The Game with Alex Hormozi - 19 Failures & Lessons | Ep 174

Episode Date: January 29, 2020

"Never get too far away that you can't see the problems." Today, Alex (@AlexHormozi) shares his failures and lessons learned in business, people management, and relationships in the year 2019. He emphasizes the importance of focusing on one thing, protecting the core, and balancing comfort and distance in relationships.Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned on his path from $100M to $1B in net worth.Timestamps:(2:41) - Product must solve pain, not be a gain.(4:44) - Effort is success, not an outcome.(8:50) - Stay close to problems in the organization.(16:20) - Balance comfort and distance for variety.(21:56) - Success created with skills, sustained with traits, beliefs.(28:52) - Time and effort required for success, not outsmarting it.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

Welcome to the gym secrets podcast where you talk about how to get more customers, how to make more per customer, and how to keep them longer, and the many failures and lessons that we have learned along the way. I hope you enjoy and subscribe. Hey, what's going on, everyone? Happy 2020. Hopefully we have 2020 vision going into the year of 2020. I wanted to do something that I don't think I've done since I've been a, quote, guru. Or really, shoot, even before that when I was a fitness guru, as in just a gym owner, not just a gym owner. but with my fitness clientele so anyways i was reading um so i have a habit of what i do is i i take

i write down my failures so this is something that i do i've done for a while um i write down all the mistakes that i make and i do this on a regular basis so i have this ongoing email thread to myself of failures i think i might call them fuck-ups but um and it's just up that was a failure up That was a failure. And periodically I'll go through and try to take stock of kind of all the failures and see if I can figure out the lessons or principles behind them that I've learned. And so I shared the list I'm about to share with you with Layla this morning. I was like, this was my 2019 kind of recap. And she was like, that was really good.

You should make that into a podcast. So this was at her behest. This is going to be more listical than my typical stuff. you guys want explanations on any of the kind of points or lessons than just comments and let me know and I will make individual podcasts kind of expounding on any of these individual notes so I I broke this up into like business strategy failures and lessons people failures and lessons and then self all right so the first the failures that I that I would say 2019 brought for me the first was you guys may not even remember

this but bolt on which was basically supplement selling secrets packaged as a cold cold front-end offer that failed and the lesson that I got from that there was twofold one is that every product must solve pain it cannot be an opportunity for game because people are irrational and they don't see five hundred dollars saved versus five hundred dollars earned is the same thing they're like ten times more willing to save five hundred dollars than they are willing to make five hundred more. So Bolton, that was lesson number one I got from Bolton was it has to solve pain. All products must solve pain if they're going to be a massive success. Next is that if you're selling something, you can only break one belief, not two.

If you have to break two beliefs of the product, it doesn't work. What I mean by that is if, for example, I mean with Bolton, the issue was I had to say, hey, you should sell supplements, number one. and people were like, okay, that's the belief I can break. There's plenty of false beliefs around just doing that. And then after they're like, all right, got it. I'll sell supplements. Then I was like, great, here's prestige labs.

They're like, but why should I sell prestige labs? So I had to sell two things. The reason it worked in our community is that people trusted me enough to say, okay, we'll sell prestige because we trust Trevor, we trust Alex. And so then I only had to break one for my community. But when I went to cold traffic, I had to break two, and that's why I didn't work. So those were two of the lessons that I got from Bolton. hybrid taught me a lot about messaging and so the lessons that I have from that are protect the

core everyone hates change everyone and those are probably my two biggest ones and so it's like speak in terms that everyone understands and doesn't get I thought I should shake the tree mix things up and it absolutely just like people lost their minds when it was indeed just one-on-one nutrition and accountability. So that was the lessons I had from a hybrid. Within Gymwatch, I had the launch of prestige that happened pretty much this time last year. We also started increasing the amount of releases that we were doing within GymWatch. We were a little less focused on acquisition. So all of these are errors. I actually spent a million dollars creating an app that retains clients. We're about eight weeks away from being done,

and we've been about eight weeks away from being done for six months. And the reason for that is because no one gives a shit about retention. So I learned that. That's why there's no retention agencies. There's only marketing agencies. People cared about retention. They think they care about retention. They don't actually give a shit about retention.

And so that was an important lesson for me. I think I focused a little bit too much on top line revenue. This last year, I mean, we did grow the top line. I think our bottom line stay the same between. 2018 and 2019. Obviously, I reinvested a ton into other technologies and things like that, like Alan that's coming out soon, done for you meals, et cetera. Those are some of the mistakes I made there. With new systems, we didn't input data collection properly. That was a big fuck up on my part. And so we got burned not knowing things soon enough. That's what it just was way too,

way later than we should have found out. My personal issue, I'll put this one in personal. And this is probably the biggest error of all, I would say, just big picture, is that I had three businesses, which is literally the opposite of what I tell everyone to do is I had three businesses. And that doesn't work. It's very, very hard. And so it was me trying to get three things. And I have a lot of growth to you. I can grow shit. I'm good at that.

But three was a lot. And so now this coming year, so I just give you all the business fairs. I'll rock through the lessons, right? Product has to solve pain, not be an opportunity for gain. You can only break one belief at a time, not two. If you have to break more than one, it's not going to work. Never break focus, get better at one thing, don't do more things. Always protect the core.

Everyone hates change, everyone. Releases don't do shit. More is less, less is more better as best, meaning just make the same thing better, will get you more than releasing more things. Give people what they want, not what they need. That was the whole mess up I had with retention versus acquisition. Everyone wants acquisition. When I started talking about retention, my own retention went down.

As in like my attrition went up. I lost clients when I talked to my retention. And that was because people didn't care. I restate this lesson again. Everyone wants acquisition. Nothing else matters to a small business owner. I also think the reason that the hybrid messaging was so polarizing is that at the time I think I was focusing on competitors a little bit so I was being reactive

rather than just like remembering that we're like 10 times fucking bigger than everyone else and like everyone else reacts to us it was just stupid it was short-sighted with me the lesson also was just focusing on effort six redefining success as effort both for me for my family for my team as well and then the last lesson is that we need to have a singular person who drives each business entity I can still be like chairman of the word so to say but like we need one person who drives this one person who drives this and that's all they think about we can't have people cross you know cross departmental cross entity because it just gets

too confusing people can't focus on two things chase two rabbits ride two horses have to serve two masters whatever the saying is so that was my those are my my failures on the business front this last year and those are some more lessons from it I'm not going to tell you about my people failures but I'll tell you about the lessons, obviously, to protect the people. These ones are a little bit shorter, but a little punchier. Only hire people to do things they've already done.

That's lesson number one. Otherwise, they're just learning on your dollar. And the higher up you go, the less acceptable that is, because when someone fucks up at a sea level, it's pretty big. When someone fucks up at a director level, it's pretty big. And this last year, we replaced 10 out of

11 directors so yeah we took people from frontline move them all the way up to doing positions they'd never done before and they made mistakes that no one should make and I'm glad that we were able to give them that opportunity to learn on our dollar and then they were probably be able to go somewhere else and not make those same mistakes and then that business owner will be better off so happy for them never get too far away that you can't see the problems ever so if you ever feel like a department is or like a section of your business is just crushing it, then it means you're too far away because there are always bodies.

So you have to know where the bodies are buried. If you don't know where the bodies are buried, there's more bodies than you can even imagine. You have to always, you can never be too far away that you can't see problems. The next lesson was don't shelter a star. So if you have a star employee and you start having to make processes around them because they're really good at one thing, but they suck at everything else. A lot of times that ends up changing a lot of the organizational structure around this person

and that ends up backfiring on you. I've had that happen twice this year, three times this year, shit. So do not shelter a star. One was just a lesson on the clarification of the boss, right? So the job of the boss is three things. Motivation, training, and communication. So communication to tell them what exactly what you want so that they understand what you want.

And then after they understand what you wanna have happened, It's literally just two things, motivation and training. And so if you are the boss, then your time, if you're like, what should I do? If you're not motivating your team, training your team, or communicating what you want done, then you're not doing the job of the boss, right? So that was just a really good clarity point for me. Another was fire for ego. So as soon as you see ego, obviously try not to hire if you see ego, but if you start to see ego flare up, ego does nothing good in the business ever. People become entitled.

They feel like they deserve things. They always feel like they're not getting their due. They're always trying to push other people down, trying to take credit when it's not 100% them. They will put other people down in order to be viewed as more successful, which means the team suffers. And it's not about people. It's about the team.

And so if you see ego, just save yourself the headache and fire. Just save yourself the headache. The next two are fun ones. Everyone will fuck you. Everyone, protect yourself. And I purposely made that one a little bit strong. And that's because we're human. You know, we want to have relationships in general.

But whenever you have money that comes between two people, then the dynamic of the relationship changes. And everyone will always act out of their own self-interest, which is the kind of the next lesson. They go hand in hand. Expects people to act out of their own self-interest and even lean into it. So lean into people's selfishness, and then you will never be surprised. And I'm usually pretty good about this, but I'm still human too. And so that goes for everyone. That goes for clients.

It goes for vendors. It goes for employees. If you have a paycheck that separates you, expect that they will always act in their own self-interest. Always. Always. They will never not act in your best interest. Like, you just have to do your best to align your interest and theirs so that it makes them feel like they're being good people by helping you when in reality they're just helping themselves, which is fine. Just don't expect people to do otherwise.

So those are my lessons from people. Relationship, this is just specific to Layla and I. The failure that Layla and I had this last year is that Lay and I spent too much time together. Like we spent all day every day, I mean, we've been doing it for the last four years together. And what's interesting is that if you study couples, Layla does a lot more of this than I do, and she's better at it. They basically found out that if you,

there's kind of like three dynamics, right? You can have one person who works and one person who's at home. You can have both on the other extreme, you have both people working together in the same business. And you have, the middle dynamic is like two people working towards sheer big picture goals, but in different, you know, verticals,

different businesses, like two executives, et cetera. And so it turns out either of the extremes is kind of not the best scenario for long-term happiness, which is interesting on the extreme where like one person's at home, one person's. Now, obviously, any of these situations can be good. These are just averages, all right, based on subjective well-being reported by couples.

It doesn't mean you are gonna be unhappy if your wife doesn't work or whatever. Just like before the crazy start coming out, like just understand this is data. All right. So put your emotions away. All right. So if you're a person, one person's at home,

one person's working, what happens a lot of times is that people start growing apart. Your realities are so different. Now that's good for the road, like you can have more chemistry and romance because you're so far apart that you can be strangers, which is why sometimes from a sexual standpoint,

that can be a good thing. But sometimes from the comfort standpoint, it's like we live and such different realities, like you don't understand what's going on in my life, right? On the other extreme, if both people are in the same business working together, this outcome out of all three tends to have

the best monetary outcome. You make the most money, these people make the most money out of all three scenarios, when two people work in the same business together. The problem is the opposite is that you're incredibly comfortable because you see, you are familiar, you see each other all the time, you share the same reality, right?

But at the same time, it makes it really difficult to have distance, and distance is what creates friction and chemistry, romance, et cetera. And so now, like, obviously, Layla and I are not gonna be getting out of the business, which is why I said, if you take these three things, don't get like crazy on me. So what we're doing is that we're separating our role

so that we can actually focus on different business entities within our larger business. And that way, she can really kind of be CEO of one part of the business, I can be CEO of another part of the business. And that way, it's like, well, how is your data, today. You know what I mean? And so we have the same end goal. We still work and have respect for the fact that one another work and I have respect for her skills. She has respect for mine.

But we're not, we don't have such shared context that every day is obviously the same. Like, you don't need to tell me what happened today at dinner because I already know because I was there with you, right? And so then it's like when you're like, I don't know what we should say to each other. And so that was like a big lesson for us. And so we spent too much time together. We didn't spend enough time with friends. These are all kind of under the same bucket. We didn't have enough fun time. I think we could have done a better job of that. And I think personally,

or we together have evaluated every relationship based on monetary ROI, not life ROI. And so, like, I only hung out with people that I felt like would increase my skill set, provide context, be good for my network, et cetera, rather than other benefits that people can provide. right i'm just being really honest with you those are the failures i had real quick guys you guys already know that i don't run any ads on this and i don't sell anything and so the only ask that i can

ever have of you guys is that you help me spread the words we get out more entrepreneurs make more money feed their families make better products and have better experiences for their employees and customers and the only way we do that is if you can rate and review and share this podcast so the single thing that i ask to do is you can just leave a review but take you 10 seconds or one type of it would mean the absolute world to me and more importantly it may change the world with someone else and so the lessons from that was just one is the dichotomy of comfort and distance so people try and solve the problem with the relationship when it's like trying to solve justice and mercy they're both right and you have to walk the middle path it's trying to solve delegation versus marco

management you can't solve the equation you have to try and balance that so the same thing with relationships right for us the economy of being super comforts super comfortable super familiar and being super distant, super far apart. You need both, right? It's good to miss someone and have that opportunity to miss someone because the distance is what creates variety. It creates spontaneity, it creates friction, it creates mystery. But you also need comfort because you can't just constantly have mystery and spontaneity

because your life would be chaos, especially if you're going to run a business. And so it's being able to balance those two things. So that's the big major lesson. Underneath of that is kind of the alter ego effect, which is a book. I don't have it next to me, but essentially you can't just have one persona. This was also a big failure of mine. I was all work all the time, which meant that I never took my work hat off a lot of times and that makes romance difficult.

And so you kind of end up just going through the motions because you're like, we have to do these things rather than like really being present. And so really focusing ironically on splitting up your egos, like you're not ego from a pride standpoint, but you go from a personality standpoint. So like you've got your work hat, you know what I mean, and then you've got your husband hat, and then maybe you have your like sexual weird hat. You know what I mean? Like because I think there's a great joke in Analyze This, if anyone remembers that movie, Robert

Deere and Billy Crystal, he's like, wait, Billy Crystal's talking to Robert Deere, who's like a mob boss, he's come to him as a shrink. He's like, wait, your girlfriend? He's like, oh, yeah. He's like, I can do things with my girlfriend. I can't do with my wife. He's like, wait, what? He's like, yeah.

He's like, I'm not going to do things like that with my wife. He's like, that's the mouth that kisses my kids to sleep at night. He's like, what are you, a pervert? And so it's obviously hilarious, but what he says, like, makes some sort of rational sense. And it really kind of delineates that concept of like, we need to be these different people because, like, you have such respect and love for your wife. And maybe in some, typically, like, not to get super weird on sex stuff, but if you look into it, typically people want the opposite

of what they have in their normal life in their sexual life. And so it's like complete opposite type desires. And so it's so counter to what that person is to you or what that person represents that, sometimes you have to occupy like a different mental space. And that's where like role playing and all sorts of fun stuff comes into play.

But anyhow, I won't get too far into that. But the point is just that having different ego separated and being clear about who those people are and the values you have and how you act, I think you'd be beneficial. And the third lesson I had from relationships is just kind of a general one, but the diminishing return of money.

And what I mean by that is like, the more money you make, the less money matters to you. I can maybe just share this with you. It just doesn't, it just stops matter. I remember when I was a kid, there was this article that I read about a, guy who got a burger, right?

That was a $50,000 burger, which was kind of crazy to me because I was like a $50,000 burger. And it was some finance dude. And I remember thinking to myself, if that guy makes $10 million a year, the relative cost of that burger, that was a $50,000 burger was more, was less than the relative cost of a McDonald's burger for me at the income that I had at the time.

And then all of a sudden things became really real for me. I was like, wow, it's like, you just need to make more money because there's so many more zeros on that side of nothing than there are on the opposite side of nothing like you can only go to zero obviously you can go in debt but like most people don't know how to get into millions of dollars of debt and if you know how to get into millions of dollars of debt then you already know that there's a diminishing return of money but for most people zero is about as low as you can go but you can go infinitely

high and so what's cool about that is that like money means less to you as as you have more of it and to the same degree you get an increased return of using it, meaning since it means less, you can do more with it. Like when when you see like rich people do crazy things, they don't really do crazy things. They're humans. They have a different context or reality. And so it's like if you could reorganize your entire house for $5, right, would you do it? And would you do it seasonally for five bucks?

Probably. Now imagine if you had enough money that the relative income, or a relative amount of time it would take you to make that money, was the amount of time it takes you to make $5 now. You probably would do it. And then people would look at you and be like, man, rich people do crazy things. They just blow their money on stupid shit. Realty is it's so insignificant in comparison to the amount of total money you have that it stops really being meaningful. And so you really get an increased return of using it because once you have so much, there's really, nothing else you can do with it right so those were kind of that was I put that under

relationships that probably goes under self um the last bucket uh is self is things that like I've learned um first is that uh you create sex success with skills you sustain success with traits and you grow success with beliefs um and that's been one that's been very true for me in terms of myself but also in what I see in other people is in the beginning you just don't have any skills. Like you need to be able to learn how to do things. But once you learn how to do things, you need to be able to have the traits, the personality traits of patience, of consistency that allows you to continue to execute those skills that you already have in order to sustain the success. But once you sustain the success, then you have to re-break beliefs that you once had in order

to grow that success even more. And it's the continual process that you have to do. For myself, I have to have guy friends. I'm a guy friend. I need to have that in my life personally. I go nuts without it. Super big expectations leads to unhappiness. And so I had to keep myself in check and realize that my expectations are so high that there's virtually no outcome

that I would be happy with. That actually happened with our meals launch. I actually still don't know. I know we're doing really well with it, but I don't know the actual numbers because I got asked by my team that like, do you want to see the numbers? And I was like, I thought about it.

And I was like, there's literally no number you could, telling me that would make me happy. And so I just said, no. And so right now I'm operating in this interesting space where I'm actually judging myself based on how much effort I'm putting forth for that side of the business rather than the outcome.

And it's actually incredibly free, which is really cool for me. So that's the expectation side. So you need to check yourself as like, before you find out news or what you think would happen, actually think like what, would any number really make me And if you find out to yourself that there really isn't one, then maybe just judge yourself on effort. You might find it kind of nice. Now in that same vein, I had a big breakthrough with my family this year.

I feel like I forgave my dad in a very true sense because I stopped judging off of what I perceive to be outcomes of parenting and rather started judging based on intention. and effort and was like, did this guy try his absolute fucking hardest to do the best he could, given the cards he was dealt? And I could not, in any universe, say that he did not try his fucking best. And as soon as I realized that, I was like, then who am I? You know what I mean? To fucking judge. And so I've switched how I judged relationships based on effort or not outcomes, and it's

been unbelievably fruitful for me. And so I highly recommend doing it. If you have someone that you've harbored resentment towards or anything like that, it's been incredibly powerful for me to use that. And so I've really reapplied that lens, that frame over, and it's been really great. An interesting one for me in terms of expectations, again, is in terms of how to run my life. So the last four years, it's been 100% all in on building Jim Lunch and all the associated entities. We've made a tremendous amount of money.

I mean, a tremendous amount of money. And in realizing that there's actually no incremental increase in money that would make any difference in my life whatsoever. Like, Layla got me four hats for Christmas, which totaled $120 that were custom made. Each hat was 30 bucks. And that was my Christmas gift. And I was pumped. pumped. You know, I was super happy to have it. And Layla and I live on seven-ish. I think the highest month we had was $9,000 a month. And we make that in usually about an hour a day. So it

just doesn't really make any sense. And so I've tried to reframe like just life in general for myself of like if I could like because no incremental increase in money is going to make a difference to me. So that means that no one year's worth of extra profit is. going to really change my life in any way. And so the only thing that would really change my life from a monetary standpoint would be selling the business, but I don't see that happening in the immediate future. And so maybe taking that out and saying, like, if I could never sell the business and I always operated this entity for the rest of my life, how would I run it and have life that

I want? And some of you might be like, well, duh, Alex is like, well, I'm young. I mean, I'll be the first to tell you what my limitations are. And so for the last four years, I've been 100% all in. I worked pretty much every hour of the day that I could. And I worked until the point where I felt like I had diminishing returns in my effort and then I would recharge and then work again. And I've just pretty much done that cycle.

Well, I say for four years, but it's really been in the last decade since I was 19, so 11 years. And so I think I'm entering into a different, it feels like I'm entering into a different chapter of like, How can I structure the business so that it's more sustainable? I don't do as much. I do more of the directing and really empower other people to do that. So that's kind of the gear that I feel like I'm getting into is finding the leaders who can run the individual entities like I was referencing earlier. And they can drive growth in all three and then I can kind of just cast the bigger vision

of like where we're going as a company, where like how we can help the most people and all that kind of stuff. And I finished my little section with the model. of 2019 that I thought I'd share with you. You probably have heard them. One is success is the best revenge. So whenever you see people talk shit about you, your clients, your employees, where people fuck you because they will if you're a business, it's inevitable.

And it's not because they hate you or they're malicious. It's just because they're just acting their own self-interest and your interest is not aligned with theirs. And so the only way to have a fruitful outcome that does not screw you in the long run is To just succeed, it's all you can do. I've played out every scenario. Like the only way you win is just by succeeding and making them irrelevant.

That's it. Like that's all there is. You can't lash out, you can't undercut because that hurts you. You can't poison yourself with anger because it only poisons you, not them. You can't spread negativity because that gets associated with you.

Like it just, there's nothing you can do besides just succeed and do better. The next is don't be cute. That one's kind of gone, viral in our community is like just don't be fancy don't try and reinvent the wheel just keep doing the boring work which is the next motto which is just putting your reps in putting your time under the bar just a total it's a volume game like life is a volume game you go on more dates so you can finally find

the girl that you want you take you know you take you know you make more tax you make more calls you make more sales you make more sales appointments and you'll make more sales like the more you do something the better you get at it so don't be cute think you're going to out fancy out smart success it doesn't work that way like you just have to put the fucking time in speed is king uh that is somewhat self-explanatory like you got to move you got to keep moving um then just uh endure right like you like you cannot lose if you do not quit so that is uh also one of the models it's like you can't lose an infinite game the only way to lose

the games to stop playing. And so if you ever feel beat down, you have to just remember that, like, you only lose if you stop playing. And that's been incredibly comforting to me in darker times. And just a big one for me to wrap this whole thing up is that some of these lessons that I shared are lessons that I know better. And yet I still made the mistakes. And so I think a lot of times myself very, very much included, I need to be reminded, not taught. There are very few new things. we need to be reminded of the things that we already know and the lessons we've already learned. So with that, I hope some of the lessons and the failures

that I shared with you were useful. I hope some of the relationship stuff, some of the business stuff, some of the stuff of maybe one or two of those things, maybe resonate with you or you find value in. But anyways, those are the lessons and failures of 2019. And I'm not sure about how, like, I've never been a goals guy, ironically. I've just been like a learn from my lessons and keep doing the best I can.

And if I learn more lessons, then the best I can will get better. And that has worked well because I can just said like, I want to help a zillion people. Like I just don't know what that's going to change on my daily basis. So if I focus on anything, it's just on the habits and the actions I'm going to take and actually scheduling them out of my calendar. If I want to read more, then just put reading in your schedule. If you want to work out more put working out in your schedule and just stick with your schedule, You know, just do that.

So anyways, hope 2019 is, or sorry, 2020 is awesome for you guys. I'm super excited about what's to come. Very, very excited. I learned a lot of lessons. And despite all of the failures that we had, we still grew by 50% in 2019 compared to 2020. I sorry, 2018. So all that to say, like, you can fuck up tremendously and still win as long as you just keep moving forward.