Practical Ways To Grow Your Business | Ep 821

Summary

The Game with Alex Hormozi: Practical Ways To Grow Your Business | Ep 821 Summary

In Episode 821 of The Game with Alex Hormozi, host Alex Hormozi delves into actionable strategies for business growth, addressing real-world challenges faced by entrepreneurs across diverse industries. Through a dynamic Q&A session, Hormozi provides insights on scaling business models, optimizing revenue streams, and enhancing customer retention. This summary captures the essential discussions, key takeaways, and notable quotes, offering a comprehensive overview for listeners and non-listeners alike.

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1. Scaling Business Models: Navigating Revenue Retention and Growth Limits

Timestamp: [00:00] - [06:12]

The episode begins with a discussion on the scalability of business models, initiated by a business owner concerned about the limitations of their current setup. The primary focus is on how business models impact growth potential, particularly questioning whether transitioning to SaaS or product-based offerings is necessary for significant expansion.

Key Insights:

• Revenue Retention as a Growth Catalyst: Hormozi emphasizes that revenue retention is crucial for scaling, stating, "If we can't clearly state our goal, we certainly won't hit it. Right? You're not gonna hit it by accident for sure." ([00:00]).
• Challenges of Coaching Models: He critiques coaching-based businesses for their scalability issues, noting that “coaching doesn't scale” beyond a certain revenue threshold due to the dependency on high-quality, singular expertise.
• Alternative Delivery Models: Hormozi outlines three primary delivery models for knowledge businesses:
  1. One-on-One Coaching: Limited scalability, typically capping at $20-30 million annually.
  2. Fractionalized Access: Scaling through templated processes and training others to deliver services, likened to pouring milk into smaller containers without diluting its quality.
  3. Institutional Models: Exemplified by firms like McKinsey and Ernst & Young, which rely on career paths and a steady influx of intelligent talent to sustain growth.

Notable Quote:

“If we can't clearly state our goal, we certainly won't hit it. Right? You're not gonna hit it by accident for sure.” – Alex Hormozi ([00:00])

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2. Maximizing YouTube Revenue: From Ad Revenue to Strategic Sponsorships

Timestamp: [06:12] - [19:49]

A YouTube creator with 2.3 million subscribers seeks advice on enhancing revenue beyond ad income. Hormozi explores various monetization strategies to unlock additional income streams.

Key Insights:

• Diversifying Revenue Streams: Hormozi encourages creators to leverage existing advertisers by directly partnering with them instead of relying solely on ad revenue. He suggests, “The people who are advertising on your channel are the ones who are getting the highest return.” ([07:00])
• Sponsorships and Affiliate Marketing: Expanding into sponsorships and affiliate deals can significantly boost income. Hormozi advises creators to consider partnerships where they provide value to advertisers, potentially receiving equity in return.
• Selling Ad Space Directly: By selling ad space independently, creators can often double their current ad revenue, enhancing profitability without extensive additional effort.

Notable Quote:

“If it's worth 3.5 million to them, then it's got to be, sorry, if they're willing to pay me three and a half, they're probably making at least 10, probably 20 off of that.” – Alex Hormozi ([07:00])

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3. Expanding Distribution for D&D Publishing Success

Timestamp: [19:49] - [31:56]

A Dungeons & Dragons publisher discusses reliance on Kickstarter for product launches and seeks strategies to stabilize and increase revenue.

Key Insights:

• Leveraging Amazon for Sales: Hormozi strongly recommends expanding distribution to Amazon, highlighting its vast customer base and potential to significantly boost sales. He asserts, “You sell 50 times more books on Amazon than Shopify.” ([15:27]).
• Diversifying Formats and Languages: By offering books in multiple formats (digital, audio, hardback) and languages, publishers can reach a broader audience and capitalize on various market segments.
• Continuous Product Launches: Establishing a steady launch schedule and minimizing downtime between product releases can sustain revenue flow and maintain customer engagement.

Notable Quote:

“The first Thing I would do this quarter is maximize all distribution of the books on all platforms that people buy books on.” – Alex Hormozi ([16:04])

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4. Structuring Offers in the Hair Extension Business: Balancing Education and Product Sales

Timestamp: [31:56] - [24:22]

A hair extension business owner seeks guidance on structuring their offerings to mirror the success of Gym Launch, focusing on education and product sales.

Key Insights:

• Balancing Education and Product Offerings: Hormozi advises that the primary revenue should stem from product sales rather than educational content. He emphasizes the importance of making hair extensions the core economic engine to ensure sustained revenue.
• High-Ticket Anchors: Introducing high-priced anchor products can increase the perceived value and drive more substantial sales. Hormozi shares a personal anecdote on the effectiveness of anchor pricing to illustrate how higher-priced offerings can influence buyer behavior.
• Customer Activation through Product Sales: Encouraging customers to sell hair extensions by heavily investing in product quality can lead to higher retention and increased sales, effectively solving revenue retention challenges.

Notable Quote:

“It's way easier to sell product than it is to sell info. Way easier.” – Alex Hormozi ([21:30])

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5. Enhancing Revenue for Online Fitness Coaches: Focused Marketing and Scaling Strategies

Timestamp: [24:22] - [31:56]

Julia, an online fitness coach for women over 50, expresses concerns about client retention and revenue growth post-program completion.

Key Insights:

• Avoiding Over-Expansion: Hormozi cautions against adding complexity to existing business models. Instead, he advises fitness coaches to focus on scaling their current successful programs before introducing new offerings.
• Optimizing Marketing Efforts: Emphasizing the importance of increasing advertising to attract more customers, Hormozi suggests leveraging existing successful marketing channels rather than diversifying prematurely.
• Revenue Growth through Higher Prices: Instead of expanding product lines, raising prices for existing high-value services can lead to more substantial revenue growth.

Notable Quote:

“I wouldn’t add any complexity to the business that you already have.” – Alex Hormozi ([28:51])

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6. Closing Remarks: Scaling Roadmap and Free Resources

Timestamp: [31:56] - End

Towards the end of the episode, Hormozi introduces a special resource for listeners: a comprehensive scaling roadmap developed alongside Layla Kraft. This roadmap breaks down scaling into 10 stages across eight business functions, providing personalized guidance to help entrepreneurs identify and address growth challenges.

Key Insights:

• Comprehensive Scaling Tool: The scaling roadmap is designed to help businesses understand their current stage and outline precise actions for growth, covering areas such as marketing, sales, product development, and customer success.
• Accessibility and Personalization: The roadmap is available for free, tailored to individual business needs, and aims to simplify the complex process of scaling a business efficiently.

Notable Quote:

“There's a special, special gift for you. For being loyal listeners of the podcast, Layla and I spent probably an entire quarter putting together our scaling roadmap.” – Alex Hormozi ([31:56])

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Conclusion

Episode 821 of The Game with Alex Hormozi offers a wealth of practical advice tailored to various business models, from coaching and YouTube content creation to publishing and product-based enterprises. Alex Hormozi's insights underscore the importance of revenue retention, strategic marketing, and leveraging existing strengths to drive scalable growth. By addressing specific challenges faced by entrepreneurs, Hormozi provides actionable strategies that can be implemented to overcome obstacles and achieve substantial business growth.

For entrepreneurs seeking to navigate the complexities of scaling their businesses, this episode serves as a valuable resource, emphasizing clarity of goals, strategic resource allocation, and the importance of focusing on core revenue-generating activities.

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Notable Quotes at a Glance:

• “If we can't clearly state our goal, we certainly won't hit it. Right? You're not gonna hit it by accident for sure.” — Alex Hormozi ([00:00])
• “The people who are advertising on your channel are the ones who are getting the highest return.” — Alex Hormozi ([07:00])
• “You sell 50 times more books on Amazon than Shopify.” — Alex Hormozi ([15:27])
• “It's way easier to sell product than it is to sell info. Way easier.” — Alex Hormozi ([21:30])
• “I wouldn’t add any complexity to the business that you already have.” — Alex Hormozi ([28:51])
• “There's a special, special gift for you. For being loyal listeners of the podcast, Layla and I spent probably an entire quarter putting together our scaling roadmap.” — Alex Hormozi ([31:56])

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By unpacking diverse business scenarios and providing tailored solutions, Alex Hormozi continues to empower entrepreneurs with the knowledge and strategies necessary for sustainable growth and success.

Transcript

[Alex Hormozi]

If we can't clearly state our goal, we certainly won't hit it. Right? You're not gonna hit it by accident for sure.

[Business Owner 1]

So I'm wondering, like, you know, yesterday when we looked at the vam, like, can the business model itself be a detractor? Like if I'm trying to think of how big can we grow this in the current model before we have to look at SaaS or products or people become, you know, obviously a big, big issue in this type of business. So how big can this go in this type of model?

[Alex Hormozi]

Yeah, I think it can. I. It can't. It's very unlikely to become a billion dollar a year sales business. The biggest problem with it. So the two big problems of that business are revenue retention, number one and number two, depending on the model. If you have like coaches, because coaching doesn't scale, I mean you can get to whatever 20, 30 million a year, but it kind of like it becomes very difficult typically after that, because getting somebody to be as good as you. This is actually what I made my whole podcast on this point. So if we scale, let's just say a one on one business as a most rudimentary version of this, you can then go down to one on four, one on eight, one on one to infinity. So you scale that way basically more and more fractionalized access to you or your knowledge, whatever. This way we have other people, other people, more other people, where you still have one on one, but it's other people who are doing this. And so here you templatize fractional, like break apart the pieces into constituent parts and then you train people on the smaller pieces so they can replicate in theory, in practice, I think what ends up happening is that let's say I have a glass of milk. If I say, hey, we're going to go to 104, 108, I pour that glass of milk into a shot glass and I say, do you still want it? Now if the milk's amazing, the they're still going to take the shot glass. The alternative here is where I have that glass of milk and I have an equal sized glass of milk, but I pour a little bit of milk in there and then I just pour a lot of water in. And I said, you want this really diluted glass of milk, but it's the same amount as what you had before. And so I found that I think more businesses do a better shot going this way than going this way. Now, the third path is what I think is the best version of this. And so if you Think about knowledge businesses. There's tons of massive knowledge businesses. So Ernst and Young, McKinsey, Bain, all started by people who put their name on the building. Accounting firms, law firms, consulting, all of those fundamentally have the same thing. There was a guy who was really smart and really good at some stuff and was able to get people to give him money. The difference is that these models are predicated on basically a career path. So they are supply constrained. And so the problem with most coaching businesses is that like, hey, you have a pulse and in seven days I'm going to get you to give you a roster of clients so I can keep selling them. But the problem is that if you can teach somebody in seven days how to teach somebody else, either you didn't teach them fully what you do, or what you do is so simple that it's not valuable. More often than not, it's the first thing which is like I taught you 10% of what I know, but I'm still gonna charge more or less the same price either way. And then that's what creates this churn factory. And so the reason all of those companies have our supply constraint is that finding really intelligent people and then they have a career path where it will take them 10 years to get to a partner or whatever, managing director status. And they start as analysts and become senior analysts, then become VPs and they become principals. And they work up the ladder, but they have huge earning potential. So somebody who is intelligent and hardworking and could actually do a job as good or better than you, who doesn't want to work as a coach. So there are people like Neil's not here for this one. There are people who are very like, you guys met my team. They're very intelligent people, but they don't want to be. They're not coaches. Right. And they're very siloed experts for these particular things. And so this is actually many to one. So instead of one on one, it's many people who are experts for one customer. I see these as the three delivery models that evolve over time, pros and cons. This one just doesn't scales quickly, but then it stops because churn becomes too big. This one is much slower because it's supply constrained. But if you get really smart people, you can build a really big firm, which is evidenced by all the massive firms. This one you have models like Tony Robbins. Who? Tony Robbins. Even if you're honest, there's 10,000 other people watching, it's still valuable to zoom back into your question. I would probably be thinking Of a. Is the goal to sell.

[Business Owner 1]

The goal is for the company to be around after I die.

[Alex Hormozi]

Okay.

[Business Owner 1]

But I don't want to sell it.

[Alex Hormozi]

Well, the. Wait, but you do want to sell it.

[Business Owner 1]

I mean, I don't have the immediate.

[Alex Hormozi]

You want to be enduring. I got it. So then the only thing that I'm solving for is revenue retention. That's really it. It's just revenue retention. And so obviously, the hair solution we were talking about earlier, if there were products that became the core business, then that becomes a very interesting model. The problem with that, for Gym Launch specifically, is that people were able gyms who use our process sell their services for so much more than they make on product. And so that was the issue. And so it was just always a bolt on. And so if they got distracted, they would just keep selling services, which I didn't make anything on with the hair business, they make so much more on hair than they do on their cut and color or whatever, like small services that they immediately just start switching to selling hair. And so it becomes the core economic engine of the business. And that's what creates the revenue retention for them. But not as much for supplements, for example. And so for your business, it's either figuring out is there hair that they can sell that they won't stop selling, which means it has to be the core business, which. Which I feel like is tough because almost all your people are practitioners, given what you just said. Or I have to give some sort of tool that they all have to use on a regular basis, which would be SaaS or some sort of hardware that helps them make better assessments that then they can charge more or whatever the hell. Right.

[Business Owner 1]

So it almost becomes like, build the Kindle, but get them on prime type of thing.

[Alex Hormozi]

Oh, that's 100% the model.

[Business Owner 1]

Yeah.

[Alex Hormozi]

Yeah. And so like gym owners.com is what gym Launch is going to become or already is in the process of transitioning into. And that's, in my opinion, the only way to transition those things into one. We don't do it to build enterprise value. We do it to retain customers, which then creates enterprise value. Cool.

[Business Owner 1]

Thanks, man.

[Julia]

Yeah.

[Alex Hormozi]

And it's also really hard. Yeah.

[YouTube Creator]

So I've got a motorcycle YouTube channel.

[Alex Hormozi]

Cool.

[YouTube Creator]

2.3 million subscribers. Top line is 3.7.

[Alex Hormozi]

Sweet.

[YouTube Creator]

Most of my money comes from ad revenue.

[Alex Hormozi]

Interesting.

[YouTube Creator]

We sell a couple hundred thousand dollars comes from products. I'm just wanting to know. I feel like I'm leaving something on the table, something big.

[Alex Hormozi]

Are you doing a lot of sponsorships in addition to Ad. Like, it's not just YouTube ad revenue.

[YouTube Creator]

It's most of its YouTube ad, really. We just started ramping up sponsorship.

[Alex Hormozi]

That's amazing. That's crazy. What's your. What are your RPMs?

[YouTube Creator]

30.

[Alex Hormozi]

Interesting. Then you get a ton. You just get a crazy amount of views. How many views do you get a month?

[YouTube Creator]

10 to 15 million. Long form.

[Alex Hormozi]

Something doesn't add up there.

[YouTube Creator]

The automotive gets pretty good RPMs.

[Alex Hormozi]

Well, yeah, but I'm just doing the math there. So if it's like 10 million views a month, so that's meal. So that's 10,000 times 30, I guess. No, that's right. It's long form.

[YouTube Creator]

Long form.

[Alex Hormozi]

Oh, got it. Okay, that makes sense. Got it, got it, got it, got it. Okay, cool. So super cool. That's great. So that's the main ad revenue. What are the people on your channel selling? What are the advertisers who advertise on your channel sell to your customers?

[YouTube Creator]

I don't know.

[Alex Hormozi]

Okay, so literally today, in five seconds, make a community post and say, hey, what are the ads that you see on my channel? Comment below and you will get. Because fundamentally, the people who are advertising on your channel are the ones who are getting the highest return. They're the ones who are paying you $3.5 million a year, not YouTube. And so it's like, if it's worth 3.5 million to them, then it's got to be, sorry, if they're willing to pay me three and a half, they're probably making at least 10, probably 20 off of that. Now, you would be able to get even more than that because they trust you rather than just some random slice. And so then I would look at the product mix of what things are being sold, and I look at which of these ones is one that either you could go directly to them and say, hey, I know you're advertising on my channel. Why don't we. Why don't we figure a little deal out here? So you can have products that you own, you can have sponsorships, or you can just run affiliate, which is similar to these, but just kind of different in terms of the characteristics. Oh, shoot. And then partnerships. So if somebody has a really expensive thing that's very hard to do, like, let's say somebody's got. They've figured out how to build mini motorcycles or something, Whatever. It's like, I might say, like, how can we partner on this? So that I can push you traffic and promote and endorse and whatever. And then you have some element of Cash flow, but a huge chunk of equity of that business. Basically, you would pitch them. This is how I position it, I would say. And you've got some cash too. So the magic here is putting money and brand buying something. So it's like you have three people in your marketing department. I am the marketing department of a business that's 20 times bigger than yours. And so I'm going to bring my entire marketing department. It's like a reverse acqui hire. I'm like letting you acqui hire me, but I'll put some cash in the deal too, and let's split this or whatever and we can go to whatever this next level is. So that would be like, this would be maybe the most complex but the biggest bet for you that you could get like, crazy, crazy returns. These things are all, I would say, smaller bets. Like, if you're not smelling sponsorships, you probably should just from a media company. So it's like, do you want to optimize for how much profit you make? Because you could just become. If you're just motorcycle media, then you just sell ad space. So not only do you get ad revenue, you just also sell ad space. And I'm guessing you could probably do probably double the revenue that you have right now, maybe more just by selling ad space. And that would just all drop to the bottom line. That would be it. But the first step of still getting who are all the people? Advertising is a great first. Like, that's my leads list of hitting those people up. And the nice thing is it's like really warm reach outs. You're like, you already advertise on my channel. So let's make this official. Right? The affiliates is like, if they're not willing to trust you, you can get a percentage of the revenue that you send. I'm not as big of a fan. I'd rather you do sponsorships. But if you need to like prove it out early or something, you can do that. And then this last category is just like, if you were to develop a product, what would you sell? If that's not your space, then I would rather you just find what's the thing that makes the most money on my channel and then how do I make a deal with them? That makes sense. That's probably what I would do. Because, like, I don't want to go build school. I was like, I'll just bring a bunch of money and then buy it. Like, it just made more sense. But I'm not gonna start another software company. That's a huge distraction for Me, But I have all these people who want to start a business and I should put them somewhere.

[Eric]

How you doing, Eric? Alex. So I just want to go through my main funnel, just using the theory of constraints. So I do organic traffic and I have my CTA which captures 46,000 people. This is for this last quarter. 46,000 people engage with that CTA and it kicks them into an AI conversation.

[Alex Hormozi]

This is physical therapy, right?

[Eric]

Yeah. This is chronic pain, head, neck, and.

[Alex Hormozi]

Yeah, just for everybody.

[Eric]

And it's a membership course. $99 a month.

[Alex Hormozi]

Okay.

[Eric]

Okay. So the 46,000 people, they do the CTA, they go into that automation. 50% of them engage with the automation and 50% do nothing.

[Alex Hormozi]

All right.

[Eric]

Of that 50%, 3% make it to the bottom of the conversation.

[Alex Hormozi]

Okay.

[Eric]

And of that 3%, 17% sign up.

[Alex Hormozi]

Okay.

[Eric]

And of that 17%, about 40% of them cancel during the free trial. So 60% of them pay seven day free trial.

[Alex Hormozi]

And this is all automated. Right.

[Eric]

I pay someone like.

[Alex Hormozi]

Sure. It's not you.

[Eric]

Yeah.

[Alex Hormozi]

How many sales is that translating into per day?

[Eric]

Per day, Per week, whatever. It's about 25 a week.

[Alex Hormozi]

25 a week.

[Eric]

25 a week.

[Alex Hormozi]

Yeah. Yeah. You just immediately make so much more money if you just got on the phone and sold them something for three grand for a year. Yeah, I told you that yesterday too.

[Eric]

So, okay, if. If keeping that membership.

[Alex Hormozi]

I made a whole podcast about that this morning.

[Eric]

Right. Just increase the value.

[Alex Hormozi]

It's about you. Yeah. Which is like you're trying to make something scalable. Rather than trying to make it valuable, make it valuable first. And the thing is, when you make something really valuable, the premium price that you can attach with it gives you the resources to then make it scalable. When you try to make something scalable before you make it valuable, you just keep running into these issues where no one wants to buy my thing, but I got it all automated. It's like, yeah, no one cares. You know what I mean? I'm not saying you, but I'm just saying in general. Yeah, I'm just saying you will be able to probably 5x your business if you just get on the once people do that 3% level. I would just have book a call, talk to one of our experts. If you do that, you'll make more money. That's the. That's the thing.

[D&D Publisher]

I have a D and D publishing business making Dungeons and Dragons book, and I've spent a ton of time doing the theory of constraints to the product development.

[Alex Hormozi]

Sure.

[D&D Publisher]

Where I have a Background in like, it DevOps. So I've been optimizing that and I've been realizing that I've been neglecting the rest of the funnel for like whole businesses.

[Alex Hormozi]

Do you sell on Amazon? You sell Shopify? What do you sell primarily?

[D&D Publisher]

I do it right now through, like Kickstarters. So launch a crowdfunding campaign. People give you a bunch of money to build this product. You then build that product.

[Alex Hormozi]

So you have a publishing business, basically.

[D&D Publisher]

Yes.

[Alex Hormozi]

Okay, got it.

[D&D Publisher]

Yes. And so do you have a pen name? So I do have.

[Alex Hormozi]

Do you have a pen name?

[D&D Publisher]

No, it's all under mine.

[Alex Hormozi]

So you're an author?

[D&D Publisher]

Yes.

[Alex Hormozi]

Okay, cool.

[D&D Publisher]

Yeah, so I've made two books. I'm working on my third. I got a handful of other supplements and stuff. And so I've done, I don't know, maybe like 30,000 in Facebook ads, miscellaneous other advertising methods. But that's not my skill set and not good at. So I'm trying to think like. Like, as going through the exercises. Revenue is definitely my biggest constraint at this point.

[Alex Hormozi]

Sure.

[D&D Publisher]

It's like I've done all the other stuff too much. I've been focused on that so I can make a better product faster, but I have need a better way to sell it. Like, I need a better way to bring in customers. And so a bunch of the people have had great ideas on things to try. Dipping my toes into TikTok doing miscellaneous things on my email list.

[Alex Hormozi]

Yeah, TikTok shop is kind of interesting, I'm sure, to buy his products.

[D&D Publisher]

Yeah, that's what Caleb had recommended. So if I. If you were in my shoes and you took like a step back to look at the business as a whole, where would you look at trying to apply your resources to really, like, build up that revenue as efficiently as possible?

[Alex Hormozi]

Do you have. But is all of your revenue comes from Kickstarter or they go to Amazon afterwards and then it becomes, I would.

[D&D Publisher]

Say 90% of it's coming through Kickstarter. And then on a RA basis, there's a project that launches every year. Well, the first project took about 14 months to get to the second one.

[Alex Hormozi]

But you only have two books.

[D&D Publisher]

Yes. So I have a third project that I've ever.

[Alex Hormozi]

So you have a launch business right now?

[D&D Publisher]

Right now, yeah.

[Alex Hormozi]

Okay, so there's like basically no revenue between launches.

[D&D Publisher]

Yeah, people can go buy the stuff in between launches on Shopify that I've got set. And I've been thinking about setting up Amazon.

[Alex Hormozi]

You should set up Amazon. Yeah, we sell 50 times more books on Amazon. Than Shopify.

[D&D Publisher]

Okay. So would the next plaything.

[Alex Hormozi]

I do a million a month in books.

[D&D Publisher]

Okay.

[Alex Hormozi]

Oh, it's just as silly to me. Silly, Ridiculous. The books are free.

[D&D Publisher]

So setting up Amazon, I'm like, they're free.

[Alex Hormozi]

You don't have to buy them. They're like, we'll buy them. All right, whatever.

[D&D Publisher]

So setting up Amazon would be like the best revenue boost ignoring doing any marketing tomorrow.

[Alex Hormozi]

Yeah, for sure.

[D&D Publisher]

All right.

[Alex Hormozi]

Because here's what's really interesting is that. Did you watch my traffic ranking video? I put out like three videos ago. It's very recent. Anyways, I'll just tell you.

[D&D Publisher]

I think so.

[Alex Hormozi]

So what's really interesting is that people don't think about Amazon as a traffic, like a social media or traffic source, but I think like 13% of customers that. Well, let's just test this. Watch my theory. Just look. Flop on this. Did anyone buy my book first? One, two. Look at this. Cool. Okay. That's cool for me, anyways. Okay. So people will buy the book and then they'll find me later somewhere, and they're like, oh, that's the guy that wrote that book that I like. And so Amazon actually gets me customers. There's this whole misnomer that, like, you have to have an audience in order. You have to have an audience to have a big launch. But if you have a good product, which it sounds like you do, then when you have 10,000 five stars, I buy books. If there's any business book that's 10,000 five stars, I'll just buy it. And so number one is I would do Amazon for sure. Like, for sure. It's where 90% of people buy books. It's like, you're not on the biggest platform that people buy and sell books from. Now you can still do your launches. I still launch through Shopify, so I can still own the customer base and all that stuff. But between, by all means, kick it up there and do it in multiple formats and multiple languages. Like, right now, I think we have like 30 or 40 SKUs from two books. So it's like we have all four formats and we have two books, and then we have them in five languages, and we have them on 13 platforms. So we have it on Kobo Digital, or Kobo, we have drafted digital. We have, like. It's kind of funny about publishing. So it's fresh on my mind. Ingram, if you've heard of that spark, if you Google it, it'll come up. And so all that to say, I think you just need to. The first Thing I would do this quarter is maximize all distribution of the books on all platforms that people buy books on. The first thing, the second thing I would do was try and expand my audience. Right now, let's just use all of the distribution that already exists. Let's do that first. And then you can do TikTok strategy or whatever you want to do to basically market any other product that this works. Now, long term, once you get your third book out, it actually unlocks a bunch of stuff because you will be able to be profitable with ads because you go to sell bundles and you can sell three books at a time and you can sell really three, but it's like six books because you're going to do audio and audio digital and hardback times three is nine books. And so you can get away with basically a $99 or $125 or $149 in terms of price tag. And you'll be able to arbitrage the traffic that way.

[D&D Publisher]

Okay, yeah. You would never buy one of these as like a audiobook because it would be. I mean, essentially you're using this as.

[Alex Hormozi]

Like, oh, got it.

[D&D Publisher]

To build your character and stuff like that. But I think the platform could still make sense then for doing.

[Alex Hormozi]

I'll say this. Yeah, you would be surprised.

[D&D Publisher]

I would be very surprised.

[Alex Hormozi]

Yeah. But like, you'd be surprised. My workbooks are audio, but they're workbooks, but people buy them on audio.

[D&D Publisher]

I don't know if I've ever seen anyone try that. But that doesn't mean it couldn't be done.

[Alex Hormozi]

People listen. Like, listening is a very different experience. And a lot of times people are like, okay, just having in the background because what's interesting, like, I get a lot of people tell me, like, oh, yeah, I've listened to your book six times. Right. It's just because, like listening, your comprehension is significantly lower than visual because it's a second attention stream. You're doing other stuff too. And so it's like every time they listen to it, they get something else. It's the same book. And so it might. Dude. It'll take you a half day to narrate it. Like, throw it up. If people hate it, you can take it down.

[D&D Publisher]

Yeah. All right, thanks. Appreciate it.

[Alex Hormozi]

Yeah, you bet. And 50% of it's. It's increased. It used to be 25 and it's a slowly increased. I think not 50. I think it's. It's like maybe like 40% of our sales are audio.

[Hair Extension Business Owner]

I have a hair extension business. We educate the stylists, how to make more money, and salon owners with hair extensions with the product. I want to know how gym launch was structured because I know that that's how we need to structure our offer. So can you tell me a little bit about that?

[Alex Hormozi]

Yeah, I mean, I think I've talked to like three different businesses that do what you do recently. So it's very top of mind. So big picture. The model that seems to work the best is, and it is similar to Jim Launcher Prestige Labs, which is the we will show you how to do the thing. Right. And then you can also sell our thing once I've taught you how to do the thing. And so the recurring revenue comes from reoccurring revenue in that they continue to buy the hair extensions. And then on the front end, it really comes down to what makes that business very valuable is proving out what percentage of customers who buy the education become permanent hair sellers. Yeah.

[Hair Extension Business Owner]

80.

[Alex Hormozi]

80. And when I say that, so it's year over year, they continue to sell. Right. And so the smart cookie move is to what are you pricing the front.

[Hair Extension Business Owner]

End at the education where we're kind of making a new offer. But for under 6 figure stylists, it'll be $500 a month. 6 figure to salon owner, be 2000amonth. Salon owner, 4k a month.

[Alex Hormozi]

Or the reason I ask is that if you have a backend where, you know, you probably run what, 50% margins on the hair or something like that, Is that about right?

[Hair Extension Business Owner]

65.

[Alex Hormozi]

Right. Great. I like, I don't even, like I would even care about the education. The majority of the enterprise value will come from. Is the hair side bigger than the info side?

[Hair Extension Business Owner]

It's 90% of our business.

[Alex Hormozi]

Oh, is it? Okay, yeah. Well, then I in some ways would almost like lower the barrier because if that's the monetization, then it's. Then the question to solve for is how do we get the absolute most amount of people to sell hair? And so you could think about it as offset CAC for the hair business more than its own business in its own right. And don't get me wrong, I'm all for it. If I had to make money or not make money, I'd rather make money. Right. But when we're talking about penetration of market share because you're trying to flip people into your selling your stuff, then if I could prove that for $300 I could get somebody activated and they actually would sell hair and I would sell 20 times more people and I make all my money on the Hair anyways, then I would basically. It's almost like creating artificial friction.

[Hair Extension Business Owner]

Yeah.

[Alex Hormozi]

I'm not saying go to 300 because they might say yes at 300, 1,000, 2,300. Like go to the highest that sells the most without getting into that next tier of losing buyers that you otherwise would have had.

[Hair Extension Business Owner]

Should they pay for education or just their product spend? So this is an exchange of value.

[Alex Hormozi]

It's a good way of doing it. Like we did that with Prestige Labs. We would have them buy. It's a little bit different because it's consumable, but we would have a salon, for example, or a gym. Buy supplements, a stack for each of their trainers. I'm a little high. If they can turn this down a little bit. And so all the trainers at the gym would all go do a 30 day challenge or whatever. They'd use the products and then they would have conviction that it actually worked. And so then it made the sales on the back end so much easier. Like, hey, I just did it. Look at my before and after pictures. Like, this stuff's really good. And so in order to activate them, we had them buy something like $5,000. Ed would probably know, I think around $5,000 worth of product. And then he gave them basically the education for free. So you still had that. Like, you still have that buy in? Yeah, you still have that buy in. And you know what's crazy is that you'll probably, you'll be amazed. You'll be able to sell way more product. Well, you probably already know this. It's way easier to sell product than it is to sell info. Way easier. Because you don't have to, like, they get it. Like everybody here who sells info, like, when you start, if you ever sell like physical stuff, you're like, oh my God. Because we're so used to selling like an empty box of air. Being like, this is very valuable. But when you actually have something in your hands, it's like, oh my God, this is so much easier. Like you could see it and look, put it on your hair. It's ah, you know. So anyways, does that help?

[Hair Extension Business Owner]

Yeah, it does. Thank you so much.

[Alex Hormozi]

Yeah, don't like break your business tomorrow. But like, I would experiment with just what, what allows me to spend the absolute most amount of money to get the most people selling hair. That's the problem to solve.

[Julia]

Hi, Alex.

[Alex Hormozi]

Yes, ma'am.

[Julia]

My name's Julia.

[Alex Hormozi]

Hello, Julia.

[Julia]

And I'm an online fitness coach for women over 50.

[Alex Hormozi]

Cool.

[Julia]

Because I do my job so well. Yeah.

[Alex Hormozi]

Okay. Yeah, there's a. I would have thought over 30, but okay, that's fine.

[Julia]

Anyway, because women have so much success in my program, after 12 months, 18 months, they're gone. I don't know what to offer them after that. But I also have a huge opportunity to tap a high net worth individual community where Instead of paying $1,000 a month for 6 months or 12 months, 24k to 100k a year, one of the reasons I came this weekend was to figure out what direction I should go. And I got a whole lot of other valuable content that I wasn't expecting. So thank you. But where should I focus my energy? Because really, when my clients reach their goal, they're gone.

[Alex Hormozi]

I wouldn't worry about the revenue retention piece for your business. So this is a really good exercise for anybody. I try and think of what are the biggest people in the space do. Like, what do those businesses look like? And so like Weight Watchers. Jenny. I'm not, I'm not saying you're the same thing, but just like in the space of weight loss, which is the space you're in, almost none of them have revenue retention. And so like Tinder, for example, I don't know if it was them, but one of them was like, the point of this app is to get deleted. Not all businesses have to have revenue retention, but this is where because people get single again and then they come back or they get fat again and come back. So it becomes more reoccurring than recurring in terms of revenue. But I think all of this comes down to, or bubbles up to what.

[Julia]

Your goal is to have an impact and make lots of money.

[Alex Hormozi]

Well, you already have the impact when you're already making lots of money. So it has to be different than that.

[Julia]

No, it's not enough. But anyway, me neither. Yeah, I guess my goal is to reach as many people as I can.

[Alex Hormozi]

Well, then make it free. Say again then just make it all free.

[Julia]

I can't. No.

[Alex Hormozi]

Okay, so then what's the goal?

[Julia]

To make money.

[Alex Hormozi]

Okay, fine. So do you want to make money by selling it or do you want to make money by growing the revenue of the business?

[Julia]

Growing the revenue. But in a model that I love doing.

[Alex Hormozi]

Well, I was pushing back on the impact, whatever thing because I also talk to business owners all day. I'm like, I hear that shit all the time. Because if that were true, then you wouldn't be like, okay, I want to sell even fewer people at a higher price. Right. I don't care, to be clear, make money. I'M all for it. I just. I want the. If we can't clearly state our goal, we certainly won't hit it. Right. You're not gonna hit it by accident for sure. So if you just said, hey, Alex, I want to triple the profit of this business, I'd be like, cool. Well, now we can actually, like, pull this apart and actually take this. Now you might have your own things around that, but, like, it's just much easier for me. So what's revenue right now? What's bottom line?

[Julia]

The top line revenue in the last two years is like 700K.

[Alex Hormozi]

Okay, what's bottom?

[Julia]

You know, when we did all that stuff, I was like, you're good.

[Alex Hormozi]

Can I just say, it's not super high.

[Julia]

I have my numbers.

[Alex Hormozi]

Okay, fine. You're good. That's fine. So you have something that's working. Right. So people are. And they're paying you $1,000 a month. Okay. So the issue that you have, I'm guessing, is marketing market. No advertising. You're not like, not enough people know you exist.

[Julia]

Yeah, that's definitely a constraint.

[Alex Hormozi]

Right. So I certainly would not advise you to do anything new right now. I think you need to sell more. Can you handle more customers?

[Julia]

Yeah.

[Alex Hormozi]

Okay, then I would be trying to.

[Julia]

Sell more and sell more at what's making money now or to focus ultimately.

[Alex Hormozi]

Do you have decent margins on what you sell now?

[Julia]

Absolutely, absolutely. I have zero ad spend. I don't have any employees. I do have consultants that I pay.

[Alex Hormozi]

Yeah. So you actually have the classic small influencer issue, which is anybody who's organic typically wants to create many products because they only have one base of customers. And so the only way they can think to make more money is to sell them something else. But you should really just see your organic audience as the jumpstart to then continuing to sell to colder and colder traffic. Because otherwise you start five businesses, and every single person here has probably seen the influence that has five different revenue streams. They all add up to, in total, a million dollars a year. But they're like, you know what I should do? Add a sixth. And so this will be different. Right. So it's just that you only know one way to advertise. And so you're looking at all these things I need to change about my business, but you just need to advertise more.

[Julia]

Okay, good.

[Alex Hormozi]

Yeah, that's honest. Like, I wouldn't add any complexity to the business that you already have. Now, if you want to add an anchor product, that's 100 grand, I'm all for adding super high anchors. Why not? So when you add an anchor, by the way, the way this works. So I learned this technique when I went to a suit shop and I was poor and I was told that I needed a nice suit. And so I went there and I said, I'm going to pay $500. That's my max for getting a suit. And I go in and a friend of mine set up the connection. So he's like, this guy's awesome, blah, blah, blah. So I get there and he does my measurements and he lines up this big rack of suits. And so he puts the first one on. And I was like, man, I feel like a boss. And he's like, so you like that one? I was like, yeah. And so I pull, you know, I look at the tag and it says $16,000. And I was like, oh, shit. The blood just drained from my face. And I was like, this is a car. And so I was like, ah. And he saw that I, like shit my pants in his nice new pants that I was wearing. And he said, do you care about the brand? And I was like, no, don't care about the brand. And he was like, I got you, sport. He like took one off and put another one on me in like one move. And at this one, I didn't even look in the mirror. I just like looked at the tags. I was like. And it was two grand. And I was like, okay, I can swing this. At least I'm not gonna, you know. Cause my friend made the intro. I didn't want to be an idiot, which now I would give zero fucks about. But anyways, and so I ended up spending like $500 on like socks and handkerchiefs at this place. And I walked out spending $2,500. And only after I walked out did I realize that I spent five times what my budgeted amount was. And this guy was a fourth generation tailor. He knew exactly what he was doing because he had the one that was one eighth the price already there. And so when you have an anchor upsell, the way you want to do it is there is something called primary and secondary features. And so the primary feature of the suit for me is to look cool. The secondary features of the suit would be, what's the material, what's the brand like, all of those things. And so what you do is you have your anchor at 25,000, 50,000, whatever you want, and then you get the gasp and people shit themselves. And one out of ten people are like, awesome, that sounds great. And you're like, holy shit, this guy just spent 50 grand on this. And he probably would have been like, holy shit, this kid just spent 16 grand. I was like, 24. Of course, I didn't have 16 grand, right. But he still put it on me. The secondary features are the things that are not material to most people, so that what you can do is basically deliver 90% of the same product for one tenth the price. And then people are like, this is like, I'm pulling one on this guy. He doesn't know that he sold me a suit that's almost the same as his $100,000 suit. And you're like, this guy is about to buy a $5,000 suit that's really a $500 suit because I showed him a $100,000 one first. And so you just change the things that aren't material to most people, and you want to come to the rescue. It's like, hey, do you care if you have my cell phone? Are you good? Just with slack, it's like, oh, slack's fine. Yeah. It's like, okay, cool. Well, then we can still pretty much get you there. Vacation, plane, flight, just a slightly differently. So I think if you. If you add the anchor upsell in and then all of the cash that you get from the few people who take that, pour it all into advertising.

[Julia]

Perfect. Thank you so much.

[Alex Hormozi]

You bet. Real quick, guys, I have a special, special gift for you. For being loyal listeners of the podcast, Layla and I spent probably an entire quarter putting together our scaling roadmap. It's breaking scaling into 10 stages and across all eight functions of the business. So you've got marketing, you've got sales, you've got product, you've got customer success, you've got it. You've got recruiting, hr, you've got finance. And we show the problems that emerge at every level of scale and how to graduate to the next level. It's all free, and you can get it personalized to you. So it's about 30ish pages for each of the stages. Once you answer the questions, it will tell you exactly where you're at and what you need to do to grow. It's about 14 hours of stuff, but it's narrowed down so that you only have to watch the part that's relevant to you, which will probably be about 90 minutes. And so if that's at all interesting, you can go to acquisition.com roadmap, R O, A D map, roadmap.