The Game with Alex Hormozi - Turning Setbacks into Success (on Diary Of A CEO) Pt.1 - Apr. ‘23 | Ep 545

Episode Date: June 3, 2023

"Our goal is always to hopefully provide more value to a company before they've ever spoken to us." Today, join Alex (@AlexHormozi) as he guests on Diary of a CEO to share his personal story of growing up with immigrant parents and feeling the pressure to fulfill his father's dreams. He discusses his journey of leaving a successful job and starting his own business, how meeting his wife changed his life, and provides insights into entrepreneurship, personal growth, and the importance of believing in oneself. 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 Diary Of A CEO's YouTube Channel!Timestamps:(3:05) - Leaving job to start a business, fulfilling father's expectations(8:20) - Breaking free from family expectations, finding support(26:59) - Making $60,000 in one day, changing the business trajectory(30:42) - Starting multiple companies, asking "why" in entrepreneurship(46:50) - Turning negative emotions into motivation, the importance of input-output(54:34) - Accepting current reality, finding joy in workFollow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

I feel like I fundamentally a lot of times don't understand the world. And so I think the reason that some people have found the content and things like that good or useful is because they feel like they can understand it. It's just because I didn't get it. And so I just make an attempt to define the terms that a lot of us use every day. And then it makes a lot easier to solve for those things in business. 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 spend several hours. consuming all of your content across multiple channels. What is the aim? What is the mission? What is the intent? If you were to try and summarize the content you're producing and the value you're trying to add and to who are you trying to add it to.

To make business accessible for everyone. That was the mission of the company. And so our whole idea was, we'll put everything out there for free. So no paywalls. So there's like we have courses on the site, the books I have for 99 cents so that anyone can get them. And you know, we'll continue to produce as much as we can. And we share the learnings that we have from our portfolio companies

in order to keep the stuff that we are putting out there, relevant, new, fresh, cutting edge because this is what's working today. And by doing that, it also brings other companies to us because they get value from the stuff. And our goal is always to hopefully provide more value to a company before they've ever spoken to us, like kind of pay for ourselves as in advance. It's kind of like the thought process,

even though we're buying it. And that was kind of the thesis when we started it. I didn't know if it was gonna work, but it seems to have gone pretty well. And it was just kind of just like, if we just give and keep giving and keep giving, we just focus on the value and delivering to the audience, it'll come back eventually.

What are you giving them and who are you giving it to? Entrepreneurs at all. stages we've served at the audience 25% of the audience has a business 75% does not have a business but wants to start a business and so that's just kind of overall and then within that 25% it just kind of categories all the way up to you know business is doing 100 million plus a year and so it's everyone and so we try and are one of the things that we talk about is like going wide and deep is like how can we figure something that is relevant to somebody who's you know launching their first product and also make it accessible or interesting to somebody who's launching a new product

line within a division of their conglomerate. And just trying to think about both people at the same time, which becomes more challenging, but it's also kind of fun. Kind of like a funnel, isn't it, in some respects? That's exactly what I saw from your content. You're making great content that's helping people that are at the start of their journey or, you know, 100 employees deep into their journey trying to figure out how to scale. You're making content that's bringing down some of the barriers, whether psychological or

practical, to enable them to reach whatever dream they have. Let's go way upstream then. What do I need to know about you to understand the life you've led? Take me way back to your childhood in the early context. Both parents are immigrants to the U.S. Mother was born in France, came here, father was born in Iran. They met in medical school in Europe,

and then my mother brought him back with her to the U.S. And then they had me, and they split. My mom had a lot of demons. She had a lot of things she struggled with when I was coming up. So I pretty much was raised by my dad. Had no siblings. It was just me and my dad until I was about 15.

He got remarried. It was a short stand in terms of how long I was like kind of in the house. You know, like right at that stage is when you can drive. And I was kind of on my own almost at that point. As soon as I could work and drive, I was kind of out of the house. And then from there did the thing that most people try and do, which is I worked hard at school, mostly because I just didn't want my dad to be upset with me. which was the main driver for most of my achievement of my career for the first half,

was all just trying to gain his approval. Did all the things that I thought he would want me to. Got a job at a government contracting consulting firm, a defense contracting, who's space, cyber, and ISR, so it's intelligence, surveillance, and reconnaissance for the military. Sounded really cool. Was less cool when you were in it. And I was very, very sad at that point of my life. And so it was very much like I didn't, I always hoped I wouldn't wake up the next day.

And it was, truly. You really mean that? 100%. 100%. Because I remember when I was looking at, because a lot of people have like rock top moments. Sorry, rock bottom moments. I think I had more of a rock top moment, which was, I was 22. I had done everything that my dad had wanted me.

to do at this point. I was looking out from the condo that I had been able to buy with this job that I had. And I was like, is this it? And the whole time, I just really didn't enjoy my life. And it was just, you know, not wanting to wake up. And it was the decision to leave Baltimore, which is where I was from, to quit that path, to decide to start a business of my own was still to this day the hardest thing I've ever done. By far, all the things we've been through to build what we have, the hardest decision was taking the leap for me. And it was because, like, I knew that my dad so much wanted me to do what I was doing because he was so happy that I was doing everything he wanted me to do at that point. And I had told him over and over again that I wanted to do this

other stuff. And he's like, yeah, later, you know, later. And so I knew that it would probably put a big dent in our relationship if I left. But for me, it was actually confronting the fact that I didn't want to be alive anymore, which was the thing that gave me enough courage, or whatever you want to call it, to actually make the decision to leave home. And so I started driving across the country. I mean, it took me six months to do this. Like when I, between when I decided, I really wanted to do this. And when I actually did it, it took me six months. And I called him when I was like halfway across the United States. And I was like, I'm going. California. I'm going to open a gym. I'm going to get into fitness. And he was like, why are you so

extreme? And you like lost it. And then we didn't really talk much for a long time. When you started realizing that your life was one where you didn't want to wake up in the morning, when you had that job in management consultancy, did you experience suicidal ideation? Is that what you're saying? When you say, I didn't want to wake up into my life every day? It was never, like, I've never had a like, this is how I'd kill myself. Nope. Never had that. I just always like the idea that I could not wake up the next day sounded good. When you look back in hindsight from that moment backwards, what are the series of decisions or the things that led you to find yourself in the position?

And I asked that because there's a lot of people that can probably relate. And there's probably quite a consistent set of frog pads or stones that one has walking down for whatever reason that leads you to a position. And we go, what the fuck? Whose life is this? I think the one line summary for me was that like I felt like I had to let my dad's dream die for mine to live. And I felt like my entire life, it had always up to that point had been like, go to the school, do these studies.

I mean, it's a common thing. Like it's not like I had something that a lot of people don't have many people. And to be fair, I'm very grateful for the skills, discipline, et cetera, that that instilled in me. Because I think you, you have the hard hand of an authoritarian parent. when you're growing up and it teaches you a lot of skills. And then, you know, the flip side is if you have a very less affair parent, like you never learn those skills, which then benefit you later.

So, you know, who knows? But for me, I knew that he just wanted me to be a doctor. That's what he was. That would have been his dream. I went to school as pre-med. And then I, it was like even changing my degree from pre-med to just a business degree was like a huge deal. But he was okay with that as long as I followed like the business path.

And so when I did my two years of consulting, which is kind of the typical like two to four years you do consulting and then you apply to go to business school, when I was going through that process, I was answering the question for like the Harvard MBA and it was like, how will Harvard MBA help your short long-term goals? And I sat there for like two days trying to answer the question.

And I was like, it just isn't. I want to start a business. And so that was when I kept trying to, you know, start that conversation with my dad and it just wasn't really happening. And so that's what, that was kind of the breaking point for me. It was like, I just felt terrible about my life and I didn't, didn't like the way it was going. And I, for me, it was such a key point because the biggest line of reasoning I had for myself in order to convince myself to confront my father or at least disappoint my father or the version of

myself that he wanted me to be was to say that like, I have to be comfortable dying in his eyes. And a lot of people, like, and many people might think that was hyperbole, but for me, it was very true. Like, I, I knew that I would die in his eyes and I did. To give you context. So I had the gyms and I opened up multiple after that, got to about six locations, sold those, started Jim Turnaround business, did that for two years. All the while we weren't really, you know, we were like okay in touch. And then we started the licensing business, which is gym launch,

and that's the one that like really took off. And we hadn't been super in touch. And I got a call out of the blue. And he wasn't like a cold call. You know what I mean? I was like, this is weird. So I pick up the phone and he's like, you're going to want to sit down for this. And I was like, okay. What's up? I was thinking like cancer. You know what I mean? I'm just like, what is it going to be?

He was like, I'm sorry. And I was like, for what? He was like, you know, everything. I was like, okay. And I was very angry still because, and this is what I told him. So I was like, you know that point? when people like get on stage and they accept the awards. And mind you at this point, I think we're doing,

we're probably taking home one and a half million a month. You know what I mean? And take home like personal income from the license. It was a decent size. Like is it, I'm not, you know, conglomerate like,

probably, but it's a decent size business. And I was like, you know, when people get on stage and they accept awards for things, I was like, the first thing they always say is like, hey,

I just thank my mom and dad for always believing in me. And I was like, I'm not going to say that. I was like, because you didn't. I was like, you're only saying this now. once everyone believed because it's not belief anymore it's fact it's evidence i was like so you're

i was like this apology means nothing to me and besides that i stopped carrying what you thought six years ago which is why i left and so i had like that's like i i could have just accepted it and i and i didn't do that um how'd you feel about that i probably like today i probably would just said thanks i appreciate it i know where he was trying he was trying to extend an olive branch And I just wasn't there. I was still seething. I was still very angry that I had not gotten any support during that process. And maybe that was very woe as me.

But I was still very angry at that point. And to give also a little bit of context, his response to that was like, well, we'll see how long it lasts. You're joking. No. So like my father and I, like, he is a very strong personality. And so do I. And we both think we're right.

Are you angry about it now? Honestly? No. I mean, like, I think I can still feel the emotions, but I feel like I have, you know, thought about it enough to say that I can logically say, I think he absolutely did the best he could with what he had. He's a single dad, another country, raising a kid, trying to get that kid to fit in and do the things that, like, one of the things that I think my dad always wanted me to be able to do

is like, because he's darker skin than I am. He's Middle Eastern. He always wanted me to like have access to like the back rooms where like deals were made that he felt like he wasn't a part of. And so he just wanted me to have that. And so I think he just drove me as much as he could to get that. It's just like when you're on the other side of it, like all you feel is never succeeding.

But I can appreciate it now in retrospect. But it definitely was still, it hardened me a lot. But that hardness, I think, has benefited me a lot in business. I had someone on the podcast say a quote, which I've never managed to forget, They said, you've got to realize that everybody you encounter, everybody that does you wrong, if you were them and you'd been through what they've been through and you had their brain, you'd be doing the exact same thing.

And it sounds obvious on one hand, but it's also very kind of illuminating that think about the person that's wronging you the most. If you've been through their shoes and you had their genetics, you'd be doing the exact same thing. Doesn't mean you have to let them off, but at least it invokes some empathy. If you hear that you cannot both hate and understand someone at the same time. True. Like if you truly understand someone, then you can't hate them.

Because you understand why. Like a lot of times I hate us from the unknown and not like because you hate because I mean, you almost say, you're like, how could like it's literally a statement of not understanding. Like how could you, if you understood, then you would know how. And that resentment is a byproduct of just not understanding as well. I was just thinking about resentment that I've had in my life when I think someone's wrong me, that sense of injustice. You're right.

How could, yeah. How dare you? Did you ever manage to get your fuel to burn less dirty? Are you burning less dirty now? Yeah, I think so. You think so? Yeah, I think so. My team tells me that that's true.

And if you look at like, because I do have some older videos that I made from like, you know, years ago. And there's definitely a different vibe. I'm significantly friendlier than I was then. I mean, even the way I interacted with customers and, you know, the team was like purely fear-driven. Like I was absolutely Because I didn't understand influence as well yet So only the stick I had was like If I if people are afraid of me

Then they will immediately comply And it's effective for short durations But not for long durations But I didn't know any better at the time And then I slowly That's when I right around that point Is when I met my wife and then she just You know, changed my life

And she started running all the businesses And I'd see her and everyone loved her And I was like man I should do more of that stuff and less of my stuff. She changed your life. Oh, yeah. For sure. Bar none.

I mean, she's like the best. How did she change you? She has brought out the absolute best in me. Like in just about every way. Like, didn't think we're going to go here. She just, she believed in me. And I think that's what most guys want. Truly.

at least for me that's what i want or needed i'll tell you a story to illustrate it so we met talked for four hours in the first date only about business because that's all i wanted to talk about and i pitched her on working for me i was like quit your job work for me and she was like i just made you logically makes sense she was a personal trainer i had a bunch of gyms and i was like if you're this good you should totally work for me she was like well let's you know let's see how this goes. And so I had this idea for the turnaround business. And it was right as I had five locations at that point.

And I wanted to try this thing out. So I flew out, did three turnarounds, flew back. And they started working. And then I sold all my gyms because it was like, okay, this makes even more money. I took all the money and put it into this gym that one of the guys I was doing a turnaround with was like, dude, you just crushed this. Like, I'm a really good operator. Instead of turning his gyms around and walking away with just the money, he's like,

you should just keep owning them. And I'll just fill up, fill them up behind you. So I could launch one, two, three gyms a month and then own them all. He's like, you're leaving so much money on the table. I was like, okay. So we did this first launch. I put all the money in. He was like, of course, he had financial difficulties.

And I had to personally guarantee the least normal stuff. And so I crushed this launch. And then I wake up a morning, I check the bank count. And it's completely empty. And I was like, what's happening? So I called him up. And he was like, well, I know you're skimming from the business. And I was like, what?

He's like, I know you're, I know you're skimming. I was like, I'm, we just, what? No. He's like, well, that was my half. And so I was like, what is happening? So I printed all the bank, the bank statements. I went line by line. I was like, let me, I'll walk you through all the bank statements.

Let's just, let's get to the bottom of this. And I remember we sat to the meeting and he was like, I don't need to see that. And he pushed it off the table. And I was like, oh, okay. I immediately was like, oh, he, I just got fucked. And he'd already been indicted for fraud. And I knew this, getting into business with him. And he was just a big misunderstanding.

And the saying goes like, when experience meets money, money gets the experience and spirits gets money, very much live that. And so after I had all my gyms, I sold them, put all the money in this thing, and then they all got taken. And so I had nothing. And Layless was with me at this point for this exciting period. So I was like, okay. She was like, hey, you know, maybe we.

we should keep doing these turnarounds instead of this weird launch and go thing you sideline for. I was like, okay, we'll do that. And so I was going to launch a gym the next month. And there was a guy who's local to that gym. And since I was refocusing, I was like, all right, I'm going to build all the infrastructure. I'll send the sales guy out to do this thing. And he crushed the launch. Did like 120,000, which for us was a big launch in like three days in three weeks. And so now I'm at Layla's parents' house because we don't really have a house at this point. And I'm the guy that she met from the internet that she quit her job for, who just lost everything.

And I needed this $100,000 to come in from this launch so that I could recapitalize. And the money wasn't hitting. I was checking the bank. I was like, where's this money? I could see the processing, the transactions, and it was all successful, what's going on? So I called the processor up, and I was like, what's up?

And they said it's a routine check. I was like, I've moved you guys six years. It's never been a routine check. And they were like, call again later. And I was like, okay, so I call about the next day, next day, nothing. And then finally it was Christmas Eve. And I owed this guy money for the commissions from the sales. And I was like, I will not get off this phone until you send me the money that I'm owed.

And to the payment process. And they were like, long story short, you were doing stuff in different locations. And I was running this all through a local gym business, even though I was all over the nation. And they were like, this is a little. regular, we're just going to hold on to this for six months. Shit. Right. Now, I owe the guy $22,000 in commissions.

I, in total now, had $23,000. So I wired him the money, and I had $1,000 left. And it was December of 2016. And I was like, I screenshot it because I still have the screenshot on my bank account. So I went from like six gyms, turnaround business, all the stuff to $1,000. And I was like, this sucks. And Layla had just got six of her friends to quit their job. to come do this turnaround business with me.

And they were starting two days later from the 24th. So the 26th of December, because I planned on getting this 100 grand in and then being able to launch six gyms because they took about, you know, whatever. It was $3,300 a day in cost to have six guys out there in the field selling. 3,300 a day that I did not have.

And so I saw it a credit card that $100,000 limit on it. And so I'm at her parents' house in an extra bedroom, I haven't lost everything. And my one Hail Mary play of this launch, the money did not come through. And I was like, I think you should leave me. I think I'm a sinking ship right now. And I would respect you. Like, we're cool if you want to walk away.

Like, we're good. Like, I won't think less of you. Like, I would walk away from you right now. Because this could, this has a very high likelihood of not going right. And she pulled my chin towards her. And she was like, I would sleep with you under a bridge if it came to that. And it's hard to comprehend, but like I had nothing.

You know, like for her to have that kind of belief was very, it was deep for me. So it was like, fuck it, let's go. You know what I mean? And so then we launched the gyms doing $3,300 a day. And mind you, I had no way to process money still. So I'm collecting 60 to 80 contracts a day that I can't process.

And if we're getting close, calls from customers like, hey, why haven't you run my card? Why have you run my card? I'm calling all these processors just like, hey, can you plead? And as soon as you get shut down from a processor, it's like a black mark, it's like going bankrupt for credit cards. They're like, oh, no, something's weird. They just won't. They have other people that can process the money for. Finally, I get like a high risk processor that does like porn in casinos and stuff to like give me. And they're like, yeah, so it's going to be like 8% processing and we're going to hold 10% as like safeguard. And I was like, Jesus. Okay. Yes. And they're like, and we can only give you 50,000.

$3,000 is your limit. I was like, I need like 200. And he's like, well, and I got this on the 29th of January. So this whole time, 3,300 a day is running on this card. And I have no money. And I have no way to process it. And 29th of January, I can run 50 grand. I run 50 grand in a day. And he's like, but it's by month. He's like, so February 1st, you can run another 50. So February 1st, I run another 50. That 100 covers my cost from the month before. And then I get two more processors for 50. Boom, boom, run those. And then, like, I got a third one or fourth one, like two weeks later. And I was able to, like, start moving things around.

And at the end of February, we'd made, like, a $30,000 profit. And I was like, okay, I think we might be out of this. The next month we did a little bit more. And I was like, okay, I think this is working. And then all of a sudden, Layla taps me on the shoulder one morning. And she's like, she like turns her laptop towards me. And it's our bank account and has all these negative transactions, like hundreds of them.

And I was like, what's going on? She's like, well, all these clients are calling me saying that the gym that we did this launch at a month and a half ago, the guy got in his chair and was like, hey, there's too many of you here. Like, just go home, just refund because I was the one who held the money. They had to do the delivery. That was the model. It was like I would fill a gym up. I would sell.

I'd keep the money. And then they deliver on the services. And after that, they could keep the customers. That was kind of like the setup. Real quick, guys, you guys already know that I don't run any ads on this and I don't sell anything. And so the only ask that I can ever have of you guys is that you help me spread the words. We can out more entrepreneurs, make more money, feed their families, make better products, and have better experiences for their employees and customers.

And the only way we do that is if you can rate and review and share this podcast. So the single thing that I ask you do is you can just leave a review. It'll take you 10 seconds or one type of the thumb. It would mean the absolute will to me. And more importantly, it may. change the world or someone else. And then another gym the next week said, hey, this guy made $100,000 out of my gym. The average gym owner makes $36,000 a year take home.

He's like, this kid from the internet took $100,000 out in a month. Screw that kid. And so he told all the customers who were there after we had left, hey, I'll keep believing your thing. Refund him. Just pay me half of what you paid him. So they cut you out. Right.

It was a flawed model. Like I didn't understand. Like, I didn't get it at that point. And so we had $150,000 in refunds that I had to, cover and I had no way of doing it. Mind you like, Layla's like, we're going to do this. I believe in you. And so I'm like, I'm like, I can't sleep.

I remember because what would happen is like the more we sold, the more the refund. Like it was a vicious cycle. So I had to sell more to cover the refunds from the ones that were coming in. And so our sales were going up and it was just like, I just, I couldn't breathe. And I was just, I would wake up at night anyways. And so I'm like writing you down these ideas of like what I think I could do. We had eight launches that were supposed to launch. next month. So I said, hey, Layla, you have this little weight loss business because she had her

personal training business. She converted her in-person clients to online during this whole process. So she's making like $3,000 or $4,000 a month. And mostly because like, I'm not stable. I'm like making all this big money and losing it all, then making it and losing it. And she's just like paying groceries and actually like making sure that I can eat. And I was like, tell me more about that. I was like, what's you're over and how much time does it take you? And then blah, blah, blah. I was like, we're going to, we're going to do your thing. We're going to call Queen Transformation. I'm going to start running ads for it, and we're going to take the sales team

and we're going to put it on your thing. And so within 14 days, she starts taking the phone calls because she was a good salesman. She's doing $1,000 a day online. No, no, all margin. What's a product? It was a 16-week, like, weight loss program.

Online. Yeah, online, exactly. And so it was 500 bucks. She was selling two of them a day. And so I was like, man, if we get the eight guys going, we'll have $8,000 a day, 240 after ad spend.

I was like, I can make $150 in profit and, like, we'll be in the clear. So I called the eight guys that were supposed to launch the next month, the gyms. I was like, get on the phone with the first guy. And I was like, hey, we're going another direction. You know, we're going to be a weight loss company. You sell direct to consumer. And he was like, dude, you launched my buddy's gym like two months ago.

And like he can't stop talking about you. It's like, it's packed. Because there are other gyms that everything would fine with. Just the ones that didn't is the ones that crushed the business. He's like, I know you can do it. And I just refinanced my house and I maxed on my credit cards to, to, to, to make this gym happen and I'm going to lose it. And given what I had been through up to this point,

I was like, that's tough, man. Sorry about that. And then finally he was like, can you, okay, instead of flying, can you just show me what you did to help my buddy out? Can you just give me like the system? And since I was like, I'm going to get out of this gym business, I was okay like selling my secrets. And so I was like, all right, man, I'll give you everything I have,

but I'm not gonna fly out there to save your ass if you can't sell. He said, no, no, it's fine. And so I picked up the highest number I could think of because he already told me he was broke. So I figured I could just get him off the phone so we could move on. And I said, $6,000. And he was like, six grand. I was like, yeah. And he was like, oh, done.

And I remember like looking at the phone and being like, holy shit, $6,000. And I was like, oh, what card do you want to use for that? Wrote on like a cardboard box. And then the next call had the same thing. And I was like, well, shoot, I have to make this thing now. And I was like, same conversation. He's like, how much? I was like, eight grand.

And he was like, yeah, okay. And each of the calls, I was like, next call, same thing, 10 grand. Next call, same thing, 12 grand. And then the end of the day, I'd sold $60,000 in licensing packages for all of the stuff that we did to do the turnarounds. Is that monthly or is that just one of the payment? It was a, I didn't even have it. I was just like, I'm just giving you everything I do.

Yeah, it became more, it became a recurring model over time. It was a PDF or something. Yeah. It was actually all my internal stuff. So it was like what I used to train my sales teams that would fly out and like what I would use to train them on how to do nutrition orientation. Like it was all the internal stuff. The only thing I actually made external was I had to create the, uh, the advertising material. So I had to basically make a white label landing page for the gyms that they could put their logo on. And then I gave, I licensed them the ads themselves that we already do convert it.

Right. So like the videos, the copy everything. They used like videos of me that we knew converted and I taught him out of run them. And then that's, that's what it did it. and we made $60,000 in a day. And I like, Layla came in from doing her two sales for weight loss. And I was like, I think we're still in the gym business. And she was like, what? I thought we were doing weight loss.

Like you just sold me on weight loss being like the next thing. I was like, I just think we were doing it wrong. And so I explained what had happened. And she's like, so is this what we're going to do now? And I was like, I guess. I was like, I can call the other 30 gyms that we did the turneruns for. I was like, they know we can do it because we just did it for. them. And so I called all those guys up and we did like $300,000 in sales that month. And it was

basically all profit and I covered the refunds and I covered the everything. And we were like in the clear. And then it was just and then all those gyms that we did that we sold, the average gym did $30,000 and extra cash collected in their first month using our our system. And so the key was that like if they didn't have to pay the overhead of the sales guy who was there every day at the hotel, the commission for that guy, like the rental car, the protein, like all the stuff that you have to incentivize and just like rent it out of their own gym and work the lease themselves. It became incredibly profitable for them. And, and then it just took off like wildfire. Like we went from like our first full 12 months of like January to January, we did 26 million

top line. 17 million in EBITA. Our first 12 months. Like it was, it was insane. Like it's hard. to comprehend that like i like that was the the moment i had been like dead broke in her parents house and then like six months later i have three million dollars in the bank account and then like 12 months after that i've got like 20 million it was it was insane and um i didn't even know how you could pay taxes like i didn't it's like i was figuring all this stuff out but through that whole thing layla was just like you can do this like we can do this like we've got this um and i think sometimes you just need one voice behind you. That just keeps believing.

What happened then? So that's 2016. You turn things around over the next couple of years. What happens, you know, leading up to where we are today in terms of your business? Can you give me a top line summary in terms of what's like that? Yeah, I'll give you the TLDR. Continue to grow gym launch. Two years later, we started a supplement company called Prestige Labs. At this point, we had thousands of gym owners that had licensed the business model and the ads

and all the stuff that we were doing. And so we sold through that distribution base. That company grew pretty big pretty quickly. A year after that, we started a software company that also helped Jims get leads in the door. It's just like an automated lead thing. And then 2021, we sold all three of those companies, the supplement and the licensing company we sold to American Pacific Group, which is a private equity firm out of San Francisco for 46.2 million. We sold two-thirds of the company.

And then the software company, we actually sold to a strategic buyer who had like a massive base. And we just had a better monetization system than they did. And that was an all stock deal. So we're just, it's continuing to grow under their umbrella. And they'll probably sell them four or five years. But from that and what we had taken in dividends during the licensing business for the five years that it was rock. I mean, still is rocking and rolling. We started acquisition.com.

So that became kind of our family office. And so we started our first investments. I think first investments we did was in 2020. So there is some overlap there. And part of the reason that I was willing to sell it was because the investments, the first of four investments we did did really well. And I was like, okay, this is what I want to do is the next thing. I didn't want to be the gym guy for the rest of my life. Because I had been, you know, at this point it had been, I think more than a decade that I'd been from like sleeping on the gym floor to having multiple occasions to doing the turnaround business to doing the licensing. Like I'd been in that game. for a long time and I think that maybe I could have stayed there and could have just continued to compound it and start doing acquisitions under that fitness umbrella but I wanted to do more general business stuff and so that was uh that's what we did and so uh now we now we buy chunks of companies usually uh usually minority stakes 25 to 49ish percent I mean we have one that we were in the talks of that we were originally minority staken and we're gonna take majority because it's been a great company and they want to the founder in the same position as I was like

just wants to do other stuff and it's a great business. But that's kind of how we see it as like growth partners. We come in, we write a check, we add value, we help grow the business. What are you brilliant at? You know, you kind of come to learn what you're good at based on comparison, but you kind of understand your area of expertise. What is your area of brilliance or expertise? I really want to ask Caleb.

Caleb. Where's Caleb? We can barely see. So Caleb sat over on the sofa. the corner of the studio. He's a friend and creative director of Alex. And I'm asking Caleb, what Alex is good at? What's his era of brilliance? I like it. Solving problems for companies, simplifying complex things into more digestible, actionable solutions as well. And how would you answer that question if you were answering it for yourself? I feel like I fundamentally a lot

of times don't understand the world. And so I think the reason that some people have found the content and things like that, good or useful is because they feel like they can understand it. It's just because, like, I didn't get it, right? Like terms like value, right? People like, provide more value. I'm like, what does that mean? And so I just make an attempt to define the terms that a lot of us use every day. And then it makes a lot easier to solve for those things in business.

And so, you know, a lot of people like, I want to grow my business. I'm like, all right, what does that mean? Like, well, get more customers, make them worth more. Okay. So it's one of those two things. All right, well, how do I make it get more customers? Like, well, there's eight ways to do it. here are the eight ways. Which one do you feel like you're best at? And just like kind of

thinking through frameworks that way is just for me it's just been my way of being able to be relatively competent in a world that feels confusing. Like there's a few things I feel like I can understand and I just hold on to those. I mean that's the very nature of innovation isn't it like asking the question. We so so often our lives just accept words and phrases and ways of doing things. Then there's a few people who are really good like Elon's one of them. Just like asking why. And then when you ask why, like, why can't you make an affordable quote-unquote, electric vehicle that is fast. Everyone else said you can't. Yeah. But why? You know, and then he's great at breaking it down into like the core components of that innovation. So,

well, if we buy the metal on the iron exchange and we do this and this, then we can do it. Yeah. So that's such an important thing in entrepreneurship, isn't it? There's some people who just ask why naturally. Yeah. It seems like to the point, to Elon, it's like, I don't understand why we can't. Yeah. Like just explain to me why we can't so that I can not think about this. And I feel like that's, you know, I would say that that's the most common thing. I'm like, why isn't this company growing?

Like, I don't get it. Like, explain it to me. And then usually a lot of people, it's like they're caught in this loop. You know what I mean of doing what they've always done or like believing that this is the only way. And I think a lot of times I've benefited from like not knowing because I, my questions don't seem stupid to me. but only to somebody who like knows what they're doing. It seems stupid.

And so from there, we're able to like, I guess to your point, innovate just by being like, I don't understand. That's what Steve Jobs, from everything that I've read about Steve Jobs and my brief conversation with Steve Wozniak once upon a time,

is he was just the voice in the room that never understood why they couldn't. And even like when we think about him removing the keyboard and doing, you know, not refusing to use a stylus and all these other crazy things he did, not using JavaScript, I think, at the time, and changing the port and removing the iPhone jack, that that is somebody who is so strong in their convictions in terms of like doing things a new way.

How important do you think that is generally, like in your view, what makes a really good entrepreneur slash leader? I think that they have to have the power to influence. And that is across lots of things. They have to be able to move other people. And you can define sales as the ability to get people to comply with your request. you can define leadership the same way. Management, marketing to a degree is getting people to comply with a larger request, you know, publicly. But I think that fundamentally is a skill that people have to have

if they're going to be successful in entrepreneurship. They have to have tremendous drive, whether that's a combination of towards or away. So they have a big mission that they really want to achieve or they have some very big fear that they're running away from. Either way, I think the fuel works just from a pure entrepreneurship perspective. The third piece is impulse control is that they have to be able to say no to things on a regular basis for an extended period of time. And I think they have to be able to boil down the success of their business into inputs and outputs.

Like if you do not know the inputs that are going to get the output that you want, then what are you doing? And so I think for most entrepreneurs, like if they have those things, if they have the ability to lead other people slash sell, just influence. they have some big motivator. They can control themselves long enough to keep ongoing during that period of time and they are doing the right things because they know the inputs and outputs to be successful to create the thing that they want.

It becomes a very difficult person to beat. On that first point then, sales, one of the things I read in some of your work is this idea that if everybody just went and spent two years doing door-to-door sales, then why is that important? Why do you think door to door sales is a key thing? I think it's just for broader definitions for the audience. I think it's just high volume transactional sales. So whether that's you doing door to door,

are you cold calling, or you work in the front desk at a gym where you do 20 consults a day, like just having a high volume because in order to learn a skill, you want to have as much exposure as you can to repeat the action. And then you want quick feedback loops

so that you can learn what you did wrong. So the perfect scenario would be, Mentor, mentee, repeated exposure, fix this, try again. Fix this, try again. And in sales, if you can survive that long, then you are good enough, that you will have gotten enough feedback. Like for most people, if they can weather the first three months of sales, then they'll usually be fine.

And so for the people who are coming up, I always tell them, like, go shout of the best guy and do twice the volume he's doing because you're not as good as him. So like, do twice the volume that they're doing, work all of the hours. And you will get better faster because you're doing. you have to suck for X period of time. And so if you can condense how long that takes you in terms of calendar days, not hours, you can get there faster.

But I think that it's important because one, you have to learn how to get rejected and still keep going. And I think that's a very valuable skill. And then two, there's lots of little things that you learn in just interpersonal communication that allow you that you can use with teammates later. You can use in marketing because a lot of the best marketers started as salespeople. And marketing is just sales one to many, as least as I understand it. And so having that kind of repetition just develops a deep understanding of human psychology, I think. And I think it's important for, if you want to get people to give you money for the thing that you have, having that as a base skill comes in handy. I think a lot of people aren't orientated towards developing skills.

I think they're orientated to lifestyle, to what I can post on Instagram, to cool, whatever's cool. but this idea of developing skills requires this thing that's kind of absent in modern culture, which is patience. And a lot, like you said rejection. Who wants that? You know, there was no glamour in what you said. Yeah. It's funny because a lot of us want traits, right?

We want to be patient. We want to be humble. We want to be, you know, long suffering, whatever words you want to use. But in order to, if I would say, hey, how would you create, if you had to create a human, what would you put them through to make them tough? it probably wouldn't be a really chill life. What would you put them through to make them patient? You probably wouldn't give them things immediately.

And so it's like we want these traits, but each of the traits has a price tag attached to it. And it's just like, do you want to pay the price tag to get the thing? And so I think if people reframe the period of life that they're going through as the price that they're paying out of their wallet, but the wallet is their time, as the seconds of life that they're trading for it, then I think more people will be willing to make the trade.

Because at least when I look at myself, like when I'm 80 something years old and I'm looking back on my life, I want to have these traits. But in order to have those traits, I know I have to go through these things. And I think for me, that's given me a lot of comfort in hard times.

One of the things that kind of adjacent to that, which causes patience is the belief that you are at some point going to get there. So like, you know, it's all well and good. You're saying to me, you do this for five years, Steve, and you'll build the skill. But I go, well, listen, if I want to be a millionaire,

and I have a low self-belief, I'm going to have low conviction. so I'm not even going to take the bet. Yeah. So how does one build that self-belief? Self-belief is such an interesting thing because it feels like this real, it's clear to some degree

that you had it in that moment of turmoil. Also, the reason I say to some degree is because it didn't seem like you had a plan B anyway. So I'm like, you were already in your parents-in-law's, like, playroom or whatever. So I don't know how much self-belief is applicable. But regardless, to keep gracing

those hurdles. You need some kind of conviction that like this is the right way to go. How do people build that? So I hear that. And to like to echo the point you just made, I hated my current existence. And so I think some people like don't hate their current existence enough. And so like I don't think, you know, like you either have to really believe that this

thing's going to happen or you have to know that your life sucks. And I knew that my life sucked. And so I knew that if I did something else, it would have, it would have, it would have a higher likelihood of changing my life than not doing something. And at least that's how I would say that I probably saw it in the beginning. It's like I didn't know if it was going to work, but I knew that I wasn't going to stop. I read I heard a quote some 10 years ago, which just came to mind when you said that on some YouTube family vlog where he said, change happens when the pain of staying the same becomes greater than the pain of making a change. And in your situation, no, it sounds like,

well, this is less painful. A hundred percent. I think, and I think that's the big. of most change. Either you have to have a reward that is that that incentivizes you. It's the away towards or away. It's either we're going away from pain or going towards pleasure. I think a lot of people are really looking for that passion that's going to be towards. But I think early days and I talk a lot about this, but like I think negative motivation is poo poohed too much. Like if you are angry, use it. If you are sad, use it. Because like, what else you're going to do with it? Like, you might as well let it help you. Like, or it uses you. you know what I mean?

And so I always like to see when I was in my earlier days, I felt like I was wielding my anger at least in a direction. And I think also a lot of people think that they have to get like it right on the first shot. But one of the beliefs that I had was that I just want to be directionally correct. Like if I move, I like I know that I don't like this. And so this way is not where I am. And so I will start taking steps this way.

And from the story that you at least heard, it's like, I'll ping pong a little bit to try and directionally move that way. And it's funny because Caleb's seen plenty of things from. what we do at Acquisition.com where we're like, we'll try it out. And if it doesn't work, they're like, oops. All good. Do you believe in yourself? I think that I have a high likelihood of repeating activities that I've done in the past. And up to this point, I have lots of evidence that would suggest that I will continue. Why didn't you say yes? Because I based the answer on that question of what I've done before. And I think it's been, it's just based on evidence now. So it's not

like a like charisma thing, at least for me. It's just like, I've done these things. And so I think it's probable that I'll be able to continue. Is there a deeper reason to why you didn't just say yes? That's actually how I think about it. Is that because it feels difficult to say you believe in yourself? Yeah, it feels weird. I don't know if hokey is the right word for what that feels like for me, but like saying the way that I said it is how I is how I feel about it. Have you been on a journey of in terms of self-doubt over the last 30 years? For sure. I think it was, but I mean fear was my big fear and anger hand in hand or my big motivators in the beginning.

And I mean, maybe that's from self-doubt. I would say that I was very certain. And I can I can feel this and I remember this. I was always certain that I wasn't going to stop. Like that I can, I didn't know, I didn't know whether I would succeed. I thought it was probable. But I did know I wasn't going to stop. And so for me, that was like enough to get me going or keep me going.

It was like, what are the controllables? Me. Okay. Well, if I do this. So like I'm big on making like unreasonable, like unreasonable that it doesn't work out statements. Just like, if I do sales. and I do more volume than everyone else on this team,

and I've shadowed the guy who's the best, and I do that for five years. It's unreasonable that I won't be at least mediocre. It will be probable that I'm above average. And it's also probable that I'll learn other things along the way. And I'll also have the resources at that point in five years that I can jump into things now that I have more context or perspective from which to make a judgment on what a good next opportunity is.

And so I like very easy to believe statements. and then having the input output equation being like, the output is that I will be a very good salesman, the inputs is that I have to do, I have to collect 5,000 nose. If I collect 5,000 nose, I'll be a very good salesman. And that, for me, like, when I was a kid,

when I played video games, I would beat the same level over and over and over again so that when I got to the next level, I would crush everybody because I had all the experience points maxed out. And so like those input output equations are really helpful for me. Like when I took the GMAT to get into Harvard, my first score was like, okay, it wasn't great. But I read this study on how to do well on standardized tests.

And they had this graph. And it went like this. It was just a straight line. It said number of problems practiced on G-Math score. So the more problems you did, on average, the higher your test score was. And I was like, done. So I bought 16 phone books of like they're like these thick, like test prep books. And I did four hours of problems every day for three months.

Every day I'd get home from work. I would eat dinner. I would do four hours of problems. I had a timer every day. And then I scored 99. Whatever percentile because it was just input output. Like I didn't, I didn't, I was naturally not even that good at math. But I just was like, if I do 10,000 fucking problems, like, I'll start to just understand

how these problems get asked. And so like, I was trying to find like, what's the input output? For this, the content game, I was like, okay, well, if we post once a day on one platform, we will get some eyeballs. If we post on every platform every day, we will get more eyeballs. If we post multiple times a day on every platform, we'll get even more eyeballs. So let's do that. Let's build that system.

100%. And so, like, those are the, like, I try and make statements that I believe are unreasonable, that if I do it enough, it will be true. And so that's, for me, that's what gives me the confidence to say, like, what if it's not working? I'm like, it will eventually. Like, if we just keep doing it, it will work. What does it take to want to do something potentially for years so that you can get good at it?

Because, you know, there's going to be people thinking, well, I want to be a great DJ, but I just can't find the motivation to spend every day three hours practicing, Alex. Yeah. I'd be like, you probably won't be a good DJ. But I would be like, you like your current state enough that you like the pain of change thing. Or like, you're not in enough pain. I've said that to plenty of people. We go speak and someone's like, how do I get motivated?

I'm like, you're not going to get motivated. Like you have to hate for me. I like, it automatically go there. I'm like, you have to hate something. Like for me, I just hated my current existence. And so for me, that was power. powerful enough to get me out. There's got to be another way though.

You know, I was thinking to you that moment where you took the leap, you know, there's, I often feel like most people that listen to this podcast often are at a point in their life where they're considering a leap. Yeah. Feel like we drag those type of people in,

we kind of like, we're a magnet to those people. So if they're in a situation that they don't like, but it's not that painful. You know, it's comfortable. Well, that's the worst. It's comfortable, but a little bit miserable. Yeah. How do you get them to take the leap?

When it's so comfortable, My boss is promising me a promotion. I think about death all the time. It's like, I'm going to die. And I think you have to agitate the pain for yourself. Like, you have to stoke the pain. Like, if you can't get through, through, because, like, it would be odd that you would be motivated by some weird passion.

Like, not everyone's Mozart and just like, I love music. And I've been, I see in, you know, see numbers and colors, you know, whatever. Like, some people are like that, but most people aren't. And so if you're not that, then you only start really liking stuff when you get good at it. in my opinion. And you only get good at it by doing it a lot of times before you're good at it. And so if you,

this is why I'm a big believer in this is that when you are starting out, I think you gotta find the thing that's the pain. And like pain motivates significantly faster and stronger than pleasure does. Like people are like, no, passion's the right way. It's like point a gun at a family member. All of a sudden, 10 out of 10 motivation.

Pain. And so like, I think people should use their pain more. And if they don't have enough pain, then one, maybe that's fine and you're a dreamer and that's okay but I will tell you that a word that I can I read in my like six month journey between when I wanted to quit and when I actually quit there was this word that just like pissed me off and it was this in this self-help or entrepreneur book and it said there are entrepreneurs and there are wantrepreneurs and I was like and it was like

entrepreneurs are people who read these books and don't do anything and I was just like I don't want to be I was like I am one of these right now and I just it just like felt so powerless. And I think that my entire life has been a lot of trying to have power. And I mean that in the true sense of just being able to direct influence in events. I've wanted to have more power to protect myself, protect the people I care about, et cetera. And I felt very powerless. And I think that I was in that comfortable, like my dad approved of my current situation. I had a job that when I told people, they're like, oh, that's fancy. But I felt powerless. And I hated that more than anything. And so I think if I want to say this to anyone who's listening, if there's anything you listen to,

all the stuff that I described that was really tough that I went through was not as hard as me quitting my job. By far, the hardest decision of my entire life, bar none. Because the things that I was actually caught up with were the opinions of other people, opinions of my father and the opinions of the people that I went to school with who I thought would judge me for leaving this good job to probably become a fill. gym owner and how lame that would sound compared to consultant going to Harvard and blah. Like I was going to go from peak white collar to a very blue collar, you know, profession making significantly less because I quote loved it. And like I'll say this again, but like sometimes you have to let other people's dreams for your life die for years to live.

And for me it was like when I when I continued to every day not want to wake up, that was my wake up call where I was like either I continue to live this way and not want to be alive or I just risked the fact that I'll die to everybody else and I think that that like it was the hardest decision in my entire life by far all this all the hard stuff we went through still the hardest decision my life how much was money on your mind when you made that decision the desire to be financially free to the point where you had millions it's weird money um Caleb would know this money doesn't really motivate me uh I would say that it would I mean I love the game for sure. But I love playing the game and the tokens are there. But for me, it was, it was,

it was, it was, it was, it was, it was beating my dad. You know what I mean? I didn't want him to be right. Like, that's what it was. Like, I didn't want him to be right. I just, I just, I remember, like, I would, I'd be sleeping on the floor. I'd be miserable. I had, you know, when I had my gym, and I had no trainers. I was teaching all the classes. And so I'd, I'd wake up. I'd do 4 a.m. 5, p.m. 6 a.m. 7, 8 a.m. sessions. And then I would then work out for myself. And then I would do, I do all the marketing in the ads and the stuff that I have to do the middle day. And then I would teach the 4 p.m., the 5 p.m., the skipping the 7 p.m. And then I would do sales consults at 8, 9, 10, 11. And then I would do the billing for all the contracts from 11 to like 12, 12, 30. And then I

wake up again. And I did that for like six months. And like I started to lose my mind because I wasn't sleeping. But even during like those times, I just literally I would envision going back to Baltimore to my father and have, and knowing that he would give me the false modesty of like, well, I know you tried, don't worry about it. Now let's get you back on this thing. And I knew that from that moment on, he would own me. And I just couldn't, I couldn't, I couldn't do it. I was like, I will do anything, but go back to that. And for me, that was my mom. I would do anything. And so whatever that, maybe you need to agitate some pain in your life, you know,

to get out of your current circumstance. And just as a total side note, play it out. What if you just never do anything? Is like maybe some people just need to stop dreaming. Maybe they need to accept their current reality and actually enjoy it. Because there's a lot of people in their 70 and 80 and they didn't do their dreams. And if they went back, like they didn't do anything. but that whole time they were dissatisfied because they didn't try.

But what if they were just like, I have a good life. I have a wife who loves me. I've got some kids. I have a job that I, you know, like, I don't mind it. Pace the bills. I mean, if you go back 500 years, it wasn't people like, man, this is my passion. He's like, dude, I'm just rowing a rowing a boat across a ferry. And that's what I do.

And that's what my dad did and his dad did. Like, this is how we eat. And so like, we have these, these idealized versions of purpose that I think Instagram and all this stuff kind of make terrible. But like, I think there's a lot of honor and work. period. And I think a lot of people fool themselves by thinking that what they do for some reason is not honorable. And I think a lot of it is like the internal versus external scorecard of like, I was saying what I said earlier about like, I believe these things to be true about the universe or like the world. But a lot of those are like, what do I believe about myself? Which is like, I can choose to do work in this way, which then I can derive joy from. So like, if I'm shoveling shit, I can choose to be like, I will be the best shit shoveler because I believe that I will figure. out how to do this more efficiently and I will you know I will I will I'll get better and I'll have calluses on my hands and I'll have a better back and whatever but I will do this well

and I think you can find joy and work if you decide to do it well so on one hand if you are if you are if you're a dream causes you so much pain then you will quit what you're doing and do it and if it doesn't cause you enough pain that you're not pursuing it or that you don't like if you you don't feel like you're in a cage right now then maybe you're not in a cage and maybe you just need to like the life you have and that's cool too.