Alex Hormozi - The Bently That Didn't Fix Anything...

Customers are harder to win, ads are pricier, and attention is more fragmented than ever. That’s exactly why Alex Hormozi’s approach hits so hard: he doesn’t teach “a platform,” he teaches a customer acquisition system that keeps working even when the platform changes. We talk through how he went from consulting to building and scaling Gym Launch, the logic behind “client financed acquisition,” and why the best growth strategies feel boring once they’re finally predictable.

We also dig into the uncomfortable stuff founders usually avoid. Alex explains how his early work ethic was fueled by anger and the need for recognition, then how he learned to decouple performance from approval and status. That connects directly to money decisions: living far below your means, resisting lifestyle inflation, and choosing freedom over optics. The payoff is not just a bigger bank account, it’s clearer thinking and better leadership when the business gets stressful.

From there, we get tactical on scaling: what keeps entrepreneurs stuck around $3M to $5M, why doing things out of sequence kills momentum, and how increasing lifetime value creates the budget to open new acquisition channels. Alex shares his own hard-earned lessons too, including the “million-dollar mistakes” that came from starting too soon, hiring wrong, and not paying close enough attention to financials.

If you want fewer fragile tactics and more durable business fundamentals, hit play, then subscribe, share this with a founder friend, and leave a review. What’s the one decision in your business you know you’ve been avoiding?

Transcript

Meet Alex Hormozi And His Path

SPEAKER_03 0:28

Welcome back to the next level business podcast, guys. This is gonna be an amazing episode. Make sure to get a pen and paper. We got the legend Alex Hamoszi on the line with us. Welcome to the show.

SPEAKER_01 0:41

Thank you for having me. Appreciate it. Very excited to uh to dig in.

SPEAKER_03 0:46

So it's funny because like before before you got out, me and me and Shane was like, we were talking. I was like, yeah, bro, he got the business and the body. Well, thanks, man. Thanks for coming aboard. You know, I saw, you know, met you actually the first time I was in Orlando at the ClickFunnels event. And you know, you and your wife spoke. And you know, it's really like connected with your story. And you know, you you you tell us about you know how you stayed in hotels and you you're doing the turnarounds, and you know, you guys uh you guys followed the the steps, you know, and you put in the work in the beginning and always you know just kind of followed your journey and what you're doing in the gym industry. I actually do, I actually help people start, you know, photo booth businesses, you know, and so kind of following that path and helping the entrepreneurs, you know, set up their businesses. So excited to have you on. And I know you like to talk a lot about your mistakes and learning from other people's mistakes, and that's kind of you know, Shane and I have had a lot of setbacks and we we're a big believer in like learning from mistakes and other people's mistakes. So yeah, hopefully you can share a lot of that today. We we did a lot of research and prep work, so yeah, we're excited. I know you said not to spend a lot of time about the backstory, but if you could just give us a quick, you know, summary uh because you come from a different world, you know, a lot of the people in the marketing world know who you are, and a lot of our audience you know is offline. So if you could just give them a quick summary and then we'll get to it.

SPEAKER_01 2:16

Yeah. So graduated from Vanderbilt in three years, got a job as a management consultant, learned how to learn at that job, which was useful, didn't like what I was learning about. Emailed 40 gym owners because I learned from consulting the fastest way to learn something is to talk to experts because they've already sipped me through the information. One of them got back to me. He was on the east on the west coast, I was on the east coast. I sold all my stuff, I moved there in 36 hours, showed up at his doorstep. He uh I spent three months working with him for free to learn the gym game from there up to my first facility because I was doing it a little bit different because I didn't know anything, I'd had no kind of preconceived notions, but I think ended up helping me in the long run. So we had a different model of acquisition, uh, which we call client finest acquisition, which is the framework that I've used to scale five companies to eight figures or multiple figures now. And it's basically a way to get customers for free for life, independent of the platform you're marketing on. And so that's how I was able to scale my gym chain from zero to six locations in three years. From there, I I started getting reached out to by by gym owners saying, like, hey, how'd you do that? So I started flying out to gyms and doing gym turnarounds, which we call gym launches because everyone's got an ego. So instead of calling gym turnarounds, we're calling gym launches. We did 33 launches in uh 18 months, where we'd actually fly out to the facility, spend 21 to 24 days there, sell 100 to 200 new customers in that time period. The deal that we'd make is we'd get all the upfront revenue, they would get the customers for free. So it's a pretty fair, fair trade. Scaled that to um to eight sales guys at its peak. We're doing eight gyms a month. Uh, if you're doing the math there, then you're like, wait a second, how could we have done that? So we we had there's a long period where it was just me and then me and Layla, my wife, at the time we were just dating, and then and then we scaled to six, and then we kept six, six, eight. And then I realized that it was a really logistically difficult model to scale. We were doing about three or four hundred thousand a month at that point, and then I transitioned unknowingly to a much better model. By uh I said, Hey, I'm gonna get out of the gym space, I'm gonna sell all my secrets, I'm gonna tell you how I ran all my gyms and I'm gonna move on. And in one day, I uh I called up the eight gyms that were supposed to launch the next month. I was like, hey man, I'm not gonna do it. He said, Please, you need to do it. And I said, You couldn't pay me enough to do it. And he was like, Well, I mean, can you just show me? And I was like, Well, fine. And I picked the highest number I could think of, which was six thousand dollars at the time, and he said, Yes. And I was like, holy shit. And so I called the second guy who was supposed to launch and had the same conversation. He was like, How much? And I was like, eight grand. He said, Yes, and I was like, holy cow. So I ended up doing 60 grand in a day selling air. And I was like, man, this is pretty cool. We should do this. And so then I called back the other 33 gyms that I had launched and said, Hey, you know, I filled up your facility. Want me to show you how I did it? And they were like, Yeah. And so I ended up selling another 30 plus facilities within the next like week or two. And so we ended up going from like, you know, doing three or four hundred thousand dollars a month as a done-for-you sales team to doing, I think we did 260 the first month that we switched to the consulting model. And then that was kind of when everything just took off because we had the average client that we worked with made $30,000 in additional revenue in their first 30, 30 days working with us. And so they were like, Well, dude, what else do you have? I was like, Well, I'll show you how to get out of the gym because what I was teaching them was like a very time-intensive model. And so I was like, I'll show you how to get someone else to do this and then scale the facility seven figures. And so that's what we that's what we ended up doing on the back end, and you know, we sold our first hundred people at 12,000, and I think we sold the next 4,000 people at 16,000. And then we sold, you know, we keep about 40% of those people on our our back end program, which is about 42 a year, which is a kind of licensing of the rest of the business model. So we basically sell an acquisition system on the front end, which breaks the entire business, and we sell the back end to solve all the problems that we that we created by you know 5xing the uh the front end. And so fundamentally, that was gym launch, which was my first my first bigger business that continues to run right now with an executive team. We built a supplement company that feeds into that distribution base of 4,000 gyms. They sell our physical products direct to consumer. After that, we started a software company that was for agencies to work leads uh because one of the biggest issues we had with our gyms is we could generate leads, but they wouldn't work them, or the front desk person wouldn't work them. So the software solved that problem for them. We scaled that from zero to 1.7 million a month within six or seven months. And then from there, I started my kind of my my next thing, which is acquisition.com, which is our way of kind of building our own portfolio of businesses. So we we don't have like general business coaching or general masterminds. I just take interests in businesses that I think are really cool. So usually between three and 10 million. We help those guys get to 20 or 30 and exit in three to five years. And so that's kind of the that's the story in a nutshell. Did it in four of four four minutes, and that's that's what we do now. And I think the you know the portfolio companies that we have right now do over a million a week in revenue, and so that's what we do.

SPEAKER_00 6:53

All right, so you packed a a crap load right there, bro. My mind is blown that you did in four minutes.

Work Ethic And Motivation

SPEAKER_00 7:00

I I want to go back to you got a hell of a work ethic, right? And I admire that completely. And where does that work ethic come from? So in your youth, did your dad put that work ethic in you? What what what kick started that kind of mad work ethic that you've got?

SPEAKER_01 7:19

So it was I used to think it was insecurity, but it was actually it was actually just rage at my father for not giving me the recognition that I thought I deserved. And so I kind of was forced into a position of non-existence from like age 12 to 25, where nothing that I did was ever recognized. And so I kept trying to up the ante to do more and more and more to get the recognition that I wanted, but in so doing, created tried to recreate a game that was based on someone else's rules, which was about money and status. And so now, having recognized that, I tried to uh do the things that I enjoy doing and do them at a high level and focus on what I what it is that I'm doing and producing excellence for excellence's sake, and kind of being in servant of the ideal of you know business. Like I want to serve business as a concept because I think that is eternal. And so I do now no longer rely so much on other people's approval, family or otherwise. And it's much more like, am I being truthful and integrous to what I believe the ideal is? And the only person who can know that is me. And so that's why I think that if you at least for me, decoupling those things pushed me to a higher level for myself, at least, because it no longer was doing more than the competition or doing more than what people expected, but going to a hypothetical ideal that only existed inside of my head of what I thought was perfect, and pushing towards that, which I think created a bigger gap from people who were fueled from a different source. And so in the beginning, it was anger and insecurity that drove me to not want to fail because I didn't want to get told I told you so, because I was told many times to not do what I was doing. I left what was considered a golden path. You know, I'd aced my G Mats, I had above Harvard's mid score, I was following the path I was told to follow. I didn't have the typical entrepreneur story of selling lemonade and baseball cards and all that. I did well in school, I got a job, I got another job, and I just realized that I wanted to make more money than I think anyone would ever pay me. And so I had a hundred percent guarantee of not achieving that if I continued on the path that I was on. And so the only way to potentially achieve what I wanted was to take the risk. So it was basically like I had a low percentage likelihood by taking the risk, but I had a 0% chance of achieving it, but I stayed where I was, and so I took it was just a math problem. And so I took what was the lower risk option at the time in terms of achieving the goal because I didn't want to change the goal.

Why Fitness Led To Business

SPEAKER_00 9:46

So, how did you get into the gym space initially? What drew you to that?

SPEAKER_01 9:51

I looked at a number of different business models. I was actually a hair trigger away from starting a frozen yogurt business. So I actually know a lot about frozen yogurt. I go, but I was between a handful of different businesses. The other business was a test prep business because I did really well in the test prep because I understood the process. I went through, I did, I think, seven or eight different phone books full of problems to prepare for the GMET. It was three hours a day for four months, is what I did. And I was able to take my score above the score that it needed to hit. And so I was like, okay, well, this is a mechanical process and this can massively change someone's life trajectory. So there's a lot of value here, and it doesn't take it doesn't cost a lot to fulfill this promise. So I was between those three things. But the one that I already knew, because I'd been doing it for you know a decade at that point. I was a state record holder in Maryland where I was from in fitness, and people were already asking me for like fitness advice and trying to like pay me for stuff like people were starting to hand me money already to help them. And so I was like, well, I already have people who are trying to pay me, so maybe I should just do more of this. And I didn't have enough money for the yogurt store, so I'd saved up about $60,000 when I was 23. And so I took that 60 and then I opened my first facility. And I thought, because I was also at the point when I had my consulting career that I was looking at the, you know, off the edge of my really nice condominium of high rise in Baltimore, that I thought that there was really nothing more to life. And so I was like, well, if there's nothing more to life, then I might as well do something that I enjoy. I was mistaken in thinking that I was going to enjoy the fitness component of what I got into, but I ended up falling in love with business when I opened my doors. And so that was the that was the thing that ended up being the game that I loved. So, but anyways, that was that was kind of my trajectory going into it.

SPEAKER_00 11:28

So, when did you get into fitness? Was it was it high school, college?

SPEAKER_01 11:33

Oh no, it was yeah, I mean it was it was middle school. I started, I I honestly can't remember a time when I was not into fitness. I have pictures of me when I was 15 in like competitive rip shape, so it's been a long time.

SPEAKER_00 11:43

Yeah, so for those guys who doesn't don't know when they look you this guy's super jacked, is what everybody is what we all hope that one day we can become if we uh put in enough gym time. But what what about the correlation there? So do you do actual bodybuilding too, or did you at one point? And what's the correlation between that and again that that tremendous worth ethic that just drives you to really who you are?

SPEAKER_01 12:11

I I probably will give an answer that might not be expected. I feel like the easy, you know, six-inch putt answer would be like, yeah, I think it transfers over from the gym. I don't actually think they're related at all. I think that people are into fitness are into fitness because they enjoy fitness. That that's my that's people are into fitness currently, right now. And I know that because I deal with tons, thousands of fitness professionals and gym owners. And I don't think that the work ethic necessarily carries over. I think that, I mean, I think small business owners in general have more work ethic than the average person, but I don't think that a gym owner, small or rather, a fitness person, small business owner has more work ethic than a non-fitness small business owner. That being said, I think that a winner is a winner. And so if you take someone who's a very high achiever, it's easier to go from somebody who has work ethic and then teach them the fitness and then they apply that work ethic than someone who has naturally enjoyed fitness and then try and teach them work ethic. Does that make sense? So someone who has work ethic teaches them fitness. Someone who has fitness trying to teach them work ethic is more difficult. And so I think that I had both, but I don't think that they were correlated. I think it just was happenstance.

Financial Discipline Without Status

SPEAKER_03 13:20

Alex, so you you always talk about living on less than five percent of your income. Yeah. You mentioned that like on a lot of uh your podcasts and stuff. So how can like an entrepreneur, you know, let's say you know, million to three million, they you know, they're still growing in the rapid growth phase, if you will. How can they get to that point? Like what steps could they take to get to that point? What should they look out for? Like, you know, I don't you you don't like to spend money on well, not don't like, but you you live very mindful, right? Like you know, not not buying the Lambos and all that stuff. And I love that because we're all sick of it, right? And and so like what could someone do to get to that point?

SPEAKER_01 14:04

So I think I think a big part of being successful is learning from other people's successes and learning from other people's failures. And so, you know, to anyone who's listening right now, if I can at least provide some sort of failure or lesson that might be useful for you, I get no more fulfillment from driving a Bentley than I did from a broken down Prius. If anything, I feel bad every time I see that I have a Bentley. It's my one purchase that I made because I was somewhat urged into it. And I was like, you know what, maybe I should you know loosen up a little bit for perspective. We make more than that every week. And so relative to my my earning, it's still you know less than a week's compensation. And so it didn't, I I could justify it from a cost basis, but from from the marginal improvement on my driving experience was negligible or non-existent. And so from that standpoint, it was a bad deal, independent of it being negligible relative to my income. So, in terms of the things that someone can avoid, I think first off, it's just understanding that everything that happens from a fulfillment standpoint comes from within. And so if people, you know, monks in the in the in the Himalayas can own nothing and be happier than every American, more never solves the problem. And so if the if the goal, I think we just need to be honest with ourselves, is the goal status or is the goal you know fulfillment? Because those are very different things. And so if the goal is status, then by all means, buy the Lambo. You know what I mean? If that's the goal, I mean it's probably hollow, but if that's your goal, then do it and then figure it out for yourself. But then again, you're following you're making someone else's mistake just to make sure that you know it is also a mistake. I don't know if that's the wisest, the wisest decision-making process. Uh uh, but for most people, I could just say, like, I get no more, I don't I I've I've I've bought the $500 stakes that are A5 that you cut with your fork. They serve on fancy platters in multiple courses because they want to keep the steak at perfect temperature. I've taken the private jets, I've taken, you know, I have an exotic car, and I I truly get no more enjoyment out of it. Try it once, sure, but I mean, I don't think I don't think it it provides anything else. But what I will say provides a lot more fulfillment and peace of mind is the ratio of income to expense. And so if I can give myself the lit, the liberty and the freedom based on my voluntary choices, that frees me up as a business owner to make better decisions about my business because I'm not operating from a place of scarcity because of decisions that I arbitrarily made to solve my own insecurities independent of my business and my income, by you know, loading myself up with needs that I, you know, with with material things that don't matter to me, then I'll do that. And I'll be a better business owner, I'll be more successful because I can operate with more freedom. So, how do you do it? You do it. And I think that if you if you cut out all the expenses in your life and you see the clarity of thought that you have, I think you will you will feel disproportionately rewarded for for that and you will want to do it as much as you possibly can. And so all you really have to do is make one decision, which is divorcing the status from your ego or for how you feel about yourself. If you can divorce those things, then I think the decisions are actually fairly straightforward. I mean, it's just math, and everyone here can do it. It's just the emotions behind it that people that get in people's way.

SPEAKER_03 17:05

Awesome. Thank you for that.

Working With Your Spouse

SPEAKER_03 17:08

So I know you and your wife work together. Are y'all still currently working together?

SPEAKER_01 17:12

Yeah, 100%.

SPEAKER_03 17:13

So I work with my wife as well. And you know, every time we tell people that, they're like, oh my God, I couldn't do it. You know, I mean, you know, you probably heard that a thousand times, right? So, like, how did you guys make the decision to to to work together? You know, what what tips do you have? How do you split roles? How do you uh solve you know disagreements on on things if she says you know it should be done this way versus that, you know, your your way?

SPEAKER_01 17:40

Really good questions. I think we had an atypical scenario uh because I actually pitched Leylon working for me on our first date. And so I would say that we we developed faster business, our business, our business partnership developed more quickly than our romantic partnership developed. And so, if anything, I still think that our business partnership is more advanced than our romantic partnership. We just we work very, very well together, and so we have a very typical visionary integrator dynamic between the two of us. And that's why when I saw her, I was like, this feels too good, like let's do this. And we had to learn the romance side because the the business side came so naturally. In terms of resolving disagreements, I think first off, we all we both know that we're here to try and grow the business. So like we have the same goal. And so if we disagree, which candidly is very rare, it's really rare. I can't on one hand the amount of times we've actually had a disagreement and we typically don't get really emotional about it. We sit the we always ask the same question, which is what information are you operating on that I lack? Because if we're making decisions with the same values and we have the same mission, just we're trying to accomplish the same thing, which is the mission, the values are how we we we believe we should get there from a how we do business standpoint. And so if we have the same outcome and we we believe the same operating principles, then the only reason that we should have a disagreement is because we have different information. And so we make sure that we're matching our information or we're writing the information appropriately or evenly. And that's where, and really it comes down to that is if we once we share information, nine times out of ten it's already solved. And the one time out of ten that's different is I might appraise risk based on some information as X, and she might appraise risk on a certain decision as Y. And then we have to walk through, okay, well, and then we walk through a pretty simple decision-making framework that we've used for a long time, which is what's the upside, what's the downside, and can we live with the downside? And so that's kind of our three-step decision-making process for one way where we look at any bigger strategic decisions, and it served me really well. For a very long time, I looked at everything as risk-adjusted return, which is just upside versus downside. The difference is, if you don't mind, I can tell a quick story that illustrates this. So Jeff Bezos talks about Amazon, and he says, you know, if you have a 10% chance of getting a hundred times payout, you should take that bet every time, right? And I took that mindset and applied it to business. The problem with that mindset is that it assumes an infinite capital base. And so a more realistic example would be you're going into a casino, it has the same bet, you know, it's a 10 to 1, sorry, it's a 100 to 1 payout, but you've got a a 10 in a one in 10 chance of hitting it, but you only go to the casino with $30. Now what do you do? And it's all you have. And that I feel like is a much more realistic decision calculus that most people are making. It's like this does have a chance of being a big payoff, but I I can't afford for this to not work, right? And so that's what take that's what the third question of that decision-making framework puts into play, which is and can I live with it? And can I live with the downside? And so I can't tell you the amount of blunders that I've been able to avoid by that third question saving me a lot of times. And earlier on in my career, I did not have that third question. I just said, what's the upside, what's the downside? And cool, I think the upside's worth it. Let's go, even if it's a 10% chance. And I ended up making tons and tons of mistakes early on and losing. So I've lost everything once. So in December 2016, I had $1,036 in my bank account. And so obviously it's not that long from then now. And so for anybody who's listening, you can turn things around quickly if you have the right skills. But I made that, I got into that situation because of a series of poor decisions. And so I think that the biggest thing that I try and look at from people who are ahead of me is just simply like, how do you think through things? Because if someone started all over again in my shoes, who was a super duper billionaire, what they would have, and they'd be able to recreate everything based on the quality of their decisions and the and the skills that they have. And so I try and think about it from that perspective. So to answer the original question for Layla, um we we have a good decision-making framework, we stick to the values, we have a line mission. A lot of times people don't know what they're trying to accomplish, they don't have agreed upon values, and they don't have a decision making process. If you can define each of those, you can pretty much get around most conflict in a relationship. And then in terms of the marriage side, if you're partners with your, if you're if you're partners with your your your spouse, there's a book called Mating in Captivity by Esther Perel. It's really interesting, and the concept is fairly simple. We spend too much time together as married people. And so in the beginning, there's a lot of variety and mystery, which is why you become attracted. And you learn more about that person and you go towards the middle of the pendulum, which is you have some mystery, but you have some familiarity, which is kind of the perfect recipe for attraction, right? But then because it felt good in the beginning, you keep doing what you were doing. You just become more and more familiar. And then you find yourself in a situation where you're in sweats and a t-shirt eating Netflix or you know, eating eating cheetahs, watching Netflix every day, and spending every hour of your day awake because you work from home, right? And working together next to each other shoulder to shoulder, right? Well, then you become incredibly familiar and you just become siblings. And so the idea is, especially if you're working together, is to you don't need to create more familiarity. You already have such shared context because of work and all the other things, that it's just actively pushing the other person away in terms of creating space. And so we like to think about it as creating space to be missed, right? You have to create space to be missed. And so for us, we sleep in separate bedrooms as much as we can. We try to. And that that creates some space physically. I work on a separate side of the house as she does. We don't attend the same meetings. And so that when I get to the end of the day and we have dinner, it's not like, well, I don't need to ask you how your day was. I was fucking there the whole time, right? I can I can say, like, oh, so you were on the meeting with so-and-so, and how was the lawyer thing? And how is that investment going? And whatever. And so we actually have real things to catch up on. Because what Esperal noted from the research is that the people who are most who are most content are married couples who are have both have careers that are different. So they both have the same mission, right? The values of work ethic and having a career are aligned, but they have enough space that they can still keep their mystery and intrigue, right? The the extreme version of the mystery and intrigue is the guy works all the time, the lady stays at home. And in the beginning it's fun, but then they grow apart and then they become strangers, and then there's no familiarity, so there's no stability. And so if you think about those as three scenarios, you have the person, the entrepreneur works, he's got the wife at home, they grow apart. You've got the the the co-career path, which is in the middle, and then you've got all the way on the other side the two people who work together every single day who are completely familiar. And so it's trying to get towards the middle and understanding that it's not a problem that's going to be solved, but a dichotomy that must be managed. So you're not going to solve it, right? Everyone wants to solve the problem, but it just has to be managed, just like delegation and and and micromanaging. You don't solve it, you manage the dichotomy between those two extremes. You manage variety versus consistency, right? You manage those those differences. You have to have them. And in different seasons, you'll have different amounts. And so I think for both of us, just understanding that that that framework of thinking about our relationship was very valuable for us.

SPEAKER_00 24:41

Are you guys able to turn off business? Like if you guys go out to a restaurant on a Friday night, yeah. Are you able to just unplug and get rid of business and just chill?

SPEAKER_01 24:53

Yes, totally. We we we actually talk differently. I speak a lot differently when I'm with my wife than I do right now. Uh I speak with a different tone of voice, I make different faces. She calls me a different name. And so we've really tried to create, I would say, like a marriage identity and a business identity. And that's that's worked very effectively for us. That's a fact. In the beginning, it was very difficult because we just pretty much were always working. And then we looked up like two years into the into the into the marriage and we're like, or two years in the business, I can't remember what it was, but and we said, this isn't worth it. Like for all the money in the world, it's not worth it if we can't like also have this other aspect of our life fulfilled. But I think we were making so much money so fast we both just didn't want to mess it up.

SPEAKER_00 25:32

Yeah, and so I've recently started working with my wife too, which it's go, it's going great. But you know, and I don't believe this, like like business owners, we think business all day, right? That's what we do for fun, it's what we do for for a hobby. I mean, that's what's filling our mind. Like Josh and I'll go out, have a drink or whatever. Dude, we're talking business the whole night. I mean, we don't shut off. But last night we were we were we were relaxed, and she's like, I do not want to talk business, please change the subject. I know, I know I'm working with you now, you know, a lot on the business side, but please, God, please help me.

SPEAKER_01 26:05

That might be useful for you. What's that? So I said, Can I provide a framework that might be useful for you?

SPEAKER_00 26:10

Yeah, go ahead.

SPEAKER_01 26:10

So we talk business all the time too, but I think there's two different ways you can talk about business. You talk about business within the context of aspirations, dreams, and goals, and you can talk about business in terms of problems that we need to solve in the right. So if it's like, man, Frank didn't turn in his fucking SOP at the end of the week. Do you see that? Like, what are we gonna do? This is the second time. That's a problem. I don't want to talk about that at date night. But if we're like, if we're looking, you know, 10 years in the future, we're like, wouldn't it be cool if we started doing this and this? That's something that's light and doesn't interfere with like our romantic aspect of the evening. Because I think I think I've heard different like dating coaches and things like that say, like, don't talk about business while you're at I'm like, dude, it's literally like well, like I think it's a silly rule. It's what we both like. Why would we stop talking about something we enjoy? It's just making sure that the energy dynamic doesn't shift from like masculine, like she does that she doesn't get into like masculine energy when she gets into that zone, and me neither, right?

SPEAKER_00 27:00

Okay, so you guys don't have kids yet, right? You and your wife? I don't think so. Are they on the horizon? Because JP's in the same boat, he doesn't have kids, they've been able to go at it, you know, 10x. They built this really cool business. Are are kids on the horizon? And and how are you going to manage that with this crazy lifestyle on the business side that you've got?

SPEAKER_01 27:22

We don't have super crazy lifestyles. I have nothing on my agenda tomorrow, the next day, and the next day. It doesn't mean that when we were building it, it wasn't like that. But currently it's it's it's really not like that. There's executive teams that run each portfolio companies. And so I meet with the executives and weigh the strategic decisions they need to make and just provide guidance, you know, where where I can and provide resources. But just as a as a forward to that, but in terms of if I were to have kids, I would I would probably treat them the same way that I that I do with employees, which is pouring into them and making sure that they're treated as an individual and and and given their autonomy. I'm not sure if we're going to have kids. I I don't I don't I don't I don't feel compelled to have them. And so I don't think there's obviously anything wrong with that. There would be no humanity with it. Um but I'm not sure for us it is something that we will do. And I think that we feel super, not to say that other people don't, but I think for us we feel very, very fulfilled in in who we help on a regular basis. And so that doesn't, it doesn't feel like a need at current. Maybe it'll change, but at current, neither of us feel that desire.

SPEAKER_00 28:25

Okay, so I remember one of the stories that you told on a prior podcast.

Pivots, Opportunity Cost, Ignorance Tax

SPEAKER_00 28:30

You were talking about, I think it's around that December 2016 time. I think you said you had a DUI. Yep. And and your doctor told about all the stress that you were under. And if you did change that, you know, bad things would happen. And you were kind of at this crossroads. And you know, business owners can be at crossroads, and you don't even have to be a business owner, they're just crossroads in life. And so you told this story of every business you had you sold in 90 days, yeah. And talk through that crossroads season because look where you are today because of that, right? Yeah, and talk about how that crossroad kind of came about, and then how it essentially just changed your life, man. What you're doing now is just phenomenal.

SPEAKER_01 29:12

So the biggest the biggest cost that all of us pay, in my opinion, this is just Alex's two cents on the galaxy, is ignorance tax, right? We pay, we pay for lack of knowledge because it costs me a billion dollars a year to not know how to make a billion dollars. That's how much it costs me every year for not knowing that scale. And so when I'm looking at the opportunities that we have, like I always have to look at like what's my opportunity cost, what's the ignorance cost that I'm paying every every every day right now? And if I feel like I have a perceptual shift where I see another level of the game that I was lacking before, and I realized that the infrastructure or the trajectory that I was built on was playing by an inferior set of rules, more inferior knowledge of the game, then the best course of action is to stop walking in that direction because I'm just walking in the wrong direction. And it it happened in a series of conversations. You know, Russell and the I'd say the number one thing that Russell gave me when I talked to him. And what's interesting is like, I think the best mentors don't give you like tactics and like here's how to run an ad. Like, I know I don't even think Russell knows how to run an ad. But what they can do is they can look at the skills that you have, your story, your resources, your character traits, your skill sets, and see the world through the frame and lens that they can see. Because I see wisdom as just the ability to see more clearly than other people. Because if you have somebody who's dumb and somebody who's wise, they look at the same situation. There's gonna be a lot more options for the person who's wise, right? They see more possibilities. And so if I now have an ability to see more possibilities than I did in the past, then it is in my best interest to take the outsized game. The the correlator to that and the hard decision, which is you know, where discernment comes in, is is this shiny object, or is this a true, you know, opportunity jump? You know, I mean, am I really leveling up, or is just this sound cool and interesting, and what I'm doing now isn't working? And I think that's what takes discernment to kind of literally test within yourself, because a lot of times you just need to keep doing what you're doing. But there do come times, and what Russell gave me says, I think you have a level 10 skill set and a level two opportunity. And so when somebody who was making a lot more than money than me said that, I believed him. I paid him. So I was like, why would I not take his advice if I paid him for his advice? You know, and so and so I looked at what the opportunity cost of what I thought the business would make, the new business, compared to my current business. I thought about what my current business was worth. And so I had six businesses. I had a 50% partner and a handful of them. And so I figured, like, all in all, I might be able to sell them if I waited and juiced them up and did all that stuff, maybe in a year for maybe a couple million bucks, maybe, right? But the business that I saw was gonna be able to make me $100,000 a month the next month. And so I figured if it took me a year to make a million dollars working in the other business versus a year of making a million or more, just doing the new thing, then the opportunity cost of me just getting rid of things on a fire sale made sense. So it was a it was a math decision. In, you know, in in in gym launch and and and prestige, these are companies that I'm not operating in the day-to-day. And it was also because I didn't have the skill set then. And I think part of that is one of the difficulties is like most entrepreneurs want to sell their business or get out of their business, not because there's anything wrong with the business, but because they lack the skills to learn how to actually build it to run without them, which is way more difficult than than I think any of us let on to be, right? It's easy to get it to maintain, but can it grow without you? That's challenging, right? And finding people to do that and working through them. And so, in terms of pivot points in my life, it's looking at if I were to sell everything today, what would I get for it? How long would it take me to have an optimal outcome? Can I get someone else to run this? And if none of those things, then how much am I losing from what I should be making in this new thing? So it's kind of like four different pieces to that, and just weighing those things out and then making the call. Two times in my life I've burned everything. I would say this last I would say cycle for me, which I feel like I cycle every three to four years. I was able to put really good managers and leaders in place to run the majority of the business without me and continue to grow it. So I didn't have to sell it.

SPEAKER_03 33:18

And that's the the executive team that you're talking about. And so those people are do you give them ownership in your business or just salary or it depends on the role.

SPEAKER_01 33:28

I mean, I think you can get a really long way with with really properly designed incentives, incentive plans, so that they can have really high upside if they can drive growth. One of the difficulties is is seeing the nuance between entrepreneurs and entrepreneurs. You want entrepreneurs in the business, entrepreneurs will walk away with your business. Uh, and so that's one of the that's one of the difficulties. Plenty of scars are on that. But just recognizing that and then, you know, like I said, building the incentive. I think that there's definitely a place for giving ownership over increment, you know, incremental periods of time. You can do phantom stock. There's lots of it's beyond probably the scope of this podcast, but there's lots of ways to design incentive plans where you don't have to give up, you know, huge amounts of equity, but you can still give up what you will get back, is disproportionate to what you are giving. And so it's really a win-win. They they get paid disproportionately, they're incentivized to grow it. You get a disproportionate amount of your time back, which in my world, if I can get 80% of my time back for 20% of my cost, then I could take the 80% and put it into another vehicle where I have disproportionate skills. Gotcha.

Scaling Patterns And Channel Sequence

SPEAKER_03 34:28

So you work with a lot of entrepreneurs. What are some of the patterns that you see over and over again that keep them from going to the next level? You know, they get stuck, you know, at you know, say three to five million and getting like to the 10 to the 20 mark.

SPEAKER_01 34:48

So yeah, it definitely differs on what what range we're talking about. So if they're in the three million-ish range, just put that as a middle peg. Typically, if they've got like one acquisition channel that they've kind of figured out, it's relatively reliable. They're usually not making that much profit because they're, you know, they're a little bit, you know, above break-even. They might be eating two to one, three to one at scale, because this is quote scale for them. And usually at that point, they need to improve the product and increase the lifetime value of the customer. And so that's increasing monetization. And so if if we can, you know, they have to have some sort of back end uh to the business that ascends the customers, usually just by adding a back end when you're at three million, you can get to 10. And then once you're at 10, you have the increased LTV or lifetime gross profit from a customer to reinvest in opening new acquisition channels. So you can go from a one channel to two or three or five channels to scale the company. I was actually counting today. I think uh Gym Launch alone runs on 13 different acquisition channels. So, you know, over time, and that's what ends up building the stability of the business, but you you ride one up and then you and then you balloon out. I don't think it's I don't think it's built with like 10 10 10 streams in the beginning. And I think to answer the original question, what do I think is one of the mistakes that they make is is doing things out of sequence. And so one of the hardest things is you know, listening to these podcasts like this one, taking one nugget and applying it when it doesn't apply to you. And so you have to know where you're at. Like if someone who's at you know, 500,000 a year hears that, then like, oh, I need to add it back. And it's like, dude, no, you don't need to add it back. Like, you need to understand your acquisition metrics and figure out how to make this more reliable and do it at scale and do it without you. Do that first. And then, because if you you know, I mean, like if you can't acquire customers without you being involved, basically your acquisition metrics are or are are made up because there's always star power and the business owner, and you're always going to be more convicted. So it has to be able to work with you know at one-third the efficacy of you. And if it still works, then you have a scalable acquisition channel that can be done, and then you know, then you can add the back end and all the other things.

SPEAKER_00 36:50

You said gym launch has uh 13 acquisition channels. What what do you mean by that?

SPEAKER_01 36:55

So there's six different new client sources, right? You've got paid media, earn media, own media, outbound affiliates, referrals. So those are the six, right? And then within those, you've got subcategories. So it's like we might be on Instagram ads, Facebook ads, Google search, GDN, and then we have you know franchisers who are affiliates who refer as business. We have referrals, we have a huge referral program. 30% of our of our gyms that come to us are based on word of mouth. We have podcasts, we have YouTube channel, we have email list, which is owned media, we have phone numbers, which is owned media, we have Facebook group, which we work in group, which is earned media. And so all of those are those different channels that we acquire customers through. And we try and make sure that we have somebody who owns those channels. We also have cold callers, we have cold emailers, and we do all of those different channels because at a certain point, especially if you're in a niche like I am, you reach, you know, you reach market saturation on one channel and you need to expand channels. The more mass market you are, the more you can ride one channel to much bigger numbers. And it really for those guys, it's like, you know, you can market on Facebook and sell weight loss, and you can get to, you know, you can get to plenty of revenue, right? And so at that point, it's like, okay, how can we continue to increase LTV because we can compensate for the inefficiencies of a colder and colder marketplace?

Personal Growth As An Investor

SPEAKER_00 38:14

All right. So as you can tell, this guy's smart as hell. My question to you, how are you growing these days? You read it, you read books, you spend time thinking, combination of the both, you have mentors, mastermind groups. What are you doing to do your personal development?

SPEAKER_01 38:29

Really good question. So I tend to read topics like binge read topics. I'm not as much of like a I read 20 pages a day type guy. I'm more like I'll read three books in four days kind of guy, and then I won't read anything for a month. That's just kind of how I do things because I'm interested in the topic and I want to learn about it. So it's like I want to learn about whole life. So I just read a bunch of books on whole life, or I want to read it, you know, learn about this and I buy a course and you know, like I just I just binge consume. So the first thing is I'll look, I'll look at where do I think the biggest bottleneck in my growth is right now. And so for me, like the transition that I've made from 2020 to 2021 has been from CEO to investor. That's probably been my personal transition. And if you think about the the entrepreneur's path, it's technician, salesman, operator, executive, investor, philosopher, bum. That's a joke. But that's kind of like the transition that you go, you know, you go through. And so I feel like I feel the transition that is happening right now, going from you know, executive to investor, because now I'm really kind of becoming a capital allocator. And so that's a skill set that I don't have, or I don't feel I don't feel comfortable with my expertise. And so most of my consumption is around investment. And so to that's the quick purview. So, what do I focus on in terms of mastermind groups? I don't, I'm not a part of any mastermind groups. Currently, I'm not a part of any coaching programs. I think that I think once you hit eight figures, this is just my belief. There's really not, there's not a ton. And so it really becomes more about networking and heroes and mentors rather than masterminds and coaching groups. There's nothing wrong with that. I came up through that world. But I think at a certain point it's it becomes more about that. And so heroes being defined as people like Charlie Munger, Warren Buffett, Jeff Bezos, Elon Musk reading the things that they put out, consuming their content, because those are guys that you'll really never have access to. And so I try and consume the wisps of their character and their knowledge as much as I can. A level below that I would say is high-level mentors. So these are people who have achieved what I want. And then just basically saying, like, I feel like I'm going to ask a disproportionate amount of your time. How is there, is there any world in which we can make this make sense for you so we can both participate? And so I don't have to go out of exchange within our relationship. You know what I mean? Like where I'm asking too much because candidly, you have more than I have to offer you. I'm aware of that. And so, how can I make this equitable? Or, or rather, abundant, how can I make this be even better for you? And I'm willing to sacrifice that in the short term to learn the skills, character traits, you know, beliefs, etc. And then the networking component, I think, is wildly underrated. And a lot of the best decisions and deals and whatnot I've I've done in my life have been through people that I've met at events. And I might not have done something through them, but they introduced me to someone else who ended up being really, really fruitful for me. So I think I usually I try to, it's difficult for me now, but especially as I was coming up, whenever someone asked me for a favor, I usually did it. And I tried to do it better than just a favor. So I tried to really over-deliver on something that someone asked me for so that I would have a legit IOU if I ever needed it. And a lot of times I called on those and I was disproportionately rewarded for fronting the work and giving first. And so I think those have been the things for my personal development that I've been that I've been thinking through and focused on.

SPEAKER_03 41:41

Thanks for sharing that, Alex.

Million-Dollar Mistakes Worth Learning From

SPEAKER_03 41:43

Last one to end off with biggest money mistake.

SPEAKER_01 41:49

Paying taxes. I think I started my supplement company too soon. I think that was I'm happy that I have it now, and I was forced to learn a lot of skills because I started it, but I think I started it too early. I think I should have waited another year or two and had more leadership in place with Jim Launch because what ended up happening is I became CEO of two companies. And that that was that was difficult because I ended up feeling I was just ping-ponging back and forth, and it was really just me maintaining and riding two horses, which was hard. So at that, that was out of sequence. It took me a long time to dig out. It took me so much longer to dig out of that. If I had just waited six more months and put more leadership in place, I think I could have done it and been better. So that's probably that was probably my biggest mistake. I have so many, I have a big list of million-dollar plus mistakes that hard cost cost me a million dollars. Like I developed an app without knowing much about the software business, put 1.2 million into it, didn't end up launching it because I realized it was another business, wasn't paying attention to my financials. My COO started working with a legal firm and they were charging us $120,000 a month for nine months. They provided nothing. They just hopped on phone calls and went through our portal, which was ridiculously long. And they were charging me $1,000 an hour for every hour of watch time. And it was my mistake that I just wasn't paying attention to it. We were just making so much money, I didn't even notice the $120,000 a month. So I have to have so many of them. I hired a I had a low-level customer service rep that worked her way up to the top to be a director. She had no experience, but she was just really good at it and had good personality. And so we had her open up a new division in our supplement company when we were starting that. She hired 30 people. Turned out we only needed three. So I had to lay off 27 people. That destroyed my glass door, let alone the cost. Like, I think the cost of that was really to the culture of the company. It really hurt. I mean, it was just that we just didn't need him. There's just, I mean, people reaching out, like, I don't actually have anything to do. I don't know why you hired me. I hired a director of marketing who really sold me on his experience. I'm sorry, is sold me on his experience and it really is potential. I don't hire for potential anymore. I hire for experience. I don't want you to learn on my dollar. You can learn someone else's dollar who hasn't learned that lesson yet. And so, you know, this guy came in at 300 or 320 a year. It's been huge. The biggest, the biggest value I've ever paid still, and and hired 17 people for department that now runs with three. And each of those people, well, you know, was a 70 to $100,000 a year. So, you know, the higher up you make the mistake in a personnel, the bigger the mistake really is because it compounds not only in the hard cost of the money, but the cost of the time that you should have been having the right person. Um, and then also the cultural debt that you incur that you have to pay with interest back once you realize the mistake. I could keep going. I mean, uh I have plenty. So, yeah, those are just those are some of my highlights, some of my favorites of the mistakes that I've made. But yeah, each of those was a million-dollar plus mistake.

Where To Follow Alex

SPEAKER_03 45:00

All right, guys. So we just saved you guys a couple million right there. All right, well, we appreciate your time, man. You know, it's been awesome learning from you and inspired by what you've accomplished and got a step of my game for sure.

SPEAKER_00 45:14

Yeah, I can't I can't believe you're 32, bro. That that just blows me away, man. I mean, it like it the people just listening, they'll be like, Oh, that dude's 55 years old. He's 32, guys. He's 32, but you're true inspiration, bro. I mean that. And I encourage all the people out there, go and consume everything you can on Alex. He's got a wealth of knowledge, and so again, bro, we appreciate you being on. Thanks for your time.

SPEAKER_03 45:40

Alex has his own podcast as well. You can find it on iTunes. You want to give a shout out on that?

SPEAKER_01 45:47

Yeah, it's called the game. Yeah, because that's I think it's what we all like. So it's it's called the game. And if you like watching, I do a YouTube channel that's kind of visual breakdowns of the same concepts. So you can just Google my name and it'll it'll come up, Alex Ramosy.

SPEAKER_03 45:59

All right, man. Well, thank you very much for your time. We appreciate it. And uh feel free to check out his podcast, guys. Great stuff. Thanks again. Take care.

SPEAKER_01 46:07

Thank you, guys.