The Game with Alex Hormozi - The Power of a “Winning” Work Culture (on BiggerPockets) Pt. 1 - July ‘23 | Ep 609

Episode Date: November 4, 2023

“In the beginning it's just ignorance, not stupidity. It's just that a lot of entrepreneurs early on don't know what good looks like.” Today, join Alex (@AlexHormozi) and his wife Leila (@LeilaHormozi) as they guest on the BiggerPockets Real Estate Podcast to discuss their company Acquisition.com and their approach to building successful businesses. They share insights on scaling, creating a positive work culture, and the importance of fostering a win-win-win environment. 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.Follow BiggerPockets on:➤ Instagram | Spotify | Apple➤ Check out full episode on YouTube!Timestamps:(2:16) - Why they’re passionate about Acquisition(7:04) - Workplace culture and the kind of talent they hire(18:31) - Work dynamic of Alex and Leila(24:52) - Why hiring is a skill in itself(28:24) - How hiring becomes the biggest hurdle for growth(33:09) - Shifting perspective of “hiring” to “talent acquisition”Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

Unless the goal is to exit the company, if you enjoy doing the thing, then it's like, okay, well, then how can we get the most of you doing the thing? Because that is the highest leverage time for you. And then it's like, how do we clear everything else off of your calendar so that you can do the most of that? 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. Alex and Layla, welcome to the Bigger Podcast podcast. Thanks for being here. Thanks for having us on. Honor to be here. So welcome back, Alex.

You know, funny, quick little anecdote, I think when we interviewed you about eight months ago, I said I had hired one of my sales guys to become my COO. And then you're like, well, I don't know if I would have done that. And then he listened to it. He's like, man. What do you think about that? And I was like, you're doing great. He's doing great.

Oh, good. Just a small update. Just a small update. And Layla, I'm really happy to have you here. Happy birthday. Thank you so much for being here. And I wanted to say, you know, I actually, I subscribe to your YouTube. channel first. It was a video you did about a year ago called How to Go From Zero to a Million

Dollars. And it was a longer piece of content. And I was like, okay, well, you know, like I'll watch a minute or two. And I watched the whole thing. And I was like, wow, this is really good. And you had like a PowerPoint. It was the whole thing. And I was like, this is great. And then a couple days later, I get served up one of your videos, Alex. And I'm like, I'm pretty sure her name Hormozie, but like, what are the chances? There's another YouTuber name Hormozie. This is all crazy. So you two are the only YouTubers that I will watch an hour long video for them.

I just watched your hour long video last week and I was like, well, every minute. Thank you. So good, good content from start to finish. Excited to talk about some of those principles. He's not lying, man. I'm glad you guys are here because this is all Rob has talked about for the last three days. Okay, okay.

Alex, can you believe that Layla's coming on her birthday? We can't mess this stuff. It's got to be perfect. Really can't mess it up. I've been rehearsing in the mirror, but it's all good. Well, I'm glad you guys are here. Thank you, especially on your birthday. That's very, very sweet of you. So we appreciate it.

And our audience does as well. Absolutely. Tell us about Acquisition.com. Why are you guys passionate about this project? Oh, fine. Okay. Is that the single? Sneak attack.

Is that like, you need a still second base? Is that what she's still? Well, no, we, yeah. Because if we ever go together, she always jokes that I will be like, you should go. And then I, like, have time to think about what I was. Perhaps a better answer. So the trick is, that's what we're doing. The trick is you're supposed to say, that's a good question to buy yourself some time.

And then you get into it. I do that all the time. I do it with you. You don't realize it. All the time. I make you talk first and then I sum up what you said better than you said it and add maybe one piece that you said. A little piece on the end, right, right? No, I mean, the reason for Acquisition.com, you know, interestingly, most of our businesses have come out of personal need.

And so, like, I got into, you know, I got in shape. And then people started asking me how I got in shape. And then I started helping people get into shape. And then I started growing a business of helping people get in shape. And then people who helped people get in shape asked me how I got the business of people getting in shape. And then people who had businesses that helped other small businesses started asking me how my business was going. You know what I mean? So just continued to work out that way.

And so Layla and I still had at the time when we started what would then become Acquisition.com, we owned Jim Launch, Prestige Labs, and Allen. Allen was our software company, prestigious ops or a supplement company, and Jim Launch was our gym licensing business. And so we had, I think at the time, just about 4,000 people had gone through our licensing program. And we had the same amount of people who were selling our supplements through that same distribution base. And COVID happened. And so that obviously impact, and the software was actually how to get is a MARTEC solution. So how to get leads in the door for brick and mortar businesses of any kind. It was supposed to be for gyms originally. And then other people who were like,

hey man, I have a bunch of plumbers. I have a bunch of whatever's. Does it work for them? And it turned out it did. So it actually had a much bigger market than we thought it did originally. And so middle of COVID, things are tough for gyms. I'm almost like, I got to take my mind off this stuff. And I get a sales call because we're rolling out software. I read all the books.

It's like founders should take the first sales call so you can get the know of the customers. And so I still had like a tinyish brand. You know what I mean? Like I had a tiny fan base. It is tough. Yeah. And so I was right on the customer. It was still okay for me to take those calls, where it wouldn't be where people would just, like, hop on to have no interest in actually the product. And so anyways, this particular call guy got on and was like, I don't want anything to do with your software. He's like, but I've read everything

that you've ever put out. I've applied all of it and I like tripled my business and I want you to partner with me to scale it. And I was like, uh, this isn't really the right time, but whatever. Anyways, he, he sold me on it and I really liked him and he owned a photography business. That's called Enchained a Ferrys. And at the the time he had one studio and he's doing really well and he had an agency business on the side that helped photographer like he marketed photographers the same way he had it for his own studio. And after finding out about that, I was like, you know, what if we just stopped this agency thing and just like scale the hell out of this chain? And so we invested in the business.

And that was three years ago. And that business now went from, you know, one single location to doing, you know, two and a half million a month over with over 30 locations that we just own all. and we just continued to scale that. And so that was like the first deal we did. And then... And you own all of those as in like, they're not franchised out or anything. Wow. Okay, cool.

And so then we did a... I was like, oh, that went well. Maybe we should do this again. So we did another deal. And then that business went from like 16 and a half million in top line to 50 million in top line the next year. And I was like, okay, that worked well. And then we did another deal, another deal.

And so by the end of that year, we had done, I think, three or four deals. I can remember it was three or four deals. Three deals. And I was like, you know, I think, and we were going back and forth on selling gym launch because it was COVID. It wasn't like the ideal time to sell a gym company. But the flip side was like interest rates were zero. And so there was tons of money in the market.

So it's like, okay, this is a great macro time to sell, but a really bad micro time for the business to sell. And but Layla and I committed a few years earlier that we would sell the business if we felt like we no longer loved the business anymore. And we'd both been in fitness for 10 years. And we were ready to just. want to be the gym guy anymore. And so, and the fact that these other deals had gone well, like, I wonder how different like life would be if like those first deal or two didn't work out. We probably wouldn't have sold. But they did work out. And so the day after we sold, which was December 24th of 2021, we started acquisition.com the next day. And so then we had because we had,

you know, we're probably taking 40 million in distributions up to that point. And then we also had our sale money, which was 46. And we started. our family office, which is Acquisition.com. And so we buy and scale businesses. That's really cool. So, Layla, I know you're the CEO of Acquisition.com. What exactly is the type of workplace that you're trying to build there? I'm trying to, and it's really we, you know, because we're a small business, I think.

But, you know, technically the team reports to me, but, I mean, we work on everything together. Really, what we want to build is, in terms of the type of place, you know, like, you look at, like, traditional private equity. It's a very punishing environment. I think, like, it's run by fear. They're pretty much like, it's the golden handcuffs, which is like, all right, I'm going to get my two years at. I won't say their names, but like these top firms, and then I'm out, right?

Because it's so unsustainable. And so, you know, when we looked at doing what we're going to do, I was like, you know, the only thing is like, I just don't want to build a place that actually treats people like that. You know, I want to build a place where we don't just build companies. We also build people because, you know, really behind the philosophy of Acquisition.com, there's really, there's strategy and there's all the strategy that we deploy into the businesses in terms of how are we going to grow these things. But who grows those is the people that are in

their businesses. And who directs the people on how to grow those functions and the businesses overall is our team. And so, you know, really the philosophy behind it is if we can build a place where we don't just achieve success of becoming, you know, a firm that does 10 billion by, you know, turning people out by paying them so much money that they feel like they can't leave, but by actually fostering an environment where people are constantly learning and developing, and we're encouraging them. And I think that there's a lot of talk against this, and any time that it's like kind of risen in the management philosophies, it's so hard to apply and to understand that people just reject it. And so my goal is to just

build acquisition to 10 billion and then have people ask how we did it and then tell them that we did it this way. And you don't have to be mean to people and pay people exorbitant amounts of money because it's such a terrible job. You can engineer an environment where people like the business wins, the people win and our partners win. And that's really what it is. I think that the founder of Whole Foods, he talks about that all the time. John Mackie, I think that's how you say his last time. I always say it wrong. But he talks about creating a win, win, win, win, win. And not even a win, win, win, but like a win, win, win, win, win. It's like a win for the community, a win for the environment, a win for the

employees, a win for the business, a win for the, you know, business financials, a win for the customers. And we just take that approach at Acquisition.com. It's like if it's not going to make a win for every single person that it touches, then we can't do it. We have to keep working on. And so the business itself exists to be an example of a win, win, win, win for our portfolio companies, a win for our acquisition.com, a win for our employees. And, you know, it just makes it more enjoyable too because I think like I can't imagine going and being the CEO of a company where I felt like people didn't want to be there. Like that just sounds awful to me. I wouldn't want to be there. So, you know, I think what we want to create is a place where people actually

like working. And I think we're doing it. Yeah. Yeah. So, I mean, it seems like Acquisition.com when you're working with these companies, you're effectively helping them scale, you're helping them build out their systems, their teams. Is your company set up from an operational standpoint? standpoint the same way you set up the companies? Do you have operators or is every employee at Acquisition.com meant to be like a super sniper operator that can be inserted into any business? It's a good question. So we essentially have a setup where, you know, there's the executive team at acquisition.com, which services, you know, the internal things that we need to have done at Acquisition.com. And then we have what we call like pods. And so there's one portfolio operator with a team of what we

call subject matter experts, say, you know, managing director of people, managing director of customer success, managing director of sales, managing director of marketing. And they as a pod can service a certain amount of businesses. They can do the value creation for those businesses in our portfolio. And then you duplicate that. And, you know, as of right now, we're focused on, you know, more like professional services and a brick and mortar chains. That's probably like the two niches that we're focused on. If we decide to branch out into SaaS, then we would build that same structure, but with people who have background in SaaS. So that's how Acquisition.com is structured. And then we bring in outside expertise and consultants as needed for like special

projects. And the way that we've built this is that a company comes in and, you know, let's say a company is doing 10 million top line and 3 million in bottom line. So probably like 30 or so employees somewhere in there. What we would then do is we will identify what department usually needs to go from zero to one. It's usually just non-existent. And then we will go and actively headhunt and recruit some of the best people from businesses that are maybe two or three times the size of that business and put them into the business. And then our subject matter expert will deploy our playbooks with that person. So that way we can create the most enterprise value at the Portco at the portfolio company level, not at the holdco level. And for us, it's like each of these, you know,

SMEs that we call them subject matter experts, you know, if they were sitting on the balance sheet of any of the portfolio companies, it would definitely, you know, hurt the P&L, but because we can fractionalize that, and a lot of high-skilled labor, it doesn't require tons of time. It just requires deep-back. It takes 10 years to learn where to hit the machine, that whole thing. And so it's like we can consolidate that cost at Holdco. So the actual profit is, I don't say inflated, but just way better at the portfolio level. Yeah, exactly, because we can consolidate all this brain power and then copy and paste things the way we already know it's working, and we can take learnings across the portfolio. And so we're like, hey, you know,

this sales setup is working really well in these three companies. We just got a new portfolio company in. Let's deploy that here, right? Or like, hey, this new media platform is doing really, really well. Let's deploy that playbook and the rest of them. So we can learn way faster and deploy it way faster. A lot of companies, a lot of personalities mixing, right? So when you're looking at some of the companies that you're acquiring,

if a company is coming in with like a sour work culture, can that be fixed? Or is that something that might cause you to like walk away from a deal? I think that given the size companies that we're investing in. You know, these companies are typically like right, just a little too small for private equity. And so, you know, when they're coming in, they have a sour work culture, not because of bad practices, but because of no practices. They just truly don't have any standards in place, any systems in place to ensure that they can have a good culture. So it's like, we're starting from ground zero. Now, I think what's harder is when businesses get bigger and they

have systems in place that promote a bad culture, right? I think that when they're small, it's just kind of like you're just accidentally creating a culture because you have nothing in place. When you get bigger, you have put things in place and still have a bad culture because they're the wrong things. That's harder to turn around. That's called a turnaround. We don't necessarily do that.

I think we've done it with one business and it's honestly a lot harder and it requires a different kind of skill. To put the systems in place to promote a good culture because they kind of just have like whatever naturally occurs, right? Yeah, it's like a hodgepodge. You know, that's something that we're good at doing, but it does take time. It does not happen overnight. The culture is the piece that takes the longest.

And honestly, it's like still what I'm trying to crack because you can change all the people around the founder. But the founder themselves, if they do not change, like, it's just really hard to change that. Yeah. David, I mean, you have a big team of, like, the David Green team. Is there a lot that you have to do to insert, like, what you see the culture being? or is that really something that you put more like on the operator level at your company? No, I haven't been able to get an operator to do that very well. That's like why I'm stuck. So that's really where I failed over the last four years over and over and over was taking

myself out, putting a person in. They understand the organizational chart. They understand the processes. They understand what's happening. As long as the money, the revenue, the deals flow in, they can keep the whole thing going. There's a change in the economy. Interest rates go up. something changes the flow that was nice.

And they, they don't know how to go and like lead the people into a new realm. And then I will have to step back in. But now it's like, I'm out of shape because I'm in the gym at six months. So it takes me a long time to like reacclimate myself to what's happening, figure out who are the pieces that are working, who are the pieces that have been slacking when no one was looking? You get the whole thing running again. And then that business over there is having the same problem. And like, I've just been bouncing around for the last.

several years because of exactly what you guys are describing. It's that leader, the one that can inspire the culture. And that's really what makes the business work is people come to the one brokerage of the David Green team because they hear me talk on the podcast and they're like, I want his standards. I want that guy's work ethic. I want that guy's eyes on my deal. I want to feel the way he makes me feel when he talks about real estate. And then when you put a person in your org chart to do a job, but they don't inspire that same level of confidence in the customer, the conversions become a whole lot harder. So it's what they're described. is building the culture of leaders that all kind of adhere to the same standard.

The subject matter experts are really the ones holding that line. It sounds like you're saying that are keeping everyone operating or is that not the role that they're playing? They hold the standard of what good looks like in each function. Yes. I think that the portfolio operators who's like the leader of those subject matter experts is the one that more so is distilling that cultural piece. And so I think we're very, I've definitely developed a philosophy around that, which is

you know, you know, hiring people who are either have our values or are so open-minded that they can, you know, flux into our values. That's what's been missing to your question. Exactly what you're saying. We just it. Just personal opinion. There's always, like, I always look at it, like, either we're going to be really good at hiring this person or, like, what we did at gym launch was, like, really good at building. Because, like, if you are used to investing in people, then it's like, maybe you just bring

someone into be your successor and over a span of two years, they watch you, they're there with you at everything and you just keep them by your side and then two years in, somebody with like very little experience can do it. That is what I've tried. I just picked the wrong person. So they got a little taste of what it's like to be David Green's guy and their ego being insane, right? Or they got a little taste of all this money and they're like, oh great, I don't have to work 70 hours a week to make it work anymore. Now I can cut back to 30 and enjoy my life. And they're taking their foot off the accelerator before you've hit like escape velocity would be the way to look at it. And I can admit that's, I think when we actually did the first interview with you, this is the hardest part for me is to be the guy who is like I was a police officer before this.

I'm very familiar with enforcing a standard or a law. Then you step into the podcast basin. You're not a, you're like a magnet of like, hey, you guys can do this. And I have not done well bouncing between those two roles. A lot of the people that will find come to me from the podcast. And now I'm like crushing their soul when I'm like, you have to step it up. Or if they're not from the podcast, they don't understand the ethos that people have from the bigger pockets realm. You guys are nodding like you understand the struggle I'm having here.

But I can admit I'm not good at it. It's a skill in itself. Yes. 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'd 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'd be.

we can help you get there. So between the both of you, is there a difference between the way you'll wake up? Like, is one of you really focusing on the internal operation of the company versus the external side of it? Yeah. I mean, everything that Layla talked about earlier in terms of like getting a win for Acquisition.com, getting a win for our internal team and getting a win for the portfolio companies is what I would consider kind of like the internal mission of Acquisition.com. The external mission is very much the stuff that we put out there, which is like to make real business, knowledge accessible to everyone.

And so it is like if we can make the entire marketplace better, then we are net positive to the marketplace. We can hopefully teach skills that then allow people to work at companies and quit the jobs they don't like to take jobs they do like and maybe even take jobs at acquisin.com or our portfolio companies. But yes, Layla is absolutely internal facing. I am external facing. Our days are almost polar opposites in terms of how we work, what we work on, how they're

structured. The hold co is not, because it's a holding company, it's not like we have a gazillion people there. We probably have 20 something. It's not big. And so it still functions like a small business in that way and that Lail and I will, you know, talk about big strategic decisions. But for the most part, we try not to change the strategy that much, which you got to give time, time. Sure. Well, in episode 649, we spoke with you about scaling from zero to $100,000, $100,000 to $3,000 to $3 million and $3 million to $30 million. And so I want to sort of talk about setting up some of the operational framework when you're in those phases. I started a company recently is called STR Kaseg, and I feel like the partners and I, we are all visionaries. And so we're at this

point now where, you know, from a funnel marketing standpoint, we've got the leads, we've got a very warm set of emails, we've had a lot of good conversions, we've actually done really, really great for the two months that we've been operating. But for me, I'm trying to understand who do I hire next? What is the ROI of that person? Because it seems like I need someone that is somewhat of an operator, but I also feel like I need someone to actually run the marketing and the follow-up to actually convert some of those leads. You know, I think we probably have similar ways of looking at this,

which is in the beginning, the first thing is that when your business is small, is that the reality is you need everything, right? You don't have a head of marketing. You don't have a head of sales. You don't have a head of CS. It's all just like open wound. But the question is, like, which artery, if clogged prevents the most blood loss? That's the way I look at it, right?

And so it's like, okay, where do we get the highest ROI if we put a person there? And I think that often what a lot of people want to do is they want to get out of pain themselves. And so in the beginning, you do see a lot of people who have a skill in terms of, say, it's sales or say it's client acquisition. And then they think, well, gosh, this is taking up all my time. I need to hire somebody. However, the question is, can the business bear you stepping back, bring someone in who's going to be 30% less effective at first, right? Say that salesperson, you're closing at 80%. They come in and they close at 50%.

It's like, well, can the business actually even support that? And in the beginning, the answer is usually no. So the question is, where are we going to get the highest ROI if we bring somebody in, which is like, what is the biggest constraint right now? Not saying it feels bad to me, right? Because I think, like, often we're so often in pain that we're like, I want someone to come in and take the sound of my place. like, what's the biggest constraint on the business? And so I would look at it from that perspective in terms of like what is not happening that if it were happening, the business would be 10x better or what is happening that needs

to stop happening to make the business 10 times better. That makes sense. Yeah, because the company is very profitable for where we are. We can certainly sustain hiring somebody. And from a marketing standpoint, I think the stubborn thing for me that I was feel like is I'm good at marketing my stuff. it's very hard for me to relinquish that control. So it almost feels like perhaps I can't walk away from that business quite yet,

but maybe if I put more of a project manager, someone that's kind of pushing the daily agenda in line, that would sort of complement my skill set a little bit. Can I throw this out there? Is there a reason that you want to step away from the marketing? Not particularly. Just time. And, you know, I have other businesses that I'm also,

I'm marketing a lot, right? You know, I have four or five different companies that I market. So that's the tough part for me. Because you probably don't think you're not going to stop marketing, right? So it's like I feel like a lot of times, like just as business owners and entrepreneurs in general, we do a lot of things based on like shoulds that someone else has told us at some point in our career. And it's like could have been a whisper, could have been at lunch, you know, five years ago. And you're just like, oh, this is fact.

And you like operate the rest of time until someone's like, hey, I don't know if that's true. But like you look at Dave Ramsey. You know, they're doing 300 million a year. He still does his podcast every day. And so I think it's just like unless the goal is to, exit the company, if you enjoy doing the thing, then it's like, okay, well, then how can we get the most of you doing the thing? Because that is the highest leverage, you know, time for you. And then it's like, how do we clear everything else off of your calendar so that you can do the

most of that? Anyways, that's just like, if we're looking at, okay, we're a big leverage points, you know, in the business. And it's just, it's just kind of funny because a lot of times we're like, man, I got to get out of sales. And you're like, well, you're an amazing sales manager. And right now you're doing, I don't know, 600,000 a month. Maybe that's not, that might not be the time right now. Like we might need to think about what are the other things on your time and take everything else off and then keep that. And then we'll have even more resources because we'll be twice as big to then go get a killer who we can hire who has an amazing track record at a company that's twice as big, you know, who knows this type of sale, et cetera, et cetera.

That makes sense for me. I mean, I feel like because, yeah, I just, I would like to just show up in market. Yeah. And so because I'm doing a little bit of the operational side back and forth, I feel like I can't really ever do the marketing side good. And I can't do the, operational side good. And so, yeah, it's just always very painful to hire. Is it always painful to hire? Well, one thing I would say is also I just, I think that at different levels in the business, I think like a project manager is like, that's everyone's go-to when they're not really sure

what role. So that's actually one that I think like vague roles, like a project manager is actually where I see like usually what it means is that we're missing a role over here, a roll over here and then somebody right here is weak and we fill it in with like a project manager. The drunk drawer. Yeah, the drunk drawer. So I would just be weary. In terms of hiring is a skill in itself.

So it's just like, dude, I'm awful at real estate. Sorry. For now. Yeah, for now, yes. Yeah, terrible, awful. Like, as good as business, that's how bad I am at real estate, the opposite. But it's because I've never applied my skill set. It's not like I think I'm dumb and can't learn it.

It's that I've never taken the time. And I think that, you know, I was forced to learn how to hire well. because in gym launch, we grew so quickly, and I had to hire so many people so quickly, I learned all these lessons that I think take, honestly, a lot of people decades to learn. Yeah. Yeah, you know, I've hired thousands of people at this point, and that's just not something most people of my age have done. And I think that it was in a compressed period of time, which then I think even cemented

the learning even more. And so it is a skill. You know, I think that if somebody's not good at hiring, sometimes it is best that you defer to a recruiting firm and watch what they do, learn from them. because I think a lot of times we think we know what good looks like and we think that hiring is just like a thing you do to get people. But it is a complete, we have, there are complete hiring departments. There are multiple different roles that help people hire.

I mean, it's an entire process of its own. So just like there is client acquisition, there is talent acquisition. And I think that Alex is very good at client acquisition. And I am very good at talent acquisition. And they're, honestly, it's just flipping client acquisition. All the things you do for that, you do to acquire talent. it's just that most businesses, in fact, 80% of businesses do not match their external strategy with an internal strategy. And so that's why talent acquisition doesn't exist in most businesses.

And most people say, well, my business is too small for that. And I'm like, well, how do you think your business gets big? Like, by having that. And so I think that if it's treated as a skill of its own and one that is imperative to the growth of the business, then I think people would see. And I guess that's what I strive to do is like to show people the importance of it. There's a lot of stats to back the importance of the people that we bring on, how we bring them on, the culture that we have as a team. But it's still, I think it's starting to become more relevant. Even when I started making content, I think, you know, two and a half years ago, I felt like I was like speaking something that nobody talked about.

You know what I mean? Yeah. Yeah. It's discussed is it's almost like a, oh, yeah, you have to be able to hire people. It's an afterthought. Yes. It's something super interesting is that for every strategy, for every three strategies that a company commits to, saying like, this is our strategy that we're going to do for this year one, here's your two, here's your three, two thirds of strategies fail, not because the strategy is wrong, but due to execution. And when they say, well, what makes the difference in companies that are able to actually execute these? Because that means that only 33% of strategies that we say we're going to do actually happen. Well, there are some companies that are able to execute seven, 38% of strategies. What makes up the delta is what people, and I guess McKinsey defines this as the

soft stuff, which is talent acquisition, culture, and people. And so it's like, you know, I feel like I'm saying all stuff that people like, oh, Layla is about the fluff. I'm like, oh my gosh, this is not the fluff. This will make you so much more money. You will grow your business so much bigger. Yeah. There's people that analyze the economy, what the government's doing and they figure out what the overall environment looks like. There's people that analyze an individual real estate investment and look at what's the income stream. What are the expenses? there's people to analyze businesses. There's people to analyze stock opportunities.

It's all some form of risk allocation. Like, how do we know where this is going to work? We've talked to so many people today, and the biggest hurdle in all of their growth was hiring. And yet you don't put that same effort into the analysis of humans, which are the one thing you can't scale without once you get to that limit, like where I kind of am. If you were to think about it, like you're really good at marketing and you probably have sales teams. you've probably taken a lot of sales calls in your life and you take a thousand sales calls or 2,000 sales calls. And then you think about that from the context of hiring. It's like a lot of entrepreneurs have had like 30 interviews that they've actually tried to make a judgment, be like, man, I suck at this.

It's like, well, it's reasonable that you suck it. You've only done it 30 times. Yeah, yeah, yeah, yeah. You know, Layla, I don't think I need a sales manager. And I'm like, do me a favor. I just want you to interview 10 and then tell me if you need one because they don't even know what a sales manager or their business should be doing. Yeah, one of the other issues in the beginning is, uh, it's just ignorance, not stupidity. It's just that a lot of entrepreneurs early on don't know what good looks like.

And so like kind of like with the operator, it's like, I just don't like, like you probably know what a good salesperson looks like. You like, like, you're like, like, you've probably hired enough of them. Yeah. I mean, just from what it sounds like in your business, it's like, well, how many good operators have you ever hired? And so it's just, it's kind of like. Such a good point.

Right. So you have, there's no, there's no ideal scene to like look at. You're like, I guess I'm going to roll the dice again. Right. Like that. I remember when I was trying to hire agents that could close my clients. I would just, I tried, I failed, I failed. They couldn't close it.

I hired one, Johnny. And he could do it. And I was like, that's what I was looking for. And then they all came after, right? Like there's something about mentorship maybe where you're following someone else and you see what they're doing that you get this pattern in your mind of what? That's a great point that you just made. And I haven't hired. I called a leader, but it's an operator like what you're saying.

The person that can run. And we've placed operators in what, two thirds of the portfolio? More. almost all of them except for like So you have a pattern in your mind of what that looks like you like all of them. Yeah. So yeah basically I guess it is all of them. We've we've taken an operator and put them in because usually the entrepreneur is the one who

starts who gets the fire going and gets to a certain point and they don't they don't like a lot of these things. And what I'd say probably one of the bigger mistakes and this is one that we've made earlier on was hiring the project manager and calling them COO or calling them director of operations. Right. And what it really is is somebody who you're like, oh, they're really detoriented. They love Asana and they love, like, checking boxes. And it's like, that's actually not what an operator looks like.

Well, I think that's why I said project manager, because it feels like going straight to operator or COO is too big of a role for where we're at. I probably not. But, you know, funny story, my COO that I was telling you about, we're thinking about hiring his wife as a project manager. So if he listens to this, he's going to be heard again. A different way of describing it maybe would just be. And this is, I guess I'm describing this as me watching what Layla has done in all the, of all the companies. Because like, I'm pretty good at acquisition and that's kind of been my hat for a long time.

But when I met Layla, I think I was doing two-ish million bucks a year in just total revenue, not making really any profit. But when she came in my life, she had a totally different perspective on how to just treat people and how to actually run a business. And it was not all the detail stuff in the Excel sheets and things like that that I thought it was going to be. It was just leadership. It was like your catalyst. It was leadership.

And that was the thing. It's just like when we're looking at operators, we're like, is this a leader? Like, does this person inspire me? Do I admire them? Will other people in the team admire them? Well, like, will they be able to, you talk about setting standards? It's like, well, if everyone on the team doesn't admire the character of this person, then emulate it.

Exactly. And so that's where you get like more and more nuanced on, oh, we can, you know, we can pick this. And it's been really cool because our director of people, like, it's funny. we probably have all these marketing stats and acquisition stats. You're like, you know, your CPR, your CPA, like all these different stats, but the same level of rigor can be applied to talent. So it's like, if I said, hey, what's your time to fill? A lot of people would be like, what's your average time to fill? And they're like, I have no idea. It's like, okay, well, what's your employee turn? They're like, I have no idea. What's the two-sided fit? And

it's like, what is that? Right? And like, two-sided fit is 90 days later. The manager and the employee rate, rate themselves on a scale from one to 10 and say, how much of, how much of a perfect fit is this, right? And if one person says zero, one person says 10, then you're a zero. Right? And if both people say zero, then it's a negative 10. And if both people say 10, then it's a 10. And so like right now, our two side of fit is 8.7. So that means that on average, both people are saying 8.7 on both sides of that equation 90 days later. Not just like, you probably hired someone and be like, it's the first week. They're killing it. They're awesome. And then, you know, I have this conversation over and over again. I'm like, hey, how is

that marketing person? They're like, oh, they suck. It's like, I thought like two weeks go, you know, right? It's just like, you got to give it time to breathe. Yes. But having the archetype and then understanding the process and truly looking at it as acquisition, like talent acquisition, where it's like, I'm going to draw a parallel. So you've got lead gen on the customer side, and then you've got application generation. And then you've got lead nurture on the, on the customer side, and then you've got application nurture, right? And then you've got sales on the customer side, and then you've got interviewing, right? And then you've got, you know, whatever the offer is. And you also have the offer that you're going to give them.

And then on the, then you have onboarding for a customer. You have onboarding for employees. And then you have retention and ascension for customers. And you have retention and ascension for employees. And so the entire customer life cycle is actually mirror images. We use different words for it. Yes. But if we don't have patterns the same. Because it's people.

Yeah. Right. But you got me thinking very few people learn sales because they start off as a W-2 worker. Someone brings a house cat, it's tuna. It doesn't learn how to hunt. A handful of people can figure out how to hunt if they're hungry enough, right? But then of the salespeople, how many of them actually make it to the tier like you're saying of being able to fill who could actually replace? me. Like that's kind of, that's usually where I try to take off and then I fail and I come back down.

And I happen to bouncing up and down. It's just rare to have a human that can get that skill set because they don't stick with it like you guys did. So if you could just clone yourself and make a whole bunch more Layla's like the business world would be. That'd be nice. Yes. I had a whole podcast called Find your Layla to entrepreneurs. I was like, find your Layla. That's it.