Most entrepreneurs suffer from doing mechanism-first thinking instead of customer-first thinkin. Today, Terri Levine interviews Dane Maxwell, a serial 7-figure entrepreneur and the author of the book called Start from Zero, which teaches entrepreneurs a way to build businesses quickly without risks and from scratch. Today, Dane tackles the “customer-result-mechanism” approach, the selling process, the timing of an idea, and so much more. Listen to Terri and Dane as they tackle how you can start a successful business by thinking about your customers first.
Watch the episode here:
Listen to the podcast here:
Shifting From The Mechanism-First Thinking To Customer-First Thinking With Dane Maxwell
I’m glad that you’ve come back to join us and that you’re looking at how you can create more value in your business. That’s what Heartrepreneurs do. We look to serve our clients, customers, and patients in an even bigger way using our skills, expertise, talent and to make a bigger impact. I have a guest that’s going to help you. You’re going to be fascinated by him. My guest is Dane Maxwell. He calls himself a serial entrepreneur and he’s taken his business from mere ideas to seven-figure companies. Within a brief period of five years, he’s gone on to create over fifteen millionaires with his teaching. He specializes in helping underdogs start successful businesses. He’s also the author of a book Start From Zero. That book teaches entrepreneurs like you, Heartrepreneurs, a way to build businesses quickly without the risks and from scratch. After it’s released, Start From Zero, quickly became a bestseller on Amazon. Welcome to the show, Dane.
I’m here to serve. Thank you.
How did you get down this path of even being a serial entrepreneur, to begin with?
I was failing at everything else. I was failing at employees, life, school, and with friends. I couldn’t get anything figured out. I then went ahead and landed on entrepreneurship. I felt an instant sense of belonging.
I can relate to that because I was an employee. I was president of a national healthcare company. I was a horrible employee. I was terrible. They loved me, but they also hated me because I constantly had ideas and suggestions and nobody wanted them. What was your first venture?
My first venture was a guitar video lesson website.
What made you come up with that? Did you happen to play guitar?
I suffered from what most entrepreneurs suffer, which was you think you have the capability for something, then you should sell it. I had a guitar teacher who was a Berkeley graduate. I was like, “Do you want to teach guitar video lessons?” He said, “Sure.” I put a camera in front of him and we tried to record it and sold some guitar video lessons.
How did that workout out of curiosity?
We pivoted it at a bunch of times. I ended up creating an innovative player for people to learn guitar. Everything about that business was solid except for the idea itself. The process I used to start it, as I’m reflecting back on it, it’s very wise of me at the time to do it. My whole philosophy with business is you find a clear customer, you figure out the clear result they want first before you do anything else, and you use a mechanism to deliver the result. Customer, result, mechanism, it’s the holy grail of business in my opinion. Outsource the mechanism. Don’t build the mechanism yourself.
When I say I suffered from what most entrepreneurs suffered from is we were doing mechanism-first thinking instead of customer-first thinking. Bezos and Amazon are number one in the world for a reason, because their core value is customer-obsession. It’s one thing to say it and another to see how you live it. Everything I did with that business was mechanism-first, but the player itself that taught you. We had sales. We had people that buy it. We had testimonials. We had customers who loved us for it. The thing is you can’t sell those for much money. It’s hard to advertise and make break-even or even make a profit. The way we had it is I sat down the camera in front of him. We record it for an hour.
I got it back and I was like, “This isn’t going to work.” I brought him back the camera and I was like, “Do this and this.” We recorded that and got it back. I was like, “This isn’t that cool either.” I said, “Let’s do it with songs. Let’s do Jimi Hendrix, The Wind Cries Mary. Teach us how to play.” He played it once at full speed and he played it once at slow speed. He then had one two-minute video on the theory behind the song. We have a Flash Player, Macromedia Flash, back in 2006. We did have the video and I’d break up the video into intro, verse, chorus, bridge. You could click on verse, you click on slow motion, and you could see the tab and him playing slow beneath it. You could pick up a song in record time. You can do it without a lot of thought. These guys like fathers that had families and their brains were fried at the end of the day.
They wanted to play the guitar so bad but didn’t have the mental resources to study tabs, use the fresh mind, and create those neurocircuitry. If you had the tab right underneath it, your brain can learn the guitar pretty quickly. If you look at that, I outsourced the mechanism to the guitar teacher. I outsourced the Flash Player to a programmer. I didn’t have a camera, so I borrowed and rented that from the local college university. We rented a high-def camera, plugged it into the back of my computer, had the tape go into the hard drive, then I’d go in and edit. I have no idea how to edit. I had to learn that. I had no idea how to compress the video correctly so it would be the right file size. I would have to test 5 to 10 different compression settings to get that right. It was fun. If someone typed in Google “Jimi Hendrix guitar tab,” you could have our Google Ad that would come up and say, “Are you looking for a guitar tab, try video tab instead.”
The only difference between making $1 and $100 is usually the idea. Everything else is the same amount of work. You’ve still got to create the product. You’ve still got to promote and market the product. You’ve still got to do customer support. I did an idea I was less passionate about after that. It was a recruiting website for real estate companies. It felt much better to have a customer value something more than to try and make my passion work. I started to become extremely passionate about what other people found valuable. I was like, “What do you find valuable?” For example, one of my companies made $9,000 in a day. There were $3,000 sales. We acquired three customers for that program.Selling is the most important aspect in business. Click To Tweet
That program teaches people how to quit their job quickly and do customer acquisition for other businesses using Facebook advertising. It’s very lucrative. It’s incredible. The best business that I see now is to do the customer acquisition business of some kind for another business, especially if you’re doing it for LASIK surgeons. You get them ten new patients a month and each one is $4,000, so you’re driving $40,000 a month to a LASIK surgeon, you can usually take a 10% cut of that. With one client, you’re making $4,000 and you could get ten of those around the country. You get about $40,000 per month business.
It’s not that hard because you don’t figure out the product, you just focus on selling. Selling is the most important aspect in business. The product is the tiniest sliver and then the selling system around it is big. I don’t think people understand this. We do mechanism-first thinking and that’s the thing we suffered from. It’s conditioned into us historically. If you’ve been asked, “How did Rockefeller made his money?” They speak of his mechanism or oil. There were hundreds of men that were all in oil. It’s not why Rockefeller got rich. It’s not because he went in oil. He had a different way. It was how he went about it. It wasn’t the mechanism that made Rockefeller.
If Rockefeller was born these days, he would slaughter people. He would do good. It would have nothing to do with his idea. The idea helped, but the timing of the idea helped him reach billions. There was a guy that did a study of startup success and he found the number one factor was the timing of the idea. For example, YouTube came out right as broadband hit, right as video codec compression hit. It exploded because the timing was right. Mark Cuban, the Founder and the owner of the Mavericks, he tried to create videos many years before YouTube.
It didn’t do well but Yahoo still bought it for $1 billion in stock options or whatever. Mechanism-first thinking. You go back to that guitar thing. I’d be able to sell a guitar video lesson for $5. It was a cool product. Once I started shifting from what I’m passionate about to what people value, I started to become addicted in the most positive way to the process of creation. My biggest business, and it’s big to me, but it may not be big to other people, it’s about $2 million per year, but the way that the money’s made is amazing.
Let me go back and make a couple of points because you have many gems. We’re going to talk about that business. First, I want the readers to get mechanism-first. That was one of the key points that I heard. It’s a customer, result, mechanism-first, the importance of having a system, a process, the selling system and the timing of the idea, an idea that people value and an idea that you’re also passionate about. Did I sum that up pretty well, Dane?
The idea you’re passionate about, that’s the dangerous territory because that’s mechanism-first thinking. Thank you for repeating it because I was passionate about guitars. You need to be passionate, but one of my businesses was called Client Lunchbox. I was passionate about that and I didn’t save it. If you’re passionate about your idea, it’s a dangerous territory in my opinion. It’s not that black and white. All the passion in the world can’t save an idea if the customer doesn’t value it. You need a customer to value it in an automatic way, the same way that when you see an attractive man or a man that meets your criteria, it triggers something in your brain. You’re like, “I am drawn to that man.” You didn’t choose to do that. That was in your brain, it fired. When you can find that in a person where they’re like, “I would buy that.” It hits that thing. That’s what you’re looking for.
That’s hard to find and when you find it, it’s heaven on earth. It’s heaven on earth to have a business where you’ve mentioned the thing to someone and they’re like, “How do I get that?” versus, “That’s nice.” It’s not an idea you’re passionate about. It’s shifting from mechanism-first thinking to what do people value and more importantly, what result do they want? Somebody was trying to start an Amazon store and he was struggling for a long time. I showed him he was stuck in the mechanism-first thinking. What would a mechanism-first thinking approach look like when starting an Amazon store? It would be like, “What product can I sell? What products are selling? What product isn’t competitive? What should my price be? How can I source the product?” You’re spending all your mental resources on mechanism-first thinking if you want to sell on Amazon.
What if you shifted your attention to people over 50 years old and you started talking to them? You ask them, “What are the things that you’re starting to think about more as you enter into the realm of the 50s?” “I think about this.” “What are some things that you have a crippling fear around?” The crippling fear, that’s an incredible question because there is so much opportunity to sell around that. The interesting thing is if we have a crippling fear around something, we may not even be able to talk about it, let alone address it.
In our industry, I am teaching entrepreneurship. I’ve got a chart called The Four Growth Levels of an Entrepreneur that we’ve created. It got from beginner to minor to major to all-star. If you look at it, you can start to reorient your attention towards living in the all-star category because the mind if left to its own devices can be quite faulty. We need to know that. The mind is automatically relating to its environment all the time. If you’re around five people, you know the famous quote, “You become the average of the five persons you hang around with.”
If you hang around with people that are all doing $10 million a year, first of, if you have no interest in ever doing anything like that or you have self-esteem issues come up and you are like, “I don’t like being around these people.” They don’t talk about their problems. They take full responsibility for their life. They don’t blame people because you can’t blame people and get to $10 million for your business. You might have your blind spots, but beginner, minor, major, all-star. For selling, the beginner thinks of selling negatively. The minor leaguer thinks of selling with fear. They’re afraid of selling. The major leaguer thinks selling is fun. The all-star sees selling as noble. You’re like, “Selling is noble.”
Without any blame or fault of yourself, you look at, “What is my unconscious think about selling?” You’re then like, “I don’t like it.” I still work on it but there are certain parts of me that see selling as negative. I want people to like me so I don’t sell. If I believe that instead of notice it as a thought, that can cripple me. In my industry of entrepreneurship, many people are afraid of the word selling. Interestingly enough, I’m letting myself be surprised. I’m like, “What if I help you build a selling system?” He’s like, “I don’t know.” I was like, “What about if I help you build a client alignment system?” He’s like, “I want that.”
It hits his brain. He had that automatic. If he saw a woman that met his criteria for attraction, it triggers client alignment system. I was talking to another more New Age type of massage therapist girl and I was mentioning the client alignment system. She said, “I like that.” I’m slotting it away in my brain and I’m like, “A client alignment system instead of a selling system.” I’ve got a whole new niche market. I don’t go after the people that want to learn how to sell. I’ll go after the people that are afraid to sell. They’re super triggered by the word selling and I’ll call it a client alignment system. If you do buy the book, it will resonate with you.
Where do we get the book, Start from Zero?
I don’t want people to buy it unless they know they would like it. Go to StartFromZero.com/five and you can get a free excerpt. There’s no email capture at all. It’s a five-page excerpt and it gives you the five-question process to find out what people value, to find out the product they want, and to find out how much they’d pay for it. You do that five-question process and you can see how I did it with someone in there. I did it with my girlfriend in there and you can see it. You can watch the five-question process. You can see the idea I found with her, how I’d market it, how I’d promote it. If you like that, then get the book. If you buy the book, there are a bunch of invitations to look at the bonus material in the book like that four growth levels. Inside the book, there’s a bonus. When you go there, you can get all the bonuses. There’s no email capture required.Train entrepreneurship, discipline it and build the brain structures for it, and it can be a joy. Click To Tweet
I have a love-hate relationship with that because I want to lead with generosity. I’m like, “I wonder how many emails I’m missing out on,” but I think about it. When someone does force email capture on me, I may give my email but I’m not usually opening their emails after it. I just got the good idea on it. I’m trying to think about it because we’re shifting to 2020. It’s a little bit of a different time. There’s no email capture for the bonuses, but there are options to give your email if you want that relationship with us. The thing is, when you go to the bonus page, you can find the four growth levels and we have this beautifully designed chart. It looks gorgeous. It’s attractive looking. We’ve got a printout of the planter brain. There are four buildable brains, the surveyor, the tiller, the planter and the gardener. The surveyor surveys the land, the tiller tills up the land, the planter plants the plants, and the gardener grows that. Most entrepreneurs only have 1, 2, 3 of those things and they’re still successful. That’s how powerful they are.
If you get all four, it’s insane what you can do. Surveyors are finding your niche market or finding where you build your business and then you till it. The planter brain is brain number three. The book has seven learning adventures. Learning adventure four is the four buildable brains. It’s a pleasurable reading experience and you can print off the planter brain. It’s this beautiful chart as well, but in the four growth levels, you can get that. On that page, we have an offer. There’s an offer to buy something at the top of the page and the bottom of the page in between all the bonuses. I was stressing out about what to offer because I know we need to offer something. I make $4 or something if the book sells.
The holy grail in business is to be able to pay money to acquire your own customers and to break even quickly right away and maybe make a little money. If you can pay for ads and then break even right away on those ads, you can scale your company and acquire customers for free and on the back end, make millions of dollars. That way, you’re not needy. You want to end your neediness like, “Do you want to promote my book? Do you want to promote my business?” If you can think about a clear customer, a clear result, and a clear mechanism, you can go and lead out, do a marketplace and bring your voice to the business world confidently. That’s the holy grail.
I need a product that people will buy that will allow me to pay money to advertise my book. I’m sitting there and it’s stressful. “What in the world am I going to sell?” My ego gets triggered and I’m like, “It’s got to be good. It’s got to be this. I want to make a lot of money with this so I can spend more money on ads.” It’s like, “I need to do something useful.” For some reason, that brings tears to my eyes and it’s much more vulnerable. It was like, “How can I dress something up to be impressive that people will buy it versus I should make something useful?” What would be useful? I’ve been in this industry for several years and I have a track on things. People have a very difficult time with selling. In fact, it’s crippling fear. I have all these assets that we built over the years and one of them is I interviewed eight entrepreneurs that were students of mine who got their first sale. We’d go into detail on how they got their very first sale. On the top and the bottom, we have, “Would you like to see how eight timid entrepreneurs transformed and got their first sales, including their emails, spreadsheets and scripts?”
That’s a crazy bonus.
That costs money.
Whatever, that gets people’s attention. That gets people interested and relating and saying, “That’s me also. I would like to be a fly on the wall and see that. I pay for that for sure.”
It’s $67. I want it to automatically happen in the brain. If we’re in the woods and we hear a tree branch snap, we think predator. Our brain automatically does that. That’s not personal. Fear fires and then we try to make it personal, but our brain is wired to trigger fear. If a bear is in the woods and the branch snaps, the bears were like “Foods, where is it?” It’s an automatic thing in the brain. We want to start learning how that brain works. We’re like sitting there and we don’t get to decide what works. That’s in adventure one. Adventure one is like, “If you want to start a business, here’s the first thing I tell you. You don’t get to decide if that works. If you launch an ad, you don’t get to decide if that works. How many ads are you going to try?”
I was listening to a talk once and the guy was trying to create a new funnel. He created a new sales funnel to sell something every week and he couldn’t get anything to work. He’s like, “I’m going to do this until it works.” In the tenth week, he still had nothing. He was moving to a new house. He had some flashlights in his basement. He told his brothers, “Put these on, try and put a sales funnel for these flashlights.” They positioned them as survival flashlights. If someone attacks you, you could flash them in the eyes. They made $20 million. We don’t get to decide what works so just try a bunch of stuff. At the same time, be aware of mechanism-first thinking.
From timid to transformed, if you go down and scroll that page, the sales letter that sells it is maybe three-pages long. The sales letter for pages that sold products, I was more insecure about. It’s maybe 10 to 30 pages long, but someone’s read my book, the trust is high. They come to the page. They need the basic details. They go through that page and they see a guy named Ashwin. He sold a grocery store as a spreadsheet. How did he do that? Another guy, he sold an idea before it existed. How did he do that? Another girl, she makes $50,000 in doing strategies to her spreadsheet. It’s very useful. That’s crippling fear. If we were to apply that to different industries, for example, there are people that own gerbils. It’s as a clear customer and a clear result.
Many of these people that love their gerbils never want their gerbils to die. They want to be with it forever. The mechanism then could be a book on tips to increase the life of your gerbil. This is a book that sold well back in the day. If you’re looking for gerbil food or gerbil things like, “These are tips to increase the life of your gerbil.” They go and they read a few tips like, “If you want all the tips, get the book.” He did well with this. Even the table of contents and the chapter titles, they researched where they asked people like, “What do you want to know about?” I want to know what foods to eat, what time should they exercise. They had all this stuff in the chapter. He had the title and then he had the chapters. He sent it out to book writers who are authors who do research and write books. He outsourced the creation of the mechanism of that book.
We have danced to many places. I want to make a couple of comments. I’m blown away by how much information you have, how much value you create in this short interview. I will say to people, go to StartFromZero.com/five. I’ve learned a ton and I’m interested. You resonate as someone who is heart-based. What I’m walking away with that, and I have goosebumps from is, I want to look at all my products and services. I know they’re useful, but I want to make them more instantaneously romantic. I’m excited. I can hardly wait to start. I would love to have you back because you have so many tips.
Let’s do it back. You give me all your products and I’ll help you make it more romantic. We’ll do it live.
That would be cool. Let’s schedule that and we’ll go live. We’ll go live also on Facebook. We’ll do something super cool. Heartrepreneurs, stay tuned if you’re not already part of the Facebook group, #Heartrepreneurs with Terri Levine. I highly suggest that you join. Hopefully, Dane will join us there quickly. I’m going to go live with Dane and we’re going to dig into this so you can see how it works. Dane, I have goosebumps. You’ve been such an exciting guest. You’ve shared so much value and let’s get the live schedule. Let’s continue to give people more value. Let’s start from zero.
Entrepreneurship is a joy. It is not a stress. It can be both but if you’re looking at it and you’re trained correctly. Doing a squat with a lot of weight can be difficult if you haven’t trained, but it can also be a great place of exhilaration if you’ve got the right form and you’ve done the training. Train entrepreneurship, discipline with entrepreneurship, build the brain structures for entrepreneurship and entrepreneurship can be a joy.
Thanks, Heartrepreneurs for tuning in. Join us on Facebook at #Heartrepreneurs with Terri Levine. I will be soon going live with Dane. I know it’s going to be even more valuable. Until next time. I’ll see you back on the show.
About Dane Maxwell
Dane Maxwell is a serial 7-figure entrepreneur that has been Pat Flynn of Smart Passive Income’s most downloaded podcast episode because of his unparalleled ability to communicate business basics that drive massive success.
He almost didn’t think there was a place for him to belong anywhere, but business saved his life and gave him a sense of purpose and significance. That kind of belonging gave him endless fuel because he had never felt it before. He started 16 business and failed a lot – 11 times. Each time he learned, figured out what worked and what didn’t and has started 5 successful profitable businesses including The Foundation that specializes in training people to start a business from scratch, Swipe My Ideas gives away profitable business ideas, Paperless Pipeline a real estate transaction management software, My Agent Base a real estate intranet software and Fear No Feeling sells unique shirts designs.
He has gone on to create over 15 millionaires with his teachings. He specializes in helping underdogs start successful businesses. Dane also has a passion for singing and he is the author of the upcoming book Start From Zero which teaches entrepreneurs a new way to build businesses quickly, without the risk, from scratch.
Love the show? Subscribe, rate, review, and share!