In this episode of the Sweaty Startup, I want to talk about one of the single-most important moments that has changed the way I think and made the biggest difference in my life as an entrepreneur; this was some of the greatest advice I could have received! Not only this, but it has also brought me the greatest return to my investments and put me where I am today.
Back in the fall of 2018, a mentor of mine that was a wealth manager brought me into his office and wanted to break down every part of my business: we analyzed my corporate structure, taxes, public equities, etc. This man had me be wildly open about my financial situation, and in that short 45 minutes left me with a whiteboard full of golden advice for my business and personal finances. He revolutionized the way I thought about debt, cashflow, and risk; he opened my eyes to a better view on taxes, investing, and planning. Perhaps the greater effect was on the mindset change I had in how I interacted with others throughout my business.
I asked him “Why are you giving all this information out for free?” He responded, “You’re thinking about this wrong. Business and entrepreneurship is about relationships and trust; I go into every interaction with the mindset to add as much value to that person’s life in as short a time as possible. I don’t care what’s in it for me, or try to make them long term prospects; I don’t think of anything else in that moment other than helping them as much as possible with the information that I know.”
Why did he do that?
He taught me that each person he met with walked out of those interactions in a better situation and knew that he was a real expert. Because of that, the next time a problem arose, they knew who to trust and who to go to. In fact, he said that 75% of the time, they would hire him on the spot in that first meeting.
Curious, I asked, “Don’t you worry that they will just take that free information and do it themselves or do it cheaper?” He explained, “What happens when you add a lot of value to someone’s life is they start to trust you as a person, which in turn comes right back around to benefit you.” He told me to try it, encouraging me to show up to my next encounter without holding back valuable information.
So I tried it.
I was doing my quarterly phone calls to leads trying to find self-storage facilities to buy. One of the first calls that I had, I came across a widow that was trying to sell her facility. I started with my normal pitch. At first, it was tempting to try and hold back my expertise, fearing that I would be giving away valuable information for free, but I held to what my mentor said. I flipped the script to add value to her situation.
I told her that regardless of her selling to me, if she wanted to maximize her value from the property, this is what I would recommend: I told her I would start a construction project and build out the storage capacity. I would raise rents by 25% on her current tenants. I would install gates around the property and I would use software to manage rent. I explained that as a result, if she continued operations for 6 more months, she would raise revenue from $24,000/month to $35,000. Then, instead of selling for 2 million right now she could sell for $3 million.
The woman was taken back and said, “I want to sell to you, can you make me a good offer? I want you to do those things.” We agreed on $2.2 million for the property, and, sure enough, after doing everything we recommended, revenue jumped from $24,000 to $35,000 a month. As for the property value today, because the market went up more than expected, that facility is now worth $4 million.
From that time, I have implemented that principle: ADD VALUE FIRST. The goal of every interaction has been to add as much value as possible, right away. You could say that The Sweaty Startup Podcast is opening up my business, “sharing all my secrets”. My partner Dan early on questioned me: “why would you do that? Aren’t you breeding competitors that will take what you say and do it for themselves?”
The reality was that, rather than people stealing my ideas and going off on their own, my network exploded. It turns out that nobody really wants to put in the work needed to succeed in real estate or even small business for that matter. In the grand scheme of things, the reality is there are millions of commercial properties and assets in the US; 50,000+ self storage facilities across the country; everyone has an opportunity to carve out their piece of the pie. I own enough of them that I wouldn’t have to work another day in my life if I chose to. So be it, if there is one competitor that out-bids us on one property at one place at one singular time.
The paradox is that we didn’t breed competitors (at least none that we knew of or that affected us). I’ve learned so much about myself and about managing business. My network has expanded; I have some 800+ people on our investor list. In short, my entire world has changed because I have implemented this mantra. Now, in any interaction that I have, be it a competitor, an investor, a potential client, or even someone I’m negotiating with, I try to add as much value to that person’s life as I possibly can.
It is common to feel that if you were to do this that you would end up losing in the end, feeling like you’re giving away value for free. The reality is that everything you send out comes back to you multiple times over. As an example, everything I have learned and know is practically everywhere, I give away everything I know for free on social media, my podcasts, etc. Yet, when I have taken that information and simply organized it into a product for sale like my real estate masterclass, people happily sign up.
On the surface does that make sense? No. Yet, it sells because people don’t want to put in the extra effort; they happily pay for easy access. If you go out of your comfort zone and try to add value to others, you will gain trust. They see you as not having a scarcity mindset, that both sides can win. You will make more money, your network will grow, and, in the end, your whole world will open up.
You can learn more about real estate through our online master class.
Three Key Takeaways:
- Business is about relationships and trust; I go into every interaction with the mindset to add as much value to that person’s life in as short a time as possible.
- The goal of every interaction has been to add as much value as possible, right away
- What happens when you add a lot of value to someone’s life is they start to trust you as a person, which in turn comes right back around to benefit you.
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