The Game with Alex Hormozi - Conversations That Changed My Life | Ep 495

Episode Date: February 7, 2023

When things in life start to seem easier, that’s when you should be going harder. Today, Alex (@AlexHormozi) shares with us the 20 conversations that were pivotal in shaping the entrepreneur he is today and breaks down each vital lesson he learned from these conversations.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:(1:08) - #1-4: Character, opportunity, offers, and timing(6:19) - #5-8: Level of effort, perspective, giving too much, and fat pitches(13:08) - #9-12: Repetition, learning budget, mutual agreement, and a bigger total addressable market(19:40) - #13-16: It’s not about you, personal branding, fame has pros & cons, and doing more(27:08) - #17-20: Investing, leveraging your product, and 2 lessons from Warren BuffetFollow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

He said, I think you have a level 10 skill set and a level two opportunity. And that was one of those simultaneously incredibly encouraging things and incredibly heartbreaking things for me. So it was a very like emotional moment for me. The wealthiest people in the world see business as a game. This podcast, The Game, is my attempt at documenting the lessons I've learned on my way to building acquisition.com into a billion dollar portfolio. My hope is that you use the lessons to grow your business and maybe someday soon partner with us to get to $100 million and beyond. I hope you share and enjoy. So we all have lots of conversations that are pivotal points in our life. And I define learning as

similar circumstance, new behavior. So if you have the same circumstances and your behavior doesn't change, it means you didn't learn anything. So these conversations changed my behavior, which is why they were so pivotal in my life direction that ultimately made me a millionaire, what, 27? And I believe whatever path we're on, we always pay for lessons with either time or money. And so we use the one we value least. And so for me, I always wanted to pay time and money to get as many lessons as I could so I could learn the lessons of my 40-year-old self, learn the lessons of my 50-year-old self, and apply them in my 20s to drag that future into the present. These are the things that changed my life. The first one is about my character. My dad told me when I was 19 and I had a terrible

reputation. And I was asking him, I said, hey, how do I change my reputation? How do I get these people to think differently about me? And I thought I needed some marketing hack or some repackaging hack of how I needed a dress or appear or whatever. In his own words, he said, why don't you stop acting like an asshole and your reputation will catch up with you? And I discounted him at the time, but as it kind of marinated, and I, you know, I drove back to college and I started thinking about it. I was like, huh, maybe he's right. And so what I started doing was acting the way that I thought I wanted my reputation to be. And in the beginning, no one cared. They treated me the way I used to be. But when the way I was behaving was different than what they were expecting,

the way they saw me started to shift. And it took about two years, for my reputation to change. And that was a long time. But I was really dedicated to doing it for me rather than doing it for them. And then eventually my reputation caught up. At one of my first jobs, a mentor of mine who was very, very wealthy, said, figuring out what you want is 99 times harder than getting it. And I'm pretty sure happiness is living as many days in a row that are good as you can. And a lot of times when I try to think about like, what makes me happy, what brings me joy, it's really hard to think about that from a big picture perspective. But when I drilled down to like what does a perfect day look like for me? And then tried to string as many of those in a row as I could,

my life started to change. Because it wasn't this big amorphous idea. I just know that these are the things I like doing every day. And so I optimized for that outcome. And then that extrapolated over the rest of my life, created a life that I desired. Another early mentor, I was going back and forth between quitting my job and starting a gym or starting my entrepreneurial journey. And he sat me down and said, you know man i've been listening to you waffle for months now he said at some point you're not going to know anymore you just have to jump and he said it in a way that made me feel like a pansy but when he said that i realized i didn't need more information i'd already done all of the research already had as much information as i was going to have i just needed to decide and so the definition of decision comes

from the latin de cadare which basically means to cut off or kill off and so the question was which future was i deciding to kill off was it the future that i was in currently that I didn't like anymore, or is it the future that I had the potential to accomplish the dreams that I had. And so by not deciding, I was actively killing off the future that had my dreams, and then I needed to choose which one I wanted to kill. And that was one of the things that pushed me over the edge. The next conversation was about sales. And so in the very beginning of my entrepreneurial journey, I didn't know how to sell anything. And rather than going through sales scripts and, you know, building rapport and learning all of this stuff, when a mentor just said,

do you want to know the secret to sales? I was like, I leaned in. I was like, yes, please. I had my notepad out. He said, the secret to sales is making an offer so good, people feel stupid saying no. And that obviously became the subtitle of my $100 million offers book. And it was because it was so pivotal in my life when I realized that I kept thinking that I had to learn how to like, again, try and manipulate and try and persuade and sure, some of those skills are useful to have. But the big, obvious one is that people didn't want the thing. And so a lot of people spend lots of effort and time trying to get better at the skill of persuasion when it's so much easier to just find things that people really want. Chick-fil-Aid doesn't need to sell you on chicken sandwiches. They just have

amazing chicken sandwiches and people go buy them, right? And so when you make the offer so good, people feel stupid saying, no, they usually don't. And that forever changed how I created new products, created new services, was I started with how do I get the most people to say yes and then worked backwards. One of my next mentors was a $10 billion CEO. He's actually a COO. So he was with a company from $100 million in revenue to $10 billion in revenue, publicly traded. And honestly, he came to me before I was really ready for that kind of advice. And one of the things he always kept telling me when I was starting out was he's like, you got to go slow to go fast. He kept repeating it to me over and over and over again. The thing is, I didn't appreciate what he was trying to tell me

at the time. And I can really only appreciate it now in retrospect, because I feel like I tell this to people all the time, is that you only unlock the compounding, which later on grows significantly faster than the erratic activity of small thing here, small thing here, new thing here, new thing here, than just doing the same thing for an extended period of time. And so what feels slow in the micro looks fast in the macro when you look at the trajectory over a long period of time. But what looks really fast in the micro is usually really slow in the macro because people can never get that compounding start harnessing because they're always starting back over at ground zero. So even though they go from zero to one over and over again, it feels really fast. They never get from one to 10. That changed how I acted

within my business and really conserving resources in terms of how few things are we really going to allocate time and effort towards in terms of new initiatives and being very sparing in terms of when we would do that because I would have to know that I was going to incur the cost of change. Because whenever you change something, the one cost is guaranteed is that change will have to get paid for. And what isn't guaranteed is that it's going to work. And so if you know you have this fixed cost, which is how you should see it, is that whenever you change something, you have to pay a price. And are you willing to pay the price if it only gives you a marginal return, which oftentimes many of the small business I see, they try and optimize stuff all day long for these tiny little

returns that don't matter because they never are in excess of the cost of change. The next lesson I learned was in level of effort. So one of my early mentors told me about flyers. And so I thought I needed to go put a lot of flyers out to get business. And so I put out 300 flyers. One guy called me back. He told me that I dinged his car. He was very upset. No one else called me. So I called the mentor back up and I was like, hey, what the heck? This didn't work. And he's like, okay, well, you know, what was your test size? And I was like, what do you mean by test size? He's like, well, you know, what was the first test? I was like, well, I mean, I just put out 300 total. And he just laughed. He's like, 300. He's like, you're not going to know anything with 300. He's like, we test

with 5,000. And then we do 5,000 a day after that. I was like 5,000 a day. He's like, yeah, like 150,000 flyers a month. And when he said that, I had this huge realization that I might have been doing the right thing all along, but I was just doing far too little of it. And at that point, I decided that whenever someone gave me advice, I wouldn't let the volume of activity that I'd done committing to a plan or committing to a project to be the reason it failed. Because I wondered to myself, how many things had I done in the past that were the right things, but I just hadn't done enough of them or hadn't done them long enough. And so whenever I do new initiative now, I think, okay, what is the maximum amount that I can do?

That would be unreasonable that I don't have a large enough sample size, that this works. And then then I can draw my conclusion. I see so many smaller, younger entrepreneurs who do something for two short, short, too little time, not enough volume that they might have been doing the right thing. They just didn't wait long enough or they didn't do enough of it. And so I never wanted that to be the reason I failed. The next conversation I had wasn't really even a conversation. I was at actually a mastermind and I saw a guy get up and he seemed so disorganized and so not passionate at all about his business. And he said, yeah, you know, we're making three or four hundred thousand dollars a

month. It's like we've been stuck here for a few years, blah, blah, blah, blah. And Layla and I were actually together at this point. And we both looked at each other where we're like, if this guy can do it, we can do it. And it was one of those moments that like concrete changes where beliefs are broken, right? And I think one of the easiest ways to break a belief is be around people who are making significantly more than you because what you find out is that they are made of the same thing as you. Same flesh, same bones, same brain. You meet them and you're like, how is this guy doing it? Right. And rather than write off, this guy is such an idiot, think despite him being an idiot, despite her being idiot, he's still more successful than me. Imagine if I used my work ethic and

my intelligence on the same lessons that this guy obviously has right. And when I shifted my perspective from that way, I was able to start using other people's successes to fuel me rather than to make me feel bad. It switched from wanting to cast stones of people to being inspired by them and thinking, if they can do it, so can I. And really internalizing that. And that was a big turning point for me. Within six months of seeing that conversation happen, we were already doing. a million a month. And at the time, we were doing like 20,000 a month. At a different event, I went up and I spoke and I told my whole plans of how I wanted to build this national gym chain, be America's next gym. And the guy who ran the mastermind said, you know what, Alex, I don't

think you should do that at all. And I was crushed. Like, I didn't even like, I barely could hear what he was about to say next because all I get here was like, this is just like my whole plan. I've been working for years towards this. I have six locations. This time I'm going to 10, this I'm going to 20, all this stuff. And he said, I think you have a level 10 skill set and a level two opportunity. And that was one of those simultaneously incredibly encouraging things and incredibly heartbreaking things for me. So it was a very like emotional moment for me. But he was both encouraging me to say like, you can do so much more.

He was poo-pooing me because I could have been doing more. And I think one of the most terrifying lines of the Bible when I was a practicing Christian was to whom much is given, much is expected. And that always terrified me because I always think like, man, I've been given so much. And so a lot more was expected of me. And this person from the outside put a bar up that was significantly higher than what I was shooting for. And that stretched my horizon for what I was capable of. And I think getting around people who can do that for you is one of the most valuable things you can possibly have in your life. And from an opportunity perspective, what he didn't say, which I had to later find out for myself, was a level two opportunity as he was defining it, is an opportunity.

opportunity that has low leverage. There wasn't a very good compounding vehicle for capital. There wasn't a very good compounding vehicle in general from a business model perspective. There was no limitless scale with media. There was no limitless scale with software or code. And so the only thing that I had to do really in this business model was just hire more people. And it was also lots of low-skilled labor, which made it a very difficult opportunity to succeed in. And so the fact that I was successful in what most could consider a shitty opportunity, he saw as a skill sets that would create a much bigger win later. And so if you are in a lower level opportunity,

I wouldn't say be upset about it. I would say you're learning with extra resistance against you. So you're getting stronger now. And then when you go onto the moon where gravity is lighter, you just knock it out of the park. The next conversation I had was actually at an event. It was a private event. It was 10 people.

Everyone was doing like eight figures or more a year. And I got invited and we were doing like three or four million years. So I felt like the small dick in the locker room. And after I went up and I explained our business model, And this is right as things started to take off. This is like the second month and things were just escalating like crazy. The guy came up to me and this guy had done $27 million in a single day. I was like, holy shit. This is crazy. This guy's made more in a day than I've made my entire life. And he said, if everything that you're saying is true, he said, fat pitches in life don't come very often. When it gets easy is when you need to go hard. Because otherwise, there's someone who's 10 times bigger than you who's going to take everything you have and not even think twice about it. They're going to eat your lunch. and cast you aside and take everything you have. Like I felt like my stomach dropped because all of a sudden what he did was instill fear in me.

Because up to that point, like right at that point, I thought I had made it. You know, we were taking home 300-ish a month. And if you're like, wait, how are you doing 300,000 or 400,000 a month taking home 300? I had like no employees and I was making it all myself. And that renewed, probably in a bad way, whatever we want to say, it renewed this huge sense of urgency for me that stayed for three years before I was able to like take my head out of the ground and say, like, is this the life I want? And so from like 300 to 400,000 a month to four plus million a month, that was literally fueled by that one conversation.

And every day I would wake up and think everyone's trying to take me out. Everyone's trying to copy my stuff. Everyone is trying to do that. And it pushed me. And I think that if you do have one of those opportunities that comes up in your life when things start working really well, that's when a lot of people ease off the gas. That's when they go easy. But it's like when it gets easy is when you go hard because you don't have that many fat pitches in a lifetime. You might get two or three.

And you just got to crack the shit out of it when it comes and expect that you're going to sacrifice some short term for some long term later. So at the same event, a different person after I had given my host, this was a very powerful event for me. A different guy came up to me and he said, hey, because at this point I was like, hey, I'm doing $300,000 a month. I'm thinking about starting a supplement business and I'm going to start that, you know, a month or two. And everyone there was like, well, you're like doubling every month with this current thing. I'm like, why do you want to start a supplement business? And I would give my reasonings. And he was like, flatter me.

He said, what if you just spent three times as much on marketing and didn't start a supplement business? And all these guys been more money than me. So I was like, well, what's the point of asking for advice if I don't take it? And so I took the advice. I didn't start the supplement business. I actually delayed it for 18 months, which still probably wasn't the best call. But I delayed it.

And in the next three months, we tripled the ad spent and went. from 400 to 780, from 780 to a million, from a million to 1-2, from 1-2 to 1-5, 1-5 to 1-8, 1-8 to 2 million, just the next six months because of that piece of advice. And I think the underlying part of that advice is that when something is going well, oftentimes entrepreneurs think, great, I won, how can I get another win? But the real win is just doing 10 times more of that thing. The hardest part is getting product market fit. It's getting people to want to buy the thing.

Once you have that, you don't need to innovate that anymore. all your innovation has to go through. How can we do more volume? The next lesson was from a guy who had a big e-commerce brand. So he was doing like 30 million a year at the time. Again, I was doing three or four million at this exact moment. And I was like, oh, my God, this guy is God. And he gave this huge presentation that was like two hours long. And I basically understood none of it. It was way high level like traffic stuff and like intent audiences. Like, I didn't know any of this shit. And I just like, I wanted to take something from it. And at the very end, someone else, thank God, raised their hand, was like, where did you learn all this stuff? And he said, at this point in my career, I can't

learn a ton from courses and masterminds and coaching programs. He said, I learn through giving myself a learning budget. He said, so pick a percentage, whatever it is, 10%, 20% of your marketing spend, and put that towards new ideas and expect to lose it. But when you're losing it, you're gaining the lesson. You're gaining the experience. And what happens is, like, you know, four out of five times where crazy ideas fail. He's like, but one out of five, He's like, they crush and become the leading edge innovation that pushes us to the next level. And him saying that at that moment, I immediately took a number and I wrote down what my new learning budget was going to be. And it gave me permission to spend money without a return immediately.

And so what happened is, if you think big picture, he just extended my time horizon for a return. And so rather than saying, I have to make my money back immediately within 30 days of me spending this, I said, if I extend my horizon over my lifetime, if I spend this money, I will learn and be better and I will learn faster than somebody who doesn't. And so that permission forever changed how I approached new acquisition channels, new sales processes, new products. I just gave myself a budget to say, it is acceptable to lose this. And then I committed to that. And that was a huge pivot point for how we were able to scale and try new things because it wasn't uncontrolled testing.

It was controlled. And I looked forward to spending on my learning budget every month. And it just gave me permission to be creative knowing that it would be okay to fail. And for somebody who doesn't like failing, it was a huge deal for me. Mosy Nation real quick, if you are a business owner that has a big old business and wants to get to a much bigger business, going to $50 million plus, we would love to talk to you. And if you like that, we would like to hear more about it, go to acquisition.com. You can apply anywhere on the page and talk to one of our team and see if we can help you get there. The next one I got from a pastor between Layla and I, he gave us a single piece of marriage advice that we have taken two day.

we have used countless times in our lives, both in our marriage personally and professionally in the business. He said, if you don't agree, don't move forward. And it was such a simple piece of advice, because in some context, there's like, who's the alpha? We have always made our decisions together. And if we don't agree, we slow down. And so a lot of times we impose this false sense of urgency on ourselves when there's almost nothing that is urgent. Like unless you're going to die, which is the only real urgency, because then you don't make any choices after that if you do. Like, if there is no death, then a lot of times taking an extra second to think, okay, is there something we're missing?

Is there a frame that we're not seeing? And so if we don't agree, the first question we always ask is what information are you using, right? And so oftentimes one of us will have data that the other person doesn't, which is why if we have the same data, because we have the same values and same mission, we do ultimately come to the same decision. So oftentimes when we don't agree, it's because one of us knows something or is emphasizing a different piece of information than the other person. And then we can get down to the information and talk about that rather than hating the other person for disagreeing and thinking that they're

stupid or that you're stupid or anything. That has saved me so many mistakes in my life. Like it has been one of the most valuable pieces of information. And you can make that agreement with a business partner. It doesn't have to be a spouse. You can make it with your spouse and it doesn't have to apply to business. But I think that if you are equally yoked in your partnership with somebody, making that the bottom line has just served me so well. Much later on my career, I went to a big half a billion dollar mastermind. So there was like 10 of us there and the total sales of everyone in the room is about half a billion dollars. I'm like, this is pretty cool.

So my business is doing a little better at this point. But I was still among the smaller ones. I think we were doing $30, $40 million a year at the time. And plenty of guys there were at $100, 200, et cetera. And I had my goggles on. I was like, what do these guys have that I don't? Like, that's all I was looking at was like, what do they have? Are they smarter?

Are they working hard? Are they sacrificing more? Like, what is it? do they have better market? Like, what is it? And the single biggest takeaway that I had from the entire thing was that they had a bigger total addressable market. They had a bigger Tam. They were going after just a much wider audience. And that was when I realized that whatever business you have, eventually you need to go wide. So you start small. So the riches are in the niches to a degree. But at a certain point, you do need to open up the aperture. So like Facebook started with college, right?

That was the, that was the niche. And then slowly they expanded over time because it's easy to do one thing really well for one avatar, which is why I always say one avatar, one product, one channel. That's how you start. But at some point, I had been so committed to that that I had to open up my eyes and say, you know what? Maybe I can expand my avatar. Maybe I can go out market. Maybe I can go broader in some way. And seeing all these people that, you know, I thought were equally intelligent and hardworking as me doing significantly better, like that was the unlock for me. The next one was when I talked to, this was one of the first billionaires that I ever met. Again, I had been stuck at 30 to 40 million for like three years. So like there was a lot of

learning that I was trying to do in this period to break through that wall. And I was telling him all these things that I was doing to try and grow my business. And he just laughed. And I was like, hey man, I'm like, I'm like putting some real stuff out here. Like, I'm suffering right now, which anybody who's watching this is like, fuck you. All right, whatever. But, you know, if you do think that way, then you don't understand the entrepreneur again because the reason people do it is because they want to grow. And when you feel like you're plateauing, it still feels terrible, independent of what the monetary outcome is. And so he said, the biggest thing that I see, and I'm paraphrasing, he's like, is that you're talking about you all the time. He said, it's not about you. It's about everybody else.

And what he meant by that wasn't like me versus customers and anything like that. He was like, all you've been telling me is what you're going to do. He's like, you need to have a stable of stallions. You need to give people a slice of the pie and let them get rich too. And And up to that point, I had hoarded everything. I never did profit shares. I did very little, like, equity interest for anybody who's a key leader. But he told me, he's like, you know what got me from $100 million top line to $500 million top line?

I was like, what? He was like doing less and getting really smart people to help me out and giving them a big slice. And it was just so simple. And maybe it just means you have to get it from somebody who's way ahead of you. And so I don't know where you're at, but maybe hopefully I can be that for you. is that at a certain point, one million, you need to learn the stuff. 10 million, you still need to learn a lot, but you get your first level management. Like 10 million plus, it's about talent.

It's about people. You have to get other people who can make decisions on your behalf, and you feel not only that they were as good as your decisions, but even better. Because the skill sets become more niched and more advanced, the bigger you go. In the beginning, most people can do their books when you're making a million dollars a year. It's not that hard. But when you're making $50 million a year, the books become significantly more complex. And that concept applies throughout every single part of the organization. And so in the

beginning, you're Jack of All Trade's Master of None, but you need to have mastery in every department of the business in order for it to scale. And you can either see that as I have to learn everything or the faster way, which is I can go buy it. So you can build it within yourself or you can buy it through other people who've already given 10 years, already given 15 years. And so a different way to think about it. I'm hit on this because I think it's important. if I can get 10 people who've all spent 20 years in their respective departments, then I basically have 200 years of experience, which funds or flows the growth of business.

The business will scale to the cumulative brain power of the organization. And if every person in the organization has learned everything from you, then it's only one brain and one lifetime that is the limit of the organization. If you have 10 people who have lived 10 different lives and achieve mastery in 10 different areas, then you now have 200 years of experience and mastery that is growing the business and is now the new cap. And like that was my big, that thing is what got us past the 30 to 40 million. Like that was a huge breakthrough for me. The next one was a podcast that I actually heard from a YouTuber that didn't have like, you know,

I probably had a few hundred thousand subscribers. He sold kind of like some sort of tax thing or whatever. And he said on a podcast, nonchaliener, that he was getting 3,000 applications a month from this like one or 200,000 YouTube channel. And it had taken him eight years to get there. And in my mind, I heard 3,000 inbound applications from a warm audience filling out a 28, you know, page questionnaire for taxes as the most insane thing I'd ever heard in my entire life. And the fact that he was getting paid to do that was insane. And that was the first conversation that I ever heard that gave me the first step towards

creating a personal brand, making content. Like that one thing, him translating all of this content he was making into the business terms of what he was getting from it, that link for me was when the light went on. I had a bunch of other things happened after that that pushed me over the edge. But that was the first time that I said, there might be something to this. The next conversation I had was around, it was really the one that pushed me over the edge. The one I just talked about was me deciding to maybe even think about this content personal brand path.

this one was the last conversation I had that made me decide to do it. I have a famous friend, you would know him if I said his name. And I was at his house and we were sitting at the kitchen table. And I said, don't you get tired of all these people, like all these weirdos, like messaging you stuff and like sending you threats and like three people a week stopping by your house, like trying to climb your fence? Like, isn't that like not fun? He said, if that's the price I have to pay to make the impact I want to have, then I would pay it every day of the week. and like for whatever reason it just like stabbed me in the heart and it made me feel like if I want to spread a message if I want to help more people that there is a cost to it now

what I will say this having now been a little bit the other side and having more recognition and whatnot is that fame has pros and cons there are cons but I believe that there are more pros than cons and so that is how I've kind of assessed it's like are there things that are inconvenient now absolutely you get stopped every time you go to dinner like you disrupted, it's harder to be like private and public. If you have a bad day, you can't do it because someone says hi and it's the one time they're going to see you. Like, there are things that are cons. But the pros outweigh the cons. You get amazing teammates who otherwise would never know you exist. You already believe in your values and you don't have to indoctrinate that way. They're like,

they see the mission the way you do and they charge 10 times harder towards it because they believe in it. And you attract partners who also have the same mission, have the same values. And it creates significantly more alignment and real world value in terms of economic value, how much money you make by having people inbound coming towards you. And I, for the longest time, I used to poop-poo making content. I used to talk shit about people who make content. I was like, just need to make, do cold outreach and run ads. Like, don't talk to me. But now having been on the other side of it, I can tell you that it was a mistake. And it took me a long time to learn. And that was the last, the final straw. Another one was a big influencer. And I wanted, this is,

again, on this personal branding journey. I'm a big believer that you can either learn lessons with time or you can pay for them in money. And this is me paying for it and money. And so I I said, hey, you're way further ahead of me. Like, how do I just shortcut this thing? And so he said, hey, you start making content on every platform. So I did that. And then I came back six months later. And I said, hey, look, we went from zero to, you know, 200,000 people in our audience in six months.

And, you know, you noted the progress. But I was like, what's your blueprint? What's the, what's the model? How's the, you know, give me the flow chart. He said, dude, we don't have a flow chart. He said, anybody who's trying to sell, tell you that is just trying to sell you a system. You just need to do so much more volume than you currently are. And he said, just pull up your Instagram and pull up my Instagram.

So I pulled it up, pulled his up. He had posted five times I had posted once. He's like, pull up your LinkedIn, pull up my LinkedIn. He had posted seven times I had posted once. Platform by platform, he get pulling one up. He was embarrassing me with the amount of content he was putting out compared to me. And so in the next six months, I put 10 times the content out, and we grew 10 times faster. And so the interesting lesson I learned from this is that there are principles that are ubiquitous. The more work you do, the more you get. The more work you do, the better you get. The better you get, the more you get out of it. Right. And so the boring work applies to everything in business, whether it's relationships, whether it's cold calling, whether

it's making content. The more you do, the more you get. And it's ironic. I felt silly that I had to learn it from someone that I paid all this money to teach me a lesson that I had already learned in a different aspect of my life, but it also applied here. So hopefully, you don't have to pay that money. I'll tell you, the more you do, the more you get. The next one was about investing. And this was a big one because we had a, my wife and I had already taken $43 million in dividends from our business before selling it for $46 million. And I was actually a pretty big pansy when he came to investing. And that's because that's why I have no debt to this day.

I still don't, not say I'm against it. I'm just a pansy about it. And I'm very upfront about it. Maybe someday I'll be able to take debt on. But up to this point, I don't. So everything I own, I own in cash. And I still have a ton of cash just stacked in treasuries, just bonds, just waiting there. And this was the breakthrough I had.

One is that if you ever have cash in a bank account, you can just put it in a bond and you'll get a higher percentage and it's safer than a bank. That was a huge, like such a simple thing. Like banks aren't as robust as the U.S. government. Banks pay you point whatever percent. The government pays you four to five. That's it. That's all there is to it. And they're almost as liquid because you can sell them in and out whenever you want.

Like that was a huge aha for me. So taking all my cash in a bank accounts and putting them into bonds while I waited with. step one. Step two that I learned from this conversation was investing only in what I knew. Because up to this point, like now I had all this money and people are like, I've got this real estate deal. I've got this crypto thing. I've got a mining, you know, whatever. There's just all these crazy thing. You know, I've got oil pipe mine. Like when you have lots of money, deal flow is not a problem. People will ask you for money. But what I didn't have was like a set of rules or parameters. And you have to make those, otherwise you get too much decision fatigue. You waste too much time doing

diligence on deals, reading, having multiple phone calls, having lawyers come in and then deciding not to it. And so this is a conversation I witnessed and it changed my life. He was telling somebody who had a lot of real estate experience. Now mind you, I don't have a lot of real estate experience. He said, if you were to put a circle on this table, what percentage of your brain knows real estate? He was like, I guess, 85%. He was like, okay, what percentage of your brain knows stocks and stuff? He's like, oh, 10 or 15%. He's like, that is your new capital allocation parameter. 85% your net worth should be in real estate, 15% should be in stocks and stuff. And it was so simple for me. Like, Warren Buffett talks about investing what you know, but for whatever reason, that conversation

translated that into real world. For me, I know business. And so what do I invest in now? Only businesses, which most times people consider private equity one of the riskest types of investment, but it's only risky if you don't know what you're doing. And this is the point, like, I can write a five or a $10 million check and be fine if I know what, like, if it's a business. Because I understand, I know what pitfalls are going to come up. Like, I get. it with a real estate department building no idea never been never built one i got nothing you know what i mean like i'm just like uh termites are bad i hear you know like rain uh water bad not on the floor not a good idea right like i don't know and so sticking with that just forever made my life simpler because

now when deals come to us i'm like that's just not in my wheel and i can just immediately say it so the amount of time and effort and lawyer calls and conversations that that saved me has paid so many dividends and now are investing doing significantly better because it's what i know and i feel comfortable with it and I can move way faster. The next one was about the leverage behind a product. So Naval has said, you only sell because you don't know how to market. You only market because you don't know how to build a product. And the thing is, is that an exceptional product is a quadratic relationship with your audience. Good marketing or good sales is a linear relationship. Meaning, if I spend a dollar, I get X dollars back. If I make X phone calls, I get Y dollars back.

But with a product, if you make an exceptional product, one person, person buys the product and they tell two, two tell four, four tell eight. And so if you focus on the product on making something that's so unbelievable that people cannot help themselves but tell other people about it. And you're like, well, how do I do that? You work on it and you keep working on it and you don't make new products until the first one's right. And if you're like, that might take years. That's why good shit takes time. And my first real experience with this after this was the book that I released, $100 million offers. That book continues to sell more copies every month, month after month, with zero advertising dollars. Like a lot of books.

And as soon as I saw that happen, it shifted in me to like, I knew the sales stuff. I knew the marketing stuff. But now, like, I would say the chapter of my life that I'm on is all folks who are on product because I realized that I could work really hard for two years and then not have to work at all or very little for the rest of my life or work very little bit on a product and then spend the rest of my life trying to market and sell it. And so it's actually less work in the long run to build a better thing than it is to build a shitty thing and then have to spend the rest of your time marketing and selling it. An excellent product is a form of leverage because you get more for your time. You put in X and you get out Y for the rest of your life.

That is leverage. And you want to have leverage in every aspect of your business and the product is the strongest one. Products also unlock compounding. Because if one person does two, two till four, four, till eight, there's a compounding vehicle in it. If you have marketing or sales, there is no compounding there. You just have to keep putting effort in and you get X return on it back. There's no compounding. And you want to have that in the vehicle because it means the longer you play the game, the bigger it gets. The last few I learned from Uncle Warren, which I didn't have a conversation with him,

but the man changed my life in many ways. And he taught me the power of brand. And brand was always this amorphous thing that I thought was complete BS. I was like, you can't quantify a brand, blah, blah, blah. But the thing is you can quantify brand. And that is what I learned from Uncle Warren. He said, the amount that you can charge above the commoditized version of your product, the delta there, is the power of brand.

And what's interesting about that is if you have a t-shirt that can sell for $20 normally and can sell for $100 with your brand on it, all of that pricing power goes to bottom line, which is why Warren Buffett invest in brands. It's one of the strongest ways to retain pricing power, which is a proxy for the profits that you can generate over an extended period of time and the new markets you can get into using the brand to wedge yourself into the new category, the brand itself becomes a huge compounding vehicle because the audience and the awareness around the brand compounds. And by the way, I've anonymized these conversations because I don't want the people that I had these conversations

with to feel like I'm name dropping them or feel like conversation I had with them in confidence ever come back to them. And so I'm keeping this whitewashed of names. Because you're not, you would recognize probably half the list on your own.