How I Made Millions Without Being the Best - Part 1 (The Iced Coffee Hour Reshare) | Ep 869

In this reshare episode, Alex (@AlexHormozi) sits down with the hosts of Iced Coffee Hour to talk about building multi-million dollar businesses, why most founders focus on the wrong things, and the surprising habits that make a top-tier entrepreneur. This is Part 1 of a two-part reshare. 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?

  I think a huge amount of the delay that happens when people are starting out is the amount of time it takes for them to realize there is no easy way. So they spend a huge amount of time, they figure out what the, what, how to do it. And then they spend a really long time trying to figure out if there's an easier way. And then they give up trying to find an easier way and then they just start the hard way. Cause the hard way is the only way.

• 0:22Speaker 01

  Alex, thank you so much for coming on the Iced Coffee Hour. Really appreciate it.

• 0:26Alex Hormozi?

  Thanks so much for having me.

• 0:27Speaker 01

  I've been a huge fan of your Twitter lately. It has been on fire. You seem to be tweeting all the time. Really insightful stuff. Recently you tweeted that it has never been easier to be successful. Why do so many people feel like it's not?

• 0:41Alex Hormozi?

  I think it's just never been easier to be distracted. So it's like, it's like the bar's never been lower, but the bar is even lower to not do it. And I think people have never been more comfortable than they are today. And so it's like Netflix and chilling and like Uber and DoorDash and all of that stuff has just made everything like comfort. Comfort is like, we're like comfort maxing right now. And so like all of these other tools, like, you know, these software platforms and AI and all this stuff is like lower the bar for people to make content or start businesses or advertise or whatever they want to do. But it's just like, it's so hard to take a risk when you could literally just do nothing. And the way that like society is now, it's like you, you're not going to go homeless and you're not going to starve. So like,

• 1:24Alex Hormozi?

  which I see as the most exciting part because you could just, you could take a huge shot and the worst case scenario is like you're not going to starve and you're going to have shelter.

• 1:32Speaker 01

  So do you think it's a blessing or a curse?

• 1:34Alex Hormozi?

  I would say it's a blessing. I mean, at the end of the day, I think technology is always going to move things forward. So that's like, it's never been easier than it is today. And 20 years ago, it was never easier than it was then up to that point. So it's like, it will always get easier for people to start businesses, which I think is a good thing.

• 1:48Speaker 01

  In terms of optimizing for comfort, what is the downside of purely just being someone at home scrolling all the time? How big is it for them not to reach their potential?

• 2:01Alex Hormozi?

  I think it's a, it's a, it's a them thing. So I don't see it as a problem at all. I mean, I think it's only a problem if you're making some sort of demand of the universe that your life must be a certain way. And so I think that's where, and it's kind of all the shoulds, like I should, like my life should have meaning, my life should have this impact, my life should, all these things. If you believe that, then yeah, it'll be an issue because it's a, like I believe in conditional shoulds, not absolute shoulds. So like if this, then you shouldn't probably scroll on your phone as much. If you want to get in shape, like maybe don't eat more than you burn. Like, but don't eat more than you burn as a general statement. It was like, do whatever you want. That's, that's your, it's your life. I just have the issue when people want something different than the way they act.

• 2:40Speaker 02

  Do you think it's overall lowered the bar for excellence? Like a lot of people can kind of just become successful by happenstance or by luck now?

• 2:48Alex Hormozi?

  I think there are definitely people who get lucky, repeat and serial entrepreneurs less so. I've only really encountered maybe like a couple of people in my career from the entrepreneur side that I'm like, this guy was just lucky. I think there are elements of luck, but it's like luck becomes a, a, like it becomes gas more than the thing that like built the car. It's like they were going to be successful. They just got way more successful because they had like kind of multiple things kind of align.

• 3:10Speaker 02

  Can you give us some examples of luck like that?

• 3:13Alex Hormozi?

  Yeah, sure. Like if you were, if you were an Amazon in 2013, 14, 15, and you put up a product, you could just crush, like you didn't have to like really know anything. There was just all this demand that was there. If you were running Facebook ads in 2011, it was just like not hard to crush. If you, if you were doing SEO in like 2008 and seven with like, you could literally just put like, coffee in like white, white font on a white background. So the whole background of a website just said coffee. But like, if you looked at this, I, you wouldn't see it. But if you like took a cursor, you could just see it says coffee here because the algorithms weren't like that advanced. And so you could just rank and get all of the rules traffic. So there was just like, a lot of the things that were lucky were just like, typically, I'll put it differently.

• 3:58Alex Hormozi?

  Luck will come from a supply, demand discrepancy within a window of time. And so where there's a huge amount of demand and a small amount of supply, and then you happen to be one of those people who gets in on that. Now that being said, part of that is like, Recognizing opportunity and so like to what degree is that luck? You know, I think the question of whether it's luck or not is whether you can repeat it.

• 4:18Speaker 01

  So I'm curious where those opportunities are today because it seems like every few years in hindsight, you could look back and be like, that was the best time to do that.

• 4:26Alex Hormozi?

  Yeah.

• 4:26Speaker 01

  What are, what's going on today that people aren't recognizing the potential in?

• 4:30Alex Hormozi?

  I think there's micro and macro opportunities. So like from the macro perspective, I think we've had like three big ones. So at least in my lifetime. So it's like, we've had internet, which is like kind of opportunity number one. Opportunity number two was kind of like web two point O, which is social. And then opportunity three is AI now. So there's the three macro ones. Now underneath of that, it's kind of like, well, Facebook ads was kind of like a, like an opportunity, kind of like within that. And then like Google search was an opportunity, like all of those are going to like sub, kind of like micro opportunities. Like I think like Tik Tok shop right now, a lot of people are kind of, kind of like in the Amazon of 2013, 14. Like I know a lot of people who are, who've really never done much and then just like within 60, 90 days are doing a million a month.

• 5:11Alex Hormozi?

  And it's just because there's a huge supply, demand discrepancy between the amount of influencers that are there that want to make money and the amount of products to sell. And they will just continue to populate it until eventually it becomes a stabilized market. But it's like when those, when those market, those land grabs occur, that's when there's typically outsized returns to be had.

• 5:28Speaker 01

  What do you think people need to be able to capitalize on these opportunities?

• 5:31Alex Hormozi?

  I think, I think you have to have skills.

• 5:36Speaker 01

  But straight up.

• 5:37Alex Hormozi?

  Yeah, like you just have to have skills. Like I remember it was really funny, like our first ever conversation that we had, I was like, man, if I had your amount of following, I was like, I'd be a billionaire. And I saw that as a supply, demand, like, and even so, like when you asked just a few minutes ago, like, you know, what's the, what things are there now? Like I still kind of see social media still thinks there. I still think that opportunity exists for people if you're good. But maybe it's less so than when Instagram came out in 20, whatever year it was. When you could just like, just post pictures of you on the sunset and have like a million followers and people would just buy because you had just had this insane reach. But I saw it as a, as a, as a, the fact that we can still, the fact that we could still advertise ourselves and get paid to do it

• 6:20Alex Hormozi?

  is still mind boggling to me that that like opportunity exists, like you can build a brand and get paid to do it. Which I think is insane.

• 6:28Speaker 02

  Okay, so now it's arguable that you have his brand, if not even a bigger brand. Are you, did you accomplish that goal?

• 6:35Alex Hormozi?

  I, I will be public about what our stuff is valued at, but I think that we've done well.

• 6:40Speaker 02

  Yes.

• 6:41Alex Hormozi?

  Yeah.

• 6:42Speaker 02

  The classic answer. That makes, that makes a lot of sense. Okay.

• 6:45Alex Hormozi?

  Yeah, I don't, I don't want to, I don't want to make claims around things. Market, market values for enterprise value for illiquid assets like private equity investments and, you know, companies that are owned really depends only on the time that somebody's going to buy it. I have had some of the biggest banks that you've heard of, Blackstone, things like that, out to this headquarters to see what we have going on. And they've been like, this is insane.

• 7:05Speaker 02

  What did they look for when like Blackstone shows up?

• 7:09Alex Hormozi?

  So what they want is what every investor wants, which is what, you know, I, I tried to set out to do in the very beginning, which was they want proprietary deal flow. So they want people who want to specifically do deals with one person. So it's not like they're shopping. They're like, I want to do a deal with you. And ideally you have some sort of captive market or niche. And so for acquisition.com, we are kind of low mid-market in terms of what, what companies or businesses are kind of attracted to my stuff. And so it's typically the business is doing like between one and a hundred million dollars a year. And so, and this was kind of the thesis of acquisition in the beginning was like, okay, everything sub a million, there's tons of people who, you know, help people get their first customer, a few hundred thousand dollars in revenue, first five clients, things like that. Like there's tons of kind of like the coaching consulting, whatever, you know, or coaching course world is there.

• 7:54Alex Hormozi?

  Then if you go like a hundred million and up, then you've got like McKinsey, Bain, BCG, Deloitte, PWC, EY, like a lot of these Gartner, like all these kinds of consulting firms that deal with like kind of above there. There's just not a lot in the like the one to a hundred million range. And what's interesting about that particular range is that that's where a huge amount of like alpha is created in terms of investing returns. And so like, for example, if you have a business, this is probably going to lose half, half the audience, but if you have, if you have a business that's doing call it like $3 million in EBITDA or profit, right, per year. And you can make a handful of tweaks and get it from three to eight million. The three million dollar EBITDA business might be worth 12 million dollars, maybe.

• 8:35Alex Hormozi?

  The eight million dollar EBITDA business can probably get somewhere between like 80 and 100 million dollars in a sale. And so it's like you have a huge multiplier effect that increases once you get above about five million dollars in profit. And especially as you approach 10, where you now become a target for institutional grade investors. So that because they can write, they have to put to work hundreds of millions of dollars. And so they basically become the customer of buying the product, which is the business that you created. And so our thesis of acquisition.com was like, well, we want to get people right before they're at that, that level. Buy at really small prices, make the changes in the business and then capture this huge upside.

• 9:11Speaker 01

  So I'm always curious why they would sell in the first place, like 10x revenue seems pretty good. But what, what does a business get out of that if they're, if they're hoping it'll, you know, it'll take 10 years to maybe make their money back or why would a business sell? Yeah. Or why would a business sell if they could scale up even further from that and sell for way more?

• 9:35Alex Hormozi?

  There's a, there's, okay, there's so many reasons, but so one just for the audience. So eight million in EBITDA would be bottom line rather than top line for the most, well, for like a lawn care business, something like that. But with regards to why would an owner sell a couple of reasons? Well, a lot of reasons, but there's the common ones, which is like divorce that sometimes happens. They get forced to sell. They have dissolution of partnerships. The partners aren't getting along. That happens a lot. Beyond that, you have a very common one, which is just chips off the table. They're like, you know, I've been reinvesting all the profits in the business or I, you know, but maybe it makes eight million dollars in profit. But I put, you know, four million back in every year to, to continue to like buy more lawnmowers or whatever else you need to do. Right. And so maybe over that period of time, maybe they have like, I don't know, five million dollars or 10 million dollars saved up after taxes. But when you're looking at an 80 million dollar check with 20% capital gains, you're looking at whatever 64 million dollars post tax.

• 10:21Alex Hormozi?

  It's like, it's a six and a half X increase in your net worth and you know that like you're done, done. And so you're like, something could happen because the thing is, is every business owner. So one of the interesting things about being an entrepreneur business owner is like, you always know where all the bodies are buried in your own business. And so you all. We see all the negatives because also entrepreneurship is a forcing function for pain. Because all and Elon talks about this. So this isn't, you know, my original idea, but basically you get all the worst problems that no one else wants to solve. Because like if something's going well, then you're not needed. It's going well. And if someone else wants to solve it and there's something wrong, well, somebody else will solve it. So it's only the worst problems that only you can solve or that no one else wants to solve that you get. And that's pretty much like what your day is every day.

• 11:01Alex Hormozi?

  And so you always almost in some ways have to be this super optimist because you deal with nothing but negative data all day. And at some point, some people just get tired of doing that. And so there's a de-risking component. Some people just like want out. And a lot of people, it's like, hey, if I had $50 million, I had $10 million, whatever the number is, they're like, I set out to set my family up and I want to, you know, chill and be on the beach now. We all know that they just get bored within three months, but sometimes you have to express that for yourself.

• 11:25Speaker 01

  So where do most businesses get stuck?

• 11:27Alex Hormozi?

  I mean, businesses get stuck at all different levels. I mean, because all you'd have to do is just look at the, the revenue breakdown. It's like 95% of businesses are less than a million dollars a year. So a lot of businesses just like barely even get to the million dollar in revenue point. Above that, it's, I think it's one in 250. So it's 0.4% gets to $10 million a year.

• 11:46Speaker 01

  So is that a market problem or an operator problem?

• 11:49Alex Hormozi?

  I think it's almost a not always an operator problem. Like unless you're like in, people will name these like really random weird businesses where someone like tries to come up with something entirely new. But I see there's kind of like three kind of types of big type buckets of risk in terms of picking an opportunity. You've got like a product market fit risk, which is I'm going to come up with something that no one's ever done before and see if people want it. That's like an Uber, like we like, let's see if strangers will pick up strangers in taxis. Like maybe it sounds like, I mean, it sounds crazy at the time, right? So that's a product market fit risk issue. Those are, in my opinion, extremely risky. The second category are technical risk issues. So like, if I just said, hey, I can come up with an AI salesperson that can take all your phone calls for you.

• 12:29Alex Hormozi?

  I don't need to guess whether people are going to want that. They're for sure going to want it. The problem is how likely you can actually do it. It's the difficulty of actually solving the problem, right? The Uber thing, it's like, well, there's some technical risk there too, but will people even want this versus they want, and I don't know if I can deliver it. And then the third category is what I would say is the, the vast majority of business owners, which is just execution risk. There's other long care businesses that do a hundred million dollars a year. The path is really literally in front of me. The only risk is whether I'm skilled enough to do it. That's it.

• 12:57Speaker 02

  So what are the biggest operating obstacles you've personally ran into trying to scale acquisition.com? Into a billion dollar business and how did you overcome it?

• 13:05Alex Hormozi?

  Yeah, well, I'll say this. Suffering is constant. It's just that the nature of the suffering changes. And so it's like the hard is always hard and it just. And I think what makes it more difficult as as the business continues to develop is that. You end up trading things that you didn't expect you'd have to trade. And so like in a lot of people's minds, it's like, oh, I can push really hard. It's like, it stops being about how hard you can push at a certain point. Sometimes it's about how long you can wait. Sometimes it's about how focused you can stay. Sometimes it's about what kind of person you're able to attract to the business. Sometimes it's just the quality of your decisions. Right? Well, a lot of times the quality of your decisions and those are just kind of like micro examples. But like, you know, in the very beginning, you have to overcome a lot of environmental issues.

• 13:47Alex Hormozi?

  It's like you have your friends and family who are telling you that it's not going to work, whatever. And they think your idea is stupid. And so you have to overcome that. And then maybe you have to overcome your own limiting beliefs. So you have to overcome that and then you start doing things and you start advertising and letting people know that you have stuff and selling them on your services, your product. And then quickly you have to learn like the first level of management. So it's like, okay, well now it's not me, it's me and maybe a couple of, you know, virtual assistants. And then you're like, okay, this is too much for part timers. I need some full timers. So you have to level up to basically being a manager, which you haven't done before. And then once you're manager, it's like, okay, well, I'm managing this half. I have to get somebody else and you get your first manager. And then all of a sudden you have multiple managers. Now you're a leader, right? And then you have to attract leaders, which is a totally different skill because you have to lead leaders.

• 14:30Alex Hormozi?

  And so at every level, I see entrepreneurship as a forcing function for pain, but also a forcing function for progress. In that you will stay in pain until you progress and then you will find new pain.

• 14:42Speaker 01

  So what's something that you've tweeted or said that people clearly agree with, but just don't implement?

• 14:48Alex Hormozi?

  I feel like we could pull it up. Where do you want to start?

• 14:52Speaker 01

  You think Twitter is like a high ROI activity for you?

• 14:55Alex Hormozi?

  Twitter is, it's like, I can't help myself.

• 14:57Speaker 01

  You just can't, that's, that's one of your indulgences?

• 14:59Alex Hormozi?

  Yeah, like, let's see, let's see, what, what, what did people not understand about this? Suck at something, work for free lots of times, suck less, wait until people ask for free work and you can't take them on. Now you have more demand than you have supply, begin to charge money, boot out the free clients for paid clients, and then offer to keep working with those clients for money. Congrats, you have a business.

• 15:19Speaker 01

  So I will, I agree with that. Now, now here's a counterpoint to that. It is hard to take people from free to paying for a service.

• 15:26Alex Hormozi?

  Totally.

• 15:27Speaker 01

  What is your way around that?

• 15:29Alex Hormozi?

  Well, it depends. So it depends on how, how high value the service is, number one. And number two is, we start with free because you need to get reps because you probably suck. And so it's like, you're really getting free feedback from people that otherwise like shouldn't, because you will be terrible. But the transitioning people from free to paid really comes down to just how good you are. And if you are like, so for example, if I, if I was redoing all your YouTube thumbnails and I said I would do it for free. Now, at your level, so everybody's listening, don't immediately DM Graham because he already has some teeth. Right, but like, the thing is, is go for somebody who's like one tenth of Graham's size, who can't really afford it. Give that guy the thumbnails and if your thumbnails beat his thumbnails, he will, if you're like, okay, well, I have now all these people are paying me. So you can pay me what they're paying me, or I'm just gonna work with them.

• 16:14Alex Hormozi?

  At that point, he'll either pay if he's making any money on his channel, or he won't. But like, there's a, there's real value that's being created there. But the idea is, you want to get your, your roster filled so that at that point, and I think part of this, I, I give this as advice because a lot of people in the beginning don't believe they can charge anything. And so it's like, fine, don't charge, get better. And then once you literally can't take people on, it's like, dude, I, I can't take you on. And then they're like, well, what would it take? And you're like, oh, money, money, I could do that, I could do it for money. And then now it's like, you actually can help someone break through the belief of like, yeah, you can ask, you can ask for money for stuff.

• 16:43Speaker 01

  Do you think there's something to look out for, for people who just want something for free and will never pay for it?

• 16:48Alex Hormozi?

  Well, I'll say this, my big caveat for free, if I'm going to give it away, is I have to get, I'll give something away for free. I'll give tons, I'll give stuff away for free that costs me money if it's to a qualified prospect. So if I'm giving, you know, if I'm trying to get into enterprise IT services, right, I'm not going to start with a local, you know, dry cleaning business who can't afford what I would like to eventually charge. So I want somebody who has, you know, BANT, which is Budget Authority Need Timing. So do they have the money to spend? Do they have the authority to make the decision? Do they have the need for the specific thing is now a good time? If I can get those four things, I'll give that person free stuff. Like if it's like, hey, I'm only doing back massages for billionaires. Fine, then like you gotta be a billionaire and I'll give it to you for free. Eventually I'll charge. But no, the homeless guy on the corner of the street will also take free massages, but he'll never be able to pay.

• 17:33Alex Hormozi?

  And so it's not that we want to give free to anyone. It's just that we want to get the most qualified prospects, get good feedback from those customers, which we should treat them like customers so that we can then eventually charge people just like them based on the feedback that we got. Otherwise, we'd be building a product for somebody who's the wrong person.

• 17:48Speaker 01

  How do you make your offer unbeatable then? Where it's unfair?

• 17:52Alex Hormozi?

  Yes, if people feel stupid saying no. So I think, so a couple of things. So there's, there's four elements of value as I've kind of defined it in the book, the $100 million offers book. So you have the dream outcome, right? Which is like, what is, what am I actually going to give this person? Every product is a dream outcome, every service is a dream outcome, which is like, what's the thing that they want to have happen? Okay, cool. So that's going to be our baseline in terms of value. Like if I'm going to help somebody make an extra $1 million a year or $10 million a year, that's going to be a baseline, but there's still going to be a discount that's applied to that. And there's basically three factors that apply to that discount. Number one is how fast is it going to happen? Number two is how much effort is it going to take on behalf of the customer? And then number three is how likely is it to occur? And so fundamentally, those are the elements of value that are either multipliers or detractors of what you can ultimately charge a customer for whatever it is that you sell. So how do I make it fast?

• 18:37Alex Hormozi?

  How to make it easy and how to make it risk free? And so with each of those components, like part of the array of making it risk free to them is if I have 10,000 other people I've done this for, it's much less risky. Right, that's proof, right? You could also do that with covenants and terms. You could either do it based on performance that sheds more the risk to you. You could also just give guarantees and satisfaction. You could get guarantees that are conditional based on things that they do. Those are all elements of things that you can do to decrease risk, which you can reverse into price. And so said differently, I could say, hey, I'll charge you $5,000 to do this thing. And if someone says, well, no, it's like, okay, well, I'll do it for $3,000, but I won't give you a satisfaction guarantee. And then what you'll find happen is like, oh, well, I'll do it for 5,000 with the guarantee. So people will resell themselves on a higher price if you take away a component that's valuable. So that's, that's the risk one.

• 19:21Alex Hormozi?

  From a speed perspective, I would say that the more I've studied like human behavior, sales, persuasion, marketing, the more I really lean into speed. Like if you want to enter any new marketplace, just look at what everyone else is doing and see if you can do it in half the time. And there's just so much value in speed. Like humans are so immediate reward focused. Like almost every business can offer a speed version. So it's like you're a YouTube thumbnail agency and you say, cool, I'll get you thumbnails in a week normally. It's like, oh, if you want for 50% more, I'll get into you in 24 hours. And for, and for 300%, I'll get to you in the next 60 minutes. Same cost to you, it's the same work, but you just give someone priority access and it's all margin. So it's like, you can always play with speed as another variable of value.

• 20:05Alex Hormozi?

  And then the, the third element has two pieces to it, which is ease. Like, how does that have two elements? Well, one is, what are the bad things that I hate doing that I get to not do as a result of buying, right? All the stuff I don't like, you're going to take away. Great. But I also want to make sure that I don't prevent someone from doing the things they do enjoy doing, right? And so I give a classic example of like, if you sign up at a gym, all of a sudden you have to start doing things you don't want to do. But you also have to stop drinking margaritas. You have to stop Taco Tuesday. You have to stop having cupcakes and stop having your McFlurries. So it's like, you have to give up stuff you like and you have to do stuff you hate, which is why it's such a hard sale.

• 20:38Speaker 02

  So do you study psychology in order to be a more effective salesperson?

• 20:42Alex Hormozi?

  I wouldn't say I study psychology. I would say I just look at data of business. Cause I, the, the, the one advantage that I have is I have a, a huge amount of data that I sit on top of between the companies that we invest in, the companies that come use our services on the advisory division, when the companies that, well, the companies we own are the companies we invest in. And so it's like, I get to see a lot of different data. And so when we make changes into a sales process or a change in terms of an offer, I could see the improvements in conversion rates. And so that's where a lot of my like these have come from.

• 21:12Speaker 02

  Are you ever surprised by the data or is most of it kind of just confirming your intuition?

• 21:16Alex Hormozi?

  All the time.

• 21:17Speaker 01

  What's been like one of the biggest surprises about this data?

• 21:20Alex Hormozi?

  Yeah, we had a, we had a company that sells B2B services. And I had this guess that based on, basically, we could collect the data of the size of the revenue of the companies that were basically leads that were coming in the funnel. And so I wanted to shut off the bottom third of the leads because they were the lowest revenue leads and just have the team focus on the top two thirds. And so I was like, hey, just pull, pull the sales data because I'm going to bet that all the conversions happening on the top end. And the conversion rate was actually evenly spread. And so I was like, huh, like almost to the percentage point. I was like, that is not what I would have expected. And again, that could be unique to that specific business. I would still posit that in general, more qualified customers buy on average more and spend more money just in this particular business.

• 22:03Alex Hormozi?

  And maybe that means that that business missed price, which would be a different problem. But given that data, I was like, huh, that's interesting. We have people who are 10 times the size, but at the same rate as people who are one tenth the size. Wild. And it's way more of a stretch for these people than it is for these people. So maybe we're missing our.

• 22:17Speaker 01

  Do you ever find out why? Have you dug into that and what at the bottom?

• 22:21Alex Hormozi?

  I, it's a, it's a great question because like I, I try, it's really hard to say why, because like, I think a lot of people like to use because, because it's very compelling. But I just try and stick with like, this is the data that I have within this given context and in this situation it worked. And I know there are principles, like things that are fast will sell better than things that are slow. Things that are easy will sell better than things that are hard. Things that are risk free will sell better than things that are not risky. Like I can take that to the bank. So like, I try and think like, what are the few principles that will always be true? And then the rest is application.

• 22:52Speaker 01

  What's something that you track within a business that most people don't even look at?

• 22:56Alex Hormozi?

  I would say the, I'd say I'll give you a handful of metrics that I track. So you'd be like, I didn't need that many. So if I had to solve for two things, it would be gross margin and revenue retention. So fundamentally, like, what do we make per sale in terms of like, is there a lot of margin that's there? If so, like that's, that's more attractive to me. And then secondarily, how likely is that this person is going to continue to buy from us next year and the year after that? So if I have a business that I have hypothetically 100% gross margins, 100% revenue retention, that's an amazing business. They literally just print money and they never lose it. Like, that's cool. That's a very attractive business. So if I only knew those two things, the only other thing I'd want to know is what's my cost to a car customer versus my lifetime gross profit per customer? So how much money does it cost me to get somebody? And then how much

• 23:37Alex Hormozi?

  they pay me over time? And so basically that fundamental, the LTV to CAC ratio or LTGP to CAC ratio, I know fancy acronyms, but that ratio between those two numbers is the fundamental economic arbitrage that exists within businesses. And fundamentally, that's why private businesses will get the highest returns in terms of returns on capital. Because in, in, in so few places, like if you were to put it in the S and P factor, and those companies are already at scale and it's harder for them to grow, you know, huge, huge percentages. Maybe, let's say you put a thousand dollars in and you get 10%, so you're 1100 bucks at the end of the year. In a business, you could put a thousand dollars into paid ads and make $30,000 in gross profit in 24 hours. Like that happens all the time. And so it's

• 24:18Alex Hormozi?

  like, that's how somebody can go from $0 to a billionaire in four years, because the returns on capital are absurd. And this is also what I think one of the big opportunities of, of social media is, is that like, okay, why is social media so powerful? It's because it drives CAC to zero.

• 24:34Speaker 01

  Do you trust customer satisfaction?

• 24:36Alex Hormozi?

  I take it as, I'll, I'll take surveys. So we survey across all the companies that we have, because I like to have leading indicators in terms of like, what's going on. I like, I care more about the reason why's that they give. It's kind of like the comment section. Like, I care more about that. But I care far more about renewal rates. So if we're getting bad scores, but everyone's buying, then I'd be like, okay, well, we found something that people need, but hate, that they have to buy from us and they'll be very quick to switch. But as of right now, there's no one else who can do it either better, faster or cheaper than we can. But I would, renewal rate, like how you spend your money is what I care the most about. Sure. I'd say what you think, it's kind of like, what do you want? And people are like, I want faster horses versus the car. So it's like, I care about that a little bit, but I care far more about what the data suggests about versus behavior.

• 25:16Speaker 01

  How often do you get a no? And it's actually a no?

• 25:21Alex Hormozi?

  What do you mean?

• 25:21Speaker 01

  How many, when you make an offer to somebody and they say, no, I'm not interested. How often is that able to be turned around?

• 25:29Alex Hormozi?

  Across what setting? Is that in a sales setting?

• 25:31Speaker 01

  In a sales setting.

• 25:33Alex Hormozi?

  I think it depends on the reason the person said no. So that would, that would be like, it would be a discovery question after that. So it'd be like, well, what are the variables you're using to make the decision? And sometimes like, I think there's, there's a big difference between a no based on value, or no based on details, or no based on authority, or no based on timing. Like just kind of said, budget authority and timing. These are the kind of the components. Well, how do we make sure that we can, can I control, can I, can I overcome some of these issues? You know, if someone's like, love what you have, I don't buy coats because I live in Panama. Like, okay, there's no need. Like I could try it somewhere. I were like, hey, I've got a gym membership. Why aren't you signing up? It's like, well, you're in Iowa and I live in Florida. Like, I'm never going to get there. Like, so it's like where, it depends on the reason for the no.

• 26:16Speaker 01

  What if it's a price issue? Where do you draw the line between lowering the price and cheapening the product?

• 26:23Alex Hormozi?

  I never lower the price.

• 26:23Speaker 01

  Getting someone who's qualified or keeping the price the same, but losing the sale?

• 26:28Alex Hormozi?

  Yeah, so I am a very firm believer in never negotiating with terrorists, including price terrorists. And so if someone wants to, like, if someone says, hey, can you do it for cheaper? You know, we always, we train on saying like, we can do it for more. And people are like, okay, yeah, I got it. I'll, I'll buy at that price. But I, the price that you quote is the price that you've stick to. Otherwise, every, as soon as you negotiate once, every price you have is negotiable, which sucks as a business. It's a pain in the butt and I hate it. So, and you want price standardization anyways, because you want different people getting sold different prices. People could talk. It's kind of sucks. So my big thing is price in terms. And so if we have this price, if I'm going to change it, then I will also change terms. So if someone's like, hey, I, I would love to buy the $5,000 thing, but I can't afford it. If we've already looped a couple of times and said, okay, why can't you afford it?

• 27:14Alex Hormozi?

  Why, how important is this to you? What would it cost you to, to not do this? You know, quantify as many of these things as possible. And they're still like, I literally just don't have this amount of, this is, here's my bank account. I have $3,000. I will buy it for $3,000. Then, and then it's just like, I can't ethically sell you the same thing as somebody else for $5,000 for $3,000. I can't do it. What I can do is I can remove a component. So let's look at these things that we have here. We have this guarantee. I can remove the guarantee and I can knock a thousand dollars off. Does that work? Okay. Also, instead of, you know, coming to the gym, you know, three times a week. If you come to the gym twice a week, will that work for you? Great. Well, let's just do that. You can do one workout at home. So I'll, I'll, I'll want to change the terms of the agreement if I'm going to change price. But I can't, I won't just say, sure, I'll do it for less. I just won't do that.

• 27:55Speaker 01

  Why do you think that most people fail? Is it a skill gap, a belief gap, or is it just distraction?

• 28:03Alex Hormozi?

  I think it depends on how we define failure. So for the people who don't start, then it's probably a belief issue. Like they, they didn't, they failed by never starting. And that's the vast majority of the people. They fail before they start the race. Of the people who do start the race, I think just for, for people, $7 million, almost all, you know, it's not, I won't even say it's at all levels. Distraction is a huge one. They start six businesses in the hopes that one of them will take off because they fundamentally don't understand how business works. Like you only have, you have very constrained resources in terms of time, money, effort, human capital, people. And you have to allocate all of those things to one business to just have a hope that it's going to work. So I think focus is a massive one. So that's kind of equal opposite of distraction. And then in terms of beliefs, the belief is the early days, distraction kind of is pervasive.

• 28:48Alex Hormozi?

  Sometimes it's just business model things, which I would just translate up to skill deficiencies. So once someone gets started, there's, there's, I think there's just two buckets. You've got, you've got procedural knowledge and declarative knowledge, which is basically the two types of knowledge that exist, which is knowing how to do something and knowing that something exists or that something's possible. And so this is where people talk about mindset, manifestate, whatever. It's like fundamentally, it's just like, you have to believe that something's possible. And so if you meet somebody who's doing $10 million a year and they're the same age as you, growing in the same hometown, you're like, whoa, I guess that's possible. Right? All of a sudden it's like, man, my perspective totally changed. Like my mindset, I manifested, who knows, whatever. But like you fundamentally now believe it can happen. Cool. So then the only delta that you have is how to do it. Right? That's procedural. So I could talk, like, we could talk about private equity all day on here and someone could listen to every private equity podcast in the world.

• 29:33Alex Hormozi?

  You understand that people are doing it, but you don't understand how to do it. And you can understand all the steps, but until you go through it, there's, you won't, you won't know how it works. And then once you do, then you can do it again.

• 29:44Speaker 01

  So what's some of the low hanging fruit that people could start implementing today that'll make a long difference, that'll make a big difference long-term?

• 29:53Alex Hormozi?

  I think shrinking the time between when you make a decision and when you take action on a decision is probably one of the strongest correlates with like high, high producers.

• 30:02Speaker 02

  Who always talk about that? Was there like a specific moment that you kind of had that realization? And then ever since you made that decision, you're going to decrease that amount of time that like the business went exponential?

• 30:12Alex Hormozi?

  So two things. So one is if you define a god being as omnipotent, then as they think things, things would exist. And so if someone is ultimately powerful, that means like the moment they think of it, it happens. Right? And so it's like, okay, if that's the hypothetical ideal, then everything reversed from that is less and less powerful. And so if I want to be a more potent person or less impotent, then I should shrink the time between when I make a decision and when I act on that decision and try to make it into a reality. So that's number one. The second issue are when it comes to decision making is that the vast majority of speed, I think that happens within a business comes down to speed of decision making. Like there are so many decisions that have to occur every single day that most of the time, and you guys experienced this within your own business.

• 30:55Alex Hormozi?

  It's like, you know, the team says, hey, what do we do with here? And then you're like, okay, let me think about that. Or let me give you a couple of like, give me a day or two and I'll come back to you. But one of the good frameworks that I have is just asking myself the question, will I get more information to make this decision? If the answer is no, then make the decision. Like you're not going to get more information to make it. So you might as well just make it now. And so that the interesting thing about that is like that speed though, a lot of times people take, let's say seven days to make a decision or even a month to make a decision. But if I can make a decision now and then make a second decision, two minutes later, make a third decision two minutes later, in a very real way, I could, I could operate a thousand times the speed somebody else's. And I think that's fundamentally like how Elon operates and how he can just get so much stuff done. He also obviously distributes a lot of decision making to people who are intelligent.

• 31:39Speaker 02

  How important is intuition when it comes to making a decision? That you just feel one thing over the other?

• 31:45Alex Hormozi?

  Well, I think, I think intuition is just like a really, really amorphous word for having a history of reinforcing with variables that you can identify or have trouble, trouble identifying. So it's like. You know, this girl walks in, I've got a bad feeling about her. That's my intuition. Well, you have a history of seeing lots of women walk in. And if you have people or women who looked a certain way or acted, you know, the way they carried themselves, the way they dressed, the way their hair looked, the way they did their makeup, the way they talked, the way they breathe, the way they, all these are the variables that you're taking in. If somebody else in the past you had a negative experience with, you would then say, oh, I get bad vibes because it's just harder for you to be like, hey subconscious, what was the variable that you identified that was similar to this other past experience that sucked? Harder to do. So do I trust intuition?

• 32:30Alex Hormozi?

  I will definitely pay attention to it. Will I believe that it's some magic power? No, I just think it's just like, there's something that I haven't been able to identify. Maybe if I spend more time thinking about it, I could maybe, you know, like, oh, it wasn't this, it wasn't this, it wasn't that. You know, this is what it was.

• 32:43Speaker 01

  Now, you've met a lot of people, I'm sure. Do you have a BS meter to tell people? Let me say, do you have a BS meter to tell if people are fake? Or if they're just maybe a bit of a fraud?

• 32:56Alex Hormozi?

  I don't, I don't know if I have a BS meter. I think that asking questions can help a lot. So like, if someone just walked in and said, like, I am a this, I'm like, I don't know. Maybe, you know, if I asked 10 more questions about that thing and I know more about that thing than they do, then I would have a better idea. If someone's talking about how to train a sales team and they're like, I know how to do that. I'd be like, okay, well, how do you think about this? You know, how do you think about this? And if they gave bad answers, then I'd be like, okay, well, you don't really know how to train a sales team. And so it depends on my skill level within that domain that someone's supposed to, you know, be good at. But beyond that, I think that people have a lot.

• 33:37Alex Hormozi?

  I think, I think people have far more, I think people have far more experience deceiving other people than we do protecting against deception. So I think there's always going to be people who are more skilled at deception than people who are better at detecting it. And so I'll say honestly, I operate from the perspective that I don't know and that I'm probably being deceived. And would I still do it anyways within these guardrails? And so I just try and operate that way.

• 34:03Speaker 01

  Mine tend to be if someone's doing really posed photos in front of expensive cars. Usually, it depends on the industry, usually bad vibes, usually head to toe designer, like if they're really.

• 34:16Speaker 02

  If this was an iced out watch, like it had diamonds on it and stuff like.

• 34:20Speaker 01

  You're in the music industry, which is fine. You have to be in.

• 34:23Speaker 02

  In the music industry, I feel like that's that's gotta be.

• 34:26Speaker 01

  Okay, usually that's a red flag. And then also when they describe what they do and you still don't understand how they make their money. There have been some people that just say, oh, I do this and that. I'm like, I don't get it. You explain it and they explain it and I still don't understand. And then it turns out the dude's just like siphoning money from somebody else. And it turned out the whole thing was smoke and mirrors. I'm like, I had a feeling about that guy.

• 34:51Alex Hormozi?

  That I will say, well, it's funny because you say that because like then it gets into a domain that I feel comfortable with. Where if someone's like, well, this is how we market, blah, blah, blah, blah, or this is how we sell. This is how we price. This is how we, you know, anything that's business related. I'll be like, no, that doesn't make sense.

• 35:05Speaker 01

  Yeah.

• 35:05Alex Hormozi?

  And it's like, I'm like, I don't know. Like I'm, I feel, I feel confident enough in my, in my, my skill level to say like, no, that doesn't, that doesn't make sense. But yeah, so I think it's gonna, it's be, it's gonna be domain specific for me to be able to say like, I'll have a better judge of character, but still even then, you know, I get, I get, I get, yeah, I want to say deceived, but like I make wrong picks all the time. You know, like with team and people, you know, hiring things like it happens, you know, it's just part of the game.

• 35:31Speaker 02

  What about things that are too good to be true? How often are people pitching you things that seem to be that way? And they're actually accurately representing their skill or the value of their business?

• 35:40Alex Hormozi?

  It's, I think the too good to be true is happens all the time and it is. I, I've yet to see something that has been too good to be true. I think chat GPT when it came out, I was like, that's too good to be true. And then it was so like, then they became a gazillion dollar company. I was like, okay, that checks out. That tracks. But most things that are too good to be true, like the saying exists for a reason.

• 36:01Speaker 01

  When, when do you think the last time is that you drastically changed your opinion about something?

• 36:07Alex Hormozi?

  It's a really good question.

• 36:08Speaker 02

  That's a chat GPT question.

• 36:09Alex Hormozi?

  Oh, it was.

• 36:10Speaker 02

  I know that I'm kidding.

• 36:11Speaker 01

  That was a me.

• 36:13Speaker 02

  It's Jeff.

• 36:14Alex Hormozi?

  And I drastically changed my opinion about something. Well, I'll give you two. So, I mean, this is in years, though. So they're bigger. So I used to believe, and this is kind of funny. So my eighth episode of my podcast, which was 2017, was stop branding. And I was like, branding is stupid. Like, just run ads with an offer. That's all that matters. Like, do outbound. Like, that's the only thing that drives sales. And it was because I just didn't understand the power of brand. I didn't understand how to brand, and I didn't understand the benefits of it. Once I understood the power of brand, it's like I've completely 180ed on that. Like, brand is everything. So I'd say that's something that I've changed my mind on, which is why I started making content and all this stuff. The, the second one is.

• 36:55Alex Hormozi?

  I, I mean, I built acquisition.com on the thesis of doing many, many smaller minority deals and taking companies right at that kind of like alpha level that I was referencing earlier. I would say now, in some ways, I feel like I have, was it re- redone the wheel? Like, redeveloped the wheel, reinvented the wheel into much more of a very standard private equity firm, which is like, we go after bigger companies. And the main reason is like, the reason that a lot of people don't like those smaller businesses is because there's so much work that has to get done. You have to, it's like, you have to turn the whole team around. Like, there's just so much to get it over the hump. Whereas something at 5 million, 10 million, 15, 20 million dollars in profit, it's like, they already have infrastructure in place. You can actually do things a lot faster in the business in some ways because there's resources.

• 37:40Alex Hormozi?

  And so I would say that I've shifted my perspective there, which is much more akin to, I could have just listened to Warren Buffett and done it that way, but I figured, no, I just learned it myself, which is like, it's better to get wonderful businesses at a fair price than, you know, fair business at a wonderful price.

• 37:55Speaker 02

  Was there data or like a personal experience that supported that?

• 37:58Alex Hormozi?

  Yeah, I mean, we did 20, we did 20, it was either 22 or 24 deals in the first 24 months of acquisition.com. And like, portfolio theory has reigned true. Like, 90% of our, our returns have come from two companies. You know, and so.

• 38:16Alex Hormozi?

  But those companies, if I had to make a bet, I probably would have bet that those would have been, they had the strongest operators, they had the strongest, it is general intelligence of the teams, you know, good opportunities, like they had checked more boxes than like, I didn't have to use as much imagination to see it working. And so the thing, the downside about me as an entrepreneur slash investor is that I am an optimist. And so I can see the version of the business that I think could be awesome and I get really excited about that. But you have to buy based on what it is today, not what it could be.

• 38:44Speaker 02

  How important is intelligence in entrepreneurship?

• 38:47Alex Hormozi?

  I think it depends on what level of success you're shooting for.

• 38:50Speaker 02

  Okay.

• 38:51Alex Hormozi?

  So I think that, I think like, if you were like, I wanted to get into AI, like you've got to be probably really smart. And I think it's, it's not even because like you're the one who's going to be the engineer doing it. It's like, you need to be smart enough that an engineer who can do that is impressed by you. Right? Like, so I think, I think it's really in the recruiting aspect where high intellect, if you will, will matter more. If you were, you know, use the lawn care example, like you can succeed in the lawn care business without being brilliant. You can succeed in the gym business without being brilliant. You can succeed in a lot of businesses. I'd say most businesses without being, you know, you know, above 50% IQ. I think there are, there are skills which people say is traits that are more important. I think courage is incredibly important. I think high agency, so the ability to make your own decisions without being influenced by others.

• 39:36Alex Hormozi?

  I think, I think honestly, just like perspicacity, like being able to endure and persevere. Because one of the really interesting things about entrepreneurship is that you get, life gives you this, like, these unlimited lottery tickets. And you just pay time to get them, but you just can always get them to cash them in. And even if you cash 10 tickets in and they don't, don't work, it's like you still have an 11th one, you still have a 12th one. And so a lot of people just will choose not to cash their tickets in at all, or even grab the tickets to begin with. And I think that, that ability to persevere is what gives you more shots on goal. And you only need one really big win to change your life forever. And so it's really just sticking with it. And I think that's the, like, on a long enough time horizon, somebody who sticks with it just gets enough,

• 40:20Alex Hormozi?

  like, they just get so many chances that something, that luck does happen.

• 40:24Speaker 01

  So on those two businesses that you said are outliers, what percentage would you allocate to being the person in charge of running it versus the business itself?

• 40:34Alex Hormozi?

  Man, I'll say 50 50. Like I was leaning, I was going back and forth. It's like, you know, cause Uncle Warren has, you know, great manager, bad market, bad market wins, you know, good market, bad manager, good market wins. I think that like the market is for sure the most powerful thing, but if we control for market, like, you know, if you're selling toilet paper in COVID, you're going to make money whether you're an idiot or not, like it's going to work. But I think the vast majority of marketplaces are not on either extreme. You're not selling to newspapers and you're not selling toilet paper during COVID. Most businesses are just kind of like in the middle. They're in markets that are just normal. And in those situations, the business model obviously has to be sound, but the business model is a reflection of the entrepreneur. And so if we remove market, then I'll say it's entrepreneur for sure, but market is more important if it's in one of these extremes.

• 41:17Speaker 01

  What qualities do you see in those people? Are there similarities between the two?

• 41:22Alex Hormozi?

  Yeah, there's, you know, it's interesting because there's like, there's, there's for sure similarities. I think there's far fewer than most people expect. Cause like, even if you look at the top, like I think Bezos and Elon are some of the goats of all time in terms of entrepreneurship. So different in terms of their personalities, the way they behave, their even values, like all those things. I think they have some significant differences. But in terms of like, what are the commonalities about how they operate? They all, they focus on speed. They focus on having an exceptional product. Both of them talk about just, I mean, Elon is a customer obsessed. He says product obsessed, but they, they translated the same thing, which is like, they focus on product first above everything else. They're super long-term focused. People might have, you know, some, something to say about me saying this, but like, I think they both have high ethics.

• 42:03Alex Hormozi?

  They're like, oh, he's devil, but whatever. I won't even comment. But high ethics, high customer obsession, long-term perspective, huge ability to tolerate pain and the ability to tolerate risk, which is to have the courage to do it. And because both of them had so many moments where they just went all in on Amazon or all in on Tesla or SpaceX or whatever. It's like, you have to have some ability to make, to, to go big and bet the farm. And I think that that every entrepreneur, that almost every entrepreneur that I know who's made it really big has had a moment where they were like, This could not work and I'm just gonna try and make it work.

• 42:40Speaker 02

  It's so interesting because I feel like there's a huge trend online right now and also maybe for the past like five, 10 years of there can never be an ethical billionaire. Do you think in order to get to that level of wealth, there needs to be a time where you compromise your ethics? Or do you think that's just a bunch of stuff that people like, like to throw out there to maybe self aggrandize themselves?

• 42:57Alex Hormozi?

  I think it's.

• 43:01Alex Hormozi?

  Well, somebody's whatever.

• 43:02Speaker 02

  Go ahead, someone who's.

• 43:03Alex Hormozi?

  I am biased. So I'll state my bias. I am trying to hit it or in process of hitting it. And so I obviously don't think that there's an unethical, like that you have to, I think, I'll say differently. If you took a random slice of the population, just, just America or even the world, you're going to have a certain percentage of people who are ethical and have a certain percentage of people who are not ethical. And the skills to run a business, I think, can operate in some ways independently of those things. So you can become super financially successful and be unethical and you can be super financially successful and be ethical. And so I think that you'll have a distribution that is normalized at the top as much as you do in the middle. Like how many people are divorced? How many people are married? How many people are like, you're going to have, how many people have kids? How many people don't have kids? Like you're going to have a random distribution there and I think people will just cherry pick bad actors.

• 43:48Alex Hormozi?

  And there's also like allegations based on like regulations, like if you look at all the big fortune, whatever companies, it really starts to come down to like, would you? If we, I mean, it gets into ethics, which is a totally different can of worms. But if you were to say like, you know, the TCPA, which is telephone consumer protection agency, whatever, they go after a company. And it was because the company didn't put the right language on their, you know, landing page. And because of that, they sued Facebook for $700 million. Is Facebook being unethical? Or are they operating in ignorance? Oftentimes when you have more laws than you can keep track of or somebody makes an oopsie, those things happen. And so it really depends like, okay, well, are we now saying that Facebook's unethical? Now, I'm not saying that I think that they're good for the world, but I'm saying fundamentally like, I think mistakes can happen.

• 44:33Alex Hormozi?

  And so the idea that people will say a billionaire might be unethical is probably different than a billionaire has made mistakes. And I think those are very, two very different things because for sure, every billionaire has made mistakes. And for sure has done things that they wish they hadn't because that's what humans do in life. 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.

• 45:17Alex Hormozi?

  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 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.

• 45:48Speaker 02

  What's a mistake you made recently that may have either cost you time, money, or credibility?

• 45:55Alex Hormozi?

  Oh God, I invested in a company that I didn't do enough due diligence. And they were doing some things that weren't compliant that I found out about later. And I just said, I don't want to be associated and I lost millions of dollars. And I just said, I'll, I just, I'll give you the equity back. I don't even want it. I just don't want to be associated. And so there.

• 46:15Speaker 02

  What could you have done differently in hindsight? What do you look for when?

• 46:20Alex Hormozi?

  We probably could have reviewed, you know, reviewed, reviewed the internal data better. Probably could have done more in-depth interviews with some of the, the key employees. Could have done more, you know, customer call reviews, both on the sales side, marketing side, and also on the delivery side, we probably could have done more of that.

• 46:36Speaker 02

  Was there?

• 46:37Alex Hormozi?

  It was a relatively small deal for us though, but like still ethically it was.

• 46:40Speaker 02

  Was there any tells maybe beforehand or you kind of? A guy was posing in front of his cars and it's ice out.

• 46:48Alex Hormozi?

  No, we didn't have any of that, but no, it was like. Yeah, I'm gonna, I'm gonna for sure catch, catch some dogs.

• 46:54Speaker 02

  If you were to observe all of the mistakes that acquisition.com makes and aside at like a pie chart, would you say the largest slice of the pie would be lack of due diligence? Or where do you think you lose the most return or value?

• 47:06Alex Hormozi?

  Where are the mistakes that we make? Honestly, I think the biggest mistakes we make are hiring. I think it's people, but it's really, I mean, fundamentally, it's gonna be people at all sides. Like people on the deal side, it's gonna be people like even when you're bringing in talent like it's a deal. Like you're signing an agreement between two parties in exchange for money. You know, so like it's, I mean, you just, you have, the thing is the number of deals that we have to do every day, every week, every month, every year is a lot. And so we're just going to make mistakes. We're gonna try our best to learn from them and we're ultimately gonna be rewarded by the quality of our decision making. But we're gonna mess up.

• 47:38Speaker 01

  When do you know how to cut the business or try to fix it? Like in that case, I would be looking at that and thinking, well, is it worth trying to? Or is it just, we can't work with these people?

• 47:49Alex Hormozi?

  It's that last thing you just said. That's really what it comes down to. So if someone I think is, knows about it and hasn't done anything about it. And then we find out about it and say, hey, you should do something about it. And they don't do anything about it. That's where I'd be like, okay, this isn't gonna work. If, you know, founders made aware of it, it's kind of like the TCPA thing. Like if, let's say you had opt-ins on a page and you just didn't have like all the disclosures that you're supposed to have to make it compliant to like text somebody or call somebody or whatever. Right? If someone did that, I'm not gonna be like, oh my God, this guy sucks. I'd be like, oh, he didn't know, like, let's, let's fix this stuff. And so that's kind of an example. Now, it really comes down to the willingness of the founder to make, to make things right. I think that's anybody.

• 48:30Speaker 02

  Do you have assessments of ethics of the people that you end up partnering with? And how important would you say ethics are? Do you not really consider it? And you just kind of look at, you look at the data as you suggested, because, because you can ask someone why they do something. And they could say whatever they want, but you don't necessarily know until you've known them for a while.

• 48:46Speaker 01

  I feel like there should be a personality test, like the Jordan Peterson personality test.

• 48:50Speaker 02

  Yeah, he does. He had 10 bucks or 15 bucks or something. UnderstandMyself.com, I think is what it is.

• 48:56Alex Hormozi?

  That's right.

• 48:57Speaker 02

  Yeah, we took it. And it was a really, and you can also compare.

• 49:00Alex Hormozi?

  I'm a lot.

• 49:01Speaker 02

  A latte?

• 49:02Alex Hormozi?

  No, no, like, you know, like, there's like, I'm a pepperoni pizza, like the, like, what kind of pizza? Like, I'm joking. It was like fake.

• 49:07Speaker 02

  I'm Slytherin, by the way.

• 49:08Alex Hormozi?

  Yeah, I'm for sure Slytherin.

• 49:10Speaker 02

  It's, it's interesting because you can also, with this data, compare how two personalities will interact with one another. So, for example, Graham and I, we were pretty different in a lot of categories, but it did say that we had good cohesion.

• 49:22Alex Hormozi?

  Oh, sweet.

• 49:22Speaker 01

  Yeah. But, but they had studies for like, business and for personality and for relationships.

• 49:28Speaker 02

  With large data, you could probably get a pretty good approximation.

• 49:31Alex Hormozi?

  Interest. I don't think we have enough data to actually do like, big data, like, analysis for that. So if you're thinking of twenties, thirties, like, it's not a lot, it's not, you need like thirty thousand, a lot more. And to have statistical power, we actually used to do a lot more tests earlier on. And I think we ended up foregoing them. Same on the recruiting side. We used to do a lot more like, personality testing, things like that. Mostly because the recruiting team ended up being like, over reliant on tests. And then we'd just like, have a star candidate, and they'd be like, well, they, they scored, I'm like, this guy's just that, like, bring this guy in. And so we ended up doing away with it. I think everybody wants a test to tell them the answer. And so I think in a, in a, in a job where you have a lot of decision making that has to occur, it's hard to not default to tests because it's so quantitative that you want to just like,

• 50:16Alex Hormozi?

  it's just kind of like trading algorithms. Like, if the algorithm says I should, like, you want to have that. And so fundamentally, either it's like, you know, I tend to be somewhat binary in this, but like, either we believe this a hundred percent, or we kind of don't. And the only times, and I'll quote Leila on this one, but like, if we do have a test that we're going to have somebody take on like, the recruiting side, the only time that we would really use it, if it's a red flag, in that it seems like it's completely contrast from what we're seeing. And so if someone's like, oh, I'm really detour oriented, I'm really timely, I'm really whatever, and then they get on, they're like, I'm a creative, and I'm so all over the, and they're like, that doesn't make sense. So then we're just like, okay, now it's just an ethical issue, they're just lying.

• 50:54Speaker 02

  So you're saying you don't want to focus on qualifying someone? Because if you're testing them, that means you probably have some dissonance between what you think about them and what they say about themselves. And if you, yeah.

• 51:04Alex Hormozi?

  Yeah, I think you will, like, by, this is what I mean, talking more as a, you know, a company owner than anything else, which is like, if you tend to give a team a tool, and they have to make a lot of decisions, and the tool supposedly helps them with the decision, the, the law of least effort will typically reign, and they'll just start using the test to make all the decisions. And I think that makes for worse decisions than actually just using everything else.

• 51:25Speaker 01

  So if someone's studying you, let's just say, what do you think is the biggest misinterpretation of your strategy or character?

• 51:33Alex Hormozi?

  Um, I think most people think that I'm meaner than I am. I think.

• 51:37Speaker 02

  He's a sweetheart, guys. Alex is really a nice.

• 51:40Speaker 01

  So nice.

• 51:40Speaker 02

  On and off camera, very, very outstanding gentleman.

• 51:43Alex Hormozi?

  Thank you. Uh, I think that, and then also in like a different setting than like a podcast. You know, it's like, you know, it's a di- like when I'm with my team, I joke around a ton. And so I'd say like, I do a lot of jokes, a lot. And I think I have, I mean, Daniel could probably say, but I think, yeah.

• 51:59Speaker 01

  What's your funniest joke?

• 52:01Alex Hormozi?

  Can't say.

• 52:02Speaker 01

  Give us a joke.

• 52:02Alex Hormozi?

  I have a lot, I've, I have a tons.

• 52:03Speaker 02

  Can you reveal that?

• 52:04Alex Hormozi?

  Yeah, a lot of, I've.

• 52:05Speaker 01

  Is it like dirty jokes or like?

• 52:07Alex Hormozi?

  Yeah.

• 52:08Speaker 02

  Like a true grandma, man.

• 52:09Alex Hormozi?

  Yeah, a lot of, a lot of, a lot of, that's what your mom said.

• 52:12Speaker 02

  That's, that's Graham's favorite too.

• 52:14Speaker 01

  I love it. It's.

• 52:15Alex Hormozi?

  It's a classic. It's a classic.

• 52:16Speaker 01

  For Jack, I'm always like, yeah, okay, mom.

• 52:18Speaker 02

  Mom's gonna watch this. Yeah. Cat's out the bag.

• 52:21Alex Hormozi?

  Yeah. Smoke show? No. But no, I'd say, I'd say that those are probably the two, the two bigger misconceptions.

• 52:29Speaker 01

  So moving on from that, how do you eliminate distraction?

• 52:33Alex Hormozi?

  Oh, this is fun. Okay. So I eliminate it by eliminating it. And that sounds ridiculous, but like, I think the vast majority of productivity hacks can get boiled down to remove everything that isn't work. So like my office has no outside light. I try to minimize all the sound in the office. I also put on earplugs and headphones. There's a great app that you can use that like blocks your phone. So like nothing can get through. So including texts, phone calls, slacks, everything, not just social media, like it's a dead element essentially. And you have to physically move across the building, which is how I do it for mine. To like un, un, un mess up your phone. And then I just have a clear idea of the work that I need to do. And so it's like, when you eliminate everything else. And then I just set a kitchen timer for when I, how long I expect a task to last.

• 53:19Alex Hormozi?

  That is when I'm like peak productivity per unit of time, uh, because there's nothing else to do.

• 53:24Speaker 01

  So is this science or is this just you? Because eliminating, eliminating the natural light?

• 53:30Speaker 02

  We see your office after this.

• 53:32Speaker 01

  I want to get a peek at that. Yeah. Like this. But why eliminate? Oh. Why eliminate light? Good office. Yeah, put a little bit. Yeah, it's fine. Yeah. Why light? For me, like, I get. Oh, I get so distracted by light. I get boost by like seeing the outdoors and seeing greenery. That's nice. It doesn't work for me, man.

• 53:49Alex Hormozi?

  Yeah, and I'll be clear. Like, if you find something that works for you, I'll say do that. And for anybody who's like, I do. Do it your way. I don't care. Like, I'm saying, this is what.

• 53:57Speaker 01

  Yeah.

• 53:57Alex Hormozi?

  I do think there's a decent amount of data that suggests that.

• 54:01Alex Hormozi?

  Anything that is not the work distracts you from the work.

• 54:05Speaker 01

  How do you differentiate between distractions and rest?

• 54:08Alex Hormozi?

  Great question. So I think there's, there's like, kind of like micro macro. So like, from a micro perspective, if you work for 60 minutes or 45 minutes or whatever, and then you're like, okay, I need a break. If you take the five or 10, you know, 10 minute, like, walk around the building or walk outside. To me, that's where you can get your natural light and all of that stuff. But then you come back and then you're fresh again and then you hit it. I see that, I see that rest as productive because it increases the overall net production over a larger period of time. So if you work like that for 12 hours, uh, and you've worked without doing that, maybe you can only work eight hours. Or you can work the same 12, but you don't get as much done. So for me, uh, it's really just the net productivity of a human being is what they get done over a period of time. So productivity has a temporal component to it and an output component. So maximizing output period of time is productivity, as I find it.

• 54:51Alex Hormozi?

  And so it is, okay, anything that increases that rate of, of, of work, which for the most part is just deleting the things that aren't work. Because few people actually work faster. You just don't work when you want to be working. And so I think if you just limit all the time that you're not working when you want to be working, you work a lot more. And if you've ever done the timer thing, which I would highly recommend, you see, if you, like, you truly take your phone away and you block out every single notification and you have, you know, you have the script, a YouTube video or write an email or make a script or whatever you have to do for your business or write and make a landing page. You'll notice that, like, you'll be like, oh, my God, and then you'll look, it's been like eight minutes and you're like, oh, my God. Like you're like monkey brain.

• 55:30Speaker 01

  I always bet not like sleeping when I keep looking at the time and thinking, oh, man, another 10 minutes went by. It's another 10 minutes. I'm not going to be sleeping. Do you ever look at the time and see, oh, 10 minutes went by? Now I only got this amount of time and my mind's focused on the time and not the task.

• 55:44Alex Hormozi?

  I don't think about that at all, actually. If I, if I like, if eight minutes goes by and I, and I, and I worked the eight minutes and I'm like, oh, my God, it was only eight minutes. I'm like, I have so much time. Like, I did all that in eight minutes because I was focused all the time and I only wanted to go reach for my phone in eight minutes. I'm like, oh, my God, I have, I have six.

• 55:59Speaker 01

  You don't see the time as a distraction?

• 56:01Alex Hormozi?

  No, not really.

• 56:02Speaker 02

  What about getting into that deep focus? If you're going around and taking maybe like 15 minutes every hour and a half or so, how do you switch context again to go from like enjoying the sunlight or enjoying relaxation into deep focus?

• 56:16Alex Hormozi?

  I think it's probably like most skills. It's just practice. I think the more you work, the better you get at working. I mean, I know that. How I worked when I was younger, I was not nearly as productive as I am now. I also worked on things that were lower leverage. So it's kind of like I get two, two benefits. Like I get more done per unit of time and the things I work on create more.

• 56:32Speaker 02

  Do you have any distractions that still sneak past your filters?

• 56:36Alex Hormozi?

  Well, not, I mean, not on the phone. I mean, that, that thing's done. Twitter like gets cooked.

• 56:40Speaker 01

  Twitter?

• 56:41Alex Hormozi?

  No, I mean, when I, when I'm working, I'm not gonna.

• 56:43Speaker 01

  What about music? You listen to music?

• 56:45Alex Hormozi?

  Only one of those.

• 56:46Speaker 01

  Silence.

• 56:46Alex Hormozi?

  Mm hmm. Yeah, I have earplugs and headphones. Like it's true silence.

• 56:50Speaker 02

  What do you listen to when you lift?

• 56:52Alex Hormozi?

  Oh, just like the same songs I've had for like 15 years.

• 56:55Speaker 01

  What songs?

• 56:55Alex Hormozi?

  Really change. I like Linkin Park a lot. Like a little Linkin Park.

• 56:59Speaker 01

  Hybrid Theory?

• 57:00Alex Hormozi?

  The new one? Is that the new one that came?

• 57:02Speaker 01

  No, Hybrid Theory is like the 2000s.

• 57:03Alex Hormozi?

  Is it the heart? I only see the album covers where it's like, is that the black one?

• 57:07Speaker 01

  The black and white one.

• 57:08Alex Hormozi?

  With Roland and like.

• 57:09Speaker 01

  I think so.

• 57:10Alex Hormozi?

  Yeah, that's a, that's a good one. I am horrendous at like the words on, like I, I cannot tell you the words of any song. And I've listened to the same songs for like a decade.

• 57:20Speaker 01

  I don't know lyrics either. I listen to the melody, but not the words.

• 57:22Alex Hormozi?

  Yeah, I don't hear.

• 57:23Speaker 01

  Maybe it's a Linkin Park.

• 57:24Alex Hormozi?

  I don't know the, I don't know the, I don't know the album name. I like, I barely even know it's Linkin Park.

• 57:28Speaker 01

  Okay.

• 57:29Alex Hormozi?

  But I just know cause I, I like that radio station.

• 57:31Speaker 01

  But what else besides Linkin Park?

• 57:33Alex Hormozi?

  I listen to 50 Cent. I like 50 Cent. Get Richard I Trying. I like that entire album. Fabulous has a lovely album. His first one, I think, I think it was self named. I think Fabulous. I like that album. I, I still also like some of my white boy music. I still listen to Little Green Day. Little Green Day. Blind, Little Third Eye Blind.

• 57:51Speaker 01

  That's good.

• 57:51Alex Hormozi?

  A lot of times Leilu just send me, cause she's like always up to date on like what's, what's hot and popping off. I also really like UK rap.

• 57:58Speaker 02

  Huh.

• 57:58Alex Hormozi?

  I've actually found that as a little subgenre that I only, only because Spotify recommended it for me. Yeah, like band for band, which is a cool song. I like that. But yeah, I like, I, I only have like, you know, 20 or 30 songs that I can listen to like in a workout. So it's like, I kind of have like a list of a hundred and they randomly shuffle and that's like my life.

• 58:16Speaker 02

  How often do you skip the song?

• 58:17Alex Hormozi?

  It depends on what kind of set I'm doing.

• 58:19Speaker 02

  Okay.

• 58:19Alex Hormozi?

  It's like if I'm, if I'm early, like if I'm about to hit a work set, like I want to make sure it's a good song. But I think that's everybody.

• 58:25Speaker 02

  Huh. Okay.

• 58:27Alex Hormozi?

  Yeah, you got, I'll, I'll show you guys.

• 58:29Speaker 02

  Yeah.

• 58:29Alex Hormozi?

  You guys haven't seen the gym, right?

• 58:30Speaker 02

  I know. I saw the, the, it's like a hydraulic something or air compression something. That was incredible.

• 58:37Alex Hormozi?

  I'll show you the new thing that just came out. I think it's to change the little gym industry. I think it's going to change the.

• 58:41Speaker 02

  Is that that? I, I saw this, a Will Tennyson video where it's like, you do like three reps of a chest press or something like that. And it, it maxes out your strength along all different.

• 58:51Alex Hormozi?

  Yeah, it's a different thing.

• 58:52Speaker 02

  Okay.

• 58:54Alex Hormozi?

  It's different, but similar concept.

• 58:56Speaker 02

  I've wanted to.

• 58:56Alex Hormozi?

  Oh, I see that.

• 58:57Speaker 02

  Yeah. So do you think distracted people then want it less?

• 59:02Alex Hormozi?

  Oh, I don't even know how to find wanting it less. I would say that for whatever reason, they're being more rewarded from their current path than they perceive the reward of the path that they're trying to get on. Like it's, I mean, I just, I think of everything in carrots and sticks. It's like they have enough stick of other people judging and enough carrot of staying the same that they don't change. They just have to overcome inertia. They just can't do it for whatever reason. And I don't want to pretend like I have some like superhuman willpower. It's just like, you know, I had, you know, it's funny because like, when I quit my job, which was still to this day, the hardest decision I've ever had to make in my whole life. Cause believe it or not, I'm actually very risk averse. I could take bigger bets now, but it's because I have more. And so like, if I lose, it's not like the end of the world. But at the time there was like risking everything or what felt like risking everything.

• 59:47Alex Hormozi?

  And that.

• 59:50Alex Hormozi?

  Was was it was because I was so miserable. It was the only reason I was able to to do it. Like if I had been employed at probably just even a different job at a different place, I probably would have been fine. And I don't think I'd ever even be here. So I don't think I had a high like predisposition towards entrepreneurship. Like some people do like I've been entrepreneur my whole life. Like I wasn't, I didn't start any businesses. I did well in school. It wasn't like, oh, school failed me like I did well in school. Like I studied hard, I got good grades and I graduated in three years from Vanderbilt like I did well. And then I got a good job, you know, in terms of on paper after that. And it was only like when I had done two years there and that normally you'd go to like business school that I was like, I hate this, I don't want to do this again, and I would rather take a shot.

• 1:00:31Speaker 02

  So it spurred from being discontent with where you were at. That's interesting because that is exactly what led to me trying out all of these different business ideas and this starting up this thing with Graham. But I never asked you like why, what would, what motivated you in that beginning that planted that seed? To try to, you know, become big in real estate or on YouTube. Was it because you were discontent with where you were at or just?

• 1:00:50Speaker 01

  Yeah, honestly, it was, it's the stupidest thing. It was that uh.

• 1:00:54Speaker 02

  Was it data entry?

• 1:00:55Speaker 01

  Yeah, with data, it was doing data entry. I wanted to be an investment banker just because I was like, they make a lot of money. I just wanted to be successful.

• 1:01:03Alex Hormozi?

  Yeah.

• 1:01:04Speaker 01

  And I would email all of these investment firms just asking to do anything for free.

• 1:01:09Alex Hormozi?

  Yeah.

• 1:01:09Speaker 01

  I'm like, I'll get you water.

• 1:01:10Alex Hormozi?

  Yeah.

• 1:01:11Speaker 01

  I'll make copies, just let me do anything and I'll, I'll just be there. And I emailed maybe like six, seven places that I found on Craigslist. Like two of them turned out to be like MLM companies. And one emailed me back and said, yes, actually, we're looking for a data entry position. If you want to interview it, come on in. And I interviewed and it looked fantastic. And they had like a sales team in the front and a back off, back office in, in, in the back.

• 1:01:37Alex Hormozi?

  Yeah.

• 1:01:37Speaker 01

  And they hired me to do data entry at, I think back then it was like eight dollars an hour.

• 1:01:42Alex Hormozi?

  Yeah.

• 1:01:42Speaker 01

  And I was so excited to go in because they made you wear like a suit every day. And I was like, I get to wear a suit to work. That's so cool. And I went in there and everyone is a zombie.

• 1:01:52Alex Hormozi?

  Yeah.

• 1:01:53Speaker 01

  And everyone just hated life.

• 1:01:55Alex Hormozi?

  Yeah.

• 1:01:55Speaker 01

  And the first like day was okay, but I started getting. In trouble for stupid things.

• 1:02:01Alex Hormozi?

  Okay.

• 1:02:01Speaker 01

  Like, I wanted to wear a headphone to listen to something throughout the day.

• 1:02:05Alex Hormozi?

  All your mindlessly.

• 1:02:06Speaker 01

  Yeah. And they said, I couldn't do that.

• 1:02:08Alex Hormozi?

  Okay.

• 1:02:09Speaker 01

  And then I made a comment about they had styrofoam cups and I said that like the paper cups were better for the environment. And they said, we're not changing. They got really upset that I even made that suggestion. And then I went up to the CEO's office one day. This was all in the first week, just to say hi to the guy and introduce myself. And I'm like, I've just started working here. And he wasn't in the middle of something. And he was friendly to me, but I got called into the manager's office later that day. And they said, hey, there's a chain of command. Like, you can't just go up to this person and talk to them. You have to talk to this manager, get their approval. It goes to me and then I could. It made no sense, but I hated it there. And the only time that people came to life was Friday at like 4:00 PM. And you started seeing people laughing and joking around and like being themselves.

• 1:02:53Speaker 01

  And then I remember there was like, they had like a casual, like one day a month. They had like a casual day where people could wear like jeans into the office. I thought that was so stupid after a while. Like, I didn't get it. But yeah, that, that single job made me hate life so much that I would do anything to never return to that. Because I honestly thought if this is the next like 40 years or I.

• 1:03:14Alex Hormozi?

  Cast it. Yeah. If this is it, I'm.

• 1:03:16Speaker 02

  Then you were willing to do something for free, which was assistant to the real estate thing.

• 1:03:19Speaker 01

  Correct. But also during that time, they had a sales team in the front. I said, I'd be a great salesperson. I just want to do sales. And they were making like a hundred, like 300 grand a year doing like phone sales. I wanted to do that. And I was told, you have to work your way up. You have to do data entry to go into the mailroom, to go into like this thing, to this thing. And then it was, that was like years away. And they also told me, no one would trust me because I was 18 at the time. Like, no one trusts you on sales. And yeah, so and then I got into sales and did well.

• 1:03:49Alex Hormozi?

  Yeah, I should like that didn't matter at all.

• 1:03:51Speaker 01

  But that for me was like the big, it's six weeks. It was only there six weeks, but that made a lifetime impact.

• 1:03:56Alex Hormozi?

  I want to highlight one thing that you said, which is just for anybody who's, who's listening. Graham. We said, I'll do anything. And then they said, well, we do have this role open to do this. I would strongly recommend if you want to quote, do anything, then just look at the jobs they have available and try and do that. So rather than just go in like empty, just be like, oh, you have a data entry position. I'll do that for you. And then in all of the extra time, that's where you try and have lunch with people. That's where you try and basically build your network within the business. So you can start leveraging like relationships to gain more skills. And then you can start, you know, moving your way in and learning what you want to learn.

• 1:04:29Speaker 01

  Yeah, that was. I agree with that. That was a tough one in that business though, because I was the only one who was 18. Everyone else was like 35 to 50.

• 1:04:37Alex Hormozi?

  Yeah. But like, because I know that you get tons of people who reach out saying like, hey, I'll take your coffee for you. Hey, whatever. And the thing is, is like a couple of points. One is Elon doesn't need someone to take his coffee. Like he's got very skilled professionals who will never mess up his coffee and also do a hundred other things that are paid gazillions just to make sure that his time is booked to the second, right? So like, one is like, I would, I would either shoot much lower. Now you might be like, wait, shouldn't I shoot for the stars? Like you can do whatever you want. If you want a higher likelihood, I think shoot for people just one or two steps ahead of you. If you've got a buddy who's doing it, he's got his own car washing business and he's doing $200,000 a year. It's like, see if you can help that guy. He probably will happily take your free labor. It's really just like levels. Like if somebody can afford somebody to take their coffee for them and manage the schedule and manage their email

• 1:05:22Alex Hormozi?

  and not have them get bothered by like, hey, can you mentor me in the meantime? Like, it's like, dude, I'm working, right? Like, I can't like, oh, so I'm just, this is what we're gonna do. So I'm just gonna coach you for, for, in exchange for coffee, because we value my time at coffee. Not, it doesn't make sense. Now, obviously, the person who says that doesn't understand that fundamentally, which is why they're in the position they're in. So I understand, like, I have some grace for it, but I try to spread that message so that people get it. But one is try and target people who are one or two steps ahead. If you're just trying to be like a helper. But if you want to get into like, learn a specific skill from a business, look at all the entry roles and then just apply to those jobs. And then reach out, be like, I will do anything and I'll be the best data entry person you've ever had. Do that. And you have a way higher likelihood of getting in the business because now you're actually meeting their current needs. It's not them meeting your needs.

• 1:06:03Speaker 01

  What about applying to businesses that don't need your help or aren't hiring? One of my things, I always thought it was great to approach places you'd want to work and just say, I'll take on any role.

• 1:06:14Alex Hormozi?

  I think it's like, I think it depends on. It depends on the visibility of the company. So if the company has like a really big social media presence, they have so many people doing that, that the supply demand of people asking for that specific thing is super not in your favor. If you went to a business that's not based on that, like you go to an electric, you know, like a HVAC company, you probably could find some work there that they'll let you do. And so I think it's again, it's like try and shoot where like the big, the big arbitrage in life is finding supply, demand discrepancies that are in your favor. And so you have a supply of work, they have a demand. Now, if there's way more supply, so many people offering it, then they can dictate their own terms. And if they don't need it, then they don't need it.

• 1:06:54Speaker 01

  Yeah. What's holding people back from excelling beyond average? Do you think it's talent, belief, motivation, there's not a carrot?

• 1:07:04Alex Hormozi?

  I think people don't do very much. I think people do a lot of talking about doing and not a lot of doing. And I think it's the doing that does everything. And I think that's the, and whether it's lack of motivation, lack of focus, lack of like, lack of a hundred different things, it just comes down to number of actions taken for you in a time. And I think the vast majority of people just wildly underestimate the volume that's required. And I think that's like, I, I hit on this so hard because like, like when, I'll tell you a story to illustrate the point. When I, when I had my first gym, I had a mentor who told me that he got all of his leads off of flyers. And so that's what he did. And so I put out a flyer and I waited two weeks and one guy called me and said, hey, you dinged my Mercedes. And I was like, it's the only call I got. So I called them as we're up two weeks later and I was, and he's like, hey, how'd that go?

• 1:07:48Alex Hormozi?

  And I was like, ready to give, I was like, it didn't work, you know, like, and he was like, and he like totally took it in stride. And he was like, well, what was your test size? And I was like, what do you mean? He was like, well, what was your test amount? I was like, well, I mean, I put out 300 in total. And he was like, oh man, he's like, hard to know if anything's going to work with 300. He's like, we test with 5,000 per batch. He's like, and then once we find a winner, he's like, we do 5,000 flyers a day. And I was like, Oh, so he's doing a hundred fifty thousand flowers a month for his business and I'd done three hundred. And this is why, like, I think the vast majority of people dramatically underestimate how much volume it is. Like, I mean, right when we started this, you're like, seems like you tweet all the time. It's like, I post that often on a lot of platforms. Now, Twitter is my, my home

• 1:08:32Alex Hormozi?

  base for how I, where everything is generated from. But like, we make four hundred and fifty pieces of content a week. And so people were like, hey, man, I've been making content for ninety days. And now it already put them in the top, you know, one percent because everyone gives up. But if you actually made a post every day for ninety days, but like, it's amazing that's ninety posts. I do that in two days. And so, but they get there and they're like, but I'm not Mr. Beast yet, you know, and it's just, and there's just, people think that someone else is doing two times or three times as much, but it's more often that they've done a thousand times or like two ten thousand times, the amount of work that they have. Like, if you counted the amount of videos that you've put out in terms of longs and shorts, or minutes of content that you've put out over the last four or five years, compared to somebody, it's not even, it's like,

• 1:09:14Alex Hormozi?

  it's so, so ridiculous, the discrepancy. Same thing with sales guys. They're like, hey, I've been, I've been selling for ninety days. I'm like, okay, so how many calls a day do you take? And they're like, I end up taking, you know, five or six live calls. I'm like, okay, so you've been doing it for ninety days. You've taken like four hundred live calls. It's like, okay, well, this is John. He's closed four thousand deals. Now, calls taken, deals. That's why he's better than you. It's just like, there's just a dramatic misunderstanding. And that probably with a thirty percent closure, he's taken twelve thousand calls. It's like, he's done three hundred times the work you have. Like, it's a lot, or thirty, but like, it's a lot more than people. So how do you compete with that guy? Because I bet there's a lot of those guys out there. You start. I mean, I think it's like, you just start. And I think it's like, I think

• 1:09:57Alex Hormozi?

  a huge amount of the delay that happens when people are starting out is the amount of time it takes for them to realize there is no easy way. So they spend a huge amount of time, they figure out what the, what, how to do it. And then they spend a really long time trying to figure out if there's an easier way. And then they give up trying to find an easier way. And then they just start the hard way. Because the hard way is the only way. How often do you get emotionally tied to outcomes? I would say less and less over time. I'm sure that there are, it depends on the outcome. Yeah, it depends on the outcome.

• 1:10:23Speaker 02

  What outcomes are you still emotionally tied to, even though you may know better?

• 1:10:26Alex Hormozi?

  Well, I think if the book launch for my next book that comes out, like, if that goes well, I'll be stoked. If it doesn't go well, I'll be bummed. You know, like those are like, and I'd say on a micro level, like, we always hope that, you know, YouTube video does well, you know, we hope that, but obviously we have our constraints of like, okay, well, do I want this to be for a business center audience, or do I want this to be for more of a beginner audience? If it's beginner audience, I have to kind of recalibrate my expectations because it'll get way more views. So it's not like I'm a robot. I think I would say that my, my emotional regulation has just gotten better over time. It's not like it doesn't exist.

• 1:10:54Speaker 02

  What other parts of your identity have you had to kill to become where you are right now?

• 1:10:58Alex Hormozi?

  Plenty.

• 1:10:59Speaker 02

  I know one was attachment to the approval of your dad. That's the thing that's been spoken about quite often. Any other?

• 1:11:04Alex Hormozi?

  Yeah, I think so. It really depends on how we define identity. But if we define that by the actions that we take, like if you were to describe somebody like he is this way, you really describe it by the actions that person does, right? It's very hard to say someone is something without doing something about it, right? We even describe people by what they do, like he's a carpenter, he is selfish, which means that he acts in selfish ways. Like it's all based on activity. And so for me, like the changes in behavior, which then ladder up to identity, I've had to become more patient. I've had to figure out which I define as figuring out what to do in the meantime. I've had to just had times where I'm like, I just, I need to let, I just need to let the, let the turkey cook. Actually, I'll let it cook. There's nothing like I shouldn't, the right, the right task for me to do is nothing. Um, I've had to learn that.

• 1:11:44Speaker 02

  Wasn't an easy change to like the permanently address that?

• 1:11:48Alex Hormozi?

  No, and I don't think it's permanent. I think you have to fight it every day like addiction.

• 1:11:51Speaker 02

  So you think there are certain characteristic traits people just naturally have or aspects of their identity that they will have for their entire life. They just have to be able to detect which ones keep them weak and then adds an active battle for the rest of their life?

• 1:12:02Alex Hormozi?

  So I guess instead of anthropomorphizing, so kind of like humanizing the things that we're fighting against in terms of behavior, it's more thinking like, I have been rewarded in the past for behaving in this way. And so it's hard for me to change that behavior, but I realized that that behavior no longer serves me. Now you're still going to have the memory of the reward of doing that thing over and over again. And so what's, what's really tough about human behavior is that punishment fades, but reward sticks. Meaning like when you go out and drink, if you drink too much, the next morning you're hungover. You're like, I'm never gonna drink again. But then a week later, you're like, you remember the reward, but you don't remember the punishment. Right. It's the same reason that people go back to ex-boyfriends and ex-girlfriends. It's like they remember the good times, but they forget about the bad times. So punishment fades, but reward sticks.

• 1:12:46Alex Hormozi?

  And so the hardest behaviors to change are ones that have rewarded you in the past. Because you will tend to remember the reward and want to repeat them. And so the only way to really beat those is to find something to do instead that rewards you better.

• 1:12:57Speaker 01

  What's one of the things that worked for you in the beginning? That stopped serving you as you've gotten bigger or more successful?

• 1:13:04Alex Hormozi?

  Well, one of the biggest ones that I talk about is when you, when you, when you quit the job and you start entrepreneurship, you get rewarded really big for taking a risk, for doing something different. But you don't need to take those kind of existential risks all the time. And the problem is that you get a massive reward for doing something in the beginning. And then you almost have to immediately unlearn that. And then stick with this current path for an extended period of time. But you kind of always remember the hit of trying something new, which is why I think so many entrepreneurs tend to always want to do lots of new things. When most of the time, they need to just get better at the thing that's in front of them. And confront whatever problem they don't know how to solve so that they can get that thing to the next level. And so they think that by doing something new, because that's what worked for them in the past, that's gonna get them the next level. And in reality, they just end up distracting themselves and trying to chase two or three masters at a time and never getting there.

• 1:13:48Speaker 01

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

• 1:13:53Alex Hormozi?

  I'm trying to think. Small hill that I'm willing to die on. That manifestation is bullshit and action is the only thing that matters.

• 1:14:02Speaker 01

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

• 1:14:06Alex 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 defined 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 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 like the mindless ideation of like, 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

• 1:14:51Alex 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 is really going to be the only thing that's going to.

• 1:15:13Speaker 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, from.

• 1:15:20Alex Hormozi?

  That was my help.

• 1:15:22Speaker 01

  Like to me, like the example of.

• 1:15:24Alex Hormozi?

  People get so upset by this, by the way, whenever.

• 1:15:26Speaker 01

  I find it really interesting.

• 1:15:27Speaker 02

  What's their main contention with it?

• 1:15:29Alex Hormozi?

  Well, they have a history of being reinforced for talking to other people about manifestation. And so they want to talk about it, 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. Action, you can define really easily. And so that's the, that's the part, right? So it's like, it's really just this word that has all these positive connotations.

• 1:15:50Speaker 01

  I just think it helps you with focus.

• 1:15:51Alex Hormozi?

  So like, what is manifestation?

• 1:15:53Speaker 01

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

• 1:15:58Alex Hormozi?

  So what is manifestation?

• 1:15:59Speaker 01

  You thinking clearly about your wants, needs, goals, what to look for, who this.

• 1:16:05Alex Hormozi?

  So prioritization.

• 1:16:06Speaker 01

  Correct. Now by manifesting that, you're going to be on the lookout for those sort of.

• 1:16:11Alex Hormozi?

  Is the manifesting the prioritization or the minute, like you, we said prioritization and then manifestation?

• 1:16:15Speaker 02

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

• 1:16:19Alex Hormozi?

  This is fundamentally why I have an issue with.

• 1:16:21Speaker 02

  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 of.

• 1:16:31Speaker 01

  Manifesting, people. And that what manifestation is.

• 1:16:34Alex Hormozi?

  That's, that's actually my point.

• 1:16:36Speaker 02

  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 just like somehow get bestow.

• 1:16:47Speaker 01

  That's doing better than nothing.

• 1:16:50Speaker 02

  But I don't think so. 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 reality of your existence. It's only giving you small dopamine.

• 1:17:10Speaker 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.

• 1:17:18Alex Hormozi?

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

• 1:17:22Speaker 01

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

• 1:17:25Alex Hormozi?

  He has declarative knowledge, but also those are skills. And so like, 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.

• 1:17:41Speaker 01

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

• 1:17:46Speaker 02

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

• 1:17:52Speaker 01

  Benefits of this podcast.

• 1:17:53Speaker 02

  I, I had no skills whatsoever. The only thing that I had was high confidence in my aptitude and, and confidence and competence. 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.

• 1:18:09Alex Hormozi?

  True.

• 1:18:09Speaker 02

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

• 1:18:14Alex 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 like, I mean, 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.

• 1:18:55Alex Hormozi?

  And you have a history of past, you know, reinforcers or punishers for a set of behaviors and you repeat them in the future. And that's the only thing that I'll 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 it's

• 1:19:12Speaker 01

  Yeah.

• 1:19:12Alex Hormozi?

  Cross domain. Well, I know that. I know.

• 1:19:15Speaker 01

  Please, please.

• 1:19:17Alex Hormozi?

  But you have the idea of like, it's across, but like, those are just sets of skills. Those are behaviors. And so focusing exclusively on behaviors and unbundling 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. That has really been, like, when people are like, man, I feel like Alex is so good at making things clear. It's like, because I just do not use amorphous language. And I thought, when I use the term, I will define the term.

• 1:19:43Speaker 01

  So now.

• 1:19:44Alex Hormozi?

  By the observable.

• 1:19:44Speaker 01

  But I believe the shift belief starts with mindset.

• 1:19:48Alex Hormozi?

  Well, it's like, we're so.

• 1:19:49Speaker 01

  Starts with manifesting.

• 1:19:51Alex Hormozi?

  What, like, what's belief? What's mindset? What's manifesting?

• 1:19:54Speaker 01

  Manifesting.

• 1:19:54Alex Hormozi?

  Well, this is like, this is not to put, like, I actually, I just want to help. Not, not you guys, everyone else. No, but I just, I don't think it serves people. And that's why, and like, I just don't like, 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.