Strategic Edge
Strategic Edge with Jay Abraham delivers practical, high-impact growth strategies for small business owners looking to scale smarter, not harder. Each episode breaks down proven methods to increase revenue, improve leverage, and unlock hidden opportunities using the assets you already have.
Strategic Edge
Jay Abraham on Finding Breakthroughs Without AI
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On this episode of Strategic Edge, business growth strategist Jay Abraham explains why breakthrough growth often starts with strategy, experimentation, and overlooked assets rather than new technology.
Abraham challenges the assumption that innovation requires AI, arguing that businesses can unlock exponential gains by rethinking positioning, lead sources, customer relationships, and existing revenue systems.
- Why innovation doesn’t require technology and where businesses can find nontechnical breakthroughs
- The difference between strategy and tactics and why having a defined end goal matters
- How to identify high-yield revenue opportunities by analyzing lead quality, customer relationships, and market positioning
- Why small, low-risk experiments can reveal which ideas are worth scaling
- How to use AI more effectively by optimizing the underlying revenue system first
- Why 10X bottom-line growth can be more achievable than simply pursuing 10X revenue
Abraham also explains how businesses can build a culture of continuous experimentation while minimizing the risk of failed ideas.
Welcome And The Big Promise
Jay AbrahamI believe we'd be gonna be going to be gonna be like, oh, I'm gonna be doing that off the market.
AnnouncerToday is one of the things that we've done is content strategic edge day brand, exclusively on ASBN.
Jim FitzpatrickWelcome back to another edition of the Strategic Edge, exclusively right here at ASBN.com. I'm Jim Fitzpatrick, joined by the one and only Jay Abraham. Today we're talking about something bigger than incremental improvement. We're talking about transformative breakthroughs, the kind of bold moves that don't just grow a business, they rewrite the rules of an entire industry. Jay is going to break down what actually separates these moves from ordinary good ideas and how you find the one worth betting on. Jay, thank you so much for once again joining us here at the Strategic Edge on ASBN.com. So so let's start, let's start here.
What “Transformatic” Really Means
Jay AbrahamIf it's designed to give you an exponential improvement in either profit, conversion, you know, residual purchases, anything like that, it is really a transformatic one. One of the fallacies that people think is that to innovate, you have to use technology. The supposition and the implied correlation is you innovate by AI or you innovate by some other technological application. And that can be true, but all really innovation means if you look it up is bring greater value to someone that they perceive uh significantly from you and nobody else. And you can bring value many different ways. And one of the ways you create non-technical breakthroughs is to inventory what I call your RSO, your revenue system optimization potential. Everybody has a revenue system, and most people follow the herd. We've talked about this continually, and yet in a revenue system, you might have this difference of KPI OPI. Everyone looks at KPIs, which are historic, but you might have 20 to 60 different drivers of potentially explosive transformative growth in many facets of your system. So when I'm working with a client, I have many different um foundational areas I look at for transformative breakthroughs. I don't ever look for technological ones first. I do look for data that technology is able to uncover. Correlations, implication, uh anomalies, uh trends, uh segments of markets that buy differently, types of buyers that spend more or more profitable or less, uh sales performance that has never been looked at from a more uh nuclear way. But most of the first tier of breakthroughs that I engineer are non-technical, but they are transformative.
Strategy Starts With An End Game
Jay AbrahamSo the first thing I look at is strategy. If you are a business under about 50 million, the odds are about 80%. Your idea of strategy is to be tactical. Really understand that strategy is everything that advances and enhances an end game. And if you don't really have an end game and everything you're doing doesn't advance and enhance that, just by implementing a strategy, not even a super strategy, you can double, you can redouble, you can redouble again. It's that much as possible the performance of everything you do, everyone you do it with, for through, every way you do it. Well, that's transformative.
Marketing Shifts That Create Advantage
Jim FitzpatrickYeah.
Jay AbrahamThen I look at marketing. You know, how mundane, how typical is your marketing, and how transformative can it be? You can transform marketing by changing the entire positioning. You can transform marketing by changing either the educational thrust or the offer thrust. You can transform marketing by creating preemptive advantage. There's many ways to do it. You can change marketing by changing what response you're trying to evoke. You can change marketing by how you reach somebody. Most people will spend a ton of time and money going to mass markets trying to find a few that are ripe to buy right now. Whereas if you change the sources you go to and you find niches that are very higher probability, whether they're uh affinity groups, whether they're discussion groups, whether they are uh organizations that have a more higher propensity of those kind of buyers, and you've and you access that, it can make every dollar you spend, every effort you make, produce 10 times. Well, I look at how to get multiple X up to 30, 40 different ways, and those become transformative. You can change your business model. If your business model is to basically go through all kinds of different ads and all kinds of different media and judge everyone the same way that a universal lead is worth X, and all of a sudden you say, Well, maybe it's not. Maybe a lead is worth different depending on where it comes from, depending on the offer it is responding to. Because I've never looked at that. All of a sudden, a transformative uh distinction is you start basically evaluating leads for what they're really worth, not just you know, you know, you're sort of throwing them into a universal pile, and all of a sudden you can invest. Spending should never be a word that anybody in business allows because spending, Jim, means you are speculating. Yeah, you don't have any idea what you're gonna get. Everything should be an investment based on analyzing the data that tells you where you can invest the the uh for the highest yield. And when you know that, that's where you spin. But if you're if you're in right now, if you're spending 100 grand a month and you have no idea what different leads are
Leads Are Not All Worth Equal
Jay Abrahamworth, what ads are better, what media is better, what anything is better, and you're just aggregating them together, and your thing is I want to get my leads for $100 or less. Instead of saying, wow, on analysis, this category of lead or this category of ad produces a lead that costs $200, but it converts three times more than the one that I can get for $50. Why am I spending all or wasting all my money on the 50s when they convert so little?
Jim FitzpatrickWell, because they're cheaper, Jay.
Jay AbrahamYeah, that's they are long-term. And people understand this. It's funny. I have a uh a former client who has a very sophisticated ad agency. You have an interest in that field. And they have a bunch of corporate clients, big um enterprise. And about a year ago, one of them got a new CFO, the corporate client, and they and they cut out all of their online digital direct response advertising, even though it was yielding a 5x uh return. And my guy called and said, it just looked at it as a line item. They didn't even look at the yield, they just said, Oh, we don't want to spend 100 grand a month on this. Wow. It was bringing in 500, it was bringing in six million dollars a year, incremental.
Jim FitzpatrickUnbelievable. Fool just foolishness.
Jay AbrahamBut when you think about that, just looking at it different is transformative, isn't it?
Jim FitzpatrickThat's right. That's right.
Jay AbrahamWhen we look at the business model, a lot of people in business have a very linear and a very incremental model. It's okay, we're gonna get a lead and we're gonna try to sell our expensive product or service. Whereas a transformative approach might be, okay, what can we do to start a relationship with almost no resistance? Or what if you know how Amazon says people that buy this buy that? Yeah. Or instead, could we have a preemptive position ahead of their purchase? That's a transformative distinction. I mean, then we look at how we call it distribution channel, but sources. Why do you have to source where everybody else does? Uh, the person you and I were talking about, David Spisak, when he was running his Mercedes dealer, stopped advertising altogether and became totally entrenched
Rethinking The Business Model
Jay Abrahamin the community. He sponsored events, he was the he was the, you know, they they they held events, they sponsored events, sure. And they owned all of Silicon Valley without spending a penny. That's transformative, isn't it?
Jim FitzpatrickThat's right. That's right.
Jay AbrahamAnd we go on and on, but we go after that, we look at after um after distribution channels, then we look at, you know, what are your products and services? How many more products or services can you ethically add to a transaction to double or redouble profit, not necessarily revenue? And how many things go along with what you sell, even if it's not what you sell, but it's in the same uh the same uh category? What else do they buy that you could add? What else is and I think we talked about this uh earlier. There's two distinctively different sources of revenue that everybody has from a buyer base. One is the before, during, after extension of the category itself. Okay, so if I was basically buying a new home and it didn't have any landscaping, the obvious area is landscaping next, and maybe it's finishing things. We bought our big house, but it wasn't finished. But then there's the question of what else does the decision maker buy? And it's everything. Yeah. If they trust, you have this license to expand dramatically how you can monetize a relationship with no investment because you can you can make uh we've negotiated tons of deals where you get half of the profit by introducing expanded product services to an audience that you have created trust with. Yeah, that's dramatic. I'm trying to say that you don't even have to get into AI to be transformatic. That's right. I actually I I told the story many times. I was in the seminar business. We did a quarter billion, $250 million of seminars worldwide.
Jim FitzpatrickWow.
Jay AbrahamAnd the total amount I put out fixed was $300,000 because I figured out uh I think we had at the at the peak 120 different
Add Profit By Expanding The Relationship
Jay Abrahampartners who put up their resources, their access to their audience, their sales force, their emails, their offices, their brand to generate business for me, and I just had to pay them on results. Well, changing the rules and not spending and wasting money on advertising that may or may not have worked, and instead building this incredible direct-to-entrepreneur distribution channel on a worldwide basis where I only paid on results was transformatic.
Jim FitzpatrickYeah.
Jay AbrahamI mean, I'm but am I making my point? And I'm not asking it to be arrogant. I'm asking it to clarify, or do you need me to come at it from a different point of view?
Jim FitzpatrickNo, no, no. I uh it's very clear. So once someone thinks they found the idea, how do they actually move on it without betting the whole business or something that's unproven?
Jay AbrahamSo this is the biggest fallacy out there. Most people uh they are promiscuous financially and promiscuous in terms of uh of shifting actions. Almost any assumption that you come up with can be at least uh uh it may not be definitively validated, but it can be at least uh pre-validated by a small safe test. And that's all you have to do. You can at least get the indicative validation. So if I wanted to see if a different market, a different media, a different access vehicle could be very lucrative, I wouldn't stop all my day job advertising. I would make an arrangement with somebody that had the best example first, and then I would basically wouldn't even care about making money, I
Safe Tests Instead Of Betting The Farm
Jay Abrahamwould care about making sure that my validation was right. And so I would do a test. Maybe I'd say, okay, let me have access to 5,000 of your people, or or have your salesperson present my product to you know a hundred of your accounts or whatever it would be, or put it in five of your stores, or whatever it would be, and then I would see if it showed light. If it was off the charts, that's great. If it's pretty encouraging, but not absolutely, then you revalidate a little larger. But any assumption that you make about anything, you don't have to mortgage the farm, you don't have to abandon everything. And in fact, one of my mentors, and I think I've talked about this before, created a concept that he called, I remember how he called it, he called them um uh oh, what did he call them? They are uh uh explosive breakthroughs that he called, now I'm gonna have a loss, just gonna was using the language for somebody else earlier today on a uh a deck I was building. Uh, he called them, oh shit, I'll come back to it. But here what he said was if you experiment every month with two wildcard bonanza equivalent breakthrough approaches, and breakthrough doesn't mean technological, they mean just doing something different, accessing it different, applying it different, articulating it different, um, packaging it different, and you don't risk a lot. Two things are gonna happen. If you try two of these, not incremental growth, but wild card growth, he said you're gonna probably not win on 80%, but it won't be complete losses. In other words, you're not gonna lose everything, but they're not gonna be winners. But you will win on 20%. That means every year you find five breakthroughs. Maybe some are doubles, some are triples, maybe you get a great slam. But the point is, over five years you have 25 breakthroughs. And 25 breakthroughs runs laps around everybody else if they're not doing this. And you don't have to risk a lot, you have to commit it to experimenting a lot. And you're really a decision scientist, you're a research scientist, whether you like it or not. Um, there's a very famous quote from one of the greatest uh management consultants of all time, Peter Drucker. And I'm gonna paraphrase it and probably not do it justice, but the essence will come across. If you aren't committed to continuously making what you do, how you do it, where you do it, uh obsolete,
Why AI Comes After The Blueprint
Jay Abrahamyou can rest assured that your competitor will be glad to do it to you and for you.
Jim FitzpatrickThat's right. That's right.
Jay AbrahamThere's no such thing as nothing stays static.
Jim FitzpatrickNope.
Jay AbrahamStays the same. You either regress or you progress, you you multiply or you diminish. You basically expand or you contract. And if you understand that, the more committed you are to experimenting safely, first of all, with non-technical breakthroughs. We just finished a manuscript that I'm working on, and the premise is you don't even start to apply AI until you've you have basically blueprinted the ultimate, the ultimate exponential performance-enhancing system. Because if you have a flawed system, then you're going to multiply flaws. AI can expand flaws faster than that. That's good point.
Jim FitzpatrickThat's a very good point. Yeah.
Jay AbrahamSo we make it the last thing you do, not the first. And then when you do it, we take the same belief system. And I think you and I have talked about this. A ton of people have already bought into a genetics for customer service. That's right. However, they buy into it without question. I come from a world where you test you test variability, you change how you say something in an ad, in a sales presentation, on your website. I have seen that kind of change be transformatic up to 2100%, 21 times better yield. You change how you position something, double, triple. Yeah. You change how you prove the veracity of your claim. You can do it with more reviews, more uh endorsements, more testimonials, telling about the companies behind it, the training of the experts behind it, the materials you use and their performance expectations. You can double. You add a bonus, you can double. You add a more a more dimensional risk reversal, you can double. Well, I just gave you double, double, double, 21%. You're not gonna get all that's in one function, that's transformatic.
Jim FitzpatrickThat's right. That's right.
Jay AbrahamThat's way before you add the AI. So I basically would have a client company go through every area, and I concentrate on on a number of things. First is RSO, revenue system optimization. Question,
OPIs Versus KPIs For Growth
Jay Abrahamwhat is my revenue system? Because most people, where does it start? Where does it end right now? Does it have to start there? Can it start before that? Does it have to end there? Can it extend monetizing or sustaining uh your relationship? Then you look at everything in between and you question how it currently performs, and this is where those OPIs come in. And we originally called them overlooked performance indicators, but I'm changing uh my thinking and thinking maybe they're overlooked performance igniters.
Jim FitzpatrickOh, I like that.
Jay AbrahamYeah, because that's really what they're designed to do. KPIs don't help you today, they might they they they give you an area to look at, but they don't give you a reason that you're getting underperformance.
Jim FitzpatrickYeah, good point. Very good point.
Jay AbrahamWhat happened in whatever period you're measuring?
Jim FitzpatrickThat's right.
Jay AbrahamSay, hey, here's how you fix that, here's how you multiply that. That's what these OPIs do.
Jim FitzpatrickYeah, very good point. Very good point.
Jay AbrahamThat's transformatic. I'm just saying, yeah, transformatic has people think. I mean, here's something else that's very transformatic. It's a mindset shift. For many years, a bunch of prominent people, I'm not going to name anybody because I don't really uh want to uh dispel what they teach, but they talk about a 10x moonshot uh goal. But what they're really implying is 10x revenue.
AnnouncerYeah.
Jay AbrahamWell, if you are a linear thinking thinker, you know, to get a 10x multiplier before AI, you've got to basically expand dramatically your operation, your people, your capital, your facility, your your
The 10x Bottom Line Mindset
Jay Abrahammarketing, your sales. Whereas getting a 10x bottom line, oh, by the way, if you're gonna do the top line, it costs a ton of money. You've got to get the right experts, you've got to figure out what the initiative is. Sure. Take longer, uh, cost more than you ever imagined, like building your own house. When it's done, it's not gonna perform world-class until you refine it. All along, you have to keep the regular business going, gotta pay for it some way. The only three ways are borrowing, taking out of your needed cash flow, or diluting your ownership. Whereas the transformatic thought shift is you can get a 10x moonshot bottom line for zero investment.
Jim FitzpatrickYep.
Jay AbrahamZero just by shifting the performance of a number of interrelated drivers in your in your uh revenue system. I can go on and on, but I'm just saying I would argue very vehemently on the entire uh implied definition of a transformatic breakthrough. I think it's far more, it's far more exciting, far more accessible, far more safe, far more um uh capable, far more uh uh doable for anybody than anybody believes.
Jim FitzpatrickYeah. Yeah, it's it it really is amazing um when you when you when you apply these these concepts to a business and uh hence the transformative breakthroughs that we're talking about today.
Jay AbrahamI hope that shifts people's reality.
Jim FitzpatrickThat's right, creating transformative breakthroughs for your business with Jay Abraham on the strategic edge right here at ASBN.com. Thank you all for watching and uh check out all of our other shows right here at the Strategic Edge. Thanks so much, Jay. Thanks.