Alex Hormozi: The #1 Strategy That Will Print MILLIONAIRES In 2025

Summary

Highlights

• Alex Hormozi emphasizes that manifestation is not enough without action to back it up 🌟.
• Discussions on how to recognize and capitalize on business opportunities in the market 📊.
• Alex shares insights on how distractions can hinder success and how to overcome them 🧘‍♂️.
• The importance of understanding supply-demand dynamics for identifying lucrative opportunities 💼.
• Alex talks about personal development and the behavioral changes necessary for successful entrepreneurship 🧠.

Key Takeaways

• Manifestation without action is pointless; taking action is crucial to achieve success 💪.
• The best opportunities come from supply-demand discrepancies; be ready to capitalize on them 🚀.
• Perseverance is essential; sometimes, sticking with it is all it takes to succeed 👊.
• Distraction is a major barrier to achieving potential; eliminating distractions is key 🔑.
• Understanding market dynamics and honing skills are vital for business growth 📈.

Overview

Chapters

• 00:00 - 00:30: Introduction and Pre-Title The chapter titled 'Introduction and Pre-Title' delves into the concept of manifestation and emphasizes the importance of taking action, highlighting that action is pivotal to success. It discusses the common misconception that there is an easy path to success and outlines the blueprint to becoming a millionaire, breaking down the different levels involved. The chapter also examines where many businesses falter and the ongoing nature of challenges, suggesting that suffering is a constant aspect of pursuing success. It may not always be about exerting effort, but sometimes about patience and focus.
• 00:30 - 01:00: Entrepreneurship as Lottery Tickets The chapter 'Entrepreneurship as Lottery Tickets' explores the concept of entrepreneurship likening it to having unlimited lottery tickets. The core idea is that while people spend time to get these 'tickets,' many choose not to pursue or cash them in. Success in entrepreneurship often requires persistent effort as only one significant success can transform one's life. Additionally, there is a discussion about the current economic landscape where many people are realizing unprecedented financial success in a short period, despite not having a previously notable record. This emphasizes the potential and opportunities inherent in entrepreneurship.
• 01:00 - 01:30: Technology and Comfort This chapter features a conversation with Alex on the 'Iced Coffee Hour' podcast. The main topic revolves around the theme that it's easier to achieve success today due to the abundance of opportunities and resources available, particularly highlighted through social media platforms like Twitter. Alex argues that while the bar for success is lower, the distractions have increased significantly, making it challenging for individuals to focus. Furthermore, Alex points out that modern comfort might contribute to people's reluctance to pursue success aggressively.
• 02:30 - 03:00: Macroeconomic Opportunities The chapter discusses the impact of modern technology and platforms like Netflix, Uber, and Door Dash on society, highlighting the trend towards maximizing comfort. It emphasizes how these technologies have lowered the barriers for creating content, starting businesses, and advertising. However, it also depicts a societal challenge where the ease of access to comfort and safety nets makes it difficult for individuals to take risks, potentially stifling innovation and personal growth.
• 03:30 - 04:00: Excellence in Business The chapter discusses the low risk involved in taking big chances in business, emphasizing that in the worst-case scenario, basic needs like shelter and food are still secured. This is perceived as a blessing, especially in the context of technological advancements making it easier to start businesses. The ease of starting a business has been progressively improving over the years, suggesting a positive trend.
• 04:30 - 05:00: Effort and Luck in Success The chapter "Effort and Luck in Success" discusses the balance between personal effort and external factors such as luck in achieving success. It highlights the potential downside of passivity, like spending excessive time on social media, and questions the assumptions of what a fulfilling life should entail. It touches on the problem of imposing rigid expectations or demands on oneself that life must meet specific standards or outcomes to be considered successful. The narrative suggests that personal satisfaction and growth are paramount and should not be overshadowed by societal expectations for meaning and impact in one's life.
• 05:30 - 06:00: Economic Opportunities and AI The chapter 'Economic Opportunities and AI' discusses the concept of 'conditional shoulds' in life decisions, suggesting choices should be based on desired outcomes rather than absolute rules. The conversation also touches on how some individuals achieve success through luck rather than effort or consistency, although this is less common for repeat entrepreneurs.
• 06:30 - 07:00: Business Growth and Operation The chapter discusses the role of luck in business growth and operation, emphasizing that while luck can significantly enhance success, it is not the foundational element of success. Successful entrepreneurs are often those who would succeed regardless of luck, although being at the right place at the right time can exponentially boost their achievements. The chapter provides examples such as businesses on Amazon thriving due to market timing and positioning during specific years.
• 07:30 - 08:00: Challenges in Scaling Businesses The chapter discusses the challenges faced in scaling businesses, focusing on the differences in online marketing strategies over the years. Initially, marketing strategies like Facebook ads in 2011 and SEO tricks in 2008-2007 were relatively simple and easy to exploit due to less advanced algorithms. For example, simple SEO tactics involved hiding keywords on web pages without visible disruption to the design, emphasizing how algorithms were not sophisticated at that time.
• 08:30 - 09:00: Behavior and Success in Business The chapter titled 'Behavior and Success in Business' discusses the concept of luck in achieving business success. The transcript highlights how luck often arises from supply-demand discrepancies and the importance of recognizing these opportunities. It raises the question of whether repeated success is due to luck or skill, suggesting that the ability to recognize and capitalize on opportunities may influence the perception of luck in business.
• 09:30 - 10:00: Operating Obstacles & Leadership The chapter discusses the concept of recognizing opportunities in different times. Historically, macro opportunities such as the advent of the internet, the rise of Web 2.0 with social media, and the current developments in artificial intelligence are highlighted as major transformative periods. It suggests there are both broad and specific opportunities currently being overlooked.
• 10:30 - 11:00: Productivity and Personal Growth The chapter discusses leveraging modern digital marketing platforms as opportunities for productivity and personal growth. It highlights the potential of platforms like Facebook ads, Google search, and particularly TikTok Shop, likening its current state to the early days of Amazon. The chapter underlines how some individuals, previously inactive in digital marketing, have rapidly achieved significant success (e.g., $1 million a month) due to the existing imbalance between supply and demand on these platforms. This underscores the notion of micro-opportunities in the digital space that can lead to substantial growth and productivity gains.
• 11:30 - 12:00: Decision Making in Business The chapter titled 'Decision Making in Business' discusses how influencers aim to make money and sell products in markets that are often new and developing. As these markets stabilize, there is potential for significant returns. To capitalize on these opportunities, possessing relevant skills is deemed essential. The conversation highlights a personal anecdote about the importance of having skills when trying to leverage a large follower base effectively.
• 12:30 - 13:00: Intelligence and Entrepreneurship The chapter discusses the intersection of intelligence and entrepreneurship, focusing on how opportunities are perceived in the market. It explores the changing landscape of social media as a tool for entrepreneurs. Initially, platforms like Instagram offered vast potential for reach and influence, but the dynamics have evolved. The narrative captures the idea of recognizing supply and demand in the digital realm and how it continues to provide opportunities for those with innovative approaches.
• 13:30 - 14:00: Risk Assessment in Business The chapter discusses the concept of risk assessment in business, particularly focusing on personal branding and marketing strategies. The discussion highlights the surprising opportunities in building a brand and getting paid through advertising and brand development. The speaker acknowledges the success of building a significant brand but refrains from publicly discussing its valuation.
• 14:30 - 15:00: Sales Strategies & Customer Satisfaction This chapter discusses strategies that enhance sales and improve customer satisfaction. It delves into the complexities of valuing illiquid assets, like private equity investments, emphasizing how their market value depends on buyer interest. The narrative includes insights from interactions with major banks, highlighting their interest in unique investment opportunities and aligning with initial well-defined investment goals.
• 15:30 - 16:00: Effective Communication & Testing The chapter discusses the concept of proprietary deal flow, focusing on exclusive partnerships where parties are interested in making deals with specific individuals or entities without broad market competition. It highlights the target demographic for acquisition.com, which involves companies in the lower mid-market range, typically generating between $1 million and $100 million in revenue annually. The initial thesis of acquisition.com was to address the segment of businesses generating less than a million in revenue.
• 16:30 - 17:00: Psychology and Decision-Making The chapter delves into the landscape of consulting and coaching industries, particularly focusing on how these services cater to different revenue brackets. It highlights the abundance of resources for obtaining first clients and initial revenue streams in the coaching and consulting sector. Larger firms like McKinsey, Bain, BCG, Deloitte, PWC, EY, and Gartner cater to businesses making 100 million and up. However, there is a notable gap for the one to 100 million revenue range, where significant growth and unique opportunities ('alpha') can be found.
• 17:30 - 18:00: Ethics in Business The chapter "Ethics in Business" touches on the profitability and valuation of businesses, using a specific example. It discusses how making strategic adjustments can significantly increase a company's profit and thus its market value. For instance, a business generating $3 million in profit per year might be valued at approximately $12 million. By making certain improvements, if profits increase to $8 million, the business could be sold for a valuation between $80 and $100 million. The underlying message implies the importance of strategic decision-making to boost financial outcomes and business success.
• 18:30 - 19:00: Managing Disruption and Productivity The chapter titled "Managing Disruption and Productivity" delves into the challenges and strategies involved in scaling businesses to become more attractive to institutional investors. It highlights that businesses with profits around $5 million become more appealing as they near $10 million, making them targets for significant investors. This scenario outlines the strategy of acquisition companies like acquisition.com, which prefer to invest in businesses before they hit this threshold, implementing changes to maximize returns as the businesses grow into more valuable entities. The chapter suggests that the big opportunities lie in identifying and enhancing companies before they reach a certain profit level, allowing for substantial upside upon eventual sale to larger investors.
• 19:30 - 20:00: Heartfelt Personal Stories The chapter 'Heartfelt Personal Stories' explores the reasons businesses get stuck at various revenue levels. It highlights that 95% of businesses make less than a million dollars annually, and only 4% reach $10 million. The discussion considers whether this is a market issue or an operator problem, concluding that it is usually due to operator challenges. Personal stories emphasize these points, aiming to provide insights and inspiration to business operators facing similar hurdles.
• 20:30 - 21:00: Motivations and Life Experiences The chapter titled 'Motivations and Life Experiences' delves into the various types of risks associated with business opportunities. It starts with the exploration of 'product market fit risk,' which involves creating something unprecedented and testing if there's a market demand for it, akin to Uber's initial concept of strangers sharing taxi rides. This is highlighted as extremely risky by the speaker in the transcript. The text suggests that identifying and understanding these buckets of risk is crucial for evaluating a business opportunity. The chapter presents a framework for considering risks that go beyond just product market fit, hinting at the 'technical risk' as the next topic of discussion, promoting a comprehensive view on the different challenges entrepreneurs may face.
• 21:30 - 22:00: Ideas on Entrepreneurship The chapter "Ideas on Entrepreneurship" discusses different types of risks associated with entrepreneurial ventures. It highlights three main categories: the risk of developing a product that consumers will want, the difficulty of technically solving the problem, and execution risk. Execution risk is prevalent among many business owners and involves the practical challenges of achieving success, even when the business model is proven and visible. The discussion uses concrete examples, such as the concept of creating an AI salesperson to handle phone calls, to explore these risks.
• 22:30 - 23:00: Manifestation and Action The chapter 'Manifestation and Action' discusses the challenges of scaling a business, with a focus on acquisition.com. It highlights that suffering is constant in business, though the nature of the challenges evolves as the business grows. Unexpected trade-offs are a significant theme, as one navigates through the complexities of business operations, emphasizing that growth involves continuously facing and overcoming unforeseen difficulties.
• 23:30 - 24:00: Behavioral Science and Business In this chapter titled 'Behavioral Science and Business,' the focus is on the various non-technical skills and personal attributes required to succeed in a business environment. It discusses the concept that success isn't just about hard work or persistence but also about patience, focus, and attracting the right people to your business. The quality of decision-making is emphasized as a crucial factor in business success. Additionally, the chapter touches on the challenges of overcoming environmental pressures, such as skepticism from family and friends, which can be a significant hurdle for entrepreneurs.
• 24:30 - 25:00: Personal Experiences and Changes The speaker discusses the personal growth and challenges faced when transitioning from individual work to managing a business. Initially, the focus is on overcoming self-limiting beliefs and starting to promote and sell products or services. As the business expands, it becomes necessary to learn management skills and hire employees, starting with virtual assistants and moving to full-time staff. The transition continues with the need to delegate management responsibilities by hiring managers, eventually leading to the oversight of multiple managers.
• 25:30 - 26:00: Business Opportunities and Investment This chapter discusses the dynamics of leadership and entrepreneurship, emphasizing the need for leaders to lead other leaders. It highlights entrepreneurship as both a challenge and a catalyst for progress, implying that challenges ('pain') drive individuals to evolve. The dialogue also touches on the common discrepancy between agreeing with entrepreneurial advice on social media (like tweets) and the lack of implementation of this advice.
• 26:30 - 27:00: Brands and Partners The chapter discusses the common issue of spending unnecessary money on forgotten subscriptions. The speaker introduces 'Rocket Money' as a solution, noting that it helps users view all their subscriptions, easily cancel unused ones, and save money. Rocket Money is described as a personal finance app that not only helps with subscription management but also monitors spending and aids in lowering bills.
• 27:30 - 28:00: Ethics and Success in Entrepreneurship In 'Ethics and Success in Entrepreneurship', the chapter explores the role of financial management tools like Rocket Money in aiding entrepreneurs. Rocket Money, a financial dashboard application, is highlighted for its functionality in tracking spending, creating personalized budgets, alerting unusual activities, and even negotiating lower bills on behalf of users. The chapter emphasizes Rocket Money's effectiveness, noting its user base of over 5 million and its achievement in saving a cumulative $500 million for members, averaging savings of $740 annually when utilizing its premium features. This section underscores the importance of leveraging such tools for ethical financial management and operational success in entrepreneurship.
• 28:30 - 29:00: Strategic Partnerships & Risk Management The chapter begins with a discussion on the impact of unwanted subscriptions amounting to $500 million and introduces 'RocketMoney' as a solution to manage and cancel these unwanted subscriptions. Listeners are encouraged to use RocketMoney to achieve financial goals faster, with a sponsor plug for the service.
• 29:30 - 30:00: Economic Levels Impact on Happiness The chapter explores the process of turning skills into a business, starting with offering free work to improve and showcase capabilities, and gradually transitioning to paid services. It acknowledges the challenge of converting free clients into paying ones and suggests that success depends on several factors, including the skill level and demand.
• 30:30 - 31:00: Ethical Discussions on Wealth This chapter explores the complexities of transitioning services from free to paid offerings, emphasizing the need to deliver value to incentivize customers to pay. The importance of quality in service provision is highlighted, noting that initial free services may be necessary for skill development and feedback. The discussion includes an example involving offering free services to improve YouTube thumbnails, allowing for an organic transition to paid services after demonstrating value. The chapter underscores that success in converting free users to paying customers is contingent on the service provider's ability and the perceived value of their work.
• 31:30 - 32:00: Auteur Theory in Filmmaking This chapter discusses the concept of 'Auteur Theory' in filmmaking, emphasizing the idea that directors are the primary authors of a film. It highlights strategies for monetization and negotiation within the creative industry, particularly focusing on how creators can leverage their unique talents and build a successful career by establishing a client roster that acknowledges the value they create. The conversation underscores the importance of self-worth and confidence in setting and demanding appropriate compensation for one's work.
• 31:30 - 32:10: Final Thoughts and Farewells This chapter delves into the experiences of navigating business and personal boundaries when it comes to offering services. The speaker discusses reaching a point where demand exceeds supply, leading to a pivotal realization that it's acceptable to charge for services. This transition from giving services for free to realizing the value of charging is framed as a journey of personal growth and understanding the psychology of others. The chapter also touches on an important consideration: being cautious of individuals who consistently seek free services and recognizing the value exchange when providing free offerings to qualified individuals.

Alex Hormozi: The #1 Strategy That Will Print MILLIONAIRES In 2025 Transcription

• 00:00 - 00:30 manifestation is [ __ ] and action is the only thing that matters A huge amount of the delay that happens when people are starting out is the amount of time it takes for them to realize there is no easy way This is the blueprint to becoming a millionaire and I'm going to walk you through the levels to becoming one So where do most businesses get stuck suffering is constant It's just that the nature of the suffering changes It stops being about how hard you can push Sometimes it's about how long you can wait Sometimes it's about how focused you can stay One of the really
• 00:30 - 01:00 interesting things about entrepreneurship is that you get these unlimited lottery tickets You just pay time to get them And so a lot of people just will choose not to cash their tickets in at all And you only need one really big win to change your life forever And so it's really just sticking with it What's going on today that people aren't recognizing the potential in there's a huge supply demand discrepancy right now I know a lot of people who are really never done much and then just like within 60 90 days are doing a million a month [Music]
• 01:00 - 01:30 Alex thank you so much for coming on the Iced Coffee Hour Really appreciate it Thanks so much for having me I've been a huge fan of your Twitter lately It has been on fire You seem to be tweeting all the time Yeah Really insightful stuff Recently you tweeted that it has never been easier to be successful Why do so many people feel like it's not i think it's just never been easier to be distracted So it's like it's like the bar has never been lower but the bar is even lower to to not do it And I think people have never been more comfortable than they are today And so it's like
• 01:30 - 02:00 Netflix and chilling and like Uber and Door Dash and all of that stuff has just made everything like comfort We're like comfort maxing right now And so like all of these other tools like you know these software platforms and AI and all this stuff is like lowered the bar for people to make content or start businesses or advertise or whatever they want to do But um it's just like it's so hard to take a risk when you could literally just do nothing And the way that like society is now it's like you you're not going to go homeless and you're not
• 02:00 - 02:30 going to starve So like which I see as the most exciting part because you could just you could take a huge shot and the worst case scenario is like you're not going to starve and you're going to have shelter So do you think it's a blessing or a curse i would say it's a blessing I mean at the end of the day I think technology is always going to move things forward So that's like it's never been easier than it is today And 20 years ago it was never easier than it was then up to that point So it's like it will always get easier for people to start businesses which I think is a good thing In terms of optimizing for comfort what is the
• 02:30 - 03:00 downside of purely just being someone at home scrolling all the time how big is it for them not to reach their potential i think it's a it's a it's a them thing So I don't see it as a problem at all I mean I think it's only a problem if you're making some sort of demand of the universe that your life must be a certain way And so I think that's where it's kind of all the shoulds like I should like my life should have meaning my life should have this impact my life should all these things If you believe that then yeah it'll be an issue because
• 03:00 - 03:30 it's a like I believe in conditional shoulds not absolute shoulds So like if this then you shouldn't probably scroll on your phone as much If you want to get in shape like maybe don't eat more than you burn Like but don't eat more than you burn as a general statement It's like do whatever you want That's it's your it's your life I just have the issue when people want something different than the way they act Do you think it's overall lowered the bar for excellence like a lot of people can kind of just become successful by happen stance or by luck Now I think there are definitely people who get lucky Um repeat and serial entrepreneurs less so
• 03:30 - 04:00 Um I've only really encountered maybe like a couple people in my career from the entrepreneur side that I'm like "This guy was just lucky." Um I think there are elements of luck but it's like luck becomes a a like it becomes gas more than the thing that like built the car It's like they were going to be successful they just got way more successful because they had like kind of multiple things of a line Can you give us some examples of luck like that yeah sure Like if you were if you were an Amazon in 2013 14 15 and you put up a product you could just crush Like you
• 04:00 - 04:30 didn't have to like really know anything There was just all this demand that was there If you were running Facebook ads in 2011 it was just like not hard to crush If you um if you were doing SEO in like 2008 and seven with like you could literally just put like coffee in like white white font on a white background So the whole background of a website just said coffee but like if you looked at the site you wouldn't see it But if you like took a a cursor you could just see it just says coffee because the algorithms weren't like that advanced
• 04:30 - 05:00 And so you can just rank and get all of Google's traffic So there was just like a lot of the things that were lucky were just like typically I'll put it differently Luck will come from a supply demand discrepancy uh within a window of time And so where there's a huge amount of demand and a small amount of supply and then you happen to be one of those people who gets in on that Now that being said part of that is like recognizing opportunity Um and so like to what degree is that luck you know I think the question of whether it's luck or not is whether you can repeat it So
• 05:00 - 05:30 I'm curious where those opportunities are today because it seems like every few years in hindsight you could look back and be like that was the best time to do that What are what's going on today that people aren't recognizing the potential in i think there's micro and macro opportunities So like from the macro perspective I think we've had like three big ones So at least in my lifetime So it's like we've had internet uh which is like kind of opportunity number one Uh opportunity number two is kind of like web 2.0 which is social Um and then opportunity three is AI now So there's the three macro ones Now
• 05:30 - 06:00 underneath of that it's kind of like well Facebook ads was kind of like a like an opportunity kind of like within that and then like Google search was an opportunity like all of those are kind of like sub uh kind of like micro uh opportunities like I think like Tik Tok shop right now Um a lot of people are kind of kind of like in that Amazon of 20 13 14 like I know a lot of people who are who've really never done much and then just like within 60 90 days are doing a million a month and it's just because there's a huge supply demand uh discrepancy between the amount of
• 06:00 - 06:30 influencers that are there that want to make money and the amount of products to sell and they will just continue to populate it until eventually it becomes a stabilized market But it's like when those when those market those land grabs occur that's when there's typically outsized returns to be had What do you think people need to be able to capitalize on these opportunities i think you have to have skills just straight up Yeah Like you just have to have skills Like I remember it was really funny like um our first ever conversation that we had um I was like man if I had your amount of following I was like I'd be a
• 06:30 - 07:00 billionaire And I saw that as a supply demand um like and even so like when you asked just a few minutes ago like you know what's the what things are there now like I still kind of see social media still thinks there I still think that opportunity exists for people if you're good But maybe it's less so than when Instagram came out in 20 whatever year it was Uh when you could just like just post pictures of you on the sunset and have like a million followers and and people would just buy cuz you just had this insane reach But I saw it as a as a as a the fact that we could still
• 07:00 - 07:30 this the fact we could still advertise ourselves and get paid to do it is still mindboggling to me that that like opportunity exists Like you can build a brand and get paid to do it which I think is insane Okay so now it's arguable that you have his brand if not even a bigger brand Are you Did you accomplish that goal i I won't be public about what our stuff is valued at but I think that we've done well Yes Yeah Classic answer
• 07:30 - 08:00 That makes that makes a lot of sense Okay Yeah Yeah Yeah I don't I don't want to I don't want to make uh claims around things Market market market values for enterprise value for illquid assets like private equity investments and you know companies that are owned really depends only on the time that somebody's going to buy it Um I have had um some of the biggest banks that you've heard of things like that out to this headquarters um to see what we have going on and they've been like this is insane What do they look for so what they want is what every investor wants which is what you know I I tried to set out to do in the very beginning which
• 08:00 - 08:30 was um they want proprietary deal flow So they want people who want to specifically do deals with one person So it's not like they're shopping They're like I want to do a deal with you And ideally you have some sort of captive market or niche Um and so for acquisition.com we are kind of low mid-market in terms of what what companies or businesses are kind of attracted to my stuff And so it's typically the business is doing like between $1 and $100 million a year And so and this was kind of the thesis of acquisition in the beginning was like okay everything's sub a million There's
• 08:30 - 09:00 tons of people who you know help people get their first customer a few hundred,000 in revenue first five clients things like that Like there's tons of kind of like the coaching consulting whatever you know coaching course world is there Then if you go like 100 million and up then you've got like Mackenzie Bane BCG uh Deote PWC EY like a lot of these Gartner like all these kinds of consulting firms that deal with like kind of above there but there's just not a lot in like the one to 100 million range And what's interesting about that particular range is that that's where a huge amount of like alpha is created in terms of
• 09:00 - 09:30 investing returns And so like for example if you have a business and this is probably going to lose half the half the audience but if you have if you have a business that's doing call like $3 million in IBIDA or profit right per year and you can make a handful of tweaks and get it from 3 to 8 million the $3 million IBIDA business might be worth $12 million Maybe the $8 million IBIDA business can probably get somewhere between like 80 and hundred million in a sale And so it's like you
• 09:30 - 10:00 have a a a huge multiplier effect that increases once you get above about $5 million in profit and especially as you approach 10 where you now become uh a target for institutional grade investors So that because they can write they have to put to work hundreds of millions of dollars And so they basically become the customer of buying the product which is the business that you created And so our thesis of acquisition.com was like well we want to get people right before they're at that that level buy at really small prices make the changes in the business and then capture this huge upside So where do most businesses get
• 10:00 - 10:30 stuck i mean businesses get stuck at all different levels I mean because all you'd have to do is just look at the the the revenue breakdown It's like 95% of businesses are less than a million dollars a year So a lot of businesses just like barely even get to the million dollar in revenue point Above that it's um I think it's 1 in 250 That's 4% get to $10 million a year Um so is that a market problem or or an operator problem um I think it's almost an always an operator problem like unless you like in people will name these like really
• 10:30 - 11:00 random weird businesses where someone like tries to come up with something entirely new Um but I see there's kind of like three kind of types of big type buckets of risk in terms of picking an opportunity You've got um like a product market fit risk which is I'm gonna come up with something that no one's ever done before and see if people want it That's like an Uber like we like let's see if strangers will pick up strangers and taxis like maybe it sounds made sound crazy at the time right so that's a product market fit risk issue Those are in my opinion extremely risky The second category are uh technical risk
• 11:00 - 11:30 issues So like if I just said "Hey I can come up with an AI salesperson that can take all your phone calls for you." I don't need to guess whether people are going to want that They're for sure going to want it The problem is how likely you can actually do the it's the difficulty of actually solving the problem right the Uber thing it's like well there's some technical risk there too but will people even want this versus they want it I don't know if I can deliver it And then the third category is what I would say is the the vast majority of business owners which is just execution risk There's other longare businesses that do $100 million a year The path is really literally in front of me The only risk is whether I'm
• 11:30 - 12:00 skilled enough to do it That's it So what are the biggest operating obstacles you've personally ran into trying to scale acquisition.com into a billion dollar business and how did you overcome it suffering is constant It's just that the nature of the suffering changes and so it's like the hard is always hard and it just and I think what makes it more difficult as as the business continues to develop is that you end up trading things that you didn't expect you'd have to trade And so like in a lot of people's minds it's like oh I can push
• 12:00 - 12:30 really hard It's like it stops being about how hard you can push at a certain point Sometimes it's about how long you can wait Sometimes it's about how focused you can stay Sometimes it's about what kind of person you're able to attract to the business Um sometimes it's just the quality of your decisions right well a lot of times it's the quality of your decisions and those are just kind of like micro examples But like you know in the very beginning you have to overcome a lot of uh environmental issues It's like you have your friends and family who are telling you that it's not going to work whatever and they think your idea is stupid And so you have to overcome that And then
• 12:30 - 13:00 maybe you have to overcome your own limiting beliefs So you have to overcome that And then you start doing things and and you start advertising and letting people know that you have stuff and and selling them on your services your product And then quickly you have to learn like the first level of management So it's like okay well now it's not me it's me and maybe a couple of you know virtual assistants And then you're like okay this is too much for part-timers I need some full-timers So you have to level up to basically being a manager which you haven't done before And then once you're a manager it's like okay well I'm managing this half I have to get somebody else And you get your first manager And then all of a sudden you have multiple managers Now you're a
• 13:00 - 13:30 leader right and then you have to attract leaders which is a totally different skill because you have to lead leaders And so at every level um I see entrepreneurship as a forcing function for pain but also a forcing function for progress Um in that um you will stay in pain until you progress and then you will find new pain So what's something that you've tweeted or said that people clearly agree with but just don't implement i mean like we could pull it up Like where do you want to start now if there's one thing I absolutely can't
• 13:30 - 14:00 stand it's wasting money And I know we've all done it We've sign up for subscriptions that you don't really realize in the moment You forget about them and then pretty soon you're charged out the wazoo for things that you never really needed or used That's why no joke I started using today's sponsor Rocket Money With Rocket Money I could see all my subscriptions in one place I could easily cancel the ones I'm not using and then I could put that money back in my pocket For those that don't know Rocket Money is a personal finance app that helps you find and cancel your unwanted subscriptions monitors your spending and helps you lower your bills so you can
• 14:00 - 14:30 grow your savings Inside Rocket Money's dashboard you can track all of your spending create personalized budgets and even get alerts if your bills go up or if there's unusual activity Rocket Money will even try to negotiate lower bills for you They'll automatically scan all of your expenses find potential opportunities to save and then they'll negotiate They'll deal with all the customer service so you don't have to Rocket Money has over 5 million users and have saved a total of $500 million in cancelled subscriptions saving members up to $740 a year when using all of the app's premium features I
• 14:30 - 15:00 genuinely can't wrap my head around $500 million in unwanted subscriptions So don't wait Cancel your unwanted subscriptions today and reach your financial goals faster with RocketMoney Go to rocketmoney.com/istic today to get started That's rocketmoney.com/istic Rocketmoney.com/istic Thank you so much to RocketMoney for sponsoring this episode Where do you want to start uh you think Twitter's like a high ROI activity for you um Twitter is it's like I can't help myself You just can't That's that's one of your indulgences Yeah Like let's see Let's see what what
• 15:00 - 15:30 what did people not understand about this suck at something Work for free lots of times Suck less Wait until people ask for free work and you can't take them on Now you have more demand than you have supply Begin to charge money Boot out the free clients for paid clients and then offer to keep working with those clients for money Congrats you have a business So I will I agree with that Now now here's a counterpoint to that It is hard to take people from free to paying for a service Totally What is your way around that well it depends So it depends on how how high
• 15:30 - 16:00 value the service is number one And number two is we start with free because you need to get reps because you probably suck And so it's like you're really getting free feedback from people that otherwise like shouldn't because you will be terrible Um but the transitioning people from uh free to paid really comes down to just how good you are And if you are like so for example if I if I was redoing all your YouTube thumbnails and I said I would do it for free Now at the at your level so everybody who's listening don't immediately DM Graham because he already has somebody right but like the thing is go for somebody who's like onetenth of
• 16:00 - 16:30 Graham's size who can't really afford it Give that guy the thumbnails And if your thumbnails beat his thumbnails uh he will if you're like "Okay well I have now all these people who are paying me So um you can pay me what they're paying me or I'm just going to work with them." At that point he'll either pay if he's making any money on his channel or he won't But like there's a there's real value that's being created there But the idea is you want to get your your roster filled so that at that point and I think part of this I I give this as advice because a lot of people in the beginning don't believe they can charge anything
• 16:30 - 17:00 And so it's like fine don't charge get better And then once you literally can't take people on it's like dude I I can't take you on And then they're like well what would it take and you're like oh money money I could do that I could do it for money And then now it's like you actually can help someone break through the belief of like yeah you can ask you can ask for money for stuff Do you think there's something to look out for for people who just want something for free and will never pay for it well I'll say this My big caveat for free if I'm going to give it away is I have to give I'll give something away for free I'll give tons I'll give stuff away for free that cost me money if it's to a qualified
• 17:00 - 17:30 prospect So if I'm giving you know if I'm trying to get into enterprise IT services right i'm not going to start with a local I you know dry cleaning business who can't afford what I would like to eventually charge So I want somebody who has you know bant which is budget authority need timing So do they have the money to spend do they have the authority to make the decision do they have the need for this specific thing is now a good time if I can get those four things I'll give that person free stuff Like if it's like hey I'm only doing back massages for billionaires Fine Then like you got to be a billionaire and I'll give it to you for free eventually
• 17:30 - 18:00 I'll charge But no the homeless guy on this on the corner of the street will also take a free massagers but he'll never be able to pay And so it's not that we want to give free to anyone It's just that we want to get the most qualified prospects get good feedback from those customers which they we should treat them like customers so that we can then eventually charge people just like them based on the feedback that we got Otherwise we'd be building a product for somebody who's not who's the wrong person How do you make your offer unbeatable then um where it's unfair Yeah If people feel stupid saying no Um there's there's four elements of value
• 18:00 - 18:30 as I've kind of defined in the book the $und00 million uh offers book So you have the dream outcome right which is like what is what am I actually going to give this person every product is the dream outcome Every service has a dream outcome which is like what's the thing that they want to have happen okay cool So that's going to be our baseline in terms of value Like if I'm going to help somebody make an extra million a year or $10 million a year that's going to be a baseline but there's still going to be a discount that's applied to that And there's basically three factors that apply to that discount Number one is how fast is it going to happen number two is how much effort is it going to take on behalf of the customer And then number three is how likely is it to occur and
• 18:30 - 19:00 so fundamentally those are the elements of value that are either multipliers or detractors of what you can ultimately charge a customer for whatever it is that you sell So how do I make it fast how do I make it easy and how do I make it risk- free and so within each of those components like part of the way of making it risk- free to them is if I have 10,000 other people I've done this for it's much less risky right that's proof right you could also do that with covenants and terms You could either do it based on performance that shifts more of the risk to you You could also just give guarantees and satisfaction You get guarantees that are conditional based on things that they do Those are all elements of things you can do to decrease risk which you can uh reverse
• 19:00 - 19:30 into price And so said differently I could say "Hey um I'll charge you $5,000 to do this thing." And if someone says "Uh well no." It's like "Okay well I'll do it for $3,000 but I won't give you a satisfaction guarantee." And then what you'll find happen is they're like "Oh well I'll do it for 5,000 with the guarantee." So people resell themselves on a higher price if you take away a component that's valuable So that's that's the risk one From a speed perspective I would say that the more I've studied like human behavior sales persuasion marketing the more I really
• 19:30 - 20:00 lean into speed Like if you want to enter any new marketplace just look at what everyone else is doing and see if you can do it in half the time And there's just so much value in speed Like humans are so immediate reward focused Like almost every business can offer a speed version So it's like you're a YouTube thumbnail agency and you say "Cool I'll get you thumbnails in a week normally." It's like oh if you want for 50% more I'll get them to you in 24 hours and for and for 300% I'll get to them to you in the next 60 minutes The same cost to you It's the same work but
• 20:00 - 20:30 you just give someone priority access and it's all margin So it's like you can always play with speed as another variable of value And then the uh the third element has two pieces to it which is ease like how does it have two elements well one is what are the bad things that I I hate doing that I get to not do as a result of buying right all the stuff I don't like you're going to take away Great But I also want to make sure that I don't prevent someone from doing the things they do enjoy doing right and so I give a classic example of like if you sign up at a gym uh all of a sudden you have to start doing things you don't want to do but you also have
• 20:30 - 21:00 to stop drinking margaritas you have to stop taco Tuesday you have to stop having cupcakes and stop having your McFlurryries So it's like you have to give up stuff you like and you have to do stuff you hate which is why it's such a hard sale So do you study psychology in order to be a more effective salesperson i wouldn't say I study psychology Um I would say I just look at data of business because I the the the one advantage that I have is I have a a huge amount of data that I sit on top of between the companies that we invest in the companies that uh come use our services on the advisory division um and the companies that well companies we own
• 21:00 - 21:30 and the companies we invest in And so it's like I get to see a lot of different data and so when we make changes into a sales process or a change in terms of an offer um I could see the improvements in conversion rates And so uh that's where a lot of my like thesis have come from Are you ever surprised by the data or is most of it kind of just confirming your intuition all the time i get surprised all the time What's been like one of the biggest surprises about this data yeah we had a we had a company um that uh sells B2B services and I had this guest that um based on uh basically
• 21:30 - 22:00 we could collect the data of the size of the revenue of the companies that were basically leads that were coming in the funnel And so I wanted to shut off the bottom third of the leads because they were the lowest revenue leads and just have the team focus on the top two/irds And so I was like "Hey just pull pull the sales data because I'm going to bet that all the conversions happening on the top end." And the conversion rate was actually evenly spread And so um I was like "Huh?" Like almost to the percentage point I was like "That is not what I would have expected." And again
• 22:00 - 22:30 that could be unique to that specific business I would still posit that in general more qualified customers buy on average more and spend more money just in this particular business and maybe that means that that business is mispriced which would be a different problem but given that data I was like huh that's interesting we have people who are 10 times the size buying at the same rate as people who are onetenth the size wild and it's way more of a stretch for these people than it is for these people so maybe we're missing our message did you ever find out why have you dug into that and gotten to the bottom I it's a it's a great question because like I I try it's really hard to
• 22:30 - 23:00 say why because like I think I think a lot of people like to use because because it's very compelling Um but I just try and stick with like this is the data that I have within this given context and in this situation it worked and I know there are principles like things that are fast will sell better than things that are slow things that are easy will sell better than things that are hard Things that are risk-f free will sell better than things that are not risky Like I can take that to the bank So like I try and think of like what are the few principles that will always uh be true and then the rest is application What's something that you
• 23:00 - 23:30 track within a business that most people don't even look at i'll give you a handful of metrics that I track So you'll be like I didn't need that many So if I had to solve for two things it would be uh gross margin and revenue retention So fundamentally like what do we make per sale in terms of uh like is there a lot of margin that's there if so like that's an that's more attractive to me And then secondarily uh how likely is that this person is going to continue to buy from us next year and the year after that so if I have a business that I have hypothetically 100% gross margins and 100% revenue retention that's an amazing business They literally just print money
• 23:30 - 24:00 and they never lose it Like that's cool Uh that's a very attractive business So if I only knew those two things the only other thing I'd want to know is what's my cost to acquire a customer versus my lifetime gross profit per customer So how much money does it cost me to get somebody and then how much do they pay me over time and so basically that fundamental the LTV to CAC ratio or LTGP to CAC ratio I know fancy acronyms but uh that ratio between those two numbers is the fundamental economic arbitrage that exists within businesses and fundamentally that's why um private businesses will get the highest returns
• 24:00 - 24:30 in terms of uh returns on capital because in in in in so few places like if you were to put it in the S&P 500 those companies are already at scale and it's harder for them to grow you know at huge huge percentages Um maybe you let's say you put $1,000 in and you get 10% so you're 1100 bucks at the end of the year In a business you could put $1,000 into paid ads and make $30,000 in gross profit in 24 hours Like that happens all the time And so it's like that's how somebody can go from $0 to a billionaire
• 24:30 - 25:00 in four years because the returns on capital are absurd And this is also what I think one of the big opportunities of of social media is is that like okay why is social media so powerful it's because it drives CAC to zero Do you trust customer satisfaction i take it as I'll I'll take surveys So we survey um across all the companies that we have because I like to have leading indicators in terms of like what's going on i like I care more about the reason why that they give It's kind of like the comment section Like I care more about that Um but I care far more about renewal rates So if
• 25:00 - 25:30 we're getting bad scores but everyone's buying then I'd be like "Okay well we found something that people need but hate that they have to buy from us and they'll be very quick to switch." Um but as of right now there's no one else who can do it either better faster or cheaper than we can Um but I would renewal rate like how you spend your money is what I care the most about And I would say what you think It's kind of like what do you want and people like I want faster horses versus the car So it's like I care about that a little bit but I care far more about what the data suggests about purchase behavior When you make an offer to somebody and they say no I'm not interested How often is
• 25:30 - 26:00 that able to be turned around across what setting is that in a sales setting in a sales setting Um I think it depends on the reason the person said no So it that would that would be a like it would be a discovery question after that So be like well what are the variables you use to make the decision and sometimes like I think there's a there's a big difference between a no based on value uh or a no based on details or a no based on authority or a no based on timing Like just kind of said budget authority and timing These are the kind
• 26:00 - 26:30 of the components Well how do we make sure that we can can I control can I can I overcome some of these issues now if someone's like uh love what you have Um I don't buy coats because I live in Panama I'm like okay there's no need Like I could try and sell what I like like hey I've got a gym membership Uh why aren't you signing up it's like well you're in Iowa and I live in Florida Like like I'm never going to get there Like so it's like where it depends on the reason for the no And what if it's a price issue mhm Where do you draw the line between lowering the price and
• 26:30 - 27:00 cheapening the product and getting someone who's qualified or keeping the price the same but losing the sale yeah So I I'm a very firm believer in never negotiating with terrorists including price terrorists And so if someone wants to look like if someone says "Hey can you do it for cheaper?" You know we always I mean we train on saying like "We can do it for more." And people are like "Okay yeah I got it I'll I'll buy at that price." Um but I the price that you quote is the price that you stick to Otherwise every as soon as you negotiate once every price you have is negotiable
• 27:00 - 27:30 which sucks as a business and is a pain in the butt and I hate it So um and you want price standardization anyways because you don't want different people getting sold different prices People could talk It's kind of sucks So um my big thing is price and terms And so if we have this price if I'm going to change it then I will also change terms So if someone's like "Hey I I would love to buy the $5,000 thing but I can't afford it." If we've already looped a couple times and said "Okay why can't you afford it why how important is this to you what would it cost you to to not do this you know quantify as many of these things as possible." And they're
• 27:30 - 28:00 still like "I literally just don't have this amount of this is here's my bank account I have $3,000 I will buy it for $3,000." Then in that instance like I can't ethically sell you the same thing as somebody else for $5,000 for $3,000 I can't do it What I can do is I can remove a component So let's look at these things that we have here Uh we have this guarantee I can remove the guarantee and I can knock $1,000 off Does that work okay Um also instead of you know coming to the gym you know three times a week if you come to the gym twice a week will that work for you great Well let's just do that You could do one workout at home So I'll I'll I'll want to change the terms of the
• 28:00 - 28:30 agreement if I'm going to change price But I can't I won't just say "Sure I'll do it for less." I just won't do that Why do you think that most people fail is it a skill gap a belief gap or is it just distraction i think it depends on how we define failure So for the people who don't start then it's probably a belief issue like they they didn't they failed by never starting Um and that's the vast majority of the people they failed before they start the race Um of the people who do start the race um I think just for for people sub a million
• 28:30 - 29:00 dollars almost all you know what it's not I would even say that it's at all levels distraction is a huge one They start six businesses in the hopes that one of them will take off because they fundamentally don't understand how business works like you only have you have very constrained resources in terms of time money effort human capital people Um and you have to allocate all of those things to one business to just have a hope that it's going to work Um so I think focus is a a massive one Um so that's kind of equal opposite of distraction And then in terms of beliefs the belief is the early days Distraction
• 29:00 - 29:30 kind of is pervasive Um sometimes it's just business model things Um which I would just translate up to skill deficiencies So once someone gets started there's there's I think there's just two buckets You've got um you've got procedural knowledge and declarative knowledge which is basically the two sides of knowledge that exist which is knowing how to do something and knowing that something exists or that something's possible And so this is where people talk about mindset manifestate whatever It's like fundamentally it's just like you have to believe that something's possible And so if you meet somebody who's doing $10
• 29:30 - 30:00 million a year and they're same age as you grown up in the same hometown you're like well I guess that's possible right and all of a sudden it's like man my perspective totally changed like my mindset I manifest who knows whatever but like you fundamentally now believe it can happen cool so then the only delta that you have is how to do it right that's procedural so I could talk like we could talk about private equity all day on here and someone could listen to every private equity podcast in the world you understand that people are doing it but you don't understand how to do it and you can understand all the steps but until you go through it there's you won't you won't know how it works and then once you do then you can do it again so what's some of the
• 30:00 - 30:30 lowhanging fruit that people could start implementing today that'll make a big difference long term I think shrinking the time between when you make a decision and when you take action on the decision is probably one of the strongest coralates with like high high producers Um you always talk about that Was there like a specific moment that you kind of had that realization and then ever since you made that decision you're going to decrease that amount of time that like the business went exponential so two things So one is if
• 30:30 - 31:00 you define a god being as omnipotent then as they think things things would exist and so if someone is ultimately powerful that means like the moment they think of it it happens right and so it's like okay if that's the hypothetical ideal then everything reversed from that is less and less powerful and so if I want to be a more potent person or less impotent then I should shrink the time between when I make a decision and when I act on that decision and try to make it into reality so that's number one the second issue when it comes to decision ision making is that the vast majority
• 31:00 - 31:30 of speed I think that happens within a business comes down to speed of decision-m like there are so many decisions that have to occur every single day that most of the time and you guys experienced this within your own business it's like you know the team says hey what do we do with here and then you're like okay let me think about that or let me give you a couple like give me a day or two I'll come back to you but one of the good frameworks that I have is just asking myself the question will I get more information to make this decision if the answer is no then make the decision like you're not going to get more information to make it So you might as well just make it now
• 31:30 - 32:00 And so that the interesting thing about that is like that speed though a lot of times people take let's say seven days to make a decision or even a month to make a decision But if I can make a decision now and then make a second decision 2 minutes later make a third decision 2 minutes later like in a very real way I could I could operate a thousand times the speed somebody else's And I think that's fundamentally like how Elon operates um and how he can just get so much stuff done He also obviously distributes a lot of decision-m to people who are intelligent How important is intuition when it comes to making a decision that you just feel one thing over the other well I think I think
• 32:00 - 32:30 intuition is just like a really really amorphous word for having a history of reinforcement with variables that you can identify or have trouble trouble identifying So it's like you know this girl walks in I've got a bad feeling about her That's my intuition Well you have a history of seeing lots of women walk in And if you have uh people or women who looked a certain way or acted you know the way they carried themselves the way they dressed the way their hair looked the way they did their makeup the way they talked the way they breathe the way they all these other variables that you're taking in If somebody else in the past you had
• 32:30 - 33:00 a negative experience with you would then say oh I get bad vibes because it's just harder for you to be be like hey subconscious what was the variable that you identified that was similar to this other past experience that sucked harder to do So um do I trust uh intuition i will definitely pay attention to it Um will I believe that it's some magic power no I just think it's just like there's something that I haven't been able to identify Maybe if I spend more time thinking about it I could maybe you know like it wasn't this it wasn't this it wasn't You know this is what it was Now you might not know it yet but there
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• 34:00 - 34:30 Oracle for sponsoring this episode And now let's get back to the podcast Do you have a BS meter to tell if people are fake or if they're just maybe a bit of a a fraud i don't I don't know if I have a BS meter I think that asking questions can help a lot So like if someone just walked in and said like I am a this I'm like I don't know Uh maybe you know um if I asked 10 more questions about that thing and I know more about that thing than they do then I would have a better idea If someone's talking about how to train a sales team uh and they're like I
• 34:30 - 35:00 know how to do that I'd be like okay well how do you think about this you know how do you think about this um and if they gave bad answers then I'd be like "Okay we don't really know how to train a sales team." And so it depends on my um skill level within that domain that someone's supposed to you know be good at I think that people have a lot I think I think people have far more I think people have far more experience deceiving other people than we do protecting against deception So I think there's always going to be people
• 35:00 - 35:30 who are more skilled at deception than people who are better at at detecting it And so I'll say honestly I operate from the perspective that um I don't know and that I'm probably being deceived and would I still do it anyways um within these guard rails and so I just try and operate that way Mine tend to be if someone's doing really posed photos in front of expensive cars Usually it depends on on the industry Usually bad vibes usually head to toe designer like they're
• 35:30 - 36:00 really watch like it has diamonds on it and stuff Unless you're in the music industry which is fine You have to be in one in the music industry I feel like that's that's got to be it can be usually that's a red flag Um and then also when they describe what they do and you still don't understand how they make their money There have been some people that just say "Oh I do this and that." I'm like "I I don't get it You explain it." And they explain it and I still don't understand And then it turns out the dude's just like siphoning money
• 36:00 - 36:30 from somebody else and it turned out the whole thing was smoke and mirrors I'm like I had a feeling about that guy that I will say Well it's funny cuz you say that because that like then it gets into a domain that I feel comfortable with where if someone's like "Well this is how we market blah blah blah blah or this is how we sell This is how we price This is how we you know anything that's business related I'll be like "No that doesn't make sense." And it's like I'm like I don't know like I'm I feel I feel confident enough in my in my skill level to say like no that doesn't that doesn't make sense Um but yeah so I think it's
• 36:30 - 37:00 gonna it's be it's going to be domain specific for me to be able to say like I'll have a better judge um of character but still even then you know I get I get I get I want to say deceived but like I make wrong picks all the time you know like with team and people you know hiring things like it happens you know just part of the game What about things that are too good to be true how often are people pitching you things that seem to be that way and they're actually accurately representing their skill or the value of their business it's I think the too good to be true is uh happens all the time I I' I've yet to see
• 37:00 - 37:30 something that has been too good to be true I think Chat GPT when it came out I was like that's too good to be true and then it was So like then they became a gazillion dollar company I was like okay that checks out that tracks Um but most things that are too good to be true like the saying exists for a reason How important is intelligence in entrepreneurship i think it depends on what level of success you're shooting for I think like if you were like I wanted to get into AI like you've got to be probably really smart And I think it's it's not even because like you're the one who's going to be the engineer doing it It's like you need to be smart enough that an engineer who can do that
• 37:30 - 38:00 is impressed by you right like so I think I think it's really in the recruiting aspect where uh high intellect if you will will matter more If you were you know use the lawn care example like you can succeed in the lawn care business without being brilliant You can succeed in in the gym business without being brilliant You can succeed in a lot of businesses I'd say most businesses without being you know you know above 50% IQ I think there are there are skills which people say as traits uh that are more important I think courage is incredibly important Um
• 38:00 - 38:30 I think high agency so the ability to make your own decisions without being influenced by others Um I think I think honestly just like perspectacity like being able to endure and persevere Um because one of the really interesting things about entrepreneurship is that you get life gives you this like these unlimited lottery tickets and you just pay time to get them but you just can always get them to cash them in And even if you cash 10 tickets in and they don't don't work It's like you still have 11th
• 38:30 - 39:00 one You still have a 12th one And so a lot of people just will choose not to cash their tickets in at all or even grab the tickets to begin with And I think that that ability to persevere is what gives you more shots on goal And you only need one really big win to change your life forever And so it's really just sticking with it And I think that's the like on a long enough time horizon somebody who sticks with it just gets enough like they just get so many chances that something that luck does happen What percentage would you allocate to being the person in charge of running it versus the business itself man I'll say
• 39:00 - 39:30 50/50 Like I was lean I was going back and forth It's like you know cuz Uncle Warren has uh you know great manager uh bad market bad market wins Um you know good market uh bad manager good market wins Um I think that like the market is for sure the most powerful thing But if we control for market like you know if you're selling toilet paper in COVID you're going to make money whether you're an idiot or not Like it's going to work Um but I think the vast majority of marketplaces are not on either extreme You're not selling to newspapers and you're not selling toilet paper during CO Most businesses are just kind
• 39:30 - 40:00 of like in the middle They're in markets that are just normal And in those situations um the business model obviously has to be sound but the business model is a reflection of the entrepreneur And so if we remove market then I'll say it's entrepreneur Um for sure but market is more important if it's in one of these extremes What qualities do you see in those people are there similarities between the two yeah there's you know it's interesting because there's like there's there's for sure similarities I think there's far fewer than most people expect cuz um like even if you look at the top entrep
• 40:00 - 40:30 like I think Basos and Elon are some of the goats of all time in terms of entrepreneurship so different in terms of their personalities the way they behave their even values like all those things I think they have some significant differences but in terms of like what are the commonalities about how they operate they all they focus on speed they focus on having an exceptional product both of them talk about just I mean Elon doesn't say customers chess he says products obsessed but they they translate to the same thing which is like they focus on product first above everything else Um they're super long-term focused Uh people might have you know some
• 40:30 - 41:00 something to say about me saying this but like I think they both have high ethics Um like ah he's devil but whatever I won't even comment Leave it there Um but high ethics uh high customer obsession long-term perspective huge ability to tolerate pain um and the ability to tolerate risk which is to to have the courage to do it And because both of them had so many moments where they just went all in on Amazon or all in on Tesla or um SpaceX or whatever It's like you have to have some ability
• 41:00 - 41:30 to make to to go big and bet the farm And I think that that every entrepreneur that almost every entrepreneur that I know who's made it really big has had a moment where they're like this could not work and I'm just going to try and make it work It's so interesting because I feel like there's a huge trend online right now and also maybe for the past like 5 10 years of there can never be an ethical billionaire Do you think in order to get to that level of wealth there needs to be a time where you compromise your ethics or do you think that's just a bunch of stuff that people like like to throw out there to maybe
• 41:30 - 42:00 self argrandise themselves well as somebody who's whatever um go ahead as someone I am I am biased so I'll state my bias um I am trying to hit it or in process of hitting it And so I obviously don't think that there's an an ethical um like that you have to I think I'll say it differently If you took a random slice of the population just just America or even the world you're going to have certain percentage of people who are ethical and have certain percentage of people who are not ethical and the skills to run a business I think can
• 42:00 - 42:30 operate in some ways independently of those things So you can become super financially successful and be unethical and you can be super financially successful and be ethical And so I think that you'll have a distribution that is normalized at the top as much as you do in the middle Like how many people are divorced how many people are married how many people are like you're going to have how many people have kids how many people don't have kids Like you're going to have a random distribution there And I think people will just cherrypick uh bad actors Um and there's also like allegations based on like regulations Like if you look at all the big fortune
• 42:30 - 43:00 whatever companies it really starts to come down to like what do you if we I mean it gets into ethics which is a totally different can of worms But if you were to say like uh you know the TCPA which is telephone consumer protection agency whatever they go after a company and it was because the company didn't put the right language on their you know landing page and because of that they sued Facebook for $700 million Is Facebook being unethical or are they operating in ignorance um oftentimes
• 43:00 - 43:30 when you have more laws than you can keep track of um or somebody makes an oopsie uh those things happen And so it really depends like okay well are we now saying that Facebook's unethical now I'm not saying that I think that they're good for the world but I'm saying fundamentally like um I think mistakes can happen And so the idea that people will say a billionaire um might be unethical is probably different than a billionaire has made mistakes And I think those are very two very different things Um because for sure every billionaire has made mistakes and for
• 43:30 - 44:00 sure has done things that they wish they hadn't because that's what humans do in life What's a mistake you made recently that may have either cost you time money or credibility i invested in a company um that I didn't do enough due diligence and um they were doing some things that weren't compliant that I found out about later and I just said I don't want to be associated and I lost millions of dollars and I just said I'll I just I will give you the equity back I don't even want it I just don't want to be associated What could you have done differently could have done better What
• 44:00 - 44:30 do you look for when when we probably could have reviewed you know reviewed reviewed the internal data better probably could have done more in-depth interviews with some of the the the key employees Um could have done more you know customer call reviews uh both on sales side marketing side and also on the delivery side We probably could have done more of that If you were to observe all of the mistakes that acquisition.com makes and aside like a pie chart would you say the largest slice of the pie would be lack of due diligence or where do you think you lose the most return or
• 44:30 - 45:00 value honestly I think the biggest mistakes we make are hiring I think it's people but it's really pe I mean fundamentally it's going to be people at all sides Like people on the deal side it's going to be people like even with when you're bringing in talent like it's a deal Like you're signing an agreement between two parties in exchange for money you know so like it's I mean you're just you have the thing is the number of deals that we have to do um every day every week every month every year is a lot And so we're just going to make mistakes Um we're going to try our best to learn from them and we're ultimately going to be rewarded by the
• 45:00 - 45:30 quality of our decision-m but we're going to mess up When do you know how to cut the business or try to fix it like in that case I would be looking at that and thinking well is it worth trying to or is it just we can't work with these people no it's a good it's that last thing you just said That's really what it comes down to So if someone I think is um knows about it and hasn't done anything about it and then we find out about it and say "Hey you should do something about it." And then they don't do anything about it That's where I'd be like "Okay this isn't going to work." if
• 45:30 - 46:00 you know a founder's made aware of it It's kind of like the TCPA thing Like if let's say you had optins on a page and you just didn't have like all the disclosures that you're supposed to have to make it compliant to like text somebody or call somebody or whatever right if someone did that I'm not going to be like "Oh my god this guy sucks." I'd be like "Oh he didn't know." Like "Let's let's fix this stuff." And so that's kind of an example It really comes down to the willingness of the founder to make to make things right I think that's anybody Yeah Do you have assessments of ethics of the people that you end up partnering with and how important would you say ethics are do
• 46:00 - 46:30 you not really consider it and you just kind of look at you look at the data as you suggest cuz cuz you could ask someone why they do something and they could say whatever they want but you don't necessarily know until you've known them for a while I feel like there should be a personality test like the Jordan Peterson personality test that you have he does or 15 bucks or something understand.com I think is what it is It's interesting because you can also with this data compare how two personalities will interact with one another So for example Graham and I we were pretty different in
• 46:30 - 47:00 a lot of categories but it did say that we had good cohesion Oh sweet Yeah But they had studies for like business and for personality and for relationships With large data you could probably get a pretty good approximation Interesting I don't think we have enough data to actually do like big data like analysis for that If you're thinking 20s 30s like it's not a lot It's not enough You need like 30,000 You need a lot more n to have statistical power Um we actually used to do a lot more tests uh earlier on and I think we ended up um foregoing them Same on the recruiting side We used
• 47:00 - 47:30 to do a lot more like personality testing things like that mostly because um the recruiting team ended up being like overrelying on tests and then would just like have a star candidate and they were like well they they scored I'm like this guy's just that like bring this guy in And so we ended up doing away with it Um I think everybody wants a test to tell them the answer And so I think in a in a in a job where you have a lot of decision-m that has to occur it's hard to not default to tests because it's so quantitative that you want to just like
• 47:30 - 48:00 it's just kind of like trading algorithms Like if the algorithm says like you want to have that and so fundamentally either it's like you know I tend to be somewhat binary in this but like either we believe this 100% Or we kind of don't And the only times um and I'll quote Leila on this one but um like if we do have a test that we're going to have somebody take on like a recruiting side the only time that we would really use it if it's a red flag uh in that it seems like it's completely contrast from what we're seeing And so if someone's
• 48:00 - 48:30 like "Oh I'm really deoriented I'm really timely I'm really whatever." And then they get on they're like "I'm a creative and I'm so all over the" and they're like "No that doesn't make sense." So then we're just like "Okay now it's just an ethical issue They're just lying." So you're saying you don't want to focus on qualifying someone because if you're testing them that means you probably have some dissonance between what you think about them and what they say about themselves And if you f Yeah Yeah I think you will like by this is me talking more as a as a you know company owner than anything else which is like if you tend to give a team a tool and they have to make a lot of decisions and the tool supposedly helps
• 48:30 - 49:00 them with the decision the the law of least effort will typically rain and they'll just start using the test to make all the decisions and I think that makes for worse decisions than actually just using everything else So if someone's studying you let's just say what do you think is the biggest misinterpretation of your strategy or character um I think most people think that I'm meaner than I am Um I think he's a sweetheart guys Alex is really a nice guy So nice on and off camera Very very outstanding gentleman Thank you Um
• 49:00 - 49:30 I think that and then also in like a different setting than like a podcast you know it's like you know it's a diff like when I'm with my team I joke around a ton And so I'd say like I do a lot of jokes a lot Um and I think I have I mean Daniel could probably say but I think Yeah What's your funniest joke can't say it Give us a joke I have a lot I have I have tons of Yeah I have a lot of like dirty jokes Yeah Inappropriate Like a true grandma man Yeah A lot of a lot of a lot of That's what your mom said Um
• 49:30 - 50:00 that's that's Graham's favorite too I love those It's a classic It's a classic for Jack I'm always like "Yeah my mom's going to watch this." Yeah Yeah Cats out the bag Yeah Smoke shop No But no I'd say that those are probably the two um the two bigger misconceptions So moving on from that how do you eliminate distraction oh this is fun Okay Um so I eliminate it by eliminating it And that sounds ridiculous but like I think the vast majority of productivity hacks can get boiled down to remove everything that isn't work So like my
• 50:00 - 50:30 office has no outside light Um I try to minimize all the sound in the office I also put on earplugs and headphones Um there's a great app that you can use uh that like blocks your phone so like nothing can get through So including text phone calls slacks everything not just social media Like it's a dead element essentially Um and you have to physically move across the building which is how I do it for mine Um to like un un mess up your phone and then I just have a clear idea of the work that I
• 50:30 - 51:00 need to do And so it's like when you eliminate everything else um and then I just set a kitchen timer for when I how long I expect a task to last that is when I'm like peak productivity per unit of time Uh because there's nothing else to do So is this science or is this just you because eliminating eliminating natural light Why light for me like I I get I get so distracted by light I get boost by like seeing the outdoors and seeing greenery It's nice It doesn't work for me man Yeah And I I'll I'll be
• 51:00 - 51:30 clear like if you find something that works for you I'll say do that And for anybody who's like I do do it your way I don't care Like I'm just saying this is what's worked for me I do think there's a decent amount of data that suggests that anything that is not the work distracts you from the work How do you differentiate between distractions and rest great question So um I think there's there's like kind of like micro macro So like from a micro perspective if you work for 60 minutes or 45 minutes or whatever and then you're like "Okay I need a break." if you take the five or 10 you know 10-minute like walk around the building or walk outside To me
• 51:30 - 52:00 that's where you can get your natural light and all of that stuff but then you come back and then you're fresh again and then you hit it Um I see that I see that rest as productive because it increases the overall net production over a larger period of time So if you work like that for 12 hours uh and you worked without doing that maybe you can only work 8 hours or you can work the same 12 but you don't get as much done So for me uh it's really just the net productivity of a human being is what they get done over a period of time So productivity has a temporal component to it and an output component So maximizing output per unit of time is productivity
• 52:00 - 52:30 as I define it And so it is okay anything that uh increases that rate of of of work which for the most part is just deleting the things that aren't work because few people actually work faster You just don't work when you want to be working And so I think if you just eliminate all the time that you're not working when you want to be working you work a lot more And if you've ever done the timer thing which I would highly recommend you see if you like you truly take your phone away and you block out every single notification and you have you know you have to script a YouTube video or write an email or make a script
• 52:30 - 53:00 or whatever you have to do for your business or write make a landing page Um you'll notice that like you'll be like "Oh my god." And you'll look it's been like 8 minutes and you're like "Oh my god." Like your like monkey brain like wants to reach sleeping when I keep looking at the time and thinking "Oh man another 10 minutes went by That's another 10 minutes I'm not going to be sleeping." Do you ever look at the time and see 10 minutes went by now I only got this amount of time and your mind's focused on the time and not the task i don't think about that at all actually If I if I like if 8 minutes goes by and and I and I worked to the 8 minutes and
• 53:00 - 53:30 I'm like oh my god it was only 8 minutes I'm like I have so much time Like I did all that in 8 minutes because I was focused the whole time and I only went to go reach for my phone at 8 minutes I'm like oh my god I have I have six more You don't see the time as a distraction no not really Do you have any distractions that still sneak past your filters oh not I mean not on the phone I mean that that thing's done Like it's cooked Twitter No I mean when I when I'm working I'm not going to What about music you listen to music no Only when I live Silence Mhm Yeah I have earplugs and headphones Like it's true silence What do you listen to when you
• 53:30 - 54:00 lift oh just like the same songs I've had for like 15 years I don't really change Um I like Lincoln Park a lot Like little Lincoln Park I listen to 50 Cent I like 50 Cent Get Rich or Die Trying I like that entire album I still also like some of my white boy music I'll still listen to Little Green Day Little Third Eye Blind Little Third Eye Blind That's good Yeah I like I I only have like you know 20 or 30 songs that I can listen to like in a workout So it's like I kind of have like a list of hundred and they randomly shuffle and that's like my life
• 54:00 - 54:30 How often do you skip the song uh it depends on what kind of set I'm doing Okay It's like if I'm if I'm early like if I'm about to hit a work set like I want to make sure it's a good song But I think that's everybody So do you think distracted people then just want it less h I don't even know how to define wanting it less Um I would say that for whatever reason they're being more rewarded from their current path than they perceive the reward of the path that they're trying to get on Like it's I mean I just I think of everything in carrots and sticks It's like they have enough stick of other people judging and
• 54:30 - 55:00 enough carrot of staying the same that they don't change They just have to overcome inertia and they just can't do it for whatever reason And I don't want to pretend like I have some like superhuman willpower It's just like you know I had you know it's funny cuz like when I quit my job which was still to this day the hardest decision I've ever had to make in my whole life because believe it or not I'm actually very riskaverse Um I can take bigger bets now but it's because I have more and so like if I lose it's not like the end of the world Um but at the time there was like risking everything or what felt like
• 55:00 - 55:30 risking everything And um that was was it was because I was so miserable It was the only reason I was able to to do it Like if if I had been employed at probably just even a different job at a different place I probably would have been fine And I don't think I'd ever even be here So I don't think I had a high like predisposition towards entrepreneurship like some people do Like I've been an entrepreneur my whole life Like I wasn't I didn't start any businesses I did well in school It wasn't like a school failed
• 55:30 - 56:00 me like I did well in school like I studied hard I got good grades and I graduated in three years from Vanderbilt like I did well and then I got a good job you know in terms of on paper after that and it was only like when I had done two years there and that normally you'd go to like business school that I was like I hate this I don't want to do this again and I would rather take a shot So it spurred from being discontent with where you were at That's interesting because that is exactly what led to me trying out all these different business ideas and then starting up this thing with Graham But I never asked you like why what would what motivated you in that beginning that planted that seed
• 56:00 - 56:30 to try to you know become big in real estate on YouTube Was it because you were discontent with where you were at or just honestly it was just it's the stupidest thing It was that uh entry Yeah With data It was doing data entry I wanted to be an investment banker just because I was like they make a lot of money I just wanted to be successful And I would email all of these investment firms just asking to do anything for free I'm like I'll get you I'll make copies Just let me do anything I'll just
• 56:30 - 57:00 be there And I emailed maybe like six seven places that I found on Craigslist Like two of them turned out to be like MLM companies And uh one emailed me back and said "Yes actually we're looking for a data entry position If you want to interview it come on in." And I interviewed and it looked fantastic And they had like a sales team in the front and a back off back office uh in the back Yeah Uh and they hired me to do data entry at I think back then it was like $8 an hour And I was so excited to
• 57:00 - 57:30 go in because they made you wear like a suit every day And I was like I get to wear a suit to work That's so cool And I went in there and everyone is a zombie and everyone just hated life And the first like day was okay But I started getting in trouble for stupid things Like I I wanted to wear a headphone to listen to something throughout the day lessly Yeah And they said I couldn't do that And then I made a comment about they had styrofoam cups and I said that
• 57:30 - 58:00 like the paper cups were better for the environment And they said we're not changing They got really upset that I even made that suggestion And then I went up to the CEO's office one day This is all in the first week just to say hi to the guy and introduce myself And I'm like I've just started working here And he wasn't in the middle of something and he was friendly to me But I got called into the manager's office later that day and they said "Hey there's a chain of command like you can't just go up to this person and talk to them You have to talk to this manager get their approval it goes to me and then I could It made no sense But I hated it there And the
• 58:00 - 58:30 only time that people came to life was Friday at like 400 p.m And you started seeing people laughing and joking around and like being themselves And then I remember there's like they had like a casual like one day a month they had like a casual day where people could wear like jeans into the office I thought it was just stupid after a while Like I didn't get it Uh but yeah that that single job made me hate life so much that I would do anything to never return to that because I honestly
• 58:30 - 59:00 thought if this is the next like 40 years it like this is it That you were willing to do something for free which was assistant to the real estate thing Correct Uh but also during that time they had a sales team in the front I said I'd be a great salesperson I just want to do sales and they were making like a hundred to like 300 grand a year doing like phone sales I wanted to do that and I was told you have to work your way up You have to do data entry to go into the mail room to go into like this thing to this thing and then it would that was like years away and they
• 59:00 - 59:30 also told me no one would trust me cuz I was 18 at the time like no one trust you on sales and yeah so and then I got into sales and did well Yeah Like that didn't matter at all But that for me was like the big six weeks it was only there six weeks but that made a lifetime impact I want to highlight one thing that you said which is just for anybody who's who's listening Um Graham said I'll do anything and then they said well we do have this roll up and do this I would strongly recommend if you want to quote do anything then just look at the jobs they have available and try and do that
• 59:30 - 60:00 So rather than just going in like empty just be like "Oh you have a data entry position I'll do that for you." And then in all of the extra time that's where you try and have lunch with people That's where you try and basically build your network within the business so you can start leveraging like relationships to gain more skills and then you can start you know moving your way in and learning what you want to learn What about applying to businesses that don't need your help or aren't hiring one of my things I always thought it was great to approach places you'd want to work and just say "I'll take on any role." I think it's like I think it depends on it
• 60:00 - 60:30 depends on the visibility of the company So if if the company has like a really big social media presence they have so many people doing that that the supply demand of people asking for that specific thing is super not in your favor If you went to a business that's not based on that like you go to an electric you know like a HVAC company you probably could find some work there that they'll let you do And so I think it's again it's like try and shoot where like the big the big arbitrage in life is finding supply demand discrepancies uh that are in your favor And so you
• 60:30 - 61:00 have a supply of work they have a demand Now if there's way more supply so many people offering it then they can dictate their own terms and if they don't need it then they don't need it What's holding people back from excelling beyond average do you think it's talent belief i think people don't do very much I think people do a lot of talking about doing and not a lot of doing And I think it's the doing that does everything And I think that's the and whether it's lack of motivation lack of focus lack of like lack of a hundred
• 61:00 - 61:30 different things um it just comes down to number of actions taken per unit of time And I think the vast majority of people just wildly underestimate the volume that's required And I think that's like I I I hit on this so hard because like like when I'll tell you a story to illustrate the point When I when I had my first gym I had a mentor who told me that he got all of his leads off of flyers And so that's what he did And so I put out a flyer and I waited two weeks and one guy called me and said "Hey you dinged my Mercedes." And I was like it's the only call I got So I called the miserable up two weeks later
• 61:30 - 62:00 And I was and he's like "Hey how'd that go?" And I was like ready to give I was like "It didn't work." You know like and he was like and he like totally took it in stride and he was like "Well what was your test size?" And I was like "What do you mean?" He was like "Well what was your test amount?" I was like "Well I mean I put out 300 in total." And he was like "Oh man." He's like "Hard to know if anything's going to work with 300." He's like "We test with 5,000 per batch." He's like "And then once we find a winner," he's like "We do 5,000 flyers a day." And I was like "Oh." So he's doing 150,000 flyers a month for his
• 62:00 - 62:30 business and I had done 300 And this is why like I think the vast majority of people dramatically underestimate how much volume it is Like I mean right when we started this you're like "Seems like you tweet all the time." It's like I post that often on a lot of platforms Now Twe Twitter is my my home base for how I where everything is generated from but like we make 450 pieces of content a week And so people are like "Hey man I've been making content for 90 days and that would already put them in the top you know 1% because everyone gives up." But if you actually made a post every day for 90 days be like "It's amazing
• 62:30 - 63:00 That's 90 posts." Uh I do that in two days And so but they get there and they're like "But I'm not Mr Beast yet." you know and and it's just and there's just people think that someone else is doing two times or three times as much but it's more often that they've done a thousand times or like two 10,000 times the amount of work that they have Like if you count the amount of videos that you've put out in terms of longs and shorts or minutes of content that you've put out over the last four or five years compared to somebody it's not even it's like it's so so ridiculous the
• 63:00 - 63:30 discrepancy Same thing with sales guys They're like "Hey I've been I've been selling for 90 days." I'm like "Okay so how many calls a day do you take?" and they're like I end up taking you know five or six live calls I'm like okay so you've been doing it for 90 days You've taken like 400 live calls It's like okay well this is John He's closed 4,000 deals Not calls taken deals That's why he's better than you It's just like there's just a dramatic misunderstanding And that probably with a 30% closure he's taking 12,000 calls It's like he's done 300 times the work you have Like it's a lot or 30 but like it's a lot
• 63:30 - 64:00 more than people So how do you compete with that guy cuz I bet there's a lot of those guys out there you start I mean I think it's like you just start And um I think it's like I think a huge amount of the delay that happens when people are starting out is the amount of time it takes for them to realize there is no easy way So they spend a huge amount of time they figure out what the what how to do it and then they spend a really long time trying to figure out if there's an easier way and then they give up trying to find an easier way and then they just start the hard way because the hard way
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• 66:30 - 67:00 ramp.com/ic and we have a link down below in the description Cards issued by Sutton Bank member FDIC Thank you so much to RAMP for sponsoring this episode How often do you get emotionally tied to outcomes um I would say less and less over time I'm sure that there it depends on the outcome Um yeah it depends on the outcome What outcomes are you still emotionally tied to even though you may know better Well I think if the book launch for my next book that comes out like if that goes well I'll be stoked If it doesn't go well I'll be bummed You know like those are like and I'd say on a micro level like we always hope that you know a YouTube video does
• 67:00 - 67:30 well you know we hope that but obviously we have our constraints of like okay well do I want this to be for a business owner audience or do I want this to be for more of a beginner audience if it's a beginner audience I have to kind of recalibrate my expectations because it'll get way more views So um it's not like I'm a robot I think I would say that my my emotional regulations just gotten better over time It's not like it doesn't exist What other parts of your identity have you had to kill to become where you are right now um plenty Um I know one was attachment to the approval of your dad That's something that's been spoken about quite often any other yeah
• 67:30 - 68:00 I think so it really depends on how we define identity um but if we define that by the actions that we take like if you were to describe somebody like he is this way you really describe it by the actions that person does right it's very hard to say someone is something without doing something about it right um we even describe people by what they do like he's a carpenter he is selfish which means that he acts in selfish ways like it's all based on activity and so um for me like the changes in behavior which then ladder up to identity um I've had to become more patient I've had to
• 68:00 - 68:30 figure out which I define as figuring out what to do in the meantime I've had to just have times where I'm like I just I need to let I just need to let the let the turkey cook I just got to let it cook There's nothing like I shouldn't the right the right task for me to do is nothing Um I've had to learn that Um wasn't an easy change to like permanently tremendously hard No I don't think it's permanent I think you have to fight it every day like addiction And so you think there are certain characteristic traits people just naturally have or aspects of their identity that they will have for their entire life They just have to be able to detect which ones keep them weak and then it's an active battle for the rest
• 68:30 - 69:00 of their life I guess instead of anthropomorphizing so kind of like humanizing the things that we're fighting against in terms of behavior it's more thinking like I have been rewarded in the past for behaving in this way And so it's hard for me to change that behavior but I realize that that behavior no longer serves me Now you're still going to have the memory of the reward of doing that thing over and over again And so um what's what's really tough about human behavior is that uh punishment fades but reward sticks Meaning like when you go out and drink if you drink too much the next
• 69:00 - 69:30 morning you're hung over and you're like I'm never going to drink again But then a week later you're like you remember the reward but you don't remember the the the the punishment right it's the same reason that people go back to exboyfriends and ex-girlfriends It's like they remember the good times but they forget about the bad times So punishment fades but reward sticks And so the hardest behaviors to change are ones that have rewarded you in the past because you will tend to remember the reward and want to repeat them And so the only way to really beat those is to find something to do instead that rewards you better What's one of the things that worked for you in the beginning that stop serving you as
• 69:30 - 70:00 you've gotten bigger or more successful well one of the biggest ones that I talk about is um when you when you when you quit the job and you start entrepreneurship you get rewarded really big for taking a risk for doing something different But you don't need to take those kind of existential risks all the time And the problem is that you get a massive reward for doing so in the beginning And then you almost have to immediately unlearn that and then stick with this current path for an extended period of time But you kind of always remember the hit of trying something new Which is why I think so many entrepreneurs tend to always want to do
• 70:00 - 70:30 lots of new things when most of the time they need to just get better at the thing that's in front of them and confront whatever problem they don't know how to solve so they can get that thing to the next level And so they think that by doing something new because that's what worked for them in the past that's going to get them to the next level when in reality they just end up distracting themselves and trying to chase two or three masters at a time and never getting there What's a small hill you're willing to die on that some people might just think is trivial that manifestation is [ __ ] and action is the only thing that matters Wouldn't you say that manifestation is the first step before action so if we it depends on how
• 70:30 - 71:00 we define manifestation So if we define manifestation as like an electrical signal occurs in your brain sure But I don't think that's how most people describe it So I would say be totally on board with manifestation if we defined it as knowing that like I know that this is possible Um like I saw this or I have some perspective that has changed Um to me that's just knowledge So if you have knowledge that you can start a bank you have to have the knowledge that you can start a bank before you start a bank That makes sense So fine But the bank
• 71:00 - 71:30 doesn't occur until you take the action But the idea of like the mindless ideation of like I'm going to manifest my husband into existence is I think relatively [ __ ] Now that being said there's some people who do that and then also take actions that then change their circumstances and then they get the husband and then they misattribute what was the thing that caused it And so for me I think I mean fundamentally the position that I'm in is trying to identify causal relationship as accurately as possible And so you know the logical proof that I use with this is just simply mindset plus no action no
• 71:30 - 72:00 outcome you know mindset plus action outcome No mindset action outcome So the action is really going to be the only thing that's going to I would argue that you need mindset You need some sort of mindset to have the action Like I'm I'm kind of big into manifestation So it's it's interesting to for me There you go Like to me like the example of people get so upset by this by the way when I bring I find it really interesting What's their main contention well they have a history of being reinforced for talking to other people about manifestation And so they want to talk about have other people nod
• 72:00 - 72:30 and smile and agree with them and those are all pro-social behaviors and so I think it makes sense that they would do that Um again it depends on how we define manifestation which I've yet to find anyone who's been able to define it well Um action you can define really easily Uh and so that's the that's the part right So it's like it's really just this word that has all these positive connotations I just think it helps you with focus But like what is manifestation let's say the uh let's just say the the boyfriend girlfriend example where you manifest the perfect but what is manifestation you thinking clearly about your wants needs goals
• 72:30 - 73:00 what to look for who this person prioritization correct now by manifesting that you're going to be on the lookout for those sort of qualities But is the manifesting the prioritization or the man like you we said prioritization and then manifesting i think the problem is that you're kind of using a derivative definition of prioritization This is fundamentally why I have an issue with and and then because you're using manifestation to indicate some sort of data or information A lot of people that have a different definition of manifestation are going to apply that to their definition of manifestation I just think manif people know what manifestation is
• 73:00 - 73:30 They don't that's actually a lot of people think like you sit down and you manifest something and then they think it's going to walk right through that door Like they think that cosmically everything will just like somehow get bestow that's doing better than nothing But I think there's there's there's data that shows that you can trigger the same dopamine receptors when you think about getting a billion dollars than when you get a billion dollars Like it's it's a similar thing Obviously it's going to be
• 73:30 - 74:00 a lot less intense when you think about it But when you daydream about all these amazing things that are happening it doesn't actually change the the reality of your existence It's only giving you small dopamine When when you could get yourself to have a firm belief that something is going to happen and that nothing is going to get in the way your actions are going to be reinforced by that Well the action is the only thing that will matter I think there's got to be a belief in yourself to stick with those actions You have declarative knowledge but also those are skills And so like so if someone tries a 100 times versus 10 times I would say the fact that they took more action is the reason
• 74:00 - 74:30 they got to where they're trying to go Now when we try to get to like why did they do that i don't think anyone has the answer to that I think the reason for that is because no one knows why they do that I think they have a core belief in what they're doing that that dealing is going to have an outcome to defend Graham When I first reached out to Graham to try to provide value you manifested this Exactly I manifested sat in my room like you manifested this podcast So I I had no skills whatsoever The only thing that I had was high confidence in my aptitude and and confidence Like I knew that I could provide value but it was more of just
• 74:30 - 75:00 like something that existed in my brain I don't know if I necessarily had evidence to support that Sure I just knew that I was competent enough And so maybe I manifested that One could argue that So the big the big zooming all the way out here just for for context I think the reason that people get really up in arms about it is because like I mean these are these are dogmas right these are belief systems which people operate at their very core Um which really just means ways of being which means ways of behaving and ways of talking is included in that in terms of behavior But people have a very hard
• 75:00 - 75:30 time defining what the hell they're talking about when we ask some of these words that are amorphous And so I have by and large just removed them from my vocabulary so that I can describe the observable and it has been probably the single most productive thing that I have done in my career And so is it a small hill it is probably the only hill and the main hill that I will die on which is that behavior rules everything And you have a history of past you know reinforcers or punishers for a set of behaviors and you repeat them in the future and that's the only thing that I will say about why someone does
• 75:30 - 76:00 something You've been rewarded in the past for reaching out to people for doing things and it can be cross domain So it's like maybe you reached out to girls and they was able to jump into business and you were able to reach out to business owners So it's cross well I know that I know hypothetical obviously not but like but you get the idea of like it's a cross but like those are just sets of skills Those are behaviors And so focusing exclusively on behaviors and unbundling terms that are amorphous has been I think the key to my ability to communicate to people train staff um
• 76:00 - 76:30 and kind of enlist people to where we're trying to go And I think that like that has really been like when people are like man I feel like Alex is so good at making things clear It's like because I just do not use amorphous language And if I want to use a term I will define the term So now by the observable but I believe to shift belief starts with mindset Well it's like we're so it's like what's belief what's like what's belief what's mindset what's manifesting you went with this is like this isn't not to put like I actually just I just want to help um not not you guys
• 76:30 - 77:00 everyone else Um no but I I just I don't think it serves people and that's why and like I just don't like now some people like I mean yes you feel great about it I'm glad that if you if you had the option between making 100 phone calls and and sitting there and manifesting you will get further making 100 phone calls And so I'm trying to decrease the amount of time it takes people to just do the thing It's funny the the first podcast we had with you you were mentioning that you had recently removed the word I think it was should It was should You had also removed like because Yeah calls
• 77:00 - 77:30 relationships We don't know you you you remove all of these words and every single podcast you're like I've since removed this word and now I guess it's just like you've gone to the meta of just reducing amorphous descriptions of things just to the observable just to the observable on this existence it's been it's been it will be I'll call this I think that the book that I write on behavior well I'll tell all of my books put together tell us about the book on behavior I'm curious it's it's it's outlined yeah it's it's cooking um but I
• 77:30 - 78:00 I have this belief and it's probably my own limitation but I want to have a publicly verified billion dollar plus um net worth uh so that I can then I think have the pedestal or at least the pedestal is not the right word um credentials I'll I'll give you an explanation of of what I mean by this So it's like in the beginning we have to start defining terms of like what's the what's the meta concept that I kind of operate off of and the biggest one is
• 78:00 - 78:30 fundamentally that like what is learning right like what is learning adaptation so it's it's same condition new behavior that's fundamentally like from a from a behavioral science perspective it's like if you were so if you're you know person is condition A and then we teach them something when they reenter condition A they change their behavior so it's observable so same condition behavior if you the phone rings and you say XYZ and then I say hey don't say XYZ say Z YW the phone rings again you say XYZ you haven't learned if you say ZYW you have learned if you say something else you've
• 78:30 - 79:00 learned but the wrong thing right but fundamentally it's a change in behavior within the same condition and so it's like okay if we say that as as kind of like tenant number one the next ten is like okay then what is intelligence so intelligence is going to be rate of learning so if I have to do that you know example 10 times with you know Jack and five times with Graham then Jack has less intelligence than Graham does in this context this is hypothetical Jack and hypothetical Graham these names are completely taken at at random Um but then it's like that but but the reason I think that's important is because then it allows people to have um direct
• 79:00 - 79:30 influence on their own intelligence So if you learn faster you change your behavior faster than somebody else then you can in a very real way be more intelligent than them And so when we asked originally like you know do you have to have real intelligence i think it depends on what type of intelligence you're talking about when it comes to to learning behaviors This is how I define it But beyond that it's like okay well then uh like a lot of words like so what's an excuse so like an excuse is a statement to avoid punishment which is very simple It's like okay that's what it's a statement that like someone says something like what's an excuse like show me when an excuse has occurred and by by looking at like you know patience I've defined this plenty of times cuz I
• 79:30 - 80:00 had to use it all the time which is figuring out what to do in the meantime So if you say to a young kid be patient they don't know what that means It's a bundled term It means nothing Be patient It means nothing So how would I give some directions on how to be patient figure out something else to do That's all you have to do We are all being patient right now for our S&P 500 accounts We're being we're doing something else That's all we have to do It's just something else And so it makes patients uh operationalized right like how can I do patients i have a very So you're really just kind of redefining all of these words or at least simplifying the words that are important and and by defining them it's more putting them into a context that we're
• 80:00 - 80:30 all talking on the same plane Well it's it's it's it's defining them within the observable universe Oh that way we can all agree these are the things that we see When someone has exhibited resiliency it means that they've returned to a baseline of behavior And how resilient they are depends on how quickly they do that If someone's not very resilient it means that they extend the the change in behavior for a long period of time If they're permanently quote traumatized it means they never change their behavior right so it's like what's trauma right trauma is a permanent change of behavior based on an aversive stimulus a negative stimulus
• 80:30 - 81:00 right but then the question is okay if we have this trauma right and then people are like I store trauma in my spine It's like what where is there is there a hard drive in your like where what cell is this being people just say things and so it's just it's a permanent change of behavior from something bad happening Okay Now if you're a little baby and you touch a stove and it burns your hand and that's an aversive stimulus and you change your behavior you don't touch hot stoves again Was trauma bad i love that I actually like
• 81:00 - 81:30 once you said that you're redefining everything into terms of the observable universe I think that that I think it'll be my most I think it'll be my most successful I'm curious though for something as I would say like like what's courage what's courage right So the interval of time a potentially bad thing affects whether you do it What about something that's so like like purpose or meaning those I feel like are really like I can't imagine how to define those I don't I think they're they're definable It just takes a long time to really think like the the
• 81:30 - 82:00 question you have to answer is what would someone do for me to say purpose has occurred i guess maybe it's so hard That's why you have to because you have to completely shift how you're seeing things and be able to observe them kind of like firsthand And so it's like what's authenticity it's how you behave when you have no risk of punishment and someone that obeys all of the terms that you've outlaid in that book It's not of obeying It's just like this is t like I have to define these terms in order to talk about them because they're all if I never define them then I would just be making face noise and other people would be perceiving my face noise in whatever way they think it means which they
• 82:00 - 82:30 haven't defined anyways And so then there'd be a lack of communication I think fundamentally like good communicators are able to transfer ideas efficiently because they use language that everyone understands and ideally things that everyone can observe with their own two eyes And so that's I try and stick to everything being observable And so as a result it's made persuasion way easier It's being the most important one is to like if I want to train which is happens a lot in a business setting It's like how do you train someone and you're like be more confident What does that mean tell a six-year-old be confident It means nothing It means
• 82:30 - 83:00 nothing They might just say like that means talk louder I don't know what that means Right and so it's a bundled term And so we have to break the term down and say like okay well this is actually a series of many behaviors underneath of confidence that when taken in aggregate we then describe that person as confident So maybe they look at you in the eyes when they talk Maybe they nod their head when they're listening Maybe they repeat back the last thing that you said Um maybe when um when there's uh when there's something that has potential risk or downside they're willing to do it Like these are all things that we can observe and they say "Okay well if you have these these you
• 83:00 - 83:30 exhibit these traits these skills in this setting people describe you as confident." Does that make sense and so being able to break things down like that has allowed me to um help my team when I'm like "Hey you know I've told this story before but basically I had I had a guy who um you know a lot of people were saying hey this guy's acting like a dick but he was a star performer." So we're like "Okay let's see if we can save him." you know and so we talked to three or four of the leaders in the company and he was still a dick And so I was like "What'd you tell him?" We're like "Oh we told him to stop being a dick." And I was like "Okay
• 83:30 - 84:00 well so I ended up meeting with him and I was like I want to be clear I don't really care if you're a dick or not Um I do care if people describe you as a dick Um and I want to like the purpose of this meeting is to decrease likelihood that everyone talks to me about you again in a negative context." Cool Great So that was the you know agenda It's like "All right so in order for that to occur um let's talk about the things that when you do them people don't like them and they call you a dick." So it's like when you interrupt people during a meeting they they think you're a dick and they call you a dick later Uh when you tell someone how to do their job uh they call you a dick and you try and force your agenda whatever It was two or
• 84:00 - 84:30 three examples And he was like "So that's all I have to do." He's like "Yep that's all you have to do." He's like "But what if uh you know I present this thing and then they they don't execute on it." I was like "Then that's not on you That's on the manager and I'll talk to the manager and make sure that they're executing but that's not on you That's not your role." And so um once that got clear all of a sudden he just stopped doing the three things that everyone the three behaviors that people then laded up to saying "He's a dick." And then they stopped calling him a dick And then everyone's like "Oh he's like night and day totally different." But it
• 84:30 - 85:00 was just like no one's specific with their language And so no one knows what anyone's talking about And I think the vast majority of people don't communicate well with one another because both people are saying words that neither person understands and no one's defining And that's why most people can't communicate at all And that's why most people are dissatisfied with their life That's why they can't manage the relationships cuz they like both people get upset No one knows how to communicate and then that's it They just like they want the other person to guess what behavior they don't like And so it's like even if I said "Oh you know John's lazy." You have to think and this is why most people don't do is because it takes work You have to think "Okay I think John's lazy Why do I think John's
• 85:00 - 85:30 lazy what what occurred what did I observe that then made me think that?" Now you might find out it's like "You know what he's actually just slow to respond." Okay Is there anything else there was one meeting he came ill prepared Is there anything else no I think that was actually it Okay So when I go to John instead of being like "Hey you're lazy." I'm going to say "Hey I need you to speed up your responses to under five minutes and when you come to a meeting have your notes ahead of time Just send them to me." All of a sudden John's not lazy anymore but it's because it was this very micro thing that we then ladder up to this amorphous term
• 85:30 - 86:00 that no one can understand And so this is this has been uh a huge area of interest for me um in defining reality And I think that honestly it's helped me navigate reality really well um and make higher quality decisions If someone reads his book how would it be actionable for them to get those ideas across with somebody else who hasn't read the book and they would have to define the terms they have to define the terms That's it's it's it's getting a a complicated word and then simplifying it into the lay well they're not they're currently not communicating with that
• 86:00 - 86:30 person So like how would they talk to somebody who hasn't read the book the way they always do which is nothing which the thing is is the point that you hit on underpins the fact that most people can't communicate well at all Right And so if a lot of people want to be different than they are and I am you know first in line on that There are many things that I I've wanted to be different about myself for a very long period of time And this book and these ideas have been the culmination of trying to change these things about
• 86:30 - 87:00 myself I would say I want to be more authentic And I'm like well what's authenticity how do I be more authentic what do I do well it's like okay well authenticity is how you behave when there's no risk of punishment And so if there's no risk of punishment how you behave basically if you're alone and no one can find out about what you do that's you authentically Now the problem is that in society we also have rules that govern other people's uh behavior right which means that the only truly authentic person is someone who behaves the exact same way alone as they do in public which will probably have something to do with your preferences
• 87:00 - 87:30 And so can you be truly authentic only in that subset of people who act with complete freedom and when they act with complete freedom act within the rules of the law anyone else who has any inclinations to do anything that's outside of society's preferences or the rules that govern um how we interact with each other uh or the laws right has to by their very definition not be authentic or be less than 100% authentic and I see many of these traits as not binaries are you authentic or not authentic but how authentic are you and also in the setting and if it's like man this sounds like it's a little bit more
• 87:30 - 88:00 complex it's like yeah welcome to reality so how have you been holding yourself back in terms of authenticity well it's also the question of uh Is being 100% authentic something that is I should be i mean realistically probably not right and so again but but but the thing is once we define the term we actually can have a discussion about it because now we're all talking the same language and it's much more productive And it's also way less charged from a like if we had never defined the term then you would have maybe been like "What do you mean like
• 88:00 - 88:30 you don't think you're authentic?" I'd be like "Well not 100% of the time." It's like "Wait so you're lying to people right?" It's like we don't attack each other like well no I I act differently in priv naked like if I walk walk around naked in public that would probably be but I'm being a little bit inauthentic right now I'm wearing clothing I normally wouldn't wear clothing right you know what I'm saying like and so again that what it does is it adds nuance but BF Skinner who's a famous behavioral scientist said um if many
• 88:30 - 89:00 variables exist many variables must be studied and so a lot of people want a very neat box with clean lines and say like this is the way it is And um I don't think reality is that way Like it's not is this person honest or dishonest it's how honest are they how loyal are they i'm curious You take a blank slate person They read and apply everything that you write in this book What does their life look like a year down the road 5 years down the road great question So it's the book will by no means be a here is how to live life because that assumes that I know and
• 89:00 - 89:30 that I think they should do something I think it's more if you want these things these are the recipes for achieving them So if you want to be perceived as patient figure out things to do in the meantime If you want to be perceived as authentic behave more in a way that you were that you do in private and public If you want to um you know be perceived as more courageous then decrease the time between uh when you perceive something as risky and when you take action on it Like all of a sudden it's like oh so I want these traits And so this would in my opinion be the first
• 89:30 - 90:00 way that at least the first place I've seen where there's like a recipe like do this How would you explain it to a child who doesn't know what the words mean and I think that's what allows well I mean it's it's what allowed me it's what has allowed me to exhibit more traits um that I that I wanted to have versus traits that I didn't want to have And until I had that I just was like why do people describe me this way is cuz I couldn't break down what I had to change but what I did um to change basically reality You're in a great position to
• 90:00 - 90:30 talk about it too It's interesting because I've you've mentioned this years ago that you had an issue I think it was with anger and you also had the patience thing Yeah But it does appear as though you've made pretty significant strides in applying corrective behavior Yeah To those More on patience less on anger but better And And how does anger affect negatively maybe your business or your life like what have you noticed um okay Well I'd say that the negative effects of anger for me have probably just come in in almost entirely from the
• 90:30 - 91:00 way that people treat me not in terms of negative outcomes business-wise I think the reason that I still have anger is because it has served me So I think we repeat things that have served us in the past And so I think one of the reasons that people misunderstand why they do things is because people ask the question what triggered that you heard that it's like oh something triggered this behavior But it's not about what happened before It's about what happened after the last time you did it So I'll give you I'll give you a real example So if Ila gets upset and this is something that I've I've really actively worked a
• 91:00 - 91:30 lot on If Ila gets upset and she gets like she cries if we're having some you know whatever I had a tendency um to try and comfort comfort for a short period and then if that didn't work I would get angry When I would get angry she would get scared When she would get scared she would stop crying And so when I got angry she stopped crying And so I learned that if I got angry I got my wife to stop crying And so it was a very reinforced I only figured that out later And so it's
• 91:30 - 92:00 a very reinforcing thing It's like oh if I can I this gets Ila to stop crying right um and so to the same degree So I've been rewarded in that setting but obviously she's like longterm it derods you know so then I have to work on that right um if I value the relationship which I do Um but the same context with uh my team right if I am quick to anger or be cold or sharp with someone and it doesn't even have to happen often like if you do it once or twice or even if you do it in front of somebody not directed towards them they're like "Well I never want because modeling is a great
• 92:00 - 92:30 way that people learn If someone shows up late and I yell at that person then that everyone else is still afraid of me and doesn't want to show up late either right?" And so what happens is the flow of communication from other people to me slows down because they're afraid of getting punished by me And so I see that as not positive for the business is me not having the information Now how do I cover for that well I have somebody like Ila who always gets all the information and that's why she's CEO and doesn't have direct reports and so we've been able to man manage that um within the business operationally But in terms of me personally like I want to be better
• 92:30 - 93:00 about that And so that's like an example of something that I'm working on What's interesting is I I kind of have a similar thing in terms of like if I if someone's emotional to me I have very very little patience unfortunately for it and it's one of my shortcomings Since you fixed that how have you noticed fixed you know sure Okay Since you uh try to improve upon that how have you noticed that that change in in real observable ways well I mean Leila has now also because she understands how this stuff works too cuz we talk about all the time like she has tried to
• 93:00 - 93:30 reinforce whenever I'm not angry and she's upset And so either in the moment or immediately afterward she's like "Thank you for not getting upset and thank you for being there for me and thank you for just hugging me and you know just waiting it out essentially." Um and so I just have to remember that when I'm in those settings and the more time she reinforces it the less strong the other reinforcer is the stronger the the the new one is A lot of this stuff has has come from suffering Like being like why can't I be this way like I want to be this way and I can't Like why
• 93:30 - 94:00 can't I and it's like cuz I don't know how Why don't I know how because I have no words that described how to do it well So how do I change this in reality and so it's been it's been the result of of of a lot of seeking and a lot of pain And that's so I don't I don't see it as logical I see this as just descriptive like this is this is how it works But but you're able to to to assign a new timeline in terms of when you learn something to to to a longer period of time rather than most people which assess things over a shorter period of
• 94:00 - 94:30 time for example like you know when you would get angry at Ila like she would quiet and you're like okay like this works but then you're able to then see way deeper into the future and then make decisions based off of that even that this isn't going to work long term Yeah Well yeah I'll get feedback and I mean to be fair I'll get feedback immediately afterwards where you know she might not be happy I got to you know what I mean and so um I think like it comes down to what are the things that we want to change and then how do we change them and ideally we want to have some sort of reward cycle as fast as possible with that new behavior and that's I think
• 94:30 - 95:00 that's how fundamentally you can change what you do which then letters up to who you are Moving on from that in terms of acquisition.com how has your criteria changed for businesses over the last two years um it's just much bigger It's just the businesses have to be a lot bigger Um they have to be billion-dollar opportunities now Um when I first started I think honestly when I first started the goal was like $50 million opportunities and then it became like $250 million opportunities and so it's almost like 5xed actually like every
• 95:00 - 95:30 every like 18 months or so it's almost 5xed So how does it work exactly a company reaches out to you and they say "Hey we want they'll go through acquisition.com on the site and then and what do they do they submit their info that they want money or they want to sell or what is it?" So we have we have um we basically have three kind of places that someone can go So for like seed capital SAS you know software type startups we have ACQ Ventures which is our venture arm And so those are typically like smaller checks that are
• 95:30 - 96:00 between like 50 and a million dollars like check sizes And so we do you know a lot of those deals We do probably like a couple deals three four deals a month sometimes Um like December did four I think we did four in January Like we we do a decent amount of deal volume there And those deals are much more like meet the founder understand the idea cool we can we can just deploy Um we have uh the private equity side which is kind of like the the big big the big boy side Um and those businesses like if we're going to do a deal they're all bespoke based on you know the valuation of the
• 96:00 - 96:30 business where we think the business can go what our value ad is Um and typically in that side it's like right now we're 40% SAS 40% um uh B2B services and then 20% consumer services And we're shifting over time towards just a blend of SAS and professional services That just tends to be where we just do really well And so that's on the private equity side And then um we have the advisory division which we started in January of last year which is uh companies that are like not really portfolio ready And so that's kind of
• 96:30 - 97:00 like that you know 1 million 10 million 30 million sometimes uh dollar per year business where uh it's like they need to change a couple of things And the reason that happened was for the three years prior to January of last year um we you know we'd look at a business we'd do four five six you know diligence calls get to understand the business And a lot of times like 90 times out of 91 we'd be like "Not a fit for us or not fit for us right now Maybe change these two things move this metric up and when you do like call us back." And what ended up
• 97:00 - 97:30 happening is a lot of founders were like "This was more valuable than anything I've ever had to go through and thanks for doing it for free." And for me it was like it was actually super expensive cuz I'm doing that 90 times times however many calls lots of companies And I was like I wonder if we could do this in a way that we could charge to do the same basically assessment of a business and say here's all the things that we would do Here's how we change it And so then we you know we we we wanted to see if people were interested in it So January I was like hey if anyone wants to come out to headquarters you can meet my portfolio team We'll kind of assess the business and be like these are the blockages to either making it more valuable or scaling it And so it's like you'll meet with my head of marketing
• 97:30 - 98:00 He'll be like okay change this on your web page Change this on your ads change this whatever we meet my head of sales if sales is constraint these are these are the things that we do and um people have really really really liked it so it's been exceptional um and I think the reason that it works so well is that there's kind of what I was alluding to at the beginning is that there's just not a lot of help at that$1 to$100 million range um and I think we can provide that and so how do you make money from that are you taking distributions from the company or have you sold some No it's just we sell it as an advisory service it's just a service
• 98:00 - 98:30 for acquisition company oh overall We have distributions that come from the private equity side Um the venture checks obviously I'm not going to see anything for that for 10 years And then um services just normal business Why don't you have a website or a place where where people could see the companies that you've invested in it's a good question It's something that I've gone really back and forth on The main reason is like when I sold Gym Launch um I sold Prestige Labs which was a sister company that did supplements and sold through the distribution base And I remember in the diligence meetings uh
• 98:30 - 99:00 for that it was like a huge point of contention that I had a 10,000 person Instagram following at the time and they were like are all the sales coming from your Instagram and the business is doing like 20 million a year just the just the supplement side And I was like no it's not coming They're like well this could be this could be an issue for us if like we can't have complete control of the Instagram and how do we know you're going to keep promoting it i was like my Instagram is not driving like 10,000 people does not make 20 million like I promise you And uh seeing how sensitive they were to kind of like keyman risk
• 99:00 - 99:30 around you know an acquisition I was like "Okay uh if I do deals and I grow my brand uh I don't want people to know what the companies are because I'm going to have to go like I'm going to write a check but then if I publicly associate with it then I'm going to have to go with the deal later." So like for example school that was purposely you know like a brand association plus money obviously that went into it Um but I know that I'm in that I'm in that for the long haul You know what I mean like I'm going to be with school for many many years And so my keyman risk is something that I'm willing to basically deal with Whereas if I buy a you know an
• 99:30 - 100:00 HVAC business I publicly associate with it Um a potential acquirer will want me to sign other non-competes I'll have to have some provisions around uh promotion and I just didn't want to do that I have gone back and forth on it though to be really like I've gone back and forth It seems to me like there would be a net benefit on that Reminds me I've gone back and forth I have gone back and forth like a Shark Tank business where it's like as seen on Shark Tank is pretty big And you could argue that the business you bring to that will drive up the valuation to a point where even without you it's still higher than if
• 100:00 - 100:30 you were never involved Agreed So then the next thing that goes is if I have all of these different things that I'm like pseudo promoting then it almost feels like I'm shilling a lot of things No And so that's been that's been where I've been I would just as a viewer of you not that anyone like not that I would question your credibility but I think that it would it would bring a lot more clarity where I could actually back and forth on it I mean I've gone back and I think it would attract a lot more businesses where you could say "Hey when you started with Acquisition.com you were valued at this much Your revenue was this much and now look at you." Here's the other thing I think it would
• 100:30 - 101:00 help you negotiate better terms saying that you're going to be on this website where it's even 100 companies and I think it's important you put them all in the same place so that it's not like you're promoting this or promoting that or you you should never talk about these businesses unless in a podcast setting where you're giving an example the other the other and yeah I mean I've been very I've been torn on it I was like you know what I mean like I've been very like uh because of all the reasons I just said but the other one is kind of like the um
• 101:00 - 101:30 the compliance thing that I just said right like if if a company could you imag like a company does something stupid and companies do stupid things Even if I wrote a venture check to a business and then and a company does something I'm an owner and any any you know reporter or you know clout seeeking YouTuber would then be like Hermosi is saying doing this and it's just like how is it different from Y Combinator where they're very public or a lot of these like even some of these private equity funds are just like that's their value prop though YC's value prop is Harvard's
• 101:30 - 102:00 value prop is like the the main thing they get as Yeah But there are plenty that go through Y Combinator that just turn out to be you know Yeah maybe not the best Yeah But I think it's Well Y Combinator is kind of unique in that like I mean to be fair if if a if a Harvard grad does something bad Harvard takes a hit Um but is a law of large it's going to work both ways I think I think it's going to hurt you if a business does something that reflects on you And if you do something it reflects on all the businesses I think it goes both ways I think the net benefit is like a 51 to a
• 102:00 - 102:30 49 like 49% down to 51% like I have I have gone back and forth to the two where I've been like I'm I'm going to make all of our stuff public Um I think we are make I think the ACQ ventures if I'm not mistaken I think our ventures things are public um so it's really just the private equity side What about school what was your mindset behind that school is an interesting one So um you know for me to again this is like you know using brand to promote something right um you know it' been
• 102:30 - 103:00 four years that I've been making content and really never promoted anything and when I look at my audience uh I make business content almost exclusively but still like 60s something% of my audience is people who want to start a business not people who have a business and I think that's just the nature of just humans like there's way more people who don't have businesses than people who do you know 9% of business n 9% of people own businesses and 91 don't And so if we're at 30% or 33% people who are in my audience uh own businesses were three or
• 103:00 - 103:30 four times represented um on like over represented by business owners because I make business content Anyways to the to to answer the question I was like is there something that I can do with this larger audience that can help them get started in a scalable way um that would provide value to everybody and so I you know I I got approached by a gazillion companies probably like you do uh over the years uh for for the audience and the access and the distribution that we have And um school was a company that I had been following since 2018 So I've known Sam for a long time And um I just
• 103:30 - 104:00 kept watching it and it just kept getting better and better and better and the it's just like all I heard was good It was just all good word of mouth because I'm so concerned with my reputation too that I'm like if I if I promote anything and it's not awesome you know what I mean like I could take a hit And so that company was just compounding month over month over month just on word of mouth It had zero marketing whatsoever It had amazing um uh customer retention in terms of people who started communities and also member retention People are in communities So it's like people are in there getting
• 104:00 - 104:30 good experience People who are starting communities are getting good experience And I think that there's a big movement in general like meta towards uh communities overall And so I thought like from a macro perspective I think it's a good it was it was well well timed and well placed And then beyond that from a long-term strategic perspective like it has network effects built in And so even in an AI world like I think it will it will do it will do great Um and so for all those reasons uh it was also something that would work for people who were just getting started And so that's why I um I invested in
• 104:30 - 105:00 school and then I promoted it So I thought it it would help the the 60some percent that didn't have businesses get started And also for the 30 something% of people who had businesses who wanted to start you like have a place that's not like an email list for all their people to to house I saw it as a much better option than like a discord or do you worry when it comes to school the one thing that I've seen in terms of a bit of a complaint sure Seems to be that there is at some level this like MLM aspect to it where I've seen schools
• 105:00 - 105:30 that people promote that teach you how to make money on school Yeah So like a school for school I think that's just going to happen no matter what Like there's there's YouTube channels about how to make YouTube channels There's like if there's anything that someone has figured out to generate a living then there's going to be people who sell how to do that thing And so I think if we chunk up a level the question is is there something wrong with that right and then number two the MLM component So I can break that into two parts The MLM thing is just like we have a referral commission which is like not a very uncommon strategy And the internet Yeah
• 105:30 - 106:00 Yeah The internet doesn't really deal with nuance but it's not like it's multi level An MLM has multiple levels This has one You refer a friend you get a percentage Like anything like if I refer you business you probably give me 20% So like you know whatever Um but yeah that's just cuz the internet doesn't deal with nuance So that's the the not MLM the single SLM the single level marketing that exists there Uh in terms of what um what people do with their community we're we're pro free speech
• 106:00 - 106:30 anti-censorship like if it's legal you can you can have a community about it You know if you want to have a community about painting have a community about painting You want community about Facebook ads have community about Facebook ads You want community about finding the perfect cologne for you you can have that You want to have one about painting model cars you can do that You want to have about how making sick beats I'm just naming all just off the top of my head all different communities Then if you want to have one on how to make a school community profitable have like we're not going to say like you can't start a community about that Like how could we do that we have millions We have tens of millions of users Tens of millions It's very big It's much bigger
• 106:30 - 107:00 than people think it is And so like either you have to start saying making this rule and that rule and then you get down the the whole rule strap or you just say like you can make community about whatever you want as long as it's legal And that's that's how that's where where you decided to draw the line Should we create a community about how to podcast or just podcast it you could I'm sure it crush You think it would crush what I don't and I we've been thinking about making making content like talking about production equipment though researching a podcast about how to podcast But then you have to ask is
• 107:00 - 107:30 there anything wrong with loves it right Exactly And that's a great question is what's and and so what and what's wrong with it i'm going to out myself right here I think there's nothing inherently wrong with an MLM However they're used in really inappropriate ways a lot of the time But inherently nothing wrong with just an affiliate program I feel where it goes wrong is people are deceptive about maybe the practices or or the buying I've studied this deception It's so much it's like I can I can say it very succinctly The problem
• 107:30 - 108:00 is that the promise doesn't match the deliverable Okay that's it It's false expectations That's it Fundamentally the vast majority of people who advertise especially in the information space do not advertise compliantly And so as a result they make promises they can't keep And so people get false uh false expectations stepping say do I think there's anything inherently wrong about saying like I learned how to do this i put I put tons of hours into compiling all this stuff and if you like me and you like my style of teaching you can buy it from me in this video course and I know you used to have one Like the the question is I don't think there's
• 108:00 - 108:30 anything inherently wrong with education or even profiting from education Colleges do it Why why can colleges do it and get give people zero ROI and no one says college is a scam Well some people do but the vast majority of people still think college is not a scam It's simply because they don't promise anything That's it That's fun Like it just comes down to that If you just don't promise anything then you're kind of in the clear If you're like "Hey I put together a course on how I you know how I succeeded as a as a realtor I make no promises to whether I'm going to follow it or it's going to be perfect for you I just share the stuff that worked for me If you want to go check it
• 108:30 - 109:00 out it's whatever It's over here You can go check it out and buy it." I don't think anyone's like "Screw this guy." Now some people will be because that's the internet but like anybody what I would consider to be reasonable No And I think to you know to a large degree like we can't listen to everyone because you will have people who are just upset about you not sharing your stuff as people who are upset with you sharing it And so might as well upset the people who don't pay you Vegas Matt also put it really well because he was involved in one before You know who Vegas Matt is he's a YouTuber here in Las Vegas massive YouTube channel on
• 109:00 - 109:30 gambling But but he said that MLMs are effectively better because the money actually goes to the people that are closing the sale rather than giving it to advertisers that are just going to inundate people Oh yeah They just take that I mean from a business model perspective you take your advertising you basically take your entire allowable cost to acquire a customer and say instead of giving that to anything I will just give that all to my sales team and then I will incentivize them to recruit other salespeople so that we can have a continued distributed base so that instead of having a sales manager who's getting paid a base salary and a a small percentage of everyone's sales
• 109:30 - 110:00 it's just like it's all performance and having the multi-level structure allows you to recruit teams just like you would in a business wait all businesses are pyramids are all businesses pyramid schemes like you know come on uh like it's Illuminati uh you know we just say things but no I don't think there's anything inherent I think the where people get in trouble is making deceptive claims and making false promises or promises that they know to not be true and the associations so
• 110:00 - 110:30 basically MLM has a bad brand has a bad brand there's enough negative associations that people who might be otherwise really good MLMs still take the heat for the bad ones people who sell information and education will take the heat for all the people who sell the bad ones And so that's the that's the rub I don't think there's anything wrong with selling education It is interesting how deeply rooted that hatred is for a lot of people It is like the most sensitive topic for a lot of people I'm curious are there any business models that you kind of secretly hate because but they're highly profitable Maybe because
• 110:30 - 111:00 they're like intellectually lazy or like just uh morally lazy maybe too Um no you'd say anything I I very much stand from the position like if it's legal then you know do if someone is willing to exchange money like again capitalism based on voluntary exchange between two parties and both parties make the exchange voluntarily because they both believe they'll be better off now the belief part is where deceptive components come come into play right but inherently I don't have an issue with
• 111:00 - 111:30 someone making like I don't claim to have a moral superiority that my way of making money is better than someone else's way of making money now my business might perceived as more valuable to an investor which is a different thing So if you're like are there business models that make cash flow but don't have inherent value yeah there's tons of do I just see it as different and that's fine So if someone were to take school as an example and just copy it and do their own thing why do you think that business would fail network effects we
• 111:30 - 112:00 already have tens of millions of users It's very hard to do And what if that also the details why doesn't someone just copy Facebook it's like they could just copy it Exactly It's like yeah people aren't there What if there's another influencer who's backing like school2.0.com let's just say they it's it's also easier said than done you know to copy Um like it's there's a lot of details on how it's programmed and how it works and what content gets surfaced and what algorithms run Like there's a lot of details in the business that make it and it's it's it's the product is so
• 112:00 - 112:30 detail driven It's all the tiny things It's not like you could copy the colors and the layout and there have already been plenty of people who've done that but they don't go anywhere And so um but we could say that about any business Yeah What do you think is the best business right now because it seems like from my perspective just on a high level the subscription model is doing really well charging one price for the year or like break it down monthly That seems to be the new thing So like what's from your perspective what changes is that in like the digital creator space generally but but every
• 112:30 - 113:00 every business has gone to now the subscription model Like I'm paying more I remember when I used to be able to buy Adobe Photoshop for like a hundred bucks and now it's like 30 bucks a month or like $40 a month for the same thing Yeah Is it a ripoff or if we're willing to pay for it it's just inappropriately priced I'm extremely willing to pay for it Oh yeah If anything it's a good deal Shout out to Adobe We'll be an affiliate I would love that man I would be shilling Adobe all the time Maybe you should reach out I feel like
• 113:00 - 113:30 you push it so hard Yeah And it's a great It's not expensive It's incredibly anyone with half a brain would want to buy Link down below Get 15 bucks off But you know before you go into that I will say the biggest benefit or the the best business that gets [ __ ] on all the time YouTube Premium People hate spending money for YouTube because it should be free I love YouTube Premium Love it I think it's worth every penny People just think they just project their own shs of like why they they should I shouldn't like what you should
• 113:30 - 114:00 that that YouTube should pay all the servers and all the compute that they have and all the workers that work at YouTube should just be free Like it's just it's just this demand of the universe that like everything has to be given to me Uh or else or else I'll be upset Okay We make more money if people watch the ads versus getting YouTube Premium and watching the video without the ads I think the ads pay more all things considered claims that the premium views are worth more which which I would believe cuz if they're paying 15 bucks a month then you just kind of have
• 114:00 - 114:30 to Okay but then you just kind of have to do some simple math and they need to watch like a million videos in a month I don't know the breakdown on that So I will answer the question that you originally asked which is why is the subscription economy like doing and I'll just only answer specific to kind of creators cuz I have a ton of uh obviously with school and then I am being one myself Um I actually just think that there's never been more creators and at the same time there's never been less trust and so people don't trust other people as much and so people are consuming significantly more
• 114:30 - 115:00 content prior to making a purchase and the purchase they make in general the first purchases are lower lower ticket on average So maybe 10 years ago um people would immediately like see one video hop on the phone and pay $5,000 for something or $10,000 for something And that's just it's it's significantly less likely now and they're far more likely to buy grab a book or grab a you know a $29 thing um that they can try and see if the if the quality of the product is or the quality of the community the quality of the subscription is what they what they deem
• 115:00 - 115:30 it's it's it's supposed to be worth and then they're willing to you know pay them for more expensive things So I think that what is more publicly seen is the subscriptions I still think many of these businesses that that do bigger profit numbers tend to also still have backends that are more premiumly priced either in terms of services or products or whatever Um but the thing that is advertised on the front end for the vast majority of people kind of like you have your top of funnel shorts and then you have your longs and then that converts into your kind of like low ticket and then that go ladders up into the you know 5% of those people or 10% or whatever percentage ascend into you know
• 115:30 - 116:00 a higher level In terms of hiring people how do you spot an A player um I will say that I have yet to have an A player that I don't know is an A player within the first week or two So what are the signs mhm What are the signs they immediat So like support right they decrease the likelihood of failure So they are taking things off my plate really quickly Um and they're proactive in terms of their uh decision decision-m and the actions that they take A lot of a lot of it is really just a tremendous amount of activity High activity high
• 116:00 - 116:30 alignment If you have both those things you have somebody who's moving a lot of things in the right direction And ideally you get a lot of attention back And so like if my life gets worse when someone starts that's a bad sign And if my life doesn't change when they start that's also not that good of a sign either Now of course there's a little bit of onboarding You're going to have some of that That's sure But like by and large I want to see some dramatic changes in how my time is getting allocated from bringing somebody in especially if they're taking things off my plate But I think that works at all levels And what's one of the things that you still insist on doing personally even though you could outsource it well
• 116:30 - 117:00 all the books Um I write all the books I write all my emails I write I mean I I do all the recording Um tweets All the tweets are mine Uh all the tweets are mine Honestly every every piece of written word that comes out of acquisition.com um is me And that is a huge amount of work And so uh it's either me because they took it as a transcription from a video that I talked uh or I wrote it There's there's there's only one
• 117:00 - 117:30 exception um to that But LinkedIn same thing Facebook same thing It's it's all tweets are actually my we were talking about this earlier but tweets are my is my biggest secret weapon for how I create so much content It's everything It's the it's the wellspring So I the tweets are my stream of consciousness uh in real time And then those tweets become tweet reels They become shorts If they're high performing I'll just say them Um many of those shorts put together become longs that'll be you know business advice or brutally honest
• 117:30 - 118:00 you know advice I wish I had had Things like that It's just 20 30 tweets put together um with a little bit more anecdote Um LinkedIn posts are multiple tweets along the same thing put together Facebook same thing So like Tik Tok same thing Like everything actually and my emails are high performing tweet concepts that then get repurposed into email So everything stems from like that one stream of consciousness And I think like as a creator you have to find whatever that that lowest friction method is for you I always used to email
• 118:00 - 118:30 myself like ideas quotes lessons thoughts and I used to use that as my method for making podcasts And then I just had this like duh realization of like instead of just like emailing myself I could just email the world via tweet and I would just like tweet them And it also made me a much better writer because you have to be so concise with your language Um that I think has actually improved my writing from the book's perspective Have you said anything that's recently gotten backlash i think I had a a LinkedIn post that got taken a little bit out of context So
• 118:30 - 119:00 those I have somebody who writes my LinkedIn but it's my it's my words but he took it from like a podcast like this and just took it there and then just took an image and put it together Um and it was it was basically like hey for 10 years uh I didn't like go to football games I didn't play fantasy I didn't go out Um and I like skipped friends weddings Like do whatever it takes to get where you want to go right and the amount of people that were like so two two different big backlashes So backlash
• 119:00 - 119:30 one was just like this guy's hustle porn Like all he wants to do is tell people to sacrifice And I'll I'll address that in a second And then the other was like what kind of life would you like i would never skip a friend's wedding Like this guy's priorities are all out of whack or whatever And so both of them come down I think kind of like the do you do you have an issue with somebody's business is like do I have an issue with how someone lives their life no Like different different destinations Like there's a there's a guy um who like is
• 119:30 - 120:00 probably a lifestyle entrepreneur and likes to like talk [ __ ] about my stuff and like I make in like a week what he's made makes in a year and he's a big you know whatever and and all I can think of when I say is like we have different goals dude like we have different goals like I don't like of course like it's like looking at professional bodybuilder like and he's like well I trained twice a day and I weigh all my food and like I get
• 120:00 - 120:30 massages and I do stretching and it takes me about five or six hours a day to do you know all the bodybuilding stuff that I do And then some CrossFitter is like "That's ridiculous I only work out three days a week This guy is trying to give you bodybuilding porn." It's like bro he's way bigger than you and he has different goals than you do And so um it's just this whole idea of like should I of like they shouldn't do that they should do it my way which fundamentally just is like I have my life is based on my preferences and their life is based on theirs Duh
• 120:30 - 121:00 And so um if you want to go to your friend's weddings by all means go to your friends's weddings I don't care You know what I mean like if you want to have a dog have a dog Like I I share the things and like I the one line that I I repeat over and again is is like my life is a documentary not a sermon I'm not telling people to do things the way I do them I just share what has worked for me and if it works for you great And if it doesn't I love you I love you all the same Where I see a lot of the backlash is just because it comes off as dogma for everybody But if you added the stipulation of like to those that want to build a successful business but that's also not necessarily like you
• 121:00 - 121:30 don't need to cater to the people that aren't going to listen long disclosures at the end of every one of your posts It's like I can't if I put all the disclosures in my tweets I wouldn't have tweets I would just have disclosures So it's one I think I think NAL said something about this but basically it's like for a post to get reach it will have to have some sort of level of polarity and to have a level of polarity you have to remove context and so it's basically like you can have complete context and no one can see it or you can be willing to stand on one line of gray and say now for me if if more people
• 121:30 - 122:00 were willing to delay gratification a little longer um because they saw some of my stuff rather than take immediate reward I can live with that It's interesting Every time we talk to you you're you always say "Oh yeah I recently did this I recently evolved this I've since developed this." You always have something that you have just done Most of the time oddly enough it's not even adding things It's eliminating things Usually words or Yeah making your criteria more strict What's something
• 122:00 - 122:30 right now that you're currently working on and maybe you don't have full clarity of it but you're seeking clarity well I mean how I'm going to launch my next book um is something that I'm thinking about just from a timing perspective So that's something I'm I'm thinking about Um a lot honestly a lot of my attention goes towards what I'm going to try not to do And so it's a it's an an accurate observation Um because I mean if you listen to you listen to all the greats you listen to Jobs you listen to Basos
• 122:30 - 123:00 you listen to listen to Elon uh entrepreneurial greats it's like they all talk about focus because it's so hard to do It's so hard because the bigger you get the more the more juicy and tanalyzing the opportunities become right and it's like and you have to just be like "Nope we're just going to keep doing this this thing that I know all the pains of and like we're just going to confront the issues we have and we're going to work through them one at a time when it's like oh but there's this amazing thing that could be fast and easy and it's like it's just fast and easy because I don't know enough about it and I just have to and like I've just
• 123:00 - 123:30 been burned enough times jumping over that bridge to know that like the grass is greener I just don't know enough." And the fact that I think it's attractive means I don't know enough And so uh 2024 was the first time in my life where I've not had FOMO And that was a first my whole career where I I didn't have a moment where I was like I should be doing that instead of this And I've been doing this you know I've been the entrepreneur game for a minute And that was uh it was only like I realized it in retrospect I was like that was an accomplishment That was a huge win for me cuz I've always had that like like a
• 123:30 - 124:00 buddy of mine close friend of mine did like $50 million in net earnings in Q4 just from trading crypto No employees Like just just traded crypto made 50 million in profit And I I remember thinking in that moment I was like "Good for you man." Like no idea how you do it Don't want to know I'm going to keep doing my thing But like at so many other points in my career I would have been like "Oh my god teach me what you're like I want to learn what you're like." And I would completely take my eye off
• 124:00 - 124:30 the ball And the thing is is like I've I think I've gotten this um a snowball that's finally started to roll And I say this now hopefully knock on wood like it'll stay that way that um I'll manifest it uh teaching I'm I hope that I can stick I can stick with stick with it and because I've continued to get rewarded for sticking with it and uh it's been the hard like acquisition.com by by duration is the hardest single business that I've the longest duration that I've only done one thing Um so
• 124:30 - 125:00 that's been pretty cool Besides besides Jack's mom Okay we're cutting that Yeah Why she was amazing She didn't tell you Um no she told me all about it actually I think uh Did she tell you to call me dad i think you are I think I'm entitled to some Am I in the will you took that like a champ So once you hit a billy in your laugh starts turning into a Bezos laugh That's great Gosh that completely threw me out I had something I had a missile in a cannon
• 125:00 - 125:30 That's also what she said Yeah All right That was snowball Snowball is rolling up I hope that I can stay focused for an extended period of time Yeah that sounds like something that Graham and I need to hear Exactly Because we're so focused on making the content and fortunately like like most of our revenue comes from the sponsors and so we're able to travel around the world We're able to spend money on the
• 125:30 - 126:00 flights and the accommodations and the crazy dripping the crazy $15 We're able to to do what we do because of because of the sponsors and and and right now it's enough but we want to always be improving And so now we're thinking like well what if we created a product or a service and we're always having discussions about how we can do that But I at some point I always wonder like like if we just focus on making better content then we get better like higher paying sponsors Same sponsors We love the sponsor higher paying sponsors because we're getting
• 126:00 - 126:30 more views and it's like a cycle because of that But but part of me also wonders like should we focus our efforts in something else my my thought with that is that I am happy also doing what we're doing now and I kind of worry that like we're good at this thing and if we take our eye off the prize we we don't but if we take the eye off what we're good at now are we just adding more onto the plate where we don't need to or we have a really great balance and a great life and things are going well and if we're just trying to create something for the sake of creating something then maybe it
• 126:30 - 127:00 won't be perfectly terrific But right now if we're just focusing on making the best content for you guys watching then hopefully it's a pretty good product Well I have so many thoughts on this Um do we have five minutes because I think I have a a very indepth answer for this So so basically I see this as a spectrum So it's a continuum that exists for and this is specific for creators in terms of how to monetize And so it's it's basically a spectrum that has risk and capital and effort kind of on either
• 127:00 - 127:30 side So like low risk low capital effort Um high risk high high capital high effort So on the all the way on the left you have sponsorships right which is what what you're doing now Cool You make money from doing the same thing One degree to the right of that would be like an affiliate relationship Like Adobe says "Hey we'll give you 20% of all of them lifetime." It's like "Okay cool Adobe hit them up." You have an affiliate relationship The next is when it starts to get a little bit you have you have your your uh your your your drop ship right your white label you find somebody who just
• 127:30 - 128:00 puts and you did this with a coffee I think back in the day right like you have that kind of middle ground So somebody else can manage everything I'm just going to promote it but I'm going to own the brand And that's that's that Um the next degree here is where you have uh you find an existing business where you can negotiate some percentage of equity in the business and ideally distributions and or royalties Um which I I'm a big advocate for creators to do both Um because you have costs associated with running the business running your business your side of the marketing right and the business makes
• 128:00 - 128:30 money because it's monetizing with whatever traffic you're sending but you need to keep advertising And so having some either you know profit share or some royalty on topline or some sort of some sort of cash flow still needs to come back cuz not all companies sell Actually the vast majority don't sell And so I think it it it balances some of the risk for a creator But that would be a minority deal especially with a company or a product that you really like And so if Adobe were smaller and would give you a percentage of you know the company that would be one where it's like and ideally this is I mean this this is me turning the tables and
• 128:30 - 129:00 speaking to you as an investor Um it's the best is when you can write a check too because then it's like there's no expectations I'm going to promote this because I believe in it and because I want it to grow and I want to get a good a crazy return on the money that I put into it And so you'll have some blend that's gonna that of that deal but usually for minority stake and maybe some performance tanches that kick in based on you know how well you do it Uh and then the the the final one the final frontier is where you actually like do everything yourself Like the whole the whole thing soup to nuts is like you're
• 129:00 - 129:30 starting a business Um that's you know uh Jimmy with Fastables right like he's really just starting a chocolate thing and finding cocoa nibs in Africa and doing all this stuff right and so the upside is typically higher on this side lower on this side in terms of the enterprise value of you know what you're promoting Um but so is the risk and the difficulty And the idea that I think a lot of people miss out on is like it's so much about the partners that you're bringing in on the side that they have to like in my opinion for a true
• 129:30 - 130:00 partnership to work they have to be able to be successful without you And if they're already growing they're already successful This is like school like school's school's going to be successful either way I just want to pull the future towards us faster Um you need a partner who who is as good as you are or better Ideally just amazing at that thing and you're amazing at this thing and then it's like the sum of the parts is what is where the magic happens But those are basic that's basically the continuum But if you're going to do anything to the right of the right of center there and you're not just like I'm either sponsoring or doing an
• 130:00 - 130:30 affiliate deal I think you can do like I think the the the best deals is kind of like the school deal where you you put cash in you you you you know buy a big stake you also promote like those are deals where it's like I think again in terms of behavior what is this going to change about what I do and I would like to do deals that change as little or nothing about what I do if I'm always going to make content anyways and I'm already getting two-thirds of people who want to start a business then I don't need to change anything now it's still high leverage because I just point them in a direction I'm like hey I vetted this I think it's awesome I think it's a
• 130:30 - 131:00 really good product check it out and it's free trial If you don't like it cancel Right Um that that is basically my and I I would use that if I were you guys as my decision-m variable which is you both accurately said it We're really good at this thing and the more we do this thing the better we get at it We get more views We get the sponsorship continue to grow Fine We can do some of these other deals as long as it changes nothing about what we do And so I think that's and that's the frame that you have to enter those conversations with which is like I'm already sponsoring So me
• 131:00 - 131:30 slotting your product in which I also happen to own a piece of and get some kickback on it doesn't change anything about what we do but then that gives you some long-term upside Um and maybe a higher distribution This would be really interesting How about this for anybody watching if you have a business that you think would align with what we're doing and you want the distribution I'd be really interested to see who reaches out from this That's a great idea And also Adobe And also if you guys Yeah if you guys would be interested if we were to create because
• 131:30 - 132:00 Graham and I have thought about this and we've helped a lot of people just in consulting uh with content specifically podcasting If you guys think that there would be demand for that So that's something that you'd want to see if we went all the way in depth pre-production production post-production research etc Let me know I'd be open to that too Yeah I tried something on my own I'll just talk about it briefly Uh I put a little feeler out there for like a networking community and I was shocked We got thousands of people who reached out who said I just want to be a part of a network of like other entrepreneurs
• 132:00 - 132:30 community on school perhaps No So we started at the very top of the list um people who made more than 10 million a year and I just didn't even think of I just wanted to go and talk to these people I probably talked to like 20 people It's it's it's the least scalable thing I could possibly do because I'm like talking onetoone with certain people it's not okay it not when people don't go up I see that focus in his eye don't go up against that so far we got a group of like a dozen people who are doing over 10 who are doing over 10
• 132:30 - 133:00 million a year and it's it's just the coolest group of like it it's something magic when you're when you have a small community like that versus something that's too big but I say when it's it's not scalable in the sense that once you get it seems like from I've spoken with quite a few people on this once you get more than like 30 or 40 you start to lose that one-on-one connection that made it special in the beginning It's really about subgroups So if you look at like is it scalable at the current model no but our community is scalable for sure So if you look at um well you look
• 133:00 - 133:30 at Y Combinator they have a much larger community than that It's really cool If you look at uh Vist not Vista uh Vistage which is a community model If you look at uh YPO if you're familiar with them young professionals organization they run they're they're national and they have chapters and but they keep the forums to like eight people And so that's that's how they keep the to the you have access to the whole network because you're like "Oh I'm also a YPO person I got I got vetted I you know I'm above a certain level." So you have that kind of cred but like the the actual super close-knit group is is like eight
• 133:30 - 134:00 people and they meet in person And so that's why I think there like I think for sure there's there's demand for something like that because people want all successful people want to be around other successful people because it's really lonely That was the one thing I was surprised about when when I was speaking with all of those people Only one of them said that their goal was to make more money Only one And that meant that maybe 30 people said "I don't care about making more money All I care about is meeting other people who share the similar problems that that I've gone through." And most of most of the
• 134:00 - 134:30 problems are pretty service level It seems like and it's like tax planning estate planning raising a family random business issues that come up init But I was shocked how common everybody all this commonalities between every human problems have existed for human lifetimes So So I thought that was interesting Yeah What is your experience of loneliness um I I really like being alone So I don't get super lonely to be super like
• 134:30 - 135:00 candid with you Um I think that there are experiences that feel isolating where you're like "No one else is dealing with this." But usually isolation is kind of like shame It only exists in the dark Like if you go out and say like "Hey I'm dealing with this thing with my marriage I'm dealing with this thing with my weight I'm dealing with this thing in business." Like there's a zillion other people who are dealing with that My mom used to say this thing that I really liked a lot The news is always the same It's just the names change And I just thought that was actually like pretty profound It's like if you look at the headlines of the news it's like you know banks default
• 135:00 - 135:30 interest rates up housing crisis like it's like those headlines have existed for a very long time We just change it's just we just change who's involved And even even the bad ones like girl gets abducted like just change the names but it's the same stuff humans doing human things And so um I think that context but it's still it's one thing to know that hypothetically another when you meet somebody who's going through the exact same thing And I think that makes people feel um less isolated But spending time alone for me personally is
• 135:30 - 136:00 like one of the most I like I like being alone Are there different tiers to wealth that you've noticed like for people that go from zero to 100 100 to a million what are those tiers and when do you see diminishing returns i think Felix Dennis has a book called like it's like how to be rich I I think it's how to be I'll teach you to be rich or how to be rich something like that Anyways it's funny but like the first chapter he breaks down like 11 levels of wealth and he says basically after $400 million liquid He's like that's when you're truly wealthy and he's he was you know
• 136:00 - 136:30 he was worth that much money He's like at that point it's like you can really do whatever you want I do think that the jumps are much smaller in the beginning in terms of what makes a really big difference I think going from anything to about six figures a year is a material change Um I think going from like you know even 10,000 a month to 20,000 a month is a significant change Going from there to about 40 or 50 is another change And if we think of like how we're defining the change it's usually like what are the variables that affect someone's daily living So it's going to be where they live um the you know the schools that their kids can go
• 136:30 - 137:00 to the vacations they can take where they can stay uh the food they eat the clothes they wear like those are all but almost all of those are affected mostly I would say like up to kind of like that 1% earning level which is about $500,000 a year Now you can live a baller lifestyle 500 but not really save anything And so if you're a responsible saver it really depends on your saving Um I'm actually a lot like Graham believe it or not even though I I I spend money because Leila spends money but like by percentage of income I spend a very small percentage of my income Um
• 137:00 - 137:30 and so it really just depends on your appetite for saving versus spending Uh and I think that's entirely personal because it's really just a question of risk Like how much risk am I willing to take on but um beyond that there's that's just a ratio But after that it's like you know you're you have nicer and nicer houses You go on nicer and nicer vacations You travel private You know maybe that's at a couple million bucks a year You start traveling private After that again it's like it's just like you're buying boats and you're buying houses Like there's there you
• 137:30 - 138:00 can't at a certain point you really can't consume any more of it Um I will say this is that I do think that and this is controversial Um but I do think that money um because you know they they had a study it's like up to $70,000 a year um and now like inflation adjusted probably closer to 100 I actually think it it continues to go up beyond that But I think the problem is that people have a skill deficiency in terms of how to spend money I think most people know how to spend money effectively up to $100,000 a year in terms of how to make their life better but they don't know how to spend it above that in terms of
• 138:00 - 138:30 like things that improve their lives Like I think but I think it's a learnable skill I think you can get better at spending money uh to make your life better And so for me things that make my life better are going to be things that buy me time back Um things that basically are all the annoyances and frustrations in my life If I can pay to make those go away those are things that net enhance Um and then long-term in terms of purpose it's like if you find something meaningful you can actually devote real resources and make a change or an impact which I think is you know you should see the updated study on that That whole $75,000 thing
• 138:30 - 139:00 No it was that was done in a in in a different country with so they they did one they did one recently uh well within the last 10 years of the United States and they found that I think it was about $150,000 was where you get peak dollar to value ratio it continues up just diminishing returns but diminishing returns and they found that it the diminishing returns really stopped about $650,000 about top 1% they found that over a million dollar a year you have
• 139:00 - 139:30 lower quality of life and I'm guessing it's because you have more problems career issues uh or maybe friends are not friends with you or you have fake people manage money which is another like a whole another thing but it was really yeah 650 700 grand and then it just kind of tapers after that I would that seems super super believable but like after you know five or $10 million a year in income like but the next strata is like I don't know 25 maybe 30 40 million a year in income like where you can do like even you know
• 139:30 - 140:00 crazier things I guess but at a certain point when you can buy the hotels you stay at it's like like whatever I don't know I don't have a need for Omega yacht I think Leila wants one though You should buy a hotel Don't say it too loud Alex thank you again for coming on the podcast It's always great to see you Yeah this is your fifth time on Believe it Is it really it is Yeah We've had no other guest if we count the you and Ila The duo show Okay The duo show That's
• 140:00 - 140:30 fair Yeah Yeah Well that's cool Maybe in a year guys You'll see him back on Hopefully And we'll see what he's eliminated from his life one year from now I've eliminated happiness from my life I've just seen it as a distraction Just don't don't eliminate podcasts That just for us Stop doing podcasts You don't do many to be honest with you But no you guys you guys we always have uh good conversations I'm glad we got to where where we did And um I only took it cuz your mom um told me that it would be a lot a little bit of debt Yeah I have a big debt to pay off there
• 140:30 - 141:00 All right guys Thank you so much for watching Till next time And thank you to the sponsors Adobe Thank you sponsors You know what to do Until next time See you