How I Made Millions Without Being the Best - Part 1 (The Iced Coffee Hour Reshare) | Ep 901｜The Game with Alex 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 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.

Alex, thank you so much for coming on the iced coffee hour.

Really appreciate it. Thanks so much for having me.

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?

I think it's just never been easier to be distracted.

So it's like it's like the bar has never been lower, but the bar is even lower to to not do it.

And I think people have 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 the 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, which I see is 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.

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

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.

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?

I think 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 it's kind of all the shoulds.

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 I believe in conditional shoulds, not absolute shoulds.

So if this, then you shouldn't probably scroll on your phone as much.

If you want to get in shape, maybe don't eat more than you burn.

But Donating more than you burn is 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.

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?

I think there are definitely people who get lucky.

Repeat and serial entrepreneurs less so.

I've only really encountered maybe like a couple 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, 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 Can you give us some examples of luck like that?

Yeah, sure. Like 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 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 its website just said coffee.

Um, But like, if you looked at this, I, you wouldn't see it.

But if you like took a cursor, you could just see just this coffee because the algorithms weren't like that advanced.

And so you can just rank and get all 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.

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?

I think the question of whether it's luck or not is whether you can repeat it.

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.

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

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 is kind of like Web 2.0, which is social.

And then opportunity three is AI. 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 TikTok 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 We've really never done much.

And then just like within 60, 90 days or doing a million a month.

And yeah, 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 land grabs occur, that's when there's typically outsized returns to be had.

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

I think you have to have skills. but straight up.

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. So when you asked just a few minutes ago, 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 just had this insane reach.

But I saw it as a... The fact that we can still the fact we could still advertise ourselves and get paid to do it 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.

Okay, so now it's arguable that you have his brand, if not even a bigger brand.

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

Yes. The classic answer. That makes a lot of sense.

I don't want to make... claims around things, 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. What do they look for when...

Blackstone shows up. So what they want is what every investor wants, which is what 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 $100 million a year.

And so, and this was kind of the thesis of acquisition in the beginning was like, okay, everything's sub a million.

There's tons of people who help people get their first customer, a few hundred thousand dollars in revenue, first five clients, things like that.

There's tons of Kind of like the coaching consulting, whatever, you know, our coaching course world is there.

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 1 to 100 million range.

And what's interesting about that particular range is that that's where a huge amount of alpha is created in terms of investing returns.

And so, like, for example, if you have a business, this is probably to lose half the half the audience.

But if you have if you have a business that's doing like three million dollars in EBITDA or profit per year.

And you can make a handful of tweaks and get it from 3 to 8 million.

The $3 million EBITDA business might be worth $12 million, maybe.

The $8 million EBITDA business can probably get somewhere between like $80 and $100 million of a sale.

And so it's like you have a huge multiplier effect that increases once you get above about $5 million in profit, and especially as you approach 10. where you now become a target for institutional-grade investors.

Because 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 level. buy at really small prices, make the changes in the business, and then capture this huge upside.

I'm always curious why they would sell in the first place.

10x revenue seems pretty good. But what does a business get out of that if they're hoping it'll take 10 years?

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.

Okay, there's so many reasons, but... So one, just for the audience, so 8 million in EBITDA would be bottom line rather than top line 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, so 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, you know, maybe it makes $8 million in profit, but I put, you know, 4 million back in every year 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, $5 million or $10 million saved up after taxes.

But when you're looking at an $80 million check with 20% capital gains, you're looking at whatever 64% million post-tax 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 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 always 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.

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 one 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.

So where do most businesses get stuck? I mean, business gets stuck at all different levels.

I mean, because all you have to do is just look at 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, I think it's 1 in 250, so it's 0.4%, gets to $10 million a year.

So is that a market problem or an operator problem?

I think it's almost always an operator problem. like unless you're like, 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.

Let's see if strangers will pick up strangers in taxis.

Maybe 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 with an AI salesperson that can take all your phone calls for you.

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 risks there too, but Will people even want this versus they want it?

I don't know if I can deliver it. And then the third category is what I would say is the vast majority of business owners, which is just execution risk.

There's other lawn care businesses that do $100 million a year.

The path is really literally in front of me.

The only risk is whether I'm skilled enough to do it.

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?

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 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.

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 your manager is like, okay, well, I'm managing this half.

I have to get somebody else. Then 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 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.

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

I'd be like, we can pull it up. Where do you want to start?

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

Twitter is like, I can't help myself. You just can't.

That's that's one of your indulgences. Yeah.

Like, let's see. Let's see. 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 So I agree with that.

Now, here's a counterpoint to that. It is hard to take people from free to paying for a service.

Totally. What is your way around that? Well, it depends.

So it depends on 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 something.

Right. But like the thing is, is go for somebody who's like one tenth of grand 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 going to work with them.

At that point, he'll either pay if he's making any money on his channel or he won't.

But there's real value that's being created there.

But the idea is you want to get your roster filled.

So that at that point, and I think part of this, 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 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 for money for stuff.

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

Well, I'll say this. My big caveat for free, if I'm going to give it away, is I'll give something away for free.

I'll give tons. I'll give stuff away for free that cost 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 a band, 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 got to 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.

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.

How do you make your offer unbeatable then?

Where it's unfair. Yes. If people feel stupid saying no.

So I think, so a couple of things. So, 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 million dollars 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, how to make it easy, and how to make it risk-free?

And so with each of those components, like part of the way 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 can also do that with covenants and terms.

You can either do it based on performance, that shifts more of the risk to you.

You could also just give guarantees and satisfaction.

You could give 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 the risk one. 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 them to you in 24 hours.

And for 300%, I'll get him to you in the next 60 minutes.

Same cost to you, 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.

And then the third element has two pieces to it, which is ease.

Like how does it 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.

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

I wouldn't say I study psychology. I would say I just look at data of business because I...

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, and the companies that, well, the companies we own and 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 theses have come from.

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

All the time. I get surprised all the time.

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

Yeah, 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 the sales data because I'm going to bet that all the conversion is 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, and maybe that means that that business mispriced, 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 I get 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 mentor. Do you ever find out why?

Have you dug into that? Well, at the bottom.

It's a great question because like 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 I try and think, what are the few principles that will always be true?

And then the rest is application. What's something that you track within a business that most people don't even look at?

I would 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, what do we make per sale in terms of is there a lot of margin that's there?

If so, that's more attractive to me. And then secondarily, how likely is it 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.

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 our customer versus my lifetime gross profit per customer.

So how much money does it cost me to get somebody?

And then how much do 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 so few places, like if you were to put it in the S&P factor, those companies are already at scale and it's harder for them to grow at huge, huge percentages.

Maybe let's say you put $1,000 in and you get 10% so you're $1,100 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 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 social media is, is that like, okay, why is social media so powerful?

It's because it drives CAC to zero. Do you trust customer satisfaction?

I take it as 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 is 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 I

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.

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

What do you mean? When you make an offer to somebody, and they say no, I'm not interested, how often is that able to be turned around?

Across what setting? Is that in a sales setting?

In a sales setting. I think it depends on the reason the person said no.

So that would be a discovery question after that.

So it'd be like, well... What are the variables you use to make the decision?

And sometimes, like, I think there's a big difference between a no based on value or a no based on details or a no based on authority or a 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?

Now, if someone's like, love what you have, I don't buy coats because I live in Panama.

I'm like, okay, there's no need. Like I could try and sell whatever.

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.

I'm never going to get there. It depends on the reason for the no.

What if it's a price issue? Where do you draw the line between lowering the price and cheapening the product but getting someone who's qualified or keeping the price the same but losing the sale?

Yeah, so I... I'm a very firm believer in never negotiating with terrorists, including price terrorists.

And so if someone wants to, like if someone wants, 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, oh, okay, yeah, I got it.

I'll buy it that price. But I... The price that you quote is the price that you've stick to.

Otherwise, as soon as you negotiate once, every price you have is negotiable, which sucks as a business.

It is a pain in the butt and I hate it. So, and you want price standardization anyways, because you don't want different people getting sold different prices.

People could talk. It's kind of sucks. So my big thing is price and 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?

How important is this to you? What would it cost you to... to not do this.

We 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 $1,000 off.

Does that work? Okay. Also, instead of 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 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. Why do you think that most people fail?

Is it a skill gap? a belief gap or is it just distraction?

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 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 what?

It's not, I don't even say it's at all levels.

Distraction is a huge one. They start six businesses, uh, in the hopes that one of them will take off because they fundamentally don't understand how business works.

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. Sometimes it's just business model things, which I would just translate up to skill deficiencies.

So Once someone gets started, I think there's just two buckets.

You've got procedural knowledge and declarative knowledge. which is basically the two sides of knowledge that exists, 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, manifesting, 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 up in the same hometown, you're like, well, I guess that's possible, right?

And all of a sudden it's like, man, my perspective totally changed.

Like my mindset changed. I manifested, who knows, whatever.

But like you finally 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.

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, you won't know how it works.

And then once you do, then you can do it again.

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

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

You 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?

Yeah. 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 reality.

So that's number one. The second issue 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.

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, 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 and 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 operate a thousand times the speed somebody else's.

And I think that's fundamentally 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.

How important is intuition when it comes to making a decision that you just, feel one thing over the other well i think i think intuition is just like a really really amorphous word for having a history of reinforcement with variables that you can have trouble, trouble identifying.

So it's like, 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 dress, the way their hair looked, the way they did their makeup, the way they talk, the way they breathe, the way they, all these other 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? 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, probably like, oh, it wasn't this.

It wasn't this. It wasn't that. You know, this is what it was.

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?

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, we 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 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 then I'm probably being deceived. And would I still do it anyways within these guardrails?

And so I just try and operate that way. Mine tend to be if someone's doing really posed photos in front of expensive cars. usually it depends on the industry, bad vibes, usually head to toe designer.

Like if they're really, if this is an iced out watch, Like it had diamonds on it.

And then you're in the music industry, which is fine.

You have to be in an industry. And the Isaac industry, I feel like that's that's got to be 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 it. 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.

That I will say, well, it's funny because you say that because 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, 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. yeah 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 going to, it's going to 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, I want to say deceived, but like I make wrong picks all the time.

With team and people hiring, it happens.

It's just part of the game. 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.

I think the too good to be true 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. attracts but most things that are too good to be true like the saying exists for a reason when when do you think the last time is that you've drastically changed your opinion about something That's a really good question.

That was a chat GBT question. I'm kidding.

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 this is kind of funny.

So my eighth episode of my podcast, which is 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 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 180'd 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, all this stuff.

The second one is 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 redone the wheel, 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.

It's like you have to turn the whole team around.

There's just so much to get it over the hump, whereas something that 5 million, 10 million, 15, $20 million 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. 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 fair business at a wonderful price.

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

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 yeah, like portfolio theory has reigned true, like 90% of our returns have come from two companies, you know?

And so, 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... just general intelligence of the teams, you know, good opportunities.

Like they just, they had checked more boxes than like, I didn't have to use as much imagination to see it working.

And so 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.

How important is intelligence in entrepreneurship?

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

Okay. So I think that, I think like if you were like, I want to get into AI, like you've got to be probably really smart.

And I think it's not even because 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.

So 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 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.

I think, honestly, just like perspicacity, like being able to endure and persevere one of the really interesting things about entrepreneurship is that you get life gives you this, like these unlimited lottery tickets, uh,

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 11th one, you still have a 12th one.

And so a lot of people just will choose not to cash the 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 sticks with it, just gets enough, like they just get so many chances that something, that luck does happen.

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?

Man, I'll say 50-50. Like, I was going back and forth.

It's like, you know, because 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 If you're selling toilet paper in COVID, you're going to make money whether you're an idiot or not.

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.

What qualities do you see in those people?

Are there similarities between the two? Yeah, there's, you know, it's interesting because there's like, there's for sure similarities.

I think there's far fewer than most people expect.

Because even if you look at the top entrepreneurs, 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 doesn't say customer success.

He says product success, but 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 something to say about me saying this, but I think they both have high ethics.

They're like, oh, he's a devil, but whatever.

I won't even comment. I'm just going to leave it there. 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 go big and bet the farm.

And I think that almost every entrepreneur that I know who's made it really big has had a moment where they're like, this could not work.

And I'm just going to try and make it work.

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 i think it's well as somebody's whatever go ahead as someone who's 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 ethical, like that you have to, I think I'll say differently.

If you took a random slice of the population, just America or even the world, you're going to have a certain percentage of people who are ethical and 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 will 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.

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, what do 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 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?

No, 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.

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 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.

Layla 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.

You've got marketing, you've got sales, you've got product, you've got customer success, you've got IT, you've got recruiting, you've got HR, you've got finance.

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It's all free and you can get it personalized to you.

So it's about 30-ish pages for each of the stages.

Once you answer the questions, it will tell you exactly where you're at and what you need to do to grow.

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 forward slash roadmap.

R-O-A-D map. Roadmap. What's a mistake you made recently that may have either cost you time, money, or credibility?

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 it. millions of dollars.

And I just said, I'll give you the equity back.

I don't even want it. I just don't want to be associated.

And so there. what could you have done differently?

What do you look for when, when 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 key employees, could have done more customer call reviews. both on sales side, marketing side, and also on the delivery side.

We probably could have done more of that.

It was a relatively small deal for us, though, but still, ethically, it was... Was there any tells, maybe?

A guy that's posing in front of his cars?

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

If you were to observe all of the mistakes that acquisition.com makes and assign it 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.

Where are the mistakes that we make? Honestly, I think the biggest mistakes we make are hiring.

It makes people. But it's really, I mean, fundamentally, it's going to be people at all sides, like people on the deal side.

It's going to 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 going to try our best to learn from them.

And we're ultimately going to be rewarded by the quality of our decision-making, but we're going to mess up. 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?

No, it's a good, 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 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 going to 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 things right.

I think that's anybody. 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 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.

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

Do you have one? He does. Are you paid $10 or $15 or something like that? understandmyself.com, I think is what it is.

That's right. Yeah, we took it. And it was a really, and you can also compare.

I'm a love guy. a latte 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 i'm slytherin by the way yeah I'm for sure.

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.

But it did say that we had good cohesion.

Oh, sweet. But they had studies for business and for personality and for relationships.

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

I don't think we have enough data to actually do like big data like analysis for that.

So if you're thinking of 20s, 30s, like it's not a lot, it's not enough.

You need like 30,000, 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 would just like have a star candidate.

And they were 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 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 it's just kind of like trading algorithms.

Like if the algorithm says, 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 100% or we kind of don't.

And the only times, and I'll quote Layla on this one, but like if we do have a test that we're going to have somebody take on like the brewing 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 detoriented, 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, nah, that doesn't make sense.

So then we're just like, okay, now it's just an ethical issue.

They're just lying. 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. Yeah. I think you will like, This is me talking more as 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 law least effort will typically rain 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.

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

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

I think he's a sweetheart guys. Alex is really a nice, so nice on and off camera.

Very, very outstanding gentlemen. 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 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.

What's your funniest joke? Get saying, give us a chance.

I have a lot. I have, I have a ton. Yeah.

A lot of like dirty. Yeah. Like, a true grandma man yeah a lot of a lot of a lot of that's what your mom said that's graham's favorite too i love it it's a classic it's a classic for Jack I'm always like yeah okay mom mom's gonna watch this yeah cats out the bag yeah smoke show no But no, I'd say that there's probably the two bigger misconceptions.

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

Oh, this is fun. Okay, so I eliminate it by eliminating it.

And that sounds ridiculous, but 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 on, on, on 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 how long I expect a task to last, that is when I'm like peak... productivity per unit of time, uh, because there's nothing else to do.

So is this science or is this just you? Because eliminating, eliminating natural light, we see your office after this.

Oh, I want to get a peek at that. Yeah, me too.

But why eliminate... Why eliminate light?

Good office. Yeah, it's fine. Why light?

For me, like I get. Oh, I get so distracted by like.

I get boost by like seeing the outdoors and seeing greenery.

That's nice. It doesn't work for me, man. 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 yeah i do think there's a decent amount of data that suggests that Anything that is not the work distracts you from the work.

How do you differentiate between distractions and rest?

Great question. So I think there's 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 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, 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, 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 per unit of time is productivity as I define it.

And so It is. Okay. Anything that increases that rate 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, the YouTube video or write an email or whatever. 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 then you'll look it's been like eight minutes and you're like oh my god like you're like monkey brain, 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 everybody's focused on the time and not the task.

I don't think about that at all, actually.

If eight minutes goes by 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. I did all that in eight minutes because I was focused all the time and I only...

Went to go reach for my phone at eight minutes.

I'm like, oh my God, I have, You don't see the time as a distraction?

No, not really. 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?

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 benefits.

Like I get more done per unit of time and the things I work on create more.

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

Or not, I mean, not on the phone. I mean, that thing's, done twitter like it's cooked twitter no i mean when i when i'm working i'm not gonna what about music you listen to music though silence Yeah, I have earplugs and headphones.

Like it's true silence. What do you listen to when you lift?

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

What songs? I like Linkin Park. A lot. Cool.

Like Little Lincoln Park. Hybrid Theory.

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

No. Hybrid Theory is like the 2000s and the heart.

Yeah. The album covers where it's like, is that the black one?

The black and white one. With Roland and like.

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

I don't know lyrics either. I listened to the melody, but not the word.

Yeah. I don't hear it. 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 Lincoln park.

Okay. Uh, But I just know because I like that radio station.

But what else besides Linkin Park? I listen to 50 Cent.

I like 50 Cent. Get Rich or Die 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 still also like some of my white boy music.

I still listen to Little Green Day. little three day blind, little third eye blind.

That's good. A lot of times Layla will 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. I've actually found that as a little sub-genre only because Spotify recommended it for me.

Like Band for Band, which is a cool song.

I like that. 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 100 and they randomly shuffle and that's like my life.

How often do you skip the song? It depends on what kind of set I'm doing.

Okay. It's like 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. Huh. Okay.

Yeah, I'll show you guys the gym. You guys haven't seen the gym, right?

I saw the hydraulic something or air impress something.

That was incredible. I'll show you the new thing that just came out.

I think it's a change level in your inventory.

I think it's going to change the dimension.

Is that that? I saw this 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.

Okay. It's a different thing. Okay. It's different, but similar concept.

Yeah. I've wanted to do that. Yeah. All right.

So do you think distracted people then want it less?

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.

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 and 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 it was like risking everything or what felt like risking everything.

And that was, it was because I was so miserable.

It was the only reason I was able 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 an entrepreneur my whole life.

Like I wasn't, I didn't start any businesses.

I did well in school. It was like, oh, school failed me.

Like I did well in school. Like I studied hard.

I got good grades. 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.

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 starting up this thing with Graham.

But I never asked you, 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?

Yeah, honestly, it's the stupidest thing.

It was that Was it data entry? Yeah, 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. And I would email all of these investment firms just asking to do anything for free.

Yeah. I'm like, I'll get you water. I'll make copies.

Just let me do anything and 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 office in the back.

And they hired me to do data entry at, I think back then it was like $8 an hour.

And I was so excited to go in because they made you wear like, 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 yeah and everyone just Hated life.

And the first day was okay. But I started getting... in trouble for stupid things.

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

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

And then they 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 p.m.

And you started seeing people laughing and joking around. and like being themselves.

And then I remember 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 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 cast it yeah if this is it I'm And you were willing to do something for free, which was assist into the real estate thing.

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. mail room to go into like this thing to this thing.

And then 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 would trust you on sales. And...

Yeah. So, and then I got into sales and did well.

Yeah. That doesn't matter at all. But that for me was like the big, the six weeks, it was only there six weeks, but that made a lifetime impact.

I want to, highlight one thing that you said, which is just for anybody who's listening.

Graham said, I'll do anything. And then they said, well, we do have this roll up and 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 and learning what you want to learn.

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. Yeah. But like, cause 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 either shoot much lower and 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 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 and not have them get bothered by like, hey, can you mentor me in the meantime?

Like, it's like, yeah, I'm working. Right.

Like I can't like, Oh, so I'm just, this is what we're going to do.

So I'm just going to coach you for, for in exchange for coffee.

Cause we value my time at coffee. not a, 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 ever had.

Do that, and you have a way higher likelihood of getting in the business because now you're actually meeting there currently.

It's not them meeting your needs. 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.

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, like an 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.

Yeah. What's holding people back from excelling beyond average?

Do you think it's talent, belief, motivation?

There's not a carrot. 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 a hundred different things. it just comes down to number of actions taken per unit of time.

And I think the vast majority of people just wildly underestimate the volume that's required.

And I think that's like, I hit on this so hard because like, Like when, I'll tell you a story to illustrate the point.

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 like, Hey, how'd that go? 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? 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 gonna 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 150,000 flyers a month for his business.

And I had done 300. And this is why I think the vast majority of people dramatically underestimate how much volume it is.

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 home base for where everything is generated from, but Like we make 450 pieces of content a week.

And so we were like, hey man, I've been making content for 90 days and now I'd already put them in the top, you know, 1% because everyone gives up.

But if you actually made a post every day for 90 days, it's amazing.

That's 90 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, 10,000 times the amount of work that they have.

Like if you count 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 it's so...

So ridiculous, the discrepancy. Same thing with sales guys.

They're like, hey, I've been selling for 90 days.

I'm like, okay, so how many calls a day do you take?

And they're like, I ended up taking five or six live calls.

I'm like, okay, so you've been doing it for 90 days.

You've taken like 400 live calls. It's like, okay, well, this is John.

He's closed 4,000 deals. Not 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 30% closure, he's taking 12,000 calls.

It's like, he's done 300 times the work you have.

Like it's a lot or 30, 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 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 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. What outcomes are you still emotionally tied to, even though you may know better?

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

Plenty. I know one was attachment to the approval of your dad.

That's something that's been spoken about quite often.

Any other? 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, 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 have 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.

I've had to learn that. Wasn't an easy change to like permanently address that?

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

And 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 it's an active battle for the rest of their life.

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 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 going to 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 exercise. 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. 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.

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

Well, one of the biggest ones that I talk about is 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 so in the beginning.

And 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 going to get them to the next level.

When in reality, they just end up distracting themselves and trying to chase two or three masters at a time and never getting there.

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

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.

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

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's 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 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 the logical proof that I use with this is just simply mindset plus no action, no outcome.

Mindset plus action, outcome. No mindset, action, outcome.

So the action is really going to be the only thing that's going to, 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 in a manifestation.

So it's, it's interesting to, for me, there you go.

To me, the example of... People get so upset by this, by the way.

I find it really interesting. What's their main contention with it?

Well, they have a history of being reinforced for talking to other people about manifestation.

And so they want to talk about how other people nod and smile and agree with them.

And those are all pro-social behaviors. And so I think it makes sense that they would do that.

Again, it depends on how we define manifestation, which I've yet to find anyone who's been able to define it well.

Actually, you can define it really easily.

And so that's the part, right? So it's like, it's really just this word that has all these positive connotations.

I just think it helps you with focus. So like, what is manifestation?

Let's just say the boyfriend-girlfriend example, where you manifest the perfect... But what is manifestation? you thinking clearly about your wants, needs, goals, what to look for, who this person is.

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

Is the manifesting the prioritization? We said prioritization and then manifesting.

I think the problem is that you're kind of using a derivative definition of prioritization this is fundamentally why i have an issue and 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 manifestation.

People know what manifestation is. That's actually my point.

A lot of people think like you sit down and you manifest something and then they think it's going to walk right through that door.

Like they think that cosmically everything, there's just like. somehow get bestowed.

That's doing better than nothing. I don't think so because there's data that shows that you can trigger the same dopamine receptors when you think think about getting a billion dollars than when you get a billion dollars.

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

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

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

You have declarative knowledge, but also those are skills.

And so like, So if someone tries 100 times versus 10 times, I would 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.

I think they have a core belief in what they're doing.

That dealing is going to have an outcome.

To defend Graham, when I first reached out to Graham to try to provide value to him...

Exactly. I sat in my room. The benefits of this podcast.

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

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.

I just knew that I was competent enough.

And so maybe I manifested that. One could argue that.

So the big, zooming all the way out here, just for context, I think the reason that people get really up in arms about it is because like, I mean, 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 hell? It is probably the only hell and the main hell that I will die on, which is that behavior rules everything.

And you have a history of past 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 cross-domain. Well, I know that.

I know. Please, please. Yeah. But you get 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 if I'm going to use a term, I will define the term by the observable.

But I believe to shift belief starts with mindset.

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

You know what I'm saying? This is enough to put, like, I actually just want to help. not, not you guys, everyone else.

No, I just, I don't think it serves people.

And that's why, and like, I just don't like now some people are like, I mean, yes, you feel great about it.

I'm glad that if you had the option between making 100 phone calls and sitting there and manifesting, you will get further making 100 phone calls.

And so I'm trying to decrease the amount of time it takes people to just do the thing.

[성공의 본질: 지름길은 없으며, 오직 행동만이 결과를 만든다]-[How I Made Millions Without Being the Best - Part 1 (The Iced Coffee Hour Reshare) | Ep 901]

📋 Summary

시작하며: '쉬운 방법'이라는 환상에서 벗어나기

성공의 기회: 공급과 수요의 불일치

비즈니스 스케일업과 운영의 핵심

행동을 가속화하는 법: 의사결정의 속도

'매니페스토(Manifestation)'에 대한 비판적 시각

결론: 고통은 상수다

🎯Key Sentences

📝Key Phrases

📖 Transcript