- What is Freedom Ocean? And what’s in it for you?
- Who will Freedom Ocean appeal to?
- Who is James Schramko? And why did he resign from a $300,000 yearly salary?
- How many hours does James define as full-time work?
Then we get stuck right in to answering some of those more macro questions many of us have about Internet marketing:
- Where are we at in the life-cycle of the Internet marketing? Have you missed the boat?
- Is it ‘Internet Marketing’ the right terminology?
- What on earth is ‘economic arbitrage’?
- Why does some parts of the Internet Marketing industry have a bad name?
(In episode 2 of Freedom Ocean, James Schramko lifts the lid on the top 10 ways of being a online marketer. And he tells us what he loves about being an Internet marketer.)
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Tim: James Shramko, welcome to Freedom Ocean.
James: This is going to be fun, isnʼt it, Tim?
Tim: Mate, it is going to be – it will be one of the great podcasts on earning a life of freedom, I reckon.
James: Yes, and I think thatʼs something that a lot of people are looking for is something different than what theyʼve already got.
Tim: Oh, yes. Oh, yes. I put my hand out for that. What was it? A couple of months ago? I had this little inkling of an idea, this little seed of an idea that I reckon a show where Iʼm the little curious kid in the corner and youʼre the bloke sitting in front of me, and Iʼve got all these questions about how do I develop this life of freedom? How do I go about taking, taking, you know – at the end of the day this is a show about doing business online. How do I – Iʼve got so many questions about that. I had you on a show that I host, another business podcast called Small Business, Big Marketing. Had you on three, four, five months ago and it struck me that the interview we did with you is incredibly popular, it was Tweeted and Facebooked and shared around the internet virally like wildfire, but also the amount of product we sold at the end of that show was extraordinary, and it just said to me, you know, weʼve touched a nerve. Yes?
James: Oh, yes. Have you been fishing, Tim?
Tim: I have.
James: Yes, I went fishing last week and we were doing surface fishing where we watch for the birds and the fish are active and then we throw our lure over it and weʼd drag it past the fish.
Tim: Were you fishing on the Freedom Ocean?
James: I was, it was actually Sydney Harbor but for me weʼll call it Freedom Ocean.
Tim: (laughs) Yes.
James: And when those fish jump on, itʼs like “bang!”
James: And I think thatʼs what happened with that podcast and if that was a one off it would be interesting, but that seems to be happening all over the place.
James: I think whatʼs happening is the general population is starting to pay attention to the internet, and Iʼm really looking forward to how you poke and prod my mind –
Tim: Oh, yes. Yes.
James: and see what we can pull out because Iʼve been dealing with people all around the world in various different places, whether theyʼre employees or whether theyʼve got their own business.
James: And I think itʼs going to be fascinating to see what we can extract from this.
Tim: Well, you know, I totally agree and around the world, too, because this is a global, this is a global issue – not really an issue, but thereʼs a lot of people sitting there 9 to 5, unhappily sitting there 9 to 5. I walked through downtown Melbourne the other day, and everyone was just looking down at the footpath, you know? I want to see heads up, looking forward, you know? Heading towards that ocean. But I also think thereʼs also a lot of – if youʼre not an employee thereʼs a lot of business owners who are doing it hard for various reasons. Not necessarily economical, maybe theyʼre just not doing what it is they love. Or maybe they donʼt know how to go about doing what it is they love.
James: I think thatʼs probably it, Tim, because thereʼs a lot of facts and statistics that if you go and dig up, will prove that plenty of people make money in difficult times. One of the things that one of my mentors taught me, he said that bad habits are formed in good times and good habits are formed in bad times. And I think for the sharp person who has sort of switched onto this and wants to stick through our podcast series, theyʼll definitely pick up tips that are not common knowledge yet and that gives you an advantage over everyone else. Itʼs like the horse that wins the race, you know? Just that little bit of extra knowledge can get you a compound effect. But it is a truly global thing weʼre talking about here. I mean within an hour or so you can travel around the world on Skype these days. I spoke to people in London, in Canada, and the USA, in Dubai, in India and the Philippines almost every single day and you couldnʼt do that 10 years ago. There was no reason and no platform for it. But itʼs fascinating to think that with the internet itʼs always alive. Itʼs like money never sleeps. The internet never sleeps, and you can get things working for you 24 hours, seven days a week.
Tim: Part of me in listening to you say that – part of me goes, “Yes, but Iʼve missed the boat.” And I hear a lot of people say that as well, “Oh, yes, but, yes there are a lot of people making money the last few years but is it still really that viable?” Where are we at in the life cycle of the internet?
James: I think in terms of life cycle most people would probably know that bell curve of product adaptation. You know youʼve got that – the early innovators, and then youʼve got the early majority come in. Thereʼs still a lot more to go, weʼre not even close to where itʼs at. I think where weʼre at is the gold rush has come; weʼve seen the first .com burst way, way, way ago in the very, very beginning of the internet field. Now what weʼve had is people have come into the market, theyʼve got away with just about everything and the market is maturing and now weʼre seeing real business come into the market. The first gold rush days are finishing. The towns are being built. The infrastructures go in place, but weʼre nowhere near overdevelopment or skyscraper area. Itʼs absolutely the right time to get in.
Tim: And whoʼs – okay, whoʼs it ideally suited to? This whole motion of – in fact, before I ask you that, because I want to talk to you about internet marketing this whole kind of – this industry name internet marketing. Is it the right terminology? Have you got a better name for it?
James: I think thatʼs a suitable term for what weʼre talking about, and I guess we can just have a look at where it fits in the scope of things. I would say the big category is business, and a subset of business is marketing, and a subset of marketing is marketing on the internet. So what weʼre really talking about here is a marketing channel. So, other marketing channels would be direct face-to-face selling or print media in newspapers and radio, and then of course youʼve got the internet. Whatʼs happened is the internet has become very powerful and the way that people are going online now, especially with phenomenons like Facebook where for example in our country, in Australia, half the people in Australia are on Facebook and thereʼs over 500,000,000 people on Facebook. So, itʼs just past that tipping point where you canʼt ignore it anymore. Itʼs like in the old days people used to go into picture theaters and catch up on the news and then they started watching it on TV and reading the paper, and now theyʼre going online. So, itʼs just become more important.
Tim: And I think, took, what weʼre saying – unlike maybe five, 10 years ago online – is that most generations are now online. Itʼs no longer left to those young people. Thereʼs a broad spectrum of people online, bandwidth is getting bigger, faster, cheaper. So, unlike five years ago it really is quite ubiquitous.
James: Everythingʼs supporting it to grow. Youʼve got internet in virtually every house. Even underdeveloped places have got internet connections now. Iʼve been to – Iʼve recently been to, over to the jungle in Belize, I went to Egypt, Iʼm going to the Philippines; all of these countries have internet connectivity.
Tim: Just tell me where is the internet connection in the jungle in Belize?
James: Basically, you know, this guy had a Wi-Fi thing in a hut.
Tim: (laughs) Yes!
James: Iʼm checking out from, you know, weʼre traveling the coach for an hour from the airport and we walk another half an hour into the resort and I get there and my iPhone works and Iʼm able to do business sitting in the jungle with Hila monkeys and Amazonian Star Snakes slithering around.
Tim: Yes. Well, and like even like you picked me up this morning from the airport and you were, you know, as you said this is an amazing business. You know, what did you take? Your iPad and your iPhone? In waiting for my delayed flight you were able to get stuff done.
James: Thatʼs it, I was able to have a look at documents that my team had uploaded yesterday, and theyʼre in another country. I mean, I support whole families now in other countries. Weʼve got this ability to do economic arbitrage. So, we can take old classic leverage techniques or money-making ideas like buy low and sell high. We can go to a country where labor costs a little bit less because they have lower living costs and we can pay them a kingʼs ransom and still resell developed services and products to western countries for a higher profit margin. And you can do this over and over again.
Tim: And I think whatʼs really important about that, and what weʼre going to cover, what you touched on then was one very small aspect of what weʼll cover in Freedom Ocean, but that motion of outsourcing, and thatʼs not about finding someone for $2 an hour. Which is quite easy to do, get someone to do stuff for $2 an hour, but itʼs about finding someone with equal skills that youʼd find here whose cost of living is less and whoʼs willing – who has an incredible work ethic. Weʼve both experienced that, you to a much greater extent, I think. You were on a phone call earlier today with a team in the Philippines of how many were on the end of that line?
James: Well, in that group we had 11.
Tim: Okay. Just, just tapping into the daily, the daily catch-up, the daily round up. But thatʼs the great thing, so weʼre going to touch on that. I guess what else are we going to touch on, James? The Freedom Ocean is very deep, itʼs very wide, and itʼs very warm. So what are we going to –
James: It is, and you know just like the real ocean, there are rules if you want to swim in the ocean. If you want to survive, there are certain nature principles you have to abide by, and I think, I think we will cover some ideas that will help people – you know, some useful tools that will help take someone from their current situation to perhaps a more free situation where they have more control. Where you can start to dictate the way you want to live and things that are currently problems are not necessarily going to be problems in the future if you believe that itʼs possible, and if you want to implement some of the stuff we talked about.
Tim: Yes, itʼs a – there wonʼt be any shortage of topics to cover.
Tim: Thatʼs for sure, and I think importantly, the spirit of Freedom Ocean is that we do explore all the topics and all the subjects and all the kind of must-doʼs that you need to attain to in order to live that life of freedom. And weʼre going to dig pretty deep on them. Itʼs not just stuff weʼre going to skim over but weʼll explore topics until thereʼs nothing left.
James: That sounds very exciting?
Tim: Yes. Yes, Iʼm pretty pumped about it. You know, once again just going back to the seed of the thought of the show is, you know, personally Iʼve been running my own businesses for a number of years now. Many of which are based on hourly rates, so Iʼm sick of working by the hour because Iʼve only got so many hours.
Tim: You know? It is about time deliverage. Personally, I have been selling stuff on the internet piecemeal, you know. Not every day, I donʼt see that Paypal thing happen every day, but I can see it, I can taste it, I can feel it, I know itʼs possible and I think as I said at the start Iʼm that curious little kid sitting in the corner. Iʼve got a lot of questions about Iʼm ready to take that big dive. Boy! Thereʼs another metaphor, weʼll have a little metaphor scoreboard for the freedom ocean.
James: Thatʼs it. Youʼre doing well so far.
Tim: Yes, thank you. Youʼre doing not bad yourself, but letʼs see who comes up with the most metaphors per show. So is it sort of familiar, itʼs about stuff the alley right, you know? Like –
James: Yes, well you know you have to be very careful when you sell your time for money, and if youʼre going to do it, there must be a reason behind it, and you want to charge plenty for it. So I actually set an hourly rate that any activity that I do must be worth ʻxʼ dollars, I think itʼs somewhere around $1,500 per hour if I want to sell my time, and I do it on the basis that I can take some information from that and leverage it in another way.
James: And so later on remind me about the before, during, and after technique that I have for making more money from the same core activity.
Tim: Yes, okay. Okay. Tell us a bit about yourself then. Iʼll shed a little insight into me which I think, you know, letʼs face it, I mean people can go to FreedomOcean.com and find out about both of us. This showʼs about our listeners, not so much about us, but just so people know that what weʼve got to say is coming from a place of experience.
James: Yes, okay, so from a qualifications point of view, I had a pretty straightforward scenario. I was working in a job and I didnʼt love it. And the longer that I did it, the more I got frustrated with it. My last job was as a general manager running a Mercedes Benz dealership in Sydney. So, itʼs a highly competitive industry and a very established industry, motor vehicle sales has been here for a long time. A very complex business as well, and I had lots of staff and we turned over tens of millions of dollars every year. So it was quite, quite a hard core role. It had lots of benefits and trimmings with that role, including driving nice cars and meeting high-profile people. But probably the true gift was I got to meet a lot of very, very wealthy people and I noticed that overwhelmingly, these people buying Mercedes Benz owned their own business. They were not employees for the main part. So, I coupled that with my interest in marketing, in selling, and in – I had this sort of light box moment that, “Wow, I could actually. I could actually sell things on the internet not just restricted to this locale and this particular brand.” And I started setting up my own websites and this is about six years ago, and after about four years I was able to quit my job and walk away from that job forever. I imagine Iʼm unemployable now and the goal was to match my income, and at the time I was earning around $300,000 per year. So I was able to build up my own business on the side after work up to $300,000 a year. Quit my job, and it didnʼt take long until I hit $1,000,000 a year in my own business. So Iʼve been full time. When I say full time, thatʼs not a normal personʼs full time.
Tim: Whatʼs your full time then?
James: Full time for me is about four hours of productive work a day, on average.
Tim: Sorry to hear that.
James: Yes. (laughs) Well, itʼs a passion, I donʼt actually have to do it. And what I have done is Iʼve really concentrated on continuous improvement and developing and refining my internet marketing skills. Every year my business doubles and Iʼve started teaching other people with workshops and courses and I take on just a handful of clients just to keep myself sharp, and I build their business with them but for the most part Iʼm building my own portfolio behind-the-scenes thatʼs not viewable to the public, not shared with the public. So Iʼm so confident with my processes that I do it myself and I teach some people occasionally when I put out a course or something.
Tim: Just so weʼre really clear about your portfolio. So Iʼm not asking you to give a specific example, but give us a theoretical example of something where you use internet marketing to create your portfolio.
James: Well, Iʼve found about 10 different ways to make money online. Like different business models or strategies, and I have quite a – say insulated – I learned from Jay Abraham to have the multiple profit pillars model. So imagine a table. Iʼve got 10 legs on my table, so itʼs very hard to take out that table. So, they have the different strategies are in different markets, and some of them are services, some of them are products. So one of my businesses is to provide services to web developers and that is to basically provide traffic services to the websites they build. And thatʼs a great business because I have other people sell it, and other people supply it and my role is just to market it and to be in charge of it and to, I guess, to spend the profits. Other parts of the portfolio are like real estate, but online where I go and find premium domain names and I build out – I develop websites on them and then I turn those websites into real businesses and I can do that many different ways. I can partner with people, I can build it and then sell it to a particular target buyer, or I can keep it and monetize it by selling things on it. Either products, services, or be a publisher. So, without confusing our audience, Iʼve tested many, many different ways of making money online. Thereʼs certain ones I donʼt do and Iʼm happy to explain why I donʼt do them, and Iʼm more than happy to share the top few that I recommend people consider.
Tim: Yes. Well, certainly thatʼs going to be the stanchion for future shows because weʼll cover all that in depth. Because I think itʼs going to be important to know, you know? You know, in todayʼs world, thereʼs no real need to reinvent things. You know, thereʼs a lot of stuff out there that hopefully people who listen to this show can take on the ideas. Theyʼve probably been down to, theyʼve probably been to many courses, read many books, probably their brains are overflowing with what could be. Hopefully this show will really focus on what should be.
James: Well, one of the, one of the biggest things Iʼve found when Iʼve entered into the education side of it is that a lot of people are teaching garbage. Unfortunately, just like the gold rush, there are a lot of promises and hope portrayed and I think many of the current crop of gurus actually started by pretending they made money and then they got people to pay for their courses and then they actually made money. But it was based on lies; and so now theyʼve got guru status but they never actually made money in the beginning other than selling the make-money ideas. So, itʼs an unfortunate scenario where thereʼs a lot of noise and clutter in the market.
Tim: Huge. Huge amount of noise.
James: And I think our responsibility is to take all of that coal and to sort it into a diamond for our listeners to just give them the bits that work. I mean, I have spent you know four hours a day every single day for the last five or six years sifting and sorting and testing and trying stuff, and the only thing I pass on to students is the stuff that actually works after all of that. After God knows how many thousands of dollars in training and courses and hours of my own team developing stuff, I know what works and what doesnʼt work now.
Tim: And you know thatʼs one of the great shames and thatʼs why I questioned you earlier about the category name internet marketing, is that thereʼs a lot of people out there that give it a very bad name.
James: Oh, absolutely. Like any industry.
Tim: Itʼs that noise, itʼs that noise that you talk about.
James: I mean, youʼre speaking to someone who came from the car industry and you know, I know theyʼre right up there with prostitutes and ambulance-chasing lawyers.
James: But within that industry, I was able to find my space where I had repeat and loyal customers and we were able to build a very strong and profitable business off the back of all the people in an industry who did a terrible job. And I think internet marketing does have a bad name because itʼs associated with the get rich quick style of magic push-button profits. I mean, all you have to do is call a product “magic bullet” and people will buy it. (laughs)
Tim: Yes, yes, yes. Put a limit of time on it. Cross it with a seven on the back of it and – well, you know, itʼs that classic stuff too of like register a domain name, write 12 blog posts, put it under your pillow at night and the next day Paypal will be ringing off the, off the desk. It wonʼt.
James: Thatʼs, and I think the reason it has worked is because people just donʼt know. Itʼs like a new, itʼs a foreign language and I think anyone listening to this podcast will actually get quite savvy with the market language and with the real foundations. There is no such thing as the magic button. There are definitely silver bullets. There are things that will get you ahead faster, but it will require effort and it will require some thought and a little bit of energy; whether thatʼs financial energy, whether itʼs time energy, but youʼll have to put something into it to get something valuable out of it like just about anything that I can think of.
Tim: Yes, yes thatʼs right. But hopefully, certainly from my point of view thereʼs also creative energy, you know, like the ability to just be out there and creating things and so, you can come at this whole internet marketing thing in so many different ways and what I think it also allows you to do is choose those niches that you may have a passion about. And when youʼre passionate about something the creation of that content and the actual marketing and promotion and getting the word out is going to be so much easier.
James: Well, it changes from work to a mission.
Tim: Yes. Yes.
James: Itʼs something you have a cause. Something drives you, makes you excited wake up.
Tim: Given that discussion, who do you think Freedom Oceanʼs really going to appeal to? Weʼve had a bit of a discussion, you and I, about the various people, like when youʼre creating any product and doing Freedom Ocean is creating a product in itself and weʼve tried to sort of picture in our mind how our ideal listener, or the one whoʼs going to benefit the most, thereʼs a number of different types of people that are going to benefit. We start off, thereʼs that small business owner – that guy or girl whoʼs running their own business – bricks and mortar, working 9 to 5 maybe Saturdays and Sundays as well.
James: Yes, I think that business owner has probably already got a website or has watched their competitors get one and theyʼve noticed the Yellow Pages just doesnʼt work anymore – no offense Yellow Pages.
Tim: No, all of our friends at Yellow Pages.
James: Itʼs actually (laughs) itʼs shrinking. Itʼs shrinking because Iʼve polled audiences if I go and keynote speak somewhere, and I ask whoʼs looked at the Yellow Pages in the last month, and then Iʼll ask whoʼs been to Google; and I have an overwhelming majority of people who will have been to Google. Itʼs just not optional for a business now to avoid the internet – you have to be online. So I think it will definitely appeal to a small business owner, a manybusiness owner, and what Iʼve found with very large businesses is that they usually have their head up their backside. They have a whole team of experts who are for the majority clueless. They tend to go to expose and corporateytype events where those people are just way behind the up-to-date techniques. Theyʼre really just out there like smiling assassins charging very high prices for outdated solutions. So, if thereʼs an executive working for a large corporation, theyʼve got a real chance to really show off, I guess, if they implement some of this stuff.
Tim: Well, thatʼs exactly what you – you probably didnʼt even know it at the time when you were at Mercedes, but thatʼs exactly what you were doing.
James: Exactly what I did. Actually, I submitted a document that was somewhere around 20 pages long to head office showing them how they could get tremendous results from their web mission and it got put in the second drawer in some clerkʼs desk. And you know what I did with that document, Tim?
Tim: Framed it?
James: I went out and I got myself two clients who paid me $120,000 a year and I handed in my resignation notice off that one document. And Iʼve since turned that document into $4,000 workshops and built an entire community around this principle.
Tim: Wow! Thereʼs another couple of things that weʼll be talking about. The repurposing of information. The building of communities in –
James: Well I think youʼve touched on it. The ideas donʼt have to be complicated and they donʼt have to be new, but they have to be implemented.
James: And you know, these people were just too clever and too special to implement this. So, going back to whoʼs perfect, the other target audience I think that weʼd be talking to are people who are in a job, who, they may have a family and they might be just finding itʼs all a bit too much. Theyʼre heading off to work trying to juggle the school lunches, the kids – you know, how are they going to get to the kidsʼ concert without upsetting the boss because they donʼt want to get sacked because they canʼt afford the mortgage, the credit cards piling up. And I can really relate to that, because when I stepped out of my job I had around about $1.5 million in loans against property and shares and I felt trapped. Up until the day that I left, I was painted into a corner and I was really struggling to find the way out and I was ready to try anything, and thatʼs why I put in so many late nights going through that information and testing things until I found the answer. So I think if someone wants to change and importantly that they believe itʼs possible, then theyʼre the right person.
Tim: Mindset. Thatʼs another show in itself.
James: It has to be covered because I think thatʼs that is 90% of it.
James: And to further expand upon what youʼve said, that people have already been exposed to information and to techniques and maybe been disappointed or misled. I think itʼs like that student who trekked up the mountain to find the wise teacher, and the teacher offered him a cup of tea and the teacher poured the tea kept pouring and pouring and it was overflowing out of the cup and the student said, “Master, itʼs full.” And he said, “Look, I canʼt teach you anything until you empty your cup.” Youʼve got to start from scratch perhaps if youʼve gone through other courses and they didnʼt work, if youʼve paid money for something and it didnʼt deliver, I think you actually pretty much have to write it off, and be prepared to wipe the slate clean and accept that the stuff weʼre talking about is proven and tested and it works.
Tim: And donʼt get – donʼt beat yourself up over it. If you have attended that $4,000 course or that $67 webinar, I donʼt think it was wasted. I think you kind of – youʼve got benchmarks, youʼve got things to refer back to based on what weʼre going to share, and itʼs good stuff to, it gets you in that frame of mind and when you do hit the sweet spot, you really know you have because youʼve got something to compare it to.
James: Exactly. It gives you a way to judge things and my grandma taught me when I learned to paint, and Iʼm not a very good painter by the way, but the lesson is correct. She said you canʼt have light without shade. You need to . . . one provides the other.
James: So these bad investments, they really highlight good investments.
James: And they let you know itʼs a way, itʼs a telltale of whatʼs possible.
Tim: Yes. Yes, I absolutely agree with that. Thereʼs going to be a lot to cover. I think for the time being thatʼs a nice little intro into what Freedom Ocean is all about, what weʼre all about, what people can expect. We are going to cover over the course of them – we donʼt have the timeframe on this – but it will be months if not years, depends on how long it takes, James. (laughs)
James: Well thatʼs, and thatʼs the thing you know, this is a field that is changing continuously, but the interesting thing is the core fundamentals donʼt change. The things that Iʼm doing now in my business that I was doing five or six years ago are still working. I think we should start with those and build out from there. I also think we have a commitment to our listener to be very direct, you know. Iʼm not going to candy-wrap stuff, Iʼm just going to tell you what works and hopefully people will respond to that.
Tim: Yes, absolutely. Personally, Iʼd love to think that in three, four months’ time weʼre starting to get some feedback from listeners who are saying, “Wow, I implemented that little what you shared on a particular area of internet marketing and it doubled my business.” Or “Iʼve gone down this track and youʼve saved me this amount of money and/or time” and thatʼs the aim.
Tim: That is the aim. And we will be sharing when we think appropriate. Weʼre not just going to get you excited; weʼre going to actually give people the tools and the resources to get on with the job. Thatʼs the aim as well, is to, itʼs all very well to give you the sort of the what and the why, but the how will absolutely be included in shows when we feel itʼs right or necessary or whatever it may be. Great, James. Well, I reckon we give that a little bit of closure at this stage, getting ready for Episode 2 where you are going to share the 10 ways of being an online marketer which you lit into earlier. And you had something about before, during, and after which Iʼll have to quiz you on next. But we will cover some – other stuff weʼll cover in Episode 2. Actually I want to know what you love. I really want to dig deep about what you love about internet marketing, and really just some of those basic concepts that as you say, I mean, they stand the test of time. The landscape may change, but, and thereʼs always, thereʼs always a new bit of software or thereʼs always a new gadget, but what are those kind of basic concepts that would put everyone in good stead.
James: Itʼs going to be a lot of fun.
Tim: Strap in for the ride. Freedom Ocean. Thanks, James, see you next time!
James: See you, Tim!