How Stock Investor Came to Be — Part 3
“Good luck at Cyber-Investing. Let’s bring it to the masses!”
–David Brown, author of Cyber-Investing,
written in Scott Elder’s autographed copy of Cyber-Investing
In my last post, I left off with:
“We didn’t want to do things the same way we had with our previous company. Starting fresh we had the advantage of being able to ask ourselves, if we were to start this company again today, what would we do different?”
Teaching people how to invest in the stock market through seminars and workshops is a very expensive and risky business. Here’s a “behind the scenes” look at how this business model works:
1. Pick a city to go to and launch a marketing campaign using direct mail and radio and newspaper advertising to invite people to attend a free seminar. A free gift is usually offered for attending.
2. Book a hotel meeting room and the sleeping rooms and airline flights for the instructor and the support team to put on the free seminar.
3. Hold two free seminars a day for three days, typically Tuesday, Wednesday and Thursday.
4. The seminar is a 90 minute overview of the investing tools. The objective is to present the features and benefits of the tools and then invite the seminar attendees to register for a more comprehensive two-day workshop.
5. Over the course of the three days of free seminars you hope to see at least 600 people and get 60 to 90 of them to pay $3,000 tuition to attend a workshop.
6. Book a hotel meeting room and sleeping rooms and airline flights for the workshop instructors and support team to teach the workshop.
7. Hold the two-day workshop, which is typically on a Friday and Saturday.
When you do the math on the gross income, on the surface it looks like a good money-making model. But it’s not. The marketing costs, hotel costs, airfare costs and personnel costs to do the free seminars and fulfill the workshop is extremely expensive.
The risks in the seminar business are huge. Sometimes only a few hundred people show up to the free seminars with only 20 to 30 registering to attend the workshop. Severe weather the week of the free seminars will keep people from attending. When the terrorist attacks on 9/11 shut down all flights, getting the instructors and support teams to the seminars and workshops became a logistical nightmare. They had to drive rental cars across country non-stop to put on the events; which very few people turned out for.
In this business, uncontrollable and unforeseeable circumstances can bankrupt you. From the time we started the company until the time we left, there had been a significant increase in advertising costs, hotel rates and airfare costs. Also during this time several other stock investing education companies started up. Too many companies offering similar programs caused the attendance to the seminars and workshops to decrease significantly.
With the costs increasing and attendance decreasing, Ross and I did not want to start another company that used seminars and workshops to teach people how to invest in the stock market. But we still wanted to continue teaching this valuable, and life-changing, skill to people.
David Brown had always had a concern that because of the tuition cost to attend a workshop, many people who wanted this training were not getting it. This tuition barrier kept thousands of people who were attending our free seminars from learning how to invest using our tools and our training. David wanted us to “take it to the masses,” which is why he wrote that in the Cyber-Investing book that he autographed and gave me.
The reality is that you can’t take it to the masses in the seminar and workshop model because of the huge costs involved. It’s simple economics… a business has to bring in more money than it puts out or the business will cease to exist. It doesn’t matter how much you want to provide this opportunity to as many people as you can because you know it will help them; to continue in business you need to make a profit on your services. As Stephen Covey put it: “No Margin, no mission.”
With Stock Investor Ross and I decided to do a test based on the feedback we were getting from the attendees of our free seminars who didn’t register to attend our workshops. 85 to 90 percent of the people who attended the seminars didn’t attend the workshops. But almost all of them were interested in using our investing tools. We know this because when people left the seminars they would tell us so. Over and over again we kept hearing the same thing, that basically included these statements:
1. I don’t want to attend your workshop but I want to use your investing tool.
2. Just let me pay the subscription fee and I’ll figure how to use it on my own.
We would tell people that we can’t do that because we felt strongly that they wouldn’t be able to figure it out on their own and that our customer service people would end up giving them a workshop over the phone. A subscription fee for the use of the investing tool does not cover the expenses of providing training over the phone. This model would also bankrupt a company in no time.
Based on what we were hearing we decided to provide three levels of participation with Stock Investor:
Level 1: The Stock Investor Tool Kit. A free 30-day trial to the investing software and training and support materials available for free at the Stock Investor website.
Level 2: The Stock Investor Success Kit. A complete 6 hour workshop from Ross on DVD with a comprehensive workbook and additional support materials at the Stock Investor website.
Level 3: One-on-one Personal Coaching sessions that are designed to shorten the learning curve, reduce mistakes made through trial and error, and get the student on the fast-track to successful trading.
Here’s what we’ve learned. Although we’ve “taken it to the masses” with the free trial opportunity, the fact is that what we were telling people before has proven true: a majority of the people will not take the time to go through the support materials and training available on our website and figure it out on their own. In addition to getting the program for a free trial, most free trial users also want free training over the phone. This simply is not economically feasible.
If a free trial user determines that they’re not willing to use the free self-directed training available at the Stock Investor website then they’re really not a candidate for that level of participation.
The Success Kit is a comprehensive training program. It features detailed step-by-step instruction, easy-to-follow visuals, and a companion workbook that follows the DVD training. It is literally a workshop on DVD. It’s comparable instruction to what people used to pay $3,000 for to attend one of Ross’ workshops.
I know that if a person were to simply “eat the elephant one bite at a time” and start with DVD 1 and work their way through the training, they will have a good understanding of the 3-Step Investing process and be proficient at using the Stock Investor software to make money trading stocks.
The Success Kit is a self-directed training program. It’s an opportunity to get everything you need to learn how to make money trading stocks at a fraction of the cost of attending a live workshop.
But some people are not wired to be self-directed learners. It takes time and discipline. It is much easier to have an experienced instructor teach you. We know that; which is why we strongly recommend Tool Kit trial users and Success Kit buyers to consider our Personal Coaching program. This is where you get one-on-one training over the phone with an experienced trader who is a certified coach on the Stock Investor software and 3-Step Investing Process.
The personal coaching sessions are structured training sessions. They are adjusted to fit your level of experience. With a personal coach you have the advantage of getting feedback and how you’re doing. You are given assignments that your coach evaluates in order to determine whether or not you’re understanding what you’re being taught.
Even though the personal coaching option costs more than the free Tool Kit option and the Success Kit option, it’s actually a better value. The reason is that you can get a quicker return on your investment working with a personal coaching. This is because coaching students are more inclined to actually trade and they have more wins and fewer losses because of the personalized training.
Here’s what a recent coaching student sent us:
“I wish to extend a whole-hearted thanks to the Stock Investor company, especially the personal coaching program for providing me with an understanding and education in the complicated and intimidating world of stock options. Your simple and straightforward step by step approach to education, and powerful software has enabled me to trade with confidence that I can achieve remarkable profits with limited risk [in the first two months of trading options I have realized a gain of almost 20%]. I intend to pursue trading as a second career and bring me to a level of financial security and independence I never thought possible.”
–Peter F.
The reason Ross and I started Stock Investor was to provide the opportunity for as many people as possible to enjoy the financial rewards and benefits that come from being a successful stock and options trader. Just as it changed my life more than 10 years ago, it has changed the lives of thousands of others throughout the world since then. And it can change your life as well.
We truly want to take this opportunity to the masses, and we’ve done so by offering three different levels of involvement: the free Tool Kit; the Success Kit for under $400; and Personal Coaching. Each level has its own corresponding level of training and support. Compared to other similar programs, we are confident that we provide extremely high value for the investment at each of the three levels.
Although it’s common for people to start out with the lower priced levels, we know that you get the most benefit from working with a personal coach. Our intent is not to force people into any of the three options, but merely to make them all available. And we’re not hiding the fact that we know that most people are not accustomed to putting themselves through a self-directed learning program… even if everything they need to succeed is at their fingertips.
Your Friend in Investing,
D. Scott Elder