Learn. Share. Evolve…

0:00:04 You probably recognize this guy, Alex Hormozzi.
0:00:06 He’s known as the $100 million man,
0:00:08 and he’s probably the most popular business teacher on YouTube.
0:00:11 So last week I flew to Vegas and I asked Alex to teach me
0:00:14 the things in his new book, Money Models.
0:00:15 Ah, how to make money. Thank you.
0:00:19 He says that this one concept has made him more money
0:00:20 than anything else in his career.
0:00:24 How would we improve our business by thinking in money models?
0:00:26 So let me walk you through the actual economics of this.
0:00:28 If 10% of people buy something that’s 10 times expensive,
0:00:29 you double your revenues.
0:00:32 So the classic upsell is you can’t have X without Y, right?
0:00:33 You can’t have a burger without fries or whatever, right?
0:00:35 It’s like, you can’t have X without Y.
0:00:37 I recorded the whole session,
0:00:39 and I want to share that with you here today.
0:00:42 All right, if I reset your bank account and your followers,
0:00:44 change your name and face, so I reset you to zero,
0:00:46 how long do you think it would take you
0:00:47 to get a million bucks in your bank account?
0:00:51 Well, having lost everything twice, I’ll tell you what I did.
0:00:53 What do your haters get right?
0:00:59 I feel like I can rule the world.
0:01:01 I know I could be what I want to.
0:01:04 I put my all in it like no days off.
0:01:06 On the road, let’s travel never looking back.
0:01:09 If I read this book, and it’s going to start a little campfire in my head,
0:01:11 what’s going to happen from money models?
0:01:13 You will love this book if you liked offers.
0:01:17 And so a money model is a deliberate sequence of offers.
0:01:19 Many businesses have more than one offer.
0:01:21 And so it’s how do we sequence those in the right way
0:01:23 that accomplishes a financial objective.
0:01:25 And so the financial objective for this book
0:01:28 and what I try to go for for every business I have
0:01:30 is something that I’ve always called client-financed acquisition.
0:01:32 And so the reason that we’ve been able to scale—
0:01:34 One user pays for the next user?
0:01:36 Yes, and a slight tweak on that.
0:01:36 Okay.
0:01:41 Which is—so it’s 2x CAC plus COGS.
0:01:42 Okay.
0:01:45 So this is our—this is the big thing that we want.
0:01:49 So it’s basically gross profit in 30 days.
0:01:51 So I guess I could move this over here, but it doesn’t matter.
0:01:55 Gross profit in 30 days is greater than 2x CAC plus COGS.
0:01:57 Let’s just explain the terms people don’t know.
0:01:57 Yeah.
0:01:57 It’s gross profit.
0:01:59 You’re not talking about overheads in this.
0:02:00 Right.
0:02:01 So gross profit.
0:02:02 CAC, cost of customer acquisition.
0:02:05 COGS, what it costs you to deliver the product or service that you deliver.
0:02:06 Yep.
0:02:09 And what you’re saying is my bar, my golden rate, my golden number I’m trying to hit
0:02:14 is I want to take the cost to deliver the service and get the customer, double it, and in 30 days
0:02:15 I need to be hitting that number.
0:02:16 That’s my goal.
0:02:20 Whether that came on the first offer or what you’re saying now is the second, third, fourth
0:02:23 thing I sell them along the way, along their customer journey.
0:02:24 It’s exactly that.
0:02:27 Can you do like a stupid tangible example?
0:02:27 Yeah.
0:02:30 So the first business I ever did this in was the gym business.
0:02:32 And so it’s a really simple example because everyone gets it too.
0:02:36 So when I came into the gym business, what the vast majority of businesses did is they
0:02:41 would run a low ticket, like $21, 21 days that they run a free month or free 14 day trial,
0:02:41 whatever.
0:02:43 That was the primary way of getting people in.
0:02:46 And so let me walk you through the actual economics of this.
0:02:50 And so if you have a business, let’s say old way, right?
0:02:53 Someone comes in, let’s say you pay whatever, 10 bucks a lead.
0:02:55 That’s your CPL cost per lead.
0:03:02 And then you can convert, let’s say you’re getting, you know, 20% of these people to start a trial.
0:03:05 So that means that it costs you 50 bucks to start a trial.
0:03:09 And then one out of three of those trials, which is the industry average, convert.
0:03:13 And typically the conversion for like a bootcamp or something like that is going to be about $99 a month, right?
0:03:14 That’s what it costs.
0:03:15 Here’s your CAC.
0:03:16 Yeah, exactly.
0:03:17 And here’s the first 30 days.
0:03:18 Exactly.
0:03:21 And so you’re upside down here.
0:03:25 Now, not only that, it probably took you two weeks to like between when you like got the lead,
0:03:28 before you got the trial, and then 21 days, now you’re at five weeks.
0:03:31 And so by the second month, now you’re like, okay, I got 99 times two.
0:03:34 Now, that doesn’t even take into account that like that 99 is not all free.
0:03:35 Like there’s costs involved there.
0:03:39 But let’s just say that these guys are amazing and they’re running 100%, you know, margins.
0:03:45 And so it’s like, okay, so this is going to take 60 days for this business to basically recoup the money.
0:03:49 Now, the problem is that in the gym industry, especially many customers leave within four months.
0:03:51 And so it’s a very tough way to make a buck.
0:03:57 And so what I kind of came in and started doing was we’d run these challenges and I’d spend the same amount of $10.
0:03:58 I’d had the same.
0:04:02 You were here when you started your, you did the same model initially?
0:04:03 No, I saw people doing it.
0:04:04 I saw people doing it.
0:04:07 And so then it was like a three-step permutation.
0:04:12 I don’t even want to tell the backstory, but basically figured it out, tried it out at a gym.
0:04:13 It worked at that gym.
0:04:14 And then I started my gym.
0:04:15 That’s basically what happened.
0:04:17 So same cost per lead.
0:04:19 I would close the same.
0:04:21 I’d get 20% of these businesses.
0:04:23 So it would cost me, let’s call it 50 bucks, whatever.
0:04:29 To, for me though, I would, off of that $50, I would sell up front and I would make 500.
0:04:32 Because your $500 offer was a challenge.
0:04:33 So you win your money back.
0:04:37 So if you lose X amount of weight and X amount of time, we get your money back.
0:04:39 Now, that was the beginning of the offer.
0:04:40 That’s an attraction offer.
0:04:41 So it’s one of the offer types I talk about in the book.
0:04:43 And so it’s like, okay, I got $500.
0:04:47 But we didn’t stop there because what are you going to do after you have your thing?
0:04:48 Well, you’re going to need some supplements.
0:04:48 And it’s like, all right.
0:04:53 So then we’d, 48 hours later, we’d sell $200 of supplements, call it 80% gross margins, whatever.
0:04:56 It’s like, okay, so I get 160 plus 500.
0:04:57 So now I’m at 660.
0:04:58 All right, great.
0:05:02 Now on top of that, it’s like, all right, three weeks in, it’s a six-week deal.
0:05:05 I would then say, hey, I’m going to roll this towards a one-year membership.
0:05:09 And so boom, we’d roll that over, which is another mechanism that we use.
0:05:11 And so then I get the one-year member.
0:05:11 Great.
0:05:16 Now at week six, or between week three and week six, we’d make a second offer and say,
0:05:17 hey, you’re already a member.
0:05:19 Can I just save you some money?
0:05:20 And they say, sure.
0:05:23 And we say, hey, if you want, what we can do is if you just prepay for the whole year,
0:05:24 we’ll knock two months off.
0:05:28 And so then all of a sudden, I’d get about 20% of people to prepay for the whole year,
0:05:31 which is the $2,000 cash up front.
0:05:37 which if it’s 20% and we add all these together, I’m getting about $1,000 up front in the first
0:05:41 same period of time that these guys are getting $99 or $199.
0:05:49 And so my ability to outspend them in an auction based attention on Facebook or Google search
0:05:50 or whatever was unparalleled.
0:05:55 And so because of that, I was able to not only outspend my competition, but because it cost
0:05:59 me, like if you’re actually doing LTV to CAC on this, it cost me $50 to make $1,000.
0:06:01 I’m getting $20 to $1,000, $30 to $1,000 up front.
0:06:05 And so I was actually able to finance the opening of all my locations that way.
0:06:11 So I could spend $5,000 in ads and make $100,000 back and literally paint the walls, put the lobby
0:06:12 in, buy the equipment.
0:06:16 And by the time I actually opened the gym, because I do pre-sales for a month or whatever, I would
0:06:20 actually already be cash flow positive day one without actually having to invest capital.
0:06:23 And so fundamentally, I will continue to tinker.
0:06:25 And this is where I got spoiled or whatever.
0:06:28 Maybe my belief set changed is that this was the first model I ever had.
0:06:32 And so every business I’ve had since then, I was like, I know there’s a way if I just
0:06:35 keep tweaking it until eventually this thing will print.
0:06:39 And then when that happens, you don’t need the outside investors because you cash flow getting
0:06:39 customers.
0:06:44 And so you basically almost like every business I’ve had has been supply constrained because
0:06:47 I can blow the doors off on the front end because I can acquire customers.
0:06:51 And so like this has been the skill that’s probably been the largest, you know, contributor
0:06:52 to my material success.
0:06:56 And like Alan went from zero to 1.7 million a month within six months.
0:06:59 Gym launch went from zero to 2.2 million a month in 20 months.
0:07:03 Prestige Labs, zero to one, one and a half-ish and six.
0:07:08 And so like each of them just very quickly just ramped because I could get customers at
0:07:08 a profit.
0:07:12 And when you look at the actual, like where the mechanics of the money happen, as soon as
0:07:13 one customer comes in, right?
0:07:15 One guy comes in.
0:07:19 Now, if he gives you that 2x CAC plus COGS, then it’s like, okay, well, I’ve paid for
0:07:21 him and I paid for the delivery.
0:07:22 Right.
0:07:23 But he comes loaded.
0:07:24 He’s holding this guy by the throat.
0:07:27 He comes loaded with my next customer.
0:07:27 Right.
0:07:29 And so, but then this guy brings me two more.
0:07:30 And so basically you keep doubling.
0:07:31 He comes loaded.
0:07:32 Yeah, exactly.
0:07:35 And so then at that point, you literally only have to acquire, you have to have the cash
0:07:37 or the wherewithal to acquire the first customer.
0:07:40 And then everything after that is financed by the customers.
0:07:43 And the greater that discrepancy, the more you don’t have to even put more capital into
0:07:44 the business at all.
0:07:48 And so that was a very long, as fast as I could say it, that’s, that’s the, that’s the, that’s
0:07:50 what we hope to accomplish the good money moments.
0:07:51 All right.
0:07:56 So a lot of people will talk about how you need a million dollars and three years of experience
0:07:57 to start a business.
0:07:58 Nonsense.
0:08:02 If you listen to at least one episode on this podcast, you know, that is completely not true.
0:08:07 My last company, The Hustle, we grew it to something like 17 or 18 million dollars
0:08:07 in revenue.
0:08:10 I started it with like $300.
0:08:14 My current company, Hampton, does over 10 million in revenue, started it with actually
0:08:17 no money, maybe $29 or something like that.
0:08:18 Nothing.
0:08:21 And so you don’t actually need investors to start a company.
0:08:23 You don’t need a fancy business plan.
0:08:26 But what you do need is systems that actually work.
0:08:31 And so my old company, The Hustle, they put together five proven business models that you
0:08:33 could start right now today with under $1,000.
0:08:37 These are models that if you do it correctly, it can make money this week.
0:08:39 You can get it right now.
0:08:42 You can scan the QR code or click the link in the description.
0:08:44 Now, back to the show.
0:08:48 I want to break down a couple of things in here just to, because I can, first of all,
0:08:49 this is great.
0:08:53 You know, in, I come from Silicon Valley and Silicon Valley, uh, virality rules all.
0:08:53 Yeah.
0:08:57 And, and they, they, you know, the early growth hackers, in fact, there’s a book called The
0:08:57 Viral Loop.
0:09:01 The guy, my mentor, the guy who, who kind of plucked me when I got to Silicon Valley, he’s
0:09:05 featured in that book because early on he was like scraping hotmail and he realized, wait,
0:09:08 I have no marketing budget, but one user can get me the next user through this thing called
0:09:09 the K factor.
0:09:11 And then you measure the K factor.
0:09:13 It becomes like, this is how Facebook and other, other businesses grew.
0:09:20 You’ve created a version of the K factor for, um, non-tech, uh, businesses that are not going
0:09:23 to grow virally, but you can grow, you can finance the next customer through, through the
0:09:24 existing customers.
0:09:26 I want to point out a couple of important things.
0:09:30 So the first one was, this is what, this is kind of book one.
0:09:33 So this is, you know, your a hundred million dollar offers book.
0:09:33 Yeah.
0:09:40 And I would, a key difference here for any entrepreneur is that you’re able to charge $500
0:09:44 when this guy’s probably honestly struggling to even charge $99 a month.
0:09:48 I drove by a place that here, there was like $5 entry offer, uh, the, uh, Las Vegas fitness
0:09:53 club or whatever, because you were not selling a gym membership, which is a cost to the customer.
0:09:55 You were selling a transformation promise, right?
0:09:58 So you’re selling customer transformation, the happy ending.
0:10:01 So first of all, what, what are you actually selling?
0:10:02 That was a key thing.
0:10:07 The second was you were then upselling upsell one of your money model.
0:10:07 Yep.
0:10:12 And you had a good insight here in, um, the preview your team sent me, which was basically
0:10:16 that you want to sell when the customer pain is highest.
0:10:17 Can you talk about that?
0:10:17 Yeah.
0:10:19 I, I’d love talking about this.
0:10:26 Um, so basically I think so many people, businesses, et cetera, get, they think about that, especially
0:10:30 services because 78% of businesses are, they think about, they have a term that they deliver
0:10:33 for a customer and they typically want to renew when they’re about to stop getting paid.
0:10:33 Right.
0:10:36 Which is typically the absolute worst time to try and renew.
0:10:36 It’s like an ex-boyfriend.
0:10:38 Hey, I’m back in town.
0:10:43 It’s like, oh, I guess I’m on month 11 of my annual trial.
0:10:43 No, exactly.
0:10:49 And so there’s, there’s basically five, five, five times that you, that you want to sell,
0:10:50 um, uh, sell a customer.
0:10:53 So number one, I’m just going to say, okay.
0:10:55 Number one is, uh, immediately.
0:10:55 Right.
0:10:57 So that’s like in the same conversation.
0:11:01 Um, the second one is after basically some sort of activation point.
0:11:06 Next, you have your halfway, which is because like, you’re like, why halfway?
0:11:08 Because it’s halfway and that’s why it works.
0:11:09 Because we’re humans at halfway.
0:11:11 You have your last chance at the end.
0:11:19 And then you have milestone, which is, which can happen kind of anywhere in here, but basically
0:11:21 they have something occur.
0:11:22 So this is something they do.
0:11:23 This is something that happens.
0:11:27 So the action item for a company here is map this for yourself.
0:11:30 But if you’re like, okay, well, which of the five do I do?
0:11:33 You want to sell the point of greatest deprivation, not the point of greatest value.
0:11:37 Sometimes the point of greatest value and the point of greatest deprivation occur at
0:11:39 the same time, not always though.
0:11:42 So I’ll give you my simple example, which is like, if I go to the best steak house in
0:11:44 the world and I have a steak and I’m like, this is amazing.
0:11:46 And the waiter comes back and says, Hey, would you like another steak?
0:11:48 I’d be like, I’m, I’m good.
0:11:49 And they’re like, what, you didn’t like the steak?
0:11:51 And I’m like, no, the steak was great.
0:11:52 They’re like, why aren’t you getting another steak?
0:11:52 I was like, I’m good.
0:11:54 They’re like, well, if you, if you like the steak, you’d get more steak.
0:11:58 And the thing is, is that so many businesses are trying to sell and upsell that way.
0:11:59 And they’re like, my customers suck.
0:12:00 They’re so cheap.
0:12:00 It’s like, no.
0:12:05 So at that point, I might have a, I might have deprivation around something that’s sweeter
0:12:08 and lighter, and that might be the right time to offer dessert, right?
0:12:10 Versus more of that other thing.
0:12:18 Now, um, the deprivation occurs at the same time as value creation when the first loop of
0:12:20 value that gets created creates the next problem.
0:12:24 So if I help you get leads and you get leads and then you’re like, holy shit, I’m overwhelmed.
0:12:26 If I say, Hey, would you like me to help you work those leads?
0:12:31 Then it’s a very natural upsell where greatest value and greatest deprivation at the same time.
0:12:36 If you are a business that doesn’t have that type of, I’ll just, I’ll just speak broadly.
0:12:41 If that doesn’t occur in your business or on a short enough timeline, then that you, you
0:12:42 don’t want to sell at that time.
0:12:43 Right.
0:12:45 And so that’s basically what we, we strive for.
0:12:48 And that’s why I’ve always been of the belief, like when someone comes in with red hot pain,
0:12:51 that’s when you sell, not when you offer your trial.
0:12:55 And so for, uh, let’s take, uh, you can use the gym.
0:12:57 We can use a different business if that, maybe, maybe that’d be nice.
0:13:02 If you can, what would you either, you know, either this or a money model, uh, well, you
0:13:05 know, you can either walk through a money model or you can walk through this for another business.
0:13:06 Let’s do another example.
0:13:07 Sure.
0:13:09 Let’s say you have a, uh, an SEO agency, whatever.
0:13:12 So if you actually, we can use one of my real businesses.
0:13:12 Okay.
0:13:14 So we have this business somewhere.com.
0:13:17 We basically help you find talent that is overseas.
0:13:19 So we help businesses where you’re like, oh, I really want a developer, but I’m not
0:13:20 trying to pay $150.
0:13:21 You were investing in that too?
0:13:21 Yeah.
0:13:21 Okay.
0:13:22 Got it.
0:13:22 That’s what I thought it was.
0:13:22 Okay.
0:13:23 Got it.
0:13:23 Yeah.
0:13:26 So we, we own this business somewhere.com.
0:13:31 So for example, I got my assistant through this, uh, you know, I’ll hire developers, graphic
0:13:33 designers, data analysts, whatever you need.
0:13:35 There’s talent is everywhere in the world.
0:13:36 Hard to find.
0:13:38 They put boots on the ground in different locations.
0:13:42 So South Africa, Philippines, and they have hundreds of recruiters in each of those areas
0:13:45 to find who’s the best 1% in each of those locations to come work for you this year.
0:13:46 Right.
0:13:47 Great business.
0:13:47 Great margins.
0:13:48 Love it.
0:13:50 Uh, happy, happy, happy owner.
0:13:51 Yeah, exactly.
0:13:52 Okay.
0:13:53 So now what’s the problem?
0:14:00 So today, the way our money model works is customer basically listens to Sean’s podcast.
0:14:03 Uh, we’ll just do this, uh, or they follow Nick on Twitter.
0:14:04 Yeah.
0:14:05 So we get leads from one place.
0:14:05 Exactly.
0:14:09 Not, not exactly fully, but that’s a bulk of it.
0:14:11 And they come in, they book a call.
0:14:19 And on that call, we try to sell them, um, a contingency based thing, which says, if we
0:14:23 find someone, pay us, um, a fraction of their salary.
0:14:27 Now they’re so low salary typically, because you’re getting talent from different regions
0:14:32 of the world that will come out to, let’s say, you know, maybe 6k per customer.
0:14:36 And what we do is that happens.
0:14:39 And then we stop and we go fishing again for the next one.
0:14:40 Yeah.
0:14:40 Okay.
0:14:43 Help us with our money model.
0:14:46 How would you, if I took, if I read this book and I want to go help Nick improve this
0:14:51 business, um, how would we improve our business by thinking in money models?
0:14:51 Yeah.
0:14:56 So the question would be like, do we need, so if I’m looking at this, right, we have attraction
0:14:56 offers.
0:15:01 So it’s like, do we have a big demand issue or do we have an LTV issue, which might be
0:15:01 upsells?
0:15:03 Do we have a conversion issue, which might be downsells?
0:15:04 All of the above.
0:15:05 Everything can be improved.
0:15:07 Or do we have a continuity thing?
0:15:07 Right.
0:15:16 And so there are different structures that lend themselves more to one versus the other
0:15:18 type of, type of problem, right?
0:15:18 That we’re trying to solve.
0:15:23 And so like for an attraction offer, if you’re like, you know what, let’s get a shitload more,
0:15:24 you know, phone calls in the door.
0:15:30 I would say, Hey, I just got this, uh, absolute savage.
0:15:31 And I would put like, this is the dude.
0:15:31 All right.
0:15:33 This guy is a fucking God, whatever.
0:15:36 Now, who here wants him?
0:15:42 And I would say the, the business that, uh, like we’re going to do a raffle and everybody
0:15:45 who, who submits to win this guy.
0:15:48 Now, obviously you got to be ethical and loyal, but assuming that you’re not a fucking idiot,
0:15:49 right?
0:15:51 Uh, this is, this is the guy that you’re going to get.
0:15:53 And you have to be a business that’s like this in order to qualify.
0:15:54 Cool.
0:15:57 So they’re going to enter their information in order to get in the raffle.
0:15:57 So they get this guy.
0:16:02 Now you’re going to say, we will pay for this guy for a year as our, as the deal, as the big
0:16:02 giveaway.
0:16:05 Not only is he amazing, we’ll also pay for him for a year.
0:16:09 And so that makes a huge, you’ll get a gigantic amount of demand, but what’s beautiful about
0:16:12 it is that the demand is for your most expensive or ideal product.
0:16:17 And so then at that point, the person, like every single other person who opts in is a qualified
0:16:23 lead who say, you know, we can’t give you Carlos, but we can give you so-and-so and you, uh,
0:16:24 we’ll give you a partial scholarship.
0:16:26 We’ll give you a partial win, whatever.
0:16:29 And you knock whatever off 10%, 20% off.
0:16:31 And then you roll that right into the continuity.
0:16:34 So that would be an example of an attraction offer that you could attach to that existing
0:16:35 thing.
0:16:38 From an upsell downsell perspective, it would be like, and there’s five different ones.
0:16:39 That’s just one that I pulled out.
0:16:40 That’s a giveaway.
0:16:42 Yeah.
0:16:48 And so like the, just for everyone’s listening, the, the, the weight loss version that I had
0:16:51 was something called when your money back, which is a different, was a different mechanism, right?
0:16:54 And so there’s, there’s five different ones that I think that work exceptionally well for
0:16:56 bringing people in, depends on the type of business.
0:16:57 And so for yours, there’s bikes go I free.
0:17:00 There’s a bunch of different versions, but like think this makes the most sense.
0:17:01 Cool.
0:17:01 We use a giveaway.
0:17:02 All right.
0:17:03 So then upsells and downsells.
0:17:07 So, um, with down, so I’ll, I’ll start from downsells.
0:17:09 So you can have feature downsells.
0:17:10 You can have free trials.
0:17:11 You can have payment plans.
0:17:14 Now for your particular business, payment plans doesn’t probably, that doesn’t really make
0:17:15 sense because it’s a continuity thing anyways.
0:17:18 And so it’s like, okay, we have free trials, which you kind of have with contingency.
0:17:22 So it’s like that parts, that risk is kind of, um, averted, but from a downsell perspective,
0:17:24 they might think, okay, well, I can’t afford six.
0:17:26 Now that’s a business decision more than anything.
0:17:28 I like to think of feature downsells.
0:17:34 So I can get you somebody who’s maybe not as PhD level, whatever, but we can do it for
0:17:34 three K a month.
0:17:38 And that person might give you more opportunities to say, yes, that would be the downsell component
0:17:39 from the upsell perspective.
0:17:42 There’s, there’s four different upsell structures that I like the classic upsells.
0:17:44 You can’t have X without Y, right?
0:17:45 Which is like, you can’t have fry.
0:17:46 You can’t have a Coke without fries.
0:17:47 You can’t have a burger without fries or whatever.
0:17:48 Right.
0:17:49 It’s like, what you can’t have X without Y.
0:17:53 And so it’s like, you don’t want to buy this big, you know, this big framed art without insurance.
0:17:54 Right.
0:17:55 So there’s always a, you can’t have X without Y.
0:18:02 And so, uh, the, so for here, because they said yes, naturally, you say yes to this next
0:18:05 thing in order to make your first decision and even more sound.
0:18:08 And this is why the whole deprivation thing that I was saying earlier is so important where
0:18:10 like, right now supplements.
0:18:10 Yes.
0:18:12 Cause some people are like, well, I don’t want to sell them something else.
0:18:15 It’s like, well, you just created this new problem that they weren’t aware of, which
0:18:19 you will now make them aware of, which is, oh, sometimes these guys flake out, whatever.
0:18:21 And so we have insurance that we can offer for, for this type of thing.
0:18:26 So me just shooting from the hip here, um, I was, I’m running through the different
0:18:26 mechanisms.
0:18:28 Easy one here in this situation is payroll.
0:18:29 So great.
0:18:32 They, a lot of companies are not set up to pay people all around the world.
0:18:34 We can manage that for you.
0:18:34 Yeah.
0:18:36 And we’ll do it for you for 500 bucks a month.
0:18:36 Yeah.
0:18:37 We’ll take care of this.
0:18:40 Cause you’re going to, you’re going to build out a remote team here all around the world.
0:18:44 You don’t want to be doing compliance and payroll and foreign exchange and tax reporting.
0:18:45 Yeah.
0:18:48 We take care of all that for you for, we have, we have an accounts team that does that.
0:18:48 Perfect.
0:18:50 And so that would be the natural upsell that you do.
0:18:51 You tack on.
0:18:53 And so some people, and I’ll just make this point.
0:18:57 A lot of business owners will, will think, well, why don’t I just include that in the
0:18:57 main offer?
0:19:04 So I’ll just say in my experience, it’s a lot of times as, as bad as this may sound, it’s
0:19:06 easier to get the second yes after you get the first yes.
0:19:12 And so like, it’s like, well, maybe if I included that, they’d buy it at six, $7,000 a month.
0:19:15 It’s like, yeah, but you might also just raise your price to $7,000 a month and then do it
0:19:15 again.
0:19:15 Right.
0:19:16 And then still have it.
0:19:19 And so, cause I mean, the amount of gyms were like, you know what, I’m going to, I’m going
0:19:21 to take the challenge system and then just include the supplements.
0:19:24 I was like, or you could just do it the way that I’ve already tried a hundred times.
0:19:27 Like, believe me, if I could sell more upfront, I would, it works better this way.
0:19:31 And I had this whole psychology around it, which is like, you have these different wallets
0:19:31 in my mind.
0:19:35 It doesn’t work this way, but like, it’s like, um, my grandmother should say this thing.
0:19:39 Like I would go there and probably like your family, like overfeed, she’d have, she’d have
0:19:39 enough food for 10 people.
0:19:41 And I go and see her on my own.
0:19:42 And I would just, she would stuff me to the gills.
0:19:46 And one time I went there with my dad and she had, she and I have different languages.
0:19:50 So she’s tough to talk to, but she said something under her breath after she walked away, after
0:19:52 I was like dying and he cracked up.
0:19:53 I was like, what did she say?
0:19:56 And, uh, he said, well, you said you were full.
0:19:59 And she said, well, your, your, your main stomach’s full, but your dessert stomach is empty.
0:20:00 Yeah.
0:20:04 And so it’s the same idea here where it’s like, well, their person wallet has been spent,
0:20:09 but their, their tax avoidance operation pain when a pain in ass isn’t.
0:20:10 And that one’s still full.
0:20:11 So we can still tap that one.
0:20:15 And so if we’re, if we’re drawing this, it’s like, okay, so we’ve got payroll as our upsell.
0:20:15 Cool.
0:20:17 And you’ll know your services better than I do.
0:20:20 Um, but it’s like, okay, so we have one or two things that we can include in the upsells.
0:20:25 Um, but the mechanism of doing it is part of, uh, like part of the money models book.
0:20:29 And so the X without Y, um, the way that we’d probably present it.
0:20:31 So each of that whole section is a lot more on the scripting of it.
0:20:32 Okay.
0:20:34 So it’s like, Hey, what a lot of people do is, uh, they do this.
0:20:35 Do you want anything else?
0:20:35 Do you?
0:20:38 And so when you say that everyone says yes by saying no.
0:20:42 And by that, it’s like, you get 80, 90% take rates on the upsell rather than saying, Hey,
0:20:45 do you want, it’s a, it’s a, it’s a binary.
0:20:46 It’s a different question, right?
0:20:47 Now they have to just consider a purchase.
0:20:52 And so all of them have like tiny little, little repositionings that work really well.
0:20:54 But that I think would make sense.
0:20:56 Like you’d say, uh, that’s, that’s the classic upsell.
0:20:57 There’s rollover upsells.
0:21:00 There’s, uh, which is one of my favorites is anchor upsells.
0:21:02 Um, which an anchor up.
0:21:08 So it would be like, let’s say, uh, you’re like, okay, if you want, uh, Nick will go find
0:21:10 the person for, I’m just making it up.
0:21:10 Right.
0:21:16 And he’ll do it, uh, for $15,000 up front and, you know, $10,000 a month.
0:21:19 Now at that point, they’re like, shit, it’s like, that’s a lot.
0:21:23 It’s like, or if you’re good with the exact same work being done by someone that Nick trained,
0:21:25 we can do it for one third the price.
0:21:27 And it’s like, oh yeah, that’s fine.
0:21:32 And so the key part is that you anchored them to the anchor is, is part of it, but there’s
0:21:35 also like, um, what you want to anchor.
0:21:38 And so the way I learned this was actually at a Salt Lake city, uh, suit place.
0:21:42 So I go in, a friend of mine sets up a private suit appointment with me.
0:21:43 Now I’m not balling.
0:21:44 I have like $10,000 in my name.
0:21:46 So I was like, he’s like, you got to have a boss suit.
0:21:48 If you want people to take you seriously, this is many years ago.
0:21:50 Obviously I’ve really listened to this advice.
0:21:53 Um, and so I go in there and the guy’s like, all right, I’ll get you.
0:21:54 And he asked me, what do you want?
0:21:55 I said, a boss suit.
0:21:57 And so I’m 23 or 24, something like that.
0:22:00 And so he puts this suit on me and he was like, what do you think?
0:22:01 I was like, oh, I look awesome.
0:22:05 And then I, uh, I looked at the tag and it was 16 grand.
0:22:07 And I was like, I, I think I turned white.
0:22:07 Right.
0:22:11 And I was like, oh, and I think he saw me like, just like freak out.
0:22:14 And he’s like, Hey, he’s like, do you care about the brand?
0:22:18 And I was like, no, not at all.
0:22:19 And he was like, I got you.
0:22:24 And so he, the thing is, is that he had his lineup already picked for me and he just pulled
0:22:25 the second one, put it on me.
0:22:26 And he’s like, what are you thinking?
0:22:27 I didn’t even look in the mirror.
0:22:30 I just looked straight at the tag and it was two grand.
0:22:31 And I was like, thank God.
0:22:34 I was like, okay, I can like, my friend’s not going to be embarrassed that he sent this
0:22:38 poor, you know, his, his muggle, his non-madge folks over peasant.
0:22:41 And so anyways, I ended up checking out that he was like, well, you want, you can’t have
0:22:42 this without that.
0:22:45 He was like, well, you want to make sure that you have the little pocket thing and you want
0:22:45 the socks, whatever.
0:22:47 So I ended up leaving for 2,500 bucks.
0:22:51 And I remember after I left, I was like, I spent five times more than I had budgeted
0:22:52 for this thing.
0:22:56 And I realized I was like, oh, but the key part wasn’t just that there was something expensive.
0:22:59 Number one is that you actually have to sell it as in, because sometimes people put anchors,
0:23:01 but they don’t really like commit to the anchor.
0:23:05 If you just say it and then immediately like don’t even acknowledge it, then it’s just like,
0:23:06 this is this thing we put in the sales process.
0:23:07 I don’t know why it’s there.
0:23:08 That’s dumb.
0:23:09 You have to commit to it.
0:23:12 Cause the thing is, is 10% of the time you have a whale and they’ll fucking buy it.
0:23:13 And you’re like, holy shit.
0:23:18 But the other 90% of the time, the key is that the thing that differentiates the anchor
0:23:22 from the core offer is a very negligible thing.
0:23:24 And so for me, the brand didn’t matter.
0:23:27 Or like, he might be like, do you care what kind of wool this is?
0:23:29 I’d be like, now somebody might.
0:23:31 And the reality is they probably don’t actually.
0:23:33 They just always buy the most expensive thing.
0:23:36 Like Layla just always ask what’s the most expensive thing.
0:23:37 And then she just buys it.
0:23:38 That’s how she rolls, right?
0:23:39 She just always wants the best shit.
0:23:40 You know, whatever.
0:23:42 But the thing is, is you want to have a model that allows for that.
0:23:46 And if 10% of people buy something that’s 10 times expensive, you double your revenue.
0:23:47 So it’s still worth it.
0:23:49 And that’s why the anchor should be super fucking high.
0:23:51 And so that’s an example of a different type of one.
0:23:55 But this one is a classic upsell, which would be positioned the way I said,
0:23:56 which is a no based, a no based yes.
0:24:00 We covered the downsell with a feature downsell and then continuity.
0:24:01 Now you already have a continuity business.
0:24:03 So there’s no real point to like saying, how do we, how do we do that?
0:24:06 But one of the, like, there’s a different mechanisms that I use in that, on that side.
0:24:08 But one of my favorites is like something called a waive fee.
0:24:11 So this works really well with expensive stuff.
0:24:17 So we would say, hey, for us to go find this person, it’s, it’s 10 grand up front.
0:24:20 Or I can waive it if you commit to a year.
0:24:23 And so you just waive the fee, but you get the commitment.
0:24:26 And the thing is, it’s like, oh, if you’re not sure, then just pay the 10.
0:24:26 You get month to month.
0:24:27 No sweat.
0:24:30 And so with that, also you say, and we would stack it.
0:24:32 So we’d be like, okay, we’re going to waive the fee.
0:24:33 We commit to a year.
0:24:37 And if for some reason doesn’t work out with Carlos, we’ll get you, we’ll get you another
0:24:39 Carlos within 90 days or whatever.
0:24:40 No, no cost.
0:24:45 And so then it’s like the, so you, you decrease cost and you decrease risk with the continuity
0:24:46 and commitment.
0:24:48 And we create artificial pain in the moment.
0:24:51 Now, what happens if they’re like, hey, six months in, I want to cancel.
0:24:52 It’s like, no worries.
0:24:53 Just pay the fee.
0:24:53 Right.
0:24:55 That I waived for the commitment.
0:24:58 So it actually creates a very simple contract, which is like, you just got to pay that on the
0:24:59 way out the door.
0:25:00 So it also increases stick.
0:25:04 So that’s like, it has like three prongs to it that makes it, but it’s very easy to understand
0:25:04 and very elegant.
0:25:07 And so that’s one of the continuity mechanisms that I use.
0:25:09 Hey, let’s take a quick break.
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0:25:35 All right, back to the show.
0:25:41 When I’m looking at a business, I’m running through the different mechanisms that we do.
0:25:42 Like, okay, we’re having issues.
0:25:44 We’re having a lot of friction here, right?
0:25:47 Now I’m guessing because you’re selling continuity on the front is probably not a huge deal, right?
0:25:48 Or, but maybe churn is, I don’t know.
0:25:52 But here it’s like, okay, which part of this process needs to get lubricated?
0:25:54 Is it we need to lubricate people coming in the door?
0:25:58 And that’s where we’d use a raffle or a giveaway or sweepstakes or something on the front
0:25:58 end.
0:26:03 Or it’s like, you know, like the thing is, is they’re signing for six, but we need them at 10.
0:26:04 It’s like, okay, well then we need to put…
0:26:05 We need to put more lubrication here.
0:26:07 Or, you know what?
0:26:10 We’re getting all these unqualified, like 80% of the leads that are coming in are unqualified.
0:26:11 We make the business decision.
0:26:13 We want to sell to these people.
0:26:17 Okay, we have a gross product, a gross margin product that’s sufficient that still makes
0:26:17 sense.
0:26:20 We still have 80% gross margins on this inferior product.
0:26:21 Okay, how do we present it?
0:26:23 And that’s where the downsell would actually become really key.
0:26:27 So I had a business that I close around in my head.
0:26:34 And what we did was for the downsell, we basically had a super high ticket thing that we were selling.
0:26:38 He’s a PhD for health stuff and he does all this like really weird health stuff for people.
0:26:41 I’ll just, if you have a problem, he’s the last person you go to and then he fixes it.
0:26:42 That’s his whole thing.
0:26:47 And so what we did, though, is we created a downsell that re-upsold people.
0:26:50 And so they’d get sticker shock and he would say, no worries.
0:26:56 If you want, I can do it for, you know, $2,000 less, but I just won’t include a guarantee.
0:27:00 And so then people were like, I kind of want the guarantee.
0:27:01 And then they’d re-upsell themselves.
0:27:01 Right.
0:27:04 The guarantee is worth that $2,000 to me.
0:27:05 Which actually gets to show you.
0:27:12 So then there becomes the art, and I talk about this in the book, of how much do I decrease price versus how much do I decrease value?
0:27:19 And so the play between those two, the more you study the customer, the more you understand which components they value the most.
0:27:26 And so typically when I’ll create a downsell structure, I’m going to think, okay, the first downsell I’m going to give is actually to re-upsell the main thing.
0:27:36 Now, if they really can’t because they clearly said no, even though it was a big issue, then I say the next one I’m going to do is going to be a tiny thing with a large decrease in price.
0:27:37 Right.
0:27:40 And so the first one, it’s like small decrease, big drop in value.
0:27:40 You know what?
0:27:41 I’d rather have the main thing.
0:27:45 The next one, though, I’m going to have a bigger drop in price with a smaller change in value.
0:27:47 Because at that point, price is actually the thing that’s stopping the sale.
0:27:53 And so then it’s basically how do I ethically lower my price without saying I’m selling different things to different people?
0:27:55 That way I can change the terms rather than saying it.
0:27:58 Because I never discount, but I will change terms.
0:28:01 Like, oh, no, they got something different than you, which is why they pay less.
0:28:02 If you want, I can give you that.
0:28:02 That’s fine.
0:28:04 But you just won’t get what you’re getting now.
0:28:08 And so that’s a little bit of a brief overview in terms of how I think through creating these.
0:28:16 But you can see right now, like if you were to do just even like a raffle once a quarter, it’s like that would probably feed all your leads for the next whatever.
0:28:22 Yeah, and I think one of the best parts about this is every business has some version of this, right?
0:28:24 This is a different way of looking at a funnel.
0:28:24 Yeah.
0:28:31 But the cool part of what I think you’re doing with your books is you’re basically taking the parts of the funnel off or getting leads through the door.
0:28:35 Being able to actually sell the first thing to them.
0:28:43 And how do you string together things to maximize the value you’re getting for every – that hard-earned lead that you already paid for and busted your ass for.
0:28:52 And one of the things I like about this is that you’ve basically codified a lot of what the best people do, but they do it in their business, then they get rich, and then they sort of relax.
0:28:52 Yeah, right, yeah.
0:28:52 Right?
0:28:53 Like I don’t need to go back.
0:29:00 I don’t need to even label what each of these things were, but you’ve sort of looked at it and said, okay, let’s call that an attraction offer.
0:29:01 What are five examples of those that I’ve seen?
0:29:03 And then you’re on the lookout for them.
0:29:05 You see it in this business and that business, and you start to put it together.
0:29:11 So I think that’s very, very valuable, even as a structured way of brainstorming.
0:29:16 Because I think most people in their business – most founders will understand, yeah, I got it.
0:29:19 I want to get more demand, and I want to make more money per customer.
0:29:19 Yeah.
0:29:20 But these are vague wishes.
0:29:20 Yeah.
0:29:24 And I think the key is to sort of not be most people.
0:29:26 I have this like rant about most people.
0:29:29 I’m like, you know, we try to fit in.
0:29:30 That’s our nature.
0:29:30 Yeah.
0:29:34 But it’s like most people in America are overweight or obese.
0:29:36 Most people don’t like their job.
0:29:37 Most people get divorced.
0:29:40 Most people don’t have enough money to pay for an emergency procedure.
0:29:44 You don’t want to be most people, yet you want to fit in.
0:29:44 It doesn’t really make sense.
0:29:47 And so I’d love to understand from you where – you see a lot of entrepreneurs.
0:29:48 Yeah.
0:29:53 When it comes to money models, what do you see is like – what are your most peoples that you’re seeing?
0:29:56 That if we just drew kind of like, here’s how most people are doing this.
0:30:00 And if you just made these sort of one or two tweaks, you’re now not in the most people bucket anymore.
0:30:02 You’re operating in a different way.
0:30:05 Your business is going to have a higher chance of success or be worth more.
0:30:11 I would say not enough entrepreneurs are students of business, and they’re students of the things.
0:30:12 And so I’ll give an example.
0:30:18 So, like, I will never claim to know more about remote work business or HVAC or plumbing or whatever.
0:30:22 But, like, people fly out here not for that, but because a very good understanding of the variables that create money.
0:30:25 And so it’s like, okay, how can we arrange these variables?
0:30:27 And then we will fit – like, you said the payroll thing.
0:30:28 I was like, okay, great.
0:30:30 You have a thing.
0:30:31 I’m not going to be the one who immediately knows that.
0:30:34 But I’ll be like, there’s a slot here that we’re missing, right?
0:30:38 And so one is they’re not big enough students of business.
0:30:42 Number two is a lot of times it’s like, well, this is what everyone else does, to your point.
0:30:44 And so, like, well, I’ll give you an example.
0:30:47 I had a guy who did guard services, right?
0:30:50 And so they staff, like, buildings like this, right, with guards.
0:30:55 And so he had huge cash flow issues because he – paper-thin margins, but it’s super sticky.
0:30:55 People stay forever.
0:30:59 And it’s very commoditized in terms of competing for bids.
0:31:07 And so, you know, after talking for, you know, extended period of time, I was like, okay, well, why don’t we just say that people pay quarter at a time and pay up front?
0:31:08 It’s just, oh, yeah.
0:31:10 And he’s like, well, no one does that.
0:31:12 And I was like, so let me give you the best overcome in the world.
0:31:14 Someone’s going to ask you, and they’re going to say, well, everyone else does it.
0:31:16 You’re like, we’ve just always done it this way.
0:31:17 That’s all you have to say back.
0:31:18 That’s all you have to say.
0:31:21 It’s always – it’s always why we’ve done it, right?
0:31:23 And as crazy as that is, that is still the number one overcome.
0:31:24 Perfectly legitimate excuse.
0:31:26 It’s still the number one overcome.
0:31:32 Like, when I used to ask for credit cards on the phone for someone to show up for, you know, personal training or a trial or something, like, most places do not do that.
0:31:34 But they’d be like, well, why do you need my card?
0:31:35 I’d be like, that’s just how we’ve always done it.
0:31:37 And then they’re like, oh, okay.
0:31:40 And so there’s all this – like, it’s so funny how some of these little lines just make huge differences in your life.
0:31:45 You, like, weaponize the uselessness of most processes.
0:31:47 It’s like we’re all so used to processes.
0:31:47 Stupid policies.
0:31:48 That are stupid.
0:31:48 Yeah, 100%.
0:31:50 And then we’re just like, oh, it’s one of those.
0:31:50 Got it.
0:31:50 From management.
0:31:51 And they’re like, oh, yeah, retarded.
0:31:52 Yeah, got it.
0:31:53 In.
0:32:07 And so one is – but, like, when I – I had to spend probably 30 minutes with him to just, like, just get him to just be okay with asking for the money, getting paid quarterly, number one, and getting paid before you do service rather than after you do service.
0:32:11 And so, I mean, everyone throws around the word first principles.
0:32:14 But it’s like, very few people actually think from first principles.
0:32:15 Like, what prevents us from doing this?
0:32:18 And I think that’s – like, this is the constraint, cash flow.
0:32:20 Then, like, what are all the things we can do?
0:32:23 Can we change payment terms, which is the first thing you’re going to do if you have cash flow issues?
0:32:25 Can we push our stuff out, net 30, always?
0:32:26 Right.
0:32:28 Like, how can we change this cash flow balance in our business?
0:32:31 What’s the money model of acquisition.com?
0:32:32 So this is really interesting.
0:32:39 So it’s so hard for me because what I have to write about is not the rules that I have to live by.
0:32:43 And so my favorite movie in the world is The Matrix, like many people’s.
0:32:50 But there’s the line in The Matrix when Neo’s looking at Morpheus and he says, so are you telling me that I can dodge bullets?
0:32:52 And he says, I’m telling you that when you’re ready, you won’t have to.
0:33:00 And so all of the things that I write about, like, even, like, selling tactics and things like that, they assume you have no brand.
0:33:07 And so, like, when you have a brand, you have so much demand and so little supply that you can set your own terms.
0:33:12 I can have zero attraction offer and make the absolute worst offer in the world.
0:33:17 I don’t have to make a Grand Slam offer at all because I might say, I don’t want to deliver much at all.
0:33:18 I will promise zero.
0:33:19 I will guarantee nothing.
0:33:23 And, like, but because then that’ll still give me less operational constraints on the back end.
0:33:30 And so at the end of the day, like, the reason I have the two parts of my logo are this is a lever and this is supply and demand.
0:33:33 And to me, those are the two biggest, the two biggest forces in business.
0:33:34 And so, like, if you have.
0:33:35 I always thought it was a whale’s tail.
0:33:36 That’s exactly what it is.
0:33:37 Yeah.
0:33:40 But, like, those are the two strongest forces in business.
0:33:46 And so all of these things are to help lubricate or create or channel demand when you have little.
0:33:51 When you have an ocean of demand, it’s hard to lose.
0:33:54 And so the model that we have is very different.
0:34:01 It’s almost like a word away model of, like, we, you know, we invite entrepreneurs out here who we think are interesting.
0:34:05 We look at the business and then we say, hey, change these things, call us in a year.
0:34:08 And that’s basically what we did.
0:34:11 We took our diligence process that we were doing for multiple years.
0:34:16 And I was like, the catalyst for it was that we had, we’re getting all these thank you emails.
0:34:18 So all these founders come in from my content or whatever.
0:34:22 And they’d be like, you know, my deal team took six calls with them.
0:34:25 And it was like, at the end was like, listen, these two metrics suck.
0:34:26 Do these things.
0:34:28 See how it works for a year.
0:34:28 Give us a call.
0:34:32 And they were like, this was the most valuable process I’ve ever gone through.
0:34:34 And then I was thinking, like, that cost me a lot of money.
0:34:35 Right.
0:34:38 And so I was like, well, what if I just charged for diligence functionally?
0:34:42 And then I got, then I could actually staff it better and all these other things.
0:34:46 And so that’s functionally what we do from the advisory practice that then feeds the deal side.
0:34:48 So you have the content, which creates the brand.
0:34:49 Yep.
0:34:55 What you did is you turned your cost into, whether it’s a profit center or break even, I don’t know.
0:34:57 But, you know, something like this.
0:34:57 This is your workshops.
0:34:58 Yeah.
0:34:58 What did you call it?
0:34:59 You called it something else just now?
0:35:00 Advisory practice.
0:35:01 Advisory.
0:35:01 Okay.
0:35:01 Yeah.
0:35:02 So there’s your advisory.
0:35:03 Yeah.
0:35:05 And you say, okay, pay us five grand.
0:35:06 Come over here.
0:35:06 Yeah.
0:35:09 But then you do have an upsell here to, like, more advisory.
0:35:09 Which is like, yeah.
0:35:15 So we just do, so basically from there, it’s, this is how we, basically how we see value creation.
0:35:17 And so we say, like, this is our framework for creating value.
0:35:20 If you like this, happy to help you.
0:35:21 If you’re like, this is cool.
0:35:22 I’ll go do this.
0:35:23 Awesome.
0:35:26 But the consulting side is true consulting.
0:35:27 It’s one thing.
0:35:29 Like, they come, we identify the constraint.
0:35:30 We say, okay, okay.
0:35:32 Well, we’re going to go look at comps.
0:35:35 We’re going to look at the different ad strategies of people who are bigger.
0:35:37 We’re going to say, this is the funnel and this is the offer that we think you should do.
0:35:39 And we say, this is all you have to do.
0:35:41 When you do that, call us.
0:35:44 And so it’s 100% from point to point.
0:35:46 It’s not like a ongoing thing.
0:35:47 It’s literally one-time consulting.
0:35:50 And that’s the quote, that’s the quote upsell.
0:35:53 And then at the bottom here, you have the equity side.
0:35:53 Yeah.
0:35:54 Where you’re like, great.
0:35:54 Yep.
0:35:55 The private equity side, right?
0:35:55 Yep.
0:35:57 You’re going to buy the businesses that.
0:35:58 Yeah.
0:35:59 And the venture arm now, which we do a lot of.
0:36:00 And venture.
0:36:01 Okay.
0:36:01 Gotcha.
0:36:04 Interesting.
0:36:07 When you started, how much of this was figured out as you go?
0:36:10 Versus grand master plan, visionary.
0:36:11 Well, there’s.
0:36:12 Turtleneck.
0:36:12 Some things were master.
0:36:13 Yeah, right.
0:36:13 Yeah.
0:36:20 Some things, I would say, the big goals for master plan, all of this mechanics was absolutely
0:36:21 like figured out as you go.
0:36:25 Like the books and how they’ve all been structured has been a five plus year plan.
0:36:29 And you’ll see what I do at the launch and why.
0:36:30 It’s going to be awesome.
0:36:34 But it will all be revealed.
0:36:40 But like the mechanics of like the prices and like how we do that, like that was very
0:36:43 much born from like, I am currently spending money on this team.
0:36:45 We have way more demand than we have supply.
0:36:48 Maybe if I can generate more revenue here, I can staff it better.
0:36:50 I can get more luck surface area because I can look at more of these deals.
0:36:52 Because you’ve probably seen this.
0:36:55 Like some companies look terrible on paper and then you meet them and you’re like, oh,
0:36:55 these guys are awesome.
0:36:56 Right.
0:37:02 And so we had to do so many like, I mean, we’d probably talk to 1% of the papers that would
0:37:02 come in.
0:37:04 And I was like, I know we’re missing stuff.
0:37:04 Right.
0:37:06 And so that was, that was basically the thesis behind this.
0:37:08 I mean, I think it was brilliant.
0:37:09 I was like, wait a minute.
0:37:12 So he’s basically gets paid for people to come and open up the kimono.
0:37:13 They get value too.
0:37:14 Otherwise they wouldn’t be doing it.
0:37:15 These are not dummies.
0:37:16 These are business owners.
0:37:18 Like they should be making good decisions.
0:37:19 But I was like, wow, that’s it.
0:37:21 The median size is 4 million.
0:37:23 So it’s not like they’re not small business.
0:37:23 It’s median.
0:37:25 So like there’s plenty of like tons of good businesses.
0:37:30 Every, every, every time we have a workshop, top one’s usually between 30 and a hundred,
0:37:34 you know, and there’s plenty in the eight, like every single, I don’t think we’ve ever
0:37:36 had one that doesn’t have multiple eight figure companies.
0:37:37 I want to play a game with you.
0:37:39 Do we have the, uh, the game here?
0:37:40 Oh, what is the, what is the game?
0:37:51 So the game was this, okay, so, so this is going to be a game that we’re calling make
0:37:52 it or take it.
0:37:52 All right.
0:37:53 So you’re going to have to shoot.
0:37:55 I don’t, I know, I know you’re not big in a battle.
0:37:56 We’re going to have to get up for this.
0:37:57 Yeah.
0:37:57 Okay.
0:37:59 So you’re going to take a shot.
0:38:00 Okay.
0:38:03 I’m going to see how far back we’re going to go here, but I think we’ll set that as the
0:38:04 benchmark here.
0:38:06 You make it, you’re off the hook.
0:38:07 Okay.
0:38:07 You miss it.
0:38:11 You have to take it with one of the tough questions that we spend the bottle.
0:38:13 I was like, I really like Alex.
0:38:15 And I was like, uh, what do people want?
0:38:16 So I asked people, what do you want to episode?
0:38:17 The guy puts out a ton of content.
0:38:18 Yeah.
0:38:20 You know, I’m not just going here to get views.
0:38:21 Like, well, yeah, let’s do something new.
0:38:22 Let’s do something fun.
0:38:24 And so they were like, ask him some tough questions.
0:38:26 So I said, okay, let me think of some tough questions, but let’s make it fun.
0:38:27 How we do this.
0:38:27 All right.
0:38:30 So first shot, uh, go for it.
0:38:34 And then you get a, if you make it, you ask you the question, if you make it, you can ask
0:38:34 me the question.
0:38:35 That’s fair.
0:38:38 Or I burned the question, uh, so it’s up to you.
0:38:39 So here’s the question at hand.
0:38:39 Okay.
0:38:40 What’s the question?
0:38:40 Perfect.
0:38:43 So the question is, what do your haters get right?
0:38:45 What do my haters get right?
0:38:51 Meaning all, you know, you get criticism as anyone does, but sometimes there’s, you know,
0:38:54 some criticism is fair or there’s, uh, components of it.
0:38:55 That’s fair.
0:38:56 So what do the haters get right?
0:39:02 Steroids is one, you know, he’s just, you know, he’s here for the money.
0:39:07 I would say from like the, the philosophical angle, you know, I would say there are people
0:39:13 who are like, uh, you know, the, say that like Alex doesn’t have a life and I’m like,
0:39:15 well, yeah, I’m pretty open about that too.
0:39:15 You know?
0:39:18 So it’s like, they will use a fact as an insult and I’ll be like, I agree.
0:39:19 Right.
0:39:21 So that’s, I think that qualifies.
0:39:21 I think that’s one, right?
0:39:26 Like, yeah, I mean, I’m intending it as a comment, but you’re like, yes.
0:39:27 And I agree.
0:39:27 I agree.
0:39:28 Yeah.
0:39:28 And if you, if only you knew.
0:39:29 And I’m open with that.
0:39:29 Yeah.
0:39:34 No, like, cause if you guys see, like I’m here seven days a week, like I work all the days
0:39:35 until I cannot work.
0:39:37 And then I take a day and then I continue to work again.
0:39:40 And I, I work 12 hours most days.
0:39:42 I’m usually here five to five, um, for six.
0:39:44 So it’s, is that a temporary thing?
0:39:47 Are you like, I’m in an era of my life where that’s what I want to do?
0:39:49 Or you’re like, that’s who I want to be.
0:39:51 It doesn’t feel, this doesn’t feel like a push.
0:39:55 Like if I, if I, when I’m pushing, I work third shift, which is I work 18.
0:39:58 If I do that for an extended period of time, that starts to grade at me.
0:40:01 But like 12s is like, that doesn’t, yeah.
0:40:02 Like five to five, five to seven.
0:40:05 I’m like, I still feel like I’ve got plenty of time to like chill out and do whatever.
0:40:07 All right.
0:40:08 This episode is brought to you by Mercury.
0:40:13 They are the finance platform of choice for over 200,000 companies.
0:40:17 Shouldn’t be surprised because I use it myself for not one, not two, but I have eight different
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0:40:24 And then I have my own personal account because now they have personal banking, which is a really
0:40:24 cool feature.
0:40:26 I highly, highly recommend it.
0:40:27 Like I said, I use it myself.
0:40:31 And the reason why is because the way that Mercury works is beautiful.
0:40:32 It’s very intuitive.
0:40:34 And you could tell that it’s actually made by a startup founder.
0:40:34 It’s an entrepreneur.
0:40:39 You could tell it’s made by somebody who used other banking products in the past and didn’t
0:40:42 like all the different rough edges and annoyances and decided to, you know, actually
0:40:43 fix it himself.
0:40:46 And really any type of entrepreneur you are, let’s say you’re an agency.
0:40:50 Well, one of the things every agency has to do is be able to send invoices, easily create
0:40:53 them, send them to customers and stay current on your balances with all your customers.
0:40:54 Well, you can do that inside Mercury.
0:40:56 And so I think that Mercury is great.
0:40:57 Highly recommend you check it out.
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0:41:01 For more information, check out mercury.com.
0:41:04 Mercury is a financial technology company, not a bank.
0:41:05 Check show notes for details.
0:41:07 Let’s do another question.
0:41:07 Yeah.
0:41:08 Okay.
0:41:08 Yeah.
0:41:09 Make it or take it.
0:41:09 All right.
0:41:10 Next question.
0:41:10 All right.
0:41:11 All right.
0:41:11 What do I got?
0:41:12 I love it.
0:41:13 All right.
0:41:16 If I reset your bank account and your followers, change your name and face.
0:41:20 So I reset you to zero, basically drop you in another, drop you in another life, not another
0:41:21 country.
0:41:24 How long do you think it would take you to get rich again?
0:41:25 And what’s rich?
0:41:29 Rich would be, let’s say for the name of this podcast, my first million to make a million
0:41:31 bucks, get a million bucks in your bank account.
0:41:31 A year.
0:41:33 And what would be the approach?
0:41:36 So you’re, you’re back to, to nameless, faceless, Alex.
0:41:36 Yeah.
0:41:42 Well, having lost everything twice, um, I’ll tell you what I did, uh, which was, I find a
0:41:46 local business that’s typically a service that I think, um, I can sell for a lot of money.
0:41:48 Um, and they’re typically undercharging.
0:41:53 And so I will say, Hey, how cheaply will you let me sell it?
0:41:57 Basically, if I, if I send you a hundred customers, how cheaply would you do it?
0:41:59 That would you charge me to do that?
0:42:03 And so I get an agreement on price from them and then I sell for whatever the hell I brought
0:42:04 you volume.
0:42:04 Yeah.
0:42:06 What’s the lowest you could deliver the service for that volume?
0:42:06 Yeah.
0:42:08 And so let’s say it’s a backcracker.
0:42:09 Let’s a chiropractor, whatever.
0:42:11 And I say, okay, um, how much will you crack back?
0:42:12 We’re at the absolute cheap service.
0:42:13 And he says, 25 bucks a session.
0:42:14 I say, okay, cool.
0:42:18 So I can sell packages of 10 for two 50 and you’re cool with it.
0:42:19 And he says, yes.
0:42:23 So I’m going to go and sell packages for three grand and I’m going to make the spread.
0:42:25 And it’s because I know how to sell and I know how to get leads.
0:42:25 Right.
0:42:27 And so, I mean, this is what I did.
0:42:30 I mean, obviously I did it in the gym space, but that’s, that’s what I did when I lost everything.
0:42:35 I just went to gyms and said, Hey, um, but for them, I could, I negotiated zero.
0:42:38 So like you already have all your cost basis.
0:42:39 I’ll just add you customers.
0:42:41 And then after the first month, exactly.
0:42:43 So I would, I would take the first, the 500 bucks.
0:42:44 I’d say like, I get to keep that.
0:42:46 And then after six weeks, you can confirm the memberships are all yours.
0:42:48 So zero CAC for you.
0:42:49 I take all the risk.
0:42:49 I do all the work.
0:42:50 Right.
0:42:54 And that’s, and then I would, I did about a hundred grand every 21 days doing that.
0:42:56 Is there a better or worse type of service business that you’d go for?
0:42:58 Like knowing what you know now, like maybe I sold to gyms.
0:42:59 I’d for sure do healthcare.
0:43:00 Healthcare.
0:43:01 Oh my God.
0:43:01 Healthcare means what?
0:43:03 White lab coat.
0:43:04 Anything.
0:43:04 Any service.
0:43:07 Like pseudo, I call it pseudo medical.
0:43:07 Okay.
0:43:09 So that’s where like, I mean, that’s why I like teeth whitening.
0:43:11 That’s, we have a chain of 28, 28 stores.
0:43:13 Like I love pseudo medical stuff.
0:43:19 So, uh, laser, you know, uh, laser, laser skin stuff, laser hair removal, uh, you know,
0:43:21 the, the chemical peels.
0:43:24 Um, I love all that stuff.
0:43:29 Like the, the beauty medical like intersection, you can just sell your eyes out.
0:43:29 It’s amazing.
0:43:30 What’s the, why you love it?
0:43:31 Because of the demand?
0:43:34 Because it’s huge supply demand, uh, inequality.
0:43:36 So there’s, if you see, if you look at the stats there, it’s insane.
0:43:40 Like the amount of demand of like boomers and all this stuff, you like want to stay young
0:43:42 and the supply side on it is so low.
0:43:46 And the reason I know this is because every single med spa that walks in these doors is
0:43:47 killing it.
0:43:49 And I talk to the founders and I’m like, whoa.
0:43:50 And I’m like, so how do you market?
0:43:52 They’re like, we just kind of like open up.
0:43:54 We just, we just announced that we’re there.
0:43:54 We have a website.
0:43:55 Yeah.
0:43:56 No, they’re like, yeah, we have a phone number.
0:43:57 People just kind of come in.
0:43:58 I was like, they don’t know.
0:43:59 That’s not, that’s not how it works.
0:44:03 That’s not how most, that’s how, that’s how crazy the supply demand difference is.
0:44:04 And they don’t think about pricing.
0:44:05 They think about nothing.
0:44:07 They just, and they make, you know, 40% more.
0:44:07 They have no idea.
0:44:09 And so that’s why I would go there.
0:44:10 That’s like a hate signal for you.
0:44:10 Yeah.
0:44:11 That’s a hundred percent.
0:44:14 When I’ve, when I see a lot of people who don’t know what they’re doing, all making money,
0:44:15 I’m like, okay, there’s something there that’s good.
0:44:18 And so that’s what I would do.
0:44:19 Cause that’s what I did do.
0:44:19 Right.
0:44:21 Thank you.
0:44:21 All right.
0:44:24 Let me get, let me get another question here that I want to do.
0:44:24 Cause I got a couple.
0:44:25 Yeah.
0:44:27 Cause it’s like, if you need to make a hundred grand to a million bucks, you could do that.
0:44:31 Like if you just, if you know how to generate leads locally and sell, you just get a service
0:44:33 business that agrees to take customers for a price.
0:44:35 And then you just sell as much as you can.
0:44:36 All right.
0:44:36 Go ahead.
0:44:41 You want me to burn it?
0:44:41 You can ask me.
0:44:42 What are you doing?
0:44:44 What did you get most wrong in the past three years?
0:44:45 Okay.
0:44:46 I’ll tell you this.
0:44:49 I started with a bit of a portfolio approach.
0:44:54 So I kind of had this thing where I was like, I don’t want to operate, but these guys are
0:44:55 operating well.
0:44:58 I can add a bunch of value similar to what you guys do at private equity or whatever.
0:45:04 And I took minority stakes in several companies that have done well, but basically when they
0:45:09 do well and I add value, I just sit there wondering why the hell don’t I own more of this company.
0:45:14 And I realized that I could have made more and really simplified my life with one great
0:45:14 business.
0:45:18 Like it doesn’t take many great businesses to get to the next levels of wealth.
0:45:21 You know, business can be worth a hundred million, 500 million, like they can get very
0:45:22 big.
0:45:26 And so I would have been better served doing less and I got it wrong.
0:45:29 I thought that I was being, I thought I was playing the game at a bit of a higher level.
0:45:34 When in actuality, if I just kept it simple, picked one of those businesses or built
0:45:39 one, one great business, I could have done better than I did spreading my focus with
0:45:40 less work.
0:45:41 I made the same mistake.
0:45:42 Yeah.
0:45:45 We did, we did 24 deals in 24 months and then we consolidated down to five.
0:45:46 Yeah.
0:45:48 Like you just, it’s, it’s, I mean, it’s 80, 20.
0:45:49 Yeah.
0:45:49 You’re like, wow, that was dumb.
0:45:52 Power law applies at basically all levels of life.
0:45:52 It still rules.
0:45:53 Yeah.
0:45:53 All right.
0:45:54 Let’s do the next one.
0:45:54 All right.
0:45:56 All right.
0:45:59 Now I’ve got, now I’ve got my, my, I’ve got to move the benchmark.
0:46:00 All right.
0:46:02 I was going to ask you, uh, this one’s funny.
0:46:04 Should entrepreneurs, should successful entrepreneurs get a prenup?
0:46:09 Um, should’s tough as a, as a frame.
0:46:10 If it’s your kid.
0:46:11 It’s my kid.
0:46:13 Uh, well, if they’re my kid, then they’re going to have my money.
0:46:14 So yeah, I’d say, yeah, get it.
0:46:21 I mean, um, for me, I, I asked Layla basically, it’s like when you, you want to, you want to
0:46:25 have a prenup in the, when you have somebody who doesn’t want to sign a prenup.
0:46:29 Like that’s like, that’s the only, that’s the only way I can say it.
0:46:29 Yeah.
0:46:34 It’s actually, so like, um, Layla and I, um, I thought I was like rich when I met Layla,
0:46:36 which I wasn’t, but like, I thought I was rich.
0:46:39 Um, and I said, will you sign a prenup?
0:46:40 And she was like, sure.
0:46:40 Like, I don’t care.
0:46:41 I don’t want your shit.
0:46:44 And so we were on the way to the courthouse to get it the notarized or whatever.
0:46:49 And in a dramatic flair, I, uh, tore, I tore it, I tore it and threw it out the window.
0:46:53 Um, because I like, it was so not a thing.
0:46:54 She was like, I don’t want your shit.
0:46:55 Like, it’s fine.
0:46:58 And I believed her and like, we’ve built everything together.
0:47:02 So, um, but I think that is very risky advice.
0:47:06 And so I would say the vast majority of people should have, like, should strongly consider it.
0:47:08 Romantic.
0:47:08 I like it.
0:47:09 All right, here we go.
0:47:10 I’m going to give you one.
0:47:10 Okay.
0:47:11 I like this question.
0:47:12 So I’ll do this one.
0:47:13 Oh, perfect.
0:47:13 Bumped in and out.
0:47:14 I know this is an easy one.
0:47:16 This is actually not that tough a question.
0:47:20 Um, if you could only follow three people on X, meaning if you had to slim your content
0:47:25 diet down to bodybuilder mode where it’s like chicken and broccoli or whatever, who’s your
0:47:27 chicken and broccoli of your content diet?
0:47:32 People you genuinely, you genuinely value what they’re putting out there on, uh, I think
0:47:33 maybe Twitter is one of your big platforms.
0:47:34 Yeah, no, it is.
0:47:37 I mean, Elon would be one.
0:47:41 Um, so I have two more, two more people to, to, to use.
0:47:47 Oh, um, you know, it’s weird.
0:47:49 I’m actually, I totally like use Twitter.
0:47:52 Like, uh, like I just like let it serve me, whatever.
0:47:52 Right.
0:47:54 And so I just like love all the threats.
0:47:54 Yeah.
0:47:56 I just like, kind of like just let it feed me, whatever.
0:48:00 Um, I’m trying to think about the other accounts that I would be like, oh, if I would, I’d miss
0:48:01 them if I didn’t see them.
0:48:02 Right.
0:48:03 It’s actually hard.
0:48:05 It feels like I’m like, who are two or two years?
0:48:06 Who are two years?
0:48:08 Um, Naval would be one.
0:48:08 Okay.
0:48:09 Naval’s a good one.
0:48:13 Um, you know, the others, I mean, I would cheat and be like the news aggregators.
0:48:16 So it’s like, oh, at least I get all that, but I wouldn’t actually pick that.
0:48:22 Um, you know who I actually think puts really good content anchor from Carrie.
0:48:23 Okay.
0:48:23 Yeah.
0:48:24 I actually like his stuff a lot.
0:48:25 Interesting.
0:48:25 Yeah.
0:48:26 I like his stuff.
0:48:27 That probably my second one.
0:48:31 Just as a very tactical, very, Oh, you know, I love George Mack stuff.
0:48:31 Yep.
0:48:32 George Mack.
0:48:33 Although I’d, I’d cheat.
0:48:34 I’d be like, just text me the thing.
0:48:36 No, George is really good.
0:48:37 I actually really like George’s stuff.
0:48:37 Yeah.
0:48:40 Now as I’m thinking about it, it’s like, say how puts good stuff out.
0:48:42 Um, obviously Williamson puts good stuff out.
0:48:46 So like, yeah, now that I’m, I’m thinking through it, it’s like, I have like this blank, but no,
0:48:49 I like, I think George, George just has some of the most unique takes.
0:48:49 Right.
0:48:50 And I think that’s why I like his stuff a lot.
0:48:51 Yeah.
0:48:51 All right.
0:48:52 Well, thank you for playing.
0:48:52 No, dude, thank you.
0:48:53 Make it or take it.
0:48:54 You took the tough questions.
0:48:55 Promozy hot hands.
0:48:57 Hard questions.
0:48:59 Yeah.
0:49:03 The, the three, you know, the biggest errors, man, that’s a, cause it’s like, which ones
0:49:04 cost me the most?
0:49:06 And then which ones did I miss the opportunity the most?
0:49:12 So it’s like, I have, it’s like, I, it’s like, just based on the, like, I, I thought I’ve
0:49:13 really beat myself up on this.
0:49:19 I have missed more a hundred million dollar net gains and multiple a hundred million dollar
0:49:22 net gains than I have made, which makes me really angry.
0:49:27 Um, but then I thought about it and I was like, you always say no to more deals than you
0:49:27 say yes to.
0:49:32 So you’re always going to miss, you’re literally going to miss more winners than you have.
0:49:33 Right.
0:49:36 But like, but like ever, I could tell you all, like, it’s like, I say their names before
0:49:37 I go to sleep at night.
0:49:42 Like I’ve, like one of them, yeah, and some of them I’m like, I should, like this one was
0:49:46 in the, like, I, there’s no, like there was a gym franchise, like buddy of mine, I’ve known
0:49:46 him for years.
0:49:47 He’s been in the business for 30 years.
0:49:49 He finally went on his own to start a franchise.
0:49:54 Um, and then I, I was like, we need to do the business this way.
0:49:56 And he’s like, I just, I just want to run a franchise.
0:49:58 Cause I was like, dude, let’s just privately own them all.
0:49:58 It’s a great model.
0:50:01 And I was like, I’ll fund the whole expansion.
0:50:04 And he’s like, I’ve already sold 40 units.
0:50:05 Like I, you know, I don’t want to flip back.
0:50:11 And, and so I ended up like not doing the deal and he’ll exit for probably 120 million.
0:50:16 Um, and this is in three years and I, I was going to, it was for 50% of the company.
0:50:18 And I was just like, he was a friend.
0:50:22 It was fitness for, I was like, there’s, I should not have missed this deal.
0:50:23 You know what I mean?
0:50:27 Uh, there’s a content creator that I, that I love and have followed for more than 10 years.
0:50:33 Um, talk to them, you know, we had a, uh, we were going to get a 33% stake in the company.
0:50:40 And from the time that I, we said no to the deal, I’d say 24 months later, they’re now probably
0:50:41 150 million dollar company.
0:50:47 And it’s just like, I have a, I have like four or five of these ones that I’m just like, I
0:50:49 should like, that was like that one.
0:50:55 And I said no, because I knew the amount that he, he slash they wanted from me was going
0:50:57 to be more than I wanted to commit to.
0:51:01 Like I, it was like, I think they saw it as like an aqua hire and I was like, I’m not going
0:51:04 to like, I will do this, but I’m not going to dive in.
0:51:10 I had a moment like this and in Silicon Valley, I was, I thought I was saying my big miss.
0:51:11 Yeah.
0:51:12 I was like, I forget which one it was.
0:51:13 It was maybe it was like calm or something.
0:51:17 I was buddy with Alex and you know, he was like raising it probably like a four or $5 million
0:51:18 valuation.
0:51:18 It’s now 2 billion.
0:51:19 Right.
0:51:23 So I could have easily written a check into calm disregarding the fact that at the time
0:51:25 I had no money, it was not angel invested.
0:51:28 There’s many reasons I missed that in addition to just not thinking it was going to be a winner.
0:51:29 Yeah.
0:51:34 But besides that, I, I was telling some story about one of these, one of these misses.
0:51:36 And I thought I was like sounding cool because I missed it.
0:51:39 And literally I just got big dogged by this guy at Silicon Valley.
0:51:41 He was just like, he’s like, okay, welcome to Silicon Valley.
0:51:42 He’s like, what are you talking about?
0:51:46 Everybody, anybody has baskets of these.
0:51:46 Are you kidding me?
0:51:47 You want to start?
0:51:48 Like I could, how much time?
0:51:52 There’s like Facebook number one, Uber’s first and second round.
0:51:52 Exactly.
0:51:53 It’s like, oh, I wrote the check.
0:51:54 I missed, did the date.
0:51:54 You know what?
0:51:56 How many different versions of this?
0:51:57 And he, but he said something smart.
0:51:58 You know, he was first, he was like, shut up.
0:51:59 Basically.
0:51:59 He’s like, shut up.
0:52:02 You think this is like a really cool, unique story?
0:52:02 Yeah.
0:52:03 Not only is this not cool and unique.
0:52:07 It’s actually just a standard cost of entry if you’re going to play this game.
0:52:07 Totally.
0:52:08 So like, what are you talking about?
0:52:08 Yeah.
0:52:11 But the second thing he said was, he’s like, I think you’re taking the wrong lesson from this.
0:52:14 Because I was focusing so much on what I missed out on.
0:52:14 Yeah.
0:52:19 Versus what the root cause analysis of why didn’t I do this?
0:52:19 Yeah.
0:52:19 Oh, okay.
0:52:22 And I’ve actually since then changed this where it’s like, actually a lot of these misses
0:52:24 were like deals I liked.
0:52:24 I wanted to do.
0:52:25 They want to do it.
0:52:29 We just didn’t chase or kind of follow up enough to like make sure a transaction goes through
0:52:32 because doing a deal takes a sprint at the end.
0:52:35 And then we actually like operationalized a bunch of those.
0:52:41 Once we got over ourselves and the kind of weird ego of missing, you know, life got a lot
0:52:44 better for us, but I had to learn that the hard way.
0:52:46 But that was probably a big one.
0:52:50 And then a lot of my big misses have been like strategic mess ups.
0:52:53 Like one of the big, like one of the biggest errors I ever made at Gym Launch was I started
0:52:55 Allen, the software company.
0:52:58 And I should have built a CRM for gyms.
0:53:00 And that was like, I had the right idea.
0:53:01 What did Allen do if it wasn’t?
0:53:02 It just, it worked leads.
0:53:04 Because the biggest pain point they had was working leads.
0:53:05 CRM wasn’t a pain point.
0:53:09 But from a monetization perspective, if I had put them all on the platform, then I would
0:53:10 have all their metrics.
0:53:10 I would have been to control revenue.
0:53:12 There’s so many things I would have been able to do.
0:53:15 You could have used the pain to get them into like the sticky forever product.
0:53:15 100%.
0:53:19 And so like, that was like, that was probably a $300 million miss.
0:53:20 And so like, that sucks.
0:53:24 Like, I’ve, that’s probably like my biggest strategic miss I’ve made.
0:53:28 Where I’m like, I literally allocated capital to build technology and I built the wrong one.
0:53:29 Right.
0:53:31 Like, but I didn’t know enough.
0:53:32 I mean, I was 27, you know.
0:53:35 On the other side of the coin, what are the biggest hits that have happened post the gym
0:53:36 launch and whatever?
0:53:37 This building.
0:53:41 So this was like an unexpected, like, wow, this was way, way more alpha than I would have
0:53:42 guessed.
0:53:42 What do you mean by that?
0:53:46 Like the, literally the real estate value or you mean just the serendipity of doing an
0:53:46 office?
0:53:46 No, no, no.
0:53:49 The fact, so I bought this building before we did any, like, it was just like, I just wanted
0:53:50 a place of a gym.
0:53:52 So like, I was like, I’m going to, I’m going to buy the building.
0:53:56 And, um, Layla was like, we don’t like, we’re all remote.
0:54:00 And we have like, you know, with the, on the, on the, just the pure hold co, I think at
0:54:02 the time we had like 15 employees just on the investment side.
0:54:07 And I was like, and so, and so anyways, I was like, I really want this building.
0:54:09 Cause it was the, it was old UFC building.
0:54:09 It’s kind of cool.
0:54:14 Um, I was like, I will figure out a way that it will pay for itself.
0:54:14 Right.
0:54:19 And so the only reason the advisory practice got stood up was because I was like, well, we
0:54:20 have this space.
0:54:23 I was like, let’s just, I’ll make a post to see if anyone wants to come out.
0:54:27 And then that’s what sprung that’s like, oh, there’s huge demand for that in person versus
0:54:28 remote stuff.
0:54:30 And so then it was like, great.
0:54:32 So we meet all these businesses and we generate cashflow.
0:54:37 So it’s like both things, but like this for sure, like that whole thing would not have happened
0:54:38 if we didn’t have a building, like zero chance.
0:54:39 I wouldn’t have done it.
0:54:41 Cause I, it was just like, I have the space.
0:54:42 Let’s try.
0:54:43 I just would never have taken that leap.
0:54:44 Right.
0:54:47 So that was probably a huge, like, didn’t guess it was going to be a win-win.
0:54:51 That’s probably like the biggest, the biggest one that’s like that.
0:54:55 Plus, I mean, you’ve got like, you know, Michael and a bunch of other guys who are here all
0:54:58 the time now, which I think it was very tempting and very easy to be fully remote.
0:54:59 Yeah.
0:55:05 And I think remote works, remote works, but in like the business Olympics, the people who
0:55:06 are serious about it, they’re going to be together.
0:55:07 They’re going to be co-located.
0:55:11 You know, like I paid Diego, I was like, move across the country.
0:55:12 I’ll pay you more.
0:55:16 Just live as like, the rule is here’s a five minute radius from like, we know where I live.
0:55:17 Yeah.
0:55:17 Pick a place.
0:55:22 You know, that’s the only rule of coming out here because there’s, you know, you can’t
0:55:23 really replace that.
0:55:23 Oh, totally.
0:55:24 We’re 80.
0:55:25 So now we’re 80% in person.
0:55:28 And so I think we’re at like 90-ish employees, something like that.
0:55:33 And so the only thing that we allow as remote is infrastructure.
0:55:36 So HR, well actually HR is here.
0:55:39 So like, but finance can be remote.
0:55:41 Certain tech roles can be remote.
0:55:44 Legal can be remote.
0:55:46 This has actually become my favorite podcast question.
0:55:49 I don’t know if you have a good answer to this because I think you’re so locked in and focused
0:55:50 on what you do.
0:55:53 But just what are you, what are you like really interested in lately?
0:55:58 Like what are you very obsessed with lately that’s not your core day-to-day work?
0:56:02 Meaning, not like a hobby, but just like, dude, I’m kind of fascinated by this.
0:56:03 Or just like, keep reading about this.
0:56:06 Or I keep wanting to meet people in this, doing this thing.
0:56:07 What’s that thing?
0:56:11 I only have two and they will not be, well, one’s the trite answer, which is like, I’m
0:56:12 reading up on AI just like you are.
0:56:14 And I spend a ton of hours looking into it.
0:56:19 The other thing is completely unsurprising is that I’m actually really into gym equipment.
0:56:22 Like I, I, like my Instagram is gym equipment.
0:56:23 It’s gym equipment.
0:56:25 Are we talking like novelty gym equipment?
0:56:29 Or what do we, like, like kind of like, I get all these, like your neck cracker, Achilles
0:56:29 machine.
0:56:29 No, no, no.
0:56:31 Mine’s like commercial, like giant.
0:56:31 Industrial.
0:56:32 Yeah, yeah.
0:56:34 Like, like the stuff that you see at gyms.
0:56:35 And why are you so interested in that?
0:56:37 What’s, what’s, get me interested in it.
0:56:41 Well, if you, like, if you train hard, like you start to notice that like some, some machines
0:56:42 are better than others.
0:56:43 And like, why are they better?
0:56:46 And then you start looking at like force curves for like, okay, where does the, you know,
0:56:47 where’s the tension the highest?
0:56:51 And then it’s like, does it correspond with where hypertrophy is maxed out for like the range
0:56:55 of motion for the muscle and like, just like, what’s the feel of the, of the, of the equipment
0:56:58 and the range of motion and the adjustability and, and like, what, like what kind of bearings
0:57:01 are they, like you can get, you can go like pretty far into this.
0:57:01 Yeah.
0:57:06 Um, and so I’ll say this, there’s the, there’s this, a new thing that came out, it’s called
0:57:07 the Vultra.
0:57:10 I’m not sponsored, um, by beyond power.
0:57:17 And I think that, I think in, I think 10 or 15 years, gym equipment will look very different
0:57:19 and it has not changed for a very long time.
0:57:25 And it’s because, uh, basically magnetic resistance hasn’t, wasn’t a thing.
0:57:26 And now it is.
0:57:29 And so like a Vulture, for example, is it’s like a brick, it’s literally the size of a
0:57:29 brick.
0:57:31 It’s this big, it can get to 200 pounds of resistance.
0:57:32 Right.
0:57:36 But not only that you can do single pound increments, which is amazing for strength work.
0:57:40 Cause like most people, the like side note for anybody, a lot of reasons you get stuck
0:57:45 at a, at a, at a machine or on dumbbells is because the percentage jump is too big.
0:57:47 Like girls with dumbbells, it’s like the worst.
0:57:49 They go from 20 to 25 pounds for a girl.
0:57:52 It’s a 20% jump in, in, in, in weight.
0:57:54 And so they just can’t make the jumps.
0:57:54 They just get stuck.
0:57:59 Whereas like the perfect gym would have literally a hundred dumbbells that are one pound, two
0:58:00 pound, three pound, four pound, all the way up.
0:58:01 And then you can make this progressions much easier.
0:58:03 So anyways, it goes single pound increments.
0:58:05 You can also change the eccentrics.
0:58:07 So you can have it be way harder on the way in versus the way out.
0:58:10 And, uh, the next thing is that you can change the curve.
0:58:12 So you can make it like, uh, really hard at the front.
0:58:14 So for any kind of pulling movement, you want to heavier here.
0:58:16 Cause you’re stronger here, lighter here on the flip side.
0:58:18 If you’re doing pushing movements, you want to be lighter here, you know, heavier here.
0:58:20 And you do that by just telling it the movement.
0:58:21 Yeah, you can just move the curve.
0:58:22 You can change the curve.
0:58:24 You can manually change the curve.
0:58:27 Uh, and so because of that.
0:58:28 Is this the European company, by the way?
0:58:29 I don’t know.
0:58:31 I, I, somebody sent me this.
0:58:35 They were like, cause I was buying the Dove, the Bowflex like adjustable, like two dumbbells,
0:58:36 but you can do all these weights.
0:58:38 And he’s like, I really want to get it, get these.
0:58:40 And I think I just wanted to be the one.
0:58:41 That’s probably a new bell.
0:58:41 Okay.
0:58:42 Maybe that was the one.
0:58:42 That’s probably what it is.
0:58:46 But yeah, the, the best ones right now are the Rep slash Pepin adjustables.
0:58:47 They go to 120 and they’re all metal.
0:58:48 There’s no plastic.
0:58:53 It was, I mean, like I can talk to women, um, but that is probably my, uh, I’ll circle,
0:58:55 I’ll close the loop on the, on the Vulture thing.
0:58:59 The reason that I think it’s so interesting is that like all the selectorized pieces you
0:59:00 see stacks of weight, right?
0:59:02 You put a pin in it and there’s the stack.
0:59:05 Those, they take up so much room because you have to have room.
0:59:08 We have to balance the piece of equipment from when people are moving it.
0:59:11 Um, and the stack takes a huge amount of space.
0:59:16 And from a shipping perspective, it’s so expensive to ship 400 pounds plus the machine, right?
0:59:18 And so it takes more square footage.
0:59:19 It’s more expensive.
0:59:20 It has smaller increments.
0:59:21 You can’t change the strength curve.
0:59:22 There’s all these reasons.
0:59:27 And so they find, like the tech is finally there where I think that there will be a next
0:59:30 generation of machines where they will only have the electronic.
0:59:31 Yeah, exactly.
0:59:33 And you just literally plug it into the wall.
0:59:36 And the thing is the square footage will be smaller.
0:59:40 The actual machines will be cheaper because this is, Vulture is Gen 1.
0:59:43 As soon as like, like in five generations, it’ll be $200.
0:59:47 Right now it’s 2000 for the brick, but it’ll be cheaper than weight.
0:59:57 As soon as it’s cheaper than mass-based iron, there’s basically no point to having mass-based
0:59:58 resistance.
1:00:02 So I get very excited about that stuff because I think it’s going to be really cool for gyms
1:00:06 because I mean, I obviously come from that space, but the amount of things that you can
1:00:07 now be able to do as a gym owner.
1:00:08 Now, I don’t own a gym right now.
1:00:10 I do own a gym, it’s just not commercial.
1:00:16 There’s so many more things you can do with customers that like your ability to do like
1:00:18 true hypertrophy training in a large group setting.
1:00:21 When you have that type of resistance, it’s safer.
1:00:23 You can’t get hurt on it.
1:00:25 Like there’s all these things that are beneficial for it.
1:00:28 So I think that that’s my, that’s my 10-year call that people aren’t expecting.
1:00:31 I think it’ll, I think a huge amount will be magnetic resistance.
1:00:32 It’ll be cheaper for gym owners.
1:00:36 They don’t break as often, incremental, all the reasons I said, and it’s less space.
1:00:38 Dude, that was a sick answer.
1:00:41 That was the one I was like, I don’t even know if I’m going to ask.
1:00:44 I feel like he’s going to tell me like, I really liked writing this book and I’m
1:00:45 like, okay, well, great.
1:00:46 No, gym equipment.
1:00:47 Have you seen my gym?
1:00:48 No, I haven’t.
1:00:48 I’ll show you.
1:00:49 Okay, yeah, that’s cool.
1:00:50 Yeah, you’ll see it and be like, oh.
1:00:54 You said you’re geeking out on AI, anything like, what’s it, you use it a ton?
1:00:54 What do you use it for?
1:00:55 Yeah, I use it a lot.
1:00:59 I use it, I mean, I feel, I, I just say I’m ashamed.
1:01:03 I use it all the time and I am ashamed that I’m, my use cases.
1:01:07 I know I should be using it better, which I think many people feel that way, but I feel
1:01:11 like at all levels, everyone feels like they should be using it more, but.
1:01:13 There should be a word for like AI guilt.
1:01:14 Yeah, yeah, yeah.
1:01:16 There’s like overwhelming sense of AI guilt.
1:01:17 Yeah, I think Elon has AI guilt, you know what I mean?
1:01:24 So, I would say like, I’m, the most interested part that I’m in for like where I’m focused
1:01:25 on AI is actually phones.
1:01:27 Because obviously I come from the sales background.
1:01:30 And so, that use case, like, I want.
1:01:31 Like phone call?
1:01:31 Yeah.
1:01:34 Like sales calls, customer support calls.
1:01:39 Like right now we have, we have fully implemented AI support and it’s crushing.
1:01:42 It’s doing so, it’s like, it’s amazing.
1:01:46 So, right now over 90% of all tickets are being resolved entirely with AI, which is, I mean,
1:01:48 you have an e-commerce, but are multiple, right?
1:01:49 Like, it’s so, it’s amazing.
1:01:53 And like, the, like, I’m getting, I’m getting these thank you emails.
1:01:54 Like, you guys rock.
1:01:55 Like, this was two minute response.
1:01:56 Like, you guys are on it.
1:01:58 And like, the whole thing’s AI.
1:01:58 Right.
1:02:04 And so, I’m like, that, it’s obviously the text-based side is there, but like, it’s weird
1:02:07 because the, if you let, you let Grok 4, I’m sure you got the upgrade or whatever.
1:02:12 The voice keeps getting, yeah, they’re so, like, I, Grok’s the one I use for voice.
1:02:12 Right.
1:02:14 So, it’s the only one that I do voice stuff with.
1:02:15 I do all the other stuff with the other ones.
1:02:18 But I’m like, why?
1:02:20 Like, it’s so close.
1:02:26 Like, the latency is so close that I just, I, that’s the use case that I’m waiting to crack.
1:02:30 Like, we’ve been working on one for a year now and the latency is, but it’s, it’s still
1:02:35 like, it’s, it’s like not, it’s not good enough that I’d be like, I want to waste money on,
1:02:37 you know, leads for it to call.
1:02:41 But it’s like, maybe it’s six months, but that’s the one, that’s the one that I have my most finger
1:02:42 like on the pulse.
1:02:42 Yeah.
1:02:43 That’s great.
1:02:44 Yeah.
1:02:45 I, dude, I hired an AI tutor.
1:02:47 Like, basically every week.
1:02:49 Cause I’m like, it takes, it’s a full-time job to keep up with.
1:02:49 Nope.
1:02:50 A hundred percent.
1:02:51 The use cases, et cetera.
1:02:52 So I said, I’m going to sit down.
1:02:54 I was like, I’m paying $500 an hour.
1:02:54 Yeah.
1:02:58 What you’re going to do is you’re going to come with a list of like, blow my mind,
1:03:01 point one, blow my mind, point two, but I get to drive.
1:03:01 Yeah.
1:03:02 Right.
1:03:05 Cause like you, you set it all up, but then like, I get to be caveman.
1:03:05 This is how I learned everything.
1:03:07 Just so you know, like, yeah, that’s how I learned how to run Facebook ads.
1:03:11 I paid a guy $7.50 an hour and I said, just explain to me how you’re doing this and then
1:03:12 I’ll learn it.
1:03:12 That’s how I learned it.
1:03:15 Literally coaches are like coaches for adults.
1:03:15 Yeah.
1:03:18 Is this like, I don’t know why there’s maybe an embarrassment factor or like a lack of imagination
1:03:19 or creativity.
1:03:21 I think it’s just like massively underrated.
1:03:22 Highest ROI money.
1:03:25 Also like the difference, it’s just like engineering, right?
1:03:26 Like they said like 10X engineers.
1:03:31 There’s really like an average coach, a good coach and like the best coaches is these orders
1:03:33 of magnitude jumps and how good they are.
1:03:36 So the other thing people do get wrong is they just take the first coach that they have versus
1:03:42 like be really promiscuous and like, you know, go date around and like go find a coach that
1:03:46 will just like rock your world because whether it’s fitness or food or what, I have like probably
1:03:49 six or seven coaches like in rotation right now in my life.
1:03:50 For AI or in general?
1:03:52 I have AI, no, just general.
1:03:52 Okay.
1:03:56 Like I have AI, I have a, I call my food girlfriend, she calls me every morning, helps me think about
1:03:57 like, okay, how am I going to eat today?
1:03:58 Yeah.
1:04:01 And helping me like uproot all my bad habits through that.
1:04:06 I have my personal trainer who does like a very specific like functional training thing
1:04:07 that I like and I do.
1:04:09 I got a basketball coach.
1:04:09 Okay.
1:04:11 And there’s people like, are you going, you’re not going to the NBA, what are you doing?
1:04:13 It’s like, well, I love playing basketball.
1:04:15 I decided like being better at basketball.
1:04:15 Not sucking.
1:04:17 Not, yeah, like this is more fun.
1:04:20 It’s like, I can go to cardio or I can have like an NBA trainer train me.
1:04:20 Oh, it’s awesome.
1:04:22 It’s way better than just doing cardio.
1:04:24 And, you know, so why am I, why would I not do that?
1:04:27 So I just have a bunch, but like it’s, it’s become to the point where it’s like comical.
1:04:29 It’s like, yeah, I’m just like looking for an excuse.
1:04:31 Like, no, but that, I mean, what other coaches can I add to my piano teachers?
1:04:32 Everything.
1:04:36 I’m such an advocate of this, um, for anyone who, if we’re still even rolling, but, um,
1:04:37 They’ve all left.
1:04:38 Yeah, they’ve all left.
1:04:38 Yeah.
1:04:39 We’re just hanging out here.
1:04:44 No, but like, um, I think the, some of the highest ROI money you can spend is one-on-one
1:04:45 tutoring.
1:04:49 Like, just like, like every time I really need to learn something, what you said, like, I
1:04:52 just, like, I will pay you a huge amount of money to just sit with me.
1:04:54 Which by the way is the killer AI use case, right?
1:04:57 So like, that’s going to be the thing where once we get it, I forgot what it’s called.
1:04:59 Have you heard like the Bloom Two Sigma thing?
1:05:01 Basically, there’s this long-term studies.
1:05:02 People want to fix education.
1:05:05 So if rich people fund, like, how do we do it?
1:05:08 And then they go do the research and they’re basically like, the number one way to get like
1:05:13 an actual Two Sigma, which is like the standard deviation jump in outcome is one-on-one tutoring.
1:05:15 Problem is it doesn’t scale.
1:05:16 So we, they wrote it off.
1:05:16 Yeah.
1:05:19 So for the last 30 years, we’ve just been like, well, we know the thing that works.
1:05:20 Yeah.
1:05:23 It doesn’t really scale and doesn’t, you know, can’t be affordable.
1:05:24 So we’ll try all these other things.
1:05:25 Yeah.
1:05:26 But it’s like, hey, wait a minute.
1:05:26 It’s bad.
1:05:28 That’s now, that’s now viable.
1:05:29 And so let’s see what happens, you know?
1:05:30 Are you in Austin?
1:05:31 No, I’m in the Bay Area.
1:05:32 No, you’re in the Bay Area.
1:05:33 Alpha School.
1:05:33 Yeah.
1:05:34 Because Joe, yeah.
1:05:39 So I talked to, I talked to Joe about Alpha School and I mean, the stuff they’re doing is
1:05:43 wild, but the issues that they’re encountering has nothing to do with education.
1:05:44 Yeah.
1:05:45 It’s everything to do with policy.
1:05:45 Right.
1:05:49 Such a pain, but it’s like, okay, two hours a day, we’re moving at twice the speed.
1:05:54 So that’s, that’s, so one fourth the time, twice the speed, they’re moving at eight times
1:05:58 the speed of a normal school and their scores are top 98 percentile.
1:06:03 So it’s like eight times the speed and the quality metrics there.
1:06:06 And then the other six hours of the day is the kid just learns whatever they like, they
1:06:10 code apps, they do public speaking, they do budgeting, they learn all these other life
1:06:10 skills.
1:06:15 And it’s just like, God, did you hear, did you see that clip by Alexander?
1:06:16 Alexander Wang?
1:06:17 Hopefully I didn’t.
1:06:17 Scale?
1:06:18 Luke Scale?
1:06:18 Yeah, yeah.
1:06:19 Which clip was it?
1:06:21 Well, he’s like, I don’t want my, I don’t want a kid until it’s native.
1:06:22 Yeah.
1:06:23 Until it’s, until it’s native.
1:06:24 And I was like, man.
1:06:26 That was one of the more insane statements I’ve ever heard.
1:06:27 Yeah.
1:06:31 In a good, like, that’s the good weird of Silicon Valley is you’ll run into people, very
1:06:31 intelligent people.
1:06:32 He’s on the edge.
1:06:32 Yeah.
1:06:35 We’ll say batshit insane stuff with a straight face.
1:06:36 And then you’re like, wait, am I insane?
1:06:36 Yeah.
1:06:36 Or is he insane?
1:06:37 I can’t tell.
1:06:37 Yeah.
1:06:38 He’s probably right.
1:06:38 Yeah.
1:06:39 But he’s crazy.
1:06:41 He has way more context on this, which is what scares me.
1:06:45 It’s like, when you have one of those, it’s like, well, you have to know something.
1:06:49 Like, if we have the same information, you might be crazy by my standards.
1:06:49 Right.
1:06:53 But if I assume that you are intelligent and can make good decisions, then it means you
1:06:53 know something I don’t know.
1:06:55 And so that’s what, that’s what frightens me from the AI.
1:06:56 Right.
1:06:56 Or you have different values.
1:06:57 Yeah.
1:06:57 Yeah.
1:06:58 Exactly.
1:07:02 But like, you know, Peter Thiel had a great, one of the great Peter Thiel, like, sort of insights
1:07:04 was when he was, went around and he was like, university is a bubble.
1:07:07 And he was basically saying, like, you have to look at university as a bundle.
1:07:08 Yeah.
1:07:08 Education.
1:07:09 Great.
1:07:09 Sure.
1:07:10 10%.
1:07:10 Yeah.
1:07:16 You know, babysitting, you know, maturation, maturation of 18 to 22 year olds is what’s their
1:07:16 social.
1:07:20 There’s an insurance policy for parents where you’re like, I don’t know, just go
1:07:20 to college.
1:07:22 I feel like that’s what I needed to do for you.
1:07:26 And there’s like a filtering thing, which is like, well, we trust that Harvard filters
1:07:26 you.
1:07:29 So we, yeah, we’ll just trust their filtering process.
1:07:30 Yeah.
1:07:32 So like college does all these different jobs.
1:07:32 Yeah.
1:07:36 And his take was basically like, if you want to disrupt it, you don’t just disrupt the
1:07:37 whole thing.
1:07:39 You have to unbundle the bundle and figure out what to do.
1:07:43 And so like, I feel like this is just such a common business thing, which is like, oh,
1:07:44 healthcare sucks or this sucks.
1:07:45 It’s like, yeah, it sucks.
1:07:45 Cool.
1:07:48 But until you’ve realized that that thing is actually a bundle.
1:07:48 Yeah.
1:07:52 You really have no shot at like upending it in any way.
1:07:52 Right.
1:07:56 You’ve got to take one part of that bundle and just 10 X that and figure out a way where
1:07:57 the other stuff doesn’t apply to you.
1:07:58 Cause you didn’t promise that.
1:08:01 And if you can do all that, like it works, you know, like, you know, the way I think about
1:08:05 what you do is you’re a teacher on YouTube, which is not a surprise to you, but like people
1:08:07 think of YouTube is like either a social media.
1:08:07 Okay.
1:08:09 Maybe another, it’s just content.
1:08:10 It’s entertainment.
1:08:11 Right.
1:08:12 But like, dude, I got little kids.
1:08:15 Miss Rachel is the best preschool teacher in the world.
1:08:16 Yeah.
1:08:19 She has 34 million preschool students who watch her on her app.
1:08:20 Great.
1:08:20 Like that.
1:08:21 She is the best teacher.
1:08:25 Therefore, she should get this huge outsized number of students.
1:08:25 Totally.
1:08:27 And like Khan Academy was a great teacher.
1:08:28 You’re a great business teacher.
1:08:31 Like I literally look at YouTube, like it’s a high school.
1:08:32 There’s just classes to offer.
1:08:35 Like I can go to David’s Center and get the history of entrepreneurship.
1:08:37 That’s an elective I decided to take.
1:08:37 Yeah.
1:08:37 Yeah.
1:08:38 Totally.
1:08:41 And like, you’re basically like business one-on-one or business, whatever, you know,
1:08:41 business fundamentals.
1:08:42 Yeah.
1:08:43 And it’s like, great.
1:08:45 I can go take business fundamentals with my professor, you know, Harbozi.
1:08:49 And like, I think when you start to look at YouTube as also a bundle of music and
1:08:53 entertainment and education, then you start to think about how I might use it differently
1:08:54 than the average person.
1:08:54 Right.
1:08:57 Because like, both you and I probably wish we started on YouTube 10 years earlier.
1:08:58 Yeah.
1:09:02 And it was the people who saw YouTube as more than what others saw it that actually got
1:09:02 that advantage.
1:09:03 Yeah.
1:09:05 No, I think that’s really good.
1:09:05 Yeah.
1:09:10 I think it reminds me of the Neville quote that I like a lot, which is technology democratizes
1:09:11 consumption and consolidates production.
1:09:14 And so it’s like, which means if you’re the best in the world, you get to do it for everybody.
1:09:14 Right.
1:09:18 And so, yeah, I actually, I think about that a lot when we talk about our channel, which
1:09:22 is like, how do we, how do we just make this the best business content, you know, possible?
1:09:25 And that’s, I mean, that’s the whole goal.
1:09:27 It’s like, if we just keep doing that, then we’ll be okay.
1:09:28 Yeah.
1:09:30 I think you’re doing a pretty damn good job of it.
1:09:31 I appreciate it.
1:09:33 The hard part is, is, uh, I’m curious how you do this.
1:09:35 Cause at one point in time, I think I even talked about this on the podcast.
1:09:41 I was like, I think he’s great and smart, but then the problem with YouTube because the
1:09:42 goddamn views are public.
1:09:42 Yeah.
1:09:45 Is they gave you an outer scorecard to use.
1:09:45 Yeah.
1:09:46 That may not be the one you want.
1:09:47 Right.
1:09:50 And it was like, I remember once I looked at your channel and it was like, if you’re broke,
1:09:51 do this.
1:09:51 Yeah.
1:09:51 Yeah.
1:09:53 If you don’t have enough money for Chipotle, do this.
1:09:55 And I was like, dude, he’s just going to attract broke people.
1:09:56 Yeah.
1:09:59 That’s the opposite of what he kind of like wants, you know, or like it’s easy to optimize
1:10:00 because guess what?
1:10:03 There’s more broke people who are more desperate that are on YouTube with a bunch of time to
1:10:03 kill.
1:10:07 You’re going to get 2 million views on the broke guy video, but like, I’m never going to click
1:10:07 that.
1:10:10 And you probably want some people like me clicking some of your content.
1:10:14 And so like, I think that’s the challenge with YouTube overall is like, if you take
1:10:17 their metrics as your metrics, you might have a big problem.
1:10:18 It’s a hundred percent.
1:10:21 It’s a, so yeah, it’s, it’s a thousand percent of problem.
1:10:25 Um, and we, it’s like, we just, we put as many controls in place as we can and it’s still
1:10:25 tough.
1:10:29 And so right now, here’s where it gets like, let’s, let’s peel a layer back.
1:10:29 Yeah.
1:10:34 So where it gets really interesting is that if I make six videos, this is our actual
1:10:39 cadence, five of them, I want to be business first, business deep, whatever we want to call
1:10:39 it.
1:10:45 And then one out of six, I say, I’m okay to just like make it wide, brutally honest truth
1:10:46 about whatever, right?
1:10:50 That one video will get more views than the other five together.
1:10:54 And so then how much does that actually weight the brand?
1:10:58 So even if I actually think about my production versus consumption, right?
1:10:59 So if I actually put my inputs, like I might have a lot of views.
1:11:05 I have a 50% philosophy brand and 50% or, you know, motivation, whatever you want to call
1:11:06 it, right?
1:11:07 Like mindset, et cetera.
1:11:13 And then 50% business E, but in terms of my production, it’s 90% of my time is business.
1:11:15 It just like doesn’t get the reach.
1:11:17 And so it’s actually one of the things that frustrates me in some ways.
1:11:21 Cause like, if I, like, if I get stopped on the street, I’m always curious, like, what
1:11:23 was the, you know, what was the thing?
1:11:27 And so, but like business owners for me, cause like I see the people walk in the door and
1:11:32 you have to be at a certain level to walk in there anyways, is like, they are more, more
1:11:34 listening and reading, uh, in general.
1:11:38 And like, we have the, we have a whole series we do called cash cows, which is kind of like
1:11:41 what we did with the Hormozy hotline, but I have them in person.
1:11:42 And then I do the whole, the whole thing.
1:11:43 And it’s like an hour.
1:11:49 And those ones right now average, like 150,000, maybe 200,000 views per video.
1:11:54 But like a brutally honest million, like, it’s just like, I could do like, we can, like we
1:11:55 can do it right now.
1:11:57 And like, I know what, like, I know exactly what we’re going to say.
1:12:04 But the, but when I ask who here likes those who shows up, they’re like, please keep making
1:12:05 those.
1:12:05 Right.
1:12:08 And so I have, I keep asking them just because I need the reinforcement.
1:12:08 Yeah, of course.
1:12:10 No, because you need an inner scorecard.
1:12:10 I need something.
1:12:12 The outer scorecard is only going to tell you one thing.
1:12:17 So you have to like instrument, like an antenna yourself to get the signal that you’re actually
1:12:20 looking for in a way that’s not necessarily biased, but if I don’t put up an antenna, there
1:12:22 is no generic antenna for this, you know, like.
1:12:27 Also a little, a little tiny thing that maybe, maybe helpful or useful, but we actually just
1:12:29 this quarter switched our metric.
1:12:34 So we used views as basically the way that I did it before was like, we will make content
1:12:35 about these topics.
1:12:37 And then as long as they’re within these topics, then we maximize views.
1:12:40 So that’s the, that’s the constraint and then maximize within that constraint.
1:12:45 We have now switched to subscriber count, uh, subscriber growth, even though subscribers
1:12:49 matter zero, it’s just, yeah, it doesn’t matter for distribution, but it’s a great signal of
1:12:49 loyalty.
1:12:50 Exactly.
1:12:54 It’s a quality score of like, I thought this was valuable enough that, so now I can still
1:13:00 do the same constraints on, um, on the content, but then use the subscriber because that gives
1:13:03 us the, because subscriber still has baked into it some element of reach.
1:13:07 But if you, if I make a brutally honest video, I’m not going to get the same amount of subscribers.
1:13:11 I am as like 13 years of business advice, like one of my best videos ever that’s, but hardcore
1:13:12 business.
1:13:15 So anyway, just something that we’ve switched to just this quarter.
1:13:21 I, um, I, I, I can’t figure, so I, I, I basically figured out what do I want, which I can’t measure.
1:13:23 So first was, what do I want?
1:13:26 I was basically like, I created it, but like, you know, you know, in popularity, they have
1:13:26 the Q score.
1:13:28 So I basically was like, give me the Z score.
1:13:29 What’s the Z score?
1:13:31 The Z score to me is a trust score.
1:13:35 So I was like, all right, probably should have been a T score when I think about it, but it
1:13:38 was the Z score, which is basically, I realized that all content, what you actually want is
1:13:44 number of people reached times the quality of the person reached times the depth of their
1:13:44 trust in you.
1:13:47 And basically that’s the equation you ultimately care about.
1:13:50 So like you can reach a lot of people on TikTok, but if they’re just like, you know,
1:13:54 if they’re not the people you’re trying to do, like, yeah, exactly.
1:13:58 You know, it’s, you have to discount factor because you’re not, your second variable is
1:13:58 not very good.
1:14:01 And then the third, which is like, how much do they actually trust you?
1:14:05 Not like they watch that piece of content or they like that thing or they hate watched
1:14:05 it.
1:14:08 And you’re like, yeah, I got views, but like, actually they’re like, this guy’s an idiot
1:14:09 or like, and I hate this guy.
1:14:12 So that’s like, that’s what I wish existed.
1:14:13 Now that’s never going to exist.
1:14:16 So I had to back channel it and basically a shame metric.
1:14:20 So I said, if, uh, if I make a thing, do I want to go put it in my favorite group
1:14:21 chats?
1:14:23 Me, myself being like, I made this guys.
1:14:26 Cause there’s a lot of shit I make that can get pop.
1:14:29 That’s popular that I would be, I would cringe putting it there because they’d be
1:14:30 like, bro, what the fuck is this?
1:14:33 Like we don’t, we don’t need this or care about this.
1:14:35 Like, what is this for?
1:14:37 Why did you put this here versus other things?
1:14:39 Like I did this one thing that went nowhere viral.
1:14:40 I did this.
1:14:42 Like I spent like two months just studying the process of creativity.
1:14:43 Yeah.
1:14:46 I basically realized with AI is like productivity values going down and creativity
1:14:47 values going up.
1:14:50 So I was like, how do the most creative people in the world work?
1:14:53 I’ve studied Elon and all those guys, but I actually have no idea how, you
1:14:57 know, all these other guys, how they operate.
1:14:58 So I studied that.
1:15:02 I put it together and I put it out there again, went nowhere, kaput, but I’ve like
1:15:03 internalized these lessons deeply.
1:15:04 So it was still a win.
1:15:09 But that was the one where if I put it in my group chats, my most successful
1:15:12 peers were actually like, dude, this is actually sick.
1:15:14 Like I actually have, I didn’t know this.
1:15:15 I took this.
1:15:20 So I’ve had to use basically like my own cringe factor of like, do I want to put this
1:15:21 in there?
1:15:23 Or would I feel like kind of stupid doing that?
1:15:28 Would I, would I feel like I need to soften it with some context and some excuses to put
1:15:28 it in?
1:15:29 Yeah.
1:15:35 That’s, I think, I mean, I think what you hit on is like such a painful part of, of creating
1:15:40 content is that the entire, the reinforcement system leads you away from the actual business
1:15:40 goal.
1:15:44 I mean, if you, if you do this for business, which I do, like it leads you away from your
1:15:48 business goal, which makes it very, you just have to have a lot of discipline of like, this
1:15:51 is the stuff I’m going to make and it will underperform and that is okay.
1:15:55 And it gets harder when you, when you get, when you know how to make the stuff that really
1:15:58 hits from a views and all that stuff perspective.
1:15:58 The more, you know.
1:15:59 Yeah.
1:16:00 Yeah.
1:16:03 I mean, but you know, it’s, I mean, this has been, it’s probably one of the largest vocal
1:16:06 points that we have, uh, as for our brand.
1:16:08 And I, I feel like it’s an accordion.
1:16:13 It’s like, you know, if we, we do just hardcore, hardcore business content, um, and then we’ll
1:16:16 be like, all right, let’s, let’s make a little bit of personality stuff.
1:16:17 Let’s show a little bit.
1:16:18 And then it’s like, oh, that did great.
1:16:20 And we’re like, yeah, then we’re like, oh fuck, we’re way too wide.
1:16:22 And then like, so I think we just kind of oscillate.
1:16:27 One thing I wish you did more of, just my personal request was that you did something, it was like
1:16:28 a short or something.
1:16:29 I don’t know who made this.
1:16:32 Somebody in this room might’ve made this, but it was like, you were just talking about your
1:16:33 figure you wear.
1:16:34 You’re talking about your shoes.
1:16:39 And I bought those shoes and so, yeah, so yeah, you hold on your Darwin outfit.
1:16:41 You’re like, I can wear this in the rain and in the pool and then I can get out of the pool,
1:16:42 go to a restaurant and it works.
1:16:44 I can go for a hike tomorrow.
1:16:47 And, um, you know, I think that’s great.
1:16:50 Cause first of all, it, first of all, I didn’t feel like I’m trying to be the Kardashian.
1:16:52 So it didn’t feel like you were trying to show me something.
1:16:55 It was just like, oh, you want to know like something I do in my life.
1:16:56 Here’s something I do in my life.
1:17:00 Um, what I thought was interesting about that was a, those, it was a good find.
1:17:05 You’d actually put real, like your own nerdiness into like doing something for your own lifestyle.
1:17:06 So it was like, it meant something.
1:17:11 Uh, but B, every time I wear those shoes, I think of you and there’s something to physical
1:17:14 anchors in a digital world that like actually matters.
1:17:16 I’m a huge believer in that side note.
1:17:18 So I think this is like a little sauce there.
1:17:23 And I think the other part of it was, um, I still said my, I like made a mission for
1:17:24 the year, like a Masogi for the year.
1:17:28 And like, I thought it was like, it should have been about business or like getting in great
1:17:29 shape or whatever.
1:17:31 But when it was like, oh, I know what I want to do.
1:17:33 I just, I was like, I want to learn to jam out on the piano.
1:17:36 I was like, and so I just made that my mission and I took it like incredibly seriously and
1:17:37 like had a great time doing it.
1:17:42 And so just yesterday, I just turned on, I just turned on a live stream on Twitter.
1:17:43 I was like, I think they have this feature.
1:17:47 I just live streamed myself doing like a piano practice, not even like a performance.
1:17:48 I was just like fucking around, like trying to learn.
1:17:49 These songs, I’m not good.
1:17:50 I’ve been doing it six months, dude.
1:17:54 I got so many DMS from like, again, the same thing, like the people who I don’t want to
1:17:55 send my content to.
1:17:55 Cause I’m like, you’re a billionaire.
1:17:59 What are you, how to get rich from a guy who’s 10 times less rich than you.
1:18:03 But I got them being like, dude, I’ve been wanting to practice.
1:18:04 I love how you made time for this.
1:18:05 Is that what you, which one did you get?
1:18:06 What room is that?
1:18:07 Who’s that teacher?
1:18:07 How’d you find her?
1:18:09 Do you think a teacher is better than the apps?
1:18:13 And I got so many of those that was like, there’s something to the lifestyle content when it’s
1:18:16 really like gym equipment, for example, like you can probably see that.
1:18:18 I like I’ll light up when I talk about it.
1:18:22 If it, if it genuinely lights you up and it shows, it’s like for other success people
1:18:24 who I don’t like, I’ve read all the books now.
1:18:27 I don’t really need a lot of like how to grow my business.
1:18:28 I’m actually pretty good at that.
1:18:33 And so like one cool way I thought your lifestyle stuff worked was it attracted me to that where
1:18:37 I probably wouldn’t watch like 10 of the other videos, but that one I was like kind of interested
1:18:38 in from a different angle.
1:18:40 And I think you kind of turned the spigot off on that.
1:18:44 I noticed, uh, but like my personal request is give me 10% of that back.
1:18:44 Yeah.
1:18:50 So this is the dichotomy that has to be managed, which is the, the, the thumbprint of the creator,
1:18:55 in my opinion, should be the representation of their current life, which means it can change.
1:18:55 Right.
1:18:59 And so it’s like, I spend, maybe it’s like 10% of my time is fitness oriented.
1:19:02 And so like maybe 10% of my content should be fitness oriented.
1:19:04 And then probably 80% of my time is business oriented.
1:19:06 Then maybe 10% of my time is philosophical and maybe five.
1:19:10 And this is now 105, but, uh, is, is relationship, whatever.
1:19:10 Right.
1:19:14 And so it’s like that, that’s my mix and maybe in a different season it’ll change.
1:19:17 And so the content should be, I was thinking it was like, should be glass.
1:19:20 It should be like when someone meets me, it’s exactly as they expect it.
1:19:21 Yeah.
1:19:23 The only thing that fucks that whole thing up is the algorithm.
1:19:24 Yeah.
1:19:28 Because I can absolutely make that, that, that thumbprint.
1:19:31 It’s just that this one will get 10 times the views.
1:19:36 And so then if you’re trying to manage the mosaic of your brand with all the little, all
1:19:39 the little shorts as tiny little squares, it’s just that you can’t control how big the square
1:19:42 is in the middle of the fucking face that you’re trying to build.
1:19:43 So that makes sense.
1:19:44 But that’s what I’m saying.
1:19:47 Like those, that thing about your shoes didn’t get a lot of views, but it made an imprint on
1:19:48 me.
1:19:52 And I would say like, I would carry more weight than like, I would say a thousand random views.
1:19:53 Tim Ferriss said this once.
1:19:57 He’s like, do I want 10,000 random people selected at random somewhere in the world to like my
1:20:01 stuff or half of Davos to be like, to really respect what I do?
1:20:03 He’s like, one’s a big number.
1:20:05 One’s a big, one’s big value, right?
1:20:06 Like, which one do I want?
1:20:06 Yeah.
1:20:07 I think there’s something similar there.
1:20:12 And also like, you know, you were talking about like, they have different wallets or different
1:20:13 stomachs.
1:20:13 Totally, yeah.
1:20:18 It’s like, I only have a certain wallet or stomach for like educational business contract,
1:20:20 me reminding myself I need to do more at work.
1:20:21 Yeah.
1:20:21 Right?
1:20:25 But I actually have other wallet share to give you on another area.
1:20:26 My fitness wallet share.
1:20:27 You could get some of that.
1:20:31 You could get some of my outfit wallet share or my relationship wallet share as an entrepreneur
1:20:34 dealing with, you know, busy, but relationships, right?
1:20:36 Like, so think of it maybe with your own analogy.
1:20:37 Yeah.
1:20:38 No, I really like that.
1:20:42 That’s, I mean, it’s always, I, we need to be reminded more than we need to be taught.
1:20:42 Yeah.
1:20:43 So I’m with it.
1:20:44 Dude.
1:20:44 All right.
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