The Game with Alex Hormozi - Having What It Takes, Escalation, & the Boring Work (on Driven CH with Albert Preciado) Pt. 2 - May '22 | Ep 424

Episode Date: August 20, 2022

What is one question you repeat to yourself over and over again? Today, join Alex (@AlexHormozi) as he guests on Driven CH's YouTube with Albert Preciado to talk about how to win big, how he scaled their social media to almost 2 million audiences in under two years, and how to understand the control, freedom, and these relations to the entrepreneurial growth in business. This is part 2 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:(0:52) - Invest more in valuable experiences. Alex quickly gauges winning traits.(5:15) - Importance of a unique physical identity for personal branding?(11:05) - Alex's content creation process, mundane tasks, and social media growth.(17:03) - Selling companies, acquisition.com routine, and company's growth strategy.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 two of the zero to $100 million in sales by age 30 podcast I did with Albert, Preciado from Driven, where we talk about how to win and win big, how we scaled our social media to almost two million person audience in under two years. And third, in the understanding of control and freedom and how it relates to the entrepreneurial journey in growth in business. Enjoy. Tony Robbins talks about this, which is like we have this like unstated question that we, We ask all the time. I think he says, his is like, can I make this better? And when I was at the Tony Robbins event, I was like, I wonder what my question is that like the one innate question you repeat over and over again. And I think mine is like, how can I use this? 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. I've always screamed to the world, I have this, or I'm going to have this before I have it. Yeah. And then it becomes a reality. Yeah. Maybe not. Maybe I don't reach the number.

Maybe I don't reach 50 million, but I reach 36 million. Yeah. And but I've always been like that. And that keeps being pushed. It, it motivates me. And you talked about private flying. I never imagined I would fly private. Yeah. Like, I never imagined it. And then I screamed to the world, like, we're going to fly private. I scream to the world. We're going to buy a jet. Yeah. You haven't bought the jet yet, but we, but we will. Yeah. But when I flew private the first time with Sil. And it felt it's just a different.

amazing feeling. I know what you like. Because you know where you spend your money. You spend money on things you love. So like flying private. Can you talk, did that change anything in your life? Or how was your first experience flying private? I've said this before.

It just transforms what is normally a painful experience into one that can be enjoyable. Like going from economy to first class, I don't think makes the flight enjoyable. I think it just makes it less painful. But I think flying private does make it an enjoyable experience. That being said to what you were saying earlier about like casting it out in the world

than trying to make into reality. This is me just throwing it out there. I think you would be just as successful if you didn't do it. Because I think it's who you are. Like, you are going to win because winners win. Like, that is innate. And so if someone put duct tape on your mouth and took away your social media, you'd still fucking kill it.

And so, you know, like on the flip side, like they've seen people who set really big goals, and then they go after them and that's what drives them. And then you can also set goals that you never miss, and you always keep over delivering on that incremental goal. I think either way, the winners win because of the activities that they do that drive the result. I'm less spiritual about winning.

Are there certain traits that you see, like when you see somebody, can you tell like in five minutes if they have what it takes to win big or does it take time for you to analyze a person? Do you know a lot of people are full shit? Yeah. I think talking to people, you get a vibe for how, you know, like how sharp they are, some level of character. I mean, there's the whole like thinking fast and slow, like you can make, you know,

I mean, because I used to know, from selling and you've done a lot of sales too. Like when someone walks in the door, I usually had a pretty good idea of whether I was gonna close them not before they even like started talking. You know what I mean? Like you just start seeing patterns over into like this person.

I know how much to tell you know, what angle am I gonna come from to like lock, you know, unlock this? But I don't, you know, I don't wanna sound arrogant. Like I can just, I can read everyone. But I think it's when you get these unique pairings of people. Like what, because I was trying to think of like, what is it factor?

What is like X factor? Like what makes someone special? What is, why do some people, get raised up, right? And I think it's when we have patterns we don't recognize. And so, for example, like if you look at this outfit, right? Yeah. A lot of times in my videos, I'm wearing a wife beater and I look like I'm in a basement. Right. Yeah. Yeah. And I think people have an expectation of what I'm going to sound like, whatever my level of intelligence is, whatever a level of success they're expecting. And then it's, it's not met.

And so I think that when people can, and I think that those patterns where people, what happens is people are like, wait a second, what happened here? And then all of a sudden, the brain goes into learning mode. Because Norma's like pattern recognition, pattern recognition. And then you don't actually have to consciously think because it's just all unconscious. Like you're just, I know what that person is. I know what they're about because people usually grab their identities off the shelf. They say, oh, I'm going to be a country boy. And then they just adopt the country boy outfit.

Or I'm going to be the, you know, Instagram influencer avatar, right? and then they put that outfit on and they believe those things, they do those things, and then they become just like everybody else. And so I think a big part of kind of like the quote, authenticity is like everybody has had a unique experience, but they don't express that. And so they just conform.

And so I think if you can, if you have true alignment of what you really deeply believe and what you say and what you do and how you act, then that is the authenticity, but I think most people are afraid of doing it because they're afraid of being rejected. And so it's so much safer to pull an identity off the shelf

dress like a goth, dress like a punk, dress like a corporate dude, dress like the real estate guys, rather than just have something that's a little bit different. And that's what I think gives people pause. And I think that's what makes, that's what gives people, you know, it factor, X factor. Yeah. Speaking of that, the branding, because you're a genius marketer and, and you know, I'm, you know, exactly what you're doing. I could tell you know exactly what you're doing. Like, There's always a strategy, because I think the same way. There's always a reason why you're doing something. So, like, for example, like, let's say if you look like me, like if you buzz your hair and you start wearing dressing like me, and then I switch it up and I start looking like you, I dress the same way and, and, you know, I get a bit bigger and stuff.

Do you think people are going to be like, wait a minute, that's not Albert? Wait a minute, that's not Alex. Do you think it's important to have a look that separates you and that gives you that unique identity? I think how you dress is a part of your identity, whether you like it or not. Even someone who like, I mean, candidly probably dresses like me, it's like I might be trying to communicate something, which is like, I'm dressing for comfort and function matters more to me than form. Like that would be a value that I'm communicating with how I dress.

It's also true. Now, if that weren't true, then it would be silly for me to dress in a way that would communicate that. Like Layla probably dresses the exact opposite of me. She usually dresses it like her outfits probably costs more than our rent. every month. And every day. But like, because for her, that communicates something else, which for her is like, I, I am excellent.

Everything I have is always dialed in. Like from every, every aspect of what I'm doing, like was curated, was thought of. And I'm here to present my best self for the day, for the opportunity for everybody in the room. And I want to respect and honor them by how I show up. Not that I don't feel that way. I just do it differently. You know what I mean?

But I think people like you because of the way you look. Like it's just you have that look. And still is the same way. She always has to be ready. Her nails, her eyelashes, she needs to put her. And she's the one, because I dress, we don't dress that much different. I'm pretty casual. But I used to dress more casual.

And she's the one that forced me to like, hey, you can't look that. You can't look at that casual when you run a mortgage company or a real estate. So she got me to looking a bit more professional. But this is me. Like, you have trainings on Tuesdays, Wednesdays. I'm dressed like this. I dig that. I don't, when I, you know, sometimes people expect you because you're the owner or whatever title you have.

They expect you to be in the suit and the tie. Yeah. And I don't like it. I'm comfortable like this too. Yeah. Is that one of the main reasons why you do it comfortable? It's not the main, the main reason is because it's just what I genuinely. I am comfortable.

Yeah, I'm comfortable. Like I, this is what I wear. I go to the gym with this. I go out to dinner with this. I go to, this is just how I dress. And like, all right, I'll go deep on this with you for a second. So I just bought 40 pairs of white tank tops to figure out what was the best white tank top. I bought probably 25 pairs of barefoot shoes to figure out which was the most comfortable when I worked out,

which was the easiest that could put on or off, which was the one that didn't bother my foot because we walked like two hours a day. And so putting all those things together so I could pick the right one so that I just don't have to think about it ever again. So like in terms of that's for me because that's just like I tend to operate that way. Like when I would, I used to eat the same sandwich every day and Lailie used to joke about it because like I had a bagel with this protein cream cheese and locks that was low fat locks because the whole meal was like 100 grams of protein. And she saw me every day experiment with a different way of eating it, which is like, okay, I'm going to put the locks, the cream cheese and the thing. And I'm going to toast it and I'll do glop, glop and then take a bite. The other way is like I put the cream cheese on and the salmon on and do that. And other ways I chopped it all, chopped all the salmon up.

So it was mush. so I didn't have to have pieces that I'd pull off because half the sandwich is missing because you got a piece. And so it was like just continuing thing, like, is there a better way I can do this? And I think that like we all have these kind of innate questions. Tony Robbins talks about this,

which like we have this like unstated question that we ask all the time. I think he says his is like, can I make this better? And when I was at the Tony Robbins event, I was like, I wonder what my question is that like the one innate question you repeat over and over again. And I think mine is like, how can I use this? And his was like, how can I make this better?

For me, like, it's so it's like, if I, you know, if I meet, and it probably sounds really utilitarian, if I meet someone like, how can I use this? Which probably sounds bad. But like, I think that's what it, like, if I have a bad situation, like, how can I use it? Like, how can I use it? And so that's, how can I use an outfit? Well, this outfit is optimized for working out. I can change my temperature really easily because if it's too cold in here, I can roll in button. And if it gets hot, I can roll it up. If it gets way too hot, I can take it off and I'm just in a beater. Right? I can do the workouts with this. and if I button it up and go out, I can go walk into any restaurant. If I take these off because these are not sandals, because I've gone to the nicest restaurants, if I put my sport mode on, no one stops me, right? Four-wheel drive.

Anyways, all that to say, I think this represents probably a lot of the values that I have in terms of like I've thought of all of these things for me of what is convenient, what is functional, what is comfortable, and then this is the end result of that. On a quick questions, on the 100 grams of protein,

can your body process that at one setting? Because I heard that you could only process like 30, 40 grams at once. So 100 grams protein is good. You get it out of the way. It's not that. So there's a nuance to that. There's a nuance to it. You can't do 100 grams of protein. It's 30 to 40 per hour. But you would eat 100 and you process the first 30 to 40 in the first hour. And you process the next 30 to 40 the next hour. Like it's in your gut the whole time. Yeah. So you can, I mean, like thinking that that would limit your protein intake because you have to space it out throughout the day would be like saying a caveman.

isn't going to get his protein if he kills an animal and then eats 200 grams of protein in one sitting because he's fucking starving that he only eats the 30 grams the other 170 are thrown out like you're going to I mean so it's just you're going to get the first 30 to 40 now and then in an hour you get another 30 to 40 just like and so you have nutrients that are going through your system yeah now Alex going to your uh where you work from like the closet is it a closet it's a closet and you and you always have no strips what are those no strips do they make you smarter or what are those what's special about the I've like I've like I've like I'm I've had two operations on my nose. I can't breathe too well on my nose. And so it just like it just keeps it open for me. Which is why I wear them. Because if I don't, I do this all day long, which I hate doing. So it just keeps it open. That was a no strip thing.

And then I like the being in the windowless closet because if I have a, like, I love views to look at. But if I look at views while I'm working, I will stare out into space for, you know, powers. And then I'm like, oh, where I'm. mine and then 25 minutes went by. So if I have this like like I'm just very scattered I think by nature. And so I try and control as many environmental, uh, conditions as I can. Hey guys, love that you're listening to the podcast. If you ever want to have the video version of this, which usually has more effects, more visuals, more graphs, you know, drawn out stuff. Sometimes it can help hit the brain centers in different ways. You can check on my YouTube

channel. It's absolutely free. Go check that out if that's what you are into. And if not, Keep enjoying the show. When I met you, you had a long talk. It was like, I think you spoke for like two hours. Because I didn't know you, right? So I see you speaking and I'm there. And I'm like 10, 15 minutes in. And then it's like 30 minutes in.

And then I'm like, damn, he's still on. So I'm like, and you're like a lot about value. You're just, you're talking about the boring stuff. Not in the bad way, but that's the stuff that people need to listen to. Yeah. People, you know, people get, they want the entertainment and all that stuff. But I stepped out, got a drink, came back in, and it's like an hour and 15, you're still there. And then it goes on and on.

And then I see, I met you after, when you came out and we're at the bar. But my question is on social media. You got into social media not too long ago, right? You weren't that known before. And I think was it eight months ago or a little bit more? 18 months is when I had made my first YouTube video. So in 18 months, you just blew up and got a bunch of followers, got a lot. got verified.

Was that your priority that you wanted to do? Or did you have a game plan on that? Or how'd you do that? Yeah. So there were a couple of things. So Dean Graciosi, who's Tony Robbins' right-hand man, who's become a... I was with him, I know him, yeah. Yeah, yeah.

He's become a close friend. I asked him, his fame worth it. Because I was like, I was very big on the, like, just be rich and anonymous. Like, I liked just being rich and anonymous. And he said, you know, Alex, I get people who send me weird messages and threats and thread my family. He said, but if that's the price I have to pay to make the impact I want to have, I'd pay it. I paid every day of the week. And we said that it really hit me because I was like, man, I guess I'm, you know, I'm trying to stay in this hole and not be known because I was

kind of shunning all that. And he's like, but if you want to make the impact, you want to help the people that you say you want to help, like you have to become known. And so that was kind of like one of the big things that that started me on the path. That's probably the last push that got me into like, all right, I'll start making content and whatnot. And then from a business perspective, you know, we're looking for internet businesses that are doing, you know, three million to 30 million a year to, you know, take a meaningful stake in so we can help scale them. And so that's what acquisition.com is. And so the best way to do that type of structure is to have inbound deal flows, to have people see stuff and then decide to walk

towards you, whereas the rest of my companies I've always built off of paid ads, affiliates, you know, cold-calling manual outbound, things like that. And so, but I knew with this process, you know, going, getting a proprietary deal flow structure set up with trust at the onset where we've already provided value. We've already helped someone 3x or 10x their business before they start working with us. It just speeds up the process so much more. And we operate from shared trust from the beginning. And it just makes for what I would hope, you know, what I, what I hoped and now I, I can say is true, a much more enjoyable experience for both people. And it makes the diligence much shorter. And so it just makes for an overall, more efficient growth process. And,

And also because we come in as a minority partner with these companies, like I have no legal strong arm. I can't say I'm going to kick out the CEO. It's his company. And so it all has to be from a position of like influence and trust. And so like recently we just pulled the stats on the portfolio, but like the average company that we've worked with increases their revenue by 80% and triples their profit within the first eight months.

It's pretty cool. But you can only do that if someone trusts you to like make major changes in the business. And like I still have to have some calls with them. be like, it's okay. Yeah. We're going to increase this price or we're going to change this continuity. We're going to eliminate this product line. And if it was a traditional kind of like private equity or family office relationship,

they would probably be much more resistant to those things. And so all of this branding stuff has the function of, you know, generating inbound companies for us. But then also if we zoom way, way, way out, I like the idea of just helping a lot of people for free without really selling anything. Do you spend a lot of money on ads right now? I spend $0 dollars on ads. Zero. Zero.

And you give a lot of money. value and you have that phrase where you say, I have nothing to sell you. Yeah. Was that, is that a strategy? Or is that, that happened on accident. Yeah, it happened on an accident. I was really frustrated because people were like, this guy's going to sell us something. I was like, I have nothing to sell you. I was like, go to the website. What can you, what can you buy? There's nothing to buy. We're an investment company. Like, that's what we do. So we buy into companies, you know, we're definitely a private equity company. And so that's what we do. So if you were like, when's the $10,000 course coming out? It's like, it's not. Like, here's what you would get for the $10,000

course. And I'll just give it to you. And you can just consume it and crush it. The idea is the strategy behind the business is get as many people as I possibly can into the world, help as many of them as I possibly can with the best stuff out there. And then the people who are hyper-executors will self-select because they can execute without hand-holding. And then they will seek us out and say, hey, I've used all your stuff. We three extra sales. We 10 extra profits, whatever it is. And like now I want to go from, you know, 5 million to 50 million. I want to go from 10 million to, you know, 100 billion, whatever it is.

So wrapping up, Alex, to close out. I know that you sold your, you sold a few companies, right? And you made a lot of millions. Can you share a little bit of the details maybe as much as you can? And then how did that change your life and Layla's life? So we sold the, we sold two of the companies for 46.2 million. It was an all-cash deal. There was no seller financing, no earn-out, no consulting back, which was great, which

was Jim Launch and Prestige Labs. We still retained 33% of the company. So we still, like, we still believe in the company. we just wanted to exit from the majority position so that we could do acquisition.com, which is the goal. We sold Allen last year as well, which we were not at liberty to say what the price was. I can say it was a $12 million top line software company what we had done in 12 months prior. So we sold all three of those companies last year. And the thing is that we've always run really high cash flow businesses.

And to your point about living really pretty modestly compared to our income, Lila and I are already taking about $45 million in dividends out of the businesses just in the five years leading up to that. And so, you know, the $46 million price tag on the sale was not like life-changing. And I can say this is that when the wire came in, I did not feel the money that came in, but I did feel the stop and cash flow. And so you're just accustomed to a certain amount of cash flow that comes in. And for me, that's like almost my like my thermostat for like how I'm doing. And all of a sudden that my big cash flow hose got dropped down to zero, but then I got this big lump, but I didn't feel the lump.

And so I feel poorer now, buildingacquisition.com, than I did with Jim Launch and Proceeds, which is kind of interesting. Yeah. I'm just saying, like, it was something that I didn't expect. Because most people, most people, they think about, oh, I'm going to sell. I'm going to get this much cash. Yeah. But then they don't realize the cash flow.

Yeah. You went through that. So that really is important. Yeah, because then you have to take that money and then go recreate the cash flow you once had. And then you have to put an entirely different hat on because we've been, like you and I, both have been in the. I've been in the business game rather than the investment investing game.

I'm not an experienced investor. I have by sheer amount of money that I can invest, I have probably a high percentage investor by net worth, but investing is not how I made my money. Like, I made money in business. You know what I mean? And that I translated it into cash. And so still to this day, like we're like acquisition.com is the thing that's going to get us to a billion.

The money that we took out is just put in really safe stuff that we don't want to lose. Like, we don't need to take big risks there because, like, this is how I'm going to make everything to get past the billion. And I say that often mostly because it's like a fun goal and I'm dedicated to doing it. But it doesn't really mean anything. Can you share of Acquisition? Yeah.com, the company. What do you exactly do? Yeah.

And how does your day look like now? What's your typical, you could answer that either last before or after, but how is your, what's your typical Monday through Sunday and Layla's? typical Monday through Sunday. Like, for example, us, we're always together. Like, we work out together, work together, work together, have a life together. Yeah. So I think it's kind of similar. But I don't know, maybe you guys separate and do different things.

How is your days? And what is Acquisition.com? So we take internet businesses from usually three-ish, you know, three to 10 million is the range that most of them come in at. And we take them to, you know, 30 to 100. And that's kind of the incubator spot. And it's almost all been internet businesses that we've taken on. And it's really, we have a, it's called value acceleration method.

So VAM is the kind of the shorthand for it. But we reverse out how we're gonna get to 50 million in terms of what does the enterprise need to look like, right? What's the leadership need to look like? What team needs to be there? What strategy and what monetization vehicle? Does this need to be in to get the multiple that it's going to yield, right?

And so we work backwards from that kind of, we put it as a 36 month goal back to the present. And then we start chipping away at it 12 weeks at a time. And so in the beginning, a lot of people come to acquisition.com. they expect that we're going to go do a ton of acquisition. But most of the times we have to fix the back end. We have to get customer success metrics in place. We have to get them on a CRM that tracks everything from click to close and to end

so we can have metrics to make decisions. From there, usually we can two, three, five, X the customer lifetime value. And that's where we get the really huge outsized returns because all that drops to bottom line. And so then we get this massive boom in profit that we can then, once we've improved the customer experience, increase the, that the, that's the, that, that's, the, that the reputation in the space. Then we have all this excess, you know, net-free cash flow that's getting pumped out of the business that we can then go spend on recruiting high-level talent, go buying into networks

or acquisition channels that we couldn't otherwise afford. And so it's really, we go back to front. So we fix the back end, fix the product, fix the experience, get the customer suite, right? Make sure customer segmentation is being tracked appropriately so we can figure out where we have the most leverage on profitability. We pull that as hard as we can. once we've pulled all levers we can on the back end, then we go and say, okay, well, we're getting, all of this is from cold calls, but do we have a cold email team? Do we have, do we have an ads team?

Do we have a TikTok team? Do we have an organic team? Do we have a partnership and affiliates team? So like all of a sudden, then we can start expanding the amount of channels that we acquire. And when you do this, is it just you and Layla or do you have like a CFO? Oh, no, we have a team. Yeah, we have a team. So everybody analyzes the business together. Yeah, exactly. So we have also, so like our CFO, for example, she's, she's done 16 sell side eggs. So she was on the team that did the sale. The biggest one she sold was $15 billion. And then the last, you know, she sold the last two companies with us.

And then before that was $750 million, before that was a billion. And so she's very accustomed to walking through these transactions. Not cheap, right? No, not cheap. She's a partner. And so what we do and we have, you know, our portfolio operating partner who's really specializing customer success and doing kind of what I just outlined, Layla's really good at getting the operational team, the culture, the leadership in place.

And so, you know, I'm pretty good at pricing and product. and getting the messaging right and whatnot. And so we think about it as like an on-demand C-suite is like a company comes in, and let's say we know that a company at 10 million needs to look like this, right? And the company currently looks like this. And so we match what our reality is to fix this

so that it matches. So we basically copy and paste our expertise into the team so that it can get to that level. And then maybe at 10 million, we might have to swap out two and get two different people in or move two people above them unless they have the ability to grow. And so like, you know,

At 3 million you might need a staff account. At 10 million, it might need a controller. And at, you know, 30 million you need a CFO. And so it's not just knowing like, okay, this is what we need to do to get there. But this is what we need to do right now in this business today to get to the next step. And so I think a lot of times it's the people would take something from two steps forward. And it's not the right sequence, even though it's the right move. Okay.

So I want to respect your time. Alex, one last question. And I realized, like you talk about controller, then C. of O, C-O-O, how important they are. So when you start a business, you kind of want to have all the control, and you want to say the last word and everything. But then when you start doing good, then you want to let go of the control

because you want to get smarter people than you to run it for you so that you don't have any control. I know you went through that whole process. So is that how it is, how you see it? Yeah. I think entrepreneurship in general is a continuous and unrelenting relinquishing of control. And so, like, most people want freedom, right?

So it's like we have these polar opposite, these contrasting values that we are after. We're entrepreneurs, so we want absolute freedom. And then we also want absolute control, and you can't have both. And so if you want true freedom, you have to give up control. If you want true control, you have to give up your freedom. And so if everything's dependent on you, then everything's dependent on you. And so for me, I value freedom more than I value control. And I think that the leveling up that happens in entrepreneurship, at least in my journey,

has been what my expectations of talent look like. Like, I remember when I got to, I got my first $50,000 a year employee, and I was like, whoa, this is awesome. Because I was used to like, $10 an hour. So I was like, this is unbelievable. This is where it's at. And then I remember I got my first $70,000 year employee. And I was like, this is where it's at.

Then I got my first six-figure employee. And I was like, okay, now we're talking. And then I got my first $250,000 year employee. And I was like, that's what's up. And then I got my first million-dollar-year employee. And I was like, okay. And so I think that what happens is just like it's continually leveling up what talent exists. And I had a mentor say this to me.

He said, you have to remember that the best talent isn't even on your team yet. They're in the future. You haven't even hired them yet. And so I think that's been probably the biggest thing because if it's a continuous process of relinquishing control, then it means it's a continuous process of leveling up the people that you can give the control to. Alex, something that the audience doesn't know about you, something you never shared anywhere. Man, French is my first language. Thank you, Alice. Awesome.

Thank you. Appreciate it. Thank you, guys. Hopefully it was valuable for your time as well.