← The Foundr Podcast with Nathan Chan
The Foundr Podcast with Nathan Chan
637: How One Decision Separates a $1 Million Business From a $250 Million One | Leila Hormozi
00:58:45
Leila Hormozi went from six arrests in 18 months to building a portfolio generating over $250 million in annual revenue by age 30.
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- [00:02]
A
Hey founder fam. I want to talk to you about something super exciting. We're officially partnered with Omnisend, the email marketing and SMS platform built specifically for e commerce founders. We've been recommending Omnisend to founder students for a while now because it just works. Whether you're launching your first store or you're scaling to seven figures, it really helps you automate your marketing and get real results. Did you know on average OMNISEND customers make $68 for every $1 they spend, which is an insanely good return. And because you're part of the founder community, you get 50% off your first three months with the code. Founder 50 just head to omnisend.com founder without the e to get started. All right, now let's jump back into the show. From six arrests in 18 months to building a portfolio generating over 250 million in annual revenue by age 30, what does it actually take to completely transform your life and become one of the most respected operators in business online? Today's guest, Layla Hormozi, co founder of acquisition.com alongside her husband Alex Hormozi, who went from rock bottom, overweight, addicted and staring at an arrest warrant on her dad's kitchen table to becoming the operational mastermind behind a multi hundred million dollar empire. What makes Layla so fascinating isn't the rags riches story. It's her unflinching honesty about the messy middle, her unconventional approach to leadership and really how to scale companies with ruthless precision while maintaining her humanity. So in this conversation you're going to hear the exact moment Layla's father's words saved her life and sparked a complete transformation. And why she believes pain, not discipline, is the real driver of massive change. Her framework for hiring and building lean and high performing teams that do way above their weight. The truth about building a business partnership with your spouse and why most people get it wrong. This is an incredibly honest conversation I've had around transformation, ambition, leadership, how to build a high performing team, how to win in business. This is incredible. Layla doesn't hold back. I know you're going to love this. Let's jump in,
- [02:18]
B
hear the stories, learn the proven methods and accelerate your growth and future through entrepreneurship. Welcome to the Founder Podcast with Nathan Chan.
- [02:32]
A
The first question I wanted to ask you is you went from being arrested six times in 18 months as a teenager to building a portfolio of companies generating over 250 million in annual revenue by age 30. Both yourself and your partner. You guys run acquisition.com and you know you guys are some of the Biggest names in the space, in this online space, business building space. What really changed, like, for you to make that true shift?
- [03:00]
B
Yeah, you know, it's interesting because, like, I think at this point in my career I'm not motivated by pain, but at that point I was 1000% motivated by pain. But yeah, I was arrested six times all related to, you know, drugs and alcohol. And during that time, I think it was kind of like a point in my life where I was being a victim of my life rather than taking responsibility for things in my life. I think that like, a lot of things had happened with my family, with my mom, who was, you know, an alcoholic and a drug addict. Irony of that. And I was just really angry. And I think as I was growing up and getting more autonomy, you know, the way that you cope with that anger changes because there's not people around you telling you that's okay, that's not okay. And so I drank, I did drugs, and you know, essentially like, why didn't you stop at the fifth arrest? That would have been smart. On the sixth time I was arrested, I actually woke up at my dad's house because I went to college, you know, like 40 minutes away from where I grew up. And I remember waking up and I was like, oh my God, I'm at my, my parents house. That's not good. And then I turned over and I looked and there's like an arrest warrant on the table. And I was like, oh my God. And then I had to get up, you know, feel like I'm going to throw up. And then I'm like, I have to walk downstairs to get out of this house. There's no other way. And I figured, I'm like, okay, I got arrested. They took me here. I don't remember what happened. Like, I was completely blacked out. And I go downstairs and I remember my dad was sitting there and I was just ready for him to just like completely rail into me. And instead he was sitting on the couch, he turned the TV off, and I sat down and I was like, what? And he was like, I'm not going to tell you what to do. I'm not going to tell you that. You need to stop. I'm not going to do this. And that I just want to tell you that I really think that you're going to kill yourself if you keep doing this. And I remember in that moment it was like, I don't think that yelling at me would have worked, but I think that in that moment, just looking at him in the eyes Like, I. I believed him. And I think it was the first time I realized that my actions had real consequences in my life. I wasn't a fricking kid anymore, and this was my fault. And I went upstairs and I grabbed my stuff and I left. And I just remember looking at myself in the mirror when I got home, and I was just like, I don't want to be this person. Like, I don't want to kill myself by. On accident because I'm so irresponsible. I drink so much. I do so many drugs. Like, that was not the intent of this. And that's what really set me off on this journey of, you know, I hadn't been that person when I was younger. I didn't want to be that person when I was going to grow up. And so I said, like, what? You know, what do I really want to do? And I said, well, it doesn't really matter what I want to do. I can't be this person to do anything. And I looked at my life and I was like, you're overweight, you're drinking, you're doing drugs. You hang out with, you know, fucking deadbeats. You know, you smoke weed, you do all these things. And I was like, I need to just stop all of it. It was like, in that moment, I just felt disgusted with myself. And I think it was at the point where the pain of change was less than the pain of remaining the same. Like, I think it made that switch at that point, and that's when, you know, humans tend to make a change. It's like, now it is more painful to remain as is than it is to change. And I think we don't like to change because we're like, we don't know what's going to happen. I didn't know it was going to happen, but I just said, nothing is worse than how I feel right now. I feel terrible. And so I stopped drinking. I stopped doing drugs. I threw away all the food in my house. I literally, like, filled my house with, like, tuna and, like, bagged chicken and mustard. And I was just like, I am just cold turkey cutting all this out of my life. And it's so interesting. Like, a lot of people like, how did you do it? Like, where was the discipline coming from? And I was like, it wasn't discipline. It was complete pain. Like, I was in so much pain. And I hated who I saw when I looked in the mirror. And I said, like, there's no way I'm. I can live the rest of my life like, This I remember asking myself the question, I was like, if you don't change now, like, what does your life look like in five years, in 10 years? And I was like, if I keep going down this route, what am I going to be? £400, £500? What am I going to be like actually dead, paralyzed, like, have lost my mind, you know? And so I started thinking about all those things and I think it was really just like my dad saying that that snapped me back into what I would say is reality. I think up until that point in my life, like I just didn't understand second order consequences. And so I did. I literally just dove into everything and anything self help that you can think of back in the day, that was like Tony Robbins, Lace Brown, Jim Rohn, like I just immersed myself in all of it. And you know, I'll say this, I don't believe that consuming a lot of things, you're not gonna be able to act on everything that you consume if you just consume book after book after book of self help. But I do think that listening to those things on a daily basis almost like hypnotizes you in a way because it puts you in this mindset. You start saying those things to yourself rather than the faults that you have, which obviously have gotten you a shitty life. And so that was when I really changed my life and I really took my work seriously. I said, I don't know what I want to do. I'm not 1000% sure, but I know I don't want to take one of the paths that I've seen taken by anyone in my family. And I started studying entrepreneurship, I started studying business. I said, I'm going to move across the country, put myself in a position where I think it's kind of sink or swim. So I moved to California by myself. I became a personal trainer, Walked to every gym that was within a walking distance from where I live in this ghetto ass apartment which was infested and also had meth heads that got busted later. And I just got a job at the closest gym that I could walk to so I didn't have to spend money on gas. And that's where I learned how to get customers, how to sell. You know, I had $5,000 in my bank and my rent was like $1,500 a month. And I was like, I just need to make this work. And that was after I ended up losing about £100. And I was sober for at that point. I think Edvin's over for like two years. So that was honestly what propelled me into the entire journey. And I think that how did you end up here in business? Right? Like, I am such a fanatic about leadership, starting with self leadership, because you cannot lead others unless you can lead yourself. And I think that that's what kicked me off on that journey. Starting a business is just a vehicle, in my opinion, for how I can help other people better their lives, whether it be like, our partners, our customers, my employees. Like, that's really what I think about every day. And business just happens to be a good vehicle for that. So it's made it easy.
- [09:40]
A
Yeah. I really resonate with what you said about pain. And I never forget something a therapist of mine taught me. He said, nathan, we choose the path that we are least afraid of. Humans will always choose the path that we are least afraid of. And if you really want to change, like whether you've got a business but it's not where it wants to be, or you don't have a business and you sick entirely. Life, I was the same as you. Like, I got to a point where the story that I had, I wanted to rewrite it. And it was so painful, this thought that I would be doing work that I didn't enjoy. And, you know, I had to change it and I couldn't rest. And I was the same as you. I listened to personal development. Like when I was working in my day job, I used to listen to The Eric Thomas YouTube when you want to succeed as Badger, I used to listen to that. I love that. Right? And he dunked his head in the water like, like I did the same thing. So I really, I really resonate with your story there. Now, I didn't mention this to you offline, but the first time I saw you and I saw Alex was, I think it was. Would have been, I think 2018 at Click Funnels Live. You know, we used to use the software. I know you guys big fans of the software at the time. And you know, Russell brought out, you guys never hurt yourself or Alex. And you guys spoke and you know, it was, it was crazy because I took my head of marketing at the time and we went and we were just like, you know what, Alex is good, but his partner Layla, like, she is a absolute bad ass. And like you would tell, like sales tactics, sales strategies. And we were so impressed. Like, we were just taking copious amounts of notes. And that was the first time I saw you. And that was what, geez, eight years ago?
- [11:35]
B
Yeah. Oh, I remember that because that was the first time that we Spoke together on a stage. And, you know, me and Alex are very different. And so I remember, I was like, we need to rehearse this many times before we do this. Like, we've spoken alone but never together. And he was like, we'll be fine. We don't need to rehearse. And I was like, oh, my God. God. And so I'm rehearsing alone in the hotel. He's watching me. I'm like, dude. So I was. I was. That was a funny presentation.
- [12:00]
A
So that was pre Selling Gym Launch. You'd scaled it, though, and you're talking some of the concepts around, how you scaled it, all that good stuff. So that was basically. Was that your guy's first business and the first business you guys worked on or. Well, no, you had the gyms. You had the gyms before that. And that was somewhat. Can you talk me through? Like, that was somewhat of a, like, failure, because, like, I always have wondered, like, how did you guys. I don't know. Alex has wrote about it, but, like, how did you guys get yourself to the point where you had no money in the bank, but you had these successful gyms? And then. Yeah, the gym launch piece was like, the last kind of the offer, and it really catapulted the business.
- [12:40]
B
Yeah, it was messy in the beginning. You know, when Alex and I met, essentially, I was a personal trainer. I had clients in person, online. I was trying to decide if I wanted to essentially run a gym, like open and run a gym, or start working online with a woman who propositioned me to be her partner. She was making, like, 30 grand online a month and said we could do this together, make even more money, be 50, 50 partners. I was at this crossroads, and then I'm on bumble. I go on a date, I meet this guy named Alex, and I'm telling him about this on our first date, and he was like, I think you should do neither of those things and you should come partner with me on this business idea I have called Gym Launch. And I was like, well, what do you do right now? And he's like, well, right now I have. You know, I think at that point he had four or five gyms. And he's like, you know, I'm thinking we can do this thing called Gym Launch, where essentially, like, you and I can fly out to these gyms, we can do the marketing and the sales, sell people into their gyms, and then they get to keep the customers thereafter. And so, you know, I'm like. At first, I'm like, I'm not gonna work for you. I'm fucking dating you. How awkward is this? Like, what the fuck's going on? And so six weeks later, of course that's what I did. And I'll be honest, I think a lot of people like, oh, he must have really persuaded you, like, it was a win for me no matter what, because I was like, at that point in my life, I'm sure, like, you understand this. I just wanted to learn. And I was like, think about how much I'll learn if I like really put my back against the wall. I'm going to get rid of everything I've built up over the last three years. I'm going to take this risk to start this business with this guy I barely know. When else in my life can I do this with very little consequences? And that's literally what I asked myself. I said, the worst case scenario is I end up right back where I am now, needing to build up my client rosters again, needing to build up my online clients again. I can accept that. And so that's when we said, okay, here's what we're going to do. He still had his gyms. I kept detailing my online clients. And then we started gym launch. So essentially how it happened is the first gym we ever did, there was one in Virginia. He said, come out, watch me do one. So you can understand kind of how I've been doing this. And then we'll go fly to different locations. And I remember, you know, I flew out, met him in Virginia, and the first day, it was a Sunday, we were going to start doing in person sales at I think it was like 3pm and he's like, cool, just shadow watch me and then you, the next day can go for it. And then he got a phone call at like 2:30. And he's like, I got to take this. And I was like, I thought I was gonna watch you do this. He's like, you got this, don't worry about it. And he left. And he did not come back for hours. So I remember the first person that walked in too. I shit you not. He was like the sheriff of the entire town. And he's like, so what is this that I'm buying? And I was like, oh my God. And I will tell you though, I. I went 6 for 8 on that first day. So I was so proud of myself because I was like, I don't even know what this product is exactly. I don't even know at this point what we're selling. Like, I've gotten zero Context, I just flew out here, and that was the start of our relationship and our partnership. And what we did for a few months is, like, I would go to Hawaii and launch a gym. Meaning, like, I would run their marketing, and then I would do the sales to sell new members in, and then I would get the upfront money from the new members, and they get the recurring revenue. And then he would be doing that in, you know, Alabama or Florida or wherever. We did that for a few months. And then I was like, dude, like, this is not sustainable. If we want to actually scale this business, we need to hire people to do this, and then we can manage it centrally. It's also exhausting to be changing. You know, it was like, every 30 days we're going to a new location. And so Alex, by the way, still had his gyms at this point. And so we hire people. In fact, we hired six of my friends from college. So I was like, listen, I know a bunch of people in sales. They're all in MLM sales. I'm going to call them up. And so I did. I called up all my friends that were in sales, and I was like, listen, I have a better offer for you. And so I recruited all my friends, and they all quit their jobs, said they're going to work for us. I lined up all their locations. So I was like, okay, the next month, we're going to have six guys, six locations. I'm going to manage it centrally with Alex during this time. Alex. And he says this himself, right? He was like. He had his hands in all sorts of things. So I quit everything, by the way, to, like, go all in on this. And then he's like, oh, by the way, I got another partner in the meantime. And I was like, go plug. And so I still. I still bring that up to this day. He had somebody who approached him and was like, hey, what if instead of you taking the upfront revenue, I give you half the gym and you just keep doing it for this gym? And he said, sure. And then the guy's like, and it works. Well, maybe we could, like, open up a chain together or something like that. And so, you know, this is like the second day that I'm with him had flown out, and he tells me this, and I was like, the fuck? I was like, whatever. I don't know. Deal. Not my problem, right? And so that guy. The. The problem was that Alex used the same bank account that we were using to put all of our money in from all of our launches. He shared it for that location because that guy really, you know, bad misunderstanding. Was indicted for fraud. And so he couldn't have his own bank account, and so he had to use our bank account, of course. So. Right. All my friends quit their jobs, etc. One day, about 30 days before we're supposed to send them all out, we check the bank account. There's like, no money in there. Well, the guy we call this partner, we say, do you know what happened? Like, where's all the money? We have tons of money in there from all these other things we're doing as well. Right. This is terrible business, by the way. I'm aware. I can't even believe that we did this. And he's like, oh, yeah. He's like, you guys were skimming off the top. So I just took my money back, and we were, like, skimming off the top. We haven't taken a dime. We were living off of my personal training. Like, my online training income was what was paying our motel and grocery bills. And this guy says this, and we were like, oh, we just got played so hard. And then he disappeared and left the gym. So then we had to fly back, take over the gym. We shut the gym down. It was a huge mess because, like, the local newspaper caught onto the story. They're like, this gym open, and three months later, it closed. Like, what a fraud. And we're like, I mean, the guy just up and left. Like, we don't live here. We can't run this gym. And so we had to shut it down, sell all the equipment, refund a ton of customers, try and fulfill on the ones that weren't at the same time, trying to get my friends trained up to fly out the next month. So, one. Now we don't have any money. We don't need buffer money, right? So we go into this knowing, like, all right, well, at least we have a credit card that we can put this all on. Which we thought would be our saving grace. And that would have been our saving grace except for four days before we were supposed to fly all of my friends out to these locations, we noticed that we're not getting deposits in the account. And I was like, hey, the money's not going up. But, like, I sold a shit ton last month. It should still be hitting the revenue from all the payment plans. I don't know what's going on. And so Alex is the account owner. He calls the account and he's like, I don't understand what's happening. Where the deposits, they play it off. They're like, oh, it's a normal thing. Don't worry, it's going to come back. Christmas Eve. We finally get a hold of a rep, and Alex is like, I'm not getting off the phone with you until you tell me what the hell is going on. Why are you holding my money? I need to fund these, my business right now. I have these people that just quit their jobs. And the rep finally says, like, there's been so much unusual activity in your account that we're locking your account for, like, at least six months. We're holding the funds. And we were like, great. And so, like, the last of anything that could, you know, essentially, like, save us, which is having a merchant processor. We don't even have that. So we don't have our savings. We don't have a merchant processor. But we just hired all these people to come out and do these launches. And so we said, we're going to have to just put it on the credit card and hope that we can get a merchant processor in time to process the money next. And so we did that and we, like, I scrounged everything possible. I made so many PayPal and like, Zelle and like, Cash app apps to try and collect money through because we didn't have a processor. Like, I had burner phones with different accounts on them because that worked at the time. And finally we end up getting a processor. It ends up working. And then over the next few months, we scaled that up, but it just ended up not being sustainable during this time. Alex says, you know what? I can't be doing this and have my gyms. So he's at the same time selling his gyms to his partners. He had a partner in each gym aside from, like, one of them. So he sells one gym, he sells the rest to his partners of the other gyms. And then we essentially get to the point where we realize that there's so many flaws in our model, which I could go on for two hours and tell you about, but we end up saying, you know, I don't know if this is going to work, so maybe we should try something else. And so we actually switched it where we thought that what we're going to do is build an online weight loss program where I was going to be the face, he was going to be the back end. And then that started working only to the degree that then we called all of our customers who we had set out to launch their gyms the next month to tell them, like, we're not doing this anymore. This is terrible. And they all were like, I will pay you whatever I have to pay you for you to just teach me how to do it. You only send anybody out. And then in one day we made like $48,000. And that was the start up Jim launch as it existed in the public eye. When we realized we didn't need to be flying people out, we just had the model wrong. Which is why I think his book Money Models is like so core because that was such a real thing for us is like we have all of these great skills. We just don't have the right money model. And that was our first business gym launch. We had gym launch, then we had Prestige Labs and we had Alan. And now we have acquisition.com.
- [22:19]
A
yeah. And so gym launch you scaled from 0 to 50 million in 20 months. So about that time I saw you guys speak, that was like insane growth. Talk to me around kind of the, the operations behind that level of growth. I must also admit this is going to sound weird, but after, after I saw you guys speak, you know, one telltale. I always like to look at companies Glassdoor and I remember thinking, oh my God, you guys, you guys have learned some lessons because there was a, like, it was some unhappy like, like it looked crazy. So tell me like, how did you manage to do that? Like, it sounds like you broke every rule in the book.
- [23:01]
B
I don't know if it's broke every rule in the book or learned every lesson very quickly. I, you know, it's funny about the glassdoor is that we had a 4.9 glass door up until I learned a very hard lesson, which is that you cannot let inexperienced managers make hiring projections. And I, when we opened up Prestige labs, I actually, I'm writing a book and this is a story that I'm telling. In it, we, I had a manager, had never hired such a big team before. She came to me. Here's my hiring plan. Here's how many people I need to hire. I need 35 people. We hired 35 people. We launched the business. We only needed five. And so I actually had a girl come to me one day and she literally asked for one on one, some customer success rep. And I said, sure. I said, what's up? And she's like, I can't ethically take your paycheck. And I was like, why? She's like, I don't work. And neither do a lot of these people on the team. And I was like. And I was like, what do you mean? She's like, you over hired? And I was like, oh my God. The manager, she Told me that she would not fire anybody. And so she quit. And then I had to end up laying everybody off. And the day before I was supposed to lay everybody off, my director of HR texted one person and told her she was going to get fired and that there was a layoff. That person told the whole team. Not only did I have the people that I was actually going to lay off, but I think about eight additional people quit on top of that because they were so mad that I was going to fire their friends and that I would ever lay anybody off. And my glass door went from like, you know, a 4.9 to a 2.2. So that that story, the operations behind it, like, Listen, I was 23 when we first started gym launch. And I talk about this a lot to my teams. You can have all the desire in the world to be a great leader and a great manager and a great operator, but if you don't have the skill, it does not matter how much intent you have. And I had all of the same desire that I do now, which is like, I just want to make an amazing place for people to work, which now I have the skill to do. I didn't have it then. And so, you know, going from, gosh, scaling a business quickly, let alone at that kind of speed at that age with no management experience, no leadership experience, it's like businesses can almost grow faster than people sometimes. And I think that I grew really quickly as a person and I had a lot of capacity based on how much I invested in myself personally. But there were so many lessons that were so hard for me to learn. And the biggest lesson that I had to learn in the first two and a half, three years of that business was my standards were not high enough. Like, the talent that I brought in, my standards for them. It just didn't match what was needed for the company. And so I set everybody up to fail because I bring in all these people, you know, off Indeed and Craigslist and like, referrals from, you know, people on my Facebook page and whatever I could find or scrounge up. And I didn't prepare them for how hard it was going to be, and I didn't prepare them for what it's like in a fast growth company. Because I'm like, fast growth equals good, right? People like fast growth. What are we talking about? No, fast growth is painful. It's hard. As hard as it is for me, it's that hard for them too. Because you have to constantly understand that whether you get promoted or not, the business Promotes you because the business is growing so fast, your job changes every few months, whether you want it to or not. Whether we've changed your title, that's irrelevant. The business has changed your title, and I didn't get that. And so in year three, I essentially took a step back, and, you know, we had had this crazy growth. It was super successful. We're making all this money, and I was just stressed out of my mind. Like, I felt like I was the glue that held everything together, which I was. You know, I was also the thing that made it not great in the sense of, like, the glass door reviews and such. You know, I hired the wrong people. And so I took a step back and I said, like, I actually don't know if anybody on this team, on my leadership team, is the right leader. Like, I remember it was, like, the scariest realization for me. I'd heard in so many. There's so many stats. I read Blitzscaling, scaling up all these books, and they're like, it's very unlikely that your leaders will be with you in five years. That started on day one. And I was like, I will be the exception. And I just. I. My flaw is, like, I believe so much in someone's potential, which is like, a strength, but it's also a flaw in that. Like, I'm like, no, no, I. If I did it, you can do it. Like, you can do this. Anybody can do anything. But sometimes it's like, can they do it? Do they want to do it? Is the right time for them to do it? Is it the right time in their life? And so I ended up having to turn over 80% of my management team in one year. And I was the one who, at that point, you know, backfilled a lot of their roles. And that's one where I got a lot of my operational experience. I essentially led every department in the business at one point in time and deeply learned what was needed for each one. And two, where I learned, I mean, that was, like, my initiation into leadership, like, cleaning up after a mistake that I made that I didn't know was a mistake when I was just trying to do my best. And so I think that, like, the highest leverage thing that you can do is know who you're hiring and hold the standards for who you're hiring and who you let in the team. And it's also the thing that a lot of people just let go to the wayside because they say, oh, these new ideas, this innovation, this. This is all more important. But, like, I wouldn't talk like, I, I came from a sales background. Listen, if I didn't think that people and hiring was one of the most important things, I wouldn't be preaching it all the time because it doesn't get the clicks. Like, why do I not, you know, the YouTube videos and such like, those don't get traction. Nobody gives a fuck. They're like, tell me how to sell shit, make money. Tell me the money, give me the marketing. But none of that works if you don't have a great team. And I think that, like, acquisition.com is so much proof to that, because the team we have here is so actually amazing. And it's why acquisition.com has grown much faster and is 10 times bigger than gym launch ever was. So it's been cool to watch as the skills that I like, watch my skills improve and therefore my business improve because of those skills. And that's been, like, very gratifying. And having like, one business that we had and that we sold, starting another business and not having to learn those lessons and the business didn't have to carry the weight of those lessons, it's been really cool to see because I think I kind of, you know, like, I so desperately tried to repair the culture there. And it did get to a point where it was repaired, but it was hard. And the business bears those scars. Like. And I mean, you see it online. It's like, if a business goes through something, it's like they'll remember forever. It's. It doesn't go away. And I was like, I don't want to bring that into my next organization. So, one, I try to be very public about my mistakes because I'm like, I don't want anybody to think that I'm perfect. Far from it. And two, I don't want anybody to think they should be perfect. Because here's the thing, Nathan. Do you think that we would have had the massive success without these massive failures? No, I don't think so. Because the same muscle that allows you to succeed at that level and take those risks also means you're going to fucking fall on your face.
- [29:50]
A
It's a rite of passage. So I'd love to delve a little bit deeper into some of these lessons. So one thing that I've, as a leader had to work through a lot is wanting to be liked by my team and really struggling holding people to account. And I think that is something that a lot of founders, especially when they're early stage leaders, developing leaders, we're all developing leaders, but really early stage Developing leaders go through. How did you work through that? Was that something of a challenge to you, wanting to be liked? You know, really struggling, like you said, like, the standards holding people to account, like, how did you work through that?
- [30:35]
B
Yeah, I think that I desperately wanted to be liked. And I didn't know it. I don't think I was aware of it. I think part of it was I was young. And I think the younger you are kind of like, that's just something also that I see a lot in. People that are younger don't have a role model to help them get out of it quickly. But it was something I struggled with a ton. I mean, I came from the side of, like, incredibly empathetic, incredibly understanding, care about people so much. Like I say, the curse of care. And I had to go through going from there to probably swinging too far the other side to then finding my middle ground in the last five years. But, you know, it's interesting is that I used to think that because I wanted to be liked, I was really nice to my team. And I always said to myself, I'm like, well, that's better than being, you know, the dick who yells at people and makes people feel bad. But then I realized it's really not because the two personalities have the same effect on people long term. Whether I'm yelling at my team, being mean to them, or I'm being so nice that I don't tell them the truth, the same result occurs, which is that person probably doesn't know what they need to do better in the organization, and they probably probably end up getting fired by me or by that mean person or not performing and opting out. And so because I was able to watch these things happen, there was enough times where I would have somebody directly under me and I would say that, like, one of my strengths, if I have, like, two things, like I'm honest and I'm self aware. I was very aware of the fact that I had failed as a leader many times in my career. And the reason that I failed was that I was too scared to hurt their feelings. I cared more about how I felt in the moment of being uncomfortable telling them the truth than I did about making sure that I preserved their career and got them to their goals long term. And it was after a very painful hire and fire where I was very close to the person, they moved to be around us. This person had a lot of experience, and I felt like they were actually like a very good friend of mine. And I did not give that person the feedback that they deserved. And because of that, I ended up having to fire them. And I remember in the firing, I said, honestly, if I could fire myself, I would, but I own the company. But I hadn't given them feedback enough. And because of that, they lost respect from the teams. And if I didn't let them go, then I would have lost other leaders. It's like the book, Ben Horowitz, the Hard thing about Hard Things. Like, that book hit so hard because I was like, there's so many decisions we have to make that it's like it's between and shittier. It's not like it's, like, great and terrible. It's like, of course then we'll do the great thing. But it's like it's. Or it's shittier. Which one would you like today? I'm not actually sure either. Is this shittier? Is this shittier? I'm not sure. And that situation came up so many times where I realized that I wanted people to have affinity towards me, to like me, to say good things about me more than I wanted to get them towards their goals. And it's when I had this frame shift where I was like, my job is not to be liked. My job is to be a great coach. And I think I started following all of John Wooden's stuff about, like, seven years ago. And that's really when I said, like, I'm the coach. Well, what's the coach's job? The coach's job is to tell you, like, you're at a 6. I need you at a 10. Here's how to get to a 10. And that changed everything for me because I said, okay, everything's a frame. I have a sales. It's like, you think about sales having a frame. There's a frame for every conversation with an employee. The frame that I have is, I'm here to get you to your goal. It's not about you personally. It's not about me personally. It's about the goal. The goal is you want to be at X, Y, and Z, and I want to get you there. And my job is to get you there. So if that means I have to be honest with you and I have to be uncomfortable doing, so, that's okay. In service of this greater goal that we both know I've agreed on and want to get to. And it wasn't until I really understood that that I made the switch. It's funny, because now I would say that people probably, when they walk in my office would be like, oh, Layla will tell you the truth. Seven years ago, that would not have been the case. I would have just sugarcoated everything. I would have been way too nice to people. And I don't even think I hate the word nice because it's not nice, it's deceptive. Like I was being deceptive to spare my own feelings of feeling uncomfortable. And when I really turned it around and thought about it like that, I was like, I can't, I just can't keep doing it. And so I think for a lot of people, like I, I feel it so hard like to this day. I had a conversation last week, I had to give somebody some very direct feedback that I knew was gonna be really hard for them to hear, especially at this point in their life with some stuff they're going through. And I was like, I've got to give them the feedback. And I gave them the feedback. And then I went to my office after. I was totally straight faced. I was neutral. I was like, I want to get you to this goal, but this is what's going on and here's why. And this is really hard for me to tell you, but here's it. After I went in my office, I almost felt like I was like, I could cry. Like, I just feel like I feel for them. But I still need to get you to the goal. I still have to tell you the truth that you don't want to hear. It's kind of like you got to do it anyways.
- [35:31]
A
Yeah, it's interesting. Have you, have you had people, especially in the early days and maybe not so much so in your new kind of era with acquisition.com but in the early days of building, you know, Allen Prestige Gym Lodge where you hired somebody, they had all the markings to be a great hire. For whatever reason, they didn't succeed, they left. And then they've seen them shine in another business. Have you seen, did you ever experience that?
- [36:01]
B
You know, I think the honest truth is I don't like follow on with like what, you know, I've seen people do well in other businesses. Yes. And I think specifically when they were not the right fit for our culture or our type of business. It's like two things I've seen is like one in Gym Launch and Allen, I don't think I was forthright enough about what it's like to be in a fast growth company in acquisition.com and very forthright about what are, what's the trade off you're making by working here. And like there are trade offs. And so like my job is to inform you of them. I think that I didn't do a good job of doing that in my last businesses, in the beginning especially. I think I got better later on. And because of that I would watch people flounder and then go off somewhere else and like be very successful. Well, a lot of the times it was like I didn't prepare them for what fast growth felt like, what a founder led company that doesn't have VC backing and all its excess resources felt like. And they did way better in an environment like that. And so I think I'm much more aware now of the type of people that will succeed in my company and also the kind of expectations I have to set for them. And also kind of like the red flags, which is like, if somebody's only ever worked at this type of company that's different from acquisition.com, them, what's the likelihood they're going to have a really great experience coming in here? Because it's going to like hit them like a bag of bricks and they're going to be like, whoa, this is a lot like people are pinging me all the time. We have late nights, early mornings, people are working on the weekends, people are in the office all weekend. Like it's going to feel like so overwhelming. And so I'm much more cognizant about, you know, we don't need 5,000 people to make the vision of acquisition come to life. I tell my team all the time, like, we need a couple hundred. And so I just need to find a couple hundred people that vibe and fuck with our values and that's it. And as long as we are completely transparent about what those are, I think it makes it really easy for people to win. I think that when you see people go off and succeed in another company, it's often because you got that part wrong. The second piece is I think sometimes you just get the fit wrong of like maybe you and that person just don't. You're. I think a lot of leaders have a very inflexible management style. Like they can manage a specific type of person. I see it all the time. It's like they can manage a sales team, they can manage a team of administrative assistants, they can manage engineers. But for one person to understand how to manage all those different types of people, very tough. And so if you think about it, a lot of teams are eclectic. They have different types of people within the team. You as a manager have to be aware. I say manager, this is be a founder. Because like I call, I'M a manager, a leader, a CEO, an entrepreneur, a founder, whatever. You have to know what are my management like, what's my management bandwidth like? What kind of people can succeed under me? And that's a question that we have to ask ourselves before bringing somebody on. Even if they can do the job, can they do the job for you with your help, how much help can you give? And those are the couple of frames that I think I've shifted to thinking about when I bring people onto the team now so that I avoid that problem from happening. Because nobody likes to see that.
- [39:04]
A
No, no. And look, I. The reason I asked that question is because something that I've reflected on, where I've kind of gone, you know, what did I really set that person up for success? But then also was I the leader with the standards and all these other things that you've talked about just, you know, throughout our conversation. Did, did I, did I put them in the right environment? Did I have the correct expectations? Did I set them up for success? Was that clearly outlined what success was like? All of those things where from reflection, you know, I'm getting better as a leader. So really want to delve into kind of how you find higher recruit, what you're looking for in talent. Because I think that is so important. It's something you're doing really, really well at. But there is a through line behind all of these businesses that you guys are a part of. It feels like everything you guys touch turns to gold. You know, not only gym Launch Allen, your SAS company, you scaled from 0 to 20 mil ARR. In 6 months. Like insane, Insane, insane. Rapid growth is always the through line. Does it start and end with the offer and then you're kind of on the back end working with the integration, you know, the integrator. Like does it start and end with. Is that the through line, the offer or. Yeah. Is it the pa like talk me through that.
- [40:29]
B
Yeah. I think there's two things that you have to have to be able to grow a business quickly and have that kind of growth, which is. It's a concept I talk to my team a lot about and actually recently I've talked to them a lot about of like studying success. Because like I study success probably more than I try to study it more than failure. Because innately I study my own failure quite often every day in my mind. I'm just joking. But success, like why do we succeed? I think there's a couple of things which is that there's a lot of businesses that can have a Great offer they can have. And I would say that elements of great offer are like, you have a great product and you know how to tell people about that product. It's kind of a wrapper of all the things, right? And then there's a lot of businesses that have a great team, they've got a great foundation, a great infrastructure, but they just don't really get this side. And so in order, like, if you look at any large business, like a really big business, they obviously have both of those things. They don't rely on one or the other of the sides. They equally look at those things and they equally weight them. Anytime we are starting something new, I think that there's, you know, the 0 to 1 and the 1 to 10 kind of strategy, which is, I think something that Alex and I are very good at is like, we're both very good in zero to one. We both operate really well in ambiguity. With zero, like blank sheet of paper, we can both build something from there. When it comes to, like, taking something from 1 to 10, I also can go 1 to 10 so I can scale something to be large. I have my preference of where I like to sit, but I can do both. When we're going from zero to one on something, I think there's two things that have to happen in tandem. And most of the time what I see when somebody isn't able to do it is that they're not doing one of these things, which is you have to be building what does the customer want, obviously, gathering the customer data, understanding what they want, understanding the market, getting the offer right, getting the money model right. It's like building the strategy around the product is what I would say in, like, layman's terms. On the other side, you have to say, how the fuck are we going to make that happen? And what most people do is they put a lot of resources here and they underestimate how many resources they're going to need here. But if there's one thing that they teach you in business school, which I didn't go to, but I have read books, is you have to put inventory before the bottleneck. So if Alex says he wants to do $100 million launch, what kind of resources am I going to put towards that? Am I going to put $20 million worth of resources towards it? Am I going to put 30 million? Am I going to, like, I'm going to create as much capacity as I can. Now, when I think about business capacity, I think about financial capacity. How much money can I put behind it? Personnel Capacity, how many people are going to get behind it? Systems capacity. Do I have the capacity from a technical standpoint to handle it? And then I think about thinking capacity. How many people wake up every morning and think about this thing? For anything to be successful, you need those four types of capacity in excess before it launches. Now, the hard part is you have to have the capital to do that or you have to have the balls to put it up without having a lot of the capital. But if you don't do that, if you don't have excess capacity when you start something, then you bottleneck yourself almost immediately. So you might get to 10 million or 15 million or 1 million or 500 grand or whatever it is, and then you cap, not because of the offer, but because you didn't build out the capacity to get to whatever revenue you're looking to. And so the more that a business can front load, the creation of capacity, the more it can recognize its potential faster. It's kind of like if you look at it like I think about like a kid and you buy them a jacket and you're like, you'll fit into this all the way until sixth grade. And like, they're a third grader. It's like every winter comes, it's like, you don't have to buy a new jacket because you've created enough capacity that's like, this is going to fit until they're in sixth grade. Whatever. I remember my parents used to do that and I use that acronym when I'm talking to my team. It's like, I don't want a jacket that's only going to last me a year. I need a jacket that can take me all the way to here. And so like when we started acquisition.com, the reason we've been able to grow so quickly and much more quickly than we share publicly is because I've constantly said, I'm putting. I'm going to just create as much capacity as possible at all times. I hired six executives in the last 90 days. Why did I do that? Because I see the opportunities for acquisition.com now. What's the only reason I can't capitalize on all of them? I don't have enough critical thinking capacity. And so I said, I don't want to just get a little. I don't want to get enough that I get like room to breathe. I want to create capacity where I have space and they have space, and then I can really capitalize on these opportunities for the company. And so I think that it's Doing both of these things in tandem. Now, the thing is like this piece, much more fun and sexy. So people like to spend a lot more time here. But this piece is all execution. Execution is where most businesses fail. In fact, most businesses don't fail because of a bad strategy. They fail because they have poor execution and they have nobody to tell them what good execution looks like. And so the reason I obsess over operations, leadership, people, is because I've just seen it so many times. I mean, I would say that out of all the portfolio companies that we've looked at and done diligence on, any of them, when they were capped, probably two of them it was strategy, and the other 50, it was execution. Just like they didn't know how and they didn't have the talent or ability to bring in people who did to inform them of what to do next. And so I hope that answers the question.
- [45:55]
A
Yeah, it does. So let's talk about, let's talk about talent because that's something you guys are obsessed with. What, where would you, where would you like to start? Because this is a whole massive, three hour, five hour, like podcast. And I agree, it is not sexy. It is not sexy in the slightest. And we have seen this. You can put around, you know, anything around hiring or leadership. It doesn't get the clicks, but it is, it is everything. Especially once you've gone from that zero to one or even zero to half a million. Like, you need people right now more than ever. You can, you can get by with AI and agents, but, but eventually you need people, you need leaders, you need teams. Eventually you need ownership. So talk me through kind of what advice would you give to people when it comes to even like your, your early stage team, right? Like, how do you find killers? How do you find people that are just going to care so much? Because I found that interesting how you highlighted around execution someone to like that level of care, because that's really a big part of it, right? Like a really, really good team member or person in your business just cares so much. So talk me through. How do you find great people? Can you lay out? We've got a little bit of time. You know, what, what are, what are the, what are the key fundamentals people need to look for when it comes to hiring and finding great talent?
- [47:25]
B
I want to start with the, the unsexy truth, which is a great environment can take a mediocre person and make them great. So if you create a great culture, then you can bring somebody in who's a six and you can get them to a nine. I've seen it happen. In fact, I was just in the boardroom. We were hosting like a little roundtable with like 15 teammates, different departments that we don't get to see and talk too much. It was me and Sharon and Neil, our coo, and we're all listening to their ideas, things. There's one person sitting there and I remember when he joined, he came in and I told his boss, I said, I think he's got a 50, 50 chance. He's got a little bit of too much of an ego for what tends to succeed here. And he is now described as a spiritual leader in the company. And he won. Unimpeachable character. Now why is that? It's because he got put into an environment where his old behavior was no longer accepted. What was cool is to be honest, have integrity, work hard, not to be egotistical and flaky, and, you know, act one way and be another. And so it's just like a very real visceral example for me of like, if you have a very strong culture, it will convert people and then you become a machine that can create leaders and create people that fit your culture. Now, there's a few things to caveat here. If somebody is just starting their business and they're thinking, well, cool, but what the fuck, I don't even have people to make a culture. Guess who makes the culture? You are the culture. The CEO, the founder, is the culture of the. They are the heartbeat of the business. I didn't get this early on. Your team, especially when you're small, is a complete reflection of your behavior. And this is like half of what my book is about, how humans learn. So if you take a kid, for example, you take a sixth grader and he's going to teach you tennis, right? There have been studies on this. If you take a kid and you tell him how to play tennis, I'm going to give you the instruction. You're going to read a book, you're going to do all this stuff. It's going to be the best pro in the world that's going to teach you how to play tennis versus you put a kid on a tennis team full of tons of kids who are great at playing tennis. They're like world class tennis players. Who's going to learn better how to play tennis? This kid who's watching the team, he doesn't know why it works, he doesn't know what works, he doesn't know the mechanics of it, but he just watches other people who Are excellent. All day, he learns. I think it's like two to three times faster than this one. Why is that? Because humans learn through observing behavior. Not hearing about it, not being told about it, not being set an expectation about it. Those things are all important that people understand coming in what they're signing up for, but it's irrelevant once they join the team. When you're small, okay, we don't have a culture yet. It takes time. Well, what takes time? It takes time for people to see who you are as a founder, because you are the culture. It was not until I realized that every single thing I did was heard through a megaphone and seen through a microscope by my team. They modeled all of my behavior. They still do. When I was in that room, there were three quotes that people said. The words came out of their mouth. They were things that I had said during team meetings to. Ron looks at me. He just gives me the eyes. Because we're like, that's a good thing. That means the culture's strong. They're literally saying words I say that they've never said before. Why is that? Because I say them so many times. Because I. I think. Think about these things. I know they're going to emulate me when I see them in the hallway and I say, hey, how's your day going? Let me ask you about this. When I see the woman who takes out our trash and I say, can I help you? Let me hold the door. Let me ask you about this. I'm thinking everywhere. All I'm thinking is they're watching. And I am teaching through my actions, not my words. The reason this is so important to hiring is because most of the time, what happens is that especially when a founder is new is that they hire people and they talk how poorly the team is all the time, but they don't take the mirror and look at themselves and say, what kind of example am I? Why would anybody want to follow me? If I ran down the street, would my team follow me? Would they run after with me? And it's unfortunate, but the truth, which is, like, we live in a day and age where they can all start their own businesses. They can make money online, they can become influencers, they can use AI. They have so many better fucking options than working for a mediocre founder. And so you're not competing against, like, another business. You're competing against all the opportunity that they have not to have a shitty boss. And so when I got this frame, I said, okay, if that's the case, then why should People work for me because the money is not it. And I said the only the reason. Who do I want to surround myself with and who do I think is required on my team for acquisition.com to win? People who are like me and Alex, who want to grow. I am obsessed with growth. If you ask any one person why they joined my team, and I was just in a rumor we did, everybody says growth. Why is that? Because when the recruiters get on the phone with people, they say, this isn't about the money, this isn't about the title. This is for people who want growth. That's the first piece you start with now, which is like, I know what I can do as a team, what I can do as a founder, which is provide a place where people can grow. Now I have to communicate that to the marketplace. This is one of the first things I did when I had six people on my team. I remember I had a mentor at the time who said, you cannot offer more money than these other places, but you can have better character than the bosses at those other places, and you can show them that. And people will work for a better boss. They will take a better boss than they will better pay any day. They just have to know that that's you. So you have to show up like that for them. And so in the, you know, essentially, like the early days when I was like, trying to get people to work for me, that was all I did, is I was like, how I cannot be a better technologist, marketer, you know, operator, finance person, whatever. But I can work on being the best version of myself every day and showing my team how relentless I am about growth. And they can say, I want to follow that person because of who they are, not necessarily what they do, but what they represent and what that means I can get from working for them. So what does that kind of boil down to? What is your offer to the marketplace as a small business owner? Like, what value does somebody get from working for you? Is it money? Power? Status? Relatability? Growth? What is it? I think that for me, I don't want it to be money. I want people to get paid well. I pay very well. But I don't want that to be the leading indicator of why people work. For me, I want it to be growth because I know that in a fast growth company, if people don't want to grow, they see every, I would say, point of inflection, point of change. They see it as a threat rather than a challenge. I want people who see growth and all those inflection points as challenges, not as threats. And so I try to screen for that on the get go by being very adamant that like, the reason you work here is to grow. If you don't want to grow, don't work here. End of story. And that also frames everything when they come in. Because if it feels hard, this is growth. If it feels like I'm giving you hard feedback, that's for growth. It's the frame at which their entire employment journey begins. For a lot of people, what I'm talking about is something that they've only thought through with their customers. But if you look at a big business, they think about their employee journey and their employee experience just as much as they do their customer journey and their customer experience. And so very early on I realized like, there are two funnels in your business. One gets customers, one gets employees. Right. And I call teammates, typically. But like, I'm saying this for the sake of understanding, you need equally strong funnels for your business to work. But a lot of people say that and they're like, oh yeah, yeah, I do that. But they have one person on their recruiting team and like a 20 person sales team. I have a big people team. I have, I think six people and we're looking to hire like four more. A lot of companies would be like, I don't know, triple, quadruple, quintuple my size before they have a team that big. But I believe in the employee experience, the employee journey and front loading, the resources there kind of like put your money where your mouth is. And I think that a lot of people undervalue that piece of the business. And because of that, they cannot get good people to work for them. Because I will tell you, I've been able to get people who have built and sold nine figure companies, have gone to all the biggest, coolest schools and in fact my entire team has like the coolest pedigree. I have none of that. And they've started companies, been a Y combinator, been investors, been all these really cool, amazing, special, very impressive things. I have none of that. Right. I just started these companies after I graduated from community college. So did I ever think those people would want to work for me? No. And it's not because of some amount of money that we're paying them or some crazy cop package. It's because of the offer that we present, which is like, we are a place for people to grow. And we are a place also where we say we leave everyone better than they came in. And that's a promise. I Make to everybody. I heard two people say it in the boardroom just now. They're like, leave them better than you found them. Which is like what we say about people when they join our team. And I think it's getting the ethos behind that because, you know, it's. It's the least tactical advice that I could give, but it's. It's also the frame in which you have to make all your decisions as a founder. And if you don't, it's just going to be a very hard road and it's also going to be shitty because who wants to have people that work for them that they don't like? Like, I don't want to walk into my office every day full of hundreds of people and feel like I don't like the people that work for me. And if you don't get this frame right, that's the reality that you build. You know, whether you don't walk into an office, maybe you walk into a zoom, and then you see all these people. Like, these people, I can't believe they always wear. Mary's always not paying attention. This person's always on the zoom. They got their dog barking. Do they even fucking work? You know, like, I experienced that in the first few years of gym launch and I was like, I cannot do this. I can't do this. And so I became obsessed over how do I build an amazing team and how do I build a team that can not just get us to 50 million, but to get us to 50 billion? And that's really like, the premise. I have thought of everything through and it starts with understanding your team as much or better than you understand your customer. Yeah.
- [57:21]
A
Look, something that really resonates with me that you shared is just. Just this idea of you will leave you better than when what we found you and, you know, really helping people do the best work of their career. Conscious of your time. This is. This was amazing. Thank you so much. Congratulations on all of your success thus far. It's been just so awesome to watch your journey from afar, from when I saw you on Stage @ClickFunnels 8 years ago to where you guys are now. It's so impressive what you are building and have built thus far. And I really thank you for your time and sharing all your incredible experiences with our community.
- [57:54]
B
Thanks, Nathan. I appreciate it. Thank you for the thoughtful questions. It was fun.
- [57:57]
A
Hey, founder fam. Thank you so much for tuning in today and if you enjoyed this episode, please take the time to leave us a a review and let us know what you think. This podcast is 100% free. We work so hard to go out and find the most successful founders and entrepreneurs all around the globe. So your feedback helps us grow, improve, and even bring on more incredible guests and insights. So if you have a second, please take a moment and leave us a review. It really means a lot to me and the founder team. It makes so much of a difference. Thank you again for listening and I'll catch you on the next episode.