The Game with Alex Hormozi - Most Business Owners Have a Focus Problem | Ep 717

Episode Date: July 12, 2024

"Your lack of ability to make decisions will kill you." In this episode, which was originally delivered to an audience at an Acquisition.com Scaling Workshop, Alex (@AlexHormozi) shares a lesson that he's had to learn repeatedly - focus. A lack of ability to focus is the Kryptonite to many entrepreneurs, and chasing shiny objects will keep your business smaller than almost anything else. Paradoxically, leaning into new opportunities is what got many first time entrepreneurs their first success, but focus is what will take you to $10M, $100M, and beyond.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:(0:09) My Business Backstory / How I Learned The Importance of Focus(2:40) You Have To Learn To Say “No” / My Definition of Focus / What Focus Means / What Is Focus?(3:42) Justine Musk Quote(4:25) $B Opportunities(5:22) Steve Jobs Quote / The Juicy “No’s”(7:02) The Greatest Superpower of Entrepreneurs / Volume Negates Luck / The Perfect Clay Pot(10:05) The Perfect Competitor(11:15) Why Do We (I) Say “Yes”?(13:02) Fighting The Same Boss(14:51) Hiring My First Sales Director(17:06) Why I Document My Journey(19:38) World class Results(21:12) People Will Always Make Room For WinnersFollow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

The biggest mistake that I have done in my entrepreneurial career, I'm going to walk through and then I'll explain kind of the meta concept that I think is why we are doing better now than we've ever done before. At the very beginning of my business, I started an online fitness coaching business called the free training project, which then flipped to for-profit. I then started a gym. Now, I did a smart move and said I'm going to focus on only one of them, which was the gym, and the gym grow.

I kept doing this gym thing because that kept working. And then all of a sudden, as I kept opening locations, I was like, man, I'm pretty at this marketing and sales stuff. Then all these people started being like, hey, can I give you money to do other stuff? And I was like, well, I accept money and I can do other things. So that sounds great. Within the next 12 months, I had a Densile agency, a Chira agency, and a business that was the turnaround business, which was me flying out to gyms. And so I tried to grow four businesses at the same time where I was CEO of all of them. It took me getting into a head-on collision in a DUI where I had a mentor of mine, whatever you want to call it, who's like, your lack of ability to make decisions

will kill you. After that, over the next seven days, I broke up with, which is probably the best term because some of you guys are in terrible partnerships and won't admit it, I broke up with my partner that I had with a couple of gyms, not all of them, but a couple of them. I broke up with a partner I had for dental, I broke up with a partner I had for Cairo, and then broke up with another business that was related to tangentially with the launch thing. And it sucked. But finally, after all of those conversations, I was able to just do the turnaround business. And then within the next however many months you guys know that story it exploded we made a whole bunch of money and then we switched to licensing and then we did three something then 480 then 780 then a million then 1 2 then

1 5 then 2 and then we kept going straight line all the way to 4 at that point I was like huh you know what we could do start another business that was when I started prestige and prestige obviously helped the top line and the bottom line as well but the day that I started prestige was the day that gym lunch stopped growing. So Jim Lounge maintained and then I grew Prestige because then Prestige got all my reign. Then I was like, okay, well, I split my attention, we went up in revenue, well I'm gonna create this ecosystem for gyms. And so then I started Allen. And so I'm now here with three companies. I just have more money to do things now. And so I'm CEO of Allen, C of Prestige Labs,

and CEO of Jim Launch. And as soon as that happened, Prestige Labs went down slowly and Jim launch went down very very very slowly and that continued until I sold Alan and then after I sold Allen Jim Launch straight line up and that was what allowed us to actually eventually exit the company I bring this up because it's been the hardest lesson of my entrepreneurial career you have to learn to say no and I actually think focus just comes down to saying no to everything that is not what you said you would do. That's it. That's all it is. And so if we want to be focused, then you can run that filter through your brain, which is

this is something that is not what I said I would do, which means if I want to be focused, the answer is no. Now, how focused you are determines the extent to which and across domains that you say no to. So on one level, you say no to business opportunities. Even more focused to be a person who says no to business opportunities and new friend opportunities. Even more focused to be somebody who does no new friend opportunities, no new business opportunities, no networking opportunities. And the list can keep going, right? If somebody did literally nothing else, then they'd be the most focused person. And so it's not an, am I focused or not?

It's how focused are you? There's this quote that I heard from Justine Musk, which is Elon Musk's seventh wife removed or whatever. Elon, if you ever see this, I love you. She said, he said no in a way that protected his resources so that he could channel them towards his own goal. And I realize that behind every no is a deeper yes to whatever it is that you do. And so I just think about it that way, which is like the focus feels bad on the outside. because no one likes saying no. But what it really is is saying yes again

to the thing you said you would do. And the reason this is so near and dear to my heart is because it's been the struggle of my life. It's been so hard for me. And the opportunities that I get presented now are insane. They're nuts. And I recently had to turn down an opportunity

that was absolutely absurd. And now the opportunities are all billion-dollar opportunities. Everything's a billion now, which is cool. But I also have Acquisition.com, which will for sure be a billion-dollar-plus company in the next 36 months. Like, we will be there. That's like we need to not do anything else.

I can just not mess it up. And it's still hard. And so I gave myself this saying, which was, and you can scale it up or down whatever you want, which is I'm not going to sacrifice my first billion for my second. And so right now, some of you have your first million, or 10 million, or 100 million, or whatever the number is for you.

And you get excited about your second 100 million, or your second 10 million, or your second million and you forget to make your first one. And I'm keep, I have so much content on this specific topic because it's something I struggle with so much. And that's why I wanted to hit on this. So you're going to hear another quote. So you guys can tell me who this is. People think focus means saying yes to the thing you focus on. You've got to focus on, but that's not what it means at all. It means saying no to 100 other good ideas that there are. You have to pick carefully. I'm actually as proud of the things we haven't done as the things I have done. Innovation is saying no

to a thousand things. Steve Jobs. You've got to say no, no, no, and when you say no, you piss people off. Also Steve Jobs. I was listening to an interview from one of his executives when they were building the, I can't remember it was the iPod or the iPhone. And so they were like, so what was it like to work with Steve? And he said, Steve would start meetings and just say, what have you said no to lately? You would just start with that. Because he figured out that that's what focus really meant, is what you say no to.

And he said, I would sometimes have some nose ready for the meeting so I could, like, throw him out. But he's like, he wouldn't be satisfied if I gave him, like, obvious nose. He said, it had to be no to something that you deeply wanted. It had to be a juicy no. And some of you guys right now have juicy nose that are sitting there, and you just have to get the credit from Steve Jobs for saying a real no. Because the other nose aren't actually knows. They're obvious nose.

And if you actually pursued them, you'd be an idiot. it. The ones that really are the meaningful ones that propel you in your career are also these sacrifices that you put on the altar of the success that you want to have. And so in some ways, it's like, it's all the opportunities that you turn away because you really thought about the one thing that you, that meant the most to you. And so I got this from a mentor. He said, if you don't say no to good opportunities, you'll never have the time to pursue the great opportunities. And once in a lifetime opportunities come about twice a year. So, So let me explain why this concept matters and why it's going to make you more money and

why I think it's the greatest superpower of entrepreneurs. So fundamentally, you can do more stuff or get more for the stuff you do. That's it, which is fundamentally volume times leverage. And within the context of a business, it's the amount of stuff you do and what you get for every repetition, which yields your ultimate output. So in the beginning, when you're really shitty at making cold calls, you have to do a lot of them to get, and you don't have a lot of leverage because you're bad at it, to get some level of output.

But here's the really interesting thing about leverage and volume. The more you do, the better you get at doing. I've told this story before, and there's a lot of different analogies for it, but two classes start in university for pottery making. One class, the professor says, you have to make the perfect pot by the end of the semester. It's the only assignment. You make one pot, and at the end I'll grade you on how good that pot is. The other group, he said, I don't care how good the pots are.

Make as many pots as you possibly can. And I'm just going to measure it, and the pot has to be round, and it has to be able to hold water, and that's it. Those are the requirements the pot as many as you can. And at the end of the semester, everyone assumed that the person who had the quality pot was going to be one who had the best pot, and the volume pots had the most volume pots. But something interesting happened, which is that the people with the volume pots had both the most pots and the best pot.

pots because they had so many more repetitions to get better. They had done more work, and they got better at what they did. And so then they had literally far more output and the quality was better. So they crushed the other team if it was a business. Bruce Lee said, I don't fear the man who's done 10,000 kicks one time. I fear the man who's done one kick 10,000 times. And so some of you are just doing one kick at a time, which are your business ventures. And you as entrepreneurs are just like wondering why your kicks suck.

It's like because they're always new. And it's starting a game over with a different character every time you get to level two and saying, well, I'm going to see if I can beat level one yet again with this new character. And then you get stuck yet again. I'm partially saying this because I'm trying to reinforce this with myself because saying no to that last billion dollar opportunity just recently I said no to. So I made a video a while ago about a billion dollar opportunity. I said no to a really big one.

It was far more than a billion dollar opportunity like this week. And so this is me rededicating to the fact that the woman in the red dress just gets hotter and hotter and hotter. It never goes away. Or at least it hasn't gone away for me if you continue to grow. If you stay the same, then the woman in the red dress or if you go down, the woman in red dress gets uglier, right? I say this figuratively.

What's interesting about this is that I actually think the distractedness comes from a place of delusion. It's that we somehow fool ourselves into thinking that if we do two things, we compete against people who do one. that we're that much better than the competition. And we're just not. Because the person who's going to beat you is the person who said no to everything else.

Imagine the perfect competitor, somebody that you would be incredibly afraid to go up against. They're incredibly intelligent. They're incredibly hardworking. They always learn from their mistakes. They never stop. They say no to nothing else. Be a tough person to compete against.

And then add on top of the fact that they're patient and they have no rush to beat you. probably going to win. Here's the interesting thing. You can be that competitor. Like, I mean, I think about myself when I had, if you count each location as a location, I had like 10 businesses I was CEO of.

If you don't count the locations, then I had four different businesses that I was CEO. It was absurd. Not only was I just the CEO, I was also the chief salesman for like half of them. And also did the delivery. Like, it was a period of time where I did not sleep,

I did not eat, I did not work out. I mean, I kind of worked out because Layla Forces me too. she feeds me, so I ended up saying in okay shape. But anyways, point is, is that I was only alive on like, I was like hooked up to just energy drinks and adrenaline hoping to make this thing work. And the harder I worked, the less money I made.

Because I was doing it wrong. And I'm hoping that I can prevent one person here from doing that. And so saying no, as I try to see this now, is putting money in the bank. Saying yes spends the money. And I think we want to say yes, because yes is feel good in the moment and feel bad later

when you have to stick with that commitment. No's feel bad today because you have to let someone down, but feel good later when you realize you don't have to go. Or you don't have to do that thing that you almost had to do. And so it's actually, nose and yeses are very short-term, long-term in terms of decision-making. So I was like, why do we keep doing this? We, Royal We.

Why do I keep doing this? And so trying to zero that down has helped me. And just saying like, oh, this is you being wanting a cookie today. That's why you're trying to say yes. You just want a cookie right now. And simplifying it like that has helped me get over it. Well, I mean, once an addict, it's always an addict for distracted focus. But for now, I have conquered my addiction for the week.

And so, you know, the reason people can't say no is because saying, yes, once you start, takes less effort. It gives reward now and pain later. No gives pain now and reward later. And I think where this really comes down is that our business, when it gets tough, stops rewarding you. Because when things are growing, it's exciting. Of course, it's like a new relationship. You're like super, you know, you're into it.

Things are moving. Momentum's happening. You're hiring people. There's cash flow. It's great. But then all of a sudden you encounter this boss or this obstacle, this thing that you can't get over. And all of a sudden, like, all that reward starts going away are becoming far more infrequent. And so then your eye starts wandering and you start looking for.

for the other relationship that high again. But trying to reframe that point as I am at level three, and it doesn't matter how many new characters I switch to, I'm going to have to battle this boss. And so all I'm doing is delaying the inevitable for a confrontation that I have to do. Thinking about it that way has basically made me be like, don't be a little bitch.

Like, you have to frame. and this is a useful exercise for anyone, is I try and frame the thing that I don't know how to, the problem as something I don't know how to do. So rather than saying, who had the ads problem? You guys. So instead of saying ads agencies don't work, I'm not saying you say this.

Instead of saying ad agencies don't work, you say, I don't know how to work with ad agencies. That is a skilled efficiency, and now it's under your control. Right? And so blame becomes something that you can control, and then now you can do something about it. I promise there are agencies that do a good job in your space. The same thing is like,

TikTok doesn't work for us. I don't know how to work TikTok. This is a skill deficiency. And if that's what I need to do for the next level, rather than starting another business and reconquering the first three because I can get to that level really quickly and get that quick high, I have to sit here,

and I have to be comfortable in the fact that I don't know what I'm doing. And the problem with that period is that you basically have to try out all of your best bad ideas until you have no bad ideas left, and you have only good ones. And then one of those good ones will work. And sometimes it takes five best bad ideas to get to a sixth good idea.

But once you have that sixth, what's interesting about it is that, like you've seen before, once you unlock level three, you know how to pass it every time. And so I would say that the reason that we've been able to move so quickly now with the companies that we have and that we invest in that we buy is that we know what level one through 100 million a year looks like. And now we're about to, you know, across our third company doing that. And so, like, we've done this before now. And I remember, I think I was telling somebody this story, but when I was trying to find a sales director for the first time, I had no idea what I was looking for. So the first thing I did was the first mistake everyone makes,

which is, oh, this guy's the best guy on the team. I'll make him manager. Don't do that. I did that. And then, of course, I lost my best closer, and my best closer also hated managing. Oh, for two. And so then I'm like, okay, I either have to give him a demotion,

which is going to hurt his ego, right? It's just terrible, rocking hard place. So that didn't work out. So then I hired another sales manager. This sales manager is the opposite of that guy. All operations, all process. And he did mediocre to bad. Better than the guy who hated people and just wanted to close deals, who was a pure hunter,

this guy did okay. Eventually we said, hey, how do you think you're doing? And he's like, not that good. And we're like, okay, you can either leave or we can take the demotion. And he was like, I will swallow my pride and take the demotion. I'd rather just close. And I was like, great. So then I had a third say.

sales manager. And this guy loved people, and he understood sales well. And so he loved spending time doing one-on-ones. He loved watching the guys improve. He was just the people person. And he was organized, and he trained the team. And the team's performance went up. And I was like, oh, that's what a sales director looks like. And from that point in my career, I haven't missed on sales directors. And that has been true of every other role I've had in the business. And so all of the time that it took for those managers cycle through was growth I didn't have, close rates that dropped, cash flow that suffered, because I didn't know what it looked like. And so I consider that ignorance debt. And so we have to pay that debt down. So all businesses incurred debt, and the biggest

one being ignorance of the founder, not knowing what it takes to grow this business. And so framing the problems that we have is the things that we have to confront as this is debt I have to pay. And there's no way around it. This is a toll of the success road that I'm on. And I will stay at this toll until I come up with the change to pay this debt to open the lever so I can go to the next toll booth and keep driving until I hit it again. And it's going to cost me probably more at the next one because these guys are greedy. These toll, these, you know, the lessons of life are very expensive. And so for me, the reason I spend so much time documenting, A lot of guys probably don't know this, but my podcast, when I started it, I didn't make it for you guys.

I made it for me. And for those of you who are trying to document your journey, a really helpful frame because I didn't really get too obsessed with the fact that I had like 200 downloads per episode. Like it didn't really matter to me because I was like, you know, it'd be cool. Because one of the biggest things I always wanted was Elon Musk and Jeff Bezos, the channel from 1997, where he's like, here I am on Amazon and this is our sign and we'll see what happens. And I wish that they had done that. And so I've tried very hard to be able to do that with my own career. And so for those of you who want a fun little tidbit, the first podcast that I have is 90 days after I lost everything.

So you can actually hear from basically ground zero to here now, the evolution in thinking. And I think that there might be some utility in that because as I'm walking through that, it's at zero. So what I'm thinking with is an entrepreneur who just lost everything is trying to figure out what the next move is. And so use that for what you will. But from a content perspective, I try and document those lessons

so that I can continually recognize the patterns again. And so what I want to have happen is, oh, this is another one of those. And then I can just play the playbook. I'd be like, what was I thinking then? And I can go back into the archives and be like, oh, yeah, this is what I'm looking for. Oh, yeah, this is what I'm looking for. Two biggest regrets I have is that I didn't document anything until I lost everything twice. Number one.

The second biggest regret that I have is that I have no recorded sales from the 4,000 closes that I did in person, not one. To be fair, tech wasn't as good then. It would have been a little bit weird, but I could have done it. And I regret that.

I mean, imagine the fucking library I would have had. And so I hope that you do that. But what I want you to have is I want you to have your playlist of your hottest calls. If you are a salesperson or have great salespeople, having them record when they're hot,

when you're like, dude, I could close anyone right now. That's what you want to record. Because the way that you pause, how you phrase your questions, your tonality, everything is what it's like to be on fire. And being on fire is simply a different way of doing things that you were before that's more effective. And so what you want to do is then study why, what is it, and how I talk and how I phrase

these words that increases the close rate of my calls. What is it? And then you can get better and better and better at closing because you'll study the the best game footage. You'll repeat the most successful activities that you did. Advantages of saying no to everything is actually keeping a DPS. Because the best person in the world has only

done that thing their entire lives. And that's how you get world-class results. The biggest returns come from the end of the cycle. Because fortunately, unfortunately, we live in a winner-take-all society. And so if you look at the top selling book on Amazon, it sells more than the bottom 5.9 million books on Amazon. And when you buy stuff on Amazon, you probably are like, oh, there's three products here,

one that has 2,000 reviews, one that has 200, and one that has 20. You're not like, you know what, I'm going to chance it on the 200. You're like, I'm feeling risky today. No, you just buy the 2000. Why? Because it's trusted. And that's how most people do it. And that's why the sales are distributed 95 percent. And then for some reason, someone doesn't like the color of the main seller or their phone didn't load weird, and they accidentally clicked the number two bestseller. right and you got lucky and so I think some of you guys have some juicy nose sitting on your table at home I think you have some strategic decisions that aren't really strategic decisions there are things that just take up all your time when you could just be working on the stuff

that you know will grow your business which is do more do better period and you don't need to try that new thing you probably don't need to go to that random lunch with so-and-so to explore synergies. I know who you are. And I'll tell you a fun story to drive this home. So recently there was a relatively large influencer who reached out to me and lots of following, blah, blah, blah, you know who they were. And they were like, hey, I would love to connect. And I was like, this will not change anything about what my plan is to grow acquisition.com. And I fundamentally have always held the belief that if I continue to grow, A, that door will either be open or there will be a bigger and better door that will open in that

door's place if it closes. Because people will always want to make room for winners. And winners have to say no to everyone else. Joe Rogan can call anybody to get them to answer his call. And if he said no to them 10 years ago, do you think it's more or less likely that they answer the call when he calls them now. More likely. But if Joe Rogan had taken every one of those calls and not built the Joe Rogan experience the way it is now, many of those people probably wouldn't answer their calls.

And so when people are trying to connect with you because of the success you have, realize that it's because of the success you have, and they will only want to reach out to you more when you have even more success. And so you actually threaten the main reason they reached out to you by choosing to take the call. And so this particular,

individual, he was like, well, you know, maybe we can, you know, I have the deal that you could blah, blah. I was like, all right, maybe this could contribute. And says, I am free on Monday at this time. He's like, well, I'm not free at that time. And I said, okay. And he's like, I'm not free on Mondays. And I was like, well, I take calls on Mondays. And he was like, well, I mean, can you change it to any of the other days of the week? And I said, no. And you just kind of like got weird. And so, and I was like, I guess we won't meet. And I I can keep living my life because I know what I need to do right now to get us to where we want to go. And there's probably nothing that this person is going to say that is going to in any way increase the likelihood that that occurs.

And so thinking about it from like, how will this change my activities, help at least does for me say no to the hundreds and thousands of things that want to take your attention. And you just have to make the decision of whether you care about that thing. more than you care about feeling good in the moment or saving face. And I would strongly recommend as fast as seemingly possible being okay with people not liking you, not understanding you, and thinking that you are different than them because you are. You're a winner.