The Game with Alex Hormozi - Getting Bad Advice from Good People | Ep 668

Episode Date: March 20, 2024

"When you have an opportunity or you have made the decision to capitalize on a new thing that you're going to do, to go all in on that thing.” Today, Alex (@AlexHormozi) discusses the struggle of determining who to listen to for advice as an entrepreneur, and shares personal experiences with making non-ideal decisions that ended up being the right ones. He encourages listeners to weigh decisions based on opportunity cost and to go all in once the decision is made.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:(1:48) - The power of going all in(2:52) - Opportunity cost: The key to making big moves(4:01) - The importance of speed in decision making(8:04) - The delta between short and long term gains(9:03) - Choosing your mentors wiselyFollow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition(This episode is a re-run. Original airdate was on September 26, 2019)

A lot of times people have really good intentions and they're not bad people and they give good advice for most people. It just may not be the right advice for you right now. If you're done with something, then be all in about being done with it. When you're making that kind of decision, make the decision in a non-emotional place. And then when you make the decision, go all fucking in and be done with it so that you can look at the opportunity costs. 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. come 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. I wanted to talk about good advice from good invention people and bad advice from good people. And I think it's one of the hardest things that you struggle with as an entrepreneur is, who do you listen to, right? Where do you get your information from and how can you test whether or not that information is valid or good for you to act on? And so I was talking to a friend earlier this morning who's got six locations and they're trying to, you know, they're thinking about going into licensing and he's got. kind of go back and forth between selling his sex locations, keeping them, keeping one of them,

et cetera. And so he was like, what do you do when you sold your six? And what I wanted to tell you is I actually did what most people would consider in a non-ideal outcome. And so what I mean by that is that I got advice for most people to not do a lot of the things that I've done in my life. And these were people who had very good intentions. And so parents, friends, you know, mentors, things like that. And so, but the decisions that we ended up making ended up being the right decision for us. And so, like, for example, when I had the gyms that I had, I actually sold five of them and closed down one of them, right? And I could have sold all of them and I could have probably bundled them together and I could have gotten a broker and probably sold for probably three or four times the amount that I did. But I'm a big believer in. So I talked yesterday about opportunities and threats. And when you have an opportunity or you have made the decision to capitalize on a new thing that you're going to do to go all in on that thing. And so for me, the added benefit of waiting a year to get the deal outcome was not as good as taking a non-ideal outcome, but taking a bigger win overall in the macro picture of life. And so I think a lot of times people with good intentions will give you

advice with a micro perspective. And so it's kind of like the advice, like save your way to being a millionaire, right? Like never get Starbucks, never out to eat, like all that kind of stuff. But like, and the thing is, is like for somebody who's going to be an employee who's going to be on a fixed income, that's kind of the only way to do it unless you want to start. making more money on the side, which then means you're entering into like the entrepreneurial realm, right? And then again, that advice no longer is valid. And so there's like, that's, that's why it's so hard having this big bucket of like, what is good advice versus bad advice? Because like, there's really just contextual, is this good advice for me right now? And so the,

the way that I've always navigated this is looking at it in math terms of opportunity cost of how much, and this is really real. Like this is, this is 100% high how I weigh out these value equations and honestly how I can drown out the noise of like my parents saying this is stupid and how mentor is saying I shouldn't make this call, but just simply saying, how much will I make if I were to start fresh on this new opportunity or this new thing compared to the current opportunity vehicle that I'm in right now? And so for them, they were like, you spent the last, you know, three and a half years, four years, pouring your soul into building these gyms and making them profitable and all the hardships and blah, blah, blah, blah. They're like, how can you just

walk away from that? How you can just, you know, in their minds, throw it away because I was just basically selling it for like one or one and a half times earnings. And I was just like, because the thing that I'm going to do next is going to be so much bigger. And me waiting a year to do that is going to lose me what I would have made in the first year of that business. And lo and behold, when we, you know, when I sold all the gyms, the very next month, I did over 200,000 in my first month. And so I was able to replace, you know, majority of the income that I had in the first month of switching to a superior opportunity vehicle. And so to take this back to like, okay, Alex, what does this mean for me? a lot of times people have really good intentions and they're not bad people and they give good

advice for most people. It just may not be the right advice for you right now. And so I guess what I want to say is like, I want to encourage any of you who are like, like if you're done with something, then be all in about being done with it. And that's that that advice has really never deserved me. And I do want to make sure that when you're making that kind of decision, you're not making a permit decision based on a momentary emotion, for sure. Like, that needs to be a logical decision that you've come to. But once you've made the decision in a non-emotional neutral place where you've looked at the math purely, not looked at the math with an emotional perspective of like, this could be amazing. You know what I mean? But like really, what is realistic? What are some other people who've done

the same path? You know, what are expected earnings, things like that? When you, when you make that decision, then go all in. I sold all of my gyms from beginning to end in 120 days. Like from beginning to end, all of them were closed. I was out of the leases. I had cash in hand or payments had started coming for the ones that I did payment payments for. And so, and I sold five of them to five different owners. Actually, that's not sure. I sold three to one owner. I sold one to a competitor. I sold one to a client and then I closed one down. And so, but I mean, I had a very, you know what I mean? Like, I basically was just like, I'm getting, I'm moving on with this. This is a, this is a, essentially a fire sale. You know what I mean? Like, I'm moving on to the next step.

for me. And so if you get to that, and it doesn't have to be with like at the macro level of your gym, but it can be with any decision. Like if you're done with something, be done with it. Trying to then go from like, I'm done to let's get ideal outcome are two very contradictory feelings. And they're very, two very different action sets that you take based on that decision. And usually if you're looking at the opportunity cost of the time, it's going to take you between fire sale to ideal outcome. And then you measure how much more you would make in the new thing that you want to do or the, you know, whatever the endeavor that you're trying to. take on is if you can measure that difference and the differential is greater to doing the thing

that you want to do, then it makes math sense to do that and cut ties with the other one as fast as possible so that you can move in that direction. 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 so we can 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 asked you do is you can just leave a review, but take 10 seconds or one type of the thumb, it would mean the absolute world to me. And more importantly,

it may change the world with someone else. And so I just want to give you advice that I didn't get when it comes to like making big moves. I've always, always moved in the direction of like making big moves, making the decision and executing. And I'll take time to make the decision. But when the decision is made, it's made. And every day that I don't act on that decision is the day that I become weaker and I become less certain of myself. So it's like once you have made it, then prove to yourself that you have balls. And I say that with love to women, you know, that you have big ovaries, whatever. And that you make the call and you move forward. And a lot of people who are non-entrepreneurial, who are, you know, more security driven, things like

that will be like, you shouldn't move this fast. It's not good to do things quickly. You know, You should take more time. You should really think about this more. It's like, well, that's just because you're security driven and you sit in your blanket of comfort. And you don't realize that there's still an entrepreneur above you who's worried every day about the business that you're getting paid for still being there tomorrow. You know what I mean? And so that's just because they live in a false sense of security. And so they play off of rules that don't actually exist.

But for you and I, for those of us who are entrepreneurs, for those people who are taking the risks, then weigh your decisions, make the decision in a non-emotional place. And then when you make the decision, go all fucking in and be done with it so that you can look at the opportunity cost. Now, that being said, if you have a business where I'm just giving you an example, this may or may not be relevant to some people listening, but like, let's see you have a business that can sell today for $3 million and, you know, with a proper process can sell for $10, right? And the proper process would take an extra, let's say, nine months. Well, then the equation would be, will I be able to make an extra $7 million in profit from a new and endeavor in that period of time. And if it doesn't look like that's the case, then you should wait and do the right process. But basically what I'm saying is you need to look at the delta between what you can get in a short period of time. I'm not saying this is necessarily for an exit.

I'm just using this as an example. It could be anything. But what you can get in a short period of time compared to what you could get over a longer period of time. And then what the opportunity and cost of doing the other thing that you would do in that meantime. And whichever one is greater is the that you should do and you should act on that in the moment. And fuck everyone also tells you otherwise. That being said, last words of advice, sorry for all the advices this morning, but don't listen to me if you want to make more than me. Like, I think one of the most dangerous things in the world is listening to people who make more than you rather than listening to people who make what you want to make. And that's something that I think I've learned as well because like when I was starting out,

there were plenty of people who made a lot more than I did. But when I look now back on the advice that they gave me, it was based on their view of the world and the lens that they, how they saw things. And it wasn't really the best advice. It was just the advice from their perspective. And so I think that like listen to Titans, you know what I mean? Listen to listen to the billionaires, listen to those podcasts, watch those guys talk because they will be able to give you perspective from, you know, 10,000 foot view of the things that are really going to drive the outcomes that you're looking for. And so like, don't be afraid to not listen to people. if it doesn't feel right for you, you know. And a lot of times they're just giving you based on

the experiences that they have and they're projecting it on to you. And I do the same thing to everyone that I'm talking, you know, to everyone who's on here right now. Like I'm just giving you my experiences and how that's worked for me. There might be another guy who's made 20,000 times more than me who's like, never do that. But that's just, that's just my two cents and my angle that has served me well, you know, with our businesses and whatnot. So make sure that the people that you're listening to have achieved what you want to achieve, not just more. And I know that's a little bit counter to some of the internet marketing culture of like, you just need to be one step ahead of the people that you're trying to serve. I think you need to be 20 steps ahead of the people that you want to serve so that you

can actually see the battlefield for not like just the next step. Because if you only see the next step, then you might not know that they would have to backstep that one step, two steps from now. And so that's where, that's where this is kind of coming from is if you can see what 10 steps ahead look like, then you can actually figure out how to get there in six rather than being one step ahead. Like, I think it maybe works from a, from a selling someone stuff standpoint, but it doesn't really work from a long-term serving that person's standpoint.