The Game with Alex Hormozi - The Entrepreneurial Journey | Ep 686

Episode Date: May 1, 2024

“It is always uncomfortable because the thing that you are now holding onto is the thing that you have to give up.” Today, Alex (@AlexHormozi) shares valuable insights on managing the delicate balance between control and delegation in the entrepreneurial journey, drawn from his experience of scaling acquisition.com to a billion-dollar portfolio. He focuses on the importance of understanding your business's intricacies and overcoming trust issues to embrace delegation, crucial for achieving significant business growth and personal freedom.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:(0:38) - Navigating control in the entrepreneurial journey(1:14) - The shift from complete control to delegation(2:04) - Scaling your business by buying back time(3:11) - Understanding your identity and control in business growth(7:04) - The ultimate rule of thumb for entrepreneurs(8:54) - Overcoming personal barriers to successFollow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition(This episode is a re-run. Original airdate was on April 19, 2021)

How far away do you get when you relinquish control? Because the thing is, is you relinquish control, but you still take full accountability and responsibility for the results. That's what's wild, is that you have to say, I'm going to give this over to you, I'm losing control, and yet I'm still responsible. That'll trip you up. The wealthiest people in the world see business as a game.

This podcast, The Game, is my attempt at documenting the lessons I've learned on my way to building Acquisition.com into a billion dollar portfolio. My hope is that you use the lessons to bring your business and maybe someday soon, partner with us to get to $100 million and beyond. I hope you share and enjoy. What's going on, everyone? I want to talk about the entrepreneurial journey as it relates to control. And the reason I think this is so important,

and this is probably the biggest reason that people get stuck. All right. And so at the end, so what I'm going to do here is I'm going to explain kind of how control shifts throughout the entrepreneurial journey where people get stuck. And I'll tell you basically the most valuable rule of thumb that I've learned in scaling our companies. All right? So first thing is the reason entrepreneurship is so difficult is because it forces you to change who you are, your identity, the values that you supposedly have as you continue.

need to grow. I'm not saying your, you know, honesty, et cetera, those types of values, but the way that you see the world and how you operate. Because in the very beginning, you, most of us at some point have to transition from a lack of control to complete control, right? And what I mean by that is either you, you know, went straight in entrepreneurship where you shifted control from your parents to yourself, right? Or if in many other instances, you started, you had a job, someone else was kind of responsible for your income for the most part because they're paying you. You weren't generating yourself. And then, and so you're very limited, right? And then you jump to taking complete ownership over all of your outcomes, right? And so you have complete control. The difficult thing is,

is that the thing that takes you the first step, that huge leap of saying, I'm going to be completely in control is usually the thing that will stifle most entrepreneurs who are trying to grow, right? Because if you have complete control and complete ownership, that's great, but there's only one of you, right? And so, So what that leads to is kind of this buyback. And I think the first time I heard this recently was Dan Mortel was talking about buyback principle and I just like that terminology. But basically you just continue to buy back your time as you continue to grow the company. And so in the very beginning, most people are buying back support time.

So it's just kind of like, you know, lower skilled support tasks that they're doing in their business. So it's like them and then they've got maybe an assistant, right? And then after that, there might be higher level support or administrative tasks. That might be like billing, collections, contracts, all that kind of stuff that might happen in the business after you have like your kind of support role taken care of. From there, the next level of control that people have to give up is selling, right? No one can sell like me. No one gets it like I get it. People just don't relate to my customers, right?

And the issue is control. You're trying to control the whole thing. And the thing is that every time you add someone in, you buy back more of your time, you relinquish control. And so the thing is, is that every level of entrepreneurship, I'm telling you right now, it is always uncomfortable because the thing that you are now holding on to is the thing that you have to give up. And this has been one of the hardest things for me. And a lot of part, a lot of this is because we identify with being the thing, right? In the beginning, I'll give you a simple example because we work so many gyms in the gym launch company.

People will be like, no one trains a class like I do, right? So it's the first level of fulfillment, right? First level of delivery is, is training, right? It's also the first thing they need to outsource. And the reason for that is because the market will pay someone $15 an hour. Somebody will come in for $15 an hour to do that work. Well, if you have work that pays you $100 an hour, then you should be doing the $100 an hour or not the $15 an hour work. But they think, because they like to feel special, they like to feel unique. No one can train like I can train. Well, I mean, obviously, there's probably some people who train a lot better than you. So maybe you should let them do the training, right? And then after that, usually the business

owner will do contracts, billing, you know, and they're usually not that good at it anyways because they're entrepreneurs. And so that's the next thing that happens, right? And so then the next piece might be some sort of assistant of some kind or some sort of right hand operator that would help you out, right? And then again, there, it's like, well, no, I don't trust anyone with the money. If I'm not looking at the money, then we're going to lose. Well, I used to say the same thing until I had someone who's better at tracking the money than I am. Huh. Crazy. Right. And so I have, I had to give up control of the money. I'm not to say I don't look at it, right?

But I had to give up control of it. And so then I'm just selling, right? Because that's the highest value thing I could do at the time was I could just talk to people and get them to give us money. Right. But then eventually there's too many, too many consultations that have to happen. I still have to run the business, right? And so I have to give that control over to someone else, which is probably one of the biggest and most difficult people. This is usually the thing that gets in the way people going, I would say it from a million over.

So up to a million dollars a year, you can just sell yourself, right? You yourself can sell and you can have these other people who are assisting you. But once you cross a million, it's usually difficult to be doing the selling yourself. And that's where you have to start scaling sales. So you have to give that control up, right? Hey, Mosin, nation, quick break just to let you know that we've been starting to post on LinkedIn and want to connect with you. All right, so send me a connection request and note letting me know that you listen to the show and I will accept it. There's anyone you think that we should be connected with, tag them in one of my or laylist posts.

And I will give you all the love in the world. All right. So let's get back to the show. The next level after doing control of the sales is now you have to teach other people in a group, not just one person, but a group of people how to sales. You have to manage sales team. You have to recruit. You have to hire.

You have to train, compensate, et cetera. And again, this level is of control. But again, here, even with the sales team, you're talking maybe three, maybe 10 million. When you get to 10 million, you're trying to go to 30, the level of control that you're giving up here is leadership. Weird. Right? Because there's just too many departments, too many people.

You can't lead everyone, right? So you have to lead a small group of people and get them to lead the people who are underneath of them, right? And so again, that's a level of control. It's control over your culture. Now, obviously, you want to lead it. You want to lead by example. You want to be the most distilled down version of that thing so that it permeates, right?

But as you continue to buy back, I think the question that I like to ask myself is, what am I trying to control? What am I trying to control? And I think if you think about that, and then rather, what part of my identity of my giving up by giving up this control. I used to think I was such a great salesman, right? No one can sell like I can sell. But you know what? I can't outsell 12 guys, right? I literally can't. You know what I mean? I can't do it. And so, and if the business model requires, you know, only a soup, like your level of sales to to make it work, then the model's

broken, right? You should be able to have people close half as many as you and still make the model work. Now, obviously, over time, you want to get them to sell better than you because all they're doing is selling, right? Whereas you were, when you were selling the way you did, you were running the business. And so with each of this kind of cycle is you have to give up control. And so I told you at the beginning that I will give you the rule of thumb that has been served me very well in running my companies, which is how far away do you get? Right? How far away do you get when you relinquish control? Because the thing is, is you relinquish control, but you still take full accountability and responsibility for the results.

That's what's wild, is that you have to say, I'm going to give this over to you, I'm losing control, and yet I'm still responsible. That'll trip you up. But the rule of thumb that I use is know where the bodies are buried. Now where the bodies are buried. And so what I mean by that is, if I don't know where the flaws are in a department, I'm too far away. So if I'm, if I talk to, let's say, a marketing director, or I talk to a sales director,

I talk to customer support. I talk to, you know, finance. And I don't know where the bodies are buried. Like, I don't know what the issues are because every department has issues. Every department has problems. It's a business. It's made of humans and humans are imperfect, right? Which means that there are always imperfections.

There are things that are not working as well as they could. If I can't name problems, if I don't know where the bodies are buried in the department, then I'm too far away, right? Now, when I say that, it doesn't mean I have given up too much control. That's not the issue. It's just I need more transparency. I need to be paying more attention to that area. And this rule of thumb has served me well.

So if I start hearing only good news from a department and I don't hear anything negative, I'm too far away. And this has been my managerial leadership rule of thumb that has really helped me a ton is nowhere the bodies are buried. And so this is the entrepreneurial journey in a nutshell. I got a lot of feedback from the $0 to $100 million video that I made of kind of the steps from a business model's perspective. but from the personal perspective, the issue is control.

And that's why most people can't get stuck because they have all these personal issues that prevent them from controlling. I'm sorry, Alex, they just don't trust people. I have trust issues. Well, get over it because you're not going to build something great without trusting other people.

So if you want your mom or your dad or the thing that you have your trust issues with to be the reason that you're not successful, then give them more power. Power to you, right? Just keep giving them control over your life because you have these issues, right? Or you can decide,

I think this person's done enough damage to me in my life. I'm not going to let them stop me from accomplishing what I want to, I want to accomplish. And so I'm going to take back that power. I'm going to take back the control over my outcomes, take responsibility, which may feel shitty in the moment, because it means I suck. But at least I suck, and I don't point at them saying they suck, because I can control what I do. And as a result, I can go through this process and continue to buy back and relinquish control buyback and relinquish control buyback and relinquish control.

first of the doing, then of the admin, then of the ops, then of the sales, and then of having a sales team, and then of the leadership, and then continuing on and on as we relinquish more and more control, right? How can you be free if you control everything?