The Game with Alex Hormozi - Obsessing Over Product: The Key to Going from Good to Great (with Lewis Howes) Pt.1 - June ‘22 | Ep 521

Episode Date: April 8, 2023

The difference between good and great is 10 times the effort. Today, join Alex (@AlexHormozi) as he guests on Lewis Howes’ Show to discuss the importance of obsessing over product quality instead of just focusing on promotion. He also touches on the value equation, the root of his ambitions, and more. This is part 1 of the interview.Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned on his path from $100M to $1B in net worth.Check out the episode on Lewis Howes’ YouTube Channel!Timestamps: (2:37) - Understanding money & improving product(13:31) - Increasing rates, beating down ego & dad(33:26) - Winning the financial game(40:54) - Money, power, and glory(56:24) - Billionaire wealth distribution(59:59) - Appreciating work from abundanceFollow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

When I was in my 20s, I wanted to be a millionaire. And when I was a millionaire, I wanted to be in my 20s. And so the idea that my future self would trade all the money he had to be poor and 20 again, made me really reanalyze how I saw living life in the moment. Welcome to the game where we talk about how to get more customers, how to make more per customer, and how to keep them longer, and the many failures and lessons we have learned along the way. I hope you enjoy and subscribe. Now, what's the difference between someone who's selling all the time and someone who's never

selling and doing a disservice because they don't offer someone to buy something? When they know, like, okay, I have this coaching program with this course or this thing where I know you can get value if you took action, but maybe they shy away from it because they want to focus on brand so much and not be the salesperson, but then it's actually doing a disservice because they're not in your program. So I think it actually has less to do with the ratio of how much they're selling. versus serving in their content, but more so the ratio of selling and serving overall. Because most times, because of this, like we were talking before this about the internet marketing

space in general, is that most people's products are not serving. They're not good. They're terrible. Right, they're terrible. And so what happens is like, it is the most right hook of right hooks possible. Like, you just lose a ton of goodwill with the thing. Apple doesn't lose goodwill when they come out with an iPhone. Everyone's just excited about it, and they use the iPhone, they tell their friends. So the difference is in the goodwill that comes with the quality of the product. And so I think that's where the issue is.

It's not like, do I sell or do I not sell? It's just is the thing that I'm selling. And the vast majority of people who are pitching all the time are natural promoters, not product people. And so, like, most times the greatest product people, like, Naval had this quote that I really like. You said, you're only selling because you don't know how to market. And you only market it because you don't know how to build a product.

Because, like, the best products market and sell themselves. Now, obviously, if you're Steve Jobs or Elon Musk, it's like you build amazing products, and then you back them with unbelievable marketing, and then you have an army of salespeople that that you know are selling for you so it's like then you have them all and then you have you know a trillate are yeah yeah yeah but like just being exceptional any of those will make you money but you get the multiplicative you know compounding effect if you're good at two or three of them

right were you always good at making money or was there a time where you were like man i'm just broke struggling and trying to figure this thing out depends on like how much we're defining you know what i mean like right out of i finished i finished college in three years and then did the management consulting path and so like out of college i was making like 50 000 right right um and i lived in Baltimore so like my cost of living was like five dollars and so I was able to save a bunch of money so I saved $50,000 in two years. Wow living there and that's what I was able to start my my gym with. Did you understand money when you were in your teens or growing up or did you feel like you were scared of it or it was scarce or are you thinking ah this I'm not really worried about money

it'll come when I'm ready I was always I've always been a saver uh-huh I've always been a saver not a huge spender. I think part of it is because I don't get a lot of like when I pay a dollar I feel something different and most times if I buy something I don't feel any different So I don't get a lot of utility spending right. I just don't get a lot from it I think I've been aware of that for a long time and so like if you don't spend a lot and you make even a normal amount of money for a decent amount of time You end up having a lot and my my income went up I would say that there's definitely elements of scarcity that I believed in for a long time Really? Yeah, I mean around competition was one tell me about it. What was that about? What was that about? So like when I had you know when I had my gyms for example this is you know almost a decade ago

You know I was so concerned with the guy down the street was what he would do's marketing is he copying my ads like I used to get so obsessed with this stuff and like it just so doesn't matter like at all like you he could copy and we could both have really big successful gyms It's not like there's a lack of people who need to get a change right And then even then it's like we're only talking about a five mile radius not like the rest of the world like it's there's just like you know orders of magnitude of thinking in terms of scale that I was just like completely like aloof to. What happens when we focus on competition so much? What happens to our ability to scale, grow, our creativity, our money-making abilities? I think you become emotionally reactive to the activities of the other person. And so you're truly focused on nothing that adds value. And so it's because of, it's not the competition, like competitors don't put you out of business, but you obsessing over

competitors does. Right. What should people be doing instead of obsessing over competition? It's all customers. It's all just to being, because like, if you can get, you know, there's a billionaire in my building who, he was asked for any of her. He's like, if you had one thing that you could tell someone if they wanted to build, you know, a company like yours. And he said, your customer must absolutely love your product. A lot of people just underestimate the amount of effort it takes to go from good to great in a product or service. It's like the difference between a five-star restaurant and a four-star restaurant, you know, it looks like 20 percent, but it's 10 times the effort. You know what I mean?

The difference between like a one Michelin Star and a two-Michelan Star restaurant is an ocean. Right. Right. And so I think like I use the book as example because it's an easy one to reference. Most people try and just write a book and then once the final word is done, they're like, send it to the editor, edit it, cool, and let's ship it out. But like that book I rewrote five times, end to end the whole thing. And each time the goal was to make it short. It's like, how can I say this in fewer words? How can I say this in less words? And in doing that and the same thing happened with Jim Lynch with that product is that every time we created a 2.0 or 3.0 or 4.0, we made it shorter. How can we make it easier to consume? And then I was reason we wrote the book about the value equation. It's like, what is value? Right. How do we define that? And so if we're customer focused, we can obsess on value and then have a very iterative approach. And I think that you came from the internet marketing world. Like, and I talk, I've given this in like a couple of like closed door masterminds where I'm like, guys, like you all say that your product's amazing. I'm like, what's your CRC? What's your

CHS? What's your NPS scores? What are your TTVs? And they're like, huh? I'm like, well, if I ask you your CPM, your CPL, your, your, your, your cost for book call, your cost of of acquisition, like all of these things, you could rather lose off in two seconds. I'm like, so you guys say that your product's amazing, and yet you don't measure a single metric around product. Wow. And so focusing on that mind. Right.

So they just, the thing is like, if we can get that part right, then you get so much, because if we can just get each customer to get one more customer, our return on ad spend doubles. Right. But then if you think about what your contribution margin is on that extra customer, if you don't have to spend the cost of acquisition, so much of that drops to the bottom line. And then the company just becomes so much more profitable. Yeah.

Just by like tiny. levers that we do here. Like, how can we take, you know, with, I think we were talking earlier about our publishing business, we're like, okay, publishing is something it takes a long time to do. How can we figure out TTV is time to value? So how can we figure out some sort of experience or some sort of when someone can have in the first seven days? Like, how can we get them a dollar? Is there anything that we can do to- Of launching their book? Yeah, exactly, like something, some proof of concept, and we were able to figure out how to, we're talking about mini-book, get that going in a very short period of time so that people could just, and we're like,

hey guys, this is an MVP, this isn't your perfect product. We just want to prove to you that it works. And so then they get $1 in their account. They're like, you are now an entrepreneur. It gets a momentum. Yeah. And now you have that identity shift that happens. Just like, I just made money on the internet.

Like, yeah, you did. Now let's do a real book that's like really good. Like this is not the product, but this is proof of concept. And so that was like a more creative when we had to do. But like in other businesses, it's like how can we always drag forward at least some sort of big win? So we get the emotional buy in to then fall through. Like when we had the gyms way back in the day. I would run people through like a six-week, really aggressive diet in the beginning.

And that was because even though the sustainable weight loss is, it takes a much longer period of time, you know, et cetera. The slower you lose it, the longer it sticks off. But the faster you lose in the beginning, the more like they are to stick with it. Interesting. So you get this emotional buy-in and you're like, cool, okay, we just did a lot of weight loss in six weeks. I need you to chill for six. Right. And then they're like, but now they believed us because we had just delivered, you know, a big win kind of early.

They got results. Exactly. Quickly. Yeah. And so it's like, we know how to do it. But now we're, like, you can trust that we do know how. But now let's just maintain for six weeks, get your hormones back, make sure everything's good. Unkey Dory, but a little more muscle because you lost them during this kind of aggressive cut.

Yeah. And then kind of, then we'll get into a more sustainable phase. Right. So it's just how can we drag that forward? And I think that level of obsession, the way people obsess about promotion, if they obsess the same way about product, the amount of profit they would make as a result of that is just like, it's huge. And those are sellable businesses. The marketing driven businesses do not have nearly the enterprise.

value the product-driven businesses do. So would you say the key to going from good to great is obsessing on product great product greatness? 100%. What if someone, you know, they have any product, the physical product, digital product, coaching, a software, and they're watching or listening, what should they be thinking about to making the product that much better? They've put a lot of time in energy, launching it, building it, they've got sales, maybe they've had it for a year or two. How do they break it all down and it says it is it 20 different factors is it like just do these three things and it's going to improve the quality of your product what should they think about it's a really good question so there's like three different angles i want to take this so much so one is like what

i talked about in the book which is like the value equation so what is like so there's four variables in the value equation the first one is the dream outcome which is is the thing that i'm delivering fundamentally valuable and this is especially for people probably more so who we're trying starting out in their in their like entrepreneurial career want to map draw it out for me if you want to Sure. Well, hold it up for people. Yeah. So you've got your dream outcome. So I just put dream here, right? You've got dream outcome, which is the first variable. The second variable is the perceived likelihood of achievement. And so the idea is, and I'll give you an example of this. If you have, let's say you wanted to get plastic surgery, whatever, and if you wanted to get plastic surgery and you had the option of two guys who are going to do the surgery, one guy is done 10,000 surgeries and one guy is fresh out of medical school, this is his first. It's surgery, which guy would you go with? Probably 10,000. It might even take this guy half the time to do the surgery as this guy. And double the price. Right. So we might. And it's double the price. Why? Because of the perceived likelihood of achievement. We believe that when we pay this man, we are more

likely to achieve what we want, even though the work is the same, probably longer on this side, but our perception of what we're going to get in a real way increases prior to purchase, which is the same reason that if you have like 20 people who told you that this restaurant is amazing, you're willing to pay way more, even though you haven't experienced it yet. Because the perceive likelihood of getting the outcome to rewind on the dream outcome. This is more a commentary that how is it that you have a 50,000, you can solve the same problem. Let's say weight loss because everybody understands that one. If I'm trying to help somebody lose weight, there's $50,000 solutions and there's $5 solutions. There's free solutions, right? 50,000 dollar solutions,

you can get liposuction, right? And get a full body lift and whatever. Got it in a day. Right. Or you can get an e-book, you know, for five bucks. So the question is, why are these two things, you know, more valuable. And that, again, goes to perceived achievement. But if I went from the weight loss to, let's say, making money, if I had two things, in general, all the things in the making money category will be priced higher because there's a more direct ROI. Yeah. So that's why between categories, dream outcome as a category can be higher or lower, but then once you're within a category, it's the other three variables. So perceive likelihood of achievements, number one, of the other three variables. The next variable is underneath, which is the time delay. So between when I pay and when

I get, what's my delay there? Right? So if I were to say, using the weight loss example, if you swipe your credit card, then you look down at your stomach and you just have abs, how valuable. We'll pay a lot for that. Exactly. And all we did was just decrease the time delay. And so let's say in a B2B example, if you had a marketing agency, for example, and normally it's like, okay, you guys need to send me all this creative, and then we got to get everything spun up. And it's going to take us, you know, 45 days to really get everything, you know, ramp, we've got to build a funnel and handle up all the while, right? And then let's do a different example. We're on the same call. the guy says, cool, we're going to get you going, and you hang up the phone, and your phone rings

with the prospect. That's pretty big. Even if it's the exact same thing, 45 days from now, your phone rings with the prospect, today your phone rings with the prospect. How different is the perception of value? Phenomally different, which is why the time delay is such a huge piece, which is why time to value, referencing earlier, is such a huge part of increasing the perceived value of the product. And so that's the time delay.

That's the third. Yep. And then the fourth one is effort and sacrifice. And so effort and sacrifice are two sides at the same point. So effort, as I define it, are things that you must begin doing that you do not want to do, that you did not have to do prior to the purchase. Give me an example. If I have to wake up early to go to the gym, that would be effort.

That is something that I now have to do. And so sacrifice I use as the equal opposite, which is what do I have to stop doing, that I want to do, that I would continue to do it if I didn't have to. Have to stop beating milkshakes at midnight. Yes. And even in the B2B example with the marketing agency, Well, now what do I have to do? I have to start making this content. I have to start hopping on meetings every week. We have to start looking over these metrics. The hiring people, I got to what are you have. Right. And so oftentimes, especially like businesses, they think that their price is the most expensive thing that they have in the cost and it's not. So think about this. If you've ever asked someone, hey, I'll give you my service for free and they said no, it's because there are other costs that you're not taking to consideration, which also means a lot of times your price has far more wiggle remnant than you think it does. And if you can decrease a more.

much bigger hidden cost by asking for more money and you can solve a hidden cost, you can make more money and improve their experience at the same time. Right. And that's when you just make oodles and oodles of money. When does someone know, so this is the good to grade concept, right? What we should be focusing on is kind of this main analogy and factor. When does someone understand a lot of people talk about their worth? Like, I'm worth this, I deserve this, whether they're an employee or they're an entrepreneur and they want to price something. Yeah. When should be thinking about their worth and increasing their rates, whether as an employee or as an entrepreneur, how do they know, because you're only worth what people are willing to pay. So how do you get people

to pay what you believe you're worth? I think there's three variables that come into like how much you can charge, right? The first one is value or perceived value. From the prospects. Perceived value, yeah. So perceived value. The second one is how good you are negotiating, which would become, which I put that, or persuading, you could probably put that as just persuasion in general. That's a good. If it's a job, you might be negotiating. If it's a customer you might be negotiating too, but it's persuasion in general. And that's a whole skill to develop on its own. 100%. And the third one is how unique it is. So that there's no easy alternative. Right. And so if, like for example, let's say I provide something that's really valuable, unbelievable at selling. Rare.

And then another guy is willing to just do all the same stuff for just less. Right. Right. And so it's being decommoditized. We're talking about in the book, too, is that people have to be able to, they cannot, and the goal should be with our services that we have, that no one can hold up our service and somebody else to say, these two are similar enough, I'll pick the cheaper one. And so the goal is how can we differentiate ourselves in enough ways by looking at the value equation and thinking, what are all the things that are making this take longer and how can I remove them? Where are all the efforts and sacrifices, even these micro things, these nuances that make things more difficult? And so, like, the kings of this, if you look at like Amazon, right? Like the biggest companies

in the world, I'll reverse. The small companies that are out there, they always focus on the first two things. Let me promise something really big. Let me show you all these testimonials. And that's all they do. Just promote these things. It's amazing. Listen to Sammy. It's amazing. Listen to Tommy. Right. That's all they do. But the biggest companies in the world focus on the bottom side of the equation, which is how can we make things faster and how can we make things more effortless. Like Netflix destroyed Blockbuster, not because they fundamentally changed the product at all. All they did was they made it happen immediately and from the comfort of your home. Right. And so they just, to dramatically decrease the cost and effort that was associated with watching movies, and boom, they blew up.

And so, like, Jason Fladley and who's a friend, he said, you know, one of the easiest business models in the world is just look at what everyone else is doing and do it in half the time. Right? Like, it's a simple. Like, people are like, what do I do for business? Just look what, like, if someone, you know, like can cut your lawn in whatever amount of time, or you clean houses? Say you can clean houses and less time? Because it's just less inconvenience when you're there in their house. Less time and less money or same money? Same money. Yeah. Or more money. You know, like, it depends. What are the hidden costs? So like probably like with cleaning, what are the hidden, what are all the things that people hate? Scheduling is probably a pain.

Right. Hearing the noise is probably a pain, like silent cleaners. Right. Like what are, like you list this out and that's, we outlined that in the book of like the process of thinking through this, but what are all the pains and problems that your customers complain to you about? And so like the goal is always in the support tickets.

So when you talk about obsessing about a customer, right? It's let's go through all the comments on the videos, right? Let's go through all of the support tickets that are coming in. And those complaints, inside of the complaints, sure, like, what you don't want to do is say, well, these guys are all victims because then you lose all the power as a business owner by just blaming them. So if you just accept all of it as like these are all, like, as long as the thing that they're saying is not false, if it's unreasonable, then let's see if we can figure it out. Maybe no one else has figured out how to do this, but we might as well try.

Yeah. Right. And so I think if you can approach it with like very open hands of like when you accept the feedback, it gives you the goal to really create huge breakthroughs and products and services. Were you always open to the feedback from customers? No. When did you learn to be like, okay, this sounds like a victim conversation, but there's something here where this person's struggling and if I can make it more effortless, it's going to be a better product for that person.

I think it's just taking time. And I think it's, because I think a lot of it, I think is really beating down your ego. And I think it's like in a lot of ways with business, in my opinion, ego is the enemy because It gives us too much confidence when we don't deserve it. When did you start beating down your ego? I mean, I've been trying to do it since I was 19. It's just been a very slow process. I just realized that it was the root of all the unhappiness.

And like everything that I have was in comparison to other people with for no reason. And like, you know, I've obviously adopted some perspectives we'll probably get into later, but that are contrary into nature in terms of like how we live. Just there's no benefit to ego. There's just none. And then I have a different thing that I've been thinking about recently. I'm excited to share it with you. Sure. So there's, you've probably heard this, but there's a lot of evidence that points to with mitochondrial DNA that we go back to like one, one woman birth. Like the

mitochondrial DNA of all humans, this comes like, tracks back to one, one woman, right? And so I think that that's interesting within the context of legacy, because people talk about legacy and they want to like, like leave something for their progeny. And we, we love our sideways family members, right? What do you mean? Like, oh, yeah, yeah, like, you're, yeah, exactly. But like, if we all came from the same mitochondrial DNA, right, then we, like, not to be like weird and huggy, huggy-lovy, but like, 100%. Yeah, of course. I find that really fascinating. It's just like, it's like a super distant cousin. And, and this is why when I met you for the first time. Yeah. What did I do when I met you? Deep long hug. Deep long hug. Oh, yeah. And I do this with a triple hug.

It was a triple. Because you, you broke in. I broke twice. I was like, bring it in, bro. And then you had to surrender. And there's a reason I do that. And there's a reason I do that. is because, oh, that's a thing. I didn't know that was a thing. Well, I mean, I mean, unless it's somewhere where it's like maybe someone who's older that doesn't want to be hugged or, you know, your wife, I'm going to give a quicker, I'm not going to be grabbing. So, yeah. But it's, you know, it's a respectful, you know, understanding the human being in front of you doing your best respected. But with you, I knew I could just hug you and it's going to make you uncomfortable. And it's going to make you uncomfortable, but,

but for me, I don't know if I'm ever going to see you again. I don't know if I'm going to see you tomorrow or anyone tomorrow. And so why not embrace people with, you know, a three to five, 10 second awkward hug? Yeah. And let people know that you really appreciate the moment. And you're present. Yeah. That's what I try to do. It's what I try to focus on. But, you know, and if we're all distinct cousins, then why not treat each other that way, the best way possible, you know? And I didn't mean to launch all the way there because I'll go right back to ego. Yeah. So I guess, yeah. Otherwise, we'll go in that direction. But yeah, so I think because all this comparison, I was like, well, if I were comparing myself to a family, remember,

we're going to feel the same way. And if all these people were on the same side as me, because we're all family, would I still feel like I would, because I've just tried to attack it from a logical perspective of like, how many different ways can I try and diffuse this bomb? And I think there's a lot of keys and you just unlock tiny piece of it. And you can just, you know, just hopefully I can over time. Get better. And I used to be very competitive as well as an athlete. That's all I thought about was winning. It's like I had to win to feel like I was worthy or I was good enough or I was talented enough. And if I didn't win, that I wasn't reaching my goal of winning the championship or the prize

or whatever it was. And I took that into business for many years. And I felt like I needed to compete with other people. And then it's funny when I started this show almost 10 years ago, I was like, it can't be about me. It needs to be about collaboration. In order for this to really grow and scale and change lives and impact people, it can't just be the Lewis House show all day long.

One, I'm not smart enough if I don't have all the answers. I'm not as talented as you. Shorter guys are way smarter. That's why you're so brilliant. You know, and I was like, I got to bring on the smart people and create a space. I can bring all the tall guys out right now. I just kind of catch it, right? Like, every, all my audience will get taller as a result.

Exactly. But it's funny because when I started to shift that, the eagle goes back into still comparing and rankings and some of these things. And I was like, okay, when I started to shift that, it's when I, you know, the platform and the community started to expand because I made it to be. shining the light on others. Yeah. You know, and doing my best to shine the light on others.

And when you do that, when you shine the light on an idea or a mentor that taught you something, usually good things come back. So that's interesting. So when did you start to shed this ego mentality? I mean, I started attacking when I was 19. 19. And how old are you now? 32.

32, yeah. And I think I have like 40% less ego than I did. That's good. And how do you have, how do you diminish the ego as you continue to and exit these big companies and build your brand and get more and more attention and known, how do you bring it back down to the humility? I think it's linking the two.

So it's trying to link these good things are happening because I'm decreasing this thing. That's smart. And so that way I can have a positive reinforcing association with the success that actually that would normally amplify the wrong character traits. What do you think would happen if your ego was at the highest level right now?

I think a lot of people would, I mean, a lot more people would not like it. like it. Like, I mean, I don't think the message would get across. To be fair, I think the message would stop. It would, the spread would happen much slower or not at all because the message would change because the message wouldn't be about the message. It would be about me. And I think that, I think that probably the reason that this has grown so much is because you've, you've tried to quiet yourself in, so that the message and the idea can spread to as many people as possible. And you put the message on the pedestal rather than Lewis on the pedestal. And I think your audience realizes. Yeah. That's interesting. So what do you think you're

You're making 50K the first couple of years out of college. You saved 50K within two years, which is amazing. So you were disciplined. What was the habit or the switch from one year to the next that started to bring in more abundance financially? Not in the incremental 20%, but it was like, boom, this was 5x, 10x. What was that habit or mindset shift for you that started to develop more income? So there's like the science and the art kind of both sides.

So like the science side is just the leverage. So the amount of money you make is proportional, the amount of leverage you employ in your life. And so, you know, four types of leverage. This is not mine. This is Naval Robagons, but I'll just say that. Yeah. So you've got labor. I use four Cs because it's easier for me to remember.

He says labor, I say collaboration. So funny that you said that earlier. Yeah, yeah. But it's just getting other people to basically use their time, right, for your cause. The second level of leverage is other people's money, is getting people to invest in your thing. And then the next two are, so these two are permissionless, the first ones. Like, you need to get someone's permission to work for you. and you get someone's permission to give you their money.

The other two are permissionless, so you can do them on your own. One is media, which is what you have here, because the cost of making one video, having one person see it versus a million people see it is the same cost. Right? And then the other is code, right? So I say content and code. So those are my four Cs. So collaboration capital content code.

And both of the, and those are not binaries. It's not, am I using other people? Am I not using other people? It's to what extent am I using other people? Am I, do I use other people's money? Yes or no? No.

It's how much of other people's money am I using. And so each of these are continuums, not binaries. So like somebody could just use other people's money and be a billionaire because of the extent they use it. But those are the types of leverage that exist. And so as my income went up, it was by proportion of the amount of leverage I was employing. Really? How are you, what of these four were you leveraging the most? So in the beginning, I had no leverage because I was an employee, right? I was using my own time. The next thing that I started doing was I became self-employed, right? So I had a little online training business that I started in between my,

quitting my job and starting the gym. And so when I started the gym, I started getting labor was the first people, yeah. Not a lot of it, but I got some of that. And so that gave me that first next year. I went from part-time interns. Yeah, yeah. I went from $5,000 a month to, I think, about $30,000 a month. So that was the, that was the big job. But it was just, I had a team. You know what I made? A small team, but I had a team, right? Now that's overall in revenue. That's not your take on. Exactly. You might have been losing money or whatever. Yeah, right. We made, we, I mean, I was probably making $20,000 a month at that point. For yourself. Yes. After expenses, a team and everything. Yeah. That was then. And then. What did that feel like going from

to 20. Did that make you feel something different? Was there a shift inside of you when you took that action? Because for me, when I started this, it was all about vanquishing my father. So it was all about, I was Middle Eastern father, only child. So like, I was raised by a single dad. It's just me and him. That was it for the vast majority of my life. And so he's, Middle Eastern came here with a thousand dollars, became a doctor, came here, learned English from watching television. You know what I mean? Has the American success story. Absolutely. That's amazing. And so I was born here, though. Speaking of the language, too. was my first actually. There's a whole story around it, but anyways. But yeah. Franks are you,

yeah. How many languages do you speak? That's the best one. I'll just leave it at that. But all of it was about making him proud, right? That's what you did. You set out to do that. That's what I was trying to do. And then I think that throughout my like adolescence, I realized that it was something that was always going to be withheld from me. So it didn't matter what it was. The goalpost would always move so that. He would never be proud enough. Right. And it was just, and it was because he wanted the most out of me. And so like if I got, let's say, you know, a 99 on a test. It wasn't congratulations. It's what you get wrong. Oh, man. Right. And there was always what it was. That's okay. Like, I'm, we're cool. I'm very happy with my life. Yeah, yeah. And I realized that.

And so this desire to gain approval turn into a very deep anger. And so... Towards the world, him, himself, other people? Mostly him. Mostly him. And most... Like, him and myself probably split. Probably 50-50. You know what I mean? And so it was like my earlier, I'll say, quote, success was purely fueled by rage. Like it wasn't, it wasn't like, it was rage. You know what I mean? I was in the same boat, yeah. Yeah. And it was like, and I, but there was probably some element of me that just like almost enjoyed the suffering because, like, I just would get in the space when, when you ask like, how did I feel? Yes. By getting the extra 20,000 a month. First, my goal was to make as much as my dad. And then it was to make more than my dad. And then it was to make more than my dad had ever made

his whole life. Oh, wow. And so once I had done that, the, I, wanted the success to be unquestionable. Like it couldn't, there couldn't be a butt. There couldn't be an asterisk. It had to be so undeniable that been vanquishing was the word, right? And so for a five-year period after I quit my job, my dad did not support. He didn't support me quitting my job. Why not? Even though you were off making money and building a business and- Because he didn't, he's like, you're, what are you, a gym owner? Like, he's like, you went to Vanderbilt, you were on a management consulting craft. You're like, you got, you know, you got above Harvard's mid-score for You could have had a credible career.

Of course. Right. Right. You know, he's figuring himself out. You know, he's figuring himself out. Yeah, let's do this little gym as a side thing. Yeah, yeah, yeah, yeah. We'll snap out, right?

And so, I mean, I made plenty of mistakes, too, when I had the gym. So it wasn't like all, you know, sunshine and rainbows for me. Like, I had a lot of mess-ups that I did. I got in bad partnerships. I mean, like, all the things that you could possibly do. And over that five-year period of me scaling to six locations with my, with my facilities, at the end of that whole thing, I ended up losing all. Really?

Yeah, lost everything. Six locations, lost the whole business. Yeah, well, I sold it, I sold five of them, I shut one of them down. Wow. Because I wanted to start doing this gym launch thing, which would be like flying around doing turnarounds, because I started, that's what I met Layla. You find a gym that's kind of like not succeeding. And you'd fly it. Yeah, when you do a makeover.

Exactly. Like the same thing. Like the same exact thing. Wow. She'd done a TV show with it. Believe me. The many regrets I have, right? That would have been an awesome one.

We did 32 turnarounds. Wow. It was almost two years, yeah. So we started doing that. Anyways, I lost everything because I took all the sale money and I put it into my last location and then the partner that I had there siphon the money out because I was like, yeah, like, well, I'll put all the money from the sale of these gyms into this thing. It doesn't matter.

It was my own mistake. It was on me. Even then it was, you know, we'll see how long, like this isn't real. And then once I started, once gym launch really started taking off, it wasn't until I think we did like 17 million in EBITA, like profit take home. In one year. in one year that my dad I was 27 that's crazy yeah my dad my dad called me and he's like are you sitting down I remember like at this point like we were like not talking too much you know maybe maybe every few months it'd be like a five-minute phone call and so I was like sure yeah I got time what's up

he's like you're gonna want to hear this and I was like okay what he's like I'm sorry and it was the first time you'd ever apologize to me in my life and what's interesting to me though is that it didn't feel like anything I didn't care why not because I'd stopped caring about what thought about me a long time ago. And it was like when I quit my job was the day that like I I accepted dying to my father. Because because very much to me at that point was I was, I was really, really sad at that point in my life when I had the job because I had really done everything that he had wanted me to do. I finished Vanderbilt in three years as president of fraternity. I had won writing awards. I had done like a bunch like I'd done everything. You know what I mean? I was in I was

vice president of the powerlifting theme like every club, all the stuff I could do. Yeah. Yeah. While while still being president and did it in three years, right? And he didn't got a management consulting job that was like, good job, had all the credibility. And it just, I knew, it wasn't enough. And I knew that. And so I knew that the choice for me was that I either had to die to him or I had to die to myself. Wow. And that was ultimately like the choice that I put in front of myself. And that was whenever I was like, maybe I should just get it. I was like, die to him or die to you. And so that was what gave me the confidence to break that. And then I physically moved because I couldn't be in the same area. Wow. So I actually, you know, 23 at this point?

So I called my dad when I was like in Ohio and I'm from Baltimore. So I'm like how? It was from from. It was for you. I called him when I was there and I was like, hey by the way, I'm doing the gym thing. He was like, okay, he's like, why don't you come over? We'll talk about it. Because he knew that if he came over with enough battering, I would be like, fine, I know, this is smart thing.

I'll take the, you know, I'll apply to, you know, booth and Harvard or whatever and I'll get the, I'll do that whole thing. And that, because that was a cycle. I just kept doing that. And I was just like, no, I'm not going to do it. So I was like, well, I can't, I'm in Ohio. He was like, what do you mean? And then the tone totally shifted. And he was like, you always do these crazy things.

And you're always like, he's like, you've never balanced. It's always extreme with you. There's no middle path. And so anyways, anyways, you know, I did that. Five years, Jim's, lost it all anyways. And then started gym lunch. And then that's one. And then that really took off.

Sure. And then, but when he called me and he apologized, and this is where I like, you know, I'm ashamed of myself. But like, I could have just let it lie and been like, thanks, appreciate it. You know, cool. Instead, I said, I said, I was like, you know, when, people get up on stage and they're like, hey, you know, they get awards and they're like,

hey, mom and dad, I just want to say, thanks so much for always believing me. I was like, I won't say that. Oh, my gosh. I was like, because you never did. I was like, the only time you accepted me, I was like, is once every other person on this planet had accepted it too. Oh my gosh, man. That's so I said that.

That's intense. On the phone, he said that. What do you say to that? He said, well, we'll see how long it lasts. Oh, my gosh. So that was. So he's still kind of in competition with you. Yeah.

And to be fair, when he apologized, he said, you know, I'm sorry. He said, but in my defense, if it had been in my time, I would have been right. And so, you know, but all that to say, like, I should have just said, like, appreciate the apology, you know, thank you. Because, you know, Tony Robbins said something that I thought was really impactful. It was like, for the vast majority of my life, it's been like how my father shaped me or whatever. But rather than thinking, like, what can I use from this dynamic? Like, what gift do I have? Yeah, like from his mother, kind of like beating him or whatever you have.

Yeah, exactly. Like, what do I, like, what do I, you know, they're blaming for the good, right? And so, like, I have so many things to blame for good from that. And I'm very, very happy with my life. That is why $20,000 a month didn't feel significant to me because the goal that I had, my expectations weren't to make money. My expectation was that I had to make more than he had ever made. And so I had a very big vacuum to drive towards, which I think in a lot of ways was a gift because, like, I blew past 100,000 month, 500,000 a month, $500,000 a month, million a month. Like, I blew past those things because, like, it was never about having enough money for me. It was about, feeding this monster. But once I got there, I realized that what I had done was set up a game to win by my father's rules. And so then I... And you could never win. Right. And to be fair, would I want to win a game that wasn't for me? And it was making you suffer. Sure. You're playing the wrong game. I'm playing his game. And so I did win, but I went at his game, not more. Right, right. And so that was kind of what I think making that realization was it was kind of the slow shift that happened from there. So when you won the financial game or the game of like, I've made more than

you in a month or year than you made your whole... whole lifetime. Real quick, guys, you guys already know that I don't run any ads on this and I don't sell anything. And so the only ask that I can ever have of you guys is that you help me spread the words so we can out more entrepreneurs, make more money, feed their families, make better products and have better experiences for their employees and customers. And the only way we do that is if you can rate and review and share this podcast. So the single thing that I ask to do is you can just leave a review. But take you 10 seconds or one type of the thumb, it would mean the absolute world to me. And more importantly, it may change the world with someone else.

How do that make you feel and when you did you realize you need to start playing a different game? And what would that game become? Okay. There was three questions there. What was the first one? How did they make you feel the moment you crossed the finish line of the game of making so much more than he'd ever made in a short amount of time? Relief? Because we actually got a relationship back.

Not like, you know, I wouldn't say we have like Sunshine or Rainbow, but like we have a functioning relationship. I would say it's role-based. Like, I'm a, you know. Yes. But what happened was we are both very, like, strong personalities. And it wasn't until I think that he accepted me as often our relationship that we were able to kind of like move forward again. Because before that, my, because my dad's, he's a doctor, so he's always had, you know,

like decent money. And I wanted to be beholden to no one, including, including him, like, I didn't want his money. Right. I didn't want anything, you know. And so I think I had to establish my own, I'd like really plant my own flag to be seen as a man in his eyes. And so I think once that happened, I think I thought there was some level of like, you know,

Like, there's no conflict here anymore. Like, this is undeniable. Yeah. This is beyond reproach. Yes. I have an attractive wife who's really nice and awesome. I have a business. I'm in good shape.

And if you think about it, like the way, I mean, I'm just being really real with you. I blame my father for the many things that I have become in a lot of ways, right? Because everything that was not perfect was criticized. Right. And so, like, I've had a six back since I was 15. Wow. And it was because he used to always criticize everyone who was overweight and being that they're undisciplined and they don't they don't try right and then I've you know like and

then it was like about having pretty good nice everything perfect women right yes not just pretty but like everything has to be perfect right and then and then making lots and lots of money and so it's like all of these elements I had to max out to again win it that game and but my whole life was designed to be bulletproof was that so that I just wouldn't be criticized and so that was because that was what I just I knew that if I could criticize myself harder than anyone could then if they did say anything, it was never as mean as what I would say to me. What's the meanest thing you say to yourself?

Oh. Like it's all around just not being good enough. Right now? No, no. But I was what it was 100%. And it was about being, to be fair, the actual thing would just be being weak. And so it was all about strength. Mentally, emotionally, physically weak, financially, weak, everything.

Just weak. That's how you felt. Yes. You felt powerless for most of your teens and 20s? Yeah, for sure. And so everything that I did was to counteract that. Right? Like, what can I do? Too big and strong as I can get, yeah.

I'm going to make as much money as possible. Have all the women I can get, yeah. Exactly. 100%. And so I pushed against that to try and to quell that, you know, that need or that desire, that feeling. Did it satiate that need when you had all those things? Yes and no.

Yes, because when I got there, it forced me to change my perspective. Perspective is what changed the way I felt. Basically realizing that those things were never going to solve anything is what allowed me to. But Les Browns, I think, says this where he says, like, Like, everyone knows that money doesn't, money doesn't make happiness, but everyone's like, I'll see for myself. You know what I mean? And so I think it was one of those, like, I had to cross all the, like, and I'd say this not as a slight to anyone else, but like, I'd check off the easy ones from the list, which is like from getting in shape, getting the good wife, getting the money in the business, all that stuff. Like, those are circumstantial. That means I can push with enough effort. I can change my conditions. I can change my surroundings in my environment. And if I can change those things, will they make me feel better? And so I think once I knew, beyond a shadow of a doubt, that that couldn't, that didn't work. Maybe they helped in some ways, but not the internal ways.

So what did you have to shift your perspective or what was that shift where you could still have it all and then have it all internally as well? I think that the whole ego death concept that we were talking about at the very beginning. I try not to talk about this too much because I think it's a lot of people take offense to it and I don't mean it that way. I sure this is just what worked for me and not as a criticism of anyone else's beliefs. For me, the idea that there was no such thing as legacy that when I died, eventually, eventually everything that I have would become dust and that anything expanded over a long enough time horizon disappears, right? Which if you are like Christian, for example, it's the whole book of Ecclesiastes. And I think the realization of that allowed me to quiet my ego a lot

so that I could be more present in the idea that like this moment will only be here in my mind and anything that I do here will not last. And so it shifted how I worked. It shifted how I saw relationships. And a lot of my thinking is around like my 85 year old self. I feel like my number one mentor is like my fictitious 85 year old self because it's the only person that I really believe has my best interest at heart and is no ulterior motive. And so there's this, there's this tweet that I had that went pretty viral, but it was like listening to a billionaire or a millionaire, I'll just use that. Like when I was in my 20s, I wanted to be a millionaire. And when I was a millionaire, I wanted to be in my 20s. And so the idea that my future self would trade all the money he had to be poor in 20

again made me really reanalyze how I saw living life in the moment. If I literally in the future will value my present moment more than the achievement of the thing that I'm seeking right now in the present, then something's off. Because even my future self knows that. Because right now I would pay all the money I have to get 10 years back. Not even thinking about it. And so then all of what I'm going to achieve in the next 10 years, I would happily give up to be right where I am right now. And so I think thinking about that really shifted a lot for me because it helped me quiet. I'm not saying eliminate, but quiet some of the thoughts that are more ego driven because the ego always wants to like separate and isolate from others and prove that it's better. And if I know that it will

all be dust, there is no better because we're all going to be dust. And so in that same way, if like if we're all going to be dust and we're all siblings, like two very strong frames, for me at least, it helped me quiet that aspect. And I think in the, that way I was able, I think, asked my people, but like I think I was able to show up better as a leader. There was better to show up better as a husband, show up better, like to make content, things like that. Like, I don't think I could have made the stuff we make now five years ago because I still think it would have been more, it would have been to proving something. Yes. Perfect. Number is proving. 100% of improving, proving someone, proving a fictitious foe wrong. Right. Right. They're all talking about.

Right. Right. Right. No one cares about. Exactly. And so that was really, and it's like, I had to shift from like, Mike, no one cares about you to, I really want to have a shirt that says no lives matter, but I feel like it would get way to. No one cares about you. But I think there's like a lot of like meat to that where it's like if we can, because in that way, we are all equal. And so I think it's almost the most egalitarian perspective is that like in the end we will all be dust.

And so I think in that way that's like we have these exchanges that we have and in some ways it makes it more beautiful. Why do you think so many people care about power and respect so much? It usually was withheld from them. I think. I think the things that we're withheld from us are the things that usually we seek the most. I think how many, how many really successful guys have daddy issues? You don't know what I mean?

So many. Yeah. And so it's like, okay, well, I didn't get his respect. So I'm going to have to compensate with my circumstances, with my environment, so that everyone respects me. And some people do that through fear. Some people do that for violence. Some people do that through success.

It really just depends on what vehicle you choose. But like, I feel like the deep need is the same. Yeah. There's something like, I can't remember the statistic, but. a number of U.S. presidents, a big number of them, like, grew up without a father or their father died early in their life. And there was, I can't remember the status, like, 30 or 40 percent or something of, like, the U.S. presidents lost their father or didn't have a father or something like that early on. And it's like, well, you know, now they're going to go prove something or go to

be something, you know, to, what about the habits that you learned of the wealthy people? Once you started to really earn it and scale your wealth, were you studying wealth? Are you studying wealth? Or were you just fixated on like, how do I get one more customer and increase my prices, make better product? What did you learn about the habits of the rich? I haven't learned much about the habits of the rich at all, to be very candid with you. I think that maybe there are some beliefs that, because, like, my dad was a doctor. I wouldn't say he was like, you know, ultra wealthy, but like we lived in upper middle class, you know, lifestyle. But in terms of like wealth as I think you and I would probably understand it, I didn't know anything about that.

And I don't think I've ever really studied it very much. I would say that my heroes now, like, I started studying wealth after I became wealthy. So, like, what did you learn about it afterwards? And what do wealthy people do that you think poor people don't do? They pick higher leverage opportunities in a sentence. So, like, rich dad, poor dad, like poor dad says get a job. Poor dad says get a higher paying job. Like rich dad says like, and the thing is there's so many innate beliefs that seem

commonplace. Like, well, of course. You know what I mean? Like, well, of course, you know, you buy some real estate. You know, it'll appreciate over time. Of course you invest in some stocks. Like, yeah, of course. But like, poor dads just don't say that.

And so you have to like learn that, I think. And I didn't. So I'm grateful in that I didn't have to learn. that because I heard that just was of course. Yeah, once you have some money, like, of course you don't. Of course you don't. And so there's a lot of, of course you don't, that I think I inherited just by being like a saving father. But there's also some upper middle class people who don't save anything. So like, but I think my dad did a lot of, I think he helped a lot with like money hygiene. I think I've had a lot of really good money hygiene from my dad.

The big, the big breakthrough that I had for me was when I stopped focusing on, and this is going to sound backwards, but when I started my gyms, I was all about building the business, right? And when I built the biggest companies that I've had and now recently sold and now we have our portfolio, it was about how do we make the most money? And I know that sounds completely backwards, but the only way that you can make the most money is to provide an exceptional valued service and charge a ton of money for it. And because I optimized around making money, I started going through for low capital expense businesses because I had lost everything after that five year stint. And so I was like, never again am I going to reinvest every dollar from the business back into the business? back into the business because I've lost it before. When I started the next business and every business I've had thereafter, like, we take dividends every month. And we do that because... You don't wait until there's an exit 10 years later and put all your money in. I'd love to do both. Yeah, yeah. Why not both? Sure. Right? And so that was... Take a dividend and get a bigger fair. Yeah. But not just put money in and wait and get no money back. A hundred percent. And the thing

is, and this was a fallacy I had because people always talk about like reinvesting in their business. But I realized that that just meant that they weren't making profit. And so... And so the vast majority businesses, even the software world is somewhat shifting in this, but they want to see profit. And then even better is if you have net-free cash flow, which is just a fancy word for the amount of money that you can take out every month after making necessary investments in the business. And so I wanted to have businesses that pumped cash flow because I had lost it all before. And so I think there's a lot of, like every one of my business seasons, I would say I've had three business seasons.

I had my gym ownership period. I had my turnaround and early gym launch day period. And then I had prestigious labs, the licensing business, and Allen. That was like my last season. Were you exited? Yeah. Yeah. And then I've said like now we're in our third season, I guess.

So brick and mortar gyms, licensing supplements and software. And then, you know, third season is what we have now. And each of those has a huge, huge magnitude of leverage that was added to it. And so, you know, this is like, gym launch was started on accident in that I was like, this might be a way that I could make money. because people were like, hey, you're doing this pretty well for your own gybs. Can you help me turn my around? Yeah, you're like, can you teach me what you've done?

It was like, all right, let me go in here and, oh, I just helped them double their revenue in 60 days. I'm good at this. I'll go, yeah. People pay me more for that, then they'll pay me to help them lose 20 pounds. Right. And so that was the big, that was when I went from B to C to B to B. Yes. And then from there, to be honest, it was just going up another order of magnitude because now,

instead of just building the one business, now we're building lots of businesses at the same time. And so that's kind of like why Acquisition.com, I think, has a much higher, you know, has bigger feet for lack of a budget. Right. And so what do you look for when you're acquiring a business or investing in a business that has cash flow and what businesses have the best cash flow? So this will be relevant for everybody in the audience and also hits on what we were talking about with the wealth thing. Like wealthy people choose higher leverage opportunities and we went over what leverage was earlier. The best businesses, especially in an inflationary period, are businesses that have low capital expenses. Okay.

And that's because if you have some examples. Yeah, yeah. So I'll give you opposite examples to make, and then I'll drive it. So something that does have high capital expense, which is what you would not want to get into, would be like stuff that has lots of inventory, stuff that has lots of supply chain, lots of manufacturing, heavy equipment, things where you have to constantly buy more stuff in order to increase capacity, right? A low capital expense business are things like services, right?

Services, you know, digital businesses, software is mixed because sometimes the development team can be considered a capital expense. So it really depends on how you build the dev team. But the idea is that if you can produce 10 times more units without phenomenally changing the cost basis, then you will have a business that has lower capitalized. And so that's what you like in most of those types of businesses produce more cash flow, have more pricing power. And so I mean that's what Warren Buffett invests in. Right.

It's high, you know, like insurance, GEICO. Right. There's no capital, it's risk. They're literally assessing risk. Air. It's math. Like the business is math. Like, if you really think it's just math is the entire business of insurance.

And what's crazy, it's just a side note is that a great way of figuring out the highest leverage businesses that exist is looking at the business that been here the longest. Insurance has been here since before the world wars. Banking. The banks have been around forever. Right? J.P. Morgan was in the 1800s. Wow.

Right? The biggest insurance companies, they're all 100 plus years old. They're found in the 1800s. And so when you have a business that's lasted that long, to me, that's a great breadcrumb of like, this thing has to print money because it means that they were able to still keep making money through wars, through famines, depression, all of it, and they were still able to keep going. And so I think that when people are like, when you look at all the, like many of the biggest businesses that exist, they have phenomenal gross margins.

I don't want to get too, like, you know, business term here, but like the gross margin is how much incremental cost it is to make a new, an extra widget, right? And so like a pill, for example, cost $100 million to make the first pill. And then every pill after that costs a penny. Right? Sure. And so the gross margin on the pill is very high because if they sell each pill for $10, they cost them a penny. Those are great margins. And most people who are small business owners or people were trying to get into small business, price like small business owners. They say, well, it costs me a dollar. I'll sell it for three or I'll sell it for two. But if you're already starting on like a 50% gross margin, it's very, very hard to make money. Because think about it, like, that's at 100, you're already at half. And then you have the rest of everyone else you have to pay off that extra 50. Very hard to do. And so like, I'll give a couple rules of thumb if anyone wants. But like if you're building a service-based business for us, by all means I have to get gross margins above 80%, which means five times the cost of goods. So if it costs me $100 a month, the minimum I'll charge is $500, right? And so that also gets you to think about business differently, which is not necessarily even how much can I charge, but how can I provide value and make it cost as little to me?

How can I be as efficient as possible? And if you think about what technology does over time, is technology takes something that's valuable and makes the cost of delivering it less. And so that's what happens is a lot of people are able to have action. to things that were once only for the wealthy, but now become for the common men, because the cost basis decreases as a result of technology. And so technology, as we see it, you know, like we can create technology,

but you can also have technological breakthroughs just through process in your own business. It's like, and that's where niching down and being very specific about the avatar becomes important, especially when you're starting because then you can productize the service. Because if you're doing everything custom, which most people when they're starting out do,

it becomes really difficult to become efficient. And it's really difficult to become efficient. Right? Or you have to charge huge fees. huge fees, which most people are too afraid to do. And so the flip side is, if I do the same thing over and over and over again, I will get better and more efficient at it and I will know how to do it faster and quicker and cheaper. And I specifically choose this type of customer so that I can have more margin because there are millions of even this one specific type of avatar. And then from there,

I can take the gross margin, the extra cash that I have and I can hire the best people. I can invest in marketing. But when you have such little margin to work off of, it's very difficult to make money. Yeah, it's so hard to grow. That's interesting. Do you think it's going to be harder or easier to become wealthy and start businesses over the next few years with everything that's happened in the last couple years and where this whole great, you know, 20, 30 agendas coming and all these different things are happening? The war and all the, you know, there might be another pandemic, whatever it might be. Do you think it's going to be easier or hardier to make money? I think technology in general makes things easier for most people. I mean, because at the end of the day, it's just it's increased access for more people.

Yeah. And so I think. To reach more people at any moment. Yeah. If I were just to use history as a guide, business has only gotten easier to get into. More competitive and easier to get into. And so I think that what happens is just the arena gets bigger. So you got more gladiators.

So it's more competitive, but more people can walk in. And so I think, but for the world in general, the more people you have fighting to make amazing products and services, the better it is for society. Yeah. But the downstream effect of that is that in a capitalist system, it is a winner-take-all for most, for many, not all, but for many businesses. And just by the nature of it, that does create social disarray. And it's just, but the thing is, like, it's still the best system that we have.

We don't have a perfect system because the other systems remove incentive and humans are driven by incentive. Even the survivorship bias, like every MLM in the world exists off the fact that there's that one guy who makes $500,000 a month selling shake mix. And the other five million shake mix producers are like someday. One day I can get there, yeah. And it's just survivorship bias, right? But that's why the whole capitalist machine works. So I think they're like figuring out some sort of a, you know, creative way. Like my, I put this in my, on my YouTube channel, but like the idea of having 100% death tax,

I thought was like take down, like the income taxes and all the stuff, but like the thing that creates the conglomerate at the top is that if, let's say, let's say I have $100 billion. Right? That's interesting. And if I have $100 billion, I'm probably pretty good at managing it because that's why I have $100 billion. So let's say I gain 15%. You're holding it. Yeah.

You're not using it yet. Yeah. Let's say I gain 15% on my assets. So like $15 billion, right, on my assets. It is so hard. for anyone to make that up in a lifetime. With just the one, and like, that might be my kid who gains 15 and the next year, he gains 20,

like, and so the compounding effect of the wealth is across generational is where I think it gets crazy. But if there were 100% death tax, because obviously this is aligned with my belief that all of it disappears anyways. So this is obviously, Alex's two cents in the world. But it's just basically dramatically lower the income income taxes.

I think income taxes should be like, as close to zero as possible, and then make the capital gains taxes higher, because that's only going to really affect the well if you really want to think about it, right? Because people who, if you make with your hands, awesome. Right. If you make on your assets, that's just what that has no, has infinite leverage with time. So if you trade the most expensive thing for your money, then I feel like you should get taxed less than if you trade no time for your money.

Sure. Just like a weird thought experiment. What do you think would happen if it was 100% death tax? I think that billionaires would become far more giving. And as they approach the end, they know they can't keep it. And I also think it would change the way the game is played. Because if you know, because this is the analogy that I, like, I haven't heard it anywhere else, I think it's mine. But if you were to imagine life as a poker game, right?

And everybody grows up, they become 18 years old, they can go into the casino. They get a chip or 21, whatever age you can be. And then you get a chip and then you sit down to the table and your dealt cards, right? And there's all the other players around the table. And depending on the cards are dealt and the skill you have, you begin to amass chips, right? And the difference between this fictitious, you know, casino and the casino of life is that in the real world, you can amass chips. You cash out, you have a big lot of money, you walk out the door, but in the casino of life,

and the green river taps you and tells you it's time, you have to get out from the table, but your chips stay on the table, and they push them to the middle to be distributed by everybody else, and continue to get played for it. And that's when you realized that it was a fake game with rules

that never mattered to begin with. And so I bought this piece of land in Austin. It was this huge, it was like a big, really, really nice lot. And I remember thinking to myself, like, got me some land. Yeah, got me some land, right? I own this.

Yeah, I got that trade to that thing is Maya, right? Yeah, right. And then I thought to myself, I was like, well, the guy before me thought the same thing, and the guy before him thought the same thing, and the guy before him thought the same thing. And I was like, and we've literally still been looking at the exact same piece of dirt, and it's just been cycled. Even if it was father to son, even if it was family to whatever, like, death taxes everyone

100%. Like even if the government doesn't, death taxes everybody 100%. And then time taxes your money to infinity because, like, people are like, I want to build a legacy. It's like, that's even just within Americana, you know what I mean, within the times of America. But like, you go a thousand years and there's never been the same superpower over a thousand year period. And so we're like, I'm going to leave a legacy. It's like, but that would be like, you know, let's say an ancient Greek saying, I'm going to leave a legacy for my kids when like they might change their currency by, you know, X, Y, Z, or. And there's so many things.

And I've had a real experience with this because my great, great grandfather was a ruler in Iran, which is where we're from. We got kicked out because we were low to the Shah back in the day. which is why my dad came to the U.S. And so despite that, my great-grandfather had like 400 wives, ruler, very, very well. Really? Yeah, very, very well. Different time, different culture. Very, very well.

He's a ruler, right? Yeah, yeah. All the money, all the women, all the everything. Literally, a ruler, right? And it doesn't matter. And here I am, I'm not even that many generations separated from it, right? Even that still.

You don't have all that wealth. I don't have that land, yeah. Right. And so, like, the idea that we're going to somehow, because the desire for legacy is the desire to cheat death. Like that's what it's done. Like we don't want to die. We want to last forever.

So we want to make something that is impermanent. And so we fool ourselves into thinking that the accolades and the material success and the books you write, whatever, are going to last forever. And they're probably not. Right. And so like, I mean, the sun's going to disappear at some point, right? Right. Like, if we don't do anything before then, like, at the very least that's going to happen.

And so if that is the inevitable outcome, I think it shifts the way people think. And I think that's when you start to do that. changing, I mean, Tony Robbins talks about like global belief systems. And that's why if someone like adopts a new religious belief, like everything changes because the reasons they do and the way they believe the world works changes. And so I think that if they did do a hundred percent death tax, it would be a really interesting way to see the downstream effects of how it changed the way the players played the game. What do you think would happen if all the billionaires started distributing their wealth sooner? I think what happens? Or would they be as hungry to be and

driven to push and build and innovate? Yes. To generate the wealth if they knew, I got to give us away anyways quickly. I think they would. Why? I think it's because it's, I think I'm going to say something that may sound bad, but I think winners win because of who they are. And so I think it's like sales guys. Like you can have an incentive or a comp plan. They just want to win. But they are salespeople. And if I get on the phone, I want to sell because of who I am, not because the comp. The comp is the ticket to get me to say yes to the deal, but it will not change in my activity. I will do it because I love to sell, right? And so I think billionaires get there because they love the game. Like you don't get to a billion without just, because you obviously don't need it for you.

You stopped meeting it for you millions and millions ago, right? And so you do it just because you love the game. What I do think, and the reason that I like that solution is because Elon must said this, but private enterprise is 10 times as efficient at capital allocation compared to the government. Right. So every dollar that private enterprise spends, it's 10 times more efficient. And so it is like if we were to death tax 100%, so whatever you accumulate while you're alive, it just goes back, like, and the thing is, it's not that it would go back into the system through

the government. It would if you were lazy. But most people knowing the government was going to take it, the last, the last efficient vehicle at the end of your life, you would then start thinking about how can I allocate this money efficiently? And so what I think what would happen is you'd create far more ingenuity and innovation around social enterprise before they die. Solving problems. Knowing that the wealth would eventually disappear. Mm-hmm. So like it's more there's this backstop that no one wants to hit. And so I think

what happened is they would change their behavior before hitting the backstop. I don't think a lot of people would just be dumping their billing to the government. I think just knowing that they had to would then-distribor them to, yeah, yeah. That would be, you know, hey, that's Alex's two cents of the world, which is. obviously different. What's, you just had a big exit, right? Last year, what was that for? How much? It was it. It was 46.4. 46 million. So when that enters your account, what did you expect what happened, what did happen, and what can you teach other people about what they should expect to happen when they have a big exit? So I will say that I did not feel the money. I did feel

the loss of cash flow because I had this, you know, I measured myself off cash flow for since. Now you don't have any. Right. You got a big chunk, but then no money coming in every month. So I actually felt, and I probably still feel horror now that I did before the exit. That's interesting. Because the cash flow is going down. Now, I know that Acquisition.com is going to be, I think, significantly bigger than two. than those companies were. But in the interim, I definitely did not feel any better after that.

I am happy that I did it because I do think I'm in the right vehicle doing what we're doing now, making the books, making the YouTube channels, the Twitters, the social media, all of them, but the cash flow is what I felt. And because I had taken dividends my whole life, the amount of money that we got out was pretty much about what we already had anyways. So it was not life-changing in any way. It didn't change how I lived at all. Like not at all. We didn't have any big like, what are you going to buy? I was like, well, I could, you know. I'm happy already. Yeah, I could buy 100 lambos before the sale. You know what I mean? Like, that wasn't good. And I never bought them in. And I never did. And I never did. You know,

because I don't get a lot of out of that. What else was different? Losing, Losing the team is hard. Yeah. Because when you sell a company, you sell the people. Like that's something that people will talk about. The connection. Yeah, but you sell, you sell the organism. You sell the system, the people, the processes, and everything.

100%. And so that was hard because there's definitely times now that we're building Acquisition.com where I'm like, man, I wish I had so and so. Oh, I already taught this person everything like I have to do it again. So there is a, but there's also some level of beauty to it because now that I'm doing Acquisition.com, I have a different appreciation for what I'm doing because every other time that I've started something, it has been from a place of lack. It has been from like, well, this is what's going to not make me more.

You know what I mean? Like the gyms was all about that and then I lost it all. So the second time was all about that again. Wow. So this time I'm starting not like that. And I know what it got like before we sold the companies last year. I spent basically 12 months not doing anything because I wasn't required in the business. Like it truly, it ran.

And so I had a lot, like it was very different. It's very depressing for me. What happens if we don't have a purpose? I mean, you find one. Yeah. You know what I mean? And so for me, but you're in a depressed state, even though you have, I mean, I'm sure you were fine, but you were emotionally mentally like, what am I doing every day?

Exactly. I have nothing to do. Can I go to the gym for so long? Right. Can I eat every meal I want? I mean, like what else you can do? I can eat every meal I want. I can travel.

Okay, now what? After three months of that, you got to have some mission, you have some purpose, right? Even though you have the money, your safety, you have everything. Yeah. but it wasn't fulfilling. 100%. And so that was 12 straight months. And it was because we were going through a sales process.

So you can't start new initiatives because I'm in the middle of a sale. And you don't want to like make any massive new hires. And so you just basically have to just like maintain. And the whole time you're wondering, I hope this deal goes through. Because if it doesn't, then you just wasted a year just doing nothing. And then you might have to do it again. So it was this, it was a super, super, it was one of the most emotionally tiring years of my life because it's always like, this is about to happen.

it's not going to happen. The deal's on the table. The deal's off the table. Like, there's all of this drama that's happening constantly. And I also, one of the things that sucked that I didn't like was, as soon as I had made the decision to sell or that I was going to entertain the idea of selling, and this is a mistake I made. Everything became about satisfying a fictitious overlord of like, what will they think about this move? Well, how will they value this? And I started thinking, whatever acquirer, whatever private equity was going to buy the company, like, how are they going to see this? Are they going to value? this or is this a waste? And so what happened was I started making the private equity buyer of my customer and that was a mistake. And so I think that like at the end of the day and now that

and what happened was interestingly, we started the sales process because my wife and I were beat down. Like we were just very tired of, you know, we've been in gyms for almost 10 years, you know, at that point. Not to say that that's not a good thing, but like whatever. We, we were, we were ready. But in order for us to sell it and make it a sell business, we had to fix all the things that were wrong with it. Right? And so we took a year before the. year. So it took two years. So it took two years basically one year to like fix everything and then one year to sell it. The thing is it's just like when you have a house that you like fix up before you get ready to sell it. By the time we're about to sell it, you're like, I love this. This is amazing.

I just fixed all these, all the problems I fixed. Now I've got more cash flow. It's proficient. You know, we got rid of the toxic people. Yes. And so it was again a very like mind trip experience where I'm like, well, maybe I should just hold it as an asset that just produces cash flow. Yeah. Uncle Warren never sells anything like sell it. is what makes you rich keeping is what makes you wealthy. Like, you know, I'm like, I've got all these kind of things in the back of my mind. But I think ultimately, like, I think no matter what we had done, we would have been fine. But I think for me right now, I think the likelihood that the choice, if I had two alternate

realities, which I don't have to play in, I think that the choice will ultimately yield more impact for more people. I would not have the attention to do Acquisition.com and the media stuff that we're doing right now. I wouldn't be here. Right. I wouldn't be here. You'd be focused on your gyms.

Yeah. Or the, yeah, exactly. On those companies that were in that portfolio. And Acquisition.com would still be a side thing, but it probably wouldn't be the main thing. Whereas now it is 100% of my attention and the companies are killing it. I feel renewed.