The Game with Alex Hormozi - Million Dollar Lessons I Learned from my Wife | Ep 746

Episode Date: September 20, 2024

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 and will learn on his path from $100M to $1B in net worth.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

The quality of your business is directly proportional to the quality of the people you hire, which is directly proportional to your character and your ability to cast a clear vision and how they fit in it, not just how you accomplish your own goals. And so I would say early Alex was very much like, they're like, what's the mission of the business? And I was like, to make lots of money. That was the mission of the business. Make Alex rich.

And so she was like, no one wants to work for that. And she would look at me, she'd be like, I don't want to work for that. And I'd be like, fuck, fine. And so as I've tried to work on myself, and very transparently, since Layla joined me, Layla has exceptional character. And honestly, the internet will never know because only the people who work in our company can really know how great of a human being she is. And unfortunately, no one will believe me because I'm her husband and people think that I'm fluffing her.

So whatever. But you can judge the validity of that statement based on the quality of the people that we bring in because really wonderful people wouldn't work for people who sucked. And Layla is exceptional. And so because of that, I've been able to have people who work in my companies who are way above what I could probably attract to my own. And it's all been because of, honestly, her relentless drive in personal development. Like, she actually has done more personal development work than anyone I know and just continually trying to get better. I mean, one of the reasons that I married Layla early on, I said, and I told her this, it was like, in a word, I was like, you're just coachable.

She takes feedback. like she actually only requires one piece of feedback to make a permanent change. I haven't seen anyone like that in my life. Like I'll give you an example. Like when I am the very beginning of my relationship, like she would laugh at like a joke or something and she'd be like, oh, you're stupid. Like she'd say like that joke. And I think she did a couple times and I was just like, hey, probably my own thing.

I was like, but I don't like when you say that. From that day, she's never said it again. And it was something that was just like part of how she acted. And the number of examples that are like that where she can just immediately change. And she does that for everyone on the team. And so she acts that way to me, but she acts that way for everyone. And so because of that, people have nice things to say. They then refer their friends.

And so the thing is, like, the world's a lot smaller that people think it is, especially the higher up you go and especially the more talents people you get. Because like winners hang around winners. And so it's funny because like all the guys are on my media team who are like the high up dudes know the guys who are on high up media teams at all other places. And they all talk. and I know who's an asshole and is a dick to their team. And guess what happens when that guy is dissatisfied for a day?

He comes to my team because hopefully our guys are like, these guys are cool. We work hard, but we work hard because we want to. We want to do a good job. And so that culture has been because of the relentless effort Lela has done to work on herself so that she can translate that into her team, which then translates that outwards because if you think about building an asset, which is what a business is or what it should become if you want to create something of value, it's never about how much you can do. It's about how much you can organize everyone in a singular election, which is why I said

and cast a clear vision. Because sure, like on one level, if you're a great person, great, then you can attract great people. But great people will still only be there because there's an ambition component, which is, okay, you're cool. Got it. That's checkbox one. Checkbox two. I have a dream for my life.

Does my dream fit within yours? And so you have to cast a vision big enough that someone else's dream can fit inside of it. And so she also taught me that. And so the before and after of this was like Alex being kind of a dick, not being able to hold on to really high level talent because I didn't give enough feedback. I was too demanding without enough ability to coach someone on how they could satisfy demands. I basically just had a really high bar. And if you didn't meet it, I didn't want you. And that made for a lot of churn.

And so she came in with a completely different approach and was like, this is where we want to go. this will fit with your career. And these are the things that I'm going to invest in you to help you get your goals. And so she very much just sees, I genuinely think that Layla sees organization as a vehicle for personal development for everyone in the company. And the fact that we do business, I really genuinely think for her is secondary. There's an exceptional book on this by Patrick Lindsay called The Motiv. And she asked me to read it for like two years.

And I just didn't because I'm a wonderful husband. It's like 100 pages. I read it in 90 minutes before she woke up on. day. Like I literally sat down. It was like sitting on the counter. I was like, I'll read it. I read it covered, cover in one sitting. And she came in to like have coffee with me in the morning. And I just looked at her. I was like, I get it. I'm really sorry. And if like I highly recommend if you're a small business owner or you're an operator, if somebody actually runs your business, read the motive. I was the bad guy in the example. And it shows what it looks like to be a good

operator of a business. And it was literally the exact opposite of everything I did. Be fast to extend trust and be even faster to take it back. And so I tend to be the more trusting of the two of us. Remember, I'm the yes man. Basically, every partnership that I have done that has gone awry, Leila strongly voiced her opposition towards and I steamrolled her. As a total side note for dudes, I actually do think that women have a better judge of character.

And I actually think it's evolutionary. I don't think it's like a man-woman thing. Actually, it is a man-woman thing because it's evolutionary. That was the point. Is that if you think about early days, women had to, they could only really find one mate. And so they had to be excellent judges of character and intention. Like who here is going to be able to stay for several years and provide and all the stuff.

And so they had to really see through the lines and judge people's nuance and how they communicate and what their intention and values were. Guys, we have way lower stakes from an evolutionary perspective. Like we just want to spread the seat. So we just get really good at selling, which why guys tend to be better promoting in those roles. But not as good at judging because someone's like, oh, do you guys, why did you guys why did he say? I'm like, sure, he said he'd do it. Why wouldn't he do it? she's like, did you not see the flashing scam sign over his head that's just Vegas lighting to

being like, I'm a scam? And I was like, oh, shit. No, I didn't see that. And so the amount of mistakes, one that she's helped me avoid. But secondly, that Layla will still extend trust. And she does that. And I would say that this particular kind of quotarism is more about the team. So I was really fast to extend trust externally to vendors and partnerships and things like that, but really slow to extend internally. And I think she is that flipped, is that she's really slow to extend trust to people outside. But on the inside, if she's like, okay, if you passed all these walls, you're in now, like you're it, like you're on the team, and we will treat you like you are on the team. But if you give us reason to not trust you, we will take that back. And so

that is how I think she's kind of like protected the kingdom, if you want to say it that way, that I've learned a lot from her. And so I think it's the internal, external kind of dichotomy that was flipped between the two of us. And I think because she extends, people trust us back. And that was something like in my organizations that was just run by me earlier, I didn't trust anyone and no trust in me. So I'll give an example. So we went through a big fancy recruiting firm. We spent $140,000 to recruit one executive that was like an ex-microsoft person who was this really good tech guy or whatever because we wanted to invest in this technology in one of our companies. And so this is supposed to be a CTO, like a technical person. And so the first day,

the guy was late to two out of three meetings. And we're like, that's weird. And then the next day, he was also late again to multiple meetings on Zoom. And when we hopped on the phone, he said, I've had trouble figuring out Zoom. And she was like, you're a CTO. Like so for two reasons. One, you're an executive. Secondly, you're a technical executive.

And you're saying that you're having trouble with Zoom. And we let him go. And it was a bloodbath of a call, to be really honest with you. I was like, I quit my job. And some people are going to listen to this and be like, You guys are whatever. There was obviously other things that they had done and the way they had communicated and how they had gotten things back in the few days that they were with us.

So no, you don't have full context. Obviously. Anyways, point being, we made the decision because that person had given us reason not to trust them. Now, we had some suspicion that they had a consulting business in between. So they had left their previous role. They were consulting for a bunch of companies. And we said, hey, we want to make sure that you're all in on this when you come on. And so for us, if someone's really spotty with their schedule, being really private with their time, and then late to multiple things for no apparent reason, that would be an indicator that they're lying.

And so for that reason, we decided, hey, we gave you the trust up front, but I'm not going to wait for you to figure shit out because even if you do, I don't trust you. And so for that reason, we let them go. And so we will extend the trust immediately, full access. But if you give us reason not to, we don't wait for a second strike. Don't require three strikes to get someone out of your life. If someone shows you their colors, believe them the first time. This one I think Layla's fucking queen of. I tend to give second chances.

Again, this is more externally partners. This guy did this thing in the past. Maybe he was indicted for fraud. It was a misunderstanding. Layla's been just very adamant that like, if someone has a history of something, I don't want to be their come up story. Like, let someone else take that shot. I'll be after that.

Because there's enough people who have just crushed it and been awesome the whole time and haven't fucked anyone over. let's just work with them. And we've avoided a lot of calamity because the amount of times that I have done that and been burned is honestly the majority of the time, as ugly as that sounds. And I want to believe in redemption. And I do, I think, but I think I want to believe in it on someone else's dime. I'm just being a really, like, I'm just keeping it really real here. And I think a lot of that comes down to employees, partnerships vendors. That's why reference checks is like we do huge amounts, really deep background checks for the people who come to like work for us or people

that we do business with. And like, we have a full third party firm that does full background checks on anyone we even do business with, like just a vendor. Like we'll run background checks on everyone. And that might sound like crazy. But the thing is like, if you find out somebody's was a sex offender, you're like, eh, is it relative to business? No. Is it something about their character? Probably. Were they convicted? Were they not? I don't know, but there's enough drama that I would just rather not. And same thing. Like, did someone steal from like, we had, a business that we were looking and investing it. And there were three partners and two of them were now in jail and the other one isn't. The other one that isn't was trying to do business with us.

And I was like, huh, how do two people go to jail and one not? That's called singing to the feds. But the point was when we found that out, it's like, sure, I'm sure they had a story. They didn't technically get in trouble. Weird enough that two of their partners are in prison. If I have the option of that or just not that, I'll just not do that. And so this is just like, Sounds quote ruthless, but when I think about like Charlie Munger and Warren Buffett and the decisions they make, they're like, yeah, just don't do that one. Like just pick any of the other people that are out there. And don't worry, that person will screw someone else. Like, don't get a shot. So don't worry about it. It just doesn't have to be you. It'll just be old Alex.

Punishment only gets short-term obedience. Praise gets long-term loyalty. This is really interesting that took me a long time to figure out. So from human behavior perspective, punishes. Fades over time. And so let me give an example. So if you ever like drink too much one weekend, you wake up the next day and you're like hungover, you're like, I'm never going to drink again. And then the next weekend, you're out there partying. What happened is the punishment associated with the hangover faded, but the reward associated with getting drunk and partying stays the same. It's the same reason if you break up with somebody, months later, you think about the good times, but you forget about the bad times. You ever see them again. Then all of a sudden it all comes rushing back. You're like, oh my God, this person sucks. What was I thinking? Right? You remember it all because punishment fades reward. stays over time. And I'm going to get really real. I think the reason that people speak really nicely about people who've been dead for a long time is that that person has never had the ability to punish them anymore for a very long time. And they only remember the good things. All that's to say. In an organization, you can absolutely get someone to do whatever you want if you punish them. Like, if I hold a gun as somebody's head, that's a threat of punishment, you can get them to adhere

for the most part. But the moment you remove the punishment, you remove the threat, they behave exactly the way they were going to before. But if you reward, they will always want to have that reward, and it does not fade. And so if you want the team to continue to act the same way when you are not there, then using reward rather than punishment is a better long-term strategy. The problem is, and this is what confounds everything, is that you can get way faster results with punishment. And so you have to be more patient and more willing to continue to invest in people when they mess up, not get angry, and continue to only reward the good thing so that you orient their behavior in that way. But then you have a longer on-ramp, but then they are way more self-sufficient long-term.

So you get higher returns on an employee by investing longer in the short term, so you get better long-term rewards. Whereas punishment, you can change their behavior quickly, but you always have to keep punishment and you also have to increase your punishment. So if you're the type of boss who just always yells the same way, eventually people get immune to it. And so you actually have to increase the intensity and variety of punishment in order to keep it effective. Just getting into behavior stuff. And that sounds like a terrible way to live. And so from her, I have seen her just use reward. She just doles out reward in such a strategic, like she's surgical in how she can pinpoint how to give reward at the right time for the right people for the right activities and orient the organization so quickly towards the cookies or nuggets that she puts out that everyone just gets excited. And she does it to me too because, hey, I like to being reward too. And so the thing about human behavior is that even if you understand it, it still works. I'll give you a really micro example. So we had someone on our

team who we always really enjoyed filming with. And we wanted to put that person in charge of the whole department. And we're like, okay, well, how do we get someone else to be just as good at filming with us? And so we were like, okay, well, we can't just tell people like, be good at filming. We're like, what is it about that person that makes them so good to film with? And what we realized when we broke it down one of the things is that like when we were talking, they would nod along. They were listening to what we were saying. And so for you, you're just a camera right now, but you're watching this as a person. But for me, I'm just looking at a camera.

And so having someone behind who's like giving me feedback in real time created a short reinforcement or reward loop that made it more enjoyable. And so for us, identifying that little loop made the whole thing more enjoyable. And so in all aspects of business, there are these little short reward loops that we can identify and then get really tactical good about them and incentivize those things. And now when we bring someone in, they know that there's three, four, five, six activities that somebody who behind a camera has to do that makes them excellent behind a camera. And then we can on-ramp people and reward them for those activities because those activities reward the person who's doing the recording. And then that becomes the virtuous cycle of reward. And that becomes really fun and profitable.