← Build with Leila Hormozi
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The most successful companies in our portfolio have the most honest founders who also happen to make the most mistakes. It's just that they don't lie and BS about their mistakes. It's that they're honest and they own up to them, and people appreciate that. What is up, guys? Welcome back to Build. And today I want to talk about honesty. The reason this is top of mind for me is this. Last week, I think there was a lot of difficult conversations that people on my team had to have. There were a lot of people within my portfolio who had a lot of difficult conversations they had to deal with. And then there was a lot of questions at a workshop that I had the last two days where people essentially had to have difficult conversations. And what I realized is that this really brought me back to a time when I didn't really understand how to handle a lot of these difficult conversations in business. I didn't realize how simple it was and what the solution actually was, which is the same solution for pretty much everybody. And so I'll tell you a little story. Back when Alex and I started Allen, it was our software company. You know, when we started the company, it was really just like, how do we create this tool that our customers can use within our current business? It wasn't like trying to create something that was a standalone business. It was actually just supposed to be a tool that our customers used. And then over time, we were like, wow, actually, this is a software thing of its own. It actually probably deserves its own team. It has, like, a completely different customer base than we actually thought, and it's its own standalone product. And so we transitioned into really separating it. And, you know, it was incubated in our current business, and we kind of took it off and created it into its own team. Through that process, you know, we rolled out different versions of the product. So if you're in software, you know that you kind of roll out like, V1, V2. It's like you start with the MVP and it's like a whole process, because you really don't know what you want to build or what you should build until you get feedback from the customers. You can guess all day, but, you know, our feedback from the customers was like, wait, actually, this is the wrong customer. And so you just don't know until you actually deploy the damn thing. And through that process, you know, we rolled out our V1, and I remember I was really excited. I was also nervous. I was like, okay, what are people going to say? What are they going to think? I hope it goes really well. And the immediate feedback was really good. And then about a week later, I remember I woke up and it was like a Thursday morning. I don't know why. I remember it was Thursday. My team had been slacking me the night before, but I had been in bed. I woke up to these slacks that were like, oh, my gosh, have you seen the feedback in our group? Look what it says. Oh, my gosh, I can't believe this. And so I woke up and I read this very long thread that was in our group, and it was basically talking about how they couldn't believe that we released such a shitty product. They were really upset. They didn't think it was worth their money, like, yada, yada, yada, right? And I was horrified. I was like, oh, my God, what the hell happened? And it seemed that some of the integrations that we had built into the product to integrate with other products had broken. And so essentially, one of the products that we integrated with updated, which broke, like, all of our integrations. And so I was like, well, fuck, that sucks. You know, my whole team, I get on a huddle with them. They're like, what do we say? What do we do? How are we gonna handle this situation? Like, what are we gonna tell them happened? Like, all this stuff? And it's like, they've been on already huddling in the morning for, like an hour when I walked into this. And I was like, why is this so complicated? And they were like, what do you mean? I was like, why don't we just tell them the truth? And they're like, well, that's terrible, because then they're going to know that we didn't catch this. And are they going to trust us? I'm like, yeah, so do you think that they're going to trust us more if we lie? In that moment, what I realized is that most of the time when something goes wrong, something isn't going well, something's off track. We haven't caught something. People don't default to telling the truth. People actually default to, what's the story I need to tell about this so that people don't see that I am imperfect and flawed. What we ended up doing was going live in our group telling them exactly what happened. I didn't hold back. I said, like, I'm very sorry. I feel terrible. Everybody that has experienced issues, I will immediately refund you. I will make this right. I promise I'm gonna do everything in my power. I can't promise I won't fuck up again, but I will Promise I'm gonna do everything in my power right now. This is my number one priority. Here's what I'm doing. I will refund all of you. And there were people who had said, you know, I just lost all my trust in Laila and Alex. I just lost all my trust in this company. Those same people literally stopped. And while I was on this live call were like, I could not have asked you to handle this any better. I don't want to refund. Keep the money. I trust you to fix it. Thank you for owning up. Thank you for being honest. Thank you for, you know, being so transparent with us. What that really taught me is that most people just want honesty. People will forgive mistakes, but they don't forgive lies. And this goes across the board for every interaction in the business. And I'll tell you a few of the places that I noticed this last couple weeks. You know, one was, you know, within a company that we're working with, and that company essentially was trying to ensure that the sales were setting the right expectations for the customers. And so we got on, we were listening to the sales script, and we're talking them through it. And the reality is, is that a lot of people, the reason why their sales do not probably set expectations for their customers is because they don't tell the fucking truth. Right? They're like, let me tell you all the amazing things that will happen. It's like, okay, well, we all know that's bullshit. Not everyone's going to find success with the product. Not everyone's going to love a product. Why can't we just be honest? One of the things that I'm most proud of is that we had opened up our workshop division about a year ago. And when we present people with a second workshop they can attend, we share all the stats, current date of what the success people are seeing, is how much money have they made since joining our workshop, how much has their business grown and what people haven't succeeded? How many people haven't seen success? Because I never want to lie to people. And my favorite saying is, state the facts and tell the truth. And I stick with that in all of these interactions, right? And so what's the problem with most people's sales teams? They don't state the facts and tell the truth. And the irony of it is that your customers then, probably because they know nobody's fucking stupid, they know that not 100% of people see this return, right? They would love to think that, but they know it's not true deep down. Immediately upon Purchase degrade trust by setting the wrong expectation. They know you're bullshitting. You know you're bullshitting. So that's the first place that I've seen it. The second place is I was talking to a business this week at our workshop who was talking about how their product delivery is not on time. And so they're like, what do I tell all my big customers? They have enterprise customers. They're like, we're not gonna be able to deliver on time. I don't know how to handle the situation. The reason is because all these people quit, blah, blah, blah. And I was like, dude, why don't you just tell them this? And they're like, oh, I can tell them this. And I was like, yes, what the hell, right? I was talking to another portfolio company, and they were saying, we promised that our customer support was going to respond within this amount of time. But now we just got this huge influx. I had two people quit. We can't uphold the times. What do I do? And I was like, have you thought about telling them the truth and changing the time? And they were like, oh, wow. No, I haven't. It's like, okay. I had another guy who brought up. He had a business partner. That business partner made a mistake that cut the business in half. And he comes to me and he says, you know, what do I tell him? I was like, what do you mean? What do you tell me? He's like, well, I think we need to go back to what we were doing before, because it cut it in half. What do I say to him? I was like, the business cut in half. Let's go back to what we were doing before. I don't think that worked as well as we wanted it to. What I've recognized is just this underlying pattern that people just don't tell the truth. They think that for some reason, we need to make up a story about reality to satisfy, you know, whatever someone's desire to understand why something is imperfect. Things are not perfect. Business is not perfect. Relationships are not perfect. This all goes back to a quote that I remember reading. It was about six years ago, and it was from Mark Zuckerberg. Your job is to be a truth teller. And this goes through all aspects of our business. Marketing, sales, customer success, delivery, IT operations, hard conversations, promoting, firing, hiring. Tell the truth. But most people are afraid, right? Most people are afraid that for some reason, being honest is going to be worse than lying and making up some kind of story. But I love this quote, and it stuck with me for such a long time. Lies run sprints, but the truth runs marathons. Lies can take you only so far in your business. And if your business, if the expectations you set for your customers, for your team, are built on lies, then so is your business. And it only goes so far before people start to see the truth. This goes so far as to the interviewing process. You know, every time I get on a final interview, usually what I do is I watch, you know, anywhere from two to three interviews that that person's had prior with my team. If they're in person, I have to read the notes, but if it's been virtual, then I get to watch those calls. And I always boil it down to, what's the one thing I'm concerned about? What's the one main issue that I want to talk through with this person? And so then when I get on the final interview, I'm honest about that. I'm like, hey, here's the one thing that I've seen throughout the interview process that I'm concerned with that might be a mismatch for what we're looking for. So I want to talk it through with you. And people are like, oh, my God. Wow. You say that on the final interview. I'm like, what the fuck? What do I want to do? Start off the relationship built on lies and walking on eggshells. And I think that this is a skill that took me a long time to acquire, because what happens when you're really brutally honest, which I think is a good thing, is that you may not get all the customers, you may not get all the friends, you may not get all the business, but you will get the right customers, the right friends, and the right business. And so in order to ensure that you have those right people, you have to be honest about what's happening. And this is just something that I've, you know, I realize over time, it was about. I want to say it was like six months ago, I realized that honesty is the most important thing to me. Does that mean that I mean to people? No, you. You can be honest without being mean. You don't need to insult somebody. You can state the facts and tell the truth. I speak in terms of objective reality, not my subjective view of that reality. Right. And so if something is occurring, I'm going to leave my opinion out of it. I'm going to state the facts. I'm going to talk about it objectively. One of the best quotes that I heard about in terms of discussing things with people, maybe about themselves, their performance, is it's a do not A whole we talk about the behavior and what occurred. We don't talk about who they are, we don't ascribe labels to them, we don't insult them, we don't call them names, we don't associate them with negative things. And that was one of the most helpful things to me. Because what I realized is that a lot of the times people don't tell the truth to people about the people and about their behaviors because they're actually insulting them. They actually think that telling people the truth is talking to them about their feelings and how they feel about something. I don't need to tell my customers how I feel. I don't need to tell my business partner how I feel. I don't need to tell myself my direct reports how I feel when they do something that I don't like. I can just tell them what occurs. And I think that a lot of the reason that people have a difficulty being honest is they think that honesty, because maybe they grew up doing this, is when you emotionally dump on somebody, which always results in a negative consequence. If you tell your employee how they've just been terrible, they're ruining the whole department, you don't look forward to talking to them, like, what good does that do? But if you're like, hey, for the last few weeks you've done these three things and I've noticed that this has happened because of that. And so I'd like to get back on track and do these things instead. Okay, so now they're probably actually more likely to do those things. But it all roots from being honest. And I've just noticed that this is something that people have a really hard time with. Why? I'm not sure. But if you want to build a really long lasting business, it's going to be really tough to do that if you lie. And exaggeration can be lying as well. For those of you who exaggerate in your marketing, exaggerate on your sales calls, exaggerate when you're talking to people about your business. Like, your customers ain't stupid. They're gonna figure it out. You're gonna get a bad reputation. I can't even tell you how many people that I've met have like these really by all measures successful businesses. And they're like, we're doing, you know, 75 million or 300 million or whatever in revenue. And I'm like, okay, well what are you telling your customers? What's the product? It's all overselling people and there's a friggin churn Factory on the other side, it's just, like, awful. But then they also, they lie to their customers. They lie just like they lie to their customers. They lie to their employees. They're like, oh, we love our customers. We'll do anything. But they're just turning left and right. And it's just all built on lies. It's like if you just built it on truth, your business would probably last a lot longer. You probably wouldn't have so many issues. You probably wouldn't have customers, employees leaving. And I know that nobody means to do harm when they make these decisions or when they do these things, or they say these things, or they exaggerate, but it does look at the outcome. Is it good or is it bad? And in almost every instance, if you look at businesses that are honest, maybe they don't get as many customers in the beginning. Maybe they lose more customers in the beginning. Maybe they have a hard time finding people to work for them. But later on, all of those things are easier. It's either hard in the beginning and easy later, or it's easy in the beginning and it's hard later. And if we inflate the truth, we stretch the truth in the beginning, it makes everything harder later because we're not matching expectations for people. And so in every problem that most people have in their business, I can almost always root it back to, they don't know how to handle it because they don't know if they should be honest. The product's not going to be where they think it is. They don't think they can hit their goals on time. They don't think they've got enough money to launch this new product. This employee is underperforming. They're not happy with their business partner. They're not sure they can be expectations for customers. All of these things just root back to if you were dishonest, you don't even have to think about this. So I'll just be honest and see what happens. Maybe it's harder in the short term, but it's a hell of a lot easier in the long term. And so with that, I would ask yourself this, which is, what problems am I facing in my business right now that wouldn't exist or would be solved instantly if I was just honest? If I just told the truth. Now, that doesn't mean you have to be mean. You have to yell, you have to insult people. But if you just told the truth, say you've got a marketing issue right now and your customers are turning on the background, right? What if you just told your customers the truth in your marketing, and what if you just told them the truth in your sales calls? Don't you think that might fix this? Say you're not able to keep up with the expectations you set for your customers. What if you just told them that you made a mistake and you can't keep up and you're going to do X, Y, and Z to make it right? What if you didn't have to sugarcoat it? What if you didn't have to make up some story? You could just solve it. What if you had business partner they're not happy with, you just told them, here's the things I was expecting. Here's what's happening. I feel like there's a discrepancy. What can we do to fix it? We just create so much drama around telling the truth. And the thing is, it's like, short term, we're being nice, we're being polite, right? But it's actually not disclosing the truth, which long term is not kind to people because people know when we're BSing. And that's the thing. It's like inadvertently by not telling the truth, you actually create more distrust. Even though you, like, make up some big lie that you think they want to hear, or you exaggerate a story or you stress the truth. You're like, they're gonna, like, they're gonna like this. They're gonna, you know, I'm gonna save face and it's gonna be okay, and they're gonna forgive me if I say these things. It's like, no, because guess what? Other things aren't going to align with that. They're gonna see out points. And then because they see those out points later on, they're gonna be like, I don't think they told me the truth in the beginning. I can't tell you how many times I've had to stop doing business with somebody simply because they didn't tell me the freaking truth. My favorite type of founders that we work with, probably the only ones we work with now, are incredibly honest. And they're incredibly honest about when they fuck up, too. And I think that that's why so many of them are so successful. The most successful companies in our portfolio have the most honest founders who also happen to make the most mistakes. It's just that they don't lie and BS about their mistakes. It's that they're honest and they own up to them, and people appreciate that. People don't feel safe when a leader or the business that they work with doesn't tell the truth. Please fucking reflect on this and ask yourself, am I telling the truth in all areas of my business? Am I being honest with myself? Am I being honest with my customers? Am I being honest with my employees? Or am I bullshitting? Because I think that's what people want to hear and it's causing problems later on if you tell the truth. It takes way less time and way less headache, both in the short term and the long term. So with that, I ask that you reflect on that today, whether it be the weekend or a weekday, and I catch you on the next one.