The Game with Alex Hormozi - The "Size of The Pie" Fallacy | Ep 238

Episode Date: September 22, 2020

Just remember that basically. No one knows you. Even when you think everyone does, no one does. Today, Alex (@AlexHormozi) talks about one of the earlier mistakes he’s made in his career which is not understanding how big the marketplace is and the players in the industry. He also talks about how you can avoid thinking that all eyes are on your business and unnecessary “peer” pressure.Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned on his path from $100M to $1B in net worth.Timestamps:(1:48) - Pie size realization: avoid fixation on one competitor.(3:04) - Focus on few competitors leads to confusion; be proactive.(5:02) - Open-mindedness: many businesses, different platforms.(7:10) - Remember, you're not as well-known as you think.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

Even in a local marketplace, do you know how many businesses are advertising on Facebook for the same seven mile radius? 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. What's going, everyone? Happy Wednesday. I'm excited to make this podcast for you because this is probably one of the number of mistakes that I think that I've made early on in my career that hopefully I can help avoid or help you avoid in yours. And I've written about this and I call it the size of the pie fallacy. And what the fallacy kind of states is that the size of the pie for most people is not just twice as big or five times as big, but probably 100 to a thousand times as big as you actually think it is.

And where this comes into clarity is that so many of us live in these tiny little ponds, right? We live in these little ponds, those little buckets of people, right? We live in two or three Facebook groups. And that's honestly what makes up the majority of our news, right? We only get news from a handful of sources. And that's what curates our context in the world. And so we think that if someone new is coming into our marketplace, right? All of a sudden, everyone knows about that.

And everyone's trying to, you know, is going to leave us to go to this other person. And this happened for me when I was in my gyms. This happened for me when we started gym launch. This happened, I mean, I'm like, it's just happened over and again. And I've seen it on the Allen side with agencies, and I've seen it literally at all levels. And what I can tell you is when I, this is probably two years ago,

there was, and actually I'll tell you, first one was when I was at my gyms. I had a new guy show up on the marketplace and I was like, oh my God, like, what are we gonna do? All these people are gonna try, they're gonna leave me to go to this other person, whatever, right? But the reality was that most people didn't know I existed and most people didn't know they existed,

right? Because most people don't care. And because the size of the pie, so much bigger than just the two groups of people that I know on Facebook that exist, right? And what was even more is that I looked at all the stuff he was doing. I remember this. And I was like, okay, I'm going to model everything that he's doing, right, to try and beat him. And after I modeled everything, one, it didn't convert like ours did.

And then two, I found out later, and this was like six months plus later, that he was making less than we were. And so this whole time I built up this fictitious thing in my mind that was eating and occupying all of my thoughts. And A, it wasn't doing as well. And B, it wasn't even making as much. But the thing is, is that what it did hurt me for is all the time and effort, it detracted for me just focusing on the customers that I had in front of me who were already there, happy to be working with me and paying me and all that stuff. Right. And so that was when I had my gyms, right? Later on, in gym launch, we had a similar thing happen, right?

You know, new guru pops up. Like, he's got something hot and sexy, right? And then what do you know? 16 weeks later, he's gone, right? And the thing is, is that, like, I've seen the cycle happen enough and I've been reactive to the cycle and then been like, oh, no, we need to incorporate something like that in our thing, blah, blah, blah, blah. But what ends up happening is that you end up shifting directions really quickly, end up being

really reactive, your customers get confused. And ultimately, the real real is that the marketplace doesn't even know that either of you exist, right? And so we think about this within the context of gyms. Here's a fun one for you. I just recently found out that there's a company that I have just barely heard of. And they sell a software product that kind of does like some sort of fitness stuff for gyms. All right.

I'm not going to say the name of them. And they don't run any ads whatsoever. And they have a massive outbound sales team, right? Cold calling, cold email, that's it. And these guys are doing 10 million a month. Okay? I have never heard of them. I had never heard of them.

I haven't seen their ads. I haven't seen anybody ever talk about them in any of the groups that I live in. And yet, they are bigger than we are. There are three times ourselves, right? And so it was just a humbling reminder for me that, again, the size of the pie is so much bigger than we can ever fathom. Right? When people are like, well, there's two of us who are competing against ads. I'm like, even in a local marketplace, do you know how many businesses are advertising on Facebook for the same seven-mile radius?

I go into groups and, you know, in groups of people who teach local businesses, right? And they're hairstylists. There's insurance agents. There's realtors. There's gyms. There's personal traders. There's storage facilities. There's like literally everything, you know, everything, mattress stores, car sales.

There's so many people that are marketing to the same thing that you think that one more gym on Facebook is going to somehow cut, cut what you're doing in half, right? And so anyways, I say all this to say, you don't need to worry about that stuff. It's, it's the size of the pie is so much bigger. And what you're looking at is also just like Facebook, right? There's also, there's Yelp, there's Google, there's Google Display Networks, there's organic, there's email marketing, there's outreach, there's cold calling. There's so many ways, there's direct mail, so many ways to acquire our customers that we just get stuck in this tiny viewpoint that it's somehow just what we're doing and it's this tiny

little slice when in reality us and a hundred other businesses are just splitting this one slice of Facebook and there's all of these other slices that exist and all we have to do is open up our minds to it and not be reactive to it and simply think how can I over deliver my customers and then how can I add channels over time right most 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 fifty hundred million dollars plus we would love to talk to you and if you like that we'd like to hear more about

about it go to acquisition.com and you can apply anywhere on the page and talk to one of our team and see if we can help you get there and for me it was just yet another humbling example of hearing that this guy was doing 10 million a month in my space and i haven't even heard of him and so it's just this brilliant beautiful reminder of how small we really are and to just continue to focus on the game that we're playing and continue to get better at the game that we're playing and not worry about other people because at the end of the day all the matters is the value that you're providing the marketplace, the values of providing the customers, and the mousetrap that you've devised for monetizing and providing value. So anyways, I hope that serves somebody, somebody who's

been worried about a competitor or somebody's in the area and they get this fear and anxiety. And I feel like I've had it happen enough times and I've been disproven so many times that my level of reactivity has continued to go down and down and down over time to now. I just kind of shrug a little bit because I've seen so many people take direct shots at us and then disappear within nine months. And so now we just continue to focus on our game, continue to do, make gym owners money, do it better than everyone else can, and run a good business. And that's entire goal. And I think that if we can translate that over, then we own the things that we can control and that are accountable for. So anyways, lots of love,

everyone. Hope this makes sense. And I hope you have amazing Pump Day. Happy Wednesday. And don't think about anybody else. Don't worry about what your trainers are saying. Don't worry about the guy across the street. Just remember that basically no one knows you exist. Even when you think everyone does. No one does. And there's another guy who's 20 times bigger than you, who also, that you don't even know exists, who's in the same marketplace as you. So sometimes it's just humbling reminders that there's a million ways to our car customers. And our tiny little fish bowls that we live in are not the fish bowls that are the world. So anyways, keep being awesome. I'll get you guys soon. Bye.