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Alex Hormozi: Choose Customers Who Value What You Sell — Transcript

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0:00my dad always told me that
0:01you only get one name
0:03so invest in it accordingly and i always
0:06thought about that i thought it was a
0:07really good line just like you only get
0:08one name like you can change your
0:09companies you can go bankrupt but like
0:11your name stays with you yeah and so
0:13that can either be an asset or it can be
0:15a liability
0:23hi i'm alex ramose i own acquisition.com
0:25which the portfolio of companies is 100
0:26million dollars a year the best-selling
0:28book i have youtube that some people
0:29find interesting and you are on behind
0:31the brand with brian elliott everyone
0:34i'm brian elliott welcome to another
0:35episode of the show alex thanks for
0:37having us to your uh your home
0:40grown mission control it's great to be
0:42here in las vegas
0:44thank you for having me i'm very excited
0:46i guess having me and we're having each
0:48other i guess
0:49having me on your your show well i
0:51usually ask my guest how did you get
0:53this job
0:54this job yeah
0:56uh
0:57so um
0:59i was a management consultant
1:01uh right out of college i did
1:04space cyber intelligence for the
1:05military which was
1:06uh sounds much cooler than it really was
1:08but i had a top secret clearance it
1:09sounded really good at dinner parties
1:11and just about only that
1:13um
1:14and you know one day i looked out for my
1:16balcony because i had a really nice
1:17place because i could afford it at the
1:18time
1:19and i was like is this it and i was you
1:21know in my young 20s
1:23and
1:25you know at that point i had done
1:26everything that i think i was supposed
1:27to do so i was you know i did well in
1:28school i you know was president of all
1:30the clubs you know graduated in three
1:32years got the good job um
1:34and i realized that it was i was living
1:36you know a life for me
1:38that my father wanted me to live and so
1:40that was kind of you know i went i i
1:42faltered back and forth for probably a
1:43period of six months um
1:45of really not wanting this to be my life
1:47but not wanting to let my dad down and
1:49so
1:51at some point the the thing that kind of
1:53pushed me over the edge was i can either
1:54you know die to myself or i can die to
1:56my father and at the end of the day you
1:58know i have to survive so i will
2:01if i if i make this decision and he no
2:03longer wants to be my dad then i can
2:04accept that
2:06wow is that extreme then
2:07yes
2:08wow
2:10say more about that are you an only
2:11child yeah so only child raised by a
2:14single father um middle eastern um he
2:17was born in iran
2:18and um
2:21you know i everything in my life up
2:23until that point was really just to make
2:24him proud so i it was very much a
2:26seeking approval seeking validation kind
2:28of drive at that point in my life
2:30and so the idea of disappointing him or
2:32not getting his approval felt like death
2:34and at that point i was actually
2:36contemplating not living um
2:38which is why that it really and it's a
2:41common theme if you have watched some of
2:43my youtube stuff um
2:46mortality has been the single
2:48biggest driver and the biggest decisions
2:50that i've made in my life and it has
2:51become a more routine
2:53process for decision making for me in
2:55general
2:56because i think it it provides clarity
2:58and it provides context
3:00to most of the decisions we have which
3:01the vast majority of them don't matter
3:03which is helpful
3:04in and of themselves and then you know
3:06beyond that it helps me make the
3:07decisions that i think removes everyone
3:09else from the playbook because if you if
3:11you study subjective well-being and how
3:13people perceive how they're doing in
3:14their own lives it looks like a smiley
3:16face so seven-year-olds think they're
3:18killing life
3:20and then it drops dramatically between
3:2220 and 30. and then there's still a
3:24little bit more of a dip right around 45
3:26that's like when people are they're true
3:28they hate life the most
3:30and then and then it kind of slowly goes
3:32up to like 55 60 and then it shoots
3:34right back up again when people see that
3:37they're going to die and that life is
3:38short and that they can make the
3:39decisions without worrying about the
3:40ramifications of other people and some
3:42of the people they're worried about are
3:43also dead
3:44right and so it was using that context
3:47for that biggest decision that's been
3:48duplicated many times in my life since
3:50then because if i have a good
3:51decision-making algorithm i try and
3:52reuse it as many times as i can
3:55yeah there's a lot there
3:57no i like it um it's just making me
4:00think
4:01i mean i have watched
4:03maybe all of your videos so i have some
4:04context but maybe let's unpack it for
4:06the audience a little bit so
4:08um
4:09you know when we're seven
4:11let's let's uh let's expand that a
4:14little bit i mean we don't have a care
4:15in the world
4:17uh the artist or the whatever we want to
4:19be has not been beaten out of us yet uh
4:22no one's told us that we are not what we
4:24think we are we're still popping
4:25wheelies and climbing trees and falling
4:28out and that's okay
4:29and then you get to your 20s and 30s and
4:31the rubber hits the road a little bit
4:34and if you've made money i guess and if
4:36that's your
4:38way of validating your work or that's
4:40your sign of success then you're okay
4:42but if not
4:43you're kind of hosed
4:46and
4:47then in your 40s i'm guessing
4:50you start to have more life experience
4:5350s maybe you start caring less what
4:55people think
4:56and then
4:58then you fast forward all the way to
5:00maybe near death
5:03and then you really get to a point where
5:04you don't care what anyone says and you
5:05really boil it down to what's important
5:07and probably i'm guessing that's
5:09love relationships
5:11legacy
5:13and then you're just like peace out
5:15is that pretty accurate
5:16i think for most people yes
5:18for me specifically the legacy piece
5:20less so
5:21but i think for most people yes
5:23and why is the legacy piece less
5:26important
5:27um
5:28more so and i i whenever i get into this
5:30topic i think a lot of like some people
5:32get sensitive about it and so i just
5:33like to put the disclaimer like this is
5:35not me judging your beliefs and me
5:36stating my beliefs is in no way yeah a
5:38judgment on anywhere else um but if you
5:40just look at expanding the time horizon
5:42over a much longer period of time if you
5:43look at it at in ten thousand years or a
5:45hundred thousand years or a million
5:46years right all of a sudden you know
5:49and the easy way to test this is to go
5:50backwards right which is do you know
5:52your great great great great great great
5:53grandfather
5:54probably not right and then if you look
5:57at it from a how much has somebody
5:59achieved standpoint um i happen to be in
6:01an interesting situation where my great
6:03great grandfather was in the ruling
6:05class in iran
6:06and he had 400 children so he would
6:08literally you know like ruled and had a
6:10lot of wealth he had a lot of wives to
6:12create 400 children right um
6:15and i actually still can't remember his
6:17name because my dad told me one time and
6:19i can't remember it um and i've never
6:21seen any of the quote legacy that i'm
6:23sure he felt like he was leaving and so
6:24if that was that level of success
6:27and legacy and only four or five
6:29generations later i don't even remember
6:31the man's name nor do i have any piece
6:32of that legacy yeah it seems a little
6:34bit irrelevant
6:36yeah i i totally see what you're saying
6:38and that context matters i mean prince
6:41died a couple years ago
6:43right
6:44right see i had no idea
6:45are you serious yeah
6:47i don't follow this prince
6:50prince i thought he was formerly known
6:52as is he is did he get that removed too
6:54he's now back to being i think it
6:55toggled back to prince
6:57uh and then
6:59unfortunately he i think he he overdosed
7:01accidentally overdosed
7:03and he passed
7:04and you know
7:06one of the greatest musicians of all
7:07time and i didn't think about him until
7:10you just said this yes
7:12so what chance do i have
7:14i'm screwed yeah and i think in a long
7:16enough time verizon we're all screwed
7:18and i think in some ways people find
7:19that incredibly disheartening but an
7:22equal opposite is
7:23if you
7:25you can't find it both disheartening and
7:27also not freeing because all of the
7:29decisions that we're making that are not
7:30for ourselves or what are or are are
7:33subject to change that we feel pressure
7:35from whether that be society societal
7:38i'll put quotes there because that's a
7:39big word
7:40um or family friends expectations that
7:43we perceive other people to have of us
7:45um
7:46if you can if you can just relinquish
7:48all of those chains i think it's
7:49incredibly freeing and um i choose to
7:53live that way
7:54yeah i also try to
7:56i still definitely feel it no that's
7:58fair that's fair and i think also um
8:00that may help us
8:02that advice is good because it helps us
8:04live in the moment
8:05because you know even if you believe in
8:08something after that's still in the
8:10future yeah and there's a question mark
8:12because no one actually knows with you
8:14know with knowledge yeah uh
8:17at least someone with a pulse
8:19doesn't know
8:20what happens or if something happens so
8:22you might as well live in the present
8:23make the best of it yeah an interesting
8:25one um that i thought through around
8:27that was um a lot of us not a lot of us
8:30all of us have 100 experience uh not
8:32being alive
8:34right it's before we were before we were
8:36born we were not alive and so we know
8:37what that was like there was nothing um
8:39that we can recollect and so i would
8:41imagine that that's the closest
8:42experience that we can have to not being
8:44live yet again um which to me is not
8:46that frightening yeah and it is freeing
8:49you're right because it's it's both uh
8:51humbling to know that you don't matter
8:53in the grand scheme of things but at the
8:55same time
8:58you you matter infinitely
9:01if you just focus on the present and the
9:04the mark that you're going to leave here
9:05and now i i contemplated i had to die to
9:08my father who died of myself and i
9:09realized that i i would rather die to
9:11him um which pretty much ended up
9:13happening um and so my fears were
9:15relatively justified um he was not in
9:18support of the things that i wanted to
9:19do i ended up quitting that job sold
9:21everything i had packed my car went to
9:23california because that's what i thought
9:24the land of fitness opportunity was
9:25because that was the only thing i really
9:26enjoyed um
9:28mentored under a guy for a few months to
9:30try and at least learn the ropes started
9:31my first facility slept on the floor for
9:33the first nine months which was a very
9:35terrible experience for me and time
9:36stamped the age for me now i was 23.
9:40okay i left at 22 and i turned 23 two
9:42weeks after my gym opened got it so you
9:44graduated early you got that dream job
9:46and then you bailed yep yeah two years
9:49and that was really at the time um and
9:51all of this kind of it was at the a
9:52splitting point where i had done two
9:54years and the kind of career path
9:56traditionally is like two to four years
9:57of management consulting and then you go
9:59back to an ivy league for your gmat and
10:01then from there you go into you know you
10:03can you can go do investment banking you
10:05can do private equity you can do you
10:06know some of the bigger white collar
10:08jobs but um
10:09it was i just didn't i didn't want more
10:11of what i had um
10:13and so
10:14i thought that i would have a better
10:16shot taking hundred thousand dollars in
10:17two years which is what the you know
10:19economic equivalent of what the degree
10:21was um and starting something on my own
10:23i figured i would learn more in the
10:24first two years and with that money and
10:26maybe even have a business by the end of
10:27that period of time that made an
10:28equivalent amount of money compared to
10:29what i would have had as a job offer
10:31let me ask you i talk a lot about
10:33signals on this show to other people
10:35in my personal life i've i've had
10:38signals that were subtle
10:41some more overt the subtle ones i missed
10:43and then had i had to learn later
10:46but how did you
10:48what signals did you get i mean you're
10:50saying like i wasn't feeling it but like
10:52so where was your motivation because
10:55i see you as this hustler this go-getter
10:57this you know
10:59this um
11:00sales person you know who just is all
11:03about gobbling up new opportunities
11:06um
11:07i mean you've it
11:09it transcends beyond that now but like
11:11at first it sounds like you were just
11:12all about the go get
11:14but how did you know
11:16like you craft you drifted into fitness
11:19because you were into maybe you know i
11:21mean at first i was driven by fear okay
11:24it was all fear fear of failure feel of
11:26disappointment fear of other people's
11:28judgment right um what did your dad end
11:31up saying did he say
11:33good luck with you no he thought he was
11:34stupid he thought i was wasting my life
11:36yeah and wasted a degree that he'd spent
11:38money on and yeah wasted a good job
11:40opportunity that he had set up for me
11:42all these things right
11:43in his defense
11:45did he immigrate here yeah okay so in
11:47his defense 100 right
11:49and i just want to tell the audience so
11:50that they're not like but
11:52it's like you know if you have justified
11:54in saying that yeah if you escape from a
11:56country where there's trauma
11:59and impending danger
12:02then your son squanders an opportunity
12:05you might get
12:06a little anxious about that 100 i mean
12:09my dad came here with a thousand dollars
12:11you know and a medical degree yeah and
12:14then built every didn't even speak
12:15english right
12:16so i can i can i mean i think gary v
12:18said this but i think what he did was
12:20harder than what i've done
12:21like i got to i got to stand on his
12:23shoulders
12:24okay you know in huawei
12:26i mean i speak english
12:29you know like just the basics like i
12:30speak english i went to a good school um
12:34uh you know i
12:36just all the support infrastructure
12:37known and unknown that was around me
12:39yeah to you know to be successful
12:41yeah i think it's healthy to recognize
12:43your privilege yeah uh but at the same
12:45time you know it came with lots of
12:47baggage too
12:49interesting okay and so you had signals
12:52which were mainly fear-based yeah and i
12:55i mean the biggest thing that made the
12:56decision for me i would say i had the
12:58logical decision and then i had the
12:59emotional decision the emotional
13:00decision was
13:01um
13:02i could i don't want to do this this is
13:05not the life i want to lead um i am not
13:07happy doing this every day i would
13:09prefer to not be alive if this is what
13:11my life will be continuously and i was
13:12like well if that is what if i would
13:14prefer to not be alive then that kind of
13:16opens up my decision calculus and what
13:18was it i'm trying to put my finger on
13:19what what was it that made you happy was
13:21it just the freedom to do what you want
13:22i didn't know it made me happy i knew it
13:24was not making me happy okay yeah so i
13:26think that's another important lesson
13:27too if i can just extract them which is
13:30one
13:32you know i'm sure a lot of people
13:33watching they feel the same kind of
13:34family pressure um they want to be what
13:37other people expect them to be if you
13:39know if that's
13:40who you are and that's totally normal um
13:43but we should always remember
13:46you
13:46know the the context in which that
13:49advice is given could be given through
13:51the lens of a certain um they lived that
13:54a certain lifestyle a certain time frame
13:57um
13:58but also
13:59you know you said um
14:04it's a process of elimination sometimes
14:06isn't it
14:07like you don't always know
14:08the reason i think about this is i've
14:10got a son who is in eighth grade
14:13and sometimes i see him look
14:16looking very serious and i'm like son
14:18what's up how are you how are you
14:20feeling it could be that bad it's kind
14:21of like you know you can see kind of the
14:23face kind of going in and you see him in
14:24deep thought and like what are you
14:25thinking about right now he's like
14:28i don't know what my college major is
14:30going to be yeah i'm like bro yeah
14:32you're in eighth grade why are you
14:34thinking about that right now
14:36but like i think that's a thing
14:38whether you're young or middle age
14:41you're trying to figure out what you
14:42want to be when you grow up you're
14:43trying to have it all figured out yeah
14:45because we don't seems like we don't
14:47like
14:50uncertainty
14:52but i think your message if i'm hearing
14:54you is
14:55sometimes you have to try it on for size
14:58to see if it fits or not
14:59and you get it on you're like well i
15:01thought that dream job was going to be
15:02like perfect but turns out you know
15:06it's tight in the crotch
15:07you know it's like i i need something
15:10different
15:11and i think giving yourself permission
15:12to do that and it was a side to what you
15:14were saying about my dad like
15:16education saved his life like he was
15:19only able to leave the country because
15:20he was educated and so there's very deep
15:22roots there and i can appreciate that
15:23but for this context or for my life it
15:25just wasn't appropriate right and when
15:27we did come to terms later
15:29um the only time he's ever apologized to
15:31me in my life um
15:33he said after his apology he qualified
15:35um and said but to be fair in my time i
15:38would have been right oh absolutely and
15:40he would have been it's just not the
15:42same time right yeah yeah i mean and
15:45yeah absolutely it wasn't that it was
15:46inappropriate it was just out of context
15:48and it didn't necessarily translate to
15:50this new life
15:51and new opportunities you had yeah yeah
15:54i think that's so important i i can't
15:56imagine how many people are
15:59sort of you know
16:01suppressed to the point
16:03of
16:04their parents or the people that have
16:06influence around them
16:07put on them yeah or sometimes it's on
16:09ourselves yeah it's most i mean mostly i
16:12love the saying you know in our 20s
16:14we're concerned about what everyone
16:15thinks about us in our 40s we don't care
16:17what anyone thinks about us and in our
16:1860s we realized that no one was thinking
16:20about us to begin with right and i just
16:22i just feel like that's i mean who else
16:23have you thought about today besides
16:24yourself probably not i mean you have
16:26your kids which is an extension of
16:27yourself but you know i feel like yeah
16:28not a lot and so most people are like
16:30that and you know
16:32a lot of it like we have a lot more
16:34leeway than i think we give ourselves
16:35credit for and i think the more that i
16:37have now you know i'll say accomplished
16:39with quotes in in material success the
16:41more i am excited about the things that
16:43i can do and that was why the opening of
16:45the book was like there are no rules
16:47and it just took me a very long time to
16:48realize that and i continued to unlearn
16:50rules that i thought existed you know as
16:52i continue to you know go on this
16:53journey yeah i love that idea of
16:55unlearning
16:57yeah i think we all just try and go back
16:59to being like we were when we were
17:01children like if like just because when
17:03you're a child you're purely present
17:05right you're just present in the moment
17:07and
17:07i i i don't like the word happy very
17:10much um i prefer using joy because you
17:11can be you can mourn joyfully
17:14right because it's it's a it's a it's
17:15internal rather than
17:17happiness which i feel is more like
17:18happenstance it's more from external
17:21and so um you know what are the things
17:23that bring me joy were things that i
17:24find you know to find joy in um and i
17:26think for anyone who's who's listening
17:28it's a much harder question to answer
17:30what are the things that bring me joy
17:32then
17:33answering the question what are the
17:34things i hate
17:35and it's easier to correct those first
17:38you're like well i hate my job and i
17:40hate my relationship and i hate the city
17:42okay those are all very changeable and a
17:45lot of times you get there by by
17:47inversion well if i wanted to destroy my
17:49life i wanted to have the worst life
17:50possible what would i do and then taking
17:52all those things that you would do to
17:53really destroy your life and make your
17:54life miserable and then reverse them
17:56it's a much easier way to solve the
17:58positive psychology equation in my
18:00opinion yeah i love that and i'm
18:02remembering this this picasso quote
18:04which is i think he said
18:05everyone is born an artist yeah right
18:08and then eventually we
18:09we you know
18:11get convinced that we're not yeah and we
18:12have to really just strip away and get
18:14you know get back to basics and i'm
18:16using art metaphorically too it's like
18:18what you do at acquisition.com or what
18:20you did in the fitness industry or what
18:22i'm doing with film you know this can be
18:24considered rr 100
18:26mine's not that great but um
18:28you know everyone can be an artist and
18:30perfect their art you know i love that
18:33um okay so you get to uh fitness you're
18:35the
18:36apprentice to a master
18:38uh you're not swole yet i'm guessing i
18:41was lustful you're getting there i was
18:43actually i'd already um i was you know i
18:45was competing at that point so i was
18:47uh but i was a strength competitor so i
18:49was very strong for my bodyweight
18:50deadlifts yeah as a power lifter um
18:53and then i
18:55started my my gym
18:57and that was the first day that fitness
18:58became second in my life so up until
19:01that point i was fitness obsessed and
19:03everybody i worked with was like dude
19:04you should quit this job and start a gym
19:05it's all you talk about all day and it
19:06was what i was obsessed with
19:08and so maybe like my go-getting was
19:10really directed towards that and i
19:11figured this was the only thing that i
19:12did i did know that i liked that and so
19:14i was like okay i'll do more of that
19:16yeah and then when i started the gym i
19:17realized that i was doing none of that i
19:18was starting a business which had
19:19nothing to do with i mean
19:21insofar as i was selling fitness there
19:23was a component of it but the vast
19:24majority of my day had nothing to do
19:25with fitness whatsoever um but i did
19:28find out that i liked business more than
19:30fitness and that was and that's where i
19:32think that there's been a lot of luck in
19:33my life where
19:34you know i just so happen to really
19:36enjoy the thing that happens to be
19:38rewarded by the marketplace with a lot
19:39of money
19:41you know like
19:42that is where i feel like there's
19:44there's a lot of luck that has lined up
19:45in my life and it's in indirect ways
19:47like that i just happen to love this
19:49and so i and because of that i will do
19:51it for a long period of time for more
19:53than most people and enjoy learning
19:55about it and talk to people in my free
19:56time and do everything i can because
19:58it's just the thing i like and it just
20:00so happens to be rewarded monetarily
20:03well
20:04yeah and also
20:06you know the physical
20:08uh benefits from it right i mean you can
20:10literally you put in the work
20:12you can see the result right it's one of
20:14those
20:15very empirical
20:17right it's very measurable
20:19right but it's like
20:21yeah it it's and i think i've heard you
20:23talk a lot about choosing the right
20:25market like if you're not in something
20:27that can scale
20:28um
20:29you might rethink that if
20:32scalability or profitability is your
20:35goal
20:37perhaps you're you're not in a market
20:38that can scale yeah and we can talk
20:40about that in a minute okay so
20:43uh you you build it
20:45you build the um the your repertoire
20:48yeah um
20:50and and then you start acquiring gyms
20:52what are you doing no so i um so i
20:53opened up uh
20:55four more locations so i had five total
20:58on in southern california was it under
21:00the umbrella of this so i had four under
21:02that umbrella and then the fifth one i
21:04did on my own so i ended up starting the
21:06gyms on my own
21:07nine months in i let two partners in for
21:10lack of a better term um i sold
21:12two-thirds of the equity in my business
21:13for basically nothing
21:16and at that point i was already making
21:18twenty thousand a month take home uh and
21:22they said that it wasn't valuable
21:23um
21:24and in some ways they were right and in
21:27other ways they were not um either way
21:29that is what happened
21:31and then from there i stayed in that
21:33partnership i ended up
21:35staying in partnership with one of the
21:36guys we didn't work well with the other
21:38guy
21:40and then after that guy was no longer
21:42the partnership i
21:44disagreed with the
21:46the other partner over time not on a
21:48personal level we actually got along
21:49really well um but just business
21:51strategy wise i wanted to be a premium
21:53price leader he wanted to be the low
21:54cost leader
21:55and so that it was just it just and so
21:57we ended up just meeting in the middle
21:58which was a very mediocre business
22:00um and so i wanted to start my own
22:02facility with kind of like my own credo
22:05and that was the fifth gym which was
22:06body force lake forest um
22:08and that gym did really well um and then
22:11i made i i that gym i acquired uh
22:15compared to the other four therefore i
22:16started this one i acquired and i
22:18acquired for no money down um for fifty
22:20thousand dollars over a year and so i
22:23basically took the whole gym over and
22:24then had to pay four thousand dollars a
22:25month to the owner and i made fifty
22:27thousand dollars in the first month
22:29um
22:30and so i was like this is great um and
22:32that's when i realized that i was i'd
22:34made so much money launching and opening
22:36gyms and then i didn't even really care
22:38as much about the running afterwards i
22:39mean i knew how to do it i just liked
22:41the launches they were more exciting
22:43and so i had this idea for a model where
22:45we'd fly around and just like launch and
22:47fill other people's gyms
22:48and so this is right around the time
22:50that my my now wife
22:52so i pitched her the idea on our first
22:54date and asked her to quit her job um
22:56which was obviously the the most
22:57reasonable thing to do uh when you when
22:59you're talking to the top sales rep at
23:0124 hour fitness which she was at 23 um
23:04and so it's like listen
23:06this may not work out but we'll make a
23:08ton of money together you should work
23:09with me um and uh and
23:12she didn't say yes
23:14so i went and i launched three gyms i
23:15came back five weeks later um and i
23:18asked her to help me process the
23:19contracts uh so we ended up processing
23:21like 120 grand in an hour and she looked
23:23at me and she was like
23:25is this the thing that you started and i
23:26was like yeah just like is it legal
23:29that was the first question is it legal
23:31um and i was like yeah it's legal and
23:33she was can you teach me how to do it i
23:34was like yeah she's like all right
23:36and so that was when she quit her job
23:37and then she and i started launching
23:39these gyms together we did that for
23:40almost a year um still very very very
23:43hard time for for me financially um
23:46mostly because i was just way i had so
23:48many poor decisions i was paying off at
23:50all times
23:52i then
23:53ended up saying you know what i'm going
23:54to sell my gyms and transition during
23:57this period of time i got a dui head on
23:59collision my mother went to the hospital
24:01that's why i actually did those first
24:02gyms because they were all around the
24:03hospital because i wanted to keep busy
24:07and so
24:08you know there was there's a lot of
24:09bittersweet during this whole period of
24:10time like that processing contracts was
24:12after i came back from like the hospital
24:13with my mom so it's just like just a lot
24:15of different like things i was going
24:16through
24:18but uh and and selling the the
24:20partnership that i had there was really
24:22hard for me again it was like this you
24:25know need for validation approval and i
24:27had noticed that over my life
24:30until i solved this problem it kept
24:32reoccurring which was
24:34i always wanted to find father figures
24:36and so
24:37the guy that i did the apprenticeship
24:39with like at the very beginning of the
24:41story i was saying earlier like i ended
24:43up getting in a really weird
24:44uh financial situation with him which
24:46didn't end well
24:48um we ended up making up years later it
24:50was it was fine but like there was a
24:51long period of time that we were
24:52estranged um both of those guys came in
24:55very father-like figure feelings i got
24:58in a partnership with another like so i
24:59kept repeating the same mistake until i
25:01i had to learn i was like you keep doing
25:03this so maybe you should stop
25:05um
25:06and i looked at my track record and all
25:08the businesses that i had only owned
25:10myself i made a ton of money in in all
25:12the businesses that i partnered with i
25:13had made no money and lost money in
25:15and i was like huh maybe i should do
25:17more of that
25:18and so that was uh so at this point you
25:21know we're launching the gyms and
25:22whatnot
25:23and uh i
25:26i sold all the gyms and entered another
25:27partnership uh with one of the guys that
25:29i had launched he's like dude i'll come
25:31behind you you shouldn't be giving up
25:32all the backside like back end of all
25:34these launches like i'll come behind you
25:36and fill the you know and manage the
25:37gyms and that way every gym you launch
25:39you own so i think that you're going to
25:40own 12 gems and you can just launch them
25:42and fill them he said but i have some
25:43financial you know issues nothing big i
25:46was indicted once no big deal um big
25:49misunderstanding uh and i was like of
25:51course he's saying so you'll have to
25:52sign everything from all the money all
25:53that stuff but we'll split it i was like
25:55sure of course why wouldn't we so i sold
25:57all my gyms put all the money into the
25:59bank account for the new business that
26:01we were gonna start you know where this
26:02is going um
26:04sold 400 people which is a massive
26:06launch for a small gym
26:08in a matter of like six weeks woke up
26:10all the money was gone um he was like
26:13that was my half of the profits i was
26:14like we haven't made any profit we
26:16started the gym with the money um he was
26:19like well the fact that you spent it is
26:20your fault not mine
26:22um
26:23and so like that all the money i had
26:26done from all my gyms at this point in
26:27four years of my life was gone
26:29um and i was saddled with a gym that had
26:31no money in it with 400 members and
26:33payroll that i didn't have money to pay
26:35for and i couldn't sell people because
26:36if i sold them i would have to continue
26:38to fulfill them and i didn't want to be
26:40in i didn't want to own more gyms i just
26:41sold all my gyms yeah and so
26:44um at that point i sent layla to go
26:45launch a gym in hawaii she crushed it
26:48she did a hundred thousand and collect
26:50it and that was enough to fund all the
26:52refunds
26:53for all of the members to
26:55gracefully which was not graceful exit
26:57the facility
26:59um
27:00wow yeah i mean talk about
27:02signals missed signals
27:05learning lessons the hard way
27:09brutal uh but also i mean story in my
27:11life like i could talk about similar
27:14things where i just i had literally had
27:16to get beat up
27:17and continue making the same mistakes so
27:19very relatable yeah um
27:23but
27:25okay
27:26so
27:28wow
27:29i'll speed the rest up so yeah no you're
27:31good
27:31we uh just so much so fascinating
27:34there's
27:35we're like not even
27:36there's way more bad that happens after
27:38that
27:39um
27:40so but the the thing is i'm telling this
27:42and it's all this happened in like a
27:43nine month period so this was just
27:45insane and so like my mother getting
27:47sick the ending the partnerships the new
27:49partnership the money get getting taken
27:51my dui had on collision
27:53so the hedon collision actually was the
27:55next big catalyst for me
27:58because that was yet again i was faced
28:00with my own mortality and i it
28:03re-re-prioritized things again it was
28:04like hey idiot
28:06yeah and so at that point i had
28:09a partner that i had two marketing
28:12agencies with by the way started that on
28:14the side
28:15a chiropractor and a dental agency i had
28:17my five gym locations with a different
28:19partner
28:21i had now the one current location that
28:23i had started with the new partner
28:25right
28:26and i had the launch business where
28:27we're launching turning around launches
28:29and i'm 26. yeah i'm imagining you know
28:31those plate spinners
28:33you've got at least nine plates going i
28:35was drinking a half a bottle of johnny
28:37walker black every night to function not
28:39to
28:40like not to get drunk to not to
28:43feel back to not being stressed that was
28:45the only thing
28:46and um like some people have like
28:49like i would never have called myself an
28:51alcoholic because it was like i still
28:53function fine i never was drunk at work
28:55or anything like that i just every night
28:56i would just drink that to like breathe
28:58yeah um how's your escape yeah it was it
29:01was very much an escape because i wasn't
29:02handling the things that i needed to
29:04handle and so i had a coach at that time
29:07who was morally more of just a therapist
29:09and he said alex your stress is
29:10literally going to kill you and so that
29:13was right after i had the the dui and
29:14the head on collision and so he said you
29:16need to change stuff like what are you
29:18afraid of
29:19you you almost died so [ __ ] it
29:22and so
29:24i ended that partnership i ended the
29:26partnership with the agencies i i
29:28believe it or not even after the money
29:30was taken i was still in a partnership
29:31with him um because i was like maybe
29:33he's right like
29:35i knew i knew that it was fraudulent
29:37when i showed him the financials and
29:38highlighted everything and was like
29:40there's no other money that was here and
29:42he didn't want to look at it and that's
29:43when i was like oh he he doesn't
29:45actually think that i took the money he
29:47he was making a reason up so yeah so
29:49anyways i got out of all of that stuff i
29:51lost all my money and then i was back at
29:53zero and this was now this was november
29:57of
29:5816. so i'm now three or four years later
30:01from me opening the gym on the floor so
30:03all a lot of the stuff happened quickly
30:06at that point we went to go launch a gym
30:08because layla was like hey i quit my job
30:10for this so you know can we like still
30:11do the thing you said you were going to
30:12do
30:13and so we we realized that okay i'm
30:15going all in on the gym launch business
30:17um
30:18and i went to go launch this gym in san
30:20diego and this guy had reached out to me
30:21because he'd like followed me because i
30:22made some content about jim's stuff not
30:24much um and he said i've got a newborn
30:26kid i really need this money like let me
30:29sell for this this gym and he was like
30:31it just so happened to be
30:3315 minutes from his house like igem's
30:35all over the nation that i was doing one
30:36at a time and he happened to reach out
30:37to me and it happened to me next to his
30:38house so i figured
30:40all right maybe someone's looking out
30:41for this guy okay cool sell it it'll
30:42give me time to get all the materials
30:43ready so we can launch way more gyms
30:45next month
30:46he crushed it does a hundred thousand
30:48dollars in sales which was like a big
30:49launch
30:50um
30:51and i owed him twenty two thousand
30:53dollars in commissions
30:55after layla's launch and paying all the
30:57refunds and everything i had twenty
30:58three thousand dollars okay
31:00so i paid him the 22
31:02and the hundred thousand dollars that i
31:03made from the sales never came
31:05because the processor because of the
31:07refunds from the gym before
31:09uh shut us down and said there's a
31:10regular activity there's too many
31:11complaints blah blah which is reason why
31:13i shut a gym down right after like right
31:15and so they said we're gonna hold on to
31:17this hundred grand and so i now had a
31:18thousand dollars total
31:20during this period of time before i knew
31:22that we weren't gonna be able to get the
31:23money laila had told her six best
31:24friends to quit their jobs
31:27and join us at gym launch
31:30and so i find out on christmas eve at
31:32layla's parents house where i'm meeting
31:34them for the first time that i had won
31:36lost all my money
31:38two
31:39all of her friends had quit their jobs
31:41and are going to start selling for us
31:42the next on the 26th so two days later
31:46and
31:47on that 26th
31:493 300 a day was gonna start getting
31:50debited for my account because i didn't
31:52have the money that was supposed to be
31:53coming for that hundred grand
31:55and so i sat layla down it was like
31:57i pulled the credit card out and i was
31:58like i have a hundred thousand dollar
32:00limit on this card it was from all my
32:01gyms so it was like my master like
32:02working capital card
32:04i was like but i want you to know that
32:05like you can leave now and we're cool
32:08like i won't judge you like
32:10carte blanche you can leave and we're
32:13i was like this has a very low
32:15likelihood of working this is probably
32:16like a 10 to 15 shot that this actually
32:19works
32:20and that's when she said i'll um
32:25she's like i'd sleep with you under a
32:26bridge if it came to that and so that
32:27was one that was when i knew that like
32:29we were like she was it she was the one
32:31she's with me you know ride or die like
32:33she's the girl i'm gonna marry yeah
32:35and so um what a moment yeah it was it
32:37was great
32:38it was actually honestly i felt numb at
32:40the time
32:41from everything but later i can
32:43appreciate it um
32:45so we started to start the account
32:46starting debited 3300 today
32:48here's the catcher
32:50we started doing you know uh
32:52what was it we were doing we did like
32:54200 grand the first month so that's 7
32:56000 ish a day
32:58this is this is where it gets hairy
33:00i didn't have a processor
33:02so we're getting 7000 a day in contracts
33:04that i cannot process
33:06and the money is still coming out right
33:08right
33:09the end of the month i get one processor
33:11turned on after calling every single
33:12favorite i was calling friends up like
33:13hey can you process contracts i'll give
33:15you 10 just send me the money and
33:17they're like this sounds really sketchy
33:19no
33:19and they were right to not do that
33:22yeah and um so
33:25processor gets turned on at the end of
33:26the month but they said hey it's a new
33:28business so we'll give you a 50 000
33:29limit i was like dude i need 200 grand
33:30like yesterday they're like 50 000 is
33:32the limit so i called the guy up and he
33:34said well it's per month so and i got it
33:36like two days before the end of the
33:37month he said so you can run 50 grand
33:39today and in two days you can run 50
33:41grand again
33:42so i was like okay and that's what i did
33:44i ran 50 grand and two days after around
33:4650 grand which was enough to cover the
33:48hundred thousand dollars the 3 300 a day
33:49that was coming out on the card
33:51so i made
33:52literally i made like a hundred dollars
33:54in profit
33:55that first month and then he got two
33:58more turned on so i got to got up to
33:59like 180 or so and then he doubled the
34:0250 to 100 so we had 200 000 in limit the
34:03next month so we hit the full 200 the
34:06next month but we're still billing from
34:07[ __ ] from last month while still making
34:08and still playing catch up but we made
34:10like a little bit of profit that month
34:12so i was like okay i think i'm in the
34:13clear i think we might have
34:15but wait there's more and so now we're
34:18going into march so this is january is
34:19the first full month december uh
34:23january's first one february is is when
34:25we're started we're playing catch up on
34:26processing march march comes
34:28and
34:30i just wrote the story out of my books
34:31all the details are fresh
34:32um we we get the
34:36call
34:37layla comes up to me i'm like thinking
34:38life is good i think we're out of the
34:40out of everything and she's like she's
34:42like white and i was like
34:44what's going on
34:46and she turned her laptop to me and
34:48there was just
34:49just scrolls of of negative transactions
34:53on our account and i was like what am i
34:54looking at she was like these are all
34:56refunds
34:57i was like
34:58again how we already did all the refunds
35:00from that gym like we can't they can't
35:01refund again like we already gave all
35:02the because i thought it was from the
35:03gym from like way back when we that i
35:04had to shut down
35:06she was like no one of the gym owners
35:07that we launched
35:08got up on his chair and told everyone to
35:10refund he just said go home i can't deal
35:12with all this because we had taken from
35:1370 to 270 clients in a month it was
35:16three i mean it was just it was just
35:17unfought the amount of infrastructure
35:19that's required to handle that which i
35:20hadn't thought through i was like
35:22you want a plus sales and marketing we
35:23will sell we will sell your gem we'll
35:25blow your gym up yeah
35:27and so
35:28that's that's what we did and then he
35:29refunded everything yeah
35:31and
35:32um
35:33unbelievable it was it so that just blew
35:36all the profit from the the month before
35:38and uh that was horrible um but then i
35:41was like okay
35:42one-off circumstance
35:44happens not a big deal like we'll get
35:46through it we'll just do more launches
35:47it's fine
35:49two weeks later
35:50she comes back again and she's like it's
35:52happening again i was like what are you
35:53talking about she's like the refund
35:54thing that's like he can't refund like
35:55we no one can refund like we already
35:57gave all the money back what do they
35:58want and um she said no two gyms uh told
36:02the clients to refund and then buy the
36:04same services from them for half price
36:07since we had left after selling so it's
36:09like someone comes in we sell them a
36:10membership you know for the way we did
36:12it we do a six-week program for like
36:14five or six hundred bucks they would pay
36:16for it we'd keep that money for the
36:17marketing sales hotel rental car
36:19everything ad spend commissions that's
36:21what we'd keep and whatever was left was
36:22the profit right
36:23after that that gym got all those
36:26customers for free to convert yeah so
36:27it's like you got really yeah you got
36:29really high qualified customers because
36:30these aren't trial customers they're
36:32paying you know 600 bucks to be there so
36:33like they care they'll show up they'll
36:35follow instructions and you should if
36:36you're doing a ride convert 70 on the
36:38back end
36:39so like you just got to wait you got to
36:40provide fulfillment for six weeks and
36:42most gyms have fixed costs not a lot of
36:43variable costs and so they didn't really
36:45need to staff up that much
36:47um
36:48not not a ton right to handle that
36:51and and so these guys are just like you
36:54know would be cooler is if we just told
36:56them all to refund and then we got half
36:57the money right and then that gives them
36:58a reason and it's really unethical yeah
37:00and they had the relationship with the
37:02clients i didn't but i held the bag for
37:03the processing
37:05so
37:06anyways they uh
37:08they they did that and that's when we
37:10had 150 000 in refunds and again i have
37:12no money um wow and so
37:15it was like this impossible
37:18situation where i looked at layla and i
37:19was like okay if you fly out and i fly
37:21out we can both do a hundred thousand
37:23and we can make sure the gyms don't do
37:24anything stupid then we can cover the
37:26150.
37:27and i just remember this other thing
37:29that she said to me which is like alex
37:31like
37:32we can't sell our way out of this like
37:34if we do that we're just going to create
37:36more like there's going to be more
37:37refunds like the amount of refunds
37:38that's going to keep going up
37:40and so i didn't i really didn't know
37:42what to do um and so at that point um
37:45she had this little side business
37:46because she still
37:47like she still wasn't sure how things
37:49were gonna work out so she was doing
37:50like three or four thousand a month from
37:51all her personal training clients that
37:52she transitioned online
37:54and as i'm trying to like think of every
37:56possible idea under the sun including
37:58like me being a prostitute it didn't
37:59matter i just was like whatever i can
38:00make to get 150 grand yeah i didn't i
38:02mean but it was it wasn't even 150 grand
38:04in revenue it'd be 100 figuring a profit
38:05that i had to come up with otherwise her
38:07friends weren't gonna get paid right
38:09and so
38:10you can feel the stress and so
38:12and so i um i so i set her down i was
38:15like wait so three four thousand one
38:16that's what's your cost in that she was
38:17like nothing it's like
38:20okay
38:21what if we blow your business up forget
38:23my business clearly i suck it's like
38:25what if we just blow you up
38:27um she's like really i was like yeah
38:28like and so
38:30she said yes and i spent i pretty much
38:32every weekend moment after that writing
38:33the best sales copy of my entire life
38:35writing an amazing ad campaign and
38:37launched everything within like 48 hours
38:39and then within a few days we were doing
38:41um a thousand bucks a day of just her
38:43selling over the phone with no
38:44fulfillment it was just like online
38:46programs for her weight loss program
38:48and i was like this could work because
38:51if i get the eight sales guys that we
38:52had at the time to come not have to
38:54travel anymore they'd all do a thousand
38:55bucks a day we did eight thousand a day
38:56after commissions we'd have about 150
38:58grand yeah without the overhead and all
39:00that right yeah exactly and i was like
39:01and no jim owner no one's going to
39:02refund because no one's telling them to
39:04refund and so
39:06um that was the plan and so
39:09i told her the plan she was good with it
39:10so we had eight gyms that were supposed
39:11to launch next month so i called those
39:13guys up and i was like hey we're not
39:14doing it anymore
39:15change the direction whatever
39:17and the first guy tells me this long
39:18story about how his friend had referred
39:20him and that we had saved his friends
39:22jim and how um he was going to lose his
39:25house and that he had refinanced
39:27everything he'd maxed out all of his
39:27cards he'd quit his job spent two years
39:29not making any money for the gym and
39:31that he needed this sob story okay yeah
39:33and i said cool not really my problem
39:35cause like everything that happened at
39:36this point i was like my level of give a
39:38[ __ ] was very low uh
39:40so
39:41and so i said sorry man he's like can
39:43you can you at least show me what you
39:45did at my friend's place and i'll just
39:46do it try and do it myself
39:48and
39:49at this point i needed money right and
39:51so uh i was like
39:54maybe
39:55um but i also didn't want to go create
39:57this whole thing because i knew the
39:57value of focus i'd learned that lesson
39:59at this point um and so
40:02i said fine i'll show you how to do it
40:03but i'm not gonna fly out there to save
40:04your if you can't sell and he said no
40:06that's fine it's fine and so he said how
40:07much and at the time i picked the
40:09highest number i could possibly think of
40:10because i thought i wanted him to say no
40:12so i could move on with my life yeah
40:13what's your ip worth yeah yeah and so i
40:15said six thousand dollars no mind you
40:17this is the student was doing a hundred
40:18thousand dollars in every single game we
40:20launched in a month
40:21and um he's like deal
40:23and i i still remember i looked at the
40:25phone and i was like holy [ __ ]
40:27i i
40:29i kept and then i just like cool what
40:30card you want to use
40:32and uh i wrote it down on a napkin and
40:34then you know finished the phone call i
40:35went over to layla and i was like
40:37holy [ __ ] i was like this guy just paid
40:39six thousand dollars for like all of our
40:41like sales scripts and all the stuff
40:42yeah how soon did you realize you left a
40:44ton of money on the table
40:46well this this was the moment
40:49and so and so i i was like i think
40:53i think there's something here and so i
40:54went and called the rest of the guys
40:56that were supposed to launch the next
40:57month or seven more guys
40:59and and you know next guy how much eight
41:01grand next time how much 10 grand next
41:03and then i did 60 000 in sales that day
41:05yeah seeing how elastic it was yeah and
41:07there's yeah and i saw at 60 grand in
41:10one day
41:11and
41:13it was i mean it was a day it changed my
41:14life and so that's when
41:16i i was like i think we're still in the
41:18gym business i think we're just doing it
41:19wrong and she's like so we're not doing
41:20the weight loss thing i was like guess
41:21not i think we're going to do this she's
41:23like well how are we going to get new
41:24customers like well we don't worry about
41:25that yet because
41:26i'm going to call the 30 something other
41:28gyms that we did the launches for and be
41:29like hey remember how i filled your gym
41:30up
41:31want to see how i did it
41:33and within the next month
41:35i think i did
41:36uh like four like
41:38i don't remember the cash collected um i
41:40think we collected 200 000 in cash but
41:42we ended up doing like four five hundred
41:44thousand dollars in sales so let me ask
41:45you more about this system
41:48was it like written down somewhere yeah
41:50it was my whole gym opening system it's
41:52like how i would do these launches did
41:53you have videos in like a module okay
41:55watch step one two three so so the way
41:57that i had structured this the the old
41:59gym launch version is we would fly out
42:00to do these turnarounds all right i have
42:01more questions about this oh sorry well
42:03i want to ask you because
42:05i'm sure that there's a lot of people
42:06who want to to
42:08create modules or you know learning
42:09modules or teaching modules whether they
42:11are
42:12doing it in-house for them people or
42:13they want to learn or maybe create their
42:15own like courses are a big thing right
42:17um but but so like were these
42:20underproduced well produced overproduced
42:23like the videos was it like a mixture of
42:26both okay yeah because i had hired a guy
42:28to do like really professional videos
42:29when i did the original launch like the
42:30old school one that walked the gym
42:32owners through like here's how to
42:33service these customers here's how to do
42:35nutrition consults here's how to sell
42:36supplements here's how to sell the
42:37membership on the backend and those are
42:38all like really nicely done professional
42:40videos and so i had
42:42everything there already for the back
42:44end
42:45the sales training i had already trained
42:47my sales guys with so that training
42:49already existed the scripting and that
42:50sales training was brutal and [ __ ]
42:52awesome yeah still like it's interesting
42:55because when you make a training with
42:56the intention of like someone has to go
42:58through this and sell [ __ ] on the other
42:59side and it's my money on the line it's
43:01different when you try and make a course
43:02on sales
43:04right because people try and make a
43:05course on sales and justify the cost
43:06that they charge someone for it mine was
43:08an hour-long training that taught
43:09someone how to [ __ ] close
43:11and it was this particular product at
43:13this price point for the gym so it was
43:14super specific selling right here's how
43:16you set the chairs up here's how the
43:17office needs to look when they walk in
43:18the door this is the joke you make
43:19that's how you do the tour when they sit
43:20down make sure they set up on the weight
43:22make sure they look at the weight they
43:23cry they buy make sure they sit like you
43:25know you do the whole thing right and it
43:26was all methodical strategic i'd done
43:29four thousand of these like i knew like
43:31we know this conversation i could still
43:32do it
43:33still
43:35and um and so as all that was stuff was
43:37documents the only thing that wasn't
43:38documented was just the ads and the
43:39landing pages i said to show how to
43:41place them yeah so i all i had to build
43:43was just that and we're just talking
43:44about facebook ads or google ads yep
43:46there's google instagram i'm sorry
43:47facebook instagram yep
43:49and we already had the ads they didn't
43:50even make them i was like this is the ad
43:52and they would use my video because i
43:53knew my videos worked so it's just like
43:54boom post this goes to this page which
43:56is a copy paste of the page that i
43:57already made change the name of the city
43:59right like that's it i was like and when
44:01they like here's how you work the leads
44:02which was the sales training the guys
44:04had here's how you sell them sales
44:05training the guy's head and then the
44:06back end they already had the training
44:07for it it was proven it was already
44:08there i just didn't have the ads part
44:09like documented so i documented that and
44:12um i sent it out i called the other guys
44:15we crushed it and then
44:16and then and then
44:18the average gym that of those first like
44:2030 or 40 that bought um did 30 000 in
44:23additional collected cash not membership
44:26not like contract value like cash
44:27collect in their first 30 days
44:29so you're a hero
44:31overnight they're just like yeah
44:33overnight success
44:35and then um and then i mean as soon as
44:37that happened they're like what else do
44:38you have and i was like well glad you
44:40asked you know i have i have my
44:41three-year licensing where i'll give you
44:43all the rest of the things that i use to
44:44run run and scale my gyms
44:46and so that was that became gym legacy
44:48which is the back end of the gym launch
44:49which was the two programs that we had
44:50front end back end
44:52which fundamentally was actually exactly
44:53how i did weight loss programs we had
44:54front end and back and we have a defined
44:55end program we sell in a continuity same
44:57process
44:58just they were just added zeros that's
45:00all it was um and there was no the cost
45:02of goods is significantly lower because
45:04it's licensing you know licensing
45:05materials licensing ads licensing pages
45:07it's not you know yeah and and if i can
45:09just point out what i'm hearing too is
45:11you got rid of partners yeah right
45:15i'm not against them now i i had to
45:17learn
45:18i had to learn how to do business on my
45:19own
45:20in order to learn how to partner later
45:24yeah but i also think you know
45:25self-awareness is key yeah like
45:27sometimes
45:29uh you know nadal is a great tennis
45:31player uh he doesn't play devils yeah
45:34that i know of
45:35right he's a solo player for a reason or
45:37you know and we had russell wilson on
45:39this show who's the quarterback now of
45:41the denver broncos from the seahawks you
45:43know and russ is a team player so if
45:45you're a team player you know and that
45:47works for you that could be fine
45:49in your model it wasn't working it was
45:50not and and you weren't getting the hint
45:52until
45:53you finally did yeah i think layla was a
45:56strong nudge there
45:58yeah
45:59yeah
46:00but those are those are super good
46:02lessons for people who may not have to
46:04make them the hard way that's
46:06yeah if you're going and this is because
46:07i get questions like this all the time
46:08for newer entrepreneurs it's like you
46:10know either they're in a partnership and
46:12this is how most people partner hey we
46:14like each other and we kind of like the
46:15subject let's get into business together
46:17terrible reason to get into business
46:18together but like y combinator we were
46:20talking this off offline two seconds ago
46:22um
46:24well combinator's shown that three
46:25partners three founders is actually like
46:27the like the sweet spot like three to
46:29four ish actually works the best for
46:31building huge companies now that's huge
46:32companies not everybody's trying to
46:34build a huge company and the founders
46:36that they have have very specific roles
46:37and functions so you've got the guy
46:39who's the you know head of coding and
46:41then you've got the promoter who's head
46:42of sales marketing then you have the
46:43operator typically which will be kind of
46:45the third leg of the stool which is kind
46:46of the minimum three roles that exist
46:49and so if you are going to partner with
46:50people they have to have a clear role of
46:51responsibility that is different than
46:53yours complementary skills 100 so
46:56complimentary skills aligned values and
46:59if you are partnering the splits don't
47:01need to be even and that's often a
47:03common thing which is like okay there's
47:04three of us therefore we should have
47:05thirds that isn't necessarily
47:08true you know like some people might be
47:10bringing a bigger network or something
47:11you know other things to the table that
47:13that tip the scales and and that's you
47:15know that's part of business but
47:17all that to say i'm not against
47:18partnerships i at that time did not
47:20understand how to partner and therefore
47:22was only able to successfully have
47:23business when it was just me fair enough
47:27incredible i mean there's just so much
47:29there
47:33let's pivot a little bit i want to get
47:35granular in some of this advice because
47:37you know again
47:39when i started this show it was i was
47:41sailing right into the perfect storm of
47:44the recession
47:46i got my ass handed to me and then had
47:48to you know climb back out of the
47:51pit that i've jumped into basically
47:54and and i wanted this to be the solution
47:56for me and it turned out to be
47:58exactly what i needed but also for a lot
48:00of other people
48:03what's what's a deeply held belief
48:05that you had
48:07maybe three to five years ago
48:09and it could be business or personal but
48:11like something you you really held to be
48:13true that you no longer believe
48:16like do you still trust people the way
48:18that you did sounds like you you
48:21i mean i know nothing about psychology
48:24uh except through my own research and
48:27therapy and all that it sounds like you
48:28had a very co-dependent relationship
48:30especially with father figure in your
48:32life right so but so naturally you had
48:34this very trusting
48:37character
48:39did that change over time do you still
48:41have uh that strong trust so i think
48:44that
48:45a lot of the revelations i think came in
48:46retrospect more than were active
48:48decisions i'd say the vast majority of
48:50the things where i i made mistakes and
48:51stumbled into the right way and then
48:53tried to think like what was different
48:54than last time
48:55um and i think one of them that you
48:58touched on is trust but a different
48:59version of that is like the gift taken
49:00relationships and i think that i was i'm
49:04i think i am naturally like if there's a
49:06on a scale from one to ten like you know
49:08one being the taker and ten being a
49:10giver i'm i'm naturally a ten
49:13um
49:14and tens get
49:16run all over
49:18ones don't get opportunities because
49:20they're always just trying to take and
49:21people just get tired of them
49:23the vast majority of people are tit for
49:25tatters so you give i give which is like
49:28the fives which is the vast majority of
49:30the population it's transactional
49:32and i think that what happened over my
49:34career is that i shifted from a 10 to
49:37like an eight
49:38um
49:39and
49:41they've actually done a lot of game
49:42theory research on this and found that
49:43like eight out of ten is the is the
49:45proper amount of give take for optimal
49:47outcome really okay so to be clear
49:50you're saying
49:51you used to be a giver
49:53ten out of ten and now you've ratcheted
49:55that down to eight out of ten and that's
49:56about the right range you think yeah you
49:58just have to know
50:00when it is your turn to take
50:02right and also i would guess because i
50:04can speak from that same experience a
50:06very relatable i'm i'm sort of right
50:07there with you and i was going to ask
50:09this just for personal selfish reasons
50:10too sometimes i feel
50:13like
50:14i'm always the one giving
50:16but then i remember
50:18that
50:20you know if you're truly giving without
50:22the expectation of return then i
50:24shouldn't have those feelings right
50:26because you know yeah you give it and
50:28then if it's without expectations and
50:30it's not transactional then yeah you
50:32shouldn't care
50:33you know it's interesting because like i
50:35i spent a lot of time defining words um
50:37and so i think there's like it's it's
50:39worth looking into like what the word
50:41give means
50:42um because you know what is the
50:44difference between giving and donating
50:47right one would be
50:49one has no expectation of return i would
50:51imagine with donation giving might not
50:53necessarily have no expectation i don't
50:55know like it's like these are the things
50:57that i jam on you know what i mean um so
50:58i don't know i don't i would normally
50:59pull my phone but like let's go look the
51:01word up well i love riffing on this
51:03because um i think it's uh
51:07it depends on the person and it's also
51:10it's all about intention it's the same
51:12reason you know some people give to a
51:14certain charity and they want to be
51:16known for status sure uh or conscience
51:20or maybe it's like uh brownie points in
51:23the life after or maybe it's to feel
51:25good right now because you know maybe
51:26your life is trash and it's like if i do
51:28a little bit of good that'll offset my
51:30feeling there's lots of different you
51:31know
51:33motivations right
51:34um
51:36that's very interesting so
51:38you think that you've changed the most
51:39in the giving category you've ratcheted
51:41it only down to an eight though that's
51:42still good it's oh i mean yeah i mean
51:45you've consumed some of my stuff like
51:46it's still very very very much give give
51:49centric yeah the thing you say in every
51:51video is i have nothing to say yeah so
51:53it's like you know the book's 99 cents
51:55the courses are free like you know at
51:56this point i just i would like and you
51:58know is there selfishness in the giving
52:00sure i feel good you know what i mean it
52:01makes me feel better i do gain status
52:02from doing it like there's plenty like
52:04there's always ways i can pull back to
52:06be you know selfish and i probably would
52:08define it rather than like giving and
52:09taking is i think the from a strategic
52:11perspective
52:13i have now noticed that
52:15it's it's give give give get rather than
52:17give give give take or give give give
52:19ask is probably i think gary's his gift
52:21give you to ask um i do prefer gift give
52:24give get because i think that that is
52:25that that has happened and that might
52:27seem contrary to what i just said about
52:2910 of 10 givers
52:31but i can
52:33i think the 10 out of 10 giving is
52:35giving without understanding boundaries
52:37it's like not holding your own space
52:39yeah it's like you can like i will give
52:41this
52:42and i will give that because i have
52:43agreed that for me this is something
52:45that i'm willing to give and i will give
52:46it you know relentlessly but it's when
52:48you are
52:49when you are allowing other people to
52:51take from you
52:52um things that you were not planning on
52:54giving and then you choose to
52:56rationalize why it's okay right or like
52:58your partnerships you know totally
53:00screwed you and then you know you you
53:02went back for more yeah and i and i and
53:04i just qualifying like
53:06i made like i own those like those were
53:08my mistakes i did not know how to
53:10structure partnerships i did not know
53:12what to look for yeah
53:13you know and they were all lessons for
53:15me so i'm you know i'm grateful for the
53:16them well but and also in your defense
53:19it seems like you have high moral
53:20character you have a
53:22a big heart and you want to give people
53:25a second chance maybe or the benefit of
53:27the doubt at least
53:28tell that story about
53:30the deal you did with someone who you
53:32lent money
53:34and um and and then
53:36you invoiced them or something and it
53:38ended up being the wrong calculation
53:40tell that story yeah so i um
53:42i so i i
53:45in wholesaling uh you try and get a
53:48building under contract right and so
53:50someone had found a really dilapidated
53:52building that they could buy from the
53:53bank uh i think for three million bucks
53:56and so they called me up because they're
53:57like we need three million dollars but
53:58we need it tomorrow yeah the bank of
54:00alex right bank of alex and i tend to
54:01always have a lot of cash for me so i
54:03was like sure
54:04um and they were gonna pay a really good
54:06interest rate which is a hundred
54:06thousand a month as long as they carry
54:08the money which is like 48 a year so i
54:10was like cool i'm in
54:11um and you know from a security
54:13standpoint it was secured against the
54:14building which had already been valued
54:15uh at 5.6 they already had an offer with
54:17earnest money on the tables they'd
54:18already lined up both sides had you done
54:20business with this person before okay so
54:22that's why that was so first brush okay
54:24right
54:25um so they both personally guaranteed it
54:27i was first lean on the on the like this
54:30is stuff you learned over time right i
54:31was first leaning on the property and
54:32they had earnest money down from a new
54:34buyer so like all my sides were more or
54:36less covered took all the risk out of it
54:37for you right no brainer so i wrote the
54:39check
54:40and then the
54:41uh so my real estate lawyer which was
54:43actually a new lawyer i was trying out
54:45um
54:46sent the invoice over uh once they said
54:49hey we've received the funds like we'll
54:51send it to you with the interest
54:52whatever and he had miscalculated the
54:55amount of interest that was supposed
54:57that had accrued because because they
54:58did very well in the sale yeah they did
55:00yeah they did i mean it was a great deal
55:01for them right yeah um you know they
55:03borrow three for you know they i think
55:06carried it for three months ish it's
55:07like three and a half months so they
55:08paid 330 or 350 000 in interest they
55:11sold it for five six on some someone
55:13else's money yeah so they made
55:15two six minus the three hundred so let
55:17me put 2.3 for 90 days work it's not a
55:19bad deal um
55:21so anyways uh we sent the money
55:23and or sorry they sent us the money on
55:25the invoice and uh they were like hey
55:28thought this didn't make sense because
55:30the agreement we had was this and so
55:32we're actually just going to send you
55:34the correct amount which is higher than
55:36what you invoiced us calculation was off
55:37yeah so there was like i think they they
55:39invoiced 280 and it was 330 i think was
55:41the actual numbers and so it was down by
55:4450 grand
55:45and um
55:46i obviously you know
55:49communicated my lawyer that i was
55:50disappointed that he had not thought
55:51through it but i probably should have
55:52looked better too i just didn't think
55:53about it um
55:55and
55:56he his lawyer the guy that sent the
55:58money had advised him to not send the
56:00extra 50 grand he said listen that was
56:02his invoice send him the money and you
56:05know hey he'll make 50 grand extra
56:07but um i'll try not to hit the mic um
56:10he
56:12said you know what like i want to do
56:14deals with alex in the future and this
56:16feels like a very short-sighted move and
56:18so he sent the money and he did end up
56:20getting more goodwill from me from that
56:22move and so
56:24you know he was the one who ended up
56:25saying something to me when he flew out
56:27to like we did like a celebratory
56:29dinner um
56:31he said you know my dad always told me
56:32that
56:33you only get one name
56:35so invest in it accordingly
56:38and i always thought about that i
56:39thought it was a really good line just
56:40like you only get one name like you can
56:41change your companies you can go
56:42bankrupt but like your name stays with
56:44you yeah and so
56:45that can either be an asset or it can be
56:47a liability yeah and why not have it be
56:49a huge brand have brand power in and of
56:52itself
56:53yeah what's that line like integrity is
56:55what you do when no one's looking yeah
56:57right and who knew he you could have
56:59been setting him up i could have right
57:02and then what happened to that lawyer
57:03that you hired oh yeah i mean he's gone
57:05and how about his lawyer he's also good
57:07so i mean that's a super good lesson
57:10about you talk a lot about in your
57:12videos
57:13how you hire people yeah um not based on
57:15skill per se first it's all about
57:18moral characters yeah yeah refresh us on
57:21what those are
57:22so we look at uh i mean for us the
57:24values that we have at acquisition.com
57:26and i think it changes by the type of
57:27company that you that you are um for for
57:30us it's unimpeachable character
57:32sincere candor
57:34and competitive greatness
57:35and so those are the only three things
57:37and we look for them pretty much in that
57:38order so and most people flunk the first
57:41one so we don't have to really look for
57:42the other two um
57:44but when you think about an impeachment
57:45character for for me i like the navy
57:47seals test um that i was told this may
57:49or may not be true but i like the test
57:51either way which was not only like
57:53um you know in in their world it's like
57:55will this guy give me give his life for
57:56me and that's what i'm expecting my my
57:58teammates to do but
58:00bear with me
58:01he said but that's the ticket to entry
58:02to be you know in team six or a navy
58:04seal he said all right to be navy seal
58:06he's like but team six it's do i trust
58:08this guy with my wife when i'm not there
58:10for a long period of time right do i if
58:12i give this guy a huge amount of money
58:14and just say i'll be back for it i'd
58:16like i don't know when but i'll be back
58:18for it yeah we'll be there 10 years
58:19later
58:20and so if you ask those types of
58:22questions like harder questions and the
58:23favorite one that i have from warren
58:24buffett that he got from a holocaust
58:26survivor was
58:28you know during the holocaust
58:30like with this person let me in
58:32and so i think that like those are hard
58:33questions right and i'm not saying that
58:35i'm expecting a teammate but they give
58:36you frames on like how deep someone's
58:37character can go
58:39um and so
58:41we try and we assume that there will be
58:43hardship in business because it is a
58:45hard game and so that is guaranteed and
58:47so it's just a question of when not if
58:49and so we try and run out the risk on
58:52teammates and portfolio companies by
58:54asking ourselves the hard questions
58:56before they are
58:58in urgent need
59:00would the alex now
59:02hire 20 something alex
59:04under the same scrutiny
59:07from
59:08i would i would probably just asked me a
59:11lot of questions so i probably would
59:13have found that it was not
59:16i would have noticed that he probably
59:18saw me as a father figure and was like
59:19this is probably not healthy for this
59:21kid at this point and given the level of
59:23ambition that i think he has i think he
59:25will outgrow the role in a very short
59:27period of time
59:28um i would either have to tie him into
59:30some sort of you know some i don't know
59:32i would have to figure something out or
59:33i would say listen man i think
59:35like why don't we do a one-tier
59:36internship or something like that and
59:37just like go on your own um or i would
59:39probably you know it would just really
59:41depend on what little alex wanted
59:44but that i mean it would just be asking
59:45questions honestly i mean it sounds like
59:47you're saying no that you wouldn't hire
59:48him
59:49it's because i know him
59:52and so i mean i think that you know
59:55some people some people
59:57need to be number one
59:59um
1:00:00and you know we look for that
1:00:02and if if that's a need then i would
1:00:05probably pass
1:00:06right
1:00:10have you been have you ever been wrong
1:00:11about someone's character
1:00:13yeah i mean like now now that you're
1:00:15more 100
1:00:17you know who's you know who's
1:00:18unbelievable layla
1:00:20girl does not miss
1:00:22like i am still more trusting i am still
1:00:24more like you know what he was having a
1:00:26bad day or like you know what like maybe
1:00:28like i still will
1:00:29try it because i think i i empathize a
1:00:31lot with people who are in difficult
1:00:33situations because i have been in them
1:00:34and i understand the difficulty right um
1:00:38layla just doesn't give a [ __ ] um
1:00:40layla just sees through people it's
1:00:42crazy like i mean even even when we like
1:00:44check in with our portfolio companies
1:00:45like this just happened we had a
1:00:47portfolio company recently um we hopped
1:00:49on we do we we check in regularly and
1:00:51whatnot obviously um and the ceo is on
1:00:53we're like anything to report what's new
1:00:55you know he gives normal stuff and we
1:00:57got off the call and she was like he's
1:00:59not telling us something
1:01:01i was like
1:01:02what like you know like i mean it's
1:01:05fine to me right and then lo and behold
1:01:07we like we find out that there was some
1:01:09there was a big problem that they hadn't
1:01:11told us about and it's just like she
1:01:13just like doesn't miss yeah
1:01:15and so i i do lean on her a lot with
1:01:18that stuff so
1:01:19our our single rule of marriage that's
1:01:21helped
1:01:22tremendously has just been if we both
1:01:25don't agree we don't do it
1:01:27yeah whatever it is whether it's an
1:01:28investment it's a hire it's a decision
1:01:31i have overridden her one time
1:01:33and it was uh when i was starting allen
1:01:35the software company which is our third
1:01:37company after we had jim launch prestige
1:01:38labs which our supplement company then
1:01:39we had allen the software company
1:01:42and i really wanted to pursue this
1:01:43opportunity and she
1:01:45didn't think it was smart given the
1:01:47resources and the team we had at times
1:01:48thought they were stretched too thin etc
1:01:51i i kind of bulldozed and was like we're
1:01:52doing this and um and and it and it blew
1:01:55up i mean we were at 1.7 million a month
1:01:57within like six months in that business
1:01:58um so i felt very validated that i had
1:02:01made the right call but on the longer
1:02:03term time horizon she had seen that
1:02:05there were some flaws in the model and
1:02:06some things that i i hadn't foreseen
1:02:09that ended up you know biting us in the
1:02:11ass and so
1:02:12um i go back to what i said originally
1:02:15which is we don't if we both don't agree
1:02:17it goes the other way too it's just i
1:02:18tend to be the us guy
1:02:21yeah that's healthy i actually got the
1:02:22same advice when i got married because
1:02:24you know you
1:02:25you either
1:02:26succeed together or you fail together
1:02:28and and either one can actually be great
1:02:31yeah it's together you're never divided
1:02:33can i ask a personal question
1:02:35um
1:02:37so do you guys have joint bank accounts
1:02:39i gave her my bank accounts two weeks
1:02:40into dating
1:02:42okay
1:02:43so they're completely joined yes
1:02:45and she takes care of the money because
1:02:47she's good at that yeah okay so you
1:02:49don't have separate accounts and you
1:02:50don't even have a login i don't even i
1:02:52don't even know how much money you have
1:02:54i really don't i get one email from our
1:02:56from from her ea every week that just
1:02:59has our balance totals between all of
1:03:01our assets yeah and that's it and i just
1:03:03scroll at the bottom i look at the
1:03:04number and i'm like cool yeah
1:03:06she could she could make it up for all i
1:03:08know i have no idea
1:03:10i could be poor i could be broke and i
1:03:11could just somehow somehow i just like
1:03:13live and my credit card always goes
1:03:14through so i have no idea so i don't
1:03:16think that's true are you are you like
1:03:18the um
1:03:19are you like the
1:03:20the optimist and she's the realist like
1:03:23you're out there you know seeing the
1:03:24vision what's possible and she's like
1:03:25bringing you back down to earth like hey
1:03:27you know let's get real with this yeah
1:03:29depends on the circumstance it depends
1:03:30on what we were talking about so i think
1:03:32the subject matter matters
1:03:34um whether it's people whether it's
1:03:36friends whether it's um a business
1:03:38decision
1:03:40i think i think some of those matter
1:03:41like we tend to but i would say maybe in
1:03:43general i think like with a very broad
1:03:45brush stroke with with exceptions um
1:03:48she tends to be
1:03:49more
1:03:50uh
1:03:52conservative i would say yeah and we
1:03:54always joke like if if it were only
1:03:56laila we would never have any businesses
1:03:58and if it were only alex we'd have too
1:04:00many
1:04:01yeah well that sim that seems you know
1:04:03like complimentary skills the yin yang
1:04:05and i'm guessing also that she doesn't
1:04:07like surprises or uncertainty no and i
1:04:09think we i will say this though i think
1:04:11we now over index to both of those polls
1:04:14more because we know the other person
1:04:16exists so like if layla somehow were hit
1:04:18by a bus tomorrow
1:04:19and i we're taking over all of our
1:04:21affairs i know that i would correct
1:04:23towards the middle i'd be like i want to
1:04:25do this she probably like i have a
1:04:27pretty good gut feel for what she would
1:04:28say yes to but i'll still
1:04:30i'll still push it just again and
1:04:31sometimes i'm surprised i'm like oh you
1:04:33are you do you do think this is good i'm
1:04:34like all right let's do it sometimes i
1:04:36just throw them out there as softballs
1:04:37for like her to swat down so that when i
1:04:39when i uh when i really want one you
1:04:41know i mean i'm like you did say no to
1:04:42all these other ones i was like so i
1:04:43feel like it's time you know
1:04:45i love that i don't see like a little um
1:04:48dialogue bubble like what would layla do
1:04:50you know
1:04:51that runs through your calculations her
1:04:52picker unbelievable like i think we have
1:04:54a very like uh warren buffett charlie
1:04:55munger
1:04:57uh
1:04:58dyna obviously you know we're married
1:04:59but like
1:05:00charlie always says no warren wants to
1:05:02pursue it it's just like i think that's
1:05:03it's very natural to have somebody who's
1:05:05going to try and pursue opportunities
1:05:06and somebody else is like
1:05:08is it core is it does it align with
1:05:10where we're trying to go yeah
1:05:11no i love that story of you know you
1:05:14basically got married for business first
1:05:16and then figured out how to navigate the
1:05:18rest that's super cool yeah we were
1:05:20living together five weeks after we met
1:05:23in motels
1:05:24in one room
1:05:26okay alex here's one for you um you talk
1:05:29about competitive advantage how do you
1:05:31create competitive advantage
1:05:33the easiest is just information like
1:05:36just know more than the other person
1:05:38and and how do you do that i mean aside
1:05:41from
1:05:42it's usually doing more and doing more
1:05:44research it's both things and a lot of
1:05:45times doing more is the research so like
1:05:47if you think about um
1:05:49every business that exists and that's a
1:05:51very broad statement but i think i think
1:05:53i can back it up
1:05:54um
1:05:55they all exist based on information
1:05:57arbitrage one party knows more than the
1:05:58other party so even if you're like i
1:06:00remember i said this and there's a bunch
1:06:02of comments and they were like well i
1:06:04own a cattle ranch how is that
1:06:05information architecture like you know
1:06:07how to farm you know how to raise steer
1:06:09and you sell it to people who do not
1:06:11know how to do that as profitably as you
1:06:12do
1:06:14yeah you know how to run that business
1:06:16and you know how to do it profitably and
1:06:17you sell to people who don't know how to
1:06:18do that and because if they did have all
1:06:20the knowledge you had then they would
1:06:20just do what you're doing and do what
1:06:22they're doing and then they would
1:06:23swallow up the supply chain and that's
1:06:24what vertical integration fundamentally
1:06:26is you eat up all the other aspects of
1:06:27the supply chain for within your
1:06:28vertical
1:06:29well and information arbitrage is an
1:06:31interesting
1:06:32and spot on but also it makes me think
1:06:35um
1:06:38sometimes
1:06:39making it more efficient or time saving
1:06:42is the key maybe you know all the
1:06:43information's i know how to get six-pack
1:06:45abs okay okay i just haven't done it yet
1:06:47yeah
1:06:48right
1:06:49um
1:06:50so i know probably as much as you do
1:06:52about how to get a six-pack or you know
1:06:54or how to you know you know get the guns
1:06:56yeah um
1:06:59but maybe you've got a shortcut or
1:07:02you've got um which would mean i would
1:07:04know more
1:07:05yes
1:07:07yeah
1:07:08you're right but but i say that in terms
1:07:11of information arbitrage between a a
1:07:13buyer and a seller in terms of how to
1:07:15create value that's a different question
1:07:17you know i mean like how do how do i
1:07:18communicate value to a prospect that's
1:07:20you know the entirety of persuasion and
1:07:21all that other stuff but like in terms
1:07:23of like how how do we pursue
1:07:25opportunities um which is a subject that
1:07:26i'm going to write a whole book about um
1:07:28but like opportunity itself which is
1:07:30just like this big word that people like
1:07:31to throw around but like what is
1:07:32opportunity how do you have a good
1:07:33opportunity versus a bad opportunity and
1:07:35so um the number one youtube that i have
1:07:37a video i have on my channel is is i i
1:07:39touch on the topic
1:07:41but i see it as three variables so you
1:07:43have uh the total number of potential
1:07:46units to sell which some people call tam
1:07:48right total decimal market but how many
1:07:49how many units of this widget could i
1:07:51potentially sell number one number two
1:07:54is what is the value to
1:07:57uh cost discrepancy so how much profit
1:07:59can i potentially make solving this
1:08:00particular problem
1:08:02and then number three is what are the
1:08:03competitive dynamics within that
1:08:04marketplace so
1:08:06uh an example that has two of the three
1:08:08would be like what if i wanted to sell
1:08:09cell phone service
1:08:12lots of people need it
1:08:13the how much it cost me to add an
1:08:14additional customer is very very low so
1:08:16very high gross margins but what are the
1:08:18competitive dynamics well there's a lot
1:08:20of really entrenched players it's very
1:08:22hard to get into that right and so when
1:08:24i'm looking at an opportunity i want to
1:08:25see all three now the the difficulty
1:08:28with using those three is that
1:08:30that equation can evolve over time and
1:08:32so if you're starting a business right
1:08:34now you might not have you know sell
1:08:36something that everyone in the world can
1:08:37buy right actually there's probably not
1:08:38many things that everyone in the world
1:08:40can't buy um i was talking to a uh they
1:08:43they sold kangen water it's like a it's
1:08:45like alkaline water yeah and you know i
1:08:47was talking about their tim they're like
1:08:48everybody everybody drinks water i was
1:08:50like yeah but no one's buying a two
1:08:51thousand dollar water machine so the tam
1:08:53isn't everybody it's people who are fufu
1:08:55enough to buy 2000 water machines which
1:08:56is a much smaller of the seven billion
1:08:59people on earth where 80 of them don't
1:09:00have internet
1:09:02i don't think your team is as big as you
1:09:03think it is right and so um but as you
1:09:06get into business you learn more
1:09:09and then you realize that you can expand
1:09:11your market in one way or another and i
1:09:13could get into how the different ways
1:09:14you can expand your market but yeah give
1:09:16us a little taste
1:09:17the one thing i remember from maybe one
1:09:19of the things that you taught me was to
1:09:20think about
1:09:22uh the scalability of folks yeah 100
1:09:25and the scalability comes uh there's the
1:09:27entrepreneur component which is like you
1:09:28know skills traits beliefs which we can
1:09:30not if you want um but then there's the
1:09:33scalability of the of the deliverable
1:09:34which is like how do i create a double
1:09:36deliverable that is more scalable when i
1:09:38if you think about my trajectory
1:09:41i first
1:09:42got in shape
1:09:43that and i had a job right and then i uh
1:09:48started selling fitness services because
1:09:50i was a skill that i learned
1:09:52and then i got other people to do
1:09:54fitness services for me so this is all
1:09:55levels of leverage so like opportunity
1:09:57is just a fancy word for leverage
1:09:59um
1:10:00and then after that i sold licensing
1:10:02which was with with media right so my
1:10:04cost of incremental uh my incremental
1:10:07costs were basically zero right every
1:10:09new customer was very low for me to
1:10:12didn't cost me much to add them right
1:10:13compared to how much money i could make
1:10:14from them and so with the different
1:10:16business you know the different
1:10:17iterations of fundamentally the same
1:10:19skill set i knew how to get people in
1:10:20shape that was the skill set right i
1:10:22added in learning how to market learning
1:10:23how to sell those were things that added
1:10:25value right and that was when we get
1:10:26into the the entrepreneur skills states
1:10:28beliefs like that was from that side but
1:10:30that is why i was able to climb the
1:10:32opportunity ladder and gain more
1:10:33leverage on the opportunity that i was
1:10:34pursuing
1:10:36and with regards to how do you increase
1:10:38your your total adjustable market like
1:10:41so there's four ways to increase it
1:10:42there's five ways to adjust it so um the
1:10:45first one are the same don't worry the
1:10:46fifth one's just the last one so you can
1:10:48go up market which means you're selling
1:10:50to bigger versions of the same thing so
1:10:51let's say i was helping hair salon
1:10:53owners i could help people who have
1:10:55chains of hair salons or i could help
1:10:56franchisors or license orders of hair
1:10:58salons it'd be much a much smaller demo
1:11:00but they'd be much bigger clients it'd
1:11:02be enterprise right i could go down
1:11:04market which would be selling smaller
1:11:06versions which would be like i could i
1:11:07could sell hairstylists right if i want
1:11:09to go down market from there people who
1:11:10aspire to be hair stylists right so it's
1:11:12like a pyramid
1:11:13um
1:11:14so you up market you can go down market
1:11:15you can go adjacent market which is
1:11:16what's similar to hair stylist that
1:11:18probably has similar wants and needs so
1:11:19probably like a lash salon or nail salon
1:11:22or something yeah
1:11:23exactly so that would be an adjacent
1:11:24market
1:11:25or i could go broader so broader is
1:11:27where you take all adjacent markets
1:11:29under one umbrella which would be beauty
1:11:31right so be like i help all beauty tight
1:11:33brick and mortar businesses right that
1:11:34would be going broader and so those are
1:11:36the four ways you can increase the total
1:11:38stressful market of whatever thing that
1:11:39you're serving the fifth is you can go
1:11:41narrower so i say that you can increase
1:11:43it four ways the fifth is you go narrow
1:11:44you get more more specific about the
1:11:46constraints that you apply to the
1:11:47requisites to become a customer the
1:11:49reason that most times
1:11:51with businesses that i take on in the
1:11:53portfolio it's actually the first step
1:11:54we do is we actually narrow it most
1:11:56times and it's because they are they
1:11:58don't even know who they serve and they
1:11:59don't know who they serve best and so
1:12:01when you're starting out
1:12:03one of the best practices you can do
1:12:05um is
1:12:07the fancy word is a common factor
1:12:08analysis but basically what is what are
1:12:09all the best clients we have in common
1:12:11so if we take 100 clients and we look at
1:12:13the top 20 because there's a pareto
1:12:14they're probably responsible for 80 of
1:12:16the revenue anyways we look at that 20
1:12:17we say what do they all have in common
1:12:19and then what if we only sold that
1:12:21amount of people and we sold now the
1:12:23same hundred but they were all of that
1:12:2420 percent right well we would 5x our
1:12:26revenue
1:12:28same operational drag because it's the
1:12:30same size company but we're selling
1:12:32better customers and most people you
1:12:34know i i get on with entrepreneurs all
1:12:36the time and they're like i think i've
1:12:37saturated my market and i'm like all
1:12:39right what's your what are you what's
1:12:40your revenue they're like two million
1:12:41bucks a year i'm like okay
1:12:43well
1:12:44the market you're serving is a 60
1:12:46billion dollar industry and you are
1:12:47making two million dollars a year
1:12:49do you feel like it's like do you feel
1:12:51like like you might be premature or you
1:12:53just don't know how to get more
1:12:54customers
1:12:56they're like well i guess i don't know
1:12:57how to get more questions like that's a
1:12:58problem that's solvable so let's solve
1:13:00that right and so then we can we can we
1:13:01can break it down there's a million ways
1:13:02to get customers so i can break that
1:13:04down too yeah
1:13:06is there a certain type of business or
1:13:08industry that you gravitate to yeah for
1:13:10the acquisition yeah so we work with uh
1:13:13business services consumer services
1:13:15ideally businesses that are e-learning
1:13:18course like i love licensing models so i
1:13:20love
1:13:21um low overhead yeah high cash yeah yeah
1:13:25exactly in margin yep
1:13:26and the problems that those companies
1:13:28typically have and we take them on
1:13:29usually between three and ten million is
1:13:30when we like in top line sales is when
1:13:32we start working with them
1:13:34the problems that they usually have is
1:13:36that it's two founder led it's too
1:13:37personality brand driven they don't have
1:13:39enough customer lifetime value as in
1:13:41they sell something one time and they
1:13:42can't get people to keep buying they
1:13:43can't get people to stick they have high
1:13:45churn but they typically have high cash
1:13:47flow but it's very dependent on usually
1:13:48one or maybe two channels of acquisition
1:13:51and so we will kind of lay out our five
1:13:53year plan to getting them from basically
1:13:54a company that has almost no value to
1:13:56getting to like 30 to 50 maybe 100
1:13:58million dollars in enterprise value
1:14:01and a company that has multiple
1:14:02acquisition streams has an extended ltv
1:14:04the ltv
1:14:05allows us to have all these different
1:14:06acquisition channels but we it depends
1:14:08on the like the order in which we solve
1:14:10them depends on the business
1:14:12did you would you have to pay for the
1:14:13domain acquisition.com was it expensive
1:14:15yeah it was 400 grand okay not that bad
1:14:18actually no i looked at marketing.com
1:14:19it's 5.6
1:14:21million okay i thought about that i told
1:14:23layla i'd send her a proposal i i never
1:14:27email i don't email i don't check email
1:14:28if anyone ever emails me i don't i won't
1:14:29read it so just let me know um
1:14:32and i literally said a proposal i was
1:14:34like so i was thinking um
1:14:36so i price anchored with marketing.com
1:14:39and then i was like we could also get
1:14:40acquisition.com which is 400 grand she's
1:14:42like well that seems much more
1:14:43reasonable because i anchored 5.6 but
1:14:44that was smart um but marketing.com i
1:14:47still sometimes think about because uh i
1:14:49do like that i like that domain but the
1:14:51thing is is the reason i ended up doing
1:14:52acquisition wasn't even for the money is
1:14:54because the type of of of people and
1:14:56portfolio companies that i am looking
1:14:57for use the word acquisition
1:15:00like
1:15:01people who don't know business i don't
1:15:04know but like
1:15:05everyone knows what the word marketing
1:15:07means or thinks they know what the word
1:15:08marketing right it's a little bit more
1:15:10um
1:15:10general right people who are trying to
1:15:12scale their companies talk about cost of
1:15:14acquisition and so it also had the
1:15:16double entendre of we you know acquire
1:15:17minority you know stakes in the
1:15:19companies in addition to helping with
1:15:21acquisition so i kind of like that
1:15:22component though yeah 400 grand i mean
1:15:24it seems like a seal because
1:15:25i think i was like
1:15:27five or six years ago zuckerberg bought
1:15:29fb.com for like 8 million or something
1:15:32like that just like probably also a
1:15:34great deal
1:15:35in retrospect yeah yeah interesting all
1:15:38right i got a couple more zings um
1:15:41i'm telling you i could i could sit uh
1:15:44i could sit for hours
1:15:45um
1:15:46i i think a lot of people want to know
1:15:47this the answer to this next question
1:15:49which is
1:15:50what is the fastest road to financial
1:15:53freedom you talk about everything you're
1:15:54doing on youtube i have nothing to sell
1:15:56i'm doing it to help people who you know
1:15:58are broke yeah you've got
1:16:01uh
1:16:02assuming
1:16:0410 plus million dollars sitting in the
1:16:06bank today maybe thanks to layla closer
1:16:08to 15 i'm guessing
1:16:09oh way more than that
1:16:13in cash
1:16:14way more than that okay
1:16:17and talk about that too like why
1:16:19why because i think everything's really
1:16:21fluffy right now yeah so i mean i i sold
1:16:24three companies last year and a house
1:16:25and two cars so i sold everything last
1:16:27year okay yeah so you're
1:16:29you're looking at what's happening
1:16:31predicting there's inflated pricings i
1:16:33mean a lot of people are really afraid
1:16:34of inflation and i think that's super
1:16:36warranted
1:16:37um
1:16:38i don't know i think it's just like
1:16:40that's a purely like
1:16:42this is like looking at uncle warren
1:16:44right he's got 150 billion in cash
1:16:46sitting right now he's not worried about
1:16:48it
1:16:49i'm like he's seen more cycles than i
1:16:51have right so he's got 25
1:16:54of his entire company value sitting in
1:16:56cash
1:16:57like he's waiting
1:16:59and so
1:17:00and that means i mean to be clear it's
1:17:02not working for you it's not earning i
1:17:04mean it's earning a tiny amount of
1:17:05interest
1:17:06compared to what you could have in
1:17:08stocks or investment properties
1:17:11so a little inflation is not going to
1:17:12kill me um
1:17:15but like when you look at the nasdaq
1:17:16during the crash in whatever 01 or
1:17:18whatever the year was um it dropped by
1:17:2178
1:17:22right so
1:17:23that would be significant it would be
1:17:25significant yes um and so i'm i think i
1:17:28think just given the timing i'm willing
1:17:30to wait a little bit and see what's
1:17:32going on
1:17:33um and i also am very close to a
1:17:34transaction so i'm not gonna like
1:17:35immediately allocate all the money that
1:17:37sounds like a bad idea um and so that is
1:17:39why i have more cash than i probably
1:17:41would normally yeah
1:17:43do you see yourself coming like do you
1:17:45see yourself they talk about this
1:17:46scarcity mindset
1:17:48do you think that's rooted maybe in your
1:17:50family story which is you know your your
1:17:52dad basically had to reinvent himself
1:17:55as the doctor coming over from a
1:17:56different country i think he has
1:17:58scarcity mindset
1:18:00i don't think so he's i mean
1:18:02wasn't that the reason he was worried
1:18:03about you choosing this path is because
1:18:05i don't know if it was scarcity i think
1:18:06it was fear i don't think they're
1:18:07necessarily the same thing fear of
1:18:08losing anything right like fear of not
1:18:10being able to provide or of not being
1:18:12success i mean i think my dad was afraid
1:18:14of what me being a failure would reflect
1:18:15on him i don't think he had anything to
1:18:16do with scarcity i think it just like he
1:18:18was afraid that it would look bad on him
1:18:20gotcha
1:18:21so then back to the quickest road to
1:18:23financial freedom mm-hmm
1:18:26i think it i think
1:18:27i mean the first answer that came like
1:18:29the bullet like the quick answer was
1:18:31knowing thyself right which is
1:18:33a lot of people because right now
1:18:34entrepreneurship's cool it won't be cool
1:18:37in a few years when everyone loses
1:18:38everything
1:18:40and so that'll probably probably
1:18:42calibrate a little bit
1:18:43um
1:18:44and so i think it's just it's just the
1:18:46one thing that you can always protect
1:18:47yourself with that and this is something
1:18:49that i have learned from my you know
1:18:51iranian
1:18:52family is you know when when the
1:18:55revolution happened in iran
1:18:58we talk about legacy
1:19:01lands buildings houses bank accounts
1:19:03government says those are ours now
1:19:05that's it there's your legacy
1:19:07gone
1:19:08that's why i'm like and people were like
1:19:10i want to build a legacy i'm like u.s
1:19:11might not even be the superpower in 500
1:19:13years
1:19:14your kids your kids might be in in
1:19:17bangladesh who knows india might be the
1:19:18hot spot 500 no one knows right
1:19:21and so that was a touch on legacy but
1:19:24skills are the only thing that will
1:19:26always appreciate in time and
1:19:28work in compound
1:19:30compound in concert so when they work
1:19:32together if you know how to do math then
1:19:34you can learn how to do accounting if
1:19:35you learn how to do accounting you can
1:19:36learn how to do tax work learn how to do
1:19:37tax work and fair how insurance works
1:19:38for your insurance works then you all of
1:19:39a sudden you're a cfo and you can
1:19:40prepare companies for sale like the
1:19:42skills stack on top of each other
1:19:44specialized skills
1:19:46are valuable
1:19:47independent of the currency or the
1:19:49economic climate and so if you are good
1:19:51you will always have a place to provide
1:19:53value because people want good stuff
1:19:55prices may vary currencies may vary but
1:19:57people will want the things you have if
1:19:59you are good
1:20:00and the only way to get good is to work
1:20:02and so i think that a lot of people
1:20:04spend a lot of their time
1:20:06in paralysis trying to figure out what
1:20:07the quote ideal opportunity would be
1:20:10when you won't know what the ideal
1:20:12opportunity is because you don't have a
1:20:13baseline and i believe that research is
1:20:15done through doing
1:20:17and you learn a lot more by doing stuff
1:20:19in action and then you will gain the
1:20:20insights of where the opportunities lie
1:20:22which is why y combinator comes up again
1:20:25what they look for in past founders one
1:20:27of their criteria for successful
1:20:29business is past experience in the
1:20:30industry so and that can be i just wrote
1:20:34a tiny blurb about this in the book that
1:20:35i'm writing
1:20:36that can be tangential like if your dad
1:20:38owned a mechanic shop or was a mechanic
1:20:40you probably know a lot more about cars
1:20:41than you then like you to you it seems
1:20:43obvious but like i don't know anything
1:20:45about cars nothing nor do i really have
1:20:48the interest
1:20:48but like if you wanted to get in the
1:20:50space you probably have some level of
1:20:52knowledge some people look at just the
1:20:54whole world and they're like
1:20:55i don't know anything but this is maybe
1:20:56a good like but i think it's better to
1:20:58have some level because usually we have
1:21:00learned stuff in our lives whether we
1:21:01like it or not and starting in the in in
1:21:04every industry
1:21:06that your parents your cousins you
1:21:08worked in there was massive opportunity
1:21:10it just depends on how you structure it
1:21:12right so like let's say my first job was
1:21:15i was a blender tender at smoothie king
1:21:17first job i got
1:21:19blender tending not a very good
1:21:21opportunity right i'm probably not gonna
1:21:22scale that
1:21:24managing there probably not either
1:21:27owning the owning the the location a
1:21:29little bit more leverage because now i
1:21:30have leverage on labor right
1:21:32owning the franchise
1:21:34much more
1:21:35right and so like
1:21:37all industries if you go high enough up
1:21:39and this is the rule of thumb for anyone
1:21:40if you want to see where where
1:21:42opportunity exists look at the
1:21:44businesses that have been here the
1:21:45longest
1:21:46because they make tons of money the only
1:21:48reason they would exist is because they
1:21:49can they can exist during downturns the
1:21:50only way you can exist during downturn
1:21:51is you make tons of profits all the time
1:21:53so that you can weather it like jp
1:21:55morgan's been here for longer than
1:21:57anybody's been alive
1:21:58right some of the big insurance
1:21:59companies
1:22:01why is insurance are profitable because
1:22:02you pay them for nothing right
1:22:05like pay hundreds of i mean depends on
1:22:07what like you pay thousands and
1:22:08thousands thousands a year for something
1:22:10that may never happen and they just know
1:22:12how to appropriately value risk
1:22:14assess risk excuse me and so wonderful
1:22:17business right insurance um and so the
1:22:20the point is is like i've now learned to
1:22:22see this as like when i see big
1:22:23businesses the bigger the business the
1:22:25more i realize that there's probably a
1:22:27very high gross margin opportunity so
1:22:28you look at the biggest companies on the
1:22:30stock market look at what they're doing
1:22:32the base unit that they're selling
1:22:33typically has tremendous like the
1:22:35biggest company in the world right now
1:22:36in terms of profit is like exxon
1:22:39that's number one in terms of net free
1:22:41cash flow that's created and they're
1:22:42crazy like people are like facebook no
1:22:44it's excellent why because they drill
1:22:45water out of the ground and they sell it
1:22:47for however many hundred dollars per
1:22:49right it's not water it's oil but it
1:22:51works the same way right and so and
1:22:53that's a massive over generalization but
1:22:55like you get the idea and so facebook
1:22:57sells eyeballs which costs them
1:22:59basically nothing google sells eyeballs
1:23:00that cost them basically nothing and so
1:23:02all of these types of businesses and
1:23:03this is where people get into the ethics
1:23:05around capitalism and whatnot but like
1:23:07you sell for what the market values it
1:23:08at period and your goal as a business is
1:23:11to drive your costs down as much as you
1:23:12can right as long as you're still
1:23:14long-term greedy which is if you drive
1:23:15them too low or you don't pay people
1:23:17long enough you introduce new levels of
1:23:19risk which then long term you actually
1:23:20lose money so that's when you get into
1:23:22the long term short term like ceo ship
1:23:24of publicly traded companies and stuff
1:23:25which we don't need into but like if you
1:23:27if you were to only own the company and
1:23:29you could not ever exit
1:23:30and you made your decisions with
1:23:32long-term greed in mind then you usually
1:23:34make the right calls and i'll say one
1:23:36last thing about the how to how to get
1:23:38freedom
1:23:40biggest mistake that i see young people
1:23:42or people who are young in the game
1:23:43making is that they want to become
1:23:45millionaires in 90 days
1:23:47and when most times
1:23:48you could guarantee that you could
1:23:50become a millionaire in a decade
1:23:52but you have to be willing to not be a
1:23:54millionaire
1:23:55for nine of those 10 years
1:23:57and if i had everyone signed a contract
1:23:59that said that when they were 20 they
1:24:00could all be millionaires when they're
1:24:0130.
1:24:03but no one's willing to do that and so
1:24:04what happens is for the rest of their
1:24:06lives they keep chasing the shiny object
1:24:08over and over again and keep battling
1:24:10the same boss and losing
1:24:12so you're talking about taking a
1:24:14thousand dollar paycheck and taking
1:24:17300 of it
1:24:19and putting it into savings and living
1:24:21on less
1:24:22living under your means yeah for nine
1:24:24years and that compounds and that you
1:24:26know i mean there's the investment side
1:24:28and i i'm not i'm not uh despite having
1:24:30a high net worth i'm not an uber
1:24:32investor i've made my money with
1:24:33businesses i haven't made my money
1:24:34investing
1:24:36um and so for people who are starting
1:24:38out
1:24:39the know thy self piece is am i going to
1:24:41be somebody who has entrepreneurial
1:24:42tendencies and could potentially own a
1:24:44business business ownership is the best
1:24:46way
1:24:47to create wealth it's also the best way
1:24:48to lose wealth
1:24:50so which i hopefully illustrated at the
1:24:51beginning of this
1:24:53and so it's high risk it's high reward
1:24:55and so yes it is the way to it is the
1:24:58way to the most wealth it may not
1:25:00necessarily be the way to the fastest
1:25:02wealth so like if you're like i think
1:25:04most most guys who have entrepreneurial
1:25:06tendencies could could make 200 000 a
1:25:09year 300 000 a year becoming excellent
1:25:12at sales
1:25:13like if you just learn that skill and
1:25:14that skill translates to all aspects of
1:25:16life right um anyone who's in most
1:25:18people who are in business know how to
1:25:19sell at some level they know how to sell
1:25:21investors they know how to sell their
1:25:22teams they know how to sell someone to
1:25:24recruit to bring on like you have to
1:25:25sell
1:25:26and so
1:25:27um
1:25:28i think for most people gaining that i
1:25:30think i think those initial jobs are
1:25:32undervalued um for your ability to learn
1:25:35and so a lot of guys are just looking
1:25:37for the perfect job when the perfect job
1:25:39is the assembly of maybe three or four
1:25:41jobs that you have to to gain skill sets
1:25:43in different areas and i think warren
1:25:45buffett said it best that's probably a
1:25:46good wrap up which is
1:25:47whenever you're working you should
1:25:48either be learning or earning
1:25:50so either you're working for the
1:25:51paycheck because it's it's it's material
1:25:54to you or you're working because the the
1:25:57incremental increase in knowledge is
1:25:58material to you but it should check one
1:26:00of those two boxes
1:26:01so this shows called behind the brand
1:26:03um
1:26:05what do you think the definition of a
1:26:06brand is and
1:26:08and how do you build a brand
1:26:11so i see brand as reputation and i see
1:26:14reputation as what people say about you
1:26:15when you're not there
1:26:18so that is your brand i think a lot of
1:26:20people take a lot of time to try and
1:26:21build their brand
1:26:22um but i think you build your brand
1:26:25inside out so what is the alex ramose
1:26:28brand
1:26:29well i mean i would say it's aligned
1:26:30with the values that we have you know
1:26:32it's unimpeachable character sincere
1:26:34candor i try and be honest with
1:26:37as much as i possibly can i try and do
1:26:38the right thing as much as i possibly
1:26:39can
1:26:40um and competitive greatness like
1:26:43like within the rules like we will play
1:26:45and we'll play to win
1:26:47and uh
1:26:49i don't need to know your current net
1:26:50worth i'm sure i'm sure you've shared it
1:26:52uh yeah we're done
1:26:54yeah and so
1:26:56well so do you have your sites on a
1:26:59particular goal are you trying to get to
1:27:02a billion or yeah so i have two i have
1:27:04two
1:27:04two goals on the horizon um the first
1:27:07goal is to get layla on the forbes 100
1:27:09for self-made richest women um
1:27:12so we only have to have 250 million
1:27:13together there so that's that's like the
1:27:16like the immediate goal okay um how far
1:27:18away is that is that 150. i mean like is
1:27:21it a year away is it no i think i think
1:27:24realistically i think we'll get there in
1:27:25like 36 months
1:27:27yeah um yeah i think we'll get there in
1:27:2936 months the
1:27:31the the you know the next goal would be
1:27:34uh would be billion and that's just
1:27:36because like if you look at
1:27:38how behind this is actually kind of
1:27:39funny for anyone who's curious uh the
1:27:41way net worth is broken up is you have
1:27:43uh high net worth very high so high net
1:27:46worth is one to five million in assets
1:27:48investable assets uh
1:27:50very high net worth is five to 30
1:27:53million
1:27:54investable assets and then 30 to a
1:27:56billion
1:27:57big range is ultra high net worth and
1:28:00then above a billion is a billionaire
1:28:01those are the four those are the four
1:28:03net worth categories that exist right
1:28:06and so
1:28:07um
1:28:08that so that for me it's like we're all
1:28:10trying to work now and so you know
1:28:11getting to the billion i guess is the
1:28:12next thing um but all the while we
1:28:15realize that
1:28:16we're doing it for no real reason other
1:28:19than
1:28:22for the love of the game and because
1:28:24the mission of the company and so like
1:28:26if you talk about brand i told you about
1:28:27our values but the mission is to
1:28:29document and share the best practices of
1:28:31building world-class companies and so
1:28:32that's why we make the books that's why
1:28:34we make the youtube that's why we make
1:28:35the courses that's why education will be
1:28:37a core to everything we do
1:28:39because that's the what we're doing also
1:28:41that matters most to us
1:28:43let me ask you a follow-up question
1:28:44which is
1:28:45why is that
1:28:47forbes 100 list important
1:28:49to you for her or is it her goal
1:28:52i think it's more it's definitely
1:28:53michael why is that important to you i
1:28:55think it's cool i think like for really
1:28:57no other like i think it's cool yeah i
1:28:59mean it's a vanity metric sure yeah i
1:29:02think it's a trophy yeah why not be
1:29:03awesome like that'd be cool yeah yeah
1:29:05and i think that's good that's a good
1:29:06enough reason because it'd be cool
1:29:08okay
1:29:09okay
1:29:10um
1:29:12final parting words of advice dan
1:29:15sullivan said something that i really
1:29:16like he said
1:29:17wanting something is reason enough
1:29:21a lot of people trying to ask you to
1:29:22justify why why do you want that why do
1:29:24you want to date that girl why do you
1:29:25want to start that business because i
1:29:26want to like that is the reason i want
1:29:29to
1:29:29yeah or maybe because you can yeah
1:29:34what was the last question you said
1:29:36final parting words of advice oh party
1:29:37words of advice
1:29:39um
1:29:44you're writing this new book maybe let's
1:29:45ramp into it that way so
1:29:47the last book you know you sort of left
1:29:49off
1:29:51where some of your last videos are give
1:29:53us a preview into what the next chapter
1:29:55is what the next book is about
1:29:57so the next book tentatively is titled
1:29:59hundred million dollar leads
1:30:01uh because most people had to fix their
1:30:02offers which was the title of which 100
1:30:04offers was the first book which is what
1:30:06are you actually going to present to a
1:30:07customer in order to get them to give
1:30:08you money
1:30:10the second thing that happens after
1:30:11people have that and people start giving
1:30:12them money is they want more and so they
1:30:13want more people to present to and so
1:30:15they need more leads and so the subject
1:30:17of that the title of the book is leads
1:30:18but the subject of the book is
1:30:20advertising
1:30:21which by the definition is to make known
1:30:23so how to make known
1:30:25so you've made a shift recently which is
1:30:27you know you used to basically buy leads
1:30:30or buy advertisings you know
1:30:32advertising by definition is to spend
1:30:34money to make known right by definition
1:30:37it's to make known right not to spend
1:30:39money just because it's a it's a it's an
1:30:40important point that's fair uh
1:30:43my interpretation is there's two paths
1:30:45there's there's direct marketing or
1:30:47direct response
1:30:49advertising and then there's branding
1:30:51and i think i've heard you say
1:30:54that you're
1:30:55more if you were 80 20 advertising or
1:30:58direct marketing before you are now flip
1:31:00the script and you're more into branding
1:31:03why did you do that and
1:31:04why do you think that's better now
1:31:06it's because you're more established you
1:31:07have the money in the bank you've done
1:31:09the business i think that having the
1:31:10money to make enables more branding
1:31:12right and so i actually think that
1:31:14branding is a higher return on
1:31:16advertising
1:31:18over a longer time horizon me too and so
1:31:21it just takes longer to come to fruition
1:31:23and if you are patient and have money
1:31:26it's by far the superior strategy right
1:31:28but when you don't have money you need
1:31:30to make money today to pay forever for
1:31:32for your advertising in general whatever
1:31:34those efforts are to make known um
1:31:37than
1:31:38than having a direct response so i think
1:31:40i think people do end up shifting over
1:31:41time from like seth godin is famous for
1:31:43being a hardcore direct response
1:31:44marketer and then being all about
1:31:45branding now garyvee was you know more
1:31:47direct response built on built the wine
1:31:49library on ppc from google is all about
1:31:51branding and i feel like i've i've made
1:31:52a similar transition but i think you
1:31:53have to like
1:31:55it's almost like you have to
1:31:57discover it yourself rather than be told
1:31:59it like it doesn't it has to become real
1:32:01for you and then it has to click and so
1:32:03for me i feel like branding has clicked
1:32:04in terms of my understanding of its
1:32:06value overall
1:32:07um it is more difficult to measure
1:32:10but it is absolutely like when you look
1:32:12at louis vuitton and you know bernard
1:32:15who's the who's the owner right he's
1:32:16worth 150 billion or whatever it is now
1:32:20he's the only one who's not a tech guy
1:32:21who's off the top of that list and it's
1:32:22because he's built a brand he's able to
1:32:24sell a purse that cost him a hundred
1:32:25dollars for eight thousand dollars right
1:32:28simply because of a brand
1:32:30and
1:32:31that's like so what is his return on on
1:32:33advertising probably higher than people
1:32:34who are at the hardcore direct response
1:32:36you know funnel you know upsell down
1:32:38syllable like discs you know buy two
1:32:40purses for one off like that's direct
1:32:41response whereas it could just you know
1:32:43brandon could just be a picture of
1:32:45lebron with a with a lebron with a louis
1:32:48vuitton handbag or whatever yeah
1:32:51i mean so your opinion you're you're
1:32:52right aligned with with what i've heard
1:32:55from everyone else and i had this
1:32:56conversation with seth many times
1:32:58yeah and and he said um
1:33:01he said a lot of good things he said
1:33:03well i i said that direct response is
1:33:05sort of like the tortoise and the hare
1:33:06like so it's the the hairs race is the
1:33:09advertising or the direct response and
1:33:11you're right sometimes you need to fill
1:33:13the funnel
1:33:14uh because you got to keep the lights on
1:33:16or you're you know you're bleeding out
1:33:17three thousand dollars a day and you
1:33:19gotta get those leads that convert to
1:33:21sales
1:33:23and then if you can do branding it's
1:33:25like the tortoises race slow and steady
1:33:27but it ends up winning the race and he
1:33:29said
1:33:30you know
1:33:31if
1:33:33if you want to know whether or not you
1:33:34have a brand or not
1:33:37you know people will pay extra a premium
1:33:40for a brand
1:33:41he said if you go into most hotels and
1:33:43you you know don't look at the marquis
1:33:44look at the carpet around the walls
1:33:47if you don't know where you are
1:33:49you can't smell it you can't see it you
1:33:51can't taste it then you don't have a
1:33:53brand you have a logo
1:33:55and a brand is you know he used the
1:33:57example of nike in the store he goes you
1:33:59know if nike builds a hotel
1:34:01you could kind of imagine what that
1:34:02might look like or smell like or feel
1:34:04like
1:34:05and you know the same goes for our
1:34:07personal brands but our personal brands
1:34:09too right if we're building empires like
1:34:11gary is you can imagine what gary's
1:34:14you know
1:34:15next thing could look like or alex's
1:34:18next thing
1:34:19is probably going to have you know
1:34:21arms sleeves cut off so there's room for
1:34:24the arms to go or at least legs are you
1:34:25a leg guy
1:34:26yeah
1:34:27i think so
1:34:28i mean we were just sitting back you
1:34:30know
1:34:31chopping it up
1:34:32reminiscing about the good old days and
1:34:34all that
1:34:35you know tracking my roots

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