Podcast Summary: The Level Up Podcast w/ Paul Alex
Episode: LegalZoom Co-Founder Eddie Hartman Explains Why 72% of Businesses Fail
Host: Paul Alex Espinoza
Guest: Eddie Hartman (Co-Founder, LegalZoom)
Release Date: December 20, 2025

Main Theme / Purpose

This episode dives deep into why such a high percentage (72%) of businesses fail, with LegalZoom co-founder Eddie Hartman unpacking the real-world lessons behind sustainable business growth, creating and measuring value, retention over churn, and the mindset shifts required for entrepreneurial success. Geared toward beginners and seasoned entrepreneurs alike, the conversation explores the strategies that drive companies from fragile startups to scalable, enduring brands.

Key Discussion Points & Insights

1. The Value Equation: Why Most Businesses Fail (02:52–07:20)

• Reason for Business Failure:
  Most startups fail because they misunderstand value—they conflate price with value and fail to communicate the full benefit of their offerings.
• Measuring Value, Not Just Price:
  Eddie explains: "The amount of money that you're willing to pay for [something] is a direct correlation to what you think you're going to get in terms of value. Price isn't really a thing. Value is a thing. Price is what we use to try to measure that thing." (03:21)
• Book Reference:
  Insights from “Monetizing Innovation”—start a business by figuring out what people are actually willing to pay for; that’s the best indicator of value.

2. Creating & Communicating Perceived Value (05:20–08:30)

• Move Beyond Product Features:
  Eddie uses the muffin example: don’t just ask “Do you like this $5 muffin?”, instead frame it as, “This is an organic, wild blueberry muffin from an award-winning recipe…”—showcase unique selling points and the deeper value.
• Paul’s Podcast Example:
  Paul frames The Level Up Podcast as more than just information—it's a concentrated tool for mindset, growth, and mental evolution.

3. Avoiding the “Single Engine” Trap (09:19–14:23)

• What is the Single Engine Strategy?
  Many entrepreneurs lean into the one thing they're good at (sales, community, product), building a company on that single strength at the expense of balanced growth.
• The Danger:
  Eventually, this single focus stalls out—acquisition without retention, premium product without enough customer base, or fanatic following without scaling revenue leads to failure.
  (“You need more than one engine, Paul. If you don’t want to stall, you gotta get wallet share and market share. You can’t do just one.” – Eddie Hartman, 14:03)
• Becoming a Profitable Growth Architect:
  Fuel growth with a balanced approach: expanding both reach (market share) and profit per customer (wallet share).

4. LegalZoom’s Journey: Finding Product/Market Fit (17:49–23:32)

• Key to Early Success:
  • LegalZoom founders listened to frustrated would-be customers—understood pain points and unmet needs.
  • “We took a hard look at what people wish they could get in terms of legal services… being able to connect with what people valued by finding out what they wanted to pay for was incredibly important.” (18:20)
• What They’d Do Differently:
  • Should have paid more attention to how customers wanted to be charged; moving from transactions to relationships (e.g., subscription model for ongoing legal needs) tripled company value.
  • “How you charge is more important than how much you charge.” (21:45)

5. Reducing and Preventing Churn (Customer Retention) (23:32–34:00)

• Eddie’s Philosophy:
  “I feel the same way about churn as my mother-in-law feels about slugs: I hate churn.” (23:38)
• Churn Framework:
  • When a customer churns, something shifted in the money-value equation—either they ran out of money, or they lost sight of the value.
  • “If you wait until somebody picks up the phone and says, 'I'm canceling,' you are way too late.” (27:09)
• Best Practices:
  • Ask for customers’ goals early and resurface their progress regularly.
  • Use “lookalike” audiences: recruit customers who resemble your longest-lasting, most engaged users—focus on sourcing the right-fit clients from the beginning.
  • “Recruit only people who look like this person [who stays]. Right. And that's going to give you a huge advantage.” (31:03)

6. Sales & Negotiation Without Pushiness (34:27–40:00)

• Negotiation Mindset:
  Prepare by anticipating objections; never give away discounts unconditionally.
  • “If you give someone a 25% discount immediately, they’ll doubt your price’s legitimacy and, by extension, your value.” (34:48)
• Give-and-Get Rule:
  • If granting a concession (discount, features), always ask for something in return (longer contract, testimonial, etc.)
  • “Exchanges make sense to people. You giving people something for free makes no sense. If it's free, then where was the value?” (39:04)

7. Principles for Scaling Successfully (40:22–43:32)

• Evolve as You Grow:
  What worked in the startup phase (single product, small team) won’t take you into scale. Evaluate and adapt as business context, offerings, and customer needs shift.
  • “The minute you have two offerings, people compare. By doing so, they become aware of the things that you’re offering which they otherwise might have missed. And remember, awareness—it’s that perception of value that unlocks willingness to pay.” (42:00)

8. Entrepreneurial Commitment & Sacrifice (43:46–50:27)

• Total Commitment Needed:
  Eddie’s litmus test: Would you borrow money from your own mom and put it into the business? If you’re not “all in,” you’ll quit at the hardest moments.
  • “If you do not super double down and over commit, there will be a day where there’s a hard choice and you’ll say, ah, you know, and that will be the slow erosion of your dream.” (45:05)
• Personal Cost:
  Both Paul and Eddie discuss lost relationships, missed time, and “giving up everything” to build their businesses.
  • “To get where I am… what it requires is a ruthless devotion to this one dream that you have…that is going to not leave room for some things you might otherwise have wanted.” (48:00)

9. The Power of Networks, Mentors, and the Team (50:27–51:48)

• Support System is Essential:
  Eddie credits mentors and co-founders for his success: “I would never, ever, ever have been able to get to where I am without them. … You need to be with your team. That’s going to help you level up. No other way to do it.” (50:53)

10. On Failure, Education, and Resilience (52:45–54:15)

• Failure as a Stepping Stone:
  “Everyone fails. … You know what [failed companies] were? It was an education. And without that, I would not have had the ladder that I stepped on to reach my next thing.” (53:33)

Notable Quotes & Memorable Moments

• “Price isn’t really a thing. Value is a thing. Price is what we use to try to measure that thing.”
  — Eddie Hartman, 03:21

• "The one thing that everybody has in common that ever leaves you, ever, is that at one point they said yes... So I've made it a huge part of my professional life studying: how does that happen? How does a person go from yes to no?"
  — Eddie Hartman, 23:43

• "You need more than one engine, Paul. If you don't want to stall, you gotta get wallet share and market share. You can't do just one."
  — Eddie Hartman, 14:03

• "How you charge is more important than how much you charge."
  — Eddie Hartman, 21:45

• "If you wait until somebody picks up the phone and says, ‘I'm canceling,’ you are way too late.”
  — Eddie Hartman, 27:09

• "Give something, get something back. Even if you don't get it, ask for it—the other person will feel like you're more sincere and have more integrity."
  — Eddie Hartman, 39:14

• “You have to realize different people will look at what you offer and assign different value to it. As you grow… you have to evolve.”
  — Eddie Hartman, 41:47

• “Understand what you’re for. It’s 100% commit. It’s all in. It’s level up. Just like the name of this podcast, right? You’ve got to put it all in.”
  — Eddie Hartman, 45:47

Timestamps for Key Segments

• 02:52 — Why 72% of businesses fail; the value equation
• 09:19 — The “single engine” trap and dangers of one-sided growth
• 17:49 — LegalZoom’s origin story; what worked and what Eddie would change
• 23:32 — Masterclass on churn and retention
• 34:27 — Negotiation: the give-and-get rule
• 40:22 — The importance of evolving your business as you scale
• 43:46 — Sacrifice, commitment, and the hard truths of entrepreneurship
• 50:27 — The value of mentors and supportive networks
• 52:45 — Embracing failure and resilience

Guest Information & Resources

• Eddie Hartman’s new book: Scaling Innovation (sequel to Monetizing Innovation)
• Contact: LinkedIn, Twitter (links in episode description)

Conclusion

This episode is a masterclass in sustainable entrepreneurship—from finding product/market fit, to avoiding common traps, maximizing customer relationships, negotiating confidently, and making the personal sacrifices that true success demands. Whether you’re just starting or looking to scale, the actionable frameworks and candid wisdom from both Paul and Eddie offer a clear, proven roadmap to beating the odds and leveling up.