How I Made Millions Without Being the Best - Part 2 (The Iced Coffee Hour Reshare) | Ep 871

In part 2 of this reshare episode, Alex (@AlexHormozi) returns with his Iced Coffee Hour interview, digging deeper into how he approaches massive scale, brand-building without burnout, and the uncomfortable truths behind what it actually takes to grow a $100M+ business. Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast, you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth. Wanna scale your business? Click here. Follow Alex Hormozi’s Socials: LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition Mentioned in this episode: Get access to the free $100M Scaling Roadmap at www.acquisition.com/roadmap

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

• 0:02Alex Hormozi?

  High activity, high alignment. If you have both those things, you have somebody who's moving a lot of things in the right direction and ideally you get a lot of attention back. If my life gets worse when someone starts, that's a bad sign. And if my life doesn't change when they start, that's also not that good of a sign either. By and large, I want to see some dramatic changes in how my time is getting allocated from bringing somebody in, especially if they're taking things off my way.

• 0:24Speaker 01

  What's a small hill you're willing to die on that some people might just think is trivial?

• 0:29Alex Hormozi?

  That manifestation is bullshit and action is the only thing that matters.

• 0:33Speaker 01

  Wouldn't you say that manifestation is the first step before action?

• 0:38Alex Hormozi?

  So if we, it depends on how we define manifestation. So if we define manifestation as like an electrical signal occurs in your brain, sure. But I don't think that's how most people describe it. So I would say be totally on board with manifestation if we define it as knowing that. Like, I know that this is possible. Like I saw this or I have some perspective that has changed. To me, that's just knowledge. So if you have knowledge that you can't start a bank, you have to have the knowledge that you can start a bank before you start a bank. That makes sense. So, fine. But the bank doesn't occur until you take the action. But the idea of the mindless ideation of I'm going to manifest my husband into existence is, I think, relatively bullshit. Now, that being said, there are some people who do that and then also take actions that then change their circumstances and then they get the husband and then they misattribute

• 1:22Alex Hormozi?

  what was the thing that caused it. And so for me, I think, I mean fundamentally, the position that I'm in is trying to identify causal relationship as accurately as possible. And so, you know, the logical proof that I use with this is just simply, you know, mindset plus no action, no outcome. You know, mindset plus action, outcome. No mindset, action, outcome. So the action's really going to be the only thing that's going to.

• 1:44Speaker 01

  I would argue that you need mindset, you need some sort of mindset to have the action. Like I'm, I'm kind of big into manifestation. So it's, it's interesting to.

• 1:51Alex Hormozi?

  That was my headline. There you go.

• 1:54Speaker 01

  Like to me, like the example of

• 1:55Alex Hormozi?

  People get so upset by this, by the way, when I bring

• 1:57Speaker 01

  I find it really interesting.

• 1:58Speaker 02

  What's their main contention with it?

• 2:00Alex Hormozi?

  Well, they have a history of being reinforced for talking to other people about manifestation. And so they want to talk about have other people nod and smile and agree with them. And those are all pro-social behaviors. And so I think it makes sense that they would do that. Again, it depends on how we define manifestation, which I've yet to find anyone who's been able to define it well. Actually, you can define it really easily. And so that's the, that's the part, right? So it's really just this word that has all these positive connotations.

• 2:20Speaker 01

  I just think it helps you with focus.

• 2:21Alex Hormozi?

  So like what manifestation?

• 2:23Speaker 01

  Let's say the, let's just say the boyfriend girlfriend example. Where you manifest the perfect.

• 2:28Alex Hormozi?

  So what is manifestation?

• 2:30Speaker 01

  You thinking clearly about your wants, needs, goals, what to look for, who this person is. Correct. Now, by manifesting that, you're going to be on the lookout for those sort of qualities.

• 2:42Alex Hormozi?

  The manifesting, the prioritization or the minute, like you, we said prioritization and then manifestation.

• 2:46Speaker 02

  I think the problem is that you're kind of using a derivative definition of prioritization.

• 2:50Alex Hormozi?

  This is fundamentally why I have an issue with.

• 2:51Speaker 02

  And then, and then because you're using manifestation to indicate some sort of data or information. A lot of people that have a different definition of manifestation are going to apply that to their definition.

• 3:02Speaker 01

  I just think people know what manifestation is.

• 3:05Alex Hormozi?

  No, they just, that's, that's actually my point.

• 3:06Speaker 02

  A lot of people think like you sit down and you manifest something and then they think it's going to walk right through that door. Like they think that cosmically, everything there's just like somehow get bestowed.

• 3:16Speaker 01

  Like an extract, I think I don't. That's doing better than nothing.

• 3:20Speaker 02

  I don't think so because there's, there's, there's data that shows that you can trigger the same dopamine receptors. When you think about getting a billion dollars than when you get a billion dollars. Like it's, it's a similar thing. Obviously it's going to be a lot less intense when you think about it. But when you daydream about all these amazing things that are happening, it doesn't actually change the, the reality of your existence. It's only giving you small dopamines.

• 3:40Speaker 01

  When you, when you could get yourself to have a firm belief that something is going to happen and that nothing is getting in the way. Your actions are going to be reinforced by that.

• 3:48Alex Hormozi?

  Well, the action is the only thing that will matter.

• 3:52Speaker 01

  I think there's got to be a belief in yourself to stick with those actions.

• 3:55Alex Hormozi?

  You have declarative knowledge, but also those are skills. And so, so if someone tries a hundred times versus 10 times, I'd say the fact that they took more action is the reason they got to where they're trying to go. Now, when we try to get to like, why did they do that? I don't think anyone has the answer to that. I think the reason for that is because no one knows why they do it.

• 4:10Speaker 01

  I think they have a core belief in what they're doing. So that that dealing is going to have an outcome.

• 4:14Speaker 02

  To defend Graham, when I first reached out to Graham to try to provide value to him. Exactly. I man, I sat in my room like.

• 4:21Speaker 01

  The benefits of this podcast.

• 4:22Speaker 02

  I, I had no skills whatsoever. The only thing that I had was high confidence in my aptitude and, and confidence. Like I knew that I could provide value, but it was more of just like something that existed in my brain. I don't know if I necessarily had evidence to support that.

• 4:37Alex Hormozi?

  Sure.

• 4:37Speaker 02

  I just knew that I was competent enough. And so maybe I manifested that, one could argue that.

• 4:42Alex Hormozi?

  So the big, the big, zooming all the way out here, just for, for context, I think the reason that people get really up in arms about it is because these are, these are dogmas, right? These are belief systems which people operate at their very core, which really just means ways of being, which means ways of behaving and ways of talking is included in that in terms of behavior. But people have a very hard time defining what the hell they're talking about when we ask some of these words that are amorphous. And so I have by and large just removed them from my vocabulary so that I can describe the observable and it has been probably the single most productive thing that I have done in my career. And so is it a small hill? It is probably the only hill and the main hill that I will die on, which is that behavior rules everything. And you have a history of past, you know, reinforcers or punishers for a set of behaviors and you repeat them in the future.

• 5:27Alex Hormozi?

  And that's the only thing that I will say about why someone does something. You've been rewarded in the past for reaching out to people for doing things. And it can be cross domain. So it's like, maybe you reached out to girls and they was able to jump into business and you were able to reach out to business owners. So.

• 5:39Speaker 01

  Definitely girls though.

• 5:40Alex Hormozi?

  Well, I know that, I know.

• 5:43Alex Hormozi?

  But you have the idea of it's across, but those are just sets of skills. Those are behaviors. And so focusing exclusively on behaviors and un-mundling terms that are amorphous has been, I think, the key to my ability to communicate to people, train staff and kind of enlist people to where we're trying to go. And I think that, that has really been like, when people are like, man, I feel like Alex is so good at making things clear. It's because I just do not use amorphous language. And if I'm going to use a term, I will define the term.

• 6:09Speaker 01

  So now.

• 6:10Alex Hormozi?

  By the observable.

• 6:11Speaker 01

  I believe to shift belief starts with mindset.

• 6:15Alex Hormozi?

  Well, it's like, we're like, what's belief, what's mindset, what's manifesting?

• 6:20Speaker 02

  Manifesting.

• 6:21Alex Hormozi?

  This is not to post. I actually just want to help, not you guys, everyone else. No, but I just, I don't think it serves people. And that's why, and I just don't like that. So people are like, I mean, yes, you feel great about it. I'm glad that if you, if you had the option between making a hundred phone calls and sitting there and manifesting, you will get further making a hundred phone calls. And so I'm trying to decrease the amount of time it takes people to just do the thing.

• 6:43Speaker 02

  It's funny, the first podcast we had with you, you were mentioning that you had recently removed the word, I think it was.

• 6:51Alex Hormozi?

  Should.

• 6:52Speaker 02

  It was should.

• 6:52Alex Hormozi?

  Yeah.

• 6:53Speaker 02

  You had also removed because.

• 6:55Alex Hormozi?

  Yeah. Cause of relationships. We don't know.

• 6:57Speaker 02

  You, you, you remove all of these words and every single podcast, you're like, I've since removed this word. And now I guess it's just like, you've gone to the meta of just reducing amorphous descriptions of things.

• 7:09Alex Hormozi?

  Just to the observable.

• 7:11Speaker 02

  Just to the observable on this existence.

• 7:13Alex Hormozi?

  It's been, it will be, I'll call this, I think that the book that I write on behavior will, it's how all of my books put together.

• 7:20Speaker 01

  Tell us about the book on behavior. I'm curious.

• 7:21Alex Hormozi?

  Well, it's not, it's, it's outlined.

• 7:23Speaker 02

  You're cooking now.

• 7:24Alex Hormozi?

  Yeah, it's, it's cooking. But I, I have this belief and it's probably my own limitation, but I want to have a publicly verified billion dollar plus net worth. So that I can then, I think, have the pedestal, or at least the pedestal, not the right word.

• 7:39Speaker 02

  Credentials.

• 7:40Alex Hormozi?

  Yeah.

• 7:40Speaker 01

  Oh, I know, I know, I know the book's title, Billion Dollar Offer.

• 7:43Alex Hormozi?

  Billion Dollar Beliefs.

• 7:45Speaker 02

  Billion Dollar Beliefs. That's pretty good, actually. I like that.

• 7:48Alex Hormozi?

  I probably call it something, I know what I'd probably call it, but.

• 7:50Speaker 01

  Billion Dollar Manifestations.

• 7:53Alex Hormozi?

  Billion Dollar Mindset, Billion Dollar Mindset, Hundred Million Dollar Mindset. Yeah, Billion Dollar Brain. I will, I'll, I'll give you an explanation of what I mean by this. So.

• 8:01Speaker 01

  It's definitely got to be a billion dollar and then something that starts with.

• 8:04Speaker 02

  I don't know. I think billion dollar would scare off a lot of people that are just looking for general, because if you want to market them now, you kind of have to be billion dollar.

• 8:12Alex Hormozi?

  So it's, so we have to define, so it's like, in the beginning, we have to start defining terms of what's the, what's the meta concept that I kind of operate off of? And the biggest one is fundamentally that, like, what is learning, right? Like, what is learning?

• 8:26Speaker 01

  Radation.

• 8:28Alex Hormozi?

  So it's same condition, new behavior. That's fundamentally like from a behavioral science perspective. It's if you were, so if you're a person is condition A. And then we teach them something when they re-enter condition A, they change their behavior. So it's observable. So same condition, new behavior. If you, the phone rings and you say X, Y, Z. And they say, hey, don't say X, Y, Z, say Z, Y, W. The phone rings again, you say X, Y, Z, you haven't learned. If you say Z, Y, W, you have learned. If you say something else, you've learned, but the wrong thing. Right. But fundamentally, it's a change in behavior within the same condition. And so it's okay if we say that as kind of like tenant number one. The next tenant is looking at what is intelligence. So intelligence is going to be rate of learning. So if I have to do that, you know, example 10 times with, you know, Jack and five times with Graham, then Jack has less intelligence than Graham does. In this context, this is a hypothetical Jack and a hypothetical Graham.

• 9:12Alex Hormozi?

  These names are completely taken at random. But then it's like that. But the reason I think that's important is because then it allows people to have direct influence on their own intelligence. So if you learn faster, you change your behavior faster than somebody else, then you can in a very real way be more intelligent than them. And so when we asked originally, you know, do you have to have raw intelligence? I think it depends on what type of intelligence we're talking about when it comes to surrounding behaviors. This is how I define it. But beyond that, it's okay. Well, then a lot of words have been like, so what's an excuse? So like an excuse is a statement to avoid punishment. Just very simple. It's okay. That's what it's a statement that someone says to somebody like, what's an excuse? Show me when an excuse has occurred. And by, by looking at, you know, patience, I've defined this plenty of times. So I had to use it all the time, which is figuring out what to do in the meantime. So if you say to a young kid, be patient, they don't know what that means. It's a bundled term. It means nothing. Be patient. It means nothing.

• 9:55Alex Hormozi?

  So how would I give some directions on how to be patient? Figure out something else to do. That's all I have to do. We are all being patient right now for our S and P 500 accounts. We're being paid, we're doing something else. That's all we have to do is just something else. And so it makes patience operationalized, right? Like, how can I do patience? Like support, what's support? Hey, why aren't you supporting me?

• 10:12Speaker 02

  A million dollar dictionary.

• 10:14Alex Hormozi?

  Yeah.

• 10:14Speaker 02

  That's what it could be.

• 10:15Alex Hormozi?

  It's like when a person you interact with deliberately lowers the probability of failure. That's when someone supports. So it's, hey, like I've been supporting you. It's like you make my life harder. You have not been decreasing the probability of failure. Like your wife, your girlfriend who's trying to take away from work. It's no, you're actually not supporting me. You're increasing the likelihood of failure. So how are you defining support? Right? And this is why I think definition of terms is so important because people just say words. They don't even understand the words they're saying and then they get upset about words. They haven't even defined themselves because they get rewarded in the past for getting upset about it. With other people they get upset about with together. So it's and so in defining into these terms has been really helpful for me because it helps me navigate the world. So it's like, what's, what's guilt? What's shame? Like these, these really amorphous terms that are trying to be like, show me guilt. It's what's when it's when you break your own rules and what shame is when you break someone else's rules.

• 10:58Speaker 02

  What about purpose?

• 10:59Alex Hormozi?

  Purpose, let me see if I have to find that one. I might have it. I have, I have.

• 11:02Speaker 02

  So you're really just kind of redefining all of these words, or at least simpler.

• 11:05Alex Hormozi?

  The words that are important and, and by defining them, it's more putting them into a context that.

• 11:11Speaker 02

  We're all talking on the same plane.

• 11:12Alex Hormozi?

  Well, it's, it's, it's, it's, it's defining them within the observable universe. That way we can all agree. These are the things that we see when someone has exhibited resiliency. It means that they've returned to a baseline of behavior. And how resilient they are depends on how quickly they do that. If someone's not very resilient, it means that they extend the, the change in behavior for a long period of time. If they're permanently quote traumatized, it means they never changed their behavior. Right? So it's like, what's trauma? Right? Trauma is a permanent change of behavior based on a reverse of stimulus, a negative stimulus. Right? But then the question is, okay, if we have this trauma, right? And then people are like, I store trauma in my spine. It's what? Where's there, is there a hard drive in your, like where, what cell is this being? People just say things. And so it's just, it's a permanent change of behavior from something bad happening.

• 11:56Alex Hormozi?

  Okay, now if you're a little baby and you touch a stove and it burns your hand. And that's a reverse of stimulus and you change your behavior, you don't touch hot stoves again. Was trauma bad?

• 12:06Speaker 02

  I love that. I actually like, once you said that you're redefining everything into terms of the observable universe. I think that that like I.

• 12:14Alex Hormozi?

  Yeah, it'll be, it'll be my most, I think it'll be my most successful.

• 12:16Speaker 02

  I'm curious though, for something as I would say.

• 12:20Alex Hormozi?

  What's courage? What's courage, right? So the interval of time, a potentially bad thing affects whether you do it.

• 12:26Speaker 02

  What about something that's so like purpose or meaning? Those I feel are really, I can't imagine. How to define those.

• 12:32Alex Hormozi?

  I don't know. I think they're, they're definable. It just takes a long time to really think like. The, the question you have to answer is what would someone do for me to say purpose has occurred?

• 12:41Speaker 02

  I guess maybe you could track something.

• 12:43Alex Hormozi?

  That's why you have to, because you have to completely shift how you're seeing things and be able to observe them kind of like firsthand. And so what's authenticity? It's how you behave when you have no risk of punishment.

• 12:53Speaker 02

  And someone that obeys all of the terms that you've outlaid in that book.

• 12:56Alex Hormozi?

  It's not like bang, it's just like this is tip like I have to define these terms in order to talk about them because they're also amorphous. And if I never define them, then I would just be making face noise and other people would be perceiving my face noise in whatever way they think it means, which they haven't defined anyways. And so then there'd be a lack of communication. I think fundamentally like good communicators are able to transfer ideas efficiently because they use language that everyone understands. And ideally things that everyone can observe with their own two eyes. And so that's, I try and stick to everything being observable. And so as a result, it's made persuasion way easier. It's being the most important one is that like, if I want to train, which is happens a lot in the business setting. It's like, how do you train someone? And you're like, be more confident. What does that mean? Tell a six year old, be confident, it means nothing. It means nothing. They might just say that means talk louder.

• 13:41Alex Hormozi?

  I don't know what that means, right? And so it's a bundled term. So we have to break the term down and say, okay, well, this is actually a series of many behaviors underneath of confidence. That when taken in aggregate, we then describe that person as confident. So maybe they look at you in the eyes when they talk, maybe they nod their head when they're listening, maybe they repeat back the last thing that you said. Maybe when, when there's, when there's something that has potential risk or downside, they're willing to do it. Like, these are all things that we can observe and they say, okay, well, if you have these, these, you exhibit these traits, these skills in this setting, people describe you as confident. Does that make sense? And so being able to break things down like that has allowed me to help my team. When I'm like, hey, you know, I've told this story before, but basically I had a guy who, you know, a lot of people were saying, hey, this guy's acting like a dick.

• 14:23Alex Hormozi?

  But he was a star performer. So we're like, okay, let's see if we can save him, you know? As we talked to three or four leaders in the company and he was still a dick. And so I was like, what'd you tell them? We're like, oh, we told him to stop being dick. I was like, okay, well, so I ended up meeting with them and I was like, I want to be clear. I don't really care if you're a dick or not. I do care if people describe you as a dick. And I want to, the purpose of this meeting is to decrease the likelihood that everyone talks to me about you again in a negative context. Cool, great. So that was the agenda. It's like, all right, so in order for that to occur, let's talk about the things that when you do them, people don't like them and they call you a dick. So it's like when you interrupt people during a meeting, they, they think you're a dick and they call you a dick later. When you tell someone how to do their job, they call you a dick and you try and force your agenda, whatever. It was two or three examples. And he was like, so that's all I have to do. I was like, yep, that's all you have to do. He said, but what if, you know, I present this thing and then.

• 15:08Alex Hormozi?

  They they don't execute on it. I was like, then that's not on you. That's on the manager and I'll talk to the manager and make sure that they're executing. But that's not on you. That's not your role. And so, once that got clear, all of a sudden, he just stopped doing the three things that everyone, the three behaviors that people then laddered up to saying he's a dick. And then they stopped calling him a dick. And then everyone's, oh, he's like night and day, totally different. But it was just like, no one's specific with their language. And so, no one knows what he was talking about. And I think the vast majority of people don't communicate well with one another because both people are saying words that neither person understands and no one's defined anything. And that's why most people can't communicate at all. And that's why most people are dissatisfied with their life. And that's why they can't manage their relationship because they're like, both people get upset. No one knows how to communicate and then that's it. They just, they want the other person to guess what behavior they don't like. And so, even if I said, oh, you know, John's lazy.

• 15:53Alex Hormozi?

  You have to think, and this is why most people don't do is because it takes work. You have to think, okay, I think John's lazy. Why do I think John's lazy? What, what occurred? What did I observe that then made me think that? Now, you might find out, you know, he's actually just slow to respond. Okay. Is there anything else? There was one meeting, he came ill-prepared. Is there anything else? No, I think that was actually it. Okay. So when I go to John, instead of being like, hey, you're lazy, I'm gonna say, hey, I need you to speed up your responses to under five minutes. And when you come to a meeting, have your notes ahead of time. Just send them to me. All of a sudden, John's not lazy anymore. But it's because it was this very micro thing that we then ladder up to this amorphous term that no one can understand. And so, this is, this has been a huge area of interest for me in defining reality.

• 16:37Alex Hormozi?

  And I think that honestly, it's helped me navigate reality really well and make higher quality decisions.

• 16:43Speaker 01

  So how much of the book is for you? And like a playbook for your entire company and team versus something that you could market with?

• 16:51Alex Hormozi?

  Market, what do you mean?

• 16:52Speaker 01

  In terms of using as, let's say, a, a sales funnel.

• 16:55Alex Hormozi?

  Oh, I don't, I think this will be like a service to humanity type thing. Okay. I think, I think fundamentally, like the reason that most people don't get what they want is because they don't see reality accurately. And so, they do things that they think will work and don't work.

• 17:07Speaker 02

  And how do you assess whether or not someone sees reality accurately or not? Is it just based off of their predictions of a certain output? And then if that output is real?

• 17:16Alex Hormozi?

  I think if you look at someone's life, you can see how good they are predicting outcomes. Do they have what they want?

• 17:22Speaker 02

  Is your book mostly then about redefining certain words and effective communication? Or what is the behavioral aspect of it? Is it just about how that?

• 17:29Alex Hormozi?

  It's about getting what you want. And I think a lot of getting what you want is being able to define what in the hell you want and how to get it.

• 17:36Speaker 01

  But the hard part is that maybe that assumes that the other person also understands those words. So if someone reads-

• 17:41Alex Hormozi?

  Well, that's why we have to define that.

• 17:43Speaker 01

  If someone reads his book, how would it be actionable for them to get those ideas across with somebody else who hasn't read the book?

• 17:49Alex Hormozi?

  That's what it hurts. They have to define the terms.

• 17:52Speaker 02

  That's it's getting a complicated word and then simplifying it into the lame.

• 17:56Alex Hormozi?

  Right, and we don't- Well, they're not, they're currently not communicating with that person. So like, how would they talk to somebody who hasn't read the book? The way they always do, which is nothing, which the thing is, is the point that you hit on underpins the fact that most people can't communicate well at all.

• 18:08Speaker 01

  Right.

• 18:08Alex Hormozi?

  And so if a lot of people want to be different than they are, and I am, you know, first in line on that. There are many things that I've wanted to be different about myself for a very long period of time. And this book and these ideas have been the culmination of trying to change these things about myself. I would say I want to be more authentic. I'm like, well, what's authenticity? How do I be more authentic? What do I do? Well, it's okay. Well, authenticity is how you behave when there's no risk of punishment. And so if there's no risk of punishment, how you behave, basically, if you're alone and no one can find out about what you do, that's you authentically. Now, the problem is that in society, we also have rules that govern other people's behavior, right? Which means that the only truly authentic person is someone who behaves the exact same way alone as they do in public,

• 18:54Alex Hormozi?

  which will probably have something to do with your preferences. And so can you be truly authentic only in that subset of people who act with complete freedom? And when they act with complete freedom, act within the rules of the law? Anyone else who has any inclinations to do anything that's outside of society's preferences or rules that govern how we interact with each other, or the laws, right? Has to, by their very definition, not be authentic or be less than 100% authentic. And I see many of these traits as not binaries, are you authentic or not authentic? But how authentic are you? And also in this setting. And if it's man, this sounds like it's a little bit more complex. It's, yeah, welcome to reality.

• 19:28Speaker 01

  So how have you been holding yourself back in terms of authenticity?

• 19:32Alex Hormozi?

  Well, it's also the question of is being 100% authentic something that is I should be?

• 19:38Speaker 01

  I mean, realistically, probably not.

• 19:40Alex Hormozi?

  Right. And so again, but the thing is, is once we define the term, we actually can have a discussion about it because now we're all talking the same language. And it's much more productive, but it's also way less charged from a, if we had never defined the term, then you would have maybe been like, what do you mean? You don't think you're authentic? I'd be like, well, not a hundred percent of the time. It's like, so you're lying to people, right? And so we don't define the term. And then all of a sudden we're attacking each other rather than just saying, well, no, I act differently in private than I do in public. To a certain degree, I walk around naked. If I walk around naked in public, that would probably be, but I'm being a little bit inauthentic right now. I'm wearing clothing. I normally wouldn't wear clothing, right? You know what I'm saying? And so again, that what it does is it adds nuance. But BF Skinner, who's a famous behavioral scientist, said,

• 20:23Alex Hormozi?

  if many variables exist, many variables must be studied. And so a lot of people want a very neat box with clean lines and say, this is the way it is. And I don't think reality is that way. Like it's not, is this person honest or dishonest? How honest are they? How loyal are they?

• 20:37Speaker 01

  You know what a banger video would be, honestly? You talking about authenticity or about the importance of authenticity? Naked. But you blur it, obviously.

• 20:44Alex Hormozi?

  Obviously.

• 20:44Speaker 01

  But just it would be in a, it would be in a, oh, you don't have to blur. Jack says you don't have to. Long bad version. Something like that would be. Tell them what time it is.

• 20:52Alex Hormozi?

  The raw dog, the raw experience.

• 20:55Speaker 02

  No, I think, I think that is a good idea. You know, it's interesting what you're saying right now. It reminds me exactly of Jordan Peterson. Have you ever spoke to Jordan?

• 21:03Alex Hormozi?

  No, I think we're actually trying to get something organized though.

• 21:05Speaker 02

  Because you see him in interviews and then he'll get called something. And he's, what do you mean by that?

• 21:10Alex Hormozi?

  Yeah.

• 21:10Speaker 02

  Like that is the most Jordan Petersonian thing ever. And you're kind of doing essentially the exact same thing. You're just creating a guide to it.

• 21:17Alex Hormozi?

  You have to define terms.

• 21:18Speaker 02

  I'm curious, you take a blank slate person. They read and apply everything that you write in this book. What does their life look like a year down the road, five years down the road?

• 21:27Alex Hormozi?

  Great question. So it's, the book will by no means be a, here is how to live life. Because that assumes that I know and that I think they should do something. I think it's more if you want these things, these are the recipes for achieving them. So if you want to be perceived as patient, figure out things to do in the meantime. If you want to be perceived as authentic, behave more in a way that you were that you do in private and public. If you want to, you know, be perceived as more courageous, then decrease the time between when you perceive something as risky and when you take action on it. Like all of a sudden it's, oh, so I want these traits. And so this would, in my opinion, be the first way that, at least the first place I've seen where there's like a recipe, like do this. How would you explain it to a child who doesn't know what the words mean?

• 22:11Alex Hormozi?

  And I think that's what allows, well, I mean, it's, it's what allowed me, is what has allowed me to exhibit more traits that I, that I wanted to have versus traits that I didn't want to have. And until I had that, I just was like, why do people describe me this way? It's because I couldn't break down what I had to change about what I did to change basically reality.

• 22:29Speaker 02

  You're in a great position to talk about it too. It's interesting because I've, you've mentioned this years ago that you had an issue, I think it was with anger. And you also had the patience thing.

• 22:38Alex Hormozi?

  Yeah.

• 22:38Speaker 02

  But it does appear as though you've made pretty significant strides in applying corrective behavior.

• 22:43Alex Hormozi?

  Yeah.

• 22:43Speaker 02

  To those.

• 22:44Alex Hormozi?

  More on patience, less on anger, but better.

• 22:47Speaker 02

  And, and how does anger affect negatively, maybe your business or your life? What have you noticed?

• 22:53Alex Hormozi?

  Okay. Well, I'll say that the negative effects of anger for me have probably just come in, in almost entirely from the way that people treat me. Not in terms of negative outcomes business wise. I think the reason that I still have anger is because it has served me. So I think we repeat things that have served us in the past. And so I think one of the reasons that people misunderstand why they do things is because people ask the question, what triggered that? You've heard that something triggered this behavior, but it's not about what happened before. It's about what happened after the last time you did it. So I'll give you, I'll give you a real example. So if Leila gets upset, and this is something that I've, I've really actively worked a lot on. If Leila gets upset and she gets like, she cries if we're having some, you know, whatever.

• 23:37Alex Hormozi?

  I had a tendency to try and comfort, comfort for a short period. And then if that didn't work, I would get angry. When I would get angry, she would get scared. When she would get scared, she would stop crying. And so when I got angry, she stopped crying. And so I learned that if I got angry, I got my wife to stop crying. And so it was a very reinforced, I only figured that out later. And so it's a very reinforcing thing is if I can, this gets Leila to stop crying. Right. And so to the same degree, so I've been rewarded in that setting, but obviously she's like long-term into Rose, you know, so then I have to work on that, right? If I value the relationship, which I do, but the same context with my team, right? If I am quick to anger or be cold or sharp with someone, and it doesn't even have to happen often.

• 24:21Alex Hormozi?

  If you do it once or twice, or even if you do it in front of somebody, not directed towards them. They're like, well, I never want, because modeling is a great way that people learn. If someone shows up late and I yell at that person, then that, everyone else is still afraid of me and doesn't want to show up late either. Right. And so what happens is the flow of communication from other people to me slows down because they're afraid of getting punished by me. And so I see that as not positive for the business is me not having the information. Now, how do I cover for that? Well, I have somebody like Leila who always gets all the information and that's why she's CEO and doesn't have direct reports. And so we've been able to manage that within the business operationally. But in terms of me personally, like I want to be better about that. And so that's like an example of something that I'm working on.

• 25:00Speaker 02

  What's interesting is I, I kind of have a similar thing in terms of if I, if someone's emotional to me, I have very, very little patience, unfortunately for it. And it's one of my shortcomings.

• 25:09Alex Hormozi?

  Yeah.

• 25:10Speaker 02

  Since you fixed that, how have you noticed?

• 25:12Alex Hormozi?

  Fixed, you know?

• 25:12Speaker 02

  Well, sure. Okay. Since you try to improve upon that, how have you noticed that, that change in real observable ways?

• 25:20Alex Hormozi?

  Well, I mean, Leila has now also, because she understands how this stuff works too, because we talk about all the time. Like she has tried to reinforce whenever I'm not angry and she's upset. And so either in the moment or immediately afterward, she's, thank you for not getting upset and thank you for being there for me. And thank you for just hugging me and, you know, just waiting it out essentially. And so I just have to remember that when I'm in those settings and the more time she reinforces it, the less strong the other reinforcer is, the stronger the, the new one is.

• 25:48Alex Hormozi?

  Real quick, guys, I have a special, special gift for you for being loyal listeners of the podcast. Leila and I spent probably an entire quarter putting together our scaling roadmap. It's breaking scaling into 10 stages and across all eight functions of the business. So you've got marketing, you've got sales, you've got product, you've got customer success, you've got IT, you've got recruiting, HR, you've got finance. We show the problems that emerge at every level of scale and how to graduate to the next level. It's all free and you can get it personalized to you. So it's about 30-ish pages for each of the stages. Once you enter the questions, it will tell you exactly where you're at and what you need to do to grow. It's about 14 hours of stuff, but it's narrowed down so that you only have to watch the part

• 26:32Alex Hormozi?

  that's relevant to you, which will probably be about 90 minutes. And so if that's at all interesting, you can go to acquisition.com/roadmap. R O A D map, roadmap.

• 26:45Speaker 01

  Well, it seems pretty easy for you to.

• 26:48Alex Hormozi?

  About that.

• 26:48Speaker 01

  This will dismiss, I would say, will make everything very logical. Right?

• 26:54Alex Hormozi?

  Well.

• 26:55Speaker 01

  Like to quantify every little thing as that's disbelief, I have this.

• 26:58Alex Hormozi?

  We can't quantify it. I don't understand it. And I think like a lot of, a lot of this stuff has, has come from suffering. Like being like, why can't I be this way? I want to be this way and I can't like, why can't I? And it's because I don't know how, why I don't know how, because I have no words that have described how to do it well. So how do I change this in reality? And so it's been, it's been the result of, of, of a lot of seeking and a lot of pain. And that's, so I don't, I don't see it as logical. I see this as just descriptive. This is, this is how it works.

• 27:27Speaker 02

  But, but you're able to, to, to assign a new timeline in terms of when you learn something to, to, to a longer period of time, rather than most people, which assess things over a shorter period of time. For example, you know, when you would get angry at Leila, like she would quiet and they're like, okay, like this works. But then you're able to then see way deeper into the future and then make decisions based off of that.

• 27:49Alex Hormozi?

  You mean that this isn't going to work long-term?

• 27:50Speaker 02

  Yeah.

• 27:51Alex Hormozi?

  Well, yeah, I'll get feedback and I mean, to be fair, I'll get feedback immediately afterwards where, you know, she might not be happy.

• 27:56Speaker 02

  Fair, yes.

• 27:56Alex Hormozi?

  You know what I mean? And so I think like, it comes down to what are the things that we want to change? And then how do we change them? And ideally, we want to have some sort of reward cycle as fast as possible with that new behavior. And that's, I think that's how fundamentally you can change what you do, which then ladders up to who you are.

• 28:13Speaker 01

  Moving on from that, though, in terms of acquisition.com.

• 28:16Alex Hormozi?

  It was like, I'm done with this, like this, this super morphous language talk.

• 28:19Speaker 01

  Yeah.

• 28:20Alex Hormozi?

  That's the thing.

• 28:21Speaker 01

  Yeah, Graham, I love it. Good goals, right? Is there anything we're missing? Cause I, I'll someone I get three years to the outline. Yeah, we, we should get, continue on. Yeah, but, but this for me, like, that was the most like focused I've been, yeah. Is there nothing else on it? No, no, continue on the out. Okay. We got, we got more stuff. All right.

• 28:36Alex Hormozi?

  Sure.

• 28:37Speaker 01

  Moving on.

• 28:38Alex Hormozi?

  Yeah.

• 28:38Speaker 01

  From that, in terms of acquisition.com, how has your criteria changed for businesses over the last two years?

• 28:44Alex Hormozi?

  It's just much bigger. It's just the businesses have to be a lot bigger. They have to be billion dollar opportunities now. When I first started, I think honestly, when I first started, the goal was like 50 million dollar opportunities. And then it became like 250 million dollar opportunities. It's, it's almost like five Xed actually every, every 18 months or so, it's almost five Xed.

• 29:03Speaker 01

  So how does it work exactly? A company reaches out to you and they say, hey, we want to be.

• 29:08Alex Hormozi?

  Go through acquisition.com on the site and then.

• 29:10Speaker 01

  And what do they do? They submit their info? They want money or they want to sell or what, what is it?

• 29:15Alex Hormozi?

  So we have, we have, we basically have three kind of places that someone can go. So for like seed capital, SaaS, you know, software type startups, we have ACQ Ventures, which is our venture arm. And so those are typically like smaller checks that are between like 50 and a million dollars, like check sizes. And so we do, you know, a lot of those deals, we do probably like a couple of deals, three, four deals a month sometimes. Like December did four, I think we did four in January, like we, we do a decent amount of deal volume there. And those deals are much more like meet the founder, understand the idea, cool, we can, we can just deploy. We have the private equity side, which is kind of like the, the big, big, the big boy side. And those businesses, like if we're going to do a deal, they're all bespoke based on, you know, the values of the business, where we think the business can go, what our value add is.

• 30:01Alex Hormozi?

  And typically in that side, it's right now, we're 40% SaaS, 40% B2B services, and then 20% consumer services. And we're shifting over time towards just a blend of SaaS and professional services. That just tends to be where we just do really well. And so that's on the private equity side. And then we have the advisory division, which we started in January of last year. Which is companies that are like not really portfolio ready. And so that's kind of like that, you know, 1 million, 10 million, 30 million, sometimes a dollar per year business, where it's like they need to change a couple of things. And the reason that happened was for the three years prior to January of last year, we, you know, we'd look at a business, we'd do four, five, six, you know, diligence calls, get to understand the business. And a lot of times, like 90 times out of 91, we'd be like, not a fit for us, or not fit for us

• 30:45Alex Hormozi?

  right now, maybe change these two things, move this metric up. And when you do, call us back. And what ended up happening is a lot of founders were like, this was more valuable than anything I've ever had to go through. And thanks for doing it free. And for me, it was like, it was actually super expensive because I'm doing that 90 times, times however many calls, lots of companies. And I was like, I wonder if we could do this in a way that we could charge to the same basically assessment of a business and say, here's all the things that we would do. Here's how we change it. And so then we, you know, we, we wanted to see if people were interested in. So January, I was like, hey, if anyone else to come out to headquarters, you can meet my portfolio team, we'll kind of assess the business and be like, these are the blockages to either making it more valuable or scaling it. And so it's like, you'll meet with my head of marketing, you'll be like, okay, change this on your webpage, change this on your ads, change this, whatever. We meet my head of sales, if sales is a constraint, these are, these are the things that we do. And people have really, really, really liked

• 31:30Alex Hormozi?

  it. So it's been exceptional. And I think the reason that it works so well is that there's kind of what I was alluding to at the beginning is that there's just not a lot of help at that one to a hundred million dollar range. And I think we can provide that. And so-

• 31:40Speaker 01

  How do you make money from that? Are you taking distributions from the company? Or have you sold some-

• 31:45Alex Hormozi?

  No, no, they just, we sell it as an advisory service. It's just a service.

• 31:48Speaker 01

  Overall, frankly-

• 31:49Alex Hormozi?

  Yeah. Oh, overall, well, no, we have distributions that come from the private equity side.

• 31:52Speaker 01

  Okay.

• 31:53Alex Hormozi?

  The venture checks, obviously, I'm not going to see anything for that for 10 years. And then services is just normal business.

• 31:58Speaker 01

  Why don't you have a website or a place where, where people could see the companies that you've invested in?

• 32:03Alex Hormozi?

  It's a good question. It's something that I've gone really back and forth on. The main reason is like, when I sold GymLaunch, I sold Prestige Labs, which was a sister company that did supplements and sold through the distribution base. And I remember in the diligence meetings for that, it was like a huge point of contention that I had a 10,000 person Instagram following at the time. And they were like, are all the sales coming from your Instagram? And the business is doing like 20 million a year, just the, just the supplement side. And I was like, no, it's not coming. They're like, well, this could be, this could be an issue for us if we can't have complete control of the Instagram. And how do we know you're going to keep promoting it? And I was like- My Instagram is not driving like 10,000 people does not make it 20 million. I promise you. And seeing how sensitive they were to kind of like key man risk around, you know, an acquisition.

• 32:46Alex Hormozi?

  I was like, okay, if I do deals and I grow my brand, I don't want people to know what the companies are because I'm going to have to go. I'm going to write a check, but then if I publicly associate with it, then I'm going to have to go with the deal later. So for example, school, that was purposely, you know, like a brand association plus money, obviously that went into it. But I know that I'm in that, I'm in that for the long haul. You know what I mean? I'm going to be with school for many, many years. And so my key man risk is something that I'm willing to basically deal with. Whereas if I buy a, you know, an HVAC business, I publicly associate with it. A potential choir will want me to sign some other non competes. I'll have to have some provisions around promotion and I just didn't want to do that. I have gone back and forth on it though, to be really, like I've gone back and forth.

• 33:25Speaker 01

  It seemed to me like there would be a net benefit on that. It reminds me some.

• 33:28Alex Hormozi?

  I've gone back and forth. I have gone back and forth.

• 33:30Speaker 01

  Like Shark Tank business where it's like, as seen on Shark Tank is pretty big. And you could argue that the business you bring to that will drive up the valuation to a point.

• 33:40Alex Hormozi?

  Yeah.

• 33:40Speaker 01

  Where even without you, it's still higher than if you were never involved.

• 33:44Alex Hormozi?

  And I'll tell you where, so agreed. So then the next thing that goes is if I have all of these different things that I'm like pseudo promoting, then it almost feels like I'm showing a lot of things.

• 33:54Speaker 01

  No.

• 33:55Alex Hormozi?

  And so that's been, that's been where I've.

• 33:56Speaker 02

  For me, I would just, as a viewer of you, not that anyone, not that I would question your credibility, but I think that it would, it would bring a lot more clarity where I actually.

• 34:05Alex Hormozi?

  I've gone.

• 34:05Speaker 02

  So you boy.

• 34:06Alex Hormozi?

  I mean, I've gone back.

• 34:06Speaker 02

  And I think it would attract a lot more businesses where you could say, hey, when you started with acquisition.com, you were valued at this much. Your revenue was this much and now look at you.

• 34:13Speaker 01

  Here's the other thing, I think it would help you negotiate better terms, saying that you're going to be on this website. Yeah. Where it's even a hundred companies. And I think it's important you put them all in the same place so that it's not like you're promoting this or promoting that. Or you, you should never talk about these businesses unless in a podcast setting where you're giving an example.

• 34:33Alex Hormozi?

  The other, the other, and yeah, I mean, I've been very, I've been torn on it. I was like, I've been very like. Because of all the reasons I just said, but the other one is kind of like the the compliance things that I just said, right? If a company, could you imagine like a company does something stupid and companies do stupid things. And then I, I mean, you didn't even own FTX, right? And you got hammered for it. You're not, you don't even own it. You're like, I'm a promoter. I got paid to sponsor. Give me a break, right? And so if I have a, even if I wrote a venture check to a business and then the company does something, I'm an owner and any, any, you know, reporter or, you know, clout seeking YouTuber would then be like, Hermosy is saying, doing this. And it's just like,

• 35:14Speaker 01

  How is it different from Y Combinator, where they're very public?

• 35:18Alex Hormozi?

  Yeah.

• 35:18Speaker 01

  A lot of these, like, even some of these private equity funds are just like,

• 35:22Alex Hormozi?

  It's their value prop, though. Y C's value prop is Harvard's value prop. It's like the the main thing they get is,

• 35:27Speaker 01

  Yeah, but there are plenty that go through Y Combinator that just turn out to be, you know,

• 35:32Alex Hormozi?

  Yeah.

• 35:32Speaker 01

  maybe not the best.

• 35:33Alex Hormozi?

  Yeah. But I think it's, well, Y Combinator is kind of unique in that. I mean, to be fair, if a Harvard grad does something bad, Harvard takes a hit.

• 35:41Alex Hormozi?

  But it is a law of,

• 35:42Speaker 01

  It's gonna work both ways. I think, I think it's gonna hurt you if a business does something that reflects on you. And if you do something, it reflects on all the businesses. I think it goes both ways. I think the net benefit is like a 51 to a 49.

• 35:54Alex Hormozi?

  Yeah.

• 35:54Speaker 01

  Forty nine percent down to 51 percent.

• 35:56Alex Hormozi?

  Like, I have, I have gone back and forth to the theory where I've been like, I'm gonna, I'm gonna make all of our stuff public. I think we are make, I think the ACQ Ventures, if I'm not mistaken, I think our ventures, things are public. So it's really just the private.

• 36:09Speaker 01

  Yeah. What about school? What was your mindset behind that?

• 36:12Alex Hormozi?

  School is interesting. So, you know, for me to, again, this is, you know, using brand to promote something, right? You know, it'd been four years that I've been making content and really never promoted anything. And when I look at my audience, I make business content almost exclusively, but still, like, 60 something percent of my audience is people who want to start a business, not people who have a business. And I think that's just the nature of just humans. There's way more people who don't have businesses than people who do. You know, 9% of businesses, 9% of people, 9% of people own businesses and 91 don't. And so if we're at thirty percent or thirty-three percent, people who are my audience own businesses were three or four times represented or overrepresented by business owners, because I make business content. Anyways, to answer the question, I was like, is there something

• 36:54Alex Hormozi?

  that I can do with this larger audience that can help them get started in a scalable way? That would provide value to everybody. And so I, you know, I got approached by a gazillion companies, probably like you do, over the years for the audience and the access and the distribution that we have. And School is a company that I had been following since 2018. So I've known Sam for a long time. And I just kept watching it. It just kept getting better and better and better. And the, it's just, all I heard was good. It was just all good word of mouth, because I'm so concerned with my reputation, too, that I'm like, if I promote anything and it's not awesome, you know what I mean? Like, I could take a hit. And so that company was just compounding month over month over month, just on word of mouth. It had zero marketing whatsoever. It had amazing customer retention in terms of people who started communities

• 37:39Alex Hormozi?

  and also member retention, people who are in communities. So it's like, people are in there, getting good experience, people who are starting communities are getting good experience. And I think that there's a big movement in general, like meta towards communities overall. And so I felt like from a macro perspective, I think it's a good, it was well timed and well placed. And then beyond that, from a long-term strategic perspective, like it has network effects built in. And so even in an AI world, like I think it will, it'll do, it'll do great. And so for all those reasons, it was also something that would work for people who were just getting started. And so that's why I invested in School and then I promoted it. So I thought it would help the sixty-something percent that didn't have businesses get started. And also, for the thirty-something percent of people who had businesses, who wanted to start, you know, have a place that's not like an email list for all their people to house,

• 38:24Alex Hormozi?

  I saw it as a much better option than like a Discord or-

• 38:26Speaker 01

  Do you worry when it comes to School? The one thing that I've seen in terms of a bit of a complaint-

• 38:32Alex Hormozi?

  Sure.

• 38:33Speaker 01

  Seems to be that there is, at some level, this like MLM aspect to it, where I've seen schools that people promote that teach you how to make money on School.

• 38:43Alex Hormozi?

  Yeah.

• 38:43Speaker 01

  So like a school for a school.

• 38:45Alex Hormozi?

  Yeah. And I think that's just gonna, I think that's just gonna happen no matter what. Like, there's YouTube channels about how to make YouTube channels. There's, if there's anything that someone has figured out to generate a living, then there's gonna be people who sell how to do that thing. And so I think if we chunk up a level, the question is, is there something wrong with that? Right? And then number two, the MLM component. So I can break that into two parts. The MLM thing is just like, we have a referral commission, which is like, not a very uncommon strategy. And the internet, yeah, yeah, the internet doesn't really deal with nuance, but it's not like it's multi-level and MLM has multiple levels and this has one, you refer a friend, you get a percentage.

• 39:20Speaker 02

  Like a credit.

• 39:20Alex Hormozi?

  Like anything. If I refer you business, you probably give me 20%. So, you know, whatever. But yeah, that's just because the internet doesn't deal with nuance. So that's the, the not MLM, the single SL, the single level marketing that exists there. In terms of what, what people do with their community, we're, we're pro free speech, anti censorship. If it's legal, you can, you can have a community about it. You know, if you want to have a community about painting, have a community about painting. You want to be community about Facebook ads, have a community about Facebook ads. You want to be community about finding the perfect cologne for you, you can have that. You want to have one about painting model cars, you can do that. You want to have about how making sick beats and just naming all, just only add all different communities. And if you want to have one on how to make a school community profitable, have, we're not going to say, you can't start a community about that. Like, how can we do it? We have millions, we have tens of millions

• 40:03Alex Hormozi?

  of users, tens of millions. It's very big. It's much bigger than people think it is. And so either you have to start saying, making this rule and that rule, then you get down to the whole rule strap, or you just say, you can make a community about whatever you want, as long as it's legal. And that's, that's how, that's where we decided to draw the line.

• 40:17Speaker 02

  Should we create a community about how to podcast or just podcast it?

• 40:20Alex Hormozi?

  You could. I'm sure it'd crush.

• 40:22Speaker 02

  You think it would crush? What it?

• 40:25Alex Hormozi?

  Yeah.

• 40:25Speaker 02

  I don't agree. We've been thinking about making, making content, like talking about production equipment, researching.

• 40:31Alex Hormozi?

  A podcast about how to podcast?

• 40:33Speaker 02

  Then you have to ask, is there anything wrong? That's why I love it.

• 40:35Alex Hormozi?

  Right. He said, and this is a great question is, what's, and, and so what? And what's wrong with?

• 40:40Speaker 02

  Yeah, I'm going to help myself right here. I think there's nothing inherently wrong with an MLM. However, they're used. In really inappropriate ways a lot of the time, but inherently. I know. Yeah. It's just an affiliate program. Or I feel where it goes wrong is people are deceptive about maybe the practices or the buy in.

• 40:59Alex Hormozi?

  I give, I have studied this.

• 41:00Speaker 02

  The deception, yeah.

• 41:00Alex Hormozi?

  So much, it's like, I can, I can say it very succinctly.

• 41:03Speaker 02

  Break it, break it down.

• 41:03Alex Hormozi?

  The problem is that the promise doesn't match the deliverable.

• 41:06Speaker 02

  Okay.

• 41:07Alex Hormozi?

  That's it. It's false expectations. That's it. Fundamentally, the vast majority of people who advertise, especially in the information space, do not advertise compliantly. And so as a result, they make promises they can't keep. And so people get false, false expectations. That being said, I think there's anything inherently wrong about saying, I learned how to do this. I put, I put tons of hours into compiling all this stuff. And if you like me and you like my style of teaching, you can buy it from me in this video course. And I know you used to have one, like, the, the question is, I don't think there's anything inherently wrong with education. Or even profiting from education. Colleges do it. Why, why can colleges do it and get, give people zero ROI? And no one says colleges scam, well, some people do, but the vast majority of people still think colleges are a scam.

• 41:45Alex Hormozi?

  It's simply because they don't promise anything. That's it. That's fundamentally, like, it just comes down to that. If you just don't promise anything, then you're kind of in the clear. If you're like, hey, I put together a course on how I, you know, how I succeeded as a, as a realtor. I make no promises to whether you're going to follow it or it's going to be perfect for you. I just show the stuff that worked for me. If you want to go check it out, it's whatever. It's over here. You can go check it out and buy it. I don't think anyone would screw this guy. Now, some people will be because that's the internet, but like, anybody what I would consider be reasonable?

• 42:13Alex Hormozi?

  No. And I think to, you know, to a large degree, like, we can't listen to everyone because you will have people who are just upset about you not sharing your stuff as people who are upset with you sharing it. And so. Might as well upset the people who don't pay.

• 42:26Speaker 02

  Vegas Matt also put it really well because he was involved in one before, you know who Vegas Matt is? He's a YouTuber here in Las Vegas, massive YouTube channel on gambling. But, but he said that MLMs are effectively better because the money actually goes to the people that are closing the sale. Rather than giving it to advertisers that are just going to inundate people.

• 42:44Alex Hormozi?

  Oh yeah. They just take, I mean, from a business model perspective, you take your advertising, you basically take your entire allowable cost to acquire a customer. And say, instead of giving that to anything, I would just give that all to my sales team. And then I will incentivize them to recruit other salespeople so that we can have a continued distributed base. So that instead of having a sales manager who's getting paid a base salary and a small percentage of revenue sales, it's just, it's all performance. And having the multi-level structure allows you to recruit teams, just like you would in a business.

• 43:10Speaker 02

  Wait.

• 43:11Alex Hormozi?

  All businesses are pyramids. Are all businesses pyramid schemes? You know, come on, like it's Illuminati. You know, like we just say things, but no, I don't think there's anything in here. I think the where people get in trouble is making deceptive claims and making false promises or promises that they know to not be true. And the associations. So basically MLM has a bad brand. Has a bad brand.

• 43:34Speaker 02

  It does.

• 43:35Alex Hormozi?

  There's enough negative associations that people who might be otherwise really good MLMs still take the heat for the bad ones. People who sell information and education will take the heat for all the people who sell the bad ones. And so that's the, that's the rough. I don't think there's anything wrong with selling education.

• 43:49Speaker 02

  It is interesting how deeply rooted that hatred is for a lot of people. It is like the most sensitive topic for a lot of people. I'm curious, are there any business models that you kind of secretly hate? Because, but they're highly profitable, maybe because they're like intellectually lazy or like just morally lazy, maybe too.

• 44:07Alex Hormozi?

  No.

• 44:08Speaker 02

  You'd say anything?

• 44:10Alex Hormozi?

  I, I, I very much stand for the position like if it's legal, then you know, do, if someone is willing to exchange money, like again, capitalism is based on voluntary exchange between two parties and both parties make the exchange voluntarily because they both believe they'll be better off. Now, the belief part is where deceptive components come, come into play, right? But inherently, I don't have an issue with someone make, I don't claim to have a moral superiority that my way of making money is better than someone else's way of making money. Now, my business might be perceived as more valuable to an investor, which is a different thing. So if you're like, are there business models that make cash flow, but don't have inherent value? Yeah, there's tons of those, but do I see that as bad? No, I just see it as different and that's fine.

• 44:53Speaker 02

  So if someone were to take school as an example and just copy it and do their own thing, why do you think that business would fail?

• 45:01Alex Hormozi?

  Network effects. We already have tens of millions of users. It's very hard to do.

• 45:04Speaker 02

  And what if that?

• 45:05Alex Hormozi?

  Look at the details. Why doesn't someone just copy Facebook? It's like they could just copy it exactly. Yeah, the people aren't there.

• 45:10Speaker 01

  What if there's another influencer who's backing like school 2.0.com?

• 45:15Alex Hormozi?

  Yeah.

• 45:16Speaker 01

  What to say?

• 45:16Alex Hormozi?

  They would, it's, it's also easier said than done, you know, to copy. Like it's, there's a lot of details on how it's programmed and how it works and what content gets surfaced. And why algorithms run, there's a lot of details in the business that make it, it's, and it's, it's, it's, the product is so detail driven. It's all the tiny things. It's not like you could copy the colors and the layout and there, there have already been plenty to be moved on that, but they don't go anywhere. And so, but we could say that about any business.

• 45:40Speaker 01

  Yeah. What do you think is the best business right now? Cause it seems like from my perspective, just on a high level, the subscription model is doing really well. Charging one price for the year or break it down monthly. That seems to be the new thing. So what's from your perspective? What changes?

• 45:57Alex Hormozi?

  Is that in the digital creator space?

• 45:59Speaker 01

  Generally.

• 46:00Alex Hormozi?

  Yeah.

• 46:00Speaker 01

  But, but every, every business has, has gone to now the subscription model. Like I'm paying more. I remember when I used to be able to buy Adobe Photoshop for a hundred bucks.

• 46:09Alex Hormozi?

  Yeah.

• 46:09Speaker 01

  And now it's 30 bucks a month or like $40 a month for the same thing.

• 46:13Alex Hormozi?

  Yeah. Is it a rip off or if we're willing to pay for it, it's just an appropriately?

• 46:16Speaker 02

  I'm extremely willing to pay for it. Yeah. So if anything, it's a good deal. So that's Adobe. If you want to sponsor like this is, yeah, we'll be an affiliate.

• 46:23Speaker 01

  I would love that, man. I would be shilling Adobe all the time.

• 46:26Alex Hormozi?

  Well, you believe in it.

• 46:27Speaker 01

  Yeah.

• 46:28Alex Hormozi?

  I think you should reach out though.

• 46:29Speaker 01

  It's expensive, but it's worth it.

• 46:31Alex Hormozi?

  Yeah. And it's a great.

• 46:31Speaker 02

  No, no, it's not expensive. It's incredibly great. You know, anyone with half a brain would want to buy. Link down below. We'll get 15 bucks off.

• 46:38Speaker 01

  Like, you know, before you go into that, I will say the biggest benefit or the, the best business that gets shit on all the time. YouTube premium.

• 46:46Speaker 02

  Oh, yeah.

• 46:47Speaker 01

  Hey, spending money for YouTube because it should be free. I love YouTube premium. Love it. I think it's worth every penny.

• 46:53Alex Hormozi?

  People just think they just project their own shit. It's like, why they should, they should, I shouldn't, I'm like, what? You should, that, that YouTube should pay all the servers and all the compute that they have and all the workers that work at YouTube should just be free.

• 47:07Speaker 01

  And I see it.

• 47:08Alex Hormozi?

  It's just this demand of the universe that like everything, everything has to be given to me. Or else, or else I'll be upset.

• 47:13Speaker 01

  I think also we make more money if people watch the ads.

• 47:16Alex Hormozi?

  Yeah.

• 47:16Speaker 01

  Versus getting YouTube premium and watching the video without the ads. I think the ads pay more, all things considered.

• 47:22Speaker 02

  YouTube claims that the premium user worth more.

• 47:25Speaker 01

  Would you?

• 47:25Speaker 02

  Which I would believe, because if they're paying 15 bucks a month, then you just kind of have to. Okay, but then you just kind of have to do some simple math and they need to watch like a million videos in a month.

• 47:33Speaker 01

  I don't know the breakdown on that.

• 47:34Alex Hormozi?

  So I will answer the question that you originally asked, which is why is the subscription economy like doing? And I'll just only answer specific to kind of creators, because I have a ton of, obviously with school and then I am being one myself. I actually just think that there's never been more creators and at the same time, there's never been less trust. And so people don't trust other people as much. And so people are consuming significantly more content prior to making a purchase. And the purchase that they make in general, the first purchases are lower, lower ticket on average. So maybe 10 years ago, people would immediately see one video, hop on the phone and pay $5,000 or something, or $10,000 or something. And that's just, it's significantly less likely now.

• 48:14Alex Hormozi?

  And they're far more likely to buy, grab a book or grab a, you know, a $29 thing that they can try and see if the, if the quality of the product is, or quality of the community, the quality of the subscription is what they, what they deem it's, it's, it's supposed to be worth. And then they're willing to, you know, pay them for more expensive things. So I think that what is more publicly seen is the subscriptions. I still think many of these businesses that, that do bigger profit numbers tend to also sell back ends that are more premiumally priced, either in terms of services or products or whatever. But the thing that is advertised on the front end for the vast majority of people, kind of like you have your top of funnel shorts and then you have your longs. And then that converts into your kind of like low ticket. And then that ladders up into the, you know, 5% of those people or 10% or whatever percentage ascend into, you know, a higher level.

• 48:58Speaker 01

  In terms of hiring people, how do you spot an A player?

• 49:01Alex Hormozi?

  I will say that I have yet to have an A player that I don't know is an A player within the first week or two.

• 49:06Speaker 01

  What are the signs? What are the signs?

• 49:08Alex Hormozi?

  They need self-support, right? They decrease the likelihood of failure. So they are taking things off my plate really quickly and they're proactive in terms of their decision-making and the actions that they take. A lot of it is really just a tremendous amount of activity. High activity, high alignment. If you have both those things, you have somebody who's moving a lot of things in the right direction. And ideally, you get a lot of attention back. And so if my life gets worse when someone starts, that's a bad sign. And if my life doesn't change when they start, that's also not that good of a sign either. Now, of course, there's a little bit of onboarding. You're gonna have some of that, that's sure. But like, by and large, I want to see some dramatic changes in how my time is getting allocated from bringing somebody in, especially if they're taking things off my plate. But I think that works at all levels.

• 49:50Speaker 01

  And what's one of the things that you still insist on doing personally, even though you could outsource it?

• 49:55Alex Hormozi?

  Well, all the books. I write all the books. I write all my emails. I write, I mean, I do all the reporting.

• 50:03Speaker 01

  Tweets.

• 50:04Alex Hormozi?

  All the tweets are mine. All the tweets are mine. Honestly, every, every piece of written word that comes out of acquisition.com is me. And that is a huge amount of work. And so it's either me because they took it as a transcription from a video that I talked, or I wrote it. There's, there's, there's only one exception to that. But LinkedIn, same thing. Facebook, same thing. It's, it's all, tweets are actually my, we were talking about this earlier. Tweets are my, is my biggest secret weapon for how I create so much content. It's everything. It's the, it's the wellspring. So I, the tweets are my stream of consciousness in real time. And then those tweets become tweet reels. They become shorts. If they're high performing, I'll just say them.

• 50:47Alex Hormozi?

  Many of those shorts put together become longs. That'll be, you know, business advice or brutally honest, you know, advice I wish I had had, things like that. It's just 20, 30 tweets put together with a little bit more anecdote. LinkedIn posts are multiple tweets along the same theme put together. Facebook, same thing. So like TikTok, same thing. Like, everything actually, and even my emails are high-performing tweet concepts that then get repurposed into email. So everything stemmed from like that one stream of consciousness. And I think as a creator, you have to find whatever that, that lowest friction method is for you. I always used to email myself like, Ideas, quotes, lessons, thoughts. And I used to use that as my method for making podcasts. And then I just had this like, duh realization of instead of just like emailing myself, I could just email the world via tweet. And I would just tweet them.

• 51:32Alex Hormozi?

  And it also made me a much better writer because you have to be so concise with your language that I think has actually improved my writing from the book's perspective.

• 51:38Speaker 01

  Have you said anything that's recently gotten backlash?

• 51:41Alex Hormozi?

  I think I had, I think I had a LinkedIn post that got taken a little bit out of context. So I have somebody who writes my LinkedIn, but it's my, it's my words, but he took it from a podcast like this and just took it there and then just took an image and put it together. And it was, it was basically like, hey, for 10 years, I didn't go to football games. I didn't play fantasy. I didn't go out and I like skipped friends weddings, do whatever it takes to get where you want to go. Right? And the amount of people that were like, so two, two different big backlashes. So backlash one was just like, this guy's hustle porn, like all he wants to do is tell people to sacrifice and I'll, I'll address that in a second. And then the other was like, what kind of life would you like? I would never skip a friend's wedding.

• 52:26Alex Hormozi?

  Like this guy's priorities are all out of whack or whatever. And so both of them come down, I think, kind of like the, do you, do you have an issue with somebody's business is do I have an issue with how someone lives their life? No. Like different, different destinations. Like there's a, there's a guy who like is probably a lifestyle entrepreneur and likes to like talk shit about my stuff. I make in a week what he's made, makes in a year and he's a big, you know, whatever. And all I can think of when I say is we have different goals, dude. We have different goals. I don't, of course, like, it's like looking at professional bodybuilder, like he's, well,

• 53:07Alex Hormozi?

  I train twice a day and I weigh all my food and like I get massages and I do stretching and it takes me about five or six hours a day to do, you know, all the bodybuilding stuff that I do. And then some CrossFitters, that's ridiculous. I only work out three days a week. This guy is trying to give you bodybuilding porn. It's, oh, he's way bigger than you and he has different goals than you do. And so it's just this whole idea of shoulditis of they shouldn't do that. They should do it my way, which fundamentally just is like, I have, my life is based on my preferences and their life is based on theirs. Duh. And so if you want to go to your friend's weddings, by all means, go to your friend's weddings. I don't care. You know what I mean? If you want to have a dog, have a dog. Like, I, I share the things and like, I, the one line that I, I repeat over and again is, is my life is a documentary, not a sermon. I'm not telling people to do things the way I do them.

• 53:52Alex Hormozi?

  I just share what has worked for me. And if it works for you, great. And if it doesn't, I love you, I love you all the same.

• 53:57Speaker 02

  Where I see a lot of the backlash is just because it comes off as dogma for everybody.

• 54:01Alex Hormozi?

  Sure.

• 54:02Speaker 02

  But if you added the stipulation of to those that want to build a successful business, but that's also not necessarily. You don't need to cater to the people that aren't going to listen regardless.

• 54:10Alex Hormozi?

  Foot long disclosures at the end of every one of your posts. It's, I can't, if I had put all the disclosures in my tweets, I wouldn't have tweets, I would just have disclosures. So it's one, I think, I think the ball said something about this, but basically it's like, for a post to get reach, it will have to have some sort of level of polarity. And to have a level of polarity, you have to remove context. And so it's basically like, you can have complete context and no one can see it. Or you can be willing to stand on one line of gray and say, no, for me, if, if more people were willing to delay gratification a little longer, because they saw some of my stuff rather than take immediate reward, I can live with that.

• 54:44Speaker 02

  It's interesting, every time we talk to you, you're, you always say, oh yeah, I recently did this. I recently evolved this. I have since developed this. You always have something that you had just done. Most of the time, oddly enough, it's not even adding things, it's eliminating things.

• 55:00Speaker 01

  And usually words, but you're not doing it.

• 55:02Speaker 02

  Or yeah, there's strict, making your criteria more strict. What's something right now that you're currently working on? And maybe you don't have full clarity of it, but you're seeking clarity.

• 55:13Alex Hormozi?

  Well, I mean, how I'm going to launch my next book is something that I'm thinking about just from a timing perspective. So that's something I'm, I'm thinking about a lot. Honestly, a lot of my attention goes towards what I'm going to try not to do. And so it's a, it's an, an accurate observation. Because I mean, if you listen to, you listen to all the greats, you listen to Jobs, you listen to Bezos, you listen to, listen to Elon, entrepreneurial greats. It's like they all talk about focus because it's so hard to do. It's so hard because the bigger you get, the more, the more juicy and tantalizing the opportunities become, right? And so you have to just be like, Nope, we're just gonna keep doing this, this thing that I know all the pains of and we're just going to confront the issues we have and we're gonna work through them one at a time when it's, ah, but there's this amazing thing that could be fast and easy and it's,

• 55:57Alex Hormozi?

  it's just fast and easy because I don't know enough about it. And I just have to, and like, I've just been burned enough times jumping over that bridge to know that like, the grass is greener, I just don't know enough. And the fact that I think it's attractive means I don't know enough. And so 2024 was the first time in my life where I've not had FOMO. And that was a first in my whole career where I didn't have a moment where I was like, I should be doing that instead of this. And I've been doing this, you know, I've been in the entrepreneur game for a minute. And that was, it was only like, I realized in retrospect, I was like, that was an accomplishment. That was a huge win for me. Cause I've always had that, like a buddy of mine, close friend of mine, did like $50 million in net earnings in Q4, just from trading crypto. No employees, just, just traded crypto, made 50 million

• 56:39Alex Hormozi?

  in profit. And I, I remember thinking in that moment, I was like, good for you, man. No idea how you do it. Don't want to know. I'm gonna keep doing my thing. But at so many other points in my career, I would have been like, oh my God, teach me what you're like, I want to learn what you're like, and I would completely take my eye off the ball. And the thing is, is like, I have, I think I've gotten this, a snowball that's finally started to roll. And I say this now, hopefully knock on wood, like it'll stay that way, that I'll manifest it.

• 57:07Speaker 02

  Teaching.

• 57:07Alex Hormozi?

  I'm, I hope that I can stick, I can stick with, stick with it. And because I've continued to get rewarded for sticking with it. And it's been the hard, like acquistis.com by, by duration is the hardest single business that I've, the longest duration that I've only done one thing. So that's been pretty cool.

• 57:25Speaker 02

  Besides, besides Jack's mom. Okay, we're cutting now.

• 57:28Alex Hormozi?

  Yeah. Well, she was amazing. She didn't tell you?

• 57:31Speaker 02

  No, she told me all about it, actually. I think.

• 57:33Alex Hormozi?

  Did she tell you to call me dad?

• 57:34Speaker 02

  Yeah, I think you are. I think you.

• 57:37Speaker 02

  I think I'm entitled to some, am I in the will?

• 57:42Alex Hormozi?

  You took that like a champ.

• 57:44Speaker 02

  Once you hit a billion, you're laugh.

• 57:45Alex Hormozi?

  Yes.

• 57:46Speaker 02

  It's starting to do a Geysers laugh.

• 57:47Alex Hormozi?

  A Geysers laugh?

• 57:48Speaker 02

  Yeah.

• 57:51Speaker 02

  Gosh, that completely threw me off. I had something.

• 57:53Alex Hormozi?

  So she said.

• 57:53Speaker 02

  I had a missile in the cannon. That's all stuff like she's.

• 58:02Speaker 02

  All right, that was a good one.

• 58:03Alex Hormozi?

  Snowball, snowball is rolling up. I hope that I can stay focused for an extended period of time.

• 58:10Speaker 02

  That sounded like, that sounds like something that Graham and I need to hear exactly. Because we're so focused on making the content and unfortunately, like, most of our revenue comes from the sponsors. And so we're able to travel around the world, we're able to spend money on the flights and the accommodations and the crazy

• 58:26Alex Hormozi?

  The watch, the dripping.

• 58:27Speaker 02

  Pre-production, the crazy fifteen dollar wagon.

• 58:29Alex Hormozi?

  Yeah, the G-Wagon.

• 58:30Speaker 02

  We're able to do what we do because of, because of the sponsors and, and, and right now it's enough. But we want to always be improving. And so now we're thinking like, well, what if we created a product or a service? And we're always having discussions about how we can do that. But I, at some point, I always wonder if we just focus on making better content, then we can get better, like, higher paying sponsors. Same sponsor, if you love the sponsor, higher paying sponsors, because we're getting more views and it's like a cycle because of that. But, but part of me also wonders, should we focus our efforts on something else?

• 59:00Speaker 01

  My, my thought with that is that I am happy also doing what we're doing now. And I kind of worry that we're good at this thing.

• 59:08Speaker 02

  If we don't sell our product.

• 59:09Speaker 01

  Drive. We, we don't, but if we take the eye off what we're good at now, are we just adding more onto the plate where we don't need to? Or we have a really great balance and a great life and things are going well?

• 59:20Speaker 02

  And if we're just trying to create something for the sake of creating something, then maybe it won't be perfectly terrific. But right now, if we're just focusing on making the best content for you guys, the ones watching, then hopefully it's, it's a pretty good product.

• 59:32Alex Hormozi?

  Well, I have so many thoughts on this. Do we have five minutes? Cause I think I have a

• 59:36Speaker 02

  Yes, yeah.

• 59:37Alex Hormozi?

  Answer for this. So, so basically I see this as a spectrum. So it's a continuum that exists for, and this is specific for creators in terms of how to monetize. And so it's, it's basically a spectrum that has risk and capital and effort kind of on either side. So like low risk, low capital effort, high risk, high cap, high capital, high effort. So on the, all the way to the left, you have sponsorships, right? Which is what, what you're doing now. Cool. You make money from doing the same thing. One degree to the right of that would be like an affiliate relationship. Adobe says, hey, we'll give you 20% of all of them lifetime. It's okay, cool. Adobe, hit them up. You have an affiliate relationship. The next is when it starts to get a little bit, you have, you have your, your, your, your drop ship, right? Your white label.

• 1:00:19Alex Hormozi?

  You find somebody who just puts, and you did this with a coffee, I think, back in the day, right? You have that kind of middle ground. So somebody else can manage everything. I'm just going to promote it, but I'm going to own the brand and that's, that's that. The next degree here is where you have, you find an existing business where you can negotiate some percentage of equity in the business and ideally distributions and royalties, which I am a big advocate for creators to do both because you have costs associated with running the best, running your business, your side of the marketing, right? And the business makes money because it's monetizing with whatever traffic you're sending, but you need to keep advertising. And so having some either profit share or some royalty on top line or some sort of, some sort of cash flow still needs to come back because not all companies sell. Actually, the vast majority don't sell. And so I think it balances some of the risk for a creator,

• 1:01:04Alex Hormozi?

  but that would be a minority deal, especially with a company or a product that you really like. And so if Adobe were smaller and would give you a percentage of the company, that would be one where it's, and ideally, this is, I mean, this is me turning tables and speaking to you as an investor. It's the best is when you can write a check to, because then it's, there's no expectations. I'm going to promote this because I believe in it and because I want it to grow and I want to get a good, a crazy return on the money that I put into it. And so you'll have some blend that's going to, of that deal, but usually for minority stake and maybe some performance tranches that kick in based on how well you do it. And then the final one, the final frontier is where you actually do everything yourself. Like the whole, the whole thing, soup to nuts is like you're starting a business.

• 1:01:45Alex Hormozi?

  That's Jimmy with Feastables, right? Like he's really just starting a chocolate thing and finding cocoa nibs in Africa and doing all this stuff, right? And so the upside is typically higher on this side, lower on this side in terms of the enterprise value of what you're promoting, but so is the risk and the difficulty. And the idea that I think a lot of people miss out on is like, it's so much about the partners that you're bringing in on this side that they have to, in my opinion, for a true partnership to work, they have to be able to be successful without you. And if they're already growing, they're already successful. This is like school, like schools, schools will be successful either way. I just want to pull the future towards us faster. You need a partner who, who is as good as you are or better. Ideally, just amazing at that thing and you're amazing at this thing.

• 1:02:30Alex Hormozi?

  And then it's like the sum of the parts is what, is where the magic happens. But those are basically, that's basically the continuum. But if you're going to do anything to the right of the, right of center there and you're not just, I'm either sponsoring or doing an affiliate deal, I think you can do, I think the best deals is kind of like the school deal where you, you put cash in. You you you you know, buy a big stake, you also promote like those are deals where it's, I think, again, in terms of behavior, what is this going to change about what I do? And I would like to do deals that change as little or nothing about what I do. If I'm always going to make content anyways, and I'm already getting two thirds of people who want to start a business, then I don't need to change anything. Now, it's still high leverage because I just point them in a direction like, hey, I've edited this, I think it's awesome, I think it's a really good product, check it out, and it's free trial, if you don't like it, cancel, right?

• 1:03:13Alex Hormozi?

  That that is basically my, and I would use that if I were you guys, as my decision making variable, which is you at both accurately said it, we're really good at this thing, and the more we do this thing, the better we get at it, we get more views, we get the sponsorship to continue to grow, fine. We can do some of these other deals, as long as it changes nothing about what we do. And so I think that's, and that's the frame that you have to enter those conversations with, which is I am already sponsoring, so me slotting your product in, which I also happen to own a piece of and get some kickback on, it doesn't change anything about what we do, but then that gives you some long term upside and maybe a higher distribution.

• 1:03:47Speaker 01

  This would be really interesting. How about this, for anybody watching, if you have a business that you think would align with what we're doing, and you want the distribution, I'd be really interested to see who reaches out for this.

• 1:03:59Speaker 02

  That's a great idea. And also Adobe. And also, if you guys, yeah, you guys would be interested if we were to create, because Graham and I have thought about this, and we've helped a lot of people just in consulting with content, specifically podcasting.

• 1:04:12Speaker 01

  No.

• 1:04:13Speaker 02

  You guys think that there would be demand for that, so that's something that you'd want to see if we went all the way in depth, pre-production, production, post-production, research, et cetera. Let me know.

• 1:04:21Speaker 01

  I'd be open to that, too. Yeah, I tried something on my own, I'll just talk about it briefly. I put a little feeler out there for a mention, not a mentorship, like a networking community. And I was shocked, we got thousands of people who reached out, who said, I just want to be a part of a network like other entrepreneurs. A community on school, perhaps? No, so we started the very top of the list, people who made more than 10 million a year, and I just didn't even think of, I just wanted to go and talk to these people. I probably talked to 20 people. It's it's it's the least scalable thing I could possibly do, because I'm like talking one to one with certain people. It's not.

• 1:04:56Alex Hormozi?

  Okay.

• 1:04:57Speaker 01

  Not when people want.

• 1:04:58Speaker 02

  Don't go up against, I see that focus in his eyes, don't go up against that.

• 1:05:02Speaker 01

  But so far, we got a group of a dozen people.

• 1:05:04Alex Hormozi?

  Who do over 10?

• 1:05:05Speaker 01

  Who are doing over 10 million a year. And it's it's just the coolest group of it. It's something magic when you're when you have a small community like that versus something that's too big.

• 1:05:14Alex Hormozi?

  Big little communities.

• 1:05:15Speaker 01

  But I say when it's it's not scalable in the sense that once you get, it seems like from, I've spoken with quite a few people on this, once you get more than thirty or forty people, you start to lose that one on one connection that made it special in the beginning.

• 1:05:26Alex Hormozi?

  It's really about subgroups. So if you look at, is it scalable at the current model? No, but are communities scalable? For sure. So if you look at, well, you look at Y Combinator, they have a much larger community than that. And it's really cool. If you look at Vista, sorry, not Vista, Vistage, which is a community model. If you look at YPO, if you're familiar with them, you know, professional organization, they run, they're they're national, they have chapters, and but they keep the forums to eight people. And so that's that's how they keep the, so like, you have access to the whole network because you're like, oh, I'm also a YPO person. I got I got vetted. I, you know, I'm above a certain level. So you have that kind of cred. But like the the actual super close knit group is is like eight people and they meet in person. And so that's why I think they're like, I think for sure there's there's demand for something like that because people want,

• 1:06:09Alex Hormozi?

  all successful people want to be around other successful people because it's really lonely.

• 1:06:13Speaker 01

  That was the one thing I was surprised about when when I was speaking with all of those people. Only one of them said that their goal was to make more money.

• 1:06:20Alex Hormozi?

  Okay.

• 1:06:21Speaker 01

  Only one. And that meant that maybe thirty people.

• 1:06:24Alex Hormozi?

  Good.

• 1:06:24Speaker 01

  I don't care about making more money. All I care about is meeting other people who share the similar problems that that I have gone through.

• 1:06:30Alex Hormozi?

  Lonely, yeah.

• 1:06:31Speaker 01

  And most of it, and most of the problems are pretty surface level, it seems like. And it's like tax planning, estate planning, raising a family.

• 1:06:37Alex Hormozi?

  Yeah.

• 1:06:37Speaker 01

  Random business issues that come up.

• 1:06:39Alex Hormozi?

  Inheritance, whatever, yeah.

• 1:06:41Speaker 01

  Things like this. But I was shocked how common everybody, all this, the commonalities between everybody.

• 1:06:47Alex Hormozi?

  Human problems have existed for a human lifetime. So.

• 1:06:50Speaker 01

  So I thought that was interesting.

• 1:06:52Alex Hormozi?

  Yeah.

• 1:06:53Speaker 02

  What is your experience of loneliness?

• 1:06:56Alex Hormozi?

  I I really like being alone. So I don't get super lonely, to be super candid with you. I think that there are experiences that feel isolating. Where you're like, no one else is dealing with this, but usually isolation is kind of like shame. It only exists in the dark. If you go out and say, hey, I'm dealing with this thing with my marriage. I'm dealing with this thing with my weight. I'm dealing with this thing in business. There's a zillion other people who are dealing with that. My mom used to say this thing that I really liked a lot. She said, the, the news is always the same. It's just the names change. I thought that was actually like pretty profound. If you look at the headlines of the news, it's, you know, banks default, interest rates up, housing crisis. It's like those headlines have existed for a very long time. We just change, it's just, we just change who's involved.

• 1:07:41Alex Hormozi?

  And even, even the bad ones, like girl gets abducted, like it's just change the names. But it's the same stuff, humans doing human things. And so I think that context, but it's still, it's one thing to know that hypothetically, another, when you meet somebody who's going through the exact same thing. And I think that makes people feel less isolated. But spending time alone for me personally is like one of the most, I like, I like being alone.

• 1:07:59Speaker 01

  Are there different tiers to wealth that you've noticed? Like for people that go from zero to a hundred, a hundred to a million.

• 1:08:05Alex Hormozi?

  Sure.

• 1:08:06Speaker 01

  What are those tiers? And when do you see diminishing returns?

• 1:08:09Alex Hormozi?

  I think Felix Dennis has a book called, it's like how to be rich. I think it's how to be, I'll teach you to be rich or how to be rich, something like that. Anyways, it's funny, but like in the first chapter, he breaks down like 11 levels of wealth. And he says, basically after $400 million liquid, he's, that's when you're truly wealthy. And he's, he was, you know, he was worth that much money. He's like, at that point, it's like, you can really do whatever you want. I do think that the jumps are much smaller in the beginning in terms of what makes a really big difference. I think going from anything to about six figures a year is a material change. I think going from, you know, even 10,000 with 20,000 a month is a significant change. Going from there to about 40 or 50 is another change. And if we think of it like how we're defining the change, it's usually what are the variables that affect someone's daily living?

• 1:08:51Alex Hormozi?

  So it's going to be where they live, the, you know, the schools that their kids can go to, the vacations they can take, where they can stay, the food they eat, the clothes they wear. Like those are all, but almost all of those are affected mostly, I would say, like. Up to kind of like that 1% earning level, which is about $500,000 a year. Now you can live a baller lifestyle 500, but not really save anything. And so if you're a responsible saver, it really depends on your saving. I'm actually a lot like Graham, believe it or not, even though I, I, I spend money because Laila spends money. But like by percentage of income, I spend a very small percent of my income. And so it really just depends on your appetite for saving versus spending. And I think that's entirely personal because it's really just a question of risk, like how much risk am I really going to take on? But beyond that, there's, that's just a ratio.

• 1:09:35Alex Hormozi?

  But after that, it's, you know, you're, you, you have nicer and nicer houses. You go on nicer and nicer vacations, you travel private. You know, maybe that's at a couple of million bucks a year, you start traveling private.

• 1:09:48Alex Hormozi?

  After that, again, it's, it's just like you're buying boats and you're buying houses. There's, there, you can't, at a certain point, you really can't consume anymore of it. I will say this is that I do think that, and this is controversial. Uh, but I do think that money, because you know, they, they had a study, it's like up to $70,000 a year. And now like inflation adjusted, probably closer to 100. I actually think it, it continues to go up beyond that. But I think the problem is that people have a skill deficiency in terms of how to spend money.

• 1:10:13Alex Hormozi?

  I think most people know how to spend money effectively up to a hundred thousand dollars a year in terms of how to make their life better, but they don't know how to spend it above that in terms of like things that improve their lives. Like I think, but I think it's a learnable skill. I think you can get better at spending money to make your life better. And so for me, things that make my life better are going to be things that buy me time back. Things that basically are all the annoyances and frustrations in my life, if I can pay to make those go away. Those are things that net enhance. And then long-term in terms of purpose, so if you find something meaningful, you can actually devote real resources and make a change or an impact, which I think is, you know.

• 1:10:43Speaker 01

  Yeah, you should see the updated study on that, that whole 75.

• 1:10:46Alex Hormozi?

  Yeah, yeah, yeah. Is that going to bond?

• 1:10:47Speaker 01

  Uh, no, it was, that was done in a, in, in a different country with, so.

• 1:10:52Alex Hormozi?

  Great.

• 1:10:53Speaker 01

  They, they did one, so.

• 1:10:54Alex Hormozi?

  Yeah.

• 1:10:55Speaker 01

  Well, within the last 10 years of the United States.

• 1:10:58Alex Hormozi?

  Okay.

• 1:10:58Speaker 01

  And they found that I think it was about a hundred and $50,000 was where you get peak. Dollar to value ratio. It continues up higher.

• 1:11:06Alex Hormozi?

  Diminishing returns.

• 1:11:07Speaker 01

  But diminishing returns. And they found that it the diminishing returns really stopped about six hundred and fifty thousand.

• 1:11:13Alex Hormozi?

  About top one percent.

• 1:11:14Speaker 01

  They found that over a million dollars a year, you actually have lower quality of life. I'm guessing it's because you have more problems.

• 1:11:21Alex Hormozi?

  Money problems.

• 1:11:22Speaker 01

  Career issues, or maybe friends are not friends with you, or you have fake people.

• 1:11:26Alex Hormozi?

  Money, which is another like a whole nother.

• 1:11:28Speaker 01

  Right, but it was really, yeah, six fifty, seven hundred grand, and then it just kind of tapers.

• 1:11:33Alex Hormozi?

  Yeah.

• 1:11:33Speaker 01

  After that.

• 1:11:34Alex Hormozi?

  I that that seems super, super believable, but like after, you know, five or 10 million dollars a year in income like. The next strata is, I don't know, twenty five, maybe thirty, forty million a year in income, like where you can do like even, you know, crazier things, I guess. But at a certain point when you can buy the hotels you stay at, it's okay, whatever. I don't know. I don't have a need for Omega yet. I think Leila wants one though.

• 1:11:58Speaker 01

  You should buy a hotel.

• 1:12:02Speaker 01

  Don't say too much.

• 1:13:13Speaker 02

  The.