REAL AF with Andy Frisella - 526. Q&AF Ft. Alex Hormozi: Compromises In Business, Learning Skills Vs. Hiring Professionals & Dealing With Yes Men

Episode Date: June 5, 2023

In today's episode, Andy & DJ are joined in the studio by Alex Hormozi. They answer your questions on what you should not compromise inside your business, where to draw the line between hiring out as opposed to developing the skills needed, and how to deal with "yes" men as an entrepreneur.

What is up guys, it's Andy Priscilla and this is the show for the realest, say goodbye to the lies, the fakeness, and delusions of modern society. And welcome to motherfucking reality. Guys, today we have Q&AF. That's where you send in your questions and we give you the AFs. And today you're going to get some extra special sauce with that. I'll tell you about that in just a second. If you want to submit your questions to be answered on the show, you can do so one of a few different ways.

The first way is... Guys, you can email those questions into askandy at andyfrasella.com. Or now that we're on YouTube, you can go on YouTube and click that little subscribe button and drop a comment under the Q&A episodes, and we'll pick some to answer from there as well. Other times you tune in, if this is your first time listening, we have shows within the show. Today you're going to hear Q&A-F. Other times you're going to hear CTI. That means Cruise the Internet.

That's where we take topics of discussion of the day. We break them down. We talk about what we think is true, what we think is bullshit. And then we talk about how we, as the people, can all be solutions to these problems going on in the world. Then sometimes we have real talk. Real talk is just five to 20 minutes of real talk. Shocking. And then we have full length. Full length is where you get the full length and the full girth. All right. It's a good conversation. We're bringing my successful kick-ass friends and we talk about how they got to be successful and kick-ass. And then sometimes we have 75 hard verses.

That's where someone who has changed their life, retaken control of their life on the 75 Hard Live Hard program, which is given for free on episode 208 on the audio platforms if you want to go listen. They come in, they tell their story, and then we talk about how they did it and how you could do it too. And for all of this information that we give away for free, we have a very simple ask. It's called the fee. The fee is

please tell somebody. All right. We put a lot of effort into this show. We try to bring as much value as we can. I give you my best shit for free that I've learned through 24 years of getting my ass beat in entrepreneurship and coming out on top a little bit, you know, most of the time. And so if the show made you think, if it made you laugh, if it gave you new perspective, if it taught you something, if it helped you, please share the show. All right. That's what we say when we, that's what we mean when we say the fee. So I was hanging out with one of my good buddies today who's in town for Summer Smash here at First Form. If you didn't know, we have this thing called Summer Smash at First Form.

And he's been on the show before. And I said, hey, Mr. Hermosi, would you like to be on the show today? And he said, absolutely. So here he is. What's happening, brother? Pumped to be here. Yeah. As always.

Yeah, it's awesome, man. Thanks for coming on the show today. Thank you for having me. I got to intro my show like that. That was a banging intro hey all the girth and the length yeah that's right yeah taking notes well you gotta have the girth in order to intro like the length really don't count for much it's all about the girth let's be real all right really want listenership penetration that's right oh man so we're gonna have alex chime in today on the q and a's and uh you know he's gonna bring some heat like he always does with everything that he does so appreciate you coming on man

yeah pump the beer all right well yeah i got something good for both of you guys oh you do yeah we got we got we got some good ones shocking yeah surprise surprise motherfuckers let's get into these guys uh andy Andy question number one, Andy, you consistently talk about zero options mentality with personal development and your goals. What are some things that you will never compromise on in your business? Well, look, I think there's about three things that have saved me millions and millions and millions of dollars, never compromising on. The first one has definitely been my mental mindset and my physical being, okay? In my opinion, head, heart, body are your tools. They are your weapon. If you're going to go to war with some weak-ass weapons, you're going to lose, all right? So that's the first thing. The second thing is in my standards, all right?

I have found that when I have caved to the pressure of lowering my standards in any way, shape, or form for any reason at any time, I have always lost every single time. And it's hard not to do that when you have pressure to do that from people that you actually respect or people that are following you. Sometimes things are really hard and they say, well, look, if we could just do this, things could be easier. And every time i've done this when everybody else wanted to do it i've lost um you know and the third thing i think is the people that i keep around me you know i have very high standards for the people that i call friends people that i keep around me those people influence you uh they make up your entire life in every single way. And if you have the wrong people

around you and you compromise and let them around you, I think it's going to fuck your plan up. It has me. Every time I've let someone in, you know, you and I have talked about this a lot. Every time I've given someone the benefit of the doubt and said, oh, you know, I kind of look past the things that are a little red flags and I'm like, ah, it ends up burning me, man. And so, you know, I think your mind, your body, uh, your standards and your relationships are three things that should never, ever, ever be compromised on. What do you think? I have some thoughts. Yeah. So number one, the first thing that came to mind was product. So in terms of like, what are you going to sacrifice?

Because a lot of times it's always like the short cut that always is more profitable in the short term, but not as profitable in the long term. And in a world that gets measured by weeks and months and quarters, then the shortcut always makes sense. But when you measure it in decades, it literally never does. And so when I had a buddy of mine who started a cookie business, really simple business, right? And I was like, how are you going to go about like figuring this out? And when he told me the story, I knew he was going to be successful. So he said, well, what I did was I looked up the top selling cookies in the US, all the boutique ones, the ones that they put online that they can still ship them across the US, even though they have a local shop. And I fly out there and I try and pay

the chef to show me what they do. And then I fly back and I try and bake the cookies. He's like, and right now I'm on batch 226. And every day I bring them into the gym and I have people try them and they give me feedback and I'm iterating it. So when you're developing a product, if you have that level of care, the likelihood that you're going to win is super high. But the converse of that is if you have a really shitty product, all the marketing does is let more people know about it faster. And so then you get in the selling business, which is a really tiring business to be in. I can tell you as somebody who came from the direct response world earlier on in my career, knowing every month that I had to sell more people than the month before just to grow the business or even break even is incredibly... Yeah. And the bigger you get, the more unsustainable.

It's exhausting. Yeah. It's unsustainable. Yeah. It is. But if you can get credit for who you sold five years ago, because they're still telling new people about you, it's the only way that you can continue to scale. The second thing that I wouldn't sacrifice on is quality of the team. And I think that, and this is, I mean, Andy and I are hidden standards from two different angles here. Yeah. We're talking, I'm talking personal, you're talking business. This goes hand in hand.

And so I will say that of the entrepreneurs that I continue to see bigger and bigger and grow every year and be more successful, the bar only continues to rise on who they let in. And I think Amazon actually has a really good, at least motto around this that we've tried to model at acquisition.com, which is everybody who comes in

has to raise the average of the team. Because you probably heard the saying A's hire B's, B's hire C's, and C's should get the fuck out of there. And the thing is, this is why organizations as they scale continue to get diluted over time. Because dumb people let dumber people in because they're threatened by someone who's as good or even better than them. But people who can lead with humility want other players on the team. And what happens is, is if you can create a virtuous cycle

rather than a vicious cycle of a deterioration of talent, but a building or accumulation of talent, then when someone comes in who's not of the talent because they lied or they look good on the interview, people are like,

dude, we got to get this guy fucking out of here. Like he's not holding his weight because we're all running and this guy's just doing the law of least effort. He's just barely trying to get above the bar. And we don't want that on the team. That's a massive pain point for most entrepreneurs. They cannot figure out how to get their culture to self-regulate.

What Alex is explaining is exactly how it's done. And the thing is, again, the first two, so product and then the people, you'll notice that when we talk about the things you absolutely can't sacrifice on are the easiest And the thing is, again, all the first two, so product and then the people, you'll notice that when we talk about the things you absolutely can't sacrifice on are the easiest ones to sacrifice on because you're usually in pain of some sort. When you want to sacrifice on product, it's because you want to make profit in the short term or you want to get something to market faster. It's usually some sort of impatience. With people, it's the exact same thing. You're in pain because you've got a hole in the company that you're like, dude, we need somebody in customer support. Today. Yesterday, right? Yeah, exactly. Or anyways, you're suffering from this hole and you want

to fill it in the short term. But the thing is, is like the hiring, onboarding, training, and then when that person sucks because you took them on too fast, then having to do it again, not to mention the lost revenue that you should have made in that period of time. People don't think about that. They don't even think about it. It costs so much more to run that way. And it's, so like think, okay, so think about the culture as the product, the internal product of the business and the product you sell to customers is the external product.

What you're doing when you bring someone in who's not as good is you're diluting the internal product of the company. And so both of these are actually dilution of products. It's just one that's outside and one is inside. And so both of them are just so tempting because you want to just get out of pain. And so like the overarching viewpoint, I think on probably all the things

Andy and I are gonna talk about with these three is, it's just you have to be willing to sacrifice the short term to get the long term, which means some, the team's gonna have to work double time. And if you have the culture of killers, you can be like, guys, I'm not going to disrespect you by bringing somebody who can't pull their weight in. And so we're like, we're going to work weekends. Because the alternative is we bring someone in here, you all hate them, we waste all our time trying to train them, and then they go try and start the road. The lowest standard. Exactly. Yeah. And so the third one that I had was brand slash values. Yeah. And I mean, the first two stem from

this last one, which is why I saved it. And I know that you and I are incredibly aligned on the importance of brand. I think it's just brand over everything, period. Because brand is just another way of saying reputation. And a lot of people who struggle selling stuff in a business, it's because when you walk in the door, you're actually coming in at a deficit. You're not even at zero. You have a negative reputation. And the longer you're in business, the worse your reputation gets. So if you're one of those people who are like, man, my cost to acquire a customer, dude,

YouTube ads are getting more expensive. Well, you can actually see on a graph what the average CPM is, so cost per impression for any kind of ad. If your cost to a car customer has gone up by more than that, it means that you have another force that's driving your cost of acquisition up. And it's the negative word of mouth. So everyone's like, oh yeah, word of mouth exists. Okay. Well, it also exists in the negative and it's way fucking more powerful and way faster. And that invisible hand is somebody who's like, oh, I would have bought that. Hey, just like the normal customers in the beginning who didn't know who you were, they say, hey, what do you think of this thing? And in the beginning, someone says, oh, I don't know.

It's like, oh, I'm going to check it out. But the second time or the third time or one year, two years later, they send that text and the person's like, oh, I heard he's full of shit. And that sale that you would have had, you don't have. And so you got to market it twice as many people to get the same number of sales. And then two years later, you got to market to four times as many people to make the same number of sales. And that's why you see people pop up and fizzle, pop up and fizzle. If you ever see an entrepreneur, and this might be you, this might be you, who's always reinventing themselves in terms of the new thing that they're launching right now, why aren't you still selling the first thing you started selling and just making it better? Well, because you compromise on the product. And so if you consider the product, if you were a one product business,

then they compromised and the business is done. And so you can just see the easy proof on all three of those things. It's like, on a long enough time horizon, if I dilute the product enough, I'll eventually go to zero. On a long enough time horizon, if I dilute the product enough, I'll eventually go to zero. On a long enough time horizon, if I dilute the people enough, I'll eventually go to zero. And on a long enough time horizon, if I sacrifice my brand and my reputation, I'll eventually go to zero. That's right.

What do you think, what do you guys think is like the hangup, right? So Alex, you alluded to why people will typically compromise, right? But like, is it like, is's another thing there like what are they do they have a bad definition of compromise like do they not see the the you know you do you understand yeah yeah i you know i think that first of all i love what you said about the product dude um you know most of you guys could solve every single problem that you have with your entire business by just taking your product and fucking making it the best it can be whatever it is doesn't matter it's tires make the best fucking tire right it's snow-coated t-shirts make the best fucking snow cone like it's very simple philosophy

but i think and it leads into your question dj i think the reason people are so quick to compromise is because there is this false reality painted out there that there is a hack to success of a certain way. Right. And so people are so impatient and they hear these glory stories of, you know, oh, I went from zero to a hundred million dollars in three fucking days with this guy's, you know, like this, the expectations of reality have been so muddied that people don't really understand what it takes to win. And what it takes to win is the exact same thing that it's always taken to win, which

is to be fucking great, undeniably great. And that does start with your product. And it does, you know, continue on to all these other issues that we talked about. You know, I'm talking a little bit more from the personal side and Alex is hitting on it from the actual business side but all of these things re requires zero compromise and i think because people have this this reality painted in their brain that entrepreneurship that there's some some sort of hack to it that they compromise everything so like they're not even seeing compromise as a negative thing. I think it sneaks up on people, bro. And I think people do not understand that this is no different than nature.

That the strong survive and the weak get killed and eaten. And it's the same exact thing. And so because we have all these goofballs on the internet for the last 10 years telling everybody they can get rich in a fucking week, we have this false understanding of what it actually takes and things like product and reputation and the things that he's mentioning are not even taken into account because people think it's so easy to win. And so, you know, I think it's a culture issue, which is why I preach so hard against it, because I think all of those things will, I think when you compromise any of those six things that we talked about, you're fucked.

Like, cause they all lead to further compromise, which leads to zero. So, you know, I couldn't tell you where it comes from, but my personal opinion is I think it comes from the ridiculous state of entrepreneurship culture that exists in today's environment all right i'm gonna i'm gonna piggyback on this because i gotta come all right so uh number one i think what your point is spot on with this which is like we talk about fact checkers right yeah where the fuck are the fact checkers are for this right where's the fact checkers for the the success that people are claiming to have right now i'm not expecting that realistically but everybody has to put their fact checking hat on for themselves and think like does this make sense? Is this reasonable? Probably not.

Just look, bro. Right. Yeah. The problem is that a lot of people who are early on don't have the perspective from which to make a judgment. So someone we were talking about the other day held up their bank account on a picture, and this happens all over the place, right? It's not one person. They hold up their bank account, and they're claiming that they're making $5, $6 million a month. And the amount that they were holding up in the bank account, transparently,

owned businesses, personally having owned businesses of that size, like that's like not even a few days of payroll. No, bro. You'd be in a fucking panic. Right. Yeah.

And so the thing is, is that people don't have the perspective of which to make a judgment. Now, when it comes to compromising, I think there's the internal of like, everyone always tries to sacrifice for pleasure today rather than pain today

for a pleasure tomorrow. That's just like human. And they're like they're sold that bro yeah they're predatorily sold that and here's but here's the here's the silver lining on this is that constraints create innovation so many of us have heard of like the early founder stories of nike and apple and you know the engineer is saying steve jobs i can't we's impossible. It can't be done. But not compromising on the value that you want. The reason you started this business for some reason was because you wanted to solve some problem for some person. And as soon as you take that compromise, you actually stifle innovation. You just say, there is a way. There's a way to do this. And if we haven't hit it, then we just need to keep trying.

Bro, that's such a great point So we can maintain our values and the thing is is that the first time you do it and like this is like this is My ask for everyone is like if you can just hold the fucking line Once and you just keep holding the line You will find a way around it and then what happens is you start to believe that it's possible and so does your team? And so then the next time it happens you're're like, remember last time we're going to hold the fucking line. We're not, I know they said sugar costs have gone up for our cookies. We're going to find a way. Like we can't, we can't get above this price. Like, how are we going to, how are we going to do it? Don't tell me we can't

tell me how. Right. And then, uh, this is just the, the, the common sense that Andy references a lot, which is like, if you go to a sandwich shop and you have a sandwich and it's mediocre, what do you do? Nothing. And that's what the vast majority of the customers that are going to these mediocre businesses are doing. So right now, if you're average, it's probably because you have an average product. Now, play the reverse scenario out that the guy at that sandwich shop, and this might be you if you're the guy with the sandwich shop, eat your own sandwiches on a regular basis. Would you eat your sandwiches? Do you eat your own dog food? And I think that cookie story just gives you a really simple example. But whether you're

in IT services, have you gone through your onboarding process as a customer? Do you know what the communication cadence is? Do you secret shop yourself? If you're starting out, one of the easiest things you can do, if you actually have a couple of real friends who really root for you, hopefully you do, just ask them to go through the product as a blind customer. So your employees don't know it's a friend of yours and have them secret shop you. And then tell you all the things that are wrong. And I promise you, there's always something that's going wrong. Usually a shitload of stuff's going wrong. And if you just fix those things, there are no... I'll tell you one truth that I repeat to my team all the fucking time, is that stop looking

for the silver bullet. There is no silver bullet. There's a hundred golden BBs. And all we have to do is make a list of every single tiny thing that we needed to improve and we start at the top. Because most of us know that there are some things that we should be doing in our business. And then what we want to do is instead of confronting the should-do list, we start the new list. This would be new. This would be exciting. But that's because you don't know

the should-do list on the new thing. And so you just start at the fucking top. And one by one, you just start ticking them off. And I promise you, when you're at number 100, you won't be wondering where the customers are. Bro, you and I just had this exact conversation on the ride to work today so today and this falls right in line with what you're talking about so today normally dj follows me all right today i rode with him and he drove my cullinan my rolls royce cullinan okay terrible fucking truck yeah so so as he's driving it he says dude what tell him yeah i mean like i mean we pull out the fucking gate i'm like andy like this fucking truck is unreal it's unreal and then i was explaining to him because uh you know we got it's a busy weekend we're moving around

vehicles on our end and so i had to drive my old suburban i'm driving my old suburban home right taking home and i'm like dude like i was driving this fucking thing and like dude compared to my And so I had to drive my old Suburban. I'm driving my old Suburban home, right? Taking it home. And I'm like, dude, like I was driving this fucking thing. And like, dude, compared to my Denali, that Suburban is a piece of shit. But I thought that was like the bee's knees when I first got it, right? But then now, like I'm driving this fucking Rolls Royce. That Denali is like a fucking hoopty. You know what I'm saying?

So he was talking about like all the details of it. He's like, bro, it doesn't shift weight. It turns perfectly. Like he's like, this is like driving a cloud. Yeah. And I said, the amount of minds that went like, this is the purest example of human potential. And do you remember what I told you? How they do it?

I told you exactly what he just said. I said, they take every single detail that you would never think of. And they dive so deep into those details to perfect those details and then they that's these are like ingredients of the recipe and once all those ingredients are perfected with high levels of standard and you put them together it creates the whole thing and I think part of what you're saying dude one of the biggest things that I noticed just from being in the personal development space for so long in the entrepreneurship space for so long is that people think they can build an empire with a fucking shitty product if

they're a good enough marketer. And you cannot do that. It's impossible for all the reasons that you just explained. It's a false expectation, you know? And so like eat your own sandwiches, like you should only want to eat your own sandwiches. You should only want to eat your own sandwiches. You know what I'm saying? Bro, I don't use any fucking buddy else's protein powder. I use my fucking protein powder. You know why? Because I think it's the best.

Period. No offense to my homies that got other companies. I don't use your powder. I use my powder because I believe in it. All right? So it's part of the deal. Your shit should be so fucking good dude that you don't even want to wear other people's shit you don't want to drive

other people's cars you don't want to take other other people's food you want your shit because it's literally the best and when you figure that out you actually have a sustainable model for the long term because the product sells itself right like? Like dude, our level one protein, I dude, I spent 19 months in the lab working on that product in 2008 before we even launched the company. Do you know how many times we reformulated it? Fucking zero. And it continues to sell. We sell probably more raw protein than pretty much anybody else in the fucking planet right now. So you say 19 months before it even launched. Like that.

You were that long. Bro, I went to the lab every fucking day. This is how I actually this is actually how I met Emily, because Emily fucking worked at a place right next to the lab. And I was there every day. So I went to fucking see my buddy, John, who was her. This is like that was it. Yes. You have to be obsessed with the quality of your shit, dude. Like and I'm not sitting here saying there isn't better stuff but the minute i find it i'm gonna work my ass off to

pass it up and like that's the competitive nature and the obsession that you have to have about your own standards that's going to take you where you want to go and there's really no other like you guys spend too much time looking for the fucking hack and not enough time dealing with the reality of just being great at what you do. Love that, man. Let me give you an AB just from a leverage perspective. So option one is you spend two months formulating the product and then you spend the rest of your life trying to sell it. Option two is you spend two years formulating the product and then you let your customer sell it for you for the rest of your life. One is two months of work and it

sounds shorter, but you're actually signing up for more work over the longterm. So if you want to be lazy and make tons of money, take longer on the front end because in the back, the wave will carry itself. How much of this do you think, first of all, that's awesome. But dude, how much of that do you think is related to people's fear of charging a little bit more for their product? I actually think it's more because I think people wouldn't be afraid of charging more for the product if they went through all that. I think they're afraid to charge more for the products.

They never did that. So they see your level one. Yeah. And then they're like, well, I should like, man, the margins he must be making. But they never did the they haven't earned the quality of product, whether it's a service or physical good to charge the premium, but they just want to, they just want to jump there.

And then they actually have a bigger rip off and even more because everyone's always price and value interrelated, right? Like they're amplifying the fucking fraud. Yeah. In their own mind. Like Rolls Royce ain't worried about the cost of the truck. No,

because they know that there's no, there's no missed dots or cross. They know what went into it. Yeah. That went into it. They know what went into it. Yeah. That's real bad. Yeah. And then you feel like, if anything, you should be like, my God, maybe I should raise the, like, I know, I spent two years on this thing.

Yeah. Right? And then you would feel completely fine because if anyone looked at you, you could look them back in the eyes and be like, so the protein, I was like, have you ever noticed when you shake up your protein, it's got little lumps in it? I was like, huh, that was a detail

that the person that you bought it from didn't think about. Have you ever drank it and get a little gassy sometimes? It's because they added extra filler in because they wanted to make it heavier, but not actually increase the protein content. Didn't think about that. And you just start going down the hundred BBs and then people are like, okay, okay, I get it. It's about shit. Right. And then it merits the price. Well, guys, let's move on to our question number two. Andy, where do you draw the line between learning advanced skills such as accounting, marketing, e-com versus hiring it in or out of your business? Well, look, I think that if you are operating a business and you

think you're going to become expert level proficient at every single task or skill that you need, you're delusional. It's not going to happen. All right. Is it important to learn? Yeah, it's very important to learn. It's important to learn because if you don't keep learning, you get passed up by people who do. And the only time that it's ever fucking cool to stop learning is when you fucking die. All right. That's the first thing you need to understand. So always be learning should be a fundamental core value of your being. It's actually a core value of every single company I'm involved in. It's a, it's a, it's a must. You have to always be getting better, but dude, in terms of like leading a brand or building a

company or this or that, bro, you're, you should surround yourself with people who are much, much, much more skilled than you at every single thing that you need. Like, bro, I want my executives to be better executives than me. I want them to be smarter than me. I want them to understand more than me. I want them to know how to solve problems better than me. I want them dedicated more than me. I want them to be better literally across the board. I want them to be in better shape than me. I want them to be a bigger fucking killer than me. I want them to be everything better because dude, if you hire in the skillset, you, first of all, it frees up bandwidth for you to create. All right. That's a big deal. A lot of you guys try to learn every single task that there is to learn. And you're not thinking that, you know, there's a difference between working in the business and on the business and your job as the creator of the brand or the business or the movement or the

organization or whatever it is, is for you to be saying, okay, this is where we're going to go. This is how we're going to do it. And then to look at your team and say, what do you guys think? And they're going to break it down and they're going to say, okay, we do this. We can do this. We can do this. We can do this. We can do this. And then by the way, they got to go do it. So in terms of having the best people around you, I think a lot of people hold themselves up with that because they're afraid of having people that are better than them around them. Ego. I actually, I want every single person that I want every one of my friends to be better than me. I want every fucking person that works for me to be better than me. It's something. And that's the attitude you have to have to build a great organization. It just is.

It has to come from a place of humility. I think it's good for someone to understand a fundamental base understanding of these skill sets, right? Like I can walk into my marketing department and I understand a lot of shit. All right. But I don't understand the shit they understand. Okay. Um, I can walk into our sales team and I don't, I know how to sell shit. I can say I'm pretty good at selling shit, but these guys are fucking selling our shit really fucking good. So I'm going to learn some things from them. And I think having a fundamental base understanding is important because it allows you to create better. Okay. But it also allows you to, um, understand when people are full of shit. Okay. Like you're going to get people in that are pretty good. Like I used to run into this deal with media people, right? People will come in and they'd

be like, Oh, fucking take 17 hours to make this video. Like doesn't take 17 hours to make a fucking video, bro. I made a video on my phone with some fucking words on it. That shit took 30 seconds. Right. All right. So you start to get taken advantage of whenever you don't have a baseline understanding of the skill set so i think there's a line um and also i think it depends on where you are in the journey i think you know when you're young in the journey like like dude when i was when i was just starting out i had to fucking do everything so i had to know everything couldn't afford it i couldn't afford to hire people. So I had to learn the skill sets.

And so then it becomes, okay, what skill sets are going to produce the most value and are the most important. And those skill sets are always going to be the exact same skill sets. It's going to be, uh, it's going to be leadership sales. Well, it's going to be sales and management slash leadership. Like those two, if you can't organize a team, you can't do shit. If you can't sell anything, you also can't do shit. And those are two skills you should never compromise on. Every single one of you should learn those skills all the way fucking to the maximum of your abilities. And then let the other skill sets,

the e-coms, the video production, the sales training, all these things, you hire in people to help with those things. You keep an eye on it, but then they deliver what they're skilled at. I think a lot of people fuck themselves because they think that if they hand it over to someone, that that person is going to be so much better than them that they're going to lose the respect of their team. When in reality, if you have a great team, they're actually going to respect you more

for putting the right person in the right position. I love man i agree with all of these things yeah i agree with everything yes uh so three fundamental skills you gotta know how to sell you gotta know how to build you're gonna know how to build people yeah right so you gotta have the thing to sell you gotta figure out the people to sell to which is sales and marketing and then you gotta be able to stay out of jail which is all the things like h. People shit, bro, is a big deal, man. I get asked that all the time. I know you do too, man. Where do you find your people? Well, I just go back out on my people tree, pick them off. Right. I got the secret fucking people garden over here and I can fucking go grab them and bring them in here, bro. You have to become an expert people developer.

Sorry. I had to say that. No, we agree on this. So here's the thing. So if you were to boil this down to fundamentals, if you only had one skill, which is that you could get other people to do things for you, then you could then say, hey, go build me a business. And fundamentally, that would work. The only problem is if that was the only skill you had, it brings up Andy's issue, which is you wouldn't know who's full of shit and who isn't. Right. And so the base level of understanding is so that you can just pressure check the fundamentals of the business. Because one thing that has continued to stay true for all the businesses that we've scaled is simple scales, fancy fails.

Being advanced just means that you do the basics at scale. You're not doing fancy things. You're not doing fancy things. You're not doing complicated things. You're just doing a hundred guys on the phones every day following the same five-step script, right? Scale brings complexity on its own. You don't need to insert it, right? So you got to know how to build a product that's good. You got to know how to sell it. And then you got to have people. Now, that being said, those are three different skills. In the beginning, you just got to be good enough to start generating cashflow. At that point, you then look at your schedule and say, okay, of these other things that have to happen in the business, which is

the cheapest one to replace, right? That takes up the most of my time. And then basically entrepreneurship after that is you continue to trade your time up for the biggest chunk that costs the least to bring in. And you just keep doing that until eventually the only thing that you were doing is inspiring and leading the vision so that you can attract the best people to be on the bus with you. Dude. And the best part about that, and this is the part barely very few companies ever get to, is that it's what I said in the first question, when you get it to that level, you're no longer having to weed people out that the culture and the, and the brand becomes self regulating. Meaning if weak people find their way in the strong people will weed them out automatically because they're not

meeting standard. And that will save you like, dude, when you get to that level, 90% of your bullshit goes away because that's what 90% of bullshit in small businesses is. You're dealing with people. Dealing with people is the hardest fucking thing ever when it comes time to organize them to move the right way. And so I fucking love all that, bro. I'm going to throw two warning flags out there. One is the early partnership. All right. So a lot of times people bring in a partner early who likes the same stuff as in like, hey, we're best friends. We both like supplements. Let's do supplements together. But you don't have different skill sets. So the only reason a partner is that somebody has a different skill set than you, has more time than you, or he's got more

money than you. That's right. That's it. The only reason to bring somebody in. If you're looking right now, hopefully you're listening to this or send this to your partner. You're like, shit, man, we both kind of had the exact same skill set. Well, one of you's got to, like, I'm not saying you break up as a partnership, but you should delineate who's in charge of what. If you're both selling and both building product and both doing the back, like eventually it's not going to work. It's like that spider.

You're describing my actual story. Okay. There was a conversation, a real conversation that Chris and I had to have about 2010. And it was this it was listen dude somebody's got to be the face somebody's got to be the operator behind the scenes and take care of these things and somebody's got to do these things and it was a fucking 10 minute conversation and we went because everybody's like where's chris yeah chris living a great life bro he fucking gets to be a part of all these businesses. He gets to work and fucking nobody knows who the fuck he is

because he can do whatever the fuck he wants. It's amazing. I got the shit end of the deal, bro. All right? So it's funny because you're like literally describing it because you use the example of supplements. Yeah. Hey, that's us.

Yeah, I'm like, Alex, tell my story. And I'll say one thing to relate back to the question, which was, I just want everyone to know I've actually never paid payroll. I've never been the one who calculated payroll. I think actually maybe a couple of times in my life between people, I messed it up. I actually handed people checks and they were like, that's not how... I wrote out the checks for their... They're like, is payroll taken out? Like the tax? I was like, I don't know. I was like, this is what I owe you. Right. And like, didn't, didn't know how to do payroll. Definitely didn't know how to do accounting. I still don't. So like people might think, oh, Alex is an, Alex is a big investor

and he owns like, I can, I know. Thing is, is like, you can value a business with a lot of other things besides a sheet, because here's the thing is the more you learn, the more you realize that people can make anything look real that isn't. So all I would then be doing is asking, if I pretended to be really good at accounting, I would just find a better criminal who could outsmart me with sheets. And that's not going to be where I'm going to win. And so that's where you have to look at the other person. The other person will be like, is this guy going to fuck me? And I think that that's a pattern recognition that just takes time to develop. And then also, does the fundamentals of the

business make sense? So to scoot all the way back, do you need to learn accounting? I didn't. Yeah. Do you need to learn how to do payroll? It has to happen, but you don't have to like learn it. I mean, during the period of time where I was like between people who were doing that for me, I just like called ADP up and I was like, hey, I've never, they're like, we have an online portal.

I was like, can you do it over the phone? They're like, we can do it over the phone. He from 1980. I was like, Hey, uh, I've never, they're like, we have an online portal. I was like, can you do it over the phone? They're like, we can do it over the phony from 1980. I was like, I am today. They're like, it was like their old people line. So I like called the tech, like I don't use a computer line. And they're like, all right, well, and then we just went, I would just say like, Jeremy H goes, you know, $372 and 67 cents. They're like, okay. And I was like, and you guys are handling the tax stuff. And they're like, yep. And I was like, all right, Johnny, like, dude, I did this. Right. So like, I didn't know how, I just knew I added up the hours, added up his commissions on sales. And then I just called up ADP and had them do it. So I'm only saying this because like a lot of people

like to overcomplicate the fundamentals of business, but like you literally just need to go get a stranger to give you money for the thing that you're going to solve a problem for them. That's it. And then everything else after that, you can find a stranger to give you money for the thing that you're going to solve a problem for them. That's it. And then everything else after that, you can find other people to help you out. And the more that you try to be the person for everything, the less you can do the thing that actually needs to be done, which is getting the strangers to buy your fucking shit. Like, dude, you have to free up that bandwidth, guys, because business is fucking hard. Because there's two kinds of people.

There's the kind of person who wants to delegate everything and know nothing you lose every time because people will steal from you and they will take advantage of you and they will crash your shit. And you can only pretend that for so long. And then there's the kind of person who wants to control everything. And that person gets stuck because they're trying to do all of these things and they're like, fuck, I got no help. And then they can't even create the vision. And they get passed by someone over here across town who has, you know, found the correct balance here of expert help, but also base level knowledge that allows them to continue to be creative and move forward. And so like, dude, find out where you are in this, in this balance, because if you're too far on one side

or too far on the other side, it's instant death. I love that. And a term that I like is, don't suffer from education procrastination. Some people who are listening to this are like, man, I'm going to start, I just need to learn more about, I just need to, like, you literally need an LLC, a bank account, and a way to process money,

and all those things you can do in like an afternoon. And I had these college kids. I don't know if I told you the story. I had dinner with these college kids. A friend of mine has a son. He's like 22. And they knew me from it. And they're like, could you come to dinner? So I go there. It's eight guys. They're all like, I'm so excited. I'm going to start entrepreneurship, whatever. And so I didn't see them for six months. And then she came back in town with her sons and it was his birthday. And so I come to the dinner again and I was like, hey, how's your business going? And he's like, well, I'm getting my LLC started. And I was like, that's not a thing. I was like, that's not a thing. That's not a six month thing.

Yeah, LLC started. The form you fill out. Yeah. I was like, you could do it during this dinner. Yeah. And the thing is, people get stuck in this education procrastination and it's really that they think that I don't learn accounting and therefore I can't start a business. And they let that be the reason that the real reason that they're not doing is because they're afraid they're not going to win.

Dude, I also think there's a false understanding that goes back to the fake entrepreneurship culture that you have to like, like people like to use this language and these big words and like all this stuff that makes them sound important. Let me tell you something, bro. You come to dinner with me and alex like we're gonna be talking some real basic shit you guys are gonna be like that's it yeah that's it like who wants appetizers stop trying to posture with your language bro just speak in real terms man learn what you gotta learn and go fucking do it it's's really, it's really not that hard. You guys make it so much harder by trying to posture.

And you only fool people poorer than you. Yeah. That's a bit like. Oh, bro. That's a huge thing. Because like, dude, when, when people are up on the mountain that you're trying to climb and you're doing that shit to them, you know what they say? Like, bro, you do that shit to me and Alex, right?

You come up and you start telling us all this shit. The minute you fucking walk away, we don't even say anything we just look at each other like it's a look true or not true a hundred like yeah a million percent because the thing is is that the guys who are really in the game they talk in the simplest of terms right so i've got like so people struggle with this thing and i used to struggle with that too and so then i made this thing because i was solving it for me and then some other people were like hey can you do that for me too so i started doing it and then you know we started running a couple ads so that we could you know get some more customers and like you know 10 years later like here we are we're the number one it services company you know what i

mean like that's how the stories really sound not like so i was uh looking at my cap table and uh and i was really looking at how we could leverage the opportunities and synergistic collaborations between cross-departmental training and learning so that we could further like do like I will get the fuck up and walk out like I will get the fuck up I'll be like look dude this ain't for me like I gotta go I can't even hear it yeah it makes my skin fucking crawl and like dude you guys and we're joking and shit, but like, be, be careful not to become that because dude, it's, it's not palatable for people who are up the journey because those people that you're trying to impress, they're just regular people, just like you

who have gone down the path with some courage and just not quit. And they, they're not any, you know, they're smarter than you because they've had more experience than you, but they're not more intelligent than you. So stop trying to pretend that you're something you're not, dude, and just go do some shit and people will respect it. Love that, man. Guys, Andy, question number three. Andy, I have a small team of five,

and I believe that it is crucial to be given honest and accurate feedback. However, I am beginning to get the sense that I have a few yes men working for me. They're great performers, super positive people, but I just don't feel like it's truly helping with growth and moving towards our mission. How can I, as the leader, create a better environment to get them out of that? Man, first of all, I'd like to say, you know, I think it's great that you're even aware enough to ask that question because I think most people get really comfortable with people telling them what they want to hear and it kills them and they never realize it. But conversely, I think that a lot of people become yes people or yes men without even realizing that they're yes men. Okay. Because what ends up

happening is you guys form your team, you continue to go down the path. You have a couple wins, right? And it's fun to win, right? And you're happy when you win. But what are you when you lose? You're not as happy, all right? So if you are, let's just say, a fiery leader, which I am, all right, you can go too fiery whenever you lose, which actually makes people gun shy about telling you the truth. And this is a mistake that I made in business for a very long time. All right. This is an adjustment that I had to make to go from a, you know, a small business to a medium sized business

to, you know, a pretty large privately owned business now in my own style. And so the first thing I would say to you is how are you responding when you lose? Okay. Are you freaking the fuck out and, and bringing fire and brimstone? Because dude, I'm going to tell you, I can, I can relate to that. Um, it sucks to lose. All right. And sometimes still to this day, when I, when I, when we lose and broke do is true. Okay.

Sometimes the fucking volcano goes off. All right. But I always feel bad about it because I know what it creates because it actually erodes the very information that I am required to have to make the best decision to move ourselves forward as a team. And so usually when you, when you have people that have become yes men, um, I've found in my experience, it's because a, they have a much better time winning and B, they're afraid to tell you the bad news. And so you have to create an environment where they can

tell you the bad news. And I think the way that I've been able to partially or just, I'm much improved. Okay. I still have my moments, but the way I've been able to do that for myself is to adjust my perspective from a leader of the team. Okay. I'm the leader of the team to just part of the team. All right. So when I see myself as part of the team and I'm just doing a part, right? Like, let's just use our podcast as an example. I'm the voice. You guys produce it. You guys edit it and we put it together. We're a team. I do my part. You do your part. You guys do your part. When I look at it like that, I don't get as upset. I just say, okay, this is bad news. All right. How do we need to adjust this so that we can win together? When I find myself a little bit in my own ego, all right. And I start

to think, fuck, I'm the man and this is my team and shit like that which bro we're all none of us are immune to okay this is a practice especially when you've won big many times it's it's it's hard to be humble when you're fucking great it's just the truth you have to practice it okay and that's not me saying i'm great but you know i'm pretty fucking good i'm just being real dude the fucking the fucking The numbers and the stats, everything, it's real world evidence. You got the pudding. So I have to fucking see myself as just part of the team, rowing the boat with the guys, with the team. And then that allows me to communicate in a calmer way, which gets me better information,

which allows me to steer the boat in the proper direction. That's my personal journey. Well, the guys see it too, right? Like they see you remove yourself as that overarching leader. And then, oh shit, well, Andy's on the same team as us. Yeah, and then you get everybody rowing a little bit harder, man, and a little bit more consistency. And they want to do better.

And so leading from a place of humility, and listen, I don't do this perfectly, all right? Very many people do this. Very few people do this perfectly. All right. And very, very many people do this. Very few people do this perfectly. They might say they do it perfectly on the internet, but the results of their life tell the story. Okay. Their success tells the story. And so, you know, there's a lot of guys, I'm just being real. A lot of guys come on the internet with Foucault. I'm a humble leader. Well, your business sucks. You must not be that fucking humble of a leader. Like you ain't that you ain't really all that. Right. So when we, when I do that, it's a different perspective.

And I feel like it encourages people to give better information that is more honest and true. But I also think it's important and it kind of goes into the, I think it kind of goes into the realm of developing people. Like we were talking about a minute ago is that you also have to develop people to have a little bit of courage and make communicate to them. Like, look, bro, I'm paying you for your fucking brain and information. Please tell me the truth. Otherwise you're not valuable to me. And setting those standards up and holding those standards, not only holding them to

those standards, but you as well, you tell the truth to them. And, uh, I think all of those things mixed together help correct a little bit of this problem that's going on. But for me, this isn't, this is a, this is a lifelong project. I'm already aware of it because I have, you know, I'm a competitive person. I'm very, I very much so love to win, but I really fucking hate to lose. And, uh, when I lose, I don't always react the best way. And I think that makes people gun gun shy which creates a situation where I can't operate with the proper information which makes it a harder way to win so that's my story I have so much that I want to talk about with this yeah okay so first off kudos for bringing this up yeah second they are not yes men. You have trained them to be yes men. And so it is 100% your fault.

So they didn't become that, you made them that. And so I think Andy and I will agree and I will give different language to what Andy just said. So there's three reactions that any leader can have or really any human can have to any circumstance, anything that happens. One is that you can reward it. Second is you can punish it. Third, you can extinguish it. So extinguishing it is just ignoring it. So somebody texts you and you just don't respond. They text again, you don't respond. You do it long enough, they just stop texting you. That extinguishes behavior. That's different than if they text you and you say, fuck, you never text me again. That's punishing. And on the third category, they text you and then you give them a cookie in some way.

And so what's really interesting about this, and there's 100 years of literature behind this, and this is one of like, the reason I have a lot to say on this is because we're actually separating out our mission between Acquisition.com and Mosey Media. So like all the stuff I put out in the actual Acquisition.com mission. And so the Acquisition.com mission is to create companies that are built off of praise, not punishment. And the reason for that is that punishment is more effective in the short term and less effective in the long term, because people forget punishment fades in your memory, right? Like you fall off a horse and a lot of times, like, or someone is mean to you. And like, after a long enough period of time,

you're like, it starts to fade, right? Whereas reward gets stronger over time. And so if you want them to talk to you more than you reward them for talking to you, but not just in general, you reward them immediately. And so believe it or not, the speed of reward is significantly more important than the intensity of the reward. So a high five in the moment when someone does something means more than a bonus at the end of the month in real terms for human behavior. And so this is what we're trying to embed. And I'll give you a little proof point. So right now, if you run a sales team and this might already be, well, if you're in a company, all right, and there's a Slack channel, and I'll tell you something that happens commonly in sales teams, is that guys will put in the Slack when

they get a sale. They'll be like, close the deal, close the deal, close the deal. Why do they do that? Because the moment they do that, immediately, they get rewarded. They get a fire emoji, they get a high five, that's awesome, whatever. Now, they haven't closed the sale yet. And that's why sales guys often overestimate their actual closes versus end of month cards that went through. Because the reward for closing an actual sale doesn't actually come until much later, but they get the reward immediately for reporting it. And so they report it more. And so if you want to change your team's behavior, then one, if you want your team to talk to you all the time, then reward them for talking to you all the time. Because you can

reward someone for accurately telling you the data, you can reward them for talking to you all the time. Because you can reward someone for accurately telling you the data, you can reward them for telling you the data, and then you can reward the content of the data. Those are three separate things. And so ideally, you want to, even if someone reports at the end of the week that they closed zero sales, what you don't want is them to stop telling you. Because for everybody who, I just told that little Slack example, how many times are they putting in the Slack that they haven't closed? Zero. Why? Because they get no reinforcement for it. They get no reward. And so if you want them to talk to you more, then the moment they talk to you, you immediately respond and say, high five,

figuratively. Give them a cookie, give them a Skittle, whatever it is. Awesome job. Thanks for reporting that. You're really on top of it. And if you can, put it as a label that they can identify with, which is, dude, you're so on top of it and if you can put it as a label that they can identify with which is dude you're so on top of it you're so good you're so accurate with your reporting it's awesome it makes my job so much easier thank you for doing really good about this like you're just even as a friend you're fucking great about it i i appreciate that a lot that means i work on it a lot yeah um and yeah thank you yeah uh and i say that because it's it's it's become the mission of our company, Layla and I, because so many people want to work and they get punished for working, which is terrible, right?

And so what ends up happening, and we were talking about this earlier, is that people will revert to the law of least effort, is that they will do as little as possible in order to not get fired. And think about this. What is the upside of them challenging you? If you don't reward them and you punish them occasionally, you will completely eliminate the behavior. And then they will just try and skate by as little as they can to not rock the boat. And so right now, this is going to be an extreme visual, but you have a puppy that you have beaten

the corner. Now, you may not see it that way, but from a behavioral perspective, they're in the corner in the cage and they're afraid to come out. And so you may have to reward them again and again and again and breadcrumb until eventually it's like, if the puppy looks at the door of the cage, you reward them. And then if they take a step, you reward them. And then finally, over time, it'll take its first step outside and then you go nuts. Oh, that's amazing. You did such a great job. And then all of a sudden they become addicted to you and they become addicted to the reward because you have now reestablished yourself. Instead of a dollar of punishment, you become the source of reward. And everyone does everything simply based because they have been rewarded for it in the past. I think, first of all, I think that's

fucking amazing. And I think it's absolutely true. And I've lived that and I continue to live that. And it's very difficult. It takes discipline to do that, especially when you're losing. One thing I want to touch on what Alex said, which is very important to what he said, because when you lose your temper, okay, and you're a competitive person and you get hot, just because you're not firing someone or, you know, taking something away from them doesn't mean you aren't punishing them okay like just like when you and i know this because like dude i've done this and this i speak from experience you will shut your people the fuck down by getting too upset when things don't go your way or just a look yeah you mean you're just like someone challenges your idea in a meeting you just look

at them they're like oh yeah like that's a different level of awareness. Yeah, all I'm saying is, is be aware of what, when you say, when he says punishment, understand that he's not talking about actual punishment specifically, it can be a lot of different things. It could be body language, it could be non-verbal, 100%. If you just pick apart someone's idea, what are they gonna stop doing? Bringing up ideas.

Here's six reasons why that's not gonna work. Yeah, right. They're gonna stop bringing up ideas up ideas. I actually love that answer, dude. I think it's a super fucking important answer. I think it's real. I think it's real corrective behavior. And by the way, to anybody who is erring too hard to the side of what we're talking about, where it's negative and you want people to, this is the path to get them to start. And, um, you know, dude, every hard time I've ever had with any project, like, let's just say getting something off the ground or, or building something from scratch. It's this, what we're talking about here has delayed the result significantly. Okay. So like, remember that every single time you lose

your temper. All right. And I'm talking to myself too, because I'm not going to sit here and say, yeah, I'm not going to sit here and say, Oh dude, I do this. Perfect. Okay. Everybody in this room would be like, you're a fucking liar. Right. So, uh, but dude, I think these guys know that I fucking love them and I give a fuck about them and I want them to win. And you know, um, I want to win together, but you will get there a lot faster if you learn to have a little bit of discipline in how you communicate when it comes to that. Can I clarify something real quick?

Yeah, yeah, yeah. I want to make sure that I'm getting this right. Are you also saying that even when mistakes are made or the team is coming to you with a fuck-up that they had, you can still reward that? Absolutely. Man, that's some powerful shit. And you're specific about what you are rewarding.

Yeah. So you're rewarding them for coming to you. You're rewarding them for being honest and accurate with the information. Which is the most important point of the whole question. You can't make the decisions without the fucking information. Without the information. That's the hardest thing as a leader to fucking get is real information. And that's why this question is so important. And this is why creating the space mentally

to not flip out and just give yourself that half second of breathing. Yeah. Pause. Exactly. To then be saying, thank you for bringing this to me. This information is valuable because it allows us to make way better decisions so that we can all win. We're going to figure this out together. Awesome work. Even if it wasn't a win. And I just want to tie this one thing because for me, this was like crazy eye-opening. So my close friend, he's a behavioral genie when it comes to this stuff. He's a PhD, all this stuff. And he showed me this study on training dogs. And by the way, if it works in all mammals,

it works in humans, just FYI. And what they did was they had a dog sit. They were trying to train a dog. And all they did was they changed when they did the reward and how long it took to train the behavior. And so if they immediately gave the cookie to the dog the moment it sat down, it obviously learned the fastest. And then at five seconds, so it sits, and they wait one, two, three, four, five, and then they gave the cookie, it took three or four times longer. After 30 seconds, the dog was untrainable. And the real around that is not that if you wait longer than 30 seconds,

people stop being able to be trained. You do train them, but you train them to do something else. Because whatever they did right before the reward is the thing that you're reinforcing. And so- That's how important the instant- That's why the timing is so, like Think about how social media has trained people. The moment you get a comment, you get a notification and you hit it. And they have

trained you just like rats on levers. You get the thing, you hit the button, you hit the button, you hit the button, you scroll, you scroll, you scroll because they've trained you to get that reward. And then if you really want to train behavior in a way that you don't always have to reward is that you start stretching out the reinforcement interval. So you reward, and then next time you might not reward. And then you reward the next time. It's like gambling, right? And then you reward again. And then two more times you don't reward. And then over time, what happens is like, think about how you potty train a kid. In the beginning, they pee in the toilet for the first time, you go nuts. Amazing, right? And the next time you go a little less

nuts, but still immediate. And then the next time, a little less nuts but still immediate and then the next time a little less nuts and then maybe it's a high five and then it's slowly over time you stretch the interval and then when your 17 year old takes a shit you're not like congratulations buddy right over just becomes the standard and what happens is and this is really interesting from a like obviously you can tell i jam on this but um the behavior that you have trained itself becomes inherently rewarding. As in like video editors in the beginning, someone to give them a skittle every time they do the edit. But over time, the act of editing videos itself becomes rewarding. And that's where you start to become a master of a skill because you can start rewarding yourself for what you do.

As in, and you're not actually rewarding yourself, the situation is, and then it reinforces the behavior. But fundamentally, that's the goal of every leader is that in the beginning, we are the manual effort that rewards specific activities that breadcrumbs, breadcrumbs, breadcrumbs, clap, clap, clap, skittle, skittle, skittle. And then over time, we stretch the reinforcement until being good at marketing rewards the head of marketing more than anything else. And then we just make sure we don't punish them for doing their job. It's fucking great shit. I love that, man. I love it.

Dude, that's such a huge, huge, huge point where people that will make or break you. It just really is. Because, dude, how can you drive the boat if you don't know which way you're trying to go? Because your guys won't tell you, hey, man, there's an iceberg up here. Or, hey, we got a problem with this paddle back here or hey you got some holes back here like if they don't tell you that what eventually happens you hit the iceberg you stop you start going in circles or your boat sinks and this dude this is real yeah it's a very important question i'm glad whoever asked that was aware enough to ask that because a lot of people really do enjoy being around people who just tell them, yes, I don't know a single human being that wins

on a large scale. That is, is one of those people, not a single one. Dude, you and I talk about this all the fucking time. How, how important it is to have the truth right in your fucking face, man. And they've also, and you've also trained them to be yes men, because for you, it is rewarding. Right. Exactly. You have been trained to, so like I've told you, like I could talk about this for a long time, but I will cut it off. But people, a lot of times think about human behavior and say, what triggered that? Right. They think about what happened before someone does something. It's cause and effect.

But what you want to look at is what happens after. Because that's why people did it. So for example, I'm going to give a really extreme example. Let's say you have, so I'll tell you like a white label the example. I have a CEO who is one of our portfolio companies. And we were telling them that they needed to make this very hard personnel decision. And the individual question said, I don't want to keep talking about this. I'm going to have a panic attack.

Okay. And so that is a behavior. She has learned to do that. How has she learned to do that? Or how has he learned to do that? Because every time he or she does that. People quit. They quit pressuring.

Everyone backs off. And so the reward for the behavior, and the moment you back off, it gets reinforced. And they'll do it again. And so if we want to see why someone does something, look at what happens afterwards. And if you really want, like, I'm going to go one more level in this,

and then I'll shut up. But it applies to all humans in general. And so think about the 16-year-old kid who sneaks out of his house, right? He's trying to go get some tail, whatever. That's his reward. That's why he's sneaking out. Now, what happens? Dad stays by the door with his shotgun or with his fucking belt or whatever it is. And he stares at the door, seething, waiting for the kid to come home. The kid walks in the door. What does he do? He punishes him him what did he punish him for coming home coming home he didn't punish him for leaving he punished him for coming home

well he already got rewarded for getting tail too exactly no and so exactly that's real man and so what you do is you create smarter criminals yeah you don't change behavior oh you change the behavior but you're not you're not the you're not getting the desired outcome. And so that, I mean, obviously, I can, but like, that's why we've dedicating the mission of the company of like, we believe that companies can crush the companies that are built on punishment. Now you might say, okay, what about like Goldman Sachs, JP Morgan, McKinsey, right? These are all, most people consider them very punishing environments. They take really high achievers, they work them to death, and then they churn out, right? That's the game. And so what happens is if you have, and this is across mammals, not humans, if you have an organism that is trapped, as in it cannot escape, and the only thing it gets is punishment,

then what it does is, like I said earlier, it reverts the law of least effort. But what you do if you have a completely punishing environment is that you just simply raise the bar of not getting punished. And so what happens is you get every single person to work themselves to death. But here's where you lose out. And this is obviously what the thesis of our entire company is built on, is that the highest performing people, the smartest super genies at Goldman Sachs and at McKinsey, because they have some smart people there, those people can work medium hard and hit the bar of what is required. But what you miss out on is what we call discretionary effort. So just like you have discretionary spending at some pocket money at the end of the month that you go buy some stuff with, you also have discretionary effort. So it's the amount of effort that you can expend on any task way above and beyond.

And that's what people call having passion, loving your job. Bro, it's where all the greatness comes from. And you punish the people who actually will make you the most money. Because you have to set the bar if you have a punishing environment at a point where you're not going to turn out of literally everyone and so you have to set it to a point where the guy who just works really hard and might not be a genius he can still keep his job but the guy who is a genius he phones it in because he can still keep his job but you miss out on the best people's best work i love that man which is what you fucking hired him to do and that's the highest leverage thing you have. Like the most valuable asset in the business.

Yeah, absolutely, bro. Love it, man. Guys, Andy, Alex. It's three. That's all I got. Hey, bro. Thanks for sitting on the show, man. Thank you for having me.

Yeah, dude. Tell everybody again where they can follow you just so they're following you. You guys need to be following Alex, bro. Alex Hormozy. H-O-R-M-O-Z-Y. If you just type Hormozy in on any platform, you'll find me. And if you have a business and you would like somebody to help you scale it very big, then go to acquisition.com. We're always looking for companies. There you go.

Well, bro, thank you so much for being on, sharing your experience and your brilliance. We all appreciate it. And I appreciate your friendship very much. It means a lot to me. Guys, make sure that you share the show. Don't be a hoe.