The Game with Alex Hormozi - You've been lied to 😡 - Gym Launch will NOT solve all your business problems... And the reason that I create NEW/Updated Plays/Processes/Tests on a REGULAR basis... Success creates deficits. | Ep 72

Episode Date: August 24, 2018

"Your business will always be broken, provided it is growing." Today, Alex (@AlexHormozi) discusses that no business program can solve all of a business's problems, as success creates deficits that require continuous growth and learning. He also talks about the advantages of leveraging information and community to solve problems faster and grow faster.Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned on his path from $100M to $1B in net worth.Timestamps:(1:32) - Acquisition system exposes growing problems.(5:32) - Iterate and leverage best practices for rapid growth.(7:32) - Leverage information and community for accelerated growth.(10:59) - Entrepreneurs acquire skills and teach others.(12:48) - Best investment is information for saving time and attention.(16:05) - Commitment to constant improvement and failing forward.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

Going on, everybody. Happy Hump Day, happy Wednesday. I don't know what day you're actually consuming this on, whether it's a podcast or video, but whatever way you are consuming me, welcome. I am breaking the mold and making three days in a row of content. I know. Crazy stuff. And this one was not planned at all, but was something that my sales director messaged me just a couple seconds ago. And he was saying that he was talking to somebody who was in launch, and they basically have grown, essentially, and as a result, need to hire people because their business is scaling, right?

And they were upset about the fact that that's not included in launch and that's everything that's in legacy, right? They're like, I think that's ridiculous. Why would I have to pay more for how to do this, right? And so I'm going to try and temper my response, but I want it to be appropriate to answer the question. So success creates deficits, and I'm borrowing that phrase from Alex Tarfan, but I mean, I don't know if he was the first one to say it, but success creates deficits.

There is no business program in existence, right, that will solve all of your business problems. Why? Because as you solve one, another will appear. It's part of growth, right? And so when Jim's come into our world in the beginning, the first problem, have is an acquisition problem. They don't know how to grow their business at will. Now the front end of the hose is arguably one of the most important ones because it's what turns the machine. If we didn't have gym owners applying, then we wouldn't have

to scale our fulfillment. We wouldn't have to grow our customer service team. We wouldn't have to scale our sales team. We wouldn't have to scale our operations team. We wouldn't have that because we don't have an acquisition system, right? But once you have an acquisition system, the acquisition system does not solve your problem. It exposes the problem that are already there in your business and most people just don't know the problems because they haven't had enough pressure put on the machine that they built. And so your machine can withstand a category one earthquake, which means you have a category one acquisition system, which might just be word of mouth, right, or whatever, which is just not earth shattering. It's not going to be

a lot of people walking in the door because you don't have the engine that's built on the front end. Now, that being said, all of these different segments requiring new skill set, which is why you as an entrepreneur need to grow, right? Like, like the business is limited by you. I can tell you that if I started another business and this ended tomorrow, I know I can tell you without a shadow of a doubt that it would be a $50 million business within 18 months. I can tell you that because I have that skill set now. I didn't have that skill set before because once you have acquisition, then what's the next thing you need to like learn? So like acquisition split into three things. It's going to be your lead generation, your lead nurture and your sales, right? Which is what we

solve for one level of service in gym launch, right? But then what happens? Oh shit, your classes get really full. Okay, now service level starts dropping. It's not that the service level really is dropping. It's more so that the trainers that you had didn't have processes in place in order to deliver a higher level of service or maintain the same high level of service over twice or three times as many people. You don't have that problem in the beginning because you didn't have an inflow, right? And so what needs to happen next. You have to scale fulfillment, right? Yeah. And so what happens? Like, you're going to move down this line. And then what happens after you scale fulfillment? Okay, now we got more people enjoying the classes. The trainers are pumped up, whatever, then what? But now our churn starts

becoming an issue, right? Because you haven't solved that problem yet because you didn't even have to worry about churn because you had so few people walking in the door, it was irrelevant, right? But once you have a huge amount of people walking in the door, a huge people being in classes, you have to scale your delivery, skill your team, that's where leadership comes into play. That's where inspiring the team. That's where having commission-based structures that make sense that are going to be tied to KPIs, right, key performance indicators. Those are all things that are going to drive the growth of the business, right? Right. And so, to try and drill this back in. So, like, no, no anything is going to solve your business's problems because it's a faulty mindset of thinking

that your business has a problem and then when it is fixed, it will be done. Like, I can retire now. And that's just a faulty mindset in terms of how you need to be as an entrepreneur and business owner. Like, you need to continue to grow if you want your business to continue to grow. If you want your business to maintain, the only way that no extra problems exist is if you decide that you no longer want to grow. And then it's true. But then if you're not growing, you're stagnating. And if you're stagnating in this market in 2018 and a market that grows faster than ever, with more competitors than ever, what do you think is going to happen when you stagnate? You die, which is why one of the core tenants at Jim Watch is grow or die.

And that's more so targeted at us, the employees, right, the employees of the company is that we need to grow or die because the company, like one of the sub statements under that core tenant is that the business's growth will be capped by the personal growth of each member, right? And so if you don't have that skill set, that's okay. That's what part of growth. is right like that's the deficit that you're feeling the pressure that you feel of like oh shit this is messed up is a good thing and if you get stressed out because of that that's not good because it just shows a disconnect between like that's it's always going to be like that like you're always going to have a deficit it's just going to be different and then you're going to

learn how to fix it now like the whole solution that we have with legacies that we've already gone through those steps for you so you don't have to have enormous periods of time of struggling which is why most people go from zero to like, holy crap, they get tons of revenue really fast. Why do so many, like, why do gyms either break or blow up with gym launch? Because we force growth, right? Because if we solve your leg gen, your lead nurture and your sales issues right off the bat, boom, it's like you step up the plate and you have like just like home run pitch after home run pitch, like balls just being thrown at you.

And like you have to step up to the plate and swing, right? And then you start cracking home runs and you're like, holy crap, this is like, there's so many runs. like there's all these things that are going on and it forces growth. And so if you're not willing to grow, then your business is not going to succeed, right? It's not going to succeed in the long haul because there's always going to be problems. And you should have to accept that. But you can solve those problems faster with community and leverage information advantage, right? If we've got 25 gyms that are doing a million plus, do you think we'd be able to go to those guys and say, hey, what are you guys doing for retention?

right and then only grab best practices from people who are actually doing best and then give those right like the reason that gyms have made more money the gyms that are in lexie have made more money than the gyms that i have will not have had right is because we have we have improved like my model was the baseline my model was 1.0 right i had done a lot of iterations i had i'd seen a decent amount of success right but what we are what we are producing now, the gym model that we have now, like why are we generating so many million dollars, why are we minting so many million dollar plus facilities so fast? Because we're iterating constantly, right? And we can iterate based on the successes of everyone who's here who is willing to look at problems, future problems, solve them together and then grab the best pieces and make one unbelievable super gym, right? And that's when you have the power of information and community and innovation, you can do that

really, really fast, right? So like at this point, Jim launch and like more so Jim Legacy because that's the majority of the business, right, is like it's become a new category of business because there hasn't been a business that's existed like this to my knowledge, right? We're not marketing agency. We're not a guru business. We have 20 full-time support. Like it's not a guru business. It's not a mastermind business because no one gets up on stage. Like a mastermind is where everyone is equal and then everyone says their own part.

That is not how this business is run. Right. So what is it? I don't know. I'm still trying to figure out a word for you. it's like it's like a white-labeled micro gym model it's a information broker i don't know how to say it but basically we just take the best stuff from the best people only and they give it to everyone and then everyone grows faster that's how you've got people like joey huber who like by his 16th week of

gym launch had like tripled his business from like him doing 40 grand a month to do in 120,000 a month recurring right by his 16th week now if you had just started your gym do you think in the first months you'd be able to do that kind of growth. Of course not because you wouldn't have the roadmap, right? You wouldn't know how to, like, you'd have to spend six months figuring out how to do lead generation. And then you'd be like, oh, shit, I'm getting leads. And you'd be like, well, how do I get them to schedule? How do we get them in the door? Right. And then you have to figure that out for six months, right? And then after that, you're like, okay, well, now I'm getting in the door, but I don't know what to say to them, right? And then you figure out sales for the next six months after

losing. And that's where most people get stuck in one of these problems and they die. Their business dies because they can't figure it out faster me. Right? But that's the advantage of having an information like advantage. So if you have leverage, you have people who have traveled the path already, all you have to do is model it. Hey guys, real quick, if you're new to the podcast, I have a book on Amazon called $100 million offers that over 8,000 five-star reviews. It has almost a perfect score. You can get it for 99 cents on Kindle. The reason I bring it up is that I put over a thousand hours into writing that book. And it's my biggest gift to our community. So it's my very shameless way of trying to get you to like me more and ultimately make more dollars

so that later on in your business career, I can potentially partner with you. So that's my give. Go check it out, Amazon, and back to the show. Okay. Sorry, guys. A little ranty there. But the reason that Jim launch does not solve all of the business problems

is because we were coming in to solve one problem, which is acquisition. And then what that problem does is it exposes all of the weaknesses that are in your business. And that is why Jim Legacy is the majority of my business, because that is the rest of the equation. Why don't, like, why don't I sell all that up front? Because everyone would be overwhelmed beyond belief.

That's why. Because they would be so paralyzed, seeing all of the holes that exist in their business, that they'd be like, I don't even know what to do. And they panic and they freeze. It's the number one thing that happens when people get into legacies. They see all of the problems that they didn't know they had. And then they're like, and that's okay. Because it happens in sequence.

You do one at a time, it just happens to be a portal that has all of them there, but you take one at a time, right? First, we solve fulfillment. Okay, now we've solved fulfillment. Now let's solve retention. Okay. Now my trainers want to get paid more because they're seeing how much money I'm making. Okay, now we start working on leadership and then we have an ascension path to them, right? Like, now we have a sales manager.

Like, all of these things are growth things that you need to do and all that ends up really happening is that you see a problem, you sponge the problem as the entrepreneur to fill the gap, you learn a, acquire the skill and then you teach someone else the skill that you learned. That is the path of the entrepreneur, right? We see a problem, we identify the problem, we become the sponge to figure out the issue or the solution, and then we figure it out well enough that we can teach someone else to do it so that they can permanently do it and then learn to do it even better than we do. That's the point, right? And then as you continue to scale yourself as an entrepreneur, then you start having people that you can start deploying against those problems and saying, hey, can you figure the cell. And that's when you start leading people and you start empowering people because

then the entrepreneur can solve multiple problems at the same time, right? But your parents is not going in to like man the phones to figure things out. But at the stage in the course where most people are watching this video right now or who are listening to this podcast, a lot of times that's you. Once you have an infrastructure that's big enough, you can start having key players that can go and do those things for you. Right. And that's how you can start leveraging time. And that's why the rich get richer, right? Is that like the first, million is the hardest the first hundred grand is the hardest right I mean for me I'll be honest with you I think the hardest thing for me with my first hundred

grand I try not talk about money too much because I don't want to come off braggy but like like that was the hardest thing because once you have that you can use that to buy more time back right and then it becomes the snowball of of growth that you can have because you can shortcut more things you can buy information which in the beginning you don't have money to buy information so you have to spend your one resource that you don't have which is time and attention It's the only thing you got in the beginning is time and attention. And so you spend your time and attention to get just enough money that you can hopefully buy enough information, the right kind of information, to drag your future forward faster, right?

So you can go through this path faster. The number one investment that I've ever made in my entire life has been information because it bought me life. It bought me time. It bought me attention back. You were like, you're 28 years old. How have you accomplished so much? People ask us that, right? God, I really hope this doesn't sound brag yet.

That's not my intention. Like, it's happened because for the first five years of my career, every single extra dollar I had, I spent on information. I spent on courses. I spent on training. I spent on a bench. I spent on coaching, right? I spent all of my money to get me better because I looked at the income that I was having. And I was like, I see the growth trajectory that's happening.

It's not fast enough, which means I'm not good enough to get there. Right. And so it takes a certain amount of like, just don't have an ego about it. You probably suck. And that's okay because I suck too. You know what I mean? And we just get better together. So the growth path will never end.

Point number one. No problem will fix your business or no solution will ever fix your business because your business will always be broken provided it is growing, period. Which means that you will always have a skill set that you are in a deficit of because your business requires you to be someone bigger than you are right now if you are growing. And the reason so many gyms break or blow up is because, the grit of the entrepreneur who goes through it is willing to grow when they're confronted with a category five earthquake instead of a category one. Because all of a sudden, their machine is put

to the test, and they can either point and say, you broke my gym, or they can say, I'm going to fix it because my film is sucked and I had no idea. My culture sucked and I had no idea. Everyone at my gym, my clients are all OGs and don't want to welcome new people into my classes. And that's my fault because I'm the owner and it's always my fault, right? It's time. It's taking responsibility. So, all right, I probably should have wrap this video, but I hope this answer some questions of the fact that like gym launch will blow your gym up, right?

It will either blow your gym up in terms of like, you will make more money than you've ever made, you can make more clients than you ever had. But the thing is, is the responsibility will always be on you, right? Because you're the one who's gonna have to grow, always, right? That's why we have 500 plus testimonies. The good news is that as long as you have the effort

and you are not somebody who is a victim, And it's someone who says, you know what? I need to grow. That's why my business isn't where I want to be. And you could be making a million dollars a month. And you should still be able to admit that. I need to grow. I have so many deficits right now.

Right? So you're never good enough. You don't know. The moment you stop learning is like the time everything dies. So, yeah. So if any of you guys, for anybody who's in gym lodge, yes, I do some things. Like, your business probably did blow up. And that's okay.

And that's why we have legacy, which is the remainder of the model. And I love you guys, and I really mean that we structured this business so that we get the maximum amount of people, the maximum amount of results as fast as possible, which I think we've done a decent job of, but we obviously can always work on a lot of things, and we're always going to try and get better. But my single promise to you is that we will always try and get better, always, and we will fail. My last legacy release, I'll tell you something. My last legacy release, which is, this was this last Friday, so I released new stuff all the time. I had been planning on this new sales method that we were doing, combining one of the other plays that we have in Legacy. And after like six weeks of trial and Aaron, like 150 man hours put on it, it didn't work, right?

Like we just couldn't get it to work. But that's part of, that's like, that's part of progress. You know what I mean? Like, if you know it's going to work ahead of time, it's not an experiment. Like, I think it could work. And a lot of our experiments do. And that's why the rate of progress in the Jim Lords group is so much. that anything that I've seen on the market right now.

Because like, we're willing to fail. And for us right now, we have the resources and the manpower, like, to spend my money or my time or my people's time that I'm paying for indirectly to test this stuff out for you. So you don't need to incur the cost of progress. We incur the cost of progress because now we have the resources to do so. And then ultimately sell that information at a margin. So everyone here, like, we buy information through failure and failed attempts and man hours. and then we sell that information as a winning scratch-off ticket that we already know works.

And then that is the secret of the legacy business model. That's all we do. We go find stuff that works. We try a whole bunch of times. We incur that big cost that no individual could incur. And then we sell that at a margin. That's it. That's how it works.

So anyways, guys, I know where's my ostriching jacket? I appreciate you guys giving me your attention on a Wednesday. It's halfway through the week, even though entrepreneurs really don't take off anyways. but I love you all genuinely. We create this company to serve you in a higher way, and we will always try to do that. So that's my promise to you. And we had some really huge plays coming up

that I will not talk about, but they're really huge, and they are coming up soon. And I'm beyond excited. And for those of you who are not in our world, that was a little taste of a rant that I did not intend, but it just weld up inside of me. So I appreciate you, And if any of this was useful for you, you know, shoot a like, shoot a comment, tag a gym owner,

and lots of love. Have an amazing time. And I'll talk to you soon. Bye.