The Game with Alex Hormozi - Hard Work Won't Make You Rich | Ep 453

Episode Date: October 27, 2022

“No one can outwork me”... stop lying to yourself. Today, join Alex (@AlexHormozi) as he talks about the factors to consider when it comes to increasing the leverage of your activities in your business, how a good strategy entails all players in the team using their specialties, and using the right metric to measure success.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:(2:14) - Factors like volume and repetition contribute to effectiveness.(3:56) - Strategy involves organizing team members and their skills.(6:20) - Success requires honing skills, application, teamwork, and recruitment.(13:06) - Choose the right game and metric for entrepreneurial success.(16:29) - Effective leadership involves leveraging team activity.(19:59) - Delegate activities in reverse order of personal efficacy.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

Hard work will not make you rich, which is why I get driven nuts by the amount of gurus and influencers and whatever who want to brag and say, no one can outwork me. I'm the best in the world. Blah, blah, blah, blah, blah. It's objectively, A, false. B, so many people work 16 hours a day and just sleep and then work again. And so then how are we defining hard work? Is it just that you work in general?

Congratulations. But if that's the metric that we're trying to use to say that you're good at working, well, then there has to be another metric because every single person on the planet it works fucking 16 hours a day, unless you start eating into sleep, which I think we can all agree is probably not a good idea. So so many people are working 16 hours a day. There has to be something else. Welcome to the game where we talk about how to sell more stuff to more people in more ways and build businesses worth owning. I'm trying to build a billion dollar thing with acquisition.com. I always wished Bezos, Musk, and Buffett had documented their journey. So I'm doing it for the rest of us.

Please share and enjoy. All right. So one of the things that grinds my gears about a lot of the people that I see on Instagram that you probably see to is this whole like, no one can outwork me mantra. And a lot of the people that even espouse that are people that I like. But I really don't like negating objective reality. And it's the same thing when someone's like, I'm the best. And you have to say you're the best because if you don't think you're the best, then like it shows that you're not confident. To me, I don't take that at all. As if someone's like, I'm the best, then I would say, then why aren't you on fucking billboards? If you were the best, That's what the best would look like.

You know what I mean? And so if no one can outwork you, I'm like, you haven't met everyone. And to be fair, I've met fucking 20 people that can outwork you. And why are we bragging about work? Because work has nothing to do, very little to do with the highest levels of the game. Right? Like Warren Buffett talks about if he makes two good decisions a year, he's had a good year. Right.

And so how is it that one of the best investors, one of the best business people in terms of measuring it by money, which is how you measure business, talks about how he does basically, nothing reads five or six hours a day, eats McDonald's, and makes a couple good decisions a year, how is it that that that guy is making so much more money than the people who are bragging about the fact that they work so hard? Now, you can either say, oh, well, Warren works by just consuming information, okay, or we think about, like, what creates output? What creates effect? So you have volume of activity, right? Number of times you do a thing, and then you have the leverage of the activity that you're doing. That's what creates the total

output, right? And so, in order to do anything, you must do something, right? There has to be some level of energy that gets input into the system. Now, the leverage that we have on that activity is going to dictate how much we get out of it. And if we do a low leverage activity many, many, many times, we might get more than a high leverage activity that gets done once. But with enough leverage, one move can do more than thousands of low leverage activity moves. So for example, if Kim Kardashian gets up there, or the Rock makes it post and says, hey, guys, I just started, this new X, he will get more leverage from that one activity, that one post, than somebody who DMs 8,000 people, or 10,000 people, right? And so was it that you can make the argument that the Rock,

you know, worked harder? Maybe. In building the audience, again, maybe. But I think the point of why I hate the concept of no one cannot work me is that there are many ways to win the game. And this is like the heart of why I want to make this video. Because if you were to think about an amazing goal as a dragon to be slain, all right, just think about that way, even though it's a process and not a destination, just bear with me. If you are familiar with video games in any way, when you create like a war party, you have a group of people that are going to go on a quest or mission, right? You don't just have ten paladins or guys who just have shields and swords.

You don't do that. Why? Because a good fighting strategy uses different tactics and different advantages. So you've got a healer. You've got a mage that's really good at damage but can't take a lot of damage. Then you've got a paladin who can't hit as hard, but he can take a lot of shots. You've got a bow and arrow person who does whatever X, Y, and Z. And so each of these characters has a role to play. And it's because the sum of the sum of the parts is greater than an individual player, right? And so having five paladins is not as good as having a paladin, a healer, a direct damage caster, and whatever. And if you don't know what I'm talking about, the point is that if you're playing football, you don't have 10 running backs. When you're playing baseball, you don't have 10 people with the Axiom skill set. You find people who have complementary skills. Let that sink. And so for a moment, if you were to think, The entrepreneur really should be the coach of the team. That is the role of the CEO, is organizing the team to win the game, right, on the micro and then the macro level, the season, and then making a dynasty long term, whatever it is, right?

And so the reason no one can outwork me is first off that it's objectively false because many people, A, outwork you today, B, outwork you have in the past. C, you haven't met everyone. And D, it doesn't fucking matter anyways. All right? That's why I don't like it. So many people outwork me. I still make more money than them. Why are we talking about this?

Like, what's the point, right? And so what this realization has brought to me is that it's about organizing the pieces of the players on the field and how the well they play together that ultimately determines how good the team is. Like, how many times have you seen the team with the All-Star that has the poor supporting cast get beat by the overall better team? It happens all the time, right? And so a lot of entrepreneurs, as I see them, are trying to play the game like they're the star player and they want to score all the points, but they lose to Apple.

Because Apple's got a team, right? They've got team players. And they build a championship team that way by having complementary skill sets. And so this is the point I wanted to make. We celebrate a specific action like work when it's really just saying, oh, look, there's a paladin who can take a lot of hits. cool, that's not the only thing that's required to win. There's other things that are required to win. And so I think what is more valuable is to know what are each of the roles that exist

within the business, A, B, on the micro level, is there one of these that you map to based on your characteristics and skill sets? And then C, what is my eventual evolution through entrepreneurship? So we'll start at the beginning, which is, what are the players on the field? So if you think about it by function, right, you've got somebody who has to promote who's got to be a good marketer. They have to understand how to make things known across different platforms. Somebody's got to be good at that, telling stories, building a brand, providing value to an audience. That's what marketing is.

Sales is being able to convert that raw attention and interest into a sale, right? And it depends on the type of business, but that monetization could be through direct response, ads, sales pages, video sales letters, et cetera. or it could be through, which is pretty much anything that's physical products or software base that's low ticket, or it's higher ticket, and you have people to people hand-to-hand combat who know how to in the beginning sell, and then later train how to sell, and then later lead people who train how to sell. That's how you build the sales function. So you have to have somebody who's good at that. These are not necessarily the same people.

Oftentimes, they're not at all the same people, right? And most times marketing and sales seem similar because people who are good at marketing, sometimes are good at sales. but I've met really brilliant marketers who suck in sales and really good salespeople with suck in marketing. Right? If you have both, that's awesome, but it's not required. Then you've got somebody who understands product. How do we make something beautiful? The guy who started Shopify, he's not CEO of Shopify.

He's had a product because that's his skill set. He's a mage, right? He knows how to cast spells. That's his thing. Or he's a running back and he's just really good at running these routes, but he still needs blockers. He still needs a quarterback to hand him the ball, right? He still needs, you know, offensive linemen, whatever. He has people who are in place to create room for him to grow and succeed.

And so you've got the product guys, right? And you've got the experience people who are managing everything outside of the actual product itself. Like, how do customers engage with us? How can provide more value? How can give them amazing experience? How do we make sure they're hitting these milestones? How do we make sure they're successful, et cetera, et cetera, et cetera, et cetera, right? What support can we offer them?

And this person who knows customers experience a customer, is not the same person who understands product and U.X and design and whatever it is, depending on the technical expertise that's required for whether it's a service or it's a product, that's a different game, right? Which is different than the guy who knew is that a close. It's a different guy that knows that to promote. And so the bigger the enterprise gets, the more specialized the skill becomes in the deeper, the well of experience that people need to be. They have to be more specialized. In the beginning, small business owners have to learn a little bit of everything because you are everything. But that mantra will kill you. And so when people are like,

I can't be outworked. You're bragging about the wrong thing. It should be like, I can't be out recruited. You know what I mean? I can't be out managed. Like that would be like, no one can build a culture like me. That's super high leverage across the organization. No one can lead like me, super high leverage across the organization.

But no one can outwork me. It's just an irrelevant activity metric, right? You have to do some work, sure. And I'm not, believe me, you guys know me. I love working. I work all the time. But I would never claim that no one works harder than me, right? There was a business owner that wanted to deal with us recently, big business, and he followed up with me four times in one day.

And then when we set the time that we were going to talk, he followed up with me two or three more times before the call. And then after the call, he's followed up with me four or five times since then. And we're talking like repeated times. And the first time we reached out, he's like, hey, you free right now? And he's like, no, I'm not free right now. And he's like, no, I'm not free right now. And he was like, no, I'm not free here right now. And he was like, all right, can we talk later today?

And I was like, no, but we can talk tomorrow at this time. And he's like, okay, that works. And this guy is absolutely relentless. And the reason he wanted to work with us at acquisition.com is because we have things that he does it. But I'm telling you right now, if I had his level of relentlessness and perspicacity, we'd be ten times bigger than we are right now. That's just not my vibe.

But I tend to have very good leverage with the activities that I do. I spend tons of time writing a book in that book prints and sells copies forever. You know what I mean? And so it's a different way to play the game. And so my main point here is that there are players on the field, right? Whether you're talking sports, whether you're talking a video game, people who are in the arena, and they have different skills. And so level two of this, one was knowing what the skills are.

Level two is knowing which player you are. And so in the middle run of this, you end up segregating yourself to a portion of the business that you're an expert at or that you're best at. And so then you go deep on that skill because you become essentially, or chief sales officer, chief product officer, or some people, I've got a buddy of mine who's CEO of his business, but he's really like CEO's CFO. He's really just a very good financial guy, and he tends to run a business that's very complex financially. So he has to be really good at that stuff, and it's very core to the business, right? And so with each of these dynamics,

the players look different. It's not about one player, like being the champion here. It's about how the team works together, which then gets to the third level of this, where if you want to flip it, third level would be up here, is that. that is just about being the coach, which is, do I know how to recruit players to my team? Like, that's what the best. Think about what the best coaches do. They're literally trying to headhunt the best players, and they're trying to recruit the best people from college, right? Like, that's what the best coaches do. So you're looking at the best young talent. Look at what Google does. Think about their recruiting efforts. They have huge influxes and resources dedicated to getting

the best and smartest people out of college, right? And they have another ring for the best and smartest people come out at business school. And then another one is their very high level recruiting at the top of the executive level. And so if you think about the parallels between sports and business, they are almost the same in that way. Now, mind you, you can only have, you know, 10 or 11 people on the field. You might have 10,000. But if each of those players represents a function or department of the business, it makes more sense. 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 can out more on

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 the thumb, it would mean the absolute world to me. And more importantly, it may change the world for someone else. When we move up the levels of entrepreneurship, we need to make sure that we're playing the right game and that we're using the right metric to measure our success. And so our activity, in terms of number of activities that we are doing, is a very newbie measure of success in the beginning.

Warren Buffett doesn't say, I sent a thousand emails today. He doesn't talk like that because he's playing a different game. And so if we want to think like billionaires, we have to act like billionaires. Or rather, if we want to act like billionaires, we have to think like billionaires. Right? And they're not thinking about, you know, Jeff Bezos isn't like woke up at 4 a.m. today. Now, mind you, I'm saying this is somebody who likes waking up early. But I also understand it's not required.

I like it. Some of you guys vibe with that, and that's cool. But we can't be as superstitious about what matters. Weeking up early doesn't matter. Going to bed late doesn't matter. Not sleeping a lot doesn't matter. Like none of those things matter. The few things that matter are the inputs that go into the system

that have the most leverage to create the most output. That's it. And so the final level of this is being the coach, is recruiting the top-level executives and creating a farm system underneath to feed into the company that you have so you can have a sustained competitive advantage and create a dynasty for the team so you can create the best winning team every year and have the soft skills of creating culture of high performance so that you get the most out of every individual player.

And the difference between amazing coaching and mediocre or poor coaching is what would players do if they had no coach or leader? And then what would they do if they had the best coach and best leader? The delta between those two is the value of the coach. the value of the CEO. And if CEO can come in and turn a business around, even behemoths around, in two, three years, behemoths.

One person can do that based on the standard that they set and the values that they stand for, that delta between minimum level of effectiveness to keep my job and discretionary work, which is the amount of work that I would do if I was maximally engaged as an employee, that delta across the entire organization is your greatest leverage.

And so if we want to build big businesses, we have to talk like big business owners and know what that path looks like. And so in the beginning, sure, there's activity. But the goal should be to get out of those activities as quickly as you can so that you can go recruit the players on the field. And then from there, rise above

and create the culture on the team. And you may know a lot about being an offensive wing or you may know a lot about being a defensive tackle because that was what you came up with, right? up on. But if you look at even the trajectory of, I like football because it's a simple example, you've got a defensive tackle who's amazing. And then what does he do? He comes back as a defensive lineman coach. And then he becomes a defensive coordinator. And then he becomes the head coach. Right. And so that and the head coach has to understand the whole game. And so if you think about

that trajectory, the small business owner is the defensive tackle that also has to run the ball and figure it out. And it doesn't look good when he runs the ball. You just have to run the ball long enough to win a couple games at the lowest levels of minor leagues, right? Enough that people are like, this guy's pretty good. I think I could help them out. And then you recruit some better players, and then you run plays again against better teams, right? Then eventually, you do such a good job that you can retire and then you move up the ranks in that way. Right. And so I wanted to make this because I grow frustrated with people touting the wrong things to the masses about what matters. Absolutely, you need to do the work. You need to put volume in it. It's the same.

the only way you get better. That is not my point. But if you start claiming that you are the best, you cannot be outworked, you are making statements that you know are not true. You know they're not true. And I am not a big believer in saying false claims because then I lose trust in myself, because then I feel like I'm lying and I am delusional, because I have no evidence to support the fact that I am the hardest working and that I am the best. I don't think I'm the best. I don't think I'm the hardest working. I think we're pretty good. I think we're pretty hard. I just wouldn't say we're the best. And so I think that if we can shift the mantra around this and then refocus it on the things that matter, which are we have to get domain expertise, we have to get sufficient domain expertise

to get over a certain level, then we have to be able to bring people on the team that can help us out, whether it's to slay the dragon or win the game, and then we work our way up the coaching ladder once we're off the field because you're no longer an individual contributor in your business anymore. You're managing people who are doing the individual contributing, and you work your way up until eventually your head coach. Or if you're a smart, smart cookie, you might have enough money that you own the team and then you hire a head coach. That's exactly what a business is from a large picture perspective. Apple is owned by shareholders. And then the shareholders hire a board to oversee the head coach, head coach's CEO. Same thing. The way you spend your time is the only

thing that is controllable. And the question is whether you were doing activities, are we How we define work is the important part of this. If we define work as the amount of time allocated to activities that make us money directly or indirectly, then, yes, people who work more in general will make more money in general. But everyone only has the same hours of the day. And I can promise you that many, many, many people. So if that's the case, then anybody who only sleeps eight hours or only sleeps seven hours and works the remaining of hours of the day,

all of them would be tied for hardest working. So then there has to be something else. So once you max out your hours worked, there has to be another variable, which is the leverage you gain on the activities and the time you spend. And that is, in my opinion, where people should focus their attention.

Now, if you're a newbie and you can't get your ass off the couch, then by all means, figure out how to actually get your ass off the couch and do stuff. But once you have tapped that out, because that's a very easy hammer to hit once you figure it out, I got to work more, I got to work more. Sure. But then there's only so many hours. And so boom, and then very quickly you hit your capacity of work. And so in order to increase your capacity, you must increase the leverage you have on the activities you do. That is why I get so annoyed

about no one can outwork me because I'm like, we all have the same hours. And if the only argument you can make is that you sleep less, which I don't think anyone would argue is a good idea, long term for decision making. So you really just have your relative maximum of how many hours per day can I work relative to the amount of sleep that I can have to recover. And okay, great, you've maximized that. Now what? Because then it comes, okay, well, I've maximized every hour that I'm awake. Well, I can do other activities that have higher leverage. What if an activity has a hundred times higher leverage? Do I still need to work 16 hours a day? Well, what if I work 12 hours a day? I get four hours back and I'm doing 100 times leverage. Because it doesn't

matter as much. So then the reality is that you just need to figure out the activities that have the most leverage and do those. Once you know how to do something, you will give out the activities in reverse order of your efficacy. If you want to be in terms of if the goal we have is to maximize the amount of money we make and the shortest time horizon, and when I say short, I mean long, but over a long time horizon, you want to give away the stuff you suck at first, not necessarily the stuff that you enjoy the least of the first, because sometimes there are things that you are good at that you don't like doing that are required for you during this season of the business. Believe me, there are many things that I do right now that are not my favorite

things in the entire world, but they are required for me right now, and we will do what is required. I think about them in terms of what is my return on time for the activity. And so the lowest leverage activities are things that are done one time and are never repeated again and do not create more output. That's why fulfilling for customers, especially in a service-based business, is almost always the lowest leverage activity. Now, you can gain leverage on the activity if you're able to record it and create media from it, because now same time gets multiplied. right? The question for leverage of any activity is what do I get back for what I put in? That's the core question. And so if I can get multiple things back for the same time, then I have more leverage

on the activity. But as a rule of thumb, the thing that provides the lease value, which you can also, in a back of napkin way, figure out by what can I replace from the marketplace at the cheapest price of the time that I spend. And so if you're, and this is the actual thing that we do with the portfolio companies who are coming in, a CEO who's going to work with Acquisition.com, works virtually every hour of every day when they come in. Almost everybody does. And so that's why, again, the whole outworking thing is just silly to me. So everyone works the same amount of hours. Sometimes they ask, they're like, well, am I going to be working more? We're like, it's impossible for you to work more. But you are going to be changing what you work on because that's the only

lever we have is we have to change the nature of the activity you have. There's only 24 hours. So you're taking 16 hours, we're going to switch these nine out, and we're going to plop these in with higher leverage activities. That's the change that we're going to do. And so the way that we do that as we look at their calendars and we look at their org chart, people are like, what are they talking about? This is how you fucking grow a business. You look at what they spend their time on, and you see which of these activities are low leverage. And you say, look at the org chart. You say, is there anyone else in this org chart that we can hand these activities to? And if a large percentage of these activities are a certain type of thing and they don't exist in the org, then it's a role

that we need to hire. So it's sort of the delegation thing that we can do when spread throughout the org, and then it frees up the entrepreneur to do more high leverage things. Or if they have figured out that the next hole in the business is that they really need to focus on the product, then if a disproportionate amount of time is focused on one thing, that would fit cleanly in one role, then we hire that role. And that is how the buying back of time happens in the business. And the ideas the entrepreneur or the CEO needs to have the highest return on time out of anyone in the organization. So hear me out. The CEO needs to have the highest return on time out of anyone in the organization because they need to always be solving the next problem. So as long as when

they replace their time, the activities they do with the new stuff, once they freed up that nine hours, builds the business even more, then that trade will always work. Where people get into trouble is where they trade the time, they pay the person, and then they don't refill their time clock up with stuff that's high leverage or higher leverage than what they just outsourced. And so the idea is you do want to always get your time back, but you want to get the time back so that you can do high leverage activities that ultimately grow their business.