Transcript
Alex Hormozi (0:00)
If you want to help a million people, sure, then you can help a million people with the content you make, and then you can monetize through the elite. And so you can sell to the few and help the many. So if you think about what I do, I make the majority of my money on my portfolio. Just be very candid with you guys. Like, we make a lot more on the deals that we do than on the tickets you guys bought. I get my fulfillment from making all the content I make. Writing the books that I do. That stuff fills me up. But I do the deals because I also like making money. This is why I'm not a big, like, follow your passion thing guy. Because I started being really into fitness and then I started a gym, and then I did well with my gym and then realized that nothing in my day had anything to do with fitness. And I'm doing payroll, rent, marketing, sale, I'm doing all the stuff of business and I'm basically never doing fitness. And so unless you want to be a personal trainer, unless you want to do hairstyling, that's like the true passion, then eventually you're going to get out of it. And so if you want to keep that cup filled, you just find a way that you can still scratch that itch in a way that doesn't disturb the business. If you try to start a second business because you have this other thing, it'll also quickly become another business that isn't the passion. I've done a lot of quarterlies and strategic planning for portfolio companies. I've been to enough of them to know how to do them well and how to do them shitty. And so what I want to do is give you kind of a framework for leaving here with the highest leverage, action items to go home with. And then we'll do all the Q's and A's. Okay, number one is what? Number two is how. Number three is who? Okay, you have to be able to track any of your initiatives to increasing number of customers, increasing ltgp, so lifetime gross profit or decreasing risk. And so I use this as the first filter when I'm at a strategic discussion with the team and saying, okay, we have limited resources, Obviously we can't do everything we possibly want to do. We limit time, money, human capital that we have to then invest. Because that's fundamentally why we like to think about every entrepreneur as an investor, fundamentally within the assets that you have, and we have to get a better return on it. Right. When we're looking at this, I think, okay, in what way? Can I clearly see that this investment is going to either get me more customers, make my customers worth more, or decrease the risk that the first two things don't continue to happen in the business? Once someone says, hey, one of your employees says, hey, I think we should redesign our website. Which for some reason is something that a lot of teams just love asking to do. I hate our website. I'm like, well, you know what? It converts, so just chill. But you say, okay, fine. Tell me how it increases the number of customers, increases lifetime value, or decreases our risk. Now, if they can't even ladder it up to that, then it's like, maybe we shouldn't do it. Great idea, though. Come back later. If they say, okay, well, I think it would get us more customers, then you can say, cool, how many by how much and how much time and effort is it going to cost us? So then we have an expected return and an expected investment that's going to take from us. Once we understand that, we can then say, okay, how likely is that? And is there another thing we could do for the same investment that would get us more customers or increase value, lifetime value more? And most times, when you have the entire universe of options, that one thing probably isn't the best one. And so that gives me the big picture of what do we need to do? We're gonna do this thing. What's the what? We're going to increase number of customers. Cause that's the thing we have in the business. Okay, cool. So let's say that we're gonna say everything else is okay in our business. We just need to get more customers. Fine. So the second order that we go through is, how are we gonna do that? Are we going to do more? Are we going to do better? Are we going to do something new? Nine times out of 10, especially if you're the 0 to 1 million category, which is about half the people here, you probably just need to do more. And I'll give you an actual, like, a rational explanation for this. If you have one sales guy and you go to two sales guys, you can double your sales. When you're big and you've got 20 sales guys, sometimes you just think you can get 20% more out of the guys you got, and that'll be less effort than hiring and training four more guys. So it'd be a 20% improvement versus me increasing the size of my team by 20%, which would be getting whatever, 4.8 more sales guys. So call it five sales guys that have to hire, train, recruit, and make sure, they were good. Well, which one is more likely and which one is faster to do? Well, once you get big enough, sometimes you get bigger gains on better. But once you make that 20% improvement now, you might have to go back to more. So in the beginning, a lot of times, more is the answer without doing anything new. When you get a little bit bigger, sometimes better and more, alternate more frequently. And then when you can't do any more, any better, that and only then is when you look at new stuff. And so most times, entrepreneurs love doing new stuff, and it's usually the last thing the business actually needs. So right now you probably have a way to get customers. And you're like, I don't know if it's scalable. Yeah, do 10 times more of it. It's probably scalable. So once we know our what, okay, we got to get more customers. What's our strategy? We're going to go with more. Then we finally have, okay, who's going to own this? Who's the person who's going to own this? And I can tell you just from experience that if I've had the Same quarterly objective 2/4 in a row, and we feel pretty solid about what our more strategy is or what our better strategy is to get more customers or increase lifetime value, then we usually have a who problem. It's like, hey, Sandra, you've been in charge of this two quarters in a row. For me to think somehow, magically, this quarter is going to be the quarter after the first two times you messed it up, that's a me problem, right? I'm the one who's making terrible judgments here. Once you go through these three frames, I remember Michael, who was here, he sits on some of the portfolio meetings. He was like, you know, it's crazy. I expected there this is when he started with us, he's like, I thought there was going to be way more like, hey, do this. And this one judo move. He's like, but 90% of the time, you guys are like, becky sucks. Let's move her over. I think we need to replace this person. Well, how's recruiting going so we can scale up this department? That's usually what the discussions are. Because past a certain size, it's all about people. And so you need very little of this when you get big and a lot of this. And when you're smaller, you feel like you need a lot more of this and very little of this. Okay, so that's my little framework for you guys in terms of thinking through what you're going to leave with here today with your sticky note of things that you want to do is make sure that you can very clearly see is this thing going to get me more customers, is going to make it worth more or is it going to make my company worth more by decreasing the risk? And if that's what the objective is, am I going to pursue a more path, a better path or a new path? And once I know that, who's going to own it and buy when? Yes sir, we offer a checking account that pays 5.25% interest. 125 million. FDIC insurance.