The Game with Alex Hormozi - The Entrepreneur Within, Gaining Momentum, & More (on Omar Elattar & The Passionate Few) Pt. 1 - Aug '21 | Ep 427

Episode Date: August 27, 2022

At the end of the day, we only have so much decision-making power. Today, join Alex (@AlexHormozi) as he guests on Omar Elattar & The Passionate Few’s YouTube to talk about his path from employee to entrepreneur, how fitness has been incorporated into his business, and how they optimize systems to scale a business. 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 Omar Elattar & The Passionate Few's YouTube Channel!Timestamps:(1:40) - "Entrepreneur Alex": Origins and sources of inspiration.(4:51) - Post-college plans, initial investments, and consistency practice.(12:17) - Alex's fitness-business balance, system reviews, and the first gym.(22:18) - Acquisition journey beginnings, meeting Leila, and business progression.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

What's up, Mosin Nation? I was recently interviewed on Omar Elitars, The Passionate Few. And in part one of the podcast, we talked about three things. One, the path from employee Alex, entrepreneur, Alex, and how I kind of stepped into the identity that I have now. Number two, how I incorporate fitness in my business journey and how I stay consistent with it despite the pressures of a business. And third, how I look at systems, how we optimize systems to scale a business and thoughts around adding them to a business at different sizes. I hope you enjoyed as much as we enjoyed making it for it. So I would fly out and I'd say I get to collect all the upfront sales. I'll spend the marketing.

I'll do the sales. I get all the upfront cash. You get all the customers. Ah, so you negotiated that deal? Yeah. So you kept 100% of the people you sign up's first month? Yeah, six weeks, but yeah. 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. Hey, guys. Welcome to this episode of the Passionate View podcast today. It's your host, Omar here. And today we're sitting down with the CEO of Jim Launch and a handful of other companies, none other than Alex Hermosi. And as some people might know in the internet space,

he's gone from literally zero in March of 2017, I think, to now just clearing 110 million in revenue between his companies. So today we're going to pick his mind here's the whole story and get some advice for how you guys can grow your mindset and business. Thanks so much for being on the show today, Alex. Appreciate it. Thank you for having me. Awesome, man.

So I know we were talking a little bit before the Zoom call about kind of the nuances of now you're kind of teaching entrepreneurship and kind of giving advice with no agenda per se. But take me back. Like, what's the, where did the inspiration for the entrepreneur that is Alex before, you know, 110 million in revenue, you know, you and your wife Lela really killing it in the fitness space. But like, take me back to Alex before all this started. What were you doing before and where did entrepreneurship start for you early on? I had a, I would say I had an atypical story. I was not the entrepreneur who felt like school didn't understand him and who, you know, struggled paying attention

and was slinging, you know, hot dogs on the side. Like, that was not my story. I did really well in school. Went to Vanderbilt, graduated in three years, Magnicam-Lowdy, did very well in the SATs. I got above Harvard's mid-score on my GMATs. And I was planning on going to the management consultant or investment banking route because that was kind of the word,

I knew that people made the most money. But I read the four-hour work week when I was a manager, consultant and I was during the process when I was I just done my two years I was 23 and I realized that there was no job that was going to pay me as much money as I wanted to make and would let me live I knew that there were jobs like being an investment banker for example you can make 10 million year as an investment banker you know once you know move up the ranks but you pretty much give 25 years your life to get there and I that was like I don't know I just didn't I didn't feel like it made sense to me to give up all my youth for money later you know what I mean we all see those

cartoons with the person chasing the money at the very end. They have all this money and they're old and they're looking into cliff. And so I just didn't want that. And so I was applying for business school. And one of the questions was how will, you know, X, Y, Z, MBA help you with your short long-term goals. And I think pretty sure this is why they asked the question to make sure that people are clear on why they're even applying. And I spent like two days looking at the question and then I just realized it wasn't out with my short long-term goals. And so then I just looked at the opportunity of office spending, you know, $200,000

and two years of not making income versus, you know, you know, starting a business. And so that was what got me to transition. I looked at a bunch of different business ideas. I was super close to opening up a frozen yogurt store. I was, I have a name for it. Yeah, Evie's treats. Yeah, I just thought it was like sweet and kiddish. It had like the candy and a positive, like vibe overall. I was going to model it after a candy store, except it had frozen yogurt, but from a decoration style, I think like lights and all the huge tubes of toppings. Like I could tell you all about the yogurt business if you ever want. But anyways, I ended up realizing that it was like $200,000 to start one of this, and I didn't have that.

So I had about $60,000 that I had saved up at 23. And how did you save up that cash just from jobs along the way? From the consulting gig that I ended after college. So I had... How much were you making give or take doing the consulting if you don't mind sharing at that time? It's good. So I had set up, I think I was making 50 or 60. I honestly remember.

It was either 50 or 60 green a year out of college. and the second year I was in that job, they allowed me to work on like commission. So if I brought in a deal, I would get a higher rate. And so they ended up switching me to that. And so we ended up having one deal that happened in the last six months of me being there.

And I got two like $30,000 paychecks. And after I got the second one, that deal ended. And so I was going to have another period where I basically didn't get a paycheck until the next deal came through. And so it was at that point that I was like, all right, I'm going to do it. And so that's when I sold my condo and I packed my car and I started driving across the country to California, which is where I opened my first gym. And when you open your

first gym, this is before you met Layla or anything like that. Right. So 24, you opened your first gym. And what's your plan at this stage? Like, are you already thinking about scale in this or it's just like a path and you want to create your own income? Like a lot of entrepreneurs now at 24, 25, they're trying to get to two comic club be on stage, click funnels. You know, like, and they make that the target instead of the stuff in front of them. Take me to your mindset-wise at that time. What was going through your head with that first one? I was never planning on being, like, I would say it was brief that I wanted to be a, so I'll answer your question with context.

I was so depressed in this consulting job that I just didn't want to be alive anymore. And so I didn't. And so when I realized that a lot of the things that I created was because of what I thought I was supposed to do, and that I was, in some places, they call that a rock top moment rather than a rock bottom moment. You get to the top of the mountain and you realize there's nothing there, right?

And so I was like, this is miserable. If the rest of my life is more of this, then I don't apply. And so that was when I, you know, quit everything, sold everything and said, well, at least if I do fitness, it's something that I'm really passionate about.

And they say, if you do something you're passionate about, then, you know, you don't have to work another day in your life or whatever the saying is. And so I kind of bought into that, which is a lie, but definitely have worked since then. but it got me on that path.

And the thing is that as soon as I started the gym, it was the hardest period of my life was the first nine months of running my gym. Actually, top two hardest periods of my life. And during that process, once I got out of like sleeping on the gym floor, which is how I started, to actually like making it into a business,

at that point I was hooked. And I just, I was all I could think about was how do I, you know, how do I scale? How do get more gyms? How do I have more locations? And from the point where you started to, you started getting momentum was about nine months, you said? I was very fortunate.

I hired a coach before I opened a gym. Yeah. So I learned from the consulting world, the fastest way to learn a skill is to hire an expert because that's exactly what you're doing the consulting, the management consultant works for that came from. Was that Sam back to our? It was.

Seven figure Sam. Yeah. Yeah. So I actually knew Sam, rest in peace, Sam. And yeah, I know that he was instrumental in so many people's fitness journey. So what did you learn from him, man? That's awesome. Yeah.

So to my knowledge, I was, I am, I think Sam's only apprentice. So he created his kind of classic Sam fashion. I emailed 40 gym owners that seemed like they were doing something. He was the only one who replied to me. I was in Baltimore. He said, come on over, Sherman, see what we can do. I drove over, knocked on his door and he was like, holy shit, your ear.

Like, that's weird. I'm here. And he's like, yeah, I'm here. And he's like, where are you staying? I was like, I don't know. I just shut up at your door. And he was like, no, I literally just got out of my car, like, from Baltimore. Like, hi. And so he said, well, you know, I'm busy right now.

He's like, but you can come over to my place for dinner tonight and you can slip over. And I was like, oh, thanks. So like, that was kind of the guy as Sam was. And I think Sam, Sam was a really passionate guy. He was definitely very opinionated. He created a lot of enemies and a lot of friends. But you always knew where you stood with Sam. So he took me in and then I woke up with him every day.

You know, I was at the gym at four with him to kind of learn the ropes. He let me sign up for his mastermind. So he was like, it's 10 grand for my mastermind. So I said, okay, here's 10 grand. I was like, I don't have a gym. He said, it's fine. And then he turned around and give me a job. So I was like, he started paying me back the money from the mess

that I just paid for. And then 90 days in, I found a location. I said, I'm going to open this one. So how scary was it for you to invest the cash at that time? Because that amount of money when you're in your mid-20s and, you know, I had 60. So I knew I had 10 left or 10 less and then I had 50. Like I was just running off of like how much money do I have?

Right. And then I opened the gym, I think, for 37 or something like that. And I spent money in the three months in between. I know I had $5,000 left in my bank account when the gym opened. And was fitness already a part of your routine? And I just want to zoom in because I think a lot of people, obviously, you're fit as hell. We see all your caps videos on your Instagram. Yeah, I was, I was, I was, I think when I was 15, I was already very fit.

Like, I was already, like, extremely fit. And how do you maintain the consistency thing? You just love it. And so the consistency is automatic at this stage. The results drive you? or does it help you with business in a certain context? Like, do you get off? Honestly, no other things.

Really? I might have an interesting answer for you. Yeah, it's interesting because I think we've talked to a lot of entrepreneurs about fitness. They're actually kind of green. They're new to it. I've been training for 17 years. So as though, like, despite the fact that I'm younger, like, I'm actually, I'm like old in the Iron game.

You know what I mean? How old are you? No. 31. 31. Okay. But like, I've been training for a long time. Like, I mean, I had state records when I was 20.

So, like, I've been competing for a long time at that point. already. You know what I mean? Yeah. And so in the beginning, I started working out because I wanted to be strong enough to protect myself. And then it transitioned from that to wanting to get girls, which it didn't help with. But that's what I thought it would help with. And then from there, it transitioned to status. Right? Once I was in college, it was more about just like looking good in general. And then from there, it transitioned to being about progress because then I got into the strength game and really started like powerlifting. competing and all that. And then once I opened my business, from that point going forward,

and that was 2013 when I opened my gym, my first gym, fitness no longer was a priority for me. My body was the vehicle for growth prior to the business, and then the business became the vehicle for growth as soon as that started. I would say from then until now, it's been more or less the same, which is I work out because it is a part of my identity. I enjoy what I feel like after I work out. the same amount of inertia to overcome to get to the workout, you know, facility. Like I have, and I'm working on this now, hopefully. I mean, I have achy joints, like my knees hurt, my hips hurt. You know what I mean?

Because I've been doing a lot of volume for a long time. So, like, I get in there and I just try and clock, I just calm punch in. It's just like I clock in, I clock out. I do my, I do my volume and I go about my life because I am in the fitness space and I need to look a certain way. And so that's kind of what I've kind of tricked myself into. It's like, I have to look a certain way. Yeah.

I don't think I actually have to, but I trick this. Sam actually told me that too that it's used as like a pressure motivation and that's why so often you see that very seldomly you see people in other careers actually maintain their physique over the course of years it happens but it's an anomaly usually people who maintain their body

are in the fitness space because they're walking billboards that creates that pressure of like shit I'm an example of what I teach at some level at least in your head yeah yeah it's difficult because you also a lot of things that make you look super fit are actually not good for your health So like me walking right at my body weight in general is not good for my longevity,

which is one of the things I struggle with because I want to make progress, right? I want to get better. But me getting better, I actually think, I mean, if I get bigger now, I just look worse. And if I get stronger, my joints hurt more. And if I gain more muscle, I live less time because my heart will give out. So that's like the real that no one talks about. So those are the things that I look at. So for now, it's like I'm just, I train to train so that I can maintain our mat.

I may lose 30 pounds, you know, when I'm 40, just to get even leaner. but anyways, not to digress into a fitz tangent. No, no, it makes sense because a lot of people, I'm sure, think about that. You know, a lot of times, you know, they say one area affects the other. Have you found that when you don't work out for X amount of time, it starts throwing you off in business a little bit or starts throwing up your mind or rhythm at all? Not at all. Not at all.

I don't work out. I'm just, if anything, I have more energy. I mean, I used to self-fitness and so I would tell you like, oh, the reason you're tired is just not working out. I think that there's some truth to that because it's usually, people are so unaware of their body and what they're eating and they're so out of touch. But like, I know what I eat. I know how many grams of everything that go to my body because I've been doing it for such a long time.

So, and if I take a week off, I'm fine. You know what I mean? And I work out. So you occasionally pick out then you're human. You're not just like this super disciplined robot that's up at like 2 a.m. or 3 a.m. 4 a.m. every day. Well, it's balance for you. So there's, so I, anything that I can't do forever, I don't do.

And so I don't follow diets. I don't, like none of those things make any sense to me, personally. Because unless you're competing, right, which just about no one is, then the only thing that you have to do is something that you can do for a sustainable period of time. And so for me, like, I'm writing a book on it because Russell, I've had so many conversation with entrepreneurs. I did this weekend where it was eight entrepreneurs and all of us are doing about half a billion a year in revenue between the eight of us. And everybody went up and shared tactics and whatnot. And then during lunch, everyone's seeing me eating cookies and twizzlers and they're like, what is wrong with you?

And on the second day, they saw me doing it again. And they're like, what the hell? Like seriously. And they're all like, no, I do keto because they're all entrepreneurs. I eat only two fats and I do intermittent fasting. And they're like, they're always just doing all this crazy shit. Sorry if I was not supposed to cuss. No, no, you're good.

I was like, you guys just have it all wrong. Like I eat two pounds of me today, which is 200 grams of protein. And that gets me about 1,000 calories. And then I eat 1,500 calories of whatever else I want. And that's every day. That's it. So if I want to eat 1,500 calories of ice cream, I do that. If I want to eat $500 pizza, I do that.

If I want to eat bagels and cream cheese, then I do that. It doesn't matter. It truly does not matter. And it's just not sexy from a fitness selling perspective because it's like everyone wants to have a unique mechanism. The route is like you eat a gram per pound of body weight and protein and then the rest of your calories to whatever your goal is. And if you want to be in a deficit, just decrease it.

But I've never, I haven't stopped eating ice cream for years. I eat ice cream probably once or twice a day. I want to ask one more question before we get back to the business stuff. I notice your assistant. guy, like you're, like you have a lot of these rules and systems. Do you spend a lot of time kind of like, you know, obviously it sounds simple, right? You know, it's something I can't do forever. I don't do. Like a very simple rule, but I'm sure it took a lot of trial and error and bullshit to get to that simple conclusion. Do you spend a lot of time consciously reviewing

and reiterating systems like in your mindset and your business? Is that a, is that a constant priority for you? 100%. It's probably the thing that I do the most of. Just refining little thing. It's developing frameworks. It's developing frameworks for thinking. Because like, At the end of the day, we only have so much decision-making power. And if we can use frameworks, then we can conserve that power and make more high-quality decisions. And a lot of times, the decisions that we are making are similar in nature. The variables may be different, but the nature of the decision is the same, right?

Are we going to spend more? Are we going to spend less? Are we going to add more acquisition? Or we're going to add this extra service line, you know, whatever it is. And so if you've made, if you're making that decision for the first time, it's very arduous. You're like trying to spring it all in and trying to weigh the, the outcomes. but if you have a framework for making the decision that it's significantly easier and faster,

you know, the higher likelihood of making the right call, which, you know, at a certain point, all of us are simply rewarded for the quality of our decisions over a long enough time rising. Mozy 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.com. You can apply anywhere on the page and talk to one of our team and see if we can help you get there.

So how do you incorporate joy in that? The results on the back end? The joy? I think it's a really good question. I think that if I look at my life now compared to what it was two years ago, I have significantly more joy in my life. And if you put, you know, 10 years ago, it's wildly different. You know what I mean?

I went from not wanting to be alive and being okay with not waking up tomorrow to genuinely being, I would be very bummed if I died. I don't know if I would ever would say that. But I would be bummed if I die. There's a lot of stuff I like my life. And so I think that the easiest way from a like a programmatic standpoint to to reverse engineer joy is just simply saying like, what do I enjoy doing on a daily basis?

And then like how can I create as many of those days as possible? That's right. And that's at least how I think about it. And so my days look more or less the same because this is what I like doing. I wake up at the time I'm like waking up. I train at my beautiful home gym that I have with that's completely commercial. home. You know, if you've seen some of the videos of it, it's very cool. You know, I hang out with my wife. We, you know, we do the same things because that's my, that's kind of my ideal day. And so

we do as many of those days as we can. Every once in a while, we had variety in, you know, so it doesn't get stale. But that's how I like living. Powerful, man. So take me back to when you start the first gym before all this happens. Yeah. You start the first one. And then it takes nine months. You get the ball rolling. And then where are you at in revenue, where you finally go, aha, now I'm starting to get it. What was happening where you went, ah, now I got. I went from being a novice. I went from being a beginner to like, okay, I get this. I started out very successfully.

I made $5,000 my first month in business. I made $10,000 the second month, $15, $20, $25, $35,000. $35 was month $7 or $8. I had the gym outsourced at month 9, so I had a manager and trainers full-time so that I wasn't running the gym, month 15. And what was your overhead monthly at that time, give or take? It wasn't too bad.

I know that I had scrolled away $50,000 in the first, I think it was the first six months, something like that. Like I'd saved $50,000. So I'd already made the money back for starting the gym in that time period. And then by month 15 opened up the second location. And then month 21, we opened the third location. And then we had four and five and then six. So six locations in three years.

And did you have partners in them or you were so on? Yeah. Yeah. I had. So I started it on my own. And then being the unwise young entrepreneur that I I was. I basically gave away two-thirds of my business for no money, even though it was making me $20,000 a month. I sold two-thirds of a business that was making $20,000 a month in every

cash flow to me for $34,000. And then I bought Sam's 10% back because he made a deal with me that he would get 10% of the business. And I didn't like that somebody else had 10%. So I gave away two-thirds at a $37,000 valuation. And I bought back 10% at a $200,000 valuation that Sam had valued it at. and so I ended up netting $17,000 for the sale of two-thirds of my business that was making me $20,000 a month. So these are examples of fucking stupid decisions that you make. And so if anyone's listening is like, man, this guy sounds like, you know, a moron. Anyone can do it. So, you know, but what ended up happening as a result of that is I now had one-third of a gym.

And so I was like, well, shit, I need three gyms just to get back to where I was before. And so that kind of, I think that might have actually tricked me into the desire to grow very quickly because I needed to make the, I was trying to retroactively make a poor decision seem like a good decision, right? Yeah. And so that was why I went into this trying rapid growth mode. So I had the two partners for the first two locations and the third location. And then me and one of the partners bought out the third partner. And then I ended up buying out the first partner. It took three years to do this process and then sold the gyps. And how are you at this age when you, when you sell the gyms in your... I was 20, I think I just turned 27. Okay. 26 or 27. I can't remember. Yeah. So that was when I sold them all. And it was right at all of this stuff, all my, my timelines overlap, right? So I had my gyms and then at this point, it was me and my, in the one partner. And I was like, hey, man, I'm going to open this gym. And so I opened my fifth one on my own, open my sixth one on my own, because I didn't want to do the partner thing anymore. Because we also had different, different opinions about how we

wanted to run it. Nothing wrong. You wanted to go high volume, low cost. I wanted to go super premium, lower, lower amount of people. It's just different. We still have a good relationship to this day. Anyways, during that process, I also started, I started getting reached out to and people were like, hey, can you help me do what you're doing? Because I'd open up all the gyms at full capacity, which was kind of my thing at that point. And so I started flying out to gyms and doing gym watches, right, which is what we'd call them. So I'd fly out 21 days, sell 100, you know, 100 to 200 people, which was a lot. I'm sure. I'm sure. recharging initially for that. I charge nothing, but I averaged $100,000 in sales for myself every 21

days. So it was working out well. So sorry, let me understand that. So you charge nothing, but we're doing $100,000 a month? Yeah, per gym. So I would fly out and I'd say, I get to collect all the upfront sales. I'll spend the marketing. I'll do the sales. I get all the upfront cash. You get all the customers. Ah, so you negotiated that deal. Yeah. So you kept 100% of the people you sign up's first month? Yeah, six weeks, but yeah. That's fucking smart, dude. Well, it's free acquisition for them. Right, exactly. And they have a fixed, and they have fixed costs. And they like the fact that it motivates you because you get paid for what you deliver on. So it's, it's a line. Yeah. Yeah, there was no, there was, I was like, I'm risking everything here. I'm paying for a hotel for 30 days. I'm paying for

a rental car for 30 days. I'm paying food for 30 days. I'm paying enhancement for 30 days. I got all that. You have nothing out of pocket. So as a result of that risk that I'm taking on, I get the upfront for six weeks and then you get the next two fucking years from the client. Yeah, yeah. What made you think of that? Or was that just your intuitive first idea?

Or did you kind of go back and forth weighing that decision out? Because that's a little scary, right? For your first time to pitch that, it's like people don't sell that all the time, right? It's not like a normal thing. There's no risk to them. Yeah.

So I was like, pay 500 bucks, reserve the date and I'll fly out. I was like, why $500? I was like, because I'm going to put three grand and in flights and stuff to your facility. I was like, this is literally just a token of commitment. Yeah. And they were like, all right, fair enough. Okay, cool.

So then, and then right away, you start getting one after another client, client, one after another. Yes, I did 33 launches over two years. And you make your first million bucks during the stage? So this is where the online community is a little bit, you know. I mean, the gyms that I had were already doing $2 million bucks here. Yeah. But like, I wasn't making $2 million.

It's just, it was revenue's not profit. I barely had anything. And then I sold the gyms. I basically fire sold the gyms because I wanted to start doing the gym launch thing because that's what Russell, who became my, I signed up for Inner Circle as a gym owner, which made no sense, by the way. Yeah. I was on the sales call, like, I was like, oh, there's tons of gym owners here.

Like, it'll be like, you'll love it. It'll get super connected. And it was one of the best of the shit that I ever made. But none of that stuff was true. and it has nothing to do. Like, he might not have known. There was nothing disingenuous about it. It just,

the group was, I was the only brick and mortar owner in the group. But because of that, they were like, what are you doing in a brick and mortar gym? Well, like, online is where it's at. And so when he heard what I was doing with my gyms,

he was like, dude, you have six gyms and you're 20, you know, six. He's like, you need to be teaching people what you're doing. And I was like, I don't want to teach anyone what I'm doing.

I was like, this thing is like, I spent so long developing this whole process. I don't want to give anyone my secrets. And so that's what's transitioned me to doing the launches, because I still didn't want to give the way the secrets because I was so scarcity, mindset stuff. And then finally, through a series of unfortunate events, basically, we were doing like six or eight gyms a month. So we started scaling it up, right? I did, eight gyms a month, you know?

How are you handling that demand? You were just hiring like crazy, like just getting the deals and figuring out how to service later because that must have been, I mean, for somebody, especially like yourself that like systems and like things in orderly fashion. It was a mess. But cash was flying in so you could use that cash to clean up the mess. It wasn't really flying.

Cash only flew in after we started doing the launches. So it's like someone would say yes, I want to do this thing. And let's say it's, what day is today? So it's April, right? So they would say yes. I'm like, well, I can't slate you for me because I've already got jim slated for me.

So I could put you in June. I've got two slots left for June. And so I had to balance how many gyms I had versus how many sales guys. The thing is as soon as I moved to the next month, I had to get eight more gyms because I had eight guys. And I couldn't get 10 because I, like, because I still had eight guys, because then you're like, do I scale up two more? But that means

I have to do 10 the next month, right? So that part was scary. But the issue with the problem with the original model was, I was the one holding the bag for the liability. Right. So I made all the sales. I processed the payments, I had no control over delivery. And candidly, the people who were coming to me who wanted to get more clients were, I mean, if we're being candid here, were not the best gym owners because really good people at delivery have full gyms. Right. So the people who were really struggling with the ones who came. And so they didn't do the best job of delivery at the time. And so I had two gyms in a matter of a week tell all the clients that I had sold to refund after I left.

It wasn't me. It was one of my sales guys. But like you get the idea. So I got $100,000 in refunds. And like I didn't. That was like everything I had saved up at that point. I had $100,000 in refunds. And basically the percentage of refunds that were there exceeded my margin in the business.

And so what ended up happening was I had to sell more the next month to cover. the month before was refunds. And I had to do that, and I had to do that two months in a row, and the nut kept getting bigger with every month that I would scale up. And so it was just this, it was horrible.

Just the pressure was just, it was horrendous. Do you think that pressure, that pressure was necessary, at least at that stage to catapult you to like have to figure it out because there was literally no other option? Yep, I'm a big believer in that.

What's interesting is that when I started the gym, you would have been at the scale you're at now, at this quick without that, or that was a catalyst, would you say? It was a catalyst because of the way the model was thought out. So this is a big proponent of this. So for anyone who's listening, most people have had financial troubles in their lives at some point, right?

But just about everyone listening has gotten out of those financial troubles. Right. Eventually. Yeah. And especially if you're an entrepreneur, there's been many times you're like, how the fuck I want to make payroll. I've got this tax bill that comes up.

And then somehow magically you pull it out of your ass and you make it happen, right? Right. And the thing is that it's my belief that everyone knows how to make money. they just aren't comfortable making it for themselves. They're okay making it for the government. They're okay making it for their employees. They're okay making it for their landlord. They're okay making it for their overhead.

When it comes to themselves, they treat themselves poorly. And so the thing that broke for me at that point was that I said, I have to just make money. I don't care about running a business. I don't care about the branding. I don't care about the enterprise. I was like, I just need to make money so I can get out of this horrible. painful situation.

That's what launched gym launch, you know, version two, which became the coaching program, right? And it was because I figured what's the most valuable thing I have? It was like,

I'll tell people how I've been making $100,000 just going to a gym and doing my process. But I was so scared of giving it away that the only reason I ended up doing it was because I was actually going to get out of the industry. So my wife started her online business. How'd you meet her,

by the way? Because I love that story. Yeah, she, you know, you know my stuff. So I was trying. So my wife and I met on Bumble, and she was a trainer, and she was the top salesman for 24-offiness in Southern California.

And so on our first date, I pitched her on working for me. I was like, hey, even if this doesn't work out, you should totally work for me. You can sell, we can make a ton of money together. And so I tripled what she was getting paid. She was like, okay, there's way more to this story. But she said, okay. And so she and I launched these gyms together in the beginning before I started scaling them up.

But she was with me, you know, ground zero, day one. growing this thing. She was with me through the transitions. She was with me through the borderline bankruptcy. She's been with me through the whole thing. And so she's a rock. But holy shit. Dude, that's amazing. Do you think the fact that you guys bonded on the connection of fitness also laid a huge foundation to it being a strong foundation for the relationship? I don't think fitness was the main thing. I think there was a much deeper connection from like a kindred spirits like souls. Yeah. We had a lot more similar to some fitness. because I mean, candidly, I dated people who were in fitness.

Like, it was, it wasn't, it wasn't, fitness is very surface level. Like, you know, she and I both were half Iranian, Iranian father, white, white mother. Both of us had issues with, you know, had had some difficulties with, both of us left our homes at the same age, drove across the country to California to start our lives again. Both of us had gone through this fitness journey transformation-wise. Both of us got into fitness and said, like there were way more similarities than just the fitness piece. And so the biggest one is that we were both growth oriented. We just wanted to grow.

And so that's why we've been able to continue to do what we do. But she started her fitness business. They started doing $1,000 today. And I was like, well, shit, let's just do this. Let's skip out the middleman with the gyms. We can just sell fitness. We'll take the eight sales guys, do eight guys selling $1,000 a day. Some digital products, it's will work.

So they're like fitness courses for $1,000 or something? It was 16-week transformation program. Okay. And she would coach them through it. It was like a done with you program kind of thing. Like, this is the curriculum, this is what you're going through. I'll talk to you every week to make sure that you're following it. We adjust things, et cetera.

And it started working. And so I had eight gyms that were supposed to launch the next month. And I called them up and said, hey, you know, we're not going to do this. We, you know, with pivoted directions. And, you know, they were like, hey, man, we need this. And only at this point because I didn't think I was going to get into fitness because I was so scarce. So you might set, that was like, fine, I saw my secrets.

And so I sold my system, you know, for $6,000. That was the first guy. And I put the number. so high that I thought no one would ever say yes. That was the jit, like that was my actual thought was, I just picked the number that I didn't think anyone would buy. And the guys said yes. And I was like, holy shit. And then now that I knew I had to make this thing, because I sold one of them, I got on the call the next guy. And I said, same conversation. And I was like, $8,000. And he was like, holy shit. And the next call, same thing. I was like, 10,000 dollars. She was like, okay. And I was

like, holy mother of God. And so I did $6,000 in sales on that one day. And I realized, I was like, I mean, I can't express how like, all I felt was like, whatever this was, let's do as much of this is humanly possible. And I want to get out of this horrible place at him because I still owed. Yeah. My nut for the next month was going to be like 100 grand. Like, and that was before overhead. I had like 100 grand that I had to cover from refunds I knew were going to come.

Then overhead. Then, you know what I mean? Then maybe they're, I get it. I get it. Yeah. So I just went back to all 33 gyms and said, hey, remember that thing I did at your gym? where we filled it up, want to see how I did it? And they were like, sure. And so I basically sold almost every one of those guys and ended up making, I think, 350,000 next month.

I hope you enjoyed that as much as we enjoyed making it for you, Mosy Nation. Stay tuned for part two of the podcast coming up next, which we're going to cover. And in part two, we discuss how to select the right niche and how important a niche is for the opportunity that you're pursuing. Second, the decisions and the decision-making framework that I use when I have difficult choices in front of me. And third, the importance of delayed gratification and separating inputs from outputs, work from result, and how breaking that chain is ultimately the unlock for success. Stay tuned and enjoy.