The Game with Alex Hormozi - How To Harness "Boring"... Why better leads to bigger...(innovation & customers) And why better is better than NEW in business not marketing | Ep 81

Episode Date: September 28, 2018

"Boring is what will make you rich. Today, Alex (@AlexHormozi) emphasizes embracing "boring" and consistent business practices for long-term success. He encourages entrepreneurs to focus on becoming better rather than bigger and to target their innovative personalities toward improving existing customer processes and experiences.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:(2:02) Embrace "boring" for financial success.(5:31) Innovate to become better, not bigger.(8:39) Improve current business before expanding.(11:20) Attention to detail fosters customer satisfaction.(14:03) Long-term success requires focus and dedication.(15:45) Aim for longevity, not just growth.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

What's going on everyone? Happy Thursday. I am having a gratitude-filled Thursday, like creamy gray skies here in Austin, but I can't help but feeling just a huge chance of gratitude to this community and for all you guys who tune in every day. So thank you so much for your attention. So I just wanted to start by saying that. And I wanted to bring up something that is kind of near and due to my heart and something that I've been kind of like mulling over a lot that I think has been useful for some of the gym lores that we have. And so this originally started from Sarah Gousen, actually. She posted something in the Legacy Group, which our gym large group, our highest level

program, about how right now she's bored. And she's like, I'm not really sure how I feel about it. I'm just, I'm just bored now with the business. And what she meant is that, like, you know, in the last year, she's doubled her three-X her gym. She has an operations manager who's come in and, you know, systems are being worked and you know planes are taking off and arriving on time and what happens is that that does kind of get boring and the difficulty is that as entrepreneurs we like to do new things right and so I was at this event last week it was for companies doing like 10 to 10 million a year was the minimum that you could be doing in revenue and so it was really interesting because it was CEOs and COOs that were in attendance there and they had to take personality profiles and basically they like assesses everyone who was there. And, you know, my personality profile, the guy was like, you're a ramrod.

And I was like, I guess that's okay. But he's like, you're a launch person. He's like, you just make new things. And I don't like being categorized anything because I think identity is fluid and skill sets are too. But it was just an interesting thing to have someone from the outside read an assessment and they go in that direction. Now, the reason that I titled this, how to harness boring, is that if you'll notice a lot of the messaging that we've had, even in our marketing, is being around being boring. And I think that one of the hardest things that had, one of the hardest things that I've had to learn is embracing boring, boring business, boring but rich. And the reality is that a lot of people when they come to us have fires and explosions going on in their business all around

them all the time. And the reality is that you should want a boring business. It should feel boring because boring means consistent right and the marketplace rewards boring like McDonald's has really mediocre food and honestly the prices aren't even that good right but it's the same and people value the same because a lot of people don't like change and so when they can have consistency and experience that is something that is valuable it's tangibly valuable like it's something that people pay money for one of the offshoots of like kind of embracing this concept of being boring but rich and having a boring business but wildly profitable but still boring, right?

Here's just a couple examples. Chipotle, right? They've been around 20 years, has only added two things to their menu in 20 years. They added queso and they added sofritus, right? That's it. And think about the level of growth that they've had as a company. They've gone from, you know, a few locations to, you know, 2,000 plus privately held because of boring but consistently amazing food.

And so if we can take that analogy and look at our gyms and say, like, how can we be how boring and consistent. What you can do is you need to take your innovative side, right? You told me I'm a launcher, right? Like, I always want to launch new things. And how can you apply that personality type to a business that needs to be boring, right? Your business needs you to be boring in order for it to have stability, in order for it to be consistent, in order for it to improve, right? And that consistency is also how you show up to your team, because if you're like hot one day, cold another day, you're mean one day, you're nice one day, you're moody, you're moody, whatever like if you show up like that then what do you think your team's going to be

a they're going to be in in a threat mode because they see this happening all the time they're like I don't know what's going on right and then that's going to relate to your customers and your customers are going to feel that same thing but the second line that I had here is why better leads to bigger is that a lot of times we as entrepreneurs want to force growth right and that's why I'm a big you know I advocate very aggressively for gyms that we work with I get them usually to downsize in the beginning which is crazy because most gurus and whatever, like open more locations. It makes me look better.

But I tell people to actually cut down on the amount of locations they have. If you have three, cut down to two, if you have two, cut down to one. And then let's make this one incredibly profitable. Because most of the gyms that we encounter who have two or three locations or five locations, and I am in no way impressed by how many locations you have, I want to see how much profit you're taking home, right? And what happens most time is people have profit and they open a second one because they don't know what to do with themselves.

And then they put themselves in a state of overworking because that's where they're most comfortable as an entrepreneur is just working all hours of the day. And the ones have happening is that the profit from one location dips down. The revenue total is higher because there's two locations with the actual profit and take them either goes down or stays the same. And now you have twice the liability and twice the work for the same amount of profit. So what we do is say like, hey, let's see if we can get this one location at $200,000 a month. Right. And so that's now we've got plenty of guys who are over the $100,000 a month mark and now they're shooting for the $200,000 a month mark with one location. Right. Profit. Now, well, I say

why better leads to bigger is that your innovation should be targeted around becoming better, not bigger. Because what happens is if you are better, then you will become naturally bigger because the product and the service that you're providing is so good that people can't help but tell their friends about it. And then you grow, right? And so one of the beautiful things about being a market leader and hopefully you all aspire to be market leaders or you already think you are market leaders, whatever, is that like,

like we can't like at gym launch right i have no one to look at like i have no one else's business to look at to try and model because like we're ahead of everyone and so it puts me in a situation where where like where do you go where do you go for inspiration right so a i look at people in other industries to see what they're doing the biggest source of innovation for you will come from your customers and it's because your customers will never be satisfied and it's one of these beautiful things where a lot of us lament that so we get sad or down on ourselves or or or The worst thing you can do is start hating your customers for complaints, right? Because think about it, Amazon still gets complaints on the fact that I ordered Prime and it didn't show up today.

Right. That would be inconceivable five years ago, right? But now, because customers will never be satisfied. As soon as you run the four minute mile, they just expect the four minute mile every single day. And if you're not comfortable with that, then you should probably not be in business, right? But if you can expect the fact that your customers are not going to be satisfied ever, then you can take your innovative personality and your desire to make new things and targeted around making things better.

Not new, not new programs, not anything. Just make the thing that you have, make the burrito that you have, make the food that you're serving, consistently amazing, right? How can we make this more consistent? How can we make this more excellent? How can we make this so boring that it never fails? We never have planes crash. We never have trainers who are not in a good mood.

We never have a front desk girl who doesn't smile and greet people by name. How do we do that consistently? Real quick, guys, if you can think about how you found this podcast, somebody probably tweeted it, told you about it, shared it on Instagram, or something like that. The only way this grows is through word of mouth. And so I don't run ads. I don't do sponsorships. I don't sell anything.

My only ask is that you continue to pay it forward to whoever showed you or however you found out about this podcast that you do the exact same thing. So if it was a review, if it was a post, if you do that, it would mean the world to me and you'll throw some good karma out there for another entrepreneur. And so, like, first you have like, hey, we got up to the plate and hit a home run. Cool. How can we replicate that exact process? How can I have my sales guys be hot every single day, not just one day and then they're, you know, mediocre and then suck? Or they're only good for a week or two and then they have another two weeks of down. Like one of the questions that we get is around sales is like, I feel like your sales team is always so good.

It takes time. It's a skill set to acquire to learn how to run a sales team and motivate a sales team properly. And luckily, Dylan is an amazing sales director who we've had internally. And he pours into the sales team and fosters a culture that is that is collaborative and competitive and awesome and amazing. Right now we've bottled lightning, which is like the rarest thing ever is having a team that's crushing the way it is. But it takes time. Right. And so it's like, you're like, man, I wish all of these things would be better. that's what you should focus on, not like, hey, I want to open a second location right now because this one's working.

There are so many places that you can improve your current business to make more profit and give a better customer experience so that it grows. Because if right now the business is not growing organically, as in the amount of people who leave versus the people who come in without you marketing, if that is a net negative, then it means the business actually still is not that good. And you should be able to confront yourself and look yourself in the mirror and say like, okay, then I need to improve it. I don't need to open something new to scratch my itch as an entrepreneur, right? I need to take my itch as an entrepreneur of innovation and targeted towards every single thing that my customer is dissatisfied with. And believe me, there's always tons of stuff.

Jeff Bezos needs to get people to click it and then have it appear on their front door within 10 seconds. Like that's what he's trying to figure out how to do with drones dropping things all over. Because if you start with what your customers want, they will always be dissatisfied. you will always have problems to fix, right? And if you can continue to focus on being better and not new, then believe it or not, it may seem boring,

but boring is what will make you rich, right? And so the last line that I have here is why better is better than new in business and not marketing is that when you're marketing, the two most powerful words in marketing are new and free, right? And so the idea is that you want to make things that are the same, seem new and different. Different is what catches people's attention. Improvement does not.

So that's why improvement offers are not very good from a marketing standpoint, right? New opportunities are things that people are really interested in and then that will catch their attention. And so what I'm saying is not something that will apply to marketing, but it will apply to how you actually run your business. And so if you look

at every single process and every touch point that your customer has or doesn't have, so for example, right now if you're like, well, we don't reach out to our customers on a regular basis, maybe a shed, right? Maybe that would drive retention. Right now we don't track our attendance and we don't like follow up with people if they haven't shown up in three days. Maybe a shit. Maybe that'll make you more money and improve their experience, right? And so it's okay to be bored. I just want to say that. It's okay to have a boring business. It's okay

to be like, I don't know what to do right now. Things are working pretty well with my gym. Awesome. Take your innovative personality type and just make it better. Doesn't need to be. be new. You don't need to have, like, Chipotle doesn't need to start offering burgers or enchiladas or whatever, right? Like, they don't need to offer that stuff because they just focused on making their process

even more streamlined. They first, they had double meat, and you could always get away, half the time they wouldn't charge you double meat because they had to transfer, they had to play banana phone four ways down the line, right? And half the time it wouldn't get there, and so you get double meat and you're like, ooh, right? And then some smart person decided to take one of those little cops put it upside down and put it one on it and then everyone knew that there was double me

and now they had these little tabs or whatever because now corporate took hold of it and actually put like a really legit process in place for it so that it never happens right so what things that are small like that because the devil's in the details right it's inconsistently having planes that take off and don't crash because the thing is is that even if one out of every 20 classes isn't good it only takes one bad class to get someone to knock them back and so like you're the the the The emphasis has to be on how can we minimize these extraneous situations because we take pride in the fact that, hey, my planes take off on time 90% of the time. Well, cool. But how do we prevent the 10% because realistically, the 10% has such a net negative impact on lifetime value and customer feeling that it can actually, like 10% negative experiences will drown a business, period.

If one out of 10 experiences is negative, you've probably heard Disney says for every, for every, tragic moment, you have 39 magic moments, right, in order to compensate for that. And the reality is that what you really need to do is just never have tragic moments. And the way that you do that is by being boring, is by embracing boredom, is by embracing process, embracing that it's not going to be new every day, it's going to say, how can we make this better? How can we make this simpler? How can we make this more streamlined? How can you make this a better experience for end users? And so if my ask for you is to give yourself an honest look, first question to is do we have more people leaving our business than coming to our business organically

from word of mouth? If the answer is no, then it means that the business needs to improve. I mean, no matter what the business can improve, but that's a great golden ratio as a benchmark. Because when you achieve that, then it means you have achieved viral growth, right? And then like that's one of the things that we've been able. And it's like bottling lightning. That's why there aren't that many successful businesses. If you're like, man, that sounds really, really hard. It is because most entrepreneurs can't focus long enough, right?

I can't tell you the amount of people who come into our world, even at this last event that we went to with the $10 million plus businesses, the CEOs came and there were a ton of them that had three or four businesses and they lined us up in terms of net profit. And we had nine times the net profit of the second highest business, nine times, nine X net profit, right? Because they can't focus, right? They have all these other things that they're focusing on. they're splitting their attention because it's new and it's exciting and it's interesting. But you have to break that because what took you from zero to one is not what's going to get you from one to two. Like, well, got you to start your gym and be new and exciting and start with things and new

programs and whatever. It was new to you at that point. But now that you're in, your skill set and your identity as an entrepreneur needs to change and what you're focusing your attention on has to be boring things. That's where you need to get your innovative itch out because it's the only way that you're business will actually improve and grow. So anyways, I hope some of this resonated with you. And as a final side note to that, the fact that customers will always be dissatisfied should be one of the most heartwarming things in the world because what it does is it gives you an endless

stream of things to improve on. It gives you an endless stream of things that you need to do as a business owner to keep up. And for me, it's heartwarming and you shouldn't take it personal. I have people in legacy all the time who give us ideas, opportunities for improvement of things that we can do better. And that's okay. I'm telling you right now, like, we are not perfect. But, like, I'll be damned if we won't try to be. And we will never get there. And that is why business is not a game of winning.

It's a game of seeing how long you can play. It's a game of outlasting. There is no winning. There's no winning. That's why, like, if there's one podcast or video that if you haven't listened to it, listen to it, it's called the Infinite Game. it's kind of theoretical, but it was one of the concepts that fundamentally shifted how I saw our business and what I look at in a 20-year time span of what we want to do, because the goal is not to win. The goal is to be here 20 years from now in the same business, right?

And the only way to do that is to outlast. And the way to outlast is to become better and to finally achieve a golden ratio where more people refer people to your business than leave. And at that point, the growth will happen on its own. You don't need to force it to give yourself a new thing to do, but it'll happen on it. So anyways, I hope that's comforting for you. Never complain about your customers. Your customers are your biggest source of innovation for you. So take that to heart.

And I hope this doesn't sound pretty cheap. That's not my attention at all. I love you. I'm so grateful for this community. Thank you guys for your attention. And if this resonates with anyone, you know, drop a like, drop a comment. We always appreciate it. And if you're in this group and you're not in gym lunch, you're missing out.

Anyways, lots of love, have an amazing day, and I'll get you guys on the flip side. Right.