The Game with Alex Hormozi - Why You Should Get Rid Of Your Google Sheets Empire | Ep 779

Episode Date: December 2, 2024

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 and will learn on his path from $100M to $1B in net worth.Wanna scale your business? ⁠Click here.⁠Follow Alex Hormozi’s Socials:⁠LinkedIn ⁠ | ⁠Instagram⁠ | ⁠Facebook⁠ | ⁠YouTube ⁠ | ⁠Twitter⁠ | ⁠Acquisition

What's going to everyone? Welcome back to the game. We're talking about making that cheddar, making more money, help more people, scaling businesses, and all that fun stuff, becoming unreasonably wealthy so that we can question the meaning of our very existence. So I will be your host today, Alex Hermosie, weird saying my own name out loud. Today, I want to talk about IT, yawn, right? Who gives a shit? Well, I think that you may want to hear me out on this, because in multiple businesses that I have founded, the biggest problem that I ran into were tactical deficiencies, so IT deficiencies, which I'll define IT as how you gather, store, analyze, and display data within a business.

What does IT stand for? IT stands for information technology. 2000 years ago, information technology was a paper and pen, right? And probably some sort of system of organizing parchment. or beads, right, for an abacus for calculating. You have data, and then you have the collection of that data, you have the analysis of that data, and then you have the displaying of that data. Data is how we make decisions, and decisions are arguably the most important thing that you

can do in a business, which is prioritizing the resources. Then it would follow that having an intelligent infrastructure for gathering, collecting, analyzing, and displaying information would be a priority. I want to share this with you because some of you are in this, position right now where you run what I like to affectionately call a Google Sheet Empire. And I want to be clear, I don't think there's anything wrong with that. And I think that usually call it below $3 million a year. This is where a lot of businesses are, sometimes up to $10, $15 million a year, sometimes

even, is mostly comprised of Excel sheets and Google Sheets for them to run, you know, the majority of the apartments they have. The reason that people use these type of sheets is because they're incredibly flexible. They can change. There's not a huge investment, you know, required to do that. The downside is they can be broken very easily. They're hard to organize. You have to manage permissions, which can also be a pain.

This will become a constraint in the business. And so I am somebody who is hilariously untechnical, and I try not to speak that over myself, but for the sake of this podcast, I will be straightforward with you. I will typically prioritize doing everything else besides this first, mostly because I just really don't enjoy it. I want to talk to you about two different IT implementations, and you're like, why am I talking about this?

I promise you, it is important. If you want to make a switch over to a CRM, which you will invariably do at some point in your business career because you realize that you can't just keep chicken scratch notes all around your office and think that that's somehow going to result in having a very basically good data to make good decisions for the business. As a quick side quest here, you'll notice that many times, especially recently for me, the first thing I do when I get into a department if I want to like fix something or a business is like I just need to get data systems in place. And so despite the fact that I hate the actual implementation of data systems, I absolutely love data. Right? And so it's kind of one of these very odd love, hate things. Like I hate the process. I love the output.

Most of you, and this, I actually am saying this with like fortitude here, most of you listening to this have shit data. So either you don't have data in general or the data that you have is not correct. You don't have a lot of confidence in the data, which makes it just as bad, basically. You can't use it to make decisions. And the reason that collecting data makes a business more valuable is two things. One, anytime somebody would want to potentially acquire a business about one of the first things they're going to ask for is data. They're going to ask for, hey, send me all this information, right? And if that information that you send is in crayon on napkins, and I say that figuratively, they're going to immediately discount the value of the business for a couple reasons.

One, because it just looks like you're not that professional. But secondarily and far more importantly, they will discount the value of the business because they will assume and rightfully, so that you were making the vast majority of decisions based on intuition and not data. Because if you were making all your decisions based on data, then you would have good data systems and good reporting, which you probably don't. And so it means that the vast majority of decisions you make are just making by gut. And I don't care how good your gut is. It's not going to be better than data. And it's not going to be better than data across a variety of different departments measuring many different inputs and outputs that occur across the business.

You're just too far away, especially as you scale. You're too far away. You can't know everything. And so you have to have this data not only available, but pushed to you. So it's one thing to say, okay, these departments collect this stuff. It's another thing to have those people send that stuff to you in a curated fashion so that you can quickly analyze what's going on out of glance. Returning back to the side quest, from the side quest, with now a bejewed sword so we can slay our ignorance, enemies, our lack of data.

The biggest mistake that I have made in IT implementations is that I was not involved directly. I have done four mega IT implementations. I've done obviously lots of smaller ones, but like basically switch entire platforms for everything, soup to nuts for a business. I've done it four times. Two times it went very well and two times it went very poorly. Because you like to know the difference. Well, the first time it went really poorly, I just said, hey, tech geek, go do

that thing and just get a setup. Tech geek went around, talked to every department head, seemed logical, asked them what they needed, said, got it, and then went back and made it. The problem was the data systems touch every component of the business. And understanding the entirety of the business at a deep level and the interplay between those variables is something that very few people in the business can do, especially a tech geek. And I say that affectionately. It would follow, that the person who probably knows the most about the business should be the one trying to figure out how to collect the data that matters

so that they can continue to know the most about the business. Because imagine somebody who doesn't know anything about marketing or sales or customer service, creating the data and creating all the systems behind it for them to do their jobs without ever understanding any of these functions. It's ridiculous. And yet, that's exactly what I chose to do. So that failed miserably.

So then we had to redo it. The next time, when I, was successful doing it, I was integrally involved in the entire process, as painful as that was. And so I, number one, would encourage you to just basically roll your sleeves up, put the belt between your thief and bite down and just deal with the fact that it's going to suck and that you're going to have to basically be very integrally involved in this because it touches everything. So if you're like, wait, so then why did the other two, one failed and one didn't? Well, here was the brilliant thing that I did. I figured after I had the successful implementation,

what I should do is forget what made that one successful and go back to giving it to somebody else. And then guess what happened? It failed. Now, to be fair, I could have had an IT person who lacked the skills of doing it properly. Very possible. To be clear, I'm not saying it is impossible for an IT person to do this. I think it is unlikely that they will be able to do it as well as if you were integrally involved, especially since you were fundamentally the receiver of this product. So it's like asking for an entirely customized workflow from a vendor and then wanting to be able to be, involved zero and telling the vendor, yeah, yeah, just go make it and just I'll assume that it's good. Of course it's not going to work, right? Like you would never treat a vendor that way. You'd hire

them and say, hey, go do this thing. And then that's it. Really unlikely that it's going to come out. I mean, it would just be sheer luck or that person would have to understand your business better than you, which is unlikely. Here's where this happens in terms of the process. In the beginning, you'll typically have some sort of, I'll call it the duct tape tech guy. Right. This is a guy who's not truly IT, but just like techie, right? Like understands how to, you know, plug different tools together, understands how to set stuff up. You know, when things break, they go in and just, you know, they duct tape, right? They fix it. That guy is typically not the guy you need to get to the next level. You need the guy who's going to work, and I hate to say this, not more slowly, but more

deliberately. All right. So big difference there. I'm not saying get the SOTI tech guy, because you'll just kill yourself. And don't do that. And then if you kill yourself, your business dies, and then, you know, and then your family is alone. They're crying over grave. All because, of a CRM. And that's horrible, right? We want to avoid that. And so the beginning is you just hire that the duct tape, bro. But the deliberate guy, the second guy, the better guy is somebody who will purposefully basically slow you down to say, hey, did you know that if we change this, it affects these three other areas? What I will do is I will take the information you give me. I will create a flow chart of here's all the different pieces that it touches. I want to make

sure that the decisions that we're making of how we want to route this information and how it would affect these downstream impacts is where you want it to go. Because if you think that one change doesn't affect everything else, you're wrong. An IT person who does your bidding that way, you will love as a founder. And I say this, having had my fair share of duct tape tech keeps that just like I had, you know, stapled to my side because I just wanted them to do what I, just fix this, do this, do this, move this here, whatever. You probably might be smiling, thinking about this because you might have that person in your business and you're like, I love this person. But the thing is, is that other people in your team all complain about them. And they complain about them because all they do is they're

basically the bull in the china shop version of you that just knows how to click buttons. And so they just go in and just break shit constantly. You're like, I'm good with it because I get my way. The thing is that it net globally hurts production. The best people that I have found in this space for tech, one, worth paying more money for. Right off the bat, I'm just telling you right now, if data's one of the highest leverage things that you can have in order to prioritize, decision-making, prioritize resources, then having somebody, like that person is basically the person that makes you look really good or really bad. People don't think about this. It's like one of the highest leverage positions you can bring on. Also, because you don't need to have a lot of IT guys.

Like if you have a really good IT person, you only need like one for a while, like a while. And so it's a role that you should not skimp on financially and also in that you should not skimp on in terms of your involvement. Because the best IT guys, in my opinion, The more time they spend them with you, the more strategic they will be, because the more they will understand the entire business. And the more you'll enjoy talking to them, which means that they'll get better. Basically, you want this nice feedback loop where you and that person have a good working relationship rather than feeling like you put them in the cupboard under the stairs and they come out every once in a while when there's like a site that goes down or like logins. You know, need to get changed. TLDR on this process.

Number one, it is okay to have a Google Sheet Empire in the beginning. But over time, you will need to transition because data is going to be one of the big constraints of the business in time and probably quickly depending on the rate of growth. Number two, I define everything that falls under IT as the gathering, storing, analyzing, and displaying of data. That's everything that I consider under IT. Third, if you're going to bring this person on, you should have a much faster feedback loop with that person on a more regular cadence so that they can start to think more like you

think and they can prioritize tasks accordingly. Otherwise, they will get buried in work. And the same thing goes when you have an IT department. Your team will ultimately start using them as though they're a vendor. They're kind of internal services. If you think about what they do in a company, they serve the internal business. They support value creation. And so the thing is, a lot of times your team doesn't know how to prioritize their time. And so it's like you have somebody who says, hey, can you automate this thing, it takes me 30 minutes a week. And it's like, okay, and then it takes them a full day to do that. And they potentially get paid three times what the person who spends 30 hours a week on that, 30 minutes a week on that work. It's like, oh, wow, I just basically spent

the equivalent of 45 weeks of that person's time on this one task. And it also results in nothing. Right. And so there are other things that would have been higher value for that person to do. And so them having the understanding of prioritization coming from you in terms of tasks can help them do the most important stuff first. Four, you got to be involved in the process. Click to close, soup to nuts. It sucks. I'm just telling you right now. My heart goes out to you.

It sucks. I hate it. I hate it for you. But it's what you need to do. Because otherwise you will look like an idiot because you will make decisions. The thing is, a lot of times data deficiencies manifest. in not knowing what to do next. So yeah, this is actually probably a good drawer to open.

If you go into a department and you're like, I'm not sure what we should do here. It's because you lack data. I made a podcast a little bit ago about how important data is, but the process of getting that data is what this one is about. And so with that being said, as terrible and painful as this process may be, it may be one of the things that makes you the most money and makes you look incredibly intelligent

because if you have good information, you will make good decisions, and the course to grow will be obvious. When it's not obvious, it's typically because the data you have sucks or it doesn't even exist to begin with. And so with that being said, give your IT guy a hug,

tell him you love him and appreciate him or her, but I haven't seen any IT girls. So maybe that's just my bias. Just in my experience, it's always been an IT guy. not to say that women can't do IT, but just in my experience. Anyways, with that being said, lots of love, make all that money so that you can question the very fabric of your own existence. See in the next one. Bye.