The Brutally Honest Cost of Success | Ep 904

Welcome to The Game w/ Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth. Wanna scale your business? Click here. Follow Alex Hormozi’s Socials: LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

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

• 0:00Alex Hormozi?

  Do you think that you can keep the same friends? Do you think that you can keep the same hobbies? Do you think you can stay up late and sleep in on weekends? Do you think that you don't have to sacrifice what average people care about? Do you think that they will support you when you start to pass them? Do you think anyone will think this is healthy, balanced, or logical? No, and they're right.

• 0:24Alex Hormozi?

  Yeah, I went white shirts today. It's been a little wild. So as you guys are hopping on, I told you that my two kinds of themes for this year are live and interactive for my media. And so I'm telling you guys right now, if you guys make content, I'll tell you my cards. Like we just started and so we're going to be doing this more. And I'll tell you why, a couple of reasons, and then I'll get into the stuff I want to talk about today. I think that fundamentally, we have to do stuff we like, which sounds kind of obvious. And so if you want to do a tremendous amount of volume of anything, like it's very hard to do it if you don't enjoy it. And so I have, I've kind of taken the perspective yet again, and I think this is like a calibration thing. Like you do stuff you like, you find a portion of it that works really well, you do a ton of that. And then you kind of go off over here and then you're like, okay, I don't like this anymore. And so you kind of come back to center.

• 1:07Alex Hormozi?

  And so I enjoy talking to you guys more than anything else, uh, which is why that's kind of the center pillar of what I'm going to be doing for media strategy going forward. As a result though, I think we'll be able to put out like a huge amount more volume because me trying to think of like, hey, you know, what's a really interesting topic that I can bring on today or riff on today, uh, is different than just like helping you guys solve your problems specifically. And so the way that today's going to be structured is same as last week. I'm going to do a quick kind of top of mind thing that I've been thinking a lot about. And then I'm going to be answering questions from y'all. All right. So to do the job you love thing, Sammy, by the way, hilarious. And like, everybody knows what she's saying, but there is some hilarious meme accounts on that that are just like S tier. All right. With that being said, I'm going to do a quick YouTube intro. So you guys can actually see this in like real time, how we do it.

• 1:51Alex Hormozi?

  And then I'm going to get into my little, my little mini topic of today. All right. I have used one strategy to win repeatedly across 13 years in business and also outside of business. And it's one of the biggest reasons that we had a $105 million launch for $100 million money models in 72 hours for my latest book. And I'm going to explain why it's the highest risk-adjusted return move that you can make to win more in business or just win more in life. And so if you're not sure what to do right now within your specific business, no matter what industry or size business you're in, or whatever goal you're pursuing, this will help. I talk about more, better, new a lot, but I want to dive into the one that is near and dear to my heart, the one that has made me the man that I am, which is more.

• 2:34Alex Hormozi?

  And I want to talk about that because the fundamental question that every single business owner needs to answer, and even every person pursuing any skill or endeavor needs to answer is, why can't I do more? And for most people, doing more is the answer, and it's far more common that it is more. What's very sneaky about more is that you get to a point, and then you say, there's no way I can do more. And at that point is where the big unlocks in volume really occur, right? And so Napoleon had this really great quote back in the day, and maybe it's misattributed to him, but he said, quantity has a quality unto itself. Meaning like if you do so much volume, you do so much work, and in the military sense, if you just have so many people, at some point, it almost has, it takes on its own quality of the amount of work, the amount of people, the amount of volume that you're putting into something,

• 3:19Alex Hormozi?

  whatever it is that you want to break through. I wanted to give you a couple of cool little anecdotes to reinforce this. So some of you guys know about Sharon, he was on the live with me, he's our president at ACQ. I'll tell you two stories about Sharon that really drove this home, and I can tell you so many of them in my life. But one of them about Sharon that really like, I'll tell you the moment where like we went from being friends to me being like, man, I really want him to be, you know, president of acquisition.com. So he was talking about how he was growing Reel. And so Reel is a $200 million or was a $200 million per year business after a $200 million market cap. So they're publicly traded, and he was talking to me of the business. And he had grown it from $200 million to 1.2 billion in less than three years, so like 30 months. All right, and I want to put that there as a moment for you guys to think about that. How insane that is.

• 4:03Alex Hormozi?

  $200 million to 1.2 billion, less than three years. How does he do it? We're having dinner, and he says, I just did 260 events in the last 365 days. And I was like, what do you mean? And he was like, I flew around and I did every single real estate event. I spoke on every single stage. And that's how I generated more demand for our platform for Realtors. And when he said that to me at dinner, I was like, this guy, he gets it. Now, we've been friends for years, but seeing him so tactically involved in the business and being like, that was the thing that took a $200 million business to $1.2 million. Just sheer volume.

• 4:46Alex Hormozi?

  Now, most people might hear that and think, well, yeah, I speak on stages one time a month. And you know, I mean, I'm on stages all the time. It's like, no, no, you're not on stages all the time. You have no idea what being on stages all the time actually means. And so, most business owners wildly underestimate the amount of volume, one, that is required and two, that they are capable of. All right, and the thing that is required is almost always higher, or sorry, your capability is always higher than what is required. But the thing is, is that you might not know it yet. And so, I've had so many times in my life that it's become my de facto operating principle. Like, I got stuck in trying to grow muscle for a really long time. And this is before I took testosterone, all right? So, to be very clear, I've taken testosterone, exogenously injected inside of me and gotten all the man juice.

• 5:30Alex Hormozi?

  But this was before that, and I was able to put on like another 20 or 30 pounds, like seven years into lifting. And the main thing was, I ended up saying, well, I wonder what would happen if I made it my job to lift all day? And I was like, well, what does that mean? So, I lived at a gym, obviously, because I was in my, I had my own gym. And I set a timer to work out every 45 minutes. So, I had set up three exercises. And every 45 minutes, I'd go in the gym and I'd hit one set on all of them and I'd go back to work. And I was doing nine or 10 sets every day, right? Which is a lot of set, and I did it every day. And so, what ended up happening is that like in a matter of four weeks, I put like 15, 16 pounds on, and I was like, holy, and I, and it broke me through all these plateaus

• 6:13Alex Hormozi?

  of size and strength that I had been stuck at for years. And so, then later, I was like, let me see if I can do it for six weeks and do it even more volume. And that's what ended up happening. Now, to be clear, some people have different genetics, some people have, you know, their joints can't take it, whatever. But the point is, is that the solutions that we have to think about is like, how can I do more? And the answer to that question, the thing that's stopping you Is the constraint of the business. All right. And so many of you guys have heard the story of the pottery class where you have a teacher. He signs two classes. You guys, you will get graded on making the best pot. So the quality of your pot is what I'm going to rate you on. And the other class, he said, I'm going to grade you on the number of pots that you make. And at the end of the semester, quality team had made one pot and it was decent.

• 6:53Alex Hormozi?

  And then the team that had just done sheer volume of pots, not only did they make way more pots, their pots were better. And so the thing is, is that kind of like the Napoleon quote, quality, quantity takes on a quality unto itself. Like you get better by doing more. And so that is why there's this, this tied relationship between the two that's massively linked that people underestimate. And so I want to read you this. This is from my internal sales handbook that I have for my sales team. Cause I want to set like, this is the culture of acquisition.com. Like we ask, how can we do more? Right? How can we do more? Now leverage is a part of doing more inputs and outputs. Like if we can get more output with leverage, let's do it. Right? So let me read this to you because I think it'll, it'll frame, frame how we think about this. Many people say they want to be in the top 1% or 0.1% or even 0.01%.

• 7:38Alex Hormozi?

  But saying that has zero bearing on whether it happens. Achievement comes from actions, not aspirations. So let's get real. To be the top 1%, you need to enter a room of a hundred people and leave number one. To be the top 0.1%, you need to enter a room of a thousand people, like a local high school and leave number one. To be the top 0.01%, you need to enter an arena of 10,000 people and leave number one. Think about it, a stadium. And in a battle to the death in that stadium, you have to come out on top. You beat everyone, not almost everyone, everyone. And so if you have the goal to be in the top 0.01%,

• 8:21Alex Hormozi?

  do you think that you can live a normal life? Do you think that you can keep the same friends? Do you think that you can keep the same hobbies? Do you think you can stay up late and sleep in on weekends? Do you think that you don't have to sacrifice what average people care about? Do you think that they will support you when you start to pass them? Do you think anyone will think this is healthy, balanced or logical? No, and they're right. But it doesn't matter. When you want to be the point zero one percent, there's no greater waste of time than explaining yourself to people who actively don't support you. It's normal for people to not understand why you do what you do. I say this because you cannot make yourself exceptional and live a normal life. To make yourself exceptional, you must live an exceptional life.

• 9:06Alex Hormozi?

  And an exceptional life does not always mean better. It just means that it's so different that most people will reject it and you. And when that happens, you must reject them as well. Oil and water do not mix. That is what it really means to be exceptional. You must become the exception. So I routinely get asked the secret to success. And it just comes down to this. Number one, get better. Number two, never stop. If you do only those two things, you will win on a long enough time horizon. The problem is people convince themselves they no longer want something once they see the experience of how hard it really is. So I want to set this expectation for you as you head off to practice scripts, mark your calendar and set your alarms. The work begins when your motivation ends.

• 9:51Alex Hormozi?

  Just win. That's from our internal handbook that we have at ACQ for our sales guys. And it's one of the ways that we, we welcome guys on. And I, and I, and I want to read that to you because I want to frame what I'm talking about today. It seems like a very simple thing, just saying, just do more. But like, it's almost become an art form and something that I have like a deep passion about, which is very odd to say. But more actually has the highest risk adjusted return move that you can possibly make within the business. The reason more has the highest risk adjusted return for a business or for you is that it's so hard to get something to work. Right? Many of you guys have tried anything. You have a new marketing channel, a new sales script, a new offer. You try a bunch of things and then finally something works. The likelihood that you changing that thing and that next thing working is actually statistically very low.

• 10:36Alex Hormozi?

  Think about how many different things you had to try before something actually worked. And so the idea is, okay, I have these limited resources. I can allocate them to take a risk and roll the dice. Or I have this thing that I know works and I need to jam more into that machine. Which is why it's the risk, the highest risk adjusted return move. Now, one of the other misconceptions I think is that there's a huge preponderance of people who talk about optimization. Getting as much as you can for as little as you can. And I don't think there's anything wrong with that. The difference is that there are optimizers and there are maximizers. Maximizers try to ask the question, how do I get as much as I possibly can? Optimizers ask, how much, how do I get as much as I can out of as little as I can?

• 11:18Alex Hormozi?

  But when you're looking at returns, maximizers win. So what's the difference between first place, you know, gold in the Olympics and second in the, in the Olympics? Silver, right? A tenth of a second in a race. But what is the realistic difference, the real world or pragmatic difference between being, being the best in the world? And second best? Everything. And so when you're talking to an Olympian, you're talking to somebody who be, wants to be the top 1%, .01%, .00001%. Diminishing returns are still returns. It's, you need to do more because you're trying to win. Not be cute about saying that you had great return. And I, I say this as somebody who was a converted optimizer.

• 11:57Alex Hormozi?

  So in the earlier part of my life, I really prided myself on doing school with as little work as possible. I was like, you, you nerds, I was like, you guys needed to study. I can walk in and hit a 91 with no studying. And I'll tell you the story that really, really changed my life. So this guy named Kemp Knott, I gave Kemp a hard time. I did, when I was in high school. And he was a kid who didn't catch on to stuff as fast. And you know, Kemp's a successful guy. Now he's done great, but this thing happened. So all of high school, I, I kinda gave this guy a hard time. And when we went to go apply to colleges, I wanted to go to Duke. So Duke's a top five school in the U S and I didn't get into Duke. I ended up going to Vanderbilt, which is also obviously a great school, but I wanted to go to Duke. And guess who got into Duke? Kemp Knott.

• 12:42Alex Hormozi?

  And so it was really interesting is that this whole time, like Kemp would go to study hall. He'd be like, teacher, you forgot to assign his homework. Like, he was that guy, right? And I honestly just really disliked him, but mostly because it probably just reminded me of my own inadequacies of like, I was just unwilling to do the amount of work that he was. And I, and I, I shamed him for doing the amount of work that he did. I was like, you have to work so hard just to try and, just to try and come close to me, right? But in the end, he got into the better college. And so it was this really humbling lesson for me that it was like, none of the colleges cared that I worked less than him. They just cared about who had the best applications and who had the best grades. And it was this really like very eye opening experience. And so when I went to college,

• 13:26Alex Hormozi?

  I had a different frame that I was like, well, I'm not going to lose. I want to go here and I want to maximize. I want to study all the hours of the day that I'm that I'm not in class, at the gym, or at the cafeteria. I'm in the library. And you can ask anyone that I ever went to school with, if you ever meet them. Like, that's where I was. I was in the library 12 hours a day because I was like, well, if I just study more than everyone, I'll get good grades. And that worked out pretty good. Right? And so that's just kind of a, just a little bit of framing around why I have such a, such a strong affinity for more. Now, I'll give you a second, kind of a little bit more heady reason. So I talked about how more is the highest risk adjusted return. I talked about how diminishing returns are still returns. They're still at the end of the, you're still output, right?

• 14:06Alex Hormozi?

  The next piece, though, is that change has a fixed cost. All right, and a variable reward. All right, so let me explain what that means. So if we have this thing that's working, right? So I want you to imagine that this line right here, ooh, nice and wet. Oh, I like it. My markers, calm down, guys. Okay. So I've got this line, this represents your revenue, or whatever your current level of activity or output is. Okay, this is output, whatever your thing is. Okay. Now, what happens is most entrepreneurs, they say, you know what? I'm going to change something. All right, and guess what happened? Because they think they're going to change something and things are going to get better, right? You tweak something, you mess around, you change your page, change your script, change your onboarding process, whatever, right? So then what happens? Well, if there's people involved, typically output will go down.

• 14:51Alex Hormozi?

  You have to retrade the team, they have to practice. You know, this variable affected two other variables you didn't know about. And so you get, and this is completely based on my observation. You typically get about a 20% decrement or decrease in performance. Okay? And so what this has created for me is my minimum rule of 20%, which is that if something is going to give me a guaranteed 20% decrease in output by me changing it. Now, this is initial. What ends up happening after that is it might not work, and then you stay here, or it might be worse, and this goes here, or it might get better, and it comes back up eventually, right? And then maybe you have a 5% higher output here, and now this is now your new baseline, it's a little bit higher than it was before.

• 15:36Alex Hormozi?

  Now, here's the thing. If you have a 20% guaranteed decrease, and you have the potential for a 5% increase, do you take that bet? No, but I see entrepreneurs every day, myself included for many years, taking that bet over and over again because I was like, I just have to get it better. I just have to get it better. But it was a fallacy. It's not true. Some like your business will never be perfect and you have to accept that back. It will not be perfect. You will always see things that you could. And the thing is, is you don't even know if it's going to get better. You just aren't sure if it's cool, good enough. And so you just want to change it. You want to mess with it. Right. But the magic is the compounding returns you get when you do the same thing over and over again. You get this, this depth of understanding, this depth of skill that happens with repetition.

• 16:20Alex Hormozi?

  Right. If necessity is the mother of invention, repetition is the father of skill. All right. So coming back to our 20% here, right? This is, this is cute, right? But let's look at what entrepreneurs will normally do. Maybe they'll start seeing some increase here, but what do they do next? They say, you know what? I've got this other idea I have. And so then they get another 20% decrease. And so they're constantly living significantly below their output means or your revenue, or whatever your thing is below what your potential is because you're constantly changing stuff. And I want to be real with you for a second. If you're a small business owner, you've got, you know, maybe 10, maybe 20 employees, or if you have anything less than that, then like, hear me right now. The amount of resources that you have to implement change are so limited.

• 17:04Alex Hormozi?

  I like, they're so limited. I pick like one big thing a year that I do, like one. And what happens is when you realize how limited your resources are, in order to deploy successfully a new change or a new experiment, what happens is it forces prioritization. It forces you to focus on what things, if I only had one thing that I could do this year, what one thing would I be like, this is the bet I'm going to take? Well, it certainly wouldn't be a 5% thing, right? Well, maybe with right handwritten cards, we'll get a 5% increase in referrals. Maybe, right? But given those resources, what else could you do? Right. And so when you look at the whole thing, the whole spectrum, and this is how I want to, I want to frame strategy for you around this. So most people think about business strategy.

• 17:49Alex Hormozi?

  I got this from Sharon. I love this. I'm using it all the time. It's so good. Most people think about business strategy like they think about making dinner. So they go to their kitchen, they open up the fridge, they look what's inside, say, what am I gonna whip up? Right? That's how they think about business strategy. But the question that we should be asking isn't, what am I gonna whip up from what's inside the fridge? We should ask the question, what the fuck do I wanna eat? And then go get the ingredients and go make it happen. And so when you, when you have, when you're saying, I'm only gonna take one bet or two bets this year, they're gonna be material. Then it forces you to be like, it's gotta be worth it. Because here's the part that no one else knows. Is assume this is still the same output, right? You've got your output. What happens is that if you change nothing, believe it or not, people get better at their jobs.

• 18:34Alex Hormozi?

  People just keep getting better. They get more skilled. And so you'll typically have one, two, three percent increases that happen kind of month over month from you just not changing anything, from just leaving it alone. And so this has taken me so much time because I'm a natural, I'm a yes hinge, right? I'm like, let's do it. Let's shake it up. Let's change things. Like, because the thing is, is I have this need from my business. I, I, like earlier days, the business satisfied multiple needs. And I didn't satisfy the business's needs, meaning I had cravings for novelty. I wanted to do new things. I would get bored of doing the same thing over again. And so because of that boredom, I would say, let's shake it up. But why? Because the times I've made the most money in my life have not been when I've been changing the most.

• 19:18Alex Hormozi?

  It's actually when the business has been really boring and we're just blocking, tackling, doing it over and over again. And so this is something that some people never learn. Honestly, a lot of entrepreneurs never learn this. And the hard question, the hard problem to solve is not the new idea that you wanna try. It's how can I do more, once I've already exhausted my existing way of doing more? I'll tell you a story to illustrate this. So I went and spoke at this personal training thing, God, I don't know, eight years ago, long time, right? So I was still successful, Jim wants it this time. So I was like considered an authority just within the fitness space. And so I go there and I give my whole, you know, I give my whole presentation, whatever. And so then a girl raised her hand and asked a question. She said, hey, I currently do outbound, you know, DMing

• 20:00Alex Hormozi?

  from my Instagram to get customers, but I want a more scalable method of acquisition. And I, and I kinda like looked at her. I was like, what do you mean? She's like, well, you know, outbound doesn't really scale. And I was like, In what world do you think that outbound doesn't scale? Of course it scales. Some of the biggest companies in the world do exclusively outbound. The problem that she had in encounter was how do I hire onboarding, train another SDR or another outbound router or another DM setter? Right? And so some people get to like five and they're like, there's no way I can have more than that. But that becomes the complex problems that we then get to solve rather than saying, I'm going to do something new. Right? And so I bring this up because, and I'll circle back to this 20% real quick.

• 20:42Alex Hormozi?

  So for me, the minimum rule is that it's gotta be over 20%. If I'm going to get a 20% loss guaranteed. Right? Of course, but I don't even know if I'm going to get this 20% because we have to analyze this through, this is an investor frame, by the way. It's called, it's called ICE. Right? Which is impact, which is like how big, right? Confidence is how likely. And then ease is what are the resources required for us to make this thing happen? Right? Now, the perfect world is something that's gigantic impact, gigantic competence and super easy. Right? That'd be the best type of thing. And so when we have a risk adjusted return move, we think, okay, I think this is, I think this could double the business. I have super high confidence and I think it could be easy. Then those are the types of bets we want to take.

• 21:26Alex Hormozi?

  Because said differently, if you know that something could double your business with one move, why would you do three? Right? Just because you have this compulsion to be busy, to mess with your team, doesn't mean it's what the business requires. Real. And so a lot of people use the business to satisfy their own ADD, to satisfy their own need for novelty. When the business thrives on same, it's very rare that you're Kodak and you need to adjust to the digital world. It's very rare. We love to tell these stories, but what we don't tell is the guy who just said, you know what? Uh, I've got three levels of my membership and we're doing a million dollars a year. How do I 10x my traffic and get to $10 million a year?

• 22:11Alex Hormozi?

  And then once I'm there, what do I need to do to get to another 10x of traffic? To get to $100 million a year? We don't ask those questions. Right? Because one of the fallacies or the pains of small business owners is that we, and myself included, right? We consistently think small. We don't think big enough. And so let me, let me give you an example on this, right? So let's say, this is where people get obsessed around optimization. They get obsessed around relative returns rather than absolute returns. So let me tell you, let me give you two examples of this. So let's say that you've got a marketing campaign where you put a hundred dollars in and you get, call it, let's say you get, you know, ten, you know, a thousand dollars out. Okay, so this is 10 to 1. Amazing, right? Cool.

• 22:55Alex Hormozi?

  But as soon as you scale to $200, let's say that you now are getting 6 to 1. So you get $1,200, which is pretty bad. You know, you, you've spent twice as much money and you only made $200 more, right? Most people would say, ah, I, I should stop doing this. The maximizer says, we made more money. Net, net, we made 900 here, 1,000 minus 100. Here, we made 1,000. This is still more. And this is what people miss out on. And so people think, and what happens is when you're a small business owner, you get obsessed with these relative returns. And there's a point where you do want really high relative returns. You want very high LTV to CAC, and we can get into some of that stuff.

• 23:40Alex Hormozi?

  But I want to just put it in this from a, from a larger thinking perspective, because I will see people stay in these optimization loops for years, right? They're like, I gotta, I, you know, my, my opt-in page converts at 30%, right? This is my opt-in. And they'll just keep testing it, trying to get it to 35 or 40 or 45%. But the thing is, is like, you will never 10x your business by getting, this 30% will never go. It will never go to 300%. It's never going to happen. But you can 10x your inputs. You can do more. You can do more and you can send more in. And then that will for sure increase your output, even if your relative return goes down.

• 24:23Alex Hormozi?

  And so if I had the choice between spending $10,000 and making 100 back, 10 to 1, or spending $1 million and getting $2 million back, 2 to 1, I would take a million in to get 2 back every day of the week and twice on Sunday. Why? Because it's more. It's still more. It's absolute returns. Absolute output, right? And so when you're thinking about yours, and I'll bring this to business now, right? I mean, I've been talking about business, but like more to business, more tactical. We have our core four, right? We have our four ways of getting customers. We've got our warm outreach. We've got our cold outreach. We've got content. And then we've got paid, right? We have paid ads. These are the only four things that you can do.

• 25:08Alex Hormozi?

  And so the magic is answering the question of how can I go from one piece of content to 100 a week? Right? And I'll tell you this, this, you know, I'll tell you a quote from Elon and then I'll tell you a story that I said. So Elon, uh, he talks often about like, you know, figure out your 10 year goal and then ask yourself, what would it take to get this accomplished in six months? You might not accomplish it in six months, but you'll get there way faster than the guy who accepted it was going to take 10 years. Right? And so I do love the frame of like, they're going to capture your kids. They're going to capture your wife. They're going to capture the thing that you care the most about. What would you do if you actually had to get this many people to start working for you for App Run? Or get the sales stream trained up or actually make 100 pieces of content when you're currently making one a day? What would you actually do? Like, what would you actually do?

• 25:52Alex Hormozi?

  And then, and I, and it's worth answering the question, not saying I couldn't. You answer the question and you say, this is what I would do. And then, this is the trick. Then you say, what kind of resources would be required to make that happen? So what would it take in terms of what would the actions be? And then secondarily, what are the resources required to make that happen? And you'll often find that it's far fewer than you expect. So I'll tell you a story. This happened literally yesterday. So guys here at one of our workshops, uh, he's doing, I think he's doing 10 minutes, six, six. I can't remember. I think it was 10 million a year. It was 10 million a year. And he's got a, like a healthcare related business. So he's got workers that do health related stuff.

• 26:35Alex Hormozi?

  Whatever. All right. And so he's got 38 of them. He's got unlimited demand. His phone's ringing off the hook. He can't deliver. All right. So he's supply constraint. And so I say, all right, so if you could get twice as many people on your staff, your business would double. I said, is that correct? He said, yes, that's correct. I said, okay. And I said, you know, what are your current channels? And he's like, I get, you know, I've got these two recruiters. They send me, you know, one good candidate a month that I end up hiring. And then I've got this like, you know, education program that I work with the colleges and I get another one person every quarter from them. So he's got 12 plus three that are coming in a year roughly, or 12 plus four, so 14 ish people. He currently had 38 to 40. Right. So that's a 30% growth rate and there's nothing wrong with that, but that growth rate is going to diminish as the base gets bigger, right?

• 27:19Alex Hormozi?

  Unless you find a new way. And so I said, all right, how much do you make in gross profit off of a new provider? He said, about a hundred thousand dollars a year. That's what he makes. I said, okay, that's what you make. I said, what are you currently paying a recruiter to go get this?

• 27:37Alex Hormozi?

  $5,000. I said, okay, could you imagine a world where you'd pay $25,000? And you'd spin up 10 recruiters and you'd say, I want you to just give me five people. And you have to give me a guarantee for six months that you replace them as many times as possible, because that was the big risk that he had. What if I hire somebody? They're not good. Right. And I want you to also add in a guarantee that if in six months, I don't keep them, you've replaced them at cost. Right. And so I'm willing to pay you more, but I want this guarantee and I want it over this period of time. If you did that, right? And this business I think was doing around $2 million in profit a year. All right. Only this 10 million. And so I said, okay, for $1 million, half of your current profit, right? $1 million, 25K, what does that get us?

• 28:23Alex Hormozi?

  It gets us 40 new providers, which is the exact size of his current business. And so for $1 million, that investment, you double the business. Now partially there's incremental margin that there should actually probably be larger than doubling the profit of the business. But here's where this gets really interesting. Let's say this business, I'll give you the math here. So $10 million top line, $2 million in profit. All right, this business probably trades at around 8x, which means right now it's a $16 million business. Okay, now, when he has his $2 million of profit, he's got two options. Option one, he just pays taxes on it. And he lived in California. And so he's only going to have $1 million after taxes. Or more realistically, if you live in California, nothing. I'm kidding.

• 29:07Alex Hormozi?

  You'll have $17 after taxes. You will have a lawsuit and a high five. The alternative here is that he can invest it. Now, let me explain how that works. So if he invests it here and he gets his 40 guys, number one, he takes his tax bill down and he cuts it in half. So now he only pays $500,000 in taxes, right? He has 500K left off of the million that's there. But here's where it gets interesting. If he doubles the amount of providers, next year, what does that mean to his enterprise value? He's going to be at $4 million in profit. Right? And that $4 million in profit then turns into $32 million in enterprise value. And so he made an extra $16 million, 6 to 1, 16 to 1, excuse me,

• 29:52Alex Hormozi?

  on the $1 million that he invested. And he did it tax free. That's how you get super rich. That's how it works. Okay, not a promise. Of course, your results will vary because most people do nothing. And this is not meant as an earnings claim. Of course, you are watching a YouTube livestream. So I have no idea what you're going to do, which will probably be nothing, because most people do nothing. Now, that being said, for each of the different ways of the core four, the ways of the warrior, the ways of the marketer, right? We have our, I'll redraw this for everybody. We have our outbound, we've got outbound,

• 30:27Alex Hormozi?

  we've got paid, paid ads. And then we've got organic or content, right? We've got organic. Okay, now, how do we do more? Right? So from an ads perspective, we'll start here. More can simply mean more money. It could also mean more creative. It could mean more platforms. All of these things are versions of more. And so I will typically do this in reverse order of risk. Right? And so that means that I think that if I'm going to put this in order for paid, it'd be like, okay, well, the first I'm going to do is make more creative. If I have more creative... I have a higher chance of getting more winners. If I have more winners, then I'm going to get better ROI and I'll be able to scale to more markets, more avatars, more segments. Great. So that's the first more I'm going to do.

• 31:10Alex Hormozi?

  The second more I'm going to do is I'm going to say, I'm going to spend more money on ads. How can I take my hundred dollars a day and spend it for a thousand dollars a day? What stops me from doing that? Right? And then third, if I do step one and step two, and I make way more creative and I spend more money, then at that point, I say, okay, well, now that I've built this machine that can create 10 times the creative volume, how do I do this within the context of Instagram? Or how do I do this in context of TikTok? Or how do I do this in the context of X, right? Each of these platforms. So some of you guys don't know this, but for the launch, for the Money Models launch, this puppy, right? So for this guy, the reason we were able to do 105 point whatever million at the launch

• 31:51Alex Hormozi?

  is because we didn't just, like, we advertised so much, right? So we did, I think, 2,000 plus ads before the six weeks out began. We had banked those 2,000 at 2,000, like, count to 100 and then do that 20 times. And if you count it, they'd be like, wow, this is really boring. That's how long it takes to count to 2,000. We made 2,000 ads, which takes significantly longer than counting to 2,000. And so this is what people dramatically misunderstand is the amount of work it takes to do more. Because then I could say, well, my editor, I only have five editors and I can't do, they can only do, you know, they can only do five ads a day each, and that's 25 ads a day is all we can put out.

• 32:34Alex Hormozi?

  Well, if I got to 2,000 ads, do I think that I'd have a higher likely of hitting this big goal? Yes. What would it take? So it turned out, we did the math, it took 15 editors. And so that means that we had to contract 10 more to do the editing. What does that cost? A lot less than 105 million. So we did it, right? So we figure out what would it take to get this big goal in terms of volume? And then what are the resources required to do that? And then is it worth it? And most times, the answer is a resounding yes, not a small yes, a big ass yes. And so then we say, then what's stopping us? And the answer is almost always nothing. Just do more. Now, that's how I would attack paid from a more perspective, right?

• 33:17Alex Hormozi?

  From a content perspective, it's the same thing in terms of scaling editors. Now, one of the interesting things about doing more is that doing more is so painful, right? It's so much work. It's a lot of work to do more. But that pain forces another forcing function, which you don't need to try to do. It will occur on its own, which is you will try and minimize how much work you're doing. Or at least you will try and get more. If you have a fixed work, like I'm going to do 100 calls no matter what. I'm going to do 100 minutes of content no matter what. What do you think happens? You think, man, it'd be really nice if I got higher pickup rates. So then you start looking at your time and saying, you know, people pick up more in the afternoons for my market. Or they, they pick up really hot between 5:00 and 7:00 a.m. in this particular market, whatever. Assuming you, you know, follow the law, whatever. You start getting better.

• 34:02Alex Hormozi?

  You start looking at the data. You start saying, go like, if I'm going to do all this work, I might as well make it worth it, right? But you have to put yourself in that pain, that pain of the lack of leverage, the pain of it being inefficient. So you have this massive inefficiency that happens, but you have to keep it there. Because what happens otherwise is like the weak-minded, the weak of will will do 100 for one day or two days in a row. They'll say, I didn't get the result I wanted. It's like, duh, of course you didn't. You didn't do nearly enough. And so the reason that your businesses may feel volatile or erratic, you're like, I don't know why. Sometimes we have high sales, sometimes we have low sales. It looks like this, right? Let's walk through an example. Let's say that you do one sale on Monday of this week, and then you do one sale on Thursday of next week.

• 34:46Alex Hormozi?

  And you do one, I'm going to make, I'm not going to draw on the whole thing. So let's say one sale on Friday of the following week, and then one sale on, you know, Tuesday of the week after that. So you're doing one sale a week and they're kind of happening all over the place. So your, your sales look like this, right? That's, that's what they look like. Let me give you the, the realist take I possibly can. There is a level of advertising that is occurring that is generating four sales per month for you. There's a level of letting people know about your stuff that is happening. If you want to get to one sale a day, you would have to 7X that level of advertising. Period. And you might even have some inefficiencies because you might not get the same out of you doing 7X.

• 35:30Alex Hormozi?

  So you might have to 14X, assuming your efficiency drops. And so what? How much would it take for me to do this 14x? And is the amount that it takes me to do the 14x less than a 7x for my business? If the answer is no, then what's stopping you? Right? And so this thinking pattern is why I think people stay small. They get obsessed with the margin. They get obsessed with, with the relative returns. They get obsessed with the optimization. But sometimes you just have to do a violent, unreasonable amount of work for an extended period of time because part of volume is the consistency associated with it. We couldn't make 2,000 ads in a day. We had to make 25 or 50 ads and we had to do it every single day for hundreds of days

• 36:15Alex Hormozi?

  in a row to get to the point where we could make 2,000. Right? And that was before we started. We ended up what with 3,000? 2,800. We made 2,800 ads. But we're like, man, I can't, I can't scale my ads by this certain way. You don't have enough. We spent 500,000 a day, per day at the end of the launch, last few days. And you can only get to that level of scale with an equal amount of scale in terms of the inputs. And so this is probably my favorite volume story that I have because it was so real for me, but I'll tell you two. So one was I paid somebody who was, you know, way bigger than me at the time in terms of like content and all that stuff early on in my career. And I was like, hey, you know, what should I do, you know, you know, to, to grow?

• 36:58Alex Hormozi?

  And I got basically no tactics from this, but it was incredibly valuable for me, which is why I'm trying to do this for you. I can't sit down with everything as one person because it'd be, it'd be physically impossible. Right? And so I tried to do these instead as my, my best, my second best, you know, attempt to do this. And he was like, dude, he's like, you just need, he said, pull up your, pull up your LinkedIn. And I was like, okay. He said, pull up my LinkedIn. And he had made 10 posts that day and I had made one. He was like, okay, pull up Instagram, pull up your Instagram. He had made three. I hadn't even made one. And then he said, pull up your YouTube, pull up my YouTube. And once we did this two or three times, I was like, I get it. I get it. I just need to do way more. He's like, yeah, dude, like way more. And so we as humans so often think I need to do twice as much. I need to do three times as much.

• 37:42Alex Hormozi?

  We can't fathom what it would mean to do a hundred times as much. Or a thousand times as much. But if you want to beat every fucking human being in the arena to the battle of the death. Right? Wouldn't you want to leave no doubt? Wouldn't you want to make fucking sure that you were going to win? Because here's the thing. If you see someone ahead of you, a lot of people get triggered by this. They see someone ahead of them, they throw rocks at them like because it makes them feel bad themselves. I strongly encourage you not to do that. If someone is doing better than you, they are better than you. In some way. And in that, you can learn of them. Real. So when someone's doing better, if you're like, I gotta beat them, you look at their volume, right? And let's say that someone's doing three times this volume that you can see. Right?

• 38:27Alex Hormozi?

  What do you do? Do you do three times the volume? No, because now you're just matching them. You need to do 10 or 20 or 30 times the volume because not only that, they're doing volume that you can't see. You're just, you're just judging on the volume you can see. And so if you want to leave no doubt, it's like not only if I did the same amount of work as that guy, I'm always behind. So I gotta do more work to catch up. But that's just based on what I can see. I might have to do more and more to make sure that I accommodate for the things that I can't see. I said, I would, I would, I'll tell you my, I'll tell you another Sharon story. This is two years ago, I think. Maybe three years ago. Geez, it might've been three years ago. He's, uh, at the time he was, uh, he was making content. He was like, it's not really popping. Like, can you help me out with it? And I actually had a repeated story to say, I literally had the flip reverse conversation with him.

• 39:12Alex Hormozi?

  Where I was like, well, how many times you post a day on Instagram? And he was like, one. I was like, how many is your posting a day on Tik Tok? How many times you post a day? And by the time I got to this, literally just the, the third one, he was like, I get it. I get it. He just stopped me. He was like, I get it. I need to do. And remember, this is the guy who got on 200 plus stages. This guy understands volume. And so to land the plane here, we were having dinner. He told me about the 200, you know, the 200 plus stages, 260 stages or whatever that he was on that year. Right? And after he said that, he just looked at me, he was like, no one gets it. He's like, no one gets it. Everyone thinks that I've got some magic trick, that I've got the most, the highest converting presentation, that I'm some amazing guy on stage. And it has nothing to do with that.

• 39:56Alex Hormozi?

  He's like, no one understands the volume. No one gets it because it's not doubles, it's not triples, it's not 5X, it's not 10X. It's 100X the volume. And so that is my word du jour. I'll close on, I'll give you a second close, we're closing twice. All right. Consistency is the rarest of traits. And I think the reason it is so rare is because you cannot observe it without at least having some level of consistency. Think about that for a second. How can you observe consistency? It's very hard to do, right? You can't see somebody coming, like you have to be at the gym every day to see someone at the gym every day.

• 40:36Alex Hormozi?

  Which is why like when people come to acquisition.com, all of a sudden they get this gigantic boost in their skillset, their productivity, their output. Because they're around everyone. Like when you show up at acquisition.com at 5:30 in the morning, the parking lot's full. Like, we're here to win, not play. We want to win. And so I think I would ask yourself the question, if I knew beyond a shadow of a doubt, that if I could do 100 times more than I'm currently doing, I would hit the goals that I have. Then I would then ask the question, great, what resources are required? And then following up to that, is it worth it? If the answer is yes, what's stopping you? I'm just so passionate about more. And you can't even do like more for one day is not enough.

• 41:21Alex Hormozi?

  Like, we had to be consistent with the amount of ads we were making for a very long time to get the volume. So you can make five posts on all the platforms in one day, but you gotta wake up tomorrow and you're at zero again, right? One of the things that I think is so magical and so amazing about like sales teams is you have a week and everyone's trying to up the tally and win the week. But what happens on Sunday morning? Back at zero, baby. Back at zero. You have to be consistent. You want to win the quarter? You gotta bring it every day, right? I don't pretend to know what it is that separates people, you know, from the people who can and for those people can't. But I would say that one of the biggest ones is like, it's a decision. It's a decision. You decide that you want to go pro.

• 42:06Alex Hormozi?

  You decide you want to make this. You want to be legit. And the thing is, is that you have to do it for you because no one will see the amount of work. Not like if you want credit for the work, you've already lost. You can get credit for the outcome, but you will never get credit for the work. Like you have to accept that real. You have to accept that you will never get credit for the work. If anything, you will get, you will get criticized for the work. The people around you say you work too much. They'll try and pull you away from the work.

• 42:33Alex Hormozi?

  But the work needs doing.