My Framework For Knowing When To Quit (on DOAC with Steven Bartlett Pt. 1) | Ep 837

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. This is a guest spot on Diary of a CEO with Stephen Bartlett. This is going to be a two-parter. And so, part one is a little bit more on the what are the key decision points for making pivots in a career? Number two is what kind of fuel you use in order to make, basically to continue to drive on after you've seen success? Number three, how to get other people to do stuff for you, either within the business or if you were the entrepreneur running the business? Some things that we've found that increase the likelihood of compliance with requests, which is just the fancy way of saying the same thing I just said, which is get people to do stuff that you want them to do. Enjoy. If you want to make more money, you might want to consider doing this.

• 0:45Alex Hormozi?

  So, number one is-

• 0:47Speaker 01

  Hold that thought for just a second, because the thing that comes before that is Miss Graff.

• 0:51Alex Hormozi?

  Oh, God. This is the entrepreneur lifecycle, and there are six stages. Now, the vast majority of people get stuck on stage three. I've made some of the biggest career mistakes at this point, and you end up living the same six months for 20 straight years, suffering until you learn how to break free from it.

• 1:06Speaker 01

  I want to go through the whole thing.

• 1:07Alex Hormozi?

  This is gonna be awesome.

• 1:09Speaker 02

  Alex Hormozi is the master of business strategy.

• 1:11Speaker 03

  An artist in skirting companies into the millions and a leading voice in how to craft your way to success.

• 1:16Speaker 02

  He's an entrepreneurial powerhouse.

• 1:18Alex Hormozi?

  Whether you're starting out or want to go from 1 million to 10 million, there are certain behaviors and actions that will increase the likelihood of success that we're going to go through. But here's the really hard truth that a lot of people don't like talking about. Entrepreneurs must be willing to make impossible choices, have the courage to be willing to be wrong, have shame by failing at things in front of people whose opinions they carry on. And that fear keeps people stuck in a job and a life they don't want for years. And that was my path. I had a white collar job, condo, overlooking the city. Everything was according to plan. And I remember thinking like, I didn't want to be alive, because I was so afraid. But, once you get over the fear, it unleashes this whole new realm of possibility of being able to do what you want. And that is when you can learn the real game of entrepreneurship, such as knowing that business ideas typically come from one of three Ps. And you only need one of those three.

• 2:02Alex Hormozi?

  And then there's the four Rs for customer success, how to learn new skills quickly, how to stand out in a competitive market, the winning strategy for 2025, and so much more.

• 2:10Speaker 01

  So, where shall I start?

• 2:13Speaker 01

  If someone's just clicked on this conversation and they're considering listening for the next couple of hours, based on everything that you do for the millions of entrepreneurs that follow you, that read your books, can you tell me exactly why you believe they should stay and listen and who should stay and listen?

• 2:30Alex Hormozi?

  At acquisition.com, we scale businesses. The content that I generate, that we put out, conversations like this, helps people who are going from zero to one, just getting off the ground, to helping people go from 1 million to 10 million, to helping the entrepreneurs going from 10 to 100 either get there or exit along the way. And there are frameworks that cross all three of those that I consider both deep and wide, that help any business navigate whatever strategic decision is in front of them to get the highest potential return for their time. And so if you're listening or watching, then if one of those frameworks applies immediately to your business and allows you to pull five years forward in your career, I would say

• 3:15Alex Hormozi?

  that's a pretty good return on time.

• 3:17Speaker 01

  For the people that are at zero?

• 3:18Alex Hormozi?

  Yeah.

• 3:19Speaker 01

  What is it that they're typically coming to you to help them with? So if you were one of them?

• 3:24Alex Hormozi?

  Yeah.

• 3:25Speaker 01

  What is it that they want from Alex or Muzi?

• 3:28Alex Hormozi?

  I think it's, there's what they think they want and what they actually need,

• 3:33Alex Hormozi?

  which are two different things. And so I think what they think they want is some tactic that's going to immediately help them start a business. What they typically actually need is the courage to be willing to be wrong and to be willing to have shame by failing at things in front of people whose opinions they care about. And I think that's, if I rewind the clock for me, it was probably one of the hardest things that I had to get over. And so I think that's why maybe my message resonates with a lot of people is because it was so hard for me to get over. And what's interesting is basically anybody who's listening, the harder it is for you

• 4:17Alex Hormozi?

  to break free of whatever kind of mental prison you've made for yourself, whether that's real or just in your head, the more compelling your story will be when you break through it. Because it will resonate with even more people. For the people that it was easy, that their story doesn't have a lot of like, I was immediately an entrepreneur, like, I wasn't like that. I had a job when I was in high school, I had a job immediately out of college. Some people were like, I was selling lemonade out of the back of my, you know, thing when I was 13. I didn't do any of that. Like, I, school failed me. I actually was pretty good at school. I didn't have any of those issues, you know what I mean? And so I had a pretty clear career path. And so I had what many would consider like, I had a real opportunity cost. So I had a white collar job and I had a GMAT score above Harvard's mid-score.

• 5:01Alex Hormozi?

  And so I had a really clear path of what my life could look like in the next 20, 30 years. And it was fairly well-defined, like, I'll go to Harvard, or Stanford, or one of the top business schools, and then I will either go back into management consulting, I'll go into investment banking, and then eventually end up in private equity. And that would be the path, right? And then all the flowers would be set at my feet, and, you know, everyone would say, "We approve of you, you're an excellent person." But when I saw the people who were 20 years ahead of me, I really didn't want their life. And then it started making me look at my life, and I was like, "I don't even know if I really want my life." And so, the, the big decisions that I've made in my life, unfortunately, have almost always come at the, at the doorstep of apparent death.

• 5:44Alex Hormozi?

  And I think maybe in some ways that makes me a coward, for having needed death to make decisions. And so, operationalizing that has been something that has helped me move faster to make decisions that I know I need to make but don't. And so, like, the first big, kind of like, what felt like a death decision was, I was a consultant, 22-ish years old, I had a paid-for, you know, condo that I bought overlooking the city, and I remember thinking like, "I really hope I don't wake up tomorrow." And that, and I don't mean that to be melodramatic, I just, I just, for a period of time, I just always just like, hoped every night, I was like, "I just really hope I don't wake up tomorrow, like, I just don't want to do this."

• 6:27Alex Hormozi?

  And what was difficult about that was that, at that time, was when my father was most proud of me. Because I was doing everything that was according to plan. You know, he could talk about like, his son, who graduated in three years from Vanderbilt, had the, had the good job, like, everything was, we're following the plan. And it was upon realizing that my ultimate expression of living out his dream was me feeling like I didn't want to be alive. And so in and it took me time to get to that point to even articulate that because obviously you never want to kind of like admit failure of like, I have really messed something up here. But I was living my life to win someone else's game.

• 7:09Alex Hormozi?

  And when I realized that, I realized that one of our dreams had to die, either his or mine. And when I realized that his dream must die in order for mine to live was a statement that I kind of crystallized when I was at that point in my life, like I had to keep repeating that, like his dream has to die in order for mine to live. And so to put this in perspective of like how afraid of my father's judgment I was, I left the state and drove across the country halfway through before calling him to tell him that I was gone. And so I bring this up because I don't try, I'm not trying to be dramatic here, but I'm saying that if you feel a lot of pressure, I get it. Like, I tried to leave the job that I was at to pursue just literally anything that wasn't that, just I wanted to start a business at some point.

• 7:54Alex Hormozi?

  I didn't know how I was going to do it. I just knew that what I was doing was not the path I wanted to be on. And everybody around me wanted me to be on that path. And so I went to go be like, hey, I'm thinking about doing something else. And, you know, it would always be that, ah, you know, don't later, later, like everything's good later, you know? And I remember when I called my dad and I told him that, he said, understand, why don't you come, like, come home? Well, I didn't tell him that I was, I was gone yet. Like, I said, hey, I want, you know, I want to go pursue this fitness thing. He said, cool, come over for lunch, we'll talk about it, you know? And, and I was like, I'm, I'm already gone. And then obviously his tone changed a lot. And, and, you know, our relationship struggled for, you know, years after that.

• 8:35Alex Hormozi?

  And I also bring that up because sometimes there's this illusion that like, you know, you get on the, on the Oscar stage or whatever it is, and you're like, hey, I just want to thank, you know, my mom, my dad, my friends for always supporting me. And I can't say that. And I wish I could. And you might not be able to say that either. And I also don't think that's a reason not to do it. And so we did struggle for years after that to kind of like, because I was basically living as what was once his prodigal son, goes and takes a minimum wage job as a personal trainer at a gym, like cleaning floors and stuff to learn, just to learn the gym business. But that was ultimately like how I broke free, literally physically leaving the area

• 9:19Alex Hormozi?

  and mentally. But I think that I had to accept that there was a timeline where my father would never talk to me again. And I had to be okay with that to pursue what I wanted. And I think that when you ask the original question, what are the people from zero to one really looking for? I read tons of business books at that time, but I couldn't use any of them because I was so afraid. And what's crazy is that like, I think about it now in retrospect, and it's like, it's crazy how large the perceived monsters can appear. And Leila has this quote that I love, but it's, fear is a mile wide and inch deep. And so you look at it, it looks like this ocean, and then you take the first step and you realize you don't drown because it's like, oh, there's ground underneath of this,

• 10:01Alex Hormozi?

  right? There's other people who are more on my path. And the friends you lose, you gain new friends, right? And so that fear was the hardest decision that I've had to overcome in my entrepreneurial career. And I think of all the split paths in my life, that was the one that if I had many timelines or many universes that existed, that was probably the one that is the most likely that I would not have parted from. So I think in like 90% of universes that Alex Ramosi exists, I'm just a consultant somewhere. And so I would encourage you, if you do feel that, you're not going to die. Like you won't die. And you might just live.

• 10:41Speaker 01

  It's so interesting because I think everything you've said is just absolutely spot on. But you're right in where you say that if you'd asked an audience member listening now, why they haven't started yet. They wouldn't say fear. They would say, I haven't got the X, I haven't got the Y. But actually, it is such an emotional thing. And we don't talk about that enough because uncertainty is, humans seem to be allergic to uncertainty. And they'd rather the certain misery of their current situation typically than uncertainty.

• 11:08Alex Hormozi?

  And I think, and I used what I consider a very non palatable word of coward purposefully. Because no one wants to say they're afraid. Because if you say you're afraid, then it means you're a coward. And I think that it only means you're a coward if you don't, if you allow that fear to change your behavior in an aversive way, as in it not towards what you want. And so, you know, the inverse of that, many people have heard it, courage is not acting without fear, but despite fear. And I think that when you act, when you allow fear to change your behavior the wrong way, that is when you can give yourself that title of coward. And I think that that is a title that I have feared my whole life.

• 11:53Alex Hormozi?

  And that label is almost, I'm more afraid of that label than the label of failure. I'd rather be a failure than a coward.

• 12:02Speaker 01

  Is there a framework for knowing when to quit?

• 12:07Alex Hormozi?

  So I think there's the, there's like the math behind it. And the math, I think, is pretty straightforward. So like, when do you quit your business? I like, you've saved up three to six months of personal savings, number one. Number two is that you have started something, because nowadays in the digital age, you can begin a business on the side that can generate income. And that income, in the small amount of time that you're not working, replaces, or at least matches, the existing income you have from your, your current job. And you've been able to do that or demonstrate that income for like three to six months. If you do that, that's a very like math way of approaching it. That also is basically never the reason that people aren't quitting their job. Like, that's a really, like, I have, I have, I have backlog. I've matched my current income with my part time work.

• 12:51Alex Hormozi?

  And if I just put my full time work, I would probably make more. Very reasonable, but never actually the reason that people don't do it.

• 12:58Speaker 01

  I was thinking about the two sort of reasons why someone might quit something or feel like they want to quit. And one of them is clearly because it's hard. And that's obviously not reason enough to quit. And then there's another one which you were speaking to there, which is it's not moving me towards a meaningful goal irrespective of how hard it is. Like a marathon, you're raising money for a charity you care about. It's hard, but you don't quit. And then there's maybe if you're running a marathon for no apparent reason, you know, there was no charity, there was no one watching, there was no like fitness benefit, then that's a good, I guess, moment to consider quitting. My story mimics yours in a way that I didn't realize. I didn't realize you went through a similar thing in terms of the parents' disownership.

• 13:39Speaker 01

  No real great option to flee to, but feeling like the current path that would have led me to be, I don't know, a business management student was significantly worse on balance than taking the risk. But I think maybe a point of distinction is it didn't, I was so naive that it didn't feel like a risk.

• 13:56Alex Hormozi?

  Yeah. So what's really interesting about that is the guarantee. And so a lot of times we don't, we don't look at what I call the don't, which is like the alternate path. And so if I had played out my existing path, I had a guarantee of outcome I didn't want. It was just at a delay. Whereas here, there's a chance that I can make it. And so one of the final kind of frameworks for making the decision was guarantee bad, chance at good. And I was like, well, I might as well take a chance. And I strongly encourage thinking about playing it out.

• 14:38Alex Hormozi?

  And so what I mean by that is like, I think fear exists in the vague, not in the specific. And so when you say, I'm going to quit my job and then what if this doesn't work? I'm going to failure, tons of fear. If I say, I'm gonna quit my job and then I'm gonna try and start a business. And if the business doesn't work, I'll probably have a compelling story that I could tell for business school if I wanted to, to show that I had some entrepreneurial slant. In the meantime, I could use that experience plus my job experience to probably get another or maybe even better job in the meantime and match or supersede my existing income. And the actual loss would be maybe the savings that I had saved up. But if I'm younger or I haven't made as much money as I want, then that's never been

• 15:23Alex Hormozi?

  the amount of money that would be material anyways on the grand scheme of what I would like to make. And in terms of living situation, I will, worst case, go back to my parents' house with my tail between my legs or sleep at a friend's couch because I have enough people that would be willing to put me up in a garage if I had to. And so it's like, okay. So my actual worst case scenario is just like, I have a cool story and maybe some shame that is self inflicted because it's not like no one else cares really. But it's self inflicted shame and maybe a detour or a different story that I have to tell later on in my career. Not as much fear there, right? But like the first one, like, I'll fail, everyone will hate me and I'll die.

• 16:04Speaker 01

  The first one sounded like it was written by your amygdala. And the second one was pure like prefrontal cortex. It was all logic.

• 16:11Alex Hormozi?

  Yeah.

• 16:11Speaker 01

  And I'm wondering, as you're going into that decision, obviously fear is gonna lead it. So of course you're gonna go for option one where you just think about the downside. Maybe there's a practice that allows you to get into your prefrontal cortex into logic.

• 16:22Alex Hormozi?

  I think that's, actually, so I think you nailed it and said it way better than I did. But I think that's, I think going from vague to specific basically disengages your amygdala because it can't reason the logic chain of causation and causality of what's going to happen next in a chain of events. And so when you get into the specific of it, all of a sudden you're like, okay, I'm not gonna be homeless and then shamed and die. I might live in inferior living conditions for a short period, which, by the way, when you're later on in your life, you'll look back and think of as the good old days because I can't believe I was couch surfing. I was pursuing my dreams, right? It's only like in the moment that it feels bad. When you look back, like even I find this hilarious. Like, like, how long after you do something embarrassing? Is it funny?

• 17:09Alex Hormozi?

  Right? Like, at some point, for almost all of us, with enough time, the shameful experience becomes funny. And so if it is going to become funny eventually, it might as well become funny now.

• 17:18Speaker 01

  Yeah.

• 17:19Alex Hormozi?

  And so it's just like pulling the time horizon up. But all of that's prefrontal cortex decision making. And so, no, but I think that's exactly like, I think that nailed it because when I thought about this, this decision, obviously, I had my very emotional statement around, like, his dream has to die for mine to live. Yes. Also, logic downside risk here. I'll have a story and I can always get my job back. Okay. And if I can't get that job back, I'll have other ones that will be available. Fine. And if I have a downgrading and some people think that I'm not as successful with them. Okay, I'll not stop, though. And so I think that that that demystifies a lot of the fears. I think that applies not just for entrepreneurial fears. I think it applies for any fear, like, I'm going to talk, I can't tell this person this bad news. All right, let's play it out. I say something and then they're going to kill me?

• 18:03Alex Hormozi?

  Probably not. So what's going to happen? I'll say these words and then they're they'll flip the table. They'll they'll flick me off. They'll maybe just feel hurt and maybe they'll cry. Maybe they'll shout. Okay. Okay. If they shouted at me, what do I do? Like, and you just kind of play it out and you're like, okay, I think I have like most of these conditions prepared for. And then all of a sudden, you can like have those things.

• 18:25Speaker 01

  What you also said is that in the face of guaranteed misery, any option is better.

• 18:30Alex Hormozi?

  Yeah, it's real.

• 18:32Speaker 01

  You get to live once.

• 18:33Alex Hormozi?

  Yeah.

• 18:33Speaker 01

  So like, why would guaranteed misery be better than any available option?

• 18:38Alex Hormozi?

  It's delay discounting. That's what's crazy is delay discounting happens both ways. Like, so like you set your alarm for 5:00 AM at night and you're like, I'm going to wake up at 5:00. But that's because you're delaying the pain of waking up. And when it's immediate, when I have to quit the job, like, I'll quit my job tomorrow for 20 years. And so it's just like, we always, we delay the fact that we're going to be miserable into the present to it like, like, we massively discount what a whole lifetime of misery would be.

• 19:07Speaker 01

  Amen. When you're thinking about what to pursue. So say you've left the job, you've quit the thing. When you're thinking about what to pursue. How much of that is a decision derived from self-awareness? Because you know, someone will look at you now and be like, oh no, Alex did this. So I'm going to start a acquisition.com. You know, or they'll say, I saw Steve Jobs did that thing with the computers. I'm going to start Apple. Or Elon, I'm going to do the spaceships. How much do you have to know thyself to know what to pursue?

• 19:39Alex Hormozi?

  Man, this is a really good question. So there's a tweet that I love by Andrew Wilkinson, which is every entrepreneur ever, colon, here's the winning number for my lottery ticket.

• 19:50Alex Hormozi?

  And so it's like, every entrepreneur will say, here's the winning lottery ticket. But it's like, that game already, that drawing already happened.

• 19:58Speaker 01

  Okay, yeah.

• 19:59Alex Hormozi?

  Right? And so like, you can't cash that ticket in. It's already done. And so people say the word first principles. No one really knows what it means. I mean, some people do, but I think far more people say it than know what it means. And so basically there are foundational truths of business that that exist. And the conditions of the environment will change. And so you have to apply those truths to whatever the current condition is. And so that's what I try and tease out with the books and the stuff that I put out in content. But at the end of the day, you have an input of time, like zooming all the way out. If the goal, assuming that your goal is to make money. Okay, like, and this is just a purely economic business goal. Then you have time, which is the primary currency that you traded. And you make dollars over a period of time.

• 20:43Alex Hormozi?

  And so I tend to reject the idea of like, never, you know, never trade time for dollars or anything like that, because everyone trades time for dollars. It's just some of us are more efficient at it than others. But even exchanges that occur that just are not denominated in time still occur over time. And so you have this foundational unit of time, which you're going to give in. What we're seeking is the highest return on that time. And so there, you know, within a business context, there's kind of three levels of things that have to occur in a business. You have to, you know, attract attention, you have to convert attention, then you have to deliver something for that attention. And in each of those things, you want as much leverage as possible. So you want as little time as possible required to get the most output. And so I have built acquisition.com on basically

• 21:27Alex Hormozi?

  two primary theses, which are in the logo, which is, this is a fulcrum for leverage.

• 21:33Speaker 01

  For people that can't see, it's like a triangle.

• 21:35Alex Hormozi?

  Yeah, so it's like a triangle, or the Illuminati, because that always gets brought up. All right. So we've got the fulcrum for leverage, and then inside of it, you have supply and demand. And I see those as the two foundational principles of business. And so, which is, you need supply and demand to have a business, and then leverage to get as much out of it as you possibly can. And so, when you're looking at the assets that you have, assets can also be skills, resources, what you have available to you. Now, if you have nothing, then all you have is your brain, your hands, and the time that you have that you can put towards learning something, which is why I'm a big fan of skill acquisition as one of the primary things that you can do is educating yourself. And not formally educating, but informally or alternatively educating yourself on super

• 22:18Alex Hormozi?

  tactical things. Once you get over the fear, then you start asking, okay, how do I let people know about my stuff? And what do I let them know? Right? And so you have to have something to sell, which is the offer. And ideally, you want the offer to have as much leverage as possible. Like, so if you sold software, or you sold media, those are things that you can cut once, sell a thousand times. If you have a conversion mechanism, it's like you can't have it be automated, like a checkout page, or some sort of video sales letter, or something like that, where people just buy without a phone salesperson. If you add a phone salesperson, there's less leverage, not to say this wrong, but you want to, you want to have the highest leverage opportunity. And then from a, from the deliverability expect, perspective, I kind of talked about deliverability first, but from the advertising

• 23:02Alex Hormozi?

  perspective, if you reach out to people one-on-one, that's lower leverage than being able to make one piece of content that a million people see. Right? And so, over time, you go from low leverage to high leverage, where you have the same inputs, but you just get significantly more for your output. And that fundamentally is like, if we're reasoning out from first principles, how do I get, said differently, the question that someone, I think, is really asking is, how do I get the most for what I put in? And you have to reason within your current context of your skills and your resources and your assets in order to derive that solution for you.

• 23:34Speaker 01

  So if someone walks up to you in the street and they say, Alex, what idea should I pursue if I just quit my job?

• 23:37Alex Hormozi?

  Yeah, right. So I would say business ideas typically come from one of three Ps. So it comes from a pain that you're currently experiencing, a past profession, so the thing that you just quit, or some of the jobs that you just quit, or a passion. So something that you're inherently interested in, that you would spend your time doing anyways, some skill that you learned while you were in the workforce, which by the way is one of the most proven ways of making money, because the economy has already showed you that people are willing to exchange money for that, for that specific job. And so in the world of gig economies and solo entrepreneurs, every business can be dismantled into just jobs being done, and all of those jobs can be fractionalized. So anybody like, we look at any business, you've got sales, you've got, you've got

• 24:19Alex Hormozi?

  marketing, you've got customer success, you've got, you've got customer support. If you want to differentiate that, you've got product, you've got design, you've got webpages, there's, you know, there's so many different components to a business, you just need to learn one of them. And then it's like, boom, you have a skill that you can trade for money that you don't have anybody else to report to. And then pain is usually, I think, in some ways, sometimes one of the biggest drivers, it's like you had an eating allergy and you couldn't find pancakes that dealt with your specific eating allergy. And you bet that there's a decent amount of other people with that allergy that also like pancakes. And so then you make pancakes that, that are delicious and amazing, that also cater to people with that food allergy, and then all of a sudden, like, you have a business based on pain.

• 25:03Speaker 01

  And why, why does that matter?

• 25:04Alex Hormozi?

  What part?

• 25:05Speaker 01

  The pain part. What leverage and advantage does it give you for the next five years?

• 25:10Alex Hormozi?

  I think that deep knowledge of the prospect is paramount or very important for creating exceptional products. And you can either do that by doing a ton and ton of research, or by being the prospect. And there's a certain amount of like visceral feel that you'll know. Like if someone wants to make a nose product for breathing, I have tried every product since I was in eighth grade. So it's been 20 plus years, 30, whatever, a lot of years that since then, and I've tried everything. And so I know the pros and cons of every product that exists on the market. And I can tell, because and I've done, it's not like, oh, I tried it for a day. It's like, I'll try things for a month at a time. And so I have so much time exposure to this problem that I have a lot of nuance in my opinion on what's wrong with the solutions.

• 25:55Alex Hormozi?

  So I can formulate a way better hypothesis on how to fix it.

• 25:58Speaker 01

  And that hypothesis would will be for an investor so much more compelling because you lead with a story as opposed to logic.

• 26:05Alex Hormozi?

  I met the guy who invested in Regal Cinemas, which is probably the biggest chain in the US. And it was when it was, there was a guy had just one theater and it became, but now because COVID has disrupted that business, but you know, for 20 years, whatever they crushed. And he said, it was so weird to say that, oh, cinemas are going to make a comeback because they've kind of been on a downturn or something like that during the time that he was making the investment. And he said, the reason I decided to invest in it was because this guy knew everything about the business down to how much the cost of kernel of popcorn was. And he just knew it so like the back of his hand that he was like, this guy can't fail. Like he just knows too much about this business to not have it work. And so in investing in, you know, making a gazillion dollars. And so, but I think that that's deep understanding.

• 26:48Alex Hormozi?

  And if you look at all of these, the passion things, you'll have deep understanding because you're spending all of your discretionary time pursuing this passion. The pain, you have a deep understanding of the, of the problem and the prospects going through it, because you've experienced it probably for years. Now, the professional one, I would say is a bit of a shortcut. Because if you're quitting the job because you don't like it, and then you say, I'm now going to do this for myself. Well, you're okay.

• 27:15Alex Hormozi?

  I mean, well, the one proven point about that is that that one is proven to work from an economic perspective. You will be able to make money doing that because you already have made money doing it. These other two are less proven, but sometimes have a significantly more upside.

• 27:28Speaker 01

  When you were talking about the breathing example with your nose, it's funny because if you had sat down and said to me, Steve, I've made these like breathing nose strips. They are better. They're 20% more durable. They expand your nostrils by 20%. It is multiples less compelling than you telling me that story you just said about being a kid, having breathing problems, trying to solve this problem for yourself. And it's funny because that that story you told versus the sort of rational logical approach or the benefits approach is your marketing campaign for the next five years on TikTok and Instagram. It's I had a problem. I solved it. I tried everything and solved it for myself. There's almost like nothing more compelling and believable.

• 28:04Alex Hormozi?

  No.

• 28:05Speaker 01

  We see that in Dragon's Den. We'll be sat there listening to these pictures all day. Then someone will come in and say, I had ADHD. I tried energy products. They all made me crash. So I went out and solved this problem for myself. And we're on edge because we almost can't argue with it at that point, you know?

• 28:20Alex Hormozi?

  Yeah. So Bezos has this great framework where he talks about missionaries and mercenaries. And so it's kind of like you have the guy who says, okay, I looked at market trends and this is a growing category. And, you know, I surveyed people and this was the, you know, the result that came back. And so I believe that if we time this product right at this point in the market, we'll achieve huge, you know, a mass adoption, blah, blah, blah, blah. And it's like lodging your way through. And to be fair, some people do, you know, do make it work. But the missionaries, the ones that end up making the most money because like, they do it sure for the money because the business has to have some economic engine behind it. But really because they viscerally experienced this problem and don't want anyone else to solve, to deal with that problem either. And so like, if I were to

• 29:03Alex Hormozi?

  tell that story, like you're saying, like, when I was in eighth grade, it was the first year that I started really noticing I couldn't breathe at night. And so I learned how to fall asleep with my hand on my face like this so that my nostril would, so I could fall asleep and my hand would stay. Because you, there's no actually other, because you can't hold your, because you fall asleep, right? And so if I fall asleep with my hand like this, right, like I'm on the couch, and I fall asleep like that, it keeps my nostril open. And I can fall asleep and it doesn't move. And so that's how I learned how to sleep for years before founding like. Just like simple nasal strips and things like that. But there's tons of problems with with those solutions that exist right now that I won't get into. But maybe someday I'll make a nasal product.

• 29:41Speaker 01

  I think.

• 29:46Alex Hormozi?

  I can tell you, if you put if you put every product in front of me that exists right now, I can tell you what's wrong with it. Because I've tried, I've tried literally all of them. Not like, I'm pretty obsessive. And so like, I've tried all of them.

• 29:55Speaker 01

  You're missing an opportunity here.

• 29:56Alex Hormozi?

  I've tried, I've tried the ones from Europe. I've tried the like, not just US. Like, I've tried, I've tried every product that exists on Amazon. I've tried all the ones from foreign countries. Every, every fan or follower who sends me a product that is a nasal company that's new, I will try the product. I still do. And there has yet, there's, there's yet to be one that has truly solved it.

• 30:16Speaker 01

  I mean, you should, I mean.

• 30:19Alex Hormozi?

  But I, I think in some ways, so this is actually a really good meta concept here, which is that if you want to be compelling, a demonstration or a model is always more compelling than anything else. And so me even going through that entire narrative, right? Is taking everyone else who's been listening to this on some journey. It's like, if you want to make a compelling pitch for a business, it's like, we pretty much just kind of went through one. And so that's, that's really what it comes down to. You're like, well, what do I do with my business? It's like, create your narrative of why you're even doing this. And if you can explain to somebody why, why they should care about this problem, or more specifically, why you care about this problem.

• 31:02Alex Hormozi?

  I'll tell you this, more investors will like, I might be like, I don't care about kitchen utensils, but this girl certainly does. And I'm sure there's other women who do too. And what everyone wants to see is obsession. And unfortunately, in like, some of the world, I know more in the UK than the US now, like, that kind of perspective of like, just being all in obsessed with stuff has almost been like bastard or like, you know, been chastised. And I but the people who are obsessed are the ones who changed the world, at least changed their world. And and I think that so a very close friend of mine did all the Olympic teams nutrition and supplementation stuff for a country overseas. And he said, you know, the difference between champions and everyone else? And I was like, what? And

• 31:47Alex Hormozi?

  he said, everyone always looks at them and says, what do champions have that I don't have? And he said, it's they have it backwards. He said, it's what do champions not have that I have? It's what do they lack? And it's an off button. They just don't stop. And so in dealing with the gold medals, he's like, they just never stop. They just can't stop. Everything in their life is geared towards one goal. And so finding that thing and they approach everything in their life that way. And I think that that level of obsession around like, everything that you touch on a daily basis is required for really getting to where you want to go.

• 32:29Speaker 01

  So interesting, because as we spoke there about the reason why the story was so much more compelling, it was back to the amygdala. It was back to emotion.

• 32:39Alex Hormozi?

  Right.

• 32:39Speaker 01

  And it's funny, because we said a second ago that when someone's thinking about quitting a job, they're like so in their amygdala, humans run mostly on their amygdala. So when we think about pitching, we should really be aiming at the same part of the brain, which is what you did when you showed me that you were sleeping as a kid with your hand stretching across your face. I immediately felt sorry for you, felt sympathy. And I immediately believed that if anyone's going to solve this problem, it is this fucking guy who's been through that pain.

• 33:01Alex Hormozi?

  I've had two surgeries, both of them didn't really work. Like, I mean, like, I've got the story.

• 33:06Speaker 01

  My girlfriend's the same.

• 33:06Alex Hormozi?

  What? Oh, really?

• 33:07Speaker 01

  Yeah. Two surgeries, but she's coming up to her third one now. We've tried all the nose strips. I saw you wearing one. I bought that one for her.

• 33:13Alex Hormozi?

  Yeah.

• 33:14Speaker 01

  And so there's a lot of people watching right now. And there's something going on with these bloody fucking noses.

• 33:19Alex Hormozi?

  Yeah.

• 33:19Speaker 01

  People shouldn't like.

• 33:20Alex Hormozi?

  Yeah.

• 33:21Speaker 01

  We're doing something.

• 33:22Alex Hormozi?

  I feel like I may have popularized some of the nose strip stuff.

• 33:24Speaker 01

  Yeah. But yeah. Making it cool. Pain, profession, passion.

• 33:29Alex Hormozi?

  Yeah.

• 33:30Speaker 01

  Ideally, you have all three.

• 33:31Alex Hormozi?

  If you have all three, then you're, I mean, my God, you're set. Like, if you, if basically pain created an obsession and for some reason you also are doing something like that in your work, like, I feel like the likelihood that you don't succeed is almost nothing. You only need one of those three. You just pick one. Like, if you just had one pain that you had that you wanted to overcome, or one passion that you were just inherently interested, because sometimes passion is nothing to, like, you might be really into model cars. It's okay, well, there's a lot of businesses that you can build around model cars. It's like you can, you can manufacture model cars. You can have services around model cars, making them faster, because some people race model cars. You can be a collector and start flipping model cars. Like, you can just make media around how to build them and then have a media company around it. Like, there's so many different components of any obsession or interest that you can make.

• 34:13Alex Hormozi?

  I was talking to, on one of the future episodes of Mozzie Tank that's coming out, we have a guy who's, he loves Dungeons and Dragons. So, he's an IT, he's an IT guy and just loves Dungeons and Dragons. And he was like, I just want this to make enough money that I don't have to do IT anymore.

• 34:31Alex Hormozi?

  And, but it was so pure, you know what I mean? And so I was like, we're gonna help you do this. And so we kind of walked through the business plan for it, but like, is he going to be a billionaire? No, but I also don't think that's his goal. And so I think being really clear on what you want is important. So if you're like, I want to be the richest person in the world, I think it's a terrible goal, but if you want that, great. Well, you have to have a multi-trillion dollar idea, because now, because by the time that occurs, there's already multi-trillion dollar companies now. So you've got to be looking at like, decade trillion dollar opportunity. And so, believe it or not, basically, the bigger the goal, the narrower the scope of the path to get there. If you're like, I want to make $10 million, I'm like, you can literally do that in almost any business. You want to make $100 million, probably still almost any business, you can do it. On a long enough time horizon, you can do it.

• 35:16Alex Hormozi?

  A trillion or decade trillion, it's going to be some sort of tech, it's probably going to have some sort of AI.

• 35:22Alex Hormozi?

  And so, you get, basically, the bigger the goal is, the narrower the scope of how to get there. But the vast majority of people are like, I want to be the richest man in the world, it's just because they don't know how to, like, really think through it and be like, all right, well, after like 100, there's really nothing you can't do. Except buy more big things. But like, in terms of your actual consumption, maybe even 20, is like, you can only eat at restaurants that go so expensive. You can only stay at the best hotels, you can only drive the nicest cars, you can do that with about 25 million.

• 35:46Speaker 01

  What do you think the cheat code is then? So I've got my idea. What do you think the cheat code is in 2025 to win at the game of attention? Like, there's got to be some new rules here because we've got AI, we've got new platforms, we've got new media. You know, I'm, I'll give you a hypothetical business idea. I'm going to be a personal trainer.

• 36:06Alex Hormozi?

  Okay.

• 36:06Speaker 01

  And I picked that because everyone can do it and it's a saturated industry. If I'm, if I'm a personal trainer in the 2025, how should I be thinking about building attention?

• 36:16Alex Hormozi?

  So I'll tell you what I wouldn't do first, which is I don't think I try and outscience the science people. Because like unless you have some PhD, there is a PhD guy who's already jacked, who's making content. And so he's more knowledgeable and more jacked than you. So you're not going to win there. And so I think in the game of attention, it's trying to find what is unique. Right? And so how do you, how do you quote, stand out when everyone's loud? And this is going to sound trite, but your fingerprint is unique, literally from a biological perspective, but so is your life and your experiences. And so there's, there's real alpha or, or benefit to be had above normal level of effort by leaning into you.

• 36:59Alex Hormozi?

  And so what makes every person unique is what makes their content unique. And so trying to be like, oh, I want to make content like Alex is probably not the best way to do it because you're not going to beat me at being me, but you'll beat me at being you. And so it's basically your flavor of media. So like for me, it's like, you know, what is, you know, my brand to, to, to model this? It's like, well, I have elements of philosophy that are in my brand. Well, do I need that? No, but that's like kind of me. I obviously talk a ton about business, marketing and sales, promotion, conversion. Those are all things that I spend a lot of time thinking about. And so a lot of my content's about that. Fitness is a component of my life. And so there's light sprinkling of fitness in my content. Also, I come from a background of fitness with the, with GymLaunch and, and the companies that I owned before that.

• 37:42Alex Hormozi?

  And so that would make sense that, and I've, my wife, Flaila, and so that's sprinkled in. And so like, those are basically the components of my life. And so that's what kind of shines through in my content. I consume a ton of comedy and so sometimes you'll see some dry humor and dark humor that, that shines through, but that's me. Now you have all of those little buckets of you and not only are those buckets unique, but also the proportions of those buckets will be different. And so maybe your philosophy is way bigger or maybe fitness part is way bigger. But I think what makes the truly unique personal trainer or fitness brand is leaning into.

• 38:15Alex Hormozi?

  People being interested in you for being you. And then being like, by the way, I have fitness stuff if you want to buy it from me. And I think the key part is the vast majority of products and services are commoditized. There you're not, you're probably not going to be significantly better than other trainers. Just being real, you're probably aren't. But you will be different than them. And we want to lean on, I want to buy fitness from somebody. And so I might as well buy from her or I might as well buy it from him. So you're taking basically the audience that would buy from anyone. But your brand premium gets them to want to buy it from you. We think about Prime, for example, with the drink, the drink company.

• 38:56Alex Hormozi?

  Like it's a, it's a drink that there's other products that already exist in the marketplace that satisfy the same thing as Prime. But if you are agnostic to that brand and you have brand affinity with that, that creator, then you're like, well, then if I have two things that are basically equal and I just like this guy better, I'm just going to, as long as the prices are comparable, I'll just vote with my dollars here. And so I think that if you're a personal trainer in 2025, it's going to be long term, it's going to be building the content. Short term, it's going to be outreach to people that you know, and making a compelling offer to get people to try to work with you.

• 39:32Speaker 01

  This overarching point you said there about being yourself. As I was thinking about it, I was thinking, gosh, do you know what? The thing that all of my favorite creators and the really successful creators have in common is they all have, I mean, use these words intentionally, the courage to be themselves.

• 39:47Alex Hormozi?

  Yeah.

• 39:48Speaker 01

  Because I'll tell you what, when I was starting out as a content creator and I looked back, I was showing one of my team members the other day, the things I used to post. It was like, everything happens for a reason. It was cringe, cliche fluff. And it took me several years to almost relax into just realizing that the game here was to get to the point where I could be myself on the internet. And actually, that was the most high value because of, you know, of what you said, it's the uniqueness part of me. But the courage to be yourself, and it's, it is the winning strategy for 2025. And it's, I think it's leaning into it. And the thing is, is that everything in you wants to not do that. I'm not really sure why. But I was having a conversation with Leila, I want to say two nights ago or three nights ago.

• 40:31Speaker 01

  I got a bunch of flack for some X posts that I made. And she just looked at me and she was like, never dilute yourself.

• 40:40Alex Hormozi?

  Because I was like, maybe I shouldn't talk about this stuff. Like, maybe I should just like, you know, I'll just lean off. And she was like, never dilute yourself. Like, there are so many more people who need that message than people who are hating that message. And she was like, and if you're actually going to make a difference in a lot of people's lives, there's going to be an equal and opposing force of people who want to reject that. Hey, guys, real quick, this podcast only grows from word of mouth, quite literally. There's no other way to grow a podcast than word of mouth. If there's some element of this that you think somebody else should hear or would be relevant to them, it would mean the world to me if you shared this via text, via Instagram, via DM, via whatever way you like to share stuff with the people you love. Thank you.

• 41:22Alex Hormozi?

  And she's like, this just comes with the territory of like, how big of an impact you want to have. And it was just such a great, you know, wife talking to husband, you know, conversation. That I guess for me, at the end of the day, I'm like, as long as she thinks I'm cool, you know, I'll keep doing it. But, um, but yeah, it was just, uh, because the diluted down version all of a sudden becomes everyone else's stuff.

• 41:46Speaker 01

  Well, you said a second ago, you're not sure why that is. But by very definition of it being unique, that that means that there is no blueprint.

• 41:54Alex Hormozi?

  Yeah.

• 41:55Speaker 01

  There is no person that's come before you and proven that it works. So the courage of being yourself, there's only one Stephen Bartlett. So if I'm truly myself, it's never been done before. That means that the risks are unknown, the upside is also unknown.

• 42:07Alex Hormozi?

  Yeah.

• 42:08Speaker 01

  But so again, going back to our hate of uncertainty, it makes much more sense for me to try and copy you because I can see a blueprint there than to run the risk of being yourself. And you are someone, I have to say, who is running the risk of being yourself. And actually, as someone who's observing you, now I know who you are and I now know who you're not. And it's important for me, as someone that follows your work, that actually I see consistency because I've established Alex and Rosie's values.

• 42:35Alex Hormozi?

  Yeah.

• 42:35Speaker 01

  And anything that diverts from that is actually less valuable because, as you say, it's more like everyone else and the things I've had before. But it's also, it wouldn't feel true anymore.

• 42:43Alex Hormozi?

  Yeah.

• 42:44Speaker 01

  And, um,

• 42:46Speaker 01

  And this is something that even as a creator myself, I have to fall back on is my audience know who I am now, for better or for worse.

• 42:52Alex Hormozi?

  Yeah.

• 42:53Speaker 01

  They're not going to learn anything new.

• 42:54Alex Hormozi?

  Yeah. You know, what's really interesting is navigating the gray. And so there are contradictory ideals. And this is what I kind of come back to when I'm worried about these types of things, which is like, you've got mercy and you've got justice. They're somehow opposed and they are both ideals. So how can we believe in justice and also believe in mercy at the same time? And so, and I mean, you can have variety and consistency. Like, there's tons of examples of this, right? And so we have these diametrically opposed ideals, which means that if you ever say, by the way, I'm a little bit more of a justice guy. Like, I understand they had a hard time, but at some point, you got to take your own personal accountability.

• 43:39Alex Hormozi?

  So like, no, you're not going to get out of the speeding ticket. You're going to get like, that's what's just. On the other hand, it's like, hey, single mom gets pulled over for driving too fast. You know what? Maybe we let her off today. Both of those stories, fair, but you're going to get attacked by the other side that has an ideal that all humans try to strive for, and it will feel terrible because they are right, and so what? And so I think that, like, understanding that that conflict will always exist between two apparent ideals that, and this is fundamentally what politics is, right? Is that there are two apparent ideals that, that all of us, I would say, 99% of people would say, justice is good, mercy is good, variety is good, consistency is good, right?

• 44:23Alex Hormozi?

  Respecting values is good, so is innovating and doing new things. How can we have both of these contradictory ideas and at the same time, like, navigate that without conflict? You can't, because how much becomes the question. And so I think that your thumbprint as a creator is that when someone presents a scenario... And says, does Alex choose mercy or justice in this scenario that your audience says gets it right? And so I think about branding in general as basically a mosaic that you get to create. And so like each piece of content is a little tile that has a single color on it. And if you just see one piece of short content of Stephen Bartlett, you don't really have an idea who Stephen Bartlett is. But if you see a thousand of them, all of a sudden you zoom out and you get to see the whole picture.

• 45:08Alex Hormozi?

  And I think that the colors that are in those mosaics and the proportion of how many yellows, how many reds, how many greens, and where are they is what ultimately creates the brand. And so, because people want to try and turn this into, okay, so I make one post about family, I make one post about finances, I make one post about whatever, right? It's like, I don't think that's how it works. I think you just be you, and then those proportions will naturally shake out. And also, over time, you will change. And so it also makes sense that your brand will change. And that was also another thing that I had to reconcile, which is like, wait, I don't know if I agree as much with some of the things that I said 10 years ago. Because the thing is, in the digital world, like my first podcast was 2017, July of 2017.

• 45:50Speaker 01

  Wow.

• 45:51Alex Hormozi?

  Episode eight is called Stop Branding. I have changed my views on branding, to be clear. But that first podcast is 90 days from when I lost everything. And so the entire, the entire like, hermosy journey, if you want to call that, from zero to billion, is actually documented 90 days from zero. It's all there. And so you can see how my views on business have changed and like, what I was thinking about at every kind of portion of my life. And so I had to just be okay with the idea that like, I will change my mind because I will get new information. Because let's take the alternative stance. If I get new information, do I just keep parroting what you did before? This is also an issue with politics, right? Is that like, he's flippy floppy.

• 46:36Alex Hormozi?

  It's like, so they're not allowed to learn?

• 46:38Speaker 01

  Yeah.

• 46:39Alex Hormozi?

  You've been in politics for 20, like, you haven't learned anything? Like, no stances changed? Like, I feel like we should be able to do that. And obviously, brands don't work that way, so it has to be gradual over time, which I think if you are always you at all times, it will be gradual over time.

• 46:53Speaker 01

  Yeah. I don't know. I think a lot of the time we end up... Over focusing on unreasonable people, which is a war we can never win anyway.

• 47:00Alex Hormozi?

  Yeah.

• 47:01Speaker 01

  Because you say that to me, I think, I think it was like, I had this, this guy, the therapist on my podcast, who I then spoke to after the podcast, and he basically broke it down to me. He was like, there's 20% of people that just absolutely love everything you will ever do.

• 47:13Alex Hormozi?

  Yeah.

• 47:13Speaker 01

  Like, you could say anything, you change them, they're fucking, they're just super fans.

• 47:15Alex Hormozi?

  Yeah.

• 47:16Speaker 01

  There's 80% of people that are actually like, he said, there's 60% of people that are really reasonable.

• 47:20Alex Hormozi?

  Yeah.

• 47:21Speaker 01

  They don't speak.

• 47:21Alex Hormozi?

  Yeah.

• 47:22Speaker 01

  They just watch, they're like reasonable.

• 47:23Alex Hormozi?

  The silent majority.

• 47:24Speaker 01

  And then there's 20% of people with no matter what the fuck you do, they're gonna be. This is like, don't spend your life focusing on the 20%. The quiet majority, the 60%, they don't tweet, they just chill. And then the 20%, you know, they're your evangelists, but, you know, I find myself falling into the trap of.

• 47:41Alex Hormozi?

  So what's interesting about the 20% is that like, I was thinking about this today. The, you're, so no matter who you are, you're going to be disliked, period. Because no one's liked by everyone. So we just have like, listen, if we can accept that as a premise, right? No one's gonna be liked by everyone. You might as well be disliked for being you than being somebody else.

• 47:57Speaker 01

  Amen.

• 47:58Alex Hormozi?

  Right?

• 47:59Speaker 01

  At the most basic level.

• 48:00Alex Hormozi?

  Yeah. You, the being disliked is a fixed cost.

• 48:05Alex Hormozi?

  And I think to, to, to take the opposite perspective, I think it is far better to be disliked for being who you are than love for someone you're not.

• 48:12Speaker 01

  Yeah. And one, one of the great entrepreneurs I interviewed on the podcast said to me, when it comes to marketing and branding and this sort of attention conversation we're having, she said to me that in order to reach your 80%, you have to piss off your 20%. Or at least be willing to piss off your 20%. It was Jane Warung, who's the founder of Demologica, global beauty brand, with I think hundreds of thousands of people. And she sat and said, to get to your 80%, you have to be willing to piss off. No, actually, fuck. She said, to get to your 20%, you have to be willing to piss off the 80%.

• 48:44Alex Hormozi?

  Hmm.

• 48:45Speaker 01

  And from a branding perspective, it makes so much sense because when you stand for something clearly, which you do, you inadvertently stand against.

• 48:54Alex Hormozi?

  You have to. If you draw a line, there's, there's, there's a side on either side and you have to say like, I'm on this side.

• 49:00Speaker 01

  Did you see that Nike ad?

• 49:01Alex Hormozi?

  Dude, I was just going to say that. I was just gonna say that. Yeah, the Willem Dafoe ad?

• 49:05Speaker 01

  Yeah.

• 49:06Alex Hormozi?

  Like, what's yours is mine and what's mine is mine?

• 49:07Speaker 01

  Yeah.

• 49:08Alex Hormozi?

  Just like, it was actually the first time that I'd seen something from Nike in a long time that I was like, this is what built this brand. And I think they had lost their way for a while.

• 49:18Speaker 01

  Yeah.

• 49:18Alex Hormozi?

  With like the woke-ism and all that stuff. And I think it's like Nike means victory, which means people have to lose.

• 49:24Speaker 01

  Yeah. And they were willing to say that for the first time ever.

• 49:27Alex Hormozi?

  Right.

• 49:27Speaker 01

  I posted it on my LinkedIn and it was 50/50.

• 49:30Alex Hormozi?

  Yeah.

• 49:30Speaker 01

  I'd say it was actually more like 80% of people were either neutral or pissed off.

• 49:35Alex Hormozi?

  Really?

• 49:36Speaker 01

  Yeah, and 20% of people were like, that is me. I am a Nike person. And for me, when I saw that, I thought I want to buy some Nike shorts.

• 49:43Alex Hormozi?

  Yeah, it was, I mean, it was the first time I actually felt like I had positive brand affinity towards the brand in a long time.

• 49:47Speaker 01

  How important in this game of building and starting is people?

• 49:53Alex Hormozi?

  Very.

• 49:54Speaker 01

  Hiring question.

• 49:55Alex Hormozi?

  Yeah.

• 49:56Speaker 01

  I'll tell you why I asked this question, because when I look at my portfolio, early-stage first founders never seem to understand the importance of hiring in people.

• 50:04Alex Hormozi?

  Yeah.

• 50:05Speaker 01

  And I bang my head against a wall trying to convince them that actually the game they're playing is in the word company, group of people.

• 50:11Alex Hormozi?

  Yeah. So I'll start with one thing and then I'll answer the question. So I was talking to a mentor of mine and he said, when I was in my twenties, it was all about the destination. He said, when I got to my thirties, I realized it was all about the journey. He said, when I was in my forties, I realized it was about the company. And I was like, I can't wait till you're in your fifties.

• 50:30Alex Hormozi?

  That's the next one, right? But I thought that was such a profound shift in terms of how he thought about his business success. Cause he was like, I don't need to be a decabillionaire. He's like, I'm cool where I'm at.

• 50:41Alex Hormozi?

  And now I just want to do it with people that I like. And so to the question about people overall,

• 50:50Alex Hormozi?

  I believe that the potential of an organization is directly correlated with the aggregate intellectual horsepower of everyone contained within it. And so if you are the smartest person in the business, then, and you can do everyone's job better than everyone in your company, then it means that the limit of the business is purely based on one person's horsepower and one person's life experiences.

• 51:18Alex Hormozi?

  And that will be the cap. And basically, it doesn't matter how smart you are. You can't live 100 lifetimes. Like, you can learn quickly. Sure, there's some people who can learn faster than others, but you're not going to be able to live 1,000 lifetimes. And so as a business grows, more expertise is required. And I think the easiest litmus test for this is if you look at the richest people in the world, almost none of them own 100% of their business. So, number one. Most of them don't even own 50. Like, most of them are small percentages. Jensen Huang's at 4% for Nvidia. Basis is at 7 or 9% for Amazon. I think Elon's at 20 for Tesla. Like, small percentages. And it's because it takes a lot of horses to take a chariot to the moon, right?

• 52:00Alex Hormozi?

  And so, basically, as you put in more intellectual horsepower, the potential peak of the business goes so much, so much higher, so much faster. Keith Rabois from, he was one of the original PayPal mafia guys, has a really good analogy for this. And he talks about it in terms of barrels and ammunition. And he says, so as soon as you get some product market fit, the business starts to grow. And you say, okay, we need to start shipping things faster. And this works the same with a services business, a physical products business, software business. The concept's the same. And so, what happens is you then hire a lot of people and you assume that your throughput is going to increase proportionally. So, we have 10 people. We hire 50. We should 5X our output. And then you quickly realize that that is not the case. And so, what happens is there are people

• 52:44Alex Hormozi?

  who are rate limiters for an organization. And those are the barrels. So, think about like a Civil War barrel, you know, old cannon. And you've got these cannonballs next to it. He said, most people are ammunition. And so, you bring more ammunition, but you're still going to be limited by the one barrel capacity of how many shots can get taken by the barrel. And so, you need to find more barrels. So, you have to go from one barrel to two barrels, two barrels to three barrels. And that becomes an increase in capacity or throughput for the organization. And there are very few of those. In a different, I can't remember the law, but it's some organizational law. But the square root of the number of people in a company generate 50% of the work. So, you have 100 people in an organization. 10 people are responsible for 50% of the value that's created. Facts. Right.

• 53:27Alex Hormozi?

  Anybody who's been in a, like, you're like, like, preach. And so the thing is, is I think the real game of entrepreneurship is that your standards rise over time. And it's unfortunate because we hear things that other entrepreneurs tell us, it's all about the people, stupid. And then you're like, sure, but look at my, and it's like, not, you're not hearing it. And I don't know, there are some, I think Williamson talks about this, how there's like, some lessons that for some reason, it's like, we have to learn for ourselves. I still believe that it's like, we can operationalize this at a lower level so that we don't have to learn for ourselves. But like, I'm convinced, I haven't figured it out yet. But, um, so every entrepreneur can resonate with this, which is, every business

• 54:08Alex Hormozi?

  that I've started, I've gotten to the success of the business prior way faster. And I kind of liken it to a video game, where it's like, you beat level one, and then, you know, you get to level two, and it's like, you spend months trying to beat this boss, and you finally figure out how to beat the boss. And it's like, great. And then you spend another three months getting, beating boss three. And then say you start the game over with a new character. It's like, you just zoom through level one, two, and three, and then you get to level four, and you're like, shoot, now I gotta spend time. It's like Virgin Land, like, I don't know how to beat this yet. And so I think that that happens for archetype finding, for skill and talent within an organization. And so

• 54:43Speaker 01

  Say that again.

• 54:44Alex Hormozi?

  So if you have functions across an organization, there are people who are going to drive results within that function. And the first time you hire a salesperson, for example, you don't know what you're looking for. And so you just hire a human who says they can sell. And maybe they can, maybe they can't. And then you cycle, you try to train them, that doesn't work, does work, whatever. And then finally, you, let's say you cycle through three sales guys, and finally you find a killer. And then you have this pattern recognition, you're like, okay, that's what I'm looking for. And then all of a sudden, you try and approximate that person or that archetype as much as you can. And so when you start your second company, you're like, oh, I can quickly staff up sales because I know what I'm looking for. But then you're like, shoot, I've never really nailed sales manager yet. And so then you cycle through, you start, you start whacking away at the boss, and then you have to end up firing the boss at

• 55:28Alex Hormozi?

  the level, because you're like, oh, God, that didn't work. And then six months are gone, because you had to find them, recruit them, hire them, train them, and then find out they sucked, and then start over again. And maybe it takes 18 months to really find the right sales manager. And then you're like, okay. I know what that looks like, but I still don't have a director of marketing. What does that look like? And so it's basically developing this pattern recognition across all functions of the business so that you know what exceptional looks like. And then over time, what happens is as a business grows, your ability to attract talent increases. And so then your standards also grow. And then you find out that there's even more nuance to this, which is that there's a director of sales at a one to 10 million dollar level, which is a different looking person from 10 to 100 million dollar level. And it continues to go all the way up.

• 56:11Alex Hormozi?

  And so it's basically building this repertoire of identifying patterns. And what if you talk to, I would say, more experienced entrepreneurs now, they don't talk about building businesses. It's like assembling them. You just assemble the pieces and you just know that this is how it's all going to flow together. And that fundamentally is basically what I try and decode within the content that I have so that it's like, here's a pattern for how you recognize this. Here's a pattern for how you recognize this, so that you can just move faster through the levels to get to where you want to go. And so to loop back to the original question, which is how important are people in an organization? People are the organization. And so if you ever want to build enterprise value, it's building the collective consciousness

• 56:54Alex Hormozi?

  of the organization, the skills and how they collaborate together towards a specific outcome. And so knowing how to staff that up is the job.

• 57:03Speaker 01

  I think the reason why first time founders feel like they have to learn this lesson themselves is because everything you've just said is an unknown unknown. Like they don't even know that they don't know it. So they stumble, they hire the sales guy because they were their friend from high school and then fucking, and then they go through the pain. And I say this because I'm so unbelievably passionate about it. I went through the same BS. I hired my friend who worked at Prada to be our account. I hired a guy I met at a rap battle to be my marketing director, who was literally playing video games for a living at 30 years old. And I went through this whole thing and then at maybe three, four years into my first business, I accidentally hired someone great. Like through no intention of myself, accidentally. And I saw the net impact they had and I thought, oh my God. Over the coming years, I learned that the game, the fundamental game here was, as you

• 57:48Speaker 01

  said, assembling the best group of people. How, if I'm a first time founder, can I put a system in place to make sure that even though I don't know what a good salesperson looks like, even though I don't know what an ex good person looks like, I still attract them to my company?

• 58:08Alex Hormozi?

  The simplest way of doing it, so the simplest way of attracting somebody to your business when you don't know how to do the job or know who to look for is to unfortunately do the job yourself. And then, once you can break down the job, we follow three Ds, which is document, demonstrate, duplicate. That's how we train anybody. So first, you have to document everything that you do to successfully do the job. And that's step by step into a checklist. Then you demonstrate. So you do this checklist in front of the person that you're trying to bring on. Then they duplicate, they do the checklist in front of you. What's interesting about that three step process is that you'll often find when you try to demonstrate following the checklist, you don't follow your checklist.

• 58:50Alex Hormozi?

  And so then you have to adjust the checklist until you actually follow the checklist. And then when you can consistently follow that checklist and get the output, then you can have them do that checklist. And so I think this is why bootstrap founders, I think oftentimes will find they tend to know more about more things because they had to learn them in order to teach them. Now, what's really interesting about what you said about accidentally finding that star at three or four years in is that I think that happens to almost everyone. Well, hopefully it happens, but the people who end up making it, it happens to almost everyone. Because then you realize, oh my God, like if I had four of these people, like we could change the world.

• 59:26Speaker 01

  Can I say something as well? The other epiphany revelation I had was the star hired stars. And so I think her name's Katie Leeson. Of the 10 people she then hired, nine of them became the best people in my company. And also, I'm not going to say his name, but someone else in my business, a C player of the 10 people he hired, he and everyone he hired was fired.

• 59:48Alex Hormozi?

  So as you go up in the organization with hires, the risk and reward goes up. And so that's something that a lot of people don't like talking about, but I will, which is if you hire somebody and let's say that they're not a cultural fit. Maybe they have the skills or they are a cultural fit and they don't have the skill fit. And they're a leader. What you find often, and it sucks, is that everyone, it's almost like, it's like a tree that has an entirely rotten branch. It's like you end up having to scoop out three quarters of what was underneath because you realized that they were ineffective or they just were against the actual mission of the business. And it's harrowing and it's horrible. But I try to give this analogy to my team because we've had to do it in every business.

• 1:00:32Alex Hormozi?

  Like it happens, it's just part of business is. If somebody goes to the bar and you're at the club and somebody racks up, you know, just ordering shots for everybody, shots, shots, shots, shots. And then that guy dips, that guy leaves.

• 1:00:49Alex Hormozi?

  We all have to pay the bill. In the moment, when we pay the bill, when we scoop out the dead wood, when we scoop out the rot from the organization, it feels horrible. But that pain isn't because the scooping out the rot is bad. It's because we planted it on bad ground or because that guy ordered all these shots but couldn't afford it. And I have a different analogy, because I really want to drive this home because I think it's important, is that in the, in the relationship world, if one spouse tells the other spouse, hey, I cheated on you, I had an affair. That moment is incredibly painful for both parties. And so what it makes you think is, oh, this was wrong to tell the truth. But it's not wrong to tell the truth. What's wrong was cheating.

• 1:01:33Alex Hormozi?

  When you tell the truth is when you make it right. And so the pain that you often have to encounter in the organization feels wrong, but is right because that was, you're, you're righting a wrong and that's where the pain occurs. And that's why so many businesses stay stuck is because they have this affair, they have this person and they're unwilling to have that hard conversation or multiple in order to make it right and they stay stuck for years.

• 1:01:57Speaker 01

  This is another quality of really successful founders that I've noticed, which is what you've just said, is the ability to have the hard conversations sooner. And in my first, in my portfolio where there's first time founders, they're coming to me and in our like monthly meetings saying, God, there's this guy who's running the econ division and he's so bad and I'm having to do the job for him. What do I do about it?

• 1:02:20Alex Hormozi?

  What do you think?

• 1:02:23Speaker 01

  But then they come back to me two weeks later and they're like, he's still there.

• 1:02:25Alex Hormozi?

  Yeah, right. A year later and you're like, it's still John. And you're like, what are we talking about here?

• 1:02:29Speaker 01

  I remember asking in one of such meeting, does John know that you're unhappy with him?

• 1:02:34Alex Hormozi?

  Oh, yeah.

• 1:02:34Speaker 01

  No. So there's this quiet dissatisfaction, which I think is a virus, right?

• 1:02:40Alex Hormozi?

  Right. And what no one wants to discuss is the fact that everyone else knows John sucks.

• 1:02:44Speaker 01

  Amen.

• 1:02:45Alex Hormozi?

  And that that becomes the minimum standard for what is acceptable for excellence in the organization. And so I think like, so if brand is what your reputation is externally, I think culture is kind of what reputation is internally. And so I define culture operationalized because I think culture is a very fluffy word. What does that mean? Right? It's the rules that govern reinforcement within an organization. What do we reward? What do we punish? And so the thing is, is that there's realistically, there's like, people have values because they're bundled terms that ladder up many behaviors. If I said Rolls Royce probably would have some value that's quality over speed, probably, right? And so they would have that, but somebody would have to say like, well, what does that mean?

• 1:03:25Alex Hormozi?

  Right? Well, we hope that we use this as a decision making filter for how it affects behaviors on every situation. So that when you're in the should I go fast or should I make it right? You make it right. And there are other organizations, kind of like the speed, justice and mercy, speed and quality. Both of them are important and sometimes they sit diametrically opposed. And so it's like, we have to say, where do we sit in the gray? So that we can duplicate decision making across the organization, so that we can maintain the culture. And so culture, you know, Leilis says this a lot, but culture, I think this is a Drucker quote, actually. Culture trumps strategy like twice a week and every day on Sunday. If you have a mediocre strategy, but an unbelievable culture, you will crush somebody who has a great strategy and a terrible culture because culture ladders up to performance and execution.

• 1:04:10Alex Hormozi?

  And almost every business is limited by execution, not strategy. Most business strategy isn't that complicated. Like, let's do a really good job, so good that people tell their friends about us. And as long as you have enough gross margin, we'll make money. It's not that hard, right? It's just that the doing it is the hard part. And so, so when we have these, they are the spoken and unspoken roles, mostly unspoken. If someone shows up three minutes late to a meeting and there's 10 people in the meeting and it's supposed to be a marketing meeting and I'm there. If I don't say anything, I have now said, we have an unspoken rule that if someone shows up three minutes late to a meeting, it's okay. I've reinforced that rule. Now, if I, I've reinforced it by not punishing the behavior or at least calling it out. On the flip side, if someone comes in and I berate them, that's also a way of changing behavior. Maybe not the right way to do it.

• 1:04:56Alex Hormozi?

  But I could then, like, what do you do in that situation? Someone shows up three minutes late.

• 1:05:02Alex Hormozi?

  First off, you would probably sideline with that person and be like, hey, I don't know if you realize that you were three minutes late. What happened? And they're like, I was on a client call. It went late. I'm really sorry. Or I was on a sales call. For me and my organization, clients and sales like will take priority. So if you have a meeting and you're on a sale and you're about to close it, close the sale. Right? But if you were just doing nothing and we have this meeting, then this is the priority. And so the next time we hop on, I'll be like, hey, guys, I just want to address something. John was late. He was late because of a sales call. Or when I DM'd him right as he got on late, I would say, hey, make sure you say that. And they'd be like, hey, guys, sorry, I was late. I was on a sales call. And then I would say, that's fine. You're good to go.

• 1:05:47Alex Hormozi?

  Always go make money.

• 1:05:48Speaker 01

  Yeah, yeah, yeah.

• 1:05:48Alex Hormozi?

  And then I'm reinforcing the right thing.

• 1:05:50Speaker 01

  Yeah.

• 1:05:50Alex Hormozi?

  Right? And so I think we're very big on rapid feedback in the moment because that's how you train behavior. So if you look at if, so there's tons of studies on this, but basically if you want to train a dog, right? And you want it to sit. If you have it sit and then immediately give a biscuit, it learns really quickly. If you have it sit and then wait 10 seconds before you give a biscuit, it takes like three times as many repetitions for it to learn that the, that the sitting gets the biscuit. If you wait more than a minute, it never learns.

• 1:06:21Speaker 01

  Really?

• 1:06:22Alex Hormozi?

  You can see the learning curve. The amount of repetitions just skyrockets until eventually there is no amount. But here's where it gets crazy. That biscuit is still reinforcing something, just not sitting. It's reinforcing the thing that just came before it. So if we want people to do something, we have to change it in the moment. And so when we train, and I think that we're, we're a training organization. We're very good at training whatever skills, is engineering ways to give many feedback loops in a short period of time around specific skills. So I use sales because it's one that everyone understands. If you're training a script with someone at the, if you, if you let someone read through a script and then at the end you say, hey, you know, here, here's the things you could have done better, blah, blah. This is how 95% of people train. It's also doesn't work.

• 1:07:08Alex Hormozi?

  We set the premise with, you're gonna read through the script, and in the first 30 minutes, we might get through a third of it. And I'm gonna probably stop you like 30 times. And if that happens, it means we're doing it right. So we set the premise that I'm gonna interrupt you a bunch of times. And as soon as you say the first line, I'm gonna be like, stop. Say it again. Say it like this. Go again. And then they're like, okay. And they say it. And I'm like, awesome job. Do it again. Awesome job. Do it again. So I reinforce it as many times as I can. Okay, go to the second sentence. Right? Now do first and second. Right? Do second and third. Right? And you keep working your way through until eventually they just say it like a whistle. They can sing it, because they've also had so many repetitions and so many feedback loops that they're like, this is what it sounds like when it's right. And I think that the vast, vast majority of organizations have no idea how to train.

• 1:07:49Alex Hormozi?

  And their entire training, their, their way of getting talent is just, uh, let's hire 10, and we'll just see who works out, rather than being able to take someone and level them up. And I think that the ability to train is one of the largest alphas that exist in organizations. Because if you can buy talent at, at B skill and get them to A+, then you net the delta and profit between what you had to attract and pay the person to come and what they perform at. If you have to use a picking strategy, then you have to pay for, for current market rate of the skill. And so you actually eat into margin because you don't know how to train. There are advantages to speed, and sometimes it still makes sense to bring in the talent, because maybe the training requires so much time that it's not worth it.

• 1:08:32Alex Hormozi?

  And so, from a hiring perspective, because we were just talking, this is the theme. We always wanna hire for the smallest skilled efficiency. And so in low skilled labor, for example, if we have a cupcake bakery, and I need somebody to work the counter, that is pretty low skilled labor. And so if there's a number of skills that are required, being able to be on time, smile, be nice, those things are bundled terms that have many skills underneath of them. Right? Whereas, teaching someone how to use the register might take like 30 minutes. And so it makes sense to hire for attitude and then train aptitude when you have low skilled labor. When you have really high skilled labor, I can't teach someone 10 years of being a CFO for M&A.

• 1:09:17Alex Hormozi?

  This is an extreme example, right? And so in that instance, we still hire for the smallest skilled efficiency, but I can probably teach someone to be nice under these circumstances faster than I can teach them to be a CFO. If they have everything that I want here, obviously you would want both, but the world isn't perfect. And so we just try to hire for the smallest skill gap. And attitude is a series of skills. And so instead of thinking of things as attitude and aptitude, just think of everything as skills and then we hire always for the smallest deficiency.

• 1:09:47Speaker 01

  The thing that's easiest to train up.

• 1:09:49Alex Hormozi?

  Yep.

• 1:09:50Speaker 01

  Okay. One of the things that's so central to that is we were saying about giving people feedback. And I wrote down, most companies and most entrepreneurs and founders are scared to give petty feedback.

• 1:10:01Alex Hormozi?

  Oh.

• 1:10:02Speaker 01

  Because if, like, I might notice you making a slight error.

• 1:10:06Alex Hormozi?

  Yeah.

• 1:10:06Speaker 01

  But it feels petty to point that out. It feels like I'm some kind of rude dictator.

• 1:10:11Alex Hormozi?

  Yeah.

• 1:10:12Speaker 01

  Why is that so important? And how do you create an environment?

• 1:10:15Alex Hormozi?

  I'm totally good at that.

• 1:10:16Speaker 01

  Yeah, I know, but a lot of people aren't. I have lots of managers on my teams and they don't want to offend people. Their central focus is too much on being nice and it's...

• 1:10:24Alex Hormozi?

  Dude, kind, not nice. It's one of our, one of our, one of our cultural, you know, I wouldn't say it's not the one on the site, but things that are repeated internally all the time, kind, not nice is one of the big ones, which is that you're actually being unkind to someone by not maximizing the likelihood that they succeed in their role. And people don't lose jobs because typically because of one thing. It's usually 100 small things. And so if we can immediately fix those 100 small things, most people want to do a good job and most people want to succeed and most people want to move up. And we can maximize the likelihood that those things occur if we help them. And this is where the culture is there. If on that first day, like I said, we say, we're going to work through the script and we're only going to get through a third of it. I'm going to stop you 30 times to correct you.

• 1:11:07Alex Hormozi?

  We've already kind of set the expectations of how things go here. Like, we will fix things and we will fix them fast. And it's understanding the difference, and I, we teach our teams this, is what is the difference between insult and criticism? So criticism is a discrepancy between actual and desired. So you're supposed to be on time and this week you were late twice. And so that is discrepancy. And you're lazy is the insult. And so the judgment that's associated with the discrepancy is insulting someone. Pointing out the discrepancy is purely criticism and that's objective. And so if you want to improve the team, remove insults, focus on criticism and tell them what to do instead. And so the easiest way to think through this, I think, is stop, start, keep. So I'll tell you a real story.

• 1:11:52Alex Hormozi?

  So we had a director level, so a relatively high person in the organization who was having behavior issues. Said differently, everyone thinks you're a dick. And so he ended up making his rounds of the executive team and having a sit down with all of them because he was really proficient at the scale. He was a high performer, like good at what he does, just no one liked him. And so he talks to four different executives and the behavior didn't change. And so he finally came to my office and he was like a little bit worried and he was like, "Am I going to get fired?" And I was like, "No, HR will fire you if you're going to get fired." "You're not going to be with me." "What are we talking about?" But when we sat down, I said, "Okay, I want to be clear.

• 1:12:36Alex Hormozi?

  I want to decrease the likelihood that people call you a dick in the future." I was like, "Does that sound like an agreeable goal?" And he said, "Yeah, I want that." I was like, "Okay, good." "I also don't care if you are a dick. I just care that everyone else thinks you are." And so I just want to minimize the likelihood that I get drawn into this ever again. So the reasons that they are calling you a dick, we need to dive into that. Because every other conversation you'd had with some of the leaders was just like, "Hey, man, stop being a dick." And the thing is, is what do you do with that? Nothing. You just get insulted and then you have nothing to do. And so instead it's like, "Okay, when you cut people off when they talk..."

• 1:13:15Alex Hormozi?

  Stop, start, keep doing. Do this instead. Shut up. So when someone else is talking, wait until they finish. And if you're not sure, ask if they're done. He's like, okay. When you give unsolicited advice on how they should run their department, don't. Or ask if they want it. If they say no, don't say anything. And so we identified three or four behaviors that he was doing. And I said, just do this instead. And literally the next week, people were like, what happened to him? He's like a new man. And the thing is, is that he wasn't a dick. He just didn't know how to behave. And so if you want to teach, teaching has to come from conditions and a behavior. And so if you're trying to get someone to be different, you have to give them the

• 1:14:00Alex Hormozi?

  conditions under which they need to change. So when someone says this, if this occurs, there's a condition, and then this is what you need to do. And so the vast majority of training that exists does none of that. It's just people shouting at each other, insulting them, and saying, hey, you need to level up. You need to, you need to get, you know, you need to increase your performance. What does that mean? And so I think one of the easiest ways to identify the actual behavior, because that's actually the tough part, is like, why do I think he's a dick? Why do I think she's lazy? Because I want to insult them, but that's not, so how do I help her? It's like, okay, why am I describing her this way? Okay, so when I slack, she's, she tends to be slow in her response. So sometimes it takes an hour, sometimes it takes three hours. I'm like, okay, so I'm going to gather that data and be like, okay. So when I talk to her, I'm like, I'm going to have this, this branch of data.

• 1:14:45Alex Hormozi?

  The next thing is, when I get stuff, you know, projects from her, they're incomplete. I feel like they're not all the way fleshed out. I'm like, okay, that's a second, second bucket. The next one is that when she shows up on Zoom, she looks disheveled. I'm like, okay. So now when I talk to Sandy, I'm not going to say, hey, Sandy, you look lazy, need you to level up a little bit here, otherwise we're going to have issues and have to put you on a PIP, performance improvement plan. Right? Instead of saying that, just put her on the performance improvement plan without saying it's a performance improvement plan, and just say,

• 1:15:19Alex Hormozi?

  When you show up on calls, change your background to like the standard company setting so we don't see your bedroom, right? And make sure that from the waist up, you look professional. And what do I mean by look professional? Have a collared shirt and put your hair back. Okay? Now, some people are like, how does that work in woke politics? No idea, deal with it in your country. But like, you should have a culture where you can say stuff like that. The second thing is that, right now, I need you to turn on Slack notifications and I need you to respond within 10 minutes. Okay? During work hours. After work hours, fine. But nine to five, you have to respond within 10 minutes. Do you think you can do that? Yes. And so the end goal here is like, I will get everyone to stop calling you lazy.

• 1:15:57Speaker 01

  It's interesting because it goes back to something you were saying earlier where you were saying specifics versus vague.

• 1:16:03Alex Hormozi?

  Yeah.

• 1:16:04Speaker 01

  Prefrontal cortex versus amygdala. Like, an insult is amygdala.

• 1:16:06Alex Hormozi?

  Totally.

• 1:16:07Speaker 01

  Can't do anything with that. But if you make it specific, then action is more likely to occur and useful action is more likely to occur. On this point of a person who's listening now, who's an entrepreneur, they've got a business and they're thinking about making those first hires, I wanted to throw a proposition at you to see what you thought of this. One of the things that I think can help you not fuck up in the hiring process, especially early, is if you just live it with the permanent assumption that you are bad at hiring. So I live with the permanent assumption that I'm bad at hiring because I've got biases, there's things I don't know about sudden things, et cetera. And when you start with that assumption that you are really, really bad at hiring, you try and decentralize the decision-making. So one thing I say a lot to startup founders is, if you're hiring a salesperson, create

• 1:16:50Speaker 01

  an interview process where there's five people and one of them might be you and the other four are the best salespeople you've ever encountered in your life. Like, who sold you your house?

• 1:16:59Alex Hormozi?

  Yeah.

• 1:17:00Speaker 01

  And ask them to be part of the interview process. How does that sit with you?

• 1:17:05Alex Hormozi?

  I think it sits great. And I think that the amount of references that you go for is proportional to the importance of the role.

• 1:17:11Speaker 01

  Okay.

• 1:17:12Alex Hormozi?

  So Sam, the co-founder of School, so he was a non-technical founder.

• 1:17:15Speaker 01

  Who's School? What is School? Sorry.

• 1:17:18Alex Hormozi?

  So School.com is a platform for building communities. Right now, it's online, but we have an in-person component so that people can meet online and then meet in person. It's awesome. And so that's the only investment that I've publicly associated myself with outside of acquisition.com. So it was a very big deal, something that I believe in a lot because it's education. It's where education and media meet.

• 1:17:38Alex Hormozi?

  Sam is the founder of School and he is not technical. And so he knew that to build an exceptional software product, you need world-class talent. And so he interviewed 600 developers to find Daniel, who had become the CTO of School. And he asked everybody to know who the best coders were. And then he talked to all those people and they asked them who the best coder they knew was. And he talked to those people. And then he asked them who they thought the best coder they knew was. And eventually, like, Daniel's name came up as like god-tier. And he's like, if you can ever get this guy, he'd be amazing. And so he ended up finding a way in to find Daniel.

• 1:18:20Alex Hormozi?

  And then he ended up becoming co-founder of School as well. And what's interesting about that process is that it actually ladders into rapid learning. And so when I was a consultant, you know, I was 22 years old and I would go and have to give presentations to four-star generals, right, about weapon systems that I knew nothing about because I was, you know, chugging beers like 12 months earlier, right? And so how do you sound intelligent in front of somebody who has 30 years more experience than you do? And so this is the consulting process for rapid learning. First is you find five experts. So you ask the one person, you're like, hey, tell me the five people you know who are the best at this thing.

• 1:19:04Alex Hormozi?

  And then you ask them, who are the five people you know who also know a ton about this thing? And for each of the interviews, you take all of their information down of like, what do you think about this? What do you think about this? What do you think of this? And what happens, you start mapping kind of like the information ecosystem. And the reason you talk to experts first is that there's no lack of information. Like, you can Google whatever you want. The problem is there's too much. And so the filter becomes where the highest point of leverage is. And so experts have spent years filtering out for what's important. And so then you basically rapidly consume the most filtered information and then you reorganize the information. And so this is what a typical analyst will do as a consultant. It's like, I would say for the Space and Cyber Project that I did, we had 600 pages of notes from all the interviews that we did. First step is you re-categorize all the news by category.

• 1:19:48Alex Hormozi?

  So it goes from raw notes to categorized notes. Then from there, you distill and consolidate notes into where the... Truths or the most distilled beliefs that we have about these particular, in this case, weapon systems, but it could be whatever. And then from there, you're able to generate your inferences for what it looks like when it's right, what the problems are, what potential solutions might be. And then that's fundamentally how you say, this is what we need to do next. That's if you're trying to learn something. But in talking to all those people, it actually works the same way because the interview process, the higher up the talent is, the more I would encourage entrepreneurs to use it as a learning process as a consultant. And so I present somebody who wants to come in for this role,

• 1:20:31Alex Hormozi?

  the actual problems of the business for which they would have control over and say, how would you solve these? And so then they tell me all the things that they would be considering and what they're thinking about. And then I'll ask the next guy what he thinks and what he thinks and what he thinks or she thinks. And then all of a sudden, one, I get free consulting, which is amazing. But secondly, you can tell by how the quality and quantity of metrics that someone tracks, how good they are at a particular scale. And so this is fundamentally what separates beginners from experts. And so beginners typically have binary thinking in terms of outcomes. Either it worked or it didn't work. An expert, for example, for a marketing campaign, isn't going to say, oh, marketing doesn't work or ads don't work. They're going to say, this particular campaign didn't work because our click through rate was too low

• 1:21:13Alex Hormozi?

  or because it was sending traffic that wasn't qualified and we weren't converting enough on the page. Or we didn't have enough people who were taking the second step in our four steps. And like they can break down any part of that continuum. If I'm interviewing a salesperson and the person says, and I say, okay, how are you going to affect these metrics? What behaviors are you going to do? So to the same degree about vague versus specific, if they give me vague things back, I'm going to dial in and say, no, but what are you going to do that's going to change that? And by the way, this is a wonderful way to teach in the organization, how what they do makes a business money. And so if you have like a customer support rep, for example, and you say, hey, how do you make our company money? If they can't explain it to you, they probably aren't doing it.

• 1:21:56Alex Hormozi?

  And it sounds as simple as it is, but if someone says, well, you know, I answer customers' questions. And it's like, how does that make us money? Now, if they're able to say, "When I answer customers' questions, I increase the likelihood that they refer to other customers, and I increase the likelihood that they stay and continue to pay for us. So I help us get new customers by delivering an amazing experience, and I get the customers that we have to continue to pay us. And if it makes sense, I recommend other products and services that we have, that I can introduce them to sales guys who can explain that so we can generate even more revenue from them." I'd be like, "One, if you can articulate that, you're probably not just a frontline customer service guy. You're probably a director, right? And so that level of nuance, the specificity, is what shows expertise. And so when I look for and I'm interviewing for candidates,

• 1:22:40Alex Hormozi?

  I first, I want to gather as much information as I can. I want to drain as much knowledge as possible. But I'm also really looking for the quality and quantity of metrics they track and behaviors that they do to influence those metrics. So in the hypothetical problem that, let's say, we're trying to solve, we have low click-through rates. I'd be like, "Okay, this is the problem we have. How would you approach changing it?" And then that actually gets me to understand what they would do in the organization. Because it's very easy to say, "I'm going to come in, and let's say a sales director, I'm going to come in and I'm going to improve the sales team." I'm like, "Okay, cool. What are you going to do? You know, I'm going to coach the guys up." I'm like, "Okay, what does that mean?" And so just continuing to ask, "What does that mean? How do you do that?" Until they're like, "Okay, well, I'm going to meet with the guys every single morning, and we're going to do role-play."

• 1:23:24Alex Hormozi?

  "All right, well, how do you role-play?" "Well, we're going to start with a script." And we're like, the more detailed they get, the more I believe they can do it because they've actually explained what actions they will take. If someone can't dial it into actions, then it's very unlikely that they're going to take them. And so what I just outlined is basically three core things. So one is the quality and quantity of metrics that they track. The second is the behaviors that they're going to do to influence those metrics. And then, laddering up to third, how do those metrics and these behaviors influence the revenue in the business? If they can explain that clearly, you have a winner.

• 1:23:59Speaker 01

  Requires them to know if the person's not bullshitting.

• 1:24:03Alex Hormozi?

  Yeah.

• 1:24:04Speaker 01

  And also to know like what metrics matter, right? Because someone could sit in an interview for my first time founder, say a bunch of big, complicated words. It sounds good. I hire them. And that's really what I'm trying to mitigate here is how do I not let a bullshitter pass me?

• 1:24:16Alex Hormozi?

  I think having them explain it as though you were a fifth grader. And so I always, I make the same joke, Ethel, because you know, you do this enough times, you make the same joke. It's like, hey, um, I need you to explain this to me like I'm a golden retriever, which is a type of dog. So assume I know nothing. Let's start there. What do you think customer service means? And so if someone really has expertise, so Richard Feynman was famous for the physicist, which is if you can't explain it to a child, then you don't understand it well enough. And so if they do confuse you, then it means that they don't understand it or they're doing it purposefully, neither of which are good scenarios.

• 1:24:55Speaker 01

  You said something during, during that explanation. You said, you were talking about your, like your founding partner at school and you said that he was pursuing a CTO. And he said, if we can get this guy, he'd be amazing.

• 1:25:08Alex Hormozi?

  Yeah.

• 1:25:08Speaker 01

  So many entrepreneurs that are starting in business have that thought sometimes. They think if I could just get that guy from that amazing company to come join our garage, where we're building this new startup, it would change our fortunes. But how? How do I get a truly exceptional person who is being paid shit tons of money, who has a comfortable job, who has security to come join me in my bedroom?

• 1:25:33Alex Hormozi?

  Well, I think there's, there's the soft and the hard side, right? So the hard side is the, is compensation, maybe you don't have as much cash. So it's like, you're going to have, you know, a few levers at your disposal. So you have, what do you pay them in cash? What's their upside if there's equity or shares they're going to give them? This is obviously if it's a software business, you can, and I'm, you know, it's probably worth segmenting this. So if you're not in a software company, which is probably the vast majority of people listening to this. There are four elements within equity that exist. You have control, so who gets to call the shots? You have risk, what happens if everything goes wrong? Who's liable? You have profits, which is the cash flow of the business. Who gets distributions? And then basically sale or enterprise value? When we sell or if we sell?

• 1:26:17Alex Hormozi?

  Who gets to participate in that upside? Those are kind of the four elements of equity. Now, the thing is, is that you can obviously grant shares or you can give stock in a company. That's one way of doing it. But you can also basically contract around any of these things. Now, most of the times, they don't want the risk and they probably won't get the control if it's your company. So you really just have profit and you have upside in terms of a sale. And so you can contract these things and there's lots of structures, so I'm not going to get into the legal around this. But asking somebody, what do you want? Sometimes it's just a very powerful way of beginning this. And my favorite question for these types of scenarios is asking, what would it take? So when you have this guy, it's like, man, it would be amazing. Like, how do I sell this guy?

• 1:27:01Alex Hormozi?

  I just ask him, what would sell you? So say, what would it take? Because I don't know, he'll tell me. And I love that frame because it assumes yes. It assumes you're going to come. So what would it take?

• 1:27:15Speaker 01

  So many of the books that you write and so much of the content you make centers on this idea of sales.

• 1:27:21Alex Hormozi?

  Yeah.

• 1:27:22Speaker 01

  And it is a sale, isn't it?

• 1:27:23Alex Hormozi?

  Totally.

• 1:27:24Speaker 01

  And I always think about the Steve Jobs quote where he met with, was it John Sculley? Who was working at Pepsi? And he said, you want to continue selling sugar water for the rest of your life? Would you want to come change the world?

• 1:27:34Alex Hormozi?

  Yeah.

• 1:27:35Speaker 01

  How does that sort of emotional, psychological element of the sale factor into persuading someone exceptional to come and join your mission?

• 1:27:42Alex Hormozi?

  I think it's the amygdala story that we started with, the nasal strip thing, which now has actually reared its nose multiple times, poked its nose in a few times here. But I think that pitch that you're giving to a potential co-founder or potential early hire who's going to be a leader is the same more or less that you'd give to an investor. It's almost the same pitch. Except instead of investing capital, they're investing time. They're investing their life. They're investing their expertise. But fundamentally, you're asking for investment. I'm just asking you.

• 1:28:08Speaker 01

  There's also this weird question, which I've actually never asked anybody. But founders often struggle with, do I hire naivety? Because that's going to probably create new solutions to old problems, like the young scrappy kid that gets TikTok.

• 1:28:23Alex Hormozi?

  Yeah.

• 1:28:23Speaker 01

  Or do I hire experience, which is going to be more expensive, more conventional and safe? And I see some companies lean too far either way.

• 1:28:31Alex Hormozi?

  Yeah.

• 1:28:33Alex Hormozi?

  I have actually fairly strong opinions on this.

• 1:28:36Speaker 01

  Oh, great.

• 1:28:36Alex Hormozi?

  So I actually think it's, and I was talking to the CEO of ButcherBox about this particular thing last week. I think it's a barbell strategy where you have people on either ends and very little in the middle.

• 1:28:48Speaker 01

  Interesting.

• 1:28:49Alex Hormozi?

  So I love lots of young, hungry people who are here for growth and want to learn and are ready to work long hours and just go all in.

• 1:29:00Alex Hormozi?

  And the people at the, call it the back half of their career that are here, that they've made enough money. They know they can get a job wherever they feel like it. You're not doing them a favor by giving them a job. And they're not, what I, a term I hate, which is careerists. They're not obsessed with their title. They're not obsessed with their career path, what their promotion plan is going to be. They basically have a litmus test, which is like, I have to have make about this to get to come in and do this with you. But they actually just really love the work. And so these people are learning, so the young people are learning and overcompensating with tons of hours and reps. And these people are bringing their experience to the game and creating significantly more leverage with strategy. The people in the middle are the ones that tend to be the pain in the ass for everybody.

• 1:29:46Alex Hormozi?

  And I don't think, and be clear here, I don't think this is actually an age thing. I think it's a perspective thing. So it's just, are you here for growth or are you here to share what you know? And I think that it's the people in the middle that are like, well, I'm bringing something, but I need some. It's like this kind of tit for tat relationship that I would say the vast majority of people that don't work out are in that bucket.

• 1:30:10Speaker 01

  And what role does naivety play in innovation here? Because the kids that don't know the rules.

• 1:30:15Alex Hormozi?

  Yeah.

• 1:30:15Speaker 01

  Are more likely to stumble across nuances, right?

• 1:30:18Alex Hormozi?

  I think, yes.

• 1:30:22Alex Hormozi?

  You can, fundamentally, you can disrupt any industry if you don't know how it's supposed to go. And so, but that's, I think that really teases out something that we said at the very beginning, which is. Starting from first principles, which is what are the few things I know to be true? And then basically forgetting everything else. And when you build from those assumptions up, you end up building lots of different paths up the mountain that may or may not have been trodden before. I think one of the most corroborating things that can happen sometimes is that you re-derive a solution that already works. And you're like, okay, well, now I know why this works. But I think that's actually, then you have more confidence in the path. And you're like, okay, that's fine. But now I know why we're doing this, not just because other people did it, but because I understand why it works.

• 1:31:04Alex Hormozi?

  And so I think it just comes down to what are the few truths that I know to be true? And going all in on those things. I know that if customers love my product, they are more likely to tell other people about it than if they hate it. That I feel very confident. So then we say, okay, what are the things that must occur in order to get someone to quote, "love my product"? AKA, increase the likelihood that they tell their friends about it or post about us. And so now, you can break this, and again, this is where quality and quantity of metrics matter. So it's like, how much more nuance can I break this up into small pieces? So it's like, okay, at what time do we deliver these messages? Around what experiences that have high likelihood of them posting? Can we decrease the friction around them sending friends? How can we make it both easy? And how can we incentivize it? And so all of these components, whether it's a service business, a physical products

• 1:31:49Alex Hormozi?

  business, a software business, it still works the same way. And for each customer, for example, as we're taking someone through this, I have four milestones that I look for, which are the four Rs. So how do I get them to review my product? How do I, well, in order it'd be, how do I retain them immediately? How do I get them to review my product? How do I get them to refer somebody? And then how do I resell them? And so they're basically, those four Rs is what I try and take every customer through. It's a very simple framework. When you think, I was like, oh, man, customer success, what does it mean? It's just like, well, these are the four things that I want to occur. And so all I'm trying to do is reverse engineer what activities increase the likelihood that each of these four Rs happen.