The Game with Alex Hormozi - It’s All About the “Not Being Cute” Approach (on BiggerPockets) Pt. 1 - Aug '22 | Ep 497

Episode Date: February 11, 2023

“The ability to work itself is trainable…” Today, join Alex (@AlexHormozi) as he guests on BiggerPockets and talks about ways to earn six figures, identifying your customer profile, his thoughts on online millionaire gurus, the skill of hiring, the “don’t be cute” approach, and more. This is part 1 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 BiggerPockets’ YouTube Channel Timestamps:(0:37) - Quick background on Alex & getting to know facts about him(8:50) - Alex’s thoughts on online millionaire gurus & the “don’t be cute” approach(15:03) - Ways to get to six figures & identifying your customer profile(26:33) - Finding like-minded people in his entrepreneurial journey(29:56) - Scaling up your business & learning the basics (32:11) - The skill of hiring well and its problemFollow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

It's usually one founder that's breathing life into this thing with lots of little helpers. It's a genius of a thousand hands. And of course, if you remove the genius, there's nothing, right? And that's most businesses. And most businesses aren't worth anything because they're not businesses. They're leveraged jobs. 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. Alex Hormosey, welcome to the Bigger Pockets podcast. Great to have you. Thank you for having me. Very honored to be here. Yeah. So for anyone who's been living under a rock, and hasn't heard about your astronomical success, amazing insight that you're giving to small

business owners. Would you mind giving us a background of where you started and where you are right now? All right. I'll give the world's shortest play-by-play milestones. So I was a management consultant. Went to Vanderbilt, graduated, did defense contracting for two years, really didn't like it, got my top-secreted clearances. It sounded sexy on paper. It wasn't cool in real life. Wanted to leave Baltimore. Went to West Coast, started a gym. Slept on the floor for the first nine months, was able to figure it out. By month 15, we had our second location. Every six months after that, open a new one, had six locations. I had lots of gym owners started asking me, hey, how did you grow so fast? And so I started helping those guys out. I ended up doing gym turnarounds where I'd fly out

to a gym, fill it up, fix it, et cetera. We did 32 or 33 turnarounds over the next two years. And then from there, I sold my six gyms and then transition from the turnaround flying out guys to Jim's business to a licensing model because it was more scalable. And so that was 2017, we transitioned to licensing. That business scaled to, I think, 37 million a year with very good margins. And then we started a supplement company, prestige labs, which we sold through our distribution base. We had 4,500 locations. From there, we started Allen, which was a software that worked at Leads for Brick and Mortar businesses of any kind. We exited all three of those businesses, one to a strategic buyer for the software, and the other two as a package deal to American Pacific

Group, which is private equity firm. Just that one was 46 million, the other one. I'm not not a lot to disclose it, but I can tell you that we did 12 million top line the year before. We sold it for the software company. It was an all-stock deal. And so anyways, that was last year. We started Acquisition.com in 2020, which became our holding company for our portfolio. Right now, the portfolio does north of $150 million a year. I'm only going to timestamp this. It is currently July of 2022 because people hear these clips later and they're like, you said, and I'm like, I know, we grow. That's why the numbers change. But, you know, at this moment, north of $150 million a year portfolio revenue between our companies,

we specialize in high cash flow service businesses and things of that nature. So it sounds like you started the gym business. You jumped into it. You pursued excellence in that area. You learned sales techniques, the psychology behind how you get people to do things. Then you learned business techniques, how to run a profitable business. You took the step that most people never take when they hit that point is you said, how do I scale this and took on bigger and more difficult problems to solve?

You started solving other people's problems, constantly helping them to do more. And then once you hit this point of big success, you said, okay, now what synergy do I have? I can go sell supplement products because I understand fitness people. Trust me. And then you solve a new problem. And you said, okay, now I can have a software company that's going to help manage this. And you sort of just spread in this like synergistic way rather than I'm going to go start a gym and then I'm going to go start a car wash and then I'm going to go start something like a loan

brokerage or something completely unrelated. Is that more or less a good summary of your approach? Yeah. I definitely did a whole bunch of things that I probably wouldn't do again. and probably would have done it necessarily in that order, et cetera. A lot of things were more difficult than they should have been. But yes, that was 100%. They were synergistic in nature.

I felt like I was leaving money on the table. And so I took those opportunities. If I could do it again, I wouldn't have done it that way. But they were still obviously very good outcomes. But I feel like I've learned since then. Yeah, I don't think there's too many people that would be in a position to criticize how it turned out for you. I think that if anyone is listening. Well, actually, I've got notes.

I've got lots of notes. On today's episode, Rob is going to tear apart. Alex's his business strategy and teach him what he should have done instead. All right. Well, thank you for sharing that. I really appreciate it. You are an incredibly intelligent man, and I'm not saying that to butter you up. I'm just saying I take a lot of what you say.

It's not fluff. It is very, very practical, well thought out. The type of advice you only get from trying and failing a lot and then figure out, okay, this is what actually works. It's kind of like listening to a gracey talk about jujitsu. That's the same feeling that I get when I'm listening to you talk about business. So before we get into today's show, we actually have a fun game that we're going to play.

It's going to be called Mozy Nation or Mozy Imitation. Oh. So in today's episode, Rob and I are going to try to guess if a fact about you is true or not, and then you are going to let us know which one was right, and we're going to see who wins. This is great. I'm so excited. I feel pretty confident. I do watch some Mozy YouTube video, so I think I got this one in the bag.

Yeah, he's been practicing, he's been researching this so that he could win. so we'll see if talent or preparation wins out here. You guys can figure out which one of us is the talent based on what we said so far. All right. Fact number one, Alex and Layla Hormozzi met on a dating app. Rob, what say you? I think I'm going to go, no. I think I'll go no, they did not meet on a dating app.

Met on Bumble. Okay, they did meet on Bumble. So I was going to say no. So I don't get a chance. It's okay. I did confuse you there. The reason I didn't answer right away is I remembered hearing a interview that you were talking about, I can't remember who it was with, but I remember

you talking about your relationship with her and how you were super busy. And there was a time she came in the room. She was like, do you want to break up? And you're like, yeah, whatever. Like, okay. And then at some point, you needed help on a business deal. She went out there. She actually crushed it for you. And it sort of like had a paradigm shift. Like, oh, maybe this person's a little more special to me than what I thought, which I frankly love that you shared that information because this is something dudes go through all the time and we never want to talk about. We want to look like Batman. We just show up and, you know, like everything goes well. But that's not how real life works out. So I was trying to remember if you had mentioned the dating app or not.

All right. All right. All right. I was going to say in a gym for sure. But all right. I'll get it on this one. It's all good. All right. Question or fact. Alex emailed himself all of his failures for the last five years. I think we'll go true on that. Not from something anecdotally that I know, but it does seem like something you would do. I could see. And then I could see how you like use that to fuel your success. I'm going to go yes on that one. I'm going to shoot with yes, but not for any of the reasons. Rob said. It's because I watched Alex's micro expression when we asked the question. I'm just going to read him completion.

How do you get it right? Talent. Talent got it. Yeah, no, 100%. That was how I, yeah, that's how I remembered the lessons. Yep, that'll keep you humble too. And that's, I mean, something we could talk about later on the show. Purposely pursuing humility when you're having massive success. is absolutely, in my opinion, like crucial. Like, it's not something that just happens. You have to make an intentional effort to stay in a humble place when it feels like everything that you're doing

is just falling in line perfectly. So I can see that would be very wise. All right. Alex starts his mornings with a hot sauna and an ice bath. You go first. I'm going to go with no. I think he only does the ice bath because a hot sauna would be too comforting.

And that just seems like something that Alex would not reward himself with comfort before he earned it. throughout the day. I'm going to go yes because I know that you wake up at four and that's a lot of time. You talk about how you get more done in those hours than people do all week. And it's very time consuming to take ice baths and sit in the sauna. So I'm going to go yes. No. I wake up, I drink a cup of coffee and I work. It's my morning. So you're not doing it. Also a great answer. I love that, man. There's certain trends that you pick up on when you follow people in this business states that everyone starts saying it because everyone else said it. Like one of the really common ones

that I noticed was Mark Zuckerberg was credited with saying I wear the same shirt every day because then I don't have to think about what I'm going to wear. And I am so incredibly beyond your level that that that I don't even have mental energy despair to pick out my shirt. And we were like, oh, that sounds good. Say that. Like I'm going to start doing that too. And everyone started wearing the same shirt. And I heard him on an interview with Gary V. And he said, yeah, I just said that because really I'm not good at dressing myself. And it sounded better than admitting I don't pick out clothes. And I was like, How many of us have been repeating this as this business maxim that's super? And he's like, yeah, I made the whole thing up.

So there's a lot of things like that, like the ice bath in the morning, the waking up super early, which I think is really good, especially if you're in a competitive environment where you're competing with others for business. But like if you're just someone who writes books, it doesn't really give you an advantage because then you got to go to bed at 8 o'clock at night. It's sort of a similar situation. So I really appreciate you admitting that you're not doing it just because everyone else says they are. I could go hard on that question. Well, let's start with that. Let's hear your opinion if you think that I'm way off here.

I think it's a big pile of gobbledygook, man. I mean, the amount of stuff that is espoused by the TikTok gurus of wealth and finance is insanity. You know, you've got the cold plunges, the finger tissues, the yellow glasses, the affirmations in the morning, the gratitude journal. It's like by the time you fucking do that, you're already halfway through your day and you haven't done anything. And so if you break this down to like a first principles thinking, it's like, okay, in order for me to do more, I must do more. Anything that is not me doing more is detracting from my ability to do. And so, period. You know, like, that's it. And so time thinking about doing, time procrastinating, doing, time recovering. Like, all of those things are just not things that are you doing. So I think the

ability to work itself is trainable. And so if people, like, feel like they need that prep beforehand, then I think that is something that is a crutch that can be eliminated and then ultimately make you more productive, not because you have some hack, but simply because you just put more time in. I do love the simplicity of that. It's really just kind of breaking it all through. And it's just like, oh, it's just this one really simple thing. And I remember I watched one of your videos that was like my $100 million diet or something. And then you talked about how you went into a room with a bunch of CEOs.

One had wheat grass shots. And then the other one was like meditating in the corner. And then you're eating Twizzlers. And they're like, what are you doing, bro? And then you basically broke down how all diets are sham and it shams. And it basically comes down to calorie deficits. And that ever since then, I'm like, oh, okay. I need to stop, I need to stop micro-counting.

It's just calorie deficit. I mean, obviously, I don't want to oversimplify, but it was just like how funny it's just like these perceptions really cloud our minds. And it's just like much more simple than what we think a lot of the times. I had a mentor who's told me this, this quote. It's a two-minute story. And I think it's very memorable. It's don't be cute, right?

He was like, you know, he was from Long Island. He's like, you know, when I used to play backyard football, I was like, yeah, sure. He's like, yeah, so, you know, you got, everybody wants to be fancy. You know, we're going to flip it to Timmy and the Timmy's going to reverse this way and then we're going to fake it and then we're going to go longer. What happens?

You drop the ball and then it's fumble and you lose the odds. He's like, nah, we're talking fundamentals football. Put the two fat guys in the middle, run to the right. And he was like, don't be cute. And he was telling me this because I was talking about this idea that I had for Jim Wunch in terms of one of the, a new initiative that I wanted to take.

And he was like, don't be cute, man. He's like, just do more what you're doing. And I feel like there's a lot of truth to that in terms of like people overcomplicate things that they already know because the truth is too difficult to stomach. Right? So it's like they don't want to accept that they should just eat less and move more. And so they want to come up with a hundred ways to be cute rather than just confronting

the fact they just need to eat less and move more. And like they don't want to confront the fact that they just need a fucking work. And so then they're like, I'm going to do all these things to prepare myself to work, right? And get myself in the right Zen and like have an attitude of abundance Aurora and like read my affirmations and do my daily journal and all this stuff. And it's like, dude, the work, the doing needs doing. So it's just who's going to do it? You know, I have a theory on that that, like, our audience is particularly susceptible to

these gurus that say, I will teach you how to make a million dollars by taking my $100,000 course. And once you take this course, you're going to go out there and you're going to flip 40 houses a year by showing you how I do it. And even if they gave you the information to flip 40 houses a year, you're not in shape to jump onto that level of a workout. It would be like if the rock said, I will show you my workout. That doesn't mean you can go do his work.

workout. It takes time to build the skills that you would need to accomplish that. And it's that, like, whenever someone's being taken advantage of, there is a part of them that is making them vulnerable to that because, like you said, they don't want to do the work. They're either lazy or they're greedy or there's some component of that that isn't, they don't want to accept. It's the case. And I feel like this is why there's constantly a new diet or a new trend or a new something. And if you're the person that sells that to people, they'll buy it. You'll make a bunch of money. And then it's funny because now you actually have money. And so you can show that your system works,

but you didn't do it by working the system. You did it by selling other people on what they could be doing, which is I really like you because you took the opposite approach. You went in there and built these gyms and grinded to learn these things. And then you said, okay, here's what I've learned after everything I've done. And I love that don't be cute approach. It's just this is the fundamentals. This is how it works to do this better.

It definitely wasn't a new opportunity. We were just like, so one of the things that we call it database marketing, But when we work with a portfolio company, especially if they're in the education space, one of the first systems that we implement is data tracking on customer success. And so, you know, we have activation points that we want to track. We know that if someone does X, Y, Z by day 30 or whatever, the likelihood that they, you know, stay or a set goes up, you know, threefold, whatever. And so what happens is then we can make substantiated claims based on what we can observe. And so the more data we collect, we can say, hey, of the people who actually send, you know, a thousand emails to prospective homeowners, people who do that, on average, four out of five of them will close the deal in their first 45 days.

And so then it gives people prescriptions of activation. It's like, I can't guarantee that you're going to do it, but I can give you the data to support what actions are going to create the outcome. And so then you can start reworking marketing message rather than make another guy who's making the same promise. You just say, hey, again, I'm not making the promise. I'm just telling you what's happened. And then you can make your own decision based on that. And that's how I prefer. And it also gives you unlimited amounts of kind of marketing angles and hooks because once you have data, you can talk to the top 20% of the,

bottom 20%, the median, the average. You can talk about people who do XYZ add contingencies to, you know, the claims that you make, and it gives you an unlimited way, but it all starts with actually focusing on the customer and making sure that they're getting what they're supposed to, you know, be getting. Right. Yeah, so I like this a lot, the don't be cute, and I am a frequent watcher of your YouTube channel, and it's a very raw channel where you sit, you talk about life lessons that you've gone through, and I really like that. I really appreciate, basically, you leave it all out there for people to kind of take an apply to their life. So one of the things that I hear you talk about really often is scaling,

and that seems to be somewhat of your specialty. I know that there's different tiers of kind of scaling companies, right? There's the first million, the million to three million and then three million to 30 million. So I was kind of hoping we could dive into that a little bit because I think a lot of people in the bigger pockets audience, they're trying to get to that first million dollars, right? And we want to really dive into some of those concepts and what's needed to really, hit that million dollar mark in the company. So do you think you could just sort of walk us through those different tiers starting with that first? How do we get to that golden egg of a million dollars for a business? I'll actually even break it down to six figures too because I was asked

on a different podcast about six figures and it actually, it's even simpler. So to get started, you have to sell something to someone. That's it. Like literally, that's all. One avatar, one product, one channel. That's it. So you have one way of getting customers. You saw one thing to one specific type of person. That is all you need to do to get to six figures. To get to seven figures, you need to learn how to do those three things, comma, reliably, comma consistently, right? So you know how to sell one product, one avatar, on one channel in a consistent manner. So you start having predictive metrics on how you can acquire customers. So it's either I spend this amount of money on advertising and this is how many, you know, calls I get that many, you know, sales, et cetera.

If it's outbound, it's like I send this many emails or make this many calls or this many text and then this many, you know, reply back, this many schedule, this many show, this many clothes, et cetera. If you're running organic, it's I know that I need to have this many posts that have to make across these different channels with call to actions that drive towards this page. For every thousand visitors on this page, I get Y opt-ins. You know what I mean? So each of these vehicles, or I have to hit my email list, you know, once a week. And if I hit it once a week with a call-to-action again, so all these are the different ways you can get customers. You could also do affiliates. You can do referrals. There's many ways to do it. But the point is that you pick one

avatar, one channel, and one product. And then as soon as you can start predicting how many inputs it takes to get an output, then you get to a million, right? And at that point, you're, you know, at one, two, three million-ish a year. One to three, you have to build out your core team. So that's usually like the first five hires, first five to ten-ish that are, it depends on the ticket of the thing that's being sold. You know, if you're selling $25,000 things versus $500 things, the team size is going to be different. But it's the core team at about $3 million. And that's usually, that's the reason that we take companies on at $3.00 is usually there because there's a core team and at $3 million, there's product market fit.

So they've demonstrated that people want this thing and they have enough support that we can take them from three to ten. Three to ten, and this is interesting because this is a mistake. A lot of people make at three. And I can stop whenever you want me to cut the lines of the problems that come up. But the problems that come up at three-ish are that people start getting cute, right? And they start saying, and here's what's difficult is that you get reinforced on the fact that the more you market, the more you sell, the more money you make. Right. And it's true.

And you can scale from there by doing more sales and more marketing. and that is what the vast majority of the industry will do because they got reinforced doing it early. The problem is that they switched the objectives. The objective of the first phase of business, which for me is like zero to three, is just to demonstrate product market fit and an acquisition channel that is profitable. That is the objective. Now, at this point, we transition objectives to increasing lifetime value per customer. So this isn't improving customer experience, putting data tracking in place.

If there's an ascension opportunity, that makes sense we need to build out that product or service line, so that, and this is the big point, so that when we, do choose to add another channel or expand on our current channel, we can do so more profitably, right? Where if you just sell a single product that might not have as much LTV as you would, you know, you would want, uh, as you scale or put more in, your margins begin to compress. So you might go up to 10 million, but your margins have compressed over time. And then you get in this place where you have to keep selling to maintain your overhead, but you're not really taking enough home and you can't have enough cash, free cash flow to grow the

business. And so sometimes it's like you have to take the step back, fix the product, fix the customer experience, fix the service, fix the data, fix the infrastructure that everything's built on, probably hire and fire some people that you promoted a little bit too early that didn't have the experience because they're actually not actually running things that well. And then once we fix that stuff, then honestly, going from three to ten usually almost happens on its own. Once we're at 10, then we go far more aggressively on the acquisition side, which is, you know, the easiest moniker that I use is more better new. So we do more what we're currently doing until we max that out. And then we do better of what we're currently doing. Is there any CRO opportunity?

So conversion rate optimization, can we switch this headline out? Can we change this lead magnet? Can we implement some of the best practices that we know to get more people to show up if it's a service business? If it's a product business, I only focus on service businesses. So lots of me, lots of our stuff is over the phone. Can we change the video sales letters and the follow up emails, things like that? All the improvements that can happen. And then different is, okay, or new is can we add a new channel to this. So we have six that we can choose from to get new customers. We've got we can hit up our own lists. we can do cold, cold outbound, we can do content, we can do paid ads, we can do affiliates, and we can do referrals.

And so there's the only six ways to get new customers. We look at those six and say, of the skills that we currently have, which of these would make the most sense to add to it? And you can even go adding a new thing within a current. So if you're running paid ads, it's like going from Facebook to YouTube, we're going from Facebook to TikTok. And so there's, you know, each one of those six squares has channels or media channels that you can, or platforms that you can tap into that give you new audiences.

So that was a little bit of a crash course there. But that's what allows you to scale from 10 to 30 and beyond. At 30-ish, the founders typically will start feeling constrained because they are the two-do behind the entire business. And please cut me off if I'm starting to bore you guys. But at 30-ish is when it stops being about the founder. Not that it was about the founder to begin with, but like you can will your way to 30. But at some point, like right around there, there's like just, oh, you get spread too thin.

And so, and this was a mistake. Okay, I'll stop. The point the point is that you need more stallions, right? And so you have to find more people who can drive things like you do. And so this is where employee compensation and recruiting become paramount to getting to the next level. Because you need to bring people in who've already won the Olympic gold, who've already run this race multiple times at companies just like yours, but bigger and better, and then have them come and run the playbook for you so that you're not driving it, but someone else is.

And so that's where compensation and recruiting becomes really important. So you can incentivize people who deserve. to have that level of compensation. And then that's you to get to, you know, get to nine figures plus. Okay. All right. Well, I think we're,

we can probably just end the podcast there, right? I'm just kidding. We've got a lot to cover on this. So let's talk about the first million because that seems to be where a lot of people are in all of this. So you talked about in your first million, you're kind of identifying a few things. It's going to be your avatar, which is going to be your customer profile. Who is your customer profile?

But then you also mentioned your one channel. Can you explain that? Do you mean the one channel that you're marketing or the one channel that you're, yeah, explain that. Do you mean like YouTube, like social channel? Give us a little bit more on that. Yeah. So there's three variables, right? So you've got platform, you've got media and then you've got the content, right, of whatever you're marketing.

So you just have to pick one of those three things together. So I told you about six ways to get new customers just now. So there's six ways to get your customers. You pick one. You double click on that. And it's like, okay, within there, if I do cold app, am I going to do cold call? I'm not going to do cold text, cold DMs,

called emails, all of those would be one platform. Right, so one method, and then you've got the platform that you're doing it on, and then you pick the type of media that you want to send. Do I want to send a voice memo?

Do I want to send a text? Don't want to send a handwritten card. Do I want to, you know what I mean? Like, it depends on the platform because some platforms, you can send multiple types of media. Some of them can only send one. And so you pick one channel,

which is all those things together, which is just a fancy word for a pathway for a stranger to become a customer, right? So we pick a pathway for a stranger to become a customer, and we focus on that one thing. Real quick, guys, you guys already know that I don't run any ads on this and I don't

sell anything. And so the only ask that I can ever have of you guys is that you help me spread the words so we can out more entrepreneurs, make more money, feed their families, make better products and have better experiences for their employees and customers. And the only way we do that is if you can rate and review and share this podcast. So the single thing that I has 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 with someone else.

And do you feel that for breaking your first million, the entrepreneur that's in this journey, is that kind of like the loneliest phase of the company? Because I feel like for me, you know, I was alone for a lot of it in terms of just in the weeds of my own businesses. And I really didn't start hiring until breaking the threshold of that in my businesses. Is that a pretty common sentiment, you think? Or is it, you know, like, do people have like well-established teams? and that's how they get to a million? No, I mean, at a million, it's usually a few hires, a few contractors.

You know, it depends, again, on the number of units sold to get to a million. You know, because you've got to make 83K a month. You've got to make 20K a week, right? So 20K a week, if you're selling 20K things, it's like you're selling four clients a month. Like, that's pretty easy to manage. If you're selling, you know, $100 things, you've got to sell 200 clients a week. So it's a little bit harder. Again, if it's a physical products business, then it's going to be mostly like support.

And if you're the media buyer slash marketer, then, you know, you can probably manage an e-commerce, but again, it just depends on the type of business. But I would say from a Zoom-out perspective, I think all seasons of entrepreneurship have elements of loneliness, and I think that it changes. I think in the beginning, it's a lot harder because you're really competitive. You're really competitive against other people rather than being competitive against yourself. And so, like, in the beginning, you're like, this guy ripped off my shit, this guy's blah, blah, you have all this, like, finger pointing.

And I was just on a podcast with Ed Milet, and we had a really good conversation about it. But, like, the 20-year club, you know what I mean? Like, I'm only in the decade club, right? But like, you know, five years in, 80% of people are gone, right? So it's like, okay, it's a little bit friendly. You're at 10 years, you know, at least for me, like, I have no, I just know how big the, big the world is. And so if there's, I remember when I was starting out with gym launch, I thought about doing a weight loss business because we were good at weight loss. And that was actually what ended up, we decided to do the weight loss business.

And that's when I pivoted. And I told the guys, the gyms that were going to do the turnarounds the next month that we weren't going to do it. And the guys were like, well, can you just show me how to do it? I was like, fine, I'll show you how to do it. And I sold them just kind of like a licensing of all my ads and all my pages and everything had already built out and tested. And then that ended up being, you know, that became gym watch and became way bigger than the little weight loss thing that we had.

But when I started doing weight loss just for a few weeks, a buddy of mine who was in weight loss came up to me, he said, yo, if you do weight loss, we can't be friends. He was doing like, $150,000 a month. I was like, dude, it's a $60 billion industry. Like, we can't both do weight loss. He's like, dude, I was doing weight loss first. I was like, bro, I had six gyms. I've been doing weight loss

but you were at 17 you know what I mean That's crazy That's crazy that he invented The concept of weight loss Like you know that guy That's so cool It's right

And so I say that Because like it sounds ridiculous And that guy ended up becoming Very very successful too And he like later on was like Dude I was just I don't know Sorry

You know because you're so afraid It's just fear You're just so afraid That something's gonna go wrong That you just want to like Hold on and clench And just point it everybody else when it just like, it just isn't about you. You know what I mean? It's just like,

if you can serve your customers, you'll have business. It doesn't matter what the competition's doing. And the market's so big. You know what I mean? So anyways, I think that's why it's lonely, but like it's lonely at my point, too, just in a different way. It's lonely because there's just not that many people that I can talk to who are, you know, doing with the same things. Right. So do you feel, because that makes sense for me. Like I've been in a lot of moments like that where it's rare to connect to something that's going through the exact kind of a very nuanced thing that you're going through. Like, have you found people in your journey that you have connected in that way?

And, like, how does one even find that? Because I think that is really tough for a lot of people to find someone that really grasp what they're saying on a personal level. So to talk on one of the points that we were talking about did in the game show earlier, I'm a huge, huge, huge, huge, huge proponent of alternative education. I love the education businesses. I love guru businesses. I mean, I love them, comma, as long as they're being done well and promising the correct thing

and really focused on the product and the customer. I love that. And fundamentally, like, guru businesses are just education businesses and they are sprouting all over the place because the demand is unmet by the formal education system. And the demand is for skills that make money. And people are not getting them, but the demand is not going away. If anything, it's grown because people are seeing on social media, all these other people making money, and they're like, this is possible.

And so in one good way, I think Instagram, and all that stuff has made more people believe that they can do it. The downside is, obviously, whenever you have upside, you've got an equal opposite reaction of people who are scaming people and things like that. And I think that the difference between a scam and somebody who is trying to deliver is intentioned. I think there are many well-hearted or well-intentioned educators who are really trying to do a good job, but they are poor teachers.

Just like there are people who love to teach who are teachers and were terrible at teaching math. And you probably had them, but they really wanted to help and they just weren't that good at it. And so I have a little bit more of a heart for both sides of the equation here, but I do think that education is the way and how did I find people? I asked and I was willing to have people say no. And real, real, very few people said no to me, my whole journey. And I think it was because the way that I asked was I didn't ask. I went and said, hey, this is all the stuff I'm good at. And then I would just prepare stuff and I would do work ahead of time to help them with their

business. And I would just get on a call and be like, here's all the value I could possibly deliver to you. And then if it was anybody worth anything because winners give back, they were like, dude, this was, I was not expecting this. Dude, what can I do for you? I'd be like, okay, I really have this question. Do you know how to do this thing? And they're like, no, but I know a guy and I'll put you guys together. And so I, like my first mastermind, I was a part of, I got voted member of the year with like 100 internet marketers and I was an internet marketer because I didn't know anything about internet marketing, which is ridiculous. I joined it because I wanted to learn. And so I just, only thing I knew then was sales. And so all of the, I wrote so many scripts for guys in that

community because it was the only thing I was good at. And so they're like, wow, this is awesome. And then they would help me out. And I was like, how do I connect a landing page to an opt-in thing? And they would sit there and they would show me how to do it. And that's how I learned. Like I did not, I learned like this. Like you and me on the phone right here. This is how I learned. And I paid dearly for that because I didn't buy that many courses. I actually bought way more one-on-one. And I bought a lot of my one-on-one by doing work for other people for free. Yeah. I can definitely relate with the opt-in form and connect again to the landing page when I first launched my very first program, that was the hardest week of my life,

because I did all the tech and all the marketing and all the content and all the editing and all the copywriting. And it hurt my brain, you know, but at the end of it, I was like, okay. And so I'm a really big proponent of learning all this stuff and mastering it before I can delegate it out to somebody else because I just want to know that they are good at what they're doing. But I feel like that's not necessarily super sustainable as the organization. chin grows, and I think you kind of mentioned this earlier, where you said, once you start scaling up, you have to start hiring these stallions or people that are better than you at certain functions. I struggle with that, not because I think I'm smarter than everybody, but I'm just always like,

no one knows it the way I know it. Is that a limiting belief that is difficult to shake your entire journey? Are you pretty good at breaking free from that limiting belief? Yeah, 100%. Limiting belief. I mean, it's prideful to think that no one can do something better than you. So a lot of times what happens is people hire people who've never done the thing and then are like, oh my God, I'm better than this person. It's like, well, obviously they've never done it before.

Hire someone who's significantly better than you, who's done that thing for a very long time, comma, who's not also running every other department of the business. And you'll be amazed at how much somebody can do. In the beginning, though, just to be clear, it is normal for people to have to learn all the basics, right? Like entrepreneurship in the beginning is very much, you know, master of all trades, you know, what is the jack of all trades, master of none? like that's very much at the beginning. You have to just be good enough at everything. You don't have to be great. You just have to be good enough to get it done

and get the first dollar across the bridge. From there, you start to begin to get more leverage. And so the entire conversation of scaling an entrepreneur is about two things, control and leverage. And so the control component is that you have, it's a consistent relinquishing of control as you move up the leverage ladder, right? Because you can't see every email that goes out.

You can't approve every post. You can't review every sales call. You can't make every video that's going to be in your course from what you're saying, right? Like you can't make every one of those things. And the person who's making it in the beginning might not be as good as you. But the question is, are they good enough? And that's why organizations improve over time because, like, you have to scale with good enough

until you can replace it with better because you have more leverage because you have more cash flow, you can attract better people. You can fix the culture, et cetera, et cetera. And so the whole concept of moving up in entrepreneurship is trading your time for increasing amounts of money. And so we're defining leverage as getting more for, what you put in, inputs and outputs in a system. The discrepancy between the two is the leverage.

If that's the leverage in a system, we try and use more and more leverage. And the first version of that is labor. And so that's the lowest form of leverage that we can use. And so we hire people to do things for us so that we can have time back to do more valuable things. In your experience, Alex, do you feel that the skill of hiring well is a really big hurdle that people have to overcome? Is this one of the bigger problems?

or is it not as big as I'm thinking in my mind? It is the problem. Yeah. It is the biggest problem. So think about this from a purely theoretical standpoint. If you understood what was required in a business, like what has to happen for a business to succeed, and then all you did was put the people in place to have that happen,

then you would not need to work. And so the reason that things are not happening is because the people are not doing the things. And so for our ability as entrepreneurs to select, so first attract, recruit, hire, manage, and ascend slash keep. The higher up you go in the business, the more leverage you have on how much money and your time you make, it all becomes about recruiting. And so you might like this from a real estate perspective, but you know, you can buy or you can build. That's kind of an M&A thing, right? So like if we have a new division that we want to get into, we can either build the thing from scratch

or we can buy it. But if you if you zero down at a micro level, you can either build talent or you can buy it. And so it's much faster to buy talent. And so I think one of the things that people overestimate. This is a quote for my wife, but she says everyone, everyone thinks they're a good judge of character until they get judged by the people they hire. And so it's a little lay-a-lame drop for you. But it's true, right? Yeah, it's true. And so if we're judging, if we're being judged based on the people we hire, I would say that in my experience, the objective facts have worked better. And so track record and case study analysis before they start. So it's like if I want to hire a video editor, for example, to cut content, then I want to look at their track record, show me the stuff

that you've already done and that you've been doing this for a long time for people just like me trying to get to where I want to go. Those are all nuances in what I just said. The second piece is, hey, here's some raws. This is what I want. Go make stuff. And then I can have 10 guys compete. And the thing is that there's so much psychological bias of like, I like, I like this guy, he looks the way I look, blah, blah, blah, blah, that we don't let the work do the talking. And so the more objective we can be about it. So in that way, I really do believe in being like color. blind and all that kind of stuff when it comes to recruiting talent because like talent comes in all forms and so all i really care about is the productivity the output of the person and so i think for me

that's been the easiest thing this is much more layless department um but in terms of like how we scale businesses and acquisition dot com we consider recruiting to be our core and number one competency because at three million with the business lacks its talent and so what we do because it's usually one founder that's breathing life into this thing with lots of little helpers it's a genius of a thousand hands. And of course, if you remove the genius, there's nothing, right? And that's most businesses. And most businesses aren't worth anything because they're not businesses. They're very, they're leveraged jobs. And so what we do is we look at the needs of the business and then we recruit people who've done the thing already and can demonstrate that they can solve the specific problem that we're facing.

And the nice thing is that if you are hiring somebody, you should have a problem that they should be solving. And so the problem is sitting in front of you and you're like, hey, head of marketing, fix my marketing on the job interview. And two things happen. Either they don't know how to do it or they do know how to do it and they teach you stuff. And so during the interview process, if you're not learning from the person that you're supposed to hire to take the job from you, then they're going to work as a subset of your knowledge because you know more than them, which means you need to train them. And so you're not buying talent. You're building it. Again, but you might be paying buying it price for building it work, which is not the trade we want to make.

So anyways, I can talk about that longer, but that's fundamentally, that's how you scale. You're making me very uncomfortable because I'm realizing as you're talking here that I tend to lean towards the, I want to coach this person up. They have a great attitude. They want to learn. They're like, whatever you want, I'll go do it. And then I actually, not only am I paying you, but I'm losing money because I'm taking time away from revenue generating activities to train you to do the thing that I'm also

paying you to do. And I'm just stuck in like sort of this treadmill that I can't get out of right now.