The Game with Alex Hormozi - The Biggest Mistakes that Entrepreneurs Make | Ep 635

Episode Date: January 4, 2024

“The only reason you shouldn't be doing more reps and adding to the bar, adding to the stuff that you sell, is that you literally have no more people to sell to. And until you have that problem, you should focus on the one thing.” Today, Alex (@AlexHormozi) discusses a common mistake that entrepreneurs do when it comes to taking on more opportunities than they can handle, the parallel between lifting weights and doing business, and why focusing on one thing at a time will give you the best results than dipping your feet into many ponds at the same time.Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned on his path from $100M to $1B in net worth.Timestamps:(1:33) - Gym analogy: understanding business complexity(3:05) - Pitfalls of over-expansion in business(4:44) - The solution: Simplifying and focusing(7:40) - Personal experience and final thoughtsFollow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition(This episode is a re-run. Original airdate was September 8, 2022)

The biggest mistake that I see entrepreneurs who are at, you know, $2 million, $3 million, $5 million, is that they are trying to solve their business growth problem by just coming out with thing after thing after thing after thing for that audience rather than thinking maybe I should expand my audience. Welcome to the game where we talk about how to sell more stuff to more people in more ways and build businesses worth owning. I'm trying to build a billion dollar thing with Acquisition.com. I always wished Bezos, Musk, and Buffett had documented their journey.

So I'm doing it for the rest of us. Please share and enjoy. Mark Bell just flew out. Awesome guy to do a podcast here with me in Vegas. We worked out, shot the shit. It was a great time. And there was this really important point where he said, you know, I wish more people would just peel weight off the bar. He said, I always respect a guy who's lifting with stronger guys and says, you know, guys, I'm going to peel some weight off so that I can do this weight the right way.

And I thought it was such a beautiful parallel in business and one of the most common mistakes in business that I see entrepreneurs at all levels make. So Acquisition.com probably talks to 25. new companies a week that are coming out, you know, approaching us about us potentially, you know, investing in their companies. And one of my biggest pet peeves, comma, entrepreneurial mistakes that I see across the board, especially in that like sub five million range, is something that will destroy your business for the long haul. And the reason is not because the strategy is wrong, but because it's too advanced. And I will explain what I mean in a second. So the easiest analogy for what I'm going to try to explain is something that hopefully people can resonate with at the gym.

So if you're working out with someone and one person is stronger than the other person and the strong guy goes first and has three plates on the bar, doesn't really matter. The weaker guy might go up and if he has an ego, give it a shot even though it's above his pay grade. It's above his strength level. And even if he could pull it off, it'd be poor and it'd probably be risky because he isn't strong enough, right? And business is a lot like that in ways because oftentimes entrepreneurs will have the right strategy. Lifting the weight and lifting heavier weight is not wrong and it's the right way to get strong, but it's just too advanced for where you're at right now. And it takes humility like the guy who says, you know what, I'm going to peel a plate off

because it's like I can do that weight better so that I can someday level up and get strong enough to do that more advanced thing. In weight and lifting, it's linear because you just add plate to slates. the bar, but in business, it's about complexity. And so adding the weight to the bar is complexity in the business, whereas simplicity oftentimes is what scales. So you might imagine, imagine somebody comes up to you and says, hey, I want to start a digital bank because I think that all of this stuff should be central and we could have payments and blah, blah, blah, blah, blah, blah. That's a hard business to build. Elon Musk can build it because he's a thousand pound squatter. It's not to say that if you

tried to build it, you're wrong for the idea, is that you just might not be there yet. And so back to what I was saying with the entrepreneurs that we talk to on a regular basis, the biggest mistake that I see is that they put on shoes that are too big for them. And the way that they do that is that they have something that starts working and then they let this insipid phrase melt into their mind and take over their actions, which is, I'm leaving money on the table. And so they have this thing that's working. and then they think of themselves, well, I don't want to fur that business out because, like,

they should get that for me. And then they try and glob that. And they're like, oh, yeah. And then I need to do this too. And I need to glob that so that they, so I can get more money on every customer. Is that a great strategy? Yes. Is the execution of that strategy very advanced from an operational perspective? Yes. And so here's the thing. I had a buddy from high school, approach me. And he was like, hey, this is what I'm doing with my contracting business, so he's a general contractor. And he was, he was roofing primarily. And I was like, okay, sweet. So you're just going to scale your roofing business? He's like, yeah, but I also do some like flips in real estate because we like, you know, fix some stuff there. I was like, okay, so you do roofs and you do

real estate flipping. He's like, yeah, but I mean, we also do some general contracting work just kind of like fix stuff inside of houses. I was like, okay, so you do roofing, you do general contracting work and you flip houses. And he was like, yeah. I was like, okay, why? He's like, well, you know, we have these resources. I'm trying to like make the most of all of it. And I, you know, some of these clients, we fixed the roof and they're like, hey, can you fix something in my house? I'm like, I can do it? So then I do it because I don't want to leave money on the table. And the question is, what problem are we solving? If the goal is to grow the business, do we think that we could have a $100 million roofing business? The answer is yes. Do we think we

could have a $100 million general contracting business? The answer is yes. Do you think we have a $100 million flipping houses business? The answer is yes. Can you have all three? Very unlikely, unless you're an Elon, unless you're a freak. But most people aren't. And that's okay. It's normal. Moise Nation, real quick, if you are a business owner that has a big old business and wants to get to a much bigger business, going to $50, $100 million plus, we would love to talk to you. And if you like that, we would like to hear more about it. Go to Acquisition. Doc. You can play anywhere on the page and talk to one of our team and see if we can help you get there. The biggest mistake that I see entrepreneurs who are at, you know, 2 million, 3 million, 5 million, is that they are trying to solve their business growth problem by just trying to glob as many different things as they possibly can.

You know the people I'm talking about. They have an audience. And so then they just start coming out with thing after thing, after thing, after thing for that audience, rather than thinking, maybe I should expand my audience and keep selling the thing that I'm really good at, the thing that I'm best at, the thing that's the best leverage for my opportunity and my skill sets. And so it's hard for people to say, or even peel back. So if this is you and you've got five different products, you sell to different avatars, you sell very clearly different services, you might want to say, okay, which one of these are my best at?

in which one of these do I think I could serve the most people with? And find the one that Chris crosses those two things and say, I'm going to forget about the rest of the stuff and go all in on this one thing. Because the problem that we're trying to solve is that we're trying to make more money. And so us doing all these other things, it distracts from the core business opportunity. And so that's where we need to peel weight off the bar. We need to peel things down and focus on the weight that we can do

and get more repetitions in it that this weight so that we then can earn the right later to maybe add one thing in at scale. Maybe when we have someone who can run that and drive that rather than you, right? And so it's probably the number one red flag that I look out for. It also tends to stem from a little bit of greed. And people, like, they're looking at other people's paychecks. I'm sending this guy so much business. I'm sending that guy so much business.

Good. Great. Get an affiliate commission. Call it a day. Move on. Right? And they try and bring these things in-house. and a lot of times they're not core to you.

It's just, it's globbing. And then you have this amalgamation, this Frankenstein-looking business that no one wants to touch. Because the first thing that we do with a business like that is we would simplify. We'd peel weight off the bar, and we'd say we need to do more reps

and more volume with the weight that we've got. And that parallel applies so beautifully in entrepreneurship that I felt the need to make this because so many of the entrepreneurs we talked to are making this mistake. And I say this because I, before I started making, making money. Had a chiropractor agency. I had a dental agency. I had a Jim Turner on business.

And I also had five locations, six locations, whatever that was, six locations. So I had this many businesses at the same time. And I wasn't making no money. And so I, do I think that I could own all these businesses now? Sure, I'm strong enough to own those businesses now. But then I wasn't. And so what did I have to do? I had to peel weight off the bar until I was left with one. and then I did more reps with that one, with the one plate on the bar, I did as many reps as I could, and then I was able to level up my entrepreneurial skill set on a clear opportunity of all of the opportunities that I was best at. And you have to just say no. And this is just like the woman in the red dress, saying no to increase in attractiveness as you get better. When I was starting out,

I might consider a thousand dollar a month thing. But when you're making a hundred grand a month, you probably aren't as interested in a thousand dollar a month thing. You just ignore it. But you have a harder time ignoring another $100,000 a month thing, right? But you have to say no to that to get to a million a month. Because what happens is you get to 100 and then you do another thing and then your attention split and then you can't get past here. And so you have to peel the weight off the bar and then you do more reps. And the thing is that even at that next level and you're at a million a month, you look at this other thing. You're like there's this other opportunity that's a million a month, but usually peel the weight off the bar and you do more reps. And so the only reason you shouldn't be

doing more reps and adding to the bar, adding to the stuff that you sell is that you literally have no more people to sell to. And until you have that problem, you should focus on the one thing. And the secret is that most people really never get into that problem because they're not even close to the size of their market. So Mosey Nation, you're an entrepreneur, focus on the one thing, peel weight off the bar, do more reps at the weight that's appropriate for you, and then watch your gains, both financial and physical stack.