The Game with Alex Hormozi - Lead to Scale: Cultivating Leadership for Business Growth (with Sean Ferres) | Ep 675

Episode Date: April 5, 2024

“Why would you allow it to change your behavior?” Today, join Alex (@AlexHormozi) as he guests on Sean Ferres channel to talk about strategies for customer acquisition, value enhancement, and retention, focusing on the importance of niche specialization and productizing services. He further explores the vital skills for financial success, AI utilization in digital marketing, balancing work discipline and freedom, and leadership development for business scalability.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.Follow Sean Ferres on:➤ Instagram | LinkedIn | Facebook➤ Check out the episode on YouTube!Timestamps:(0:25) - Mastering the trio: build, sell, lead(1:14) - Product quality over marketing(2:13) - Navigating the path to riches with limited resources(4:01) - Rebuilding from scratch: strategies for rapid recovery(5:37) - Maximizing lead nurturing and conversion in digital marketing(10:55) - Balancing freedom and discipline for success(12:54) - The truth about achieving an elite physique(17:03) - Embracing AI: the future of digital marketing and beyond(20:28) - Navigating business and dating(22:56) - Cultivating leadership to scale your businessFollow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

the big problem is that the more generally are, the more impossible it becomes to standardize value creation. And that's the big advantage of niching down. So you have to productize it. 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. So, man, in your opinion, what are the three most powerful skills that someone should develop if they want to make a lot of money? I mean, the three core skills are you going to learn how to build, you got to learn how to sell, and you got to learn how to lead. Just like that. There we are. In terms of maybe like hard skills that someone should really

focus on learning to develop like sales, copywriting, leadership, what would you say are the most important? Well, those are the three big buckets, right? So it's like one is that like leadership is just the internal bucket of getting people to do what you want them to do at scale. Right. And then from a selling perspective, I include that in all things that are marketing, letting people know about yourself, promotion and actually converting people into customers. And then the third piece of building product and services is so that at scale, if the product is good enough, then you won't lose customers. And if it's exceptional, the product itself will get you more customers. And so most businesses take into their natural extreme on a promotional level typically are leaky buckets because

the product actually sucks. And most businesses suck in general because most products are good and most people want to cancel very quickly and don't want to continue to use them, which is why very good companies are very rare. Most of them generally are mediocre or not good. And so I prefer to solve a business from back to front, which is like, can we find something that people actually like and want to continue to use and continue to pay for? And then the marketing is almost a commoditized skill. It's very easy to let other people know about your stuff and do so louder and louder and louder provided the product is good. And then the internal has to get run with a leader that can attract the challenge to continue to do this. Because quickly, the business will bottleneck based on the founder

and their expertise, or usually they have a niche that might be product people, they might be tech people, they might be finance people, they might be whatever. And then they have to be of the character to attract the talent that will allow them to get to nine figures or whatever, is that the goal is. Yeah, 100%. Let's say my only goal was just to get rich AF. What is rich a F just so we define it? A hundred million. One, it's a good number. Cool. You're willing to work card, but you have limited skills and experience. What business would you start right now? And I have no money, right? Very limited. Yeah. Maybe a couple thousand. Yeah. So then I would probably, I would probably build a boring business and services. And I would probably pick something around

the body. Like, you know, I wouldn't start a design firm because I think that has a high likelihood of getting disrupted in some way by AI. As silly as this sounds, like a nail salon or a lawn care service. I mean, especially body ones, dentist stuff. Like, you still have to go in and get your teeth taken care of. And many times people value the human exchange more than something robotic. So for example, in the fitness world, this is my like my data point around this, there was a brand called Coco Fit. They struggled a ton and then eventually went out of business because they tried to automate personal training. So they created these all in one machines that would, you'd have a keyfob and it would count your reps. And every time you went to the

machine, it would say how to do more and what you did last time. It's really cool console. The problem was Their theory was that the reason that people were getting results is that they didn't know what to do when the reality is that no one was showing up. And so people hire personal trainers because they want another human to talk to and to hold them accountable to showing up. Same reason, like if you had a robot cutting hair, there might be a percentage of the population that do it. But a lot of women like the going to the hair salon and having that exchange. And so I would probably build a business around services in general would be my way and then I would continue to scale that. And you could do that at a local chain level and you can make a lot of money to do that. or you could do it at a national level, which would be like professional services.

Yeah, 100%. I love the idea behind the core stuff that's going to be here forever, you know? Yeah, really cool, man. So, dude, this was an interesting one. Like, obviously, I know you can't go back and split test life. And obviously, you have achieved quite enormous success. So things ended up working out. But let's say, hypothetically, the great fires of Las Vegas burn everything to the ground.

You lost everything. You had to start again. What would you say is the number one thing that you would have done differently to get to where you are now. And I have no reputation, right? Yeah, no reputation. It burns my organization on the ground with it. So I actually have lost everything before.

And so I know what I did, and I probably would have done the same thing. So the easiest way that I did to go make $100,000 in a month when I had nothing, was that I would go find a business that was local, that I understood, and that I could sell something expensive for. I would front the capital to market. I would work the leads, and I would sit at the front desk and sell, and I would negotiate what they would be willing to do a big bulk of services. I wanted to find a chiropractor and I'd say, hey, if I sent you 100 customers this month,

what's the lowest rate you would do all 100 customers for this level of service? And then I would just negotiate that down and then I would spend as much as I could and sell it for as much as I can so I could make the spread and then they would service the customers. And for them, it's a zero risk offer because they don't have to do anything. I front everything else. And then for me, I don't have to do anything but market and sell and I can take all that. So like when I lost everything, I immediately was able to make 100 grand the next month by doing that playbook. Dude, your story's crazy. Like, there's no amount of times you can tell me and I still

want to hear it every time. It's so inspiring. It's insane. Yeah, really cool, man. So that was kind of like the high level stuff. I want to ask three rapid fire, like more granular tactical questions on ads specifically. So switching gears for a second. What would you say is the best lead nurturing process to take people from paid ad to book to call in your experience? Real talk? Brand. But actually. What I can tell you is that from all the portfolio companies that we have, there's no silver bullets.

It's a lot of golden babies. It's basically doing the fundamentals at scale. So all the things that you know you should be doing but aren't doing, just actually doing all of those things tends to be the thing that works best, which is contacting the leads immediately, following up multiple times per day, personalizing the messages to the person, having some sort of open loop between first call and second call,

something that you can provide value to in a very real way, that's where I like having, I think I talk about this in the book, like having services that people actually know have value, like a real value, not just like ascribed value, and saying I can complete the second half of this on our next call. It just gives people a very strong reason to show up for that. And you get some reciprocity before you go for a close or whatever. And so I like thinking about like each of those little check marks

and saying, can I make sure we're actually doing this at scale? I'll share this with your audience. Like having now gotten one company to $10 million a month and the portfolio is significantly higher than that, advanced people just do the basics at scale. Like there is nothing. There is no, like the scale brings the complexity. It's not novel things.

It's just what does it look like when you service clients at one-on-one? Everyone's like, it's so easy to service clients one-on-one, right? Because it's just you and you over-delivered and you do a great job, right? It's like, so just standardize what that looks like and actually getting good people to do that to a hundred times over is what advanced looks like. But there's not a lot of new stuff. It's just actually making sure that it gets done, which becomes all about operational constraints more than anything else. Yeah. One of my favorite lines in the book and that I've heard you say a lot is the advanced people never don't do the basics. And I think it's really easy to forget the basic stuff as you start to scale up because you feel like you've outgrown it.

But in reality, you really just need to keep doing it over and over again. You don't outgrow fundamentals. Yeah, 100%. I've made that mistake many times. Cool. So, man, what would you say some of your best practices for maximizing short rates for? for calls booked, especially from cold traffic. So we had Allen, which was our lead nurture software. And so we had 4,000 plus appointments a day. And so I have a decent amount of data to provide on showup rates.

So the number one factor, which no one knows for show up rates, is the amount of time slots available per day. So across all factors, being available for more times, more total hours and more actual slots creates more total throughput. And having more days per week open. because what happens is like if someone can't find the ideal time, they take a less ideal time. And it's a less ideal time so they have a lower likelihood of showing up. Right.

And so the idea is it's completely reversed from this whole idea of like show a partially filled calendar. Like it's complete horseshit. Like just give as many times as you possibly can and people will pick the time that's most convenient for them. We did notice that at least in the huge amount of data that we looked at across all appointments up to five days was okay. That was surprising to me.

I would have expected to be shorter than that. But that was actually what it looked like. Now, one of the downside. of providing so many time slots is that you will have a higher percentage of people, if you're just talking about throughput show, but you might have a lower show rate.

So you talk about the entire funnel, you get a higher percentage to book, and even if it's further, like, if you're just looking at how many clicks did I get and how many showed appointments did I get, then you have to play the interplay of my salesman's calendar, right? Because I might have to have more sales guys that have fewer people show up, but I get more total showups.

Does that make sense? Yeah, I definitely used to subscribe to the partially shown calendar kind of thing for scarcity, but I've realized that what you said is true. Inmediance. So that is the single greatest thing. The rest of it is personalization, volume of reachouts, speed of reach out, and availability. So those are the four core nurture pillars. So what's the availability in terms of days per week and hours per day and number of time slots available per day?

So there's three functions for availability. For volume of reach out, it's how many times am I reaching out per day? and how many days am I doing the follow-up? The speed of contact at the initial and speed between contacts, meaning if I reach out to somebody within five minutes, cool, but if they text me back five hours later, am I immediately texting them back at that point, too? So speed of first reach-out and speed of response.

And then you have the fourth pillar, which I forgot, and I named two seconds ago. Personalization. So it's personalization, which comes down to communicating with them on the channel that they prefer. And so some people prefer messaging on Facebook Messenger, some people for phone calls, some people for email, some people for SMS. And it's basically lasting all four.

And then the one that they respond on is the one you stay on. Because that's the one that they've shown that they prefer. It's like, I will never respond to you. I don't care. Ever. But I do respond to text. I rarely respond to DMs, but like if I were to rank these things. And so if someone can text me, then that's the highest likelihood response channel for me.

There you got. So if anyone wants to get in contact with Alex, now you know how. Magicly find my number. cool i got two questions on lifestyle and then i want to jam on some ai stuff and then we'll bring the other guys in so you mentioned on a podcast with tom bill you that you don't have rules so i for example quite often end up working up until midnight 2 a.m 3 a.m and basically fucking up my sleep schedule because i have too much freedom right because i'm self-employed so how do you kind of strike that balance between freedom and discipline you know if you're driven and you want to accomplish big things

I think it's a micro macro look like it's kind of 80-20. Like if you know that when you stay up late, like there are times when I will gas it and go past my red line in terms of work. And I know that I'm eating into tomorrow. But if I'm like in a flow and I'm crushing it and the muse shows up and the muse wants to work, then I work. You know what I mean? But if there's some days on the flip side where I wake up and I just feel foggy as shit

and I just like for whatever reason, I ate too much Mexican last night and I don't have it that day, then I might call it earlier. Like the idea of me pushing through and punishing when it comes to the type of work I do. Now, if I were, if I were doing a more brute force work, then I would care less. You know what I mean? If it was just like, if I was doing reach outs, I was doing cold calls, I was training, personal training sessions. I was cutting hair, I'm just going to brute force my way through it because I don't need to have higher brain function. And that's not an insult.

I'm just saying, like, you're not like thinking of creative things. You know what I mean? You're just, you're working the work. But when it comes to like writing or making presentations or communication of some sort, it's more I try and optimize around how can I maximize over a week, how much flow state I can be in so I can just get the most total quality output. Yeah. So it's not about rules.

It's more like which of these things has a highest likelihood of getting me the most. Mosy Nation, real quick, if you are a business owner that has a big old business and wants to get to a much bigger business, going to $50, $100 million plus. We would love to talk to you. And if you like that, we'd like to hear more about it. Go to acquisition.com. You can play anywhere on the page and talk to one of our team and see if we can help you get there. Definitely super helpful.

Switching gears for a sec to fitness, you don't have to answer this one if you're not comfortable, but it is probably the number one question that I got from everyone. So I'm just going to read a word for word. So this guy says, Alex, you look like Hercules if you ate a tank. Obviously, your diet and your workouts are on point, but I still haven't been able to achieve a physique like that in over a decade of training. I don't know many fitness influences are on gear and lie about it, which is super demotivating because they're selling unrealistic expectations.

I wish more people would be honest because I don't see anything wrong with juicing at all, and I don't know why there's such a stigma around it. So I just wanted to know, have you taken any performance enhancements, or do you just have goat genetics? Huge respect either way, you're an idol. Yeah, I'll answer. I'll give the answer in a second, but I want to address the thing that I think matters more here, which is why does it matter?

because let's say that everybody's not on steroids just for a hypothetical sake. Okay, well, what's the next thing you move to? Well, they all have better genetics than me. Okay, great. You're right. Congratulations. You'll never achieve what you want. Now what?

Okay. Well, what are you going to do? Well, you probably still need to train harder to use whatever genetics you got. You probably need to eat better no matter what genetics you got to get more out of what you have. And so, like, whether someone else is on gear or not, changes nothing because even if they weren't on gear, I might have goat genetics and you might not, which then becomes the new thing that you get to blame. And so, and I say this with love and I knew that I saw the message six times me earlier. I know that this was out of blood, but I say this like very

genuinely like control the controllables. Like what difference in your behavior does me being on gear or not being on gear or having goat genetics or not having goat genetics? What does that change about your behavior? Why would it, why would you allow it to change? behavior. And so at the end of the day, if you want to get jacked, then you do the maximum amount of things that jack people do. Now, I don't know how hard you train. There's plenty of guys that who have been training for a decade. They look the same. I also see them in the gym. They don't train that hard. Right. If you've ever trained with an IFBB Pro, right, if you train with people who compete in fitness, they'll probably expose you to a much higher level of training. Right.

Like if you feel like, well, I've been, you know, I try to eat well, well, I would ask this question when I had fitness clients. I would say, okay, did you follow the meal plan? They would always say yes. And I'd say, okay, let me ask differently. Seven days. week, you had three meals a day that you were supposed to eat and two shakes, right? This is what I would make for Jen Pop. It's not like an espouse. I'm just big disclaimer. I say of those seven days week, so three meals, two shakes, seven days a week, how many days were you perfect on that? And they'd be like, oh, I mean, at least four. And I'd be like, right. So I asked you, did you follow it? You said yes. And then I asked you, did you follow it more specifically? And you said no. In one day, you can fuck up

your entire diet. It's not that hard. You have a 500 calorie day surplus, and then one day you eat 2,000 extra, you break even. Right? And then you're surprised that you're not looking different. And so, like, remember, I came from this world. So, like, I have more charge around it because I've had thousands of client conversations around weight loss and fitness stuff. But no.

So I'm on TierT now. I've been on TIA since I was 28. I also had state records before I went on Tier Tate. And I was 235 pounds. And muscle and fitness wrote an article about me being natural when I was natural. And so I am no longer pure natty. I'm on TRT. I take 75 milligrams a week.

And that's right. Yeah. I mean, it's a low doses anyway. So there we go. For the record, for everyone's asking. Yeah. And when they tested it,

I think on TRT, I think my test after was like 900. Boom. So there you go. Now, the thing is just, now what do you do with that? Yeah,

exactly. Like, now what do you do with that? It just doesn't change. Yeah, no, I know. I know. I say this out of love for every, like,

person in the audience who asked that question. I say that because it's what does it change about your behavior? Nothing. And I was jacked his ship before this when I was 235 pounds, which is bigger than I am now when I was natural. I trained harder and I ate more. Fundamentals. Yeah. Yeah. Killer. One quick question about AI. And then I've got some guests that I want to bring on quickly. So just curious to hear your thoughts on the future of AI, specifically as it pertains to like the digital marketing industry and copywriting, as that's what audience does, right? So short to midterm, I always see AI as an advantage for

copyrighters, right? It's a tool that can help us with our output, idea generation, pump out first drafts a lot faster. But long term, let's say we do get to the stage where AI is able to write an entire book, build the whole sales funnel, write all the ads, film all the ads, publish everything done within an hour, right? What do you think happens to copywriters? Do you think the role of copyrighters transitions more into like prompt engineer, marketing engineer, or should we all just pivoted and run for the hills? Yeah, so I have thought about this a lot, and so I think that you just have to take things to the natural extreme,

which is when AI and robots can do everything that a human can do better than a human can do, then money won't matter. And so then it will be irrelevant. And then it will be purely based on what percentage of people have access to the smartest they are. And then who governs, who has access to that. So we'll get to a society, in my opinion, taking to its natural extreme where money will be irrelevant, and there will have to just become a new system.

Now, I don't know what that system is, but that's what would happen. Now, until that happens, we don't have a ton to worry about. As far as like, what will I change about my behavior tomorrow with knowing this? Right.

Well, there's always going to be arbitraged between people who know how to do something and people who don't. So people are like, oh, my God, like, copyrating AI. It's like, do you know how many small business owners don't even know what Chats dbt is? Zillions.

And even if they did that they don't know how to recognize good copy. And so, like, right now, chat, GPT writes code. What? I don't know how to do. Write code. Guess what else I also don't know how to do? See if the code it wrote was good. I don't know. And so what ends up happening in my opinion, at least in the short term, is that you can get a 10x increase in productivity because you can write at such a faster rate of code or copy or whatever because you have the perspective to make a judgment on how good it is. Right? And you can make adjustments and you can tweak the prompts and all that other stuff. And so short term, it's going to be people who know how to leverage AI to get more out of what they do. Long, long term, nothing's going to matter anyways. And so I think that sounds like an eventuality, but what is that going to affect about today? Not a lot. And just like any technology, use it your own advantage.

Do you think that we're going to reach a point of UBI where humans have effectively been replaced by AI? And then if so, then like what role do you think like humans will play if there's no need for us? You know what I mean? I would say it's above my pay grade. But I am, I am like I will continue to keep active. And I will say this other thing that might help the audience, which is like, if you're a competitive person, then you're going to have access to the same resource everyone else does. And as long as you're the type

person who continues to compete and continues to go above average, it's still you, like, realistically, you're not competing against AI. You're competing against humans. And so just like always, there's going to be resources. There's going to be tools. Then someone will have them better than others. And so you're still competing against people until eventually you're only competing against machines, in which case, all bets are off. And so, Until that point, the only controlable I have is to get better and to continue to compete. Well, we'll see what happens when we... Cool, man. That's been really, really helpful.

I just want to bring AJ on for a second. He's got a question about business and dating. Ah. Yeah. You can from spicy topic. Alex would have shown. Thanks for watching this. Alex.

He's a lot to the folks here. So my question is actually inspired Alex for your video on I. I.O. the tiger. Really strong video. and the trip thought of going all in, my question is, how do you juggle business and dating when you were single? I know you mentioned previously, you know,

when you did a millionaire, day when you broke, it's a human need, right? So I'm curious what the nuances here. I feel it's always been a cycle of focus and if it's as well, dating goes to shit. Do you have any frameworks

on advice run structuring, dating? Yeah, yeah. I would say there's seasons and I think you just got to give yourself grace around it. You know what I mean? Like if there were seasons where I wasn't actively looking for anyone

and people just walked into my life. And their seasons were, like, when I had my gyms, I had customers walking in every day. They knew people. Like, there was just more, I had more surface area of luck in terms of exposure of meeting people. Once I went to multiple locations, I was actually at my house all the time,

trying to manage all locations. I didn't really go to the locations as much, especially during, like, customer hours. And so then I had way fewer, like, exposure to girls. And so then I got on the apps and started going on dates and stuff. And so for me, I just made it work that during my lunch break was, when I would, you know, swipe and do my calls because I just worked at like leads. And so I would

just have the same two to three exchanges and then immediately say, hey, can I just give you a call? I'm on my way to lunch. We'll learn more about each other in a 10-minute phone call than we will on five days of texting. And four out of five times, they would say, sure, thank God. Somebody's actually taking control, blah, blah, blah, blah, hop on the phone, ask them, set script, like, what's your goal right now? You know, label them with a problem over their past experiences. And then, you know, open loop. Okay, cool. Well, that sounds interesting. Sounds like our goals are why. I think maybe will help you out. You know, how about we talk about this over drinks or whatever? And then if it just sounded like not a good date or person, I would just not do it.

And so my biggest, you know, hack was just how many dates I said no to after a five or 10 minute call rather than wasting two hours. Payed in full. Yeah. But that way, I had, I did my first update ever and I had a girl that I met and I was like, oh, you are horrible. I never, I just wish I could just disappear. I'd never want to talk to you again. And then I was like, I will never not have a conversation with somebody over the phone prior to a date. And so that's how I did it from that point on. Love that. One last question super quick. I'm sorry, Stephen Belize, but James, bring us home. Yo, can you hear me? Yep. Shoot. Alec. Lovely meet you. Massive inspiration. Love the event. Love the book. My question is, I have a e-commerce coaching company for beginners, and I'm in the process of doing the

research right now. I think I actually have a record-breaking for our industry success rate. So I'm growing that extremely quickly just on word of mouth and funnels alone. But my question for you is, the company is growing mainly because of me speaking and through ads and funnels. I'm the face of it. That said, when I get to a point where, say, around a million a month, I want to be in a position where I can create leaders for it. Other people in America, Europe, who become their own face like me for the company to help it grow that way, kind of like you did with gym launch. I was wondering what the process is to create leaders like that to grow a company. Okay, I'm going to give you three directions.

So direction one is you can scale via events as a big part of your delivery. So if you look at the biggest kind of education businesses that are in the space, so we're talking like nine-figure businesses, almost exclusively use events because scaling coaching teams is very difficult. So that's number one. Number two, like Jim Launch is obviously a very big company. What we did was we, because we were hyper-nitched, we could productize almost every part of the service.

And so that allowed me to take people who wouldn't otherwise be you or me or my face or whatever and still deliver the same level of value. That's the big problem is that the more generally are, the more impossible it becomes to standardize value creation. And that's the big advantage of niching down. So you have to productize it. The third kind of bucket here that you can do, or like the consideration is that you can then bring people on

if you think they are exceptional and basically have people who run P&Ls of kind of departments. So for example, at gym launch, we had an agency service, which was part of what we did for gyms. And so you can have someone who is in charge of that department, but it basically runs as a separate company. Now, it's under the umbrella and you cross-sell and all that kind of stuff, but you really bring a leader in who's exceptional and they get compensated off the P&L of that micro-business.

And so, like, if you look at Jeff Bezos with Amazon, Amazon is barely even a company. It's just a conglomeration of many, many, many, many businesses. And so he even calls his CEOs. That's what he calls them, even though they're just employees, but they still run their own books. They run their own profit and lost statements. And that way, you can incentivize them like owners. And so the key is to translate your question, it's like, how do I get people to act like owners in a business that they don't own? Genius.

So the answer is that you try and get as close to ownership compensation, at least in the manner that you attract them and compensate them as possible. Got it. Got it. Thank you so much. I'll look into those. All right. Appreciate you. Thank you, Miles.