The Game with Alex Hormozi - Investments, Using Reinforcements, & Best Team Practices (with Vince Del Monte) Pt.2 - March ‘22 | Ep 454

Episode Date: October 29, 2022

(Disclaimer: This interview was recorded over Zoom. We apologize in advance for the quality of the audio.)It's so much easier to have influence once you have the thing than to try and get influence to make money. Today, join Alex (@AlexHormozi) as he guests on Vince Del Monte’s YouTube to talk about investments, reinforcing behavior, and scaling teams so that other people can do the work for you so that you can ultimately make more money without doing all the work. 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 Vince Del Monte’s YouTube Channel! Timestamps:(0:38) - Addressing the need for a better program and different types of guarantees.(3:59) - Insights on building your first team, delegating responsibilities, and scaling.(7:06) - Thoughts on building and maintaining an internal team efficiently.(10:06) - Strategies for investing money effectively.(14:42) - The importance of authenticity and avoiding pretenses, especially in terms of financial status.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

Mosey Nation, welcome back to this day's episode of The Game. We talk about three topics on Vince Domonti's podcast from March of 22. We talk about investments. We talk about reinforcing behavior. We talk about scaling teams so that other people can do the work for you so that you can also print that monies without doing all of the works. I think you guys will enjoy it. And I'll see you in there. 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. This might be a question in the weeds here, but if we're going to ask you, reinforcement of this, I guess this is, you know, of course you need to reinforce it. This is probably a dedicated role to, you know, if somebody's saying, hey, they'd get results.

I mean, the whole idea is to put this stuff in motion and then to find out issues as it shows up. What would you say to somebody who's afraid to, like, me, kind of entrust it, you need a better program. You probably need somebody dead. dedicated to helping these red light clients, et cetera. I can hear people's thoughts. They're fearful of, okay, I'm going to put this in motion,

but what if this creates a customer service nightmare? It's kind of like the point, though. It's like, then you go fix those problems too. Yeah, and then you have this crazy front end, and then you fix the problems in the back, and you have a business you're making 10 times more money. I love it. All right.

With some time we have left here, anything else you want to talk about on offer that you get asked there? I missed asking you that just will make this the mafia offer. Well, the other two types of guarantees, you have anti-guarantees, which is we're looking for the type of, like, and you can do this, which is all sales are final, which is we're looking for the type of people that don't want guarantees. We're looking for people who want to do the type of work, and we're going to be investing a tremendous amount of time in you.

And if that sounds scared you, then you can definitely go buy an e-book for nine bucks. So many times I see salesmen, I'm sure you have too, they, they, they facet close, right? They're like, oh, yeah. I mean, if there's any issues, you know, like either fucking have a guarantee or don't and own it, right? Own it. And then the fourth one is a performance offer, which is based on some sort of thing

that's supposed to happen and it's proportional. So it's like, hey, here's the deal. You pay me 100 bucks every penny. That's it. That's interesting. Wow. There's so many different creative ways to do. I just love what you're saying. This is all different. My first business coach got me on the anti-guarantee, by the way. I remember

when I was $25, it was $7,500, six months. It was actually with Corey Rood. internet marketing center. I bought his DVDs, 300 bucks. They called me up on the phone. They asked me how I was doing. I said, I know what I want to do the rest of my life, but I'm overwhelmed. And he said, all right, would you want some help? I was a shirt. So I had to put it on two credit cards. And I actually had to follow up with me. And I said, when I go on the follow-up call, I got him, I'm going to tell him, if you can guarantee me an extra, Alex, get this.

My grand ambition when I started was an extra $3,000 to $4,000 a month. So I said, if you can help me do that, I'm in. So when I said that to him, he laughed. And I said, what are you laughing at? You know, if you can guarantee this, I'm in. And he said, Vince, we don't do guarantees over here. I said, you don't? What do you mean? He's like, well, we're guaranteeing our time, but we don't know what you're doing with your time. So there's no guarantees. And that was my first introduction to the whole concept that success is your responsibility and your duty. I wasn't doing him a favor by becoming a client. He was doing me a favor of offering his services to help me. So I love that anti-guarantee.

I just wanted to share that. Yeah. The book goes into a ton of detail in all these things. But yeah, big picture. Those are the elements. Scarcy, urgency. We didn't even talk about bonuses, but scarcity, urgency,

guarantees, bonuses. Each of them has depth. And then the actual offer itself, and then which things should be bonuses, which things should be core offers, and then how you position in, how you should play with the numbers of people, how you should add in the rolling cohorts,

all that kind of stuff, so that you can ultimately sell more people at higher prices. Awesome. Well, hey, maybe just for a few, final minutes, Alex, you know, now this is what's going to break the business. Maybe just start giving some insights on how to build your first team. That shows up for a lot of entrepreneurs, business owners, whatever they call themselves these days. First person you're going to hire,

like, what does that first team of four or five people look like in just your process of letting go of control, delegating responsibility, setting standards of performance in order to, you know, free up your time to keep scaling. Yeah. So they're just, they're minute. venture big businesses. You know what I mean? So most entrepreneurs, you know, when you're, when you're starting, because you have to learn a hundred roles and do them all fractionally. And then over time, as the business grows, you have almost enough work for a full-time person, right? And it might scare you because you're like, well, I was running this business on my own. So if I have one person, then I should be able to have, they should be able to do the same amount as me, except it doesn't

work that way. So you probably need to hire five people to do the same amount as you because they're going to do one fraction of the thing that you're doing. And so I always outsource in reverse order of marketing. So if I think that right now, if you look at it, the easiest way to do this is do a time study. So you get a sheet of paper and put it in 15 minute blocks

and then you look at what you're doing with your time. So most people are massively disorganized. And if you're like, that sounds like it'll take time. I promise you, you'll triple your productivity when you measure what you're actually doing. Right?

Because you want to brag to yourself and like you're really productive. And then by doing that, you'll actually get a lot more done. So you'll never waste time when you do time studies. So you do a time study. And then what you do is you block. it into like what type of work it is and then you can ascribe the value to replace that job so

if you're doing administrative work that's 15 bucks an hour if you're doing you know customer success which would be responding to is this the right brand of food and hey I'm stuck with my weight what do I do again probably 15 bucks an hour like not a lot of skill is required there right sales higher value marketing higher value CEO making big decision strategy decisions higher value. Product, so making all the higher value. So what we're doing is, first it'd probably be frontline support or fulfillment, right? Next might be administrative.

You can swap those. They're relatively equivalent. I think it would be better in some sort of operations person. So some sort of administrative help kind of like an ex-office manager is a great one to look at. You know, somebody who ran two dentist offices and then they wants to work remote, like those are great options. They're Swiss Army knives. They're used. used to doing lots of little things.

So that would probably, because that person will give you a lot of time back. They can also help you with your personal life, which still takes very real time for you. So that would probably be number one. Number two would be customer success. And then number three would probably be something around product. Number four would be sales. And then I might have to hire. I probably get a vendor for bookkeeping and finances and things like that.

So some of these things can be vendors. That would probably be the first core, you know, four or five. You're still going to probably be running marketing and running the ads and making the videos and making the pages because that's going to be your thing. What's your thoughts on going on building an internal team

where what role is like we just recently discontinued services with our sales agencies. Great guys but I needed to squeeze out more profits and wanted to have more control, have more of a dynamic sales team making offers and that. So one of you

really, you know, I guess, I know, there's a right way or wrong way, but what are you definitely your thoughts and best practices around internalizing your team and just kind of keeping a lean, mean, like a high functioning team that can coordinate action and it doesn't get too fat where your profits are bigger. Just I think that would be some great advice because I see some guys, they hire this team and then they hire this agency, then they hire this agency. Now they're of a sudden they're just, they're losing a lot of control and they've not, they're kind of like maybe delegated way too early some of these things.

Yeah. I hesitate to make a broad sweeping generalization because sometimes an agency is a good fit. Sometimes a sales agency is a good fit. You sacrifice control for speed oftentimes. Finding good vendors is just as hard as finding good employees. There's a lot of them and not a lot of them are good. So it just takes time and effort.

I think most people are, I think the biggest problem is that people are just really impatient. And so. Yeah. You said people are really impatient? Inpatient. Yeah, because they're impatient because they just want to hire the, you know, they interview five people in this entire one.

And they're like, well, I guess that's it. It's like, well, did this person blow you away? It's what I didn't blow you away? Then why are we hiring them? There's just a body. And now you're going to have to spend more time getting them on board. You're going to have to continue to spend your time getting them to do stuff. It's just, it's just like the first million is learning how to promote, right?

You know, one to ten is product. 10 to 100 is people. Yeah, once you cross a million buckish, it's going to be the lifetime gross profit for customer, which is going to be directly related to the quality of the product, a and the modification system behind it. which is going to be a series of offers, upsells, price points, et cetera. It's going to be the machine is the second word.

And then after that, once you hit a million bucks a month, then it's all people. The people who need to be taught are low quality, is their raw potential, they're not realized. So if someone's like smart and hardworking,

that's raw potential, but they don't have experience, right? And I can tell you that your first 100,000 dollar employee, it's different. Is you hire your first $250,000 employee? It's different. When you hire your first million dollar

version, different gains. And so I can tell you, having done all of these things, it's a different level of acumen, different level of delegation that you can have, different level of freedom. And what's ironic is that people, entrepreneurs want freedom and control and you have to pick. You can't have absolute control and then try and have freedom because if you control it, you are not free. And that's the entrepreneurial journey is that you go from having no control to complete control and you've rest of your life giving away control again.

I love it. Oh, man, that's still great. I'm going to ask everybody what their biggest takeaway is. The stuff about offering the renewals earlier on was just brilliant for me. I want to thank you for that, Alex. Thank you for sharing that so generously. One of our young guys on the rise. Just speak to just last question, I promise.

Just on investing, I've never asked you. I didn't even think about asking you on investing, but since you touched on, what's a good use of, like, you know, how you're utilizing your money? You know, I've heard Cardone kind of summarizing, you know, invest in yourself, invest into your brand and invest in the assets. Can you have a little a tier? just kind of like a simplified version of your investing strategy? I think that's a pretty good, I think that's a validation.

I mean, overall, it's like you invest in yourself because you want to get skills. You invest in your brand because as a matter what you do, your brand is still be there and it'll jumpstart anything. And then you have assets for success. I think the biggest issue most people have is they start trying to invest ways more than. I mean, I didn't actually make my first investment decision. And so I think I had 14 million after taxes in my bank account. Like I didn't even make that.

And some people will be like, that's crazy, that's ridiculous. But it's at the same time, like, I'm not investing all this money, but they're broke. I'm like, what are you investing? I'm like, look, if you broke, you know, the only people who will criticize that are poorer than you. Right. I'm just somebody right now. So, number one tip of advice, don't listen to people poorer than you. Second piece of advice, don't listen to people poorer than you want to be.

If you're an employee, then it's a totally different equation. You're an employee and you know what you're fixed income, you know what your, what your, what your, what your income, is going to be more or less, then I would still invest in skills so I could get a better job that pays more. That's me. Unless you're like, I'm a teacher. I love being a teacher and this is all I wonder for the rest of my life. Cool. If that's what you're doing, then you've already won because you love what you're doing. And then you're putting a certain percentage your paycheck away. If you're like, I want to make more money, then you should be investing in the skills that are going to take you to the next level of your job. Because trying to save on $60,000 a year when if you just

invest in yourself, you can get to 250,000 you're in a better position, like 12 months later, then why would we waste time trying to invest the excess 10 grand to get the S&P return when you can 4x your income, right? It doesn't make sense, right? And I'll tell you this, last point, because I get passionate about this, is that like every super rich person you see, and people ask me for investing advice, this isn't a shake of you, I'm just saying in general, People ask me for investing advice because now I have money to invest. Hey, Mosin, a quick break just to let you know that we've been starting to post on LinkedIn and want to connect with you.

All right, so send me a connection request and note letting me know that you listen to the show and I will accept it. There's anyone you think that we should be connected with, tag them in one of my or layless posts and I will give you all the love in the world. All right, so let's get back to the show. I got money by making money, not by investing. Every single wealthy super, you see, you know, Mr. Wonderful. Yeah, it had a $400 million exit.

Mark Cuban, billion dollar exit. So people see this and they're like, oh, he must be a good investor. It was like, well, he just received all this cash and then he had to allocate it, right? And so then at that point, then yeah, then the fundamentals come in, buy stuff for less than it's worth, sell it more than it is, right? I mean, the stuff doesn't have to be overly complex, but most people do it way out of sequence. I had an 18-year-old message me yesterday saying, hey, I invested $2,000, I'm getting $100 a month, quote, passively for my $2,000.

What should I do? And I'm like, you should take the $2,000 and buy a course on how to make more money. That's awesome. Because we're dealing with no flow. So increase the, if you're an employee or an entrepreneur, if you're an entrepreneur, then I think the threshold is even higher. For an employee, it's a lower threshold. And because there's less variability,

you can always park a certain amount. With entrepreneurs, like I spent every dollar I had on more education, more skills, more beliefs, more network, more whatever, until I couldn't find places to put the excess money. Thank you so much, man. you guys all go out and buy Alex's book. It is like by far the best book on marketing. Some of our top students,

one of our guys in our group, Frank, I get Frank, a little shout out. He does over, you know, 40K on a bad day and he's one of our top guys. And he said to me,

I just listened to Alex from Ozzie's book all day. I talked to Tanner too. He said, I'm going to make a few extra million off that book. So guys, these are like, these are exceptional marketers who are already doing incredible things.

And, And Alex is here sharing and giving you guys, I know he's got loads and loads more. This is the best stuff on this subject matter that we're talking about today to help you guys grow. And you also hear a story. I really appreciated you, Alex, sharing your story on your podcast. He really humanizes himself. I think that's really crucial to help people break out of that survival and scarcity mindset when they're first starting. And I was really inspired just to hear those first few years of your journey.

So thank you for sharing all that. how awesome it was to not make my first million dollars until year six you know. Yeah, and most people don't hear that and they think that they're the only person struggling out there, right? Yeah. I'm the only person going through this right now. Oh, I'm the only person that's, you know, having all this, you know, rejection. I'm like, no, that's pretty normal. I'll tell you this much too. Just in the fitness space, it's, it's, it's by its nature, a very aesthetic, you know, status driven space overall, right? Everyone's posting on Instagram literally, right sure you know looking cool i'll just tell you this story to maybe drive this point home but like

there's a guy that i know uh who's reached out to me multiple times for help he's almost lost everything multiple times just in the last couple years he's in the how to make money in internet space and i saw a little really put up and it was like how to be a millionaire before 30 and i texted him and i said are you a million he's like well i mean i've done a million dollars in sales and i was like do you need me to define what millionaire is he was like well okay well no i'm not not a millionaire. I was like, then stop fucking pretending to be ones so that you stop feeling like a piece of shit all the time because you text me about how you feel like a fraud. I'm like it's because you are one. So stop. And so I think it's like it's so much,

it's so much better. And I'll just say this from experience. It's so much easier to have influence once you've done the thing than to try and get influence to make money. Make money. And then you'll have the influence. And then you won't feel like a fraud because you can point back to evidence. most people have no evidence. So you have to rely on your own pump up and stories and emotions which are fleeting. And I think the only way to stay in the game for a long period of time

is to have bedrock a foundation upon which to build your own church, right? And so if the business is your church, then you have to build on a strong foundation. Like I love Gary V's thing. He's like the first video I made was I was 34. He's like, we'd already done 60 million, you know, in annual revenue before I even started

talking about this stuff. Right? And so I would say there's a common theme throughout like the little trajectory and I'm going over but I it's okay you nuts well like I had one gym and that gym was very profitable I didn't start selling how to make money with your gym for my one gym I didn't start it after two gyms I didn't start after five gyms I didn't start after six gyms right but even when I had six gyms I wasn't sure if I was going to be good enough yet so I started doing turnarounds and I did almost a year of turnarounds before I got rid of my gyms and then from there after doing the 33 turnarounds at that point for almost two years was when I was like,

you know, I feel like maybe I'd be able to do this now, right? And then when we did 30 million in our second year, people were like, dude, you're business coaching. And I'm like, I think I'm just going to keep doing this thing that I'm doing. You know, like, dude, you should do this for Cairo. You should do this for salons. I was like, I think I'm just going to keep doing what I'm doing. And then for another two years, right?

And 120 million in sales. And I'm like, okay, you know, I'll write a 99 cent book and just see how that goes. Yeah. It's a athlete. Yeah, after he wins a gold medal, he doesn't start coaching on how to create gold medals. He goes up and then he's already thinking about the next Olympics, the next Super Bowl, the next championship.

Yeah, I get you. No, I mean, I'm not anywhere near where, you know, that level, but I totally appreciate, you know, wanting to respect the process of seeing how far you can take it. The process, I think that the longer you wait, the higher the peak of the pyramid is. The reason so much stuff everyone sees on the Internet is so useless, is because it's recurgitated.

It's not first knowledge. People are teaching stuff they've never done, which means they're not good at teaching it because they don't actually understand it. Which is why you should never fear a competitor who copies you. At the very nature, they won't be better than you. They require you to exist.

You do not require them. People are like, dude, I saw your value equation someone else, so they didn't give you credit. I'm like, dude, I don't give you shit. Oh, send the team after them. Oh, let's press a lawsuit. Yeah, exactly. Exactly because they're trailing, right?

If you're innovating and they're always trailed, they're always a couple steps behind. No one owns truth. This is true, right? And so anyways, the reason people sound better than other people is because they have depth of knowledge. And you create depth of knowledge through executing the same patterns in different stimuli,

in different environments. So you see different outcomes. And so then you see this huge pattern, huge array, and they're able to have deeper inferences around the things that actually matter. We talked about the early selling thing we talked about earlier in terms of resigns, right? That comes because I've done it. Yeah.

If someone else had been on here and had not done it, they would have made something up and it wouldn't have worked. Yeah, you're saying TD Bishop Jake's pastor, he says a lot of people use language to cover up lifestyle. And we live in the Twitter nation, right? And yet everybody kind of skims the surface. Nobody can really scuba dive with their subject matter. And I think, you know, that's why I'm never going to write a parenting book, Alex. Until my kids are about 45 years old. Then maybe they're out of the house securely married.

Then maybe I'll write a parenting book. But that's why, yeah, my dad always says don't export things that aren't working inside the home. It's like, Vince, don't go preach on social media how your marriage is when you and Flavie are still fighting. It's like, get your own ship in order, right? And I think that's just what a great standard to hold to and to just say, hey, I'm going to get my, before I start preaching. I gotta be living this out. I love it.