mega partnering transcript pt 1

8/10/2019 Mega Partnering Transcript Pt 1

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Mega Partnering

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JayAbrahamsRelationalCapitalSeminarwithJTFoxx

I'm going to tell you why I'm here, what I hope to do, what's cool about it, what's

flawedaboutit,whatyoushouldgetoutofit,andalittleinsightonme.

Idon't

do

alot

of

seminars

anymore.

Idon't

do

alot

of

public

speaking.

Most

of

my

life

isnowworkingwithoperatingbusinesses.It'swhatIusedtodo.Idoitagainnow.

Inthecourseofmylifework(thosethatknowaboutme,thosethatdon't)I'veworked

withabout465 industriesand I'vehadthegoodfortuneofdoing itaroundtheworldand

being able to look at a myriad of different ways of being strategic: business models,

marketing, selling, value adding, preemptiveness, preeminence, etc., etc., etc. But its

probablyIdon'tknow$3billionor$4billionof the transactions. I'vehelpedbusiness,

partners,clientseffecthavebeenthroughveryinventivealliances,jointventures,allkinds

ofwaysthattookethicaladvantageofsomebody'sassets,access,brandcurrency,etc.

I've never been a good daytoday manager. I'm basically a marketing and strategic

savant.Iwasinterviewedbythepressmanyyearsago,andtheysaid,"What'syourstrategy

ofbusiness?" Isaid, "There's twodifferentconflictingones,but they integrate.One is I'd

liketohavetherightstoeverythingintheworldandfigureoutwhattodowiththemlater.

Andthensecondly,mymanagementstyleistofindsomeothercompanythathashundreds

or thousandsofemployees,payroll,overhead,structure,goodwill,andneedsmorecash

flowtoputthroughitandmakethemmyprofitpartner."So,theevolutionofwhatyou're

abouttoexperienceneedstobesetupforyou thenI'lljustgetintoit.

Myreal

love

is

being

on

the

front

lines

of

capitalism.

I'm

very

impressed

with

anybody

whocanteachothers,andI'vedoneitforthirtyyears.Butifyoureallyhaveitinyourblood

todo it, it'smore fun,so Ibasicallydothatallthetime.But J.T.'sbeentryingtofindthe

magicresonatingpoint,andhehiton itacoupleofmonthsago.Because I'vebeendoing

workwithlotsofotherpeopleandputtingallkindsofdealstogether,andI'vebeensortof

sharingdialoguewithhim.

J.T. said, "What if we created a business to help other people with business and

products,tryingtomakeconnectionswithotherbusinesses,influences,distribution,media;

wheretheycouldleverageuptheotherperson'sresources,sales,anddistribution?"And I

likedthat

alot.

I've

done

transactions

like

that

all

my

life,

and

I've

taught

it

to

clients

all

my

life,butI'veneverreallytriedtocreateanentity.

Isaid,"Okay.Ifwe'regoingtodothat,we'vegottoarticulatethepremise,firstofall,in

ameaningfulenoughwaytowhere itmakessensetoothersso itmakessensetous."So,

youareallhopefullythebeneficialguineapigs.You'regoingtolistenandwatchsomestuff,

andI'mgoingtotrytoexplainit.Andwhereappropriate,I'lltellastory.


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Howmanyofyouareincommercialretail/wholesaletypebusinesses,andrealestateis

asecondaryactivity?Okay,aboutathirdofyou.Howmanyisrealestateaprimaryactivity?

Howmanythatsayit'saprimaryactivityactuallyhaveajob,aswell?Okay,cool.

WhatI'mgoingtodoisexplainamacroconcept.Then,IhopeIblowyourmindwithall

thederivative

ways

that

concept

could

be

harnessed,

monetized,

mined

and

maximized

by

somebody, whether you own a business, you work for the business, you want to put

yourselfinthetollposition,oryouwanttobasicallymakeajointventurewithsomebody.

I'mgoingtotrytohaveoutofbodycommentaries,occasionally,where Idemonstratethe

different implications. I'mgoing toprefacebysaying two things.Thismayormaynotbe

readyforprimetimebecauseit'sthefirsttimeI'veeverpresentedthisinthisform.

This doesn't mean I haven't done power partnering and strategic alliances, joint

venturing and endorsement, and referral (I mean, I teach that all day long) but I'm

integratingitinadifferentway.So,theconceptisleveragingotherbusinesses'resources

thatis

the

concept.

Mytakeonthisisitreallyistheultimatebusinessmaximizingandmultiplyingsuccess

strategyanybodycouldmake.

Theworkingpurposeishowtouserelationalcapitalmaximizingstrategiestomultiply

thesuccess,theprofitabilityofanybusinessyourun,anyproductorserviceyoucurrently

oreverown, sell,develop,get introduced to,gaincontrolofandyou'vegot to think in

termsofeverything I'mgoingtotalkabout,abouta twowayvalue.Becauseeverything I

explain, that can be capitalized on through other people's businesses, distribution,

association,media,

can

have

the

reverse

effect.

If

you've

got

abig

enough

company

with

enoughdistribution,enoughbrandcurrency,youcandotheoppositeandbringitthrough

yours.

Itsjust a declaratory statement, but it's true. Whether you know it or not, the world's

changed.Nothingworksaswell.Advertisinginthecoldmarketishard.Gettingcredibilityis

hard.Generatingprospects,convertingprospects,building trustit'shard. Ittakesa long

time.Salespeopledon'tgetasmanyappointments,closes,etc.

So, your probability is down dramatically. The probability of an ad working, the

probabilityof

asalesman

selling

right

away,

the

probability

of

anew

product

being

viable

to

the marketprobably anything you try to do on your own, as an island, is harder and

harder.Thesuccessislessandless;thus,theriskcostandopportunitycost,isgoingtobe

higher,andtheviabilityandprobabilitylower.

Youplayawonderfullybettergameplanthananyoneelse.Youcangaininfinitelymore

marketing,selling,distribution,andbuyerpower.Thisissortofjustalitanyofwhatthisis


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goingtogiveyouifyouuserelationalcapitalmaximizingleverage.AndI'vegottoexplainit.

Idon'tlikethephrase,butIdon'thaveabetteronerightnow.

When J.T. talks about it, and if you look at all the definitions in the book, what

everyone'ssayingrelationalcapitalis,istherelationshipacompanyhaswiththeirvendors,

orwith

their

buyers,

or

with

their

team

members,

or

with

their

community.

I'm

saying

maximizingandleveragingisyourabilitytoethicallytakefullesteconomicadvantageofall

thoserelationshipsforthebenefitofanotherproduct,company,service,ethicalagenda

andethosalwaysplaysintoit.So,I'mgoingtoberuggedherebecauseIhaven'tlookedat

thisslide,andIdon'tlikeit,butI'llcleanitup.

So,ifyoucanlearnhowtoleverageoffofotherbusinesses,otherorganizations,other

entities,othermedias'relationshipwiththeirreaders,theirmembers,theirmarkets,their

distributorsthe world is your oyster. You can play a better game. You can gain more

marketing,selling,distributionpower.YoucanhaveHerculean leveragestrength.Youcan

countervirtually

any

negative

issue

that

assails

you.

Got

no

credibility,

got

no

money,

got

no sales force, got no advertising budget, got no R&D, got no storage, and got no

manufacturingcapacity,equipment.Noneofthoseareproblemswhenyouunderstandthis,

soyouroddsofwinning,andwinningreallybig,increasebyordersofmagnitude.

Okay.AndI'mjustgoingtogothroughalitanyofreasonswhyIwantyoutorecognize

theinherent,combined,multifacetedpower,andtheeconomicimpact,andwhat'sgoingto

comeaftertheselittlebullets.

Thisisthesecretofgettingpeopletobuyfromyoufromalmostaninfinitenumberof

sources.And

anybody

that

knows

my

body

of

work

knows

that

my

biggest

frustration

with

most businesses is all their revenue, all their success is dependent on one source, one

sellingapproach,andonemarket.Well,thisgivesyounearinfiniteaccesstoallthemarkets

youeverwanttopenetrate.

Number two. The mistake that costs most startups everything (most small and

mediumsized businesses all their upside potential) is first of all, they try to do it

themselves.Second,theyhaveaselfdeludedrealitywheretheydon'thaveenoughcapital,

enoughresources,andtheybelievethey'relimited.Startupstrytodoitallwithabeautiful

idea or a crazy idea. A little capital. None of this is necessary if you use these relational

capitalmaximizing

levers.

Any entrepreneur, CEO, or P&L oriented business manager who doesn't have all the

capital,whodoesn'thavealltheresources,whodoesn'thavealltheexpertise,whodoesn't

havealltheskillsetstheyneedheretoforeyoueitherwouldhopeandpray,orwish,or

say,"Okay.Whenwemakesomemoremoney,we'llreinvestitininfrastructure.Whenwe

makesomemoremoney,we'llbuysomeequipment.Whenwemakesomemoremoney,


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we'llhiresalespeople.Whenwemakesomemoremoney,orwegetaninvestor,orIhitthe

lottery,we'llcreateanewproduct."

Well,nowwhatI'vejustsaidisyoudon'thavetoworryaboutthat.You'vealwayshad,

you have today, you have any time in the future, the infinite capacity to acquire any

resource,any

skill

set,

anything

that

capital

would

buyas

long

as

you

understand

how

to

makethepropositiontowhoeverhasit,andthatgetsveryexciting.

Now,ifyou'reupagainstawalltryingtofigureoutnewwaystogrowyourbusiness

because those of you who raised your hand are in businessany of you may struggle

becauseyougetstuck?Youcan'treallygetpastacertainpoint.Youradsaren'tworking.

Yoursalesapproachismarginal.You'vebeenmarginalized,commoditizedbyotherpeople

doingthesamethingoffline,online,inyourmarket,outside.Doesthatrelatetoanybody?

Well, now it's not a problem, because you can have advantage. You can have

preemptiveadvantage,

literally

in

aheartbeat,

when

you

understand

how

to

do

this.

And

I'mdoingnothingrightnowmorethantryingtogetyoutoappreciatethebenefit,because

ifyoudon'tunderstandthebenefit,youwon'tgetjustgiddy,excited,orintoxicatedonthe

poweroftheprocesses.

Youcanwintonsmorebuyers, influencemonumentallymorepeople,andfavoryour

company,product,or service overeveryoneelse.Someexamples.And I'mgoing todate

myself;I'vebeenaroundalongtime.

Firstexample,wewent inthirteenmonthsfrom$20,000to$13millionandfrom200

buyersto

500,000,

without

spending

adime

using

aderivative

of

what

I'm

going

to

tell

you.

The business got so successful; we sold it for $80 million to a public pharmaceutical

company.

Anothertime,Itookaservicecompanywhowasdoing$300,000,andtwoyearslater,

we had aggregated $2 billion. And we didn't risk a dime, because we utilized everybody

else's infrastructure, everybody else's distribution channel, everybody else's good will,

everybody else's brand currency. And I'll try to be specific, but I want to see how this

resonatestoday,andwe'reprobablygoingtorepeat itagaintomorrow,so if Idontdo it

perfectly,I'lltrytodoitdifferentlytomorrow.

You can stop competing with everyone else in your market, and start lapping and

leaping.Thekeytoeverythingisthereisadelusionalfallacyinourinherentbeliefsystem.

Thatwebelieveforsomedeludingintoxicatedreason.Idon'tknowwhy.It'sananalbelief.

Nodisrespectifyouhaveharboredit,butyouthinkthatyouarerelegatedtohavetogrow

in slow, incremental, linear steps.And you've got todo italone. Andyou'vegot tobuild


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yourbrandbyyourself.Andyou'vegottoreinvest.Andyouhavenoalternative.Andthat's

aboutascrazyascanbe.

I'dliketosharewithyouwhatIcallthe"IndianaJonesSchoolofBusiness."Theyoung

onesheremaynotrememberthefirstIndianaJones,butthosemyageorolderwill.

So,IndianaJones.Rememberwhenhe'sbeingchaseddownthebazaarbythebadguys

withtheturbans,andhe'stryingtoescape?Hejumpsintoanalley,andhe'srunning.Andit

turnsouttobeadeadendalley,andthere'sthisgodawfullytallgiant.Thegiant'sspinning

thesetwoswords.It looks like Indi'sagonerandmaybethegiant isgoingto lopoff Indi's

head.Andforonepensivemomentwethink,Gosh!It'sonlytwentyminutesinthemovie.

Is it over already? Then after this moment of eerie, scary contemplation, Indi basically

says,"Screwit,"andpullsouthisgunandshootshim.

Well,youcanchangethewayyouplaybusiness,ifyouplaybusiness.Youcanchange

theway

you

build

abusiness

if

you're

going

to

start

abusiness.

You

can

change

the

way

you

relatetoyouremployer,evenifrightnowyou'resubordinateoryou'vebeenmarginalized

to being just another whatever. Your role is when you grasp the power of the

methodologieswe'regoingtotalkabout.

The biggest mistake that most people make in building businesses and trying to be

competitiveedgeisfirstofall,theydon'thaveanadvantage.Imean,Ithinkthatit'sdumb

toplayanygameonanequalsetting ifyoucanethicallyand legallyandhonorablyplay it

and control all the advantages, don't you? So why do people do it? What's a great

advantage?

Well, letmetellyouwhataterribleadvantage is.Aterribleadvantage issaying,"Oh,

boy!I'mgoingtostartabusinessfromscratch.Oh,boy!I'mgoingtotakeallmylifesavings.

Oh,boy!I'mgoingtouseitall.I'mgoingtoputitall,investitinafacilityandmaybehirea

salespersonandtrytofigureoutasalesapproach.Andoh,boy!I'mgoingtotrytopayall

that I've got left, or go on my credit and get an advertisement. Oh, boy! I'm going to

negotiatetheworstratepossiblewiththemagazineornewspaper.Andoh,boy!I'mgoing

torunanadthatprobablydoesn'twork.Andoh,boy!I'mgoingtobefrustratedandscratch

myhead.But,I'manentrepreneur.

Whenthe

same

time

and

effort

(and

almost

none

of

that

capital)

could

go

to

abunch

of

different companies that have been in business for ten, twenty, thirty, fifty, a hundred

years, they could have already gained the trust of the market, have powerful influence,

havedistribution,havesalespeople,emaillists,mailinglists,distributionlists,distributors,

retailers. And you can generate strategic alliances with them which, first of all, already

guaranteeprovidingalltheresourcesyoudon'thave.Second,inherentlymakethemarket


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many times more receptive, because it's coming through somebody they already trust.

Third,itgivesyouleveragegaloreontheupside.

I mean, why do anything dumb if the same effort or less, the same time or less,

infinitelylessrisk,capital,cangetyoumanytimesthesuccess,overnight,andyoucandoit

andcompensate

any

business

weakness,

resource

gap,

or

skill

set

void

you

have?

Am

I

beingtooabstract?I'mgoingtogetdeeper,butI'mtryingtogetyouexcited,andthenI'll

trytotranslateit.I'mstillonthebullets.Ihaven'tevengottenintothemethodology.

Most people work their asses off. There's no argument that you don't work hard.

There'snoargumentthatmosteverybodyinbusinessisn'tpassionate.There'snoargument

thatyoudon'twanttoaddvalue.Bytheway,I'maposterboyforadultattentiondeficit,so

bearwithme.IwanttoamendsomethingthatJ.T.said,becauseIwasthinkingaboutiton

theplane,andifIdon'tspititout,I'llforgetit.

Inlife,

we

are

rewarded

mostly

for

two

things,

and

the

third

thing

is

the

vehicle

that

gives us the reward. The things we are rewarded for are the quality, complexity, and

consistency of problems we solve for others, or the quality of opportunities we make

possibleforothers.

Now,theproblemwiththatismostpeopledon'tknowtheyhavetheproblems.Most

peopledon'tknow theywanttheopportunities.So,wehavetobecomeveryadroit,very

masterfulatbeingabletoidentify,articulate,demonstrate,verbalize,andcommunicateto

peoplethatweseewhattheywantinadeeper,richer,moretangiblewaythantheyeven

do, and that we can verbalize what it is, and it's the solution to this problem, and the

converseis

the

achievement

of

this

opportunity.

Thekeytoaddingvalue(whichisthebridgethatmakesthatpossible)isthataprospect

seesthatyounotonlyseetheirneed inadeeperwaythantheydo,youseetheirdesired

positive outcome with clearer clarity than they do. You believe it's real, and you are,

perhaps, theonlyperson,entity,productor service thathas thecapacityorcapabilityof

makingitpossible.

Andyourabilitytomakeitpossible(eitherbyfacilitatingit,ifyou'retransactionalorby

explainingit,ifyou'reatrainerorateacher)isthevalueadded.Doesthatmakesense?So,

problemsolving,

opportunity

fulfillment,

the

bridge,

is

really

the

value

you

add.

It

has

alot

todowiththis,butit'stotallytangential.ButIthought,Whatthehell.I'llshareitanyhow.

So,whatIwasgoingtosaywasIhaveabeliefsystem,andreallyit'saderivative.Some

ofyouwhohavebeeninfluencedbylotsofbusinessbooksknowaguythatIknow,Michael

Gerber.AndMichaelGerberhasabookcalledTheEMyth,andit'sagoodbook.Butit'sgot

aphrasethathasresonatedwitheverybody.Hesays,"Stopworking inthebusiness.Start


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workingonthebusiness."Everyonegoes,"Iwanttostopworkinginthebusiness.Iwantto

startworkingonit."Greatphrase.Notonepersonknowswhatthehellitmeans,butit'sa

greatmantra.

I'mgoingtogiveyouanotherphrasewhichyoucanstartarticulating,butyou'llknow

whatit

means

because

after

Igive

you

these

bullets,

I'm

going

to

give

you

substance

and

content,andI'mgoingtogiveyoudirectives,andI'mgoingtogiveyouactionableideas.But

the phrases you want to replaceare, "Stopworking harder for yourbusiness. Figure out

howtogetyourbusinesstoworkharderforyou."Andtherearetworeasons.

One. There's five or six (and this isn't in my presentation. I'm going back to old Jay

Abrahamseminars)butthere'sfiveorsixformsofwealthcreation.Oneiscurrentincome.

Secondisfutureincome.Thirdispsychicincome.Forthcouldbe(Imightbeoutoftheway).

It'sthefulfillmentyougetbyknowingyou'reincontrol.It'snotcontrollingyou.

Thefourth

one

is

asset,

like

the

wealth

you're

creating.

And

if

you

do

what

I'm

going

to

teach you today, you will create distribution channels that are recurring income streams

thatyoucanuseforyourproduct,service,andcompanyforeverbutyoucanalsouseitto

put all kinds of other products and services through it, and it's an asset. It's a revenue

generating mechanism that can be quantified. It can be monetized. It can be sold or

borrowedagainst.Youcansellequityinit.It'sgotallkindsofcoolpossibilities.

And again, I'm not trying to be particularly lucid. I'm trying to be a big (right now)

umbrella.What I try todowhenever I'm introducinganewconcept isnotworry terribly

aboutyouunderstandingeveryfacetbutIwanttohauntyoumercilesslyandruthlesslyin

apositive

way,

for

the

rest

of

your

life,

to

think

about

how

to

do

itbecause

mastering

the

transactional process is important, but understanding the macro dynamic, right now, is

muchmorecriticalforyou.Makesense?

So, if you want to hit the ball out of the park, again I'm going to try to tell you

something. I'm going to give you an example. I went into the seminar business so many

years ago, I don't remember. All of my friends were selling $495 seminars. They were

runningadsinthemagazines,andtheywererunningadsinthenewspaper,andtheywould

have people do previews. You've all probably seen previews where you get a 90minute

titillationandthentheytrytosellyousomething.AndIsaid,"Screwallthat."

IwenttoallthepeopleI'deverhelped.Iwenttoeveryinvestmentnewsletter.Iwent

to Tony Robbins. I went to Success magazine, Entrepreneur magazine, and a bunch of

peopleI'dhelped.AndIbasicallyhadthemsendout(thiswasbeforetheInternet)aletter,

or had them create a separate, internal, supplemental newsletter telling everybody who

readtheirnewsletterseverybodywhowasoneoftheirclients,everybodywhowasoneof

theirstudentsthatifyou'reanentrepreneuroreverwanttobe,ifyou'reaprofessionalin


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business,ifyouareaP&LorientedmanagerandyouwantyourP&Ltobebigger,andyou

wantyoursalestoincrease,andyourprofitstomultiply,there'sonepersonwhocandoit.

He'smyfriend,andhe'sdoneitforme,andifyoudon'ttakeadvantage,prayhedoesn'tdo

itforyourcompetitor.

Wesold

$15,000

seminars,

and

we

sold

$250

million.

The

maximum

Iever

had

at

risk

overthethreeorfouryearswedid itbigtimewas$300,000,andthatwasonlybecause I

funded, inthebeginning,acoupleofmailings.But Icouldhavehadthreegrand,but Idid

$250millionandstopped,really,becauseIgotbored.Idon'thaveanyfriendsthatdidthat,

evenwithallthemoneytheyspent.Thatisthepower.

My biggest clientback in the old days, I had five clients in the investment services

business. Most people would run an ad in the Wall StreetJournal or they'd run radio

commercials.Ijustsaid,"Screwthatstuff."Iwenttoeveryfinancialadvisoryletter.Iwent

toeverybodywhohadeverbeenanauthorofabookonanyspecific formof investment

thatever

related

to

my

clients'

interests,

and

we

made

joint

ventures.

We

made

strategic

alliances.Wemadeendorsementdeals.

AndImadeoneperson$25millionthefirstyear.Imadeanotherperson$33million.I

mademyself,onjustmyoverride,$4millionayearandwedidn'triskapenny.That'sthe

power of not looking inside at what I can do as an island, but instead saying, how I can

leverage,allthegoodwill,alltheassets,allthedistribution,allthecompoundOkay,I'm

goingtogiveyouadifferenttake.Isn'tthisfun?

So, you guys are here for partnering, but all of you have, I guess, some prejudice

towardsunderstanding

real

estate,

return

on

investment,

yield,

capital,

and

all

that

stuff.

So,ifIsaidtoyou,Notonlyisitpossible,butitsprobablethateveryoneofyou,nomatter

whatyoudonow(nomatterifyoudoityourself,don'tdoityourself,doitforothers,don't

haveanyproductor service)could, in thenextyear,gain functionalcontroloverat least

many millions (probably many tens of millions, conceivably hundreds of millions and

potentiallybillions)ofdollarsworthoftangible,intangibleassets,goodwill,brandcurrency,

without risking a dimeand you could leverage off of it. And even if I only gave you a

pathetic,crappy(excusemyvulgarity)leverageof3or4or5percentyield,itwouldstillbe

prettygood,wouldn'tit?

Well,that's

what

happens

when

you

use

leveraging

techniques

to

take

advantage

of

other businesses. Ethical advantage. Strategic advantage. Other businesses' distribution.

Otherbusinesses'buyers.Otherbusinesses'salesforce.Otherbusinesses'goodwill.Other

businesses' delivery.Other businesses'distributors. Otherbusinesses'brandcurrency.Do

youunderstandthat?


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Exceptinrealestate,unlessyou'reextremelybrilliant(Iknowthat'swhatpartneringis

all about) but in the partnering, it's not like musical chairsbut ultimately somebody is

puttingupthemoney.You'vegottoeitherbeverycompellingandyou'vegottogetherto

putupthemoney,oryou'vegottogetthebanktoputupthemoney,oryou'vegottogeta

group of investors and a syndicate to put up the money, but somebody's holding the

money.

With what I'm teaching, you never put up the money. It's already been put up. Its

cumulativecompoundandyougettoaccess.Yougetto leverageoff.Yougeta firstclass

ride without paying for the ticket. That's sort of interesting, isn't it? Am I frustrating?

Confusing?Intriguing?Alloftheabove?Noneoftheabove?

As Isaid,youguysareguineapigs. I'mjustplayingwithhowtoexpressthis,because

thisisthegenesisofabusiness.Therewillprobablybeatrainingelement,onlybecausethe

majorityofpeoplearen'treallybigenoughtobetransactionalclients.ButthegamethatI

play,and

Iwant

to

play,

is

to

basically

get

control

of

people's

businesses,

control

of

their

assets,controloftheirproducts,makesomemoneyjusttokeep them inthegameasan

advisor,andalsotakethepiecesofthedealandbuildallkindsofassetstreams.

It's sort of like Mark McCormack figured out (I can't remember the name of his

businessinCleveland).Whatisit?He'sdeadnow,buthewasthefirstpersonthatfigured

out thatsomebody like (itwaseitherArnoldPalmeror JackNicklaus) theycould lendhis

namebytheway,that'sanotherformofrelationalcapital leveragetheycould lendhis

name toproducts, services,anddevelopments. Itwouldadd salesviability,butalso they

couldgetapieceofthedeal,anditturnedintoamultibilliondollarprocessandcompany.

Andyou'reontheprecipice,today,inlearningoratleastindiscoveringorgrasping

something very powerful that can be applied about any way you want, for anyone you

want,anytimeyouwant.

Sometime(I'mprobablynotgoingtodoittoday)butIwasgoingtolistalltheproblems

people have in business, and show you exactly how relational capital leveraging and

maximizingovercomesit,so Ijustput ithereforthat. Ialreadytalkedabouthowyoucan

gaincontrolof$100million,orabillion,and Ican showyouexactly.Letmegiveyouan

example.

Myexampleaboutwhen Ididtheseminarbusiness.Oneofthepeoplethat Iusedas

my relational capital leverage was Tony Robbins. Now again, I've got to go back in time

becausetheworldkeepschanging.Someofyouyoungpeoplewon'tknowthis. I'msixty

three.Theonesthatarebetweenfortyandmyagewill.So,startintheage.


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There'sthiscompanycalledGuthyRenker.GuthyRenkerit'shilarious.Theycameto

mewhentheyweredoing$10millionandIwasdoing$20million,andtheywantedmeto

getinvolved,andIdidn'twantto.AndnowIthinktheyweredoing$2billion.Idon'tknow

iftheystillare.Butthey'retwoguys,GregRenkerandBillGuthy.Veryniceguys.

So,they

met

this

guy,

Tony

Robbins,

and

they

thought,

Wow!

He's

got

the

dynamism,

and the personality. So they put up their money, and they ran infomercials for Tony

Robbins.Andalltold,theyprobablyspentacoupleofhundredmilliondollars.

Now,they'reputtingthemoneyup.Tonybecamethepartner.GuthyRenkerputsthe

moneyup.Tonygetsall theexposure fornothing.They sellPowerTalk,PersonalPower,

whateverhe'sselling.Tonygetshalftheprofit.Guthygetshalftheprofit.ButTonygotthe

name.Hegotthebuyeralreadypredisposedtohim,whoalreadypaidfixedmoneytostart

arelationship,andTonygottheentirebackendwithoutriskinganything.Itgetsbetter.

So,now,

Tony

gets

aname.

Guthy

Renker

is

spending

hundreds

of

millions

of

dollars

gettingallthisgoodwill.Tonygetsaname.TonygetshalftheprofitandTonygetsallthe

resales.ThoseofyouthathaveevergonetoTonytheUPWsandtheDateswithDestiny

andtheMasteriesandallthatstuffhe'smakingalotofmoney.

Now.IhelpTony.Tonymakesalotofmoneyfromme.TonyseesthatIcandoit.So,I

gotoTony,andIsay,"Well,Tony.You'vegotallthesepeoplethatwentthroughPersonal

Power.You'vegotallthesepeoplethatwentthroughUPW.You'vegotallthesepeoplethat

wentthroughDateWithDestiny.You'vegotallthesepeoplethatwentthroughMastery.

You'vegotnothingelsetosellthem.So,nowit'sbasicallyastaticassetthatyou'vealready,

theoreticallysqueezed

everything

out

of.

"Howabout ifnomoneyoutofyourpocket,no lostopportunitycosthowaboutif

yousendalettertothemandsay,'Ifyou'reinbusiness,ifyou'reaprofessional,ifyou'rea

P&Lorientedmanagerandyouwant togrowyourprofit,your success,yourstockvalue,

youranything,youspendthreetofivedayswithmyadvisor,JayAbraham?'"

Isaid,"I'llsharerevenuewithyou,and I'lldoallthework. I'llcreatethearticulation.

You have total control over it. And we'll send it out only to the people that have been

througheverything.Onlythepeoplethathavenomoreworkforyou."Notaharddeal,is

it?But

Iknew

that

those

were

the

top

of

the

pyramid.

Tomakealongstoryshort,thefirsttimewedidit,Imade$9million.Now,that'sgood,

butIgota$9millionreturnoffofGuthyRenker's$200millionor$300millioninvestment.

TonyRobbins'investmentofflyingallovertheworlddoinghis[thumpschest]allthatstuff

for eighteen hours, and not peeing for five days, and showing people the power of

concentration.


11/23

Mega Partnering

Page 11 of 23

AndallthatgoodwillIgottoleverageoffof,andmydownsidewasIfundedamailing

list(butIwassmartenoughtoknowthatbeforeIfundedthewholelist,I'dfundacoupleof

thousandpieces)and if itdidn'twork, Iwouldhavebeenout$2,000.But itdidwork,so I

made$9million.DoesthatgiveyouaninsightintowhatI'mtalkingabout?[Applause]

My gift is I've been blessed enough that I've been in so many environments that I

understand leverage insideandoutside.Cash leverage. Intangible leverage.Leverageyou

can'tbelieve.And today I'm trying togiveyoua little introduction. Ihaven'tevengotten

started.I'mjustgivingyouthebullets.I'vegotseventyslidesifwegettothem.[Laughter]

So, we have identified (and I'll go through some of them quickly today) fortythree

differentwaysthatyoucanleverageoffofanybusiness. Letssayyou'restartingabusiness

andyoudon'thavethemoney toeven fundanofficeandbuytheequipment.Yougo to

somebodywho'sgottoomuch,andyoumakeadealwiththem.Itcanbeanequitydeal.It

canbe

giving

them

ashare

of

the

revenue

for

the

first

year.

You

give

them

ashare

of

somethingelse.Youcanaskthemtogiveyouadeferredrentalnote.Youpayonlyifyou're

successful. It's like an infinite number of things, and we will get to those, but there are

fortythreeofthose.

I've identified twelve symptomsofwhat Icall "performance implosion."That's when

your business isn't growing. You're stuck. That's when you're spending more and more

time,andyourmarginsaregoing lowerand lower.Andyou'retryingmoreandmoreads

thataren'tworking.Andyou'rethrowingmoremoneyagainstthewall,andgettinglessand

less.AndIbetthatafewofthosethatresonateswithrightnow,doesn'tit?

As J.T. was saying, when I met him, I saidand I'm saying this very clinically, not

arrogantlywhen I used to be in the training and the seminar business, we would sell

$15,000 [to]$25,000programsaround theworld. Iknowhow todo that,and Iwasvery

goodat it.But it'snotareallysustainablebusiness. It'sbasicallyanelongatedpromotion

whereyoumakealotofordinaryincome.

AndwhenIwastalkingtohisfriend,Isaid,"Youguysaren'tinbusiness.You'reabunch

of promoters. You're a bunch of promoters that, sooner or later, if you don't take your

brandcurrencyandyourcashflowandputitintosomethingsustainingandrepetitiveand

perpetual,you'll

be

aflash

in

the

pan."

The

reason

Idon't

do

many

seminars

anymore

is

thatIgotmybrandstatureuptothepointthatIcangethalfinterestinabusinessforno

cashinvestment.

Forexample,we'rejustlaunchingfoursocialmediamagazinestothemarketplace,and

I'vegotequityinallofthemforputtingnothingupbuttherelationalcapital.Ithinkwe're

doinganentrepreneurialchannelonSiriusSatellite,andI'llownhalfofitjustforbringingto


12/23

Mega Partnering

Page 12 of 23

thetablemybrandcurrency,myfollowing(whocouldbesubscribers)andmyrelationships

withtheStephenCoveysandtheTonyRobbinsandtheDaymondJohns.We'vegotRussell

Simmonsandthingslikethat.Well,thatstuffispowerfulcatalyticelementsthatifyoucan

understandhowtoharness(andyoudon'thavetostartuphere)butit'sinfinitelypowerful.

So,it'swhattodowhenyou'veexhaustedalltheotherbusinessgrowthsuccessoptions.

Imean,youcangotoeveryseminaryouwant,and Icantellyouhowtosellbetter.

Therearea lotofwaystosellbetter. Icantellyouhowtomarketbetter.Lotsofthem. I

onlyknowprobably500. Icantellyouhowtomakeyouradbetter. Icantellyouhowto

leadgeneratebetter,convertbetter,monetizebetter.Butthat'speanuts.That'slike,"Okay,

youwanttoplay inthesandboxordoyouwanttoownpropertyfor500or1,000feet in

Malibu?"

That's the difference. And if you understand that the key to everything is gaining

control,access,andassetsbutnotowning it.Youdon'thave toown it.Allyouhave to

ownis

the

power

that

they

represent,

the

capital

compounded

that's

been

invested

in

them.Theaccesstheygiveyou.Theinfluencetheymakeavailableandthecredibilitythey

instantlycreateforyou.

Youwanttogetfansravingeverywhere?Well,guesswhat.Youcantelleveryonehow

greatyouare.Or,ifyoutrustaJ.T.Foxx,andhetellsyouhowgreatyouare,guesswhat?

Theroomstandsupandgivesyouanovation. Isn'tthat interesting? Ididn'ttellyouhow

greatIwas.Youdon'tevenknowifI'mgreat.Butyouwerecaughtupinthewholeprocess.

Thatpsychological phenomenon isanexactdemonstrationofwhat I'm talkingabout. Do

youunderstand?And itcanbedone in information.We'redoing itwithbigcorporations.

We'redoing

it

in

tangible

fields

and

intangible

fields.

Youcandoit,too,andI'lltrytogetmoregranular.Andifnottoday,I'mgoingtotrya

differentversionofthistomorrow,becauseIdidn'trealizethatyouweren'tallgoingtobe

inthisroom.AndI'lltakequestionsandstuff,butI'mjusttryingtohauntyouprovocatively

withthepossibility.

Therearedifferentkindsofmaximizercandidates.Oneisacompanythatisnationalor

international,anddoesn'tbegintoexploiteverythingthey'vegot.Maybeyou'vegotoneor

twoproductsandyoudon'tdoeverythingwithyourbrand,yourad,yoursalesforce,your

distribution.The

other

is

alimited

company

that

wants

to

be

bigger.

The

other

is

acompany

that'sgotaproductorservicethatcouldberepurposedlotsofplacesandonandonand

on. But there's all these different scenarios that if I were doing this in its full majesty, I

would,but I'mjuststill inthebulletstage,so Idon'twanttospenda lotoftime. It'show

youcanaddten,ahundredthousand,andamilliondollarsmoreamonth.


13/23

Mega Partnering

Page 13 of 23

Andagain,anybodywhoknowsmeknowstwothings.One,myhype is real. It'svery

unbelievable that I got started when I was eighteen. I've been married three times. I've

beenaroundtheworldprobablyahundredtimes,andIreallyhavedoneallthisstuff.And

when you've done all this stuff on the front lines of capitalism, you have a context of

understandingwhichisscary.So,whenIsayabusinesscanadd$10,000or$100,000or$1

milliondollars

amonth

recurring,

it's

not

B.S.

hype

that

you'd

see

on

asite

on

the

Internet.

Now, you're not going to do it in your underwear watching reruns of Oprah in the

afternoon,andspendingaminuteaweekdoing it,butyoucanaffirmativelydo itwithout

addingalotofrisk.Youcanaffirmativelydoitwithouthavingalotofreadycapital.Youcan

do it by understanding how to harness, mine and control what J.T. is calling relational

capital, and what I'm using right now (but it's a sloppy phrase [and] I want something

better)"relationalcapitalmaximizingleverage."Alotofwords,butaverycoolconcept.

Okay.So,Ibelievemostbusinessesarestagnant.MylastbookwascalledTheSticking

PointSolution.

The

whole

key

was

most

businesses

are

stuck,

and

don't

even

know

it,

and

they'restucklotsofdifferentways.Ithinktodaymostpeoplearestuck.

Now, I'mgoing tomakeapoint,and I'mso sorry that I'mnotorganized,but I really

wasn't intent on being organized, because I didn't come here to bedazzle you with my

eloquentsilverytongue.Icameheretointroducethisconcept,andplayaroundwithit,and

giveittoyouinbenevolence,butactuallyworkitthroughformyownmind.So,you'rethe

recipientwhileI'mbasicallyplayingwithitmyself;but,I'mgoingtotellanotherstory.

Acoupleofyearsago,aguy that Ihelpedwhenhewas firstgettingstartedIdon't

evenknow

if

he

does

alot

anymorehis

name

is

Bob

Allen,

and

he

was

in

real

estate

alot.

I

don'tknowifheisanymore.Buthewasalwayscomingupwithsomeveryinteresting(not

necessarily cutting edge) but inventive concepts. He'd call and say, "Jay. I've got a new

concept. It'scalled"CrackingtheMillionaireCode."And I'dsay,"Okay."Andhedidsome

nicethingsformewhenwestarted.

Hesaid,"Ineedyoutodosomethingtoreciprocate."Isaid,"Yeah,whatdoyouwant

me to do?" He said, "Would you mind, in two hours or less, telling people that have no

money,noproduct,noservice,nobusinessskill,nocapital,howtheycanmake$1million

legitimately in a year? Oh, yeah. With no risk?" And I said, "You're serious?" He goes,

"Yeah."Isaid,

"Okay."

And

Idid.

I'm

going

to

tell

you

what

Itold

everyone,

because

it

relatestowhatI'mtalkingabouthere.

Ididaboutfortyfiveminutes.Ittookmefortyfiveminutestoexplainit.AndallIsaid

was,"Allyou'vegottodoisgotoGoogleandseeallthehottopics.Idon'tcarewhatthey

are.Weightloss.Moneymakingbusinessopportunity.Realestate.Doesn'tmatter.Don'tgo

tothefirsttenortwenty listings.ForyouSEOguys, I'mgoingtogivetheopposite.Goto


14/23


15/23

Mega Partnering

Page 15 of 23

Sears started Allstate with one simple idea. Now, Sears today is a fragment of their

stature, but there was a time (those my age or older who know) it used to be highly

respected.Everyonewouldgothere.Andtheysaid,"Let'sstartaninsurancecompany."And

somebody said, "Hey! Let's send agents in the field knocking on doors and cold calling."

Somebodyelse

said,

"Why

do

that?

Why

don't

we

just

stick

akiosk

right

in

the

middle

of

all

ourtraffic,andhavepeoplegivethemquotes,andjustletthelawofaveragesworkforus?"

Andtheybuiltamultibilliondollarcompanythatway.

There's a fascinating, fascinating story that I'll tell a couple of different ways. I'm

probablygoingtobeoutoforderbecausethere'saslideremindingmeofthislater,butit's

onmymindnow.Yearsandyearsago, therewasacompany thatwas in thebusinessof

creatingaffinitygroupinsuranceprograms,andtheywerehavingtroublegettinggroupsto

buytheirpolicies.Andsomeverybrightpersonsaid,"Wow!Whydon'twejustcreateour

owngroup?"And so, theycreatedAARP forone reason, tohaveaclientwhowouldbuy

theirinsurance.

Ican't

remember

what

the

insurance

company

is,

but

they

ultimately

had

todivestofitbecausetheyhadbillionsandbillionsofdollars.

Thepoint is ifyoucanfindanorganizationthatalreadyhasdirectaccesstothesame

type,kind,genericprofileofbuyeryouwant,andthatbuyertrusts them,andthatbuyer

respects them, and that buyer will give them open access (which means that buyer is

infinitelymorefavorablydisposed,morepredisposedtowardsanythingofyoursthat,that

organization would say was worth trying) then that is such a great, powerful, basically

distribution opportunity for you. You have near infinite access to capital equipment.

Intellectualcapital.Highlyreceptivemarketsfornothing.Norisk.Noinvestment.

Let'ssee.I'mtryingtothinkofanevengreaterexamplethatwouldjustblowyourmind

ofsomethingveryinteresting.Well,there'sastoryI'mgoingtotelllater.Thestoryhasbeen

toldtendifferentways.Oneway issomebodywentuptoBaronRothschild inFranceand

wantedtoborrowmoney.TheotherstoryissomebodywentuptoBernardBaruch(those

ofyoumyageknowhewasafamousfinancier).Anotherversionis[somebody]wentupto

oneoftheKennedys.Itdoesn'tmatter.

Somebodygoesupandsays,"Iwanttoborrowmoney,"andtheysay,"Iwon'tlendyou

a dime, but I'll do something a hundred times more valuable." What they did was they

walkedarm

in

arm,

back

and

forth,

five

times

across

the

floor

of

the

stock

exchange.

They

said,"WhenIdothat,everyonewillloanyouorgiveyouallthemoneyyouwant."Thatis

the power of relational marketing leverage. You become regional, national, international

overnight.


16/23

Mega Partnering

Page 16 of 23

AnybodyhavetheircomputersortheiriPadswithyourightnow?Areyouonline?Put

in AbrahamRussia.com. You probably won't get a picture because I guess the graphics

don'twork.

IhavepartnershipsineightcountriesoftheformerSovietUnion.Ihavepartnershipsin

Israel.Ihave

partnerships

in

Tokyo.

Ihave

partnerships

in

Beijing

and

Shanghai.

I've

had

partnershipsinAustralia.

Thedealistheyputupallthemoney.Theyputuptheirinfrastructure.Theyputupall

theirdistribution.Theyputupeverything. Ibasicallyguidethemand Igethalftheprofits

andIownhalfoftheassets.That'sprettygood,isn'tit?Ialsogetallthedealflow,because

they'rejustsellingtraining,andtrainingtomeisminusculecomparedtoassets,accessand

equitiesinbusiness.Butit'snotthathardtodo.Youcantakeapersonwho'slocalandbe

regionalornational.Andyoucantakeabusiness,oryoucantakean intangibleasset.Let

megiveyouanexample.

Let'ssaythatyouareaveryeffectivecosmeticsurgeonwhoworksinChicago,andthat

youhavereallygoodmarketingyouuse inChicago,butthat'stheonlyplaceyoumarket.

Andtherearetwoimplicationsaboutthat.One isyou'vegotgoodmarketing.Twoisyour

good marketing will wear out quickly, because all of the interlopers and rapscallion

competitorsaregoingtotrytoplagiarize,emulate,andmodelyouradvertising,right?So,

whenyou'redonewithit,it'sasunkenasset,isn'tit?Therefore,you'vegottocomeupwith

anotherone orifit'sagoodad,goodmarketing,keeprunningit.

Butdoyouthinkthereareanyothercosmeticsurgeonsordermatologistsoranyother

GPs(because

you

don't

have

to

be

acosmetic

surgeon,

obviously,

to

do

cosmetic

surgery)

outsideof Chicagowhomight love topaya royaltyor a usage fee,or if it'sethical,case

sharing(Idon'tknowifitis)withsomeonewhohadmarketingthatcouldworkinSt.Louis

orKansasCityorToledoorClevelandorLosAngeles?I'vedonethatalldaylong.Iusedto

create renewal and subscription marketing for one newsletter, and make a share of the

profits,butI'dretainownership,andIwouldreuseitforfiftyotheronesandmakemillions

ofdollars.

TheconceptthatI'mtryingtointroduce(althoughnotnecessarilylinearandstructured

andintegrated)isunimaginablyrelevanttoeveryoneofyou,nomatterwhatyoudo.You

wantto

help

your

employer?

You

want

to

put

your

wife

in

business?

You

want

to

put

afew

dollarsandgetcontrolofsomething?Youwanttodoajointventurewithsomebodyelse?

Youwanttobuyabusiness,butnotpayadimeforit?Orcreateanewprofitcenterfora

businessandownthatprofitcenterequallywiththebusinessbecauseyouunderstandhow

tomonetize itusing relationalcapital? It'ssortof interesting, isn't it? Ican't tell ifyou're

thinkingdeeplyornot.Okay,good.I'mjusttryingtoshowyouwhatyoucanget.


17/23

Mega Partnering

Page 17 of 23

Thinkaboutthis.Who'sgotareasonably(notahuge)butabusinesswithatleastover

adozenemployees?Raiseyourhand.How'dyou like tobeable togrow it infinitely?No

moreworriesaboutbenefits,insurance,retirement,litigation,personnel,anyofthatstuff,

andyetyougethalfofalltheupside.That'dbeprettyinteresting,wouldn'tit?

Justso

you

know

thisand

by

the

way,

there's

not

one

thing

that

Italk

about

Ihaven't

done.Iwantyoutounderstand.Noneofthisistheoretical,andhe'sright.Formanyyears,

all I did was doing it. Then I taught it. And this is fun occasionally, but I don't have the

patiencetobeastheoretical. Ijust likebeingdownanddirty,andsortof inthetrenches.

ButIwanttotrytopatientlyexplainit.

So, whatever your business might be in need of, that you need to grow, expand

prosperYouneedequipment?Somebody'sgotit,andyoucanfigureoutadealtogetthe

useofit.Onapercentage.Forthebusinessthatcomesfromamarket.Onadeferred.The

technology.Somebody'sgot it.Youcanaccess it.Thefacilities.Thestaff.Themarket.The

advertising.The

retail

location.

The

manufacturing.

Their

credit.

Their

influence.

Their

distribution(meaningtheirsalesforce).Theirbuyers.Theirwebsite.Theirtraffic.

I've had people who had no money to show at a trade show, and I'd say, "Find

somebody who's got a huge booth, who's not competitive, give them equity, phantom

equity,alltheprofit fromthe firstsales (becauseyougettherepeatoryougetthegood

will)andhavethem letyouuseacorner.Theyspend$100,000tosendeverybodyanddo

theirdisplay.YougettherejustforstayingatMotel6.Butyoucandoalmostanythingthat

yourmindhasthecapabilityofbelieving.Marketplacesupremacyanddominance.

Mybrand

currency

in

the

entrepreneurial

market

is

very

strong.

Idon't

believeand

maybe if you look it upin thirtyfive years, I don't think there's anything negative and

there's,Idon'tknow,900,000oramillionsearches.IwasgoingtoapresentationatSirius

and Iwasabletomaketencalls.AndStephenCoveycalledandsaidhe'lldoashow.And

theguyfrom"SharkTank"saidhe'lldoashow.AndRussellSimmonssaidhe'lldoashow.

And the roving editor of Inc. magazine said he'll do a show. And the editorinchief for

fifteenyearsofEntrepreneursaidshe'lldoit.

Whenyouhavethatkindofaccess,youcanmakelotsofdeals.Buttheinverseisifyou

can figureoutwhohas thatkindofaccess;mostpeopledon'tknowhow tomonetize it.

Mostpeople

don't

know

how

to

maximize

it.

If

you

do,

you

can

be

their

benefactor.

You

can

betheircatalyst.Youcanbetheirpartner.CalvinKlein(Idon'tknowaboutRalphLauren)

they all had partners who knew how to maximize the catalytic value of their talent.

So,I'mtryingtoshowyou,unfortunatelyorfortunately,tothinkaboutamultifaceted

value.Youcandothisforyourcompanyoutside.Youcando itforyourproductsoutside.

Youcando itwithotherproductsorservices inside.Youcando itoutsideyourbusiness.


18/23

Mega Partnering

Page 18 of 23

Youcandoboth.Youcandoallof theabove.You'reonly limitedby two thingshighest

andbestusetheory,whichyoudon'tevenhavetoimposeonyou.Andyouallshouldknow

whatthatmeansfromrealestate.Doyou?

Imean,withme,mylifeislikeabusstop.Icanlookatasituationandnormallyfigure

maybenot

amillion,

but

an

infinite

number

of

ways

to

monetize

almost

anything.

So

my

problembecomes,"DoIwanttodothisfor$100,000,ordoIwanttodothisformaybe$1

millionplus interest inanassetthatmightbeworth$10million?"Atwhereveryouare

youmaybeaboveme.I'mnotsayingI'mthatmuchbetter.Youguysmaybe,withyournet

worthandyourresources,abletostepalloverme,andGodblessyou.I'mjusttryingtosay

that it doesn't matter where you are. What matters is the derivative of this can be

applicabletoanyone.

So, leveragingandmaximizingrelationalcapitalallowsanyIstoppedrightthereand

we quit.Wouldn't you be curious to know what follows? [Laughter] Now, I've got to tell

you.Isent

over

these

terribly

long

(because

Iwas

on

atrip)

phrases,

and

they

tried

very

admirablytoturn it intoPowerPoints,andtheyweredisgusting.And itwasn'ttheirfault.

So,Isaid,"Breakituphere.Breakitupthere."Idon'thaveacluewhatfollows.I'mgoingto

beassurprisedasyou.

Knowinghowtofullyleverageandmaximizerelationalcapital.Okay.Youcanharness,

minerelationalcapital leverageamultiplenumberofways.Numberone. Ihaven't looked

at thissowe'rebothdiscovering ittogether.Fortunately, it isthebodyofmyknowledge

andworkandexpertise,soIcantapdanceandwingit,evenifIdon'tknowwhatI'mtalking

about.

You can take full ethical advantage of other people's entities, assets, access, brand

distribution,momentum,andcriticalmass.Whatdoesmomentumandcriticalmassmean?

ItmeansthatJ.T.mighthave(ohIdon'tknow)tenthousandpeoplehespeaksto.That'sa

lotofmomentuminayear,andIcangethimtotellpeopleaboutJayAbrahamifIwant.IfI

figureoutabusinessmodel,Icanhavehimgothroughallthechafflookingforthewheat.

Idon'tmean[tobe]thatdisrespectfulofyouasan irrelevanthumanbeing.Butif I'm

lookingforbusinessesthataredoing$10millionandhe'stalkingto10,000ofwhich100are

there,andIwantedtofind100myself,I'dhavetospendmoney.Travel.Call.Research.But

that'swhere

you

can

get

enormous

leverage.

You can take economic and strategic advantage of your own company's unused

relationalcapitalleverage.Youmayhaveasalesforceandsellonething.I'lltellyouastory,

because Iguess this is important. J.T.mighthave toldyoubecauseheaskedme to tella

storyyoucoulduse,soifit'sredundantIapologizebutitmeanshestolemystory.


19/23

Mega Partnering

Page 19 of 23

Yearsago Ihadsomebodybackwhen(andagain, I'mdatingmyself).Believeme, Ido

lotsofstufftoday,butI'mtryingtogiveyouaneasy,relativeexamplethat'sanobrainer.

So, I had a client that was making and selling aerobic, sort of cool designer clothes for

peoplewhodidaerobics.Theywereliketheleggingsandtightsandstufflikethat.Theyhad

threeorfourmajorleadproducts,andtheyweresellingitin5,000stores.Theywereselling

itin

Target,

Nordstrom,

just

abunch

of

places.

But

the

product

was

starting

to

burn

out,

andotherpeoplehadknockedhimoff,andtheydidn'thaveanyotherproducts.

And they come to me wanting to know what to do, because they weren't really

creative.Theyhadstumbleduponcreatingthesethreeproducts.AndIsaid,"Youguysdon't

even have a clue. Your real asset isn't your three products. It's the fact that you've got

incredibly close relationships with the buyers at 5,000 outlets. You have a distribution

channelwithbuyerswhodon'tjustbuyleggings.Theybuyleotards.Andtheybuyhosiery.

And they buywhatever else goes along with that. Undergarments.And theybuy fashion

things."

Isaid,"Youhavetwothingsyoucando.Goonaroadtripalloverthehotplacesinthe

country.GotoSantaFe.GotoL.A.GotoBeverlyHills.GotoSouthBeach.Gotothehot

aerobic studios, because they're all going to have a little, tiny store where they sell

Gatorade, and they sell Red Bull. And somebody locally, who is creative, has put some

designonasweatshirt,orontennisshoes,oronasweatband,andissellingfourofthem."

AndIsaid,"Makeadealwiththem."Andtheysaid,"Wedon'twanttobedistributors."

Isaid,"Don't.Tellthemtheycanhaveallthesalesfromtheirbigdistribution(theyprobably

sell six of them a year in that location) and give them 4 or 5 percent royalty, and put it

throughyour

distribution."

And

they

did

that,

and

they

made

millions.

I'm

giving

you

that

as

anexamplethatthebeginningpartofthisdiscussionwaspredicatedonwhatyoucoulddo

outsideharnessing,capitalizing,leveragingoffofotherpeople.

The same question is What do you have? And even if you don'tyou may have a

littlebusinessbutyou'vegotthetrustofsomebigbuyers,orsomeinfluentialpeople,or

peoplewhobuyalotofbigticketthings.Sowhatcanyoudointernallywithyourgoodwill?

Withyourrelationships?Withyourdistribution?

Number three. Utilize your company's personal contacts to mine thirdparty

opportunities.What

can

we

do?

I'll

give

you

agood

example.

I'm

very

close

to

five

different

peoplewhoI'vehelpedandwehaddealstogether.Youknowthesixdegreesofseparation.

Youknowwhatthat is.So, Ihavethesefournewsocialmediamagazinesthatarecoming

out. They're coming out Monday. It's digitally online. You can get them for nothing, and

they'rereallycool.


20/23

Mega Partnering

Page 20 of 23

I used my relationship with Daymond John, and he became the first one who we

featured.WehaveoneonFacebook,andoneonLinkedIn.It'sabouthowtouseFacebook

inbusiness,LinkedIninbusiness,TwitterinbusinessandGoogleinbusiness.Hehadasetup

forMarkCubanforthismonth,butbecauseoftheNBA,we'renotdoingthat.Idon'tknow

MarkCuban,butIwassupposedtointerviewhimbecausehedidit.Itfellthrough,soIgot

onthe

phone

last

night

to

two

other

people

who

Ihave

helped.

One'sgot90percentAshtonKutcher,who Idon'tknow,buthe'sverybigonTwitter.

Anotherone'sgottheheadsocialmediapersonforMTV(andI'mnotanMTVenthusiast)

but forStephenColbertand JonStewart.Anotherone'sgottheheadguyofTargetsocial

media.TheOlympicCommittee.Anotherone'sgotthetopguyfromLincolnPark.

It's what you can do when you have access to relational capital. You can help third

partiesuseitforotherpurposes.I'vehelpedallkindsofpeoplemonetizetheirinfluenceor

theirinfluencer'sinfluenceortheirthirdpartyinfluence.Itdependsonmyagenda,andit's

allalways

fully

disclosed.

I'm attention deficit. When you're attention deficit, you can't remember a word you

said,acommitmentyou'vemade,astatementyou'vedeclared.So,you'vegottomakesure

youdealwithtotalintegrity.You'redealingwithtrustworthypeoplewhereyousay,"What

thehellisourdealagain?"You'vegottobeabletonever,everlie,cheatorsteal.

I'lldodealssometimes fortheeconomicgain,sometimes forthestoredvalueofthe

reciprocity,sometimesfortheabilitytohelpathirdpartyutilizetheirinfluenceforanother

purpose.ButIplayamuchmorecomplexgame.I'mjusttellingyouthattoshowyouwhat's

possible.Iam

not

telling

you

that

to

intimidate

or

overwhelm

you,

because

everyone

can

startsmallandparlayup,andyoushouldalwaysstartsmall.

BecauseevenifyouunderstandeverywordIamexplainingmasterfully,Icanpromise

whenyougooutand trytoexecute,you'llscrew itup.Notbecauseyou're incompetent,

anddefinitelynotbecause it isn'tamonumentallypowerfulforce. It'sjustyoudon'thave

yoursealegsyet.

Isanybodyhereapilot?Areyouaprofessionalpilot?Okay, itdoesn'tmatter.When

you started pilot school, they didn't say, "Okay. Here's a book about it. Go watch the

simulatorfor

three

hours,

and

here's

the

key

to

a747.

Tomorrow

you're

taking

800

people

toOrlyanddon'tcrash.Didthey?Youhadtodoitmethodically.

Ialwaysrecommendthatfirstthingappreciatethemagnitude,becauseyoucankeep

leveraging it up. And when I say leverage, by the wayI mean, Jay Abraham has built a

career on a lotof differentdistinctions,and ifyouaskmewhat I stand for, it'sprobably

leverage,morethananything,butit'sacertainkindofleverage.Anybodyamedicaldoctor?


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Well,everybodyunderstandsthattherearetwokindsofcholesterol.There'sthegood

andthebad.Ifyou'vegottoomuchofthebad,youmaybasicallynothavebloodflowing.If

youhaveenoughofthegood,itcancompensate,right?

Well,there

are

two

kinds

of

leverage,

too.

Iassume

J.T.

teaches

it.

But

there's

the

kind

ofleveragewhereyougetanasset,orabusiness,orsomephysicalorintangibleasset,and

youusefinancialleveragetogetcontrolofit.Youhopethateithertheappreciationinthe

flip or the cash flow will service it, or the investor has got deep enough pockets. And if

everythingworks,andtheworldstayseuphoric,it'scool;butifanythinggoeswrong,you're

screwed,right?

Well,Idon'tdealwithmuch,orany,downsideleverage.WhenItalkaboutleverage,it's

liberating. It'sexhilarating.It'sanimatingtoeconomicspirits.BecauseallIdealin istaking

the upside higher and higher, and having almost no downside. Any downside you have,

unlessyou're

crazy,

in

the

stuff

Ido,

is

almost

nothing.

Itsopportunitycost,sometimes,becauseyoucantestanything.Youcanallayanyone

else'sfears.Youcaneliminateanyguarantees,anyborrowings,anyequity,andanykindof

yokeofnegativity,obligatoryresponsibility,orliabilityeasily.Andagain,IknowI'mbeing

abstract,butI'mjusttryingtointroduceitandgetyouexcited.Areyouexcited?Good.

Youcanalreadyseewhatelse Idid.Youcanbeamatchmaker,dealmaker,finder,or

catalyst.Idoitall.I'lltellpeoplehowtodoit.I'lldoitforsomebody.I'lldoitwithmyown

assets.I'llgiveyouanexample.

I have relationships with a lot of people in the business opportunity field. I don't

personallydoanythinginitanymore.Notthatthere'sanythingrightorwrong.Mostpeople

don't do anything with it, and I don't like being intellectual entertainment. I like being a

catalystthatmakesthingshappen.ButIhavealotofpeople[who]havealotofpeoplein

theirlistwhospentalotofmoneyontrainingand[did]nothingwithit;alotofmoneyon

hopesanddreamsandnothingwithit.

IwentandIfoundapersonwhoisamerchantaccountserviceforretailers.Theyhave

abusiness.Igotthemtocreateathirdversionofthebusinesswhichwasaspecialversion

designedfor

merchants

who

wanted

to

grow

their

business,

where

we

put

my

intellectual

capitalin.Itwasourvalueadded.Everyoneelsesays,"We'llcutyourfeesbyamillortwo

tenthsofapoint."Wematchpeople,butwegivethembusinessgrowthassistanceasour

valueadded.IcreatedanentitythatIownedathirdof,forever,byconceptualizingit.

ThenIwenttoallmypartnersinthebusinessopmarketandIgotthemtogotoallof

theirfrustratedbusinessopportunityseekerswhospent$6,000or$10,000or$25,000for


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trainingandhaddonenothingwithit,andIsaidtothem,"Howaboutifacompanyinvests

inyou?We'llpaytotrainyoutobeourrepandsetupclients,andwe'llpayyouupfronta

bonuseverytimeyougetusamerchant,andwe'llgiveyouaresidualstreamforever."And

wegot600peoplethefirsttime.

Thepoint

is

you

can

create

entities

and

equities,

at

will,

once

you

understand

what's

possible.AndI'mnotdeludingyou.I'mtryingtoshowyouthatyoucandoincrediblethings.

I'mnottryingtodenigrate. I'mnottrying tobearrogantorsubjugateanybody.Youguys

maybetentimesbiggerinyourbusinessthanIam.Ijustamgeneralizing.

Ifyouthinkyou'renotbigenough,you'rewrong.Anybodycanharnessderivativesof

this to start. And really, if you can grow a real estate business when you've got to

somewhereget(unlessyou'regoingtodoittotallywithnothingdownandsellerfinancing)

ifyou'regoing tohave toget someoneelse to finance it, this isamillion timeseasier to

integrate into business. And I haven't yet applied it to real estate, but I'm sure it has

derivativesthat

are

fine.

Whyfocusontheseleveragingmaximizingdeals?Why?Well,numberone,theymake

the businesses that successfully do them worth more, because you get more cash flow,

moreperpetual,ongoing, repetitive income.Thatcreatesmorebrandcurrencyandmore

wealth, net worth, etc. They produce far higher average revenues, and you've got no

downside.

Andyoucankeepyourregularbusiness,dothese,andeverythingcomingfromthis is

incrementalinmostbusinessesthatI'velookedat,ornowhereclosetofullyoptimized.All

ofyou

know

this,

and

its

Manufacturing

101,

Business

101.

If

you've

got

underutilized

opportunitycostsorcapacity,thatcanbethree,fourorfivetimesmoreprofitablethanthe

businessyou'redoingrightnowtojustsortofcoveryournut.So,allthedealsyoumakecan

bemanytimesmoreprofitable,buttheycanbemuch,much,muchmoresustainable.

They make any business owner startup more productive, more effective, and more

efficientimmediatelyinstantly.Withtherightstructureddeal,youcanbuildabusiness.You

canbuildaclientele.Again,Idon'tdomuchwithmybizopportunityfriendsanymore,butI

rememberayearago,ortwo,somebodystartedabusinessandtheyusedalltherelational

capitaloftenpeoplewhohademaillists,andtheyhada$10millionbusinessfourmonths

later.And

it

was

arecurring.

Itwassomekindofasoftwarebusinesswheretheywererebuilding.So,theyhada$10

million recurringbusiness,andeven if theyhadattrition (which theywould) theyhadan

assetthat,atwhatevermultipleyou'retalkingabout,everyoneelsecreatedforthem,and

theygavethepartnerswhopromotedithalfofthefirstyearprofit.Soeverythingelsethat

accruedfromit


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AndI'vegottotellyouafunnystory.Thisishilarious.Yearsandyearsago,goingback,I

wasinthenewsletterbusiness.Ihadrelationshipswithallthesenewsletters.So,Icreated

newslettercontent.Iwouldgotoothernewsletterswherethecontentwasn'tcompetitive.

I would get them to promote my content in their newsletters. I would build 5,000

subscribersat

$200.

Then

I'd

get

somebody

who

wanted

to

buy

abusiness,

and

Iwould

sell

themtheliabilityandthesubscribers,andIwouldkeepthemoney,andIwouldgethalfof

theprofitontherenewal.Ididthatabouttentimes.

It'samazingwhatyoucando.Am Ibeing tooabstract? I'mjust trying togiveyouall

kindsofvariants,anditdoesn'tmatterwhatindustryyou'rein.AsIsaid,peoplethinkI'min

thetrainingbusiness.That'ssuchaminusculepartofwhatI'vedoneallmylife.I'vebeenin

retail,wholesale,manufacturing,andtechnology.Ihaveinterestsrightnowinthepodiatry

field. I'vegot interests inthepublishing field. I'vegot interests in thesocial field. I'vegot

interests inthe financialservice field. I'vehelpedmoredifferentpeople inmoredifferent

industriesin

more

different

parts

of

the

country.

I'mtellingyou.Whateveryoudo,ifyoudoityourselfWorkforsomebody.Youwant

to take over a business? I mean, my son (I've got many sons) but one of them always

wantedtobuyafranchise.Andthey'renever likeamajorfranchise. It'sasecondaryone.

AndIalwayssay,"Why?"

What I say is, "If you really want that business, why don't you get a Yellow Page

directoryofeverybody ineverymajorcitythat's independent,callthemupandtellthem

youwanttoknowtwothings.Wouldtheygobackinthatbusinessagain?Dotheystilllike

thebusiness?

Would

they

be

willing

to

teach

you

the

business

and

let

you

pay

them

alittle

usagefeefortheirtechniques,theirads,andtheirtraininginyourmarket?Andiftheydon't

wanttogoanywhereelse,ifyouwanttorelicenseittopeopleeverywhereelseandshareit

withthem,wouldtheyletyou?"

It'sjust a way of thinking. Do you understand that? All it is, is a different way of

thinking.It'salimitlesswayofthinkinginsteadofalimitedwayofthinking.[Applause]

JayAbraham,ladiesandgentlemen.

Thankyou.

mega partnering transcript pt 1

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