How Ryan Deiss Built a Multi-Million Dollar Empire Through Strategic Subtraction

Ryan Deiss has launched over 200 businesses.

Many have succeeded (his company portfolio has a combined $200 million annual revenue).

Some have failed spectacularly.

In 2006, an algorithm update wiped his entire business empire off the face of Google. At a bar in Dallas, he sat alone, $250,000 in debt, with a borrowed pen and a cocktail napkin, facing a stark choice: figure out a solution that evening or apply for jobs in the morning.

The napkin scribble became the foundation for what would grow into a multimillion-dollar enterprise.

Sixteen years later, Ryan would find himself in another make-or-break moment with his business, The Scalable Company. After 18 months of fighting what customers were clearly telling him they wanted, he finally had to admit defeat.

Ryan's journey reveals a counterintuitive truth about building a successful expertise business: The path to scaling isn't about doing more. It's about strategic subtraction.

And that's a lesson he learned the hard way, multiple times.

The journey to those 200 businesses began in 1999

Fresh out of high school, Ryan created and sold his first digital product: an ebook on how to make your own baby food. The book sold, so he quickly followed it up with guides on different topics, like how to roll sushi.

He's making real money at a young age and asks himself, "What would happen if I had 100 of these ebooks?”

So, he continued launching and selling products throughout college. Fast-forward to graduation in 2003, he now has 200 websites monetised through various products (ebooks, software sales, lead gen, affiliate marketing).

At the same time, while launching these websites, Ryan started attending digital marketing conferences. These conferences were mostly full of older guys, so when a college student showed up, he looked out of place, and a lot of people naturally asked, "What are you doing here?"

When Ryan tells them about the success he's having with these 200 websites, people start asking him, "How do you do it?" Do you have a book on that? Are you consulting?”

At first, he didn't have or do any of those things, but after enough people asked, he decided he should have something to point people towards, so he started a simple newsletter (that would become the basis for DigitalMarketer). He'd talk about what he and his partner (Perry Belcher) were doing with their businesses. In fact, he funded several new businesses through the newsletter with declarations like:

There was an appetite for the practical how-to information Ryan shared, and there was so little of it available in the early 2000s. He was actually 'doing the work' of growing online businesses and sharing what he was learning.

Then came the crash that changed everything

Ryan's websites centred around one strategy: SEO ranking with organic traffic from Google. But in 2006, when Google changed its algorithm, his sites disappeared from search results overnight.

So he pivoted to buying ads. Got good at it, too. But it was an expensive education.

‍He'd gone $250,000 in debt figuring out Facebook Ads, and eventually, his cash dried up. There were no more loans available. He was broke.

He borrowed a pen from the bartender and pulled a cocktail napkin closer. On it, he mapped out how his business actually made money:

He realised that the business was getting too complicated, so he shut down all but six of the hundreds of businesses he’d been juggling.

The next year, he generated a million dollars in revenue from just those sites, and he was back in business.

It was Ryan's first lesson in strategic subtraction. It wouldn't be his last.

But, before we get into that further, let’s return to a significant event in Ryan’s timeline…

Ryan noticed something about the marketing world

Going back to those marketing events he was attending, many of them were essentially pitch fests.

Each speaker would give a 60-minute talk, which would consist of a 20-minute intro, 10 minutes of pseudo content, and 30 minutes of pitching their thing.

As a customer at these conferences, Ryan wasn't happy. He wanted the kind of useful and practical content he was sharing in his newsletter, but nobody was sharing that on stage. So, Ryan and his business partner asked the question, what if we launched a marketing conference where attendees actually got value from the content, not just the networking opportunities?

So, in 2009, they launched the Traffic & Conversion Summit

It mainly was Ryan and his business partner on stage (with a couple of outside speakers). 180 people showed up, and they loved it, but Ryan and his partner made no money from it. In fact, they were in the red. They sold early bird tickets to the second conference to pay the bills from the first.

Ryan and his partner launched DigitalMarketer in the third year of the conference, taking individual recorded sessions from the Summit and selling them as products. That was the brainchild for what would become one of the largest digital marketing education platforms in the world.

But Deiss subsequently learned an interesting lesson that's worth sharing here. While the sale of those individual sessions went well, Ryan and his team decided to transition to a Netflix model with a member's area of content. Sign up, and you get everything. It failed because…

“As copywriting teaches us, highlight everything and you highlight nothing.”

Churn was high.

When Ryan and his team asked prospective buyers, "Would you like a one-stop shop where you can buy everything?" The unanimous answer was "Yes." But when DigitalMarketer built the all-you-can-eat content subscription service, the majority of people bought and shortly left.

When Ryan and his team drill down into why people bought, they find that people are signing up to access one particular video, and then they'd churn. The only people who stuck around were those who had the time to read everything that came in, which was the minority.

So, DigitalMarketer switched back to the A La Carte model.

People were joining DigitalMarketer to learn about one specific thing. They didn’t hang around for more content. They hung around for community, which tied back into Ryan’s success with Traffic & Conversion Summit. Great content went hand in hand with meeting other people trying to do the same thing, and when it was simply great content followed by more great content (with no community), the business model didn’t work.

But, just as DigitalMarketer was hitting its stride, Ryan made a move that surprised many:

He sold Traffic & Conversion Summit

It wasn't part of some grand exit strategy.

Ryan and his partners weren't actively shopping the conference around. The opportunity landed in their laps when Affiliate Summit, another event in the space, was acquired. The founders were friends of Ryan, and when he called to congratulate them, they told him, "This company is looking to acquire other events in the marketing space. Do you want an introduction?" The buyer was Clarion Events, the second-largest event management company in the world.

Ryan had a conversation with Clarion Events. They were interested in buying, and in addition to the money, they offered international expansion. Until now, Traffic & Conversion Summit was held exclusively in San Diego. Ryan and his team had always dreamed of taking the conference worldwide but didn't know how.

They had a wide-ranging business model that included events, eLearning, training, coaching, and software. Like the time when Ryan cut his portfolio from 200 down to six, he felt he was in a similar position where he needed to double down further through omission and pick the one thing they were truly great at. They chose DigitalMarketer (eLearning, training, and coaching).

So, in 2018, Ryan and his partner sold Traffic & Conversion Summit but retained control over the content. In the terms of the deal, they also maintain partnership status, so even after the sale, Traffic & Conversion Summit was still presented by Digital Marketer.

Therefore, as Traffic & Conversion travels around the world, it takes Digital Marketer with it.

There was another reason why Ryan and his partners were happy to sell the conference arm of the business but never DigitalMarketer.

Digital Marketer acts as a platform business

What is a platform business?

The platform, DigitalMarketer, holds the knowledge and expertise to launch and scale businesses. It’s the goose that lays the eggs. The eggs are sold, but sell the goose and you have no more eggs.

During this period in 2018, Ryan and his partners sold several 'eggs' from the portfolio until they were left with very little other than Digital Marketer.

At this point, Ryan’s sitting on a lot of capital. What should he do with it?

He shared his plans with a few friends in the investor space who told him, “Starting companies and investing in companies are two completely different things. You have zero experience in one and a lot in another.” They were right. His skill set in building companies from the ground up didn't necessarily translate into becoming a successful investor.

Still, he didn’t have the energy to start all over again. So, he found a middle ground…

He launched The Scalable Company

The Scalable Company (Scalable) would act as a second platform business. Where DigitalMarketer operated mostly in the B2C space, Scalable would help B2B companies scale their business and, in the process, effectively get paid to do due diligence on exciting B2B opportunities that they could invest in.

It’d be a front for Private Equity Investments.

What was the idea for Scalable?

It came from painful lessons of the past. Ryan was a master at growing new businesses, but learning how to scale them had taken many painful lessons. In 2016, for example, three of DigitalMarketer's 'Eggs' were on the Inc 5000 list. One of the businesses ultimately did well, and Ryan and his team secured a healthy exit. Of the other two, one was sold for scraps to competitors because "the founder couldn't get out of his own way." The other lost $2 million and laid off 180 people because Ryan and his team had hired the wrong CEO.

During those days of building or overseeing hundreds of companies, Ryan had made a lot of money but also experienced the down-sides of running businesses that don’t scale:

He had an existing audience, he just had to figure out what they would buy today. And although Ryan knew this audience well, that turned out harder than you'd think.

The first challenge was finding the right message that would resonate with his audience

Ryan started with broad positioning statements:

Looking for the right hook, Ryan began publicly testing different ways of articulating the pain points. He tweeted:

"Why is it that as my business makes more money, I personally make less?"

That tweet went viral because it spoke directly to a problem that his specific audience was experiencing.

Ryan found his headline position, but despite finding a message that resonated…

It took two years to figure out the Scalable offer

The original idea was a mastermind.

He'd sold those before through DigitalMarketer and knew that high-performance business owners like to be around other high-performance business owners. Scalable launched at the end of 2019, and when the COVID pandemic started in 2020, the idea of in-person meetings was turned into a virtual mastermind where, once per month, you hang out with Ryan and a bunch of smart entrepreneurs.

They sold some variation of that for the first 18 months, but it couldn’t scale beyond the people who already knew and liked Ryan.

Until he landed on a Scalable Framework

The day before one of their mastermind events in 2020, Ryan was trying to figure out how to connect a bunch of disparate tools. Ryan and his team had figured out the scaling conundrum years ago. They had models helping you make good decisions at every stage in business growth. Things like:

Several of these tools were essential to building a business that scaled, but the sequence of how they fit together was unclear. So, ahead of this event, Ryan went back to first principles and Googled: “What is an operating system?”

Ryan had an aha moment. He already had six tools that would slot into those three categories of an operating system. Better yet, three of them were clearly the ones you’d start with, so he had the base of a pyramid.

He’d discovered The Scalable Operating System

He started delivering the framework at events, and customers loved it. Ryan and his team frequently heard feedback like, "This is a game-changer.”

So, they rolled out the operating system.

Ryan started selling this as a classic $3,000 cohort course, but as much as they pushed it, few customers wanted to buy the course, and those who did didn't have much success implementing it.

So, Ryan shifted back to the mastermind format with the course bundled in. There would be weekly calls and in-person meet-ups four times per year. But still, it was a hard sell, and customers continued to struggle to implement the framework successfully.

The solution was staring Ryan in the face. Every customer was telling him what they wanted, but for 18 months, he was resisting their requests. Customers wanted 1:1 help building, installing, and implementing the operating system.

‍That was the exact opposite of what Ryan wanted to sell.

‍He knew how hard it’d be to scale a service business and build the infrastructure for 1:1 support.

The only real economies of scale in that model are upselling and retaining customers. He continued to fight it, but now we're in October 2023, and the business has experienced consecutive months of losing money.

The business model isn't gaining traction, and if it continues, they'll have to start laying off people

So Ryan finally decides, "Let's see if we can sell this 1:1 engagement." His business partner, Richard, tells Ryan, "If we can sell it, I'll fulfil it until we have the people in place for fulfilment.”

So they tell their salesperson to go and sell this (at this point, the salesperson had been begging to sell 1:1 implementation as customer after customer had been asking for it). They sell on the first sales call, then the second, and in a very short period of time, they get their first 20 customers. Subsequently, they build a team of people to fulfil the 1:1 engagement of helping customers install the operating system.

And that process supports Ryan’s advice on getting your first $1 million:

So what did the Scalable offer evolve to?

After the first 16 weeks of helping the customer install an operating system, they offer to install the marketing and sales systems required to grow the business (pulled from DigitalMarketer). That’s sold at a monthly rate. During this stage, there’s a quarterly review with monthly and weekly async checks, and at this point, the customer is also welcomed into a community. If they want a 1:1 call with a member of the Scalable team, they can request it.

Once Scalable finds this "product-market fit," Ryan takes the next step to firmly cement the business as an expert in helping entrepreneurs scale their companies.

He starts writing the book Get Scalable

The objective of the book was to generate leads for Scalable's services. It would share the story behind launching the business (failed attempts at scaling) and the Scalable Operation System to grow the business successfully and avoid all the mistakes Ryan and his team had made.

Like April Dunford and Obviously Awesome, Ryan taught the material in live settings before writing the book. Early on, it was "loose and unstructured" in those Masterminds. He witnessed people's reactions and noticed when they leaned in or switched off.

He refined that material to become the cohort training material (remember in the early iterations of the offer?), had it transcribed, then using the transcription as the basis of structure, wrote the book.

(As a note, Ryan did something similar with a previous book, The Invisible Selling Machine. That began life as a webinar. Austin Kleon's Steal Like an Artist started life as a series of 25 quotes to help you "steal like an artist." Same with Blair Enns and The Win Without Pitching Manifesto. That was an end-of-year newsletter in 2008. Notice the pattern here. Great business non-fiction often starts as a shorter form piece of content. The content resonates, the author notices, gets feedback, and then digs in deeper.)

He had gold on his hands, and he knew it. The feedback was great, and don't forget, Ryan had mastered the methods he was sharing.

It took Ryan years of doing, getting results, good or bad, and then stepping outside that process and figuring out how he’d achieve the same results for someone else. The years at DigitalMarketer were the doing, the time at Scalable was him stepping outside to figure out how he’d done it and how he’d help others achieve the same result.

So, Ryan writes and publishes the book Get Scalable…

But he doesn’t launch the book

Not in a traditional sense.

When Ryan wrote his first book, Invisible Selling Machine, he had a big book launch and sold 30,000 in the first week, but he wanted to do something different with this book.

He'd noticed that the books that had the greatest impact on him personally "owned a category," were perennial sellers, and were not born from the biggest launches. Those books were introduced to a subsection of influential people within a category and spread slowly (at first) via word of mouth.

For example, when Tim Ferriss launched The Four Hour Work Week, he emailed a bunch of people (Ryan being one of them), invited them to an exclusive event, sent them the book, and asked them to talk about it. Word of the book spread. There was status associated in sharing the book because, early on, few people had heard of it; it was a completely unique (and good) book.

It was similar with Alex Hormozi and his first book, $100m Offers. The book had a twist, was good, and wasn't widely known, but early 'sneezers' were keen to share it.

Ryan wanted to write a book that would be recommended to the exact person trying and struggling to scale.

The other factor in the decision was that a big launch creates a big surge, which Scalable could not benefit from. Scalable can onboard 20-30 new clients each month, so what's the benefit of selling 30,000 books and attracting hundreds of leads they can't service?

So, instead, Ryan promoted the book with one email to his list, which sold 12,000 copies in the first few weeks. From there, the goal was to sell approximately 1,000 copies per month, which they currently do.

So, how do they sell the books?

15-20% of their ad budget runs straight to the book. They’re doing 200 sales per month on Amazon through ads. Between 300-400 on Meta per month. The rest is organic. Going towards that target of 1,000 books per month (Here's the source on those numbers).

Beyond that, they also have a lead magnet. The Scalable Operating System is made up of those six specific tools, and Ryan and his team pulled one (The CEO Scorecard Template) to give away as a lead magnet.

When someone downloads the template, they're pre-qualified (i.e., revenue numbers, whether they're the business owner, etc.). We'll come back to what happens with these good-fit leads.

For those who aren’t qualified, what happened in the past was they’d receive a sequence of emails selling them courses priced in the hundreds or thousands.

Ryan and his team have since changed the sequence, primarily because people don't buy how they used to (more on that in a moment).

Instead of those old sequences, subscribers are offered the book because, as Ryan puts it, "a lot of people in the business space would rather buy a book than a course." This is especially true post-2020, when people have become fatigued with courses.

Scalable discovered that once somebody bought the book, sales increased on the courses that supplemented it, as did sales on their services.

This is all in stark contrast to the way Ryan used to market.

Ascension no longer works

Remember those 200 websites Ryan built earlier in his career? Much of the marketing he used to generate revenue was through the ascension model.

That looks something like this:

That's the old-school digital marketing approach to building revenue, and Ryan was one of the best at it.

But in his own words, that model no longer works. Customers don’t buy the way they used to.

That's the case in every industry. The marketing funnel no longer works the way it once did. The linear path they once followed through your funnel is broken, and few are prepared to speak with a salesperson until they're ready (because they no longer need to).

In every category, we have more easily accessible options than ever before.

Here's what B2B buying actually looks like today: People bounce around the internet like pinballs, consuming whatever interests them.

They're watching YouTube tutorials at 11 p.m., scrolling LinkedIn on the train, binging podcast episodes while walking the dog, and quietly following the people they might one day buy from.

By the time someone finally sends you that email, they may know more about you than some of your friends do.

These seemingly "out of nowhere" leads have actually been watching you for months. The sale happened ages ago, you just didn't know it yet.

So, what does the new game of marketing look like?

If you make an offer too soon, you will not only miss out on the sale, but you will likely burn those leads.

So now, after Scalable has qualified the lead, they send the lead a piece of pillar content. In this case, it's a 120-minute video combined with a 60-page report, which is essentially a webinar version of the book (the report is more or less a transcript of the webinar).

That video and report comes with the email saying:

“Welcome. If you’re interested in getting some help building your operating system, we can do that here. If you have no idea what an operating system is, here’s a video you can go watch. That’s your next step.”

Ryan is using this pillar content approach not just for email but as the backbone of his entire content strategy.

For years, he'd kept YouTube at arm's length

"The future of digital marketing is the past."

Everything revolved around creative messaging in the Mad Men era because distribution channels were limited and controlled. With just a handful of TV networks, radio stations, and magazines, getting your ad in front of people wasn't the challenge. Standing out was.

Creative teams were the rockstars because a brilliant, emotionally resonant ad could transform a brand overnight.

The media buying side was simple. Everyone knew where the eyeballs were.

With the advent of SEO and Facebook ads, that changed. Nobody knows that better than Ryan. His success through the 2000s and 2010s was built on expertise in SEO and Facebook Ads. If you understood the algorithm better than competitors, you won. With enough traffic, low conversion rates through average creative works just fine.

But now the script has flipped.

A killer offer doesn't just sell the destination, it reveals the journey. It gives prospects the confidence to say "yes" because they can visualise exactly how you'll get them there.

And the simplicity of that principle is maybe the greatest lesson from Ryan's journey.

From his early ebook empire to DigitalMarketer to Scalable, Ryan's greatest successes have emerged from moments of strategic subtraction. His process follows a pattern: first expansion, then contraction.

The expansion is crucial: it's where he discovers what works, what resonates, what sells. But once he finds traction, he ruthlessly cuts everything that isn't part of the core offer people love.

Each represents the same core insight: As counterintuitive as it seems, the blueprint for building and scaling an expertise business is about expansion, then subtraction.

And the real courage isn't in cutting what's failing. It's in letting go of what's working adequately to double down on what's working exceptionally. It's closing down profitable but unremarkable offerings so you can pour everything into the ones that truly resonate with your market.

Ryan's journey teaches us that the most valuable scaling insight isn't a complex system or intricate framework. It's knowing when to expand and when to contract and having the wisdom to sacrifice good opportunities for great ones.

Sometimes, starting over with just a pen and a napkin.

P.S. Here's more on Ryan's latest book, Get Scalable.