The Comeback - Week 5

Today on David to Goliath [17-minute read]:

1. My Controversial Morning Routine

2. Revisiting Car Washing Business

3. Lessons from $100M in Adspend

4. Mindset: Upholding Your Standards

5. Book Recommendation

Before we get into my controversial morning routine that my mother despises, yesterday I typed up a post on LinkedIn sharing the top 3 takeaways from building a 100,000 subscriber Newsletter in public.

Maybe it will help someone, maybe it won’t. But thought I’d share regardless so you know exactly what’s going on behind the scenes at David to Goliath! Here you go:

And please drop me a line on LinkedIn if you get 10 seconds spare - I love nothing more than connecting with people who are in the David to Goliath community. It’s what makes all the grind worth it.

Right, time to unveil my contoversional morning routine…

Road to 100,000: Behind the Scenes

My New Morning Routine (with a controversial substance):

In the pursuit of maximizing creativity and fulfilling our mission to hit the audacious 100,000 subscriber target on the David to Goliath Newsletter in 2024, I've incorporated a unique morning ritual:

• A hydration tablet from LMNT,

• A cup of black coffee (I’m sweet enough)

• 2 pints of water

• A timer

• And a touch of controversy - nicotine

I can almost hear the collective gasps - nicotine? Isn't that linked to harmful effects? Doesn’t it kill you?!

I know, I know (I feel judged). Nicotine has been tangled in the web of misconceptions, largely due to its association with tobacco.

The truth is, when used in isolation, it can be a surprising ally for creative minds.

But do your own research. This Newsletter certainly is medical advice! (I personally love the Andrew Huberman podcast for deep insights/learnings on human biology).

This is my new morning routine to get ahead:

• 6:00AM - 6:15AM: Get up, drink LMNT and 2 litres of water

• 6:15AM - 7:00AM: Run, cold shower, stretch

• 7:00AM - 1:00PM: Coffee, Nicotine, turn on brain.fm, set timer and deep work (I’m still dialling in this part as I often get distracted!)

But seriously nicotine helps.

It gives me a clarity that pierces through the early morning fog and allows me to think creatively when writing pieces like this.

So as I say, do your own research - I’ll just report back on what’s been working for me. But do explore, question, and find your own muse for creativity.

It will give you a massive competitive advantage in the long-run.

Now, before we dive into everything I learned spending $100M on paid advertising, it’s time to have some fun.

On this week’s David to Goliath podcast me and Dan had a chance to reminisce about the good old days - washing cars for cash (yeah, we were the cool kids - clearly).

But we reflected and knowing what I know now after scaling 2 companies from pretty much nothing to 7 figures, here’s what I would have done differently:

Revisiting Our Car Washing Business with New Knowledge:

When the world was simpler, ambition sprouted from the humblest of endeavours.

Armed with little more than buckets, sponges, and a ton of laughter, went out transforming boring driveways into gleaming masterpieces (kinda).

So if I was to start a car washing business from scratch today here’s exactly what I’d do:

1) Collecting Data:

Back in the day, we'd knock on doors. What I should have been doing is collecting phone numbers after we completed the car wash.

Then we’d have a list of verified clients whom we can do repeat business with.

2) Scaling Up Operations:

Scaling up would be the next move, hiring a team of go-getters that would do the work on our behalf (leverage via people).

3) Marketing:

The database – a goldmine for marketing. We’d understand through door-to-door conversations exactly what customers needed.

How they spoke, their biggest pain points, and why they want their car washed in the first place.

We’d then use this info to build out our ICP (ideal client profile) and start running organic and paid advertising (potentially get someone with drop-dead gorgeous looks on camera to catch attention!)

4) Increasing Lifetime Value:

Now, let's talk upselling – the secret sauce (I’m really gearing you up for todays main topic now). Quite simply: It's much easier to market to existing customers.

The average stranger needs 7 touch points to trust someone and do business.

So if we already have a list (from collecting data) of hundreds, potentially thousands, of car washing customers, what’s next?

Ask them about cleaning the inside of their car, cleaning their gutters, even their clothes!

All increasing the lifetime value of each customer and building repeatable business with higher profit margins.

5) Rejection and Volume:

One thing I also know now which I didn’t back then is the amount of force it takes at the start to build your customer base (check out the ‘Business Boomerang’ if you want to learn more).

If I was to do it again I’d set the expectation I’d need to knock on 100, maybe even 1000 doors, to get just 1 yes. Then I’d just reverse engineer the numbers and focus on the inputs.

Because we’d be making the most of each customer with data collection and upselling, it would be worth all the up front effort and back end it would give us a massive competitive advantage.

Again this is why most people aren’t successful. They are not willing to do the real work in the dark that brings greatness into the light.

So there we have it. My Car Washing Business revisted:

1. Collect Data

2. Hire a Team

3. Invest into Marketing

4. Upsell Existing Customers

5. Set the Expectation on Volume

If you’re stuck and looking for a way to make money fast, literally anyone can do this so feel free to steal!

Or apply it to any other business model (damn I’m getting tempted just writing this - Dan… shall we?! No Nigel - remember: FOCUS).

And if you enjoyed that, buckle up because we’re about to go balls deep on 1 topic I spent $100M and 6 years learning the hard way:

Main Topic: Paid Advertising

I have spent $100 million on paid advertising across the companies I’ve run - for companies of all shapes and sizes. I’ve seen it all from dropshipping, to scam courses and brands that stand the test of time.

Before we get into the mechanics of how paid ads work, let’s take a step back and understand the game that social media platforms play - as most never even stop to question.

Firstly a new platform emerges.

The platform needs to get a ton of eyeballs - fast. So how do they do this?

They offer massive, free, organic reach.

Businesses flourish, creators amass followers, and there's a sense of limitless opportunity.

Word spreads and the eyeballs flock in. The social platform is licking their lips. Why, you ask?

Because they’ve just amassed millions of new data points. Of which they’ll be auctioning away to new advertisers.

You know all those forms you never read when you sign up to a new social media platform?

Yep, that’s basically confirming you’re allowing them to extract all your data - for billions of dollars. And to be fair, considering it’s all free for you the user, it’s a pretty damn good value exchange. That’s why these social platforms are so valuable and worth so much.

Then over time, the organic reach dies.

The social media platform is ready to cash in and make you pay for that reach.

This is when you hear most people start complaining: “I built my business on Facebook and now I can’t reach my customers anymore”.

Well, I’m here to tell you that’s your fault. You were ignorant and didn’t understand the end game the platform was playing.

At this point you have 2 options:

1. Learn how paid advertising works (read on)

2. Go to a new platform which is at the organic reach stage

Just don’t be that person blaming algorithms because that will solve nothing - and I’m pretty sure your employees don’t care for it. They just want to know their jobs are safe. So let’s get you a game plan in place…

Now, how do paid ads actually work?

Ever heard the phrase, "Advertising is solving a Math problem?” (I’d be surprised because I just made it up - but it’s true!).

Every click, every interaction – it's all part of a complex equation that, when solved strategically, opens doors to unprecedented success.

When I think back to my school days, personally, I hated Maths. The best result was a pat on the back or getting the highest test score (yawn).

But in the world of business, the outcome is making a sh*t ton of money. I don’t know about you although I find that a lot more sexy (yes, maybe it turns me on - guilty).

Anyway getting back to it: Paid ads operate as an auction system.

Let’s say me and my friend Dan are both selling a supplement product. We both have our sights set on finding new customers, i.e. someone's newsfeed.

Facebook algorithms identify individuals who have been avidly liking supplement pages.

In this auction system, where attention is the currency, Dan decides to invest $10 to get into that newsfeed.

But I, because I have more cash from better unit economics (more on that in a second), invest $15.

Ultimately, I will win that customer and get in their Newsfeed to show them an ad for my supplement product - in the hope they will click it and buy from my website.

While there are other factors at play such as quality of content/copy, essentially paid advertising is a game of economics.

And to win big there are 3 main things you need to understand (that I learned the hard way by burning through a ton of cash so hopefully you don’t have to!):

1) Customer Acquisition Cost (CPA / CAC):

First is the understanding of how much it costs to acquire a new customer. If you pay $10 in the auction system on Facebook, that’s your cost (some companies also throw in other marketing/operating expenses).

To decrease the customer acquisition cost, you have 2 main levers:

Firstly, The Off-Site Problem - Getting more clicks for cheaper:

This is when your message fails to resonate with your audience.

The solution?

Research:

Upgrade your creative and fine-tune your copywriting.

By first understanding your Ideal Customer Profile (ICP) – how they speak, the circles they move in.

Become part of their tribe.

Your message needs to hit home, and to do that, you must speak their language.

The best way to do this is speak directly to your customers or the communities they hang around in (more on that later).

Testing:

META conducted a revealing study on what the top 1% of advertisers do differently – they test 11 times more. That’s it.

The volume of testing required for excellence is often underestimated.

Test relentlessly.

Create a systematic approach to test different creatives, copy, and everything in between.

If one creative works, now test the next variable – the headline.

Use the same creative, test different headlines on each ad.

This way, you grasp control over the creative and understand the impact of each headline on performance. This is known as ‘A/B’ or ‘split testing’.

Secondly, the On-Site Problem - Converting more traffic to customers:

This emerges when your audience resonates with your message on the social media platform but you fail to convert when they hit your site.

Here’s how to Turbocharge your Landing Pages:

Headlines:

The biggest thing is the headline, the bit before ‘the fold’.

This term came from the newspaper days – the part you see before you open it up.

David Ogilvy, the godfather of advertising, emphasized that 80 cents of your advertising dollar is spent before the fold.

So, invest 80% of your time crafting and testing headlines in line with your ICP.

If you skip this step, everything else will be compromised.

Consistency:

Ensure your ads and landing pages align seamlessly, even down to the colours.

As Robert Cialdini outlines in his bestselling book ‘Influence’ humans are creatures of consistency.

If the content in your ads doesn’t specifically match the content on your website and landing pages, potential customers will subconsciously lose trust and click away in seconds.

Software and Speed:

There’s countless softwares for building landing pages.

My personal approach, when working with Shopify pages, has been using Webflow, as it can be integrated seamlessly into the backend through a nifty tool called Replo (I should really get some affiliate links).

But to be honest, just find a software/tool which integrates seamlessly into your current ecosystem.

Another fundamental thing is load speed and the software must be capable of fast loading times - especially on mobile - where 80% of your traffic will be driving from.

The digital landscape is a fast-paced realm. Platforms like TikTok induce extremely short attention spans.

If your landing page takes a split second too long to load, you're losing potential customers.

This may not have a dramatic impact with just one customer, but imagine directing 10,000 potential customers and facing a 20% bounce rate because of load speed.

This means losing 2,000 potential customers.

If you cut that in half, suddenly you have an extra 1,000 people staying on your page, engaging with your content and buying your products.

That’s what I call a high leverage activity.

If you want to check your current site speed use this tool (it’s free): https://pagespeed.web.dev/

Note to self: Get some damn affiliate links!

Here's the bottom line: for the social media platform, it's all about user experience.

When someone clicks on an ad, they’re eagerly anticipating what lies ahead.

But if the website doesn't load fast, what signal does it send back to the platform that brought them there?

It's a signal of a poor user experience – less likelihood to engage, less attention on the platform, and ultimately, the platform can't maximize their attention.

What will the social media platform do?

They will prioritise another advertiser and drop your reach.

And if you don’t think they track this stuff, you’re wrong.

Anything that can improve their customer experience they track because it’s their entire business model. So play the game, build faster landing pages and get more reach for less.

2) Lifetime Value (LTV):

LTV is the average amount your customers will spend over the entirety of their relationship with your business.

A healthy business strives for a 3 to 1 LTV/CAC ratio.

Although ideally this would be elevated to 5, or even better 10 to 1. This is also one of the main metrics your potential investors will look at - so make sure you know your numbers!

The more profit you can make on the backend, the more cash you’ll have to be more aggressive on the front end in the auction system.

See how that works? (easy as 1, 2, 3..)

That’s why the Goliaths of your industry drive up the prices for everyone else - because they have better economics and financial leverage in the market. They outbid everyone and eat up market share.

There are many ways to increase LTV but start simple. Have a great welcome sequence via email, dial in your cart abandon flows and start testing with SMS since the open rates are much higher.

A more advanced approach would be building a community - although that’s a topic for another day as this Newsletter is already long enough!

Now for my personal favourite…

3) Days to Profit/Customer Acquisition Machine:

I swear no one talks about this and I’m sure your marketing agency doesn’t want you to know (well, you can blame it on me).

In a world where many shout 'spend, spend, spend,' this metric is your true compass.

Because sure, lifetime value is great for businesses who have a ton of cash.

But what if you’re bootstrapped and can’t lose $10 every time to win a new customer until the profit kicks in 3/6 months down the line?

In reality, you’ll run out of cash and never even see the day that lifetime value kicks in.

So, this is the strategy for you. Where you don’t have to put any money down but can acquire unlimited new customers (I literally can’t put into words how powerful this is):

Think: You can get a credit card with a 30-day payback period.

Then, if you figure out a way to repay the initial $10 spent to acquire your new customer (and operating cost), as well as bringing in an additional $10 through upsells/other services within 30 days, you can pay back your credit card and reinvest the extra $10 to acquire a new customer.

See the magic in that?

You’ve just generated a customer acquisition machine from thin air, with no money down.

Easy peezy lemon squeez… No, not quite.

Yes, not many people know what I just told you - so use that knowledge to your advantage.

But, building this machine is hard. You first must have an incredible product or service that can generate more money in 30 days or less – this is where many fall short.

Secondly, to get that customer in the first place for a competitive price in the auction system, you have to do a ton of testing (remember that META study I mentioned?).

The volume of testing required for excellence is again underestimated.

Add to that, a solid understanding of your entire unit economics.

Without this three-tier foundation, of:

1. An incredible product

2. A systematic testing system

3. Knowing your numbers inside out

Paid advertising is essentially gambling.

Believe you and me, Facebook and other platforms are more than willing to take your hard-earned cash, everyday of the week.

But with the right strategy, and leveraging the above, you can scale your business, dominate the market, and secure your place at the forefront of your industry.

Speak to Your Customers:

Lastly, speak to your customers and no, I don’t just mean through sub-par email surveys.

Get on the god damn phone!

Take a nugget of wisdom from Aaron at Hush Blankets, who we had on David to Goliath last Thursday.

By just speaking to their customers they went from nearly going bust to building the ‘Ice Cooling Blanket’ which transformed their business and put them on the path to $48 Million in 48 months (see how they pulled this off).

Have conversations with at least 100 of your customers. Or if you’re not there, try to do it with 100 potential customers.

I guarantee this will redefine your business.

Understand their:

• Language

• Pain points

• Current Situation

• Dreams/aspiration

And you’ll fuel your headline copy and content with authenticity and resonance.

The benefits are twofold. Yes, you’ll craft better copy, but it's also about connections.

Think of your last 10 purchases - did the founder reach out to you?

Imagine the impact if Jeff Bezos got on the phone and had a 1-1 with you? (maybe one day hey…)

Building relationships may be hard work, but the momentum from genuine connections surpasses any marketing strategy.

If you do this early doors and build a foundation of an incredibly personalized marketing strategy, paid advertising will put that foundation on steroids.

There you have it - everything I learned from spending $100M on paid advertising.

That was a lot (grab yourself a coffee/nicotine gum because we’re not finished just yet!)

My $100M paid advertising lessons in summary:

1. Understand social platforms

2. Decrease your CPA

3. Increase LTV to 3X CPA

4. Generate 2X CPA in 30 days

5. Get on phone with customers

And remember, just like in a casino, the house always wins.

So go in with a strategy and put the odds in your favour.

Don’t say I didn’t warn you!

Mindset: Upholding Your Standards

I recently stumbled upon a Tweet from Mr. Hormozi:

"You don’t have commitment issues, you have high standards. There’s a difference."

Let that sink in. 

Reflecting on the breakdown of the relationship I had with this woman who cut me out, it stopped me dead in my tracks - I literally could not move (If you’re new to this newsletter, you can read the entire backstory here - warning though, it’s a lot!).

She yearned for a family, a future, a plan. I faltered, unwilling to compromise.

She told me I had commitment issues - for months and months I thought she was right.

But it left me confused and unable to put my finger on the real issue at heart.

Now reading this quote, it all makes sense. I didn’t have commitment issues; She did not meet my standards.

And let me be clear: This is standards in all areas (which are important to me) because for many things she massively raised my standards - that’s why I respected her so god damn much.

But I really struggled to separate what I did and did not accept. Especially challenging with such strong feelings involved.

So instead of being open to confronting the problem head-on, I stayed in my head and said nothing. Which spiralled into a titanic mess and left her completely broken and me nearly taking my own life.

Lesson learned.

Moving forward I’m going to be much more selective about the people, opportunities, and endeavours I choose to invest my time and energy in.

I know many will disagree with this approach. It’s a hard way to live your life and you will have to let people you love go.

But I have to be honest if I’m to reach the top 1%.

If I’m not, long-term, I will resent the people around me and this will end much worse for all parties involved (speaking from that recent experience). So personally, I don’t see this approach to be selfish.

Sometimes in life, you have to be the bad guy/girl short-term to be the good guy/girl long-term.

Let me put it another way: What if, by sticking to your standards, you build something that long-term impacts the lives of thousands if not millions?

Is it then in fact selfish to not let go of people short-term who stand as obstacles on your way to building something massive that inspires the masses?

That my friend is a question you’ll have to answer for yourself.

Just remember: To be exceptional, you have to be an exception.

And it all starts with being brutally honest.

Book Recommendation - Atomic Habits by James Clear:

Moving on from mindset, the book I’m recommending this week is Atomic Habits by James Clear.

I had 2 main takeaways:

1) Tiny Habits Win Big with Time:

Going against the allure of ‘instant gratification’, Clear unveils the profound influence of small habits, where the magic resides in the daily 1% improvement.

Consistent, incremental steps that compound over time.

“If you get one percent better each day for one year, you'll end up thirty-seven times better by the time you're done.”

Clear challenges us to shift our focus from the destination to the journey, where systems take centre stage.

Goals are about the results. Systems (and inputs) are about the processes that lead to those results.

He offers a proven system for building good habits and breaking bad ones, which in turn propel you toward your goals.

There are 4 critical steps:

For establishing good habits:

• Cue: Make it obvious

• Craving: Make it attractive:

• Response: Make it easy

• Reward: Make it satisfying.

And for breaking bad habits:

• Cue: Make it invisible.

• Craving: Make it unattractive.

• Response: Make it difficult.

• Reward: Make it unsatisfying.

By understanding this habit loop, you gain the power to design good habits and eliminate bad ones.

The first step though is becoming aware of what your habits are.

• Monitor yourself closely

• Write down habits using above framework

• Implement new ones to replace the bad ones

2) The Impact of Environment:

My other huge takeaway from the book is the impact of your Environment.

Why is it that people spend so long thinking about the clothes they buy, the car they drive, and where they go on holiday?

Yet researching where they spend most of their time (where they live) is an afterthought.

I guess it speaks to our emotional nature as humans and the lure for status. But if you can take a step back and understand the impact of environment, it’s an easy way to get ahead.

Imagine for a second you wanted to make $10M a year.

If you lived in a house with 10 other people that already made $10M a year then just by the sheer fact you were in that room, listening to how they think, what they spend their time doing, your identity would be rewired.

Before you know it, you’d also be making $10M (or at least you’d be much closer).

If you’re not where you want to be right now brutally audit your environment and ask yourself:

Does this environment allow me to do my best work?

Are the people around me going after the same things?

Can I easily connect with those who have already walked the path I tread?

If the answer is no then research and get a plan in place to put yourself in an environment where the people live that already have the life you want.

Then do everything in your power to make it happen.

I’m not saying this is going to be easy but it’s one of the best ‘hacks’ I’ve found for transforming your life in the quickest time possible.

Lastly my favourite quote from the book - it’s too good to leave out!

“The purpose of setting goals is to win the game. The purpose of building systems is to continue playing the game. True long-term thinking is goal-less thinking. It’s not about any single accomplishment. It is about the cycle of endless refinement and continuous improvement. Ultimately, it is your commitment to the process that will determine your progress.”

Today In Summary:

1): Creative Curiosity: My morning routine is mine because I explored and tested. Instead of just copying have a curious mind and find out what sets your creative spark alight.

2: Power of Knowledge: Skillsets and experience apply to all walks of life. Just as I could (I think I could) now scale a Car Washing business after being in the trenches building start-ups, you too have unique knowledge that the market values. Keep acquiring knowledge/skills but remember your value.

3: Paid Advertising: Running ads successfully just comes down to solving a math problem. Re-read this section and when you know your numbers get testing. The sky is the limit for those who are willing to dare.

4: Upload Internal Standards: If you truly want to achieve greatness it will be a lonely path. People you love will question everything you do. But you have to stay strong because there are thousands, if not millions, of people who desperately need the impact you’ll make on this earth.

5: Environment: The quickest way to get ahead in the shortest period of time is by controlling your environment. The place you live, the people you interact with - audit every input and design your environment in line with your goals.

Apparently, this Newsletter is over 4,000 words long. I was advised to cut it so Gmail won’t clip it - but I’m one stubborn individual.

If you did make it to the end - thank you and I truly mean that.

Being able to pour my heart out into these long winding articles is helping me get through my darkest moments. Every day I question if what I’m doing is right, if I’ll ever get over this woman and if I’m doing enough to positively impact the lives of others.

If you’re going through any struggles right now then know you’re not alone - we’re on this journey together.

The only thing that will get us through is hard work and self-belief.

So my friend, keep dreaming like a giant. But fight and believe in your dreams like a god damn underdog!

Together, let’s rewrite history baby.

Yours truly,

-Nigel Thomas