Stop Trying To Get Rich. Get Better.
(Alex Hormozi Video Transcript)
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Transcript
Stop trying to get rich. Get better. And, if you get better, getting rich will happen as a consequence.
Getting rich is an outcome; getting better is an input. Most entrepreneurs are focused on the output as the thing, and so they’re scattered in terms of where their focus is because they’re just trying to do everything they can to drive this number up rather than trying to do the thing that creates the wealth.
I see a lot of small business owners circling around, asking the same question, which is figuring out how they’re going to scale, and you’re almost all doing it the wrong way.
John Paul DeJoria said, ‘You don’t want to be in the selling business,’ and everything that I described at this point is very much the selling business. The only way that you can grow that business is by selling more units, by selling more customers, and that’s a very terrible business to be in. That’s also the business that 95% of businesses are in: they’re constantly struggling for leads, constantly trying to figure out where their next customer is coming from.
If this is you, then listen to what I am saying right now.
If your goal to grow your business is to say, ‘Okay, I sell books. Great, I sell books. In order for me to grow my book business, I have to get more people to buy my book and that’s it, period.’ Well, if you do that, you literally have to market and sell for the rest of your entire life, and the only way to grow your business is to advertise more. That’s literally it, the only way to grow.
Unless you’re supremely good at advertising and you learn how to master affiliates, you learn how to master SEO, you learn how to master making content, you learn how to run paid ads, you learn how to do email, you learn how to do outbound, you learn how to do all these things so you can maximize your sales. Unless you do that — and the thing is, and this is what sucks, is that the next month you have to reload all your sales again. You have to start at zero again, and that sucks. That’s how the vast majority of businesses live.
The thing is, it doesn’t have to be that way. You have to look at the back of the business and say, ‘Why are there so many holes in my bucket?’ Pouring more water into the hole-y bucket — everyone understands this conceptually, but we don’t act that way. I say this from experience because, in the earlier part of my career, I only chased revenue and profit. I wanted growth at all costs, but the thing is sometimes the cost of that growth is the long-term growth of the business. You sacrifice the long-term growth so that you can grow faster in the short term.
Big picture, what you want to do is figure out something that people don’t stop buying. I feel like I say this over and over again, but no one does it. It doesn’t have to be a recurring business model; you just have something that people tell their friends immediately about. For example, we sell almost a million dollars a month in books, and I don’t advertise the books. It’s because people read it, then post about it, tell their friends, other people buy the book, and that circle goes on. And it’s because we spent more time on the product.
It’s like the sandwich shop that says, ‘I have to sell more customers into my sandwich shop,’ but their sandwiches are just mediocre. And so they’re going to be stuck forever trying to figure out what the new hook is. To be fair, I wrote a book on offers, and I think that’s important when you’re getting started, but long-term, the offer just gets them in the door. How well you deliver on the offer is what’s going to keep them paying over and over again, it’s going to get them to send referrals.
I’ll tell you a story. I had a friend of mine who started a cookie business, and when he started the cookie business, this is what he did. He went around the country to the top cookie stores and chefs or bakery chefs — I don’t know what they’re called, bakers — and he asked them if he could just hang out with them and learn how they bake their cookies. Some of them said, ‘Pound sand,’ but some of them were like, ‘Sure, you can hang out.’ He learned what they did to bake cookies, and then when he came back home, he baked a new dozen cookies every single day for a year. He numbered all the batches, and he had 365 batches of cookies.
Every time he did it, he gave it to tasters, and then people would say, ‘You know what? I like this. I don’t like this,’ whatever. By the end of that time period, when he opened his restaurant, guess what also happened? The many people who had tasted his cookies, he got their numbers. He was giving free cookies away so that he could figure it out. He also generated leads from his area, and then he opened and had a smashing success of a business selling premium cookies in a local market, which is a tough business to be in, but he crushed it. He did it because he spent 365 days doing the work to figure out the hundred tiny details that make a perfect cookie.
So, if you’re in the sandwich business, if you’re in the SEO business, if you’re in the mechanic business, it’s figuring out what we need to do to make the cookie that much better. That’s the work that no one’s willing to do, and that’s the good news — that’s the opportunity.
That’s the opportunity that most people aren’t willing to do. If you ask small business owners what they need, they say, ‘I need more leads.’ They all say that. Now, if everybody says they need the same thing, to me, that’s a big light bulb that if they’re all pursuing the same thing and none of them are growing, then they’re probably looking for the wrong stuff.
If you’ve been stuck at the same level for a long period of time, listen to what I’m saying right now. You have to find out why people aren’t buying again. You have to find out why people aren’t referring their friends. Sometimes you’re like “Well, when I ask them, they don’t tell me.” Sometimes you have to read between the lines, and that’s the hard part, but that’s the work. That’s the work.
I get a little bit peeved about this because I see so many small business owners that aren’t growing. They’re not growing because they’re always thinking about how they’re going to get more leads, but they’re not realizing the fact that they have to get more leads because they have so many holes in their bucket.
There is a level of advertising that you have to maintain in order to test. My friend with the cookie store had to go out to people, and he had to get them to try the cookies. But the objective, once he had his second batch of cookies, wasn’t, ‘Oh, I need to give out twelve batches a day.’ No, that wasn’t the goal at that point. The goal was to refine the product, refine the service, make it better, get the onboarding, the recruiting, the hiring, the training of the employees so they could deliver the service good enough so that when he scaled, the quality of the product remained the same or ideally had a process in place that it would improve over time.
People rush to scale because they have some sort of insecurity about, ‘I have to make progress.’ But the thing is, not all progress is measured in revenue immediately. Some progress happens at a delay, and one of the biggest progress markers that happens at a delay is product. When we talk about delayed gratification, one of the ways to exercise that muscle of learning to delay reward for the work you do is improving the thing that you deliver.
If you improve your sales, you’re going to immediately see a jump. If you improve your leads, you’ll immediately see a jump, and that’s why it gets so addicting for small business owners. They say, ‘Oh, look, I improved this little sales thing, and look, we’re making more money.’ Yes, you are making more money, but the thing is, you’re not going to make the big money. The monster money comes from the back end.
The reason you can’t afford your leads — there’s never not enough leads. I want to impress this upon you. There is an unlimited amount of traffic in the world across all media. You’ve got radio, you’ve got newspaper, you’ve got direct mail, you’ve got Instagram, you’ve got Facebook, you’ve got YouTube, you’ve got TikTok, you’ve got Spotify ads, you’ve got podcasts, you’ve got affiliates, you’ve got SEO. There are so many different places where eyeballs are.
The problem is not that you don’t have enough leads; the problem is you can’t afford them because your product sucks. This is the problem.
You have to build it back to front. Consistently. Think about this from a competitive moat perspective. If you make the same amount of money per customer as your competition, then you are always going to be in a race to the bottom. When I say race to the bottom, I mean a race to the bottom of CAC. All you’re going to be doing is trying to find little hacks to hack social media, to hack ads, to do whatever, and those hacks are always short-lived.
The biggest businesses — and I look at this a lot because I spend a lot of time trying to think, ‘Okay, how’s Alex going to get to a billion? How’s Alex going to get to ten billion?’ — I look at the biggest companies, and the thing is, have you noticed that the biggest companies aren’t doing the Instagram hacks? Have you noticed they’re not trying to do these little, ‘Oh yeah, if you put this hashtag at the bottom,’ or ‘If you do this little call out or shout out,’ have you noticed that they don’t do that? The reason they don’t do that is because they don’t have to, because they have won the long game. The long game is the LTV game. It’s, ‘How much is a customer worth to me?’
Dan Kennedy said this a long time ago, ‘He who can spend the most to acquire a customer wins.’ I rephrase that as, ‘He who can make his customers the most valuable wins,’ because being able to spend the most is a product of how much you make a customer worth to you, which is a function of what the gross profit is and how many times they buy. The ‘how many times they buy’ function has a direct proportion to how good the quality of the product is. By the way, when you improve the quality of your product, guess what happens? You get referrals.
Now think about this. Again, we have to play this out two, three steps. If you start marketing, let me tell you some truths that will not change. Advertising will always become more expensive. The cost per eyeball will always go up. Look at CPMs on Facebook, look at CPMs on YouTube — the costs per eyeball will always go up, on every platform. And, as you scale, your advertising will go to colder and colder audiences, and it will become less and less efficient. This happens at scale. These are truths. These will not change. These are facts.
If you want to scale a business, how can you scale if you have two things that are going in a linear direction against you? The cost of advertising to reach the eyeball goes up, and the conversion percentage of those eyeballs also goes up (Mike here; I think Alex misspoke and probably meant to say the conversion percentage goes down — that makes more sense here) because you go to a bigger and bigger audience that knows less and less. They’re less problem-aware, and less product-aware, and you have to do more education upfront to a less interested audience. This happens. This is an inevitability. So how do you combat that?
One of the cool ways that you can increase LTV for almost any business is actually building a community around your business. I just became co-owner of skool.com, and, you can go there and we have facilitated and made super, super easy getting a community built, monetized, and thriving. Whether you want to start a community business, which is one type of person, or you’re already a business owner, it’s a great way to increase the LTV of your customers, provide more value to them, and have one place that you can always disseminate all your information, all your announcements to them to continue to extend the LTV. You can go to skool.com/games or just skool.com and you can start for free.
You combat that by having referrals, and referrals come from every sale. If every sale — one, that person keeps buying — and two, they send you another customer, guess what happens? That CAC gets cut in half. You need an equally strong compounding vehicle that works in your favor to maintain your LTV-to-CAC ratio.
When you improve the product you also decrease CAC via referrals, at scale. So it doesn’t matter how much scale you have, if you deliver an exceptional product, you will be able to have — you always know that 1.3 customers, or every customer, brings you 0.3 new customers on top of that. You decrease your cost to acquire by 30%, and you get the LTV boost that happens on the back end as well, which is that they buy more, they spend longer, they’re willing to pay a premium, and so forth.
The third wheel of that, in terms of product, is that product is the end of the brand cycle. If you think about brand as a reinforcing loop, in the beginning, when you start a company, you make a promise. Fundamentally, that’s how you enter the marketplace. You say, ‘I’m going to solve this problem. That is my promise to you.’ Anyone can say that. What builds the business over the long term is your ability to deliver on that promise. Otherwise, it’s the same reason you see all these fucking internet marketers who start a new business every six months. The new business is like, ‘I got to find the next offer,’ because they’re so front-end obsessed. Because they never figure out — what was wrong with their first offer? People bought it; the problem is you couldn’t deliver on it.
Just a little Vegas warning sign, by the way: if you see the same guy changing up his offer every six months, it’s because he doesn’t know how to keep his promises. He lacks the skill of product. He lacks the skill of delivery. He lacks the skill of being able to recruit, hire, and manage a team that can deliver consistently. He lacks that skill. Honestly, what happens to that person? Over time their reputation gets degraded. You start saying, ‘This guy’s a has-been. He’s washed up. All he does is promote new stuff. He’s a shill. He just sells whatever is hot.’
Many of you are that person, and so you keep trying to find new ways to get leads when you can’t keep your promises. If you keep your promises and you put all your focus there, your CAC will go down. It will continue to go down. That’s what’s crazy: the more you do that, the more you reinforce the brand loop. You make a promise, you keep that promise, and then the people you keep the promise to tell other people you kept the promise. That decreases your CAC.
The inverse of that — and there’s a quantitative test for this — if you run advertisements and your cost to acquire a customer increases at a faster rate than the average cost of CPMs (the cost per impression) in your market, then it means you have word of mouth working against you. Think about this. Everyone understands positive word of mouth. We all get that, right? We’re like, ‘Oh yeah, I get referrals.’ Did you know that you have far more negative referrals?
You have way more detractors. You have way more people that when they see an ad of your business, what do they do? They reach out to other people to ask about you, and then people who would have purchased choose not to based on information they get online or asking someone they know. Your conversion rate decreases over time. You complain that ads aren’t working when in reality, all of this is the invisible hand of your product sucking.
I get passionate about this because I see it so many times, and it’s the thing that keeps you stuck. The only way to combat this is to become a world-class marketer and just only know how to sell shit. If you’re selling to a really big market, I’m going to be honest with you. There’s a lot of really big-name marketers that the only reason they make money is because they sell to the ocean of humanity, and they only need one transaction. They spend all their time trying to arbitrage media, as in they know what their cost per impression is, they know how much they make, and they just jam as much as they can in there. But that’s not a business. That is a cash flow job that you get really good at with that skill, but that’s also why marketers have terrible reputations.
Building a brand is, in my opinion, the good side of marketing. The brand is simply the associations that people have with your product, and if those associations are positive, then you build that reputation. You build that positive association, and that takes time.
If you make the brand your end goal, then you will be able to charge higher prices than other people for the exact same thing, and people will purchase from you because, from a value equation perspective, their perceived likelihood of achievement goes up. Their risk associated with the purchase, in terms of what they believe their ease and the ease of achieving what they’re going to get, goes up. Even if your time delay is slower, they have so much conviction that you’re going to deliver on your promise that they’re willing to pay the premium.
Your cost to acquire customers goes down at scale. Brand-driven advertising is more profitable than the pure scammy direct response stuff. It just takes longer. But, the ROAS is insane. It’s not like 2x, 3x, it’s like 30x, 100x. It’s way bigger, and that’s how companies like Apple print money. They print money. Look at their marketing spend; they print money because they have a line of customers that bought their last product, and just by knowing that they have a good reputation of delivering on their promises, they buy the next one.
I’ll tell you a story that happened. One of the first times I really saw this was when I was probably a year into Gym Launch. We’re ripping and roaring in terms of scale, and everyone’s just printing money using the system that we had. I launched something called — I think I called it LNS at the time, which was like “lead nurture system”, something like that. I can’t remember what I called it, but basically — ah, it was ALN. It was “automated lead nurture”. That’s what it was, ALN. I did this big webinar, I did this big launch, and because gym owners are business owners, there were a number of them that couldn’t make it on the live, but they heard that I had sold this thing.
The amount of people that reached out after the webinar, not having seen the webinar, and said, ‘Hey, here’s my credit card number, whatever it is, just give it to me. If he launched it, I know it’s good.’ I had never had that happen in my life. I was like, ‘How do I never stop this from happening again? I want this to always be my norm,’ and it reinforced so strongly how important it was to keep your promises.
There’s a relationship that I think is missed a lot, especially in the info and online space, and I want to hit on this, but it applies to all businesses. There are three lines that you have to keep in touch with: you have the price that you charge, you have the value that they get, and then you have the cost associated with delivering the thing. You want these lines to be as far apart as humanly possible — all of them. You want them to be spread out super, super far. You want to have crazy high value at the top, you want a price that’s a premium, and then you want to have a lot of juice left over relative to your cost.
The way to get that kind of space between your cost and your price is to do the work of the hundred details that your competitors aren’t willing to do.
They’re not willing to find out that when someone walks in the restaurant, if we just find out what their name is at the car, we can greet them by name. Small thing, right? We have the waitresses all write down on the receipt what their name is and say, ‘Thanks for coming in,’ or whatever. We try to make sure that they all get their waters within 30 seconds of sitting down. We make sure that they get their bread within two minutes. We make sure that we check in every five or every ten or whatever we’ve tested has been the right amount. Maybe it comes down to asking the customer upfront, ‘Hey, do you want me to come — is this a fast dinner, or is this something you want to kind of juice and enjoy? I will match your cadence.’ Maybe simply asking the question draws attention to the fact that you care. It might not even matter what you do, but maybe simply asking the question improves their experience.
It’s these 100 BBs, no silver bullets. The good news is that your competition is lazy as fuck. It’s so easy. Think about how many businesses — I do business with a lot of businesses on a personal level, on a business level. I would not recommend most of them. And the thing is, those vendors think that I’m an amazing customer. I’m a hair away from being a detractor.
Many of you have customers that are a hair away from being detractors. Sometimes you’ve got customers who pay for your thing and still tell people not to buy it. My pool guy, when I had a pool — I don’t have a pool anymore — but when I had a pool, that guy was so inconsistent. He didn’t clean stuff all the time. I’d walk out afterward and be like, ‘What did he do — did he even do anything this week?’ But I still paid because it was just such a hassle to change. But I was absolutely a detractor. When my neighbor asked, ‘Oh yeah, who’s your pool service?’ I was like, ‘Don’t use my guy. I just don’t have time to find somebody else.’ They’re like, ‘Oh, thanks,’ and that small business owner is like, ‘Man, I have such a great business.’
We’d have gym owners who thought their gyms were hot shit, and then somebody opens up across the street and literally takes all their customers. What they didn’t realize is the main reason people went to their gym is it was just convenient. They thought all their workouts, they thought all their music, they thought the layout of the gym, the equipment there — they thought all that was important, but the thing that mattered most was that you just happened to be the only gym in a five-mile radius of this spot. A lot of times, the reason that you’re winning, you don’t even know why you’re winning.
Professor Burgelman from Stanford said this: ‘It’s better to know why you have failed than to succeed and not know why.’ I think that’s a very profound statement because for us as business owners, we’re always willing to attribute negative things to outside forces. We’re always willing to say, ‘Oh, you know, COVID happened, my business got hurt,’ or whatever. ‘The economy is bad, credit rates are compressing,’ but we aren’t willing to give outside forces the credit for when we do well. We’re like, ‘Oh no, that was me, that was that marketing initiative. Oh yeah, that’s because we’ve been really working on the team.’ It might just be nothing to do with you at all.
Understanding what are the drivers that actually drove the success are some of the things that you have to find out that your competition doesn’t know. So many business owners just believe in mythology. They just make up narratives around why they’re successful, and they have no way to prove it.
One of the things that I see people just melt in front of me when I ask, they’re like, they basically just tell me a story about their business, they say ‘Well, people don’t do that because,’ and then they insert some make-believe thing. I say, ‘How do you know that?’ and then they just look at me. Like, ‘How do you know that?’ They don’t. They’ve never measured it.
I had a vendor recently who was like, ‘Hey, we need to do this, this, and this with something on media.’ I was like, ‘Okay, why?’ He was like, ‘Well, this is going to create more growth.’ I said, ‘How do you know that?’ and then he gave me another stat, and that stat was derived from the first stat that he said to increase. He said, ‘When this increases, this increases.’ I was like, ‘No shit. Do you know how math works? Of course, of course it does.’ To be clear, I don’t think this was out of malice. But no one thinks, and the good news is your competition doesn’t think either.
If you want to win, you just need to stop — like, whenever someone gives you a ‘because’ statement in your team, just ignore it. If they do give it to you and you insist on trying to listen to it, then say, ‘How do you know that?’ Most of the time, they’re like, ‘Well, you know, gut feel.’ Your gut feelings mean nothing to me. If you haven’t tracked it and you have no data to support it, then you — I can make up things too.
When you hear podcasts of business people and they’re telling you the things that work for them, the crazy thing is that most of the time, they don’t know either. This is what drives me nuts. People are like, ‘Hey Alex, do you think that having a hard childhood, having a troubled relationship with your father — I don’t. We’re fine, right — but do you think that is the reason that you’re so driven?’ I’m like, ‘I don’t know. How would I know?’ I know that I am driven. There’s a bazillion things that have happened to me in my life. I don’t know which one it is, but we create these narratives around it to believe it.
I’m bringing this kind of conceptual idea because right now, many of you are creating stories that you tell yourselves to make yourself feel better about why your product isn’t as good as it should be. But you have an excuse that only you need to believe, and you believe that excuse, so it excuses you from working harder on the stuff you know you should be doing but aren’t.
That work — the work you know you should be doing but aren’t — is the opportunity because that is the work that your competitors also aren’t doing.
I’m telling you from the bottom of my soul, it is so easy to beat people today. They are so soft. They have no work ethic. No one can stick with anything. Everyone’s distracted. They’re on social media, they’re counting their fucking notifications because they can’t stick with shit. They can’t say no.
Sometimes you got to say, ‘Hey guys, we’re going to stay at this revenue level until we get referrals over 30%. We’re going to stay at this revenue level, we’re going to stay at this level of advertising because I don’t want anyone else to know how mediocre our sandwiches are. Why would I tell anyone else? I don’t want anyone to know. If I could test this with no one knowing, I would do it, but we have to advertise a little bit so we can fix our thing.’ But the point of that first phase of growing the business — because you start making sales — is to get better, not to get rich.
The point in the first phase is to learn, not to earn.
If I started a new cleaning business tomorrow, the first year would just be trying to nail the model. I wouldn’t be thinking about what we’re growing every — I wouldn’t care. I would only be focused on how we can make this experience so that no one leaves, and that’s all my obsession is. Because I know that once that happens, whether you sell one customer a month or five customers a month or ten customers a month, your business will not stop growing. If you do not lose customers, your business will not stop growing.
So while every one of your competitors is looking for cheaper leads and trying to find the new place where they do their little hacky Instagram thing, you can sleep well at night knowing, ‘I sold ten customers last month, and this month I’ll sell another ten, but I’ll have twenty. The month after that, I’ll sell ten and I’ll have thirty. The month after that, I’ll sell ten and I’ll have forty,’ and we will just keep fucking growing because I spent a year or two years or five years figuring out exactly what to do that delivered for my customer.
That is the work that no one will do, and that is why entrepreneurship is much more a battle of wills than it is a battle of intellect.
You have to be willing to delay gratification for an extended period of time and eat glass, and that eating of glass is seeing how many failures you have until you get it right.
This is the difference between small businesses and big businesses: their willingness to put up with that long period of time of getting the product right. And once you get it right, you can scale to the moon because you will make more than everyone else on your back end. You will deliver on your promises, your brand will be reinforced with every sale rather than degraded with every sale, and then at scale, you will continue to be able to acquire customers profitably because you have a force that is compounding, which is the referral base of customers that tells other people how good your stuff is while also continuing to purchase themselves.
In Silicon Valley, they have a saying, ‘Break things, move fast.’ I think that was one of Facebook’s early values. That ‘Breaking fast and moving’ stuff is building back to front. That is building the product through iteration so that you can have extended LTV, so that you can have the activation of users. Fundamentally, think about it this way: if Facebook did not get users activated and they were like, ‘We need to spend more on marketing so we can get more users,’ it would never work at scale.
It has to have a compounding vehicle built within the business, and the compounding vehicle in the business for most businesses is the quality of their product. That is the compounding vehicle. You have to get people to continue to buy, or continue to use in Facebook’s case. They have to think about how can we eliminate friction in a hundred different ways so that we can make it smoother. This is what we work on at Skool all the time: ‘How can we make this easier, how can we make this faster, how can we make this more streamlined so that anybody can be successful with it?’
Most small business owners fix one or two things, and then they immediately want to scale. They want to gas the advertising to make more sales. The problem with that is that it does this: you increase sales, and so by percentage growth, it’ll be really aggressive, and then it starts slowing down. You can always tell the growth of businesses like this, especially at the $10, $30, $100 million mark, and they’re not even close to their total addressable market because the only way they grew is through jamming sales and marketing, not through having a product that compounded.
That is the big difference between massive multiples in companies when you sell for 20x, 50x, massive numbers. Because the person who’s acquiring it has no doubt that that business will continue to compound and grow. If the business is purely based on marketing sales, then they know that it’s only as good as its last month. If the marketing director leaves or their sales channel gets shut down, then the business is going to rapidly decline.
Not only does it make the company significantly more valuable, it also makes life a lot more chill as an entrepreneur because you know that this month, like last month, like two years ago, the customer you sold to two years ago, you put all that effort in, they’re still buying today.
Improving your product is the highest leverage thing you can do because every single person gets that product. You work on it one time, and then it’s, you know, cut once, sell a hundred times. Cut once, sell a thousand times. Whereas marketing is a linear relationship. You have to go market more to get more customers. But if you continue to improve the product, that thing can get you a hundred times more customers or massively increase LTV, and so you get a disproportionate return on the effort you put in on making your thing better than you do on getting more customers.
Chunking up, what we’re tracking with product is the price that we’re able to command for our services or our product, the number of recurring purchases that we have from somebody. So if you have a recurring business, it’s the average number of orders that someone’s going to make with your business over a lifetime, or it’s the churn associated with your subscription or membership. These give you the quantitative outputs of a high-quality product.
But the inputs are going to be closer to what are their activation metrics. The way that you look at this is you do something called a regression analysis around, ‘Okay, let’s look at the cohort of customers that don’t cancel,’ because there are hopefully some customers that don’t leave you, and you look at what things occurred, and you have to look at a lot of variables of what things occurred in those customers that haven’t occurred in other customers. Once you find those things that occurred, those become activation points or at least your first guess at activation points.
Then what you do is you drive your onboarding towards that activation point, some people call it a retention point, and then you re-measure again. If you know that once people achieve a sale from SEO for your agency, the likelihood that they cancel goes down precipitously, then all of your effort for onboarding is how quickly can we get them a sale from our SEO. If it’s for weight loss, you find out that somebody needs to lose seven pounds in the first two weeks, and if they lose the weight, then the likelihood that they continue to stay is very high, so then you drive all of your activation, your onboarding, towards getting to that point.
Everything is about looking at the people at the end, looking at the thing that preceded them getting to that point, and then putting all of your focus on getting people to have that experience.
At the most basic level, I had a first book, and many people who bought this book and liked it bought the second book when it came out. Obviously, we had a launch, but the thing is, we still sell thousands and thousands and thousands and thousands of copies of this book every single month. And, even though this book ($100M Offers) is two and a half or three years old or whatever it is, this book still sells thousands and thousands and thousands of copies every month because there’s also new people every month that are getting into entrepreneurship or want to learn about making better offers for their business.
And so, the people who upsold between product one and product two, many of them saw nothing besides the fact that they found out that I had another book out and then bought it. I don’t say that in a self-aggrandizing way, I say that because I’ve lived the other way, and it’s much better to do it this way.
Closing Remarks
If you’re trying to increase LTV, to have a compounding business model, then one of the first things you need to do is do the unscalable. I made an entire video about it. Go check it out. It’ll probably help you.
From Video Description (from Alex):
Want to SCALE your business? Go here: https://acquisition.com
Want to START a business? Go here: https://skool.com/games
If you’re new to my channel, my name is Alex Hormozi. I’m the founder and managing partner of Acquisition.com. It’s a family office, which is just a formal way of saying we invest our own money into companies. Our 10 portfolio companies bring in over $200,000,000+ per year. Our ownership stake varies between 20% and 100% of them. Given this is a YT channel, and anyone can claim anything, I’ll give you some stuff you can google to verify below.
How I got here…
21: Graduated Vanderbilt in 3 years Magna Cum Laude, and took a fancy consulting job.
23 yrs old: Left my fancy consulting job to start a business (a gym).
24 yrs old: Opened 5 gym locations.
26 yrs old: Closed down 6th gym. Lost everything.
26 yrs old: Got back to launching gyms (launched 33). Then, lost everything for a 2nd time.
26 yrs old: In desperation, started licensing model as a hail mary. It worked.
27 yrs old: “Gym Launch” does $3M profit the next 6 months. Then $17M profit next 12 months.
28 yrs old: Started Prestige Labs. $20M the first year.
29 yrs old: Launched ALAN, a software company for agencies to work leads for customers. Scaled to $1.7mmo within 6 months.
31 yrs old: Sold 75% of UseAlan to a strategic buyer in an all stock deal.
31 yrs old: Sold 66% of Gym Launch & Prestige Labs at $46.2M valuation in all-cash deal to American Pacific Group. (you can google it)
31 yrs old: Started our family office Acquisition.com. We invest and scale companies using the $42M in distributions we had taken + the cash from the $46.2M exit.
32 yrs old: Started making free content showing how we grow companies to make real business education accessible to everyone (and) to attract business owners to invest or scale their businesses.
34 yrs old: I became co-owner of https://Skool.com to help the many people who want to start a business online do so.
Today: Our portfolio now does $200M/yr between 10 companies. The largest doing $100M/yr the smallest doing $5M per year. Our ownership varies between 20% and 100% ownership of the companies. Many of them we invested in early and helped grow (which is how we make our money — not youtube videos).
To all the gladiators in the arena, we’re all in the middle of writing our own stories. The worse the monsters, the more epic the story.
You either get an epic outcome or an epic story. Both mean you win.
Keep crushing. May your desires be greater than your obstacles.
Never quit,
Alex
*FULL DISCLOSURE*
I make content to make money — just — on a longer time horizon than most. I want to build trust with business owners so we can find the best ones and help them scale. And if they’re awesome, write them a check and go all the way as partners.
Find Alex Hormozi on:
Books & free courses: https://www.acquisition.com/books
Podcast: Find his podcast “The Game” on your chosen platform
YouTube: https://www.youtube.com/@AlexHormozi
Instagram: https://www.instagram.com/hormozi
X (formerly Twitter): https://twitter.com/AlexHormozi
Facebook: https://www.facebook.com/ahormozi/
LinkedIn: https://www.linkedin.com/in/alexhormozi/
TikTok: https://www.tiktok.com/@ahormozi
P.S. (from Mike)
“If you introduce something valuable to someone, they associate that value with you.” — Alex Hormozi
If you found this valuable, think of just one person who you think would also find it interesting and share it with them. Great way to build goodwill.
No affiliation with Alex Hormozi
I hope you found this transcript helpful, have an awesome day.
