The Game with Alex Hormozi - Switching Mindsets, Investing, & More (on Anik Singal) Pt. 2 - Sept. '22 | Ep 506

Episode Date: March 4, 2023

“You gotta learn how to build, you gotta learn how to sell and you gotta learn how to lead.”Today, join Alex (@AlexHormozi) as he guests on Anik Singal’s The Fighting Entrepreneur to talk about if he plans on investing in companies in the future, switching to organic traffic, what his next book is about, and what sectors he’d like to acquire. This is part 2 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 Anik Singal’s YouTube Channel!Timestamps:(0:16) - The front & back end of Gym Launch, & Alex’s next book: Hundred Dollar Leads(5:40) - Plans of investing, Acquisition’s support staff, and switching to organic traffic(13:16) - Alex shares with us his favorite social platform & what he thinks of the others(18:50) - If Alex could go back in time & give younger Alex advice what would it be?(20:49) - Sectors Alex would like to acquire or be a part of in the futureFollow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

I see business as three core skills. It's like you've got to learn how to build, you've got to learn how to sell, and you've got to learn how to lead. 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. What was the front end? Was it like a course or was it straight into the licensing model? I think the back end was like the full suite, right?

Pay us X amount per year and have access to everything. Yeah, the Jim launched the original product for the first five years was $16,000. for 16 weeks. So 16K, 16 weeks, $1,000 a week. And gym owners would make significantly more than that in new contract sales, cash or prong, cash collected, et cetera. It definitely was not a course. And I think that's where we parted from that probably five years ago. I saw, you know, I saw the course business world. There's something wrong with it. But it was, especially because we're niche, you know what I mean? So you've got 50,000 gyms in microjims. I'm not going to, you know, if I wanted to sell 2,000 gym owners at 1,000 bucks a pop, I'd make $2 million. Like, that's just not super

interesting. But if I sold 2,000 gym owners at, you know, $100,000 pop, it's like, it's $200 million. It's much more interesting. So it's like, how can we, how can we do that? But no, for us, it was implementing an entirely new business model because with the implementation of like the acquisition system, other holes in the business become clear. It's like, oh, you're pricing on your current, you know, business is off. And hey, these are the new membership options you should be selling. This is how you should lay out your floor. This is how you should be comping your coaches. It's how you cop your sales guy. Like, there's all these other problems that came up as soon as we saw the first problem. So the first one was really just kind of an

accelerator to get them people in the door, get them cash in their pocket. And the second one was to buy them time back and transition it from a job to an asset. Got it. And so that was a front-in. Your front-in was 16,000 for 16 weeks. What was the backend behind that then? 42. 42. Was that the licensing where they get like access to like basically the done for you? Licensing. One was just a truncated duration. Yeah. Okay. Got it. Because they could use the ads. They could use the pages. They could use everything we'd already built. Just press go and just put their name on it. But they could use it only for that 16 weeks. Was that the?

Yeah. Ah, okay. So it's a pretty seamless transition into the 40 because it's just more of what they already paid a lot of for and got value. My favorite upsell. More of what you already got. Yeah, more of what you already got, which you probably liked and enjoyed and got results from, so now you want to keep using it.

Ah, it makes sense. All right, I'm glad I asked that question. Very simple business. Well, and I'll tell you, I've run, all right, here, I'll say it. I made learn about as damn complicated as it can get. I've made other businesses. Actually, actually, I think my superpower is. I complicate things.

Like, I go in and I'm like, oh, let's, you know, let's see, how do I do this? And lately I'm just like, and I swear, I think it's because we had a baby. So I have like limited energy. So I'm just like, yo, like, let's not do that. Let's not do that. Let's definitely not do that. Let's just do this. And like, let's just do this and do a lot of it.

And you've talked about this in your podcast before where you're like, a lot of entrepreneurs, especially in the information space, will get to a certain size. and they're just like think it's over and start launching everything else. And it's like, dude, you barely got started. Like, there's such a huge market. I have a really good friend of mine. He owns a pizza restaurant. So I was like jiving with him a few weeks ago telling him ways and strategies to use the internet.

I don't see anyone doing this. I'm like, this is how you can get business using the internet. It's like not hard. And he's just looking at me like completely like, right? And I just happened to go Google this. And I was shocked. There's 42,000 pizza restaurants. in the country.

And I was like, holy crap. I think it's 40. So it's 42,000 non-franchised, non-corporate-owned. So it's, yeah, it's like, it's 42,000 like independent pizza,

which first of all, by the way, that was a really easy data point to get. And I was like, wow, that's cool. Like Google had it right at the top. And I was actually thinking of you. I'm like, this market needs to be Alex Hermosie. Like this, like, these guys don't know what they're doing about how to get business.

But, all right, I have a question. I don't know if you're publicly on the record about this. What's the next book you're writing? $100 million leads. Ah, nice. Love it. So your book, you know, that's how I came to know of you. And I feel like a lot of people are kind of getting to know of you from all places.

I've kind of, you know, seen stuff about Jim Lunch and all of that. But your book, you know, and the book came out. So this is funny. I'll give the backstory. It was like, everyone starts talking about. I'm like, who the hell is this guy talking about offers? Like, what is this $100 million offers? Like, what is this?

Just ridiculous. So I was like, I got to look. at this. Like, I've been in this space for 20 years. I don't know what this guy is. So I opened the book. I started reading it and I'm like, that's the one question, by the way, that I have, so I teach copywriting, I teach everything. The one question I have always struggled to answer for students is, how do you make a good offer? And like, I could just never really answer it. It's a tough question. And so now it is, it's just like, go by Alex's book. That book's got the full framework. And I also say, good luck, because it's freaking hard. You'll spend more time trying to check off the boxes

in that book than ever, but that's by design. So $100 million leads. So you're going to share systems to generate leads, paid, organic, all anything else that you've got, you shared about that? Yeah. So there's four ways that a person can let another person know about a thing. And then there's two strategies in addition to that. So there's six in total, but the other two leverage the first four.

That's awesome. All right. Awesome. Do you have a rough idea when it's coming out? I'm guessing Q1. I finished the final, I like the first draft. this last weekend. And so I'll have to go through second drafts and edits and all that kind of stuff. And then usually, I'm guessing that'll probably take 12 weeks. And then from there, it'll

take 12 weeks to get it published and all that kind of stuff. So probably six monthsish from now, Q1. Awesome. All right. So let me ask you this question. You kind of alluded to it earlier. Will you ever operate another business? Or is it just investor from here on for you? It depends how you see the hold co-operations. You know what I mean? Because it's, if you think about Warren Buffett and Charlie, I think they definitely are active in, you know, Berkshire Hathaway. They have 19 employees, et cetera, now is, does it require, do any of the portfolio companies require them to grow? No, absolutely not. But they're actively involved in trying to, you know, fix things.

Now, obviously, they're much older now and they take, but it's not looking at what they're doing now. It's looking at what they did to get here, right? I think they were working a lot. And so, you know, it's the same degree. That's very much how my time has spent is it's almost all helping the portfolio companies, but not actually selling something, if that makes sense. Sure. So that, and I was actually going to ask you, it sounds to me very Berkshire Hathaway,

and I was going to be like, do you have any employees at Acquisition.com? I have seen the office you work out of, so I did see that TikTok video. Can't fit many employees into that office. So do you have any official employees of Acquisition.com? Yeah, no, we have a full. Okay. Okay. Awesome.

And so what are they doing other than obviously the support staff to help support you? I know I've worked with your assistant who's awesome, but do you have people that are out there looking for deals, analyzing the deals, What does this support software play? Yeah, I mean, there's definitely the deal analysis side. That's a decent amount of bandwidth. But if we were to divide the company up, 75% of it is supporting the portfolio of companies.

And so that's basically everything we can to help each of the departments of each of the companies grow. So we've got people who are experts in marketing, people are experts in sales, expert in all these different components so that we can help from growth. Oh, that's excellent. Okay. So you have people that work full-time.

for Acquisition.com whose job is to coach whatever their expertise is into the portfolio companies, whether it be sales or marketing or any of that. Yeah, I wouldn't use the word coach, but yes. Support. Is that better? So why not use the word coach? I'm curious. Why did that get you laughing? What's wrong with that word? Mostly because I think it has a different connotation. You know what I mean? I would say this is much more, you know, advice counsel than it is like coaching. You know, they're not on accountability calls and stuff like that. They're more like, this is how you need to lay out this department, this is the comp structure. These are the way that we're going to recruit these people.

Like we need to switch the software up, things like that rather than like, hey, did you do the things you did last week? You know what I mean? It's a little. Yeah. Kind of consultant slash like almost like a board member. Yes, it's much more akin to that. Okay.

Got it. Got it. Got it. That's a good difference. And I'm glad you brought that up. All right. So let's pivot to social media. It's a lot of work, man.

Why not just do some paid stuff? What's going on? Like, and let me, let me share why I'm saying this. So I'm a lot. I'm not going to complain. And my social media is blowing up, but we were just talking about this before our interview started, where my head AV guy was like, man, we're just like, it is so crazy how fast we burn through the stuff we shoot. Because one week, we'll be like, yeah, we're two months ahead.

And it's like, hey man, I'm able to run out of content like three days. So like, can we film more? And I'm like, we just filmed. And so it is exhausting. But I'm seeing, you know, your stuff and you're very prolific. You made a video recently. We talked about, like, kind of how much you spend just on it. So I'm curious.

You came from paid. You did a ton of paid. And then all of us on one day, you're like, I want to do organic, like a lot of organic. Talk me through that mindset. Well, the first one was, so I said just right, that there's six ways you can get customers, right? So you can do paid ads. You can do content marketing. You can do cold outbound or you can do warm outbound, where you can do referrals.

You can do affiliates. Right. So there's a kind of like the six strategies you can do to get people, right? I had built a company using five of those six. So I've used each of those five in different companies that we've owned and then sold. The one that I hadn't done is I'd never built an organic-based brand. And so it sounded fun to try and do something that I hadn't done before. And that was honestly, the primary thing.

The secondary reason was that I knew that for what I wanted to build, I would want it to be inbound. Like deals are not sales. You know what I mean? It's a partnership for a very long-term commitment. You have to come in with trust. especially because we're in a minority stakeholder situation. We have to be able to lead with influence rather than with legal arm twisting, which is how I prefer not to live my life.

And so kind of solving backwards from the problem of like, how do we get lots of people who already trust me to want to work with me for the long term? It's like, well, then they should have consumed a lot of my stuff. So I can either do a paid thing, but that's still more salesy. And we're buying, not selling. So we're in a reverse situation. So I had to kind of reverse the funnel and make it off of inbound. And so that's why I did it off organic.

Hey, guys, love that you're listening to the podcast. If you ever want to have the video version of this, which usually has more effects, more visuals, more graphs, you know, drawn out stuff. Sometimes it can help hit the brain centers in different ways. You can check on my YouTube channel. It's absolutely free. Go check that out if that's what you are into.

And if not, keep enjoying the show. Right around the time that I saw you really go deep into it was right around the time that I was thinking about it, I have not done cold outbound, but of all the ones that you mentioned, the only two I've not done are cold outbound. I've done a little warm outbound. I could probably do better with that, but I had not done organic at all. And mostly the reason I had not done organic was it is a time commitment, but mostly also,

I'm a bit of a private person. So the idea of me talking about my relationship with my wife or whatever, it just didn't really settle with me. And so this is a funny story. You know, I appreciate this. So we use some of the same resources in the sense of consulting. that work with us. So the first time he came down, flew down to film with me, he's talking, and he was telling me a lot about kind of stuff that you and him have done together. He keeps talking, and I'm like, all right, when you went to film with Alex's first time, how many videos did he do?

And he's like, he did 100. I'm like, we're going to do 101. And he's like, I don't want, I was like, we're going to do 101. He's like, we don't really need to beat Alex. I was like, damn it, I said we're going to 2001. But I was arguing with him because he would tell me to do certain topic, right? And I was like, I want to talk about that, right? And boom. he'd be like, let me show you, right? And of course, he would show me your channel. And so I studied your channel. I like the mix.

I think it's very, very meticulously done. You can see the balance of like, hey, sticking to the point of like, you know, that attracts that. But then sometimes kind of veering off and getting personal. What's interesting is I would watch your content for more of the professional side, but I just told you earlier. I'm like, I've seen your flannel shirt. I thought that was freaking hilarious. I've seen your office video. So actually, it does help for people that are following you to, like, kind of see

that other side. Like, your Chipotle thing, dude, makes me laugh. Like, every time I go to Chipotle, every single time I eat Chipotle, I'm like, I think about Alex Ramosey. So you somehow branded yourself a long Chipotle now. But that stuff really helps. And so when I got started with it, I wanted just outreach. I was like, I'm really tired.

Here was what I was tired of. I was tired of every time someone sees my face, it's commercial. It's an ad. It's me holding. something, me saying come. Yeah, and I was like, I would love them at a different place in my life. Now, I'd love to be able to, every time someone sees my face, I want them to be like, oh, what is he up to say today? Like, and so Organic was the best way to do that. For anyone who's listening or watching, organic will take some time, but man, once it starts to

take off, it's like a freaking freight train that, you know, like right now we're getting on YouTube alone, like 15 million views a month. I don't even know how to process that. It's like, it's growing so fast. So what's your favorite social media channel? Let's say, the head, you got to lose them all, you get to keep one, which is the one that you think. To consumer to post them. No, to post for your business. I like YouTube. YouTube.

What about the consumer? I would have said YouTube slash podcast. I just like the long form stuff. You know what I mean? The long form stuff, you can go so much deeper into topics. I feel like you can provide a lot more value in a real way. Not that you can't do it in the shorts, but it's, you get the difference. You can really take a part of topic and get someone to understand something rather

than just like a quick, quick hitting belief shift. Hey, Ryan, did you hear that? Ryan, did you hear that? Long form is still better than short form. And I argue about this all the time. You can also think about shortest top of funnel versus middle or bottom of funnel. You know, it's a different way of thinking about it.

So maybe it's, I mean, again, these are preferences. We do them all. And then in terms of using its Twitter by far, I'm a huge Twitter guy. I love Twitter at all. I don't do Twitter at all. I don't even, I don't even not to log into my Twitter. I don't know why people like Twitter.

What's so great about Twitter? talk to me. Like, I'm not, I'm just not in the Twitter land at all. So not to offend anyone on other platforms, but I think the quality of the average Twitter user is higher. So, like, they have higher average income, like, higher IQ. I don't know. Like, the discussions that are happening on Twitter are much more interesting to me than, like, you're not going to see, like, tons of viral cat videos on Twitter. You know what I mean? Maybe there are, but they're just not getting served to me. I don't know. But, like, there's just less of that. The other thing that I like about Twitter is kind of like, it's like a, it's like a, it's like a, it's like a, a,

more maverick LinkedIn. You know what I mean? People are not necessarily more polished there, but the difference is that people are being judged on the quality of their ideas. So it's not just some girl who's posting butt pictures. It's all you got is, and because of the character limit, it forces concision.

And so I think a lot of people tend to draw on. A lot of people don't know why they're saying what they're saying. They just like make noise. And so I think there's a higher signal to noise ratio on Twitter overall. And so I think I get more value from consuming Twitter. And then I also think that Twitter has made, me a better writer because it forces me to consolidate my thoughts into single like various shorter sound bites speaking of twitter so on twitter if i want good people to follow could i go to your profile

and see who you're following is that a good measure to see like some like because we have similar interests you know like business people you know i'm i'm pretty sure i would enjoy following the same type people that you follow so i'll just hack whatever you're doing mine's like one third one third one third it's like comedians philosophy and uh and business those are like the three that i follow Nice. All right. I can see that. So speaking of Twitter, what do you think? You think he's going to, Elon Musk is going to get Twitter or you think it's going to fall apart? I hope so. I hope so. I think it'd be really good for the platform. And I really like the platform. Do you think there's a lot of fake users and robot issues? I'm sure. I mean, I don't know how you do with it on Instagram, but like a third. I mean, I get, you know, 50 plus comments per post that are just robots on my Instagram. So I can't imagine that. I'm getting a lot even on YouTube now, a lot of comments that are pushing people.

Yeah. Yeah. I mean, I'll tell you what, most of my posts on social media, I get to learn just how much people hate me. People that don't know me hate me. And yesterday, so this is a funny story. You'll appreciate this. And I got my first one million view video on TikTok after being on it for like almost three months, just frustrating me. And of course, it's got my wife in it, right?

It's a video about me and my wife. And I don't remember filming it. My wife has one simple rule with me. She's like, if you're going to talk about me or use me, because she's not, she's in my business, but she helps manage our investments, but she won't. Like, Layla will be on camera and show, no. My wife is like, I'm not, don't take a picture of me, don't do anything. So she's like, if you're going to use a picture of me or whatever, it has to be approved by me first.

I want to see the picture. I'm like, all right, I don't know, man. In the middle of this filming session, how I end up. filming this video. I don't remember filming it. I'm listening to it again. I'm like, when did I say that? The video hits. I see it on my own TikTok and I'm like, oh shit, because I see a picture of her right in the front. And I'm like, this was not approved. And I'm like, okay, whatever, she won't know. She's not on social media. She has no accounts in any social media. But her friends usually tell her, except like, I check like an hour later and the videos crossed like 100,000 views. And I'm like,

oh, shit. This is the one of all of them. And it goes viral. So yesterday she finally makes me, She's, we hit a million. She's like, read the comments. I'm like, never read the comments. She's like, well, what's the point of posting? I'm like, don't read the comments. So she finally forces me to read them. You won't believe this, Alex.

I thought I was being punked because they're all positive. I couldn't. I scanned a hundred comments and I couldn't find a single negative one. And I was like, wow, I think people are getting nicer. Yeah. Then look at the next video. And then I'm like, never mind, we're back to normal. Like everything is good in the language.

land of TikTok. All right. So, man, we've been through a lot. So first of all, thank you for being so open and just sharing everything. For me, it's, you know, like I told you with where I am right now, I'm trying to get, I'm trying to nail that simplification side of it. And so it's really interesting to hear how you think about what a business should do to be simple, but highly valuable and kind of learning from the gym launch. Someone recently I saw on Facebook post, and this is a tip for everyone. They're like, stop talking about Alex's 100 million offers book. And if you're smart, go read his gym launch book. I don't even know you had a book to call that. So I was like, all right, I'll go read that. They said lots of great wisdom there. Hey, if you could go back 10

years and give yourself one piece of advice, one, what would it be to help accelerate your growth faster? It's tough because I wouldn't want to mess up what's happened. I'm very happy with how things have turned out. So I really wouldn't want to mess with anything. I thought about that a lot because I, you know, I'm sure you play out these hypothetical scenarios, which is like, you know, If my 80-year-old self comes back in time and tells me something, it's like, if he comes back in time and says nothing, then I'm like, oh, it must turn out well. I'm just going to keep doing what I'm doing. Let me ask it a different way. I'll ask it a different way.

It'll be easier. 20-year-old walks up to you right now, says, Alex, give me the number one advice. What's one advice you would give me that, you know, is bar above all advice about being a successful entrepreneur? Learned how to sell. Learn how to sell. Got it. Yeah, I agree. It's so pervasive.

So, I mean, I see business as three core skills. it's like you got to learn how to build, you got to learn how to sell, and you got to learn how to lead. It starts with selling because no one knows about your stuff until you sell them the thing, right? And then as soon as you sell,

you realize that you don't know anything about building product or building services. So then you got to, you keep selling it as people are not going to like what I'm about to say, but like, your route is that when you start, you're going to suck, right? And that's normal because why would you be good?

You've never done it before. And so you have to accept the fact that you have to just try with 110% to fulfill as much as you can from the promises that you're making on the sales side. And so try not to promise too much. The easiest thing to do is start working for free.

Just to get those initial successes in, learn from the failures of the people that you, the customers you get, even if they haven't paid you, even if they didn't pay you, they're still customers. Learn to get to the point where they're like, hey, if you said, hey, I'm not going to help you anymore. They would say, well, I want you to help you. And then, well, then pay me. And then if they say yes, then you know you've got something that's actually providing value. And that's kind of like the shortcut of selling and building products or services. And then the level above that, that turns it into a business rather than just a high paying job. job is learning how to lead others. And so I see those three core skills of business.

Yeah. No, love it. Absolutely love it. It's been super interesting. The last question I'll close up with is you're obviously watching the markets. You're seeing what not markets like in like market markets. I just mean economy or just different industries. What is one, two or even three sectors that you're really hoping that perfect application comes through for acquisition.com? What's an area that you're really like, man, I really want to get into or acquire or be a part of a company that's in this area? Man, you should see the amount of cool, interesting companies we see every day. From an exposure standpoint, I definitely would love to have more Web3 stuff. Everything that I have seen come across our table is not people who know business.

It's just people who just really know are very interested in Web3 stuff, but think that the normal fundamentals of business don't apply. So I'd love to see a marriage of like the fundamentals of business with the new technology that exists. so that would be one of them. It's kind of like the internet way back in the day, people thought like fundamentals of business didn't apply with the internet stuff. It's like it still applies, just has, you know, different benefits. So that's one. Number two, I love unique alternative education stuff.

I mean, it's our core thing, but that's, I love, I love those types of business. It's low capital expenditure, high cash flow. And I would say a third one that would be like a shadow one people probably wouldn't expect is payment processing loan, a lot of like finance-related stuff. I've become a lot more interested in that side of the world, like the businesses of finance rather than like finance, if I had to limit to three categories, probably like finance, some sort of alternative education and then web three stuff. There's probably three that like would be really interesting to me.

Love it. Awesome. All right, man. Well, listen, I want to respect your time. I'd love to have you back in the future at some point. Hope to run into you in an event at some point. And if I can be of any help to you, please always you know how to reach me and keep inspiring us.

Thank you so much. Congratulations again on your success. I appreciate it. Thank you for having me and up the audience, God, I feel like from the time we had.