The Game with Alex Hormozi - The Case Against AI | Ep 993

Starting point is 00:00:00 In this video, I'm going to make a case against AI and more specifically why more people are not making money despite using AI a lot and token maxing and vibe coding and making all these apps and all that stuff. And so the big misconception I think around AI is that AI somehow canceled every other form of leverage. And if you knew the channel, leverage just means the difference in what you put in and what you get out. If you have a lot of leverage, you put a little bit in, you get a lot out. If you have low leverage, then you put a lot in, you get a little bit out. So that, you know, AI introduces high leverage, which is great. But the thing is, is that there's a lot of things that create leverage. And so this whole misconception around like, oh, we must only use AI in order to succeed,

Starting point is 00:00:44 taken differently, businesses right now who are using AI and individuals who are using AI and they're seeing their token bills go up are somehow not making more money. And so what I find kind of interesting is a couple things. So number one, when I look at our business, we are we now have had another kind of step increase in our revenue um but it's not because of AI that's the thing it's not because of AI they I didn't exist we still would have had the increase and so it's not like a direct line there the second kind of proof point that I think is more interesting around this and then I'll give you some tactics is that I talked to a number of

Starting point is 00:01:19 my wealthiest oldest friends uh over the last week or two and I said listen I know you need to have public appearances saying of course we're you know I'm a super AI advocate because you have to do that. But I said, how much are you actually using AI every day? And like, they kind of like look around and they're like, dude, I'm not using AI. And I was like, well, your teams are. And he's like, oh, yeah, of course. You know, of course, you know, they're like, of course our teams are using. And I'm bringing people in and we're training the team up and all that stuff. And I was like, but you're not using it. And they're like, no, no, I'm not. And I was like, so that's very interesting to me. And so this is the thought that I kind of want to challenge you with

Starting point is 00:01:56 and then I'll leave some tactics at the end, which is there are a lot of forms of leverage. And many forms of leverage are multiplicative. So, for example, capital still has tremendous leverage. AI coming in didn't somehow erase the leverage that capital uses. If you are in media and you make a video like this and thousands of people see it or millions of people see it, that is tremendous leverage, right? AI doesn't erase that. And when you multiply some needs together, let's say you have capital and you have media and maybe have teams, right? People still create leverage for other people. I do find it ironic that like these, the frontier labs that have all this AI still have thousands of employees. And so it's just like kind of interesting as a counterpoint of like, well, people are still being, you know, needed and useful. But the thought of it is this is that I'm seeing so many business owners trying to AI max. And they're because their capacity to work has increased using. AI, they are now doing things they otherwise would not have done if they didn't have AI.

Starting point is 00:03:01 But the thing is, those things that they otherwise wouldn't have done were lower priorities. And so now they're doing things that were less important, faster, and automated. Great. Not great. Doesn't matter. That's my point. And so one of the interesting things about not having AI is that it forces you to prioritize better. It focuses you to focus on the things that are going to move the needle in the business.

Starting point is 00:03:23 and I'm not seeing, with an exclusion of like just a handful of exceptions, most AI use cases that I've seen are not actually making the business a ton more money. I think that having, you know, way more ad creative, I think for sure is helpful from, for an advertising perspective. We have an AI sales rep, which has been helpful. But the thing is, it's like, the AI sales rep is great. But like, I also know how to build sales team. So it's not like this, you know what I'm saying?

Starting point is 00:03:50 Like it's like it's more efficient, you know, and it's scale. but it's it's typically not the limiter of the business. And this is my point, is that the constraint of the business, many business constraints, at least at this point, are not still as perfectly solvable with AI. And if they were, then ever would be making a ton more money.

Starting point is 00:04:08 This is kind of like the crux of this, which is, let me give you some other examples of leverage that people are just not employing that you don't need any tech expertise to do. If you have a one-on business, you can go to one-on, you know, one-to-one many. It's like that would create a lot of leverage, even one-to-small group.

Starting point is 00:04:22 It's if you want 101 to one-on-10, and you have 10x leverage. Like, just like that with that one decision, right? If you go from having scheduled appointments with clients to asynchronous appointments with clients, it's like that gives you a tremendous increase in leverage in terms of how many people you need from a deliverable perspective. If you change your sales motion so that a higher percentage of people buy, and so instead of needing 10 salespeople need two, and they close the same amount

Starting point is 00:04:42 because you've basically educated your prospects throughout the sales process more fully so they need less information to make the decision, which means you have fewer conversations and shorter conversations for your sales stuff. they talk to more qualified customers, then as a result, you can take what used to take 10 people, and you can funnel it to two. None of that uses AI. This is my point, is that there's so many places in a business where you can increase leverage that there's this fallacy that because I now have this infinite tool, and I'll use infinite with quotes here, I'm just seeing a lot of people using and not

Starting point is 00:05:12 making more money. That's kind of my point. And so it's this idea that we can throw away the fundamentals of business, but that's not true. Like, you have to, one, is you want to use every form of leverage that you have at your disposal to solve the constraint of the business. If you don't know what the constraint of the business is, you're just doing more shit automated does not make you more money. And I think this was the conversation that I was having. Because I'll tell you the highest leverage thing that you can do, even higher leverage than AI.

Starting point is 00:05:42 Ready for it? Making good decisions. Think about it. If I have my whole team and I say, hey, guys, we're actually not going to do this whole bunch of work over here, because I don't think it's important anymore. By doing that, I get so much more out of my team. It is more efficient for me to determine that something is not a priority

Starting point is 00:06:05 than for me to automate something that is not a priority. That was good. That's pretty good. That is higher leverage. And so I will get more out of this resource that I have, my team, than if I just try and automate it and then create an output that isn't relevant. And so this is what I'm saying. And so I think quality still matters.

Starting point is 00:06:32 AI's not there for a lot of things. There's obviously use cases and we're, you know, I would say very early and very aggressive adopters of AI across the business. When I look at the business overall, the things that are growing it are the things that have always grown in it, right? We need to generate more demand. We need to convert a higher percentage of that demand. And we need to deliver, you know, very high quality stuff.

Starting point is 00:06:52 And right now, AI can help. But it's like having, like, access to a lot of, it's actually, you know, it's actually probably a really good analogy. A lot of, it's almost like access to a lot of virtual assistance. Like third world virtual assistance. That's what in some ways right now, a lot of the use cases are like that. I'm not saying it's perfect analogy, but like there's a lot of through lines there, which is that's always been there.

Starting point is 00:07:15 And to be fair, I think virtual assistance right now sometimes are even cheaper than the AI token usage. But that's always been there. And businesses have still competed that didn't have them or did have them. And it's still the same marketplace. And there's still high quality and there's still people have good brands. And there's still great offers and bad offers. like if you have a terrible offer, then AI on the back end's not going to help you. Now, you can say, I'm going to use AI to improve my offer. Maybe. Maybe not. I don't know.

Starting point is 00:07:38 And so, anyways, that is my public service announcement, which is that AI, though it increases leverage, does not cancel other forms of leverage. And for most people, they're using it on things to be more distracted because they have more resources now. They are still making poor decisions about how to allocate those resources. And as a result, thing three are not making more money just because they have AI. And so to ask yourself this question, which is, has implementing AI in my business made me more money? If it hasn't, then you are likely using it in the wrong place, which means that you need to return to the thing that matters most, which is identifying your true constraint. And then forcing all of your very limited, and I say that for myself,

Starting point is 00:08:28 included all businesses compared to the resources available in the world. Every one of us has a spec of resources developed to us. And so we have that tiny spec and our ability to focus that tiny speck of resource on the one thing that's going to move the needle. Our skill at being able to do that is the thing that will ultimately make you more money, even more than AI is just a tool. It's not the answer. So anyways, that is my two cents for the day.

Starting point is 00:08:56 I hope you, uh, I feel like my very important. prompt to style. If you hate it, you can let me know too. Anyways, lots of luck. If you like this video and your business owner who wants to break through your current revenue ceiling, I just filled every lesson from scaling 10 businesses past 10 million and three businesses past 100 million into a completely free scaling roadmap that I've used to go from 0 to 1, 0 to 10, and 0 to 100 plus. And so you can click here and you can check it out. Again, absolutely free. And since your business owner, appreciate you and enjoy.

The Game with Alex Hormozi - The Case Against AI | Ep 993

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