Tai Lopez defines himself as a leading investor, entrepreneur, and author. His revealing insights into the world of e-commerce and marketing have elevated him to the status of celebrity among entrepreneurs and ambitious start-ups through his “Good life” theory.
In August, Mohnish Pabrai took part in Brown University's Value Investing Speaker Series, answering a series of questions from students. Q3 2021 hedge fund letters, conferences and more One of the topics he covered was the issue of finding cheap equities, a process the value investor has plenty of experience with. Cheap Stocks In the Read More
Lopez went “from rags to riches” –that is, from selling lemonade as a kid to business guru– by implementing his own, unique mixture of intellect and bravado.
“It has been his desire to educate his audiences on the importance of establishing good habits, learning from valuable resources, and most of all, reading.” But is this success repeatable by others?
In this interview, Lopez shares a bit of his philosophy; one that not only can apply to business growth and investment but also –he asserts emphatically– in everyday life.
You’ve partly built a personal brand around your success story. What’s been your recipe for what you call the "Good Life"?
Many people want to make a lot of money, but people forget about the basics. And that is: you don’t need to be fancy, you just have to be fundamentally sound and learn and hone basic skills. To achieve whatever you want in life, learn how to communicate, how to close a deal, learn how to speak in public.
If you don’t learn this and other fundamental stuff, you won’t be able to get the job of your dreams, start a new business, close sales, or create new revenue streams. I always tell people “If you want to start a company, make it fundamentally sound,” or “build a career that is fundamentally sound.” Fundamentally sound means solid, coherent, watertight.
Forbes recently referred to Dressbarn as a “tale of digital smarts and perfect pandemic timing”..
I always say that building a website is neither the hardest nor the only thing you should do. The web is oversaturated with websites and e-commerce pages, and you risk being less than a drop in a big ocean.
So, there are three steps that I follow for a physical product e-commerce business. The perfect start is what I define as “ethically addictive products,” regardless of the platform; there are many examples we could think of, like coffee, clothes, make-up, or Netflix –those are products that people can’t stop buying but do no harm.
Upon choosing an “addictive product” that can lure repeat buyers, look for a large total addressable market to achieve high volume. And then you have to find the right pricing structure based on an ascension model, which is a mouthwatering low price, followed by a core price, and then by upgrades.
To all those entrepreneurs out there, what does it take to break even and translate their ideas into revenue and growth?
I’ve always said, “If you’re broke, it’s because you suck at the fundamentals.” A successful company or initiative is a bit like a successful country. Take Sweden, for instance: Sweden has a high standard of living, not because it’s rich, or because it’s a “socialist” country –in fact, it is the complete opposite. It is successful because it has fundamentally sound education because it is fundamentally sound when it comes down to wringing the most out of its resources.
This is what entrepreneurs should learn and master –creating value propositions, digital marketing strategies, and products that are compelling. And how do you do that? you have to be creative. I’ve seen some brilliant industrialists and entrepreneurs doing the same over and over again, in love with their own ideas and insisting on them because they won’t admit they’re in the wrong.
You’ve mentioned that increasing productivity “is what the U.S. should do to fix its entire economy.” How is this possible?
The majority of people in business procrastinate –that is the Parkinson syndrome. They do not think creatively whenever they encounter a roadblock and don’t go out of their way to solve problems for the companies they work for. All of this is in an article I wrote some years ago called “The Bouncer of the Brain”
So, growing the economy doesn’t have to do with what politicians say every day. To fix the economy we must avoid procrastination; if every single American was just twice as productive, the country’s GDP would increase from $15 trillion to $30 trillion, and even tax receipts would double without raising the tax rate. This would pay for everything and we wouldn’t be constantly in debt.
Do you think, then, that these issues could be solved from early education at schools? Teaching people to be entrepreneurship-minded to be more efficient?
I firmly believe that we have all the tools in our brain to be more productive. But every employee tends to “mentally parasite” their bosses –even those with a high level of education or those with PhDs. Now, top entrepreneurs are the exception to the rule, and that is why they can make $100 million, run successful businesses and thrive.
I loathe the school system because it doesn’t teach people about “mental leeching,” energy drains, and glucose conservation of the brain.
Nobody learns about this at an early stage of their education. There are three solutions to this: one is, always assume that people won’t do the job right –and that is not being negative, but realistic. Secondly, you have to create a training system, followed by a quizzing system. You train your workers to do their best and constantly check that they’re not being mentally lazy and know what they’re doing.