Unlocking Secrets to Business Growth w/ Alex Hormozi

It’s one thing to START A BUSINESS. It’s quite another to SCALE IT FOR LONG-TERM SUCCESS. This week I’ve invited serial entrepreneur and investor ALEX HORMOZI to share expert advice on how to MONETIZE AND GROW your business. I hope you’re ready for a show with some of the most UNIQUE and INTELLIGENT business insights I’ve heard in a long time and all from a guy who’s only 32 years old! Alex is the CEO of ACQUISITION. COM, and he and his wife Leila have built a portfolio of companies that generate more than $85 million annually in sales. They are active PHILANTHROPISTS, donating millions to advancing equal access to education in underprivileged communities. Alex is also active on social media and a frequent guest contributor to FORBES and ENTREPRENEUR, where he shares good and bad lessons with ASPIRING ENTREPRENEURS to help them avoid mistakes he’s made along the way. Today, he’s going to do that for our #MAXOUT audience. Even if you’re not in business, Alex will also cover many things you can use in your personal life. We’re going to dig into the concept of LEVERAGE which is exactly what you’re going to need for your business and personal growth. Alex explains the FOUR TYPES OF LEVERAGE--LABOR, CAPITAL, SOFTWARE, AND MEDIA--and how you can get LEVERAGE ON YOURSELF. One of the keys to success is always operating with a sense of URGENCY. Alex has an EVERYDAY URGENCY BLUEPRINT you’ll want to hear and apply to your life. We’re also going to spend a lot of time talking about Alex’s takes on SCARCITY STACK and the TRIM AND STACK HACK to maximize your business’s growth. They’re simple and powerful strategies that work in every type of business. Alex has also got important advice on how and why you should be PRODUCT and CUSTOMER EXPERIENCE ORIENTED if you want your business to really take off. There’s a ton of stuff to unpack this week…My advice on where to start? By LEVERAGING YOUR LISTENING to what Alex has to say. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Ed Mylett?

  I hear so many small business owners say the exact same thing. They just never have enough time in the day. Well, I measure time differently. I've compressed, condensed, heck, I've bent time. My first day is 6:00 a.m. to noon. My second day starts at noon and goes till 6:00 P.M. And my third day, 6:00 P.M. to midnight. I now get 21 days a week. Stack that up over a month, over a year, over five years, and my life's completely different than it would have been otherwise. And if you want to win as an entrepreneur, you have to compress your time, too. And you definitely can't afford to waste it. Waiting weeks on a big bank for capital? Your best bet's to work with my friends at Cardiff. They know how to compress time for entrepreneurs. They get your business approved in minutes and funded the very same day. They're America's favorite small business lender, and for good reason.

• 0:45Ed Mylett?

  Over 20 years in business, over $12 billion deployed to small business across America. Stop letting bank delays slow down your momentum. Head to cardiff.co/ed. That's cardiff.co/ed. Cardiff.co. Real growth, fast funding. Cardiff. Borrow better.

• 1:01Speaker 01

  Mr. President, my company, for me, of the explosion on our rig.

• 1:05Speaker 02

  On October 2nd.

• 1:06Speaker 01

  Causing massive water displacement and triggering a tsunami. They all heap the blame on me.

• 1:11Speaker 02

  Tom Cruise is. Digger got us into this mess. And Digger's gonna dig us up. From the director of Birdman and The Revenant.

• 1:18Speaker 03

  What would happen if I stopped drilling? You stop, you freeze to death, that's what.

• 1:22Speaker 02

  With great power comes great deniability.

• 1:25Speaker 03

  I'm not the first nanny.

• 1:27Speaker 02

  Digger. See the trailer online. Only in theaters October 2nd. Rated R. Under 17. Not a middle without parent.

• 1:36Speaker 02

  This is the Ed Mileage Show.

• 1:40Ed Mylett?

  All right, welcome back to the show, everybody. I have been looking forward to this interview for a few weeks. Mutual friends of ours that turned me on to Alex said, "You need to get with this young man and get him on your show." And then when I dove into his content and his work, I was blown away. He is brilliant. I don't say that very often when I introduce people. I think he's probably got one of the highest IQs of anybody I've ever had on the show. And his content, as it relates to personal success and particularly entrepreneurship, is very unique, very special, very detailed. And I wish we had three hours today like other podcasts have because we could use that entire three hours and still have a bunch of time and stuff left over. So he is the host of The Game with Alex Hormozi on all these different platforms. He's a serial entrepreneur. By the way, he's built brick and mortar businesses, virtual businesses.

• 2:25Ed Mylett?

  He's written incredible books. He's got another one coming out. So Alex Hormozi, welcome to the show.

• 2:29Alex Hormozi?

  Thank you so much for the introduction. I will do my very best to live up to it.

• 2:32Ed Mylett?

  You better live up to it.

• 2:35Ed Mylett?

  The fact, I was so impressed with him. I got into all of his content and then I said, can you be here next week? Like one week from now? And he goes, yep, I'm there. And then he looked, I think it was your anniversary or something. So I gave him a reprieve for a couple of weeks and now he's here today. You guys, this is like, you're on the treadmill, you're gonna start running faster than you normally run. And you're gonna want to get to a notepad too. So here we go. Let's just dive into all your stuff. We're gonna go all over the place. You have this really unique definition of even what opportunity is in and of itself that I've never heard before. So how would you define like just the term and the, the, the concept of opportunity?

• 3:07Alex Hormozi?

  So it was something that I was analyzing a lot because we get lots of entrepreneurs who are like, hey, what should I do with my life, et cetera? And when I look at how my income has increased, you know, throughout my career, a lot of times it wasn't a function of the work ethic. In the beginning, you have to work, right? But then the next big lever on that is the opportunity. And so if you think about any kind of output in a system as volume times leverage equals output. The work has to start. So you have to have something to multiply, which is the effort. And then the next is, is that leverage. And so within the context of a business, I tried to define it for myself, which was how many potential units of the product can I sell?

• 3:48Alex Hormozi?

  And then what is the gross margin potential of the product that I'm trying to sell? And then what are the competitive dynamics within the marketplace? And so an example of something that has two of the three and not necessarily all three would be like, uh, if I want to get into telecommunications. So I said, okay, I hate that I have no service. Like I want to solve this problem. And so I'd say, well, everybody needs phone stuff. So huge, huge potential market. The gross margins on an additional user is almost a hundred percent. So, okay, really attractive. But then what are the competitive dynamics? Oh, I would have a really hard time entering into this marketplace because it's super capital intensive, et cetera. And it's like, okay, so maybe the opportunity in, now we rewind the clock.

• 4:30Ed Mylett?

  Yeah.

• 4:31Alex Hormozi?

  Fifty, sixty years or eighty years, and that was the opportunity, right? Cause you had all three of the dynamics, but then you look at newer things like crypto, you look. Get, you know, the cannabis industry, which is still nascent. And those were a lot of people smoke weed or want to, you know, be involved in that industry or participate in consuming it. Right. Um, there's, there's great margins, especially if you're vertically integrated with, within the space. And the competitive dynamics are still like, you can still be a new entrant and have a huge amount of market share. As it's continuing to grow faster than the rest of the marketplace as well. So there's a fast growing market that's growing faster. So if you just stayed the same as the market, you're still going to outpace anybody else.

• 5:11Ed Mylett?

  Really good.

• 5:11Alex Hormozi?

  And there's fewer people taking it up. And so it's like, you have two, two competitive dynamic, kind of like trail wins behind you. And so when I looked at, um, like we exited our three companies last year, I was like, okay. I want to be really, really selective about what opportunity we pursue, because I know that, you know, Warren Buffett is like one of my big heroes. And he talks about how it's much more about not, not about how hard you row, but about what boat you're in.

• 5:37Ed Mylett?

  Yeah.

• 5:37Alex Hormozi?

  Um, and he tells a story about how he had a companion who was basically the same as him and they both split off from Columbia. And he became Warren Buffett and the other guy just had a normal career in the steel business. Different opportunity. And so I think being selective about the opportunities we pursue is probably the greatest leverage point you have on your career.

• 5:54Ed Mylett?

  What if you're in the middle of one? So this is a really interesting topic. I was thinking about driving in here today. I wanted to ask you some of this stuff, like your take on it. And by the way, our take is very similar. But I think this is an interesting time where perhaps you should be evaluating your boat. People just keep rowing, don't they? Like just keep rowing because you're so far in, you're like, I'm 70% of the way down the road here. I'll just row harder. But I'm wondering about looking at that boat, two things on it. One, should someone, it's really laser focused. Should they even look up and evaluate the boat? And two, what about these times? You spoke about Buffett, had this great talk a few weeks ago about inflation. And about maybe what your boat should or shouldn't look like in high inflationary times, which we're clearly in now. So does inflation impact any of what you've described in terms of evaluating the boat or what you do with it?

• 6:38Alex Hormozi?

  I would say two components. So first would be someone's timeline. And so if they're like five years from retirement, it doesn't really make sense. You should eke out the compounding returns you have of the 30 years that you put into whatever it is. But not should, that would be, you know, if I were in that, that's what I would do. If you can think in longer cycles and you have one, two entrepreneurial cycles left, then you get the opportunity cost starts to really weigh in. We're like, okay, well, I might not make as much next year, but three years from now, I could be making five times as much. Am I willing to give up two years of earning to make five times more three years from now and then set myself off for the rest of that time? The younger you are, in my opinion, the more you should be taking those types of bets.

• 7:17Alex Hormozi?

  And then within inflationary period, this is, you know, Uncle Warren speaking, but you want to have things that are have low capital expenses. So you don't need to add new equipment, new facilities in order to expand whatever business you're in. And then you want it to be things that produce lots of cash flow. And so if you have something that's high cash flow, it has low capital expenses. When you're growing in an inflationary period, you can adjust the prices very easily. And when you make those adjustments, it drops straight to bottom line rather than having to then go back, buy more equipment, which now has eaten up that additional cash flow.

• 7:49Ed Mylett?

  Yeah. See, I totally agree with you, by the way, this idea right now of, you know, scalability, which we're going to talk about in a minute too. By the way, when he says young people, when you're listening to this man speak, he's 32 years old. And so there's two things about you. One, your brain's really big and two, you have a wisdom far beyond your years. My sense is that that has a little bit to do with your relationship with your dad, which we might get into later. And the other is just vast amount of experiences you've crammed into basically your 10 years or so post-college, right? One of the things you've been pretty good at doing though, is using leverage. And leverage to most people typically means borrowing money from other people. But you define leverage freaking brilliantly. So talk a little bit about what real leverage is and the way you define it.

• 8:32Alex Hormozi?

  So leverage is the difference between the inputs and outputs in a system. It's the discrepancy between what you put in and what you get out. So if I have a lot of leverage, then it means if I put a little bit in, I get a lot out. If I have low leverage, I have to put a lot in to get a little bit out. If I'm working at a Froyo shop, I have to put a lot of time in to get a very little amount of money. So I have very low leverage. If I If I do, put a deal together, right? And I make a couple of phone calls and then that deal yields me $10 million from connecting parties and then maybe underwriting something. All of a sudden, that's a lot of leverage. So I put a very little bit amount of time in, I get a lot of money. And so the idea of, of using more leverage is looking at what my inputs and my outputs

• 9:15Alex Hormozi?

  are and figuring out how I can create bigger and bigger discrepancies between those.

• 9:18Ed Mylett?

  Are there different types of leverage other than just money?

• 9:21Alex Hormozi?

  Yes.

• 9:22Ed Mylett?

  Which, which are?

• 9:23Alex Hormozi?

  So, um, anything that increases your output.

• 9:26Ed Mylett?

  Okay.

• 9:27Alex Hormozi?

  Without per unit of effort is leverage.

• 9:30Ed Mylett?

  Hmm.

• 9:31Alex Hormozi?

  And so that can happen in the physical space. So like a literal lever is, increases your leverage. If I take this, we take this podcast and you put it on YouTube, that was leverage because we put the same input in, but then we get more output. If I have a cold calling system and I'm able to now dial 10 phone numbers per minute because I have a dialer that's doing outbound, I have more leverage per unit time. If I, um, take a, a form of media and then I, I transcribe it and then I also make an audio version, that is leverage. So all of those are different versions of just getting more out for what you put in.

• 10:06Ed Mylett?

  Hard question. So I, uh, let's, let's, let's dig deep. I'm an entrepreneur and I'm listening to this, doesn't matter. I could even be self-employed. I sell life insurance. I'm a mortgage broker. I'm in real estate. I've got, yeah. Got a cannabis business. I got six people working for me. And I now kind of get from listening to this dude and listening to Ed regularly, like this idea of leverage is what successful and wealthy people do, right? They do it better than other people. This is a really big deal, everybody listening to this right now. They do this better than you. They understand the concept of this better than you. And to the extent that you can understand it and most importantly, apply it is where you make a shift. So it's a hard question because you've answered it, but I want to push you harder on this. If I have any type of business right now and I've evaluated the concept that you've described here, how do I apply it?

• 10:50Ed Mylett?

  What do I look at in terms of buttons I could push to get more leverage?

• 10:54Alex Hormozi?

  Yeah. So Naval Ravikant does a really good, um, job of defining his four types of leverage. Now, within those, I described a lot of different leverage around one, which is media, right? But you have leverage around labor, which is you buy other people's time. So that is a first version of leverage. So is there something that I'm currently doing that I can pay someone else to do to gain time back and then use the excess time I have to make up the difference? So if I can pay someone $10 an hour and I know that I can make $50 an hour on the phone selling, then I can pay somebody to do any of my tasks for $10 and then I make up the time selling.

• 11:23Ed Mylett?

  Stay on that. Brilliant. We're gonna go to the other three, but just stay on that. This is something I struggled with young. I don't know if you did. When I was young, I didn't have a lot of capital. I used to think, no, I'll just, I will do these things because I can't afford the expenditure right now. Were you ever that way when you were young in business?

• 11:38Alex Hormozi?

  Totally.

• 11:39Ed Mylett?

  I just held on.

• 11:40Alex Hormozi?

  A hundred percent.

• 11:40Ed Mylett?

  Because I'm like, I had this scarcity idea that this may be the $2,000 a month that keeps me in business. Yet it was the very thing that kept me in the small business I had.

• 11:50Alex Hormozi?

  I think there, I mean, you gotta work double time. I have, there's no real sexy answer that I have for that, which is just like, you have to work the normal amount you would to make your money, and then you have to make enough, and then you work again to make someone else's money. And that's in the beginning. So it's like, I'm making my job and I'm making someone else's job so that I can buy that time that I used to work to pay someone else.

• 12:06Ed Mylett?

  Very good.

• 12:06Alex Hormozi?

  To then make more money in that period of time.

• 12:08Ed Mylett?

  Really good.

• 12:09Alex Hormozi?

  And the big thing that I think a lot of guys, because I, on the flip side of the entrepreneur space, the influencer, whatever space, people are always talking about buying your time back, but then they don't talk about what you do with the time you bought back. So if you just buy your time back and don't do anything, you're gonna make less money. I just want to be clear.

• 12:23Ed Mylett?

  Yeah.

• 12:23Alex Hormozi?

  But, um, because I had an entrepreneur who was talking, he was like, I bought all my time back. He's like, but I'm really not making, I was like, you're not doing anything. Like, you still need to work. You just gotta now work on higher leverage opportunities. More dollars per time. So in that, that input is my time, my output is my money, so it's a higher leverage thing of my time.

• 12:37Ed Mylett?

  What are the other three?

• 12:38Alex Hormozi?

  So you got labor, which is the, which is the most operationally complex and heavy of the, of the types of leverage. The next one is capital. If you can raise money, leverage other people, that's the one that, you know, the mortgage brokers that are, they're more familiar with, real estate guys. Because if I don't have to put any money up and I can buy something and then I can sell it for more money, then I get to make the, the difference between those two things. And I used it on some, on basically, someone else took the time to earn the money. And then they just gave me that time, if you think of money as a, as a tradable unit of time, that I got to borrow and then make the difference on something. The third one, and I think three and four kind of go hand in hand, but it's, you've got software, sure, code, and then media.

• 13:19Alex Hormozi?

  So code is just, you know, you write code and it, it takes you one time investment to get the thing to do something. And then every additional time, so the input was the time I took to build once, and then every additional person who uses the software and gets a benefit from it, I get almost no incremental cost. And so that's leverage. And then with the, the media side, we, you know, said it earlier, if, it takes the amount of time for us to make this one podcast, if one person listens to this, or a million people listen to this, it's the same amount of effort.

• 13:44Ed Mylett?

  Yeah. I told you guys when I introduced them that this would be stuff you've not heard before. So, and it is. There's another type of leverage. And I really related to this. I'm 20 years further down the road than you on some of these things. I very much relate to some of the things you talk about. Obviously, you have this relationship with your dad. Maybe we'll go there, but that you were, you know, just trying to prove him wrong all the time. But you said something in one of your quotes. You said, "I found out later that I was constantly trying to prove a fictitious person wrong." Meaning, the type of leverage that I got on myself when I was young. "I'm gonna prove them wrong. I'm gonna prove them wrong." It was like this. I mean, I think the best way to describe me as an early entrepreneur was a little bit angry. And I leveraged intensity.

• 14:27Alex Hormozi?

  Yeah.

• 14:28Ed Mylett?

  I leveraged anger. I actually leveraged fear of losing to this fictitious person, of them being right. And by the way, some of that probably served me really, really well. But I don't know that it was healthy long-term. So what about that getting leverage on yourself idea? Would you recommend someone operate out of that space? And talk about your own journey on it.

• 14:51Alex Hormozi?

  I would recommend you use the resources you have to create the life you want. And so if the cards that you have dealt right now are anger and fear and disappointment, then you can either wallow in those, or you can turn something good out of it. And so, I mean, I love the saying, "You can either let life beat the strength out of you, or you can let it beat it into you." And I think that you can use that. You could put pain. You could put disappointment. You could put fear. You could put whatever that life, you know, thing is. And so it's just a decision of whether these circumstances are going to serve me, or I'm going to serve them. And so I think that whatever your raw materials are, a lot of people lament what cards they're dealt. But you don't have control over those cards. You only have control of how you play the hand.

• 15:32Alex Hormozi?

  And so I think everyone just needs to move past that and, you know, stop the pissing contest on who had a sadder upbringing.

• 15:42Ed Mylett?

  Yeah, I also think though that you have to be, if you're making progress, you know, one of the things that's made Jordan great or Brady great is changing the leverage they get on themselves. So it's not that Tom Brady still isn't playing football to prove the fact that he was a six-round draft pick. Right? But this notion that that's what he gets up every single day, that's the chip on his shoulder anymore is not true. He's now playing for greatness. He's playing because it's his standard. He's praying to, so, and I find with a lot of entrepreneurs, they don't ever change the leverage. And so when they get to where they have proved that fictitious person wrong, or they have gotten to where they are no longer starving, they don't have any mechanism to drive themselves any further. You know what I'm saying?

• 16:22Alex Hormozi?

  I do.

• 16:22Ed Mylett?

  I think a lot of people are just oblivious to the fact that you've lost leverage. I'm not motivated anymore. I'm not inspired. It's because the old lever you pulled that worked at one stage, you need to now find, Jordan used to say, listen, I play every day, but Jordan didn't take a bunch of games off. He'd say, because there's a kid in the stands, who it's the one time he's ever going to see me play is that night in Sacramento. And even though it's the Kings, I'm going to play all out because that kid's going to tell stories about seeing me play. That's different than his motivation, his rookie year to prove he belonged in the league, right? Entrepreneurs don't find that new lever. You obviously have.

• 16:57Alex Hormozi?

  I, so, I've made some content on that specifically that Michael Jordan said. So I like, super resonate on that. Like, that was my biggest of the whole series that I watched. That was like the point where I like had to pause and like chew on it. But it really made me appreciate like every, every podcast, every, every opportunity that we have to share something to really try and bring it rather than call it in, you know what I mean? But yeah, for me, my, my leverage has changed. I think I was really angry, um, younger, and more fearful than angry.

• 17:29Ed Mylett?

  Me too.

• 17:30Alex Hormozi?

  Just really, just the idea of the disappointment and him being right was just like unbearable.

• 17:36Ed Mylett?

  Him being dead.

• 17:37Alex Hormozi?

  Yeah.

• 17:37Ed Mylett?

  Yeah, isn't it? Do you think, I think that, um, anger is typically the manifestation of fear.

• 17:43Alex Hormozi?

  Yeah.

• 17:43Ed Mylett?

  And so I, when I say angry, I wasn't throwing chairs all the time or anything like that. But there was this almost like, Game day intensity type anger every day to the way I approached my life and my business. So let's just touch on it since we've we've gone there for a minute because everyone has these different things that move them. But as I get it, your dad was a doctor and just no matter what you freaking did. It was just never good enough, right? It was just, hey, man, you got you got a 99 on the spelling test. What was up with the one you missed, right? Or, you know, I made millions of dollars, Dad. Yeah, but you're a Vanderbilt magna cum laude, blah, blah, blah. Why aren't you a brain surgeon or a neuro or whatever, right? So this was a driving mechanism for you. Has it has it been resolved now? And I think a lot of people can relate to this.

• 18:28Ed Mylett?

  I'm going to prove my parents wrong. I'm going to prove this hater wrong. I'm going to prove this friend of mine wrong.

• 18:33Alex Hormozi?

  Yes, it has been resolved. I think, you know, it I kept leveling up the ante of like, I want to make as much as my dad. I want to make more than my dad. I want to make more than my dad's ever made his entire life. Like, you know, all of those kind of like points. And then once that had, once I thought it was beyond contestation, it was undeniable. And that was the, I mean, that was my first goal. It's like, I wanted it to be beyond reproach. I didn't want there to be a pause or whisper or hesitation in saying, you won. And so after transitioning from that, it was like, but I didn't have a gap in in motivation, though, to be honest. Like, yeah, okay. So, yeah, I didn't I didn't really have a gap from there. It was just, what else can I do? And how big can this get? And I want to see what life looks like when we're there.

• 19:15Ed Mylett?

  I think that's the separator, though. I think most do. And I think the reason you've had multiple exits. And then you decided, okay, I'm going to get into social media. And then you've been good at that, right? I think that that's because you haven't had the gap. But I think you'd agree with me. Vast majority of people listening to this either have not become successful yet or get to a particular level. And they bought their time back and then they do nothing with it. Like what you said, they just can't find that. That starvation fear thing that they had when they were broke. They just don't have it now that they're eating, you know, they can go to Mastro's and have dinner and get a glass of wine once in a while, right? And they go, okay, that was it. And I think part of that is because it was always this place to get away from. And also that it's not become a standard. Like, for me, I think often in life, we don't know, we, what do you get?

• 20:00Ed Mylett?

  Your goal or not is immaterial. You're going to get your standard long term. So I'm always evaluating what my standard is. And for me, that standard is, I want to be excellent. I want to be great. I also want to contribute. And I know that. Guy was on my show recently, Rory Vaden, he said something that's probably never gonna leave me the rest of my life. He says, "You are best equipped and capable of helping the person you used to be."

• 20:20Alex Hormozi?

  Oh, yeah.

• 20:21Ed Mylett?

  But what, where, what I heard was, "That's why it's incumbent upon me to keep growing and changing, so that there are previous versions of me of people that I can help." Like, I look at you and I, there's a part of me when I was studying your stuff, I'm like, "I'd like to become close to this dude, 'cause I think I can help him." 'Cause I've been the 32-year-old, successful dude, you've got a great wife that you talk about all the time. I wanna watch you the next 20 years, like, legit change the planet. 'Cause I think you have the drive and the intellect and the experience to do it. So, but, speaking of that time, the next 20 years, I have this debate with my friends all the time, man, I'm like, "So, if you could give up all of your money, but you could get 10 years back in your life, would you do it? Would you go back to 15 years old again?" And it's interesting, I'm diving into your stuff, and you literally said, "I would easily,"

• 21:05Ed Mylett?

  I think you said, correct me if I'm wrong, "I would give up all of my money to get 10 years back and be 22 years old again." Is that accurate? 'Cause you're nodding, but we're on audio, okay?

• 21:15Alex Hormozi?

  Yeah.

• 21:17Ed Mylett?

  And then you also connect it to what the next 10 years also means or doesn't mean to you.

• 21:22Alex Hormozi?

  Yeah.

• 21:23Ed Mylett?

  Everyone? Like, just get ready for this answer right here, 'cause it's awesome. Go ahead.

• 21:27Alex Hormozi?

  Well, I, um, I play with time a lot, in terms of, like, when I think through decisions, and so, I was thinking about my 85-year-old self, and I do think that I'll be a billionaire or multi-billioner, just looking on the math, if I don't change anything right now. Um, and I know that that man, looking back at me today, would trade everything he has to be 32 again. And not only just 32 again, he'd be 32 and picking up trash, having nothing. I know that I would trade all my wealth to do that. And so, to the same degree, if I were to look 10 years into the future, I know that that 42-year-old would trade everything he has to be my age again. And so, it forced me to take a new look at what I was supposedly sacrificing time, et cetera, for, for something that I know that I would willingly trade back to have the moment.

• 22:09Ed Mylett?

  Hmm.

• 22:10Alex Hormozi?

  And so, it made me experience the present in, through old eyes, anew.

• 22:15Ed Mylett?

  Oh, my gosh. And what's that mean? Does that mean that you choose what you're doing more carefully? Does it mean you're more present in the moment? What, what is, how does that apply and manifest itself?

• 22:25Alex Hormozi?

  This is something that I think a lot about.

• 22:27Ed Mylett?

  Me, too.

• 22:28Alex Hormozi?

  So, I, so Caleb's probably nodding in the back. Um, I call it the grandfather frame, um, because... Give me two minutes. You got it all. You can have ten. So there's something called the frame of the veteran, which is if you're really upset about something, if you imagine that that thing were to happen a thousand times in a row, every single day, all of a sudden, it starts to become immaterial because it's just how you expected it to be. It's always this way. If every time you go to traffic, it's always an hour, you're not going to get as upset about it if you know that happens every single day. And so it's called the frame of the veteran. And so that was really good for helping me decrease stress earlier on in my entrepreneurial career. I'd use that frame. But I was like, I wonder if I can think of a different frame that would allow me to experience gratitude because it's something that I've struggled a lot with. I'm just not inherently like, I don't five-minute journal every day. Like, I'm just not that guy.

• 23:10Alex Hormozi?

  And so when I think about my 85-year-old self waking up in a body that doesn't hurt, right? And I wake up to my wife and I look at her and I'm like, and she's so young because I'm 85 and I'm coming back to revisit this moment. And I'm thinking about the problems that I'm experiencing in the business. I'm like, how cool is this? I remember when I was doing this stuff and experiencing these little problems. Like, this is cute. You know what I mean? And it just gives me, it gives me this huge veil of like serenity, for lack of a better term, to experience the moment through different eyes. And then to the same degree, when it comes to like the rush and et cetera of like growing the business and whatnot, I think what it does is it's almost like an Occam's razor of focus of like, what are the few things that matter most right now? Are we truly helping the customer?

• 23:54Alex Hormozi?

  Because when I'm 85, I'm not going to care nearly as much about the money I made, but the people I helped. And so I think it keeps the main thing, the main thing, and it allows, at least for me, and I want to be very clear, I try to keep this frame at the forefront of my mind and I practice it and it takes time. And I, you know, I catch myself getting angry. I'm like, hey, if I was 85 in this moment, how would I think about this? And then it reframes the whole situation, just like the frame of the veteran does. And so I'll tell you a short tactical story of this. So this is going to sound really lame, but I had a cat and it was two years old and my wife and I loved the cat. Really cool dude. Anyways, he died. Had some weird heart thing. And I thought to myself, he's two years old. What if I had expected that he was only going to live six months?

• 24:36Alex Hormozi?

  I was like, what if that was what all cats normally only lived with six months? And I got him four times longer than that period of time. And so it shifted my likes, my sorrow into gratitude for just all this extra time I got to have with this little cat. Now, you could take cat, you can make it whatever you want. But like that reframing things has allowed me to decrease my emotional activity to circumstances so that I can make better decisions in the present around people, business, et cetera. And so that's served me well.

• 25:01Ed Mylett?

  I am blown away that a 32 year old has those thoughts. But I love you because I've been having those thoughts all my life. My dad died about a year, will be two years soon. And I actually moved it to one more day. Not my 85 year old self, but if I had one more day, how much more grateful would I be for this challenge I'm going through right now? Or this moment where they walk through? Cause I too struggle with gratitude. I actually have struggled with being present. And I love these conversations on the show because I actually built this bizarre gratitude muscle where I was actually more grateful for the thing I was dreaming about that I didn't have than when I actually got it.

• 25:39Alex Hormozi?

  Totally get it.

• 25:40Ed Mylett?

  You know what I mean by that?

• 25:41Alex Hormozi?

  A hundred percent.

• 25:41Ed Mylett?

  Yeah. And like, that's not a cool way to live because you're always not where you are. You're always projecting. I'm like, I would get more excited and more turned on about what I had not yet done that I know I'm going to do than the actual very thing I was doing. Right? And now when I put it through that one last day.

• 25:55Alex Hormozi?

  Yeah.

• 25:55Ed Mylett?

  I go, this is pretty awesome right now. What would I give on that last day for this moment right now? Driving out here today, I had a conversation with myself about the things I want to be doing now in my life because of this question I asked myself. And it was interesting. I was like, if I had to choose, would I actually drive? If I were choosing, would I drive out and do this show today with you? And I have one other show. And the answer today was yes. But lately, there have been certain things that I was doing. That I needed to do when I was young and coming through that I no longer need to do. And that valuation is really, really healthy. I'm going to give you the contrast now of your content. So we've gone to this, not Pollyanna, but conceptual thinking. But then you have this thing called the everyday urgency blueprint.

• 26:39Ed Mylett?

  So I love the concepts of time because there's people, you know, they're just like very spiritual, long-term thinking, almost esoteric and conceptual thinking. And then there's like the day-to-day, what the heck do you do to get to where you can afford to have these thoughts and conversations you and I have? So what is the everyday urgency blueprint? Cause this is some good stuff right here. Really good.

• 27:00Alex Hormozi?

  You know, it's, it's the, it's the chopping of wood. It's the taking out the water. We call it do the boring work, um, which is repeating successful actions over and over again. If it worked once, it'll work again. And more times than not, people do something, it works and they think, oh, I should change it.

• 27:12Ed Mylett?

  Yes.

• 27:12Alex Hormozi?

  When, so one of the big concepts that I preach, at least in business is that simple scales, fancy fails. And so the idea is how can we take something like with scale comes complexity? We do not need to add complexity to a system. If you take a hundred phone calls a day and you turn it into 10,000 phone calls a day, there is inherent complexity that gets added because you have more communication lines from different people. You have systems that have to organize it, et cetera, et cetera. And so we don't need to go do more fancy things. If we simply do the volume, the complexity will come. And so we don't need to add the additional variable, variable of complexity to scale. It happens on its own. And so simplicity, so thinking through the razor of simplicity creates a forcing function

• 27:55Alex Hormozi?

  of you remove all other things besides volume to the equation. So it's like, I can either sell more units or make them worth more. That's it. That's all we can do to make more money. And so always thinking through that frame of if we're trying to grow the business,

• 28:12Alex Hormozi?

  do more of the thing, right? Right? Or make the thing expense more expensive or worth more to the customers. We can charge more and ultimately make more per customer. And so anyways, that has been always like the, to the rubber meeting the road of the, the grandfather frame of gratitude down to like, you have to do the stuff that makes the money.

• 28:27Ed Mylett?

  Yep.

• 28:28Alex Hormozi?

  And doing more of that.

• 28:29Ed Mylett?

  I think that duality is super powerful. So that's why I wanted to stack them. We're talking about other stack. in a minute too, stack them back to back because I think you can hold two thoughts at one time. I think you can have this concept about your life where you want to reflect on the final days. You have tremendous freaking urgency in the moment, right? And and have concepts that move the needle every single day of your life. Why do I say that? I think there's two types of people right now on the planet. There's the seminar goer person who's all in the thoughts and the clouds about reflection and energy and this and that and the other thing. And frankly, they're not getting around to making their life matter day to day. Then there's the people that you and I used to be, which is we're making our life matter every single day. But we have none of the energy, the spirituality, the concepts of time in our life.

• 29:14Ed Mylett?

  And so I think the duality, the complexity of those two things, the contradictions is what makes this conversation the most valuable. Now I want to talk about.

• 29:23Alex Hormozi?

  Can I add one thing to that?

• 29:24Ed Mylett?

  Please.

• 29:25Alex Hormozi?

  So I I in in the comments on YouTube and things like that, I know that a lot of people struggle with that concept. And so I want to give a different example that I think might drive this home. You already do believe multiple contradictory things at the same time. You believe in justice and you believe in mercy. You believe in variety, you believe in consistency. And so there are these these these yins and yangs that exist. And it's not to say that the white part of the yin or the black part of the yin is right. It's understanding the middle path. And I think wisdom is knowing when to do what. And so it's when am I using justice versus mercy? It's not that justice is right and mercy is wrong, or mercy is right and justice is wrong. The wisdom is allows us to walk in the gray and be comfortable and and select which is appropriate for the moment.

• 30:11Ed Mylett?

  Oh, brother, so good. Yesterday, I was coaching someone who used to lead a pretty big country, a big one. And and we had this conversation. He said, you know, when I was really at my most productive, I operated out of fear often. And now I'm constantly forcing myself to operate out of gratitude and abundance and all these other things. And I said, sir. The truth of the matter is it's knowing when to select those mechanisms. Fear is not necessarily a negative emotion. It's the abundance of it that can become negative or too much of it. But if you never leverage fear, heck, fear helped me prepare for this podcast today. I don't want it to bomb. I want it to do great, right? So there's leverage in everything and wisdom truly is, I love what you just said, of knowing which lever to pull when and knowing when the right part of it applies. So good, man.

• 30:55Ed Mylett?

  Again, I'm sitting here in front of a 32-year-old and I don't mean to, you know, for a lot of people listening to this, they're like, 32 is old. I'm 23, right? So I want to make sure that I don't use my own age bias. But at the same time, I think I had many of these thoughts when I was your age, but I certainly didn't have the ability to articulate them like you do. And I'm super, super impressed with you. I just want to acknowledge you because you're serving millions of people right now. Also, I think you could serve them with parts of your story they don't know. There are people listening to this right now that are failing. They're bleeding money and maybe they've just had a business shut down or the last two years has wiped them out a little bit. Or they're looking right now going, alright, I'm gonna have to make a pivot. So you're a guy who had a lot of success building gyms. It was really, really going well, as I understand it. You go over the next one, you pour all the juice from all the profits into the next one and you go bust.

• 31:40Ed Mylett?

  So there was a point where this man that I'm talking to right now, by the way, not that long ago, was busted. You were broke. What did you do when you were on your ass? Were you on your ass mentally ever or was it just a physical being broke? And then what did you do to make a move? Because there's a lot of people right now, right where you were.

• 31:58Alex Hormozi?

  I just focused on the controllable. So there was a lot of things that I felt like I could not control or that were circumstantial, etc. And so it was just, it's kind of like the simplicity thing of like, what are the few levers that I have at my disposal? And at the time, I was like, I know how to market and I know how to sell. And so that's what I'm gonna do. And so I, the story is crazy, but I had a credit card left from all the businesses that I had sold and then... Lost all the money, but I still had the credit card and Amex, thank God, had not actually changed my credit limit. So I had a hundred thousand dollar credit card and I wanted to launch Gym Launch, which was like this turnaround business where we'd fly out to gyms. And so we had six guys that I'd already recruited and I thought this cash was going to be there and it wasn't. And so I put thirty-three hundred dollars a day on a credit card and I only had a thousand

• 32:43Alex Hormozi?

  dollars in my bank account. And so every day I was becoming thirty-three hundred dollars poor. And when we started that, I didn't even have a payment processor because we got shut down. And that was where the extra money was supposed to come from. And so we were, we were doing, you know, I had, it was thirty-three hundred a day in hotels, airfare, ad spend, rental car, per diem, food for all the sales guys who were out on the road, like doing the gym turnarounds. And I could not process the money that they were sending contracts over from. And so I'm seeing these contracts stack and stack and stack and I had no way to process it. And I'm just watching this debt bill go up. And then, and I got a processor the last week of the month and it was only for fifty grand and we had like three hundred thousand dollars in contracts and I had a hundred thousand in expenses. But he's like, hey,

• 33:25Alex Hormozi?

  it's per month, which means on the first of next month, you can run another fifty. And so I ran fifty on like the 28th of January and then I ran fifty on February 1st. I got two more that week and got us another fifty. So the two fifties back to back covered my hundred K from the last month and that was like, kind of like the, the plane coming under. There's like way more of me about to lose it, like, and losing it again and again after that. But I can go as deep on that side as you want.

• 33:50Ed Mylett?

  Well, like, where were you mentally? I mean, were you mentally when that's happening, you're like, my dad was right, he's got me. Or were you like, still, I'm gonna prove him wrong?

• 33:56Alex Hormozi?

  Oh, I was, so I had made the decision that I would either die or I would succeed. And so I didn't know when it would happen. I just figured if I continued. So I, so if there's one thing for the audience, if anyone who's going through it right now, like, one of the, the thing that I would, the refrain, the repeat, repeated message that I had to myself over and over again was, I cannot lose if I do not quit. And so it was, that was under my control. Then when I would talk about like controlling the controllable, like I could choose not to quit. And so if I could just have that, then it meant like, it was like this tiny little thing is like, if I don't quit, I didn't lose. It just means I still get to play. And when you think about like, I think, I can't remember if it was Aristotle's or Plato, but he says like, you shouldn't judge a man until the day he dies.

• 34:39Alex Hormozi?

  And so, you know, you have an amazing life and then the last five years, like everything goes, and you get executed publicly of like, wow, would people say you had a good life or a bad life? Like you can only judge after the man is dead. And so I also think about that within my own life now, like when you think about like, what's the leverage for the next, for the next chapter? It's like, well, I'm not dead yet. And so I gotta keep going because that's what, you know, that's what we're gonna look back on. And so I had this little thing that I could protect, which is my willpower. And it's just like, if I do not quit, I cannot lose. And so I was so afraid of losing that just not quitting became the one thing. And so if I just kept moving one foot at another, one phone call after another, one sales appointment after another, I knew that if I did that long enough, eventually it would turn around and I could

• 35:21Alex Hormozi?

  myself out of this situation.

• 35:22Ed Mylett?

  Yeah. Wow. I, I'm blown away because I have equated only losing with quitting all of my life. And the reason for that is, I just want to share it because we're going back and forth. Well, my dad, my dad was an alcoholic when he got sober. I said, Dad, are you never gonna drink again? He goes, I can't promise you that. I'm just not gonna quit for one more day. I'm not gonna drink for one more day. And many, many times in my business, I'm like, I can't, I am incapable mentally right now saying, I'm never going to quit. That's a like 80 year decision, based on a bunch of crap right now, but I can decide not to quit for one more day. And that means I have not yet lost. I literally equated quitting with losing. And so no matter how behind in the score I was,

• 36:04Ed Mylett?

  I had not officially lost the game. The clock has not run out until I go, I quit. And so I was still in the game. So this, this concept, I just, I love when someone says stuff and I put it through my life barometer, my meter. I'm like, nope, I did that. You're exactly right. I know someone who did that. You're exactly right. What a great answer. Now you're talking a lot about stacks. By the way, can you guys, if we did a show, by the way, that's moves this quickly through stuff before like, Let me get more in your brain, let me get more in your brain. I almost feel like I'm using you today, you know what I mean? Like, I'm just working this dude through the whole show. But it's great to have somebody on that I could just keep working for my audience, because this is my family. Sometimes when you're talking to somebody, like, alright, let me help you along here with this. With you, I'm just like, go, go, go, give him that one, give him that one, give him that one. And I love that about you.

• 36:48Ed Mylett?

  The stack stuff is super cool to me. And I love the terminology you use. So now we're gonna move a little bit back over to marketing and branding and all that kinda stuff. You have this thing called the scarcity stack. I'm a big believer in this. I just literally did a real estate deal based on the premise that you teach. Now, I didn't call it this, but I don't think people get the concept here at all. And I think it's one of the lost art forms in marketing, and you describe it in a modern way. So what's the scarcity stack?

• 37:20Alex Hormozi?

  So if we think about all exchanges as forces between supply and demand, right? Within a marketplace. And I think the more cycles I have in entrepreneurship, and I understand that I'm still young in the game, the greater and greater appreciation I have for those simple two forces of supply and demand. And what's interesting is that you can influence demand, or you can artificially stimulate demand by marketing stuff, by making, increasing awareness about your thing, right? And so more people find out about it, so your demand goes up. And so that artificially shifts the demand curve in your favor, and so you sell more stuff, right? The other side is not nearly as well-used, and I think is almost as powerful, if not more powerful, than the demand side, which is, how can I cut supply?

• 38:03Alex Hormozi?

  And the first time I really saw this happen in person was I was at an Arnold Schwarzenegger charity event at his house. And they wanted to introduce me to some of the big donors, because we're big donors. And the guy was a jewelry, like, mega dude, right? And so he was like a first generation from Serbia, hard dude, like, but he sold like, you know, $500,000 watches, things like that. And they had just raised the prices for the charity event from $15,000 to $25,000. And the charity organizer who made the introduction was like, "Yeah, we listened to George, she told us to do this thing, I was a little nervous about it." And he just said it so matter-of-factly. He said, "Whenever demand increases," he said, "cut supply." And when you look at what Chanel and Louis Vuitton and some of these, all these luxury brands do is like,

• 38:47Alex Hormozi?

  they are masters of scarcity. And so when you can get someone into a FOMO situation where they fear missing out, you can actually trigger this incredibly emotional decision. And what it happens is you decrease the action threshold. And so you have a person who normally wouldn't take action. And so the scarcity, the fear of missing out on this opportunity decreases their threshold of taking action and they, they, they walk across the line. And if you use this concept of scarcity and use it within your business where, the way I like to think about it is that, so whoever's listening right now, if you have a business or even if you're, if you're a salesman, whatever, if you were to 100x your volume tomorrow, you probably couldn't handle it. And so there is an actual cap on your business as it currently stands.

• 39:32Alex Hormozi?

  You're just not articulating it because you're afraid of saying, well, if I can only take 10 people, then they'll think I'm a small business or whatever. But if you said, I only take 10 people, even though it is your actual cap, it has a very different feel to it. And what happens is you now actually pace your business at a point where you don't over, overextend yourself. And you create a stronger pool of the customers into your world.

• 39:56Ed Mylett?

  I'm just looking at you. I don't want you to stop. When I'm looking at you like that, it's not, I want you to stop. I just, it's brilliant and it's totally true. And to the extent that, here's what I like. If you can listen to the concept stuff and then do the hard work, those of you that are listening or watching this, to the application in your business. So this scarcity idea, you go, no, no, no, I'm in the protein business. So we have unlimited amounts of protein. Then maybe the scarcity isn't the product, the scarcity is the time. Meaning that if they don't hurry up and start doing it, every day they fall by, like saving money. If you're in the financial services business, you go, no, no, there's plenty of these contracts for investments or insurance. Yeah, but every day they don't move forward, there's a scarcity of time that they can make up for with the compounding of money.

• 40:38Ed Mylett?

  So the, getting the concept of FOMO or the, the limiting amount of it, or how few people do it. Absolutely increases value proposition. So, so, so good.

• 40:48Alex Hormozi?

  It's for the salesman in the room or in the room.

• 40:51Ed Mylett?

  Right.

• 40:52Alex Hormozi?

  Think about it in terms of the opportunity cost or the cost of inaction. And so the nice thing is that you'll always have a cost of inaction that's amounting. And so that will typically stack in your favor as the salesman with every second that passes. And so all we have to do is direct the prospect's attention to the cost that is already happening, but they are just not aware of or focusing on. And so we just direct the attention and then all of a sudden, what was nonexistent becomes a problem. And so you see this in politics all the time. Whatever they're talking about, more becomes the hot topic of the election, but it's only because they're putting attention to it, not because people actually care more or less about it.

• 41:25Ed Mylett?

  Right. They're telling us that we should care more or less about it by the attention they're putting towards it, right? And so this is, the media are masters of this. And by the way, these things work so well, everyone, that you have to leverage them ethically.

• 41:37Alex Hormozi?

  Yeah.

• 41:37Ed Mylett?

  And this is one of the things I just want to say upfront, because these concepts of scarcity and FOMO, it has to be ethically stated and truthfully stated, because long term, if you push these levers the wrong way, you'll destroy your reputation if there's not a factual basis for what you're describing. Okay, a couple more stacks.

• 41:53Alex Hormozi?

  I'll give you a, oh.

• 41:54Ed Mylett?

  No, please do it.

• 41:55Alex Hormozi?

  So, so there's, there's two elements of trying to create FOMO, besides like risk reversal is a whole nother thing with guarantees and things like that. But there's scarcity, which is a function of the number of units. And then there is urgency, which is a function of time. And so a lot of people say scarcity and urgency, but they don't know the difference between the two. And so urgency is, it doesn't matter how many units I have, the deal ends tomorrow.

• 42:13Ed Mylett?

  Yes.

• 42:14Alex Hormozi?

  Right? And so if you can't introduce that, and so I'll give you an example of like, well, we have protein. It's like, well, you have protein, but I may have a Valentine's Day special that is ending this week. And then next month, I might have a, a spring special. But the thing is, is when I'm articulating to a prospect, I can say, hey, this particular promotion ends tomorrow or ends in two days. Like, you should get this starter to get, get your loan application in, because like, I can't guarantee that as soon as we get into the spring, springtime, we're going to have the same things, right? And then with, with the scarcity component, it's a function of units and what you were saying earlier, there's always a way to think about it. Like with the protein, like I thought of a different example. I thought of flavors. I was like, oh, just have a limited flavor. Protein's gonna be here, but this particular flavor will not be.

• 42:57Alex Hormozi?

  And so it's like you can always, or you can put scarcity in terms of the bonuses you add. So it's like, hey, I have proteins and they're all vanilla. I was like, but for this month, I'm going to be adding a free workout or a free workout template or a nutrition template that I'm going to add with my protein, which I'm not going to be giving next. So it's, so then what you can do is you create these additional value ads, which no one else is doing. And then with the additional value add, you both add value and create scarcity at the same time to urge the person to take action.

• 43:25Ed Mylett?

  Very good. See, no, no, no, please don't be sorry because that's informative even for me. Listen to me, everyone, this is, this I told you, you're gonna get stuff on today's show. This is why I do the show, by the way. I want to provide a value and a depth of insight between two people communicating that you wouldn't get anywhere else based on their experiences. And here's the thing on this, listen to me, everybody. It is your ability to take these concepts that are absolutely surefire and find the applications in your own life, get them with your team as well. I have to tell you, in business, I have found that the principles are sort of enduring over time. This FOMO concept or scarcity concept is as old as time. Technology, timing, marketing changes the application and the mechanism of which you deliver it. But this is not a new idea.

• 44:08Ed Mylett?

  It's new idea for 99.9% of you because nobody, nobody talks about these things anymore. Because they haven't done the hard work of how does this apply now? How does this apply now? Warren Buffett, you and I both still take advice from a guy who is double my age and I'm already old because the principles that this dude teaches are timeless. It's our ability to apply them now that separates us in our life.

• 44:36Ed Mylett?

  Trim and stack hack, what the heck is that? I wrote it down because it's a cool term.

• 44:42Alex Hormozi?

  So when we're, when we're thinking, and this is, this is if you have more control over the services that you're selling. So this tends to be a little bit more on the service side. You can still think through it from an e-commerce side, but I'm just gonna apply this to service because it's easier. So the first thing that we like to do when we're, when we're thinking about creating a new product line, or when I say a new service line, we think about what are all the problems that our prospects are suffering from? And what are the things that are coming up on sales calls that they're saying? Struggling with or they wish that we could solve for them. And so we think about and the way to think through this is tactically, what has to happen step by step by step? And there's 100 mini steps like you think, oh yeah, we do these two things. If you really chunk down and zoom in and and look at it's like, well, they first they have to click this thing. And then they have to integrate their whatever. And then they like, there's all these micro steps.

• 45:25Alex Hormozi?

  And so we list out all of these problems and then we translate those problems into solutions. Yeah. And so we worded as solution wording to the problem that we are solving. And then, once we have, okay, this is, these are all the problems that we're now solving. These are the solutions. Okay, now, how do we deliver on these solutions? So we can think about this in terms of like, we could have, we could have a portal that does a training. We could do some sort of one to many thing. We could have a semi-private or small group. We could have it be in person. We could have it be remote. We could have it be a phone call. We could have it be a chat support. So I have something called a delivery cube, which kind of goes with this in terms of how you get into levels of service. So on one level of the cube, you have what is the ratio of the people? So like, like I said, one to one, a small group, one to many. You have the speed of response. So it's like, is this going to be a, we respond instantly?

• 46:10Alex Hormozi?

  Or is this a, we respond in 24 hours or we respond by the end of the week? Is it something that we have? And then it's the quality of the service. Are you going to just get a frontline support rep? Or are you going to get a VIP, you know, concierge? And then the medium of that service, which is, is it Zoom? Is it in person? Is it a phone call, whatever? And so there's a cube and I go in more detail about it. But when you're thinking through this, you think through those variables, how are you going to deliver the solution? And so we had the problems, we have the solutions, and then we think about how we're going to deliver the solutions. Okay, there we are. Now, when we think about that, we then write, what's the cost of delivering this solution? Yep. And so then we, we, we look at all of those things and we say, okay, if we had to prioritize just the ones that these people find extremely valuable

• 46:54Alex Hormozi?

  and that are low cost for us. What if we just combined all of those and then took out the rest of them? So all the things that provide tremendous value and happen at very little or no incremental cost to us. And then that is what we will package together and then we'll bundle that whole thing as a much bigger problem solving solution. And so then, then when you put those things together and then you add some scarcity, you add some bonuses, you decrease the risk with some sort of guarantee if you can, you add some sort of urgency around acting, then you have what I would consider a very compelling offer. And if you have a compelling offer, it makes it very difficult to be poor.

• 47:28Ed Mylett?

  Yes.

• 47:29Alex Hormozi?

  Because, because what happens is when you make offers that people feel stupid saying no to, they tend to say yes.

• 47:33Ed Mylett?

  Yes.

• 47:34Alex Hormozi?

  And when people tend to say yes to offers you have, you tend to make more money. And if you did it and you designed your offer in a way that you provide a lot of value and it costs you very little to do it, you make lots and lots of money. And so that is the idea and we try to repeat that action as many times as we possibly can.

• 47:47Ed Mylett?

  Yes, that's the sort of business.

• 47:48Alex Hormozi?

  Yeah.

• 47:49Ed Mylett?

  No, but when you step back and look at it, you take these very complicated things and make them simple and to you, it's like, yeah, just, but what you just described is actually called four years of business in college, right? Distilled into like 90 seconds. Cause that's exactly how business works. I have this other theory right now that's gone by the wayside in business and it just blows my mind. And that is like, at the end of the day, I want my existing clients to send me or customers to more clients and customers. And of all of this stuff, it's like, I'm blown away by how little time, and I mean like almost none, with independent contractors or big old companies spend on the product and the, and the client or customer experience with you.

• 48:31Ed Mylett?

  What did I feel, what energy did I get that would make me want to tell someone else? You should have the same experience I had. They spend all this time on everything other than that thing, which is the only thing that will cause your business to grow without your effort afterwards. So I want you to talk about that.

• 48:50Alex Hormozi?

  This is like my favorite topic. So I'm very excited about this. Okay. So I'm going to quote Naval Ravikant, cause I love this quote. He says, "You only sell because you don't know how to market and you only market because you don't know how to build a product."

• 49:00Ed Mylett?

  Oh gosh.

• 49:01Alex Hormozi?

  And so the idea is, and so if- Let's break down things to the basic units, right? There's only five ways you can get more customers. Number one is you reach out to people privately. So you cold call, cold DM, cold email, whatever, right? The next one is that you make content that attracts people to you. They find your stuff, they discover it, right? The third is that you run paid ads, right? And then the fourth is that you get affiliates and partners who are other businesses who serve people like your customers and refer them to you. And then finally, customers tell other customers. Yes. So here's what's interesting is that if you think about when we talked about leverage, so this is going to come full circle, which is great.

• 49:42Alex Hormozi?

  The first four that I discussed have linear, they are linear in nature, meaning if I make 10 more dials, I can predict how many customers I'm going to get from that, 10 more reach outs, or I spend 10 more dollars on ads, or I make another piece of content. It's relatively predictable in terms of what's going to come back. It is a linear equation.

• 50:02Alex Hormozi?

  You add more in, you get more out. With a quadratic equation, you get an exponential. Unfortunately, in the entrepreneurial space, people are like exponential. They say it a lot, but they don't know what it means. It really just means it multiplies, which is not what exponential is. But with a referral or a customer telling another customer, one person tells two, two tell four, four tell eight. And so one of the difficulties that I see a lot of businesses get into is they get to 3 million, or they get to 10 million, or they get to 30 million, especially like consumer products. There are constants in business. One is that the cost of acquiring a customer will go up over time because impressions will cost more money and you'll have more operational drag on your business. And so if those two are constants, then you have to have an opposing force that is going, that cannot be linear in nature, that's going to contradict that.

• 50:46Alex Hormozi?

  And so if you are in a consumer-based business, the only one that can counteract a one-way direction of increasing cost of impressions and infrastructure is the decreasing cost of acquisition because every time you get a customer, that customer brings you to more customers. Yes. And so that is like the great equalizer in business. And I had a firsthand experience with this. Recently with the book, the offers book, because I made one post about it, one, and I didn't have a following a year, two years, you know, whenever I put these a year ago. And that book, from what I understand, has sold more than New York Times bestsellers. I just didn't do the politics thing. But right now it's sold over 200,000 copies in the first year and I have no paid ads. I have no anything. It was just because people were like, dude, you should check this book out. Yeah.

• 51:30Alex Hormozi?

  And so I say that to say like, if you nail that piece, everything else gets easier and it's much harder. It's easier to market and make money in the beginning and then harder to fix it. Once you have a bad product. The reverse is also true is that it's harder to spend more time in the beginning fixing the product. But then when you scale, it's easier. And so the question is whether you want it to be hard to break through. And this may not be real for some of you, but like, once you get to a $10 million enterprise, like it gets very difficult to break through that barrier if the product's not that good. That's right. And it's much harder to take the time and effort to fix the product. And I'm going to do a quick segue here because this happens all the time. So when, this is just at least our experience of the portfolio companies we have.

• 52:11Alex Hormozi?

  What got you to, you know, one or three million is not necessarily what gets you to 10 million and 30 million. Because in the beginning, you need to sell something to someone that you have to promote it. You have to promote the stuff you have, otherwise no one knows about you and you're obscure. And so people have to buy it. Where people make the mistake is that they get this positive reinforcement from the fact that they marketed and sold and think, I need to do more of that. And I'm going to say, yes, you will, but just not at this moment. Because at this point is actually a pause point. And the goal is not to even necessarily make tons of profit at this point. The goal is to fix the product such that you start to generate a significant amount of business from referrals. Until that occurs, there's no point in adding more gas to the acquisition engine because you're basically just setting yourself up for failure at a later point. That will then reach a point of equilibrium where the only way to grow is to sell more people.

• 52:56Alex Hormozi?

  And at some point you will run out of people to sell, depending on the niche that you're, that you're going after. And so the idea is to actually alternate. So you focus on the acquisition in the beginning. You get one, I will always say, one product, one avatar, one channel. That's what you have to do to get to one to three million. And so at that point, then you fix the product and if you fix the product, you will sneeze your way to 10 million. Without doing anything else. And then once you're at 10. If you have fixed the product and the customer experience such that you have a large percentage of your business come from word of mouth. Now you've extended the LTV of the customer. You have increased growth profit per customer that you can now spend profitably and out compete everyone else who just wanted to bulldoze their way to 10 million with a lower LTV. And then you can go crush them on every other channel that they're on. And then you go back and say, hey, we're going to build a cold email team. Hey, we're going to build a cold call team.

• 53:41Alex Hormozi?

  Hey, we're going to build a paid ads team. Hey, we're going to build affiliate partners and channel partners. And you can do that because you have so much fucking extra profit per customer. You spent the time upfront to fix it and make it good and you'll sleep better.

• 53:51Ed Mylett?

  Yep, and you've got proof of concept. So you just scale the crap out of it.

• 53:54Alex Hormozi?

  Yeah.

• 53:55Ed Mylett?

  No one's ever said that on my show. No one's ever, never said that to me about the pause part in the middle. And one of the most insightful, really you would have had to have already done something significant in your life type breakthrough thoughts that someone's ever shared on the show. And I almost want to move it to the very beginning of the show because it's so important. I hope everybody stuck around for that. I got one last question for you. First, I like you a lot. I respect you a lot. Tell us where they can find you, but then I got a better question for you at the end.

• 54:23Alex Hormozi?

  The game podcast, Alex Ramosi. That's if you like podcasts, that's the easiest thing. If you like videos, we're on YouTube really big. And if you like short stuff, if you type my name on whatever social media channel, you'll probably find me.

• 54:33Ed Mylett?

  You, I told everybody this would fly by, but probably the fastest show I've ever done. I mean, really the fastest show I've ever done before. Curious, and I don't even know what you're going to answer. So we go all the way back. You're this kid being raised by this dad that's pretty demanding dude. Smart dude, all these options. Go to Vanderbilt, crush it. By the way, in the middle there had a DUI, had some stuff happen that wasn't really good that I read about, and you've turned it around. Business failures, then tons of success, then multiple exits, and then obviously this really unique way of looking at business that's accurate, by the way. But you've worked really, really hard and you've sacrificed a lot of things in your life. You're still very young, but I grabbed you at 32. I'm curious if it was worth it and I want you to be honest.

• 55:17Ed Mylett?

  Like if you had to do it again, would you do all this stuff again? Or would you have done something differently? If you could go back those 10 years, give up all your money. Like, okay, you're back, you're 22 again, you're just getting out of college. So I took all your money from you with our proposition earlier. Would you go do all of this again or would you live a different life?

• 55:32Alex Hormozi?

  I wouldn't do all of this again. I would do all of this better, but I would do, I would live this life. I mean, the moment you asked the question, I was like, the yes was in my throat just waiting to, for you to finish the question, but like. I'll be a little crude, balls to bones through and through. Like, this is, this is what I love. It's my, it's, it's my, it's, it's, it's what I love. I mean, I draw pictures about business. I write books about business. I make videos about business. I do business every day. If, if somebody doesn't have a business, it's difficult for me to be friends with them. Because we, we have so little shared context, not because it's their fault, but because I have nothing else that I, that I do in my life. And so, they want to talk about biking and I'm like, that sounds cool for you.

• 56:16Alex Hormozi?

  I have no interest. And people are like, what's your hobby? And I'm like, I don't have any. And I'm cool with that. And so, I, it took me a while to just accept that that's okay. And so, I a hundred percent would do what I do. I love what I do. This is the most fun thing in the entire world. And I, the, the, the deeper I get in business, the more I want to live a long time. And that was something that I didn't have earlier on in my life. And so, I just, there's just so much I want to do that I just, I just, I, that's, you know, it's like I crammed a lot in 10 years. I'm like, I just, there's so much cool stuff and I, I want to do it all, you know, as much as, within this world that, you know, that we have.

• 56:55Ed Mylett?

  I can't wait to watch you do it. You're outstanding, brother.

• 56:58Alex Hormozi?

  Thanks.

• 56:59Ed Mylett?

  You're outstanding. I really enjoyed today, a great deal. And you're going to come back on. I don't know when, but we're going to have you back on because there's like 19 other hours we could be doing. So, make sure you guys follow Alex and hey, everyone, make sure you get my book, The Power of One More. It's number one book in the world still right now. And please share the show. We're the number one growing show in the world for a reason, which is because you guys share it. And I bring the best people on every single week and I get the best out of them when we communicate because all of you mean so much to me. I love all of you and I want you to continue to max out your lives. God bless you. This is the Ed Mylett Show.