- Doctor Alex Mehr is a former NASA engineer,
and the CEO of Mentorbox, former CEO of Zoosk,
and he has had over a billion dollars in sales.
He's also the business partner of Tai Lopez,
who you might remember from the Here's my Lamborghini
in my garage viral video.
- Here in my garage.
- I wanted to talk to him about testing billion
dollar business ideas, because his approach to testing is
to go all in if there's amazing results,
or if results are lackluster to throw the experiment out
even if you made money.
So here are some of the takeaways
from our conversation with Alex Mehr.
First I wanted him to outline his approach
to testing new business ideas.
- Every weekend, we launch a new app, or a new idea.
And it was never complete, it was never pretty,
it was never completely finished,
but the goal was to start developing it.
So we came up with the idea by Friday night,
and we start developing it Saturday and Sunday,
and we would completely push it out by Sunday evening.
So that was a method we were pursuing.
- At Experiment 27, and actually with all of my businesses,
we're huge believers in testing as well,
as evidenced by the name.
I think you can try a million things,
and if you just try more than the next person,
eventually you'll succeed,
as long as you're willing to abandon a concept
when it doesn't work.
Which brings us to our next point,
how does Doctor Mehr know
when to abandon a specific business?
- Yeah, so when I started that process,
I was, I want to say,
24 or 25.
So, you know, I couldn't start a company earlier,
and I wasn't really, I didn't grow up
wanting to be an entrepreneur.
I grew up wanting to be a scientist.
So I think I would attribute some of it to being
a scientist by the time I became an entrepreneur,
I was also a little bit older,
so I had a scientific approach,
and I, you know, I had developed that approach,
meaning systematically testing things
and killing experiments if they're not working.
- That was huge for me,
and speaks to when something's great you know,
and then when something's lackluster or good,
you might not know.
It's a lot more obvious when something's amazing
than when something is just sub par.
I'll use joke writing as an example,
because it's something I've been doing a lot recently.
When a joke is hilarious, you'll laugh so much
that it like, changes your bone composition.
But when a joke isn't hilarious,
you can still fake a laugh and trick yourself
into thinking a joke is actually good.
It's only by putting a neutral joke and a great joke
next to each other, that you can see
that the neutral joke is actually bad.
And it's the same with business.
It's only by putting an amazing business concept
next to one that's lackluster,
that you'll see how much better the amazing business is.
And how much more possibility there is
for an experiment that actually works.
I wanted him to go into more detail on
committing to an idea that doesn't work,
because it's a mistake a lot of us make.
- I value people more than companies, more than products.
So that's my hierarchy.
At the top, people, team, you know, your coworker,
your family, yourself, even.
Then, company, then product.
A lot of entrepreneurs get this upside down.
They're too committed to a particular product,
even though the market really doesn't want the product,
even though it is a product that is hard to sell.
So it makes a bad company, or a bad business,
and then everybody around you, your employees,
your investors, yourself, your family,
suffers because of your commitment to a bad product idea.
To me, it's actually a selfish thing.
So when people say, I'm committed to this product idea.
I'm like, well, you're trading off.
So one, it's not working, the market doesn't want it,
you're actually trading off that passion,
that commitment to a product,
versus a lot of other things that,
in my opinion, are more important.
- Which brings us to our next point,
your goal should be to prove that an idea isn't good.
- Actually, your goal should not be to prove that
an idea is good.
Your goal should be to prove that an idea is not good,
meaning your goal should be to just cross things off a list.
So that's how I have it,
like literally the opposite of a lot of other entrepreneurs
that I see that their passion literally
is driving them to a corner.
And I tell them, listen,
we are people, we are more important than products,
we are more important than ideas,
we are more important than companies.
So the last thing you want is to suffer,
you and people around you, for a particular idea.
So try to actually scratch your ideas,
cross ideas off a list.
So do the other way,
say is this idea worthy of my time and attention?
And given today's tools, you can build it really quickly,
test it using ads,
if you are not sure if the traction is there or not,
launch two, three more.
And then compare.
That's, at the very high level,
how I think about the entrepreneurial process,
especially for first time entrepreneurs.
- In science, they call it the null hypothesis.
So you're trying to create experiments that will
disprove that what you think is correct is actually correct.
That's the exact opposite of what most people do
with marketing experiments,
which is trying to prove themselves right.
That leads to biases, and that leads to ultimate failure.
Or worse, settling for something
that's not the best it could be.
Then, if we're talking about experimentation,
it just makes sense to talk about
when an experiment succeeds, how do you scale it up?
- So, the first thing I did was to launch Facebook ads
to a funnel, to see how much it converts, basically.
The CPA, if you will, Cost Per Acquisition.
If I am not mistaken, the first ad was a picture ad.
- And he mentioned paid advertisements,
so I wanted to know why is he such a big fan
of paid advertising?
- I love paid advertisement.
In other words, this is how I think about it,
and I know that there are people that come from different
schools of thought.
There are three buckets, or three steps.
First layer, is lead generation.
Second layer, is lead capture.
Third layer is lifetime value capture or management.
So the first layer is lead generation,
and I think of it as like units of power.
So I think of it, let's say you have ten units of power.
I think organic, word of mouth is one way to grow,
but it's probably one out of 10.
So if you're growing your company purely organically,
you're basically at 10% of your potential,
if you fully optimize it you're at 10% of your potential.
So I love paid advertisement.
The paid advertisement and growth hacking is literally
the remaining 90%, or the remaining nine units,
out of which five units is probably Facebook and Insta,
three units are Google and YouTube.
One unit is everything else combined,
retargeting AdRoll, Twitter, Linkedin, and all that,
and then one unit organic.
That's how I think about it.
Now for different businesses it's kind of different,
but if you're growing your business
without paid advertisement, you're kind of missing out.
- Tai Lopez had that huge win with his in the garage video,
so it makes sense why Doctor Alex Mehr
would be into paid advertising.
Also, Zoosk, his business before was a dating app
that also grew with mostly paid advertising.
And to get super tactical, I wanted to talk about budget,
how much does he budget per experiment?
- My thing is, about 50 conversions,
and whatever is conversion?
If it is a purchase,
if it would be a walk through to a retail store,
it could be an email submit,
an opt in, but whatever it is,
or it could be like a phone call scheduled.
Whatever it us, you need about 50.
And the reason I say it, is because the first 25
is you're probably still debugging your funnel and routes.
The next 25 is where you can actually measure
what is the overall cost per conversion, and you can,
I mean if you have more budget you go to 100.
So, if it is for most projects,
you can get to an email,
by a few dollars for an email submit, for an opt in
for a form opt in.
So depending on cost per conversion, that budget changes,
but I want to get 50 conversions minimum.
- A link to Doctor Alex Mehr is down in the description
below, check his stuff out.
And if you want marketing support for your digital agency,
and you sell anything from branding to advertising to
front or back end web or mobile development,
check out Experiment27.com.
And if you want the exact script we use on client calls
to close new business, you can get that for free
in the description down below.
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Only if you think they'd get value though.
Thanks for watching.