The Game with Alex Hormozi - Turning Insecurity into Motivation (on Charlie & Ben Podcast) Pt.1 - Sept. '21 | Ep 409

Episode Date: July 16, 2022

It’s all about the mindset! Today, join Alex (@AlexHormozi) as he guests on the Charlie & Ben Podcast to share his advice on money mindset, using money as a measuring stick, how to turn insecurity into motivation as fuel for the pursuits that you have, and more! 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 Charlie & Ben's Podcast on YouTube!Timestamps:(1:13) - The Diminishing Returns of Money(7:31) - Millionaire vs. Billionaire Mindset(11:40) - Why anyone can be top 1%(16:19) - Turning insecurity into motivation(22:55) - Alex’s business equationFollow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

Mosey Nation, I was just on the co-creators of Chrisma On Command's podcast. They've over 5 million subscribers. And they had some very non-business, but business and money mindset questions specifically for me. Those guys were doing a few million bucks a year and felt very bored. And so it was a half coaching, half consulting call. And we talked about some really cool stuff. One, mindsets around money. Two, the difference between millionaires and billionaires and how they think about it.

How to use money as a measuring stick the right way. And ultimately, how to turn insecurity into motivation. as fuel for the pursuits that you have, both happiness-wise and also wealth-wise, enjoy. This is also part one. What I had done up to that point and up until maybe a couple years ago was I wanted to beat my father so badly at his game that he could not claim that I had not won. And so every aspect of my life has been built to be impenetrable. 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. I want to get to the life stuff. I definitely have a lot of questions just personally about what, you know, I'm confused if we should start with business or like. You can do it ever. Do you have a preference? You can do whatever.

All right, well, let's do it here. Because this is the burning question that I have. I make, you know, a fraction, an order of magnitude less than what you make. But I really feel that I've solved my money problems with rare, rare exception. Totally. And so I am, I'm curious. when I hear you talk because you say all these things and I have the same experiences. Like I've given a lot of money for me to charity and it has felt morally right, but I don't

feel it in the same way. Like I know it's the right thing to do, but I'm not feeling it. So my question for you is, I guess there's two big ones. One, why continue to use money as a measuring stick? Is it like you're like, I'm going to have a billion dollars or this, that, and the other thing? Why has that remained? And then two, what are the the milestones of money or things that you've been able to spend money on that have really increased the quality of your life and some that haven't because I'm seeing increasingly that it seems like there's fewer and fewer things that I can spend money on that increase the quality of my life. So then I go, well, what am I doing? I'm just going to play video games with my friends, which is a complete

waste of time if I'm trying to make money, but is fun while I'm doing it. Right, which we want to make money to go have fun. So then wait, what is, right? Yeah. Yes. So let me see if I can answer the second question first, because it was the one you just asked. Sure. The marginal utility of money decreases massively over time, right? So the additional, your next million dollars makes a significantly less impact on your life than your first million dollars, right?

And the first $100,000, in my opinion, has, you know, 80 to 90 percent of the utility you get for money from the first hundred grant, right? And then everything after that is really, really diminishing in terms of its return. There are two things that I get, that I get value from. One is I like flying private. It's, uh, it's totally, it's true. Not private. I was going to say first class. That's what I get.

Private is way better. It's not even close. It's way better. It's about $49,000 more per flight. Well, you know, you can get it. We're not at that level yet. It's about, I'll tell you. So you can do it for, it's about $4,000 to $5,000 an hour.

So if you have a three hour flight, you're looking at $12 to $15,000. And if you got six to eight seats on the plane, you know, if it's you and two or three other people, all of a sudden, it's like $2,000 to take it. Like, it can be, I'm not, by no means of my sense. saying it's like, you know, cheap. I'm just saying that like I like it. I do think it, to use Warren Buffett's word, I do think it's indefensible. But at some point, I'm like, well, why even?

What am I accumulating more money to do? Right. And so it is 100% of comfort thing. But what, and Layla consolidated this statement. Well, I won't talk more about private lying. But she said, what it did was it transformed travel from a nuisance into a positive experience. And so going from economy to first class. it's still a nuisance. It's still a pain, right? It's just a little less of a pain, but it's still a net negative, in my opinion. Flying private, I would say, borders on and may actually be a positive experience because you literally just drive your car to the plane. You walk on the plane. You've got flay and lobster, and then you get off the plane into your car and you drive to where you're going. And there's no security. There's no, there's no other, there's no babies. It's just, it's nice. So that's the one thing that I would say. And the other one is I like buying places with views.

So we're in a Las Vegas penthouse right now, and it's beautiful. You know what I mean? Like I look outside and I feel like I genuinely gain perspective because I see everything and I see the amount of wealth that exists in the world. And I think it helps. It only helps me from a perspective standpoint. So there's the two things that I think that have been, I would say, very expensive that I have gotten actual value from.

But beyond that, very, very, very little marginal utility of extra money. The first question I think you asked was, why use money as a measuring stick and why Why do I say the billion thing? So I have absolute commitment to getting there, and I have no emotional investment towards its achievement. I don't care. It's more that it's kind of like Gary V's like, I'm going to try and buy the Jets. It doesn't really matter.

It's more just about the game. And I think that, and it might be self-aggrandizing for me to even think this way, but I think it's probably true because I'm human. I think that people will listen to me more if I'm a billionaire than if I'm just a hundred billionaire, you know, and that's probably just my own insecurity. or whatever. And I think that we'll get there, based on the math, it would be unrealistic for me not to get there unless I massively blow something, you know what I mean, somehow. And so just on the math, just literally the pure cash we have, not even the businesses, or the cash flow that those

generate, if we just sat that in 10% when I'm 65 off a billion dollars. So mind you, a billion dollars today will be $10 billion then. So, you know, you can't think about that. But anyways. inflation does. Well, sorry, can I, can I turn in? Because I kind of want to, I want to ask this a simple, it's going to sound similar, but it's, I'm going for something different, which is, so I don't know, and I'm not trying to say your exact net worth. Let's just say you have $40 million or $50 million in the bank cash, right? No, I'm probably, I'm probably closer to the mid-30s. It depends on you, like an investable assets. $35 million. Sure. What motivates you to do work you don't enjoy? Or do you just only do work that you enjoy?

Because I could imagine having $35 million in the bank and going, I'm only going to spend my time doing things that are fun. And the second something's not fun but can make me more money, I'm just not going to do that thing because I don't need more money. And so I'm curious, do you have that philosophy? And if not, what is it that gets you to do the thing that's inconvenient or stressful or not fun? So this is interesting. I believe that humans need challenges to enjoy life. And so then it starts to become. am I living by my values?

Because am I the type of person who, who, because one of my biggest fears, and I remember saying this over in Oregon was that I never want to become soft. I never want to feel like if everything were taken from me, I could not build it again. And so for me, I feel very shishi, foo, whatever word you want to use for not wanting to do certain things. Now, that being said, to your question, the vast majority of my time or 100% of my time, I pretty much spend doing stuff that I find enjoyable or stimulating to a certain degree. But I won't shy away from something if it's, if to get to the thing, the next thing that I want to do, I have no difficulty in attacking it.

But I think what ends up happening to the question that you have. And this may be interesting for you. I don't know what level you guys are at business-wise, but when I talk to seven-figure entrepreneurs, right, they're talking about tactics. They're talking about, hey, we did this order bump. We did this change in headline or we'd switch in this new platform. It's tactical. Eight-figure guys, they're usually talking about. processes that they're putting inside of their business.

You know, they just hit a million a month or a million and a half, two million a month more than there. And they're like, that's what they're, that's what they're thinking about. All the people that I know who are, and I think, I think we'll hit, I think we'll cross a hundred million in revenue by probably end of Q1 next year, maybe Q2 next year. But the conversation that I have with all the guys that I know that are at that level and above, it's all about people. And so I was having this conversation with a friend of mine and he was like, yeah,

all the business owners that we serve and they have a big platform. He's like, they're always like, how do I get more traffic? How do I get more traffic? And we both were laughing and I was like, I would just say, go hire someone who knows how to get traffic and then do that. And we both crack. Sure, sure. But that's, candidly, that's how I think about stuff now.

And if I were to start a new endeavor, I wouldn't build a business. I would assemble a business. And so it's like, I know we need one of these, one of these, one of these. I'd put it together and say, go pursue it on my behalf. Here's the incentive for everybody. And that's how the business would grow. And if it doesn't grow, then I would swap people out until it was growing. And so the thought process changed, but I think you do have to go through it.

And maybe that's a believer story I'm telling myself. But most of the guys that I know who have achieved that did go through each of the steps so that they could cross-check and be like, I know this guy's full of it. And I know this guy knows his stuff so that you can simply make better judgments on other human beings with decreasing error rate. You still have them, but just fewer errors. I do want to circle to this because I actually really need to figure out the hiring thing. But I do have one question because I agree that people need is a weird word, but I would say

thrive on challenges and if challenges are rewarding and fulfilling, do you find that you diversify them amongst monetizable challenges and challenges that don't make money? Or do you focus mostly on challenges that make money? Because I could imagine, again, 35 million of the bank, you go, I'm going to learn to play piano. I'm going to build a homeless center that makes no money at all in Las Vegas. And I'm going to try to invent something. I'm going to do the challenge. of inventing a new way to improve solar energy. And maybe it'll be a billion dollars, but maybe it'll just solve global warming and I won't make any money. But I also know people who are serial entrepreneurs and everything they do is in the pursuit of wealth. And so I'm curious,

how do you pick your challenges, I guess? What drives you? So money is not the driver. I just love the game of business so much. I just love the game of business. I loved and was obsessed with fitness. I have multiple state records. I was, you know, I mean, like I was in good, physical competitive shape, right? Still are. I saw the quads before we started. I appreciate it. But as soon as I got into business, the love that I have for fitness just paled in comparison

to just like how obsessed I was and how much I just loved spending every hour that I could. And like my free time now, like right now I'm going through a course on deal structure. I was like, this is great. You know, like I'm just like I love it. Like I truly love it. And so in terms of challenges, the way that I have skinned to the things. challenges for me, at least in my current season, is pursuing bigger goals than I did before, monetarily, but with massive constraints. Right now, my actual, like, mental target is I'd like

to do $100 million in profit a year. So that's my, that's my, between all the portfolio companies, right? That's my next target. And so if I do $100 million in profit per year, I don't want to do that as a slave. I would like to do that as an owner-advisor and working two to three days a week with them. And I say work, so for me, the work is like meetings. So that's meeting with the CEOs and companies, meeting with a handful of leadership. That's what I consider like work, work. And then the rest of my time is, you know, making the YouTube stuff, writing the books, making the courses that we're going to be publishing, doing podcasts like this. Like, these are all just, this is, you know, I enjoy the, I enjoy this a ton. Nice. Yeah. So, well, the reason I,

the reason I ask you is because I could imagine people who are listening who, who are very enviable of your life. the fact that you are an advisor who buys businesses, who has more money than almost anybody on the planet. They want to get where you're getting, but maybe they don't feel the same way you do when they first pick up entrepreneurship. So maybe they were a great athlete who doesn't find the business books exciting or whatever it is. Maybe they're an incredible musician who, when they try to go into the online course world, they find it a grind. Have you had any success with yourself or with other people learning to love the game? Or do you find that

It's kind of like how some people like art and some people like sports and you like it if you like it and you don't if you don't. So if business is your game, you're set up for success. And if it's not, then you don't get to be Alex Formosie. Yeah. So first off, I just want like for the audience, you even saying the 35 million thing, I literally feel pains of insecurity. That is not that much money. Just so you know. Really?

I just want like, I just want to give everyone like that. Like I'm like, my God, it's not over 100. I'm such a poor person. I hope no one hears this. Like I can tell you the thoughts that I'm having while we're talking about this. Wow. Well, I respect yourself, awareness and your willingness to share that. I'm happy to.

I'll tell you all the things that are just flawed within me. But the other part, which is if you don't inherently love the game, right? So my perspective on this has shifted, which then makes it hard for me to even talk because then I think about some of the things I said five years ago. I wish I just never said anything. But then it's like, then I wouldn't speak anymore and then whatever. And so my viewpoint on it is that I do think that there's a lot more luck than I used to give credit for. And the luck is not from outside circumstance of like things happening and meeting people, but more luck of the draw, the initial draw of like, what were my genetics, what was the initial upbringing that I had or the stimuli I was exposed to?

That gave me these proclivities. Because if you think about it from a large number standpoint, right, with a large enough pool of people, which most people, just about everybody is within a system where the money is involved, right? And if we just said only capitalist systems, sure, there's still a billion plus people or two billion plus people that are, I guess, including any of three, you know, half the world's population is in a capitalist system of some sort, right? And so with that many numbers, lots of people will work hard. But the people who have a proclivity and work hard and have some level of natural talent towards it will just excel better and faster. And so I think that everybody can be in the top one percent, that I believe, which means, you know, one to five million investable assets. I believe everyone can do that in their lifespan 100%. But most people don't have the character traits and the discipline to do that.

Now, is that luck? Is that, you know, who knows? But the question that my closest friend, Dr. Trevor Cashy, who's a scientist in studies behavior stuff all the time, is like, is it useful to ask the question? Because it's not under our control at all. He's like, so you might as well tell yourself that you do have a natural proclivity to being in business if you want to be successful. successful in business. Real quick, guys, if you can think about how you found this podcast, somebody probably tweeted it, told you about it, shared it on Instagram or something like that.

The only way this grows is through word of mouth. And so I don't run ads. I don't do sponsorships. I don't sell anything. My only ask is that you continue to pay it forward to whoever showed you or however you found out about this podcast that you do the exact same thing. So if it was a review, if it was a post, if you do that, it would mean the world to me and you'll throw some good karma out there for another entrepreneur.

My question was only like, what do I do if that's, I'm just making up an example, but what do I do if I'm an incredibly talented guitarist who wants to start a business where I'm teaching people in music and I've been trying for two years and it's just not working. And I don't think I have that proclivity. Can I acquire that, I guess? I think you could. I think you'd probably be smarter for that person to go find someone who loves that game. And then the only skill you'd have to have is how do I have the perspective from which to make a judgment that this person actually is good?

and then do I have enough skill in negotiation so I can make a favorable deal for myself? And so if you can do those two things, you can be Justin Bieber, who's not a business guy, but it's still extraordinarily wealthy. M&M is not a business guy. He's still extraordinarily wealthy. So I think there's still ways to play it without necessarily having business be the game, which I find kind of interesting too because I'm not Kylie Jenner. You know what I mean?

And Kylie's younger than me and wealthy than me, which I'll tell you another one. When I found out she was a billionaire and she was younger than me, I literally had a day where I was like, I just felt like, I felt horrible about myself. Oh, no. I'm telling, I literally was like, I suck. I was like, why am I not? So I'm just telling you like, the insecurities run deep to get here, right? Sure.

Well, you know, you had an Instagram post, and I really appreciate, this is one of the reasons I want to talk to you. Your candidness. Yeah, I love it. There's an Instagram post where you said, you were in text conversation with a friend and you said something to the effect of like, the bigger the hole in your heart, the bigger the stuff required to fill it. So I have millions of dollars. read what you will into that. I think I just, I appreciate you saying it and separately for if you have, have you ever done anything like therapy or psychedelic medicine or anything like that?

And have you found it, have you found it helpful? Because I mean, I appreciate you sharing all of your knowledge. But and then when I hear those things as well, I mean, dude, I can, I can totally relate to that smaller number values. And I guess at some point, I'm appreciative that. the stubbornness in me quit and it went, this is fucking stupid. Like 100,000 subscribers, a million subscribers, five million.

And there's like, when I get that diamond play button at 10 million, then people will see me differently. And I hear that same. And as his business partner and best friend, it's been a mixed blessing. Like as this friend, I'm like, that's great.

And as the business partner, I'm like, remember when you had all those insecurities? Yes. It's taken the wind out of my sales. It's taken the wind of my sales. So yeah, have you addressed it other than, filling it with success and achievement.

Have you taken other ways of looking at that internal feeling? Yes. And how is that gone? Like what is what is soothed or a... Yeah, I would say that I think time dulls the sting of pain, you know, over a long enough time horizon. But for me, I don't think pain, the pain changes when we look back on it until we understand it.

And I think that's, I think for me, defining what the objective was for quote therapy or self-work or whatever, simply as, as I seek to understand. And I think it becomes far less intimidating to go explore some of these things. If you're like, I'm just, I'm not here to change anything. Like you're telling yourself, right? You're like, I just want to understand it. Right.

And so for me, the conclusion that I've made, and candidly, this is also just the story that I might just be telling myself. So, hey, who knows? But the story that I tell myself, at least, is that I had these massive insecurities about my father's approval. Right. So that was the thing that was withheld for me. my childhood, adulthood. I mean, in four contexts, my father called me, and he pretty much said all the things that I'd done up to, you know, every, every decision that I had made was not a good decision after I decided to veer off the path of the job, right? Everything after that was a bad decision.

And it was only when I had literally made more money than he'd ever made in his entire life that he said, you know, you're going to want to hear this. And I stepped out, it was like, what? I'm at like dinner. He was like, I'm sorry. And I was like, for what? And he was like, you know, for saying that you shouldn't have done this. And I was like, okay. And he was like, no, I think it was, he's like, but for the record, he's like, if it had been 30 years ago when I was coming up, I would have been right. Yeah. And I remember thinking to myself, one, if I cared about your opinion, I wouldn't have done it. And so I had to break the sting of your approval when I was literally on my balcony thinking about killing myself.

in my consulting career, that was what was the painful enough to force me to make the change where I was like, well, if the alternative is death, then I can at least disappoint my father. That was really what it had to. Like, it sounds ridiculous, but that is what I had to. And that's why you probably often hear me measure a lot of decisions against death because it helps me gain perspective on what is important. And so for me, I was like, well, I am guaranteed to be to be miserable forever. If I'm going to be miserable forever doing this, then I might as well die. And if death is what this is, then I might as well choose this and live with the disapproval. And so I explained that.

And the piece that I think I delivered that I think stung, but I think the audience might appreciate was like, I was like, you know that moment? I was talking to my now. I was like, you know that moment when people get on stage and like, I just want to thank my mom and my dad for always being there and always being supportive of me? I was like, I'm not going to say that.

I was like, because you weren't. And so you can probably hear in my voice. Like I still have the anger that's there. Yeah. But what I had to realize was what I had done up to that point and up until maybe a couple years ago was I wanted to beat my father so badly at his game that it would be that no one that he could not claim that I had not won. And so every aspect of my life has been built to be impenetrable.

And so it's like I don't want to just be in shape. I want to be so jacked that no one says that I am not in shape. I don't want my wife to be just a girl. I want her to be incredibly hot, incredibly cool, and fucking good at business in making money, right? I can't just make money or have a living or just be in the top 1%. I want, I want so much money. And the real reason is because I just want everyone to leave me alone and not hurt me.

Right? Yeah, yeah. And that's how I built my defenses up. And so it was to be just an unhurtable machine, but it was just because deep down I was, right? And so the game that I did was to play a game that he had built for me, And so now the question that I had to ask myself was, what game do I want to play? And so it's been, it's been illuminating for me to try and redefine my own game. And I think that for me, my decision, acquisition.com is the first business that is spawned from my desires rather than from the games and the variables that were set out by, you could say society, dad, whatever, that I had to win, right?

And so the new games that I'm trying to play are to die the person who gave the most. And so those are the things that feel aligned with my values, not the values that I was trying to prove to other people. Yeah. I mean, this is your conversation interview, but I just did MDMA with my dad. Oh, right. So that's like a, yeah. And it was not exactly the same. I would say everything that I hear about you, I have like an order.

It's the same for me, but in order of magnitude less, you know, but it was that competitive, that thing going on and the deep seeking of approval. And, you know, he told me the same thing when I did my business. And in understanding him, it was because for him, it didn't work in his, era. That wasn't how you did things. So I totally relate and separately will try to convince you to do MDMA. But for now, for now, I actually. unless you want to stay on this, I wanted to sort of talk about a little bit about the book that you've got and offers and stuff like that. Did you want to stay on this, Ben?

No, go for it because I want to circle back to business, but it feels really shallow compared to what we're talking about. So I'll let you do that. And then I'll bring up a topic that's a tie with how shallow you go. I'm happy to talk about money, mind you. Like, I enjoy making money and all the things about it. So I'm happy to talk about this. You know, this is my life, man.

I love going in and out. Like, I love sitting up here and talking about like, dude, this whole game is bullshit. Like this is all silly and it doesn't matter. And then fucking screaming when I'm losing. You know what I mean? Like, how do I get better at this game? So that's how I live. And that's everything.

But in terms of the game, in terms of the offer, one of the like learning, listening to you is, you're very pithy. You've got a lot of useful frameworks that are helpful. And one of them that as I watched a video was the, it's like an equation for what an offer is. And I don't want to mess it up. But essentially on the top part of it, you know it better than I do. I'll let you introduce it. Yeah.

So I think the contribution of that book to maybe the marketing community or business community as a whole. Like if it were summarized into one thing, it would probably be that equation, which is the value equation. And the reason that it actually came to be was because I was trying to, I was actually, this came to me like three years ago when I was building our supplement company. And when I was doing research on supplements, it turns out that supplements sell, there's twice as much revenue in supplements as there are in gyms as a whole. And I was like, how can that be? Right? Because like Jim's obviously helped way more people get in shape. I was like, but, but if that were, but the marketplace values with the marketplace values. So it was like that was kind of the data point that set me on this kind of little path to figure this out. And so, and trying to compare like, why is this thing, they both solve the same problem. Why is this one worth more? Why do people pay more for this than this? And so it came off these four variables and then organized them to an equation that became a fraction, which was the value equation. So if we're, I think we're, we have a too, so people can see this, right? So if you draw a line in the middle of the screen, which is just the fractional line, there's the top of the equation, it's the numerator.

I know everybody's remember from grade school, right? And the denominator is the one or another the, okay? So the first part of the equation is dream outcome, which is what is the experience of transformation that a customer is going to go through that we are, or that rather we are promising that they're going to go through, right? And so this is more to speak that in general, if you have, if I'm talking to men, for example, and I say, I can help you make a million dollars versus I can help you be handsome, right? In general, most men will value making a million dollars more than being handsome. And you can see that by the size of the men's beauty market compares to the making money market for men. So it's not that all things, but just in general,

this category of items will be higher valued than this category of items. And so that is the only purpose of this first one is what is the experience that we're actually going to be giving and how much value would that confer to the ultimate price will be able to charge. So that is variable number one. Now, if two things are the same outcome, let's say it's weight loss, right, and I've got a $9 ebook, and I've got a $50,000 liposuction surgery, they both have the same outcome. Why is $150,000 and $1.09? Because of the other three variables. So variable number two, now that we're talking about two types of solutions in the same vehicle,

right, or so the same destination, but different ways of getting there. So number two is perceived likelihood of achievement. And to use the liposuction example, if I have two doctors, right, and one of them has done, has not done a surgery yet, they're fresh out of medical school, and the other guy has done 10,000 surgeries, and they're both going to do a liposuction surgery, which of these guys would we be more likely to want to work with? Which of them would be, would we be more likely to want to pay more? The 10,000, we probably asked this guy to pay us to be his first patient, right?

And here's what's even funnier, is that of these two people, it'll probably take this guy longer. So it has nothing to do with time. We're going to get more work out of this guy. It's probably harder for this guy than it is for this guy. He does it in his sleep. But still, our perceived likelihood of getting what we want when we buy, and the important point is that it confers value to the prospect prior to the purchasing

decision. So the knowledge that this guy has done $10,000 versus the knowledge that this guy's done zero actually provides value that can be translated into increased pricing power to a prospect. So when you start your business and you're, and you've done a hundred testimonials, I used to joke. I was like, oh, that, because we raised our prices over time. And I was like, well, that was my hundred testimonial price. I was like, this is my 4,000 testimonial price.

Because the likely that you achieve this, it would be unreasonable for you to believe that our, our solution will not work. Right. So those are the first. It also seems to be, especially in the internet, it's almost, I don't, it appears exponential, right? I guess there's, when you're number one in a category and people just trust that it's you, given the time is finite, especially if there's any time like the liposuction doctor, he's not just charging three times. Like, he's charging an insane amount of money more,

and his clientele are willing to pay for it. And part of that's because the delicate dance of desire, right? The supply to ban currently, right? But we can get in that later. Yeah. So number one for everybody is dream outcome with the experience or what's the thing that we're providing? Number two is the perceived likelihood that the prospect

believe that they believe that they will achieve it upon purchase, right? Same thing. If you get the $9 ebook, what do you think the likelihood is that you can lose fat on your stomach, probably pretty small. If you get liposection, what percentage likely do you think that you're going to actually lose fat on your stomach? Pretty fucking high. So you mentioned, you mentioned testimonials. Is this, is this the variable most influenced by marketing? And in terms like, you know, if you have a sales page on the internet. Is that what a sales page does? Is it like tries to confer

certainty in so many ways? Marketing fills the whole that word of mouth does not have for a business. Because if you think about which just word of mouth is, if you have three friends who read the book, right, and said the book was good, I don't need to have a sales page for the book because you already have a perceive likelihood of achieving a desirable result from reading the book. Right. So it fills the whole if you don't have word of mouth. But yes. Yeah, if I tell my friend to read a book, he'll just read it.

And you're already filling out that value part of the equation for them. But yes, 100% to your point, yes. For people who, for a new prospect, you doesn't know who you are, you're marketing, your messaging, your sales, your stories, you're positioning in the market place. So for all, it's going to be the thing that's going to confer the perceived likelihood of achievement. So there's the top two. Got it. For us as business owners and our entrepreneurs and marketers, our goal is to increase this to the highest of our ability.

We want them to have a beautiful experience, a beautiful beach in Maui that they're envisioning themselves on and a very high likelihood of achievement. If they buy this thing, they're going to get to Maui, right? Now come the other two parts of the equation, which is the bottom half. These are the detractors. These are things that take away, increased doubt, increased risk. All right. So the first is time delay. So between when I purchase and what I'm going to experience the result.

And so as a fun anecdote for anybody, if you want to create value in a marketplace, look at whatever else is doing and provide the same thing in half the time. Easiest way to provide value, right? But for most people, and I want to demonstrate this, right? So if we had a weight loss example, and I use weight loss because everyone understands it, if you were to click a button and buy a $1,000 thing for weight loss and you're a guy, and all of a sudden you look down to your abs or your stomach and there's just a six-pack there, how unbelievably valuable would that thing be?

wild. Oh, yeah. Right? And if you were a marketing agency, which I feel like a lot of the marketing world and lots of people have their SMMAs or whatever it is, right? If someone signed up and as soon as their credit card ran, their phone rings and they pick it up while they're on the phone with you after just buying. And it's like, hey, this is Mark.

I heard about your company. I just saw some of your advertisements. I'd like to, you know, I'm interested. They'd be like, holy crap. And the thing is, is that the only thing that changed, that might still happen 60, 60 days from now. But how much more valuable is. is the service or the product if it happens fast, right?

And so the goal is that time is a huge component of value. Fast beats free. The reason Spotify was able to take over, even though there was this huge rampant piracy in the market, was that it was fast. That's how they beat free. And I've got a friend of mine who has, I think they probably have 20 locations now,

who created like the MVD rather than the DMV in New Mexico. And so they got licensed through the state to bring. provide DMV renewal services as a private company. And their whole shtick is you come in, you pay $50.50 to not have to wait. That's it. That's the entire value prop. And they kill it. Yeah, that's TSA pre-check. That's all. 100%. I wish there was more of that. But it's one of the easiest value things to think of as an entrepreneur is like, how can I do this thing faster? So that's the third in the in the value equation. And the fourth and final is effort and sacrifice. And I didn't talk about this as much in the books.

so I'll be able to give the listener something that's unique here, is that effort sacrifice, I see them as two sides of the same coin. Effort is things that a prospect has to begin doing, that they were not doing, that they do not enjoy as a result of the purchase. So this might be, if I had a marketing agency, all of a sudden, I've got to start working leads. I have to make ads that I have to give this person. I have to make creative.

I have to have weekly meetings with the team and blah, blah, blah, blah, all this other stuff that comes as a consequence of the purchase, right? The flip side, sacrifice, are what are the things that I enjoy doing that I no longer am able to do as a result of the purchase? And so a lot of times they're flips out of the coin. Like if I'm Susie and I got to wake up early because I got to go to the gym now because I'm trying to lose weight, while I used to sleep in. So that's a sacrifice. I'm no longer able to sleep in.

The effort is that I now have to wake up. So it's kind of two sides of the same thing. But I like delineating the two because I think you think differently about things when you hear both sides of it. And so the idea for us as business owners is how can I get the effort and sacrifice. as close to zero as humanly possible. Because in theory, and as I've kind of evolved in the business world, I used to spend the beginning part of my entrepreneurial career, always focused on the top side. It was always about bigger promises, bigger claims, lots of testimonials, right? It was all the marketing side of it, right? But as I got older and we started making more money and I started

observing the people who were making far more money than me and the companies that are much bigger, it became realizing that the way that those guys were providing value was on the more competitively defensible side because anyone can make claims and anyone can have testimonials and big marketing and great copy in words and stuff. That's the easy part. The hard part is actually having the operational advantage of figuring out the way to provide the thing faster and provide the thing without effort and sacrifice on behalf of the prospect. And so that's why in the book I taught in the section, getting the bottom to zero, which is like in theory for us as entrepreneurs, if we could have anything on the top side of the equation that's positive, but the

effort and sacrifice and time delay was instant, right? As soon as they purchased it, it was instant, you would have an infinitely valuable product. And if you think about like Amazon, Netflix, each of these, each of these Uber, whatever, each of these companies has this value proposition in all of the effort in Amazon and their reinvestment strategy has been on decreasing effort and sacrificing and decreasing time delay, making things faster. Yeah, yeah. So I went as well as I'm going through this, I was thinking of our own business. and I love it when I find ways that, I don't know if it's cut the gourdian knot or like find, oh my gosh, if I just, you know, frame it differently. One of the things that I was coming up against, at least in my head, if it's not a limiting belief, is the physics of transformation. And so like take weight loss, for instance, you know, you're doing gym stuff and you can always promise seven minute abs, six minute abs.

Can you talk about designing a product that fulfills these? Like, it would seem that finding an offer that did it a bigger thing. more reliably, faster, and that's just hard to do. So operationally, and in sort of creating these products, like, I know how I might love to talk about what I do, but how do I make that a thing? What are the skills that one does in order to actually devise a product that you can realistically handle being talked about in this awesome one? Totally.

So in the book, you know, the section I go over this. And so hopefully it's not repetitive for you guys, but the audience, I haven't read it. So I think, I think thinking about product. improvement is really hard because what does that mean, right? But just thinking about what are the problems, every single problem in as nuanced details I possibly can about the customer experience, both perceived and actual, that the customer is going through from before they start to use the product all the way through the end and after the result or experiencing the result of the product, every single micro step

that occurs on that process, how can I lubricate that? How can I make it faster and easier for them so that when they get to that, they just click cheat code and then they move through. Right. And so with services, this is probably easier, right? But this is where great product and design comes into play. It's like, okay, well, I'm used, if you had software, right? It's like, how many clicks do I need to get here?

Is there a way that we can reorganize the U.S. So that we can do this in fewer clicks? How can we display the information differently? You know what I'm saying here? Like, how can we make it so the effort and sacrifice in terms of training their team and all of that stuff is decreased and minimized so that ultimately the experience is improved? Hope you guys enjoy the first part of the two-part interview with those guys.

Charlie and Ben are really awesome dudes, and I think you guys will really dig what is coming into part two of this, where we dive even deeper.