Take The High Leverage Opportunities | Ep 815

Want to scale your business? Click here. Welcome to The Game w/ Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth. Follow Alex Hormozi’s Socials: LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

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

• 0:02Alex Hormozi?

  Infinite Banking, Insurance, you have 29 agents, and you're needing to decide whether you need to be the face and get customers to feed your agents, or you should go all in on getting more agents and teaching them how to do lead gen.

• 0:20Speaker 01

  Yes.

• 0:21Alex Hormozi?

  Cool. Yeah, so do the second one.

• 0:27Speaker 01

  Do the second one.

• 0:29Alex Hormozi?

  Yeah, it's significantly higher leverage. So basically, so think about this is what problem do you want to solve? So either you say, "I want to become a..." Like, you want to keep growing your brand top of funnel, so that you just have more and more people are interested in Infinite Banking, and then you have all these agents that you pass it off to, so that they can, you know, basically transact and own the relationship. So that's like option one. That is, I would say, the lower risk path, because you're already doing that today. And so, how many, is it on Instagram that you do your stuff?

• 0:58Speaker 01

  Yeah, all on Meta and YouTube.

• 1:00Alex Hormozi?

  Okay.

• 1:00Speaker 01

  And we're getting...

• 1:02Alex Hormozi?

  What's your followership from that?

• 1:05Speaker 01

  15,000 subscribers on YouTube, and 12,000 followers on Instagram, and 6,000 on Facebook.

• 1:12Alex Hormozi?

  Yeah, and what percentage of the leads come from that stuff versus whatever you do in person?

• 1:18Speaker 01

  15% come from online, and...

• 1:22Alex Hormozi?

  Okay, where's the rest come from?

• 1:23Speaker 01

  The rest of it comes from referrals and networking and...

• 1:26Alex Hormozi?

  Dude, get agents. I don't even know what we're talking about. For sure, get agents.

• 1:29Speaker 01

  Go get agents.

• 1:30Alex Hormozi?

  Yeah, I thought, I thought it was like you're 60, 70% of the business is coming from, from your organic.

• 1:36Speaker 01

  No, most of it's coming from...

• 1:37Alex Hormozi?

  For sure.

• 1:38Speaker 01

  And then the challenge with the agents, originally it was all of me teaching people how to do that. How to go out there and get business, go network, go join BNI, Chamber of Commerce, whatever. That's what worked for me. And then we would get good people that were like, "Hey, I don't have any network." So I said, "All right," and they asked where leads were. And I said, "All right, so let me go create leads." And we started calling business owners, because that's who I was selling to. But they were not showing up, and they weren't really busy, whatever we were offering wasn't, whatever. Then I reread $100 million offers and $100 million leads. And I looked at the value equation, I said the best value I can give is to real estate investors. So let me go get real estate investor leads. And then we're calling them all day long. And the people that I'm hiring don't know how to communicate with them properly.

• 2:22Speaker 01

  So the only, they end up just setting up appointments and then they hand them back off to me.

• 2:26Alex Hormozi?

  Okay.

• 2:26Speaker 01

  And they're good, but I think it comes down to recruiting. People want leads, the first question, where do we get your leads?

• 2:33Alex Hormozi?

  Yeah.

• 2:33Speaker 01

  If you say you have to go generate your leads, they might go look at somewhere where they give them leads. So we started giving people leads, so we make an offer to recruits. That's good.

• 2:43Alex Hormozi?

  Uh huh. Well, I think that one is you could probably just take the existing brand that you have and just be more deliberate about the call to actions that you make. And basically, because like if you talk about high level insurance stuff, that's going to attract both people who want to learn more about insurance, but many of those people will be agents.

• 2:59Speaker 01

  Yes.

• 3:00Alex Hormozi?

  And so I think if you basically alternate the CTAs, you, you'll be able to basically, I don't want to say chase to, but you know, but, in some ways you kind of can double dip here because as long as the content strategy fundamentally doesn't really change, you're just changing really the calls to action, then you can kind of get a little bit of the best of both. But I do think that the big thing that you need to crack is teaching them to generate their own leads. Like that is a hundred, like, that's the limiter of your business.

• 3:24Speaker 01

  Heard.

• 3:24Alex Hormozi?

  So you need to bring them on and you need to have the training system to get, to reliably get them to self generate. Like that's it. Like that's what you have to do. If you do that, the sky's the limit.

• 3:33Speaker 01

  And the 20 people that we have at a 29 that are just simply coming in and cold calling real estate investors all day.

• 3:39Alex Hormozi?

  Yeah.

• 3:40Speaker 01

  Right now, that are setting up an insane amount. I think our offer is not great, so I'm going to the drawing board with that. But all those people, now I gotta go teach them, I'm just teaching them how to cold call.

• 3:50Alex Hormozi?

  Well, they already are cold calling, right?

• 3:51Speaker 01

  Huh?

• 3:51Alex Hormozi?

  They already are.

• 3:52Speaker 01

  They are cold calling now. Well, they're coming in, I'm teaching them to cold call.

• 3:55Alex Hormozi?

  That's fine.

• 3:55Speaker 01

  Rather than coming in, teaching them to go shake hands and kiss babies.

• 4:00Alex Hormozi?

  You want to teach them the highest efficiency strategy for getting customers, so whatever that is. So you can, it's just like whatever your method is that you think the highest percentage of people will succeed with, that's what you teach.

• 4:08Speaker 01

  Cool.

• 4:09Alex Hormozi?

  So whether it's shake hands, kiss babies, or it's cold calling, whatever.

• 4:12Speaker 01

  Or a combo of both?

• 4:13Alex Hormozi?

  Yeah, or a combo of both. Either way is fine. Um, but like fundamentally, like look at the biggest insurance companies in the entire world. They are that big for a reason and almost all of them. They are recruiting machines.

• 4:24Speaker 02

  Right.

• 4:25Alex Hormozi?

  Like that's where fundamentally, because like they're not a supply constrained business. Like you can sell as much insurance as you want.

• 4:29Speaker 02

  Right.

• 4:30Alex Hormozi?

  Like you're not supply constrained.

• 4:31Speaker 02

  Yes.

• 4:31Alex Hormozi?

  Right, like you're just demand constrained.

• 4:33Speaker 02

  Yes.

• 4:33Alex Hormozi?

  And so you've just got to get guys and then put the system in place so that they learn how to sell. And then that's the business.

• 4:39Speaker 02

  Heard, heard. Thank you. Appreciate you.

• 4:41Alex Hormozi?

  Yeah.

• 4:42Speaker 02

  Hey Alex, my name is Henry. I sell education. I teach people how to fix and flip. Mainly the Hispanic market, so it's only in Spanish. We did 1.3 mil last year, second year in business. And we want to do 3 million this year.

• 4:56Alex Hormozi?

  Cool.

• 4:57Speaker 02

  So with the more, better, new, right? Right now, we only do two events a year. Big events, 600 people. And we upsell to a high ticket, 12,000, right? And we convert 20% of the room, more or less. So that 80% that went to that room, never sees me again. I never sell them anything again.

• 5:18Alex Hormozi?

  Okay.

• 5:18Speaker 02

  And well, that 20%, they bought my high ticket. That mentorship is a year.

• 5:22Alex Hormozi?

  Sure.

• 5:22Speaker 02

  And after that, I don't sell them anything ever again.

• 5:26Alex Hormozi?

  Okay.

• 5:26Speaker 02

  So more, better. Do I just do more of these events and like never ending looking for new customers for the rest of my life, or should I focus?

• 5:37Alex Hormozi?

  No, you're good. You're in education.

• 5:38Speaker 02

  Yeah.

• 5:39Alex Hormozi?

  And education graduates people.

• 5:42Speaker 02

  Yeah.

• 5:42Alex Hormozi?

  That's how education works. So if you look at the education system overall, the way to great continuity in education is just always have something else to learn or to teach. Right? Like first year, now you're an undergrad. Now you're a graduate student. Now you have a masters. Then there's a PhD and you get a second PhD, right? Like you just, you just keep, you know, people will just become endless students. And so, um, do you want to sell the business eventually, or do you just want to make money?

• 6:03Speaker 02

  Uh, make money. I mean, we're not.

• 6:04Alex Hormozi?

  No, it's fine. No, I prefer the truth. Uh, yeah, I mean, the easiest thing to do is just double the amount of events you're doing. Either just do, you can either go one a quarter, or you can do two at 1,200.

• 6:15Speaker 02

  And would you travel, or just stay in where I'm at in Miami?

• 6:19Alex Hormozi?

  Is that where you run them now?

• 6:20Speaker 02

  In Miami?

• 6:21Alex Hormozi?

  Yeah, I do east coast, west coast. Yeah.

• 6:23Speaker 02

  Yeah, maybe Texas or something.

• 6:24Alex Hormozi?

  Yeah.

• 6:25Speaker 02

  Okay.

• 6:26Alex Hormozi?

  I mean, you have a really simple solution. Like just run the same playbook more times. If you were like, I want to build a more valuable business, then I would say, take the year to figure out revenue retention, which is how do I get these people who pay me $12,000 to pay me another $12,000 or pay me $30,000 next year? Or even down sell them to something that's $5,000 a year, but they stay.

• 6:46Speaker 02

  Right. And focus on retaining that top tier that paid me the high ticket?

• 6:51Alex Hormozi?

  Yeah, but I think considering for the model that you have, down selling the upsell, I actually like a lot. So if they paid you 12, maybe they'll stay for three a year, three to five, just to have access to the network and some of your vendors and the stuff that you kind of like provide. And I think that's something that people would be far more likely to stick with. And so then you can basically think about your business as, from a zooming all the way out perspective, is that the $12,000 is actually like offset CAC, which is like if you could break even on the $12,000, if you know that someone gets into a $3,000 a year membership, that's pretty much all margin, that doesn't leave. So it's like, that allows you to spend way more than your competition, because they need to make money on the 12, you can break even on the 12. And then you just have this

• 7:34Alex Hormozi?

  stack of $3,000 bills that just keep stacking up. That's like low, low effort to maintain.

• 7:39Speaker 02

  Got it.

• 7:40Alex Hormozi?

  Makes sense?

• 7:41Speaker 02

  Yeah, it's good.

• 7:42Alex Hormozi?

  But yeah, the nice thing is that you're honest about just wanting to make more money. It makes this a lot easier.

• 7:44Speaker 02

  Yeah.

• 7:45Alex Hormozi?

  Yeah. Yeah. Don't say, I want to make an impact.

• 7:48Speaker 03

  I'm James. I sell custom branch railings to homeowners. We did 420 or so last year. I was, I've read 10x is greater than 2x. And so last night it was coming to me again, like, do I really just want to double, or do I want to try the 10x?

• 8:03Alex Hormozi?

  Sure.

• 8:03Speaker 03

  And so what I want to try to do is to develop a network of product specifiers, architects, designers, contractors, that can act kind of like a referral network. I want to shift away from the minnows and to focus more on whales. We had one client last year, bought $50,000 worth of handrails. And if I could get 10 of those in a year, then I would double revenue just with 10 clients. So kind of what are my best strategies to go about achieving that?

• 8:27Alex Hormozi?

  So where did you source the single whale this year?

• 8:31Speaker 03

  He found me. It's all inbound. It's all through search.

• 8:33Alex Hormozi?

  Okay, so SEO or PBC?

• 8:35Speaker 03

  SEO.

• 8:36Alex Hormozi?

  Okay.

• 8:36Speaker 03

  I just started Facebook ads about three or four weeks ago. They're going pretty good, qualified about half of the leads so far.

• 8:44Alex Hormozi?

  So I would, so if you want to go whale hunting, then I think your, your initial thought strategy of finding the architectural firms and engineering firms and whatnot is a good one. I would probably try the outreach method as my primary way because you can be hyper-targeted in terms of who you're reaching out to. And the, the key to making it work though is like, what's in it for them to refer you business?

• 9:09Speaker 03

  Are you asking me that?

• 9:11Alex Hormozi?

  Uh huh.

• 9:12Speaker 03

  That's an excellent question.

• 9:13Alex Hormozi?

  Okay.

• 9:14Speaker 03

  So architects will typically in a plans, like if they make a set of plans, they'll specify what kind of tiles to use and what kind of windows to use, et cetera. So I've, I've, we've gotten plans in the past where it's like, it's got the pictures from the website with the CAD drawings and everything on the plans.

• 9:27Alex Hormozi?

  Mm-hmm.

• 9:28Speaker 03

  And so it's like how to persuade them to do that kind of in absentia. And I should also note that we ship nationwide. So this is not like, you know, a hyper local market.

• 9:38Alex Hormozi?

  Are you shipping or are you, are you doing installs or no?

• 9:39Speaker 03

  No, we haven't done an install.

• 9:40Alex Hormozi?

  Are you just, you just actually?

• 9:41Speaker 03

  We just ship product.

• 9:42Alex Hormozi?

  Interesting. Got it. Then who are the decision makers? Well, right now it's been primarily residential is what it sounds like.

• 9:50Speaker 03

  Right. It's primarily homeowners. We've done some commercial work, you know, but it's primarily homeowners who are, you know, looking for something different. And so it's very, what I call intentional inbound search. It's like they're looking for something, they're deliberately searching it out, they find it, you know, we have a lead magnet kind of which is like 250 different ideas.

• 10:10Alex Hormozi?

  SEO.

• 10:11Speaker 03

  It's SEO and I, you know, yeah.

• 10:13Alex Hormozi?

  Well, this is a fundamental change in business strategy. So you're aware of that. So with that comes risk. Cause like if the, obviously the lowest or the, the highest risk adjusted return move or lowest risk, I guess, is to probably add, like if I were like tomorrow, what would I do? I'd probably just add PPC in right now because you already have something that's working on SEO. I would probably see how can I get way more articles written so that my SEO traffic can go up? Can I tackle more, you know, more keywords? That's like the for sure will work and make you more money play. The going after whales for sure can make more money because why not add zeros to things? It'll just be a completely different sale and you'll have two levels of sales.

• 10:58Alex Hormozi?

  So sale number one is going to be for the affiliates and then figuring out what's going to make it worth it for them. And then the second level is what's the, you know, what's the actual sale to the, to the whale customer? So who's the decision maker with the whales?

• 11:09Speaker 03

  Like the final decision maker is gonna be the homeowner, whoever's doing the project.

• 11:15Alex Hormozi?

  So you just want bigger homeowners?

• 11:17Speaker 03

  The architects have the ability to specify it and to put it in front of the client. So like, we also did another one, which was about sixty thousand for a guy that was doing a development of Airbnbs. In Virginia. He put up like six yurt kind of things.

• 11:32Alex Hormozi?

  Yeah.

• 11:32Speaker 03

  And, you know, so I had two very big.

• 11:35Alex Hormozi?

  So both of them were architects that sent you these?

• 11:37Speaker 03

  The one was an architect and the other was a construction company.

• 11:40Alex Hormozi?

  Okay, yeah, so you're gonna have to go B2B outreach is the, basically when you look at Core Four, that's gonna be your, what you're going to do, and then they're going to be your affiliates. And so, the million dollar question is, what's in it for them? So, my proposition would be, so there's three ways you can do affiliates, at least in the world of Alex. So you have, they sell your shit for you and they get a commission. That's option one. That's typically my least favorite option, but it is an option. Option two is that you give them some morsel of something that you sell, that they can sell for a hundred percent markup, they can keep all the money, but you get the introduction. This is my favorite way of doing it.

• 12:22Alex Hormozi?

  The third way is that you basically allow them to just bundle in your free thing with their services. Now with architecture firms, it's not like they're gonna bundle in a railing for their service, but just for everybody else. Like, those are the three things. So it's like, they bundle your, basically your lead magnet in for free with their thing they sell, so it enhances the value of their overall package. You give them the things that they can upsell your lead magnet for an amount of money that they can keep a hundred percent of. Or they just sell your stuff and they get a kickback. Is there a version for this, where they can just upcharge? Like, you can do a small portion of this that they get a hundred percent of?

• 13:01Speaker 03

  A hundred percent? Like, I don't think so. Like, maybe some kind of contractors or architect discount?

• 13:07Alex Hormozi?

  We wanted them to be stupid to say no.

• 13:13Alex Hormozi?

  Yeah, because like the generic like you get 20% kickback is just like everyone does it. Like, who here does 20% kickbacks for anybody who refers you business? You can raise your hand, I'm not gonna be upset. Okay. And so, the point is, is that, and you probably, no one here has referred anyone else's business. And it's because no one cares. That's, that's kinda the point. And so, it has to be an irresistible offer. And so, if we give away the lead magnet or something, think about it as like, my CAC for a $50,000 customer is the cost of the lead magnet. And if I close one out of three introductions, then it's 3X the cost of lead magnet is my cost to acquire a customer, which is usually pretty darn good. But it sounds like an irresistible offer to the architecture firm, because they're like, "We can just sell this and keep 100%." You're like, "Yep, just make the introduction and I'll deliver that."

• 13:58Alex Hormozi?

  And then when you talk to the customer, you're like, "Yeah, I'll deliver that. Here's one rail, but you need 10 more." And then you make the sale. Does that make sense?

• 14:06Speaker 03

  I'm not entirely sure. Like, people would order the entire project.

• 14:09Alex Hormozi?

  Okay.

• 14:09Speaker 03

  So it's not like, you can just, like, I can't just ship you a sample and be like, "Hey, look, here's a..."

• 14:13Alex Hormozi?

  Yeah, then you're gonna have to do the commission-based structure, which is not my favorite, but that's probably the way you're gonna have to do it. So either you can do the discount, I mean, I would say, "Guys, I have 20% that I can play with here." So you can take all 20 and give them no discount, you can take a 10% discount and then they get, and then you get 10% kickback. Like, this is what I got. I'll make it work whatever way you want, but this is my bare bottom price.

• 14:35Speaker 03

  Okay.

• 14:36Alex Hormozi?

  And I think that's what, like, that's the outbound strategy.

• 14:38Speaker 03

  So should I then, in turn, raise prices for direct-to-consumer?

• 14:43Alex Hormozi?

  Yeah, I'd love that.

• 14:44Speaker 03

  Okay. Thank you.

• 14:46Alex Hormozi?

  Yeah. Love that for you.

• 14:50Speaker 04

  Hey, Alex.

• 14:51Alex Hormozi?

  Hello.

• 14:51Speaker 04

  Thank you for the content you create. My name is Manal Fatah, I'm the founder of Alfen.

• 14:55Alex Hormozi?

  Of what?

• 14:56Speaker 04

  I'm the founder of Alfen, so...

• 14:57Alex Hormozi?

  Alfen?

• 14:58Speaker 04

  Yeah.

• 14:58Alex Hormozi?

  Okay.

• 14:59Speaker 04

  So basically, we sell tools to creators to help them make more money. And we also simplify how brands collaborate with creators.

• 15:04Alex Hormozi?

  Okay. You say tools like software?

• 15:06Speaker 04

  So software and service agency tools. So we have a music label, a creator agency for big creators, and then a platform as well.

• 15:14Alex Hormozi?

  Okay.

• 15:14Speaker 04

  So I'm coming to that just in a bit, I know the focus topic. We made around 4.3 million last year. And basically, my goal is to try to get to 100 million.

• 15:23Alex Hormozi?

  Alright.

• 15:23Speaker 04

  Now, the issue here is...

• 15:24Alex Hormozi?

  What's the split between the three in terms of revenue?

• 15:28Speaker 04

  One million for the creator agency. One point three million for the music label. And then the rest is on the brand side.

• 15:37Alex Hormozi?

  And the brand side is you basically being an agent to do.

• 15:40Speaker 04

  Exactly, connecting it both. But basically, what I've been doing is that I realized the disruption of AI that's kind of coming in.

• 15:46Alex Hormozi?

  Okay.

• 15:47Speaker 04

  I also saw the scalability of what we were doing because I've been in the YouTube space for a while. So a lot of these services aren't going to be scaling as much. So in the past two years, I've been taking that profit and putting it into a tech platform. Basically, it's like a creator store where you can sell your services, digital products, but also items that you love. So the skincare that you use, the hair cream, the shoes, and you earn a commission. And we use all of that data to make it easier for brands to know what creators to work with. Because right now in influencer marketing, it's like a spray method, right? I'm going to pay, I have no idea how much conversion they're going to actually get me. But our integration shows you for a thousand clicks, they get you these number of visitors and then they end up buying. My challenge here right now is that I'm trying to scale that business. But my business model is we make money when you make money.

• 16:31Speaker 04

  So on the brand side, we get a fifteen percent commission or margin on all the spend. And on the creator's side, we get around eight percent from whatever they make with their fans by selling these digital products and courses or affiliate links.

• 16:44Alex Hormozi?

  Okay.

• 16:44Speaker 04

  My issue here is I've got forty thousand creators, but only a thousand are making money. Right? And I've been kind of struggling between going on a SaaS model to be able to scale. Because when I do any social marketing, we get a creator that comes on board, but they don't make money right away. So it's not like you, you know, and the longer it takes you to recoup your ad spend is not usually a good metric for scalability. So I'm kind of pivoting, should I go into a SaaS model where right whatever I make from the creator, I'll just be like, hey, like just pay me that price and I take zero percent from you? And then I just charge the brands the commission to collaborate with those creators. This way I can scale the business in a much faster.

• 17:21Alex Hormozi?

  Say the, say the last part again.

• 17:23Speaker 04

  So instead of me making percentages from creators.

• 17:26Alex Hormozi?

  Yeah.

• 17:26Speaker 04

  I provide them the same tools that a lot of them make, make money. And I keep zero percent.

• 17:31Alex Hormozi?

  Okay.

• 17:31Speaker 04

  But then let's say they have to pay like twenty bucks a month.

• 17:33Alex Hormozi?

  Sure.

• 17:34Speaker 04

  But then I still make my money on the upside on the brand side by connecting them with these creators.

• 17:38Alex Hormozi?

  Okay, so switch to a subscription.

• 17:40Speaker 04

  Switch to the subscription, yeah.

• 17:41Alex Hormozi?

  Okay.

• 17:44Speaker 04

  Because right now, like, I have 40,000 creators who've signed up, but I'm really making money off 1,000.

• 17:48Alex Hormozi?

  Right, and it's free to sign up, and you only get paid if they get paid. Yeah. So, you're in a prosumer audience. So, if you look at Shopify, for example, it's super, it's, if you look at the amount of people who've tried to build marketplaces, almost all of them fail. And it's my opinion that the best marketplaces do run as SaaS, and then, once they get to scale, they can, they can kind of push more marketplace, like Shopify, for example. Like, it's 29 bucks a month, or whatever it is, because they know that the vast majority, like, they make more money charging 29 dollars a month than getting 4% on zero for the vast majority of stores. But people continue to pay for the hope that someday they will make money. And so, I think the idea of switching to SaaS

• 18:33Alex Hormozi?

  is not a bad one. I am concerned about the four businesses that you have. So, because in order to win at SaaS, you have to be, like, all-in on software. And so, the alternative to that would be, instead of letting creators come on for free, you would charge them to come on, which you could do, it has, like, a one-time setup fee, and then maybe increase the likelihood that they win. Either path would work. But if the ultimate goal is that you want to build a network of creators, then you want to have the lowest barrier possible on the creator side.

• 19:10Speaker 04

  So, I'm still thinking of a free tier and a paid tier, with some minor benefits, but then, if you really want to make money, you gotta end up paying a subscription.

• 19:18Alex Hormozi?

  Yeah. Yeah, you'll have to play with the feature set, because that's always a bitch.

• 19:24Speaker 04

  It's just the path of least resistance to getting to 100 mil.

• 19:27Alex Hormozi?

  Yeah, so I think, I think adding the subscription for the base, and then still maintaining the revenue that you get from the sponsors makes sense. I would maybe push back slightly on the hypothesis that they can't convert anything, because it dramatically decreases the value of the network from the sponsor side.

• 19:47Speaker 04

  What do you mean by that?

• 19:47Alex Hormozi?

  Because some people will pay for impressions.

• 19:49Speaker 04

  Yeah.

• 19:50Alex Hormozi?

  And so, those guys can for sure deliver those. And so maybe there's like two tiers that you can sell. You have another product on the ad side or the media side. It's just something to consider.

• 20:01Speaker 04

  Perfect. Thank you.

• 20:02Speaker 05

  You just validated my thoughts.

• 20:03Alex Hormozi?

  Oh, good.

• 20:04Speaker 04

  I just wanted to make sure I'm thinking the right way.

• 20:06Alex Hormozi?

  No, I think it makes sense. Yeah, it either have to, basically you have to position as higher ticket and do premium wake level onboarding and then select only for the really good creators. And that would be like you charge five or $10,000 and you really get them set up. Or you basically flip the other way, go freemium. And then it's all based on like basically media arbitrage where you're just running tons and tons of ads to get people onto the platform and you just know what your average revenue per platform user is.

• 20:29Speaker 04

  Perfect. Thank you.

• 20:33Speaker 05

  Hi, Alex.

• 20:33Alex Hormozi?

  Hello.

• 20:34Speaker 05

  My name is Alex Yama. You can call me Alex Rodriguez.

• 20:37Alex Hormozi?

  From Puerto Rico?

• 20:38Speaker 05

  Yeah, from Puerto Rico. So I'm a music attorney.

• 20:40Alex Hormozi?

  Abogado.

• 20:41Speaker 05

  Abogado correcto en la música y el entretenimiento.

• 20:44Alex Hormozi?

  Yeah.

• 20:45Speaker 05

  So what we do is we, our constraint is focus.

• 20:48Alex Hormozi?

  Okay.

• 20:51Alex Hormozi?

  At least you said it. Yeah.

• 20:53Speaker 05

  So we have.

• 20:54Alex Hormozi?

  Three businesses.

• 20:54Speaker 05

  A law firm.

• 20:55Alex Hormozi?

  Yeah.

• 20:56Speaker 05

  So basically it's three businesses.

• 20:57Alex Hormozi?

  Yeah.

• 20:58Speaker 05

  But today, thanks to Ed and Sammy, we got much, much more clear on what we should do. But I would like to know, how would you think about this? Because the, the law firm side, it's growing 20% year over year without me actually doing anything, just redirecting people that comes to me through my law firm. And right now it's about 100K. And then we have the educational side and that is making 200K. And it's been stuck like that in the last two years.

• 21:31Alex Hormozi?

  True.

• 21:31Speaker 05

  And we're building.

• 21:32Alex Hormozi?

  And you get customers from organic?

• 21:33Speaker 05

  Yeah, both are organic.

• 21:34Alex Hormozi?

  Okay.

• 21:35Speaker 05

  So if you don't have money to pay us as a lawyer, you go to the educational platform. And we are developing a contract automation software for big companies like major labels or publishing companies. So right now, the, the product, our software, our goal with the software is to sell. We are seeing that. That other, that big music companies are buying tech.

• 21:59Alex Hormozi?

  Yeah.

• 21:59Speaker 05

  So, specific for them.

• 22:01Alex Hormozi?

  Sure.

• 22:02Speaker 05

  So they're doing everything manually. We want to sell that, but we have a cash flow problem.

• 22:06Alex Hormozi?

  Yeah.

• 22:06Speaker 05

  Because we're selling to, you know, people without a lot of money and their service size does make money.

• 22:12Alex Hormozi?

  Yeah.

• 22:13Speaker 05

  So, our, our, our problem is where should we focus?

• 22:16Alex Hormozi?

  Yeah. But you're, what's, what's monthly churn right now?

• 22:20Speaker 05

  On the, it's.

• 22:21Alex Hormozi?

  On the software?

• 22:22Speaker 05

  We got a hundred people and we only have forty active right now.

• 22:26Alex Hormozi?

  And how long have you been doing it?

• 22:27Speaker 05

  In the first year.

• 22:28Alex Hormozi?

  In the first year. So you've retained forty percent. Are they actually active though? So they're paying?

• 22:32Speaker 05

  The people that are active are paying three thousand dollars per year. And there are only like four.

• 22:37Alex Hormozi?

  Four?

• 22:38Speaker 05

  Four that are paying three thousand.

• 22:40Alex Hormozi?

  And then what are the other thirty-six paying?

• 22:42Speaker 05

  Are paying six hundred per year.

• 22:43Alex Hormozi?

  Okay, got it. Okay, so I think we, we, we chatted about this last night. So

• 22:51Alex Hormozi?

  you have a, there is no right answer, but there is a path that you have to pick. And so either you're going to be enterprise company and you're going to build only for that. And I would say like you probably will just transact on the education side in order to fund this. I, in general, don't like this plan, but you could do this. Because you'll be split attention. And this is fundamentally why people raise money in software. So they can just focus on one customer the whole time, build the product and then actually get it to work. Okay, that's that. Because you said that you're retaining forty percent in basically a

• 23:25Alex Hormozi?

  prosumer-ish market, which is where you're at. I would be inclined to say that you probably are pretty close to a decent product.

• 23:33Alex Hormozi?

  So you probably have nailed something there. Because keeping forty percent of people one year later on, you know, whatever it is for musicians that you guys have for contracts and whatnot. You could absolutely go all in on that and get that to like fifty or sixty percent. And then you just need to have a different acquisition system. So you probably just need to. Go spend money acquiring customers. And that already cash flows because of the education side. And are the people who are still paying you on the software also education customers or no?

• 24:04Speaker 05

  They usually come from the education or from my legal services as well. So I have some clients that be 80% of the job.

• 24:11Alex Hormozi?

  Here's the million dollar question. The million dollar question is if they stop the education, do they keep paying for the software?

• 24:17Speaker 05

  Yes, because it's a one time.

• 24:19Alex Hormozi?

  Well, then that's what you mean the software is one time.

• 24:21Speaker 05

  No, the education.

• 24:22Alex Hormozi?

  Oh, well then.

• 24:23Speaker 05

  So they just pay and they're gonna use the software.

• 24:26Alex Hormozi?

  As long as they, so the only thing that we're solving for is revenue retention on the software. And so like enterprise in and of itself is not more valuable than lower market. It's just that tends to be stickier, which is what makes it more valuable. But if you can get a larger marketplace, easier to acquire customer to stick as well as a large enterprise customer, you've got a gold mine if that's true. And so if you want to go spend money, acquire customers with the education or media as your liquidation and then get, you know, 100% like, but the goal that you guys should have is like, we don't care at all about the education. All of your focus, all the profit goes into just fixing one number, which is that you need to look at M12, so a month 12 retention. And just say like, okay, we're at 40, how do we get to 60? And then how do we get to 70? And that's all you're solving for.

• 25:10Alex Hormozi?

  Because if you solve that, then the thing will just keep growing. And that's the beauty, I mean, that's fundamentally the beauty of software. Once you get it right is that it just keeps growing.

• 25:17Speaker 05

  Thank you.

• 25:18Alex Hormozi?

  Yeah.

• 25:18Speaker 06

  My name is Mike Nathan. I sell cellular therapy in home to the old affluent injured probably and athletic. We're new, but we've got a million dollars in revenue, half an EBITDA. We would like to get to 25 million.

• 25:34Alex Hormozi?

  In home or?

• 25:36Speaker 06

  In home.

• 25:36Alex Hormozi?

  Okay, got it.

• 25:37Speaker 06

  Consider mobile healthcare.

• 25:38Alex Hormozi?

  Okay, is it like guy drives out or is it you sending machines?

• 25:42Speaker 06

  RN drives out, gives you an IV infusion in your home.

• 25:45Alex Hormozi?

  Okay, got it.

• 25:47Speaker 06

  We'd like to get to 25 million. We're built to be bought. We want to exit, so we think we're on the cutting edge of this. What's stopping us is my team is awesome.

• 25:55Alex Hormozi?

  All right.

• 25:56Speaker 06

  Great, and from the NFL to a lot of great, we have great business to doctor, B to B sales experience. Zero B to C experience and that playbook we're learning is wildly different. We have no idea what we're doing.

• 26:11Alex Hormozi?

  Yeah, so what stops you from just doing way more of the doctor stuff?

• 26:15Speaker 06

  It doesn't, it doesn't quite pay as well. Meaning, we have people that knock on doors to orthopedic surgeons who are looking for patients with alternatives to surgery, PT chiropractors. It's a lot of effort and there's some that are going to refer to you and some that just will not.

• 26:33Alex Hormozi?

  Yeah.

• 26:34Speaker 06

  So that's our constraint in a one market in the Twin Cities. It's a one market play.

• 26:40Alex Hormozi?

  Mm-hmm.

• 26:41Speaker 06

  We know there are more people looking for this solution. So we want to understand what the B to C is. If we go to then Dallas, Philly, LA as we try to scale it, we're convinced it needs to be a better ROI than maybe what we're doing right now.

• 26:55Alex Hormozi?

  What do you do? So you're making 50% margins, right? So what's the cost to acquire a physician?

• 27:00Speaker 06

  Cost to acquire a physician?

• 27:03Alex Hormozi?

  Mm-hmm. Who refers your business? Cost of acquiring affiliate?

• 27:06Speaker 06

  It's oftentimes just, it can be a physician, so we don't track it that way, but it's $500.

• 27:11Alex Hormozi?

  Okay. So it costs you $500 and then what does the average physician refer to you in a year?

• 27:16Speaker 06

  Uh, six thousand.

• 27:18Alex Hormozi?

  Okay. So I mean, you're getting 12 to one there and you already know how that works. So like what stops you from doing 10 times more of that?

• 27:25Speaker 06

  Uh, we.

• 27:26Alex Hormozi?

  You're saying they don't pay well, but that's the part I'm not sure.

• 27:29Speaker 06

  Well, we'll see.

• 27:30Alex Hormozi?

  Cause you're getting 50% margins.

• 27:31Speaker 06

  We've run through the woods and hit all the people that are going to refer us. The number's not amazing, or at least I just know there's more there. I assume there's more. There's gotta be more than the, you know, the 200 people we've hit in the.

• 27:42Alex Hormozi?

  Like you've, I mean, you've only really talked to 200 in terms of like reach outs and, or 200 who've signed up as affiliates kind of thing.

• 27:48Speaker 06

  I don't know the number off the top of my head, but it's in, it's in the hundreds, less than a thousand of B to B, PT chiropractors, orthopedic surgeons. We've done that.

• 27:59Alex Hormozi?

  In the Twin Cities.

• 28:00Speaker 06

  And the super small people that have given us has been, some give four, five and six, some give zero.

• 28:06Alex Hormozi?

  Yeah. Do you have an active affiliate manager who's like regularly reminding them?

• 28:09Speaker 06

  No.

• 28:10Alex Hormozi?

  Yeah. So with, so the way that I think about affiliates is it's basically a second tier of customer. And so you need to have somebody who's regularly kind of like stoking the affiliate fire to keep them activated and continue to get them to continue to refer business. So I'll give you an example. So there was a roofing company, for example, it was a restoration company. They had one star, star salesman and all he did was he'd go around to other tradesmen and get them to refer them business. And so they would get a thousand bucks to refer the restoration business, business. But the sales guy got 500 for every time they referred. And so that guy, all day long, was knocking on doors, walking in the front door with donuts, asking them how they're doing, bringing coffee to the guys, and then

• 28:53Alex Hormozi?

  reminding them that they existed. And that's all he did. And so I think you were getting, you're doing the hardest part, which is getting them to refer. You just didn't have the consistent referrals. Because if you had 200 active affiliates who were consistently referring you business, and most of these physicians, you know, especially like GPs, things like that, like, I mean, they see thousands of patients. And many of them could probably benefit from the services you have. And so the activation is both getting them to refer consistently, but also a percentage of customers that they see that they refer to you. So it's kind of both sides of it. And so I think that the missing link with what you were already doing was just that the, you didn't have, basically, the continuous affiliate marketing strategy to get them to keep sending you business. So that's probably like, right

• 29:37Alex Hormozi?

  now, today, I would fix that first. Because you already have the acquisition system, you already have the network. And so for me, like, reactivating that affiliate base would be the first thing that I did. The second thing, maybe, because you might just reactivate the base and all of a sudden you're like, I got 200 guys who are referring me business, holy shit, we're at 10 million. But the second thing I would consider probably, I would still probably focus most of my time on the B2B because you already have it. But for this business, I think that it lends itself for, what's the price point?

• 30:04Speaker 06

  $6,000 a treatment.

• 30:06Alex Hormozi?

  Per treatment, okay. Wait, so the average doctor will send you one $6,000 patient per year? When you said it costs you 500, they'll send you one patient?

• 30:15Alex Hormozi?

  Interesting. So do you have a process for once the patient gets the thing calling the physician up?

• 30:20Speaker 06

  Sorry, say that.

• 30:21Alex Hormozi?

  So like, I'm Dr. Smith, I send you Sandy, Sandy goes and gets the, well, you come to Sandy and Sandy gets the treatment. Is there a cycle where you call back, me, Dr. Smith, and say, hey, we just dealt with Sandy, here's some of her stuff?

• 30:34Speaker 06

  Not in a medical term, like we're not putting notes back in because it is private.

• 30:38Alex Hormozi?

  For sure, yeah.

• 30:38Speaker 06

  But we do, we ask for more referrals, just circle back that way. There's not a patient loop back.

• 30:46Alex Hormozi?

  Okay.

• 30:46Speaker 06

  That's not true. Sometimes that does happen, excuse me, it does.

• 30:49Alex Hormozi?

  Yeah.

• 30:49Speaker 06

  That's not systematized though.

• 30:50Alex Hormozi?

  Yeah, I would systematize the hell out of that. Because it's like, hey, you just sent me this person, like, let me close that loop for you. She's awesome, we did this thing, she loved it. By the way, and then we have the, you know, the opening to the, to the other, like, what customers, or customers, sorry, what patients did you see this week? Who you think would be a good fit, right? And rather than saying, do you have any, it's which ones would be?

• 31:11Speaker 06

  Yeah.

• 31:11Alex Hormozi?

  Is the question. Small training stuff, but it matters.

• 31:15Alex Hormozi?

  So I feel like there's so much on the B2B side that honestly, that's probably where I'd be ripping apart.

• 31:19Speaker 06

  So you would not go after a B2C approach, like advertising online, going, pushing in on a strategy on that?

• 31:24Alex Hormozi?

  It's not that I wouldn't, it's that when I think about, so this is the difference in like theoretical and actual, like, I would, given, given the fact that you, like, you're already running good margins on this thing, basically doing it, and take this the way I mean it, completely unoptimized, like, right now, right? And again, I'm not, this is not a slight.

• 31:46Alex Hormozi?

  Then I'm like, there's so much juice left in this thing, I don't want to now start something new, it's like, I barely got this one going. I want to like crush this. And when I, when I'm like, no, we've, like, we follow up with every single person, I've got a full-time affiliate manager who steps by, our affiliates, I'm calling them affiliates, but, you know, drops by the docks once a week just to remind us, say nice things, hey, by the way, like, that is happening all the time, and we've already covered like literally every single physician in the Twin Cities. Then I'm like, okay, let's go B2C. But if we haven't completely squeezed the hell out of this thing, and it's already working at the level it is right now, with like, zero, like, you're only getting one patient per doc, it's like, so, yeah, so you getting B2B customers is the same as Getting one B to C customer, I understand why you'd be frustrated because you'd be like, well, fuck it. I'll just fuck. I could sell one customer on my own without having to deal with the doc.

• 32:31Alex Hormozi?

  But the whole point is that like, I want them to be sending 20, 50 a month. And they can because they have the volume. And I think that first one has to be like a beautifully choreographed experience. Because that first patient's the test run for them, for you, right? They'll refer you one and they'll see what happens. Right. And so, one, it's like Sandy's got to be blown away. Right? She's got to come back and be like, oh, my God, that place was amazing. And then you also have to go back to the doc and be like, we blew Sandy away, by the way. And so I think you have to tackle it from both sides.

• 33:01Speaker 06

  Okay.

• 33:01Alex Hormozi?

  That's what I would do. Getting into the ad side, you absolutely could do it and I could walk through some, you know, whole strategy there. But I, I, if, if we swap places, that's where I would be focused.

• 33:11Speaker 06

  If you were going to try to expand into other major metros in the next 18 months. Would you, would you have the B to C sorted out before you went to the next market? Or would you?

• 33:21Alex Hormozi?

  Honestly, no. If I crush my B to B play, then I just run my B to B playbook in the, B to B playbook in the new market. Like, once I find something that works, I just want to just. Yeah, pillage.

• 33:32Speaker 06

  Right on. Thank you.

• 33:33Alex Hormozi?

  Yeah, no, you bet. Thank you.