The Game with Alex Hormozi - Money Making Advice You Needed to Know Yesterday | Ep 640

Episode Date: January 16, 2024

“You gotta learn how to sell and you gotta learn how to lead.” Today, Alex (@AlexHormozi) answers your questions and shares valuable insights on building viable and scalable business structures. Topics covered include focus, discipline, problem definition, key business skills, product value, team dynamics, business partnerships, and the use of technology. Strategies for enhancing brand power, attracting quality clients, handling volatile customers, and improving sales close-rates are also discussed.Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned on his path from $100M to $1B in net worth.Timestamps:(0:48) - How Do I Get Rich AF?(2:33) - What If You Had To Start Over?(3:51) - Three Most Important Skills To Develop?(5:44) - How To Balance Freedom and Discipline(7:26) - What Advice Would You Give To Your Younger Self?(8:30) - Best Leila Story(11:14) - Biggest takeaway from writing $100M Offers + Leads(13:45) - Do you like book summaries?(14:26) - Can you scale my business?(18:08) - Difference between Skills and Meta-skills(21:47) - How would you fix the education system?(25:50) - How do you choose what to learn?(28:04) - Takeaways from Branding Education(33:54) - Deleting vs. Solving problems(35:41) - How to price premium services?(39:36) - What does a great accounting firm look like to you?(43:14) - How much should I learn before hiring for a role?(45:30) - How to fix operations?(47:56) - What should agency owners avoid?(49:20) - How do agencies become irreplaceable?(52:52) - How do I deal with a needy client?(56:29) - How do I stand out?(58:39) - Should we franchise?(01:02:59) - Where do you find knowledgeable people?(01:04:24) - Should we do group selling?(01:07:20) - How do I build trust in sales?(01:08:50) - Number 1 Reason Show Up Rates Change(01:12:29) - How to increase performance of setters and closers(01:14:43) - How to sell emerging tech(01:15:26) - What are the best A.I businesses you’ve seen?(01:19:32) - How to hire a good development teamFollow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

maintaining the discipline to be very focused about the problem that you're solving and who you're solving it for. And I think that solves 90% of the problems from a strategic perspective for any small business owner, including an agency. Welcome to the game where we talk about how to sell more stuff to more people in more ways and build businesses worth owning. I'm trying to build a billion dollar thing with Acquisition.com. I always wished Bezos, Musk, and Buffett had documented their journey. So I'm doing it for the rest of us. Please share and enjoy. Why audience ask me questions for 10 hours and here are the best moments.

let's say my only goal was just to get rich a.F. What is rich A.F just so we define it? 100 million. Why not? It's a good number. You're willing to work hard, but you have limited skills and experience. What business would you start like right now in 2023? And I have no money, right? I would probably build a boring business and services. And I would probably pick something around the body. I wouldn't just start a design firm because I think that has a high likelihood of getting disrupted or, you know, in some way by AI. If I were, you know, it's as silly as it sounds, like a nail salon or a lawn care service, things that, I mean, especially body ones, uh, dentists 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, like this is my, like my data point around this, uh, there was a brand called Cocoa Fit. And, um, 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 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 a really cool concept. 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 to the gym. 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 to 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. I love the idea behind the core stuff that's going to be here forever, you know. Let's say hypothetically, the great fires of Las Vegas burn everything to the ground. Okay, 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?

No reputation. Yeah, it burns my reputation 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 like go make 100 grand 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 at scale for. So for example, if 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 can 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 of that. And so like when I lost everything, I immediately was able to make 100 grand the next month by doing that playbook. 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. Like in terms of maybe like hard skills

that someone should really focus on learning to develop that 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 your stuff, 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 aren't good and most people want to cancel very quickly and don't want to continue to use them, which is why very, 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.

Like 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 talent to continue to do this because quickly the business will bottleneck based on the founder and their expertise or usually they have a niche. They 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. the talent that will allow them to get to, you know, nine figures or whatever it is that the goal is. You mentioned on a recent podcast with Tom, Bill, you that you don't have rules. So I, for example, you know, I quite often end up working up until midnight, 2am, 3am, 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? It's, it's kind of 80-20. Like, if you

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 my, you know, I just, 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. If I were doing a more brute force work, then I would care less. You what I mean? If it was just like, if I was just 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 don't know what I mean? You're just, you're working the work. But when it comes to like writing or 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. So it's not about rules. It's more like which of these things has a highest likelihood of getting me the most. What's up, Christoph? In one podcast, you said that your most feared decision in life was to quit

your job when you were 22 or 23. My question is, what advice would you give to your younger self if you could in that exact situation? When you have nothing to lose, it also makes it the best time to make high-risk decisions because you have a disproportionate upside. Not quitting if you want to do something else, like if you have this desire to do something else, is like not taking a stranger up on a free lottery ticket on the street. If they give you a free lottery ticket and you lose, you're back to not having anything. If you win, then your life changes forever. And so I think a lot of people place a disproportionate amount of weight on the opinions of other people who are going to judge them in the short term because quitting your job is short-term pain for long-term fulfillment, if that's what

you want to pursue, because the short-term pain comes from the judgment of others and likely a back step in income. But long-term, you're working on a thing that you want to be working on. Now, if you like your job, and that probably doesn't apply to those people, but like if you're in that situation, it's really a long-term short-term sacrifice, which a lot of people aren't able to make. The second question, let's think that my audience don't know anything about Lila, except that she's your partner. But I think she has exceptional knowledge and she's a really good personality. If you could only tell one story about her that makes a complete picture about her, what would it, what would it be? So Leila had quit her job to join me to start gym launch. This is when we were

doing turn around. So we're flying around the country. So she quit her job after knowing me for only a month and then started basically living with me in motel rooms. She had built up a book of business. So she was actually giving up something that she had spent two years building to pursue this thing with me and we were new. Like we had just started dating. About six months into that, I told her that I needed a break. And the, she actually asked me, she was like, it sounds like you don't really want me to be here, do you want me to leave. And I was like, yes, that would be great. I had just lost all the money from the partner. I had this location that I had to either shut down and had no cash to do it. And I had to service all these contracts that didn't have the money to service.

And I also had like three other businesses that I was trying to run at the same time at a chiropractor agency. I had my gyms. I had gym launched the turnaround business. I had a dental agency, all of those with different partners. And I was the one who did marketing sales for all of it. And so I was just so spread thin. And so she, I needed to generate money to basically pay the bills of the gym that I couldn't pay that the money had just gone out the door for. Right after me saying, I don't think we should be together, she had to leave like the next day to go to Hawaii to launch a gym for this guy that she's no longer dating, that she quit everything to leave. Tough situation that nine,

out of 10, not even nine, 99 out of 100 girls would have just said, no. They would have been like, I'm just going to go back home and, you know, try and get all my clients back. But she didn't do that. So she flew out to Hawaii. I didn't have enough money to give her like a nice place. And so, um, I had her split in Airbnb with five guys, five dudes and Lela. Not ideal. And so she worked out of the Airbnb and, well, realistically, she worked out of the gym most of the time and did the biggest launch that we'd ever done. And so like when my world was crumbling around me and I really needed her to come through, she stood tall. And she did it in a time that I probably didn't deserve that level of loyalty because I hadn't shown her any. And so she did that. And then I made enough money

from her launching that gym that I could pay off all the bills of the gym that was going under that I just lost all the money on to basically come out breaking even so that we could actually go back all in on gym launch and get rid of the other companies. Oh, man, I think I haven't heard this story before. What went through your mind? I can't really believe this and understand it. Well, when she did that, I wanted to be with her. She had extended me loyalty that I had not given her. There was probably a few defining moments in our relationship. That was the first big one. Thank you very much for sharing this. The next one is kind of basic question, but I'm really curious about the answer. What was your biggest takeaway of writing 100 million offers and also 100 million leads? The offer is a strategic question that

influences all aspects of the business and is also a mental exercise that people can feel like they're making progress on their offer a lot faster. Leads is a lot more about activity and implementation. And so people can get ideas from like the lead magnet chapter, but then you have to start reaching out to people posting content or running ads to start getting leads in the door, right? And so there's a little bit bigger of a hurdle with leads than there is offers, but it's also the main driver of business is letting people know about your stuff. And so I think that many people will mentally masturbate to the idea of making these amazing offers, but I think former people make money by actually letting people know about their stuff, which is leads. What went through your mind when

you rewrote it for the 18th or 19th time? So unless I can work once and have something provide value on an ongoing basis, which is a high leverage activity, then it makes no sense. I think most people shouldn't write books because the amount of work it takes to make a great book that actually lasts the test of time is extremely difficult. I think I read, uh, I read, a blog post where they said how to write a blockbuster blog post. And there was a chart where they said if you put in like a hundred hours to write only one blog post, there maybe will be a million views. But if you put like 50 hours, there maybe will be just 10,000 views. It's exactly that. There's diminishing marginal return, but an increase, an exponential increase in absolute returns.

You know, the gold medal sprinter in the Olympics versus the silver medalist. Like from a business context, the person who's at the gold medalist might have worked 10 times more, right, to get this much more out. But what's the difference in absolute of gold versus silver, everything? Just being this much better, people are like, well, I don't want to work 50 more hours to be this much better. But being this much better might make you the best at that, whatever the blog post is, or that business or that solution. And the amount of winner takes all the economy has shifted towards, people want the lowest risk solution. And so if you have the best solution, then it is the lowest risk thing to buy. And so to be number one versus number two, 80% of the economics, sometimes 90%

of the economics, go to number one. And so it makes absolute sense to work 10 times harder, even though you might only be this much better from a marginal perspective on the chart of rankings, that might make you 10 times higher. Some context. We have like a book summary application where we give also exercises and tips to implement the book. What's your average take on books and, I mean, book summaries? Is it good? Did you use them before? I don't read many book summaries. Mostly because you rely on the person who's doing the summarizing

to find what they think is the most viable thing for you, right? Because a lot of times what I find, if I read a book, the nuggets that I find are not the main concepts. It's actually the details. If you don't know anything about a topic, then the summaries are great to give you a lattice or a framework to understand the rest of the information that you're going to consume.

but once you have a basic understanding, it's in the edges, which is where you can expand your knowledge, right? And so there's not a lot of shortcuts to getting really good at something. Now a bit of selfish question, but I'm really curious about your thinking. Yeah, yeah.

Okay, so you remember you had a video where you scaled a no-strip business to $50 million in six minutes. Could you do this with a book summary app? Basically do a breakdown of a book summary. So it's an application? Yeah, it's a subscription-based application. Yeah, got it.

What's the price point? $10. Okay, what's turn? I think 15 to 20 percent. Monthly or yearly? Monthly. Monthly. Got it. So you have to fix that first.

At the end of the day, everything's going to be cacted LTV. So if there was one single metric that I'm going to look at a business, it's cap to LTV ratio. So how much it costs to me to get somebody and how much do I make from them over the lifetime? Until that metric is better than the competition. So like Blinkist, right? I think that's one that's like that. I would have to look at their LTV and what are the things that they're doing that,

like, why are people going to come? the me versus them. Right. So either I have to be more niche in my selection of books so that I'll have a wider selection for a narrower audience. Like competing against Amazon is very tough. But if you, if you niche down into a specific topic, then you can actually have a wider selection because Blinkis is just going to take the best sellers, right, for every, every category, because that's going to be the most people. And they're VC backed and they're funded and they can acquire customers at a loss for a long period of time, acquire market share. And unless that's the game you're trying to play, then you have to play different, which is I want to be really specific about

the avatar that I want to go after. And so that's where you do a little bit of research ahead of time and say, okay, is there an underserved market that might actually, A, have a big reading preference. So like salespeople is one of the most common professions on planet Earth. From a personality perspective, how many sales guys read all the time? I don't know. I would have to look into that. And so you might be like, okay, well, sales guys aren't the guy, but maybe HR specialists read a ton. Okay, well, if they read a ton and there's, like Blinkist might have one book on HR. But I could put a hundred different things that are related to that or one degree separated. And then I can create the illusion of a wider selection of topics, but around a narrower,

an narrower avatar or concept, right? I would start there and then over time you can expand if you want to and just reach, you know, you go adjacent, you go to finance or you go to whatever. Like, this is me just spitballing again like I did the no strip thing. From the economics perspective, you have to get LTV to the point where like your churn should be under 3% in order to make this really work. Once it's under 3%, monthly, yeah, monthly. I mean, ideally you want to maintain 80% annually, at least.

If you want this thing to be a big thing, all of my attention would be only focused on that. Like, until you fix that, there's no point in acquiring customers because there's going to fall out the back end. Like, there's literally no point because then you're also getting lots of people in that will then say that thing sucks. You don't know what I'm not saying it sucks. But I'm just saying like, a friend of theirs is going to say, hey, I signed it for this thing. They're going to be like, oh, I tried. I didn't like it. And then they're like, oh, okay, maybe I won't stick on it.

I want to be so quiet about what I'm building until all my metrics are right. and then I want to blow the doors off. But most people want to keep hitting these income goals rather than looking at the metrics of the business that are actually going to drive the long-term goal. Because anyone can market their way to a hundred thousand or a million a month, even with an app like this.

If you blow enough money, enough people find out about it, you can do it, but then you can only maintain it as long as you're spending that much money. The moment your spend drops, your income drops, and that's not a business that I want to be a part of. Our USP is that we are doing, we are in Hungary, and we are doing it in Hungarian.

and there is no other application in Hungary. Okay, that's great. If we scale to maybe Poland, we would do it in Polish and not in English, and that's the USP. I like that. And I mean, then at that point, I would just look at, I tried model as closely as I possibly can, the number one player in the US from a UX perspective, from the selection of titles, all that kind of stuff.

And then I would see if my metrics change if I do that. If not, then it's like there's some assumption that I'm basing this business off of, that's not right. In the Denimir and a podcast, I think, you talked about, skills versus meta skills. Could you expand this maybe? A meta skill is a skill that helps you acquire more skills. Learning how to read is a meta skill. Like learning how to learn is a metaskill. With the broadest brush drug, all the way chunked up, learning to learn well quickly and retain information and be able to implement it is a skill. You give 100 people a course, right? That's free.

The differences in the people who are going to be successful and not successful are the ones who already have sufficient metas skills to be able to then use the information and implement it. like at one polar extreme, you've got somebody who's completely incompetent, right, who like, you have to teach them how to turn on a computer. And on the other extreme, I can say, go build me a company and the person can do it. So this person can translate a directive into each of the sub-buckets and knows how to do that. And so it's really like your success percentage basically is predetermined by how low you break down the skill requirements for someone to be successful. So like the reason that I write the books at the grade level that I do isn't so that people who are experts

don't get value from it, it's so that it makes it even easier for experts, and it makes it attainable for people who don't know. So I can get 70% of people who read the book to get leads versus 10% of people to get leads if I just cut out some of the steps and made assumptions about their skill level. The last 10 or 20%, the people who are still going to benefit from, I'm just also going to include, turn on your computer, here's how you do that. And from the software perspective, with what you're doing, that's also how you get a way larger percentage of your clients to activate. Typically, we make assumptions because we assume that every customer is just like us. And so they have the same meta skills as us, and they have the same interpretation or perception

of the world and the U.S. And so that assumption isn't true. Like, all you have to do is, and I'm sure you've done this, like, you look at people scrolling on your app and you see the heat maps and you're like, why are they clicking that button? Because they have different skills and experiences that they're bringing to the table. And so then we just continue to accommodate it, break it down to the level that you could show it to a three-year-old and they would immediately know how to use it. Like the fact that babies learn how to use iPods is an indication of how we're

how simple they have made it to humans to use. And that's why they have such mass adoption. How will you teach someone how to learn? We already know how to learn. It's just that most people don't know how to teach. Everybody learns stuff all the time, right? If you touch a stove and it's hot and it and it burns you, you learn not to do it again. Like learning is is natural. Like we all learn. But people who want to teach a specific behavior don't know how to do it. And so it really just comes down to three things, which is what do I reward, what do I punish and what do I extinguish? right? So reward is you give a carrot right after someone does something, punishes you, you know, you zap them or you smack them after they do something, or extinguishes you do nothing,

right? So if your wife walks in and she got her, her nails painted neon orange and you don't like it, you might not want to punish her because that's probably going to have negative ramifications in the rest of your life. But you might extinguish it. So you might not say anything about the nails. Or you might say something different. She's like, do you like my nails? I might save something back like, I'm happy that you got what you want. What we're doing is what behavior are we training. And so if you think about teaching as training, I think it's a much more useful word to think through. Because at the end of the day, you have only taught someone if their behavior changes in the same context. As in, if I want you to say these words when the phone rings, if I say, cool, we're going to put you through this training.

And then the phone rings. And then you don't say the words, you have not learned. And I have not taught you. And so it's how many times can I simulate this experience, this stimulus, the context, so that I can have have them do the behavior I want within the context that's going to trigger it and then reward them immediately. And that's how you have a feedback loop that trains people to do something. So that is why the tricks in the application and the gamification and those stuff. How will you restructure the education system if you could? Yeah, sorry for this question. No, you're good. You're good. I would focus almost exclusively on meta skills,

teaching people how to learn, step one, and then teaching people the things that are the next level underneath, which is learning how to write, learning how to read, learning how to speak, learning how to do math. Like those are the building blocks of everything else that follows. And in the school of Alex or the school of Formosie, everyone passes only when you learn. There are only 100% and you continue to do it until you learn. Like the arbitrary division of grades along age is ridiculous to me. And I think if there were a lot more clarity around the goal, which is like, until you can read 10 pages out loud, without making a mistake, you do not move on. If you can do that in a day, fantastic. If it takes

you a year, okay, I don't judge you on that. It's just how long will it take you to learn the skill? So a good buddy of mine, Dr. Cashy, taught an autistic kid how to read. He couldn't stay still reading for more than one word at a time and then he would like have fits or whatever. And so he came to train the child on how to read with a bag of skittles. And so when the kid would read a word, he would give them a skittal. When he would read more words in a row than he ever had, like a record, he would give him two Skittles. So he rewarded the behavior and then he had big bonus rewards when he would unlock a new level. And so he kept doing that.

And within one afternoon, he had him reading a full page. What is the behavior that I want to reward? How can I reward more of it? Now, none of it was punishing. He didn't smack him when he messed up. When he read less, he still gave him one to reward him for the activity. And then when he read more, he gave him extra reward. As the kid becomes less full on Skittles and he's like, you know, sugar, he like, doesn't want any skills anymore.

The Skittles become a proxy for approval. and they work just the same. How do you know that when to punish, when to reward, or when to extinguish? We try very hard to almost exclusively reward, because punishment changes behavior faster. Reward changes behavior longer. It just takes longer to work. Right. Like if someone calls me Alex and I don't like that and I slap them and I say, never call me

that again, I might change their behavior really quickly. If I leave the room and someone else says walks in, they might say, I was talking to Alex because I'm not there to punish them. And so punishment only works as long as the source of punishment is there and the person doesn't get accustomed to the punishment because punishment itself becomes desensitized over time. And so to effectively punish someone, if you want to consistently punish, then you have to increase the intensity and variety of punishment over time because otherwise people get desensitized

to it. If you're always mean and yell at all of your employees, eventually they stop caring. So you have to increase the level of your threats, right? You then have to say, I'm going to fire you. I'm going to kill you, right? You have to make these threats increase because you increase the intensity and the variety of how you claim to punish them. Reward, you can reward long enough that you can then extend the gaps between reward to eventually you don't need a reward anymore. And people will continue to do the activity because they have always done it.

So it's the exact example with the Turkishi and the guy. Yeah. I would imagine if he was doing this over and over again, he'd prove the point. He's not like a full-time reading teacher. The concept is that he would read and then maybe the next time he'd, comes in, he gives him a mosquito every other time he reads. And the next time I'm at every third time. And the next time I'll be only when he hits a new record. If I can get the kid to read long enough that he actually starts to like the story, then the story starts reward in and of itself and then I can

move away. And then the kid reads without me. And so fundamentally, that's what you try to do when you train any activity is that most people who are experts at anything get rewarded from the activity itself. Because once you develop a level of mastery and the skill, you enjoy it because you're good at it. So I hope we will meet again and maybe speak longer. Thank you very much. Dude, I appreciate you, Christoph. Thank you so much. Thank you for inviting your community and hopefully your community got value from the event.

And hopefully they use the books and grow the economy and hungry and all get, you know, way, way better at whatever it is they're doing. You are incredibly committed to education and self-improvement. How do you select what you will pursue for education? There's so many possible topics. So what process do you go through to select what you're going to be educating yourself on? And how do you also select potentially someone to educate you on that topic? We do everything off the theory of constraints at appraisers.com, which is basically that a system will grow until it's constrained until its limit.

So it's kind of like the idea of the weakest link, right? So it's finding what the weakest link in the chain is where the constraint of the system is so that we can decontrain it and then grow to the next natural constraint. It's a very simplistic look, but it's extremely effective because it just cuts down all the noise until. So like if I had to pick one thing that is the big limitation of this business, what would it be? And so then we just get laser focused on solving that one problem, solve that problem, and then we move on to the next constraint. And if we solve their problem and the business doesn't grow, then we pick the wrong constraint. And so sometimes the constraint is your ability to judge what the constraint is, which is why,

you know, wisdom is one of the hardest things to earn, which comes from experience, right? Is that you're able to recognize patterns. And so for me right now, to answer the other part of the question, I'm focused on learning about brand stuff right now. So brand is my big topic that I've been diving really deep on brand and media. And I'll probably write a book on brand just from the findings that I have because I don't think there's many good books on brand because I could read you 20 different definitions of brand and branding and they all sound like cockermany.

And so coming up with an operationalized version of what that means so that it can actually be useful. And I try to learn this stuff so that I can use it. And then whatever I learn, I just pass it forward because branding for me, despite being now quote known for this or like an organic content guy, I won't even do this two years. Like this is brand new to me. Like I, you know, I have way more experience on the paid outside. That's what I did the last decade. And I, you know, people got to see a tiny taste of that when I was launching the book. But that's, that's the big thing is fighting out with the constraint of the businesses. And if you need to

chunk all the way up, it's if you want to grow a business, you have to sell more clients or make them worth more or decrease risk. Those are the, those are the things that are going to grow the value of a company. And so just simply asking the question, like, why do we not have 10, more customers or why are we not making 10 times more money and then figuring out what the answer that question is oftentimes is the constraint just because you're saying hey I'm I'm currently educating myself on on branding and that's fresh for you what would you say is like a major takeaway in terms of education for the topic of branding that you're just like I wish I would have maybe known this when I started to try to learn about this two years ago this is like a Pandora's box if I start

talking about it it might be like 10 minutes so I I can I can riff on it but like buckling audience. So if we look at the origins of what a brand is, right? Where do brands come from? Brand comes from you brand cattle, right? That was the original use of a brand. And so, why would you brand cattle? Because you want to change the behavior of people who look at the cattle. So if you have a cattle that doesn't have a brand and the cattle that does, the people were looking at it will behave differently. If the cow doesn't have a brand, I might take the cow for myself, or I might kill it, or I might eat it. I might do whatever. But if the cow has a brand on it and I know the guy, I might return the cow to him. Right. So it changes what I do.

All right, that's an important point. So the point of a brand is to change or elicit a desired behavior in the widest percentage of your target audience. Now, how do you do that? You do that by making associations between something they don't know your brand in the beginning with something that they do know that is positive and rewarding if that's what you want, right? And so the index, it's a four by four box of what brand really is. You have the direction. So you've got away from and towards. And then you've got strength. So very high and very low. So, you know, if you have a really weak thing that's away from, it's like, I kind of don't like this thing, you know, slow Wi-Fi, you know, like what I'm like bad brand. On the flip side, you might have

a political party, which depending on the audience, might be super strong and away from or towards. Now, Taylor Swift, for example, would be someone that I would say has a very strong brand and towards. There's not a lot of people who really hate Taylor Swift and a lot of people who really love Taylor Swift, right? So it's positive and it's strong, right? Somebody like Ray Roman. Mono, if you heard that, you know, or like Tim Allen from the old sitcom days, might be someone who is positive, but weak. A lot of people know who he is. Am I going to show up to his event? Probably not. The idea is that in order to build a brand, we simply pair things that people know with things that they don't know. The things they don't know is our logo, our tagline,

our company with things that they do know and think are positive. If you were to think about the brand as a bouquet of flowers, it's like having many flowers in a bouquet. And so if I were to break the bouquet and spread all the flowers, there is no bouquet. But simply by gathering them together, by making associations, I create something new. And that bundle of associations is the brand. Now, if I were to break one of the flowers or make it rotten, it would affect the appearance of the entire brand. And so that's why if you make a single mistake, a Dylan Mulvaney move for Bud Light, you can affect the entire brand. If I get a DUI or somebody you know gets, you know, accused of doing some sort of terrible heinous act, right?

It affects the entire brand. R. Kelly, bad brand now, right? Despite all as the positive, the one broken rose or the one rotten flower affects the entire bouquet. We have to be very deliberate about what associations we want to make with our own brand so that we can continue to positively associate ourselves. And the point of the brand is that we get a desired action or behavior from a specific audience. The idea of growing the brand a lot of times is that you sacrifice some,

audience for other audiences. So like when I was starting making content, I did it in my closet, right? And there were some hardcore people in the OG Mozy Media days that are like, I appreciate you. That were like, man, I miss the closet videos, right? Now, I might have lost some of those people when we started making a little bit more polished videos, et cetera, some people, not all. Right. I traded so I traded losing some audience to gain more. When you're making a brand move, you're basically always making a bet that you will gain more of your desired audience than you lose by making a change. And so you can approximate or slowly move a brand over time by making more associations in one direction and fewer associations in the other. And so that's how you can move a brand

over time. Bud Light made a wrong bet. They thought, and maybe this is just corporate group think, right, that if they made an association to Delam Levaney, that they were going to get more people to buy their beer. I mean, fundamentally, that's the only reason you would do it as a company, right? You believe that long term you get more people to buy your beer. The problem was, that wasn't true. Now, the interesting thing is that there probably are people who were a big fan of that move. It's just that there were more people who weren't. They were far away. Right.

There were more people who were not a fan of that move. And so that became an away from association. And so that is what I am trying to encapsulate and put together into how to brand. Because now that I feel like I understand it a little bit, I see it as, in my opinion, you know, it's kind of like Neo in the Matrix when he's talking to Morpheus and he says, so you're telling me that I can dodge bullets. Morpheus says, well, when you're ready, you won't have to. And so we learn all these tactics about sales and marketing and show up rates and CRO hacks and all this shit.

But if you have a brand, if you see the matrix, everyone shows up to your calls. No one has price objections. Everyone is excited and refers their friends. It just takes longer to make associations because fundamentally all branding is is teaching. You are teaching someone to do something. You want them to behave a certain way and you have this red, red card. And when you see red, it means stop. That's all we're doing.

So green lights have strong brands. They're positive. Everyone loves green lights. Right. Like it's a simple thing. Just no one owns it. But green lights are a great positive association. It's a great brand.

Right. And so that's the idea of what I'm kind of diving more into. And I see it as the ultimate sheet code for business. It just takes long time to do. And most people aren't patient. You're telling me I can dodge business problems. I'm telling you that once you have a brand, they become irrelevant. You talk about deleting problems as your favorite way of solving them.

Yes. How do you decide what's deletable versus what's not? Because I can imagine the person who really loves that strategy doing nothing and just deleting all problems. So how do you prioritize a problem worth solving versus a problem that is deletable? Well, it's just percentage likelihood of impact. Chunking all the way up to like, will this cost, me number of sales, like sales velocity, will this decrease the lifetime value of customers? And will this increase or decrease the likelihood that whatever I'm doing right now continues

to occur? So we're trying to value a company, right? We look at what's the sales velocity, how many customers they sell? What's the lifetime value of every customer? Because then you can extrapolate what their run rate's going to be at scale at max, unless we change something. And then you divide that by risk, which is how likely is it that there's going to be an outside event that's going to change this thing from continuing to occur? This box of making money, how like is that it will continue to grow or at least stay the same. And so if I have a problem, I have to be able to track it back to one of those three things. And if it doesn't really track to one of those three things, or there's another problem that has a much higher likelihood impact

in terms of it's higher likely and it has a greater effect size, then I'm going to prioritize that. It's just that oftentimes if someone's like, man, I really think we should change the colors on the site. I would just say like, what's the likelihood? Like I have been notorious for having ugliest shit sites, my entire career. And you can make branding, make associations. And I think there's there's an argument there but what's the likelihood that it's going to affect how many companies do a deal with us it hasn't up to this point and so is it a constraint of the business no is it something that i could improve absolutely there's also a hundred other things i can improve i could also send more emails which i don't do like there's lots of things i could do but what are

the few things or the one thing that matters most which then ladders back up to what is the constraint of the business if i look at the highest price competitor in my market and i one up them and then they won up me potentially. Like, is there ever a point in which we just say, like, we're priced premium enough or do we always have to go for the top? Like, how do you make the determination of premium? There's basically four positions in the market. You have luxury all the way at the top, which is technically a veblen good, which means when I increase the price, demand goes up. And that's because there's an association with the price that makes it more valuable. So the fact that everyone knows how expensive it is affects the value that I get from it. The fact that

everyone knows the Rolex is 100 grand, the one that I'm wearing, whatever, then I actually make the Rolex more valuable. So it becomes a virtuous cycle, which is why LVMH is one of the most valuable companies in the world. Then you have premium, which is basically the above average. So it's there you have to pair utility with the premium. In luxury, the extra price tag is the value. Whereas with premium, like BMW is premium. They're not luxury. They're a little bit better at a lot of stuff. And so you pay a premium because it is a little bit. They use better materials. It breaks less. Whatever. Right. And so then you have your, you know, your mid-term, your run of the mill, your commoditized space, which sucks. And then you have

your low-cost leaders, which they make their entire business on how can I drive efficiencies in operations at all levels of the business so that I can be the lowest priced person in the marketplace, right? And still make a profit. To route to your question of like, when is enough enough? the key indicator for me, and most of this, like the quote, higher ticket world, you're not luxury goods. The fact that it's expensive is not the reason that people want to buy it, right? So it's actually technically a premium. I'm more extremely about the price to value discrepancy than anything else. And a lot of people get into trouble because they raise the price so much that it's just an excess of the value they provide.

And so then they actually create a negative experience. Like if Chipotle were $50, people would probably not like Chipotle. even though the product is really good, but at $50, I don't know. And so the reason to believe is so viral, you know what I mean? It's like the price to value discrepancy is so good that they tell their friends, right? And so that's where this kind of marriage of how can I just short circuit people's brains from value perspective, which is what I try to do with the books and the courses, so that it becomes viral on its own. And then my cost dual car customers is zero.

And so then everything after that is just gravy. are the four variables when you're using this is you've got the price the value at the top which is what they get right the price is what they pay you've got your cost of goods to deliver and then you have your profit left over and so it's playing with those four variables so that you can maximize the the amount of absolute profit that the company makes pricing high has become shorthand and where i think people get a lot of benefit from the offers book is that when you price higher, you automatically weed out shitty customers. And I think many times that is the real reason that a lot of people's businesses grow from that price. Now, obviously, there's more profit. You have access things that you can deliver on.

But a lot of people don't actually take that excess money to create a better experience. They do a gotcha and then they never get anything from that customer again. And so that's the wrong way to use it. But if I had to think like, okay, what are the reasons that, you know, a company might be successful that does charge premium is that they actually, reinvest the premium price into a superior product, and they are very clear about the avatar that they go after and what the quantitative requirements are that are black and white that they know from looking at their best customers, their top 20, top 5% of customers, and then saying, we're only going to cater to these customers in the future because the likely that we can

give them a great outcome is higher. And then that can create, you know, you can merit or earn the premium that you have because you have data that supports that if you are this type of person, we can get you this type of result. What does the ideal experience with an accounting firm look like to you? And I asked because one of the things that stuck with me is you said, you've never done your own books. Like you've always considered that something that was delegatable, important to delegate. You've also referenced bringing, I believe, accountants in-house, kind of going back

and forth between outsource and in-house. So what does that ideal relationship look like to you now? And maybe what did that ideal relationship look like when you were going through your first, you know, seven figure and eight figure company. A lot of professional services should look at Wi-Fi for inspiration. You're like, what does that even mean? You don't, you don't want to like clap when the Wi-Fi is working. You just notice when it doesn't.

And so you just want it to be in the background. You just want it to work. Right. And so a lot of companies are like that. Like, there's a lot of services that people think they need to like over, you know, communicate stuff on. Like, I just want the financials to be accurate and I want them to be timely. That's it.

And I want things broken down in a way that allows me to, make business decisions. And that's where, like, I think the top tier of accountants transform into fractional CFO and CFO kind of materials where they actually help you use this data to make informed decisions about the business. Is there a way that I can translate what we do into how it would affect a business owner's life? So I'll tell you a little story because I think this might be really relevant. This will be really relevant for you guys. Moza Nation, real quick, if you are a business owner that has a big old business and wants to get to a much bigger business, $250 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 and you can apply anywhere on the page and talk to one of our team and see if we can help you get there. So one of our portfolio companies has had a ton of growth. Three years, they went from one location to, I think we're at 38 locations now, right? All self-funded, all of cash flow. All right. So really, really tremendous growth in three years. And it's compounding, so it's growing faster and faster. And when we were at about 30 locations, We were stuck at 30 locations for like two quarters. And so I got on the phone with the CEO and he was like, dude, I just, I just feel like I don't know how many locations I can open based on cash flow.

And because they had net receivables were a little bit extended, things like that, right? I like shook the screen for sick as it was a Zoom call. I was like, I need you to freeze frame this feeling you have right now. It was like, okay. I was like, think about this feeling you have. I was like, what you were feeling is finance as the constraint of your business. you do not have a finance function that is operationalized enough. Like you do not, like you are underdeveloped in the finance function.

You have a bookkeeper who's not that good. As soon as he, like, I could see, it just clicked. I was like, that is the constraint of the business. Until we get the finance function in, you're going to just be operating blind. And then once you know, we have this much cash flow, we can open two locations a month or three locations a month. Then you can be more aggressive with everything else

because you're confident that you're not bankrupting the company accidentally on your own. If I were an accounting firm, I would try and pinpoint the, problems and relate them to how it's going to affect growth in the business. Like, how is the constraint so that you can talk in the language that a business owner is going to understand. Like, they just, how many, I'll bet you, like, if I could see everyone's hands, how many people in your audience, all the business owner does is go to the right, go to the bottom and say, so we made more money this month? Great. And so I think adding that level of strategy of like, by the way, I think this is a little fat compared to other companies that we're looking at.

This is a little bit under compared to other companies we're looking at, and this might be an area of opportunity. Little things like that that actually add value to the business if I were somebody who is in charge of account. I'd like to get this answer in less than 60 seconds because I know we got to go and I want to be respectful of your time. This has been incredibly informative. How much of a skill should you develop or how much should you educate yourself before hiring for it? So for example, do I need to be a sales manager before hiring for sales management? What you hit at is one of the hardest parts of business. You need to make an informed decision without context,

which is why being an entrepreneur, you end up becoming a jack of all trades so that you can have enough context to make at least an informed decision. And so I'm going to steal a playbook out of, oops, wrong shoulder, there we go, out of Layla's book here, and I'll give you my tactic on this, which is you want to interview for people who are sales managers. and you don't want to hire anyone for a little bit, which sounds tough. But what you want to do is you basically want to interview for information.

Now, if you meet a gold star that's amazing, but you want to talk to people. And if you know more about it than they do, they should be teaching you. And once you talk to 10, 20 people, they're basically like expert interviews for what it should look like. And so then you get a very good idea of what the role should look like after listening to people. And you'll get an understanding of the level of nuance. And I'll give you this one little tidbit that is super powerful when it comes to judging skill. The quality and quantity of data that someone chooses to collect around their particular department is almost directly proportional to their skill. And so, for example, I have lots of marketers who are like, I'm in a mate, my product's amazing.

And I say, cool, tell me your metrics. I was like, what's time to value? Right. What are the key activation points? Like, what's churn? Right. Like just some of these metrics and they're like, well, dude, our refund rate's really low. Right, but I'm like, okay, I was like, well, what about the marketing side?

They're like, well, CPMs are this. This is our click through rates. This is our conversion on the page. This is our percentage to schedule. There's our percentage to show. This is a percentage of open rate. This is percentage. Like, they go through all this stuff and I'm like, right.

So I can see very clearly that you're a better marketer than you are product. And so simply getting an idea of the quality and quantity of the data that someone collects around their department, like when we hired our director of people, it was the first time that I had someone actually tell me metrics. I'd never heard of. And I was like, she's the lady. She's the gal. My community loves you and that's how we are here. And I literally got like 150 questions.

I had to narrow it down to five or six. It was so hard. You mentioned something in the $100 million offer that to hit your first 100K, you don't need a lot. You just need an offer to sell. And that's exactly what we did. But right now we are hitting a bottleneck. And our biggest bottleneck is operations.

And I want to know how exactly you got out of gym launch operations. because we have a very similar business model for service providers. For what service providers? Mostly agencies and digital consultants with lead generation and sales. The way we do it is with a one-on-one consulting and in a group coaching format. So coaching models in general tend to be very difficult to scale because the reason people come to use for expertise. In order to get other people to provide that expertise, then you have to create lots

of experts who then eventually walk off and start the business on your behalf and take your customers with them. I would say there's a couple different approaches. So the first is that there's the law firm and the McKinsey kind of consulting model. There's a track to become a partner in the business. And then that's kind of the whole business structure. So there's a way to share in the profits. They do make lots of money.

But the owners of those end up having to dilute themselves out. Not that there's anything wrong with that. You can make lots of money doing it. But that is a version of the model. The other way is to productize the basically get narrower on the solution that you're providing and productize it to the greatest degree possible so that anyone could do it even if they have no knowledge of it in terms of like the implementation of the thing. That is more the direction that we went with gym launch because we had a very specific,

we don't even, we didn't even work with all gyms just to show how narrow we were with it. We worked with only micro gym owners. We have now expanded to health clubs as well. The five or six years that I was doing it before we sold, we were only microjims. And so just to show like how incredibly narrow that was, someone had to have at least 30 members, assigned lease, one employee, and be running this type of model for them to be a customer. and then if they fit all those things, we could generate a lot of revenue using our playbooks. I could have somebody who had no gym industry, no expertise whatsoever, and still say,

send this email, say these words, here's 10 recordings of people doing this exact same thing. This is the expected value. And so that's like from the delivery perspective. Now, operating the business overall comes from talent and being able to find people who are just smarter, smarter than you. And people say that, but like when you actually meet somebody who's smarter than you and then they admire an aspect of what you've done so that they start to work for you, that's where you really start to have the magic happen. What are some of the things that agency owners should avoid doing if they ever want to scale any experience?

Okay. So what things should an agency owner avoid when they're trying to scale? Yep. Yep. I mean, the same things that any business owner would want to avoid when they're scaling. Agencies tend to fall into the, you know, they tend to fall into the bucket of trying to be everything to everyone. So maintaining the discipline to be very focused about the problem that you're solving and who you're

solving it for. And I think that solves 90% of the problems from a strategic perspective. perspective for any small business owner, including an agency. The second piece is that if you're in a service-based business, the quality of your talent is going to be directly proportional to your growth because you're basically selling fractionalized people. That's what service businesses are. You're selling some level of training that you're able to give and having more efficiency than an individual business owner would have. Like the classic, you know, small business owner or lead gen agency that charges $2,000 a month. The idea is that if they were to hire somebody

full-time to run these ads, it would cost them $5,000 for $6,000 a month, but you have copyrighters, designers, and media buyers and page designers who all work a fraction of their time for this one business, and they can get it more efficiently, and you can still do it at good margins, right? Like, that's fundamentally what services are. And so the quality of that talent and the culture that you have at the business to attract and keep that talent are the kind of the key or the crucial pieces of the success of the model. You mentioned something in the book where you mentioned the agency model where you hire an agency to learn the stuff and you internalize it and then when you have stopped learning, you replace

an agency. But reaching agency models, agency businesses, how to become irreplaceable? In your perspective, how should one go there? Should we start with one business, then upsell the next and upsell the next and upsell the next offer? Creating the irresistible offer isn't necessarily about having a zillion products. It's more about explaining and communicating. the many small things that you have to do anyways. And so rather than saying, like, I'm going to generate leads for you, that's like one outcome.

But there's many things that have to happen along the way. You have to create landing pages. You have to write copy. You have to have to have follow-up sequences. You have to work the leads. You have to have scheduling. You have to, you know, they have to split test. You have to make new creative.

Like, there's lots of things that have to happen in order to just get the single result. And it's just making sure that we're delineating those things because an unbeknownst or an ignorant business owner, I say ignorant in the technical sense, like they just don't know, would have no idea what you're doing. You're like, yeah, just go get me leads. It's like, well, it's much easier said than none. And if I was doing it from an outbound perspective, it might be like, well, I have to warm up domains. I have to, you know, spin up different accounts.

I have to split test different email openers. I have to split, like, you have to explain all the steps. And they're like, wow, there's a lot more work that goes into this. Now I can appropriately value this price tag that you described to whatever the service is. So that's piece one. In order to be irreplaceable, oftentimes, you'd have to go after significantly bigger customers. If you're an agency for Fortune 100 companies, it would be so costly for them to spin up at scale the of talent that's required to do like programmatic media buys across 100 different platforms

in different countries. And then the likelihood that they want to leave or do this on their own is significantly lower. The idea that any service provider is going to become truly replaceable, like any business can do anything on their own. And I would prefer to put myself out of business and do it in a way that aligns my customers with me than have a model that I know is basically has a timer for obsolescence. Not everybody works with Fortune 500 companies, right? Most emce. Many people, They might work with, you know, small and medium businesses. They help them.

Let's say you become a marketing agency for chiropractors and you work. You become so good at that. In general, people won't leave you because they're just good at that particular service. And the thing is the small business owners are really tough because they're the problem. Like they're super erratic. They're super volatile. Their cash flows lumpy. They don't know where their next paycheck's going to come from.

And to no fault of your own, they can cancel because they just can't make payroll that month. Look at the biggest agencies that exist. Ogilvy. You have Vayner is up there now. Who do they service? massive companies. Why? Because the quality of the customers are higher. And so they know that when they sign a contract, they actually stick with the contract. We all know that if you have a small business owner who signs a 12-month agreement for agency services, he's good for three months.

The biggest model that I've seen for small business owners from a marketing perspective was an agency that was running $300 a month. $300 a month price point because they had figured out and like there's a key here is that like those business owners are so price sensitive. It's not whether you can sell them. It's whether you can keep them on their worst month. The price isn't based on the value that you can deliver on the best month, but how much you can keep on the worst month? Because that's where the turn comes in. The best model that I saw was doing SEO for small business owners, and they had completely automated every aspect of it. It was basically just a playbook. And I think it generated reviews and maybe a couple phone calls a month. But at a $300 month price point, if they got one or

two phone calls a month, it was worth it. So the bar to get over to ascribe value, and especially on something that I call like a nuisance business, where it's like, I know I should be maintaining my reputation. know I should be doing some of this stuff. Okay, for $2 or $300 a month, I don't feel guilty about not doing it because this is being handled. We're in a consulting model, right? What happens is some clients actually do the work and they get results. And some clients, they need a lot of follow-ups and they need a lot of accountability from you.

How do you maintain that? Like I know I'm getting very nitty-gritty into this, but I do. I'm good with nitty-gritty. You talk to basically one of the core problems of all B-to-B businesses, which is that you end up taking over the person's entire business until eventually they're like, yeah, if you could just send me a check every month. and you do you run the business that would be awesome that's why being very disciplined about problem definition from the services that you provide number one and here's the one that everyone messes up

who you pick it's not like even if you work with chiropractors right as that as that example you don't necessarily even want to work with all chiropractors you look at the customers that you have right now that are the best customers like the top 20 percent or the top 10 percent you say okay what characteristics do these people have that other people don't have in my client list and that's both from the soft perspective or the quantitative differences they have a certain size business they're over a certain amount of They have a number of locations. They have a certain amount of employees, number of customers. Like, you just get all that data on them.

And then also, what was the experience that they went through when working with me and was it different than some of my other customers? Because one of the things that happens oftentimes is that the first few customers you get become really sticky. And then you start scaling. And then you have this front revolving door, but you still have your core business of these people that you had in the beginning. Right.

So why is that? Because these people got more help from you and actually got delivered more value. And then you basically tried to scale without scale. the value that you delivered to the original customers, right? And so if you're at whatever, 15,000 a month and you've got five customers and they're all like having a great experience and you keep signing people on and they keep leaving, it's like, okay, well, instead of me trying to sell five this month, why don't I just sell one and do a great job and then not lose them? And like, that's the key to compounding in a service business once you pay down the

inefficiencies of them not knowing what to do yet and being very specific about who you serve and who you don't. Like we didn't work with personal trainers. Cycling studios and like yoga studios, 100% could use our model. We didn't work with them because the founders tended to be psychologically different. Their adherence was super low because they just come from a totally different worldview than the guys who were more fitness, weight loss, transformation focused, even though at the end of the day, it's just a membership with a back room where people work out. But mindset-wise, they had a very hard time kind of adopting a different model, even though monetarily, it totally made sense, which means you need to have discipline to say no.

Dude, this is so hard to say no to this new upcoming business because you know they can help them, but they just don't fit your criteria. 100%. I have 13 companies. I get 1,800 a day who reach out. Right. So you have to say no. It feels weird to like say no because a lot of the time I get. So we specifically go.

That's why most people stay poor. They can't say no. And what happens is you go for the short term money and you sacrifice the long term money because then you just get in this operational rat race. And then you scale up your costs to meet the fact that you took on all the. these customers that you shouldn't have taken on to begin with. And then you have to pay them every single month. So then you have to keep on taking on customers that you shouldn't have taken on to begin with. And you get in this vicious cycle that you can't get out.

Until you downsize, you take two steps back, five steps back, fix your ego and then say, I'm only working with these are the ones that I have the highest likely to success with. Everyone else, I have mediocre success. And I can say it's their fault. I can say it's my fault. It doesn't really matter. All that I know is that the likelihood that they achieve what I think they should achieve is low, period.

So I'm not going to sell them. I'm not going to sell them. Aren't you afraid that the tam will go smaller? Of course. You can build a niche, an inch wide, and a mile deep. There's 30 million small businesses. You don't need to service them. Like, there's 50,000 gyms that fit the model that we have.

Now, if you want to build a $10 billion company, then yeah, you're going to have to go after a bigger problem. But if you want to build a nine-figure company, you can do that in almost any industry. So you mentioned that when you started out, you started with the first five customer framework. That was awesome. And then you just grew with referrals. So this question came from a fitness consultant herself.

And she said that with the competition that the fitness market is, how do you stand out? Honestly, it's just being authentic. 99% of the fitness market just looks at what other influence are doing and say, I'll just copy that and I'll do stuff like that. But then you just do a worse version of what somebody's already doing. Zooming all the way out, fitness, like there's no secret. Work out more. Stop eating shitty.

You'll look better over a longer time horizon. Like that's what it is, right? There's going to be a subset of an audience that is like you, genuinely. and they want to get their, they could get fitness information from Alex, but if I'm a, you know, a 45-year-old Indian mother, I'm probably not going to be her source for fitness information, even if I see the identical stuff as another 45-year-old Indian mother. Now, if that 45-year-old any mother looks at my fitness content and tries to make content like mine, it's going to seem weird. You can stick out by actually being yourself. I know it sounds trite, but the real, like,

this is real. There are so many unique aspects of someone's life and the things they're interested in compared to other people, that if you just lean into those differences, those unique, the things that you're actually into, that are weird, right? Rogan's into aliens and mushrooms and comedy and fighting. Who would have told him, like, you should be Joe Rogan? And you're going to have people who like some aspects, and then the super fans will be people who overlap on two or three of the interests that you have. If you picked my brand to be like dessert, working out, philosophy, business, marketing, sales, they're people who follow me because they only like the business and money stuff. There are people who follow me because they only like the philosophy stuff.

They're people who follow me because they just think the desserts and calves stuff is funny. It just depends on what someone's going to come in for. But if you're just you, then you can stick with it for the long term and that's what's going to build over time. And make you, quote, stand out because there is only one version of you that's lived your life. So just live it publicly. Thanks a lot, man. I think we are at the end of our tenure. Thank you very much for being here and keep writing great books.

I hope you make so much money from the book. and just and crush it because at the end of the day, there's more problems than any one person can solve and I hope we build businesses to solve them. So explain to me how the franchise works. Yeah. So we have a lot of clients that want to work with us and we have a lot of closers that want to work with us. And Yovina and I, we just can't manage everything ourselves. It's just too many people. We had two options. Option number one is place managers to replace us, right? And then give like two to three accounts, client accounts to each manager so they can manage them obviously and we can scale that way. The problem with that was that managers only get paid so much and they only care so much about the business itself, right?

But when it comes to partners, they get 50% cut. They get exactly what we are getting 50-50. The franchise thing is interesting because I feel like you would be able to achieve that simply with a profit share rather than getting investment and equity and all like the, because if speed is the goal, then you can basically do the makeshift in terms of because like they're, I'm assuming many of them aren't planning on selling, right? And so the only reason the equity would be valuable is if they're going to sell it sometime in the future. And buying, quote, more locations isn't really a thing either. I would imagine that just like it'd be a lot faster, just contract, you know, basically put legal language around getting a profit share in the structure, you know, the cut that you have, like many companies have scaled sales orgs. You know what I mean? Like insurance brokerages are just massive sales orgs.

Like real estate agents are massive sales orgs. And so they don't necessarily have equity. You don't mean equity deals because those can just get litigious and there's lawyers and just take, I'm sure you guys have already seen this. It just takes more time. And I feel like there might be, like you could probably remove a couple of components to get the same behavior, which is ultimately what you're trying to do is get people who act like owners. So that's just, that's me just shooting right off the cuff of just looking at it.

So that's kind of why we kind of came up with the franchise model to put like a nice barrier there. So it's for people who like have the experience in the space of running an agency or like scaling, managing high ticket sales teams. But now you're getting like the infrastructure that we've kind of built over the past four years. I mean, you can still do all that without the franchise agreement. But what problem are you solving?

Why are you not bigger? It's a management problem just in general. We're bringing on more partners and doing it faster and doing it more in a more organized way. So what you said, it does make sense because that will remove some friction and it would allow us to bring more people without risking, you know, the equity in any way. I mean, based on the model you have, you guys can own 100% of the, you know, like the franchisor. But even if it was just like, you know, the main co, you can still have streams, because you have the soft. So tracking becomes the issue, but since you already have that infrastructure bill, the ability to just make sure that they get overrides.

Now, if you want to put a $10,000 buy-in or something just because you feel like that increases commitment levels, I mean, that's fine. But if you look at like a chick-fil-a, for example, are you familiar with their model? Yeah. Right. And so each location probably costs, I actually don't know the build-out cost, but I would imagine it costs at least a million, probably one and a half to build a location for chick-fil-a. And the operators put $10,000 in. And so it's more of a symbolic gesture than it is like them. actually contributing capital to whatever the thing is, but they actually don't own equity in the business. So they get a 50-50 profit share after a royalty that goes to Holdco. Just looking at what they've been able to build, it seems that that structure works without the equity in terms of

eliciting the behavior that you guys are going for. But from everything that you said, even right at the beginning, you were like, well, we needed something that was more scalable because obviously we had lots of people. There's many people who have scaled businesses with lots of people. And so it sounds like it's actually a talent deficit. Like you need to hide. hire somebody or bring someone who's a high level operator who has scaled a sales driven org. What's revenue right now? Revenue for the phone sales organization. Sure.

Well, every month is different around like $4 million right now. Per month. Is that GMV? So like gross sales volume and then you're getting whatever 20, 25% on that. Yeah. So you'd be looking at somebody who's scaled a sales org from, you know, 10 million to $100 million and who's really ops heavy. So you'd want somebody who looks like who's very, very leadership driven, not a systems person.

That's not the right person. You're looking for somebody who's who you admire. Take this way. I mean it, you need an adult, right? That's not a function of age. Just saying you need someone who has experience doing this. Because if I were looking at, like if I were going to go buy in, right, set of phone sales, the first thing I would do is hire an operator. Because right now, all the things that you've described have been people issues. So if I'm operating on the theory of constraint, which is what we do, I'd say, okay, well, then people issues seem to do the main problem for this business. So I'm going to hire somebody who has experience in this particular domain in a sales org who has gone from. from X to Z. A million dollar question. Where do you find such people? Well, you guys are sales guys, right? So it's outbound. Outbound is the easiest thing to do. You could also run ads, but the best people already have jobs. And I mean, you guys know this from your business, right? And so it would be outreach. Outreach is the easiest thing to do. Go to LinkedIn. And LinkedIn has so many tools now, like search for people who meet these, you know, these three or four job titles, probably like a like a senior vice president or a VP of sales, sales director might be a little too low, but probably a VP of sales or VP of sales ops, something like that.

Like you'll have to play with the title. It is kind of like an ad in advertising. Like you have to play to figure out when you get the right avatars on the phone. But as soon as you get to click, then you're like, okay, these are the types of people I want. And then you talk to as many as you can. And the limit test that I have for high level talent is that I should be learning from them on the phone call. So if I feel like I have to teach them stuff, they're not the right person. Like if they're teaching me things, which is also great because then you can keep taking notes and after 20 or 30 phone calls, you're like, okay, I have a very good idea of what excellent looks like and I can make a more educated decision on the type of person that I want.

But that person who's very operational should be a people-driven leader, especially in this type of work. For the second part of this call, we would like to just bring our partners to and just ask some sales question in general and learn from you. You know, with our model, do you believe that we should utilize group selling methods like webinars, seminars, seminars, events? That way we can compress the time frame we make money or just focus on one-to-one sales. I think it depends on the product as being sold. Usually products above $30,000. And that's why we're focusing on like one-to-one model right now. I think you can do.

So the way that I like building sales orgs is having repeated sales materials and then individualized. So like repeated sales materials are going to be like the VSls, the webinars, things like that. but you're not closing on those webinars. You're just qualifying and setting. And so I want sales guys to be doing as little information spewing as humanly possible and really being able to start the call with so you're ready to buy. And then yes or no and then work your way. So you have 60 minutes to close rather than, okay, great.

Now like discovery. Let me talk to you about how we might be able to help you. Because then sales guys get really tired of saying the exact same pitch. Then they sound like robots. Then they get zoned out because they're saying something. They're not listening. And so the talk ratios get way off. And so I prefer having as much of the standardized information sharing being done before the call so that the closers time can be maximized to closing rather than just like teaching.

But I wouldn't be trying to pitch 30K stuff directly to a payment page. I'd probably be pitching that to, you know, qualify or set calls. Yeah, that's how we're we're doing it right now. But we've seen some other people, they have like live webinars, you know, and they have the sales guys on the live webinars. And even though they're selling super high ticket offers, they try to like, do that communication slash information stage of the call, like just through the chat. And then once they show a level of interest, then they get them on the call. Well, they're using the webinar as the set. Correct. At the end of the day, there's a certain amount of information that someone needs to have

or a certain amount of exposure that they have to have to a brand or a product for them to, you know, make a buying decision. And so that can be a long set and then a short close. It can be a set webinar close. It can be a long webinar or then a close. Like, there's just a certain amount of selling. You know, the runway for the plane has to be a certain length. It doesn't really matter where you slice it. It just has like this is a amount that the majority of people need to have before making a purchasing decision. Now, some people might need less. And that's okay, because they probably got it beforehand from other things that they've consumed. So if you want to say, okay, how do I sell? I want to increase the likelihood that the highest percentage of people buy, then I want to create an experience that

the highest percentage people get all of the information that they need prior to the closing conversation. And so if you do a webinar as a big set thing, I mean, to me, that's the same. I mean, that's all the same. Like, if you run ads to webinar, ads to VSL, then they go to a scheduler. Or, you know, if you have a live call team where you have a number that becomes the CTA and then the call team's answering calls in real time. Operationally, I wouldn't upend my entire business because of just a slightly different way of doing it, because I think it's more happy to glad. As long as your throughput is good and you're, you know, like, you're making money and you're growing right now, I would, I don't know if that would be the constraint of the business. So like, I think the stuff that we were talking about earlier, like, that seems more of the constraint, then. and kind of the individual tactics, you know, in the example you gave. What's your method for building trust and credibility on a sales call in the fastest way possible? Like, what method, what approach do you often take for that? Well, I mean, brand matters more than anything, like right off the bat. And the vast majority of like the hard closing tactics and hard sales tactics have to exist in lieu of not having a brand. It's like we have to make up all this hard stuff.

It's kind of like in the matrix means like when you're good enough, you won't have to. Dodge bullets. Or like you're saying I can dodge bullets. It's like, well, when you're ready, you won't have to. So like the brand is when you're ready, you won't have to. But if you don't have that, which is the big thing that you should have. But if you don't have that, then it's the same things that you would normally do. You're going to try and find common ground, be relatable.

Like a lot of it just comes down to how well do you understand the avatar? Right. So I think a lot of sales teams under, underpreparer, by under understanding the avatar, the prospect and overeducate the product. Like if I understand what a 45 year old woman's suffering from, I can basically do the same sales call and at the end of the call say, I can pitch therapy, I could pitch, I could pitch weight loss, I could pitch a gym membership, I could pitch, you know, I could pick cleaning services. It doesn't really matter because if I understand the avatar really well, I'll be able to speak to her pains. And what you said is true. Like brand is extremely powerful. And with the clients that we take on

for our agency, do you recommend that we go for people of very strong brands and take that approach? Like that's the way to be the focus, right? Like, where's go for the brand and from there? Yeah, strong brand, strong product, for sure. Fair question, though. Yeah, relatability, common ground. What's been the number one reason you've seen showup rates increase or decrease? It's 100 golden babies, no silver bullets. So when we go into a company, we have something called a lead nurture checklist.

And so it's just like 17 things that we do. And each one of them adds like 2 to 5%. And so that's how we can get something from like 30, 40% short rates to 85% show rates. It's just doing a lot of little things. So I would not look for like the one trick. It's just like, okay, how quickly we're responding? How much information do we provide them beforehand? Are we providing a personalized video?

Like, can we give them a gift card for showing up that they can share our coffee with us? Like just how many different things can we add in to increase the likelihood that they show? Can we create an open loop between the set and the close that they're going to get information that they got their interest peaked? Is there a way that we can say that we're going to show them that we're going to do a certain amount of work on their behalf? Then we're going to give them the deliverable on the next call. Right. So they have a huge incentive. They have huge curiosity so that they would want to show up.

Like this is particularly true in insurance products. So like we have an insurance company. And so like we create personalized insurance plans. It's like, okay, well, how do we get more people to shop? But we don't want to send them the insurance plan that we're going to make them before the call. We just say, we'll explain it to you on the call. Yeah, we implement a lot of those tactics as well. Probably there's some stuff that you're doing that we currently don't have at the moment as well.

I don't know if it makes sense to share on this call. But you said those kind of like 17 things. Is it possibly maybe like send it to us? No. So, um. Oh, no. Sorry, man. All right.

Honestly, it really depends on what the business is. If we're looking at an insurance business versus a weight loss business, like, it's more applying a principle across. But that being said, the big one that's probably missing, like, it's usually the big obvious thing, which is we can always do the hundreds of little tactics, but you're trying to dodge bullets rather than, like, winning before you start, which is like, why do so few people trust you? Like, that's the big, that's the big, like, I see the matrix. And then everything else becomes irrelevant. So for Acquisers.com, our show rate on calls is nearly 100%. So if we call so, if we say, hey, we'd like to find out more about your business. Today is Tuesday.

Our next opening is Thursday of next week. So nine days from now, show rate's still 100%. Because of brand. We actually don't need to do any of those tactics. Now, we have those tactics so that we can help the companies that don't have those level of brands. But like, you want to stack the deck. You want to answer the question, why does no one trust me and solve that? Otherwise, you're always going to deal with these issues.

Like, do the fundamentals, for sure. But the big things that don't matter most is who you're choosing is your customers. So Vista, you guys heard of Vista private equity. So they're the biggest software private equity. They've got a gazillion dollars, whatever. The way that they look at a business is that they do a customer analysis. And so they look for the 80-20, right? They look for the 20% of customers that are worth more than everyone else.

And they then do a customer analysis and say, what do these 20% have that the other 80% don't? And then they exclusively look for customers that are that 20% and then they say no to everyone else. And so then what happens is if the sales velocity remains unchanged, they 5x the business. So sometimes you'll make more money just by saying no so that you can have the capacity to say yes to the few guys that matter more. And if you're not getting more of those people, then solving that problem rather than saying like, how do I keep getting, how do I polish a turd instead of going from that perspective just saying like maybe I just should not try to polish turds because it's still a turd.

Right. And like how do I get the people who are much better companies to be attracted to my business? And if you have a customer list that people aspire to be like, then you'll get more and more people. Like that's where that's like kind of the branding side for you guys, which is how can I, I associate with better quality brands so that other better quality brands realize that what we do is legit. You can try and optimize the shit out of something, but like usually it's the big obvious stuff and we don't look at the big obvious stuff because they're actually harder problems to solve and they take longer. But it's where the most values unlock. What's the ideal frequency

and the topics of coaching calls that would increase the overall performance of setters and closers? So I would say it's less about the topics of the calls and more about what you're training repeatedly and what you're rewarding. So sales is one of those really interesting businesses or like, you know, departments that you can see very clearly like you guys are probably seen different sales teams and they have very different cultures. And so it would be like, what are the cultures that create the highest performance? In our experience, you know, you can go on all on either extreme. You can have a very punishment driven culture, which is very individualistic. Or you can have a very team driven culture, which is typically reward based. What you want to reward

is adherence to the script, not closing. Like that's a huge shift for most sales teams. If you reward adherence to the script, then what happens is you get everyone to follow the script. Now, if they aren't closing, they need to change the script. But it's much easier to change the script once you've taught adherence than it is to have a bunch of lone wolves who do anything they can to close the deal, which then impacts your brand. So like a really simple tactic we did at one of our chains was we just said, cool, we'll give them five bucks if they follow the script. Whether they close the, now mind you, the tickets are smaller, right? It's just higher volume. We'll give them five bucks if they follow the script.

And if they close or they don't close, they get paid either way. You know what's interesting? The thing they're most curious about when they send their managers is do I get the five bucks for the adherence, even though they make three times more on the close. So we still give them benefits for closing. But they want to know whether they got the approval of the manager. Because the $5 actually matters less than the approval from the manager saying you did a good job. The $5 is more of a token. And it's a lot of sense. And if you can imagine, because everybody here is sold before. If you got on a call and you knew that you could get paid no matter what just for following the process, it takes some of the pressure off. Like think about, like you hop into the car, like, I'm just going to make sure that I get my bone. matter what on the adherence. But guess what happens when everybody hears to the script? You fucking close more. Because sales is one of the biggest issues where we have false positives, where someone goes rogue and then closes and basically gets reinforced for doing the wrong thing. And then they start doing the thing that they did that one time that worked and then it doesn't work over and over again. So they change the behavior. They learn the wrong thing. And so then you have to course correct. Right. That's why sales, like, it's all about adherence. And then we can be really

strategic about really making sure the script is beautiful and crisp and concise. And we just, and we just drill the team on adherence. The big topic I want to do is how to sell emerging tech. You don't sell emerging tech. It's selling the plane flight versus the vacation. If I could tell you that your financials would be absolutely accurate and updated in a real time, would you want that? How much would you be willing to pay compared to what you currently pay? A lot more. Great. What if I said I could do it for less than what you're currently paying? Are you interested? Great. This is what I need. The fact that I'm using AI is irrelevant. You just sell the outcome. and then you're not really...

Yeah, no one cares. AI is great for YouTube clickbait, but for sales, it's irrelevant. That was like one of the main tools and wanted to get a cut. What else you want to do for the next 16? You must be getting a ton of businesses, essentially some, a lot of AI businesses

that are coming across your desk right now at Atholition.com. What are the things that's making, sort of jumping out at you, and what are the sort of commonality between things that makes you really go, oh, well, that seems to have some kind of staying out. The best majority of AI businesses

that are looked at are dog shit. And so either they're not real, AI, which is 99% of them, they're basically just built on chat GPT, which is fine. There's nothing wrong with that, but I'm just like, let's not claim that we're creating AGI. On the other hand, it's people who have no business acumen. And so they're like, it's totally different. Like the normal laws of business don't apply. It's like they have always applied and they will always apply because they're just how business works, right? Those are the vast majority of people that I see in that. I do think that AI implementation for Main Street is an enormous

opportunity. So AIifying, if you will. And I don't. don't think, I think your first conclusion is right, which is being the custom guy is tough. You know what I mean? It's just it's all things to all people, which is nothing to no one. If I'm talking to the audience now, if you guys want to get into this world, what you want to do is look at an industry or an avatar that you understand well. And so one of the things that like Y Combinator and some of these great, like, you know, legendary investors look at is how much time a founder has suffered and lived through a problem. I can talk about breathing because I've had two know surgeries. I've been falling asleep on my hand since I was in eighth grade so that I could

breathe. So like I've lived with the problem for a long time and I've tried many different types of solutions. So I have tons of industry knowledge if I were to start a company like that. If you have a job right now or have had any type of job, you've worked in a business. That's a baseline of background knowledge that's difficult to just jump like even if you were a server at a restaurant for two years, you still will probably know more about restaurants than 99% of people who aren't in the restaurant industry. Like I don't know anything about how restaurants were because I just never really worked in one. You could probably be aware of because you now also have this understanding of what AI can do

to think, okay, there's a hundred problems in a restaurant. Is there one very specific problem that I can solve well and is very similar between restaurants? Because as soon as you get the point A to point B, you can create the clear value prop and you can message around that. Getting extremely specific, which is, I think what you were saying that you give the advice to, is super smart. And it makes the problem set really narrow to solve. So you can become an expert that's an inch wide and a mile deep.

They're the exact same thing. The reason that most people don't do that when they're starting out is because you don't have enough demand. You have so few leads that come to you that you're like, well, I mean, shit, I need to pay rent this month. And I only got four leads this month. And all four are completely different, but I need the money. And so I get it.

Re-deploy that cash into getting really concentrated on your marketing, which is what offers and leads is all about, so that you can find that specific avatar that you can over and over again repeat, which is also why referrals are so strong because if you do a good job, they will send you other people just like them. The question is, is yes, I can pick a niche to do this AI automation. I can build AI solutions and sort of targeted one, but what is the opportunity that I should target within the niche? And that comes down to either, A, as you said, industry experience that you already have, or sort of B, what we've said is finding some sort of partner within the industry. So we say you can either try to pay them for the time as a consultant

or you can just message enough people and say, hey, look, I'm looking to bring these kind solutions to the industry. Would you be willing on working on this with me? I need a little bit for your specific knowledge, but in exchange, I'll create this thing and you can refer it. You can basically have first dibs on sharing it to your network and you can make some money that way. Yeah, I definitely wouldn't do it as a consulting relationship. The thing that you're going to be selling is the product. And so having a consultant who's the one who's in charge of the primary value that you're driving is not a good idea. And so you'd want somebody who's long-term incentivized to continually improve the product, continue to innovate the product, see the things that

are coming around the corner to keep it up to day, make it better, make it stronger, etc. It really just comes down to how to have a normal business partnership. So all the normal rules of business apply and this person has some specific knowledge you don't have and you should ideally have specific knowledge they don't have. They should be asking the question like, why do I partner with the people in your community? If I'm an AI developer, right? If you're trying to figure out which of the problems to solve in an industry, it's just value created times ease of implementation.

That's the equation, which if you chunk it up, it's number of potential customers times gross profit per customer. If I have six different problems I could potentially solve, which one has way more people who have it, which one's easier to do, which one unlocks the most value. One thing that we're starting to see as us ourselves actually trying to build one of these AI automation agencies, now AI development company as well, is that by building a development team that is capable, what is your take and your experience with how important that development resources is? I mean, it's sure with your event, you must know, working with

developers can be a complete plan, but having them in-house and having a really good team to rely on as you shoot for those big opportunities can be key. What's your experience being like this and how important do you think that development resources, when you're not? you go for this bigger place? Very? Okay. I mean, we were thinking the same thing, so I was glad to know you agree on that. It's the product.

Like if you're in a service business, the quality of the people that you use to provide the service is the product. And so those people usually want to be compensated well because if they are really good, then the places that they're coming from will want to pay more to keep them. And so you have to give them a great place to work and a financial incentive or some upside that they get exposed to that they wouldn't otherwise. Like, you want them to feel like owners. And the best way to do that is for them to actually be owners. If you're trying to get on the cutting edge of technology,

then actually having the people who are good at that is the business. Well, it is a great resource to have a really killer marketing team under your belt. But the development side of things I tend to find, at least in our experience, has been a harder thing for us to create. Because we don't know it. Like, it's easier for you to do the marketing stuff because you're good at it. So you know if someone's full of shit on the interview. You just don't know if anyone's full of shit on the interview because you have no context.

The most important hire, which is why I say this, is you need a technical co-founder. You need somebody who has a real stake in making sure that the people were coming in are actually good. Not that you're checking a box and saying, hey, I have 14 people on my development team. Anybody in the true high-tech world knows that one amazing developer is more valuable than 100 B developers. This is the hardest part of business is hiring people who are really good at something without knowing the in-depth knowledge. And that's where, like, leveraging somebody who might not want to work for you that you do think is brilliant to at least interview or double check on how good they are is really valuable. That's where like building a network becomes important.

And getting even some tests like of aptitude for them to take so that you can at least get some sort of baseline. But it's all going to be about how skilled that person is. Because ideally if they were as good as you are at marketing, then you guys would probably have a really successful business. We've been fortunate enough to find that, find that magical sort of technical co-founder. So we're starting to get them really well compensated, both getting an equity as well. So we are off to the race.

completely changed our business. I can't even stress for anyone of you in here, that that key hire is just a complete game. I'm sure you've had it, Alex, in your business where you've just found that right person and it just completely changes. Thank you. All right. Appreciate you guys. Thank you. And appreciate the community. Thank you guys for showing up. Hopefully the book serves you guys well. Do you feel like in general, do you think that the, you think you brought as much value as you promised? I hope so. I try to answer the questions to the best of my ability and provide value. So.