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4 Steps to Making $10,000/Month in Your First Business

2024-03-08 · Long video (solo, talking head or whiteboard) · Ali, Daniel Priestley · recording, 23:33 · watch on YouTube

Topic: Business and entrepreneurship · mode: Explanation and tutorial · tags: His own numbers, His medical past, Sponsor segment present

Ali walks through Daniel Priestley's CAOS framework for a first business making $10,000 a month: a concept that fits your origin story, mission and vision; an audience with money, tested with an intro event, a quiz or a WhatsApp group; a $2,000 offer needing five sales a month, refined face to face with 30 customers; and sales through weekly LAPS, treated as education.

What is said

The parts of the video and what is said in each (★ — how much it matters to the video).

00:00:00 — Building a $10K-a-month business like following Lego instructions

  • ★★★ Ali presents Daniel Priestley's CAOS framework as a step-by-step way to start a first business and scale it to $10,000 a month, like following a set of Lego instructions. — 00:00:00
  • ★ Daniel Priestley says he has built multiple $10 million-plus companies. — 00:00:29
  • ★★ Daniel Priestley says a series of steps lets you de-risk and demystify starting a business. — 00:00:29

00:00:57 — Brick one, concept: lifestyle versus performance business, origin story, mission and vision, ten ideas narrowed to three

  • ★★★ Thinking you must invent the next Facebook or Uber to make $10K a month is the wrong way to start a business for basically everyone, Ali says after Daniel Priestley: Facebook is a performance business, and most people should build a lifestyle business, at least initially. — 00:00:58 · lifestyle business, Facebook
  • ★★ Daniel Priestley says a lifestyle business is kept small for fun, freedom and flexibility, while a performance business is built to be sold: big, valuable, worth $50–100 million or more, with employees, investors and debt. — 00:01:27 · lifestyle business
  • ★★ Ali compares a performance business to building a skyscraper and a lifestyle business to building your dream home: the skyscraper takes far more people, investment and time, and is much harder. — 00:01:41 · lifestyle business
  • ★★★ To choose a business idea, Ali advises looking into what Daniel Priestley calls your OMV, your origin story, mission and vision, since you are much more likely to succeed in a business you are interested in. — 00:01:57
  • ★★ Daniel Priestley: From working with entrepreneurs, Daniel Priestley finds there is always a moment around age 10 to 13 when they discovered they were independently powerful, separate from their parents, and that entrepreneurs are at a deep level trying to get back to that feeling of empowerment. — 00:02:20
  • ★★ Ali's origin-story moment came at around that age, 10 to 13, when he first learned to code and realised he could build websites and make money on the internet without needing his mum's permission. — 00:02:55 · Ali Abdaal's mother
  • ★★ Ali's origin story has elements of freedom, creativity, sharing and making money on the internet; 16 years on, his YouTube channel shares creative videos online in a business that gives him financial and personal freedom, which is why he can keep going. — 00:03:09
  • ★★ A business idea need not fit your origin story, mission and vision, Ali says, but everything is easier if it does: doing something just for the money, you burn out easily when results are slow, while doing what you enjoy you are more likely to keep going. — 00:03:28
  • ★★★ Ali repeats the point he has made throughout his channel: a business is a vehicle that solves problems for people, ideally people who can pay, so business ideas are ones where you can provide value. — 00:04:08
  • ★★ Daniel Priestley: To find business ideas, Daniel Priestley says to come up with ten ideas and pick the best three. — 00:04:37
  • ★ Ali used to do private tutoring to make a bit of money, earning £5.50 an hour, which gave him a sense of autonomy and agency. — 00:04:46
  • ★★ From ten ideas brainstormed in about ten minutes, Ali picks the three he likes most as an example: a web design agency, a productivity app, and courses for medical school applicants. — 00:05:00

00:05:39 — Trading 212 sponsor read

00:06:37 — Brick two, audience: people with money to throw at the problem; an intro event, a quiz and a WhatsApp group

  • ★★★ Daniel Priestley's "unfortunate truth": for any problem some people throw time at it and others throw money, and to run a great business you need to talk to the people with money to throw at the problem. — 00:06:59
  • ★★ Noah Kagan's process in Million Dollar Weekend starts with the audience and then the concept, the reverse of Daniel Priestley's order; Ali says it is basically the same, depending on which order you prefer. — 00:07:12 · Noah Kagan
  • ★★★ It is far easier to build a business serving people who have money, Ali says: courses for medical students would be a terrible business because they have no money, while courses for medical school applicants are better because their parents pay. — 00:07:36
  • ★★ Most entrepreneurs recommend first reaching financial freedom with a business that targets people who have money, Ali says, and only then doing pro bono work or building for consumers with little to spend. — 00:08:05 · work optional
  • ★★ Daniel Priestley says to test a business concept as fast and as cheaply as possible, looking for an idea where you push the door and people respond. — 00:08:25
  • ★★★ The first way to validate an idea is an intro event: to test a productivity app, Ali would run a free Zoom webinar and see if he could get 30 people to attend, posting on Facebook, Instagram, university groups, Twitter and LinkedIn if he had no audience. — 00:08:51 · Zoom, Facebook, Instagram, Twitter, LinkedIn
  • ★★ If you cannot get people to sign up for a free webinar on doubling their productivity, Ali says, you will not get them to pay for an app that promises the same. — 00:09:20

  • ★★★ Early entrepreneurs focus too much on the product and far too little on distribution, Ali says: "build it and they will come" no longer works amid so much noise, and distribution is king. — 00:09:27

    “build it and they will come is no longer a viable strategy”

  • ★★ The second way to validate an idea is a quiz or questionnaire, Ali says: send people a free quiz, such as a productivity scorecard, and if enough take it there is demand. — 00:10:00

  • ★★ Ali uses ScoreApp, a quiz platform run by Daniel Priestley, for a quiz for a course he is working on; his business liked the product so much that it invested in the company. — 00:10:18
  • ★★ The third way to test an idea, from Daniel Priestley, is to start a WhatsApp group, such as one sending a daily productivity tip; if people will not join a free group, they will not buy the product. — 00:10:55 · WhatsApp
  • ★★ Daniel Priestley's friend Max, wanting to build a product for family offices, started a WhatsApp group for family office managers; about 19 joined immediately, the beginning of a very successful business. — 00:11:03 · WhatsApp

00:12:15 — Free business coaching bundle with his CEO coach Eric

  • ★ Ali has sessions with his CEO coach Eric Partaker every two weeks. — 00:12:15

00:12:42 — Brick three, offer: $2,000 per package and five sales a month, guitar lessons, sitting down with 30 customers

  • ★★ The offer, the third brick, is a slide deck, brochure or web page describing what you sell, Ali says, made before you have created the thing itself. — 00:12:55
  • ★★ The $2,000 rule blew Ali's mind: nearly every business idea he would have had as a less experienced entrepreneur could never charge that, such as a productivity app at $3 a month or a burger stand at about £7 a burger. — 00:13:23
  • ★★ Ali ran a tutoring business for medical school applicants for several years, charging £100 to £150 per package, about $180. — 00:13:43
  • ★★ By the $2,000 rule the productivity app is out, Ali says, and a web design agency is his most reasonable route to $10K a month: he can see himself charging businesses $2,000 for a website five times a month. — 00:14:12
  • ★★ Ali says a medical school courses business would have to go very high end to charge $2,000, such as a multi-day event or targeting private schools with very rich parents. — 00:14:30
  • ★★ Daniel Priestley says a very small number of people have a lot of money, and in most cases they are massively underserved. — 00:14:49
  • ★★ Daniel Priestley: For Ali's example of guitar lessons, Daniel Priestley says reaching $2,000 packages would mean family lessons at home at $200 a month with a 12-month minimum commitment, and delivering five such sales a month would need many guitar teachers, so it is not very scalable. — 00:15:08
  • ★★ Alex Hormozi (quoted): Alex Hormozi says every entrepreneur works just as hard as every other; the business, the vehicle you choose, dictates how much money you make. — 00:15:53 · Alex Hormozi
  • ★★★ Choosing the game you play in business is massively important, Ali says: the owner of the local Indian restaurant works as hard as he does or harder, but Ali suspects his vehicle of online courses and content makes him far more money. — 00:16:17
  • ★★ Daniel Priestley owns but does not operate eight businesses offering high-ticket services to clients with a lot of money, Ali says, and works less hard than Ali while making far more money. — 00:16:17
  • ★★★ Ali endorses Daniel Priestley's rule of thumb for a first business: you must be able to charge $2,000 for a package, so that five sales a month reach $10,000. — 00:16:40

  • ★★ Daniel Priestley: To refine an offer, Daniel Priestley says to get "close enough to lick their face": right up close to your customers, seeing exactly how they interact with it. — 00:17:04

    “You wanna get close enough to lick their face.”

  • ★★ Ali says testing an offer in person works better because people always give much better feedback face to face than online, where they can simply click off. — 00:17:20

  • ★★ Daniel Priestley says not to judge your product or service until you have sat down with 30 customers and seen how they respond. — 00:17:34
  • ★★★ As a beginner Ali would never have sat down with 30 customers, but his friends who are second- and third-time founders spend a great deal of time talking to customers, because validating the offer matters more than building it. — 00:17:43
  • ★★ The ultimate mistake of beginner entrepreneurs, Ali says, is thinking far too much about building the thing and far too little about talking to customers to refine and validate the offer. — 00:18:10
  • ★★ Anyone who actually starts a business and sits down with 30 customers will probably reach at least $10K a month, Ali says, but most viewers will not do it because it is work. (hedged) — 00:18:37

  • ★★★ Against the narrative that $10K a month is easy, Ali says starting a business is simple but not easy: there is a step-by-step process like Lego instructions, but it takes work, letting go of your ego and putting yourself out there. — 00:19:00

    “It's simple, but it's not easy.”

00:19:22 — Brick four, sales: LAPS, the team behind 10K a month, the doctor as salesperson, the Apple store

  • ★★★ Daniel Priestley's sales process is LAPS: keep a spreadsheet of leads, book appointments, give a presentation or conversation, then ask for the sale; great salespeople keep a rhythm of weekly LAPS. — 00:19:46
  • ★★ To get leads, Ali lists social media, paid ads, friends and family, or cold calling and knocking on doors, then booking appointments on paper or with a tool like Calendly. — 00:20:08
  • ★★ A $2,000 offer is a high-friction sale that needs a sales conversation, Ali says; at first you do those conversations yourself, and over time you build a team with someone selling for you. — 00:20:30
  • ★★ Daniel Priestley says a business making $10K a month typically has two to four people: a salesperson, someone for customer service or fulfilment, and maybe a bookkeeper, administrator or assistant. — 00:20:55
  • ★★ Daniel Priestley calls the "I don't like selling" feeling silly: almost everyone has had good and bad experiences with salespeople, as with bookkeepers, lawyers or doctors. — 00:21:14
  • ★★★ Ali agrees with Daniel Priestley that a doctor is like a salesperson: diagnosing an issue and offering treatment options with a recommendation is exactly what a sales conversation is. — 00:21:31

  • ★★★ In a sales conversation you honestly lay out the customer's problem, options A, B and C and what each costs, Ali says: sales is education, not forcing something down people's throats. — 00:21:58

    “Sales is education rather than forcing something down people's throats.”

  • ★★ Daniel Priestley has never had a bad sales experience at an Apple store, because its staff are professional, listen, make recommendations to solve your problem and do not try too hard to sell. — 00:22:26 · Apple

  • ★★ Daniel Priestley says Apple store sales staff reportedly do 40 minutes of sales training every day before customers arrive. (hedged) — 00:22:40 · Apple
  • ★★ Richard Branson (quoted): Richard Branson says a business is simply an idea to make other people's lives better. — 00:22:55
  • ★★★ To build a business that reaches $10K a month, Ali says, you have to get on board with sales, because without it you never make your customers' lives better with your product. — 00:23:05

In the description and comments

  • ★★ Ali Abdaal (channel): Physical product businesses are not ideal for a first business when the goal is $10K a month, the channel replies to a viewer who says physical products take a lot of capital and know-how. — creator comment

Threads in this video

  • refine · How big should you grow your business? — Thinking you must invent the next Facebook or Uber to make $10K a month is the wrong way to start a business for basically everyone, Ali says after Daniel Priestley: Facebook is a performance business, and most people should build a lifestyle business, at least initially. (00:00:58)
  • refine · How do you find a business idea? — To choose a business idea, Ali advises looking into what Daniel Priestley calls your OMV, your origin story, mission and vision, since you are much more likely to succeed in a business you are interested in. (00:01:57)
  • retold · Ali starts learning to code at 11, wanting to make a text-based game like Kings of Chaos — Ali's origin-story moment came at around that age, 10 to 13, when he first learned to code and realised he could build websites and make money on the internet without needing his mum's permission. (00:02:55)
  • refine · Should you follow your passion when choosing work? — A business idea need not fit your origin story, mission and vision, Ali says, but everything is easier if it does: doing something just for the money, you burn out easily when results are slow, while doing what you enjoy you are more likely to keep going. (00:03:28)
  • restate · How do you find a business idea? — To find business ideas, Daniel Priestley says to come up with ten ideas and pick the best three. (00:04:37)
  • restate · Who should a first business sell to? — Daniel Priestley's "unfortunate truth": for any problem some people throw time at it and others throw money, and to run a great business you need to talk to the people with money to throw at the problem. (00:06:59)
  • restate · Who should a first business sell to? — It is far easier to build a business serving people who have money, Ali says: courses for medical students would be a terrible business because they have no money, while courses for medical school applicants are better because their parents pay. (00:07:36)
  • refine · Who should a first business sell to? — Most entrepreneurs recommend first reaching financial freedom with a business that targets people who have money, Ali says, and only then doing pro bono work or building for consumers with little to spend. (00:08:05)
  • restate · How do you test a business idea before building it? — Daniel Priestley says to test a business concept as fast and as cheaply as possible, looking for an idea where you push the door and people respond. (00:08:25)
  • refine · How do you test a business idea before building it? — The first way to validate an idea is an intro event: to test a productivity app, Ali would run a free Zoom webinar and see if he could get 30 people to attend, posting on Facebook, Instagram, university groups, Twitter and LinkedIn if he had no audience. (00:08:51)
  • refine · How do you get leads and traffic for what you sell? — Early entrepreneurs focus too much on the product and far too little on distribution, Ali says: "build it and they will come" no longer works amid so much noise, and distribution is king. (00:09:27)
  • milestone · Ali works with his CEO coach Eric Partaker (2022) — Ali has sessions with his CEO coach Eric Partaker every two weeks. (00:12:15)
  • refine · How should you price your first offer? — Ali endorses Daniel Priestley's rule of thumb for a first business: you must be able to charge $2,000 for a package, so that five sales a month reach $10,000. (00:16:40)
  • looked back · SixMed, Ali's medical school admissions courses (2012) — Ali ran a tutoring business for medical school applicants for several years, charging £100 to £150 per package, about $180. (00:13:43)
  • restate · How should you price your first offer? — For Ali's example of guitar lessons, Daniel Priestley says reaching $2,000 packages would mean family lessons at home at $200 a month with a 12-month minimum commitment, and delivering five such sales a month would need many guitar teachers, so it is not very scalable. (00:15:08)
  • refine · What kind of business should you start first? — Choosing the game you play in business is massively important, Ali says: the owner of the local Indian restaurant works as hard as he does or harder, but Ali suspects his vehicle of online courses and content makes him far more money. (00:16:17)
  • restate · How do you test a business idea before building it? — As a beginner Ali would never have sat down with 30 customers, but his friends who are second- and third-time founders spend a great deal of time talking to customers, because validating the offer matters more than building it. (00:17:43)
  • refine · How do you sell without feeling sleazy? — Daniel Priestley's sales process is LAPS: keep a spreadsheet of leads, book appointments, give a presentation or conversation, then ask for the sale; great salespeople keep a rhythm of weekly LAPS. (00:19:46)
  • restate · When should you hire people for your business? — Daniel Priestley says a business making $10K a month typically has two to four people: a salesperson, someone for customer service or fulfilment, and maybe a bookkeeper, administrator or assistant. (00:20:55)
  • restate · How do you sell without feeling sleazy? — Ali agrees with Daniel Priestley that a doctor is like a salesperson: diagnosing an issue and offering treatment options with a recommendation is exactly what a sales conversation is. (00:21:31)
  • restate · What kind of business should you start first? — Physical product businesses are not ideal for a first business when the goal is $10K a month, the channel replies to a viewer who says physical products take a lot of capital and know-how. (creator comment)
  • refine · Should you build an app as a business? — By the $2,000 rule the productivity app is out, Ali says, and a web design agency is his most reasonable route to $10K a month: he can see himself charging businesses $2,000 for a website five times a month. (00:14:12)

Where the stories that moved here went next

Mentioned

Central: CAOS Framework · Daniel Priestley · lifestyle business · the $2,000 offer rule

Also: People: Alex Hormozi · Ali Abdaal's mother · Eric Partaker · Noah Kagan · Richard Branson

Works: Feel-Good Productivity (book) · Million Dollar Weekend · The 3 Alarms

Organizations: Apple · Facebook · Instagram · LinkedIn · ScoreApp · Trading 212 · Twitter · Uber

Concepts: LAPS · OMV · work optional

Products: Calendly · ChatGPT · Keynote · WhatsApp · Zoom

Also centred on Daniel Priestley: I Asked 15 Experts For Life Advice. Here's What I Learned. · A Multi-Millionaire's Advice on Starting a Business #shorts · I Asked 5 Millionaires for Their Best Financial Advice · 5 Steps to Start Your First Business · 7 Life Lessons School Didn’t Teach You

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