The Game with Alex Hormozi - Fear, Envy, and Barriers to One Billion (on Driven CH with Albert Preciado) Pt. 1 - May '22 | Ep 421

Episode Date: August 13, 2022

Suffering isn’t a prerequisite for success. Today, join Alex (@AlexHormozi) as he guests on Driven CH's YouTube with Albert Preciado to talk about the things that we're afraid of and whether they use us or we use them, and how to focus on one path for an extended period of time to achieve the goals that are unreasonable in everyone else's eyes, but not your own. This is part 1 of the interview.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.Check out the episode on Driven CH's YouTube Channel!Timestamps:(1:33) - Motivation: Must crisis drive change? Impact of Leila?(7:42) - Life lessons, wealth regrets, focus barriers, envy insights.(19:33) - Alex's routine: workouts, diet, health impact on success.(24:12) - Fears: Financial insecurity, past struggles haunting thoughts?Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

Moses Nation, what's going on? We got a special podcast for you today. This is part one of the zero to $100 million in sales by age 30 podcast I did with Albert Presiato from Driven. We had a great discussion. And the three points that we hit on this one was the dark side of motivation, the things that we're afraid of and whether they use us or we use them and how to focus on one path for an extended period of time to achieve the goals that are unreasonable in everyone else's eyes, but not your own. And this is part one of our two-part podcast. Enjoy. If I had known one, how to pick the right opportunity and two said, okay, if I did just this thing for the next 10 years, it would be unreasonable for me not to be a billionaire, then nothing else matters. Welcome to the game where we 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 we have learned along the way. I hope you enjoy and subscribe. Hey guys, I'm here with Alex Hormosey and really excited. Welcome to Driven Channel. I'm really pumped up about this interview because me and my wife, we talk about. lot about you guys. We're like, damn, usually we're like the young entrepreneurs that are doing good and making money and everybody's older, you know, but, but with you guys, we're like, damn, you guys make

us feel old. So, like, I know you're 31, your wife's 29 and you guys have an incredible story that reminds us a lot also of our battles. Like when you start a business, you go broke, you don't have money, you're barely surviving. And I know you sold businesses for a lot of money. You made some, some good money. And now you're CEO of Acquisitions.com. So, Alex, first of all, thank you for being part of this. And do you feel like you have to get to that darkest moment to become somebody really successful? So, like, you're really successful. I see you guys, especially with the age, you guys have done a lot.

But like in the beginning, I know that there's a lot of times where, like you said, you don't want to live anymore. You're really stressed out. And you get down to your last penny. Do you think that's important for somebody to go through that and come back up to really? make it or be in a position where they're going to continue to make it? You think you could have done it differently without having to go through all that pain? Yes and no. So I don't think that suffering is a requisite for success.

But I do think that it is very likely. And I think that when I think what it does is it gives us evidence. Like when you get into hard times, it doesn't change who you are. It gives you evidence of who you are. It just, it displays, it demonstrates who you are. So some people are like, you know, when the going gets tough, the tough, you know, whatever the saying is. But I think that a lot of times it just reveals our character. It doesn't necessarily create it because it might have already, it might have already been there that whole time.

And then we just get the environment in which to prove it to ourselves. But I think it goes from the man with the opinion to the man with the experience, which L.H. Hardwick said, no man with an experience is ever at the mercy of a man with an opinion. And so like somebody could be like, oh man, like 2008 wasn't that bad. Like somebody who's younger, it hasn't gone through it. But like man with an opinion, man with an experience who went through it, he's never at that guy's mercy. And so like there's some some like soul hardness that I think comes through that because

you have evidence in your past of like I have been through worse. That being said, I think that you can you can extrapolate any negative experience to give yourself a shield against any new negative. So it's like, I'll give you different example. So let's say you've you're new to business, which a lot of people may, maybe you listen to this are. Yeah, yeah. But you might have had a tough upbringing, which a lot of people listen to probably have,

right? Because a lot of people suffer because we're kids, right? If you think to yourself like, man, like none of this is nearly as bad as my dad whipping the shit out of me, all of a sudden it just gives you a very different context of what hard feels like, right? Or mom or whatever it is, right? And so, or my brother, it doesn't matter who it is. But the point is, like, we've gone through hard shit. And I think that what hard feels like is the same, whether it's a, you know,

a business heart or an emotional heart, it feels the same. And so I think if you can take these past experiences that are hard before and extrapolate them onto your current situation, you realize you've been through so much more than this. And then you can look back and say, to use the Morpheus quote from the Matrix, like, I stand here truthfully unafraid, not because of the path that lies before me, but because of the path that lies behind me. Yeah.

And so I think that those hard times give us evidence of who we are. Yeah. And I think it's the stories that we tell ourselves that create the futures we're going to have. Alex, what do you think if you wouldn't have met Layla? Yeah. And maybe you meet Kyla or somebody else. Where do you think? Kayla, right?

Where do you think you are at this moment? Do you think you're as successful, less successful? Because let me tell you something. The reason why I asked this, because me and still are really different. Yeah. Like I'm like the visionary, the recruiter, the sales guy, and she's the operator. So she operates everything. Like if we have an event, like if she didn't have me, I, you know,

we wouldn't have any people. But if I didn't have her, we would have people and we would lose all the people because I don't know how to operate, plan, organize. I'm horrible at that. So like my job is to bring in agents and her job is to keep the agents. I don't know that that makes any sense. Totally. It's the same dynamic.

We have the identical dynamic between Layla and I. How does that work and where do you think you would have been without Layla? So of course, since Layla is in the background of the audience, I would be homeless under that bridge. That's what I would, I would just be there just without anything. No, but we actually have this conversation a lot. Like if I were not in her life, she would probably just find someone who's similar to me

and to find a complimentary skill set. And like if she were not in my life, I would probably, like the business requires these functions to occur. And whether it's mixed between me and Layla or Layla's going, because like we talk about like, what if Alex dies? Because we, you know, we think about like, you know, what happens after that.

Same scenario. Well, she might have to find two or three people to do the functions that I'm doing. And so I probably can't find one later. but I might be able to find like two or three people who can fill the holes that she leaves to make sure that the functions get done. And so it's like, so why Combinator has put out a lot of research on the fact that like three founders is the ideal amount of people for a business. And I think that that just happens to be like there are kind of buckets of activity that must occur in order for a business to be successful. And it's just more difficult for a single founder to do that on their own where all the hats learn all the things or find and incentivize someone who's good enough to be like owner level of.

give a shit. I don't know, like the cussing words on this, but like, yeah, the owner level of give a shit in a company when it's early days. And so I think that's why it gets so hard for people to get going, because especially if you're a solo, you own 100%, et cetera, if it's just you, like we both have the advantage of two owners just right off the bat. And I remember when we were coming up and competing against other people, I always used to think like, even if I'm toe to toe with this guy, I was like, I've also got hurt. And he doesn't. And I was like, it's two on one. Like with every, every business, you know, competitive space I thought.

I was like, it's 2-1-1. Like, we always come to the, with an advantage. And so I think that if you can get that, that founding team in place of talented people who, who have complementary skill sets. And for anybody who's watching, like, the three kind of big ones, and you alluded to it, was like, you've got your acquisition side,

which is how are the promoter, who's going to bring people into the door. You've got the, the operation side, the product side, right? Which is, what are we going to, how are we going to fulfill the promises we made on the front end? Right? And then the third one keeps the other two out of jail, which is, you know, HR, finance, legal, IT, taxes, you know, accounting, all that stuff. And so those are kind of the three elements that we see within the business. You've got your product, you've got your acquisition, and then you've got all the stuff to keep yourself out of prison. Well, what is the biggest lesson you think you learned? And do you think maybe if you would have known what you know now, you could have been with more money earlier? Yeah. Is there one big lesson that if you can go back, you'll change? Yeah.

It took me five years to learn focus. It took me five years, maybe 10, depending on what I mean about focus? Picking one opportunity and ruthlessly going after that one thing. I think a lot of people, I mean, me. I get so, like I get excited. I love opportunity. I love seeing the unseen, seeing where things can come together. Because I see your mind going like, like I could tell like from far, like when you walked in the first time right here.

And we met back in the Bradley's event. Yeah. But you just, I could tell that you have so many ideas going around your head. I don't know if that's true, but you seem like you're thinking like 100 things at once. And so like you talked about focus. Yeah. Does that also mean how you manage your time? Because I know in the beginning part, you give everybody your time.

And then after you start growing, then you stop giving people time. And then some people just get insulted and they get mad. And how do you approach that? So two separate. One is one side of like the networking and people thing and the other side was like the business focus side. So on the business focus side, it's really, it's accepting the fact that there are always many, many 10 out of 10 opportunities. So the first thing I did was I was picking bad opportunities to go after. You know what I mean?

Like, you know, opening a dry cleaning store or rather I'll walk up the opportunity ladder. This might be interesting for everyone. So like opportunity level number one is that you're working at a dry cleaning store. Right? Like you're just, you're cleaning the clothing. Right. that's like lowest level opportunity. You're training time for dollars.

You have zero leverage. One level above that is you're managing at that store. So now you in some way have some leverage, but you're not still owning, but you're operating, right? Level above that is you own the dry cleaning store. Okay, that's cool. But your leverage is you got five mile radius of people that you can serve out of the entire world. And the only level of leverage you have there is labor. That's all you have is you leverage over other people's time.

The level above that is you franchise or you, you sell other people your business model for how to do it. Now all of a sudden you've got capital and you've got leverage. You've got other people's money and other people's time. So all of a sudden, that thing can go from being a maybe a $1 million opportunity to $100 million opportunity. Right. And then all of a sudden, if you aggregate franchises, right,

now you're at a billion dollar. So it's like each of these things we, and if, let's say you created a software that made the whole thing faster. It's like now you're using code and that. And then you associate like Kylie Jenner's brand with like Kylie Clean, whatever. And so then you're using media to get even more leverage. on the opportunity. And so learning about leverage was the thing that took me a long time to understand in terms of what boat I'm in. So I'll give you the quote from Warren Buffett. But he said,

I'll give you the full quote. So he had his closest friend from Columbia Business School, who went to school with them. They were really smart, really hardworking, liked each other a lot. When they finished, one, his best buddy went to do into steel business, manufacturing steel, and then he started Berkshire Hathaway. You know, 30, 40 years later, this guy, the steel business is a tough business. He didn't, I mean, he's like, he made an okay living. He's like, but he didn't do anything

really exceptional. And then Warren built Berkshire Hathaway. And he said, and that's when I learned that it wasn't about how hard you row, but what boat you're in. And so there's a lot of really, really hard working people out there

who are really smart. The thing that they're missing is ignorance of opportunity. It's ignorance of leverage. And so if you can get into a better leverage opportunity, the same time or same effort or same intelligence can yield you a 10x,

20x,000 X, X,000 X return, which is hard to conceptualize, but still true. And so understanding the leverage of the opportunity, and then from a character perspective, understanding that I have to pick a high leverage opportunity and I must stick with it for an unreasonable amount of time. I have to just keep doing it. And the outsized returns, the compounding of the opportunity comes from the depth of the experience,

which comes through repetition. And so a lot of people get, you know, whether a mile wide, an inch deep, rather than a mile deep an inch wide. And most times that kind of death of experience is what gives you the compounding outsized returns in the longer haul. And so I think if I had known, one, how to pick the right opportunity and two said, okay, if I did just this thing for the next 10 years, it would be unreasonable for me not to be a billionaire, then nothing else matters.

So even if somebody's like, dude, I've got this new tech thing. It's going to be huge. I could say totally understand. But if I do just the thing I'm doing right now, I'll get to a billion, which is right now the current goal. And so that's it. And I could have 20 other things. Like, dude, we got to do this building together. Like, I'll bet you I could make money on that.

but if I do nothing else besides this one thing that I'm focused on, I will get to a billion. And so everything that is not that is a distraction from that. Hey, guys, real quick, if you're new to the podcast, I have a book on Amazon called $100 million offers that over 8,000 five-star reviews and it has almost a perfect score. You can get it for 99 cents on Kindle. The reason I bring it up is that I put over 1,000 hours into writing that book. And it's my biggest gift to our community. So it's my very shameless way of trying to get you to like me more.

And ultimately make more dollars to that later on a lot. your business career, I can potentially partner with you. So that's my give. Go check it out, Amazon, and back to the show. What do you think keeps people from not doing that? Because like there's so many opportunities that have come up. And especially now with how much you're known now, a lot more than before, right? You probably get a ton of opportunities. Or people pitch you like, hey, I got this. I'm going to make you, we could make millions with this. But why do you think, let's just say Scott? Yeah. Why can Scott just focus on mortgages or real estate.

Why does he have to do events? Why does Scott have to go out there and do like this other side business and this other side business? And then they just get. Deluded. Yeah. And then they don't, when they could just go out there and make millions in real estate or mortgages.

Yeah. What do you think is what gets people to do that? Yeah. It's kind of frustrating. Yeah. Because I have, you know, I lead a lot of people.

And then I find them like, hey, you know what? It's cool doing the little swing and dance at TikTok and, but what is that? Like focus on what you're doing. Make more calls. Yeah.

Yeah. So I think it's human behavior. And so the way that we describe this is local versus global benefit. And so a simple example is like, if I want to have a six pack, right, why does Sarah go grab a piece of cake rather than grabbing a piece of chicken breast? Because the local benefit, the acute benefit of having a piece of cake is higher in the small, in the local region. But the global benefit for her body is lower. And so humans in general will tend to optimize for local benefit rather than global. And the people who can simply optimize for global benefit for their system-wide benefit

are the ones that get the biggest compounding returns over the long haul. It's the same thing as in a business setting. Why don't the sales guys leave notes in the CRM so that when the customer service draper, the onboarding rep can see the notes to have a way better experience, have way better ascension rates, way less churn, drop out, all these other great metrics that would improve the overall business. because the local pain, right, of writing the notes in is harder than not doing it. But doing it gives the global benefit that is worth it, right?

And an interesting one from an operational perspective, because I'm sure you've also had the flip side of people who over-operationalize things, they over-process shit, and then it gets too hard, is that the point of process is to give a global benefit. And so you can measure, is there a global benefit from this thing? If we're having people do lots of stuff, but it doesn't have a global benefit where the global benefit does not outweigh the cost.

Like, for example, let's say that one of the benefits is if we could have people walk through a 20-step sales page thing so they could finish all of that without the finance department hopping on. Sure, that might be a benefit globally, but the global loss might be that we lose sales by like 70% because it's such a pain in the ass.

Right? And so you have to look at global cost versus global benefit on any kind of initiative. And so to get back to the why does, why does Johnny have a bunch of side hustles? It's because the local perceived benefit of a shiny object sounds exciting. Even though globally we could make a very easy argument that if you took all that time, all that attention, all that waste and energy,

and just put it into the thing that is this main vehicle, you get outsized returns because the thing that Johnny doesn't understand, and this is alluding to the lesson that you mentioned earlier, is that like all the gains come at the end. You know what I mean? And so many guys are like, they're doing 80% effort in three things, where if you just did that extra 20 for the one thing, you would get more on that 20 than you would on everything else. Yeah, that makes a lot of sense. And so it's a diminishing

marginal return with an outsized absolute return. And so I'll give a different example to drive this. Sorry, I'm just for like loading the example. If I'm a runner and I'm in the Olympics and I ran and I train and I train, the amount that an extra, you know, two hours a day of training, training does for me, the amount extra speed I get is might be this much, right? The last two hours compared to the first two hours, I might get this much extra. But this much extra is the difference between first and fourth. And so what's the absolute difference of that marginal return? It's everything. Yeah. And so I think that when we when we're trying to compete in the space, we have to understand like you are going to have less return on your time in an opportunity, but the absolute

return of being that much better than everyone else makes all the difference in the world. If you're a really good sales trainer versus the best sales trainer, you'll make 10 times more money being number one. Yeah. And that's the absolute versus marginal difference. And Alex, when you guys were growing and you guys made a certain amount of money where you never made that money before. Yeah.

You guys are both good looking, really good shape. You guys look like models. When people, did you ever have people having envy towards you? Like when you started growing, maybe you had your right hand person or your left hand person. And then they're like, wait a minute. If they could do it, I can do it. Maybe I'm going to go out there and start something and be their competitor. Did you ever deal with people like that?

Peeling the pieces apart. There's the envy side and then people, you know, copying and do things like that. Yes, I think the last time I counted, we had over 20 people who would work for me who tried to start similar companies. So yes to that question. In terms of envy, I don't know. I don't know what their primary motivation was. It might have just been like wanting to do more for themselves. Like, and that's fine.

You know what I mean? But at the same time, like, now we will compete. And like, and I will do everything I can to win. Yeah. And so, you know, are any of those companies bigger than the company that we had? No. Are all of them together not bigger than a quarter of what we had? No.

Is there something that you guys do to keep to maximize all the people that you have so that? Yeah. That was a good lesson that from. what you were asking earlier about like any lessons that I learned. I think that early on it was just like every dollar has to be mine. You know what I mean? I think that giving more slices of the pie to people, you get so much more. Like Jeff Bezos right now owns 10% of Amazon, right? Elon owns 17% of Tesla. Warren Buffett owns 38% of Berkshire house or his stock, whatever. And so these these huge guys understood a concept, which is like the more money you can make other people, the more money you make,

even though if the pie's not 100% yours. And it took me, that was, that's a lesson that took me too long to understand. Because if you give other people slices of the pie, then you can gain your time back disproportionately. And so it's like, it'd be better to have 51% of 100 businesses, you know what I mean, than 100% of, you know what I mean? And because you can just give the opportunity way. But the problem is that everyone thinks that the boat they're in is the only boat they'll ever be in for the rest of their lives. Not just say you shouldn't focus on that boat, but I'm saying like, we think so small.

And are you talking about equity-wise or also compensation-wise? Both? Yeah, but I just mean in general, just like however you slice up the pie. Now, getting back to the whole fitness part, I heard somewhere, like, I don't believe it, but maybe you could convince me otherwise. But I heard you say that you work out twice a week and that you have a way of eating where you get all your food in the beginning. And is there a science that you mastered? It's the end.

So it's the end of the day, mostly. But there's minimum effective dose, right? And then there's MRV, which is maximum recoverable volume. So there's the two extremes from a training perspective. So the amount that it takes to maintain the amount of muscle mass you has is typically significantly less than most people expect. And the amount that it takes to grow and to get an adaptation, and then the maximum amount that you can do and recover from is usually much further down the volume spectrum than people expect. And most people are just in between those two things. So they're above the amount to maintain, but not enough to adapt.

So they're just doing more work than is necessary to just basically stay the same. Right? And I think that that happens with a lot of systems in terms of like, let's say you're working on sales. It's like, they read their sales script every morning. So they're enough to have to maintain. They do the minimal amount to maintain. But maybe they do a little bit more, but it's not enough to drive adaptation to drive growth. Right.

And so, I mean, the fitness example works for life in general. But if I want to grow, then I will train like 90 minutes, six days a week. So every day and I'll train maybe even two hours a day. And I will force the muscle to grow. Like you will either break or you will grow because there's no way you can stay the same given the amount of punishment I'm putting on this muscle, right? And it's not about even the intensity. It's like if I do legs every day for six days straight, my legs will grow.

If your arms are small and you train arms every single day, your arms will grow. promise you. And so then what happens is if I know that I have the work ethic to do this level of volume, then it comes to, okay, what extra, not to get too tactical here, but like, what exercise selection can I do that does not give me joint pain? Because if you do that much volume, joint pain can start coming in issue. So then it's about finding the exercises that you are really biomechanically advantaged for that give you the least amount of stress or rotating between two to three of those throughout that six day cycle. So you might go like exercise A, B, C, and then ABC for that six days. And that way you get a little bit of variety on the joint while still maximizing the maximum.

amount of volume you do. That's the training side. The food side is, I know that you've alluded to the video that I had, but it's just calories and protein is pretty much all you have to do, which is why we eat dessert every night. We do that. Because like if you could have rice and potatoes or just like a big ice cream Sunday, I'd rather have a big ice cream Sunday, but that's my. Are you still on the clean drinking diet or do you drink? We do not drink much. I would say like Layla has one drink and I will have some of it sometimes. But it's definitely not with the intention of getting drunk. It is, because I know I saw a video where you posted, you didn't drink for a while.

Yeah. How did not drinking for a while? How did, and how does your health in general, like staying in shape, working out, how does that contribute to your business's successes? I think at that time when I stopped drinking, it was really important. I think that now it would matter less because the things that I, I was, I would drink, like, I never had a drinking problem. You know what I mean? It was just like, I would be stressed from work or whatever and I would just like want to have a shot or two at the end of the day or three shots or four shots to just like take the edge off, right? But the thing is,

when I, when I forced myself to stop drinking, I did a cold turkey because I was like, what's the point? It's just like, if you're going to do it sooner or later, might as well do it sooner, right? And so I stopped drinking the day that we decided to without really any prompt. And then what happened is for the next six months, I would feel this like itch, like whenever I was stressed, like, man, I could really use a drink. But I couldn't. And so it forced me to confront the things that I wasn't confronting, which is like decisions that were unmade, hard conversations I needed to have, relationships that needed to be cut out or brought in, depending on, you know, what they were. And so basically I had all these unresolved loops that I needed to close. And then once I closed all those

loops, once I closed all those loops, my desire to drink went down dramatically. And then when I did decide to drink two and a half years later, you know, it wasn't like, ah, you know, to like, you know, guzzle down five bottles of liquor because I wasn't drinking for a place of stress. I was just, I was like, okay, things are good. And so we're in the same place now. We're, I think as long as you don't drink to, to run away from anything. Yeah, yeah, yeah. then I think it's much less likely that you'll do it in excess. But most people do it to escape.

And I did too. Yeah, yeah. Do you have any fears? Probably lots. I haven't thought about them lately. Probably the main human ones. You know, fear of failure, I suppose. I think a lot of that has become less,

but it might just be because I have all this evidence that I haven't failed. So I don't know. But I think that if I were to, like, if all of that were to be removed from me today or tomorrow, I think I'd be okay. Do you ever feel like a fear of being broke again? And let me explain a little bit more. Yeah.

Because, for example, you guys live really like a simple way of living. Like you, I know you had a, you bought a car because. Because Brad. Yeah, yeah. And so you got a Bentley. Then you sold it. Then you sold everything. You got your cash put aside.

And you got your money put away. Your means of living are not that high. Yeah. But then I think about, because I agree with that. But then I think about, like, what if I die tomorrow? And I didn't, I don't drive what I want to drive. I don't travel the way I want to travel. How do you process that on how are you going to spend your money on?

It's a great question. I think that to what you said, like drive what I want to drive, live where I want to fly where I want to fly. We do that. I just don't want to use someone else's drive what they want to drive. And so I realized for me when I had the Bentley that it didn't make any difference in my life. I did it because I thought it was cooler what other people would think like, you know, I mean, I literally did it because Brad was like, dude, go buy one. I was like, fine, I want to buy one. And it didn't do anything for me. And so like what are the things that we find valuable? Like, we enjoy going out to dinner. So we've gone out to dinner every night for ever. We haven't used our kitchen. And I like that. You know what I mean? And like when we go out, we get whatever we'll, you know what I mean? Like, it doesn't matter what, like we get whatever we want. I get two entree. Last night at two entrees, free desserts. Like, I just like that. And it's cool. Like, I enjoy that. You know, we fly private a lot.

because we enjoy that and we get returns from that. We bought, like, I'll just say a big number worth of big homes recently after having sold everything. And then, you know, as soon as we got there, we're like, oh, I don't want to deal with all the, I don't know that the housekeeper, the av guy, the lawn care of the pool guy, the decorator that like all of the stuff. And I was like, I just don't give a shit. And so we have like a 3,000 square foot, you know, apartment that we can lock and leave

and go wherever we want. And so I think that the point of money is to bias options. And so I want to have the option to work. Because if I can't work, it's just as bad as having to work. And if I want to go fly private, I want to have that option to do it. I don't want to have to do it. And so I think it's for us, we've optimized towards optionality rather than, then quote, freedom.

And that concludes part one of the Albuquerquehado driven podcast. Stay tuned for part two, which is a banger. I hope you enjoyed as much as we enjoyed making it for you.