Alex Hormozi (2:31)

At acquisition.com we scale businesses. The content that I generate, that we put out, conversations like this helps people who are going from zero to one just getting off the ground to helping people go from 1 million to 10 million, to helping the entrepreneurs going from 10 to 100 either get there or exit along the way. And there are frameworks that cross all three of those that I consider both deep and wide that help any business navigate whatever strategic decision is in front of them to get the highest potential return for their time. And so if you're listening or watching, then if one of those frameworks applies immediately to your business and allows you to pull five years forward in your career, I would say that's a pretty good return on time.

Stephen Bartlett (3:18)

For the people that are at zero.

Alex Hormozi (3:19)

Yeah.

Stephen Bartlett (3:20)

What is it that they're typically coming to you to help them with? So if you were one of them.

Alex Hormozi (3:25)

Yeah.

Stephen Bartlett (3:26)

What is it that they want from Alex or Mosey?

Alex Hormozi (3:29)

I think it's there's what they think they want and what they actually need, which are two different things. And so I think what they think they want is some tactic that's going to immediately help them start a business. Would they typically actually need is the courage to be willing to be wrong and to be willing to have shame by failing at things in front of people whose opinions they care about? And I think that's if I rewind the clock. For me, it was probably one of the hardest things that I had to get over. And so I think that's why maybe my message resonates with a lot of people, is because it was so hard for me to get over. And what's interesting is basically anybody who's listening, the harder it is for you to break free of whatever kind of mental prison you've made for yourself, whether that's real or just in your head, the more compelling your story will be. When you break through it because it will resonate with even more people. For the people that it was easy that their story doesn't have a lot of, like, I was immediately an entrepreneur. Like, I wasn't like that. I had a job when I was in high school, I had a job immediately out of college. Some people were like, I was selling lemonade out of the back of my, you know, thing when I was 13. I didn't do any of that. School failed me. I actually was pretty good at school. I didn't have any of those issues, you know what I mean? And so I had a pretty clear career path. And so I had what many would consider, like I had a real opportunity cost. So I had a white collar job and I had a GMAT score above Harvard's mid score. And so I had a really clear path of what my life could look like in the next 20, 30 years. And it was fairly well defined. Like I, I'll go to Harvard or Stanford or one of the top business schools and then I will either go back into management consulting or I'll go into investment banking and then eventually end up in private equity. And that would be the path, right? And then all the flowers would be set at my feet and everyone would say, we approve of you, you're an excellent person. But when I saw the people who were 20 years ahead of me, I really didn't want their life. And then it started making me look at my life and I was like, I don't even know if I really want my life. And so the big decisions that I've made in my life unfortunately have almost always come at the doorstep of apparent death. And I think maybe in some ways that makes me a coward for having needed death to make decisions. And so operationalizing that has been something that has helped me move faster to make decisions that I know I need to make but don't. And so the first big kind of like what felt like a death decision was I was a consultant, 22ish years old. I had a paid for condo that I bought overlooking the city. And I remember thinking like, I really hope I don't wake up tomorrow. And that, and I don't mean that to be melodramatic. I just for a period of time I just always just like hoped every night I was like, I just really hope I don't wake up tomorrow. Like, I just don't want to do this. And what was difficult about that was that at that time was when my father was most proud of me because I was doing Everything that was according to plan, he could talk about his son, who graduated in three years from Vanderbilt, had the good job. Everything was, we're following the plan. And it was upon realizing that my ultimate expression of living out his dream was me feeling like I didn't want to be alive. And so it took me time to get to that point, to even articulate that, because obviously, you never want to kind of, like, admit failure, of, like, I have really messed something up here. But I was living my life to win someone else's game. And when I realized that, I realized that one of our dreams had to die, either his or mine. And when I realized that his dream must die in order for mine to live was a statement that I kind of crystallized when I was at that point in my life. Like, I had to keep repeating that, like, his dream has to die in order for mine to live. And so to put this in perspective of, like, how afraid of my father's judgment I was, I left the state and drove across the country halfway through before calling him to tell him that I was gone. And so I bring this up because I don't try. I'm not trying to be dramatic here, but I'm saying that if you feel a lot of pressure, I get it. Like, I tried to leave the job that I was at to pursue just literally anything that wasn't that. Just, I wanted to start a business at some point, I didn't know how I was going to do it. I just knew that what I was doing was not the path I wanted to be on. And everybody around me wanted me to be on that path. And so I went to go be like, hey, I'm thinking about doing something else. And, you know, it would always be that, you know, later, later, like, everything's good later, you know? And I remember when I called my dad and I told him that, he said, understand, why don't you come home? Like, come home. We'll. I didn't tell him that I was. I was gone yet. Like, I said, hey, I want to go pursue this fitness thing. He said, cool, come over for lunch. We'll talk about it. You know? And I was like, I'm already gone. And then obviously, his tone changed a lot. And, you know, our relationship struggled for years after that. And I also bring that up because sometimes there's this illusion that you get on the Oscar stage or whatever it is, and you're like, hey, I just want to thank my mom, my dad, my friends for always supporting me. And I can't say that And I wish I could. And you might not be able to say that either. And I also don't think that's a reason not to do it. And so we did struggle for years after that to kind of like. Because I was basically living as what was once his prodigal son goes and takes a minimum wage job as a personal trainer at a gym, like, you know, cleaning floors and stuff to learn. Just to learn the gym business. But that was ultimately, like, how I broke free, literally, you know, physically leaving the area and, you know, mentally. But I think that I had to accept that there was a timeline where my father would never talk to me again, and I had to be okay with that to pursue what I wanted. And I think that when you asked the original question, what are the people from 0 to 1 really looking for? I read tons of business books at that time, but I couldn't use any of them because I was so afraid. And what's crazy is that I think about it now in retrospect, and it's like, it's crazy how large the perceived monsters can appear. And Layla has this quote that I love. But it's fear is a mile wide, an inch deep. And so you look at it and it looks like this ocean. And then you take the first step and you realize you don't drown because it's like, oh, there's ground underneath of this, right? There's other people who are more on my path. And the friends you lose, you gain new friends. Right? And so that fear was the hardest decision that I've had to overcome in my entrepreneurial career. And I think of all the. Of all the split paths in my life, that was the one that if I had many timelines or many universes that existed, that was probably the one that is the most likely that I would not have parted from. So I think in, like, 90% of universes that Alex Hormozi exists. I'm just a consultant somewhere. And so I would encourage you, if you do feel that you're not gonna die, like, you won't die and you might just live.

Stephen Bartlett (10:42)

It's so interesting because I think everything you've said is just absolutely spot on. But you're right in where you say that if you'd asked an audience member listening now, why they haven't started yet, they wouldn't say fear. They would say, I haven't got the X, I haven't got the Y. But actually, it is such an emotional thing, and we don't talk about that enough because uncertainty is. Humans seem to be allergic to uncertainty. And they'd rather the certain misery of their current situation typically than uncertainty.

Alex Hormozi (11:09)

And I think, and I used what I consider a very non palatable word of coward purposefully because no one wants to say they're afraid. Because if you say you're afraid then it means you're a coward. And I think that it only means you're a coward if you don't. If you allow that fear to change your behavior in an aversive way, as in not towards what you want. And so, you know, the inverse of that. Many people have heard it. Courage is not acting without fear, but despite fear. And I think that when you act, when you allow fear to change your behavior the wrong way, that is when you can give yourself that title of cowardice. And I think that that is a title that I have feared my whole life. And that label is almost. I'm more afraid of that label than the label of failure. I'd rather be a failure than a coward.

Stephen Bartlett (12:03)

Is there a framework for knowing when to quit?

Alex Hormozi (12:08)

So I think there's like the math behind it and the math I think is pretty straightforward. So like when do you quit your business? I like you've saved up three to six months of personal savings, number one. Number two is that you have started something because nowadays in the digital age you can begin a business on the side that can generate income. And that income in the small amount of time that you're not working replaces or at least matches the existing income you have from your current job. And you've been able to do that or demonstrate that income for like three to six months if you do that. That's a very like math way of approaching it. That also is basically never the reason that people aren't quitting their job. That's a really. I have backlo. I've matched my current income with my part time work and if I just put my full time work I would probably make more very reasonable, but never actually the reason that people don't do it.

Stephen Bartlett (12:59)

I was thinking about the two sort of reasons why someone might quit something or feel like they want to quit. And one of them is clearly because it's hard. And that's obviously not reason enough to quit. And then there's another one which you were speaking to there, which is it's not moving me towards a meaningful goal irrespective of how hard it is. Like a marathon, you're raising money for a charity you care about. It's hard but you don't quit. Yeah, and then there's maybe if you're running a marathon for no apparent reason, you know, there was no charity, there was no one watching, there was no like fitness benefit. Then that's a good, I guess, moment to consider quitting. My story mimics yours in a way that I didn't realize. I didn't realize you went through a similar thing in terms of the parents disownership. Yeah, no real great option to flee to, but feeling like the current path that would have led me to be, I don't know, business management student was significantly worse on balance than taking the risk. But I think maybe a point of distinction is it didn't. I was so naive that it didn't feel like a risk.

Alex Hormozi (13:57)

Yeah. So what's really interesting about that is the guarantee. And so a lot of times we don't look at what I call the don't, which is like the alternate path. And so if I had played out my existing path, I had a guarantee of outcome I didn't want, it was just out of delay, whereas here there's a chance that I can make it. And so one of the final kind of frameworks for making the decision was guarantee bad, chance at good. And I was like, well, I might as well take a chance. And I strongly encourage thinking about playing it out. And so what I mean by that is like I think fear exists in the vague, not in the specific. And so when you say I'm going to quit my job and then what if this doesn't work, I'm going to failure tons of fear. If I say I'm going to quit my job and then I'm going to try and start a business and if the business doesn't work, I'll probably have a compelling story that I could tell for business school if I wanted to, to show that I had some entrepreneurial slant. In the meantime, I could use that experience plus my job experience to probably get another or maybe even better job in the meantime and match or supersede my existing income. And the actual loss would be maybe the savings that I had saved up. But if I'm younger or I haven't made as much money as I want, then that's never been the amount of money that would be material anyways on the grand scheme of what I would like to make. And in terms of living situation, I will, worst case, go back to my parents house with my tail between my legs or sleep at a friend's couch because I have enough people that would be willing to put me up in a garage if I had to and so it's like, okay, so my actual worst case scenario is just like I have a cool story and maybe some shame that is self inflicted. Cause it's not like no one else cares really. But it's self inflicted shame and maybe a detour or a different story that I have to tell later on in my career. Not as much fear there, right. But like the first one, like I'll fail, everyone will hate me and I'll die.

Stephen Bartlett (16:05)

The first one sounded like it was written by your like amygdala, like a fear. And the second one was pure, like prefrontal cortex. It was all logic.

Alex Hormozi (16:12)

Yeah.

Stephen Bartlett (16:12)

And I'm wondering, you know, as you're going into that decision, obviously fear is going to lead it. So of course you're going to go for option one where you just think about the downside. Maybe there's a practice that allows you to get into your prefrontal cortex into logic.

Alex Hormozi (16:23)

I think that's actually so. I think you nailed it and said it way better than I did. But I think that's, I think going from vague to specific basically disengages your amygdala because it can't reason the logic, chain of causation and causality of what's going to happen next in a chain of events. And so when you get into the specific of it, all of a sudden you're like, okay, I'm not going to be homeless and then shamed and die. I might live in inferior living conditions for a short period. Which by the way, when you're later on in your life, you'll look back and think of as the good old days. Cause I can't believe I was couch surfing. I was pursuing my dreams. Right? It's only like in the moment that it feels bad when you look back. Even I find this hilarious. How long after you do something embarrassing is it funny? Right? Like at some point for almost all of us, with enough time, the shameful experience becomes funny. And so if it is going to become funny eventually, it might as well become funny now. And so it's just like pulling the time horizon up. But all of that's prefrontal cortex decision making. And so. No, but I think that's exactly, I think that nailed it. Because when I thought about this decision, obviously I had my very emotional statement around, like his dream has to die for mine to live. Yes. Also logic, downside, risk. Here I'll have a story and I can always get my job back. Okay. And if I can't get that job back, I'll have other ones that will be available.

Stephen Bartlett (17:46)

Fine.

Alex Hormozi (17:47)

And if I have a downgrading and some people think that I'm not as successful as that. Okay, I'll not stop, though. And so I think that demystifies a lot of the fears. I think that applies not just for entrepreneurial fears. I think it applies for any fear. I'm going to talk. I can't tell this person this bad news. All right, let's play it out. I say something and then they're going to kill me. Probably not. So what's gonna happen? I'll say these words and then they'll flip the table, they'll flick me off, they'll maybe just feel hurt and maybe they'll cry, maybe they'll shout, okay, okay, if they shouted at me, what do I do? And you just kind of play it out and you're like, okay, I think I have most of these conditions prepared for. And then all of a sudden you can have those things.

Stephen Bartlett (18:26)

What you also said is that in the face of guaranteed misery, any option is better.

Alex Hormozi (18:31)

Yeah, it's real.

Stephen Bartlett (18:33)

You get to live once. So, like, why would guaranteed misery be better than any available option?

Alex Hormozi (18:39)

It's delay discounting. What's crazy is delay discounting happens both ways. So you set your alarm for 5am at night and you're like, I'm going to wake up at five. But that's because you're delaying the pain of waking up. And when it's immediate, when I have to quit the job, like, I'll quit my job tomorrow for 20 years. And so it's just like we always, we, we, we delay the fact that we're going to be miserable into the present. To like, like we, we massively discount what a whole lifetime of misery would be.

Stephen Bartlett (19:08)

Amen. When you're thinking about what to pursue. So say you've left the job, you've quit the thing. When you're thinking about what to pursue, how much of that is a decision derived from self awareness? Because, you know, someone will look at you now and be like, oh, no, Alex did this. So I'm gonna start a acquisition.com, you know, or they'll say, I wanna. I saw Steve Jobs did that thing with the computers. I'm gonna start Apple or Elon. I'm gonna do the spaceships. How much do you have to know thyself to know what to pursue?

Alex Hormozi (19:40)

Man, this is a really good question. So there's a tweet that I love by Andrew Wilkinson, which is every entrepreneur ever. Colon. Here's the winning number for my lottery ticket. And so it's like every entrepreneur will say, here's the winning lottery ticket. But it's like that game already, that drawing already happened.

Stephen Bartlett (19:59)

Ah, okay.

Alex Hormozi (20:00)

Yeah, Right. And so, like, you can't cash that ticket in. It's already done. And so people say the word first principles. No one really knows what it means. I mean, some people do, but I think far more people say it than know what it means. And so, basically, there are foundational truths of business that exist, and the conditions of the environment will change. And so you have to apply those truths to whatever the current condition is. And so that's what I try and tease out with the books and the stuff that I put out in content. But at the end of the day, you have an input of time, like zooming all the way out. Assuming that your goal is to make money, okay? And this is just a purely economic business goal, then you have time, which is the primary currency that you trade it, and you make dollars over a period of time. And so I tend to reject the idea of like, never, you know, never trade time for dollars or anything like that, because everyone trades time for dollars. It's just some of us are more efficient at it than others. But even exchanges that occur that just are not denominated in time still occur over time. And so you have this foundational unit of time which you're going to give in. What we're seeking is the highest return on that time. And so within a business context, there's kind of three levels of things that have to occur in a business. You have to attract attention, you have to convert attention, then you have to deliver something for that attention. And in each of those things, you want as much leverage as possible. So you want as little time as possible required to get the most output. And so I have built acquisition.com on basically two primary theses which are in the logo, which is. This is a fulcrum for leverage for.

Stephen Bartlett (21:34)

People that can't see. It's like a triangle.

Alex Hormozi (21:36)

Yeah, so it's like a triangle or the Illuminati, because that always gets brought up. Right? So we've got the fulcrum for leverage, and then inside of it you have supply and demand. And I see those are the two foundational principles of business. And so which is you need supply and demand to have a business and then leverage to get as much out of it as you possibly can. And so when you're looking at the assets that you have, assets can also be skills, resources, what you have available to you. Now if you have nothing, then all you have is your brain, your hands, and the time that you have that you can put towards learning something. Which is why I'm a big fan of skill acquisition as one of the primary things that you can do is educating yourself, and not formally educating, but informally or alternatively educating yourself on super tactical things. Once you get over the fear, then you start asking, okay, how do I let people know about my stuff? And what do I let them know? Right. And so you have to have something to sell, which is the offer. And ideally you want the offer to have as much leverage as possible. Like, so if you sold software or you sold media, those are things that you can cut once, sell a thousand times. If you have a conversion mechanism, it's like you can't have it be automated, like a checkout page or some sort of video sales letter or something like that, where people just buy without a phone salesperson. If you add a phone salesperson, there's less leverage. Not to say that's wrong, but. But you want to have the highest leverage opportunity. And then from the deliverability perspective, I kind of talked about deliverability first. But from the advertising perspective, if you reach out to people one on one, that's lower leverage than being able to make one piece of content that a million people see. And so over time, you go from low leverage to high leverage, where you have the same inputs, but you just get significantly more for your output. And that fundamentally is like, if we're reasoning out from first principles, how do I get said differently? The question someone I think is really asking is, how do I get the most for what I put in? And you have to reason within your current context of your skills and your resources and your assets in order to derive that solution for you.

Stephen Bartlett (23:35)

So if someone walks up to you in the street and they say, alex, what idea should I pursue? I've just quit my job.

Alex Hormozi (23:39)

Yeah, right. So I would say business ideas typically come from one of three Ps, so it comes from a pain that you're currently experiencing, a past profession. So the thing that you just quit, or some of the jobs that you just quit, or passion. So something that you're inherently interested in that you would spend your time doing anyways, some skill that you learned while you were in the workforce, which, by the way, is one of the most proven ways of making money, because the economy has already showed you that people are willing to exchange money for that specific job. And so in the world of gig economies and solopreneurs, every business can be dismantled into Just jobs being done. And all of those jobs can be fractionalized. So anybody, like we look at any business, you've got sales, you've got marketing, you've got customer success, you've got customer support. If you want to differentiate that, you've got product, you've got design, you've got web pages. There's so many different components to a business. You just need to learn one of them. And then it's like, boom, you have a skill that you can trade for money that you don't have anybody else to report to. And then pain is usually, I think, in some ways, sometimes one of the biggest drivers is like, you had an eating allergy and you couldn't find pancakes that dealt with your specific eating allergy. And you bet that there's a decent amount of other people with that allergy that also like pancakes. And so then you make pancakes that are delicious and amazing that also cater to people with that food allergy. And then all of a sudden, like, you have a business based on pain.

Stephen Bartlett (25:04)

And why. Why does that matter? The pain part? What leverage and advantage does it give you for the next five years?

Alex Hormozi (25:11)

I think that deep knowledge of the prospect is paramount or very important for creating exceptional products. And you can either do that by doing a ton and ton of research or by being the prospect. And there's a certain amount of, like, visceral feel that you'll know, like, if someone wants to make a nose product for breathing. I have tried every product since I was in eighth grade. So it's been 20 plus years, 30, whatever, a lot of years that since then. And I've tried everything. And so I know the pros and cons of every product that exists on the market. And I can tell because. And I've done. It's not like, oh, I tried it for a day. It's like, I'll try things for a month at a time. And so I have so much time exposure to this problem that I have a lot of nuance, in my opinion, on what's wrong with the solutions. So I can formulate a way better hypothesis on how to fix it.

Stephen Bartlett (25:59)

And that hypothesis will be, for an investor, so much more compelling because you lead with a story as opposed to logic.

Alex Hormozi (26:06)

I met the guy who invested in Regal Cinemas, which is probably the biggest chain in the US and it was when it was there was. I had just one theater, and it became obvious Covid has disrupted that business. But, you know, for 20 years, whatever, they crushed. And he said it was so weird to say that, oh, Cinemas are going to make a comeback because they'd kind of been on a downturn or something like that during the time that he was making the investment. And he said, the reason I decided to invest in it was because this guy knew everything about the business, down to how much the cost of a kernel of popcorn was. And he just knew it so, like the back of his hand that he was like, this guy can't fail. Like, he just knows too much about this business to not have it work and soon investing in, you know, making a gazillion dollars. And so. But I think that that deep understanding, and if you look at all of these, the passion things, you'll have deep understanding because you're spending all of your discretionary time pursuing this passion, the pain. You have a deep understanding of the, of the problem and the prospects going through it because you've experienced it probably for years now. The professional one, I would say, is a bit of a shortcut because if you're quitting the job because you don't like it and then you say, I'm now going to do this for myself, well, you're okay. I mean. Well, the one proven point about that is that that one is proven to work from an economic perspective. You will be able to make money doing that because you already have made money doing it. These other two are less proven, but sometimes have significantly more upside.

Stephen Bartlett (27:29)

When you were talking about the breathing example with your nose, it's funny because if you'd sat down and said to me, steve, I've made these breathing nose strips. They are better. They're 20% more durable. They expand your nostrils by 20%. It is multiples less compelling than you telling me that story you just said about being a kid having breathing problems, trying to solve this problem for yourself. And it's funny because that that story you told versus the sort of rational, logical approach or the benefits approach is your marketing campaign for the next five years on TikTok and Instagram. It's I had a problem, I solved it. I tried everything and solved it for myself. There's almost like nothing more compelling and believable. No, we see that in Dragon's Den. We'll be sat there listening to these pictures all day that someone will come in and say, I had adhd, I tried energy products, they all made me crash. So I went out and solved this problem for myself. And we're on edge because we always can't argue with it at that point, you know.

Alex Hormozi (28:21)

Yeah. So Bezos has this great framework where he talks about Missionaries and mercenaries. And so it's kind of like you have the guy who says, okay, I looked at market trends and this is a growing category and I surveyed people and this was the result that came back. And so I believe that if we time this product right at this point in the market, we'll achieve huge mass adoption, blah, blah, blah, blah. And it's like logicing your way through. And to be fair, some people do make it work, but the missionaries are the ones that end up making the most money because they do it, sure, for the money, because the business has to have some economic engine behind it, but really because they viscerally experienced this problem and don't want anyone else to deal with that problem either. And so, like, if I were to tell that story, like you were saying, like when I was in eighth grade, it was the first year that I started really noticing I couldn't breathe at night. And so I learned how to fall asleep with my hand on my face like this so that my nostril would. So I could fall asleep and my hand would stay. Because you. There's no actually other. Because you can't hold your. Because you fall asleep, right? And so if I fall asleep with my hand like this, right? Like I'm on the couch and I fall asleep like that, it keeps my nostril open and I can fall asleep and it doesn't move. And so that's how I learned how to sleep for years before founding. Like, just like simple nasal strips and things like that. But there's tons of problems with those solutions that exist right now that I won't get into. But maybe someday I'll make a nasal product.

Stephen Bartlett (29:42)

I think, I mean, literally just delivered pictures.

Alex Hormozi (29:47)

I can tell you if you put every product in front of me that exists right now, I can tell you what's wrong with it. Because I've tried literally all of them. Not like I'm pretty obsessive. And so, like, I've tried all of them.

Stephen Bartlett (29:56)

You're missing an opportunity here on it.

Alex Hormozi (29:57)

I've tried. I've tried the ones from Europe. I've tried the one like, not just us. Like, I've tried. I've tried every product that exists on Amazon. I've tried all the ones from foreign countries. Every. Every fan or follower who sends me a product that is a nasal company that's new. I will try the product. I still do. And there has yet. There's. There's yet to be one that has truly solved it.

Stephen Bartlett (30:17)

I mean, you should. I mean.

Alex Hormozi (30:20)

But I think in some ways. So this is actually a really good meta concept here, which is that if you want to be compelling, a demonstration or a model is always more compelling than anything else. And so me even going through that entire narrative is taking everyone else who's been listening to this on some journey. It's like, if you want to make a compelling pitch for a business, it's like, we pretty much just kind of went through one. And so that's really what it comes down to. You're like, well, what do I do with my business? It's like, create your narrative of why you're even doing this. And if you can explain to somebody why they should care about this problem, or more specifically, why you care about this problem, I'll tell you this, more investors will like, I might be like, I don't care about kitchen utensils, but this girl certainly does. And I'm sure there's other women who do, too. And what everyone wants to see is obsession. And unfortunately, in, like, some of the world, I know more in the UK than the US now, like, that kind of perspective of, like, just being all in obsessed with stuff has almost been like, bastard or like, you know, been chastised. And I. But the people who are obsessed are the ones who change the world, at least change their world. And I think that. So a very close friend of mine did all the Olympic teams nutrition and supplementation stuff for a country overseas, and he said, you know the difference between champions and everyone else? And I was like, what? And he said, everyone always looks at them and says, what do champions have that I don't have? And he said, they have it backwards. He said, it's what do champions not have that I have? It's. What do they lack? And it's an off button. They just don't stop. And so in dealing with the gold medal, he's like, they just never stop. They just can't stop. Everything in their life is geared towards one goal and so finding that thing. And they approach everything in their life that way. And I think that that level of obsession around, like, everything that you touch on a daily basis is required for really getting to where you want to go.

Stephen Bartlett (32:30)

So interesting, because as we spoke there about the reason why the story was so much more compelling. It was back to the amygdala. It was back to emotion. And it's funny because we said a second ago that when someone's thinking about quitting a job, they're like, so in their amygdala. Humans run mostly on their amygdala. So when we think about pitching, we should really be aiming at the same part of the brain, which is what you did. When you showed me that you were sleeping as a kid with your hand stretching across your face, I immediately felt sorry for you, felt sympathy. And I immediately believe that if anyone's going to solve this problem, it is this fucking guy who's been through that pain.

Alex Hormozi (33:02)

I've had two surgeries. Both of them didn't really work. Like, I mean, I've got the story.

Stephen Bartlett (33:07)

My girlfriend's the same.

Alex Hormozi (33:08)

What? Oh, really?

Stephen Bartlett (33:08)

Yeah, two surgeries, which she's coming up to her third one now. We've tried all the nose strips. I saw you wearing one. I bought that one for her.

Alex Hormozi (33:14)

Yeah.

Stephen Bartlett (33:15)

And so there's a lot of people watching right now. And there's something going on with these bloody fucking, like, noses. Yeah, people shouldn't, like. Yeah, we're doing something.

Alex Hormozi (33:23)

I feel like I may have popularized some of the nose drip stuff.

Stephen Bartlett (33:25)

Yeah. Kids making it cool. Pain, profession, passion. Ideally, you have all three.

Alex Hormozi (33:32)

If you have all three, then you're. I mean, my God, you're set. Like, if you. If basically pain created an obsession and for some reason you also were doing something like that in your work. Like, I feel like the likelihood that you don't succeed is almost nothing. You only need one of those three. You just pick one. Like, if you just had one pain that you had that you wanted to overcome, or one passion that you were just inherently interested. Cause sometimes passion has nothing to, like, you might just be really into model cars. It's okay. Well, there's a lot of businesses that you can build around model cars. It's like, you can manufacture model cars. You can have services around model cars, making them faster. Because some people race model cars. You can be a collector and start flipping model cars. You can just make media around how to build them and then have a media company around it. There's so many different components of any obsession or interest that you can make. I was talking to on one of the future episodes of Mosey Tank that's coming out. We have a guy who's. He loves Dungeons and Dragons. So he's an it. He's an IT guy and just loves Dungeons and Dragons. And he was like, I just want this to make enough money that I don't have to do it anymore. But it was so pure, you know what I mean? And so I was like, we're gonna help you do this. And so we kind of walked through the business plan for it. But, like, is he going to Be a billionaire? No, but I also don't think that's his goal. And so I think being really clear on what you want is important. So if you're like, I wanna be the richest person in the world, I think it's a terrible goal. But if you want that, great, well, you have to have a multi trillion dollar idea. Because now, because by the time that occurs, there's already multi trillion dollar companies now. So you gotta be looking at like deca trillion dollar opportunity. And so believe it or not, basically the bigger the goal, the narrower the scope of the path to get there. If you're like, I wanna make $10 million, I'm like, you can literally do that in almost any business. You wanna make $100 million, probably still almost any business, you can do it on a long enough time horizon. You can do it a trillion or decatrillion. It's going to be some sort of tech, it's probably going to have some sort of AI. And so you get basically the bigger the goal is, the narrower the scope of how to get there. But the vast majority of people who are like, I want to be the richest man in the world, it's just because they don't know how to really think through it and be like, all right, well after like 100, there's really nothing you can't do except buy more big things. But like in terms of your actual consumption, maybe even 20 is like you can only eat at restaurants that go so expensive, you can only stay at the best hotels, you can only drive the nicest cars. You can do that with about 25 million.

Stephen Bartlett (35:47)

What do you think the cheat code is then? So I've got my idea. What do you think the cheat code is in 2025 to win at the game of attention? Like there's got to be some new rules here because we've got AI, we've got new platforms, we've got new media. You know, I'm give you a hypothetical business idea. I'm going to be a personal trainer, okay? And I picked that because everyone can do it and it's a saturated industry. If I'm a personal trainer in the 2025, how should I be thinking about building attention?

Alex Hormozi (36:18)

So I'll tell you what I wouldn't do first, which is I don't think I try and out science the science people because like unless you have some PhD, there is a PhD guy who's already jacked, who's making content and so he's more knowledgeable and more jacked than you. So you're not going to win there. And so I think in the game of attention, it's trying to find what is unique. Right. And so how do you. How do you, quote, stand out when everyone's loud? And this is gonna sound trite, but your fingerprint is unique, literally from a biological perspective, but so is your life and your experiences. And so there's real alpha or benefit to be had above normal level of effort by leaning into you. And so what makes every person unique is what makes their content unique. And so trying to be like, oh, I wanna make content like Alex is probably not the best way to do it. Cause you're not gonna beat me at being me, but you'll beat me at being you. And so it's basically your flavor of media. So, like, for me, it's like, what is my brand to model this? It's like, well, I have elements of philosophy that are in my brand. Well, do I need that? No, but that's like, kind of me. I obviously talk a ton about business, marketing and sales, promotion, conversion. Those are all things that I spend a lot of time thinking about. And so a lot of my content's about that. Fitness is a component of my life. And so there's light sprinkling of fitness in my content. Also, I come from a background of fitness with gym launch and the companies that I owned before that. And so that would make sense that. And I have my wife Leila, and so that's sprinkled in. And so, like, those are basically the components of my life. And so that's what kind of shines through in my content. I consume a ton of comedy, and so sometimes you'll see some dry humor and dark humor that shines through, but that's me now. You have all of those little buckets of you, and not only are those buckets unique, but also the proportions of those buckets will be different. And so maybe your philosophy is way bigger, or maybe fitness part is way bigger. But I think what makes the truly unique personal trainer fitness brand is leaning into people being interested in you for being you and then being like, by the way, I have fitness stuff if you want to buy it from me. And I think the key part is the vast majority of products and services are commoditized. There are. You're probably not going to be significantly better than other trainers just being real. You probably aren't, but you will be different than them. And we want to lean on. I want to buy fitness from somebody, and so I might as well buy from her or I might as well buy it from him. So you're taking basically this audience that would buy from anyone, but your brand premium gets them to want to buy it from you. If we think about prime, for example, with the drink company, like, it's a drink, that there's other products that already exist in the marketplace that satisfy the same thing as Prime. But if you are agnostic to that brand and you have brand affinity with that creator, then you're like, well, then if I have two things that are basically equal and I just like this guy better, I'm just gonna. As long as the prices are comparable, I'll just vote with my dollars here. And so I think that if you're a personal trainer in 2025, it's gonna be long term, it's going to be building the content short term, it's going to be outreach to people that you know and making a compelling offer to get people to try to work with you.

Stephen Bartlett (39:33)

This overarching point you said there about being yourself, as I was thinking about it, I was thinking, gosh, do you know what the thing that all of my favorite creators and the really successful creators have in common is? They all have, and I use these words intentionally, the courage to be themselves.

Alex Hormozi (39:48)

Yeah.

Stephen Bartlett (39:49)

Because I'll tell you what, when I was starting out as a content creator and I look back, I was showing one of my team members the other day the things I used to post, it was like, everything happens for a reason.

Alex Hormozi (39:57)

Cringe.

Stephen Bartlett (39:58)

It was cringe, cliche, fluff. And it took me several years to almost relax into just realizing that the game here was to get to the point where I could be myself on the Internet. And actually that was the most high value because of, you know, of what you said. It's the uniqueest part of me, but the courage to be yourself.

Alex Hormozi (40:15)

And it's. It is the winning strategy for 2025. And it's. I think it's leaning into it. And the thing is, is that everything in you wants to not do that. I'm not really sure why, but I was having a conversation with Layla, I want to say, two nights ago or three nights ago, I got a bunch of flack for some ex post that I made and she just looked at me and she was like, never dilute yourself. Because I was like, maybe I was like, maybe I shouldn't talk about this stuff. Like, maybe I should just like, you know, I'll just lean off. And she was like, never delude yourself. Like, there are so many more people who need that message than people who are hating that message. And she was like, and if you're actually going to make a difference in a lot of people's lives, there's going to be an equal and opposing force of people who want to reject that. And she's like, this just comes with the territory of, like, how big of an impact you want to have. And it was just such a great wife talking to husband conversation that I guess for me, at the end of the day, I'm like, as long as she thinks I'm cool, I'll keep doing it. But, yeah, it was just. Because the diluted down version all of a sudden becomes everyone else's stuff.

Stephen Bartlett (41:28)

Well, you said a second ago you're not sure why that is, but by very definition of it being unique, that that means that there is no blueprint.

Alex Hormozi (41:37)

Yeah.

Stephen Bartlett (41:38)

There is no person that's come before you and proven that it works. So the courage of being yourself. There's only one Stephen Bartlett. So if I'm truly myself, it's never been done before. That means that the risks are unknown. The upside's also unknown.

Alex Hormozi (41:50)

Yeah.

Stephen Bartlett (41:50)

But so again, going back to our hate of uncertainty, it makes much more sense for me to try and copy you, because I can see a blueprint there than to run the risk of being yourself. And you are someone, I have to say, who is running the risk of being yourself. And actually, as someone who's observing you now, I know who you are, and I now know who you're not. And it's important for me, as someone that follows your work.

Alex Hormozi (42:12)

Yeah.

Stephen Bartlett (42:13)

That actually I see consistency because I've established Alex and Moses values.

Alex Hormozi (42:17)

Yeah.

Stephen Bartlett (42:18)

And anything that diverts from that is actually less valuable because, as you say, it's more like everyone else and the things I've had before, but it's also. It wouldn't feel true anymore.

Alex Hormozi (42:26)

Yeah.

Stephen Bartlett (42:27)

And. And this is something that even as a creator myself, I have to fall back on. Is my audience know who I am now, for better or for worse.

Alex Hormozi (42:35)

Yeah.

Stephen Bartlett (42:36)

They're not gonna learn anything new.

Alex Hormozi (42:38)

You know what's really interesting is navigating the gray. And so there are contradictory ideals. And this is what I kind of come back to when I'm. When I'm, like, worried about these types of things, which is like, you've got mercy and you've got justice. They are somehow opposed. And they are both ideals. So how can we believe in justice and also believe in mercy at the same time? And so. And I mean, there's a number. You can have variety and consistency. Like, there's tons of examples of this, right? And so we have these diametrically opposed ideals, which means that if you ever say, by the way, I'm a little bit more of a justice guy, like, I understand they had a hard time, but at some point, you gotta take your own personal accountability. So, like, no, you're not gonna get out of the speeding ticket. You're gonna get, like, that's what's. Just. On the other hand, it's like, hey, single mom gets pulled over for driving too fast. You know what? Maybe we let her off today, both of those stories fair. But you're gonna get attacked by the other side that has an ideal that all humans try to strive for, and it will feel terrible because they are right. And so what? And so I think that, like, understanding that that conflict will always exist between two apparent ideals, that. And this is foundationally what politics is, right, Is that there are two apparent ideals that all of us. I would say 99% of people would say justice is good, mercy is good, variety is good, consistency is good. Right? Respecting values is good. So is innovating and doing new things. How can we have both of these contradictory ideas and at the same time, like, navigate that without conflict? You can't, because how much becomes the question. And so I think that your thumbprint as a creator is that when someone presents a scenario and says, does Alex choose mercy or justice in this scenario? That your audience says gets it right? And so I think about branding in general as basically a mosaic that you get to create. And so, like, each piece of content is a little tile that has a single color on it. And if you just see one piece of short content at first of Stephen Bartlett, you'll. You don't really have an idea who Stephen Bartlett is, but if you see a thousand of them, all of a sudden you zoom out and you get to see the whole picture. And I think that the. The colors that are in those mosaics and the. And the proportion of how many yellows, how many reds, how many greens, and where are they, is what ultimately creates the brand. And so, because people want to try and turn this into, okay, so I make one post about family, I make one post about finances, I make one post about whatever, right? It's like, I don't think that's how it works. I think you just be you, and then those proportions will naturally shake out. And also, over time, you will change. And so it also makes sense that your brand will change. And that was also another thing that I had to reconcile, which is like, wait, I don't know if I agree as much with some of the things that I said 10 years ago, because the thing is, in the digital world, like, my first podcast was 2017. July of 2017.

Stephen Bartlett (45:33)

Wow.

Alex Hormozi (45:34)

Episode eight is called Stop Branding. I have changed my views on branding, to be clear, but that first podcast is 90 days from when I lost everything. And so the entire hermosi journey, if you want to call that from zero to billion, is actually documented. 90 days from zero. It's all there. And so you can see how my views on business have changed and what I was thinking about at every kind of portion of my life. And so I had to just be okay with the idea that, like, I will change my mind because I will get new information. Because let's take the alternative stance. If I get new information, do I just keep parroting what you did before? This is also an issue with politics, right? Is that like, he's flippy floppy? It's like, so they're not allowed to learn.

Stephen Bartlett (46:21)

Yeah.

Alex Hormozi (46:22)

You've been in politics for 20. Like, you haven't learned anything. Like, no, stances change. Like, I feel like we should be able to do that. And obviously, brands don't work that way. So it has to be gradual over time, which I think if you were always you at all times, it will be gradual over time.

Stephen Bartlett (46:36)

Yeah. I don't know. I think a lot of the time we end up over focusing on unreasonable people, which is a war we can never win anyway. Because you say that to me. I think it was like, I had this guy, the therapist on my podcast, who I then spoke to after the podcast, and he basically broke it down to me. He was like, there's 20% of people that just absolutely love everything you will ever do. Like, you could say anything. You change them. They're fucking. They're just super fans. There's 80% of people that are actually, like, now, he said there's 60% of people that are really reasonable.

Alex Hormozi (47:03)

Yeah.

Stephen Bartlett (47:03)

They don't speak.

Alex Hormozi (47:04)

Yeah.

Stephen Bartlett (47:05)

They just watch. They're, like, reasonable. And then there's 20% of people with. No matter what the fuck you do, they cannot be. This is like, don't spend your life focusing on the 20%. The quiet majority, the 60%, they don't tweet. They don't just chill. And then the 20%, you know, they're your evangelists. But, you know, I find myself falling into the trap of.

Alex Hormozi (47:23)

So what's interesting about the 20% is that, like, I was thinking about this today. The. You're so no matter who you are, you're going to be disliked, period. Because no one's liked by everyone. So we just have to, like, listen, if we can accept that as a premise, right, no one's gonna be liked by everyone. You might as well be disliked for being you than being somebody else.

Stephen Bartlett (47:40)

Amen.

Alex Hormozi (47:41)

Right? Amen. At the most basic level, the being disliked is a fixed cost. And I think to take the opposite perspective, I think it is far better to be disliked for being who you are than love for someone you're not. Yeah.

Stephen Bartlett (47:56)

And one of the great entrepreneurs I interviewed on the podcast said to me, when it comes to marketing and branding and this sort of attention conversation we're having, she said to me that in order to reach your 80%, you have to piss off your 20%, or at least be willing to piss off your 20%. It was Jane Warung, who's the founder of Dermalogica global beauty brand with I think, hundreds of thousands of people. And she sat and said, to get to your 80%, you have to be willing to piss off. No, actually fucking. She said, to get to your 20%, you have to be willing to piss off the 80%. And from a branding perspective, it makes so much sense because when you stand for something clearly, which you do, you inadvertently stand against. You have to.

Alex Hormozi (48:37)

If you draw a line, there's a side on either side and you have to say, like, I'm on this side.

Stephen Bartlett (48:42)

Did you see that Nike ad, dude?

Alex Hormozi (48:44)

I was just going to say that. I was just gonna say that. Yeah, the Willem Dafoe ad.

Stephen Bartlett (48:48)

Yeah.

Alex Hormozi (48:48)

Like, what's yours is mine and what's mine is mine. Yeah. Just like it was actually the first time that I'd seen something from Nike in a long time that I was like, this is what built this brand. And I think they have. They had lost their way for a while with like the wokeism and all that stuff. And I think it's like, Nike means victory, which means people have to lose.

Stephen Bartlett (49:07)

Yeah. And they were willing to say that for the first time ever.

Alex Hormozi (49:10)

Right.

Stephen Bartlett (49:10)

I posted it on my LinkedIn and it was 50. 50.

Alex Hormozi (49:13)

Yeah.

Stephen Bartlett (49:13)

I'd say it was actually more like 80% of people were either neutral or pissed off. And 20%. Yeah. And 20% of people were like, that is me. I am a Nike person. And for me, when I saw that, I thought, I want to buy some Nike shorts.

Alex Hormozi (49:26)

Yeah. I mean, it was the first time I actually felt like I had positive brand affinity towards the brand in a long time.

Stephen Bartlett (49:30)

How important in this game of Building and starting is people.

Alex Hormozi (49:36)

Very.

Stephen Bartlett (49:37)

The hiring question. I'll tell you why I asked this question. Because when I look at my portfolio early stage, first founders never seemed to understand the importance of hiring in people.

Alex Hormozi (49:47)

Yeah.

Stephen Bartlett (49:48)

And I banged my head against the wall trying to convince them that actually the game they're playing is in the right company. Group of people.

Alex Hormozi (49:54)

Yeah. So I'll start with one thing, and then I'll answer the question. So I was talking to a mentor of mine, and he said, when I was in my 20s, it was all about the destination. He said, when I got to my 30s, I realized it was all about the journey. He said, when I was in my 40s, I realized it was about the company. And I was like, I can't wait till you're in your 50s. What's the next one? Right. But I thought that was such a great, like, such a profound shift in terms of how he thought about his business success, because he was like, I don't need to be a deca billionaire. He's like, I'm cool where I'm at, and now I just want to do it with people that I like. And so to the question about people. Overall, I believe that the potential of an organization is directly correlated with the aggregate intellectual horsepower of everyone contained within it. And so if you are the smartest person in the business and you can do everyone's job better than everyone in your company, then it means that the limit of the business is purely based on one person's horsepower and one person's life experiences, and that will be the cap. And basically, it doesn't matter how smart you are. You can't live a hundred lifetimes. Like, you can learn quickly. Sure, there's some people who can learn faster than others, but you're not going to be able to live a thousand lifetimes. And so, as a business grows, more expertise is required. And I think the easiest litmus test for this is if you look at the richest people in the world, almost none of them own 100% of their business. So, number one, most of them don't even own 50. Like, most of them are small percentages. JENSEN Huang's at 4% for Nvidia. Bezos is at 7 or 9% for Amazon. I think Elon's at 20 for Tesla. Like, small percentages. And it's because it takes a lot of horses to take a chariot to the moon. Right. And so, basically, as you put in more intellectual horsepower, the potential peak of the business goes so much higher, so much faster. Keith Rabois from he's one of the original PayPal mafia guys, has a really good analogy for this. And he talks about it in terms of barrels and ammunition. And he says, so as soon as you get some product market fit, the business starts to grow. And you say, okay, we need to start shipping things faster. And this works the same with a services business, a physical products business, software business. The concept's the same. He said, so what happens is you then hire a lot of people and you assume that your throughput is going to increase proportionally. So we have 10 people, we hire 50, we should 5x our output. And then you quickly realize that that is not the case. And so what happens is there are people who are rate limiters for an organization and those are the barrels. So think about a Civil War barrel old cannon, and you've got these cannonballs next to it. He said, most people are ammunition. And so you bring more ammunition, but you're still gonna be limited by the 1 barrel capacity of how many shots can get taken by the barrel. And so you need to find more barrels. So you have to go from 1 barrel to 2 barrels, 2 barrels to 3 barrels. And that becomes an increase in capacity or throughput for the organization. And there are very few of those in a different. I can't remember the law, but it's some organizational law. But the square root of the number of people in a company generate 50% of the work. So you've got 100 people in an organization. 10 people are responsible for 50% of the value that's created.

Stephen Bartlett (53:08)

Facts, right?

Alex Hormozi (53:10)

Anybody who's been in a. Like, you're like, preach. And so the thing is, I think the real game of entrepreneurship is that your standards rise over time. And it's unfortunate because we hear things that other entrepreneurs tell us. It's all about the people stupid. And then you're like, sure, but look at my. And it's like, no, you're not hearing it. And I don't know, there are some. I think Williamson talks about this, how there's like some lessons that for some reason it's like we have to learn for ourselves. I still believe that it's like we can operationalize this at a lower level so that we don't have to learn it for ourselves. But like, I'm convinced, I haven't figured it out yet. But. So every entrepreneur can resonate with this, which is every business that I've started, I've gotten to the success of the business prior way faster. And I kind of liken it to a video game where it's like you beat level one, and then you get to level two. And it's like you spend months trying to beat this boss, and you finally figure out how to beat the boss, and it's like, great. And you spend another three months beating boss three. And let's say you start the game over with a new character. It's like you just zoom through level one, two, and three, and then you get to level four, and you're like, shoot, now I gotta spend time. It's like virgin land. I don't know how to beat this yet. And so I think that that happens for archetype finding for skill and talent within an organization.

Stephen Bartlett (54:26)

Say that again.

Alex Hormozi (54:27)

So if you have functions across an organization, there are people who are gonna drive results within that function. And the first time you hire a salesperson, for example, you don't know what you're looking for. And so you just hire a human who says they can sell, and maybe they can, maybe they can't. And then you cycle through, you try to train them. That doesn't work. Does work, Whatever. And then finally you. Let's say you cycle through three sales guys, and finally you find it kill. And then you have this pattern recognition. You're like, okay, that's what I'm looking for. And then all of a sudden you try and approximate that person or that archetype as much as you can. And so when you start your second company, you're like, oh, I can quickly staff up sales. Cause I know what I'm looking for. But then you're like, shoot, I've never really nailed sales manager yet. And so then you cycle through, you start whacking away at the boss, and then you have to end up firing the boss at level because you're like, oh, God, this didn't work. And then six months are gone because you had to find them, recruit them, hire them, train them, and then find out they sucked and then start over again. And Maybe it takes 18 months to really find the right sales manager. And then you're like, okay, I know what that looks like, but I still don't have a director of marketing. What does that look like? And so it's basically developing this pattern recognition across all functions of the business so that you know what exceptional looks like. And then over time, what happens is as a business grows, your ability to attract talent increases. And so then your standards also grow. And then you find out that there's even more nuance to this, which is that there's a director of sales at a 1 to $10 million level, which is a different looking person from 10 to $100 million level. And it continues to go all the way up. And so it's basically building this repertoire of identifying patterns. And if you talk to, I would say, more experienced entrepreneurs now, they don't talk about building businesses. It's like assembling them. You just assemble the pieces and you just know that this is how it's all going to flow together. And that fundamentally is basically what I try and decode within the content that I have. So that it's like, here's a pattern for how you go recognize this. Here's a pattern for how you recognize this so that you can just move faster through the levels to get to where you want to go. And so to loop back to the original question, which is how important are people in an organization? People are the organization. And so if you ever want to build enterprise value, it's building the collective consciousness of the organization, the skills and how they collaborate together towards a specific outcome. And so knowing how to staff that up is the job.

Stephen Bartlett (56:46)

I think the reason why first time founders feel like they have to learn this lesson themselves is because everything you've just said is an unknown unknown. Like they don't even know that. They don't know it. So they stumble. They hire the sales guy because they were their friend from high school and then fucking and then they go through the pain. And I say this because I'm so unbelievably passionate about it. I went through the same bs. I hired my friend who worked at Prada to be our account. I hired a guy I met at a rap battle to be my marketing director, who was literally playing video games for a living at 30 years old. And I went through this whole thing. And then at maybe three, four years into my first business, I accidentally hired someone great, like through no intention of myself, accidentally. And I saw the net impact they had and I thought, oh my God. Over the coming years I learned that the game, the fundamental game here was, as you said, assembling the best group of people. How if I'm a first time founder, can I put a system in place to make sure that even though I don't know what a good salesperson looks like, even though I don't know what an ex good person looks like, I still attract them to my company?

Alex Hormozi (57:51)

The simplest way of doing it. So the simplest way of attracting somebody to your business when you don't know how to do the job or know who to look for is to unfortunately do the job yourself. And then once you can break down the job, we follow 3DS, which is document, demonstrate, duplicate. That's how we train anybody. So first you have to document everything that you do to successfully do the job. And that's step by step into a checklist. Then you demonstrate. So you do this checklist in front of the person that you're trying to bring on. Then they duplicate, they do the checklist in front of you. What's interesting about that three step process is that you'll often find when you try to demonstrate following the checklist, you don't follow your checklist. And so then you have to adjust the checklist until you actually follow the checklist. And then when you can consistently follow that checklist and get the output, then you can have them do that checklist. And so I think this is why bootstrap founders, I think oftentimes will find they tend to know more about more things because they had to learn them in order to teach them. Now, what's really interesting about what you said about accidentally finding that that star at three or four years in is that I think that happens to almost everyone. Well, hopefully the people who end up making it. It happens to almost everyone because then you realize, oh my God, like if I had four of these people, like we could change the world.

Stephen Bartlett (59:09)

Right. So I say something as well. The other epiphany revelation I had was the star hired stars.

Alex Hormozi (59:16)

Yeah.

Stephen Bartlett (59:16)

And so I think her name's Katie Leeson. Of the 10 people she then hired, nine of them became the best people in my company. And also, I'm not going to say his name, but someone else in my business, a C player.

Alex Hormozi (59:26)

Yeah.

Stephen Bartlett (59:27)

Of the 10 people he hired.

Alex Hormozi (59:28)

Yeah.

Stephen Bartlett (59:29)

He and everyone he hired was fired.

Alex Hormozi (59:31)

So one of the. It's. So as you go up in the organization with hires, the risk and reward goes up. And so that's something that a lot of people don't like talking about. But I will, which is if you hire somebody and let's say that they're not a cultural fit, maybe they have the skills or they are a culture fit, they don't have the skill fit and they're a leader. What you find often, and it sucks, is that everyone, it's almost like it's like a tree that has an entirely rotten branch. It's like you end up having to scoop out three quarters of what was underneath because you realize that they were ineffective or they just were against the actual mission of the business. And it's harrowing and it's horrible. But I try to give this analogy to my team because we've had to do it in every business. It happens. It's just part of business is if somebody goes to the bar and you're at the club and somebody racks up, you know, just ordering shots for everybody. Shots, shots, shots, shots, shots. And then that guy dips, that guy leaves. We all have to pay the bill in the moment. When we pay the bill, when we scoop out the deadwood, when we scoop out the rot from the organization, it feels horrible. But that pain isn't because the scooping out the rot is bad. It's because we planted it on bad ground or because that guy ordered all these shots but couldn't afford it. And I have a different analogy because I really want to drive this one because I think it's important is that in the relationship world, if one spouse tells the other spouse, hey, I cheated on you, I had an affair. That moment is incredibly painful for both parties. And so what it makes you think is, oh, this was wrong to tell the truth. But it's not wrong to tell the truth. What's wrong was cheating. When you tell the truth is when you make it right. And so the pain that you often have to encounter in the organization feels wrong, but is right because you're righting a wrong. And that's where the pain occurs. And that's why so many businesses stay stuck is because they have this affair, they have this person, and they're unwilling to have that hard conversation or multiple in order to make it right. And they stay stuck for years.

Stephen Bartlett (61:40)

This is another quality of really successful founders that I've noticed, which is what you just said is the ability to have the hard conversations sooner. And in my first, in my portfolio where there's first time founders, they're coming to me and in our like monthly meeting saying, God, there's this guy who's running the E Comm division and he's so bad and I'm having to do the job for him. What do I do about it, Steve?

Alex Hormozi (62:03)

What do you think?

Stephen Bartlett (62:05)

But then they come back to me two weeks later and they're like, he's still there.

Alex Hormozi (62:08)

Yeah, right. A year later. And you're like, it's still John. You know, you're like, what are we talking about here?

Stephen Bartlett (62:12)

I remember asking him at such meeting, does John know that you're unhappy with him? Oh, yeah, no. So there's this quiet dissatisfaction which I think is a virus.

Alex Hormozi (62:22)

Right, right. And what no one wants to discuss is the fact that everyone else knows John sucks.

Stephen Bartlett (62:27)

Amen.

Alex Hormozi (62:28)

And that that becomes the minimum standard for what is acceptable for excellence in the organization. And so I think, like, so if brand is what your reputation is externally, I think culture is kind of what reputation is internally. And so I define culture operationalized because I think culture is a very fluffy word. What does that mean? Right. It's the rules that govern reinforcement within an organization. What do we reward, what do we punish? And so the thing is that there's. Realistically, there's like, people have values because they're bundled terms that ladder up many behaviors. If I said Rolls Royce probably would have some value, that's quality over speed, probably, right? And so they would have that. But somebody would have to say, like, well, what does that mean? Right. Well, we hope that we use this as a decision making filter for how it affects behaviors on every situation so that when you're in the should I go fast or should I make it right? You make it right. And there are other organizations kind of like the speed, justice and mercy, speed and quality. Both of them are important. And sometimes they sit diametrically opposed. And so we have to say, where do we sit in the gray so that we can duplicate decision making across the organization so that we can maintain the culture. And so culture, you know, Layla says this a lot, but culture, I think this is a Drucker quote, actually. Culture trumps strategy, like twice a week and every day on Sunday. If you have a mediocre strategy but an unbelievable culture, you will crush somebody who has a great strategy and a terrible culture. Because culture ladders up to performance and execution. And almost every business is limited by execution, not strategy. Most business strategy isn't that complicated. Like, let's do a really good job, so good that people tell their friends about us, and as long as we have enough gross margin, we'll make money. It's not that hard, right? It's just that the doing it is the hard part. And so when we have these, they are the spoken and unspoken rules, mostly unspoken. If someone shows up three minutes late to a meeting and there's 10 people in the meeting, and it's supposed to be a marketing meeting, and I'm there, if I don't say anything, I have now said we have an unspoken rule that if someone shows up three minutes late to a meeting, it's okay. I've reinforced that rule. Now if I. I've reinforced it by not punishing the behavior or at least calling it out. On the flip side, if someone comes in and I berate them, that's also a way of changing behavior. Maybe not the right way to do it, but I could then, like, what do you do in that situation? Someone shows up three minutes late, first off, you would probably sideline with that person. Be like, hey, I don't know if you realize that you were three minutes late, what happened? And they're like, I was on a client call. It went late. I'm really sorry. Or I was on a sales call. For me, in my organization, clients in sales, like, will take priority. So if you have a meeting and you're on a sale and you're about to close it, close the sale, right? But if you were just doing nothing and we have this meeting, then this is the priority. And so the next time we hop on, I'll be like, hey, guys, I just want to address something. John was late. He was late because of a sales call. Or when I DM'd him right as he got on late, I would say, hey, make sure you say that and be like, hey, guys, sorry. I was late. I was on a sales call. And then I would say, that's fine. You're good to go. Always go make money.

Stephen Bartlett (65:31)

Yeah, yeah.

Alex Hormozi (65:31)

And then I'm reinforcing the right thing. Yeah, right. And so I think we're very big on rapid feedback in the moment because that's how you train behavior. So if you look at. So there's tons of studies on this, but basically, if you want to train a dog, right, and you want it to sit, if you have it sit and then immediately give a biscuit, it learns really quickly. If you have it sit and then wait 10 seconds before you give a biscuit, it takes, like, three times as many repetitions for it to learn that the sitting gets the biscuit. If you wait more than a minute, it never learns.

Stephen Bartlett (66:04)

Really.

Alex Hormozi (66:05)

You can see the learning curve. The amount of repetitions just skyrockets until eventually there is no amount. But here's where it gets crazy. That biscuit is still reinforcing something, just not sitting. It's reinforcing the thing that just came before it. So if we want people to do something, we have to change it in the moment. And so when we train, and I think that we're a training organization, we're very good at training whatever skills is engineering ways to give many feedback loops in a short period of time around specific skills. So I use sales because it's one that everyone understands. If you're training a script with someone, if you let someone read through a script and then at the end you say, hey, here's the things you could have done better, blah, blah. This is how 95% of people train. It also doesn't work. We set the premise with, you're gonna read through the script, and in the first 30 minutes we might get through a third of it. And I'm gonna probably stop you like 30 times. And if that happens, it means we're doing it right. So we set the premise that I'm gonna interrupt you a bunch of times and as soon as you say the first line, I'm gonna be like, stop, say it again, Say it like this, go again. And then they're like, okay. And they say it. And I'm like, awesome job, do it again. Awesome job, do it again. So I reinforce it as many times as I can. Okay, go to the second sentence right now. Do first and second.

Stephen Bartlett (67:18)

Right.

Alex Hormozi (67:18)

Do second and third. Right. And you keep working your way through until eventually they just say it like a whistle. They can sing it. Because they've also had so many, so many feedback loops that they're like, this is what it sounds like when it's right. And I think that the vast majority of organizations have no idea how to train. And their entire training, their way of getting talent is just, let's hire 10 and we'll just see who works out rather than being able to take someone and level them up. And I think that the ability to train is one of the largest alphas that exist in organizations, because if you can buy talent at B skill and get them to A plus, then you net the delta in profit between what you had to attract and pay the person to come and what they perform at. If you have to use a picking strategy, then you have to pay for current market rate of the skill. And so you actually eat into margin because you don't know how to train. There are advantages to speed, and sometimes it still makes sense to bring in the talent because maybe the training requires so much time that it's not worth it. And so from a hiring perspective, because I know we were just talking, this is the theme, we always want to hire for the smallest skilled efficiency. And so in low skilled labor, for example, if we have a cupcake bakery and I need somebody to work the counter, that is pretty low skilled labor. And so if there's a number of skills that are required, being able to be on time, smile, be nice, those things are bundled terms that have many skills underneath of them, right? Whereas teaching someone how to use the register might take like 30 minutes. And so it makes sense to hire for attitude and Then train aptitude when you have low skilled labor, when you have really high skilled labor. I can't teach someone 10 years of being a CFO for M& A. This is an extreme example. Right. And so in that instance, we still hire for the smallest skill deficiency. But I can probably teach someone to be nice under these circumstances faster. Then I can teach them to be a CFO if they have everything that I want here. Obviously you would want both, but the world isn't perfect. And so we just try to hire for the smallest skill gap. And attitude is a series of skills. And so instead of thinking of things in attitude and aptitude, just think of everything as skills. And then we hire always for the.

Stephen Bartlett (69:29)

Smallest efficiency, the thing that's easiest to train up.

Alex Hormozi (69:32)

Yeah.

Stephen Bartlett (69:32)

Okay. One of the things that's so central to that is we were saying about giving people feedback, and I wrote down most companies and most entrepreneurs and founders are scared to give petty feedback.

Alex Hormozi (69:44)

Oh.

Stephen Bartlett (69:44)

Because if, like, I might notice you making a slight error.

Alex Hormozi (69:49)

Yeah.

Stephen Bartlett (69:49)

But it feels petty to point that out. It feels like I'm some kind of rude dictator.

Alex Hormozi (69:53)

Yeah.

Stephen Bartlett (69:55)

Why is that so important? And how do you create an environment?

Alex Hormozi (69:58)

I'm totally good at that.

Stephen Bartlett (69:59)

Yeah. But a lot of people aren't. I have lots of managers on my teams, and they don't want to offend people. Their central focus is too much on being nice.

Alex Hormozi (70:05)

And it's dude, kind not nice. It's one of our cultural. You know, I wouldn't say it's not the one on the site, but things that are repeated internally all the time. Kind not nice is one of the big ones, which is that you are actually being unkind to someone by not maximizing the likelihood that they succeed in their role. And people don't lose jobs because typically because of one thing. It's usually a hundred small things. And so if we can immediately fix those hundred small things, most people want to do a good job, and most people want to succeed, and most people want to move up. And we can maximize the likelihood that those things occur if we help them. And this is where the culture is there. If on that first day, like I said, we say we're going to work through the script and we're only going to get through a third of it, I'm going to stop you 30 times to correct you. We've already kind of set the expectations of how things go here. Like, we will fix things and we will fix them fast. And it's understanding the difference. And we teach our teams this is what is the Difference between an insult and criticism. So criticism is a discrepancy between actual and desired. So you were supposed to be on time and this week you were late twice. And so that is the discrepancy and you're lazy is the insult. And so the judgment that's associated with the discrepancy is insulting. Someone pointing out the discrepancy is purely criticism and that's objective. And so if you want to improve the team, remove insults, focus on criticism, and tell them what to do instead. And so the easiest way to think through this, I think, is stop, start, keep. So I'll tell you a real story. So we had a director level, so a relatively high person in the organization who was having behavior issues. Said differently, everyone thinks you're a dick. And so he ended up making his rounds of the executive team and having a sit down with all of them because he was really proficient at the skill, he was high performer, like good at what he does. Just no one liked him. And so he talked to four different executives and the behavior didn't change. And so he finally came to my office and he was like a little bit worried. And he was like, am I going to get fired? And I was like, no, HR will fire you. If you're going to get fired, you're not going to meet with me. What are we talking about? But when we sat down, I said, okay, I want to be clear. I want to decrease the likelihood that people call you a dick in the future. I said, does that sound like an agreeable goal? And he said, yeah, I want that. I was like, okay, good. I also don't care if you are a dick. I just care that everyone else thinks you are. And so I just want to minimize likely that I get drawn into this ever again. So the reasons that they are calling you a dick, we need to dive into that. Because every other conversation you'd had with some of the leaders was just like, hey man, stop being a dick. And the thing is, what do you do with that? Nothing. You just get insulted and then you have nothing to do. And so instead it's like, okay, when you cut people off, when they talk, stop, start, keep doing, do this instead. Shut up. So when someone else is talking, wait until they finish. And if you're not sure, ask if they're done. He's like, okay, when you give unsolicited advice on how they should run their department, don't or ask if they want it. If they say no, don't say anything. And so we identified three or four behaviors that he was doing. And I said, just do this instead. And literally the next week, we were like, what happened to him? He's like a new man. And the thing is that he wasn't a dick. He just didn't know how to behave. And so if you want to teach, teaching has to come from conditions and a behavior. And so if you're trying to get someone to be different, you have to give them the conditions under which they need to change. So when someone says this, if this occurs, there's a condition, and then this is what you need to do. And so the vast majority of training that exists does none of that. It's just people shouting at each other, insulting them, and saying, hey, you need to level up. You need to get, you know, you need to increase your performance. What does that mean? And so I think one of the easiest ways to identify the actual behavior, because that's actually the tough part, is like, why do I think he's a dick? Why do I think she's lazy? Cause I want to insult them. But that's not. So how do I help her? It's like, okay, why am I describing her this way? Okay, so when I slack, she tends to be slow in her response. So sometimes it takes an hour, sometimes three hours. I'm like, okay. So I'm going to gather that data and be like, okay. So when I talk to her, I'm like, I'm going to have this. This branch of data. The next thing is when I get stuff, you know, projects from her, they are incomplete. I feel like they're not all the way fleshed out. I'm like, okay, that's a second bucket. The next one is that when she shows up on Zoom, she looks disheveled. I'm like, okay. So now when I talk to Sandy, I'm not gonna say, hey, Sandy, you look lazy. Need you to level up a little bit here. Otherwise we're gonna have issues and have to put you on a pipe performance improvement plan. Right. Instead of saying that, just put her on the performance improvement plan without saying it's performance improvement plan. And just say, when you show up on calls, change your background to, like, the standard company setting so we don't see your bedroom. Right. And make sure that from the waist up, you look professional. And what do I mean by look professional? Have a collared shirt and put your hair back. Okay. Now, some people are like, how does that work in woke politics? No idea. Deal with it in your country. But, like, you should have a culture where you can say stuff like that. The second thing is that right now I need you to turn on Slack notifications and I need you to respond within 10 minutes. Okay. During work hours, after work hours, fine. But nine to five, you have to respond within 10 minutes. Do you think you can do that? Yes. And so the end goal here is like, I will get everyone to stop calling you lazy.

Stephen Bartlett (75:41)

It's interesting because it goes back to something you were saying earlier where you were saying specifics versus vague.

Alex Hormozi (75:45)

Yeah.

Stephen Bartlett (75:46)

Prefrontal cortex versus amygdala. Like an insult is amygdala.

Alex Hormozi (75:49)

Totally.

Stephen Bartlett (75:49)

Can't do anything with that.

Alex Hormozi (75:50)

Yeah.

Stephen Bartlett (75:50)

But if you make it specific, then action is more likely to occur and useful action is more likely to occur on this point of a person who's listening now, who's an entrepreneur, they've got a business and they're thinking about making those first hires. I wanted to throw a proposition at you to see what you thought of this. One of the things that I think can help you not fuck up in the hiring process, especially early, is if you just live it with the permanent assumption that you are bad at hiring. So I live with the permanent assumption that I'm bad at hiring because I've got biases, there's things I don't know about certain things, etc. And when you start with that assumption that you are really, really bad at hiring, you try and decentralize the decision making. So one thing I say a lot to startup founders is if you're hiring a salesperson, create an interview process where there's five people and one of them might be you and the other four are the best salespeople you've ever encountered in your life. Like who sold you your house?

Alex Hormozi (76:42)

Yeah.

Stephen Bartlett (76:42)

And ask them, ask them to be part of the interview process. How does that sit with you?

Alex Hormozi (76:48)

I think it sits great. And I think that the amount of references that you go for is proportional to the importance of the role. Okay, so Sam, the co founder of Skool. So he was a non technical founder.

Stephen Bartlett (76:58)

Who's School? What is school? Sorry.

Alex Hormozi (76:59)

Oh. So school.com is a platform for building communities. Right now it's online, but we have an in person component so that people can meet online and meet in person. It's awesome. And so that's the only investment that I've publicly associated myself with outside of acquisition.com, so it was a very big deal. It's something I believe in a lot because it's education. It's where education and media meet. Sam is the founder of Skool and he is not technical. And so he knew that to build an exceptional software product you need world class talent. And so he interviewed 600 developers to find Daniel, who'd become the CTO of Skool. And he asked everybody to know who the best coders were. And then he talked to all those people, and then he asked them who the best coder they knew was. And he talked to those people and then he asked them who they thought the best coder they knew was. And eventually like Daniel's name came up as like God Tier. He's like, if you can ever get this guy, he'd be amazing. And so he ended up finding a way in to find Daniel and then he ended up becoming co founder of School as well. And what's interesting about that process is that it actually ladders into rapid learning. And so when I was a consultant, I was 22 years old and I would go and have to give presentations to four star generals about weapons systems that I knew nothing about because I was chugging beers 12 months earlier. And so how do you sound intelligent in front of somebody who has 30 years more experience than you do? And so this is the consulting process for rapid learning. First is you find five experts. So you ask the one person, you're like, hey, tell me the five people you know who are the best at this thing. And then you ask them who are the five people you know who also know a ton about this thing. And for each of the interviews, you take all of their information down of like, what do you think about this? What do you think about this? What do you think of this? And what happens, you start mapping kind of like the information ecosystem. And the reason you talk to experts first is that there's no lack of information. Like you can Google whatever you want. The problem is there's too much. And so the filter becomes where the highest point of leverage is. And so experts have spent years filtering out for what's important. And so then you basically rapidly consume the most filtered information and then you reorganize the information. And so this is what a typical analyst will do as a consultant is like I would. So for the Space Inside project that I did, we had 600 pages of notes from all the interviews that we did. First step is you re categorize all the notes by category. So it goes from raw notes to categorized notes. Then from there you distill and consolidate notes into what are the truths or the most distilled beliefs that we have about these particular, in this case, weapon systems. But it could be whatever and Then from there you're able to generate your inferences for what it looks like when it's right, what the problems are, what potential solutions might be. And then that's fundamentally how you say this is what we need to do next. That's if you're trying to learn something, but in talking to all those people, it actually works the same way. Because the interview process, the higher up the talent is, the more I would encourage entrepreneurs to use it as a learning process, as a consultant. And so I present somebody who wants to come in for this role, the actual problems of the business for which they would have control over and say, how would you solve these? And so then they tell me all the things that they would be considering and what they're thinking about. And then I'll ask the next guy what he thinks and what he thinks and what he thinks or she thinks. And then all of a sudden, one, I get free consulting, which is amazing. But secondly, you can tell by how the quality and quantity of metrics that someone tracks how good they are at a particular skill. And so this is fundamentally what separates beginners from experts. And so beginners typically have binary thinking in terms of outcomes. Either it worked or it didn't work. An expert, for example, for a marketing campaign, isn't going to say, oh, marketing doesn't work, or ads don't work. They're going to say this particular campaign didn't work because our click through rate was too low or because it was sending traffic that wasn't qualified and we weren't converting enough on the page or we didn't have enough people who are taking the second step in our four steps and like they can break down any part of those, any part of that continuum. If I'm interviewing a salesperson and the person says, and I say, okay, how are you going to affect these metrics? What behaviors are you going to do? So to the same degree about vague versus specific, if they give me vague things back, I'm going to dial in and say, no, what are you going to do that's going to change that. And by the way, this is a wonderful way to teach in the organization how what they do makes a business money. And so if you have like a customer support rep, for example, and you say, hey, how do you make our company money? If they can't explain it to you, they probably aren't doing it. And it sounds as simple as it is. But if someone says, well, you know, I answer customers questions and it's like, how does that make us money now? If they're able to say, when I answer customers questions, I increase the likelihood that they refer us other customers and I increase the likelihood that they stay and continue to pay for us. So I help us get new customers by delivering an amazing experience and I get the customers that we have to continue to pay us. And if it makes sense, I recommend other products and services that we have that I can introduce them to sales guys who can explain that so we generate even more revenue from them. I'd be like, one. If you can articulate that you're probably not just a frontline customer service rep, you're probably a director. Right. And so that level of nuance, the specificity, is what shows expertise. And so when I look for, and I'm interviewing for candidates first, I want to gather as much information as I can. I want to drain as much knowledge as possible. But I'm also really looking for the quality and quantity of metrics they track and behaviors that they do to influence those metrics. So in the hypothetical problem that let's say we're trying to solve, we have low click through rates. I'd be like, okay, this is the problem we have. How would you approach changing it? It, Right. And then that actually gets me to understand what they would do in the organization because it's very easy to say, you know, I'm going to come in and let's say a sales director. I'm going to come in and I'm going to, I'm going to improve the sales team. I'm like, okay, cool. What are you going to do? You know, I'm going to coach the guys up. I'm like, okay, what does that mean? And so just continuing to ask, what does that mean? How do you do that? Until they're like, okay, well, I'm going to meet with the guys every single morning and we're going to do role play. All right, well, how do you role play? Well, we're going to start with the script and we're like, the more detailed they get, the more I believe they can do it because they've actually explained what actions they will take. If someone can't dial it into actions, then it's very unlikely that they're going to take them. And so what I just outlined is basically three core things. So one is the quality and quantity of metrics that they track. The second is the behaviors that they're going to do to influence those metrics. And then laddering up to third, how do those metrics and these behaviors influence the revenue in the Business, if they can explain that, clearly you have a winner.

Stephen Bartlett (83:39)

All of that requires them to know if the person's not bullshitting.

Alex Hormozi (83:46)

Yeah.

Stephen Bartlett (83:46)

And also to know, like, what metrics matter. Right. Because someone could sit in an interview, if I'm a first time founder, say a bunch of big complicated words, it sounds good, I hire them. And that's really what I'm trying to mitigate here is how do I not let a bullshitter pass me?

Alex Hormozi (83:59)

I think having them explain it as though you were a fifth grader. And so I always, I make the same joke. Because, you know, you do this enough times, you make the same joke. It's like, hey, I need you to explain this to me. Like I'm a golden retriever, which is a brand, a type of dog that has down syndrome. All right? So. And I always get a laugh. And I'm like, so assume I know nothing. Let's start there. What do you think customer service means? And so if someone really has expertise, so Richard Feynman was famous for the physicist, which is if you can't explain it to a child, then you don't understand it well enough. And so if they do confuse you, then it means that they don't understand it or they're doing it purposefully, neither of which are good scenarios.

Stephen Bartlett (84:42)

You said something during, during that explanation, you said you were talking about your, like your founding partner at school and you said that he was pursuing a cto and he said, if we can get this guy, he'd be amazing.

Alex Hormozi (84:55)

Yeah.

Stephen Bartlett (84:55)

So many entrepreneurs that are starting in business have that thought. Sometimes they think if I could just get that guy from that amazing company to come join our garage where we're building this new startup, it would change our fortunes. But how, how do I get a truly exceptional person who is being paid shit, tons of money, who has a comfortable job, who has security to come join me in my bedroom?

Alex Hormozi (85:20)

Well, I think there's, there's the soft and the hard side, right? So the hard side is the, is compensation. Maybe you don't have as much cash. So it's like you're going to have a few levers at your disposal. So you have, what do you pay them in cash? What's their upside if there's equity or shares that you're going to give them? This is obviously, if it's a software business and it's probably worth segmenting this. So if you're not in a software company, which is probably the vast majority of people listening to this, there are four elements within equity that exist. You have control. So who gets to call the shots? You have risk. What happens if everything goes wrong? Who's liable? You have profits, which is the cash flow of the business. Who gets distributions and then basically sale or enterprise value when we sell or if we sell, who gets to participate in that Upside. Those are kind of the four elements of equity. Now, the thing is that you can obviously grant shares or you can give stock in a company. That's one way of doing it. But you can also basically contract around any of these things. Now, most of the times they don't want the risk and they probably won't get the control if it's your company. So you really just have profit and you have upside in terms of a sale. And so you can contract these things. And there's lots of structure. So I'm not going to get into legal around this. But asking somebody, what do you want? Sometimes it's just a very powerful way of beginning this. And my favorite question for these types of scenarios is asking, what would it take? So when you have this guy, it's like, man, it would be amazing. Like, how do I sell this guy? I just ask him, what would sell you? So I say, what would it take? Cause I don't know, he'll tell me. And I love that frame because it assumes. Yes, it assumes you're going to come. So what would it take?

Stephen Bartlett (87:03)

So many of the books that you write and so much of the content you make centers on this idea of sales.

Alex Hormozi (87:09)

Yeah.

Stephen Bartlett (87:09)

And it is a sale, isn't it?

Alex Hormozi (87:10)

Totally.

Stephen Bartlett (87:11)

And I always think about the Steve Jobs quote where he met with. Was it John Scully who was working at, like, Pepsi, and he said, do you want to continue selling sugar water for the rest of your life? Would you want to come change the world?

Alex Hormozi (87:21)

Yeah.

Stephen Bartlett (87:22)

How does that sort of emotional, psychological element of the self factor into persuading someone exceptional to come and join your mission?

Alex Hormozi (87:29)

I think it's the amygdala story that we started with the nasal strip thing, which now has actually reared its nose multiple times, poked its nose in a few times here. But I think that pitch that you're giving to a potential co founder or potential early hire who's going to be a leader is the same more or less that you'd give to an investor investor. It's almost the same pitch, except instead of investing capital, they're investing time, they're investing their life, they're investing their expertise. But fundamentally, you're asking for investment. I'm just asking you.

Stephen Bartlett (87:56)

There's also this weird question which I've actually never asked anybody, but founders often struggle with do I hire naivety? Because that's going to probably create new solutions to old problems like the young scrappy kid that gets TikTok. Or do I hire experience, which is going to be more expensive, more conventional and safe. And I see some companies lean too far either way.

Alex Hormozi (88:19)

Yeah, I have actually fairly strong opinions on this.

Stephen Bartlett (88:23)

Oh, great.

Alex Hormozi (88:24)

So I actually think it's. And I was talking to the CEO of ButcherBox about this particular thing last week. I think it's a barbell strategy where you have people on either ends and very little in the middle.

Stephen Bartlett (88:36)

Interesting.

Alex Hormozi (88:37)

So I love lots of young, hungry people who are here for growth and want to learn and are ready to work long hours and just go all in. And the people at the call it the back half of their career that are here that they've made enough money, they know they can get a job wherever they feel like you're not doing them a favor by giving them a job. And they're not what I a term I hate, which is careerists. They're not obsessed with their title, they're not obsessed with their career path, what their promotion plan is going to be. They basically have a litmus test which is like, I have to have make about this to get to come in and do this with you. But they actually just really love the work. And so these people are learning. So the young people are learning and overcompensating with tons of hours and reps. And these people are bringing their experience to the game and creating significantly more leverage with strategy. The people in the middle are the ones that tend to be the pain in the ass for everybody. And I don't think, and be clear here, I don't think this is actually an age thing. I think it's a perspective thing. So it's just, are you here for growth or are you here to share what you know? And I think that it's the people in the middle that are like, well, I'm bringing something, but I need some. It's like this kind of tit for tat relationship that I would say the vast majority of people that don't work out are in that bucket.

Stephen Bartlett (89:58)

And what role does naivety play in innovation here? Because the kids that don't know the rules are more likely to stumble across nuances. Right?

Alex Hormozi (90:05)

I think, yes, fundamentally you can disrupt any industry if you don't know how it's supposed to go. But I think that really teases out something we said at the very beginning, which is starting from first principles, which is, what are the few things I know to be true? And then basically forgetting everything else. And when you build from those assumptions up, you end up building lots of different paths up the mountain that may or may not have been trodden before. I think one of the most corroborating things that can happen sometimes is that you rederive a solution that already works. And you're like, okay, well now I know why this works, right? But I think that's actually then you have more confidence in the path and you're like, okay, that's fine. But now I know why we're doing this. Not just because other people did it, but because I understand why it works. And so I think it just comes down to what are the few truths that I know to be true? And going all in on those things. Like, I know that if customers love my product, they are more likely to tell other people about it than if they hate it, that I feel very confident. So then we say, okay, what are the things that must occur in order to get someone to, quote, love my product, AKA increase the likelihood that they tell their friends about it or post about us? And so now there's. And you can break this. And again, this is where quality and quantity of metrics matter. So it's like, like, how much more nuance can I break this up into small pieces? So it's like, okay, at what time do we deliver these messages around what experiences that have high likelihood of them posting? Can we decrease the friction around them sending friends? How can we make it both easy and how can we incentivize it? And so all of these components, whether it's a service business, a physical products business, a software business, it still works the same way. And for each customer, for example, as we're taking someone through this, I have four milestones that I look for, which are the four Rs. So how do I get them to review my product? How do I, how do I. Well, in order it'd be how do I retain them immediately, how do I get them to review my product, how do I get them to refer somebody and then how do I resell them? And so they're basically those four R's is what I try and take every customer through. It's a very simple framework. Right when you think I was like, oh man, customer success, what does it mean? It's just like, well, these are the four things that I want to occur. And so all I'm trying to do is reverse engineer what activities increase the likelihood that each of these four R's happen.

Stephen Bartlett (92:18)

This year. 55% of businesses globally are utilizing AI in some form. It's become so integrated across every point of my businesses that it's hard to remember a time when my team and I weren't using it. Adobe Express, who sponsored this podcast, is a prime example of a tool our team uses day in and day out. Its Generate Image tool only needs a few words describing what you want and using AI, it returns many images for you to choose from. If you're watching, see how quick and easy it is and you can try it yourself for free. The customizable templates mean you or anyone in your team can create something that stands out without starting entirely from scratch or being a design expert. It's the type of technology that differentiates Adobe Express from being just another design tool and makes it the quick and easy Create Anything app. Such Adobe Express will download it for free in the App Store right now. Well, I want to go through the four Rs, but I also, I think that what comes before the four Rs is knowing how to get customers in the first place, which was a tricky one. And actually maybe even the thing that comes before that is being psychologically prepared for the toll and the rollercoaster that business is. I found this, found this graph of yours.

Alex Hormozi (93:29)

Oh, God, yeah.

Stephen Bartlett (93:30)

And I think for any founder starting a business, it's important for them to understand this cycle. I think you call it like the crash burn cycle or something, because if you're not aware of this cycle, when you hit certain parts of it, you're probably going to think that there's something wrong with you, but there's a certain inevitability to this crash cycle. I'll put it on the screen for anyone to see.

Alex Hormozi (93:50)

This is the entrepreneur life cycle until you learn how to break free from it. And so there are six stages. You have stage one, which is uninformed optimism. This is where you see your friend or you see something online and it looks like they're making money, or it looks like there's some opportunity and you think, oh my God, that sounds amazing. And you have optimism because it looks great, but it's uninformed because you have no idea what it entails. So then you dive in and you say, okay, I'm going to pursue this thing, whatever. Is it baking cupcakes or I'm going to do lawn mowing or I'm going to do crypto trading, Whatever second step is, you get into it and you're like, oh my God, I don't know. There's so many things involved in this, and this is significantly more complicated than I. I expected. So then you become an informed pessimist. You now know that it's hard or significantly harder than you expected. The third stage is you have your crisis of meaning or the value of despair. So you're continuing to do this stuff. It's continuing to not work, and you keep working, and it keeps not working. And so this is the step, and this is the point of truth, and this is the cycle where the paths of the entrepreneur split and the vast majority of people take this next step, which is they then say, you know what? There's that thing over there that my other friend's doing. Maybe I should do that instead. And so then they hop back to uninformed optimism, and then they go boom to inform pessimism, and they just go around and around and around, and they live the same six months for 20 straight years. Now, the other path from the Valley of Despair is sticking with it. And so then you become an informed optimist, because now you understand. You still understood all the bad stuff, but you also understand the good stuff and how to avoid the bad and maximize the good. And then once you're there, you stick on that path long enough, and you end up achieving what you originally thought was really easy and fast. And so that cycle, this is more or less the Alex Hormozi life story, which is why I can so intimately describe each of the steps, is that I call that loop, and that the person on the other side, the woman in the red dress, which is probably my favorite part of the Matrix movie, which is Neo, who's the main character, is in a program to teach him one thing. And so he's walking through the crowded streets of what looks like a New York City with Morpheus leading him. And he's drawing on about something that he's supposed to learn. And he says, neo, were you listening to me, or are you looking at the woman in the red dress? And Neil was looking at the woman in the red dress as Morpheus is talking. And then he says, look again. And he looks back at the woman in the red dress, and it's Agent Smith with a gun pointed at his head. And in that moment, he's like, freeze. And he explains that you're either one of us or one of them. And they are the people who are sentinels sent to destroy us. And so what appears to be the woman in the red dress is actually an agent from the system meant to destroy the opportunity that you're in right now. And so I love the woman in the red dress so much because it's so real, because you're in this thing, you're in this relationship with your business, and you're like, you know, this girl seems great. And then you get to know her, and you find out she snores when she sleeps. And all of a sudden it's like, you know, you see the sweatpants and no makeup in the morning, and you realize that sometimes she's moody, whatever. But you start to get to know. You're like, I don't know if we're gonna get married, but, like, you know, this is kind of where we're at. And then you see a woman in the red dress, and you're like, you know what? I think that's the girl. And so you quit this relationship with your business, and you get into that relationship, but then you realize that that girl has crabs, she has a crazy ex boyfriend, and you're like, oh, my God, I didn't want to deal with any of this stuff, right? And so my CFO so was one of the first people that you're like, oh, my God, I hired that person. It changed everything. So my CFO and Jim Lodge had taken four companies from 0 to 100 million. She had done over 40 MA transactions. Her largest one was 5 billion. Super experience. She was at the very end of her career, and she was like, I'll take you guys. I'll take this one last ride with you guys. And so, mind you, Layla And I, I'm 26 or 27 at the time. Layla's 23, 24. And we're sitting across the table from a very experienced business person being like, please help us. And so one of the things that she taught me that I will never forget is she said, the grass is always greener on the other side. You just don't know that it's fertilized with shit. And she's Southern, so she had this deep Southern neck. She's like, there's always shit, shit everywhere. And so she's like, I've been in enough businesses to know that all businesses have shit. And so you just have the shit you don't know about and the shit you do know about. And you're in this business. And so this is the shit you know. And that has been so profoundly impactful in my life because it was so hard for me to break the cycle. Really hard for me. I mean, I gave you my life story of the many businesses that I'VE been involved in. And so, like, the entrepreneurial ADD has been so real for me. And I've made some of the biggest career mistakes by just pursuing and splitting my attention between multiple endeavors. And I can say truthfully that this 2024 was the first year and this is now 2025, the first time in my life where I haven't experienced foma. So fear of missing out. And it was one of those things that I just always had. I would see somebody doing really well. Oh, man. I mean, I should be getting into that. Like, that I shouldn't be doing this. I'm just doing that. And it was one of those things kind of like being happy where, like, you don't realize you're happy. You just look back and you're like, you know what? That was a really good year. You know, like, you kind of, like, you kind of see it in retrospect. What I realized was that now when I hear someone say, like, oh my God, I crushed it with this thing, I think that's amazing for them. I'm sure there's tons of problems that I don't know about, and that's amazing. But I'm going to keep doing this thing because this is the only thing I know how to do pretty well. And I'm just going to keep compounding my information advantage against everybody else who thinks this is easy and wants to get into it. And so I think that, that any massive company that you know of has existed for multiple decades. And in order for something to exist for multiple decades, the founder has to stay focused on that thing for the whole time. And I measure focus by the quantity and quality of things that you say no to. And I measure commitment, or I define commitment as the elimination of alternatives. And so if you think of marriage as the ultimate commitment, then it is the ultimate commitment because you've eliminated literally every alternative besides this person. And so I think that many business problems and Many entrepreneurs would 5x10x their business if they simply gave themselves no way. Out. Out. This is what I'm doing. And I'm. I mean the term, you know, burning the boats, but I'm eliminating all alternatives and structuring my love, such that I make it very difficult to pursue the alternatives. And I think by doing that, you can actually conquer this cycle and make it past the split where you go crash and burn and then restart the doom loop or make it to informed optimism and then eventually to the achievement that you want.

Stephen Bartlett (100:47)

There's so much there. There's so much there. But it's such an important point. So where shall I start? So at that moment here, this crisis of meaning moment, what I see so much of is entrepreneurs, not necessarily quitting the old thing, but just taking on something else. And I get. Entrepreneurs will come up to me in the gym and they'll say, hey, Steve, just want to let you know what I do and see if you can offer me any advice. And then they'll list three things. They'll say, I'm starting this crypto thing with my friend Dave, I've got this hair business where we're selling on E. Com and I've got this other thing. And they almost assume that the more things they're doing, the higher the probability that they'll be successful in something. My mum was that. My mum has started 30 businesses and I watched for my whole childhood how she would start a hairdressing salon and then the person down the street running an estate agents would come in and say, we're making loads of money as an estate agent. She'd start that. That business would suck. She'd hit this mom, a moment of crisis of meaning should then start a furniture business. And again. And she. So she jumped between 20 to 30 businesses and it's kind of still happening now, where they last six months, they eventually go bust. She sort of like, you know, like the monkeys that swing to the next branch swings to the next thing. And there's never been the escape velocity that comes from this informed optimism part. So, yeah, this. It really rang true for me in every sense of the word, this idea of like. Like a focus going against all of your instincts and your emotions, but being pivotal to achievement.

Alex Hormozi (102:20)

I think entrepreneurship is far more a war of the heart than it is a war of the mind. Like, we can understand what we should do, we just don't do it. And I think that's why we're so much better at giving advice than we are at following it. So most people, if they just followed their own advice, they'd be successful, right? And so with this kind of valley of despair, I call it niche slapping, it's like, don't make me niche slap you. Which is like, when you have three things going on, it's like, let me slap you into just picking one. Because the thing is that any of them can work, but none of them will work unless you pick only one. Because it's actually, in my opinion, an exercise in arrogance to assume that you doing three things is somehow going to beat somebody who's doing one. And I can promise you the competitor who is going to beat you is only doing that one thing. And you think a third of your time is going to beat theirs? No, it's not going to. I think it's arrogant. And so there's actually like an under. There's like an underpinning of ego underneath of this. And I say this as somebody who did this. So, like, when I had the launch business, I also had my six gyms. I also had a chiropractor agency, and I also had a dental agency agency. And so I would introduce myself and be like, oh, I own lots of companies. But I think one of the biggest misconceptions when you're an entrepreneur is not understanding the difference between being an owner and being the CEO. And so they might hear that you have a portfolio, they might hear that I have a portfolio and be like, okay, well, they have a portfolio, so I must model that. That guy's tall. I should play basketball. Doesn't work that way. So if I want to be rich, I should fly private. Doesn't work that way. It's conflating order. And so we must do these things in order to get the outcome. We have to concentrate on only one thing in order to get the outsized return and that spreading of attention. Especially when you're newer in the entrepreneurial career, it's like, you already don't know so many things. How do you now want to have three sets of unknowns that you want to try and conquer at the same time? And the fallacy of thinking is that I'm going to try all of them and see which one works, but none of them will work because you're waiting to see which one will work. Because you can force, in my opinion, you can force one thing to work, provided, like, I'm going to just assume basics. Like, you're not selling $5 bills for $4. The normal economics of a business, if a real estate business exists, there are other people who are making money. There are hair salon businesses where people are making money. There are lawn mowing business where people are making money. You can make money in all of them. You just can't make money in all.

Stephen Bartlett (104:50)

Of them at the same. And when you walked in today and you sat down on the chair, I said like, what's going on with you professionally? I remember what you said. You said more of the same and better. Which clearly comes from your wisdom.

Alex Hormozi (105:02)

My infinite wisdom. Right. Well, it's just from, from, from, from, from suffering the, the, the woes of this, like, the biggest entrepreneurial mistakes I've made in my career have all come from splitting my attention. Every one of them. Like, every single one of them. Like, I talked about how I had the E Commerce business that I bolted onto my. To my licensing company. I should not have done that. As soon as I did that, my revenue started slowing down in its growth.

Stephen Bartlett (105:29)

Why did you.

Alex Hormozi (105:30)

Because I was add Like, I just. I was like, oh, my. I don't want to leave money on the table and I want to be so violent about this. You are always going to leave money on the table. That is the result of focus, but you're leaving a small amount of money on the table to pursue the much larger money that's on another table of just sticking with the thing that you're on right now. Because compounding, if I were to show a chart here, it's like if you're at year three of your thing and you want to think about moving to year zero of a new thing, you have to compare. Maybe year zero of a new thing grows faster, but it has to grow faster than year three to four of the thing that you're on right now. And I think that's that people will compare year zero to year zero, but not year four to year zero. And the thing is, you actually, we have a linear life. And so it's an unfair but true comparison of the opportunity cost. And every exceptionally successful entrepreneur that I know has just stuck with one thing for such an inordinate amount of time. And I think there's a quote by, I want to say, Shane Parrish, but he says success is doing the obvious thing for an extraordinary period of time without believing that you're smarter than you are. And it's just like, we know what we need to do, so we don't need to make our lives more complex. Complexity will come with scale, I promise. And so just simply trying to do more of what you're already doing well is already hard enough. Don't add anything else. And so if you need to write some sort of commitment of like, I'm just going to stick with this, then do that. But what happens is when we were talking about the levels earlier about like beating the bosses, so what happens is you know how to beat boss one through three of the game. And so then you just say, okay, well, I'm just going to start the game over and beat boss. I mean, this time it's gonna be different, but then you just get to level three again and then you're stuck again. And so people just keep getting up to level three and new endeavors over and over again, because they never learned how to get past that boss. And so you just have to confront the uncertainty of knowing that you don't know how to do it, but that you will figure it out if you keep doing enough repetitions. And that's where you talk to as many people as you can, you see what they said, you consolidate it all and you say, I think this is the highest likely path, it might not work. But I do believe fundamentally that if we cut people's hair well, and we do it for a long period of time, we will have a thriving business. And if we have a really good model from that thing, we might be able to open up another location. And if we keep our costs down, we might be able to have an actual model that we could either invest our own capital or bring somebody else and take it national. All of these, I have yet to find a business that can't get to $100 million a year that has a permutation of it that exists. You're a dry cleaner, Fine. Well, cool. We'll build the model. And either we're going to license the model, we can franchise the model out, we can get outside investors, we can scale it nationally, we can do it. But the crazy goals are only crazy because people have crazy timelines. They're actually very sane goals. If you extend the timeline out, if you have a true 10 year goal or true 20 year goal, almost anything's accomplishable. I mean, almost every multibillion dollar company is about, you know, they get, it's usually between like years 6 and 10 when companies get to kind of like those big numbers. And most people who are listening to this are five years into entrepreneurship, but you're six months into the thing that you've been working on right now. And you keep restarting the clock for getting to year 10 every time you start over. And I think that's the part that it took me a very long time to figure out. And I think it takes a lot of entrepreneurs, like everyone messes around with a lot of stuff in the beginning because you just don't know what you're doing. And so in my experience, it takes about five years for most entrepreneurs that I know to just find something that works. It takes about five years to figure out which way is north. And then it takes another five years and a lot of people, that's it, they restart, they go off, crash and burn, and it takes another five years to build something that can create generational wealth. So it's about a 10 year slug and here's the really hard truth about it. If you have a job right now, for almost all of that five years, you quit your job because you don't want to work as hard as you are and you want to make more money. And as soon as you quit, you will realize that you are now going to work way harder than you were and you're going to make less money for an extended period of time. The one benefit is that you get to claim all responsibility for how little you make and how much you work, because you're like, my boss is an idiot and it's me, but it's the truth. And I think that that in some ways having that optimistic ignorance is actually one of the really redeeming traits of entrepreneurs. And one of the really hard parts is that the biggest jump you have to make gets so immediately reinforced from the freedom you have from being able to chart your own path. But that big success of quitting one thing and starting another, you need to immediately forget. And I think that fundamentally that is why so many entrepreneurs keep doing it, is because the first time you do it, it's the biggest rush ever. You quit your job, you do the business and you get some first traction. And that first dollar that you make when the new business is like the best dollar ever. Right? But it's such a strong reinforcer that what does it reinforce? It reinforces stopping what you're doing and starting something else. And so I think one of the fundamental errors of entrepreneurship is that sometimes the jumping ship to start this thing is the lesson that you need to immediately unlearn, because after that you have to just stick with it for a very long period of time.

Stephen Bartlett (111:20)

There's also something in that entrepreneurs don't go into starting a company with the belief that their hypothesis is wrong. So in year one or seven months in, when they realize that their initial hypothesis was wrong, they think that means abandon shit because my hypothesis was wrong. Whereas successful entrepreneurs that I've met, especially second time founders, realize that their hypothesis is almost certainly wrong from the jump and that the process of starting is to correct and to find a new hypothesis. I think about like Mark Zuckerberg in his room with like face swap or whatever it was, rating people's attractiveness and now Meta. Is this like virtual reality AI company?

Alex Hormozi (111:56)

Yeah.

Stephen Bartlett (111:57)

But understanding that your hypothesis is, is wrong from the jump and that this is a process of finding a new hypothesis I think will give you a little bit more patience as well through these cycles of the crisis of meaning and so on.

Alex Hormozi (112:09)

So two things so one is I had this tweet that went super viral, but it was like, first time founder. Hey, I need you to sign an NDA before I tell you my business idea. I know you've gotten it. I know you have. Third time founder. Here's everything I have. Here's all the documents, here's all the projections. It's probably all wrong, and this probably won't work, but I have a couple smart people, and I think we'll be able to figure it out. It'll probably cost longer and take longer. Cost more and take longer than we think, but we think it's worth a shot. And then things went by because everyone who's been on both sides of that understand, like, the entrepreneurs got it. Cause they're like, oh, my God, I was that guy. And all the investors get it. Cause they're like, oh, my God, I deal with this guy all the time. But actually, what you just said, with the many, many iterations, that from your original idea until what actually happens is yet again one of those demonstrations of the difference between a beginner and expert. A beginner has binary thinking. So they think this worked or it didn't work. And if it didn't work, then I need a new idea rather than having the nuanced thinking of a master or an expert or advanced person who says, what about this? If I click into it, I break it into its component parts. What about this didn't work? Okay, it's not that meta ads don't work or advertising doesn't work. It's that we didn't nail the hook in our ad, or that we didn't make our offer clear enough on the landing page, or it was not congruent with the advertisement, or, you know, the offer itself wasn't very compelling, or it didn't have. It didn't. Like, it was just this. Everyone's coming in and saying, yeah, yeah, I kind of want that, but this is actually my issue. We're not solving the core problem. So. So it's always in the details. It's always in the sifting through the many small things that you find the kernel that ends up fixing the business. I mean, I know that Facebook was trying to fix their virality issue, and they were locked in a room for days trying to figure out how they could get more users to retain on the platform. Right? People would sign up, but then they wouldn't do anything, and then they'd drop out. And so finally, Zuck just said, okay, we have some belief that if people have more friends that they will engage. And so they didn't. And here's the thing, like, with the uncertainty, they couldn't prove it. He just was like, I feel like that's better than them not having friends. And so he said, all right, the new goal is 10 friends in 14 days. That's the goal. So we have to create the experience so that we can get it to introduce them to 10 people or connect them with 10 people that they already know on the platform within 14 days. And as soon as that happened, then obviously Facebook took off or continued to grow. And so he wasn't like, oh, Facebook doesn't work anymore, or social networks aren't going to be a thing. It's usually way smaller and way. The adjustment you need to make is much more nuanced than what you originally expect. If the foundational principle of, like, cutting hair, mowing lawns, whatever, it's like this problem exists and I can charge a certain amount and make a profit on it, then there's nothing wrong with the business. It's just what is the constraint that's holding us back and then usually zooming into the constraint and realizing there's 20 things that are contributing to the outcome, not one. And that's where expertise. And you develop that expertise by trying and failing.

Stephen Bartlett (115:23)

Yeah.

Alex Hormozi (115:24)

And that's just the name of the game. And so I think you have to have an incredibly high tolerance for failure without internalizing it and feeling like you yourself are a failure as a result of failure.

Stephen Bartlett (115:34)

Well, this is it. When I started my first business at 18 years old, called Wallpark, Social Network, whatever, I thought the game was to be right.

Alex Hormozi (115:42)

Yeah.

Stephen Bartlett (115:43)

I came to learn from businesses that came after that. Actually, the game of entrepreneurship is to be successful, and they're two very different things to win. Because when you want to be right, you not only want to be CEO and you want your hypothesis that you put in that first pitch deck to come true. And even when customers are telling you that you were wrong, you try and force the fucking opportunity.

Alex Hormozi (116:02)

You don't know.

Stephen Bartlett (116:03)

But when you. When your game is to be successful, there's a couple of really interesting things that I observe happen. One of them is you. I watch founders say, actually, maybe I'm not the best person to be CEO.

Alex Hormozi (116:12)

Yeah.

Stephen Bartlett (116:13)

Even though I founded this thing, maybe I should be chief Brand Officer. When I think about some of the top Companies in the UK represent just valued at 100 million. Gymshark. Ben's business valued at 1.5 billion. Julian's business probably valued at a billion. I'M involved in some of these businesses in different ways. But the thing they all have in common is at some early point, the founder put their ego secondary to the success of the business. They said, actually, I'm not the best CEO. I should be head of brand or marketing, product or product or whatever it is. And that's that mindset shift from being, I need to be right, and I need to be at the helm of being right versus this thing needs to be successful.

Alex Hormozi (116:50)

And this goes back to the who, which is, if you. If you. At some point, if you want to have a really ridiculously successful company, it will require more lifetimes of expertise than you can live. And so then it's. It becomes a recruiting game. Like, very quickly, almost all business becomes recruiting, which is, how do I. I mean, if you. If you listen to Zuck talk about it, you look, you listen to Elon talk about it, you listen to Steve Jobs talk about it. Steve would talk about how the best players that he had in the company, he would set aside, like a year to 18 months to bring them in.

Stephen Bartlett (117:22)

Amen.

Alex Hormozi (117:24)

And he said, every time I, you know, I knew who I wanted. And then I would. He's like, you know, I would take some calls with other people and I would just be like, but they're not John. They're not John. And so he would just keep working on them and working on them and working them until eventually they're like, you know what? Fine. They, like, give up. They're like, if this guy is this persistent, like, he probably will be a successful entrepreneur and he will take us there. And I think that people are the highest leverage thing that you can bring into the company outside of crazy technology.

Stephen Bartlett (117:58)

One of my favorite videos of all time is where Steve Jobs, who you just mentioned, talks about hiring truly exceptional people. And he says words to the effect, I'll play it on screen. He says, people think the success of Apple is a consequence of me and my talent and my skills. But what I've actually done is I've built my career, quote, on hiring truly exceptional people, doing the extremely hard work of finding them and hiring them. And this crazy thing happens when you do that is it propagates, I. E. A players then want to work with A players. They also hire A players, and it spreads. I think it was this video.

Alex Hormozi (118:31)

I've built a lot of my success off finding these truly gifted people and not settling for B and C players, but really going for the A players. And I found something. I found that when you get enough A players together when you go through the incredible work to find, you know, five of these A players, they really like working with each other because they never had a chance to do that before. And they don't want to work with B and C players. And so it becomes self policing and they only want to hire more A players. And so you build up these pockets of A players and it propagates. The thing is that it's just like money won't make you happy. It's one of those things that every founder has to figure out for themselves. But the thing is, and I've had obviously a bunch of conversations around this, but what you think is an A player today is not what you will think an A player is in five years. And so I think one of the the hardest mental hacks around this is trying to project yourself into the future, into the size business that you want to have and say, who would be an A player at that size and scale? And then coming back to the present and saying, how do I get them to work for me today?

Stephen Bartlett (119:48)

Amen.

Alex Hormozi (119:49)

And it's really. And so as a mental process for anybody who does have a business right now and has some employees, if you like everybody right now, you probably have some version of your A player because every business has at least one hopefully, right? Besides you imagine your business had five of those people like you picture in your head. You've got that one person, now you have five of them. How much more would you make? Would you double? Would you 10x? Would you 50x? And sometimes you realize you're like, no, I think I would actually 10x. And so if that were the case, one, not only would you 10x the company, number two, the value of the company would more than 10x because it would no longer be. It would be significantly less reliant on you and it'd be more reliant on the team that you've built. Number three, it would happen faster because you would have more barrels that were firing concurrently, moving things forward. And those pieces when put together, you have to then ask yourself from an opportunity cost perspective, what other activity could I be doing that would have the possibility of 10xing my company doing it faster and increasing the enterprise value multiple. That's not that. And if you can't find one, then it means you're working on the wrong stuff. And I think that is one of those great litmus tests of like if I can find something and I'll give you a really simple one, that's not human. The talent based here, something as simple as calling your leads. So there's tons of research that suggests that you can 4 or 5x your conversion of leads by calling them within 60 seconds of them, opting it for any product you have. If you have all of these priorities that you have across the company, does any of them have the high likelihood of 4 or 5xing your business immediately with very low cost of doing so? Less so than just calling the leads within 60 seconds? If the answer is no, then by God, why are you not calling all your leads within 60 seconds? The follow up question would be like, well, I don't have enough people to call our leads within 60 seconds. So then we'd say, okay, what does 4x the revenue of your company worth? Okay, what does it cost to hire one person whose only job is to just call the leads? Now, I recently talked to a restoration company, so they did water damage for homes when they got hit by storms. And he told me, he said he was converting 55% of his leads, not calls leads. And I was like, how on earth are you doing this? And I was like, well, how many leads a day do you get? And he said two or three. I was like, okay, so what's the process? He's like, oh, it's really simple. My aunt, I pay her $60,000 a year and she has only one job. She has no responsibility in the company. Besides, the moment a lead comes in, you stop having sex with your husband, you stop cooking, you stop loving your child, and you immediately call the lead. That's the only responsibility. She just has to make three calls a day at the moment the leads come in and he pays her $60,000 and that brings in millions of dollars of revenue. And so you're not going to pay for it out of the dollars you have now. You're going to pay for it out of the dollars that you're going to make that you're not making yet because you haven't done it yet. And so pin in that back to the people. I think the hardest time, we call this the swamp@acquisite.com, but it's usually between like 1 and 3 million is the swamp. And I think there's a numbers reason for why it's such a painful period for entrepreneurs. Let's say 1 million for simple math. If you have a million dollar business, let's say that you have 20% margins. So that means you're making $200,000 a year in profit. For you to get an A player, it's probably going to cost you 100% of your profit to get that a player. And so you'll have what appears to be an impossible choice. You'll have, do I sacrifice basically 100% of my profit to bring this person in, or do I work another six hours a day to do the job that this person's doing? Both paths work. Both are painful and risky because the overworking yourself thing, you can get yourself through that hump, and then now you're at maybe 3 or 4 million, and that 20% is 800. You can spend 200. You still have cash flow. You can still live. The downside for the picking the person path is that what if you pick wrong? And this, by the way, ladies and gentlemen, is why entrepreneurs get outsized returns, is because we take on outside risk. And so this is the job, is that we have to be willing to make impossible choices. And the vast majority of choices for entrepreneurs in the business are impossible choices between two relatively bad scenarios, because the rest of the choices don't even feel like choices because they're obvious. Of course we should call our leads faster. Of course we should follow up more. Of course we should try and onboard faster. Okay, all these things are the obvious ones, but when you have, man, I'm trying to think of the ones. I'm not serious. Almost all the decisions that you get stuck with. And Elon says this really beautifully. He says running a business is like staring out to the abyss and chewing glass, because the staring out the abyss component of it is just the fact that this may never work and you're almost facing existential risk at all times to the business. And the eating glass component is that you will, by nature of your role, get funneled the worst problems in the business and the problems that no one else can solve. So it's one, problems that people can't solve. Two, the worst ones or that they don't want to solve, and they suck. And so you basically become a filter for the worst things. And that's why it feels like a fire every single day in the business, because you're the only one who can make the tough call, because no one else wants to choose between these two impossible choices. And you're like, why is it so hard? And the thing is that it literally never stops being hard. It's that the currency that you pay for in the hardness changes. And so a lot of people have this envisionment of the rocky cutscene of it must be hard for business. But I don't think that's where the hardship comes. I think the hardship is that at every level of business, there's new sacrifices, new that you didn't know you were going to have to make. Because if it was just, oh, I have to work long hours. There's tons of people work long hours in their business and don't grow. And it's usually because they're unwilling to have a hard conversation. It's a different currency, right? They have to take on risk. It's a different currency. They have to make some sort of bet, right, that they otherwise wouldn't have had to make. They have some sort of legal issue that they encounter. They have an employee who tries to sue them for some sort of. Of mal. Whatever, right? All of a sudden you're like, wait, all of these things are happening and they happen on a regular basis. And at each level, you unlock new levels of glass that you get to true through. And so this is why, like most entrepreneurs, in my opinion, don't actually quit. They fizzle. So it's not a big bang usually. It's they just. They stop seeking. So either they get content at the level that they're at and they just don't strive for more. And sometimes they say it just wasn't worth the trade. And I respect that. If you're like, you know what? I'm at a million dollars a year and I don't want any more, fine, you won. Congratulations. Like, you won at life. But most of the times they don't really quit. They just stop trying and then they just either coast or it just fizzles into nothingness. And that's just my experience of having. And I'm sure you've seen this, having gone through like cycles of entrepreneur. It's like seasons. It's like, oh, yeah, I came in through even like in the media and influencer space, whatever. It's like, like there's a bunch of guys that 10 years ago, it's a different landscape now than it was 10 years ago. Some people adapted, some of them were like, I don't like the. They weren't willing to chew the new glass, which is, how do I learn TikTok? How do I learn? But, man, blogs were so good. It's like, yeah. And they're not anymore. I talked to an entrepreneur, really massive, many hundreds of millions a year in sales. And he was like, dude, we were killing it on infomercials, so tv. And he's like, we just, you know, we really just have to crack YouTube. And I'm thinking to myself, like, dude, it's 2024. Like, you needed to crack YouTube 10 years ago. And he had the resources to do it, but it was just a different kind of hard. And so most of the hard is one, a level of uncertainty that goes into it and almost certain immediate failure because the first thing you're going to do will, will probably not work. And again, it's the iterations of when you get into the new domain, you have to transfer your generalized knowledge, which is that as an entrepreneur I will know that this doesn't work probably because I only know four things about it and I need to know like 400. And so I will get my first shot and I need to get directionally correct and then just keep doing more of that. And so I gave the consulting way of learning kind of like a new space. But if you want to learn a new skill, the fastest way that I do it that's outside of courses or anything, is tremendous volume of activity. So whether that's like, I want to take a lot of sales calls, I want to do a lot of outreach, I want to make a lot of content, I want to do a lot of customer success calls. Whatever it is, you do 100 of those and then you see, what are the top 10% of these? Okay, what did these top 10% have different than the other 90? And then I say, okay, well these ones had these three things that were different. Let's try and do those three things on the next hundred. And then because of the variety of life, there's going to be some new variables that exist that you look at the top 10% of the next hundred and you're like, okay, we did those three. But there's also two more things that happened in this 10 versus the other 90. Now let's do all five of those things. And over time, this is how you develop a checklist for making banger content and banger videos. And I'm sure, like there's this clip, David Perel talks about Chris Rock's creative process and he says, how is it that you see Chris Rock at Madison Square Gardens and It's just like 60 minutes of just fire. You're like, how is this guy so funny? And it's because what you don't see is the many small clubs and the first club that he goes to and does a whole hour long set and has like three moments that people laugh a lot about. And he's got like five minutes that are good and the other 55 minutes basically suck. And so the next time he goes to a club, he takes those five minutes, puts him at the front and then he tries all new material for the next 55 minutes, and he gets another five minutes, and he continues to repeat this process and put the new stuff at the front until eventually he has 60 minutes of uninterrupted laughing. And then people are like, oh, my God, he's so talented. I can't believe that he can just stand up there and talk into a microphone and make everyone laugh. Cross age boundaries, cross cultural boundaries, cross, you know, all of the boundaries that you might imagine. How can he be so funny to everyone? That's how. How can that guy be so good at writing? Well, he looked at the stuff that he wrote. He found the best stuff, made it into the few things that he always does, and then kept writing. And that fundamentally is the process of learning anything. And it's usually not one thing. It's many small things that, when added together in aggregate, create the outsized returns. Sorry, that was a little pulpit there. I just get violent about Skill Acquisition. That's what it takes.

Stephen Bartlett (130:48)

So interesting, but so interesting to see your journey through that and how. And how you ended up at Skill Acquisition. Because I was. As you went through, there was three things that I was thinking about, and I managed to write them down. The first at the top of it was you detailed three reasons why hiring the exceptional person when you're faced with that paradox of what do I do with my profits? Makes so much sense. One of the big things I hear from founders that they don't appreciate is to go for a long period of time, you have to have some kind of emotional regulation. And as you were talking about the different levels of business, and at every level, you have more problems. What I often see is a young founder hasn't hired those levels in between to deal with all those different types of problems, and they are, like, burning out and thinking of quitting. I had someone in my office last week, and she's on the route to build about a $50 million business this year. And the first question I said to her was, what's your executive team? And she just, like, rolls her eyes, and she's like, I don't have an executive team. She'd done a post on social media, basically in tears, saying that she was gonna quit. She's got a 30 to $50 million business. It's growing like wildfire. But she's about to almost quit it because she's dealing with every single problem. And often founders say to me, they think because they're experiencing so much hardship in that, like, 1 to 3 million phase, that forever it's going to be just huge pain. And I talked to them about this thing I called the Promised Land.

Alex Hormozi (132:13)

Dude, I love this.

Stephen Bartlett (132:15)

Cause in the first two, three years of my business, I thought that forever I'm gonna have to deal with every fucking problem. Jenny in the office is pissed off at Dave. And on Saturday night, when they were drunk, they did something which they shouldn't have. And I realized the problem was I hadn't solved for hiring these levels. So everything was coming to me. And the emotional toll on my nervous system of dealing with every problem was not sustainable. And then I accidentally hired someone good. Yeah, Katie, who I mentioned.

Alex Hormozi (132:39)

And then she dealt with all the shit.

Stephen Bartlett (132:40)

She dealt with all this. And then I could think again as a founder.

Alex Hormozi (132:43)

Right.

Stephen Bartlett (132:43)

So I wanted to just give a moment to that and your thoughts on that.

Alex Hormozi (132:48)

I want to do my best shot at operationalizing what you just said for somebody who's listening. When we encounter this issue, we have a specific process that we go through. And so we tell the founder, I want you to make a Google sheet, really simple. And I want you to have the time slots from 5:00am to, you know, midnight, whatever, however long you work, in 15 minute increments. And I want you to set a timer, easy timer, kitchen timer, like for cooking, for every 15 minutes. And every 15 minutes, I want you to. When it dings, I want you to write down what you did. One or two words. Doesn't take a lot. Now, as soon as I say that, people are like, oh, my God, I don't have time for this. I will promise you it will be the most productive week of your life because you will be aware of how you're spending your time. Every time I do this, I immediately think I should do this all the time. And I don't. So just do it. Just do it for the one week. Okay? And so what happens is you'll do it for a whole week. And then what? The second step of this is, you'll look at that and you'll say, okay, wow, I didn't know that 40% of my time is dealing with this thing. And I can hire a role to handle 40% of my time for this amount of money. If I had 40% of my time back, I could double this business and that would be worth significantly more than what I'd pay this person. And then you look at the next 15% of your time and you're like, okay, is this something that I can give to somebody else? Can I push this down? Can I create some process around this that can correct it, or do I need to keep eating it for a little bit until it's enough that it's a full time role? And so fundamentally, I see the entrepreneur as the many hatted fractionalist that you continue to pull things onto your plate until you have enough that you can ship it out to somebody else full time. And being aware of again, the one resources we have, which is time, how we're allocating it so we get the highest return. And so if you look at the stack of time, as an entrepreneur, we are always getting paid for our time. Kind of the premise of the whole talk here is that we trade our time for dollars. And so we always. The whole process of entrepreneurship is continuing to trade up what you're trading your time for. And that's like at the most foundational level, that is all we're doing. And so to take this as a hypothetical, your business doesn't need you right now. You spend whatever hours you do working and you do these things. Imagine a world where you could hire somebody who could spend the same amount of time doing all that stuff. Now you own the business and whatever you have to pay them, you take out of the profit. And everything else is now distributions that you own as an owner. That's it. Now the entrepreneur who's mission driven then stacks their plate with even more things that they need to do and then just continues that process over and over again. Now this is the part where the pushback comes, which is no one can do what I can do. And I want to say you're right. And if I wanted to, let's say you were a unicorn. So we can imagine this mythical unicorn. We've got this white horse, got the horn, tail, everything, and the little pixie flies for the magic that's around it. Okay, you probably won't find a unicorn, but you can find a white horse and you can find a rhinoceros to get the horn and you can find some fireflies to give you the twinkles. And so you may not hire one person who has all of these things, but you can hire three. And then those three together can potentially do everything that you're doing better because it's all they're doing with all of their time. And breaking it up into basically understanding that you're not going to find that unicorn, but you just break it into pieces and then you can partition it out to people who can just do those parts, makes it a lot more manageable from an emotional level to think like, I'm never going to find this of course you're not. And that's okay because we can solve for parts of our calendar. And fundamentally, when you buy back the time, you can then do what you're like, basically take the next step in the business.

Stephen Bartlett (136:40)

The other really interesting thing is you were talking about your friend who was doing blogs and missed YouTube. Was the idea that our success traps being old innovators dilemma that success traps us in the past. So your friend probably missed YouTube because he didn't want to reallocate headcount to something that was working and paying the bills. And this I guess ties into your point about failure being so unbelievably important. Because what me and you both do right now is gonna get old.

Alex Hormozi (137:06)

Yeah, like, do you know what I mean?

Stephen Bartlett (137:08)

And we probably both watched the people that came before us fade into irrelevant.

Alex Hormozi (137:11)

Look at these dinosaurs. Yeah, right.

Stephen Bartlett (137:13)

And we're part of some kind of new school of content creation. But we're gonna become part of the old school if we don't.

Alex Hormozi (137:19)

Yeah.

Stephen Bartlett (137:21)

What's in that gap?

Alex Hormozi (137:23)

Adapt. And I think that it's a port. So you know, Google has their, I think Sergey like solved this mathematically, but. But I think they called it 7020 10. So 70% of resources get allocated to the core business, do more of what we're currently doing. 20% goes to adjacent businesses. So things that are high likelihood success, that are one step removed from the existing core business. And then 10% goes to moonshots. Totally off the path. Like, let's just see, maybe we'll get 100x return. We probably will lose on most of these. And he proved it with math. He's smarter than I am. But fundamentally that is the concept of more better, new. And so that's one of the chapters in the lead's book, which is, okay, now that you have the core four right, these are the four things that you can do. You can post content, you can run ads, you can do outreach to strangers, you can do outreach to people. You know, those are the four things any person can do to advertise. The first thing you do is you do more. And for most small businesses, they're doing so little and think they're doing so much and it's a huge gap in understanding. And so I'll tell this story. That's probably the easiest way to explain it, which is when I had my first gym, I called up a mentor. He had 20 locations. I said, how do you advertise? He said, I use flyers. I said, okay. So I put 300 flyers out it didn't work. I called him back. I was upset. I said, wtf? He said, slow down, what was your test size? And I said, said, what do you mean? He's like, well, your test size. So like, I mean, the 300 wasn't the only amount that you put out. And I was like, well, yeah, it's like, well, our Test size is 5,000 flyers. And then once we have a winner, then we do 5,000 every day in terms of flyers that they put on cars to get people in the. Get people in. And so over a 30 day period, he would be putting out 150,000 flyers. And over a 30 day period, I put out 300. And so he was in a very real way doing whatever the math is there, but like 300 times or whatever, I don't know, a lot more. 500 times the math, sorry, 500 times the Flyers that I was. And of course he was getting a better result. And so one of the fundamental misconceptions of small businesses is that they mistake low volume for volatility. Meaning if you're not sure where your sales come from, from, and you get one sale here and then, you know, two weeks later you get another sale, and it feels sporadic, it feels volatile. Well, there is a certain amount of advertising activity that is occurring over that period of time. And we know that a month passes and you get one to two sales. And so the companies that are in your space that are doing one to two sales a day, take what you're doing in a month and they do that every day. And I know that you can get this, and I want to put this in context here. I hear I would like to build a personal brand. And I say, cool. And then I ask, how much content are you putting out? And they say, you know, I put out, you know, one or two pieces a week. And I think that's amazing for context, for anyone who's listening to this, we put out 450 pieces a week. And so the brand that we have is way larger because we do so much more than you do. And that's. It's. People can't fathom the idea that someone works 2 times, 5 times, 10 times, 1000 times more output than they are doing. But it is usually the reality of why they are getting a thousand times more than you're getting. And fundamentally, this is the concept of leverage, which is you get more for what you put in. In the beginning, you're the one doing the flyers, then you get leverage, because then you make enough from those flyers that you can look at your time, study and be like, okay, I can pay two guys to do these flyers and I can get eight hours back. That would be amazing. But now you've got two guys doing flyers, which is still double of what you were doing. Now you have double the revenue that's coming in. You're like, okay, should I hire more guys? That's more. Or should I do something better? Should I change my flyer up? Should I change the offer on the flyer? That would be better. Or should I start Facebook ads? Well, the new which would be Facebook ads is the 10% thing. Now, when you're looking at allocation of resources, let's say we're now fast forwarding a little bit into a company that has, you know, profit that they can do stuff with. Part of the reinvestment is insurance for the future. And so every business has three strategic buckets that it has to allocate its resources into. Number one is, how do we get more customers? Like, if we get more customers, the company grows, period. Number two, how do we increase lifetime gross profit per customer? So if we got the same amount of customers, but we made all the customers worth more, we would also grow bucket three is how do we decrease risk, aka how do we increase the likelihood that the first two things don't stop happening? And so those are the three buckets. And so when you look at that 70, 2010, the 70, for the most part, is usually going to be directed towards get more customers, make them worth more and the better. Also ladders up to that. The risk factor is usually going to be the new thing that you're going to do to ensure your future is going to be there by the time you get there. And so if we noticed, for example, that YouTube becomes like legacy television and viewership starts dropping and it becomes this new VR whatever, right? @ some point we're going to have to look and be like, we need to take 10%, 20% of our profit every year and start building out this new team. We're going to continue to do what we're currently doing. And here's the mistake that you need to avoid. Don't take the stars that are making the one thing work and then push them on the other thing. You have to find the people who can build this, otherwise you're going to sacrifice the core because all of a sudden it's like, oh, God, well, now we're totally screwed because now we're not getting customers from our existing thing and we haven't figured out the new thing yet. And so this is fundamentally where I see the CEO role. It's like you want to eventually become the flex player, which is that you can parachute in to a specific division or department that's solving a complex issue. And then you have the benefit that you have as CEO or founder is that you have decision making power and you have the ability to allocate resources and immediately say yes to things. And that's why, and to be fair, it's unfair to your team to say, why can't they do things as fast as me? Well, because you can write the checks and because you can say yes, you don't need to check with the committee, you don't need to run it up the flagpole. It's just you saying, do this, do that, don't worry about that. I'm telling you, you can stay late for this meeting. This is more important. And so strategy is just a fancy word that people say when they mean prioritization. That's all it means. We have unlimited opportunities that we can allocate things towards, but we have limited resources. And so how do we prioritize those unlimited opportunities against those limited resources? That is fundamentally what strategy is. And that's another way of just saying we prioritize your gut.

Stephen Bartlett (143:48)

And my gut is the home of our digestion and it's also a gateway to better health. But it can be hard to know what's going on in there. Zoe, who sponsors this podcast, has one of the largest microbiome databases on the planet and one of the world's most advanced at home gut health tests. Their blood sugar sensor, which I have in this box in front of me, goes on your arm so you can see how different foods impact your blood sugar. Then there's the at home blood sample, which is really easy and analyzes your body's blood fat. And of course, the famous blue Zoe cookie, which tests your metabolism. Oh, and I can't forget, there's also a poo sample, which is a critical step in understanding the health of your microbiome. And you post it all to Zoe and you get your results back, which will help you to understand your body's response to different foods using your results. Zoe's app will also create a personalized nutrition plan for you. And this is exactly why I invested in the business. So my question to you is, how healthy is your gut? Head to Zoe.com to order your kit and find out. And because you're one of our listeners, use code BARTLETT outlet 10 for 10% off your membership. Head to Zoe.com now at my company, Flight Studio, which is part of my bigger company, Flight Group, we're constantly looking for ways to build deeper connections with our audiences, whether that's a new show, a product, or a project. It's why I launched the conversation cards. I've relied on Shopify before, who's a sponsor of today's podcast, and I'll be using them again for the next big launch, which we'll hear about soon. And I use them because of how easy it is to set up an online store that reaches all of you, no matter where you are in the world. With Shopify, the usual pain points of launching products online disappear completely. No matter the size of your business, Shopify has everything you need to make your business go to the next level and better connect with your customers all over the world. To say thank you to all of you for listening to my show, we're giving you a trial, which is just $1 a month. You can sign up by going to shopify.com bartlett that's shopify.com bartlett or find the link in the description below on the car example you're talking about with the flyers. What I was thinking is, so many businesses try and win on the game of creativity, so we'll create something more creative and appealing as an advert. And I see this in my portfolio because they'll send me something and they'll go, steve, one particular business I'm thinking about, a major national supermarket, has given us a display slot in 400 supermarkets. Which display should we use? And they'll say to me, this one or this one? And I remember replying to them and saying, I don't know and you don't know, but here's the system to find out. We're gonna create 100 displays and we're gonna run them as ads on Facebook or we're gonna create some kind of environment where we're not gonna try and win on being the best creative guesses. We're gonna win on our rate of experimentation. We're gonna conduct more experiments. And I think this is a real shift in so many regards, because especially if we've gone through university and we've been trained as a copywriter, we have the old problem of wanting to be right, not successful and being able to, as a creative, even as a podcaster, say, I don't know what the right answer is, but I'm going to create a system where our rate of experimentation is going to be so much higher than our competitors that we're going to stumble across the right answer more than they do is a shift in thinking.

Alex Hormozi (146:57)

So there are two types of questions that you shouldn't ask, Questions that can be solved with a spreadsheet sheet, and questions that can be solved with testing. And so fundamentally, the outside advice that you get on something that can be solved with math, just solve with math. And I would say, like, 30% of the questions that I get are like, should I sell this one or this one? And I'm like, okay, well, what's lifetime value of this product? And what's lifetime value of that product? Okay, what's cost to acquire for this customer? What's cost to acquire for that customer? Okay, this is a math problem. You have a way higher LTV to CAC ratio here. Allocate resources here. But that's a math problem. Anyone can just do that Math. Math. For the testing one, I love this, like, the leads book. I didn't know what to name it. So it's about advertising. So I ran story tests for, like, a week or two, just saying, $100 million promotions, $100 million advertising, and then advertising one. It was like, $100 million advertising, $100 million marketing. Okay, and then advertising wins. And I'm like, okay, $100 million advertising, $100 million leads. Leads wins. $100 million leads versus two other things. Leads keeps winning. Okay, that's the title. And then I did the same thing for the COVID I did the same thing for the sub headline. And so I tested every component of it to get the thing that people seem to want, which is like, the book is advertising, but ironically, people want leads. So it's kind of like, do I want to have a book on drills or do I have a book on holes? Right? People want the hole in the wall, not the drill. That's just the vehicle. And so the book is just the vehicle to getting leads. But as a quick hack for anybody who has a brick and mortar business, this is just a quick hack for anybody. If you're like, what market should I expand into? Here's five markets we're looking at. Take $1,000. Run your best promotion that you win in your current market in all five of those markets. See what your lead cost is in all five markets. The one that has the lowest lead cost, then open in that market. Don't spend $250,000 doing all these studies and then and then building out this location only to find out that the lead cost in that area sucks. Just test it first. It's the best $5,000 or $10,000 that you're ever gonna spend to just ensure this is a risk bucket, Ensure that when you're there, it's gonna work.

Stephen Bartlett (149:02)

I mean, amen. It's our whole philosophy, so it's so wonderful to hear that. And I didn't realize that you'd done that with the book.

Alex Hormozi (149:09)

Oh, yeah, I have it in the chapter where I'm like, you have to wrap everything and I show all the tests that I ran and you can see all the percentages of people saying, this is the. That's the book title.

Stephen Bartlett (149:19)

When people look at you, Alex, you're a guy that knows a lot about a lot. And one of the questions that I often get as well is I need a mentor. People, kids will come up to you and say, I'm sure they say to you all the time, will you be my mentor?

Alex Hormozi (149:31)

Yeah.

Stephen Bartlett (149:31)

Do mentors matter?

Alex Hormozi (149:35)

So I'll explain what I'm thinking through. So to answer that question, I think it asks what is required to witness and is a mentor required? No. But there are certain behaviors and actions that will increase the likelihood of success. If you can do those actions faster, then you will have a higher likelihood of winning and higher likelihood of winning faster. All of humanity has been built on us standing on our. Our forefathers shoulders and taking what they learned. We don't have to figure out how light bulbs work. I have no idea how the Internet works, but I know that it works and there's somebody who can figure it out. And so we just start where they kind of lay off the baton and then we pick it up from there and we run the next however many, and then we die and we hand it to the next guy. And I think you don't need mentors, but you need to learn from people ahead of you. And so I think in models, not mentors, what can I model about their behavior so that it can change my behavior to increase the likelihood that I win faster. And so everything that I do, and I feel like this is a pretty strong statement, everything that I do ladders up or down to behavior. And so you've probably noticed it when I talk about training and employees, when I talk about advertising, I just want to increase the likelihood that a stranger takes it to desired action. That's all I'm trying to do. And when we get into behavior change, it removes a lot of the surface level fluff that I think confuses the vast majority of people. And so I'm always afraid to go on podcasts where somebody is really heavy in manifestation and energy and frequencies and whatever the hell and they'll say things like, I manifested this meeting, and I'll be like, like, you didn't you have content that did? Well, because you produce content on a regular basis. And then your EA reached out to my ea. That reach out is what initiated this, not whatever vibes you were setting out into the universe. Now, some people might say, yeah, it was also the vibes. But I would bet that if they made the content and did the reach out, I would still do it. Which means that those are the core things. Because if we remove those, if we just did the manifestation and didn't make the content of the reach out, I would not be. And so one of these works, one of these doesn't. And so that is what has allowed me to try and extract the essence from the mentors or heroes ahead of me. I consume a tremendous amount of Elon Bezos, Zuck. Anything that I can find that they put out or that they're interviewed on, I try and consume it. And the whole goal is I want to think about their decision making process as it relates to what they did, did, and try and apply that to my context in terms of behavior. And so that has been just like the big, big, big zoom out for. Do I need a mentor? No, but you need to learn stuff. And so whatever way is the fastest way for you to learn things, do that. And so I'll tell this story because I think it's like, do you need one? No, no one needs one. You can literally just do all of these things through trial and error on your own, and you will figure it out. Time is obviously the one thing that is the big question mark. And I think part of it is a question of how valuable is your time to you? Not in a micro example, but could, would I pay in time or money to move forward five years and not make five years of mistakes? So when I started my first gym, I didn't actually start the gym because I quit my job and I drove across the country and I showed up at a guy's house that I googled on the Internet who said he was good at running gyms. His name was Seven Figures Sam. All right? And so he was a gym goof. And so I showed up at his actual gym unannounced. And I was like, hey, I'm here to be mentored and learn. And he was like, I'm working. I really don't know who you are. And like, maybe we'll talk tomorrow or something. And I was like, okay. And he's like, where are you staying? And I said, I don't know, haven't decided yet. He's like, what do you mean? I was like, that's my car. I just drove here and all my stuff's in there. And he's like, you have nowhere to. I was like, I figured I'd just figure it out when I got here. And so he offered me to stay at his house that night, which was unbelievably generous. And maybe my salesmanship got him, you know, who knows? But within a few weeks, he had a meetup of all the gyms that were kind of like following his little system for how he ran his personal training studio and boot camp. And I got to go as a 22 year old and I paid to have access to this community of gym owners. And they were all going around talking about what was going good and what was going wrong in the business. And when it got to me, I was like, well, okay, so I want to open a location. And this is kind of what I was thinking about my model. And this is what I was thinking about price points. And they were like, wrong, wrong. Here's why that's not going to work. Here's how that's not going to work. And I was like, oh, okay. Well, this is where I was going to buy equipment. They're like, don't buy there. That's retail. You can get it from secondhand over here and it's literally a tenth of the price. And I was like, oh, that's awesome. Okay, great. I was like, well, I was thinking about getting this type of thing. They're like, no, girls will eat shit on that and they'll fall. I've had two girls do it. Don't worry about it. Like, you're not going to use it. But you can get sandbags. You can use them all the time and they're super cheap. And if you have to replace them, you can, but you can use them for like hundreds of exercises. And I was like, great, I'll do that. And then I was like, okay. So I was thinking about this kind of square footage for my, for my facility. They're like, dude, you don't need all that. You can cut that in half. And I was like, okay, well, cut that in half. And I was like, I'm willing to pay two bucks a foot. And they were like, no, never go over 150. And I was like, okay, never go over 150. And so like, in a matter of a day, I got to take like all of the knowledge of all of these guys of the mistakes that they'd all made with their gyms. And I started my first gym just on their backs. And so how much was that worth? To me, Years. And so for me, I have always been willing to pay in whatever currency was required to get knowledge that I don't know.

Stephen Bartlett (155:25)

Can you get that now for free?

Alex Hormozi (155:27)

Yes. It didn't exist then. YouTube wasn't even a thing. Instagram had just come out, like, for context. For everybody who's listening to this, I think about this equation a lot. And I actually had some video of somebody shitting on me for this. But I'm going to say it anyways because there's the 20% that are going to say it. That's right. I'm not going to dilute myself. So I saw a salesman say this at a conference, and he wrote a million dollars on a whiteboard. And he called up a lady in the audience and he said, how much do you make? And she said, $50,000 a year. So he wrote $50,000 underneath of a million, and he subtracted it and it said $950,000. He said, it costs you $950,000 every single year. You don't know how to make a million dollars a year. And so the question is, what is the value of that skill? And the answer is the difference. And so the troll who responded to this originally was like, well, you can keep going. What about $100 million a year or a billion dollars a year? And I was like, yes, yes. If you had the skill of making a billion dollars a year, then the difference between 50,000 and a billion is the delta of the value of that skill. And it's really not one skill. It's many skills that ladder up to when combined together to create that kind of value. But I remember that being seared into my memory, which is like, whatever I want to have. The delta between where I'm at and where that thing is is basically what I'm willing to sacrifice in order to learn what I need to learn to get there. And I think that if people appraised that delta not by the money in their wallet or the time that they currently have, but how much they would be making or how much time they would have and how much that's worth to them, then I think far more people would be willing to invest in their education. And it's such a taboo word because people hate the word education. It's like, oh, it's like work, but, like, you want to be an entrepreneur, like, you gotta learn. There's so Much stuff to learn.

Stephen Bartlett (157:18)

Parrots versus practitioners. This is an idea that I've thought about a lot over the years because I look at someone like you and I can tell based on everything you say today that you are a practitioner. In this analogy, what I call a parrot is someone who hears what Alex said and then starts saying it. But your lessons and wisdom have come from going through that shit and being able to distill the essence, like Richard Fryman, and then share it. Yeah, there is a group of people that just spend their whole life reading books, posting about it, et cetera. They never take the jump. Parrots vs practitioners is the best way to learn. Being a practitioner.

Alex Hormozi (157:54)

This is widely known in the education space, but not as much in the content world. But there are two types of education. There is procedural and there is declarative. So declarative knowledge is knowing about something. Procedural knowledge is knowing how to do something. So a simple example would be, okay, okay, I understand how private equity works, right? Like that. You can, you could talk about it. You can explain how, okay, they take some debt and then they have this arbitrage and they get this enterprise value, multiple whatever. But you've never done a deal. And until you've done a deal, you will not have procedure knowledge of knowing how to actually do a deal. And so you can read 100 books on sales, but you will learn more about actually selling from your first hundred sales calls.

Stephen Bartlett (158:33)

And businesses are the same.

Alex Hormozi (158:34)

Yes. And so the idea, in my opinion, for most people is that if you want to rapidly learn, you want to rapidly do those hundred repetitions as fast as you can so that you can suck a hundred times in a row and find the 10 that sucked the least and then say, how do I suck least on the next hundred? And you keep doing that so many times until eventually you suck so little that you're actually good hard work. Yes. And I think, you know, this is actually really interesting because it ladders up to cause there's two types of creators. You've got entertainers, and then you have educators. At least that's how I separate it. The point of entertainment is to maintain the attention of the audience. That is it. So the point of an entertainer is to literally just keep people watching. The point of an educator is to change someone's behavior. And so if you, if you want content to do well in either of these buckets, fundamentally, at least in the education space, you are selling time. So education is, I spent all this time doing this thing to learn these four things that I can give to you so that you don't have to spend this time learning it. And so education is actually, if said differently, what you do is you buy time. So when you buy, it's the only thing, it's the only way to actually buy time today. So if you want to basically time warp into your future, you have to buy education so that you can buy all of the life experiences from all these people and then not pay for it in your life. You pay for it with less time by consuming what they have or some money or some combination of those things. And fundamentally, we usually pay with the currency that we value least. And so, interestingly, a rich person values their time more than their money, and so they're willing to pay with money to get time back. A poor person will also pay for their time and drive around to 10 different gas stations to find the one thing that's $0.10 cheaper, or drive to 10 different grocery stores to use whatever coupons they're valuing their time over their money in that instance. And so back to the educator. If you want to be certain or have confidence in any endeavor, you have to do so much volume of activity that it would be unreasonable that you would suck. And if you were to write out the equation of like, okay, how many public speeches would I need to give for it to be unreasonable that I would succeed? Is it 10? Is it 100? Is it a thousand? Write the number that you're like, there's no way that I would suck after this many. And then all of your effort gets really narrowed. Commitment, elimination of alternatives, focus, turn down quality and quantity of other things to just doing that. And the key part of this is not just to do the thousand, but after every 10 or every 20, looking at the top 10 or 20% and saying, what did I do? Well there. Cause you have to have the feedback loop, otherwise it's not just doing 100 reach outs, you have to do 100 reach outs and then look at what works, and then do more of what worked. And so for the parent versus the practitioner component of this, even if you're starting out, you can have confidence in what you're doing because you derived the solution and you can actually answer why you do something. So if you cannot explain why you believe what you believe, it's not your belief, it's someone else's. And so most people, I would say, parrot the vast majority of the things that they say because and to be fair, that's how humans learn. You're five years old, you say, what's that? They say Bull. And you say bull, you parrot it back, and there we go. Right? But when it comes to skills, you can describe what other people have said before, but if something goes wrong or what about this condition, you won't know what to do. But if you derived it from the ground up, and there's a great portion of this in the Y Combinator community that you or the Silicon Valley community that you probably heard is maybe like three or four months ago, it was like, founder mode. I don't know if that gets to the uk. Okay.

Stephen Bartlett (162:17)

It was from Brian Chesky. I actually messaged him about it after.

Alex Hormozi (162:20)

Oh, yeah, it was awesome. Right? And so basically the tenet is that the founder always has special powers in the company because you know what built it. And so that is basically, at its core, the practitioner versus parrot. The people who came later are parroting why you do what you do. But you know what conditions you were in when you made this rule, and also you know how to break it and when to bend those rules. And so if you build something when you built it from those repetitions to distill out the few truths that exist, you'll know why those are the truths. Like, I'll give you a really simple example. So if we, you know, we've tried to learn YouTube and we've gotten better over time, but in the beginning, I did this massive review, and I figured out that the videos that we had that had three things at the beginning, Proof, Promise, Plan was the videos that did the best. And so then all of a sudden we said, okay, all videos have to have Proof, Promise, Plan right at the beginning, the first 30 seconds. Great. So we started doing that for a while, and then we looked at the outliers among those, and we were like, oh, well, we also. And some of the ones that did really well also had some sort of visual picture of this plan. All right? So it became Proof, Promise, Plan, picture. Then we kept looking, and we found out over more repetitions that if we also include some sort of pain or problem that's being solved, that also helps. So Proof, Promise, Plan, picture, pain. And so you're like, wait, if you keep adding to this thing, it's gonna get really long. No, Sometimes you can check multiple boxes with one thing, and this becomes the elegance of creation. Like, how can I check off three of these boxes with one sentence? Right? And so that is, by the way, if you're, like, thinking about this, you're like, do they really think about this when they're making videos? Yes. And that is the difference between a 10,000 view video and a million view video. And it's understanding that level of nuance across the entire thing that creates expertise. And also when you're like, oh, this video flopped. When you're a beginner, you're like, these videos in general don't work, or content doesn't work, rather than saying, this video didn't work, and here's why. Because we did three of the five. And so it's just like all of the. I mean, the devil is in the details and you meet the devil himself by doing the unreasonable amount of work. And then it becomes, it goes from uninformed lack of knowledge to informed optimism. Because first you're like, I can make videos and get rich. Then you realize that it's really hard to make videos that people watch. And then finally you start to develop a framework of this is how I make videos that people watch. And when they don't watch it, it's because I didn't follow it.

Stephen Bartlett (164:40)

It's so timely because it weaves into something you said earlier. Because my girlfriend came to the recording yesterday and as I went into the green room and I sat down, she went, babe, look, I found this new app. And I said, what is it? She goes, it's an app that summarizes books and it's called like head something. And she showed me it. And I go look at my book because I know the laws, I know the chapters, I know all of the principles that lead up to the point. So show me my book and law two. My book's called 33 laws. So it's these 33 laws.

Alex Hormozi (165:06)

I got it.

Stephen Bartlett (165:06)

Yeah. And law two is about the Richard Fryman technique you talked about. And I explained why that process of learning something, simplifying it to its essence for a 10 year old, teaching it to someone else, if they understand it, move on. If they don't, go back to the top and learn again. And it summarized Law 2 of my book term, like writing is the best way to learn.

Alex Hormozi (165:26)

Yeah.

Stephen Bartlett (165:26)

And I said, babe, I said, if you just read that summary, the top of the pyramid, and you don't have the story and all these agreeable foundations, which I then explained to her, would you be able to then translate that and truly understand the nature of the problem so that you could apply it to lots of different settings and so on. And then I told her what that second law in my book actually meant, and she deleted the app because there's no point knowing the conclusion.

Alex Hormozi (165:49)

The aphorism.

Stephen Bartlett (165:50)

Yeah, the punchline when you don't know the story and without the story, you can't, I guess, get to the first principles of the thing.

Alex Hormozi (165:58)

So this is really interesting because with that Feynman example, it proves that the distillation of knowledge is not bidirectional. So you, Richard Feynman, can break it down to a child, but a child cannot then rederive what Feynman has done.

Stephen Bartlett (166:12)

Interesting.

Alex Hormozi (166:13)

Yeah. And so it's, it's convenient for the transmission of communication and for teaching someone who's, let's say, coming new to an organization. Here are the things and these give you the decision making frameworks around which and it can give you directional guidance. But that is the whole founder mode. That is basically a different way of getting to the founder mode idea. That person derived this thing. And so when a problem arises, we can re derive the next solution rather than trying to apply the aphorism to a new setting.

Stephen Bartlett (166:44)

Another point for founders who are getting their work copied, because everything you've just said actually should give a founder who's having their work copied, their T shirt designs, their content copied, huge amount of peace. Because if I need to know steps 1, 2, 3, 4, 5, up the staircase to success to be able to predict step six, then if someone's just copying your step five, you should be at total peace because they don't know the foundations that would lead to the next step. And that's what we see as podcasts is podcasters copy you. They'll copy your thumbnail, your title, your whatever, dude.

Alex Hormozi (167:15)

I mean, I'm sure you see it everywhere.

Stephen Bartlett (167:17)

Yeah, yeah, but the piece that I have is, honestly, I say to the team all the time, if that's the thing that makes us special, we're fucked anyway. Like, if it's the thumbnail or the this or how we do this, if it's the trailer that made us special, we're fucked anyway. But also there's a set of principles. We call it the iceberg. The 99% of what we do, you can't see. It's the culture, as you said.

Alex Hormozi (167:40)

It's like, I have so much on this. So one is right. When I sat down, you were telling me about the episode that we ran that was akin to a shark tank, but new version that we had on our channel. And you saw me kind of grow and be like, it was 56 minutes on video, but it was so much work to produce that one thing. But no one sees all the work behind it. That's the 99%. So that's thing one. The next thing Is think about the. If you're a founder who's plagued with competition and being upset about it, I was one too, and I want to tell you how I got over it. So number one is think about the alternative, which is that no one copies you because no one cares about what you're doing. Well, then it would be a requisite for success that people copy you. So as long as you are successful, this is just a part of business. The second piece is by definition, if someone copies you, they are second period. And so if you want to lead, you can't look at anyone else. You have to consistently be deriving the next step, the step six that's unseen from your first five steps to innovate, rather than I'm just going to parrot the next thing. And as soon as you find yourself copying, you have admitted defeat. You've admitted that you are no longer the leader and that you were just following in someone else's footsteps and you're giving them the baton and saying, you be the champion. I'm happy with second, third, fifth place. And in a winner take all world like attention is all the fruits go to the first place. Anyways.

Stephen Bartlett (169:07)

Amen. Amen. I have nothing more to add. Let's talk it. The last thing I want to talk to you about is it's really like a three part thing. It's hard work, love and happiness. Okay. And I put them together intentionally. One could say work, life, balance.

Alex Hormozi (169:20)

Yeah.

Stephen Bartlett (169:20)

Love, happiness. I think these things are kind of fundamentally intertwined. But how do you think about it? You're someone that's known as being very obsessive, very into your work, to say the least. You have a wonderful partner who seems to be aligned. I know.

Alex Hormozi (169:35)

Oh, super.

Stephen Bartlett (169:35)

Okay, good.

Alex Hormozi (169:36)

She's hardcore.

Stephen Bartlett (169:37)

So let's go through it. Work, life, balance slash hard work, love and happiness. Okay, if we start with work, life balance. It was that shit question.

Alex Hormozi (169:47)

Beliefs on it.

Stephen Bartlett (169:48)

Yeah.

Alex Hormozi (169:50)

So I will answer with how I derived my kind of life thesis, which was after we. So when we went to. So we had taken about $40 million in distributions from gym launch personally throughout the, you know, years that we ran the company. And then in the year of the sale, for those who've never sold a company before, you typically don't want to change a lot of things. You kind of want the company to just be like, be stable, keep working, everything's fine. And so it's one of the most harrowing experiences to go through because you can't really change anything. And if you're the founder, you're always trying to innovate, so you can't do what you're normally doing. And you also can't start the next. So you can't change current and you can't start new. Because if the deal doesn't go through, then you don't want to start two businesses, remember? Because cardinal rule number one, we're not chasing women in the red dress. And so you basically have to sit idly by and just let things operate. And so in that year, it was one of the most miserable years of my life because I basically had nothing to do. And when I looked back on my life, this sounds like I looked back on my life as though it's been so long. I looked at the days that I enjoyed the most, and on those days, I had worked out and I had produced something, and I had done both of those with people I liked. And almost all of those days, I'd worked many, many hours. And when I realized that the idea of working hard so that I can insert blank the. So that actually makes it still destination driven. So that was when I derived what I called hard work is the goal. Goal. It's just to work hard. That is my goal, and then die on things worth doing. And those are the days that I love. And I get a tremendous amount of pushback for saying this. And it bothers a lot of people. And to them I say, live your life whatever you want. This is, again, my life is not a sermon, it's a documentary. This is just how I do it. You can do whatever you want. And for the people who are dissatisfied, try it. And if not, no worries. I really enjoy working. Like, the best days are like, when I write those books. It's the happiest I am. And it's not happy in the moment because it's really hard. But the amount of challenge is about proportional to my level of skill. And every book I think is better than the last. And the third book that's coming out is gonna be. Be fucking awesome. I'm very excited about it. But there's nothing that I enjoy more. But in the moment, I'm like, how do I break this down? And I'm just rubbing my forehead and I'm like. And then I create two, three different frameworks. I'm like, nope, that doesn't work here. And that doesn't work here. Which means some kid in Afghanistan is going to get stuck on this step because it doesn't work. I have to figure out how to get it so that it works everywhere. And I keep Driving. But the moment, it's like, it clicks. I'm like, that's it. Fight me. That's the framework. That is what I strive for. And for me, the love, the happiness and work have all, because of the nature of my life, been one. Now, some people have lived their lives where their love life and their happiness and their work are all separate. For me, it has just been life, and I like it that way. And for the people who are upset by that, I'm not upset about how you live your life. I just choose to live it this way. And if in the future I change my mind, I'll change my life. If I get to a point where I'm like, this is no longer a priority for me, something else is, then I will. But when I look at the centenarians and I look at the people who. I look at Warren Buffett as somebody and Charlie Munger as two of my heroes. Charlie worked until the day he died. And to be clear, I don't work on a seven day calendar. I don't work a certain hour. I work as much as I can until I feel like my rate of output drops precipitously because of fatigue and I sleep. And then if I feel like on a longer time horizon of like, I've worked nine days, I've worked 20 days, I've worked 30 days in a row, and I'm like, all right, I feel like I don't have any gas today, then I'll take the whole day off. And whether that's a Tuesday or a Sunday or a Saturday, I take the day off. And that just is what it is. And I've just. I have learned to work that way and I'm okay with it.

Stephen Bartlett (174:07)

The goal, clearly for you then is, is the hard work itself and not a certain place you're trying to get.

Alex Hormozi (174:13)

To, necessarily, because that always moves.

Stephen Bartlett (174:14)

Yeah.

Alex Hormozi (174:15)

And so Jesse Itzler has this, and maybe I'll be able to steal it from him someday. But I saw him show a picture of his kid finishing a race and putting a zero up. And what that signified was nothing left in the tank, that he'd spent everything he had on the field. And I would. And it's like I have this visual of the 300 movie where the queen says to the king as he goes off to battle, she says, come back with your shield or on it. And I kind of see, like my work that way. Like, I can't imagine a better way to go out than, like doing the thing I love. And it bothers a Lot of people that I love something different than they love. And it's like, it really. It really bothers me that it bothers them to be honest, because I make no projections, like, do whatever you want. And I feel like if I ever had one thing that people took from me, it was like, absolute freedom. And because of that absolute freedom, we are 100% responsible for our own lives. And so where we place the finger of blame is also where power flows. So if you blame your parents for your life, your parents have power over your life. If you blame your. Your boss for your bad life, your boss has power of your life. If you blame you for your bad life, at least you can change you and you can do something about it. And so I think absolute responsibility has been my core tenet. And if you have a life where you're like, I don't want to care about work that much, and I just want to spend all my time with my family, I'm like, congratulations, you fucking won. That's amazing. Just don't assume that everyone's you and that winning for me is. Is the same as winning for you. And I think the times that I talk about this, I know that my message won't resonate with everyone, and that's okay. But it's for the few people who were like me and felt like everyone told them there was something wrong with them. And I still get people to tell me there's something wrong with me. And if wrong means not normal, then yeah, you bet. But it's more so that you are different, and that's okay. And I think that if you're okay with that, then it unleashes this whole new realm of possibility of being able to do what you want. And kind of like I had the, you know, you do 100 of these, and you look at the top 10%. Do 100 of these, look at the top 10%. That was my way of trying to operationalize happiness, because it was this ephemeral thing that When I was 18, 19, 20, 21, 22, I struggled a ton with. I was very depressed. I looked at, you know, religion. I looked at a lot of different things, and this is common for people at that age. And I. I came up with a mantra for me at that time, which was, fuck happiness. Now, people then hear this, and I'm sure this will get taken out of context, but that was basically like this release moment for me where by continually chasing happiness, it always existed outside of. Of me. And so it was always this carrot that was in front of me that I could never really get to. And so by saying, fuck happiness, I was like, it's unattainable. I'm just going to work, and I'm just going to do the stuff I want to do. And when I started doing the stuff that I wanted to do, I looked up years later and I was like, I actually kind of like my life. And I was like, is this what happiness is? And I was like, I don't know. But I think one of the major plights of humanity, myself included, is the expectation that life should be different than it is. And so we create this idea that whatever we have right now is not what it should be. And I think should is the root of all pain. Is that all the things that we think should happen but aren't is basically the measurement of our pain. And so I've tried to eradicate should for my life, should for other people. She should do this, they should do that, that, and just lean into is. It just is this way I work, period. Not I should work more, I should work less, or I should work differently, or I should see my mom or I should call my dad more. I do this, and if something changes, I will change. And so unconditional shoulds. Now, if there is a condition of, like, if you want to make more money, then this is a higher likelihood you might want to consider doing this. Those are things that I don't consider in that category, but just the generalized shoulds of, he shouldn't do that. He should build a family, he should have kids, he should have gotten married earlier, he should have gotten later, he should have married someone different. He shouldn't have the life that he has. He shouldn't work this way. According to what. And so for me, that is my theory on life, on happiness, work and love has been very unified because is, I love my work so much that I got out of a relationship. And when I started dating Laila, I said, I am not willing to change this. And so you have to be willing to deal with me working this way or this won't work. Because my relationship with my work is the most satisfying relationship I have. Now people will hear that and be like, well, that's because he's never experienced true love or whatever narrative they'll. They'll say, but it's like, you haven't lived my life and I haven't lived yours, and I don't project anything onto you. But I love what I do. And I get attacked for liking what I do so much. And I like working a Lot. And it's because they have negative associations with the word. And that's their own history of their experience with the word. But I see my goals and my relationship with my goals as one of the most sacred things that I have, because I see them as a relationship with myself. Myself. And so those proxy, when someone comes in and says, hey, sweetie, you've been working too much, according to what? Why should I stop now? Let's do this other thing. And people will probably see this as a. They'll put whatever labels they want on it. But I just said, this is what I would like to do with my life, and if you can incorporate yourself into that, that would be amazing. And so my second date with Layla, after we talked about business for four hours on our first date, was I said, I'm going to be working all day. It'd be cool if you worked with me. And she just worked next to me. She had her own thing, but she just worked beside me. And I was like, this is nice. And over time, eventually was like, hey, maybe you want to work on my thing with me? And she was like, yeah, that sounds good. It was a little bit more than that. But, like, fundamentally, I got her to switch to working on it with me. And at that point, what we got to talk about was what we were creating together. And to me, that's been the journey of my life, and it's been amazing. And I'm not saying it works for everyone. I'm saying it probably doesn't work for most people, but it has worked really well for me. And it would make sense for me that my path would be different than most people's because I don't behave like most people. And so I would have to have a different formula for how I drive meaning or joy from my own life. And since I don't believe in inherent meaning, just the meaning that we choose to ascribe to things, then it's up to me to create that meaning within the work that I do. And so the reason acquisition.com was all based on. And it was during that year where I just basically had nothing to do, where I was like, what do I want to do with my life? Because I don't need to work anymore. And that was, you know, we'd taken 40 out before the sale, and then we obviously got the sale. So, like, I don't need to work. I like to work. And I try to spend. I look at. You know, I had this boss that told me this and was one of the catalysts for looking at Life this way. She said, I had just had a good weekend or something, and I came in like chipper, and she said, well, you must have had a good weekend. And I was like, yeah, it was good. And she said this. It was like an offhanded comment. She said, I'm pretty sure the key to happiness is living as many days in a row like that as you can. And it was actually really operational. I was like, I can use this. What are the good days? How do I live as many of those days in a row as I can? And so I've been attacked for saying that I don't really enjoy going on vacation very much. And it's because I just want to get back to doing the thing that I really enjoy doing. And I remember Layla and I went to Mexico this year for a week, and it's always during the week of Christmas because no one works, and it drives me nuts. And I've just, like. I've just given up trying to get, you know, get everyone to work, because even if my team will work, because my team will, because they're crazy, too. Other teams won't and vendors won't. It's a span anyway. And so while we were there, all I came out with was like, this is for other people and not me, comma. And that's okay.

Stephen Bartlett (182:44)

Earlier on, when we were talking about.

Alex Hormozi (182:46)

Sorry, that was a long run.

Stephen Bartlett (182:47)

No, it's beautiful because it. So a couple of takeaways from it. But earlier on, we were talking about being a great content creator is a byproduct of having the courage to be yourself. And from that, everything you just said, my soliloquy. Yeah, I also gleamed something similar, which is because being happy requires the same thing, which is the courage to be yourself. And in both, in the previous analogy, you said everybody is unique, and that is their value as it relates to showing up in marketing or with whatever product they have. But also, when I think about Alex's story, your story, and all you went through with your father and the early experiences in that consultancy firm, the gym, the place you worked, logically, from first principles, the thing that's gonna make you happy because you are completely unique is gonna be completely different from everybody else.

Alex Hormozi (183:37)

Right?

Stephen Bartlett (183:37)

Like, to varying degrees, depending on how you're sort of defining your early experiences are. But I actually think we talked about the courage of being yourself. There's also the courage of being happy. And with the courage of being happy, you have to withstand public pressure. The shoulds you said from your parents, whatever, from social media, especially as you become a bigger creator, to actually just listen to how you feel every day.

Alex Hormozi (184:01)

Can I throw something out that I think might like? So this blew my mind. So I was in around that same period of time because I talked to everybody I could to try and get context on this. And so I called a friend of mine up, or not friend, I would say, acquaintance that I got connected with who'd sold his company for hundreds of millions of dollars. Really bright guy. And one of the questions I asked him, I said, so how do you drive meaning from your life? And he said an answer that really, really shook me, which doesn't happen that much, given my worldview. He said, why do you think that life needs to be meaningful? And it was just this really interesting question, which is basically that I had an unspoken demand of the universe. Life should be meaningful. I should be happy. And so it's the shoulds that we don't even know that we think and say that are the ones that change us the most, like, hardcore. And so my favorite quote of all time, which is probably at the front of a few of the books that I have and will probably be the one that'll be on my tombstone, is a permutation of an Orson Scott Card quote, which is, we question all of our beliefs except for those that we truly believe and those we never think to question. And so I would say that a lot of my entrepreneurial career, even just human journey, has been, what are the beliefs that I so, so inherently believe that I don't even see them. I don't even think about the should. And so when he said that to me, I was like, whoa. I have had this inherent demand of the universe that my life be meaningful. And now people would hear this and be like, they have their shoulds, and they're going to say, well, it should be meaningful. And I'm like, why? According to what? And if we look at history, history pretty much sweeps everyone under the. Under the bed. Like, within 100 years and within a thousand years, basically everyone. And the people that we remember, we remember some of their works, and we go 100,000 years in the future or 10,000 years in the future, probably unlikely that we will be remembered in general. And that is solving for the idea that we need to be remembered again. We have to. Why? And so my solving has been for degrees of freedom and responsibility. So what are the things that I can control? And I will do the very best of my ability to try and do the things within my control to ideally make other people's lives Better and my own in the process. Now, that is a choice rather than a. I demand that of the universe. And this gets really abstract and heady really fast. And so I will try and, you know, bring us back down to Earth, but by demanding that life be meaningful, by demanding that I be happy, be when I understood that I was demanding these things and pursuing them, that they were outside of me, by saying I need to do this, that I created inherent space that I could never gap or I could never close. And so by trying to forget or eliminate the demand is where it was the first time that I experienced those things. And so I try to keep them out of my head to the greatest degree possible so that I can be inside of them. That sounds weird. Rather than in pursuit. And so the times where I derive the most joy from my life, if I'm optimizing for that, which is. I wouldn't necessarily say that I am optimizing for joy. I think Williamson was like, you definitely optimize for purpose or meaning or something like that. And I kind of reject a lot of it, mostly because I do what I have been rewarded for doing in the past. And so because I have a behaviorist view of the world, which is that everything boils down to behaviors. Why do I do these things? I do these things because when I have done them in the past, I have enjoyed the result. And so I continue to do things that I've enjoyed the result of. And if other people have done things that they enjoy the result of, then I encourage you to keep doing them. And I also encourage you to not project that other people need to also do those things and that they will experience the same result as you, because they might not.

Stephen Bartlett (187:58)

Alex, thank you. Oh, that was such a beautiful way to end. And I. I've. It's so interesting because if. If people attack you for that, I just wanted to give my own perspective, is when I hear you say these things about not. Not enjoying holidays and.

Alex Hormozi (188:13)

Yeah.

Stephen Bartlett (188:15)

Things about your relationship with Layla and how. How that happens for me, I feel even if I don't agree with 100%, I probably get to 95%, to be honest with you. The fact that you're telling me that you're different makes my difference, whatever it might be, feel acceptable. Do you know what I'm saying?

Alex Hormozi (188:35)

I 100% know what you're saying.

Stephen Bartlett (188:37)

Because when I heard you say these things, and I go, oh, my God, Alex feels like he's different from the normal two we might not be. Me and Alex aren't the Same. But we both feel inherently like we're not playing by the rules and. And therefore, in some way getting life wrong based on this, like, public narrative of the way we should live our lives. I thought, amazing. I remember watching the video where you talked about not liking going on holidays and being, like, absolutely obsessed, and me thinking, oh, my God, I'm so fucking glad he said that, because deep in my heart, somewhere I felt a guilt.

Alex Hormozi (189:08)

Yeah.

Stephen Bartlett (189:08)

Oh, you know, a guilt. And I'm like, where did the guilt come from?

Alex Hormozi (189:11)

Right.

Stephen Bartlett (189:11)

I'm doing it. Something that I love every single day. But I feel guilty. Well, I feel guilty because of other people's shoulds. Right. Right. So please, Alex, despite the. Despite any critics that might be out there, please continue to have the courage to be yourself, because you have no idea how it's making a group of weirdos that feel like they don't fit in feel heard and understood for their variants.

Alex Hormozi (189:33)

Well, that is my. Yeah, I mean, it's. I. I make it for them.

Stephen Bartlett (189:36)

We have a closing tradition on this podcast, as, you know, where the last guest leaves a question for the next guest, not knowing who they're leaving in for. I'm laughing because it's so ironic.

Alex Hormozi (189:46)

Okay.

Stephen Bartlett (189:49)

What is the meaning of life?

Alex Hormozi (189:54)

Well, the short answer is obviously 42, but I actually do think it's learning. Because if we think about what learning is, it's that you're exposed to new conditions that over time, change your behavior. And so you are different now than you were 10 years ago because you've learned more things. And so if we think about the meaning of life as what is the output of life? So I actually do really like this. So people talk. I can relate this to business. Of course, I can relate what's the meaning of life to business. But what is the meaning of a business? The purpose of the business is whatever the output of that business is. That's the meaning. It's what the output of that business is. And so if the mission, like with Elon, is to get to Mars, then the output of the mission is that people get to Mars. And so that's the meaning of that business. And so the meaning of life in general for me, I think, for all humans is that the output of experience is learning. And so we will learn, regardless whether we want to or not, we learn. Learning happens whether you want. Whether you like it or not, you will learn. And I think that that's where I would just leave it. And the question is, are you learning the things that you want?

Stephen Bartlett (191:25)

Amen. I highly Recommend people go and check out the new format you launched on your YouTube channel. Now, it's titled Building a One Million Dollar Business for a Stranger in 56 Minutes. It's kind of like a new take on Shark Tank, but it's more actionable, more practical. It's what you referenced earlier, and I know it took you many, many, many, many hours to perfect it, but it's a really interesting format that I think YouTube is seeking because it's so actionable and practical. And I highly recommend. I'll link that below. But I would also highly recommend people go and check out these books. I mean, they've been. To say they've been smash hits is a massive understatement. Thank you. I mean, I just see it everywhere. I feel like it's a prerequisite of any entrepreneur's toolkit when they're starting and they're trying to figure out frameworks for scaling a business, making sales, generating leads. And I know there's another one on the way which you won't tell me about, but I know it's coming this year, which is volume three of this, this format. And I'm exceptionally excited to see it. And for any entrepreneurs out there that are looking to get in business with you, I highly recommend they go check out acquisition.com because there's so much there. Regardless of where you are in the cycle, whether you're starting out, whether you're scaling up, whether you're looking for advice, acquisition.com is the place to be. Thank you, Alex, for your generosity. I appreciate it. And thank you for all that you do. Thank you for being weird and different. Because, like, that's, again, that's the value. That's all the value in the world. We don't need more of the same. We need people that have the courage to be themselves and the courage to be happy. And that's exactly who you are. And I really, really appreciate it.

Alex Hormozi (192:47)

Thank you so much.

Stephen Bartlett (192:51)

Isn't this cool? Every single conversation I have here on the Diary of a CEO, at the very end of it, you'll know I asked the guest to leave a question in the Diary of a CEO. And what we've done is we've turned every single question written in the Diary of a CEO into these conversation cards that you can play at home. So you've got every guest we've ever had their question, and on the back of it, if you scan that QR code, you get to watch the person who answered that question. We're finally revealing all of the questions and the people that answered the question. The brand new version 2 updated Conversation cards are out right now at the conversationcards.com they sold out twice instantaneously. So if you are interested in getting hold of some limited edition conversation cards, I really really Recommend Acting quickly. Q1 is often when businesses start implementing new systems and processes in hopes of creating efficiencies for the year ahead. And over the course of my career I've learned just how crucial having the right systems in place is. One which has helped me across many of My Investments is NetSuite. They're also a sponsor of this podcast. NetSuite is the number one cloud financial system. Through their streamlined platform you'll find all of your accounting, financial management, inventory and HR in one place. Their technology has been a real game changer, especially for my team at Flight Studio as over the last year here we've moved out of startup mode and into scale up mode. We no longer have to juggle multiple systems and having everything together has reduced the number of manual tasks and errors. Over 41,000 businesses have chosen to future proof their business with NetSuite. So if you'd like to learn how it can help your business, head to netsuite.com bartlett and free download the CFO's Guide to AI and Machine Learning. That's netsuite.com bartlett.