The Business Game No One Tells You About. Hormozi Hotline. | Ep 908

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.

• 0:01Alex Hormozi?

  Let's talk about whatever. And by whatever, I mean ideally key men-related topics. You don't understand the value of enterprise value. Of course, you build net worth without taxes, but it's fictional numbers that can't liquidate. I like cash flow, hard cash. Thanks, TubeBLCTGJ. Let me tell you why enterprise value fucking matters. Enterprise value is important for a variety of reasons. Enterprise value dictates how valuable something is. So Stripe, for example, is not publicly traded, but people are willing to invest money in it and so the founders can get liquidity. And so what you want is to be able to spend something. But the thing is, is that that comes from the position of not, of already not having enough. So let me explain.

• 0:46Alex Hormozi?

  Once a business actually has enterprise value, it usually has already generated or had the ability to generate more than sufficient cash flow for the owner, which means that all the excess cash flow that the business generates is going to be transferred to the owner in a tax inefficient manner. And so then what happens is that you want to have growth in your net worth that isn't affected by taxes. Right? And so if you say, "I want cold hard cash." Cool, bro. You want to pay your rent. I get it. After you're done paying your rent and after you pay your house off and after you pay for your parents' house and after you pay for their cars and your kids' schools and all that, there's still cash flow coming in. And then you're like, "Well, I want to upgrade all my cars." "Okay, great." "And then I want a vacation." "Cool, costs a hundred grand if you want to be a fucking baller."

• 1:29Alex Hormozi?

  Okay, then what? Then you want the most efficient tax vehicle for building wealth, which is your enterprise value. Guess what else you can do with a high-value enterprise? You can take loans against it. You can get lines of credit. It becomes an asset. You can raise capital on that. Right? And so, said differently.

• 1:56Alex Hormozi?

  There's levels to this game. If you want to move up levels, you need to play a different game. And you have to graduate. If you can't, if you don't know where your rent's coming next month, fuck enterprise value. Being super real here, fuck enterprise value. If you have those things satisfied, and the vast majority of my content, I try to make for business owners who are trying to get bigger, who are trying to scale. Enterprise value becomes increasingly important. Basically, the bigger you get, the more you satisfy your needs, the people around you need. At some point, then it becomes about the game. And to be clear, I'm not saying this game is the only game worth playing, and there's not other games in life that are worth winning. But in the game of business, net worth becomes the objective measure.

• 2:42Alex Hormozi?

  And so, that's how that works. Cool. Okay.

• 2:47Alex Hormozi?

  Let's go to next question. So Alex, as a software dev trying to grow a startup app, what do you recommend? I mean, that's like saying, how do you advertise?

• 2:58Alex Hormozi?

  Honestly? Read this book. Pick one of the core four, which is either gonna do outreach to people you know, outreach to people you don't know. You're gonna do paid ads, you're gonna make content. The other four things you can do is get an agency to do that thing for you, find affiliates to do that thing for you, get customers to do off a viral loop, or you have employees that do the first four on your behalf. Those are your options. Which one would I pick if I were you? In the beginning, you actually care more about revenue retention. And then eventually, once you have revenue retention, then we have to figure out whether it's gonna be viral growth, or it's all based on like, I can keep everyone who comes in. Past month 12. But the issue is that no one knows about my stuff. And then it just becomes a CAC to LTV ratio. Problem. It's just math after that. Okay.

• 3:42Alex Hormozi?

  The problem, the hard part is obviously keeping people. Okay. Can you clearly define how to find out what is valuable to your marketplace? Yes. You ask them to buy it. And if they pay you for it, then they have found value in it. And if you're like, what? How do I know how to define value? I actually wrote a book on that too.

• 4:05Alex Hormozi?

  I actually made an equation for it. So the value equation has four components. One is the dream outcome, which is what is the thing that people ultimately want? And then the other three variables are things that detract or pull away from that dream outcome. And so if I can give you this dream outcome, let's say that you want to get a six pack, you want to be in shape, and I say it's going to take two years. So it's going to be slow. It's going to take time from you every single day. It's going to be, it's going to take a long time and it will take you a lot of time. So that's two elements of time. It's going to cause you to have to do things that you don't want to do. And it's going to cause you to do, stop doing things that you do want to do. So you stop good stuff and you start bad stuff. And on the top of that, there's a chance that you might not hit it, even if you do all these other things right and you take all this sacrifice.

• 4:50Alex Hormozi?

  Is that a valuable thing? It's kind of, but I basically described the fitness sale to you. You got to work out, you got to stop eating tacos, you can't drink on the weekends, right? It's going to take multiple years. And it's also going to take you time every single day. You're going to be sore, you're going to be tired, all this stuff, right? And then on top of that, you might try this whole period of time and you might have terrible genetics. And so all that to say, it will, that's why you have to spend an hour arm wrestling somebody to sign up for personal training. On the flip side, if I sold GLP-1, which is a diet drug, right? And they have a new drug that's coming out that they're going to pair with GLP-1, which is like a muscle preserving drug.

• 5:33Alex Hormozi?

  So you could literally keep or maintain, or gain a little bit of muscle on this drug while also starving yourself. Then you have a better physique and it takes no willpower and you just take this drug. So it's fast, it's virtually guaranteed because it requires no willpower. It gets you the physique you want. Which one's more valuable? Which one do you think would be harder to sell? Probably the personal training one. And so fundamentally, this is how you differentiate value. Hopefully that answers your question. All right, hotline, let's rock and roll. All right, who we got?

• 6:10Alex Hormozi?

  Hello. You're on speaker. What's up, man?

• 6:14Speaker 01

  Hi, this is William in Michigan. How you doing, Alex?

• 6:18Alex Hormozi?

  William in Michigan?

• 6:20Speaker 01

  Yeah.

• 6:21Alex Hormozi?

  All right. What's up, man? Tell me about the business.

• 6:24Speaker 01

  Yeah, so I'm in the, uh, wiping booties for seniors business. You're supposed to live in memory care business. And the main problem we have, skills are good, but it takes a long time to get the LTV. So they stay within a year at least in our business. But I'd like to find out a way to bring the cash forward. So it's kind of like, you know, we're getting cash, but it takes two, three months for us to really get good profits. And then, of course, after that, it's doing really well. But how are we bringing that cash up forward and present that ahead of time?

• 6:55Alex Hormozi?

  Are you billing insurance or are you billing private?

• 6:58Speaker 01

  Private, man. No, no insurance.

• 7:01Alex Hormozi?

  Okay, got it. So do you bill monthly or how do you bill?

• 7:06Speaker 01

  Yeah, so we bill, you know, the first of the month. And a lot of times we look to collect first and last month's rent. And last month's rent's fully, you know, refundable on a 30-day notice, but it's similar to like an apartment building.

• 7:18Alex Hormozi?

  Yeah, got it. So I would have, honestly, all, there's really only two options that are like immediately available to you, or I guess three. So number one is you could have some sort of setup, enrollment, onboarding, some sort of fee like that, that you could put into the upfront payment. That's thing one. Thing two is you could require first three months upfront.

• 7:43Alex Hormozi?

  That's option two. Option three is you can add on additional service that many of them need. And then you could contract that out. So let's say that, what are the other things that someone has to buy in order to begin your service? I'm guessing there's some sort of moving costs or moving services, right?

• 7:59Speaker 01

  Yeah, there's like ancillary, like transportation, beauty, hair and nails, stuff like that.

• 8:05Alex Hormozi?

  Yeah, so basically what we do is just create a bundle that many of those people immediately need to buy in addition to, have you read the MoneyMiles book?

• 8:15Speaker 01

  Yeah, I'm reading through it and I bought the course too.

• 8:17Alex Hormozi?

  Oh, awesome. So, big picture, the, one of the first stories I tell them there is a guy who owns a storage facility. And so, he gave a free month of storage away. So, very similar business to yours. Not saying that you get free month, but same idea. It's like, well, what else do you need to have when you have a storage unit? You need a lock? Oh, you need boxes? Oh, you need insurance? Oh, you need maybe a bigger unit? Right? And so, all of these things pull cash forward. And so, well, not the bigger unit, but the other ones do. And so, same degree, it's like, okay, can we sell insurance on top? Can we sell the move-in services? Can we sell the boxes associated with that? You agree with this?

• 8:55Speaker 01

  Yeah.

• 8:57Alex Hormozi?

  So, I think people will have some, some sort of elasticity. Like, people are very, very sensitive to the monthly fee. Right?

• 9:04Speaker 01

  They are.

• 9:05Alex Hormozi?

  Less, the people are less sensitive to one-time fees, because it's only once.

• 9:09Speaker 01

  Correct.

• 9:10Alex Hormozi?

  So, we just need to create that one-time fee for people. And it'll be even more profitable, obviously, if it's not just a fee, but it's also tied to stuff they already have to get solved. And if they do it through you, then it just feels easier.

• 9:23Speaker 01

  Yeah.

• 9:24Alex Hormozi?

  Does that help?

• 9:25Speaker 01

  Yeah, something else I was thinking about too, is like, furniture. We have it fully furnished, but maybe we could give them like, buy extra furniture. If they want a nice queen tile, or upgrade on their bed, we could offer that to them too. That's something that just popped up. I didn't have a problem about that.

• 9:40Alex Hormozi?

  Yeah, exactly. So, we just look at all the other problems that a customer has, that they're going to pay somebody to solve, when, because you're at a transition point in someone's life. The money's coming out of their pocket, and it's already, and the wall's already open. And if you can, especially because this is such like, a stressful time for many families, if you can just say like, if you can just say, "We'll handle everything. Just pay us this extra fee. We'll make it easy." Uh, many people will just give you that money. And then, I think you would pull forward all your, your cash flow to our customers.

• 10:09Speaker 01

  Awesome. Okay, well, sounds good, Alex.

• 10:11Alex Hormozi?

  Appreciate you, William.

• 10:13Speaker 01

  Yeah.

• 10:14Alex Hormozi?

  All right, have a good one, man. Do we have somebody on here? All right, we got some votes coming in. What's up, man?

• 10:22Speaker 02

  Howdy, how are you?

• 10:23Alex Hormozi?

  Howdy. What's your name?

• 10:25Speaker 02

  My name is JT.

• 10:27Alex Hormozi?

  JT. All right, JT.

• 10:29Speaker 02

  Yes, sir, brother.

• 10:30Alex Hormozi?

  Tell me about your business.

• 10:34Speaker 02

  I run like, a real estate company.

• 10:35Alex Hormozi?

  Okay.

• 10:36Speaker 02

  Called Closer, and it handles the marketing and sales for like, years. Wholesalers and people getting into the business, they can scale faster and earn, learn the process while they earn it, earn money.

• 10:46Alex Hormozi?

  Okay, so you generate appointments and leads for them?

• 10:51Speaker 02

  We generate the leads for them and we send our sales team on the deal. So basically, we are running like the entire front end and the back end. So they're basically running the marketing, but they get to learn while they do the process with us.

• 11:04Alex Hormozi?

  So why, so this genuine question, like, why do you do that versus just like doing wholesaling?

• 11:11Speaker 02

  I do it because it fixes the cash, our cash conversion cycle. Like, we're able to, we're able to fix the, like, the liquidity issue in wholesale because the phase on market is so long. And we're taking it down to where we can, like, become way more profitable as we do this.

• 11:30Alex Hormozi?

  Yeah, okay, um, you could raise money and just do it, side note, but, all right. Okay, so what do you want to have happen? That's not happening.

• 11:44Speaker 02

  When we're on like sales call with people,

• 11:49Speaker 02

  basically, they agree on the price, but a lot of the times, like, they can't afford the first payment or they can't get approved for financing. And I'm like, is that a sales problem? Or is it like a lead problem and should we just collect whatever cash they have or no?

• 12:06Alex Hormozi?

  Well, how are they going to afford to pay for the marketing too if they can't pay for, or is that what you're saying? They can't, they can't afford to pay for the marketing?

• 12:13Speaker 02

  Yeah, so they can't afford to pay for the marketing.

• 12:15Alex Hormozi?

  What's the revenue stick, what's the stick in this business? Like, how, like, do people stay for years doing this with you? Like, what percentage of customers are here 12 months later?

• 12:24Speaker 02

  No, it's mostly not that they're here 12 months later. It's like the onboarding for the LTV is roughly like 35,000 within like 90 days. But over time, like, the only thing they really stay for is like the CRM that they use.

• 12:42Alex Hormozi?

  Okay, so you white label go high level or something?

• 12:45Speaker 02

  Yeah.

• 12:46Alex Hormozi?

  Okay.

• 12:48Alex Hormozi?

  Okay, so the issue is that, like, what's your LTV to CAC right now?

• 12:54Speaker 02

  So, right now, our CAC is roughly, like, 5,000, but we're, we're, um, at 35, like, 35,000-ish LTV.

• 13:05Alex Hormozi?

  Okay, so you're 7 to 1, okay.

• 13:09Alex Hormozi?

  So, I mean, that inherently is okay. So what stops you from doing more of what you're doing?

• 13:17Speaker 02

  Um, nothing's necessarily stopping me. Our close rate is just super low.

• 13:21Alex Hormozi?

  Okay. I would probably just throw lead qualifications on the front end. It'll just, like, decrease the frustration of your team. You'll probably increase your, well, obviously, you'll increase your close rates if you take out the disqualified, but it'll, you'll close more in general because the sales team won't be beat down from hearing no all day.

• 13:38Speaker 02

  Okay.

• 13:38Alex Hormozi?

  I'll tell you this, man, you will make significantly more money by adding qualifications to a funnel. Like, I almost, I have almost never, I'm like, I'm trying to think of a time where me adding qualification friction made me less money. Your metrics will change, so like, your, so not CAC and LTV, but your, LTV might change, but,

• 14:00Alex Hormozi?

  said differently, like, your cost per call, or cost per click, or cost, you know, whatever metric you use there, will probably go up, but your CAC may go down. And your LTV will certainly go up.

• 14:13Speaker 02

  Okay.

• 14:14Alex Hormozi?

  I would just add more qualifications in the process and then do more.

• 14:18Speaker 02

  So I guess that is, I guess that's a fear of mine, would be for the appointment to go up, a cost for appointment to go up, but basically, it should make it more profitable because we're not talking to unqualified people, correct?

• 14:31Alex Hormozi?

  Yes, because, listen, if you let some of these minnows in, right, it's not a good fit for them. It's putting, it's their last dollar. Like, you should not, like, you shouldn't do it ethically anyways. But, like, outside of ethics, because that will, that never convinces anyone if they're making money. It's not good for the business. It's bad for the sales team. It's bad for reputation. And fundamentally, like, when you accept everyone, you ward off people who can actually afford stuff.

• 14:55Speaker 02

  Yeah, yeah. And like, I guess, for the, we, like, like you said, you're big on lead magnets. So, we do provide like, a really in-depth training guide, like, really in-depth, but, the issue there is, the majority of people who come in are not qualified at all. So should I add more qualifications to that, too?

• 15:17Alex Hormozi?

  So, you can add qualif-, what is the lead magnet again?

• 15:21Speaker 02

  The lead magnet is a training, like, it's like, all of our SOPs, like, all of our SOPs, all of our, basically, for our entire company.

• 15:28Alex Hormozi?

  You can, I mean, you can have the SOPs there, whatever, just put, add an extra box that says, like, whatever the qualifications are that are, that you know are required for somebody to be a good customer. So like, for example, at the book launch, people could opt in to show up to the launch. The launch functionally acted as a, as a lead magnet in this scenario. I still ask for people, whether they owned a business, and if they had a business, what revenue level they were at. Because I don't have no need for leads in a CRM who are not business owners above a certain size to get a call from my team. There's no point. It's a waste of their time, it's a waste of ours. They should just use all my free stuff. And so, just add a qualifier on the, on the front end.

• 16:07Speaker 02

  Okay.

• 16:07Alex Hormozi?

  And then only call those leads. And then have the thank you page sort, uh, leads, the best leads to the sales team, and then the worst lead, just send them to an automated thing, that maybe self-liquidate some of the ad spend.

• 16:18Speaker 02

  Okay. So, I, on the qualification question?

• 16:22Alex Hormozi?

  Yeah.

• 16:22Speaker 02

  Would you put, like, something vague? Like, we have, right now, we have a qualification question, like, are you willing to invest in your business?

• 16:28Alex Hormozi?

  No, but that's not a qualification question, dude. That's, that's, uh, like, do you have a pulse and a credit card question? I'm saying, you have to-

• 16:34Speaker 02

  Yeah.

• 16:35Alex Hormozi?

  You need to figure out who your avatar is. Have you read the Lost Chapters book?

• 16:38Speaker 02

  The Lost Chapters book? No, I haven't read that one.

• 16:41Alex Hormozi?

  First chapter of the Lost Chapters book is finding your av-, or your first avatar. All right? The process that it walks through that, in, in the book, in that first chapter is, you need to look at the customers who have spent the most with you and stayed the longest. What are their characteristics? So we look at their demographics, like, who are they? Right? We looked at their quantifiables, like, do they have a certain income level? Do they have a certain amount of kids? Do they have a certain family? Uh, and then I look at geographic, do they live in a certain area? Right? And so when I have those three things put together, then I know that it's like, okay, it's actually conservative, Christian males, you know, 35 plus.

• 17:16Alex Hormozi?

  Who are married is actually my best avatar. It's like, great. So that's what we're going to make in our ads. And your big fear right now is if I make more qualifications, my cost is going to go up. But it's not, dude, because you're going to need to advertise to the right type of customer and you'll get those people to opt in and then you will go but get them to buy more expensive stuff. It's everyone's fear. Everyone's fear is going from general to specific, but when you go specific, you get the right people. Okay. So actionable steps are just like the qualification question and making it specific to the avatar. So in order, it will be determine the avatar by looking at all the customers that you have. You want to look at who they are, what quantifiables they have, geographics, and if you can bonus points for sales process. Did they consume anything else in the sales process?

• 18:01Alex Hormozi?

  They have a different experience than the people who didn't, who aren't worth as much. Once we have that data, we then weave that into the advertising in terms of callouts of who the avatar is. We weave that into the landing pages, weave that into the dropdowns for the questions and the friction that we add in the funnel. We add that into the VSLs. If you have a VSL, I'm sure you do, that that tells them about the process and it begins with pains and the hook of that specific avatar. You do all that stuff, you will for sure convert one.

• 18:29Alex Hormozi?

  Okay. Cool. Thank you, brother. You bet, man. Have a good one, dude. All right. So it looks like, ooh, what does it look like? Let's, let me see if any question. Okay. What you think are the best revenue retention opportunities for an architecture firm? What would it take to get there started from scratch? All right, Emiliano, I'm going to give you, I'm going to give you some, some game. So some businesses like yours, you need to chunk up a level to figure out revenue retention. So what does that mean? So I'll give you an example. So Alan, see the universe knew Alan, the software that we ran. At the beginning, I was trying to sell lead nurture services to brick and mortar businesses, SMBs.

• 19:12Alex Hormozi?

  The problem with lead nurture services, when you have an SMB, is that they have inconsistent lead flow. And so we're, so as soon as they're like, oh, this is great, but how do I get leads, right? And I was like, oh no, this is a whole nother problem. This is a different business. And so then we had the smart idea of like, well, what businesses already have leads? And the answer to that question was businesses already working with agencies. And so then I said, oh, maybe agencies are really our customer. And so that's what we figured out was that agencies would bring customers in and they would churn those people out. But they, let's say chiropractor agency has 10 chiropractors that pay $2,000 a month. I'm sorry, mini itty bitty agency, right? They've got 10 chiropractors paying $2,000 a month. And let's say every month they lose two chiropractors and they gain two chiropractors.

• 19:53Alex Hormozi?

  I can rely on that agency to use my software month over month over month with each of his chiropractor people, even though the logos of the people inside of his little ecosystem will change. But my revenue retention on the, at the agency level was super good. So, why did I tell that story? Because it's an analogy for you, Emiliano, which is that your architecture firm, you're thinking about it at the house level or at the building level, right? If you chunk up a level, which is like, okay, who are the referral partners or who are the people that you do business with on a regular basis? Is it contractors? Is it, who are the people referring you business? And so, once we find those people who, who you're doing business with on a regular basis, we want to demonstrate that we're retaining them rather than the, at the project level.

• 20:38Alex Hormozi?

  So you chunk up and then those become your nodes of revenue. And so you then have your acquisition or your sales motion is going to be geared around, how do I advertise and acquire more of these referral partners? And I know each referral partner is worth X and it costs me Y in order to acquire them and I can retain them significantly more than I can for the individual products or logos that they're bringing on. Does that help, Emiliano? That's how you do it. Okay.

• 21:03Alex Hormozi?

  Next caller. Hello. What's up, man? What's your name?

• 21:09Speaker 01

  My name is Liam. I'm 24. My business is going to do about 6 million in revenue this year. And we do apparel for TV shows on limited time exclusive drops.

• 21:19Alex Hormozi?

  Apparel, okay. So you do, so you partner with a, you partnered with Shark Tank, right? I'm saying hypothetically. So you partnered with a TV show and then you make Shark Tank merch and then you drop, they drop that merch on their show and you deliver.

• 21:33Speaker 01

  We market it ourselves. We drop it through our channel. So it's a collaboration, but it's all through our own channels.

• 21:40Alex Hormozi?

  But you obviously get to use their brand in the advertising and, and then you do some sort of like split on the profits, I'm guessing. Yes?

• 21:48Speaker 01

  Yep.

• 21:48Alex Hormozi?

  Okay. Great. So you're doing 6 million. What's internal revenue? Or rather, what's gross profit and then what's internal revenue? So that's kind of three numbers there.

• 21:56Speaker 01

  Gross profit this year, we're going to be running at about 10 to 15%. And

• 22:01Alex Hormozi?

  Gross?

• 22:02Speaker 01

  About 30%. People wore

• 22:04Alex Hormozi?

  So 6 million dollars is what you made? That's how many shirts were bought, right?

• 22:09Speaker 01

  Yep.

• 22:10Alex Hormozi?

  Okay, six million dollars of shirts are bought. What do you sell a shirt for? What does it cost you fully loaded?

• 22:18Speaker 01

  Fifty dollars for a shirt and it costs about twelve.

• 22:21Alex Hormozi?

  Damn, okay. Okay, so you got thirty-eight on fifty, right, is what is what you're making, right?

• 22:28Speaker 01

  Yep.

• 22:28Alex Hormozi?

  Okay, fantastic.

• 22:31Alex Hormozi?

  Now, so what's that? That's seventy-five percent-ish gross margin, somewhere in there. Okay. So, that's fine. Now, of that thirty-eight dollars, what's the split between you and the TV show?

• 22:44Speaker 01

  Each license is negotiated independently. It can range from five percent to twenty-five percent depending on the size of the IP.

• 22:50Alex Hormozi?

  Oh, so they get five percent. So they would get two and a half dollars per shirt, all the way to getting twelve bucks a shirt?

• 22:59Speaker 01

  Yeah.

• 22:59Alex Hormozi?

  Okay, that's not bad. That's not bad. Okay, this is workable. So I'm just gonna say like midpoint, let's just say midpoint is ten bucks. All right, we'll be aggressive with it. So ten bucks, so you actually got twenty-eight dollars per shirt on a fifty-dollar shirt, call it twenty-five with other shit. So fifty percent is what we're working off of. Okay, so what was net profit?

• 23:22Speaker 01

  About six hundred K.

• 23:24Alex Hormozi?

  Got it, ten percent. All right. So, what's the problem?

• 23:28Speaker 01

  We've completely capped out on our, we do almost exclusively paid traffic on Meta and TikTok. We drive people to a waitlist for the drop, we hype the drop up, and then we do a launch.

• 23:39Alex Hormozi?

  All right.

• 23:42Speaker 01

  And the pricing model, we base it off of what we can acquire a lead for. And the problem is our cash flow becomes super inconsistent because each IP performs wildly differently in terms of how much revenue we generate. And some waitlists will convert at like a twenty-five percent waitlist to purchase ratio, some will convert at five percent. And so we need a more cost-effective way to acquire leads because essentially we're just getting the water at fifty percent.

• 24:10Alex Hormozi?

  Yeah. So I think that the big thing that's actually missing for you is predictive data. So, you being able to say like, you're like, well, they perform wildly differently. Well, the more you do it and the more data you track, the less wild it should be. Does that make sense?

• 24:27Alex Hormozi?

  So if you were to take somebody, I'll give you an example, a simple example. If somebody else were to go launch a book, right? And they have, call it four million YouTube followers, whatever. And I launch a book and I have four million YouTube followers. Why is it that my book is going to sell way more than theirs? Right? You should be able to answer that question quantitatively. And so that'll take a lot of the guesswork and the volatility around which brands you partner with and the power of the negotiation. Because I'm sure there's some deals where they thought their brand was significantly more valuable than it really was. And there's probably other brands, and this is probably even sometimes more often the case, a brand that they don't think is that valuable at all. And in fact, it's actually super valuable in terms of the people who are willing to buy. So thing one is predictive data.

• 25:11Alex Hormozi?

  Thing two, have you considered going to influencers and doing this exact same model?

• 25:18Speaker 01

  We have. The big thing is emotional relevancy to the show or to whatever the IP is. A lot of influencers, they're not doing particularly well for something like that. Where it's like, a really good example is the Nelk Boys with Four Cent, right? Find a commonality with the audience. They have a hierarchy of brand over, they treat themselves like ambassadors. We've looked at it, we've interviewed them, but the numbers just never made sense to us.

• 25:47Alex Hormozi?

  Well, I mean, like, I feel like they should. Because you're taking premium TV shows, which have a lot of times smaller audiences than like some big creators do.

• 25:58Speaker 01

  You're right.

• 25:59Alex Hormozi?

  Mr. Beast can drop a T-shirt and do your entire year's revenue in like a day.

• 26:04Speaker 01

  You can dive deeper into the creator economy, leverage your already existing audience. We don't have to spend so heavily on ads.

• 26:10Alex Hormozi?

  Yeah, and they'll collab it with you. And there's a zillion of them, and a lot of them don't make money.

• 26:18Alex Hormozi?

  And they're not going to be hardcore negotiators. Sorry, go ahead.

• 26:22Speaker 01

  All of the IP that we're collecting are in a specific niche.

• 26:25Alex Hormozi?

  Yeah.

• 26:25Speaker 01

  And as we retain a whole lot of IP, we can renew these releases over and over again.

• 26:31Alex Hormozi?

  Okay.

• 26:31Speaker 01

  And that makes us an acquisition target when we have all these relevant IP.

• 26:36Alex Hormozi?

  You mean just the T-shirts that you're allowed to use and the ads that you can run for them?

• 26:41Speaker 01

  Exactly, because all the TV shows, they're anime TV shows.

• 26:44Alex Hormozi?

  Oh, word. I got it. So you're super niche. So the issue is what? Is the issue that like it's not growing as fast as you want? And I mean, what kind of exit do you want?

• 26:55Speaker 01

  I would like to get positions for like a four to five X EBITDA within two years in like the 10 plus range.

• 27:03Alex Hormozi?

  Well, who wants to? Okay, I'm going to say it back to you. So basically like you want to make like three or four million bucks on a sale?

• 27:09Speaker 01

  Yes.

• 27:10Alex Hormozi?

  Okay. Who would be an acquirer for a business like this? Who's the buyer?

• 27:17Speaker 01

  Big media distribution companies. There's a whole bunch of any moving into westernizing this Japanese IP. There's some pretty big players, multiple billions of dollars in space now.

• 27:28Alex Hormozi?

  Yeah, but if they're.

• 27:29Speaker 01

  Advising a couple of this and all the exclusive IP, exclusive rights.

• 27:35Alex Hormozi?

  Yeah, I have two pieces of relatively kind of maybe bad news. Bad news. Number one is that multi-billion dollar companies don't write four million dollar checks. It's just, it's de minimis, right? It doesn't move the needle. The second issue is that the nature of what you do is not that complicated. I can just have the show and make my own T-shirt. I'm not saying this because I want to blow your balloon up. That's not the, that's not my point. I'm just kidding because I want to, I want to help. So you're all in anime. I mean, I mean, what about anime creators? There's tons of those, even in that niche.

• 28:08Speaker 01

  Yes, this is what we're looking at doing next is building out a really solid investor program.

• 28:12Alex Hormozi?

  Yeah.

• 28:15Alex Hormozi?

  You could build, I think the ambassador program, so if we're talking about high leverage, right, I think the ambassador program is really smart for a couple of reasons. Thing one is that each of the ambassadors themselves, once you, you can, they could go promote each of these other products and then make money, kind of like you build your own functionally, a TikTok shop of t-shirts via ambassadors who are pushing them because they think the t-shirt's sick. That's not that hard of a push and a lot of people would sell that, right? You will then see which ambassadors have the most pull. So you'll get early data. And then when I was talking about early predictive data, you will then be able to say, oh, these, here's, we have a thousand ambassadors of people who are micro and nano creators and maybe mega creators around anime, and we're going to make t-shirts

• 28:56Alex Hormozi?

  for the top hundred of them and do drops so that every week, we do two drops a week for these creators. And they're going to go promote other t-shirts for the premium brands that you were talking about, the IP, throughout the year. But you, but they themselves will do two drops for themselves, which will pull way fucking harder anyways.

• 29:18Speaker 01

  Okay, so to, just to make sure I understand this, it would be partnering with larger creators, doing drops relevant to their audience, building relationship, and then that would also double dip where they would promote for our exclusive IP releases as well. That's actually a really good idea.

• 29:36Alex Hormozi?

  All right. Thanks.

• 29:38Speaker 01

  Yeah. There it is. Yeah, I'm going to own all the creators. All right.

• 29:43Alex Hormozi?

  There you go, brother. Have a good one, man. I'm gonna go chat. Okay, so I am starting a SaaS on property due diligence slash inspection services for buyers interested and serious about buying one or more properties. Should I hire inspectors or operate a platform model? Honestly, dude, I think you'll find out. Like, I think you, like, you'll take a bet, and I started Allen and was like, oh, we're going to build lead nurture for small businesses. This will be a home run. And then I found out that agency owners were actually our best, our best customer. So you'll probably, depending on how different the, I'll say platforms are significantly harder to build. So I think B2B SaaS is a way safer bet. I mean, as a co-founder of school, I can tell you, it is not easy

• 30:24Alex Hormozi?

  to do. And the hardest part is the part that school is already through. But it's the five years of going from, you know, every single person saying, can I white label this? Can I white label this? And you having no real value prop besides like, someday, this will be really valuable when it's a marketplace. But once you turn that corner because you make the product so good, then the marketplace component, if you're staying true to a platform model. But I would, the reason platforms get the multiples they do is because it's so, so expensive and so hard to do.

• 30:55Alex Hormozi?

  I would prefer a B2B SaaS model. If I was, if I was a betting man and it was my life and equals one, you can't live 10 lives or 20 lives. I would probably, but if you're like, I have to be a trillionaire, then if that's the thing, then you gotta go platform.

• 31:08Alex Hormozi?

  Okay. Okay. Actually, I'm gonna answer this other one. Rowdy Adventures. I have a patent that will be pending in eight weeks. What would you recommend to do in preparation for that? I've already been working on finding this cheapest manufacturer to get the price of parts down. All right. So I've got good news and I've got bad news. So patents, believe it or not, don't mean shit unless, guess what? You have a legal budget to defend them. So I have a five-person team, full-time in-house, that all they do is takedowns. Every week, we take down 50, 100, 200-plus accounts. All those scam things where people try and sell my stuff or the impersonator account, like all that stuff that happens.

• 31:48Alex Hormozi?

  Like we have a full legal team that gets them delisted, gets their ad account shut down, gets them removed from social media, gets their Shopify pages down, gets their processes removed. That's a whole process. But that only works if you defend it. And so basically, in the eyes of the law, if you do not defend your patents or your IP, they, they're not that defensible. Also, like the idea, like business is much more ruthless and cutthroat than you think it is. Because like, people will just steal your shit and then say, what are you gonna do? Right? And then it's gonna be a multi, it's a long legal process to prove, how close is it? Is this fair competition? There's a lot of other stuff. So having a patent in and of itself does not in any way guarantee success.

• 32:29Alex Hormozi?

  You're still going to have to market it. The patent has to be around something that truly is core, that no one else can reproduce around the product.

• 32:38Alex Hormozi?

  And so basically, you still gotta start a business. You still gotta make the business make money. And then, when you have some of that money and you start to get successful, that is when the dupes will start flowing in, the duplicates. And then at that point, you need to start allocating a certain amount of capital to continue to defend the IP. I, like, as far as we're concerned, until the business is successful, the patent means nothing. Okay. So, who else we got?

• 33:03Speaker 03

  Hey, Alex.

• 33:04Alex Hormozi?

  Hello, sir.

• 33:06Speaker 03

  Hi, uh, my name is Sam. My business partner and I run a membership site for real estate agents where they basically get daily social media templates, lead magnets, training videos, all this stuff to help them save time and get better at Instagram.

• 33:20Alex Hormozi?

  Okay.

• 33:22Alex Hormozi?

  So it's a membership?

• 33:23Speaker 03

  Yeah, so we do-

• 33:24Alex Hormozi?

  What do you give them on a monthly basis?

• 33:29Speaker 03

  A lot of it is just daily social media templates, so thirty days of content that they can edit, customize to their own personal branding, post on social media, and then there's a library of like little lead magnet things and that they can customize again and use on their Instagram and training videos help them set all up their Instagram, all that stuff.

• 33:47Alex Hormozi?

  But mostly it's gonna be the content templates?

• 33:51Speaker 03

  Yeah, it's a content membership, yeah.

• 33:52Alex Hormozi?

  Okay, got it. Okay, so how many people you got? What do you charge?

• 33:57Speaker 03

  Yeah, so we charge, uh, forty-nine dollars a month.

• 34:00Alex Hormozi?

  Alright.

• 34:00Speaker 03

  We have just under three hundred members.

• 34:02Alex Hormozi?

  Okay.

• 34:04Speaker 03

  And, uh, yeah, I mean, we do just under sort of twenty K a month.

• 34:07Alex Hormozi?

  Yeah.

• 34:08Speaker 03

  And we take home seventy-five, eighty percent of that.

• 34:10Alex Hormozi?

  Cool, got it. So what is the, what's the issue?

• 34:15Speaker 03

  Yeah, so my question is-

• 34:17Alex Hormozi?

  What's churn, real quick?

• 34:18Speaker 03

  How do you decide whether to sort of push-

• 34:19Alex Hormozi?

  What's churn, what's churn?

• 34:20Speaker 03

  Yeah, uh, yeah. The hover's around twelve percent.

• 34:24Alex Hormozi?

  Ooh, monthly?

• 34:27Speaker 03

  Yeah.

• 34:27Alex Hormozi?

  Monthly? Yeet, okay, got it. Do you have any metrics that like after a certain point people continue to stick?

• 34:34Speaker 03

  We've only been in business for just over a year, so it's hard to get that like twelve month kind of stick number, but monthly it's twelve percent.

• 34:43Alex Hormozi?

  Yeah, yeah, well, I'll tell you why this is important. If, let's say it's twelve percent, well, twelve percent is tough because that's like you lose all the customers by the end of the year, almost. Okay, what's sales velocity right now? Meaning monthly sales, units sold?

• 34:55Speaker 03

  Uh, between, you know, fifty a month, forty, fifty a month.

• 34:59Alex Hormozi?

  Fifty a month?

• 35:01Speaker 03

  Yeah.

• 35:02Alex Hormozi?

  Okay, got it.

• 35:04Alex Hormozi?

  Okay, so you're still, you're still growing, but slow.

• 35:09Speaker 03

  Yeah, we're getting to the point where churn is starting to catch up with us.

• 35:12Alex Hormozi?

  Yeah.

• 35:13Speaker 03

  And that kind of- Leads into my question being, you know, how do you kind of decide whether to push or pivot? When there are sort of these structural challenges or at least perceived structural challenges in your market? And you're maybe looking at a different market, a different niche that might be better for your business or for your offer essentially. And then not marketing, but as in not doing it for real estate agents, maybe doing it for a different market.

• 35:39Alex Hormozi?

  Why do you think this other market is going to be different than real estate agents?

• 35:46Speaker 03

  Yeah, so I mean, generally, real estate agents, from our perspective, there is a lot of structural volatility in terms of their income and obviously with SMB, that's, you know, a given, it's probably even worse real estate agents. And they don't make a lot of money, there's not a lot of willingness to pay. And basically what we've seen in our market, there is like a market leader with, you know, over 5,000 members, been doing it for six plus years now, and a couple others with a thousand plus, like we are a late entrant into this market. This is something we started to do just because we thought we might as well pick a proven business model. And we've seen other content memberships in other industries like, you know, accountants, one with like aesthetic nurse practitioners, started at the same time as us, have the same

• 36:29Speaker 03

  Instagram following, we've gone through their funnel and they've like 5X. From, in terms of what we've been able to do growth wise, and we're wondering, trying to figure out why that is essentially.

• 36:38Alex Hormozi?

  Do you have full transparency into their numbers?

• 36:41Speaker 03

  I have full transparency into a few of their, just, you know, the amount of members they've had and the amount of Instagram followers they've had. I've kind of gone through their funnel a little bit. I know that they don't necessarily run a ton of ads, like it's not like they're doing a ton of ad spend, for example.

• 36:54Alex Hormozi?

  Do you know what their churn is and how many members they have?

• 36:59Speaker 03

  I can give you one example of one that has, we have like 50K on Instagram, they have 40K on Instagram, we're kind of friendly with them, and I know they have like 1,800 members.

• 37:09Alex Hormozi?

  Okay.

• 37:09Speaker 03

  And that's, and their sales velocity, from what I can tell is like 100 plus a month, maybe 150, 200 a month.

• 37:17Alex Hormozi?

  Okay, and they started the same time as you?

• 37:20Speaker 03

  Basically, yeah, similar following all that.

• 37:22Alex Hormozi?

  I mean,

• 37:23Speaker 03

  And they have no, they have no big competitors.

• 37:25Alex Hormozi?

  Yeah. Well, I mean, I think going to an underserved marketplace is not a terrible idea. The reason I'm like more okay with this is that you guys are still really early. You know what I mean? Like it's kind of, it's pretty much a brand new business. I do think that like, is this business that you have fixable? Yes. If the market leader, I'll put quotes around that, has 5,000 people. Well, there's like a million Realtors. So there's lots of opportunity that's still there. Like no one really owns the market. So those are kind of the plus sides. I'm going to also bet that like, to your point, it might not be that Realtor, like Realtors, of course, if you take them in aggregate are, have volatility. But if you look at the top 5% of Realtors, like they, they make, they're full time, right?

• 38:07Alex Hormozi?

  If you have a lot of part timers who are in there, uh, then you have huge amounts of churn because they're not even, they're barely even business owners, right? So you could probably fix.

• 38:15Speaker 03

  This is our value prop though.

• 38:17Alex Hormozi?

  Yeah. Okay.

• 38:18Speaker 03

  Yeah. Just in terms of our value prop, I mean, if you're a top 1% agent, you probably have some sort of social media manager or media team or a low cost alternative to that essentially. So it's kind of just a feature, not a bug, I guess, of our business.

• 38:31Alex Hormozi?

  Okay. Zooming all the way out. What do you want to happen?

• 38:35Alex Hormozi?

  Do you want to sell this thing to make more money?

• 38:39Speaker 03

  Short term, make more money for sure. That's what we're focused on.

• 38:41Alex Hormozi?

  Right. So the thing is, is that you're selling 50 a month, which is actually like, really not a lot from a sales velocity perspective, even the size of that market. And that like, that is the problem, but like you could sell, like if you have a million person marketplace, it's like, we could be selling a thousand of these a month, right? And then the churn, even though it's 12%, it's like, well, we just know that we're going to get eight months on average, times 50 bucks. So we're going to make $400 per customer as long as CAC is, you know, a hundred dollars or less. Cool. We have high margins. We're good to go. And you just take the money and then you do whatever you're going to, you're going to do. That's like short term, you could do that. And I think targeting people who've done a sale within the last 30 days or something like that. Maybe they're not the 1%, but they're like quote, on the way. They're quote reinvesting their business and if they just had a sale in the last 30 days, they have some cash.

• 39:27Alex Hormozi?

  There's some elements here that you can do. I also like, are you doing a big, uh, do you do a big promotion for getting annuals?

• 39:32Speaker 03

  Uh, we, yeah, we try our best. We do two months off. We're starting to add other bonuses in terms of the annual as well, to try to push more people towards.

• 39:40Alex Hormozi?

  Right now, LTV is eight months for you. So you might as well give four and pull the cash flow forward since it's equivalent and churn on those customers will be lower.

• 39:48Speaker 03

  Right.

• 39:48Alex Hormozi?

  Cool. All right. So that's thing one. Now, it's the larger question of like, should you go after a bluer, a bluer ocean market? And in so doing, like, does that mean you're going to start another Instagram page and like, build that whole thing up and do that game?

• 40:02Speaker 03

  Essentially, that's the thing that we're relatively best at, the thing we've invested a lot of time into. It's something that I think we can do, but it's obviously going to take time and time away from our everything else we do.

• 40:14Alex Hormozi?

  Okay, I'll tell you what I want. I don't think it's a bad idea. I'll say that. I don't think it's a bad idea. Like, normally, I just say, like, no, stick with your existing thing. I do think you should stick with this thing a little longer, and I'll tell you why. I think that it would behoove you to learn which types of realtors churn versus the ones that don't. And there's probably two or three characteristics that separate the people who do versus the ones that don't. Number one. Number two, I do think you need to make a better incentive to get people to prepay for annual. Number three, is there a version of this business that, like, on top of this, you sell some sort of maybe $500 a month thing as an upsell, or a $1,000 a month thing that does have some sort of managed element to it, that you have lots of AI and automation built into it so that you can do it with high gross margins?

• 40:57Speaker 03

  Right. Yeah, definitely something we've thought about, just adding, adding upsells, adding different offers.

• 41:00Alex Hormozi?

  Yeah, I like, I can appreciate the simplicity of the business, believe me. I just feel like you have a lot more to learn from this before doing the next thing, rather than just saying, like, oh, it's the avatar. It's just because, like, that's the obvious thing that everyone says. And the market leader, and I'll quote here, has 5,000 people. It's not that many.

• 41:18Speaker 03

  No, and I've tried not to just say the avatar to the best of my abilities, you know what I mean? It seems like, yeah, it's easy way.

• 41:24Alex Hormozi?

  So that's what I would do. All right. So I would try to learn more about the customers, number one. Number two, I'd have the annual prepay thing. Number three, I would start running ads and see what your cost of acquisition is with ads. And having that strong prepayment thing, I would also have a self-liquidating offer on the thank you page that could be even higher than just the annual, right? Because that could just improve the funnel metrics overall. Maybe like a two or three.

• 41:50Alex Hormozi?

  Yeah, and I'll say higher ticket with quotes here. I'm sorry, I'm sorry, like 197 to 397, somewhere in there, which might be like, uh, we have all these accounts. We'll tell you, we're going to give you the 100 best performing pieces of real estate content over the last year. I would buy that. All right. That's what I would do. I think you need to learn this game better and then you'll have more perspective and you might just break through and then just become the market leader.

• 42:10Speaker 03

  Yeah. Okay. Thank you. Really appreciate everything you do.

• 42:12Alex Hormozi?

  Appreciate you too. Okay.

• 42:16Alex Hormozi?

  Mr. Mosey. That's Mr. Mosey to you. Uh, as a video editor who's facing client acquisition problems, I get scared thinking of AI and if I even have a scope in the future. Bruh.

• 42:29Alex Hormozi?

  Why would you be scared of AI when AI makes your job 100 times easier to scale? Like,

• 42:36Alex Hormozi?

  for the short to medium term, there is tremendous leverage, like the, everyone knows, quote, knows that AI is going to come for everyone's job. Okay. Internet is going to disrupt every industry. Okay. And it has, but guess what? There's also businesses that still don't operate on the internet. So use fax machines. So like, it's still going to follow an adoption curve of early adopters all the way to laggards and some people will never adopt it at all. And those businesses can still make money. Real talk. Some people use fax machines, still make money. Some people only do in-person business and only use, you know, paper and clipboard, still make money. And so I wouldn't fear it. You always want to harness it because as long as humans can compete against humans with tools, that's how it's always been for the dawn of mankind.

• 43:19Alex Hormozi?

  As soon as it's AI versus human, AI will win. And so, but as far as I'm concerned right now, use the AI to get as much leverage as you can. Maybe you could 100x your scale using technology rather than fearing it. Last caller.

• 43:35Alex Hormozi?

  Hello, senor or señorita.

• 43:37Speaker 01

  Oh, can you hear me?

• 43:38Alex Hormozi?

  That's a senor. Hello. Talk to me about the business.

• 43:41Speaker 01

  So I do robotics, cutting candy machines, essentially. That's our main product.

• 43:46Alex Hormozi?

  Robotics and what?

• 43:47Speaker 01

  Two different people.

• 43:49Alex Hormozi?

  Hold on.

• 43:49Speaker 01

  Robotic cutting candy machines.

• 43:51Alex Hormozi?

  Robotic, cutting and canning machines?

• 43:55Speaker 01

  No robotic cotton candy like

• 43:57Alex Hormozi?

  Cotton candy. Robo cotton candy. Got it. All right.

• 44:04Speaker 01

  Yes, you can put it like that.

• 44:06Alex Hormozi?

  Okay.

• 44:06Speaker 01

  So we have too many business we sell to. We have entrepreneurs who buy our machine as an investment and put them in locations. And then we have actual businesses who we do one of two things with. We place it there for free, give them a percent of sales, or they can buy it for their business. Now, we're at a point right now where we have a bunch of entrepreneurs, too many to count, who want to buy a machine, but they don't have enough locations to put them at. So what we're trying to figure out is we're trying to figure out the best way to get locations.

• 44:34Alex Hormozi?

  I love this business. This is cool.

• 44:35Speaker 01

  Look too well, and we're trying to basically build an outbound funnel.

• 44:38Alex Hormozi?

  Dude, this is a cool business. I like this business. Okay. So give me, give me some, give me some cotton candy money. Give me some cotton candy money. What, what is that? Obviously, it depends on the location, foot traffic, blah, blah, blah. But what does the average cotton candy, robo cotton candy machine make? I've been waiting all day for a call like this. Go ahead.

• 44:56Speaker 01

  At a trampoline park, it's not amazing. It's about a thousand bucks a month. But I've had a higher tier venue, so think like museums, museum parks, water parks. We have machines that are doing ten to fifteen thousand a month.

• 45:08Alex Hormozi?

  Okay, but average is a thousand?

• 45:10Speaker 01

  I would say average is about three or four thousand.

• 45:12Alex Hormozi?

  Oh, okay. Average or median?

• 45:16Speaker 01

  Average.

• 45:17Alex Hormozi?

  Okay.

• 45:17Speaker 01

  Median, median is probably about that range, but there's a lot of outliers.

• 45:20Alex Hormozi?

  Okay, okay. Cool. Three to four thousand dollars a month. All right. I can rock with that. Four grand a month, making a thousand a week selling robo cotton candy. Okay.

• 45:29Speaker 01

  Yeah.

• 45:29Alex Hormozi?

  So can you supply all these machines? Do these people want to buy them?

• 45:35Speaker 01

  Yes.

• 45:36Alex Hormozi?

  Okay, so you have the supply. All right, so then what again is the constraint here?

• 45:40Speaker 01

  So the constraint is getting enough businesses to want for us to put the machine. We have entrepreneurs who want to buy it, but they don't want to buy it unless they have a location. So we need to find locations.

• 45:50Alex Hormozi?

  They need to find the location. They need to find the location.

• 45:53Speaker 01

  So that's what you've been doing, but that's the main constraint. If we could find them locations, A, we could charge for it, and then B, maybe you just take it ourselves if it's a good location.

• 46:01Alex Hormozi?

  Well, that's what I'm saying. It's like if they, like the value of the entrepreneur is that they front capital and work.

• 46:09Alex Hormozi?

  If you just find the location, then you should just own the location, right? Like, why bother having them there? It's like, why split it?

• 46:16Speaker 01

  Usually, we're looking for locations in their areas because it's a servicing thing, right? Like, I don't want to have to hire a new guy in Connecticut for one location, right?

• 46:25Alex Hormozi?

  To service the robo cotton candy machine?

• 46:27Speaker 01

  I'd rather give that to somebody else. Yeah, it takes a lot of service.

• 46:31Alex Hormozi?

  Okay, fine.

• 46:32Speaker 01

  And what we do actually is we take a percent of revenue that their machine makes on the day's service, so that's the second line of business.

• 46:37Alex Hormozi?

  Okay, got it.

• 46:38Speaker 01

  Either way, we make them.

• 46:38Alex Hormozi?

  I love this business, dude. Okay, cool. So, you just need to go generate leads for businesses that want to make money for no dollars down? And you're having trouble with that?

• 46:48Speaker 01

  Yeah, same here now.

• 46:50Alex Hormozi?

  How are you advertising?

• 46:52Speaker 01

  Okay, we tried cold ads, like LinkedIn didn't work, Meta didn't work. The only thing we've really, I've seen success with is calling the businesses or emailing them.

• 47:03Alex Hormozi?

  Okay, alright. Okay, so emailing is working. I'm not even gonna touch the first statement that you said, because I just want to light my hair on fire. Okay, I'm gonna go off for a second, then we're gonna circle back to this email thing. For everyone, if you run meta ads, and it didn't work, it doesn't mean that meta ads don't work for your thing. It means that your meta ads and your conversion process didn't work. Not that meta ads don't work. Okay, rant over. Back to you. Emailing people and then asking them if they want free money has gotten response rates. Alright, so what are the metrics of our outbound funnel for our robo cotton candy business?

• 47:40Speaker 01

  What's this if you're interested in?

• 47:42Alex Hormozi?

  Walk me through the funnel.

• 47:44Speaker 01

  I don't know, a hundred emails, we'll get about two to three to respond, and out of that, honestly, most will close, because it's a really easy thing to sell.

• 47:52Alex Hormozi?

  Okay, you send a hundred emails, and you get two to three responses, and you'll close basically anyone who responds. So, let's just say, let's get really conservative here and say that you close one out of a hundred, hundred emails.

• 48:04Speaker 01

  Yeah, sure.

• 48:05Alex Hormozi?

  Okay, great. So, one out of a hundred emails, okay, and what's the cost of a machine?

• 48:09Speaker 01

  About fifteen thousand. But again, the night of the show, we don't have any funding.

• 48:13Alex Hormozi?

  Fifteen thousand? Okay, what do you make on a fifteen thousand dollar machine, upfront?

• 48:19Alex Hormozi?

  All right. So then what stops you from sending 10,000 emails a day?

• 48:26Speaker 01

  One of the things I'm working on, working on doing that and opening up cold calling.

• 48:31Alex Hormozi?

  And building a cold calling business side. Is that what you said?

• 48:35Speaker 01

  Yeah, exactly. Those are the two that that work the best.

• 48:39Alex Hormozi?

  Yeah. I mean, like, this is a great business. How can I help?

• 48:45Alex Hormozi?

  You're like, I send 100 emails, which takes two seconds, and I make $7,500.

• 48:51Speaker 01

  Yeah.

• 48:53Speaker 01

  That is, you know, something that's a lot easier. So my main focus has been for the past couple of weeks has been the cold calling aspect. How do you bring people on? How do you train them to do this? I watched a video last night you made. It was like an hour long presentation about like BDRs to like the ratio of those people to salespeople. You're kind of like just walking through like a setup you would have for something like this. Cause right now, salespeople control the entire funnel. They find the lead, they contact them. And it's messy. There's not enough things in the pipeline because people are busy closing deals essentially.

• 49:25Alex Hormozi?

  Everything's good, man. That you just have it. You have a process that works and you haven't scaled it up yet. I mean, the returns on this are stupid.

• 49:35Speaker 01

  They're amazing. It's ridiculous.

• 49:37Alex Hormozi?

  So like you're winning. It's like you gotta hire some headcount. Okay.

• 49:42Alex Hormozi?

  It's like every SDR can probably bring like, I mean, my God, dude. I mean, this is absurd. I didn't even know. I didn't even know where to start. But it's like, it's, I mean, we just have to, like, you have to warm up domains. You have to have multiple domains. We have to send, we have to get to 1,000 emails a day. We're going to inbound 20 ish qualified leads. Those 25 qualified leads are going to talk to one setter. And you have one close, like, you don't need, like, you don't even need to have an army to to make this thing make crazy money. Let's say you had a team of four setters, one closer from this model. Like four setters, Jesus, four setters, you could get to 10,000 emails a day. So you get 100 leads a day.

• 50:23Speaker 01

  I'm glad you said that. So I think our problem is it's the opposite. We have four closers and we actually don't even have a single setter.

• 50:29Alex Hormozi?

  Well, then they gotta work their leads.

• 50:31Speaker 01

  Yeah. They hunt their own food to the street is what we said.

• 50:33Alex Hormozi?

  No, but I'm saying like you, you need to basically, let me say it this way. They have to hunt their leads. You can hand them some leads that you generate from email outbound.

• 50:44Alex Hormozi?

  And do it as a round robin, first come, first served, first person who grabs it as soon as you put it in.

• 50:49Speaker 01

  So would you hire someone specifically for outbound for email and call the same person? Like, how would you go about growing that, like the pipeline itself at the very beginning?

• 50:58Alex Hormozi?

  Well, the thing is, is that right now, given the site, like if the close rate on these deals is already so high, you could have the closers just work these leads. So basically, everything that's email inbound, just hand them straight to a closer and boom, they close the deal, right? That's all it is. Now, they still have to work their phones and go get deals for themselves, and that's fine. Like, our closers still do two hours outbound every day because it keeps the short sharp and it keeps them appreciating the leads that we send them.

• 51:24Speaker 01

  Interesting, okay.

• 51:25Alex Hormozi?

  Now, SDRs, though, dude, I mean, you could get a list of just business owners, work that. And there's also, I mean, right now, there's, the AI dialers are getting exceptionally good, especially for this type of thing. But you could even do this old school. And so, like, fundamentally, either you're going to install SDR team, or you can have an AI SDR team. You have so much opportunity, you have four sales guys, I would, like, my immediate next action, because I'm only going to give you one, is that I would go from 100 emails to, I would say, I would go to 5,000 emails a day instead of 100. That's what I would focus on. Like, all my focus is, how do we go from 100 to 5,000 emails a day?

• 52:03Speaker 01

  Would you do it, or would you have them?

• 52:04Alex Hormozi?

  No, I would do it. You can automate most of this stuff. You don't need them to do it. It can come from their account, but they're not doing it.

• 52:10Alex Hormozi?

  That's it. You literally need high-level email automation with some AI personalization on the front end, warm up the domains, set up multiple names, one for each guy, probably have backups as well, to send the emails to them. Each guy gets 10-ish plus leads a day from these emails, closes six, and you're at, dude, you're at, I don't know, a lot.

• 52:32Speaker 01

  Okay, copy that. I appreciate it.

• 52:34Alex Hormozi?

  All right. That was our Mozy Hotline. So, appreciate you all. Peace and blessings be upon you. Rock and roll. Provide value. And, uh, don't break the law. Bye.