How a $50M Lawsuit Reshaped Taylor’s Entrepreneurial Journey | Taylor Welch
In today’s episode, Taylor Welch, a renowned figure in the consulting industry, shares his tumultuous journey from establishing a consulting business with annual revenues surpassing $30 million to facing a government lawsuit and ultimately rebuilding his empire. Welch and I delve into personal stories of parenting, contrasting their children’s distinct personalities and discussing the impact of fatherhood on their lives. The conversation transitions into Welch’s professional setbacks, including a significant legal battle with the government over a scam within his company, which led to a comprehensive investigation by the Federal Trade Commission (FTC). Despite these challenges, Welch highlights the importance of resilience, the value of learning from failures, and the crucial role of retention and strategic pivoting in business growth. He emphasizes the significance of embracing failure as a stepping stone to success, underscoring his journey of rebranding and providing insights into his innovative approaches to entrepreneurship, marketing, and building sustainable business models through retention and valuable relationships.
Taylor is the founder of Welch Equities and the Wealthy Consultant. He consults & manages a portfolio of brands and clients making the world smarter, happier & healthier. His first brand reached a combined value appraisal of 78 million dollars and today services nearly 10,000 customers and clients yearly. Tune into his content and projects at taylorawelch.com/links and enjoy.
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Justin: What is up? Entrepreneur, DNA family. As always, I have an incredible guest. Now, this guest is telling me that two plus two equals four, and I want to make sure that I don’t believe him. Emphatically. I don’t know if that’s scientific math, yet I rely on bubble mass first of all, so you know you can already see our Dynamics, incredible, one of my closest friends, someone who I look up to as an advisor in the space, but also someone I can rely on as a close friend to be an ear and a shoulder. But also you guys need to know he built the industry standard when it comes to a consulting business well north of $30 million a year, and lost it all and got sued by the government and has now rebuilt it. Mr. Taylor Welch is here. What’s up, dude?
Taylor: Dude, that sounds really bad when you say it that way, and it was worse, but yeah, nice and triggering. Dude, we both became dads in like, the same season as well. That’s why we’re kindred spirits. Because when you have when you have kids, your whole life changes. You have different In fact, that’s why we’re 30 minutes late on this podcast, because, because you have kids.
Justin: That is a 100% and I have a pregnant wife, and I had no veto power. This morning, I said, Honey, our boy Taylor is is, and she says, I love Taylor. You wish him all my love, but you are gonna take your child to school today.
Taylor: I’m not gonna battle your pregnant wife at all. I would have done whatever she asked.
Justin: That’s pretty much what I did. I said, Yes, honey, I will, and I will stop by Starbucks and get you your sausage, egg and cheddar. Good husband. Not a big deal. But yes, you know, to keep on the family thing. You have a little boy now, obviously your beautiful girl has been in our presence now for years, but now you have a beautiful boy who is a machine. (He’s a dank) he is.
Taylor: They’re so different, even from like early age. So Kate was, Kate’s five. She’s, you know, this like delicate drama princess, and so she plays with her toys like an like a normal human. Harrison plays with his toys by breaking them. Aha. He doesn’t think that they’re fun if he can’t break them. And he’s just hitting everything all the time. So the other day, I think I’m telling you the story, like he jumped out of my lap and just hit the hardwood floor. And I was like, Oh no, he’s about to start screaming, and he climbed up and then did it again. And I was like, this is definitely a boy, very different.
Justin: Very and you’re someone I come to because I have a girl, the princess, the drama, the feelings, and I’m having a boy coming up. And so I talked to you a lot about that, because it’ll be a different, different parenting. Do you feel like you’re different father to Kate than you are to Harrison? Do you feel like.
Taylor: Yeah, because I if I say, if I just, and I think part of this is personality, but with Kate, probably like your daughter. If I just am like, no, we don’t do that. That’s pretty much enough. She kind of is like, Oh, I daddy’s upset with me, Harrison, you have to haul out, like, slapped him his hand, like he just doesn’t feel the same. He thinks saying no is like a game. It’s a joke, yeah, and like, he doesn’t, you know, he’s one, so you can’t, like, spank him per se, or, like, he’s a baby. He doesn’t understand, but he thinks it’s funny when you slap his hand. So if you’re slapping his hand to, like, don’t touch the oven, he laughs and wants to touch it again. And it’s like, okay, we gotta, we gotta work on it.
Justin: You know? I just, I firmly believe. And then you have definitely been you’ve progressed more than most men, but I don’t know if we change a whole lot, no matter how many years we have. Call it four, call it 40.
Taylor: Yeah, you know what? What happens, though, is Society programs us to behave in our little box, but it never really goes away like that. Drive to explore, it’s always there. But I do think men have become pretty emasculated, especially in our society we’re just like, man, why are you? You’re so afraid of losing you’re just weak at this point. And I’ve I want to be that dad that’s like, I want my kids to know them when you mess up or when you fail, that just teaches you how to do it better the next time. And so even with my daughter, we’re trying to program that right now, because she’s in school, and she’s like, I didn’t know how to spell something, and I can’t spell and it’s like, Well, that’s good. That’s awesome. And she kind of is confused by that, and it’s like, it’s awesome when you don’t know how to do something, because that’s when you get to learn how to do it. Cool, like opportunity as a dad, to train our kids how to grow up and be entrepreneurs and take risks and not be afraid to lose. And we’ve lost that as a society. I think for the most part.
Justin: I would tend to agree. I mean, I think we have mutual friends that kind of speak to that point. Um. That many have followed and will be on this podcast. But I think there’s a, there’s a tendency to just play, even play mediocre. You know, our friend Kent, who was just on this podcast, right? Mediocrity is the enemy? (Kent clothier), Yep. And that’s it is because everyone kind of is just okay. They don’t want to be judged, they don’t want to fail. And I just this, this whole thing goes back, in my opinion, especially in the last decade or so, just the fear of the judgment from friends, families, the ridicule, and it’s just nonsense, and it’s unfortunate. It is true. The reality is here now that social media and all the other things, but you’re right. I mean, if we can empower our kids to be excited to fail to some extent, right? Within reason, then it gives them the opportunity to learn and listen. You as a friend, have come to me years ago just about, Hey, dude, this this loss that you just took was a blessing, right? Because now you’re able to pivot and learn from it in the same thing is true as an adult, right? Like, if you’re not playing all out and you’re not going for it, I’m going to make the argument you’re really not trying hard enough, and a lot of that is because you’re scared of X, Y and Z, and you’re just going to play mediocre.
Taylor: There’s this really interesting I gave a I flew out to speak at an event last summer, and they wanted me to talk about failure. So there’s this interesting idea in biology called methodatism, M, I, T, H, R, A, D, A, T, I, S, M I think we’ll just tell you spell it big M, I, T, H, R, A, D, A, T, I, S, M, but it’s this idea that the number one hedge against decline is actually decline in small doses. The number one hedge against failure is is failure in small doses. This is how vaccines work. This is how the immune system works. But it’s the same in business and in life. When we are if you want to be not in not insecure anymore, you have to actually have exposure to situations that make you feel insecure to beat it. So it’s actually a form of exposure therapy. And one of the things happened to me is I got the I got the unfortunate experience of everything I touched worked for like, 10 years. And when, like, that doesn’t sound unfortunate, that sounds great. And it’s like, (oh yeah) Midas touch. But when I experienced failure for the first time, I had no data for how to deal with failure. My first business hit eight figures, my second business hit eight figures, my third business hit eight figures. My fourth business was about to hit eight figures, and then it didn’t. And I was like, whoa. Like the economy must have collapsed, like I must be losing my my marbles, and I’ve hired a mindset coach, and I’ll never forget this conversation. She was like, she she’s spoke to me for like, five, five minutes, and she works with hedge funds and real estate gurus and big people. And she was like, you know, your problem is that you forgot what it’s like to fail, and now you have no idea how to deal with failure. And so I think that you look at an entrepreneur’s life every 10 years, is like 10 to 12 years you’re going to have. You have three to four years that are really, really good, and you’re gonna have three to four years that are sort of average, they’re just okay. And then you’re gonna have like, two to four years that are, like, legitimately trying to physically kill you, mind, body, soul and spirit. You should the whole thing. It’s just a clock and it just rotates. And what happened to me was the worst case scenario where it’s like the front load, the first front four years were amazing, and then there was some mediocrity. But then my failures were clustered in like a two to three year period. And so I had two personal Black Swan, cataclysmic events. I had one macro like, obviously covid, with how that affected all of our businesses. And so when you look at the last two or three years, it’s been three black swan events, bam, bam, bam. And yeah, I learned how to fight the last three years. It was really, really insane.
Justin: The analogy is great for life, but what I like about that is the understanding of like, if you don’t have the minor failures, you’re not going to have resiliency. And you personally, knowing you, you could have went under for the big black swan event like you could easily checked out and said, I’m out. I’m going to go cut hair with my wife. I have beautiful hair. I’ll cut some. And you could have just, you could have easily, I mean, easily and, and no one would have blamed you, because that’s how big of a like, oh no scenario you were in, right? And what I credit you is not just not doing that, but taking some time. And I remember, you know me and your dad would talk about your what would we call? Call it, when you were on, like, reprieve or whatever, like you’d have a 30 day, like, I’m just not going to talk to anybody. (Oh, yeah, sabbatical), Sabbaticals. And I credit you for that, because that type of personal time, that ability to kind of recharge. And I know you, and look at your library behind you, I know you just sat there reading and thinking, people don’t do that enough. When they kick they hit a little failure, a little one like not on levels that you and I have achieved or nor near your what you’ve achieved in terms of getting hit it like breaks them, because they’re just not used to it, even the littlest ones, and they don’t sit and breathe and think and accept it and say, Okay, how can I do better next time? They just crumble, and they think it’s over, and they quit on the little ones, right? And again, in my world of real estate, you go, lose 10 grand on a flip. I get the 10 grand a lot of money. It’s not like I’m I make so much I don’t want 10 grand. But relative to losses like you’re seeing in some of the news now, with these commercial buildings defaulting on $400 million worth of loans, I mean, what is 10 grand, right? But it gives you perspective to say, if you are going and having these minor failures, it gives you a time to reset each and every one of those failures. So God bless the day you ever have really a hit, you have some shielding against it, inability to like rebound, just like you said, the immune system, right? If you get little sicknesses over time, your immune system builds off of it. Same thing with failure. And so I love what you I think it was even today you posted something since I was up at 4:30 hitting the gym, whatever. (Hey, boy) I think you posted something about this, about these minor failures, and it hits dude, that it is what people need to hear is take some of these L’s, and don’t make them big L’s, but take something along the way.
Taylor: Dude, there’s a there’s a the podcast that we do called Daily mind medicine, and we release it every day. Is like five minutes a day. What’s funny is, we stopped this and we started it up again because I wanted to test it on a new feed. It’s like, in marketing, like, with especially digital, like, we’re, like, tracking everything. And I was like, I want to see if people actually want this. So we stopped the main show. We just started it sort of in secret on another podcast line, which is about the stupidest thing you can do if you’re trying to grow a podcast. And what happened is, like the market just followed the new feed. I think I only posted about it one time, so it’s I was telling you about this, like, you know, the main shows like 100,000 downloads a month. Well now this secondary small feed did like 40,000 downloads last month, and it’s its second month.
Justin: And just for my curiosity, when you mean feed, are you talking like Libson versus simple cast or or, what do you mean by that?
Taylor: It’s like a brand new podcast, so we use a for it, but it’s like Libson. But what, what it shows me is that the market is sharing it, so they’re just following it around. But I’m, we’re releasing an episode, I think, in two or three days, and it, it’s kind of interesting, because I was, I was reading one of my favorite books called the Bible. And Bible is basically just like, it’s kind of, it’s, it’s a business book, if you really it’s how the human existence is supposed to work. And there’s this verse in in Matthew where it basically said, like, Jesus was led into the wilderness to reveal his strength to the enemy. And I was like, hold up a minute. That doesn’t make any sense. So first of all, you don’t want to be in a wilderness. There’s no water, there’s no food, there’s no business out there, like you’re just by yourself. But then why would he say that he was led to the wilderness to reveal his strength? And I had to think about it, and I had this aha moment, like this sort of Revelation. People like to flex at the top, but the real Flex is at the bottom. That’s when you flex is when it’s easier to quit than it is. It is to keep going. That’s when your flexes. And this has a revealing function to the universe, the worlds, the resistance, whatever people call it. And I was like, you know, the what I’ve trained to myself is actually to to enjoy that. Dan Martell calls it the pain cave. And as you feel it in the gym, you feel it in business, you feel it in investing. If you can learn that the the moment to flex is when there is massive resistance and no one around to save you, that’s when you flex, and your greatest Flex is just not quitting, not quitting at the bottom. So there was a period of three or four months where I was like, talking to my wife and like, Babe, let’s just sell everything. We have more than enough assets, and let’s just move to the country, buy 1000 acres, put a solar roof up on that thing, and just disappear. And my wife is actually like, is that what you’re called to do? I was like, shit, you’re right. Nonethe is great. We’re not gonna, we’re not gonna play that game. (Yeah, it’s playing small) And then when you play small once, it’s harder to play big the next time. (Yeah) You know.
Justin: Well, in this is, you know why I made the intro I made that maybe you didn’t love but it’s true and it’s honest, and I give you the credit to be able to not just bounce back in the way you have. And we can get into the story for everyone who’s like, what the hell happened to this guy Taylor? But I mean, you, you know you have a The King is back. I think daily or weekly or monthly thing you do, the wealthy consultant book is top of the charge consistently, day in, week in, month in, all the time. You have another book coming out, but you’ve re purposed yourself to some extent, you’ve rebranded yourself to some extent, you’ve rebuilt yourself to some extent. And that is really what it becomes about is making pivots, adjusting in different iterations of what has worked, and strip away the stuff that didn’t work. (Yeah) And I give you a whole lot of credit to be man enough and listen your wife, by the way, which is, that’s good. Oh yeah, she’s dead on. Was that really what you were called to do? And you specifically were not my friend. You are a light when it is dark, and you have the ability to lead a lot of people in business, but also in thought and in spirit. And so, you know, I give you the credit because, you know, kind of diving into the story. You built this 30, 40, $50 million a year company, and the FTC came to knock in.
Taylor: Yeah. So, we started, this is a company called traffic and funnels. People can look it up. It doesn’t exist anymore, but we, at one point, we had 200 staff inside the portfolio. I mean, you would, you saw our offices, you come in, it’s just sprawling and packed. And I started in 2015 we started taking clients, and it just grew, and it was a good product. We started doing consulting, me and my old business partner. So yeah, we got to the peak of this, this organization, and we were acquisition kings, like we could buy customers for cheap, a couple 100,000 customers. These are a couple 100,000 credit cards. Credit cards, not leads. Millions of leads were coming in the organization on a yearly basis. And it became at at a certain level, it became fatiguing for me, because when you like, when you don’t exactly know what you want to build, and you’re just chasing scale, if that scale is not put into a bucket, so to speak, of like, what does this actually do for my next thing, I think Cormosi calls was, before he started his podcast, we were talking about this, and he was like, the game behind the game, that’s what entrepreneurs are actually chasing. It. The main game is not the business. The main game is, what does the business do for you? Business do for you? And I didn’t know what that game was, so I was just growing. For the sake of growing, we had such a large pool of customers and clients that someone started building a multi level marketing pyramid thing inside of one of our client groups. (Wow) I haven’t told you all the details. Listen, (You have not) let’s unpack that for a minute.
Justin: Hey, by the way, if you’re an entrepreneur, if you do hard things, big things, a friend of mine, Taylor Welch, has one of the best podcasts out called Daily mind medicine, if you want to supercharge your thinking, your resilience, your problem solving, everything from how you do more and get more done to how you handle failure. You know this, but your number one asset is your mind, bar none. Nothing else compares. The reason I love this podcast is because it’s only three to four minutes long. So I grab my cup of coffee and I get my mind right every morning, you should absolutely check this out. Go to dailymindmedicine.tv or just look on Spotify or Apple podcasts. It’s like a nootropic for your brain. Enjoy.
Taylor: So, we had a sales training organization. There were about 50 to 60,000 clients in that sales organization.
Justin: And just for a purpose of everyone understanding how massive that is, what was the price point?
Taylor: They came in for like 100 to 200 bucks, and then they would escalate all the way up to like 10 or 12k.
Justin: So just do the numbers, everybody. You can see what he built, right? If you just do those simple numbers on that one silo, that’s one of his silos. Yeah. So go ahead
Taylor: One of four, and it grew really fast. And when something grows really fast, like, out of control, fast, you struggle sometimes with, like, hanging on to it. So it’s not just the building. The. Thing, it’s like you got to sort of be able to hang on to it so it doesn’t run away from you. And we were struggling, really, to hang on to it, because there were so many clients coming in that keeping track of everyone and delivering the service was was a challenge. So we fixed the operations, but then we started noticing people would people were emailing in, and they were like, Hey, I bought this thing from you guys, and it and then you disappeared. And we’re like, Okay, well, that’s not that’s not like us. What did you buy? They’re like, Oh, it’s this 5k thing. We’re like, we don’t have anything for 5k What did you buy? Send us everything that that you bought. And it was some random dude in Facebook Messenger being like, Hey, I work for sales mentor, and I have a guaranteed job for you, and it’s 5k and so we would find this person, we would we would ban them and eliminate them. But then it kept happening, and then there were, like, dozens of these people. They were all in our client groups selling this fake product that had no affiliation with our company, and so we had to basically go on like lockdown with the groups. And then we got a letter from an attorney general from Washington state. (That is fun). That was a great day. Yeah, they were investigating this pyramid scheme inside of the company, and so we had to send a bunch of data. We won that case because it wasn’t us, and it just kind of kept, kept happening. And I’m not gonna sure,
Justin: Once they kind of cracked the door open, then it gives them an opportunity to say, Okay, what if this is happening? What else is there? Is that kind of how that all transpired? Is the AG, poked a hole in it, and then there’s a hole. So everyone starts to look through the hole
Taylor: That and clients of ours had bought this thing, and so they were in there, because the way that this guaranteed job worked is they would pay five grand, and then the way they made money is they would sell that 5k package to other clients of ours. (So, it was like a multi level, like?) Legit multi-level. In our own group, we had clients coming in who were like, well, how do we get rid of it? We have to refund the clients and get rid of them. They didn’t know that was us. And we finally got it under control, and we ended up moving on. Like I ended up transitioning out. I felt like God wanted me to do something different, and so I moved on, parted ways, and about a month after I moved on, we got a letter from the Federal Trade Commission, and they wanted to know who this person was, and there were probably hundreds of complaints that had made its way up to the FTC from this.
Justin: I was just gonna say, for those that don’t know, the Federal Trade Commission, otherwise known as the FTC.
Taylor: they’re the big dogs. (Yeah) they’re not who you want to tangle with. So, at the very beginning, when that first started, I was like, this is just a misunderstanding, like the AG, and we’ll just be able to put it to bet. And so we, we spent the first 60 days, like, proving that we weren’t this person. They didn’t work for us. We had nothing to do with it. And they were like, Cool, well, we’re gonna subpoena everything you’ve ever done.
Justin: And you’re like, Well, cool, all right.
Taylor: I was like, I don’t even own these businesses anymore. And they were like, it doesn’t matter you were involved, as you know we did, right? So we, we, they originally subpoenaed like, 700,000 sales goals and 30,000 individual ads, all the data in the businesses. And you got to understand like, we’re we’re not. We weren’t just some, like, put a random offer together, business like, we kept data on on clients. We had data on millions of people, and they wanted all of it. And I learned in hindsight too, sometimes the sometimes the way that their investigations work, they’re tracking other targets, and they know where they came from, and so they’ll subpoena the source to kind of get the the information on the other target. And so.
Justin: Almost like in a drug thing where they go out to low hanging fruit to try to make them turn on the higher (Yeah. So, we were the gatekeepers). You’re the low hanging fruit, because they wanted something bigger or different that came through your world, right?
So, we were like, look, we can’t at one point, this was in like, the the early 2023 we were like, look, we figured out a solution to get you 700,000 calls. We’ll put two VAs full time on our CRM, and all they’ll do 40 hours a week is they’ll download calls and they’ll send them to you, and we’ll be done in 12 years full time. That is wild. That’s how many calls we got. And they were like, no, just send us. You know, I think they 30,000 like, randomize it. We send them 30,000 calls. And we had to prove everything. We had to prove every claim that I ever made. We had to prove, prove they had Facebook posts and. Uh, social media content, they had everything. And once they got into it, it then became about like, How much money do you have? What are your assets? What can we pull out of this? And we finally, kind of had to get to a place where we just settled to move.
Justin: You know, from my understanding, because of you, and a couple other people that we are both aware of that have gone through it or going through it. I mean, there’s a real agenda for they want money in their company to collect it, period.
Taylor: They do good things. So, they do go after legit scammers. But sometimes that line is like, they’re in this they’re in this investigation now, and they’ve spent resources to, like, subpoena everything, and now it’s like, well, we have to get something from this and at least make a statement. So we got to the table, and we started negotiating settlement. And they were like, we would like everything your business has ever generated a revenue.
Justin: Said no, I would like everything my business has ever generated in revenue too.
Taylor: Yeah. I was like, that’s not really how it works. Like, you step we’re like, they’re like, Where’d the money go? We’re like, people, humans, yeah, you know, they’re running a business. And even with like, so I got really into a state protection and trusts and permanent insurance and all this stuff, like, pretty much locked down. But with the government, they’re the ones that create all of that. They’re like, yeah, we’ll just undo it. (You’re like, sweet). So, I was like, I call my attorneys. This is, like, the summer of 2023, I was like, what’s the worst case scenario here? Because we didn’t do anything wrong, and I’ve spent, at that point, you know, $300,000 on attorney fees, just not even defending myself, just hiring an attorney to explain accrual finance to, like, basic stuff and they’re like worst case scenario. By the way, never ask an attorney worst case scenario.
Justin: Because they’ll give it to you that’s like you’re looking you have a scratch in your throat. You look up on Google, what does a scratch in my throat mean? Oh, I have brain cancer. Perfect.
Taylor: Exactly, great. I’m gonna die. So just give everything away (Yeah). And that attorney was like, you know, well, real worst case scenario is like, they want your house, so they take it and they want your cars, and they take it and then they ban you from ever doing business again. And I was like, Whoa, this is bad. She’s like, really, really bad. So we go back to the table to negotiate, and we’re like, we can’t do that. We don’t have $70 million sitting around. We don’t have $17 million sitting around like our ass, or we have assets that are liquid and all this stuff, and they’re like, cool, well, we’re just gonna see. We’ll see what you got in court. And I had to kind of get to that place mentally where I was like, even if they take everything away, I have to trust my ability to start over and be okay. And my wife one day, she was like, I don’t really care. Like, if we have to live in an apartment, we’re gonna be fine. And that was unlimited for me, where I was like, All right, we’ll be fine.
Justin: Let’s go. Well, I had a not quite as extreme as yours, but my big loss, me and my wife had the same conversation. Is there something about a woman who will sit there and look you dead in the eye and say, We’re gonna be fine, you know, go get a studio apartment for us, and we’re gonna be fine. I’m gonna support you, and we’ll make it happen. And for me, just so you know, it triggered something inside me of a hunger in a you know, I always talk about like being a lion and being able to provide for your pride and your tribe and hunt and, you know, provide like, that moment really kind of triggered that thing, because I knew I had her support. It was just it really became like, now there really is no limit. I can go as big and as far as I want, because I have the support of her. To say, the alternative is live in a studio apartment for $800 a month, and she’s into that, well, let’s just go win then and go for it.
Taylor: Yeah. So that was, like, a good turning point for me. And then they finally, they came back and they were like, Okay, no, we’re gonna settle. We’re not gonna see you. And we worked out the math, and the math was like, not based on anything that we did or didn’t do, is based on my net worth, that they could that, you know, they basically poured over everything. There are some things that you can’t touch, like permanent insurance is never going to be cracked open. If you crack open permanent insurance, every politician goes bankrupt tomorrow. (You’re talking about life insurance?) Yep, like, whole life things like that. So there are things that that are, like, really well hedged trusts make it difficult, but they’re not like, 100% foolproof. So they finally got to the to the settlement table, and then my attorneys were like, Okay, so here’s what you need to be prepared for next. They’re gonna drag you, they’re gonna drag your name through the mud, because if they can’t win a if they can’t get like, a monetary type of thing, then it’s going to be, like, a moral victory. Like, oh, we, we saved the market from these horrible scammers (Sure). Then the next phase started where I was like, Dude, you have one reputation (yeah) and I’m about to lose mine. Yep, it’s like, and I’m about to lose mine unfairly. It’s not even, it’s not even fair.
Justin: If you do something things that are yeah (for sure)
Taylor: Like you look at stories of Jordan Belfort and people that have just, you know, they made they made mistakes, they made errors, and they paid for it and they came back. (Yeah) That’s one thing, but then to, like, have to come back from something that you didn’t even do, that was another hurdle for me to get over. And, yeah, that was intense, man. Because if you go look up, I think everyone should look up the press releases, it’s like, it reads like a read, like a child’s pop up fiction book where it’s just like, not even. It’s insane, it’s crazy. So I had to go through that and make my own press release and all this stuff. But what’s interesting is that the thing I was afraid of, from a reputation standpoint, it did the opposite. People were like, Whoa, dude. You’ve been through this shit. Teach me how to teach me how to avoid that. It almost created battle scars that made my reputation stronger. And what I learned from everything, at the end of the day, is that everything that comes from life is actually a benefit for us, if we look at it the right way. It’s that. It’s a cliche saying, like, things don’t happen to you. They happen for you. Can’t see that in the moment, but in hindsight, when you look back, I was like, Yo, this was this was great. This was awesome. Like, this is actually exactly what kind of set me apart, so to speak, inside of my space few months ago.
Justin: Yeah. But there’s so much to unpack, and just for the sake of time, we can’t, because I know you so well, but like, you weren’t built wrong by any means, but I think you were built in a way that wasn’t best for you. Like, there’s no right, is what I’m trying to say. But there’s right for you in the way you are currently built, ultimately, in the big picture, in the macro, was not right for Taylor Welch, right? It was right and did a lot of good. But right for you is what you’ve now rebuilt and continue to produce with what you have going on. And you know, I’ve talked at length about it, and I tell you one of the things that you said to me six months ago, if that is it is all about your reputation, your brand, making sure you are branded. So that reputation thing that you just talked about is really, really important. I don’t want people to lose sight of that, but then to be able to create an ecosystem of branding. And there’s just a flywheel, in your words, that everyone, everywhere, on all platforms, is seeing you, and it just takes one little thing and you’re back at it. And so let’s just talk quickly about like, how did you? You know you got knocked down. You did not get knocked out. You got back up. It was a very heavy financial cost. It was a very heavy emotional cost, heavy spiritual cost. But when getting back up, what do you think you relied on? Or not think. What did you rely on? What did you go build and what did you say? Okay, if I’m doing this again, here’s how I’m gonna do it differently.
Taylor: I wanted to not be in the acquisition business, because when you look at what can be broken, if you have a concentration risk on any one thing, it’s very easy for anybody to come and disrupt you. So like, if you look at any of the big businesses who are like, actually world class, they usually have multiple sources of enterprise value, or moats, as like warm up, and would call them. And one of the things I realized is that if you scale on the acquisition side, you could die on the acquisition side. And so, I started pivoting my approach to like, okay, dude, if I’m blocked from the ability to get new customers, what would I do if I couldn’t get new customers? If I couldn’t acquire new clients? How would I monetize this brand? And I kind of settled on this idea of, like, you know, retention is actually superior to acquisition. Elon, selling one Tesla doesn’t make a difference. Not a difference. Like, what makes the difference for Tesla’s enterprise value is the fact that people buy multiple Tesla. You can’t compete with the Supercharger network. You can’t compete with the training that’s going into the AI. There’s so many different, you know, equalizing functions inside of that brand that protect the value of the brand. So how do I take something like that and put it into consulting or coaching or info and historically, the way you build an info business is you just write a book, and you try to sell as many of them as you can, or you get as many clients in a month as you can. But the way that I’m building our portfolio right now is we’ve actually created feedback loops inside of the system so that we can see how long people stay and why they leave. And so, this company, is that I’m running the Wealthy Consultant is growing really slow for me. Yeah, I’m the guy that historically will go from zero to seven figures and in two months, and then we’ll go from seven figures to eight figures inside of a year. And this business is, you know, four to $5 million a year and growing, but it’s on its second year, and so it’s, it feels slower, but our retention on the back end is, is about 90% it’s 87% and we’ve built everything so that people it’s very easy to leave based on a choice. So, there’s not like long term contracts, but it’s very difficult to replace. So, think about what I just said, if it’s easy to leave and difficult to replace, you have the cleanest set of data that you could possibly get when it’s hard to leave you have faulty retention data. So, the stickiness of a product is not the contracts that lock you into 12 months, 24, 36 months. The stickiness of a product is actually the replacement cost of the product. And so, for consulting, when you can engineer a system where people are paying to be a part of an ongoing relationship, and that relationship is valuable enough that it’s difficult to compete with or replace. You have a really clean set of data. We’re doing the same thing on on service. So, the content agency, the web design agency, basically, we’ve engineered the economics so that when someone comes in, they’re buying an asset. Just think about a car. When you buy a car, you put a down payment, and then you pay monthly for it, right? We’re used to paying both ends. It’s not just upfront, it’s not just MRR, it’s both end. So, we have this new book that just released called revolving price, which kind of explains this thinking, and it teaches you how to put an onboarding and a revolving price component onto a consulting offer, and you build a book of business. And when you build a book of business, there’s recurring revenue that comes in, and that multiple goes from 2x to 6x to 8x to 10x because when somebody’s buying a book of business, you’re buying a retention business, not an acquisition business. If you lose the marketer of an acquisition business, the business dies. Now, if you lose the marketer in a retention business, nothing happens. It stays the same. So, it’s a safer more dependable type of approach, even in the engineering of of the pricing, but in the ecosystem approach on the front end. You know, we have all of these different this plays into the economy as well. When, when liquidity is sucked out of of the economy, which is happening right now, people take longer to make decisions. It’s not that the money goes away. It’s that if you spend $5 on $50,000 of liquidity, you can do that really quickly. If you spend $5 on $500 of liquidity, you’re going to slow down that decision. And so conversion cycles go from, you know, 24 hours to six months. And so, we need to give people things to do during that decision making period. So we kind of have pivoted around to like marketing’s job is not to acquire the client. Marketing’s job is to help the prospect do their own due diligence on the products. We have books from for $3 books for $10 we have courses for $100 $200 we have events. We’re an events business right now, so we’re running 15 to 18 events a year, and it’s not more work, per se, but we’re offering more things at lower prices so that the market can effectively compare. They’re comparing thousand-dollar event which is cheap to a $20,000 program which seems do or die. It’s very risky for them. So, the more you can front load that cheaper front end of the funnel or of the ecosystem, then the faster the decisions happen on the back end those pause to make sure that that comes through okay.
Justin: Dude that came through brilliantly. In fact, it was something I just introduced you to Jason. Because he is kind of the guy right now to help consultants like myself or yourself. Now, you are your own beast, but, you know, others that don’t have the skill set you have, right? Because low ticket to your what you’re saying, I’m fully bought in as of then the last year, you know, you know, I’ve spent some time with Grant and his whole thing, everyone thinks he’s some high ticket master. Bro, he is a low ticket master, his hats, his books, his $97 weekend course. It’s all low ticket. And that’s the ecosystem and into your point giving the market time to decide, while making the decision, but getting them enough homework, if you will, or whatever, the decision becomes infinitely easier. And having more than one or two different things, it is clear as day. What books do you have out right now that people can go get and worth working they go get them?
Taylor: I’m actually forwarding this to you right now, dude, because I don’t think I’ve sent this to you the new revolving price book I just texted you (You have not), yeah, I just texted it to you. So, I just, I just bought you a $3 book, because we’re real friends.
Justin: Dude, real friends. Look at us, real friends. I’ll get you a, I’ll get you a $7 Starbucks. (Thank you).
Taylor: Look you returned it double plus interest, real estate. I love that we have the “Wealthy Consultant” that’s on Amazon, and we launched that last July. It’s been on, it’s been on the number one bestseller list for three different categories on Amazon since we launched it. We have a revolving price that’s not on Amazon, that’s a direct so like 80 years ago, there was a big, big market for pamphlets like small, little books. In fact, like the American Revolution was started because of pamphlets. If you think about it, the Federalists like these are small, like ongoing types of newsletters. But they weren’t newsletters. They were books. They were like pamphlets. They were quite dense. And the the publishing arena killed this model, because if you’re gonna go through the effort of putting together a bookstore, you don’t want to sell a $3 thing. You want the book to be 80 to hundred pages. And so now we have is we have this weird unintended consequence of a book that should be 10 pages, and it’s 200 pages, it’s like 190 pages of bullshit and 10 pages of good. Because we’re actually, when you go through a time like this, the things that were working four years ago are not going to work right now, but the things that worked 50 years ago are working because this is just, we’re in a macro correction, a micro correction that has turned into a macro correction. So, we’re publishing these small books that are like 50 pages. We’ve got another one coming out in April on offer building. This one that just came out is on revolving price. So “How do you build a book of business, rather than an acquisition chain?”. We’re launching a new full length book today called the Exceptional Experience. This is on client retention and our metrics. So NPS, client effort scores, how to actually onboard in a 90-day kind of running quarterly roadmap. And so, it’s basically, it’s a fooling book on, how do you handle, you know, 100 plus clients at a time without them leaving? We’ve got a sales book that comes out in July. It’s basically my sales models. And so we have all this stuff that people can access. And if you go to Amazon, you can just search Taylor Walsh and pull up the Wealthy Consultant. But inside of that, there’s a lot of gifts, bonuses. There’s an offer building training. So if people buy it, they can scan the QR code, it’ll take you to a private link, put your email in, and you can download a lot of goodies from that. But the key here is that when you talk about flywheels, it’s never just one thing. So momentum is like a wave. So when a wave goes up, it it goes up, and it crests, and then it comes down. And that’s like pretty basic, like we’re explaining just how basic things work. When you want to force the momentum of a business up, what you have to do is the wave goes up, but before it comes down, you’ve got another thing that’s creating another wave. And then before that comes up, we got another thing that’s coming up. And if you plan right, what you get is you get, like, the Wealthy Consultant last this month is February, when recording it, record month in February. If we don’t sell anything in March, we’ll have a record month in March. Like, no sale (Just on continuity?). That’s on the continuity in collections. Yeah, that’s where you want to be as a business. And where a lot of people are as a business is like, I’ve got to go sell X amount of clients to pay the burn. It’s our burn for like, the next 12 months is already covered, based on the way we’ve set the business up. And part of that is this forcing function of, like, there’s so much stuff to pay attention to. The market is like a head on a on a swivel. There’s looking for wherever the thing is, like, right now your podcasts, the market’s looking at you because you’ve got momentum. And there’s like, I can’t stop looking at Justin because he’s got momentum. Yeah, you can force that through this continuous wave of launches. And so, there’s, like, a book every two months that people can buy until the end of the year. And in between all of that, we’ve got events that people could come to. And it’s just forces like gravity inside the middle of the market where everyone’s like, Yo, what’s Taylor Welch doing? Like, what he seems like. He’s doing something all the time. And I’m not busy. You know, my working hours right now for the Wealthy Consultants, 25 Ish hours a week. It’s not crazy, but because it’s planned the right way, there’s all of these waves of momentum that people are getting in, and as long as the quality of the product is good, people just go, yo. I spent $3 for this. What the hell.
Justin: Yeah. Like for sure and when you over deliver they just keep wanting the other stuff. And essentially, they get to the point where you have the high ticket, and it’s because they bought 10 year $3 books. And they’re like, Wow, if I can get this much out of $3 books, imagine what I can get working with actually, Taylor, right? And that’s everything. I mean, it’s something you really preach to me. And even this talking right now kind of re edifies, like, I need seven, you know, lower ticket, super high value things to be offering my world,not three.
Taylor: Yeah, there’s, there’s different schools of thought. Some people are like, Yo, just do one thing and push everything else out. If you’re a beginner, like, if you don’t know anything about what you’re doing. I agree with that. Like, do one thing and figure out how to do it well before you do the next thing (Sure). But for pros, like, especially pros who are like, Yo, I was doing really good three years ago, and now not what’s going on. This is part of the key. You have to fractionalize your offerings to match the market. So pricing in a down market, I don’t know how much time we have. Just cut me off when you’re bored.
Justin: It’s not bored. The listeners get bored. That’s my bill.
Pricing does three things. Pricing has a has an information function. So, the price of something tells you the surplus of the good or service you’re selling. Pricing has an incentivization function, so pricing incentivizes other people to come into the market. This is, like, is, is? This is taking, like, a very advanced macroeconomic concept and turning it into, like a three minutes clip information, incentivization and rationing. So, pricing will ration the supply of a good. When you ration the supply, you’re actually propping up the demand. So, what happens? What’s going on in real estate right now is actually the rationing function of pricing. So real estate can’t exactly single family can’t crash because there’s no houses, right? Who are rationed because permits are hard to get and it’s difficult to build these things quick enough for the increase of demand. And when you look at a business that’s selling information, you have to meet all three of these criteria. And it’s not a 1, 2, 3. It’s a loop, so it’s a circle. And they all be because when you ration something, what do you do? You kick back into the information. It’s telling you something about the market. When that is done, you go and incentivize new builders to come into the market and make money. We’re taking the same concepts, we’re putting it in information. The most valuable asset you have is your time. So, you can’t just lower the prices of your programs, right? Because then your rationing is removed. What you have to do is you have to build programs that sit inside the other two categories and make them available for cheaper so that the market can do their own due diligence.
Justin: I love that. I love that. I think that’s a I think people need to rewind that, go re watch that, if not watching this, go to “justincolby.tv” and re watch this. But if you like even just a little bit of what Taylor just said, this is like a daily function for him. This is how he thinks, how he talks, how he educates. So I tell you, go find @taylorawelch on Instagram. I believe it’s just straight up, Taylor Welch, right?
Taylor: Taylor A Welch, and then Taylor A Welch on Facebook, and then the podcast, right now is, there’s two of them. But daily, “My Medicine” is kind of like a daily, really fast dose. It’s on podcast Spotify. You can pull it up anywhere.
Justin: I love that dude, brother. Thank you very much for coming on. I’m excited to see the King is back, if you will. Let’s go. Let’s go. Go. Go find this man, anything he puts out. If you are in business, regardless of what vertical you need to be digesting his information, whether it’s books, pamphlets, podcasts, this man is an incredible business owner, incredible mind. Make sure you’re following Taylor Welch. Appreciate it, bro.
Love you.
Love you too.
