Alex Hormozi on The One Investment That'll Make You a Millionaire

this is the bigger pockets podcast show 6 49. like so they have to just figure out a way to tie whatever the thing if they're really passionate about something by all means go all in on if you're i.t then you're thinking how can i decrease page load times how can i get conversion rates up you start getting into the cro side how can i organize the data in such a way that the ceo can make better decisions and we have real-time reporting against all the sales guys so we can optimize our funnels towards the best converting guys right like all of all aspects of the business can make more money but people don't think about it through that lens so the first thing is how do i tie what i do every day to making more money in the business you connect that dot and then you improve that connection what's going on everyone this is david green your host of the bigger pockets podcast here today with a special treat we have an amazing guest who i think probably brought his best performance that i've ever heard him do online here today joining me is my co-host rob robelts abasolo to take down this awesome interview with me rob why don't you tell people about our guest since i know that you are a huge huge fan and then tell us what you like about the show yeah that's right so we had alex hormozy on who is somewhat of the uh the youtube poster child for entrepreneurs everywhere i started noticing him popping up about uh i wanna say like six twelve months ago when my channel was growing and man i just really gravitated towards all of his videos because he puts a lot of information there on how to scale business mindsets how to manage people and uh yeah we get into a lot of the nitty-gritty there of scaling from zero to one million dollars one million to three million three to thirty million dollars and honestly i felt like for as big of a fan i was i didn't fanboy too hard i don't think it came through so i think i kind of held it down no i thought you did a great job and alex really did most of the heavy lifting in this one he breaks down some of the struggles that i'm having in business and that rob is having as well he gave us a kind of a cool origin story of where he started and what he would have done differently as he built himself up to a net worth of i think he said over 150 million it was a lot 100 million yep big several businesses that he's built and sold and what he learned from that the struggle of scaling and how you need to learn how to hire and how your ego can get in the way and wanting to hire the right people building funnels both for leads and for hiring like all stuff that many real estate investors trying to scale their business are struggling with right now probably worth several hundred thousand dollar like if you had to pay alex to get him to tell this to you specifically be very expensive and you're all getting it for free here on today's show before we bring alex in to blow your mind today's quick tip alex talks a lot about how you need to invest in yourself before everything else he actually says you should continue to pour your money into growing yourself and increasing revenue before you do anything else i highly recommend that you consider investing in yourself before you invest in stocks bonds treasury notes cryptocurrency whatever it is that's fun don't forget to invest in yourself and if it's the right fit for you you can try that out by visiting biggerpockets.com and checking out the rookie bootcamp so if you are new and wanting to learn how to invest in real estate they have a course set up for you where you can show and one of us bigger pockets personalities will be teaching you specifically how to invest in different asset classes that you might be interested in so head over to the website and check that out rob anything you want to say before we get started no no this is a really inspirational for me because i never knew that there was someone that liked chipotle more than me but uh alex actually might top this and we'll get into that towards the end of the episode so stay tuned all right let's bring in alex alexey welcome to the bigger pockets podcast great to have you thank you for having me very honored to be here yeah so uh for anyone who's been living under a rock and hasn't heard about your astronomical success amazing insight that you're giving to small business owners would you mind giving us a background of where you started and where you are right now all right i'll give the the world's shortest uh play-by-play milestones uh so i was a management consultant uh went to vanderbilt graduated did defense contracting for two years really didn't like it got my top secret clearances sounded sexy on paper it wasn't cool in real life uh wanted to leave baltimore went to west coast started a gym um slept on the floor for the first nine months was able to figure it out by month 15 we had our second location every six months after that opened a new one had six locations uh had lots of gym owners started asking me hey how did you grow so fast um and so i started helping those guys out uh i ended up doing gym turn around so i'd fly out to a gym fill it up fix it etc we did 32 or 33 turnarounds over the next two years um and then from there i sold my six gyms and then transitioned from the turnaround flying out guys to jim's business to a licensing model because it was more scalable and so that was 2017 we transitioned to licensing uh that business uh scaled to uh i think 37 million a year um with very good margins and then uh we started a supplement company prestige labs which we sold through our distribution base we had 4 500 locations from there we started allen which was a software that worked leads for brick and mortar businesses of any kind we exited all three of those businesses one to a strategic buyer for the software and the other two as a package deal to uh american pacific group which is private equity firm uh just that one was 46 million the other one uh i'm not allowed to disclose it but i can tell you that we did 12 million top line the year before uh we sold it for the software company it was an all stock deal what it was that was that was last year we started acquisition.com 2020 which became our holding company uh for our portfolio uh right now the portfolio does north of 150 million dollars a year i i'm only going to timestamp this it is currently july of 2022 because people hear these clips later and they're like you said or like i know we grow that's why the numbers change um but you know at this moment uh 100 north of 150 million a year portfolio revenue uh between our companies um we specialize in in high cash flow uh service businesses and things of that nature so it sounds like you started the gym business you jumped into it you pursued excellence in that area you learned sales techniques the psychology behind how you get people to do things then you learn business techniques how to run a profitable business you took the step that most people never take when they hit that point you said how do i scale this and took on bigger and more difficult problems to solve you started solving other people's problems constantly helping them to do more and then once you hit this point of big success you said okay now what synergy do i have i can go sell supplement products because i understand fitness people trust me and then you solve a new problem and you said okay now i can have a software company that's going to help manage this and you sort of just spread in this like synergistic way rather than i'm gonna go start a gym and then i'm gonna go start a car wash and then i'm gonna go start something like a loan brokerage or something completely unrelated is that more or less a good summary of your approach yeah i definitely did a whole bunch of things that i probably wouldn't do again and probably would have done it necessarily in that order etcetera a lot of things were more difficult than they should have been but yes that was 100 they were synergistic in nature i felt like i was leaving money on the table and so i took those opportunities if i could do it again i wouldn't have done it that way but um they were still obviously very good outcomes but i feel like i've learned so since then yeah i don't think there's too many people that would be in a position to criticize how it turned out for you i think if anyone is actually i i've got notes i've got lots of notes on today's episode rob is going to tear apart alex's business strategy and teach him what he should have done instead all right well thank you for for sharing that i really appreciate it uh you are an incredibly intelligent man and i'm not saying that to butter you up i'm just saying i take a lot of what you say it's not fluff it is very very practical well thought out uh the type of advice you only get from trying and failing a lot and then figuring out okay this is what actually works it's kind of like listening to a gracie talk about jiu jitsu that's the same feeling that i get when i'm listening to you talk about business so before we get into today's show we actually have a fun game that we're going to play it's going to be called mosie nation or mozy imitation oh so in today's episode rob and i are going to try to guess if a fact about you is true or not and then you are going to let us know which one was right and we're going to see who wins this is great i'm so excited all right i feel i feel pretty confident i do watch some some mozy uh youtube video so i think i got this one in the bag yeah he's been practicing he's been researching this so that he could win so we'll see we'll see if talent or preparation wins out here you guys can figure out which one of us is the talent based on what we've said so far all right no fact number one alex and laila hormozy met on a dating app rob what say you i think i'm gonna go uh no i think i'll go no they did not meet uh on a dating app what okay they did beat on bumble so i was going to say no so oh my bad i think you have a chance it's okay i did confuse you there the reason i didn't answer right away is i remembered hearing a interview that you were talking about i can't remember who it was with but i remember you talking about your relationship with her and how you were super busy and there was a time she came in the room and she was like do you want to break up and you're like yeah whatever like okay and then at some point you needed help on a business deal she went out there she absolutely crushed it for you and it sort of like had a paradigm shift like oh maybe this person's a little more special to me than what i thought which i frankly love that you shared that information because this is something dudes go through all the time and we never want to talk about we want to look like batman we just show up and you know everything goes well but that's not how real life works out so i was trying to remember if you had mentioned the dating app or not all right that one all right all right i was gonna stay in the gym for sure but all right i'll get it on this one it's all good fact number two alex spent seventy five thousand dollars for four private phone calls with grant cardone true i'm gonna go with true as well that just sounds like something that alex would have done whoever made the question it was a little tricky i spent a hundred and thirty five thousand dollars we're both wrong there we go remember exactly directly but yeah i do remember right directionally correct i'll take it yes did you let me ask you this did you get more value out of the content of the calls or the relationship you built with grant if any relationship honestly both um i got i got more than that in value very easily i got that more than that from the first first phone call it makes a lot of sense why you to talk to him with the way that you've scaled like he's kind of the scaling expert in the business field right now in america yeah in in organic branding which i had not done and so i figured you know i i couldn't get in touch with gary um and grant was willing to take the call so i was like hey man um i have all the means just what do you just lay out the plan how would you do it and he just kind of laid out what he thought i should do and i was like okay cool i'll do that so it worked well hey man if you ever need advice i charge 120 cents per call so just let me know and we can get it set up i'm on van mosel like all the major outlets all right question or fact number three alex emailed himself all of his failures for the last five years i think i'll go true on that not from something anecdotally that i know but it does seem like something you would do um i could see and then i could see how you like use that to fuel your success i'ma go yes on that one i'm gonna shoot with yes but not for any of the reasons rob said it's because i watched alex's uh micro expression when we asked the questions i'm just going to read him completely that was um that was how i yeah that's how i remembered the the lessons yep that'll keep you humble too and that's i mean something we could talk about later on in the show purposely pursuing humility when you're having massive success is absolutely in my opinion like crucial like it's not something that just happens you have to make an intentional effort to stay in a humble place when it feels like everything that you're you're doing is just falling in line perfectly so i can see that would be very wise all right number four alex starts his mornings with a hot sauna and an ice bath you go first i'm gonna go with no i think he only does the ice bath because a hot sauna would be too comforting and that just seems like something that alex would not reward himself with comfort before he earned it throughout the day i'm gonna go yes because i know uh that you wake up at four and that's a lot of time you talk about how you get most done before people get like more done in those hours than people do all week and it's very time consuming to take ice baths and sit in the sauna so i'm gonna go yes no i uh i wake up i drink a cup of coffee and i work it's my morning also a great answer i love that man there's certain trends that you pick up on when you follow people in this business taste that everyone starts saying it because everyone else said it like one of the really common ones that i noticed was mark zuckerberg was credited with saying i wear the same shirt every day because then i don't have to think about what i'm gonna wear and i am so incredibly beyond your level that that that i don't even have mental energy to spare to pick out my shirt and we were like oh that sounds good say that like i'm gonna start doing that too and everyone started wearing the same shirt and i heard him on an interview with garyvee and he said yeah i just said that because really i'm not good at dressing myself and it sounded better than admitting i don't pick out clothes and i was like how many of us have been repeating this as this business maxim that's super and he's like yeah i made the whole thing up so there's a lot of things like that like the ice bath in the morning the the waking up super early which i think is really good especially if you're in a competitive environment where you're competing with others for business but like if you're just someone who writes books it doesn't really give you an advantage because then you got to go to bed at 8 o'clock at night it's it's sort of a similar situation so i really appreciate you admitting that you're not doing it just because everyone else says they are i could go hard on that question well let's start with that like let's hear your opinion if you think that i'm way off here i think it's a big pile of gobbledygook man i mean the amount of stuff that that is espoused by the tick tock gurus of wealth and finance is insanity you know you've got the cold plunges the the finger tissues the yellow glasses the affirmations in the morning the the gratitude journal it's like by the time you do that you're already halfway through your day and you haven't done anything and so if you break this down to like a first principles thinking it's like okay in order for me to do more i must do more anything that is not me doing more is detracting from my ability to do and so period you know like that's it and so time thinking about doing time procrastinating doing time recovering like all those things are just not things that are you doing so i think the ability to work itself is trainable and so if people like feel like they need that prep beforehand then i think that is something that is a crutch that can be eliminated and then ultimately make you more productive not because you have some hack but simply because you just put more time in i do love the simplicity of that it's really just kind of breaking it all through and it's just like oh it's just this one really simple thing and i remember i watched one of your videos that was like my 100 million dollar diet or something and then you talked about how you went into a room with a bunch of ceos one had wheatgrass shots and then the other one was like meditating in the corner and then you're eating twizzlers and they're like what are you doing bro and then you basically broke down how all diets are sham and it shams and it basically comes down to calorie deficits and that ever since then i'm like okay i need to stop i need to stop micro counting it's just calorie deficit i mean obviously i don't want to oversimplify but it was just like how funny it's just like these perceptions really cloud our minds and it's just like much more simple than what we think a lot of the times i had a mentor who's told me this this this chord it's a two-minute story and i think it it's very memorable it's don't be cute right he was like you know he was from long island he's like you know when i used to play backyard football i was like yeah sure he's like yeah so you know you got everybody wants to be fancy you know got that you know we're going to flip it to timmy and then timmy's going to reverse this way and then we're going to fake it and then we're going to go longer what happens you drop the ball and then it's fumble and you lose the odds he's like nah we're talking fundamentals football put the two fat guys in the middle run to the right and uh and and he was like don't be cute and he was telling me this because i was talking about this idea that i had for for jim lunch in terms of one of the a new initiative that i wanted to take and he was like don't be cute man he's like just do more what you're doing and um i feel like there's a lot of truth to that in terms of like people over complicate things that they already know because the truth is too difficult to stomach right so it's like they wanna they don't wanna accept that they should just eat less and move more and so they wanna come up with a hundred ways to be cute rather than just confronting the fact they just need to eat less and move more and like they don't want to confront the fact that they just need a work and so then they're like i'm gonna do all these things to prepare myself to work right and get myself in the right zen and like have an attitude of abundance aurora and like read my affirmations and do my daily journal and all this stuff and it's like dude the work the doing needs doing so it's just who's going to do it you know you know i have a theory on that that um like our audience is particularly susceptible to these gurus that say i will teach you how to make a million dollars by taking my hundred thousand dollar course and once you take this course you're gonna go out there and you're gonna flip 40 houses a year by showing you how i do it and even if they gave you the information to flip 40 houses a year you're not in shape to jump onto that level of a workout it would be like if the rock said i will show you my workout that doesn't mean you can go do his workout it takes time to build the skills that you would need to accomplish that and it's that uh like whenever someone's being taken advantage of there is a part of them that is making them vulnerable to that because like you said it's they don't want to do the work they're either lazy or they're greedy or there's some component of that that isn't what they don't want to accept it's the case and i feel like this is why we there's constantly a new diet or a new trend or a new something and if you're the person that sells that to people they'll buy it you'll make a bunch of money and then it's funny because now you actually have money and so you can show that your system worked but you didn't do it by working the system you did it by selling other people on what they could be doing which is i really like you because you took the opposite approach you went in there and built these gyms and grinded to learn these things and then you said okay here's what i've learned after everything i've done and i love that don't be cute approach it's just this is the fundamentals this is how it works to do this better it definitely wasn't a new opportunity we were just like so one of the things that we we call database marketing but when we work with a portfolio company especially if they're in the education space one of the first systems that we implement is is data tracking or customer success and so you know we have activation points that we want to track we know that you know if someone does xyz by day 30 or whatever the likely that they you know stay or a set goes up you know threefold whatever um and so what happens is then we can make substantiated claims based on based on what we can observe and so the more data we collect we can say hey of the people who actually send you know a thousand emails to uh to prospective homeowners uh the people who do that on average four out of five of them will close the deal in their first 45 days and so then it gives people prescriptions of activation it's like i can't guarantee that you're going to do it but i can give you the data to support what actions are going to create the outcome and so then you can start reworking marketing message rather than being another guy who's making the same promise you just say hey again i'm not making the promise i'm just telling you what's happened and then you can make your own decision based on that and that's how i prefer and it also gives you unlimited amounts of kind of marketing angles and hooks because once you have data you can talk the top 20 of the bottom 20 the median the average you can talk about people who do xyz add contingencies to you know the claims that you make and it gives you an unlimited way but it all starts with actually focusing on the customer and making sure that they're getting what they're supposed to uh you know be right yeah so i i like this a lot though don't be cute and i am a frequent uh watcher of your youtube channel and it's a very raw channel where you sit you talk about life life lessons that you've gone through um and i really like that i really appreciate you basically you leave it all out there for people to kind of take and apply to their life so one of the things that i hear you talk about really often you know is scaling and that seems to be somewhat of your specialty i know that there's different tiers of kind of scaling companies right there's the um the first million the million to three million and then three million to 30 million so i was kind of hoping we could dive into that a little bit because i think a lot of people in the bigger pockets audience they're trying to get to that first million dollars right and we want to really dive into some of those concepts and what's needed to really hit that million dollar mark in the company so do you think you could just sort of walk us through those different tiers starting with that first how do we get to that golden egg of a million dollars for a business i'll actually even break it down to six figures too because i was asked on a different podcast about six figures and it actually it's even simpler so uh you know to get started you have to sell something to someone that's it like literally that's all one avatar one product one channel that's it so you have one way of getting customers you sell one thing to one specific type of person that is all you need to do to get to six figures to get to seven figures you need to learn how to do those three things comma reliably comma consistently right so you know how to sell one product one avatar on one channel in a consistent manner so you start having predictive metrics on how you can acquire customers so it's either i spend this amount of money on advertising and this is how many you know calls to get booked and then from that many calls i get that many you know sales etc uh if it's outbound it's like i send this many emails or make this many calls or this many texts and then spending you know reply back this many scheduled this many show this many clothes etc if you're running organic it's i know that i need to have this many posts that i have to make across these different channels with call to actions that drive towards this page for every thousand visitors on this page i get why opt-ins well you know what i mean so each of these vehicles or i have to hit my email list you know once a week and if i hit it once a week with a call to action again so all these are the different ways you can get customers you could also do affiliates you can do referrals there's many ways to do it but the point is you pick one avatar one channel and one product and then as soon as you can start predictively uh as soon as you can start predicting how many inputs it takes to get an output then you get to a million right and at that point you're you know one two three million is a year uh one to three you have to build out your core team so that's usually like the first five hires first five to ten ish that are it depends on the on the on the ticket of the thing that's being sold you know if you're selling twenty five thousand dollar things versus five hundred dollar things the the team size is gonna be different but it's the core team at about three million and that's usually that's the reason that we take companies on at three is usually there because because there's a core team and at three million there's product market fit so they've demonstrated that people want this thing and they have enough support that we can take them from three to ten three to ten uh and this is interesting because it's a mistake a lot of people make it three and i can stop whenever you want me to cut the lines of the problems that come up but the problems that come up at three ish um are that people start getting cute right and they start saying and here's what's difficult is that you get reinforced on the fact that the more you market the more you sell the more money you make right and it's true and you can scale from there by doing more sales and more marketing and that is what the vast majority of the industry will do because they got reinforced doing it early the problem is that they switch the objectives the objective of the first phase of business which for me is like zero to three is just to demonstrate product market fit and an acquisition channel that is profitable that is the objective now at this point we transition objectives to increasing lifetime value per customer so this is improving customer experience putting data tracking in place um if there's an ascension opportunity that makes sense we need to build out that product or service line so that and this is the big point so that when we do choose to add another channel or expand on our current channel we can do so more profitably right where if you just sell a single product that might not have as much ltv as you would you know you would want as you scale or put more in your margins begin to compress so you might go up to 10 million but your margins have compressed over time and then you get in this place where you have to keep selling to maintain your overhead but you're not really taking enough home and you can't have enough cash free cash flow to grow the business and so sometimes it's like you have to take the step back fix the product fix the customer experience fix the service fix the data fix the infrastructure that everything's built on probably hire and fire some people that you promoted a little bit too early that didn't have the experience because they're actually not actually running things that well um and then once we fix that stuff then honestly going from 3 to 10 usually almost happens on its own once we're at 10 then we go far more aggressively on the acquisition side which is you know the easiest moniker that i use is more better new so we do more what we're currently doing until we max that out and then we do better of what we're currently doing is there any cro opportunities so conversion rate optimization can we switch this headline out can we change this lead magnet can we can we implement some of the best practices that we know to get you know more people to show up if it's a service business if it's a if it's a products business i only focus on service businesses so a lot to me a lot of our stuff is over the phone um can we change the the video sales letters and the follow-up emails things like that all the improvements that can happen um and then different is okay or new is can we add a new channel to this so we have six that we can choose from to get new customers we've got we've got we can hit up our own lists we can do cold cold outbound we can do content we can do paid ads we can do affiliates and we can do referrals and so those are the only six ways to get new customers we look at those six and say of the skills that we currently have which of these would make the most sense to add to it and you can even go adding a new thing within a current so if you're running paid ads it's like going from facebook to youtube or going from facebook to tick tock and so there's you know each each one of those six squares has channels or media channels that you can or platforms that you can tap into that give you new audiences so that was a little bit of a crash course there but that's what allows you to scale from 10 to 30 and beyond um at 30ish the the founders typically will start feeling constrained because they are the juju behind the entire business and please cut me off if i'm starting to bore you guys um but at 30ish is when it's it's it stops being about the founder not that it was about the founder to begin with but like you can will your way to 30 but at some point like right around there there's like just oh you get spread too thin and so and this was a mist i stayed i know uh okay i'll stop the the point the point is is that you need more you need more stallions right and so you have to find more people who can drive things like you do and so this is where employee compensation and recruiting become paramount to getting to the next level because you need to bring people in who've already won the olympic gold who've already run this race multiple times at companies just like yours but bigger and better and then have them come and run the playbook for you so that you're not driving it but someone else's and so that's where like compensation and recruiting becomes really important so you can incentivize people who who deserve to have that level of compensation and that's you get to you know it's a nine figures plus okay all right well i think we're we probably just end the podcast there right just kidding we we've got a lot to cover on this so let's talk about the the first million because that that seems to be where a lot of people are in all of this so you talked about in your first million you're kind of identifying a few things it's going to be your avatar which is going to be your customer profile who is your customer profile but then you also mentioned your one channel can you explain that do you mean the one channel that you're marketing or the one channel that you're yeah explain that do you mean like youtube like social channel give us a little bit more on that yeah so there's um there's three variables right so you got platform you've got you've got media um and then you've got the content right of whatever you're marketing so you just have to pick one of those three things together so i told you about six ways to get new customers just now right so there's six ways to get your customers you pick one you double click on that and it's like okay within there if i do cold outbound am i going to do cold call am i going to do cold text called dms cool emails all of those would be one platform right so one method and then you've got the platform that you're doing it on and then you pick the type of media that you want to send do i want to send a voice memo do i want to send a text i want to send a handwritten card do i want to you know i mean like depends on the platform because some platforms you can send multiple types of media some of them you can only send one um and so you pick one channel which is all those things together which is just a fancy word for a pathway for a stranger to become a customer right so we pick a pathway for a stranger become a customer and we focus on that one thing and do you feel that for breaking your first million the entrepreneur that's in this journey is that kind of like the loneliest phase of the company because i feel like for me you know i i was alone for a lot of it in terms of just in the weeds of my own businesses and i really didn't start hiring until breaking the threshold of that in my businesses is that a pretty common sentiment you think or is it you know like do you do people have like well-established teams and that's how they get to a million um no i mean at a million it's usually a few hires a few contractors you know it depends again on the the number of units sold to get to a million you know because you got to make 83k a month you got to make 20k a week right so 20k a week if you're selling 20k things it's like you're selling four clients a month like that's pretty easy to manage if you're selling you know a hundred dollar things you got to sell 200 clients a week so it's a little bit harder again if it's a physical products business then it's going to be mostly like support and if you're the media buyer slash marketer then you know you can probably manage an e-commerce but again it just depends on the type of business but i would say from a zoom out perspective i think all all seasons of entrepreneurship have elements of loneliness and i think that it changes i think in the beginning it's a lot harder because you're really competitive not that you're really competitive against other people rather than being competitive against yourself and so like in the beginning you're like this guy ripped off my this guy's blah blah you have all this like finger pointing and i was just on a podcast with ed mylett and we had a really good conversation about it but like the 20-year club you know i mean like i'm only in the decade club right but like you know five years in 80 of people are gone right so it's like okay it's a little bit friendlier at 10 years you know at least for me like i have no i just know how big the big the world is and so if there's i remember when i was starting out with jim launch i thought about doing a weight loss business uh because we were good at weight loss and that was actually what ended up we decided to do the weight loss business and that's when i pivoted uh and i told the guys uh the gyms that we're gonna do their turnarounds the next month that we weren't gonna do it and the guys were like well can you just show me how to do it i was like fine i'll show you how to do it and i sold them just kind of like a licensing of all my all my my ads and all my pages and everything that i already built out and tested and then that ended up being you know that became gym launch and became way bigger than the little weight loss thing that we had but when i started doing weight loss just for a few weeks a buddy of mine who was in weight loss came up to me and said yo if you do weight loss we can't be friends he was doing like 150 grand a month i was like dude it's a 60 billion dollar industry like we can't both do weight loss he's like dude i was doing weight loss first i was like bro i had six gyms i've been doing weight loss since when you were 17. you know what i mean um that's crazy that's crazy that he invented the concept of weight loss like you know that guy that's so cool it's right and so i say that because like it sounds ridiculous and that guy ended up becoming very very successful too and he like later on was like dude i was just i don't know sorry you know because you're so afraid it's just fear you're just so afraid that that something's gonna go wrong that you just want to like hold on and clench and just and just point at everybody else when it just like it just isn't about you you know i mean it's just like if you can serve your customers you'll have business it doesn't matter what the competition is doing and the market's so big you know what i mean so anyways i think that's why it's lonely but like it's lonely at my point too just in a different way it's lonely because there's just not that many people that i can talk to who are you know dealing with the same things right so do you feel because that that makes sense for me like i've been in a lot of moments like that where it's rare to to connect with someone that's going through the exact kind of very nuanced thing that you're going through how how like have you found people in your journey that you've have connected in that way and like how does one even find that because i think that is really tough for a lot of people to to find some that really grasp what they're saying uh on a personal level so to talk on one of the points that we were talking about in the game show earlier i'm a huge huge huge huge proponent of alternative education i love i love the education businesses i love guru businesses i mean i i love them comma as long as they're being done well and promising the correct thing and really focused on the product and the customer um i love that and fundamentally like guru businesses are just education businesses and they are sprouting all over the place because the demand is unmet by the formal education system and the demand is for skills that make money and people are not getting them but the demand is not going away if anything that's grown because people are seeing on social media all these other people making money and they're like this is possible and so in one good way i think instagram and all that stuff has made more people believe that they can do it the downside is obviously whenever you have upside you've got an equal opposite reaction of people who are scamming people and things like that and i think that the difference between a scam and somebody who is trying to deliver is intention i think there are many well-hearted or well-intentioned educators who are really trying to do a good job but they are poor teachers just like there are people who love to teach our teachers and we're terrible at teaching math and you probably had them but they really wanted to help and they just weren't that good at it and so i have a little bit more of a heart for for both sides of the equation here but i do think that education is the way and how did i find people i asked and i was willing to have people say no and real real very few people said no to me my whole journey um and i think it was because the way that i asked was i didn't ask i went and said hey this is all the stuff i'm good at and then i would just prepare stuff and i'll do work ahead of time to help them with their business and i would just get on a call and be like here's all the value i could possibly deliver to you and then if it was anybody worth anything because winners give back they were like dude this was i was not expecting this um dude what can i do for you i'd be like okay i really have this question do you know how to do this thing and they're like no but i know a guy and i'll put you guys together and so i like my first mastermind i was a part of i got voted member of the year with like 100 internet marketers and i was an internet marketer because i didn't know anything about internet marketing which was ridiculous i joined it because i wanted to learn and so i just only thing i knew then was sales and so all of that i rewrote so many scripts for guys in that community because it was the only thing i was good at and so they're like wow this is awesome and then they would help me out and i was like how do i make the landing page to an opt-in thing and they would sit there and they would show me how to do it and that's how i learned like i did not i learned like this like you and me on the phone right here this is how i learned and i paid dearly for that because i didn't buy that many courses i actually bought way more one-on-one and i bought a lot of my one-on-one by doing work for other people for free yeah i uh i can definitely relate with the the opt-in form and connecting into the landing page when i when i first launched my my very first program that was the hardest week of my life because i did all the tech and all the marketing and all the content and all the editing and all the copywriting and it hurt my brain you know but at the end of it i was like okay and so i'm a really big proponent of learning all this stuff and mastering it before i can delegate it out to somebody else because i just want to know that they are good at what they're doing but i feel like that's not necessarily super sustainable as the organization grows and i think you kind of mentioned this earlier where you said once you start scaling up you have to start hiring these stallions or people that are better than you at certain functions i struggle with that not because i think i'm smarter than everybody but i'm just always like no one knows it the way i know it um at what point is that is that a limiting belief that that is difficult to shake your entire journey are you pretty good at breaking free from that that limiting belief yeah 100 limiting belief i mean it's it's prideful to think that no one can do something better than you so a lot of times what happens is people hire people who've never done the thing and then are like oh my god i'm better than this person it's like well obviously they've never done it before hire someone who's significantly better than you who's done that thing for a very long time a comma who's not also running every other department of the business and you'll be amazed at how much somebody can do and so um in the beginning though just to be clear it is normal for people to have to learn all the basics right like entrepreneurship in the beginning is very much you know master of all trades you know what is jack of all trades master of none um like that's very much the beginning you have to just be good enough at everything you don't have to be great you just have to be good enough to get it done and get the first dollar across the bridge from there you start to begin to get more leverage and so the entire conversation of scaling and entrepreneurship about two things control and leverage and so the control component is that you have it's a consistent relinquishing of control as you move up the leverage ladder right because you can't see every email that goes out you can't approve every post you can't review every sales call you can't you know make every video that's going to be in your in your course from what you're saying right like you can't make every one of those things and the person who's making it in the beginning might not be as good as you but the question is are they good enough and so it like and that's why organizations improve over time because like you have to scale with good enough until you can replace it with better because you have more leverage because you have more cash flow you can attract better people you can fix the culture et cetera et cetera and so um the whole concept of moving up in entrepreneurship is trading your time for increasing amounts of money and so if we are if we're defining leverage as getting more for what you put in right inputs and outputs into systems the discrepancy between the two is the leverage um if that's the leverage in the system we try and use more leverage and the first four version of that is is labor right and so that's the lowest form of leverage that we can use and so we we hire people to do things for us so that we can have time back to do more more valuable things and your in your experience alex do you feel that the skill of hiring well is a a really big hurdle that people have to overcome is this one of the bigger problems or is it not as big as i'm thinking in my mind it is the problem yeah it is the biggest problem so think about this from a purely theoretical standpoint if you understood what was required in a business like what has to happen for a business to succeed and then all you did was put the people in place to have that happen then you would not need to work and so the reason that things are not happening is because the people are not doing the things and so for our ability as entrepreneurs to select so first attract recruit hire manage and ascend slash keep uh talent at the higher up you go in the business the more leverage you have on how much money in your time you make it all becomes about recruiting and so you might like this from a from a real estate perspective but you know you can buy or you can build that's kind of an m a thing right so like if we have a new division that we want to get into we can either build the thing from scratch or we can buy it but if you if you zero down at a micro level you can either build talent or you can buy it and so it's much faster to buy talent and so i think one of the things that people overestimate this is a quote from my wife but she says everyone everyone thinks they're a good judge of character until they get judged by the people they hire and so uh it's a little mic drop for you um but it's true right yeah it's true and so um if we're judging if we're being judged based on the people we hire i would say that in my experience the objective facts have worked better and so track record and case study analysis on before they start so it's like if i want to hire a video editor for example to cut content then i want to look at their track record show me the stuff that you've already done and that you've been doing this for a long time for people just like me trying to get to where i want to go those are all nuances and what i just said the second piece is hey here's some raws this is what i want go make stuff and then i can have 10 guys compete and the thing is is that there's so much psychological bias of like i like this guy he looks the way i look blah blah blah that we don't let the work do the talking and so the more objective we can be about it so in that way i really do believe in being like colorblind and all that kind of stuff when it comes to recruiting talent because like talent comes in all forms and so all i really care about is the productivity the output of the person and so i think for me that's been the easiest thing this is much more lay-less department um but in terms of like how we scale businesses in acquisition.com we consider recruiting to be our core and number one competency because at three million what what the business lacks is talent and so what we do because it's usually one founder that's breathing life into this thing with lots of little helpers it's a genius with a thousand hands and of course if you remove the genius that's there's nothing right that's most businesses and most businesses aren't worth anything because they're not businesses they're very they're leveraged jobs and so what we do is we look at the needs of the business and then we recruit people who've done the thing already and can demonstrate that they can solve the specific problem that we're facing and the nice thing is that if you are hiring somebody you should have a problem they should be solving and so the problem sitting in front of you and you're like hey head of marketing fix my marketing on the job interview and two things happen either they don't know how to do it or they do know how to do it and they teach you stuff and so during the interview process if you're not learning from the person that you're supposed to hire to take the job from you then they're gonna work as a subset of your knowledge because you know more than them which means you need to train them and so you're not buying talent you're building it again but you might be paying buying it price for building it work which is not the trade we want to make so anyways i could talk about that longer but that's fundamentally that's how you scale you're you're making me very uncomfortable because i'm realizing as you're talking here that i tend to lean towards the uh i want to coach this person up they have a great attitude they want to learn they're like whatever you want i'll go do it and then i actually not only am i paying you but i'm losing money because i'm taking time away from revenue generating activities to train you to do the thing that i'm also paying you to do and it never and i'm just stuck in like sort of this treadmill that i can't get out of right now but i mean certainly alex there has to be some people in your umbrella in your company that you do train up and those are kind of the people that they're like the foundation of your company right or is it completely objective like you can just buy all talent when you're starting a company depends on the nature of the work and what you're able to pay so for example um like frontline work in general you're going to get lower skilled labor and so it becomes a competitive advantage to have a very good training program because then you're you're you're getting the work done for less than the market right so if someone comes equipped with the skill you have to pay the premium of them having already acquired the skill if we have a really robust training system uh like if you're a door-to-door business door-to-door sales business like solar pest control whatever then a really big business will pride itself on the fact that it can take somebody off the street put them run them through their gauntlet of training and then on the other side they've got a 400 000 year producer and so it depends on the nature of the thing that you're selling and what your competitive advantages are yeah yeah that makes sense i i think i've i've been so slow to hire simply because i feel like i want to have a few people that i build up and train simply because i want them to speak rob and no rob and write rob right and and think think the way that i think so that when we start hiring externally they can then train all those people because they've been trained by me but it's hard it's harder than you think i mean i just hired a ceo for my my education brand and that was a really big that was a really um pride busting moment for me to to really finally sit down and say okay i it's not that i was failing but i was failing myself from a personal standpoint of being able to be sane and not stressed and like fulfilling family needs and everything like that and i really feel just the moment that they accepted the offer i was like oh i can finally stop saying no to everything because anytime i have a new idea or something new that i want to do with my program i would immediately say oh yeah but the logistics on that are a headache i would never do it but it's a really cool thing and i was in the meeting with my ceo uh yesterday and there was like three ideas that came up and i i stopped him from riffing on it because i was like no the logistics on that are a nightmare and then i was like wait a minute i don't have to worry about the logistics it's literally your job to do that and he's like that's right man you tell me what i want to do what you want me to do and i will make it happen and i was like wow this is now i understand why people hire people so um i think a lot of this came down to like one of the reasons i chose him is he he came from my organization he was it paid me to for a consultation i didn't charge him 120 000 though i think i charged him like 150 bucks like a year ago then he joined my program then he joined my mastermind then he joined my sales team and then he quit because he was too busy working his full-time job and i said no wait don't quit i need i like you too much come back and i was able to bring him on and integrate him but one of the reasons i think i saw him early on was actually something that you said and it's your philosophy on superstars i'd like to talk about that for a second where when you when you see a superstar you know it can you tell us expand on this a little bit it's not common and i think you get better at recognizing it over time you know i think the amount of people who hear me talk about superstars and they're like oh yeah so it says start if i were to meet a super superstar i'd be like i don't know that's a superstar because you know i had a mentor who who sold his uh business for you know multiple b's um and he said you know alex you have to remember that the best talent has yet to come he's like the best hire you've ever made is in the future and so it's always like this constant raising bar um but superstars when you find them you have to hold on to them and you have to find a way to now mind you the big comma here is that as long as they do not break the culture and you're not making exceptions for them from a cultural basis because that's one of the biggest issues is that you've got this super high individual contributor who actually detracts and is a cancer for the overall you know company and so that's that's the hardest hi that's the hardest fire to make but it's the one you have to make but superstars who fit within the culture i mean you want to give them as much opportunities you can and support them in their growth so that they can grow but even then with like like the salesman to the co move i would have been like huh that's interesting it's a very different character trait and very different skill set so i'm like huh interesting that wouldn't have been my first guess yeah yeah well i think the salesman thing that was definitely part of his i think he just wanted to be a part of the organization and so he was willing to do sales for me just to be like hey i just want you to know i'm in and i had seen him like you know that throughout the whole journey he was kind of not not the ground level of like the raw built channel but pretty close to the beginning of everything and so i was like all right well this guy has been around since the beginning he's had faith in me so i'm going to have a little bit of faith in him and honestly i mean just in the one week that we've started i'm already like really i needed someone that was uh complementary to me right because the phrase for me that i always think about is if we're both the same one of us is unnecessary and so for me if i i can't um i can't work with someone who's a visionary and like has big strategy big ideas because that's what i have i don't need that i need someone to actually go and run with it yeah so i want to kind of talk about a little bit here can you give me your opinion on when you're talking about scaling what is the more difficult stage um is it that first reaching the million dollars is it the reaching the three or the thirty or uh even any numbers past that it's so difficult it's so difficult to say which one's the hardest i would say the heart feels different so you know the the first the the first stage you know zero to six zero to seven the heart is that you don't know what the you're doing i don't know if i'm allowed to cuss if i'm not then believe me uh bleep hopefully be out it's all good yeah you have no idea what you're doing the biggest threat you have your business is ignorance it's just not knowing what the hell you're doing that's the threat right um and that is hard because it just you feel like you're just flying through space and you have no idea you're disoriented um once you cross like getting from a million to three million is very difficult um because you have to learn an entirely new skill set which is like you have to hire your first team right and that's that's very difficult for a lot of people um you know three to ten is difficult because you have to unlearn the thing that made you successful up to this point which is you're focusing on front end rather than on product and back end and so that becomes it's very difficult it's like it's like spiritually difficult at that point you know what i mean once you're at three to ten you're already out of the like i have to work i have to cry my face off in terms of like hours in because at some point the amount of work that has to get done surpasses your ability to work which means you have to work through other people um you know at 10 million the difficulty is you have to give up even more control and so at each of these levels you're giving up different types of control you know in the beginning you're giving up control of fulfillment the next level you're giving up control of sales then you're giving up control of you know finances things like that then you're giving up control of of marketing then you're giving up control of managing all those things then you're giving up control of leading you know the company uh and so on and so forth so like there's always this relinquishing of control which is i would say spiritually very difficult and it's easy to say very hard to do and that's what we look for in the portfolio companies that we're thinking about taking on we look at the ceos we're like do i think this person has the humility to give up control when it is required yeah david i think you're pretty good at this i think you're really good at finding people that you can as you say develop them and help you know run the different companies that you're that you've created what what's been the toughest i guess phase for you when it when it came to scaling i'm like i'm having a whole psychological session with myself as i'm listening to alex talking to hives over there yeah like it keeps on coming back that like every issue i'm having in business is a reflection or a symptom of an issue i have with myself so like as i'm thinking about why what he's saying makes perfect sense why don't i do that there's this big arrow that comes pointing at some character flaw that i have or a fear that i would have or uh like maybe i don't want to commit to to being there every single day at eight o'clock and if i'm going to hire this person and pay them 300 000 i have to be just as committed as i want them to be so maybe alex at some point we could talk more about like what your advice would be but rob i'm sorry what was your question there this is how deep i am in psychology i know well i can already see the the youtube title is alex hormozy exposes david nice nice clickbait title um i want to know for from your standpoint what what's been the dif most difficult stage for you to scale in in any of your companies was it getting to the zero to one million mark or was it any stage after that i think by alex's definition here the three to thirty is where i keep getting stuck so i i am very good at what you said a business is just a leveraged job you have one person a bunch of support pieces right and i get to where i max i cannot get any higher than this i am doing as much as i possibly can and then i pick the person and i hand over a lot of my responsibilities and then i go off and i crush it in another thing and when i come back i'm like ah like what happened and then i have to take that person out and put a new person in and i just get stuck in that like leap off cycle and then i fall right back down and it's definitely a problem with hiring like i'm sure someone who's good at this would look at it right away and say you're doing it wrong but i've been probably three years on that treadmill yeah you know it's an interesting concept to think about um layla and i discussed this a lot publicly but it's called the hidden funnel or the missing funnel but if you think about what has to happen to acquire a customer right so you have to do some sort of lead generation there's some sort of lead nurture there's some sort of sales uh there's some sort of delivery and then there's some sort of retention and then some sort of ascension right so those are kind of like the steps that you take through for a customer well the same funnel exists on the other side of the business which is as the business grows you need to have a funnel to acquire talent acquire employees and so you have instead of lead generation you have application generation instead of lead nurture you have application nurture so it's like how quickly are we getting these people booked for interviews like the best best talent finds a job in eight days eight days when they start the day they start searching if your entire job hunting process takes longer than 8 days you've already lost all the good people right and then from there the sale is the interview right and with good talent it should be a sale right because they should be able to be picky like if the person that you're trying to hire doesn't have any other opportunities do you really want to hire them right yeah you know and then from there you have the delivery which within the context of an employee is going to be the onboarding process of like how am i going to acclimate you to this business what are our culture what are our values how do you get paid how do we do with time off what's our compensation philosophy what is your career path what is your ascension blah blah blah right all these things that have to get covered and it takes time right like we onboard a new like senior executive it's going to be a month of one to two hours a day with the executive and then finally we have uh retention and ascension right so it's like okay now that we have this person they're onboarding they're productive it's like how do we retain them and continue to get them motivated and then is there the opportunity for ascension the same way we have that with a customer and so you really have this mirror funnel that exists in the middle of the business that's external versus internal but the promotion process is the same and most people build this front end and they don't have a concurrent funnel that funnels into the business to build the infrastructure the business to support the leads and customers that are coming in and ultimately that's how you're able to scale it by having if you remember what i said earlier there's one avatar one product one channel we can have the same process on the back end which is like we have a specific avatar that we're searching for and we have a specific job that we have and then we have a channel that we're looking to get them on on a consistent basis getting the consistency down is really what gets you from one-off hires to having a consistent hiring process just like your lead generation process right like you get that in order to get to that point you get comfortable with the process i always have to be lead generating and then you need to sort of take that same pattern and apply it to well i'm lead generating for talent at this point yes yep so that's where where i've been stuck and that's just the the challenge i like until i can figure out what it is in me or find the right person that can do that for me right like there's probably a person that is good at hiring people that if i had someone like that man i think i would i would 10x pretty quickly that's and just any last advice there oh yeah and i was just gonna say like and that's why for us within within our firm like the only thing that we keep in-house is recruiting because at least for me i think about the highest leverage ways because like if i were to do anything us as a hold code do anything for the portfolio companies actually doing this rather than advice in addition to uh recruiting that means that that company becomes less sellable in the future because then hold code have to go with it right it has to sit within the enterprise for the value to be created right in the enterprise value itself and so the most efficient way of us doing that is for us to hire and find that talent which is what we can do with our reputation our reach etc that's it our you know competitive advantage and we can bring the all-star into the business and then now the values being created on a consistent basis the problem's been solved for good and then that value sits inside of the enterprise which then makes everybody more money later i want to take a slightly different approach to what we're talking about and get your opinion on something i'm writing a book for bigger pockets right now and i think it's going to be called pillars but the basic concept is instead of trying to find out how to buy a bunch of real estate without acquiring any skills or without having any money why don't you just solve the problem of why you're broke right get your spending under control get a budget right here's some tools to do that get good at making money because that's actually something that is possible to do especially in america so there's defense offense and then you invest the difference and that will be the part on investing in this look i'm i'm trying thank you i'm trying to come up with uh advice for people who are not making enough money in their job because as what i noticed is as we talked to people like you the constant problem is how do i get talent how do i get someone to do a good job how do i it's not like we're holding people down saying i don't want to pay you more money we're desperately looking for these leads of people that can help our business and then you've got a whole population of people that are saying i want to make more money there is a huge disconnect that's happening here so do you have any advice either for me that i can put in the book or for the people who are listening who are not happy with how well they're doing for what they can do to actually bring more value to their employer and make more money yeah so i think everyone needs to turn off their their their their 19 year old finance expert guru and stop trying to you know invest in the s p 500 and invest in the s 500 right they should be putting every dollar they have into themselves rather than an index because i can promise you if they put a thousand dollars into themselves they're going to make more than 100 a year off that increase in skills and so the biggest issue that most people have is they don't have the ability to discern what their missing link is or what their next step is what's the if you think about the theory of constraints which is that a system will grow until it's constrained and so what happens is most people add potential to a system but they don't actually increase the throughput of the system so for example if i had a a bridge right and it has a weak link in the bridge or let's say a chain is probably simpler so if you have a chain and you have to pull two things the amount of force that you can put on the chain is just predicated based on the weakest leg and so what happens is that people reinforce a strong link and not the weak link in the chain and so they add potential to the chain but they don't actually add any more strength that can be pulled and so if you think about the amount of money you're trying to make as up as a amount of money that you're literally trying to pull towards you that weak link is going to be the skill deficiency that you have and so most people solve problems that aren't really there and they spend a lot of their time reinforcing skills that they enjoy but that's not their deficiency and so that's why like the entrepreneurship thing is you have to be a jack of all trades master of done you have to be good enough to get the thing across across the finish line to pull you know pull the money towards you uh you don't have to have the strongest length you just need all the links to be strong enough and so i think most people aren't good at assessing their own deficiencies and so if the follow-up question is how do you assess deficiencies right how do you know what's what's missing the question is what are the revenue generating activities within a business how can i get myself closer to those revenue generating activities um and so you can look at product as a revenue generating activity you can look at sales and revenue generating activity you can look at marketing is rather generating activity and so if you think about those as kind of the three core pillars of what businessing is and then you have back of house right you've got finance you've got i.t you've got uh the other pieces but the people who ascend even in the back office know how to generate revenue and bottom line for for their division so for example my cfo uh suzanne chiflett she um you know she led a 15 billion dollar acquisition uh 5 billion of 1 billion the last company she was out with 750 million she's been dollar one to 100 million two times so like she's she's been there and the first thing she did on our like our first interview is like oh you won't have to pay for me i was like and she's paid very well um and she's like you don't have to pay for me she's like i'll save i'll save more than what you're ever going to pay me just first six months i'll save you that i was like oh cool and so smart people know how to do that like like a an intelligent you know video editor is going to come and say dude i can 10x the amount of views that you're getting on this thing because he's going to tie himself to marketing a good product person is going to say i can i can decrease our churn which is going to increase your ltv i'm going to be able to get more people to ascend because they have a higher mps score and they're more likely to want to keep buying from us like so they have to just figure out a way to tie whatever the thing if they're really passionate about something by all means go all in on if you're i.t then you're thinking how can i decrease page load times how can i get conversion rates up you start getting into the cro side how can i organize the data in such a way that the ceo can make better decisions and we have real-time reporting against all the sales guys so we can optimize our funnels towards the best converting guys right like all of all aspects of the business can make more money but people don't think about it through that lens so the first thing is how do i tie what i do every day to making more money in the business you connect that dot and then you improve that connection let me ask if i understand your your chain link analogy there because i thought that was really good and i also love what you said is like solve a problem for somebody bring value to them and you're paying your own salary you can name your own price if you're making or saving the company that money i did a ted talk about building skills and in it i described how when i was you wouldn't think it from looking at me now but i used to be incredibly skinny like i was very insecure i was a bean pull six foot uh one and like 150 pounds it was terrible and so it was just a challenge for me to get to the gym at all i just was working out next to meat heads and i hated how how it felt and i was trying to work out my gym launch man exactly exactly we didn't have that back then alex uh i was trying to work out my arm because that was the biggest area of insecurity that i would have i would wear like extra long t-shirts because i don't want people to see how skinny my arms are so i'm doing these curls and i and i realized i can't even get a bicep workout because my wrists would get tired before that muscle would like the muscles in my wrist were not strong enough to do it and then i finally got my wrist strong and i had that same problem with my forearms they would burn too much and i couldn't get to the bicep so i had this like process where i had to strengthen individual links in that chain before i got to the actual freaking biceps so i could work it out am i is that close to what you're describing that people have with their own personal skills that they're maybe they they want to get to this part in bringing value but they've got these weak links they have to strengthen before they get there like it's a perfect analogy the one that you had it's a perfect analogy and as a total side note because rob you're in the in the education space like one of the big things that people there's a big misconception which is that one product or one course or one coaching thing or one mastermind is going to be their messiah it's going to be the one thing that sets them off and the thing is is that the testimonials that anybody receives is not purely because of the of the program that they have and that's hard for a lot of educators to take on because they want to take they want to take they want to take responsibility for everyone's success but the thing is if you take responsibility for everyone's success you have to also take responsibility for everyone's failures and so i think that a realistic approach is probably better like you didn't teach the person how to read you didn't teach the person in arithmetic you didn't teach them multiplication and so education sits atop foundations and so a lot of times and this is this is for everyone who's listening to this who is who's going through educational programs and they haven't made money yet the point is to get is to make progress and the hardest part in the beginning of entrepreneurship is ignorance and you have to pay down the time tax of ignorance as fast as you can and so you pay down that time tax of ignorance through education and the thing is is that if you are fortifying different aspects of the chain if there is a link that is literally missing until let's say there's let's say there's 30 pieces of the chain that have to get built for us to pull a certain amount of money towards us all right just for to keep the analogy parallel if there's 30 links the first course you take might give you 20 of them right but you didn't make money and so that person then said they shake their fist at the guy and say screw that guy he took my money but you're 20 links out of 30. right and then you take another thing because you at least accurately identify what was wrong and you get another eight links now you get two links and then you go to this next final guy and he gives you the last two links that you need and then you're like this guy's the messiah this guy's the stuff i did two other programs i didn't get any results right the thing is is that you were measuring you were measuring based on outputs not on impacts and you were measuring based on how much money you would make rather than how much work you were doing on you and so i think if people can make that shift based on them being the investment that they are making then they will always see the return and then it obviously focuses more on the process and the outcome and if you can do that because i can tell you for me personally um you know how because i get asked a lot and hopefully it comes off the right way like how did you move so quickly because we're 32 years old across 100 million net worth last year um and we get asked this question all the time and it was because we always took 100 as much of the excess cash that we had and just plowed it into education it was all about how can i how can i have more i mean my goal in life was to be wise when i was really young i was like i want to be wise and wisdom is seeing is seeing what other people cannot say right and so it's it's understanding the circumstances and having to discernment to see what is true and what is not and so if we look at why you're not doing well in business it's being able to properly discern and identify what those problems are and you only get that through repetition you get that through experience you get that through mentors and people who have more contacts than you who can breathe into your life and so anyways i'm very passionate about that and so i just think that a lot of people do the education industry at a service because they they go to college and four years later with a spanish degree they can barely speak spanish and then they take one course and they're like i'm not a millionaire and if it's if it's hard then that's what makes it worth doing like if it were easy it wouldn't be worth doing you wouldn't even want it if it were easy that dude that is so true i feel like the education space gets poo poo'd on a little too much especially for all the legitimate people out there teaching stuff and it's like i i the way i say it is i've learned it the hard way so you can learn it the easy way but the bad news is is that you still have to put in a lot of hard work for it to work out it's not it's not hard but it is hard work a lot of the time in real estate you know it is hard to if you're really getting started but i like that you said ignore the 19 year old finance bros because i do feel like that is the thing i actually got interviewed for a podcast or for a youtube video about a month ago and it was a buddy of mine and he was asking a bunch of millionaires hey if you're talking to someone just getting started how would you recommend investing a thousand dollars and every single one was like s p 500 i would think like solana or like bitcoin i was like um yeah and i was like you're not going to make any money on education sorry you're not going to make any money really that's like life changing with a thousand dollars in a stock investment invest in education buy a thousand dollar course or two 500 course and learn a skill that allows you to make more money maybe it's video editing maybe it's i don't know amazon real estate whatever it is i don't really care but learn empower yourself give yourself knowledge and use that to make more money because at the end of the day starting out the thousand dollars i mean while some people have done it and become billionaires from it i'm sure it's not something i mean you know you get you got to get real lucky with a thousand dollars on like a bitcoin call or something like that to make a ton of money so i always say go learn and that is what's going to make you the money not necessarily like a like a tiny little investment in in my opinion 100 of anyone's money especially sub 30 should be invested in only one thing which is increasing their earning capacity that's it is increasing your earning capacity so much so that you cannot spend the money that is coming in and then and only then when you literally can't find places to spend the money on education which is why i get so excited to spend 130 grand you know uh to further for the calls with with grant or anything i've done that a number of times twenty five thousand dollars a call i've paid plenty of those types of calls and they've always returned and the constant is that you have to be willing to work and if you have the belief which i do which is that i always want to be the best student so if i go into somebody's program i will say if someone else can then so can i and then i will do whatever they did and do a little bit more and so or a lot more and that way i can always because if it worked for one other person then it means it can work for me and so like i've always had that as a deep-seated belief at least it's served me well and maybe maybe it'll serve the audience um i know i went on a quick tangent with that but um really lights me up because it's like what i what i care about i'll give you a quick example because i think it'll drive this home so a friend of mine has a daughter she's 17 years old she got a job at a bowling alley and she was making minimum wage i think it's like 7.50 whatever and um he's like why don't you just uh get a phlebotomy certification it's a weekend and you immediately make 25 an hour right and so people think about that i'm like guys it's 500 in two days it's a weekend to get a phlebotomy certification and forever she will have three and a half extra earning capacity for the rest of her life and so if you take that same thousand dollars and put it in the s p maybe it goes up ten percent maybe it goes up twenty five percent because that's a crazy year right well cool you have two hundred 250 extra you can have 250 extra per week just by investing in that one thing where you get a 50x return or 100x return right and then you take that excess to your point david right and you say okay phlebotomy is this skill is there another skill i can stack on top of this maybe it's project management or management skills in general and i can manage 50 phlebotomists right like it's just it's it's leveraging it's leveling up the skill set and the opportunity vehicle that we're pursuing so i could be a blender tender you know what i mean at a smoothie shop right or i could be a manager a little bit better probably still not a good vehicle or i could own a smoothie shop or i could own the franchise of all the smoothie shops like it's all just degrees of leverage and acquiring the skill set are required and just as long as you know what the path looks like then you can ask the question what do i lack that that person has and i think that's usually the one of the more valuable questions rather than envy and and point in casting stones about why someone's ahead of you and why they they were cheap and you're actually a really virtuous person and they must be doing something negative to be ahead of you maybe they're just better than you and if you can at least admit that and have the humility to do so then you can create the deficit that you can then solve i love it man i i think what you're saying right now has the ability to change lives more than almost anything else that could be said and it it hits right at the core of like you are actually in charge of your own success if you take the responsibility for building skills you just don't hear people talk about how important it is to have skills like you get that napoleon dynamite complex right girls like guys that have skills i don't have any skills but that's what that's what will put you in the position of empowerment it's not the next get-rich-quick scheme it's not some clever marketer telling you could have a ferrari like me if you do this type of a thing like what you're trying to do when you're taking these courses or educating yourself really is building skills and i think like you take anyone you put them in a jamba juice and they're the blender tender and they take the right approach and then they learn how to become a shift manager and then from there they learn how to manage the other people and then they get put in charge of hiring and then they're looking at company books and well we can increase revenue if we sell a cinnamon bun with every smoothie or whatever you're actually building skills that then they say let me put you in charge of the whole jamba juice let me put you in charge of my other five jamba juices now you learn how to franchise and you can buy a i mean that's literally kind of what you did yeah and this is the key to making it it's like and for everyone's always like i don't know where to start start with the money watch where the money goes how does the money come in the door like you just have to watch the path of the money like from it click to close cradle to grave so how does this person find out about whatever business you're working in like ask those questions like that is fundamentally what the understanding of business is is understanding how do i monetize raw attention how do i get raw attention how do i attract it towards me how do i convert that attention and exchange goods for goods and services four dollars right how do i get that good and service person to come back and spend more money right like if you know what that path of the money looks like and that's where you can ask i remember when i actually was a smoothie blender tender because that's why i used to accept because i was born i remember i and if you're like man i haven't thought about that it's okay neither did i you know i mean like i worked for two years at at a smoothie store and every day i would i would look at the total sales i would add it up and i never actually thought about i never once multiplied it out to see what the monthly revenue was it was just numbers to me like i didn't i didn't care it just didn't matter i just came in and clocked out but like i'm telling you now sitting where i'm at if i can if i can save you that time follow the money if you can follow the money and get yourself closer to the money you will become more valuable and if you don't know how to get close to the money ask and most business owners even if they're not most business owners even if they are small business owners will know a little bit more than you and in that you can learn yeah do you think the uh the owner of smoothie king told the owner of jama juice hey man you can't do smoothies or else we can't be friends they probably aren't friends but probably when they were starting out but now it's you know both those companies are you know multiple decades old you know who knows but yeah i mean that's it's it's funny though because like ed said it's like the 20 year i can't wait to get like the 30 or 40 year club because i mean you think about a guy who's you know you're 65 plus years old do you see that guy like shaking his fist at the other no of course not like he's old right it's like and so if you're going to be that way eventually why not be that way now i agree i think i'm i could be i'm competitive in my own respect but like i've had friends that have started similar things in me and they've come to me and they're like hey i just wanted to i wanted to bring it up like is it okay if i like if i do this i don't i'm like dude i didn't invent airbnb or short-term rental i didn't invent investing in this city i didn't invent this concept you can do whatever you want because i got nothing to gain from being competitive with like friends in the space right we can only help each other grow there's a lot of people right on and you also get into like psychographics which is kind of interesting if you're a mass market thing like you know anyone can do airbnb short-term rentals right so somebody might be attracted to you someone might be attracted to me someone being like attracted david some people might be attracted to layla so like not only do you have demographic differences in terms of like who's the avatar that we're marketing to but like psychographic we have different values we stand for different things and so people are just naturally going to just say like i want this flavor of airbnb even though the actual mechanics might be the same it's just i want this flavor because i just prefer this community i prefer these values this is more my five which is fine you know really appreciate you sharing your experience here alex this is like legit really gold information that i think can change lines for lives for those that have ears to hear please listen to this one again let it sink into your heart ask yourself those tough questions because this will get you more money than you would need and investing in real estate becomes a lot easier when you have a lot of capital to go do it all right we're going to move on to the last segment of the show this is the world famous famous four in this segment of the show we ask every guest the same for questions we will take turns firing them off at you question number one alex what is your favorite real estate related book crushing it with real estate apartments wow i i'm impressed you had a book to say there i was thinking you might be like i don't do real estate i do business so you're gonna say the burr book since you've read it before yeah i've read i've read probably five real estate books um and that one is really good it was really well written the guy didn't sell anything i was like i like he had a really cool that's brian murray right i can't remember the author name but i think it's right black with a red yeah it's black with the red thing that's him yeah he partnered with my former co-host of this brandon turner uh brian is now the partner with him in his company odc they buy mobile home parks super cool yeah yeah and it was a good book okay question number two what is your favorite business book for what stage in business for someone just uh struggling with scaling how about that struggling with scaling i think ready fire aim by uh what's his pen name mike masterson it's mark ford um who's the who's the co-founder of agora uh which is a direct response giant they do i think a billion a year uh so he's he has a book that goes all the way up you said it was uh ready fire aim ready fire him okay yeah he talks about the transitions in business between each of those levels too okay great i always uh write down these books whenever people say it with the aspirations to read them one day so got it on the list i'll give you i'll give you a flip side one um any of the books by patrick lincione he talks about operations and fundamentally like that's why most if you're talking scaling right it's people and so that those books are fables so they're really light reads you can read them in one sitting and they really teach really important lessons the the book called the motive um changed my life uh and is what got me to break through the that plus you know i was in a big reading mode because i just felt stuck at in the mid 30s but i couldn't couldn't get through and that was among the books that most deeply most profoundly shifted how i acted as an entrepreneur awesome man question number three when you're not out there building 100 million dollar gym empires uh what are some of your hobbies i don't have many i work out i work and i eat that's most of most of what i do actually this is very topical because i am somewhat known in on the internet as the chipotle guy and then i recently saw that you posted you ate at chipotle 500 times in a year one time which is that actually does put me to shame and embarrassed me that i haven't done that before yeah yeah i did uh because i was a single guy and so it was way more efficient for me money like the amount of time it takes to grocery shop prep cook clean et cetera um it was way easier for me to just get chipotle twice a day and the end of the day chipotle was easy because it didn't detract from work so the only thing i really had to do was the lunch chipotle and i didn't eat breakfast so i would just go nothing bowl nothing bowl and that was all i ate i didn't even have anything in my fridge besides egg whites coke zero red bull and johnny walker black label it makes sense though because when you're making a certain amount of money it might be a 20 000 lunch that you just say if you had to go to the grocery store and you had to shop and you had to come cook your food so that makes a lot of sense all right last question from me in your opinion what sets apart successful entrepreneurs from those who give up fail or never get started the ability to deal with short-term discomfort for long-term achievement that comes from everything it's like if you literally boil success down in any field it's just the ability to endure short-term discomfort for long-term achievement whether you want to lose weight whether you want to have a good marriage whether you want to have a you know be a good leader whether you want to have a six-pack whether you want to make money it's like you have to be willing to endure a short-term sacrifice for a long-term achievement okay that is very good because me and david are currently both working on our six packs so it really took this one to heart um i'm starting with the four pack first you know got some got to get a way to go there um okay and then last one for alex uh where can people find out more about you or what you're doing uh all all on the internet uh i have a podcast called the game so uh you can just search the game on any place that you listen to podcasts spotify apple all that jazz stitcher all the weird ones we're on all of them now um that's that's the best thing if you like videos we have a pretty big youtube channel and we're on all the social medias so just search my name alex ramos and you should find me go do it everybody go subscribe to his youtube channel yeah i i don't know i haven't i've said this i watch your channel it's been really cool to see you blow up man you're like the youtube poster child for all entrepreneurs out there so very much appreciate all the content that you put out there uh david what about you man where can people find you online at davidgreen24 on youtube at davidgreen real estate and on biggerpockets everywhere so you can message me on there if you have any questions for me rob how about you you can find me on on the youtubes at rawbilt on instagram at raw built and then if you want to see me do crazy little cute dances on tick-tocking find me at rawbilto alex last question i lied i have one more question for you how long do you anticipate we have to endure before we stop having to look at the little like tick tock pointing at bubbles thing i'm i'm losing my mind every time i see these now yeah it's really interesting because like i you know we've grown a decent amount i think we started september of last year so we're almost coming in on a year i think we've grown 400 000 or something like that as of today um in that period of time from zero and i didn't do any dances ever and so i think people people look at you know because it was musically before this so it made sense that there was a little bit more dancing kind of in the like that embedded in the culture of it but fundamentally it's not a dancing app it's a short-form video app and so i think it's just about whether you can deliver value in an entertaining way in 60 seconds or less and so you know the dancing is just like a non like when i see business people or like lawyers doing dances of like five things you need before you do a deal it's like due diligence and like i just the internet i mean like you know you don't need a dancing point just talk to like about the five things and how you do it and keep it under 60 seconds and you've got a tick tock you know what i mean and so um i i think it's people misunderstanding the platform and this is by no means me being some social media expert but just at least my understanding of as it currently stan as it currently is it's just like it's just short for a video and then you just know that there's a slightly different demo there and trying to cater it a little bit more like my general things about marriage and food and fitness tend to do better than my business stuff but it's also probably because the audience in general is a little bit younger probably um but it'll age up you know in five years they'll all be starting their businesses and hopefully you know they'll be able to get some value from it did you hear that people you don't have to dance and point at bubbles that have a little piece of please share this video make it go viral get out collectively we can end this horrible trend that makes me want to poke my own eye out every single time i see these things and i think it might be a realtor thing i follow a lot of realtors and there are a lot of real oh that's that's what i'm supposed to do i'm gonna i'm gonna start making exclusively that content and then tagging both of you in it now you will too all right alex thank you very much man we really appreciate you we're gonna let you get out of here rob i know you love when i do this any last words before we go no man no no final words other than thanks for coming on and uh i watch all your tick tocks there you go appreciate you guys thank you so much for having me in to the audience i hope you were able to get you know some return on your attention i know that's all of our hopes so thank you so much thank you alex this is david for rob the dancing tic toc machine abba solo signing off [Music] you

Channel: BiggerPockets

Views: 301,083

Keywords: biggerpockets, real estate, real estate investing, investing, rentals, rental property, investing in real estate, income property, bigger pockets, passive income, alex hormozi, alex hormozi interview, alex hormozi business tips, hormozi, alex hormozi skills, alex hormozi system leila hormozi, how to make a million dollars, how to become a millionaire, how to be a millionaire, how to get rich, how to build a business, build a business, entrepreneurialism, success principles

Id: EMs0sxYdG2I

Length: 79min 13sec (4753 seconds)

Published: Tue Aug 16 2022