Dave Ramsey and Entrepreneurship Porn

Ever hear that Dave Ramsey guy? He’s on FOX Business radio talking about how to get out of debt, stay debt-free, and he answers people’s questions about money.

He’s brilliant.

Not because he’s really great at answering questions, but because he’s built the perfect sales funnel. He’s a sales guy hawking books and ad-supported media, fee-based services like budgeting tools and classes, and selling tickets to his events.

It’s even more brilliant when you realize he’s built a business out of telling people the same thing over and over again in about 2-3 different ways. Unlike, say, Car Talk, where the questions are sometimes impossibly hard and solicit equally hard and often wrong (but funny!) answers, Dave’s callers routinely ask the same question over and over again for three hours a day with no real wrong answer.

Questions fall into one of three categories:

1. How do I get out of debt?
2. Should I pay X with Y (i.e., should I pay off my mortgage with my retirement savings)
3. How do I help/handle this person (usually a family member, but can also be a debt collector or other financial entity).

And the answers are always practically the same:

1. How do I get out of debt? “Sell everything you can and/or just pay it.”
2. Should I pay credit/medical/car/bank debt with retirement/second mortgage/loan? “No.”
3. How do I help this person? “Tell them to stay out of debt and pay it if it they’re in it. If it’s a debt collector or the like, pay them.”

There are some differences of course, but it generally boils down to “Pay it and stop going into more debt.” It’s just that answer for 1.5 hours of a 3-hour show. The remaining 90 minutes is devoted to selling books, tickets, and other media of his own creation creation.

That’s brilliant.

If there’s any downside to this, it’s that some questions squeak through the call screener that doesn’t fit the narrative very well. Or if they do fit the narrative, the question falls into the lesser-talked about 4^th category:

4. I have this really bad debt, and I don’t know what to do.

Here the answer is usually: “Make more money, then pay it off.”

Oh, gee, I hadn’t thought of that. Thanks!

If your reaction to that statement was, “Come on Justin, that’s harsh. Dave’s great.” Let’s substitute in a different question with the same logical answer:

“How do I lose weight?”

“Eat a carrot, ride a bike. Next question.”

See? It’s easy. Except it isn’t. Especially if you’re simultaneously paying off debt and are “eating broke people’s food” to get there.

And that’s the other part of his brilliance. He’s answering dead simple questions with what are very logical answers and it works great on a radio show. “You should just make more money” is a very easy thing to say. It is not, however, ever easy for someone in a remote town with no real industry to just run out and be a millionaire. Not everyone gets a trophy, so not everyone gets to be a millionaire like he claims.

A good example is a caller from the other day who was 18 years old. She had been in a car wreck; she’s lost her ability to walk or move much for 30 days under doctor’s orders. Being 18 she has had almost zero opportunity to do anything beyond her $10/hour job in a rural town. Dave’s answer after learning her parents weren’t very useful was “Go to a church, maybe they can help.”

Because in reality, real people have real problems that sometimes just suck. Everything in her situation was a complete failure from the top to bottom, and there’s no answer for her. Here it’s, “You just failed, because this is a problem that will now pretty much ruin you. Too bad.” There just isn’t a good answer for her. Certainly not one that sounds good on national radio. And that was the best he could do.

But it doesn’t change Dave’s brilliance in what he’s been able to build. He’s built a top-down sales funnel with all these things that make lots of money off people who, by very nature of the audience, don’t have a lot of money. He’s built a narrative and personal brand at a large scale. He’s done remarkably well and has no patience for people who “just don’t do something better”.

My point here for purposes of this blog is Dave’s doing something a lot of entrepreneurs dream of doing. He gets to help some people, ignore the ones he can’t or doesn’t want to, he gets to sell lots of things very quickly with a mass market audience, and make money from all kinds of different revenue streams. It’s a really good business.

And it’s something I talk about this week on my much smaller, much less listened-to podcast, The Smaller Business Podcast. (Why is it listened to less? Because not everyone gets to be on the radio — there’s only so much time and spectrum, after all).

Because while Dave’s brand of “real tough talk” works for a lot of people who have avoided really bad luck, it’s not so easy in business where most things are reliant upon some modest amount of sheer luck. As such, there’s no shortage of things in the sales funnel for small business owners under what I’d call a special brand of “EntrePorn”. Dave’s brand of “real talk” isn’t really available for businesses because business is too messy and illogical. That’s this week’s topic.

You’ll probably never hear this on the radio because it’s not uplifting and doesn’t sound lofty and good with a “you can do it” attitude. Here it’s, “You probably can’t, even when you try.” And just like Dave’s logical take on finances, this, too, is just simple, logical, unforgiving math.