Throwback: Getting Bad Advice from Good People | Ep 153

In this throwback episode, Alex (@AlexHormozi) dives into how well-meaning people can give harmful advice, and how to evaluate guidance that may cost you time, money, and momentum. 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.

• 0:00Speaker 00

  A lot of times, people have really good intentions and they're not bad people and they give good advice for most people. It just may not be the right advice for you right now. If you're done with something, then be all in about being done with it. When you're making that kind of decision, make the decision in a non-emotional place. And then when you make the decision, go all fucking in and be done with it so that you can look at the opportunity cost.

• 0:25Speaker 00

  The wealthiest people in the world see business as a game. This podcast, The Game, is my attempt at documenting the lessons I've learned on my way to building acquisition.com into a billion dollar portfolio. My hope is that you use the lessons to grow your business and maybe someday soon, partner with us to get to a hundred million dollars and beyond. I hope you share and enjoy.

• 0:44Speaker 00

  I wanted to talk about good advice from good invention people and bad advice from good people. And I think it's one of the hardest things that you struggle with as an entrepreneur. Who do you listen to, right? Where do you get your information from and how can you test whether or not that information is valid or good for you to act on? And so I was talking to a friend earlier this morning who's got six locations and they're trying to, you know, they're thinking about going into licensing and he's kind of going back and forth between selling his six locations, keeping them, keeping one of them, et cetera. And so he was like, what did you do when you sold your six? And what I wanted to tell you is I actually did what most people would consider in a non-ideal outcome. And so what I mean by that is that I got advice from most people to not do a lot of the things that I've done in my life. And these were people who had very good intentions. And so parents, friends, mentors, things like that.

• 1:30Speaker 00

  And so, but the decisions that we ended up making ended up being the right decision for us. And so like, for example, when I had the gyms that I had, I actually sold five of them and closed down one of them, right? And I could have sold all of them and I could have probably bundled them together and I could have gotten a broker and probably sold for probably three or four times the amount that I did. But I am a big believer in So I talked yesterday about opportunities and threats. And when you have an opportunity or you have made the decision to capitalize on a new thing that you're going to do to go all in on that thing. And so for me, the added benefit of waiting a year to get the ideal outcome was not as good as taking a non-ideal outcome, but taking a bigger win overall in the macro picture of life.

• 2:13Speaker 00

  And so I think a lot of times, people with good intentions will give you advice with a micro perspective. And so it's kind of like the advice, like save your way to being a million, you know, be a millionaire, right? Like never get Starbucks, never out to eat, like all that kind of stuff. But like, and the thing is, is like for somebody who's going to be an employee, who's going to be on a fixed income, that's kind of the only way to do it unless you want to start making more money on the side, which then means you're entering into like the entrepreneurial realm, right? And then again, that advice no longer is valid. And so there's like, that's, that's why it's so hard having this big bucket of like, what is good advice versus bad advice? Because like, there's really just contextual, is this good advice for me right now? And so the, the, the way that I've always navigated this is looking at it in math terms

• 2:58Speaker 00

  of opportunity cost of how much, and this is really real, like this is, this is 100% how I weigh out these value equations and honestly, how I can drown out the noise of like my parents saying this is stupid and how mentors saying I shouldn't make this call. But just simply saying, how much will I make if I were to start fresh on this new opportunity or this new thing compared to the current opportunity vehicle that I'm in right now? And so for them, they were like, you spent the last, you know, three and a half years, four years pouring your soul into building these gyms and making them profitable and all the hardships and blah, blah, blah, blah. They're like, how can you just walk away from that? How can you just, you know, in their minds, throw it away? Cause I was just basically selling it for like one or one and a half times earnings. And I was just like, because the thing that I'm going to do next is going to be so much bigger.

• 3:42Speaker 00

  And me waiting a year to do that is going to lose me what I would have made in the first year of that business. And lo and behold, when we, you know, when I sold all the gyms, the very next month, I did two, over 200,000 in my first month. And so I was able to replace, you know, majority of the income that I had in the first month of switching to a superior opportunity vehicle. And so to, to take this back to like, okay, Alex, what does this mean for me? A lot of times people have really good intentions and they're not bad people and they give good.

• 4:11Alex 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, you've got HR, you've got finance. And 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 answer 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

• 4:54Alex 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.

• 5:06Speaker 00

  Advice for most people. It just may not be the right advice for you right now. And so I guess what I want to say is like, I want to encourage any of you who are like, like if you're done with something, then be all in about being done with it. And that's, that, that advice has really never disserved me. And I do want to make sure that when you're making that kind of decision, you're not making a permit decision based on a momentary emotion, for sure. Like that needs to be a logical decision that you've come to. But once you've made the decision in a non-emotional neutral place where you've looked at the math purely, not, not looked at the math with an emotional perspective of like, this could be amazing. You know what I mean? But like really what is realistic? What are some other people who've done the same path? You know, what are expected earnings, things like that?

• 5:49Speaker 00

  When you, when you make that decision, then go all in. I sold all of my gyms from beginning to end in 120 days. Like from beginning to end, all of them were closed. I was out of the leases. I had cash in hand or payments had started coming for the ones that I did payment, payment plans for. And so, and I sold five of them to five different owners. Actually, that's not true. I sold three to one owner. I sold one to a competitor. I sold one to a client and then I closed one down. And so, but I mean, I had a very, you know what I mean? Like, I basically was just like, I'm getting, I'm, I'm, I'm moving on with this. Uh, this is a, this is a essentially a fire sale. You know what I mean? Like, I'm, I'm moving on to the next step for me. And so if, if you get to that, and it doesn't have to be with like at the macro level of your gym,

• 6:34Speaker 00

  but it can be with any decision, like if you're done with something, be done with it. Trying to then go from like, I'm done to let's get ideal outcome are two very contradictory feelings. And they're very, two very different action sets that you take based on that decision. And usually if you're looking at the opportunity cost of the time, it's going to take you between fire sale to ideal outcome. And then you measure how much more you would make in the new thing that you want to do, or the, you know, whatever the endeavor that you're trying to take on is. If you can measure that difference and the differential is greater to doing the thing that you want to do, then it makes math sense to do that and cut ties with the other one as fast as possible so that you can move in that direction.

• 7:16Alex Hormozi?

  Real quick, guys, you guys already know that I don't run any ads on this and I don't sell anything. And so the only ask that I can ever have of you guys is that you help me spread the word. So we can help more entrepreneurs make more money, feed their families, make better products and have better experiences for their employees and customers. And the only way we do that is if you can rate and review and share this podcast. So the single thing that I ask you to do is you can just leave a review. It'll take you 10 seconds or one type of the thumb. It would mean the absolute world to me. And more importantly, it may change the world for someone else.

• 7:45Speaker 00

  And so I just want to give you advice that I didn't get when it comes to like making big moves. I've always, always moved in the direction of like making big moves, making the decision and executing. And I'll take time to make the decision, but when the decision is made, it's made. And every day that I don't act on that decision is a day that I become weaker and I become less certain of myself. So it's like, once you have made it, then prove to yourself that you're, you have balls. And I say that with love to women, you know, that you have big ovaries, whatever. And that you make the call and you move forward. And a lot of people who Who are non entrepreneurial, who are, you know, more security driven, things like that will be like, you shouldn't move this fast. It's not good to, to do things quickly. You know, it's, you know, you should take more time. You should, you should like really think about this more. It's like, well,

• 8:29Speaker 00

  that's just because you're security driven and you sit in your, in your blanket of comfort. And you don't realize that there's still an entrepreneur above you who's worried every day about the business that you're getting paid for, still being there tomorrow. You know what I mean? And so that's just because they live in a false sense of security. But, uh, and so they play off of rules that don't actually exist. But for you and I, for those of us who are entrepreneurs, for those people who are taking the risks, then weigh your decisions, make the decision in a non emotional place. And then when you make the decision, go all fucking in and be done with it. So that you can look at the opportunity cost. Now that being said, if you have a business where, I'm just giving you an example, this may or may not be relevant to some people listening, but like, let's say you have a business that can sell, uh, today for $3 million and, you know,

• 9:12Speaker 00

  with a proper process can sell for 10, right? Uh, and the proper process would take an extra, let's say nine months. Well, then the equation would be, will I be able to make an extra $7 million in profit from a new endeavor in that period of time? And if it doesn't look like that's the case, then you should wait and do the right process. But basically what I'm saying is you need to look at the, the delta between what you can get in a, in a, in a short period of time. If, I'm not saying this is necessarily for an exit. I'm just using this as an example. It could be anything. Uh, but what you can get in a short period of time compared to what you could get over a longer period of time, and then what the opportunity cost of doing the other thing that you would do in that meantime, and whichever one is greater is the one that you

• 9:55Speaker 00

  should do, and you should act on that in the moment. And fuck everyone else that tells you otherwise. That being said, last words of it, last words of advice, sorry for all the advices this morning, but don't listen to me if you want to make more than me. Like, I think one of the most dangerous things in the world is listening to people who make more than you, rather than listening to people who make what you want to make. Um, and that's something that I think I've learned as well. Cause like, when I was starting out, there were plenty of people who made a lot more than I did. But when I look now back on the advice that they gave me, It was based on their view of the world and the lens that they, how they saw things. And it wasn't really the best advice. It was just the advice from their perspective. And so I think that like, listen to titans. You know what I mean?

• 10:40Speaker 00

  Listen to, listen to the billionaires, listen to those podcasts, watch those guys talk, because they will be able to give you perspective from, you know, 10,000 foot view of the things that are really going to drive the outcomes that you're looking for. And so like, don't be afraid to not listen to people if it doesn't feel right for you. You know, and a lot of times they're just giving you, based on the experiences that they have, and they're projecting it onto you. And I do the same thing to everyone that I'm talking, you know, to everyone who's on here right now. Like I'm, I'm just giving you my experiences and how that's worked for me. There might be another guy who's made 20,000 times more than me, who's like, never do that. But that's just, that's just my, my two cents and my angle that has served me well, you know, with our businesses and whatnot. So make sure that the people that you're listening to have achieved what you want

• 11:24Speaker 00

  to achieve, not just more. And I know that's a little bit counter to some of the internet marketing culture of like, you just need to be one step ahead of the people that you're trying to serve. I think you need to be 20 steps ahead of the people that you want to serve, so you can actually see the battlefield for not like just the next step. Because if you only see the next step, then you might not know that they would have to back step that one step, two steps from now. And so that's where, that's where, that's where this is kind of coming from is if you can see what 10 steps ahead look like, then you can actually figure out how to get there in six, rather than being one step ahead. Like, I think it maybe works from a, from a selling someone stuff standpoint, but it doesn't really work from a long-term serving that person standpoint.

• 12:13Alex 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. You've got 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 answer 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 that's relevant to you,

• 12:57Alex Hormozi?

  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.