ReversingCancer.org that funds projects the standard medical and scientific community doesn't fund because it's too far outside of the usual models.
07:15 Who Perry’s typical clients are and how the 80/20 rule can help them.
07:52 How the 80/20 rule was a big part of how Perry first got famous almost 20 years ago with his book on Google AdWords.
10:06 Perry gives you permission to fire some of your clients - he shares a story of giving this advice at a keynote.
13:09 Perry shares that for most people,10 or 20% of what they are doing is out of guilt, obligation, or habit, and that they shouldn’t be doing those things at all and his ‘racking the shotgun story’.
17:03 How to use ‘racking the shotgun’ in your marketing and how the math works for the 80/20 principle.
21:29 Perry shares his biggest failure – his involvement in a well-known multilevel marketing company and how he learned that quitting is part of the 80/20 principle – you cannot say yes to everything!
25:12 You can get Perry’s 80/20 book for a penny plus shipping atthis link. Find out for yourself how tiny hinges swing big doors.
“One of the most important things about getting wealthy is you harness natural forces in your favor. And you let nature do most of the work. You let the market do most of the work. You let the prevailing trends do most of the work. And if you are, if you're fighting tooth and nail to get something to happen, you're probably not harmonizing with nature.”
– Perry Marshall
To get a copy of Perry’s80/20 book for a penny plus shipping visit this link.
To learn more about Perry visit https://www.perrymarshall.com/bio/
If you'd like to know how books, movies, and society programs you to be poor, and what the cure is visit wealthonanyincome.com/tedx. You'll hear Rennie's TEDx talk and can request a free 27-page Roadmap to Complete Financial Choice® and receive a weekly email with tips, techniques, or inspiration around your business or money.
AND if you'd like to see how you can increase your wealth and donate to the causes that touch your heart. Please check out our affordable program ‘Wealth with Purpose’.
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Rennie Gabriel 00:09
Hi, folks, welcome to Episode 132 of the Wealth On Any Income Podcast. This is where we talk about money tips, techniques, attitudes, information, and provide inspiration around your business and your money. I'm your host, Rennie Gabriel. In past episodes, we spoke about how to understand the numbers from your business, how to measure the level of pleasure based on where you spend your money, how to track your money in 5 to 10 seconds, and what determines how close you are to Complete Financial Choice®, and how to run your business without being in your business. Last week, we had Deepak Saini, who was a CPA for 20 years, and is now an Anti-Aging and Longevity Coach, talk about a change in careers. Today, we have as our guest, Perry Marshall. Perry is one of the most expensive business strategists in the world. He's endorsed in Forbes and Inc. magazines, and has written eight books. His reinvention of the Pareto Principle is published in Harvard Business Review. And his Google Book laid the foundations for the $400 million digital advertising industry. Perry, welcome to the Wealth On Any Income Podcast.
Perry Marshall 01:31
It's great to be here. Thank you. You're mutual friends of Rob Goyette. Any friend of Rob's a friend of mine, so I'm really happy to be here. And I love the work that you do.
Rennie Gabriel 01:42
Thank you so much. I appreciate it, Perry. So let's get started with some questions. Okay, apparently you talk about the 80/20 rule. But why are you doing this?
Perry Marshall 01:53
80/20 is the most powerful thing that nobody properly explained to you. My kids all understood 80/20 by the time they were seven years old. I think it's literally that important. Because most of what you do produces very little and a very small amount of what you do produces a lot. And most people treat their time and their activities and their priority lists, as though everything is equal and nothing could be further from the truth. In fact, nothing's equal and nobody's equal - in the economic sense. I don't mean in the sense of being valuable human beings, or made in the image of God, that's a different conversation. And I'm very happy to have that conversation. But, from this, if you hire 10 salespeople, 2 of them are guaranteed to outsell the other 8 put together. It's basically a lot of physics that that's going to happen. And if you go get 10 customers, 2 of them will spend the other 8 combined. And if you go find 10 consultants, 2 of them will give you better advice than the other 8 combined. And if you read 10 books, 2 of them will do you good, more good than the other 8combined. And this is how the world is constructed. Vilfredo Pareto figured this out about 100 years ago. He figured out that 20% of the people control 80% of the wealth and 80% of the people only control 20% of the wealth. And it's true across all countries. And if you take another step in really looking at what he said, it means the "haves" have 16 times more than the "have nots". And the good books, do you 16 times more good than the bad books. And the good salespeople sell 16 times more than the bad salespeople. And this applies to everything you can measure in business just about. And when I finally saw this for what it was my brain melted. And so this is one of the most important conversations we could possibly be having.
Rennie Gabriel 04:25
And that's a reason to have this conversation. And that's why when you were talking to Rob about this, I said, 'Oh, I want you on the show'.
Perry Marshall 04:34
Yes, yes. It's a very exciting topic. It just never stops getting deeper. So I can't wait to just roll up our sleeves and get right into it.
Rennie Gabriel 04:45
Terrific. So you're probably aware, if you noticed in my emails, that I donate 100% of the profits from the work I do to animal and veteran charities. And so tell me about a cause that you support.
Perry Marshall 05:00
I founded a charity a couple of years ago called, reversingcancer.org. And it is an organization that funds projects that the standard medical and scientific community doesn't fund because it's too far outside of the usual models. Because they all have models. And they all have criteria by which they judge things. We have somebody who is literally reversing - inducing, and then reversing cancer in amphibians at will. I have a woman at Columbia University in New York, who has figured out how to detect cancer at stage negative one. And inside the cancer industry, everybody knows that there's no money in early detection. Well, I don't care. Finding out you have cancer at stage negative one, or stage one is very, very treatable most of the time. Finding out that you got it in stage three or four is a great way to spend a quarter million dollars and be dead nine months later,
Rennie Gabriel 06:13
Which is good for the pharmaceutical and the medical establishment.
Perry Marshall 06:18
Yes. So that's why we founded reversingcancer.org. So I love the fact that, well, people get to a point, when they are successful in business, not everybody, but some people do, where they go, I can only ski behind so many yachts at one time. And I need to do something meaningful, that I feel is really going to move the needle in the world on problems that I care about that for some reason, not enough other people care about. So what am I going to do? And that's what I hear loud and clear in your communication.
Rennie Gabriel 06:59
Thank you. And I appreciate that, Perry. And I'm really appreciative of what you're doing, because it makes so much sense. So tell me who the clients are that you're trying to reach that you want to be working with.
Perry Marshall 07:15
My ideal client is somebody who's between half a million dollars and five million dollars revenue, and they know they could be doing better. They have a reason to want to do better, but are stuck on whatever it might be. Sometimes it's marketing problems. Sometimes it's a product definition. Sometimes it's a structural part of their business. Sometimes it's how they're recruiting talent. But I'm primarily known as being a marketing person. And I first got famous for writing the book on Google AdWords. I wrote best selling books on Google and Facebook advertising. But what isn't as obvious is the way that I figured those platforms out, which goes back 20 years. I published my first Google Book, just a few months shy of 20 years ago, when Google was brand new, most people did not even know that it was possible to advertise on Google back then. They're like, Google advertising? And like, they would draw a blank, like, they have that white screen, and I don't remember any advertising. And when that was just starting to go on, 80/20 was how I figured it out, I realized that every aspect of slicing and dicing a Google campaign and finding the leverage points, is really finding the 20% that produces 80%. In fact, it was even more extreme than that. It was the 10% of the ad campaigns that produced 90% of the results. And you needed to either ignore or delete the other 90%. It was a matter of extreme inequality. I had ad accounts with hundreds and hundreds and hundreds of ads that had all been tested. And 25% of the traffic came from one ad that somebody had written on a lucky Tuesday afternoon, and they hit just the right chemistry and just the right message, and just the right audience. And this is how all of it works. It's all about finding the 80/20s.
Rennie Gabriel 09:38
And that makes so much sense because after your conversation, I started to look at where my income comes from, and it's rental properties. And I mentioned to you that we have one tenant who's a headache. I calculated out the 80/20. It's actually if I could get rid of her, which is 5%, that provides, then I've got 95% headache-free.
Perry Marshall 10:06
Yes, yes. And so let's start with firing clients. Because this is so counterintuitive, most people have never thought of it. I did a keynote a few years ago, at a meeting, there was like 200 Certified Public Accountants in the room. And I was the keynote speaker, which is very funny, because I'm the furthest thing from an accountant that you could ever have. But they were all very nice. And it was a wonderful event. And I said, 'So, I want to show of hands. How many of you, you know you do the taxes every spring, and you got that one client, he calls you on April 13, or April 17, maybe, and he's got this, like this, banker's box full of receipts. He wants you to do all of his taxes in like four hours. He sends you 800 emails, and he's only paying you $300. How many of you . . .?' And like, all these hands go up. And I said, I, Perry Marshall, best-selling author, keynote speaker, give you permission to fire that client. You don't have to be mean about it. You don't have to be nasty. You just send them a letter, you know, my board of directors, that's you and your wife, we're reviewing our business and we realize there's some accounts that we're just going to be no longer able to service. And I am sending you all of your records. And here's a list of some other accounts you could consider. And thank you very much for your business. I said, the minute you send that letter and get rid of that client, your income went up and your work went down. And all it took was one letter or one email. I give you permission. There is no law of the universe that says on the day they were born and a doctor slapped him on the butt that you were born with an obligation to do their taxes just because they found you on the internet or, because their friend referred you or, because you were in a certain office and you answered the phone when they called. Like, wow. And you start, you start deleting, you get rid of product lines, you get rid of problem clients, you get rid of people who complain and constantly open support tickets. There's no law of the universe that says you have to solve all the support tickets. Just give them a refund and send them on their way.
Rennie Gabriel 12:42
It makes so much sense because I owned a pension administration company. I had hundreds of accountants who would refer business to us and what you're expressing, I've heard from so many of them, and it's hysterical. And I'm so glad you gave that room of CPAs permission to fire those clients.
Perry Marshall 13:05
Yes.
Rennie Gabriel 13:06
They ought to be blessing you for that.
Perry Marshall 13:09
Yes, yes. And so we carry around a lot of obligations. I think there's, most of us, 10 or 20% of what we do we shouldn't be doing at all. We're doing out of guilt, or obligation, or habit, or what have you. And you just don't, it's not necessary. Let me tell you a story. I've got a friend, true story, when he was 17 he dropped out of high school in Denver, hitchhiked to Las Vegas. And he became a professional gambler. He had been reading gambling books, and he thought that just sounded like the coolest thing in the world. And this is before reality TV, and this is in the 70s. So, about three or four weeks into living in Vegas, playing poker games, fake ID, casinos, all of that, he's like, This is harder than I thought it would be. So what does he do? He goes, Well, I must need more gambling books. So he goes to a gambling bookstore. And he's roaming around and he runs into this guy named Rob. And he finds out that Rob runs a professional gambling ring. Wow, that's amazing. Could you teach me what you do? For a percentage of your winnings I can teach you what we do. Okay, they shake on it. Jump in the jeep, John, we're going for a ride. Going down the highway . . . So how do I win more poker games? John, the way you win more poker games is you play people who are going to lose. Those people are called, marks. Where do I find marks? Here, I'll show you. They pull into a parking lot of a strip club. They walk into a strip club. There's women, rock and roll, people drinking. It's loud, it's noisy. He sits John down at a table. He pulls a sawed off shotgun out of his jacket, which he carried everywhere he went. He holds it under the table, opens it and slams it shut. So it goes, ssshhht.
Rennie Gabriel 15:36
And I just know that sound.
Perry Marshall 15:40
It's called racking the shotgun. Some bikers over in the corner like whoa, one of them is literally reaching for a gun in his boots. The owner comes over, Hey, what are you guys doing over here? It's all right, Bob, just teaching the lad a lesson. Not causing any trouble here. John, did you see those biker dudes turn around when I made that noise? In this loud, full of distractions club we're in? Yeah. They're not mark's. Don't play poker with them. Play poker with everybody else. Now that was like, the signature lesson of John's gambling career. We call it racking the shotgun. And John and I have adapted it to, racking the shotgun is anytime you or anybody else sends a signal that some people respond to, and most don't and it tells you who do I want to deal with here.
Rennie Gabriel 17:00
That makes sense. Or who do you want to avoid?
Perry Marshall 17:03
Or who do you want to avoid? Either way, right? So every support ticket is a rack the shotgun. Every phone call is a rack the shotgun. Every email, every email, you get every email you send. You send a thousand emails, 100 people open it, 900 didn't. That's racking the shotgun. 50 clicked on the link, 950 didn't. That's rack the shotgun. 30 got on a webinar, 970 didn't. That's rack the shotgun. 10 bought something, 990 didn't. Rack the shotgun. One of them went on your Mediterranean cruise, 999 didn't. Rack the shotgun. Rack the shotgun. What good marketers do is whether they rack it themselves or whether they just watch while other people rack the shotgun. This is going on all the time. 24/7, 365, there's shotguns being racked all over the place. And the 80/20 is the inequality of racking the shotgun. 80/20 says the responsive people are 16 times better than the unresponsive people. But here's the kicker. This is where it just gets insane. The top 20% of the top 20% are another 4x, 64x. And then there's a top 20% of the top 20% of the top 20%. And that's 256x. And I'm not kidding, I'm not joking, I'm not exaggerating. There's no hype in this. In fact, I published a math formula in Harvard Business Review five years ago, that explains all this. It's a crazy calculus formula. 80/20 says it's basically a law of physics that somebody is as rich as Jeff Bezos. It's a law of physics that somebody is as rich as Elon Musk. This podcast is called wealthonanyincome.com. So if I could give my interpretation of the name of your podcast, it's the top 20% of the top 20% of whatever group of people that you're a part of, if you go to the tippy top. Okay, even the poorest guy who owns a laundromat, oh, sorry . . .
Rennie Gabriel 19:36
I'll verify this. When I started from broke at age 50, I was earning 5,000 a month. I set aside $500 a month. But I didn't do what needed to be done in real estate by myself. And within eight years, I went from flat broke at 50, by age 58, multi-million-dollar net worth based on saving that $500 a month.
Perry Marshall 20:06
Yes, yes. Because you put that to the places where it multiplies 16x, 64x, 250x 1,024x. And those exist. And if people, it's funny, it's like, as soon as people recognize this for what it is, they can't unsee it. They're like, Oh my goodness. 80/20 is everywhere. It's in the tree. It's in the road. It's in my grass. It's the amount of traffic on the carpets in my house. It's how many, the rooms we use in the house. It's the things that are on the grocery list. It's where we write the biggest checks. Yes, all of it's 80/20. You see it, and you can't unsee it and all of a sudden, it's like having these x-ray glasses that you can see patterns in the world that everybody else misses. It's incredibly powerful. It'll make you rich.
Rennie Gabriel 21:08
It did. And I wasn't even aware of it operating. And so well, okay, let's turn this around a little bit. Tell me about what you're - it's a two part question - tell me about what your biggest failure was, and what insight you gained from that.
Perry Marshall 21:27
I think my biggest failure was spending about seven years drinking the Kool Aid in Amway, multilevel marketing. I got in when I was 21, or 22. I was a very green, wet behind the ears, somewhat gullible engineer. I was one of those people who will actually do what you tell me to do. And now anybody who does what you do, or teaches people or coaches people or consults, knows that most people don't really do anything. Right? 80% of people don't. I was in the 1% that do. And I believed everything they told me. And when it when it wouldn't work, and they told me it was my fault, I would just work harder. And then they would tell me it was my fault. And it wasn't their fault. And then I would work harder. And this just went on and on until I had exhausted every possibility. And I finally convinced myself, you know what? This thing didn't work. This works about 1/100 as well as they say it does. And whatever magic pixie dust it takes to make this work, I don't got it. And, so I was stupidly persistent. And look, persistence is a great thing. But sometimes you just got to quit. 80/20 says, what you quit is more important than what you do. It's what you say, you can't say yes to everything. So you have to say no to a lot of things in order to make a great investment. I've got a good friend, Richard Koch, who's worth about $2 billion. And he wrote the original 80/20 book, it's called the 80/20 Principle. It came out a little over 20, probably 25 years ago. Richard is an equity investor. He's like, he's, like a little smaller than a venture capitalist, let's say. And the way . . . he's got a set of criteria for investing, and the most important thing that you need to know about his investing is it's no, no, no, no, no, no. And once in a while, there's a yes. As best I can recall, I think he's made less than 25 investments in 30 years, and gone from 4 million to 2 billion in 30 years. What you don't invest in is at least as important as whatever you do invest in. This is not how most people
think.
Rennie Gabriel 24:31
No, and I agree because I was an angel investor for a short time and found out you can lose a lot of money. And I won't tell you how much but it was a lot.
Perry Marshall 24:48
Oh yeah.
Rennie Gabriel 24:49
Well, okay, we're coming up to the close here. And so what I want to know is how can people who want to know more about this, know more about you, what you have to offer, how do they get a hold of you? What free resource can you provide that will be the right thing for people? Or even if it's a penny for a book.
Perry Marshall 25:12
Go to the link that you give in the show notes, and you can get my 80/20 book for a penny plus shipping. So in the US, it'll cost you seven bucks, and international it will cost you 14, whereas it's about 20 on Amazon, and it'll come with some extra videos that you don't get if you buy it at the bookstore. And 80/20 Sales and Marketing will change your life. It will change your life. You will never see the world the same. You'll never see a spreadsheet the same. You'll never see employees the same. You'll never see support tickets the same. You'll never see salespeople the same. You'll never see advertising channels the same. And when you find that tiny hinges swing big doors, tiny hinges swing big doors . . . Rennie, you were talking earlier, if I go through your investment career, you go from broke at age 50 to millionaire at age 58. There's about five or six key transaction twists on the road. It was, and you can name them. It was this and this and this and this they cascaded and multiplied. And what seemed impossible was suddenly is easy as iced tea.
Rennie Gabriel 26:35
You're absolutely correct. I can identify those small hinges that move the big doors and went from broke to multi-millions in eight years. And the first three years was nothing more than creating $18,000. But once that was deployed, things turned around quickly.
Perry Marshall 27:00
Amen. It's not some mystical fairy dust thing. The world is a rational place. It runs on rules, runs on principles. And the 80/20 principle is the best principle I know how to teach in business.
Rennie Gabriel 27:16
And thank you because I am reading your book, I did get a copy. And I'm saying, Oh my gosh. You know, when you talk about fractal, which we're not going to get into, I'd say, This is a natural law. Either you fight nature, or you use it to your advantage. And it makes so much sense.
Perry Marshall 27:36
Yes, yes, yes. And, you know, one of the things would be like being a gullible 21-year-old engineer was, I was conditioned in a lot of ways to fight nature. And one of the most important things about getting wealthy is you harness natural forces in your favor. And you let nature do most of the work. You let the market do most of the work. You let the prevailing trends do most of the work. And if you are, if you're fighting tooth and nail to get something to happen, you're probably not harmonizing with nature.
Rennie Gabriel 28:20
Like when you were with Amway.
Perry Marshall 28:22
Yeah. They told me that I was, you know, you're one of the most powerful trends in the history of the world is behind you. But none of the evidence was actually saying that. It was a great sounding story. And I desperately wanted to believe it. But my own results were saying, Dude, this dog doesn't hunt. And I had to let go. And there it was a very big part of me growing up to admit, okay, dude, you had some very bad judgment, and you were wet behind the ears. And you're smarter now. And it's time to act on the smarts that you've acquired and move on to something else.
Rennie Gabriel 29:03
Well, congratulations for doing that, Perry. And thank you for what you contributed to the Wealth On Any Income show. Thank you for being on the podcast.
Perry Marshall 29:13
Thank you, Rennie. It's an honor to be here.
Rennie Gabriel 29:16
And to all of those who are still listening, if you'd like to know how books, movies and Society programs you to be poor, and what the cure is, then log on to wealthonanyincome.com/TEDx. You'll hear my TEDx talk and can request a free 9-Step Roadmap to Complete Financial Choice® and Philanthropy. And receive a weekly email with tips, techniques or inspiration around your business or your money. And if you'd like to see how you can increase your wealth and donate to the causes that touch your heart, please check out our affordable program, Wealth with Purpose. To my listeners, thank you for tuning in. You can listen to the Wealth On Any Income Podcast on your favorite platform, and please rate, review and subscribe. Until next week, be prosperous. Bye bye for now.