Throwback: How I Made My First Million (In Profit) | Ep 380

Wanna scale your business? Click here. 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. 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?

  Welcome back to the game. Today, I talk about how I made my first million. And the big difference was focus, honestly. There was a clear transition point in my life where I went from doing business, and I'd been doing this for years, and becoming a, I mean, crazy as any of those, but a millionaire. It seems so cringe to say it. I think even saying cringe is cringe now. I think it's like old people's stuff now. Anyways, how I made my first million, and there were significant changes in my behavior. And this podcast zooms in on that exact moment and the shift in behavior, and then the resulting outcome. And I think you'll probably be able to take one, two, maybe more, things from this episode that could potentially help you out. I want to talk to you about how I made my first million dollars in profit.

• 0:44Alex Hormozi?

  Mind you, the reason I'm so big on profit rather than revenue is that at that point, I had already made, you know, I was already making a couple million dollars a year between all the different things that I was doing, but I was taking home basically nothing. Because I was so spread thin, I wasn't paying attention to profit. I was just looking at revenue, trying to beef myself up and feel status, rather than thinking about what I was actually taking home. And I told you in a different video how I got in a head-on collision in a DUI at 60 miles an hour on the highway and walked away from it. And that was kind of the catalyst that ended up changing my life in a lot of ways. Mostly because I decided to confront decisions that I'd been putting off and make hard calls that I didn't want to make to force myself to focus on one thing. And so what I want to do in this video is talk to you about the result of that decision

• 1:27Alex Hormozi?

  and what kind of happened and transpired in the next six to 12 months, which is anything but a Cinderella story. I made the calls. I went all in on gym launch. I basically fire sold my other businesses. And just as a quick tangent on that, like, a lot of times, I think the great thing that we have is sitting right in front of us after we let go of the things that are holding us down. I'm a big believer in the theory of constraint, which is, you know, a system will grow to, up to its, basically its bottleneck, right? And then until you relieve that, like, systems will grow as long as they're not constrained. And so most of us are constrained in many ways, and we just do not recognize them, which is why we have things called limiting beliefs. It is a constraint, right? And for me, in a very real way, I had constraints in terms of all the different things that I was allocating.

• 2:10Alex Hormozi?

  My attention to I had, you know, I think literally like nine or 10 business businesses. I'll use quotes here that I was trying to run at the same time and I was spread so thin that I could barely allocate anything and I was working every hour of the day and I was drinking half a bottle of Johnnie Walker at night. So I'd just go to sleep. And so anyways, I got in the head on collision. I decided to make the next, the next move, which was going all in on gym launch. And this is the beginning of yet another hard road ahead. And so at this time, for those of you don't know, I started flying around and doing done for you gym launches. And so what that was, was basically Laila and I would go and do a gym turnaround. I didn't like to use that word because I didn't think gym owners liked it. I was originally going to call it gym rescue, but no one wants to be rescued. So I called it gym launch and everyone was okay with that name. We would fly out to brick

• 2:52Alex Hormozi?

  and mortar facilities. We'd sit at the front desk. I would spend my own money on, on, on everything. So the offer was pretty simple. I said, I would fill your gym in 30 days for free. That was the offer. And I was like, I'll spend my own money on the ads. I'll spend my own money on the hotels, the food, the everything. And the deal is I just get to keep the upfront cash that I collect and then everything afterwards that's contract value, you get to keep. It was a pretty compelling offer, right? They didn't have to do anything, right? They would just say yes, and then I would show up. I think I'd ask them for $500 to reserve the date just to make sure that they wouldn't like not be there. But I made it a refundable deposit. But anyways, I would fly out and we would spend all the money in marketing and we would sell on average when Laila and I would go, we'd sell on average about 200 people in 21 days. So we'd average about 10 sales a

• 3:35Alex Hormozi?

  day. And then we would take, you know, then we'd fly to the next one. This is kind of what we had been doing in 2016 and I was doing this while also having six gyms and two agencies and, and, and all these other things that were going on and I was spread wildly too thin. And that's when I got in the DUI and then decided to end everything except for gym launch. We ended up basically, I had to shut, I had to, I sold five of the six gyms. I shut down the two agencies and then I had one gym that was left over. And I put the money from the sale of those other businesses, which was not a lot, into kind of the last facility. The partner that I had at that facility ended up feeling like I had been taking distributions somehow from the business, which I hadn't. And then he

• 4:18Alex Hormozi?

  took what he believed was rightful compensation for him not being involved in that gym anyways. Basically took the rest of the money out of the account. And so I basically was left with nothing. So I was truly at this, this, you know, rock bottom moment of just got into DUI. I just got rid of all my gyms. I put all the money from those gyms into this last facility. That money got taken. And I then decided to close that one gym down. And then when I did that, I couldn't sell anymore at that facility to generate cash flow because I wanted to close it down. I didn't want to be involved in that gym anymore. And so I basically stomached rent and payroll out of there with no new cash flow coming in. And I watched my bank

• 5:00Alex Hormozi?

  account basically go from some money to no money. And so at the end of that, we shut the gym down. I got tons of refunds and things like that that ended up happening afterwards because people are weird when you, when you shut a business down. So heads up. And so we just kept, but the coach that I had at the time was just like, just write the checks, do right by everyone, and you'll be able to, you know, escape this thing unscathed emotionally. And more or less, I did. I was able, like, that was some of the best advice I ever got. Like, I just, I didn't try and pursue anything with the partner. I just wrote the checks for all the customers who, even if, even if we had fulfilled the services, I just wrote the checks. And I actually didn't. Leila wrote the checks

• 5:40Alex Hormozi?

  because I was, I was so like, destroyed by this entire decision, you know, process. But anyways, I was completely, you know, clean slate at that point. I think all in all, I had $23,000 left over at that point. And so after, after selling six businesses and all this stuff, I had like, nothing left. And this was hard for me because I just spent four years building, you know, six facilities and all that stuff. And I almost had nothing to show for it. And that was one of the biggest lessons that I've had is that like, you have all these skills and experiences and character traits that you develop to show for it. Like, the entrepreneurial journey is one that improves you, not anything else. And so that's why I'm such a big believer in that stuff. Because like, I had these things, these assets that I did not value. And what's crazy is that

• 6:20Alex Hormozi?

  in the next, you know, 30 days or so, we did a hundred something thousand in sales. And so I was like, oh, wow, we, we can do this. And so Anywho, actually, I think what ended up happening is I had almost no money and then we did a launch and then I, after all the cost and everything, I think I had twenty something thousand in money for me. The next month, Leila and I said we were just focusing purely on this business. She told all of her friends from high school to quit their jobs, right? So she had six friends from high school that all were doing MLM, Shake Mix stuff. And she said, hey, you know, you should quit that and start selling this stuff. We can make a hundred bucks a pop instead of, you know, making five dollars on Shake Mix. And they were all like, awesome, let's do it. In between month between, I think it was like November-ish going into January, which

• 7:05Alex Hormozi?

  is when we wanted to slate the six gyms that we were going to launch at the same time, which of course makes sense, right? Why go from one to two when you could go from one to six? Because it's a brilliant idea of Alex's, right? And so we had one month in between where I was going to go launch a gym with Leila. We were going to do like a hundred grandish and then I was going to be able to, that was kind of going to be the restart money, right? So here's what happens next. I get a text from a guy and he's like, hey, my brother lives in the same city as where you're starting your new gym. And I was like, or not starting, doing a launch. I was like, okay. And he's like, yeah, he's a salesman. He really needs a job. He's got, he's got a baby and he's got another one on the way and it might be a good fit. And so anyways, I knew I needed to take a month to kind of put all the resources together to start doing the launches at six at a time and training the, those sales guys and everything.

• 7:49Alex Hormozi?

  So I was like, okay, that might, might work because then I don't have to spend all day selling. And so anyways, I trained him and he crushed it. In the next thirty days, he did, I think a hundred and twenty thousand in sales in December, which is like, A, a hard month to do it in and B, it was a great first, you know, launch for somebody who's new, which also kind of proved the model to me because I had done it, Leila had done it, but we never had someone else who wasn't like super tied to me doing it. Obviously Leila was more invested than just, you know, just an employee, right? At the time. And so it was awesome. So I was like super excited. I was like sick, this hundred grand is going to be the launch money for the next thing. This will be great. And so at this point, Leila says, this guy's a winner. I'm going to take him home to meet my family, which is hilarious because I was not a winner at that time.

• 8:33Alex Hormozi?

  And so anyways, I'm at her, at her family's house. Christmas Eve and we had been selling for three weeks at this point. So we had, you know, seventy, eighty thousand in sales at this point. And what was weird was I was running all the, the money through just my gym processor because I still, you know, maintain the processing, uh, like my POS. And, um, and so anyways, I always got deposits on Tuesdays and I was like, huh, this is weird. We haven't gotten a deposit since like, I didn't get a deposit last Tuesday. And I was like, okay, that's odd. And I called them and they're like, hey, you know, uh, I gave it like three or four days because I was like, you know, maybe it's delayed or something. And it had been a holiday because it was in the holiday season, whatever. And so, um, the deposit's supposed to hit. It doesn't. I wait some days, keep checking, doesn't hit. I called them. They say, hey, you're in an annual review. Uh, it's standard, nothing to worry about. And I was like,

• 9:18Alex Hormozi?

  that's weird. I've been with you guys for five years. I've never had an annual review. Interesting. And then waited a couple of days, called again, was like, hey, man, like, we're really gonna need these funds. Like, I need you to deposit these. Um, and they're like, yeah, yeah, yeah. It's, we're, we're, we're just working through some final things, blah, blah, blah. I was like, all right. And so Christmas Eve, uh, I call them and, uh, we're supposed to launch six gyms starting on the 26th. So two days later. I called the guys up and I was like, I'm not getting off the phone until you send me the money. Like, I'm not, like, I need, there's a hundred grand that's sitting there. Like, I need that money. The guy was like, sorry, you know, we're seeing some irregular activity, uh, in your account. And this is because we had written all these refund checks for, for, uh, clients when I was closing down the, the gym, the, the last gym that I had. So there's been some irregular activity. This isn't the way

• 10:03Alex Hormozi?

  that, um, you know, you're not, you, it seems like you have a virtual business now. That's not what this is intended for. This is supposed to be for a single brick and mortar location. So we're gonna hold on to all the funds for six months and I, I lost, I lost it. Um, and for those of you don't know me, when I lose it, I don't actually get like explosive. I just get incredibly cold and very mean. And so I probably said some of the meanest thing, like I didn't cuss. I was just like, I destroyed the person's character that I was talking to on the phone, like that person questioned like why they were alive. And so anyways, I got off the phone and, uh, Leila and I's parents are supposed to go to the movies because it's, it's, it's Christmas Eve and her dad was like, you know, he seems a little stressed.

• 10:44Alex Hormozi?

  She's like, is he always this way? And, um, and of course I was a little bit stressed at that time. Um, and so here's what was crazy is that as we're going to the movie theaters, I'm just like completely numb. I just was like, I feel dead on the inside. And so we go to the theaters, the movie's playing in front of me. I'm not even watching the movie. Leila holds my hand and she's like, what's going on? I was like, I'll tell you later. Um, she takes my pulse, my resting pulse is like a hundred and twenty in a dark movie theater at age twenty seven. Um, I was stressed out of my mind. And so we left the movies, um, and I told her, I was like, the money's not coming. And she was like, what do you mean? And I was like, they're keeping it. And she's like, can they do that? I was like, apparently. Like, this was the first time I'd even known this, that a processor can hold money.

• 11:26Alex Hormozi?

  And so anyways, I got home, I still owed the salesman from the last month who'd done that huge launch, like this, this, all these sales that had happened, somebody had sold them, right? But I didn't collect the money from it. And so I owed a $22,000 commission check and I had $23,000 left. And it was on money that I never received. And so, um, in, in congruence with the, the lesson that I had learned from, you know, the, the clean exit of all these other things, which was like, just do right by everyone and then you won't have any emotional scars that you'll carry with you. And so I wrote the check, um, actually I wired it for 22,000 and I had a thousand dollars left. Um, and that's when we got home and I told Leila, you know, everything that I had done. Um, I was like, I have a thousand dollars left. And we were supposed to launch, she had told her six friends to quit their jobs.

• 12:10Alex Hormozi?

  Um, and we were going to start launching gyms two days later on the 26th. Um, and I was like, I have a thousand dollars and I have a credit card that has a hundred thousand dollar limit. I was like, I will do this. I was like, but this could go horribly wrong. So you don't have to stay with me if you don't want to. And, um, that was like, this was the moment for me that I, that I knew I was going to marry Leila. And she said, I would sleep with you in Erbridge if it came to that. She's like, we'll get through it. And that was when I was just like, I wanted to like, you know, I would, I would have been teary, but I was so emotionally numb at this point that I just wanted to just like, keep moving forward and keep, keep, keep getting through it. And so anyways, 48 hours later, I make all the ads, I set up all the campaigns, all the funnels,

• 12:52Alex Hormozi?

  all the everythings. And I remember turning the campaigns on for all the six locations that we're gonna do. It was like off to on, off to on, off to on, off to on. And I remember I was sweating. I was literally sweating when this was happening because I just felt such dread. I was like, this could literally just ruin me. Like, right now, I have no money, but I'm not in debt. And I'm gonna be going in debt at a rate of $3,300 per day of money that I do not have. And so anyways, I turned it on and the six guys were at the locations. And it was $3,300 a day because I was paying for hotel, airfare, food, car, ad spend, and commissions every single day for six guys. And I had, remember, I had $1,000, right? And so it was all coming out of a credit

• 13:34Alex Hormozi?

  card. And the next 30 days, and we ended up getting canceled by the processor, right? I told you this at the beginning of the story. So I started all this, and I had no way to process money. So these guys are getting leads, they're making calls, they're closing deals, and I can't process the money. All right? And so, so we're sitting there, right? And, and, and these contracts are just coming in, right? And we had them scan them. So we had this mobile app, and we had this central Dropbox, which of course is not PCI compliant. I had no idea what PCI compliance was. And so we had this one lady that we used to work at my job that I was paying part-time to process this. Mind you, I didn't understand what like, how much work this was, because we were

• 14:15Alex Hormozi?

  doing like 50 sales a day, right? Between these locations at like 500 bucks a pop. And I was paying someone for part-time, four hours a day of contract work, which was just insane. It was like, it was probably two people's worth of work, and I was paying somebody part-time. It ended up, that ended up blowing up because she couldn't do that and her full-time job. So, and, and we didn't even have a way to process the money anyways, right? And so anyways, we're, I'm calling everybody I know to try and figure, I was like, hey, can you process this? And then you can keep 10% and just send me the rest of the money. And people were like, I don't know, man, like, I don't know if I want to do that. And so no one would process the money for me. And so I called, you know, every person I knew, and then I finally got in touch with a guy.

• 14:56Alex Hormozi?

  Alex Roy at the time who specialized in like high risk processing, which is basically the category I was in at that time. And he said, I can get you set up. And I was like, okay, cool. He said, but given the record that you have right now, because you just refunded all those, all those people at the last location. He's like, they're going to want a reserve, which means they keep a certain percentage no matter what. And they're going to put a limit on how much you can, you can, you can charge. And I was like, okay, cool. He said, they'll give you a $50,000 limit. And I was like, dude, I need like four times that. And he was like, sorry, man, that's what I can get you. And so the last week of January, all right. So we were doing, you know, we're doing five, six, you know, thousand a day in sales, maybe more than that. And I had no way of processing it, right? And the last week I get

• 15:37Alex Hormozi?

  this processor for $50,000 and I run, I run $50,000 in a day, right? And he's like, okay, here's the good news is that it's per month. So it was the end of, he's like, so this week you can do 50 and the next week you can do 50. And then I'll see if I can get more lined up, more processors at 50K to allow you to start processing for them. And I was like, okay, fine.

• 15:57Alex Hormozi?

  Hey guys, love that you're listening to the podcast. If you ever want to have the video version of this, which usually has more effects, more visuals, more graphs, you know, drawn out stuff, sometimes it can help hit the brain centers in different ways. You can check out my YouTube channel. It's absolutely free. Go check that out if that's what you are into. And if not, keep enjoying the show.

• 16:17Alex Hormozi?

  So next week we do 50 on that same processor. And then we set up another one and another one, another one. And I was able to like, catch this, this falling plane as it's going. And we ended up somehow, I think we ended up processing 100 grand, actually, that first month. I think he got two people, he got somebody like the last day of the month and I processed another 100. Sorry, another 50 to get 100 for that first month. And then the next month I had three processors. So I was able to process 150 and things actually started working out, right? So, you know, we did 100,000, which basically just covered my credit card bill, which is doing 3300 a day, right? So I just boom, I'm back to zero again. But at least I like had a way of getting out of this thing, right? So the next month,

• 16:57Alex Hormozi?

  I think we did 150 or 180. I have the chart in my book, 100 million dollar offers. I can't remember what it was, but it was somewhere in there. And so I processed that February and we actually had a profit that month. So I was like, holy cow, like we, I think we made like 30 or 40 grand. And I was like, oh my God, I think we might, we might get out of this, right? But wait, there's more, there's more to the story. It gets worse. And so I think we're, I think I'm in the, in the home stretch, right? And so then March rolls around, alright, so at this point, people that we had sold in January, uh, we, we were selling six week weight loss programs at local gyms. All of a sudden, I see this massive hit on the bank account for a hundred grand. And I was like, whoa, what's going on? What happened?

• 17:40Alex Hormozi?

  And it turned out that two of the facilities that we had launched in January, um, and this is now at end of February, beginning of March, um, they told, um, a number of their, uh, clients, hey, if you refund, uh, you can just sign up through me, uh, and I'll, I'll do it for less.

• 18:01Alex Hormozi?

  And so we had already paid for the airfare, the flights, hotels, commissions, ad spend for all these sales. So, you know, the margin on this was lowish, right? I was probably running 20% margins. And, uh, that hundred thousand completely wiped out all of the savings that I had had over the next, the last month or two, right? And, uh, and it was actually more than I could even handle. And so we had to sell more to cover the refunds. And so this is where things got even more fun. Uh, and I say that sarcastically. So this is what happened next. February, we do more money. March, I know that we have to sell even more. So I, I hired two more sales guy. We do eight launches that month. And that's to cover the refunds that are starting to come in from January. Alright? You can probably see where this is going.

• 18:45Alex Hormozi?

  The refunds start getting worse. There's more and more and more. It turns out after everything, 35% of all of our, of all of our sales that we were making were getting refunded, which is an astronomical number that is hard to even comprehend. And it was because we had no control over the fulfillment, right? So we were selling and then other people were filling on contracts that we had sold. And so, and there was a lot of, you know, hey, just refund, sign up through me. Don't worry, like, cause we'd be gone, right? We were already, we'd already left the location and these people were getting fulfilled on contracts. And so we didn't have the relationship with the customer, the business owner did. And so it was a really dumb model from that perspective, um, I learned, right? One of the lessons I learned there was control of, like, you want to control everything end to end. If you want a life lesson. And so anyways, the next month, we're, we, we, we have to sell more.

• 19:29Alex Hormozi?

  And so I think we did 280,000 the next month. And I was like, okay, cool. But all of the excess cash that came from that, from like the profit went into funding these refunds from the month before. And then refunds just kept going up. And so I knew that in April, I was going to have to sell even more to cover the refunds from February and March. And I felt like I was in a death trap. I was like, I don't know how to get out of this. Like every month I have to sell more to cover the refunds from the month before. But then the cash from these things, somebody needed to cover the next month and sell even more. And honestly, I had no idea what I was gonna do. And so, um, all of a sudden, uh, Leila at this point, cause she still has one foot out the door a little bit because she was like, I don't know about this guy. Um, and so this whole time she'd been living on like $3,000 a month that she was getting from her like online coaching business. So she had transitioned her personal training clients to online.

• 20:14Alex Hormozi?

  Um, and she was doing like three grand a month from that. And I was like, hey, why don't we take the middleman out of this? We know how to market and sell weight loss. Let's just sell it online, which by the way, is a massive transition from doing brick and mortar. But anyways, I was like, you know, I was in absolute desperation. And so I wrote one of the best sales pages of my entire life out of just sheer need. Took me two days to write the sales, the sales letter, maybe three. And I didn't even like get up from the computer. I was just writing the sales letter. And so, um, I started running traffic to it and we started doing a thousand bucks a day. Um, of just online. So there was no margin, there was no, uh, it was all margin, right? Minus ad spend. And I was like, holy cow, this could work, right? And so we had eight sales guys. And so I was like, okay, we can tell these guys, they don't have to sell at gyms anymore. They can sell from home, they can see their wives and we can do 8,000 a day.

• 20:56Alex Hormozi?

  Cause if we're doing a thousand, just, just with her selling, we could do eight, 70 more guys and do 8,000 a day. And so I told the guys the next month, uh, the gyms that were lined up to launch the next month. Hey, we're not gonna, we're not gonna be doing this anymore. Sorry, we're gonna be going in another direction. And they were like, hey man, like, we need this. And, um, I was like, sorry, man. Like I, it's just, it's just, I'm not doing that model anymore. And, um, they were like, well, can you show us what you're doing? Cause like my friend told me that you signed up like 200 people at his gym in like three weeks. And I was like, No, man, sorry. And he was like, dude, please, like, and I was like, I'm not flying out there, man. I'm sorry. I'm not doing it. And so anyways, push comes to shove, I was like, fine, I'll show you how to do it. I was like, but I'm not flying out there to save your ass if you can't sell.

• 21:40Alex Hormozi?

  He's like, no, no, no, that's fine. He was like, well, how much to show me how to do it? And at the time, I picked what was the highest number I could possibly imagine in my head, which was $6,000. And I said that because I didn't want him to say yes. And because I didn't want to do it. I just wanted to move on. So I was so, hopefully at this point, you see how scarred I was by all of these experiences leading up to this. And the guy said, okay. And I looked at the phone and was like, you've got to be kidding. And I was like, holy crap. And so it was $6,000. And then I had seven more guys that I was supposed to call, you know, to tell them that I wasn't going to do their launch the next month. And so the next conversation I had, I was like, well, shoot, if I'm going to do it, I guess, I guess I have to make it now that I sold one of them, this whole program.

• 22:26Alex Hormozi?

  Next guy, same conversation went the same way. And he was like, well, how much? And I was like, eight grand. And he was like, okay. And I was like, holy cow. And then every single one after that said, yes, and ended up doing $60,000 in sales in a day. And I, I looked at Leila and I was like, we might be able to get out of this. And at that time, as much as people talk about the romantic, like, vision and strategy and, and impact and saving lives and all this stuff, like, it wasn't any of that. I was just trying to be able to not be in debt and pay the, pay the bills that were mounting every single month off. And so I knew that I needed to make like 150,000 in profit in the next like 30 days or so, in order for this to work, right?

• 23:06Alex Hormozi?

  And this was the only way I could do it. And so what I did was I, I called, you know, those guys, they all bought. And then I called up every gym that we had launched at that point, which was like 32, I think. And I called every one of those guys and was like, hey, you know how we filled your gym up? Want me to show you how I did that? And they were like, yeah, that would be great. That's exactly what we did. And so I ended up doing like 300,000 in sales the next month, selling a digital product, which was actually more like a consulting type thing. And here's what's crazy. The next thirty days, the average gym that used the consulting program, GymLaunch, did thirty thousand dollars in collected cash. Not contract, not contract, not anything like that, but thirty thousand dollars in

• 23:50Alex Hormozi?

  sales in the next thirty days. And then that is when everything took off like a rocket. Because every single one of those guys told every person that they knew that was in the gym space, like, dude, I just did this thing and it killed. That was what gave birth to GymLaunch as it became the consulting company, the licensing company, where we license out all the materials, all the ads, all the copy, all the scripts, how to set up the lobbies. And the thing is, is that when people ask me about the story, and this is, you know, now we're six months into 2017 at this point, so I've gone through like the hardest eighteen months of my entire life. That is when we just went from, I think we did a hundred grand that first, you know, month or last few weeks, and then we did three hundred, then four eighty, then seven

• 24:35Alex Hormozi?

  eighty, then a million, then one two, then one five, one eight, two, two two. Like, we just kept, we just grew like a rocket. And a lot of people think it was because of the marketing that I was running at that point, but it wasn't. There was a lot of it was just the word of mouth and the actual product worked, you know what I mean? And I use that as an example, because like, right now, I launched the book, Hundred Million Dollar Offers, it's ninety-nine cents, with one post on my Instagram, which is not that big, of a following. And right now, it sells about a thousand copies a day with no funnels, no ads, no whatever. And it's because the product was good. You know, and people talk if the product's good. And with this product, I was able to charge an egregious amount of money, but it was

• 25:19Alex Hormozi?

  because we chart, because we were making people so much money. Like, if I gave you a system that made thirty thousand dollars on average in the first thirty days, how much is that system worth? Right? Most guys charge, you know, for franchises, they'll charge five hundred thousand for a system that does something like that, right? And I was just charged sixteen grand, because I was like, holy cow, like, they're gonna make double their money in the first thirty days if they just do this, right? And I was so, I knew every aspect, every piece of this process, because I I'd done it not only for my six gyms, but for the thirty plus that we had launched. And so like I knew the differences between different markets. I knew how to train sales guys to get them to do it. I knew how to position the offer. I knew how to do the the layout of the sales room in the lobby. So you can maximize the amount of people that you could sell. I knew how to do the nutrition consultations the next day. So you could cover all the ad spend.

• 26:04Alex Hormozi?

  Just with product sales, right? Like I knew all these things because I did it. And so I tell this story to illustrate one thing. One is that what you were going through now doesn't mean like your work works on you more than you work on it. I was developing skills, character traits and beliefs through this entire three, four, five, six year period of just of just eating shit. That I did not know was for me. And so we think that the first business, the second business, the fifth business you start is going to be the business that's going to be it for you. But like the journey is long, you know what I mean? And you accumulate these skills and these beliefs and these traits over time. And those become the things, those are your actual assets, right? The businesses are just manifestations of those assets in reality.

• 26:47Alex Hormozi?

  And so as as as these things took off, right? My, you know, my life radically transformed. And the piece that I I get a lot of questions about is like, how can I do what you did in my space or in my niche or my whatever? And the thing is, is people want to skip the first five years of the story, right? The first five years was that I I didn't sell a portion of how to make ten thousand dollars a month from a gym. When I had my first gym, I didn't do that when I had a second, I didn't do that when I had a third, I didn't do that when I had a fourth, I didn't do that when I had a fifth, I didn't do that when I had a sixth, right? Because I didn't feel like I was good enough. And it was only, and even then I started doing the launches as the next thing.

• 27:29Alex Hormozi?

  Because I wanted to make sure that everyone always got way more value than they paid me, which was zero. They paid me nothing and then I would fill their gym up, pretty good deal, right? No risk for them. And so I did that for almost two years, doing the gym launches, right? Where we'd fly out and you already know how that went, which was difficult and hard for me. But I learned so much. I learned how to run a virtual sales team. I learned how to do all these things so that when I did have the next opportunity that lined up for me, we went from zero to 30 million in the next year in revenue, because I had accumulated all of these skills and these character traits that I would not otherwise have had. And so a lot of people want to just jump to that part, but they don't have the skills, they don't have the character traits, they don't have the beliefs that align with what they want to achieve. And so I'm a big believer that the foundation that you set is going to dictate the height of the peak

• 28:14Alex Hormozi?

  of the pyramid that you want to build within your life and the business that you want to grow. And so most people have a very small foundation. They took a course and then they want to start selling how to, you know, run Facebook ads, right? Or whatever. And so the reality is that they're just not good enough. And that's why. The thing that they have just doesn't work that well, which is why it doesn't make money, which is why they don't make money, right? Because the amount of money that you'll make will be predicted by the value that you provide to the marketplace. That's always what it is. I know this is a longer story, but I think that hopefully it illustrates, one, that the path is not straight. Two, it is fraught with difficulty. And mind you, me telling you the very, the quote "end of this story" is that like, oh yeah, then you know, everything took off like a rocket.

• 28:58Alex Hormozi?

  All of these types of problems, there was different problems that we had to solve then. Just like, how do you double every month? And somehow keep up with high-quality service and support and train talent while also bringing new people in and keep a culture and all of these things. But at the end of the day, the product brought us so much forgiveness from our customers because they were just all making so much money using the systems that we had laid out, that we were able to build the infrastructure as the plane was flying, you know, during the journey. And so anyways, that was the transition of me going from broke and looking up bankruptcy lawyers to we did 3 million in profit just in the last... Like four or five months of that year and then the next year we did seventeen million in profit.

• 29:42Alex Hormozi?

  And that was because I switched from a a service to to media, which has no cost of reproduction. So there's significantly higher gross margins on it, which is a better opportunity vehicle. And what's interesting about this, and I'll just I'll I'll hit this because I I could probably make a video on this one concept alone. And I think it's worth highlighting is that when I had my gyms, right, that I had relatively the same skill set, right? I knew how to help people lose weight. I knew how to, you know, I knew how to market. I knew how to sell. I had these locations, all of that. From there, I transitioned to a done-for-you sales model, right? And I made more money, right? Now, I had some issues. It's funny because I could look at that model now and fix it in two seconds because it's obvious what I would need to do to change the model. But I didn't do that.

• 30:25Alex Hormozi?

  But I made more money in terms of revenue and, you know, in terms of net margins, I was making more. But there was holes in the in the actual way the model was designed, which is why I had to do with all these other things. And then finally, we switched to licensing, coded media, right? And that is where, you know, the highest gross margins exist. And so I had the same skills, right? But as my beliefs changed and my character traits changed and developed, I was able to switch into better and better opportunity vehicles for the same set of skills. And that is what that is what ended up creating the the fortune that Leila and I were able to, you know, amass in this period of time. And it was because of of that transition through different vehicles, repackaging the same skills. And so the first step in this is getting the skills to to repackage.

• 31:09Alex Hormozi?

  And I think most people just want to skip that part, which is the rocky cutscene that every single person that I know is successful does that no one wants to talk about. Every every single great big business owner that I know have have these years of thankless work where they develop these skills, these traits in these beliefs that end up setting them free. And everyone wants to just take the the one course and thinks they're going to become a millionaire in six months, and it's just not the case. And so many people are far ahead of me in their entrepreneurial journey, you know, than I was in my first two years, three years, five years. And so I I tell the story to hopefully give anyone hope who's like two years in and isn't making money. It's like, well, multiply that by three and then that's about where I was. That's where I started making real money. So anyways, lots of love, Mozy Nation. I love you all. My name is Alex from Mozy. I own acquisition.com.

• 31:54Alex Hormozi?

  We do about $85 million a year in revenue, and I have absolutely nothing to sell you. Keep being awesome. If you did enjoy this, hit the subscribe button, and I'll see you in the next video. And if you didn't like this, then I love you either way. All right, lots of love, and I'll see you there. Bye.