SFR 206: Is Your Red Ocean Even RIPE? – Stephen Larsen

SFR 206: Is Your Red Ocean Even RIPE?

Jan 8th, 2019 anchorwave

Do not choose an ocean that isn’t red. Here’s how to know if yours is…

The Red Ocean is your market. But NOT all oceans are red, and NOT all red oceans are ready to birth a blue ocean.

So how can you tell when a Red Ocean is ripe to be picked… and how to position yourself in that ocean for success?

Steve Larsen red ocean strategy


…Keep reading, and you’ll discover the #1 biggest reason I see that people DON’T have a successful sales funnel… that has nothing to do with the:

  • Sales Message
  • Offer
  • Funnel
  • Traffic

I’m gonna show you HOW to know if a Red Ocean is ready to birth a Blue Ocean … and WHY it matters.

Let me tell you a story…

I watch a lot of people get up on stage to talk about their thing.

I remember this one guy who was making loads of money in real estate. He was showin’ the numbers and all this cool stuff.

Real estate sales message

However, the sales letter that he was using was NOT that impressive. I don’t mean that in a mean way. He just wasn’t an amazing sales message writer.

BUT he was making a lot of money because of WHAT he was in.

A little bit later, I was coaching somebody who was an amazing sales message writer. Their offer was so incredibly sexy. They had an amazing sales funnel, and their traffic looked great…

BUT they were hardly making any money because of MARKET they were in.

Market research

WHAT they were in was the problem:

  • Not the sales message
  • Not the offer
  • Not the funnel
  • Not the traffic

… nothing else.

It was WHAT they were in.

I went through this red ocean strategy at my OfferMind Event. If you want to get tickets for next year you can go to It’s gonna be awesome.

Steven Larsen OfferMind

… but listen up, cause I’m going to be dropping some gold here for you too.


If you aren’t making money the problem is often, NOT that you don’t have an amazing offer – it’s that you’re literally in the wrong market.

  1. Money is not known to exchange hands at a high rate.
  2. People don’t like spending money on the kind of solution that you’ve created.

So, ahead of time, there’s a checklist I go through to make sure that what I create is gonna sell.

Will this sell - market research

When I started in this game, I’d always start with a funnel. I’d be like, “Oh, sick. Here’s this sweet funnel.” BUT I’d run into some serious snags and really big issues along the way…

So I started thinking, “Oh, crap. I can’t start with the funnel anymore. I need to start crafting the sales message.” I was like, “Oh, sweet.”

BUT then I learned that that’s not true either…

Now, before I even start crafting the sales message, I think about positioning. It’s all about the WHO. I call it “The History of the Who.”

So I dive deep into the Who and the Opportunity to help me determine the likelihood of me building a successful sales funnel before I ever pursue writing a sales message.

I want to stack as many cards in my favor as I possibly can to make it a win. Why wouldn’t I? And you should too!


King of offer creation and red ocean strategy

A lot of people ask me:

Q:  “Stephen, why on Earth are you not providing more sales funnel educational programs? Why are you not building more courses about sales funnels?”

A: …Because there are SO MANY people doing that. It would be suicide for me to go do that. It’d be dumb.”

It would be a dumb move for me even though I was the lead funnel builder at ClickFunnels.

Why? Because Russell Brunson is the category king in that space.

I’m not gonna go fight over scraps in that area.

Russell Brunson funnel category king

I’m not gonna compete with Russell. That’d be stupid. Does that make sense?


So before I ever decided to start sellin’ Offer Creation stuff or anything in the funnel world. The question I asked was: “Where do I fit in the ecosystem of all the markets that are out there?”

And that’s what I’m gonna walk you through here.

This is super crucial stuff, but a lot of people don’t ask this before they jump in and decide WHAT to sell… and that’s a HUGE mistake.

Is your red ocean pregnant

Here’s the concept…


Before I start building out a NEW value ladder, the first thing I want to do is identify a Red Ocean that’s ripe and ready give birth to a Blue Ocean baby because:

  • NOT ALL markets are created equal.
  • NOT ALL markets are at a price point with a history and a customer education level that’s right.

Beanie Baby red ocean strategy

For example:

The market for Beanie Babies was massive 10 years ago, now, by comparison, it’s super tiny.

So if  you’re like, “Stephen, I’m sellin’ Beanie Baby accessories…”  *CRINGE*

Your market, your Red Ocean, is TINY.

Tiny red ocean strategy

The likelihood of being successful is so small, you’d literally have to capture darn near 100% of your market for your Beanie Baby accessories business to be successful.

Likewise, who here wants to invest in KMart or Sears? No one. Why? Is there a market? Yeah, but it’s sooo wicked tiny – you don’t wanna go there.


Now, I wanna walk through a few things that I look for to make sure that what I’m entering is a place of security… and that the chance my chosen market being lucrative is exceptionally high.

Remember, the real estate guy I told you about at the start of this blog?

He’s an example of someone who was NOT a good sales funnel creator. NOT good sales message writer. NOT amazing at creating offers, but just good enough…

Specifically, he chose a good enough market to come out of – which meant he  made a lot of money.

How to succeed in business

It’s more about picking a ripe market than almost anything else. The actual positioning inside the market and what Ocean you’re coming out of.

I’m not makin’ fun of it, but man, if someone else comes to me and wonders why they’re not making money as a “homeopathic life coach selling to college students…” *GAH*

Market research - The cards are not in your favor

I don’t care if you’re the best, you’re just not positioned to make a lot of money. The cards are not in your favor.

… so what do you look for when picking a ripe Ocean?


  1. Timing matters when it comes to markets.

Often when a big company explodes, a lot of them will attribute it to timing.

How to succeed in business - Timing

  • We were in the right place at the right time.
  • We had the assets we needed.
  • We had the business we needed.
  • We had all of the things in place to take advantage of something that we saw that no one else was in.”

So timing matters, and I want you to know that.

Markets are living, breathing things. They don’t need to stick around and often they don’t.

Don’t be surprised if your funnel doesn’t work, if you’ve chosen

  • A small market
  • A market that’s contracting instead of expanding

I’m gonna tell you why markets don’t stick around…

There are specific signs I look for to let me know that I’ve found a market that’s safe to enter…

Market research - Is it safe

So if you’re cool with it, I’m goin’ a little deeper…


So, these are the things that I look for to know if this market is ready to birth a Blue Ocean.

#1: Conflicting Beliefs

If you have a tiny market which it starts to grow and expand. If money’s being reinvested that market and customers are being created, sooner or later, those customers will bring in more customers, and they’ll sell each other.

…Eventually, you’ll get to a spot where the market/ red ocean starts to get so big and so many gurus start to appear that, (regardless of industry), conflicting beliefs will start to arise.

Conflicting Beliefs are a key sign to look for.

Traffic temperature and conflicting beliefs

When that happens, “Oh, Baby! Blue Ocean”

So whenever there’s conflict inside the Red Ocean, inside of a market, that’s an amazing opportunity for you.

#2: Too Many Product Options

The theme of products inside of a Red Ocean is very much like, “Hey, we’re better, no we’re better, no we’re better.”

There’s a lot of very similar products that are just slightly better than each other. There are not any products that are different.

Different is the theme of the Blue Ocean.

Different red ocean strategy

…And when you start to see tons of products competing on ‘better,’ that’s one way to know that the Red Ocean is ripe.

It’s why, if you don’t know your market/ Red Ocean, it’s really risky.

#3:  Customer Innovation

If customers are starting to innovate on the products in the Red Ocean, that’s another big sign.

#4:  The rise of C- level influencers

  • There are category kings and main honchos; the Russell Brunson’s of other industries. The A-level influencers, the big fish.
  • Then there are B-level influencers. Not quite as big, but still quite big.
  • When you see the rise of C- level influencers. The third tier influencers; that’s a big sign that you’re ready to branch out and take people from the Red Ocean to take a following into a NEW Blue Ocean.

# 4: An Ugly Ocean

By this I mean, is your Ocean is contracting? If your Ocean is leaving don’t pick it. I like avocados a lot. Avocados are good for like five to seven days, then they go bad.

Traffic temperature gone cold

It’s very much that way with Red Oceans. The ship may have sailed… or the avocado may have gone rotten ?

Don’t try to make a dying or dead market work for you. It won’t work.

I’m not sayin’ that you can’t make money, but the road is long. Stop doing that!


You know your market is dying specifically when businesses are NOT reinvesting cash back into the Ocean.

If businesses are taking money out of a market and not putting it back in, that’s a contracting market.

If you don’t see entrepreneurs:

  • Reinvesting cash
  • Building up the business
  • Building up systems and teams
  • Building up more infrastructure.

… that’s a contracting market.

Grant Cardone’s last event was 9000 people. His next one is 35000 people. They’ve rented a whole baseball stadium.

How to succeed in business - events

What does that tell ya?

A: The dude is reinvesting cash back into that area. That’s some freakin’ security. That is an expanding market.

If you see A-level gurus reinvesting cash at that level – that’s a big deal. It’s not just cool, it’s a signal.

If I wanted to sell Grant Cardone’s salespeople, that would be a sign to me that it is safe for me to go create a new opportunity. Does that make sense?

# 5: A Decrease in New Buyers Entering The Market

# 6: A Decrease in New Sellers

… Meaning:

  • There are no more new businesses being created
  • There are no new people
  • There’s a declining rate. Then don’t go into that market.

Market research - decrease in sellers

You’re lookin’ for strength in numbers in both customers & successful businesses.

#6: Fad or Foundation?

When you can ask this next question, it’ll help you like crazy:

Is my Red Ocean a fad or a foundation?

Fad = Beanie Babies, POGs, KMart, Sears…

Fad market research

This is one of the MOST key things I can teach you right here… and it’s the main core of this entire episode.

Too often, people make a product and they come to me and ask, “Steve, who should I sell it to?” I’m like, “You have no idea who your market is, do you?”

The Red Ocean is your market. That’s who you’re pulling from and bringing over to your new opportunity.

But before you chose a market you need to answer the question, “Is my Red Ocean a fad or a foundation?”

How do you do that…


There’s a key way to know whether your market is a FAD or a FOUNDATION, and it all comes down to the temperature of traffic.

Know your traffic temperature

I know this is more of a technical episode… but stay with me. This is HUGE.

This is the difference between millions of dollars and nothing.

Seriously, this is the difference between a break-even business and a profitable business right here.

I do NOT ever have to ask, “Where’s my customer?”  – because of what I’m about to tell you.

It’s one of the major reasons why my stuff’s blowin’ up, even though I’ve only been away from ClickFunnels for a year.

Steven Larsen traffic temperature

Not tootin’ my horn, just sayin’…

It all comes down to the temperature of traffic.

People skate past this idea too fast.

There are three kinds of traffic or three temperatures of traffic:

  • Hot traffic
  • Warm traffic
  • Cold traffic

…And I know, as my audience, you’re like, “Yeah, duh Stephen I’ve heard that.”  Follow me…

Hot traffic temperature

#Hot traffic takes the smallest amount of education to sell. The bridge t needed to actually cause a purchase is very tiny. They’re problem aware, and they’re solution aware.

#Warm traffic needs a little bit more education to sell. They’re problem aware, but they’re NOT solution aware.

#Cold traffic takes a freakin’ gigantic bridge to sell. You have to educate them like crazy, lots of education. They’re NOT problem aware or solution aware. So you gotta educate them about the problem and the solution.

…and that’s super challenging.

There are not many companies ever really build that cold traffic bridge. That’s the key.

If you’re struggling in your business right now, It’s probably because:

  1. you don’t know your WHO. You have no idea who you’re selling to.
  2. You DO know WHO you are sellin’ to, but you might just be sellin’ the WRONG person. You’re literally attached to the wrong market, the wrong Red Ocean.

This DOESN’T mean you have to abandon everything – just switch. CHANGE.

I had to do that in March. March of this year, I realized I was sellin’ the wrong person. I had to switch whole markets.

Switch markets - how to succeed in business

I went back, and I changed all the vernacular in my:

  • Copy
  • Emails
  • Sales letters
  • Actual offer

…I changed everything.

Same product, but I changed the messaging because I realized that my Ocean was wrong.


How to find your red ocean strategy

There is a piece of your Red Ocean that would LOVE:

  • A new opportunity
  • A new vehicle.

They’re in the current Ocean and use the current products and the current vehicles. BUT they HATE them. That is the best person to sell.

Remember, The 3 personas of the Red Ocean? Go back to that episode again if you need to refresh your memory.

I’m NOT goin’ for everyone inside of the Red Ocean. I’m goin’ for the person who’s, like, “I love that  I can get health/ wealth/ relationships, but I freakin’ hate the vehicle. I hate this product. I hate using it. I just don’t know what else to use?”

Three personas of the red ocean strategy

My friend, that is the easiest person to sell to. That’s WHO I sell to.

When someone calls me on social media, they’re like, “Stephen, will you help me be successful with x, y, and z?” I already know they’re NOT the right person just because of that one move.

… I’m like, “Probably not.”  If you’re not willing to go get the program off of the webinar that I put out there, you’re not my customer. I’m not here to convince you…

BUT… the person who is in the Red Ocean, and they:

  • Hate the vehicles
  • Hate the products that are there

… that’s who I want to talk to. That’s the easiest person to sell.

Stick with me. this is BIG. Millions of dollars, BIG.

  • This is why ClickFunnels is ClickFunnels.
  • This is why Apple became Apple.

Seriously, right here, this is it…


The secret to how to succeed in business

When you’re selling to hot traffic, (people who are problem aware and solution aware) you are in a zone, that I have come to call, “Customer Collection.”

There’s not much you have to do except tell them a tiny story + very small levels of education, and you have collected the customer.

I’m looking for the market that has moved successfully from customer collection to customer creation.

Boom! That’s the key, right there.

Customer market research

Can your market create a customer, not collect?

…And customer creation is what you see ClickFunnels focusing on a lot right now.

I’m the One Funnel Away coach. The One Funnel Away Challenge is built completely to create customers.

Russell Brunson has soaked up tons of people from multiple of markets. He’s collected a lot of the customers out there. Now…

ClickFunnels has moved from customer collection to customer creation.

Steven Larsen one funnel away

They’re selling more to cold kinds of traffic. MUCH HARDER! So hard that markets close when they can’t sell to NEW markets.

If a market can’t go from customer collection to customer creation – the market dies because they run outta customers; they run outta fresh blood to sell.

Sure they can continue to sell existing customers, but it’s NOT sustainable. It’s only sustainable when you can move to customer collection successfully. Does that make sense?

I know it’s getting deep here; you might have to read times, and that’s okay. BUT I want you to understand what I’m looking for. I call it Red Ocean Analytics.

Red ocean analysis

I spend waaay more time understanding the Red Ocean than I do building the Blue Ocean.

It’s about me selecting the right market to come out of to write my sales message for, to adapt and create an offer for, a sales funnel for.

But before any of that, I want to know…

  • Am I hookin’ up to a market that is expanding?
  • Is money being reinvested?
  • Is your market contracting?
  • Is your Red Ocean gonna die because it’s NOT been able to move from customer collection to customer creation?

Customer Creation = Not many markets do that.


Customer creation is hard

Now, ClickFunnels knows how to create customers because you’re talkin’ about Russell Brunson.

Steve Jobs knew how to create customers too…

It took me forever to get an iPhone, but Apple created a customer out of me. I was, like, “I don’t know, I have a computer, I don’t need an iPhone.”

Facebook, okay. I hated Facebook for years. I had a love-hate relationship. I still kind of do…

How to succeed in business - Create customers

But FB created a customer out of me. They literally built a customer. I was not a customer. I was kind of openly anti-Facebook. They created a customer out of me.

They were able to move from customer collection to customer creation. Very hard. Not easy to do. Not many markets do it.

And if you’re like, “Oh, I gotta create customers.”  No, you don’t…

I never have to ask the question, “Where is my customer existing?” Because the Red Ocean is creating my customer.

Did you just get the “AHA”?

Red ocean strategy AHA

Let me repeat that… I never have to ask:

  • Who do I sell to next?
  • How do I go create my next customer?
  • Where does my next lay down sale happen?

… I don’t deal with any of that crap because I know exactly WHAT market I am coming out of.

I have been very careful to make sure that the market is creating the customers for me.

…Because if they are collecting them only, then yeah, I’m gonna have to answer the question, “Where’s my next customer?” But I don’t have to do that because I only pick markets that CREATE CUSTOMERS.

It’s freakin’ incredible!

Frankly, it’s the reason why my stuff’s been selling so well. It’s the reason why I have made moves to very carefully become the Category King of Offer Creation  – because nobody’s in it.

Where am I coming out of? I’m stemming out of the sales funnel building world.

Why? Because they’re moving from customer collection to customer creation with People like Russell Brunson, the One Funnel Away Challenge, and all the new education that’s out there.

One Funnel Away

There’s so much noise in the sales funnel market. It’s a safe place for me to consistently find my customers. BOOM!

If you want MORE about this, I went way deeper during OfferMind.

There are at least eight points that I collect about every single market before I even start building a funnel.

Again, love to have you at the next OfferMind. I’m totally pitching you. You need to come.

Before I ever build a brand new opportunity, a brand new value ladder, or anything like that. I dive in and ask, “Is my Red Ocean ready for a Blue?”

I am gonna find a market to sell to that has:

  • Moved from customer collection to customer creation
  • New buyers & new sellers
  • Conflict inside the market
  • Differing opinions
  • Lots of options
  • A lot of product options startin’ to pop up in there
  • A lot of education
  • The audience is getting smarter – which means I can start selling people who are problem aware but NOT yet solution aware.

…Timing matters!

The market, (the Red Ocean), is priming my dream customer for the Blue Ocean I want to create.

Do you understand how BIG this is?

Once I’ve found my ripe ocean, then I can go do all my other stuff for:

  • Sales Message Creation
  • Offer Creation
  • Sales Funnels
  • Publishing

… all that other stuff that I do.

Steven Larsen content machine

I’m publishing for the Red Ocean NOT the Blue. The Blue barely exists. The Red Ocean is your market, NOT the Blue.

I want you to feel what I’m talkin’ about when I say that. I didn’t understand any of this stuff when I first started out.

And one of the reasons why everything failed was because I was fighting over the scraps because I didn’t know my position in the market.

I know this is deep. This is a lot of theory… it’s not even theory. This is HOW it works.

I want you to understand why positioning and picking a ripe ocean matters so much.

Until Next Time – Keep Crushing It!

Boom. If you’re just starting out, you’re probably studying a lot. That’s good.

You’re probably geeking out on all the strategies also, right? That’s also good.

But the hardest part is figuring out what the market wants to buy and how you should sell it to them.

That’s also what I struggled with for a while until I learned the formula. So I created a special MasterMind called an OfferMind to get you on track with the right offer, and more importantly, the right sales script to get it off the ground and sell it.

Steven Larsen OfferMind event

Wanna come?

They’re small groups on purpose so I can answer your direct questions in person for two straight days. You can hold your spot by going to

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