The Diary of a CEOAlex Hormozi’s Warning: Stop Chasing AI, Build This Instead!
EVERY SPOKEN WORD
150 min read · 30,038 words- 0:00 – 2:33
Intro
- AHAlex Hormozi
I do a $106 million launch. My mom got to see it, which is really cool. She dies four weeks later. It was just like, how am I supposed to show up right now? So I write these tweets as notes to self.
- SBSteven Bartlett
I'd never heard you talk like that publicly before.
- AHAlex Hormozi
Yeah. I'm like, "What do I need to hear right now?" And I was like, "I- I'll write that," which is like, "I just have to keep fighting." And people will judge how much you love someone by how much you choose to suffer. I don't think the person that you lost probably wants you to suffer. One of the lessons that I've learned from an entrepreneurship perspective translated into life is we will get these moments of dissatisfaction or discomfort and be like, "I'm-- Life sucks. I need to change something." But my emotional discomfort is not an adequate reason to change what I'm doing. And so there's all these other skills that are still required to be successful in business, but if I can compress 14 years of business advice, the first thing I would say is you have to decide whether you care more about your future than what other people think about your future. Like, someone's version of you has to die because everything at the very beginning of entrepreneurship comes down to one thing, which is fear. And it makes sense to be afraid. It's because we want certainty, but the only way to know is to start. The second thing I've learned is that the fastest way to build a $10 million business is not the fastest way to build a $100 million business because focus and patience are the two enduring competitive advantages because they're so anti-human. And so this is where entrepreneurs will skyrocket, and I'll unpack that concept.
- SBSteven Bartlett
So how are you thinking about your business in the world of AI?
- AHAlex Hormozi
I'm a big AI advocate, but people are using AI in the wrong places. Like outsourcing thinking and decision-making to AI is a really bad decision because you will just get dumber. This is the best asset I've got for now, so I wanna keep it as sharp as I can. Finally, this is like the, the absolute raw truth I could possibly give, which is the single best financial decision that I ever made, and that is-
- SBSteven Bartlett
This is super interesting to me. My team give me this report to show me how many of you that watch this show subscribe, and some of you have told us, according to this, that you are unsubscribed from the channel randomly. So favor to ask all of you, please could you check right now if you've hit the subscribe button if you are a regular viewer of this show and you like what we do here. We're approaching quite a significant landmark on this show in terms of a subscriber number. So if there was one simple free thing that you could do to help us, my team, everyone here, to keep this show free, to keep it improving year over year and week over week, it is just to hit that subscribe button and to double-check if you've hit it. Only thing I'll ever ask of you. Do we have a deal? If you do it, I'll tell you what I'll do. I'll make sure every single week, every single month, we fight harder and harder and harder and harder to bring you the guests and conversations that you wanna hear. I've stayed true to that promise since the very beginning of The Diary of a CEO, and I will not let you down. Please help us. Really appreciate it. Let's get on with the show. [upbeat music]
- 2:33 – 5:00
How To Use AI As An Entrepreneur
- SBSteven Bartlett
Alex, I, I feel like we have to start with AI because it is front of mind for both, I think my audience, but also for entrepreneurs that I speak to at every step in the journey, whether they are-- I was with Adara, who's the CEO of Uber, the other day, um, in New York, and he-- that's what the conversation was about, AI. But then I speak to startup founders who are trying to build a software company and can't find a moat-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... that is defensible. Those conversations are about AI. What is your-- How are you approaching this as an entrepreneur?
- AHAlex Hormozi
How can we use AI to do the things that are the ar- the normal functions of the business at a way better, way faster, et cetera? What I'm seeing a lot, especially with founders or people who are starting out, is they're using AI to do a lot of dumb things really fast, [chuckles] and they're trying to build companies that the models are going to swallow up pretty much immediately anyways, or already have for super users, and it's just gonna like become easier.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And the question that I would ask for the entrepreneurs who are, you know, AI maxing right now, and again, I think it's very good to adopt new technology, is, "Are you making more money?" Just the very simple, "Are you making more money now?" And even though you're token maxing [chuckles] -
- SBSteven Bartlett
Yeah
- AHAlex Hormozi
... and spending all this money on tokens, like, are you making more money? And I had a business I looked at the other day. They had 11 VAs that were doing, I can't remember, some sort of like data cleaning work.
- SBSteven Bartlett
VAs?
- AHAlex Hormozi
Yeah, uh, virtual as- uh, assistants. So low-skilled labor overseas that was doing work, and I think it was something in the neighborhood of like $11,000 a month is what they were paying for these 11 VAs. And they were doing a good job, and it all worked. And they then spent $350,000 to try and create an AI system that would replace what these 11 virtual assistants were doing. But that means they spent three-plus years of costs on what these 11 virtual assistants were doing, and it wasn't even the constraint of the business. It was just a process they could automate, not that they should automate it-
- SBSteven Bartlett
Mm-hmm
- AHAlex Hormozi
... because it's not the thing that's limiting their growth. And so they still need more customers. And that wasn't the thing. This was like part of their, their quote process or something, but that wasn't the limitation. They didn't have enough demand.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
People are using AI in the wrong places. They're trying to start AI businesses when they shouldn't start AI businesses. They should use AI in their business. They're trying to advertise as AI businesses when you should just advertise the thing that your customer cares about, which is the solution to their problem, the outcome. None of that's changed, but because you got really excited about it, you think your customers are gonna be excited about it. But most people are-- a lot of people are afraid of AI. Um, so it's not necessarily even a positive, and it's not making you more money, which is the final question.
- 5:00 – 7:12
Where Will Value Come From In An AI World?
- SBSteven Bartlett
When you listen to someone like Elon Musk, he says that work will become optional-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... in, in the, in the future. And I sat here with a couple of experts on AI. They-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... they kind of explained to me what it is. And from a very simpl- simplified perspective, this machine that has these neural nets in it, which b- have lots of parameters, basically connections like the human brain does, and when they train it, the parameters become reinforced, the, the ones that made the right decision, and the ones that made the wrong decision are like basically cut out. Sim-- Again, I'm simplifying this. These brains, these digital brains are getting bigger and bigger and bigger. Um, it's, it's like almost inconceivable to me, based on what they've said to me, these AI experts, that at some point it isn't able to do a lot of the cognitive work that people are currently doing. My question really here is like, where does the value remain in a world where intelligence is cheap-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... and abundant and, um, higher, one could say, and also in a world where robotics are coming over the horizon too? Like, where is the value?
- AHAlex Hormozi
I think stakes. For example, AI can give all of the recommendations in the world, but someone has to own the decision.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And so as of right now, maybe it will in the future, AI isn't, isn't a citizen of any, you know, any country. It doesn't pay taxes, and so somebody has to be responsible.
- SBSteven Bartlett
To liability.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
And upside on, on, on the flip side. And to take this into different domains from the media perspective, imagine Jimmy, so MrBeast, has a video and they're like MrBeast is getting replaced by AI. He's not getting replaced by AI because if he had a video that said $5 million and the $5 million wasn't real and the Lamborghini wasn't real, there'd be no stakes.
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
Like chess, right, has become more popular now than it's ever-- like, than it's been in recent history, but robots can beat humans at chess.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
But no one cares.
- SBSteven Bartlett
I think about the F1 as well. You'd still want Lewis Hamilton in the car.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
You take him out of the car, you stop watching F1.
- AHAlex Hormozi
Right. So humans want stakes, and so there's the compensation side of it, which is that somebody's gonna be responsible, someone has to risk the money, somebody paid for the tokens, somebody owns the LLC, someone is, is, owns this. And so there is value in the judgment and the assumption of risk and upside-
- SBSteven Bartlett
Mm-hmm
- AHAlex Hormozi
... which can be money or just the responsibility. From a media perspective, we still have to introduce stakes into the, into the show. Now, of course, there's gonna be the fiction world. They're gonna be much harder hit, but if you're trying to do a reality TV show, the real part has
- 7:12 – 8:36
How To Generate Great Ideas In The Age Of AI
- AHAlex Hormozi
to be there.
- SBSteven Bartlett
One of the, um, things that I find really interesting about you is you spend a lot of time thinking, and in a world of artificial intelligence, a lot of people are now deferring their thinking-
- AHAlex Hormozi
Mm
- SBSteven Bartlett
... to these frontier models like ChatGPT or Claude, Gemini, or whatever.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
And, um, we've spoken about this before, but one of the things we both agree is that knowing the right questions to ask, clarity of thought, critical thinking, making the decision is gonna be one of the things in a world of AI that's critically important. So my question to you is, like, how are you having good ideas, cultivating good ideas, and giving your space, your sort of mental space to be able to think about problems?
- AHAlex Hormozi
Mm-hmm.
- SBSteven Bartlett
What's your practice?
- AHAlex Hormozi
I'll, I'll attack this from two different angles. So first is, I think outsourcing thinking to AI as of right now is still a really bad decision. If you-- [chuckles] It's like I think anybody who's used AI for any period of time knows that you can get it to agree to anything, and that's frightening when it comes to making decisions. And so every time I'm like, "You know, what? I think it has gotten a little better," I'll just give it a, like a really obvious decision to make. I'll go, "Okay, let's open up, uh, Claude, let's open up OpenAI, let's open..." Like, let's open all of them up, and I'll ask the same question to all three, and they're just all over the place. And so I'm like, okay, this is still back to my [chuckles] judgment, right?
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Number two is that if you do delegate your decision-making to it, you get dumber. Now, there's all this research. I'm sure you've had people on the podcast who've talked about it, and it's like, I for sure like this is the best asset I've got for now, so I wanna keep it as sharp as I can. Do not delegate the hardest work you have, the hardest thinking work you have, because you will just get so weak so fast.
- 8:36 – 13:38
Why Long-Term Thinking Wins In Business
- SBSteven Bartlett
A new idea that's sprung into my mind over the last, I'd say, three to four months that I've kind of been chewing with is this idea of what happens when you go long.
- AHAlex Hormozi
Mm.
- SBSteven Bartlett
So long-term thinking-
- AHAlex Hormozi
Mm-hmm
- SBSteven Bartlett
... and how you build differently today if you just extend the time horizon and then how you can, like, beat competition-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... just by th- like instead of thinking in terms of, okay, you know founders, they al- always think in terms of five years and then exit.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
But what happens if you think in terms of, like, 50 years? What are the different decisions you make in terms of the foundational blocks?
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
And this is why I have these blocks. 'Cause I saw you do something on YouTube with some blocks before.
- AHAlex Hormozi
Mm-hmm.
- SBSteven Bartlett
Could you explain this idea of sort of long-term thinking in terms of foundations?
- AHAlex Hormozi
So we do this exercise in person with entrepreneurs 'cause I think it's so powerful, which is if I were to say, "Hey, build me the tallest tower using a series of blocks." If I say, "You have five seconds," you're gonna, you're g- you're, you're, you're right here, right? And that's, that's all you got. And you're like, "Oh, it's time. Hands off." If I said, "Okay," now let's assume we had a little bit more blocks than I could build in, in five seconds. And I said, "Okay, what if I said you had five minutes? Would you build it differently? What if I said you had five days? What if I said you had five years?"
- SBSteven Bartlett
And you have unlimited blocks.
- AHAlex Hormozi
Right.
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
And so what happens is the foundation completely changes based on the height of the building because of the time horizon you're thinking in.
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
I had a mentor tell me this, um, a long time ago, and it, like, really stuck with me, which is the fastest way to build a $10 million business is not the fastest way to build a $100 million business. Well, even, and the fastest way to build a $1 million business is not the fastest way to build a $10 million business. Like, you could probably build a one-person agency to a million dollars a year pretty quick.
- SBSteven Bartlett
One client.
- AHAlex Hormozi
Right. Yeah.
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
It's just like, it's just you could do it really quickly. Getting to 100, though, you, you think about it differently.
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
You would-- And so I think, um, to your point, one of the still outstanding competitive advantages that you can have as an entrepreneur from a thinking perspective is just thinking longer.
- SBSteven Bartlett
Yeah. It's really been front of mind to me. I, it, it's funny 'cause when I started thinking about-- Do you know why it is? It's because I told myself in this season of life-
- AHAlex Hormozi
Mm-hmm
- SBSteven Bartlett
... that I was going to do the business that I'm running now, which is our holding company called stephen.com, forever. And I immediately noticed that I made a different set of decisions. I started thinking about the factory, I called it, which is-
- AHAlex Hormozi
Mm-hmm
- 13:38 – 18:30
Why Most Businesses Never Reach $10 Million
- SBSteven Bartlett
What's interesting as well is that-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... that particular moment there where the entrepreneur hits this-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... they, they come to people like me and you in the street-
- AHAlex Hormozi
Mm-hmm
- SBSteven Bartlett
... and they say-
- AHAlex Hormozi
Right
- SBSteven Bartlett
... that they are, "I can't get past here. I'm bottleneck."
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
What, what is it that they should've done? So many entrepreneurs come up to me. They might hit, I don't know, 500K revenue, a million revenue, and they come up to me-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... and they go, "I don't know what to do. How do I get to 10 million from here?"
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
And I think in part what you're saying is they, they should have made a decision earlier on to build a slightly different type of company from zero?
- AHAlex Hormozi
I'll say what the million-dollar business owner is missing when they're trying to get to 10 is what they would've done differently is they would've stayed longer in the product market fit phase or trying to make sure that the customers who come in keep wanting to spend money with them, which they either do periodically. So, like, if you buy a soda that you like, you keep buying it. It's not like you're on a subscription, but you just buy it regularly. On the other hand, there's subscription revenue, which is truly recurring, uh, like your Netflix subscription, whatever. But they know that when that customer comes in contact with the business, they're going to stay, and that money's gonna keep going, which is what allows it to stack. And so if we think at the most basic level, if every time you get a customer, they never left, then the business will do nothing but grow.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
It will either stay the same or it will grow. Whenever you get a new customer, it just keeps growing. And w- the difficulty of g- the, the, the $1 million entrepreneur is that getting to a million dollars you can do really quickly, or 10, and I know that the, the, the world is like, "Ha, I can't believe that." I promise you, you can do it if you just learn enough skills. Um, but that can happen really quickly because it just doesn't take a lot of moving parts to make it happen. Getting to 100 or getting to a billion dollars in revenue, I haven't gotten to a billion yet, but I, I feel confident I know what we need to do. The million-dollar entrepreneur is trying to fit a billion dollars of new sales in in one year.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And that's the problem is that at the, at the end of next year, because all the customers they signed up to make their million dollars are gone because they aren't good enough, they have to go back to the market, market and sell, and get another million dollars of customers. So they think, "Oh, I have... If I, if I wanna get to $2 million a year, I have to go sell twice as many customers," which is true. But if we had to compare two companies, let's say we have company A and company B. All right? We got company A and company B. They both are selling 100, you know, new widgets a year. Okay. Let's say company B loses all of the 100, but they wanna double because it's an entrepreneur and he's like, "I gotta grow." And so he sells 200 people year two. Well, then let's say he's got $2 million in revenue, and he's got $1 million in revenue here, and let's say year three, uh, he sells 300 units. B- he lost all 200 again because he has no stickiness, and so he makes $3 million. Okay, cool. Now, let's say this company A sells 100 year one. They make a million dollars. They keep all 100 customers. Okay? But let's say that that company keeps the same number of people they're selling new. So 100 new customers come in this year, but they keep their old 100. So now they h- also have 200 customers and do $2 million. And then year three, they keep their same 100 and then the 100 from year two, so now they have 300 total customers 'cause they got 100 new, and they have 3 million. So both of these businesses on paper, your entrepreneur friend comes to you and says, "Hey, I've got a $3 million business," and, "I've got a $3 million business. Which one do you invest in?"
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Now, you and I do this every day, and we're like, "All day we do this one, not this one," because next year he's gotta go and sell 600 new customers. Now, where this gets... You can start seeing this in the financials because I can tell you that the cost of getting 300 new customers costs significantly more than the cost of getting 100 new customers-
- SBSteven Bartlett
Mm-hmm
- AHAlex Hormozi
... and having 200 customers that are existing and still paying you.
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
And so you're gonna see that in the bottom line getting compressed, and this is where ex- you know, growth at all costs becomes a problem. But for this entrepreneur, he spent the time to figure out how to get all 100 customers to stay. Now, if he encounters your distribution or my distribution, and then all of a sudden we say, "Great, now I know that I can bring this thing 10,000 new customers," then this thing becomes a billion-dollar-a-year business because we solved the most important part first, which is that the revenue stays.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And so when people build in a rush, they don't build a good enough thing, and so as a result, you scale really quickly, and this is where knowing marketing and sales can be dangerous because the better you are at marketing and sales, the faster you can grow revenue. But you get to a point where you, you have a certain velocity of sales. I can only sell 100 people or 200 people or 500, 1,000 people a month, whatever it is, and at that point, you either have to always be seeking more distribution because you have a hole in the back of your bus-
- SBSteven Bartlett
Mm-hmm
- AHAlex Hormozi
... but the moment the sales stop, the business craters. And I would say that that is more common than the alternative, which is that you actually have a sticky business.
- 18:30 – 19:47
How To Price Your Product Or Service
- AHAlex Hormozi
to pay a premium.
- SBSteven Bartlett
On pricing then-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... how do you think about pricing? Is it a subjective thing or is it an objective thing? I- do I go look at the market and see what everyone else is charging and then decide that, or is it what I feel like I deserve?
- AHAlex Hormozi
[laughs] I think what we feel we deserve matters the least in that, in that [laughs] thing.
- SBSteven Bartlett
Good.
- AHAlex Hormozi
I think it's all about what the customer's willing to pay. And so one of the hardest parts for, for newer entrepreneurs is they sell out of their own wallet.
- SBSteven Bartlett
What do you mean?
- AHAlex Hormozi
And so it's like if I have somebody who's really good at fixing cars, they're like, "Well, it's not that hard. You just, you know, do little screws here. Like, I wouldn't, I wouldn't pay anybody for that. Like, I'd do it for free." It's like, yeah, but I don't wanna do it, and I would pay you a lot to do it 'cause I don't wanna fix my car. And so because it's been easy for you, you think it's easy for everyone, and because you think it's easy for everyone, you're not willing to charge a lot for it.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And so they get into this vicious cycle of undercharging and having not enough margin, and then as a result, having to do more of the work, and then if they get more work coming in, they don't wanna say no. And so then they basically fill up their entire plate so they have no excess capacity, but then they can't... They don't have the time to train anyone, they don't have the time to interview, they don't have the time or the, or the cash, right, to, to afford the next person. And so usually when someone's like, "I'm overwhelmed," if I say, "Do you have a lot of margin?" Then either, "Yeah, you're running 70% margin, dude. Like, hire some help." If they don't, then it's two or three steps earlier where the offer's wrong, the sales motion's wrong, which is typically the- they're mispriced.
- 19:47 – 23:22
The Biggest Hiring Mistakes Founders Make
- SBSteven Bartlett
Do you get it all the time where people say to you, um, "You know, Alex, I tried to hire someone and they fucked up, and-"
- AHAlex Hormozi
[laughs]
- SBSteven Bartlett
"... so I can't, I can't trust anybody to do it as well as I can and the clients love me"?
- AHAlex Hormozi
[laughs] I think it's ego.
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
I think we wanna be special, and I think we like to be needed, and I think that it is not the business's job to solve your emotional needs.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
[laughs] The business's job is to serve the customers.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And so we are not as unique as we think. If you could go back in time, you could teach yourself in a 10th the time because you know all the mistakes that you made and the right things that actually ended up working. So it's like great, instead of taking 10 times as long as you did to learn it the first time, go back as though you were teaching it the right way to somebody else. [laughs]
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And so you can collapse the time it takes to, to teach someone how to do the job. And most times what founders are looking for is a unicorn, right? They're like, "Okay, uh, I have two employees and I do everything, and so I need to hire someone who's just gonna be like me and just do everything else." It's like it's not gonna work that way. And so I use this little analogy that I like, which is, so we have our, our horn of the unicorn. This is gonna be so bad. Or here we go. So we've got our... [laughs] All right. Here we go. We'll give it a little hoof, maybe a little... Some tail. Here we go. And here we go. And we need to have some, some sparkle, right? 'Cause it's a unicorn. It's special. Okay. It's got a little donk there. But they're trying to replace themselves with a unicorn, but there are no unicorns, and we know this. And so they go through interview and interview and interview, and then they never find anybody 'cause they can't find a unicorn. But if you were like, "How do I find an animal that's got a horn?" Well, you could go find a rhino. Okay, I've got a rhino. They've got the horn. It's like, okay, and then I need a horse. Well, I can go find a horse. And then I gotta find the sparkle, so I'll get some fireflies for the sparkle, and then I'll get a horse for the horse. And so just like that, instead of saying, "Oh, I... Someone has to live my exact life and have gone through the exact, exact same trial and tribulations to figure out all the unique things that I know," it's like, no.
- SBSteven Bartlett
Hmm.
- AHAlex Hormozi
They try to find in one person what they can more easily find in three.
- SBSteven Bartlett
This is relationship advice as well, isn't it?
- AHAlex Hormozi
[laughs] Right, yeah. Demanding your, your partner, uh, be all things to you.
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
Your coach, your, uh-
- SBSteven Bartlett
Therapist
- AHAlex Hormozi
... you know, your, your guru, your therapist. [laughs]
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
Your biggest cheerleader. Yeah. It's exactly that. It's, it's just... And I think in some ways there's an ego element that I think is very reinforcing, which is that I'm so special no one can do what I can do, and I think that's a very attractive lie that we like to believe.
- SBSteven Bartlett
I guess there's also inherent in that, um, insecurity and fear that you see in these early entrepreneurs that if I hire another person, I now have the responsibility-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... of paying them.
- AHAlex Hormozi
Mm-hmm.
- SBSteven Bartlett
Right now it's me, it's safe, I can control this. Um, but if I bring on other people, they've got mortgages and families, so-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... now, now it's terrifying. So a good way to justify my fear to myself is by saying, "Look, I tried. I can't trust anybody. I couldn't find anybody good. I guess it's just gonna have to be me, myself, and I."
- AHAlex Hormozi
And I think if that's what you want, like, go for it.
- 23:22 – 25:52
Why Starting Feels So Hard
- SBSteven Bartlett
so much. W- have you seen a change in the types of questions that you're being asked? Because, because the world has changed, people are more interested in personal branding or business or whatever else. Are people asking you new questions?
- AHAlex Hormozi
No, actually I don't think.
- SBSteven Bartlett
Really?
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
What are the questions that you get asked?
- AHAlex Hormozi
I get asked a lot of like, "Hey, I'm thinking about doing this, this thing. What do you think? I'm thinking about starting this kind of business. I'm thinking about starting a podcast agency. What do you think?" I'm like, "It doesn't matter what I think." [laughs] Like, I'm like... And so I'll just ask the next question, which is like, "Well, what have you done so far?" And-
- SBSteven Bartlett
Why do you ask that?
- AHAlex Hormozi
Well, because the answer nine times out of ten is, "Well, I mean, I haven't... I was just thinking about it." I'm like, "Okay. Well then nothing's happened." [laughs]
- SBSteven Bartlett
What's going on there with those people that come up to you and they say they're thinking about something, but they haven't done anything about it?
- AHAlex Hormozi
I'm guessing that they wanna talk to me about business stuff, and so this is the only business-related thing that they can talk about, and so that's probably why they talk about it-
- SBSteven Bartlett
Mm
- AHAlex Hormozi
... or they bring it up. Um, or they wanna feel like in some ways it's kinda like progressive, productive procrastination, or that I'm gonna somehow give them one answer that's going to, like, finally get them over the hump of starting. But Most people start because one, starting feels like this very amorphous thing. When, when... Like, I was about to say like, have you, has there ever been something that you don't know how to do? [laughs] Well, whenever I approach something that I don't know how to do, it always feels amorphous. It's like this big thing, and I don't know where to start. Like, how do, like how do I grab onto a piece of it? And so having gone and attacked like these amorphous things like start a business, which actually means nothing, you have to break things down to much smaller steps of action. That's why the, for me, the most basic thing to start a business is like get an LLC-
- SBSteven Bartlett
Mm-hmm
- AHAlex Hormozi
... open a bank account, have the ability to process money, and then ask a stranger if you can do something for them in exchange for money. As soon as you do those four things, congratulations, you're a business owner. You've already beaten like 95% of people who... And you've also changed your title from wantrepreneur to entrepreneur, and I think that is one of the mo- just like, um, when, when a customer buys from you versus just consuming your free stuff, their identity completely changes. They're now a customer, which means they're far more likely to purchase, uh, future things from you than somebody who's not bought something. That's why, you know, ascensions and renewals are much easier than getting somebody to buy the first time, right?
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And so I think to the same degree for us as entrepreneurs or people who aspire to be an entrepreneur, it's like go make the first dollar. And then as soon as you have that taste of like, "Oh, this isn't... I, I actually grabbed the corner of this thing. I, I, I understand. I just gotta get them to give me money to do something."
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
"Or I can build something and then have them buy it from me, and then I have to figure out how to build more of them," right? If it's a thing. But like that's it at the most basic level, and everything else is just, is, is confusion.
- 25:52 – 30:49
What Alex Would Do Differently Starting Again
- SBSteven Bartlett
If you could go back to the starting blocks and whisper something in Alex's ear when he was starting up, advice that would've made the journey easier, more profitable, whatever, what is, what are the sort of layers of advice you would've given him at the s- at starting blocks?
- AHAlex Hormozi
[sighs] So I've actually thought about this a lot. If I went back in time and I saw an older version of myself, if he appeared in this room right now, let's say 20 years from now, is, is looking at me, my hope is that he would say nothing because it would mean that it worked. Now, if I, if I was going back and let's say that I, I, I hadn't taken the step and I hadn't been able to, to make the jump, what would I say in that instance, um, is you have to decide whether you care more about your future than what other people think about your future. Someone's version of you has to die. It's either your desired version of you or someone else's desired version of you, and the thing is, is you're gonna be with you a lot longer than they are. I think everything at the very beginning of entrepreneurship comes down to one thing, which is fear, and justified. It's, it makes sense to be afraid. Like there's a lot of risk. There's a ton of unknown. There's so much stuff that you don't know, but the only thing I can also say is that it also puts you in the exact same position as every other person who started in entrepreneurship. They didn't know, and the only way to know is to start and to have faith that you will not know the way up the mountain, but as you walk up the mountain, the fog starts to clear. And the fog will always be there, but you'll always be able to see the couple steps in front of you.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And so your responsibility is to only take the steps that you can see in front of you. That is it. And then once you take those steps, the next steps will become clear, and I think that's where there's an obsession with knowing the entirety and, and it's because we want certainty. We want to know that if we do all of these things it's going to work, and you don't. You want certainty from a world that will give you none. And if you're uncomfortable with that, entrepreneurship might not be for you. [laughs]
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
But I, I even say that, and I almost, I almost, I almost regret saying that because I was so risk-averse when I started. Like people see the content now or they see you now and you're so confident and, and great on podcasts and like, but I'm sure the first podcast you did, you like look at it and you just-
- SBSteven Bartlett
Mm-hmm
- AHAlex Hormozi
... absolutely cringe, right?
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
I had a video that I put out that was like the first content that I made that I was like reacting to my own first content, and it's horrendous. It's horrible. But the thing is, is that you have to be willing to be cringe. You must embrace cringeness. You will not be cool. It will not look good.
- SBSteven Bartlett
Mm.
- AHAlex Hormozi
You will suck.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And everyone will know you suck, and you will know you suck. But again, it's do I care more about their version of me or my version of me? And am I willing to be a work in progress, or am I unwilling to do it because I want to s- keep my current station in life? But the thing is, is that you're at a local maximum, and there's a desire in you probably, if I'm talking to my younger self, to be at a higher maximum than I am right now. I feel like I'm capable of doing more, but I'm so afraid of risking this tiny little bit that I've built for myself. But the, the, the reality is that the only guarantee that you have and of all the paths in front of you is that you stay on the current path, you will not get what you want.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
So there is a chance that you get what you want if you move, but there is zero chance if you stay. And I think those were some of the thought processes that actually got me to take action, was knowing that I for sure, guaranteed 100%, would be dissatisfied with my life if I had not taken the shot. And then playing out plan B with excruciating detail, and I think that's also one of the big ones for fear is that like fear only exists in the vague, never in the specific. Also, so does confusion, right? So the fear is I'm going to do this thing and I'm going to fail. Fail is not specific. And I'm... And then everyone's gonna hate me, and then eventually I'm gonna get ostracized and die. Like we catastrophize everything 'cause we're evolutionary beings, right? We're, we're, we're, we're mammals. But if you really think what does failure re- like what does failure even mean? I, I, I ask someone to buy and they say no. Is that failure? What if I ask another person? What if I ask 100 people? Okay, well, what if I ask 100 people and all 100 people say no? Am I allowed to change what I'm, what I'm offering? Yes. Okay. So you get another 100 people, and maybe one of them says yes. Okay, but even in that period of time where you had the 100 people who all said no to you, and let's say you quit your job and so you have no income. Okay, what are, what are the options available to you? Can you talk, can you go and sleep on a friend's couch? Can you go back home y- with your tail between your legs? Well, it's only a tail between your legs if you stop trying. If you go home and say, "Mom and Dad, I wanna save up some capital so that I can h- I can extend my runway so that I can go after this big goal," Mom and Dad might be cool. It might be friends. It might be, or it might be 10 friends going together and, and... 'Cause I split a bedroom.
- SBSteven Bartlett
Hmm.
- AHAlex Hormozi
So I had a house with six people in it, um, and I split one of the bedrooms with another guy. I paid 400 bucks a month, and I had a mattress on the floor. And I was never there, but it was just like I tried to keep my living expenses as low as possible, and I think One of the big ones especially is that, um, people are unwilling to sacrifice their short-term lifestyle and appearances in order to achieve their long-term goal, and so they're handcuffed to their lifestyle.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And so you'd be astonished at how little you can actually live on if you try to live on little.
- SBSteven Bartlett
This goes to, back to the-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... long-term thinking argument as well-
- AHAlex Hormozi
Yes
- SBSteven Bartlett
... which is like if you think about your status in 10 years versus today.
- AHAlex Hormozi
Yes. And I'm, I'm willing to take this dip.
- 30:49 – 33:53
What To Do When You Feel Uncertain In Business
- SBSteven Bartlett
Y- one of the things you said was really interesting, and I, it, it dawned on me that most people might not realize this about people like you, which is that you said there's uncertainty all the way up.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
Now I imagine, imagine an 18-year-old entrepreneur listening to Alex Hormozi, they're gonna be thinking, "Oh, he's got everything figured out all the way up," and he's no longer living with uncertainty, fear, confusion, ambiguity.
- AHAlex Hormozi
[laughs]
- SBSteven Bartlett
He's no longer having to think hard about how to solve a problem because he's got all the answers.
- AHAlex Hormozi
Right.
- SBSteven Bartlett
But actually the, as you described it, in my head I, I imagined all of these, this sequence of n- almost never-ending doors that all just have a cryptic message on, on them.
- AHAlex Hormozi
[laughs]
- SBSteven Bartlett
And you imagine you go through one door and there's 10 more, and they all have-
- AHAlex Hormozi
[laughs] Oh, my God.
- SBSteven Bartlett
During, you go through one-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... and you're like, "Okay, this was the right one," and then there's 10 new ones that all have a vague language on them [laughs] and you've got to pick which one to go through next. You go through, okay, you bounced off that one. Shit. You took an L.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
Lost some money. You go through another one. Okay, this was the right one, and then there's 20. [laughs] Actually, your optionality is increasing with-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... the more success you have, so there's more doors and more decisions to make, more uncertainty, which most people don't realize. But actually, as you were saying it, I was thinking, "Fuck, this is exactly what I'm going through now." Like I s- I was up till the early hours of the morning with one of my colleagues yesterday night, and we're just figuring out which door to walk through.
- AHAlex Hormozi
So this is really interesting because the earlier you are in your journey, the more specific the advice is. Because if you do not have a business, the first step is the same for everyone, which is you must start an entity-
- SBSteven Bartlett
Mm-hmm
- AHAlex Hormozi
... and then you have to have a bank account so that you can exchange money, and you have to have a, a way or manner of collecting that cash. Now, of course you could have cash business, but I would say most people use credit cards now. So you have a processor-
- SBSteven Bartlett
Mm-hmm
- AHAlex Hormozi
... a bank account, and an entity. It doesn't matter what business you start, that is the first step. Now, as the business grows, you have more resources, the, the nature of the business is different, and so the number of doors that are ahead of you are actually multiplied by a huge factor.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And so right now, it's actually never easier to know what to do than when you start.
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
And so it has nothing to do with you not knowing. Of course you know, I just, we just said it. It's everything to figure out why you're not doing it. And more specifically, whose voice you're listening to that is not yours that you are afraid of disappointing or afraid of their judgment. And if you can identify that voice, 'cause, and you actually put a name on it, it's not like, oh, p- what are people gonna think? It's not people. It's probably, like, two people.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And if you name it, you're like, "Oh, it's just James and Betty."
- SBSteven Bartlett
Yeah. [laughs]
- AHAlex Hormozi
So this is really real. So one, when I was about to sell Gym Lodge, I really, I, I... It was actually a very hard decision for me. Super hard. Um, and when I exited, one of the reasons I almost didn't exit was because there was somebody that I knew in my circle, not even, like, a super close friend, that I realized when I got really clear on whose voice I cared about, I thought that they didn't think that $46 million was enough money, that they wouldn't think it was legit.
- 33:53 – 36:38
Why Alex Delayed Starting His Business
- AHAlex Hormozi
I wanna say, say this in more detail 'cause I think it's, it's important. The person that you see in front of you is not the person who, who took the leap to start the business. I belabored that decision for six months. I had almost, like, a pre-canned answer when people were like, "Oh, so what do you do with your career?" I was like, "Oh, you know, I'm a consultant. I'd like to do a business school and then someday start my own business." It was like I, I could say it in my sleep. But the someday start my own business, when I tried to think a little bit more first principles, I was like, "Okay, well, in what way is this business school going to help me start a business?" And when I looked at the starting salaries of business school, it was, like, $120,000 a year after you went to a good business school. And then I thought to myself, "Well, it costs me $60,000 a year and I can't make money during that period. So I'm gonna lose one twenty for sure," and at the time I was making 50, $60,000 a year. And so I was like, "So it's $240,000 is my, call it my opportunity cost of it in two years. Do I think that I can take the money that I had saved up and in two years get to $10,000 a month?" I was like, "I think I can do it." And so that was part of the reason that I ended up not going to business school, and it was because of a question on the business school test, was how will a Booth MBA help his short and long-term goals? And I just sat there for three days trying to answer it, and I realized, I was like, "I don't know if it will help my long-term goals."
- SBSteven Bartlett
That's so interesting.
- AHAlex Hormozi
So I mean, it's good that they have those questions 'cause it actually forced me to answer it. Now, back to the, the, the six months. I read, I g- I was probably reading, no joke, a book every two days 'cause I, the job that I had had high seasons and low seasons, and during low seasons, I basically just read books. And they were almost all self-help books. And I got to this point after reading however many of them that I looked back on my life and realized it was exactly the same, and I thought, "Oh, if I don't do anything, my life's not gonna change." And so I had this idea that if I just keep reading these books, somehow my life was just gonna change. And that was, like, one of the realizations that I had. I had the friend who was also in a white collar, you know, job like I was, and every night we'd probably get on the phone for two to three hours and talk about how we were gonna start a business. And I had this, I had this, this IKEA carpet that I bought that was a, a cowhide carpet, and the spot where I'd walk back and forth was, like, worn out on the cowhide because of how much I would just pace in my small, uh, flat just going back and forth just talking about the ideas that I had to start a business. Every time I wanted to start it, I would tell my dad I want to start the business, and he, he would be like, "Let's, let's not be unreasonable here." He's like, "You've got a good job." He's like, "You're following the plan. You did Vanderbilt in three years. You had good grades. You got... You're gonna do two years here, then you go to one of the top Ivy, you know, MBA schools. Like, it's... You're good. Don't like..."
- SBSteven Bartlett
Mm.
- AHAlex Hormozi
This is part of it. This is part of it, right? I acted with such cowardice that I had to, I had to drive halfway across the country Before I could call my dad to tell him that I, that I had quit my job and that I was going to start a business. Because I knew that if I had done it while he was there, he would talk me out of it, because he had already talked me out of it a bunch of times.
- 36:38 – 39:55
The Lessons Alex Learned From His Father
- SBSteven Bartlett
Why was he doing that? I, I learnt a little bit about his background over the last couple of days.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
I've got some photos. I mean-
- AHAlex Hormozi
Ah. That's right, the OG.
- SBSteven Bartlett
And I think there, there's context in his own story-
- AHAlex Hormozi
Yeah, yeah
- SBSteven Bartlett
... which completes the picture.
- AHAlex Hormozi
So whatever people see of my success, I think in a lot of ways what my dad accomplished, the more I think about it, is bigger. My dad fled during the Iranian rev- uh, Revolution, right? And then he went to go to, uh, France to become a doctor, but he didn't speak French. [laughs] And so he had to go try to go into medical school and take orgo in a language that he didn't understand, and so he failed two years in a row. And his brother was like, "Go to Belgium, start fresh, go to a new place." And so he ended up, uh, getting all the way through medical school, and then he met my mother in medical school, and then they came back to the US. Now, his medical degree didn't transfer to the US [laughs] and so he had to get a US fellowship in order, a residency or whatever, but no one would take a Middle Eastern guy who had a super thick accent, who was fresh out of medical school, and there was all these US-based people here. And so for two years, he ran X-ray slides. He finally gets a residency, and then he decides when he comes back to Baltimore, which is where my, where, where I'm from, that he's going to, instead of join the practice that my mother had with her father, he was gonna go out on his own, which is pretty ballsy, right? He didn't have... A foreigner, didn't have anything. And so he asked to find out how much a construction costs for building your own surgery center, and it was like $250,000 then, so it was a lot of money. He didn't have that. And so he looked at all the legal requirements for what, what it entails to be a surgery center, and then he went to Home Depot and built a surgery center that met all the specs and got it inspected so that he could have his own surgery center in his practice. Then, right as his practice was starting to work, my parents got divorced. They changed the, the locks on the door 'cause he had, like, a separate thing. His patients show up, and they didn't know where to go. It was an ugly divorce. And so then he's, he's starting his own, and this is when he was talking to me then. So fast-forward now, and he's like, "I've been in practice for, you know, 20, 30 years," whatever. He's like, "Those years, I didn't even think about them." I think I was like, "I feel like I'm not moving fast enough. I feel like I need to, need to do these things," and he's like, "Dude, a year, two years now," he's like, "it's nothing." He's like, "When you're my age, you're not even gonna think, you're not even gonna remember it."
- SBSteven Bartlett
Hmm.
- AHAlex Hormozi
The, the honest truth of the matter is that I really desperately wanted to prove that I could do it on my own.
- SBSteven Bartlett
Who did you want to prove that to?
- AHAlex Hormozi
I don't know, everyone. Me, him, the world. I remember being terrified about the idea of winning the lottery. Sounds really weird.
- SBSteven Bartlett
[laughs]
- AHAlex Hormozi
When I was in college, I bought a Super Bowl ticket 'cause it was like a billion dollars or so. I was like, "Let's do it for fun," whatever. And I rem- and I remember having this, this moment right before the, the number was gonna get called of sheer terror, of what if I win? Because I was like, "I will never be able to prove that I, I have the mettle, that I can do it." And so, and of course people would say... Now, if someone was to give me a billion dollars, I'm happy to use it because-
- SBSteven Bartlett
[laughs]
- AHAlex Hormozi
To be fair, though, because I already have this, I already have the status and the track record that I, that I built this.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And that's also the reason that, like, when I started my, my business, like, I didn't take a loan. Like, I used my own money that I had saved because I, I want it to be mine, and I knew I would know. And I think, yeah, my dad had absolutely perfect intentions. He gave me what I believed to be, for a vast majority of people, probably pretty good advice.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
It just wasn't the advice that I needed for the goals that I had.
- SBSteven Bartlett
There's
- 39:55 – 41:40
How To Know If Entrepreneurship Is Right For You
- SBSteven Bartlett
an interesting thing, because people like me and you make business content, and we talk about entrepreneurship a lot.
- AHAlex Hormozi
Mm-hmm.
- SBSteven Bartlett
Um, I, I often wonder if we're leading some people astray in the context of some people actually should take that advice.
- AHAlex Hormozi
Mm-hmm.
- SBSteven Bartlett
Some people shouldn't become entrepreneurs. Um, and how does one know if entrepreneurship in its broad definition is for them or not? Or, like working in a company, having, you know, having a great job is for them. It's funny, we, we were... I was doing this sh- show once, and I said to the producer, who was just off camera, I said, um, "Do you think I'm happy?"
- AHAlex Hormozi
[laughs]
- SBSteven Bartlett
So this is, this is someone who gets to see, has seen me for six or seven years behind the scenes every day since we were on my kitchen table.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
Has been there with me every corner of the world, the, the best and the worst of times. I went, "Do you think I'm happy?" He went, "Yes." He said it quickly. And then he, and then I said, "Would you want my life?" And he, he couldn't have said no more violently.
- AHAlex Hormozi
[laughs]
- SBSteven Bartlett
So much so that it was almost offensive. He was like, "You're happy." And then I went, "Do you want my... Would you like my life?" He goes, "No." [laughs]
- AHAlex Hormozi
[laughs]
- SBSteven Bartlett
And he was like, and, and he was, like, laughing. He, he would not want my life, but at the same time thinks and believes, having seen me behind the scenes for seven years, that I'm happy. And in there, I think you have something, which is the, the sort of subjectivity of, of, of journey. Like, is this your journey? How does one know listening to this now if they should be an entrepreneur or not?
- AHAlex Hormozi
So I'll give a couple of frames, 'cause decision-making is what probably we both do with a lot of our time. So one is what's the goal? What do I want to have happen?
- SBSteven Bartlett
Everyone says the same things here. They say, you know, "I want freedom to make my decisions. I want, you know, m- financial freedom."
- AHAlex Hormozi
But then we have to be specific.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And so just like fear only exists in the specific, goals have to exist in the specific in order for them to be real and for you to make accurate decisions.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And this is why I'm so obsessive about language and, like, observables and things like that. So what is, one is what do I, what do I actually want to have happen? And then number two, what does that change about my actual daily life?
- 41:40 – 43:08
How To Beat Decision Fatigue
- SBSteven Bartlett
On this first point, funnily enough, I said to you, "Freedom."
- AHAlex Hormozi
Mm-hmm.
- SBSteven Bartlett
And then I immediately realized that the least free person in this conversation-
- AHAlex Hormozi
[laughs] Dude, this gets... Okay, this is great.
- SBSteven Bartlett
[laughs]
- AHAlex Hormozi
So I think about this. It's the freedom to choose.
- SBSteven Bartlett
Hmm.
- AHAlex Hormozi
But I think people stop at freedom. There's this almost fetishization of independence and m- keeping your options open and ma- and options maxing, right?
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
For your life, but all of the best parts of life come on the other side of exercising an option and cl- and go- walking through a door, but in so doing, leaving the other doors that you could have walked through behind. And so the secret to getting a life you want is making a commitment, but you will not get all lives you want. And so at some point, you have to sit at the precipice, and you have to make a trade. And you have to say, "I want this more than something else." That means I know I'm not gonna get this, and I choose to say that I want this more. And I think this is where people just sit at the crossroads, and that is what takes the majority of time. Not just getting into business, but also when you're in business, people will sit at the crossroads of like what type of company do I wanna build, what type of product, and what type, what, what type of business do I want? And we sit there, and I... When I see people get stuck, it's almost always unmade decisions. 'Cause unmade decisions can last forever.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Whereas if you're in, if you're in a trial loop of feedback, feedback, feedback, like you'll figure it out.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Like you'll move.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
But if you're in an unmade decision, it could sit there forever, and that's, that's like the freedom to choose. We have to choose.
- 43:08 – 44:47
Is It Easier To Start A Business Today?
- SBSteven Bartlett
Are you seeing this sort of new generation that have grown up with all the tools to start their own business? That we're in this personal brand era-
- AHAlex Hormozi
Mm-hmm
- SBSteven Bartlett
... where everybody can make content and build a brand and then do like panel talks for a living or sell like ads on LinkedIn.
- AHAlex Hormozi
Mm-hmm.
- SBSteven Bartlett
Um, what, what is going on here? This sort of younger generation, under 30 now, keeping their options open, wanting freedom. If you compare that to, say, maybe my dad, who, you know, one job, did that career for 20, 30 years of his... He lived 40 years of his life. It's a very different world we're living in.
- AHAlex Hormozi
There are more people starting businesses than ever before. I know since COVID, there's, there's, at least in the US, the stats that I looked at recently, it's like there's been more new businesses per quarter. It's been growing really aggressively, at least in the US, and so more people are starting businesses. And so I think that lowering the cost of entry has got more people across the line. I think having more access to information has got more people across the line. But why aren't... why isn't everyone going across the line? I think there's a couple things. One is, to your point earlier, I don't think it is for everyone, and so I think the issue there is one of motivation. They have too many carrots, so good things keeping them in their current position, and not enough sticks or bad things getting them out of their current position. And I think, um, I think it's a, it's a Tony quote, Tony Robbins quote, which is, uh, "The pain of staying the same has to be greater than the pain of change."
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And I think that when that happens, and it could be the pleasure of change could be, has to be greater than the pleasure of staying the same. E- equal opposite, but I think most people who are in that slice, there's pain. And so you will change the moment it is more painful to stay the
- 44:47 – 46:46
Ads
- AHAlex Hormozi
same.
- SBSteven Bartlett
[paper flips] I've spent the last decade building and investing in companies, and so often the conversation around marketing budgets follows the exact same pattern. The budget gets approved, but then the results don't come back, and most of the time, the creative pitch and the offer is fine. The problem lies with the audience. Ads reach people who will never buy or refer, nor do they have the power to sign off anything at all, and this is why so much budget gets wasted. LinkedIn Ads, who are a sponsor of this podcast, lets you reach them specifically by job title, seniority, company size, industry, the skills that they have, and much more. You're no longer hoping your ad reaches the right person. Instead, you're defining exactly who sees it, and LinkedIn Ads drives the highest B2B return on ad spend across all major ad networks. Give them a try at linkedin.com/diary. And if you spend $250 on your first campaign, you'll get a $250 credit for your next one just by going to linkedin.com/diary. Keep this to yourself. Terms and conditions apply. [paper flips] For the last couple years, I've been working on something that I realized every podcaster listening to this, but actually probably every creator listening to this might just need. Podcasting is difficult for many reasons, and one of them is that these hosting platforms don't give you much information, and also because they're so fragmented, you kind of have to go through every single platform, uploading it to YouTube, and then taking the same big old video file and uploading it to Spotify's platform. It takes huge amounts of time, and that friction means most of us don't do it. That is the problem we set out to solve, and so we built something called Flightcast, which you can find at flightcast.com. And today, Flightcast is also one of our show sponsors, and some of the world's biggest podcasters are now using our platform to run their shows because it gives you an edge, it saves you time, it gives you analytics most people won't typically get. It allows you to use AI to be more informed on your show, and it has growth tools that other hosting platforms don't have. So podcasters that are using Flightcast have this unfair advantage. So go to flightcast.com/doac now. [paper flips]
- 46:46 – 47:31
Is Doing Hard Things Always Worth It?
- SBSteven Bartlett
Do you think life rewards you somewhat proportional to the hardness of the problem that you solve?
- AHAlex Hormozi
So I think, um, a hard problem doesn't necessarily guarantee that it is a valuable problem.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Like if you run a marathon very hard, it doesn't necessarily make you more money. So like there's lots of hard things that are out there that will not turn into [laughs] monetization.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
The second thing is I think it depends on the size of your goals, and so if you want to be a millionaire, you do not need to solve a hard problem. You just need to do a little bit better than other businesses that are wildly underserving their customers, which I promise you there are plenty. [laughs]
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
You can just have a pool cleaning business that just cleans better than the other guy and like shows up on time, and all you gotta do is knock on doors and ask if they wanna switch because their current company probably doesn't pay attention
- 47:31 – 49:58
How To Succeed As A Content Creator
- AHAlex Hormozi
to them.
- SBSteven Bartlett
One of the things that, you know, a lot of f- founders, entrepreneurs are thinking about at the moment is producing content.
- AHAlex Hormozi
Mm-hmm.
- SBSteven Bartlett
We're living in, in, in an interesting time where a kid in Mumbai or a kid in Manhattan can both produce content using LLMs, uh, AI. They can produce videos theoretically. If you imagine any rate of improvement, they're gonna be able to make videos, photos, churn out your quotes. They could use your quotes, change them a little bit, and p- have an agent post them for them. Where is the moat in content where you think about... If you think about supply-demand dynamics, there's-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... fixed demand. The Financial Times did a report saying that time spent on social media is sl- starting to dip a little bit since-
- AHAlex Hormozi
Oh, really?
- SBSteven Bartlett
... 2022 for younger generations.
- AHAlex Hormozi
Interesting.
- SBSteven Bartlett
For older generations, it's still sort of like going up or, or flat, but for Gen Zs it's like starting to come down a little bit. So s- stagnant demand, tsunami slop coming in of AI content.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
Huge supply shock. Every unit of content itself is gonna become less valuable therefore. Um, and the algorithms are getting more violent, or I should say-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... are becoming more, um... Someone with 10 million followers can get 2,000 likes. Back in my day, 15 years ago when I started on social media, if you had a million followers, you got a million, a million likes-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... or a million views, should I say.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
What's the game of content in such a world? Everyone's, everyone's making content now.
- AHAlex Hormozi
To your point, what's the moat? Um, reality is the moat
- SBSteven Bartlett
Reality is the moat
- AHAlex Hormozi
I'd say the number one biggest business influencer, I think on the planet, is Elon Musk, and he happens to own the biggest business on the planet, be the richest man. Uh, Jeff Bezos, huge business influencer 'cause he has Amazon. [chuckles] Warren Buffett, probably the number one investing influencer. Like, people fly around the world, and when he, when he talks, everyone listens. And so even if a teacher in Des Moines, Iowa, word for word quotes Warren Buffett, and let's do one better, let's say makes even better advice than Warren Buffett does, it's still not gonna get the same views because they just forgot to build Berkshire Hathaway and have 100 years [chuckles] of, of track record. And so what I'm saying there is that when reality is the moat, it means that your brand is the moat. It means your reputation is the moat, which can only happen in reality. Now, that said, I do think it's gonna affect different types of content differently. If you're in the world of making fictional whatever stuff, then yeah, I think it's gonna hit... I think AI is gonna hit you much harder, but even then, there's still gonna be the, the standard holder. Somebody has to determine that this slop is too sloppy, [chuckles] and that you still have to work really hard to make the AI make exactly what you want and have it at the caliber that you want it to be
- 49:58 – 53:03
How Alex Is Adapting His Content For The Future
- AHAlex Hormozi
at.
- SBSteven Bartlett
Have you made any changes to your content because of everything that's going on with algorithms and AI?
- AHAlex Hormozi
Mm-hmm. Yeah. I'm focused on only doing things that only I can do.
- SBSteven Bartlett
Hmm.
- AHAlex Hormozi
Most people can't get hundreds of business owners to fly out in person every month that are all million-dollar-plus business owners to seek advice on real business problems at 3 million, 5 million, 10 million a year, 500K a year. Most people don't have that, and so I can demonstrate expertise in a live and interactive fashion in a way that other people can't do. I think that live is something that... I mean, AI, maybe in the future we'll have some AI avatars that can go live, but at least in the short to medium term, I think live is good. I think IRL, as in, like, it's actually real people talking, which is, we talked about the Scale or Fail show that we just launched. It's real entrepreneurs, and there's stakes [chuckles] involved.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
I think that is something that is not going to be replaced. But if we think about content on this continuum, all right, let's make this continuum risk. When I say risk, it's the risk that a consumer has in consuming the content and executing on it.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And so if we differentiate entertainment and education, is entertainment, the point of the content is to be consumed. It's the only objective of entertainment. The point of education is to change behavior.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Right? So that's our, that's our split. Now, entertainers will get hit harder than educators will. The entertainers that have stakes involved will be able to maintain that moat by still focusing on IRL, real stakes, real stories. Now, in the education world of risk, let's put something that's really low stakes. There we go. So we've got beauty on this side. If I have an AI influencer-
- SBSteven Bartlett
Hmm
- AHAlex Hormozi
... who does a makeup tutorial, I don't think the risk is super high that if, you know, if the tutorial is good, that a girl's, like, gonna not use the tip that they made in the thing. I think that's pretty likely. If you go maybe a little bit riskier, let's say I have some personal finance stuff. Well, what's the cred- So the credibility in beauty is beauty. [chuckles] The credibility in personal finance is do you have personal finances, right? So who's the number one, uh, influencer in personal finance? My opinion, I think it's Dave Ramsey. He also happens to be... I don't think he c- he calls himself this, but I think he's a billionaire, and he's got a massive, I think he's public, $300 million a year, uh, revenue that he's done, and I think there's some other newer, newer age people. Uh, I think Vivian Tu is, is... She's a personal finance person. I think, um, Erica Kolberg touches in this. She's the legal, legal gal. Um, anyways, all this to say, all of them have more credibility. Like, if you just start giving out tips on how to save money, there's no credibility, reality. There's no reality. You have nothing to back it up.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Now, as we keep moving further, let's say business, where if you make a wrong call, you could lose your business. Here, you lose some money. Here, you lose a bad day of makeup. So the risk goes up. The riskier or the higher the consequences of being wrong, the more people are going to, I think, double down on credibility of source.
- 53:03 – 56:21
Why Credibility Is Your Biggest Competitive Advantage
- SBSteven Bartlett
What's interesting is I also heard, as you were describing flying these 100 business owners out to-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... Vegas-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... is I heard scarce, hard and scarce.
- AHAlex Hormozi
Mm-hmm.
- SBSteven Bartlett
And I still thought a lot about these two words as sort of the pillars of my own content strategy, which is with an LLM, yeah, a kid in Mumbai could churn out a video.
- AHAlex Hormozi
Mm-hmm.
- SBSteven Bartlett
Um, but the reason why we have, you know, somewhat of a moat here still is because it is hard to shoot on nine cameras. It is hard to bring Alex Hormozi here. It is hard to get Alex Hormozi to say yes to doing this.
- AHAlex Hormozi
[chuckles]
- SBSteven Bartlett
It is hard to get Michelle Obama or J.D. Vance to say yes to doing this.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
So there's... It's hard from a production perspective, but also from, like, to accomplish this-
- AHAlex Hormozi
To... 100, yeah
- SBSteven Bartlett
... is hard. And then what you described, I heard a lot of the, like... I heard hard and scarce. Who can bring 100 entrepreneurs to Vegas who are all successful in their own right and, and have them ask you questions?
- AHAlex Hormozi
Mm-hmm.
- SBSteven Bartlett
So that's great content for us to watch.
- AHAlex Hormozi
Mm-hmm.
- SBSteven Bartlett
It's, like, really impossible to, to-
- AHAlex Hormozi
Very hard. If I had only had a $46 million exit, I don't know if I would attract the number of entrepreneurs that, that we do now.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
But now that we do 250-plus Skool's a billion-dollar-plus company, it's like I have credibility that the, the, the YouTube, the content, right, is not... Like, I s- we s- I still do business. [chuckles]
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
You know what I mean? We have chains of brick and mortar that, that we're involved in. I just don't talk about it 'cause it doesn't... it's not relevant for most people. It-
- SBSteven Bartlett
Let's look at the opposite then as well, just to show people-
- AHAlex Hormozi
Yeah, yeah
- SBSteven Bartlett
... what the opposite of hard and scarce or, or of this approach is. What types of content should we all kind of stay away from now?
- AHAlex Hormozi
So I think commoditized tips and tricks, um, when you have no... Again, like, proof is in the pudding. Reality is the moat. It's basically the opposite of that, so if you are posing, if you are pretending, if you have no proof, um, that you are good at this thing, and again, this is on the education side, then There's a big, I call it the big Vegas, uh, WISPI. Why should I listen to you, right? Why should I listen to you? [laughs]
- SBSteven Bartlett
[laughs]
- AHAlex Hormozi
And if you can't answer that question for, I'll say, a, a prospect, you know, prospective customer, within the first, like, couple seconds, they'll just listen to somebody else. Because the reason that credibility matters so much is that it's actually lower effort to consume information from somebody who's an authority. And so if I'm-
- 56:21 – 1:01:56
The Value Equation Explained
- SBSteven Bartlett
Seven or eight years ago, when I used to have, you know, big clients, Uber, Coca-Cola, whatever, around the world, um, we used to do a lot of, like, social competitions, social media competitions. And I used to have this mental framework for the perfect competition.
- AHAlex Hormozi
Mm.
- SBSteven Bartlett
And I, I, I remember the day that I, when I first heard of you, and you were coming on my show, and I was looking through some of your writings, and you almost had an identical framework.
- AHAlex Hormozi
Yeah. So the, the core... So each of the books has one core concept, and then it breaks down how to use it, et cetera. But the value equation comes down to what's the outcome, and some outcomes are worth more than others.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
If I can help you cut your hair versus I can get you to be in perfect shape, perfect shape is worth more. If I can get you to be a billionaire versus perfect shape, billionaire is worth more, right? So we have outcome, and then we have perceived likelihood of achievement.
- SBSteven Bartlett
Perceived likelihood of achievement.
- AHAlex Hormozi
Mm-hmm.
- SBSteven Bartlett
Okay. So this is the... Okay, interesting. Yeah.
- AHAlex Hormozi
It's the inverse of risk.
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
How likely do I think it is? And then we have, on the downside of this, we have, um, time delay. How long is it gonna take me to get the thing? And then we have effort.
- SBSteven Bartlett
Is this, is this-
- AHAlex Hormozi
And sacrifice
- SBSteven Bartlett
... is this effort and sacrifice?
- AHAlex Hormozi
No, different.
- SBSteven Bartlett
No?
- AHAlex Hormozi
Yeah. So effort is all the things that you have to begin to do as a result of a decision-
- SBSteven Bartlett
Mm-hmm
- AHAlex Hormozi
... that you don't wanna do. Sacrifice is all the good things that you have to stop doing as a result of a decision.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
So if I get into fitness, I have to stop eating the stuff I like, and I have to start eating stuff I don't like. I have to start waking up earlier. I can't sleep in as much. Uh, I have to be sore where I wasn't before.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Um, and so that's my effort and sacrifice piece. The time delay is, okay, if I can get in shape in three minutes versus getting in shape in three months or three years.
- SBSteven Bartlett
Okay.
- AHAlex Hormozi
The outcome is am I getting in shape or am I being a billionaire? And then how likely is this to happen?
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
'Cause on some level, like if I buy a PDF of a fitness program for $19, or I pay $3,000 for a personal trainer to train me in person three times a week, my perceived likelihood of achievement of buying the PDF versus personal trainer is much higher.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Now, the effort and sacrifice is actually gonna be relatively fixed, but this is the part that goes up. Now, the time delay, if done right, should also be fixed there. But this is what explains the difference in value on a product level. But the value equation works for everything, just like, just like consuming content.
- 1:01:56 – 1:04:27
Why Delayed Gratification Pays Off
- AHAlex Hormozi
So there's, there's the consistency piece, and I think the other one with it with regards to the long-term component is patience
- SBSteven Bartlett
Yeah
- AHAlex Hormozi
Also, to be, to fair, focus because, um, Sharan, my partner, says this. He says, um, "People only see the choices you made, not the options you had"
- SBSteven Bartlett
Hmm. Hmm
- AHAlex Hormozi
And so you can't really witness focus. You just see winning
- SBSteven Bartlett
Mm-hmm. Mm.
- AHAlex Hormozi
And so to the same degree with patience, again, you only see the win. Like, if you look at a marathon, people are there at the beginning, and they're there at the end. No one's here in the middle
- SBSteven Bartlett
Yeah
- AHAlex Hormozi
'Cause it's the only fun part. The content of a marathon would be the, the intro and the exit. Like, you'd literally make it into a clip that's 30 seconds. It'd be like, "Ha-ha, yay," and then maybe a couple of mile markers, and it's like, "Wait, we compressed this. What a, what a bargain. Great, great return on time." You can't really witness patience unless you've literally followed it from the beginning, which of course you'll have your OG people who are with you in the beginning of Diary of a CEO, and they've s-
- SBSteven Bartlett
Mm
- AHAlex Hormozi
... they've seen the patience start to play out. But it's one of the things that, like, one of the, the, the ultimate gifts that I would hope, and the equal opposite of this is Steve Wynn, I think, talked about how his, uh, the best thing in the world is that someone comes their first time to one of his casinos, bets big, and wins. It's the best thing ever. The worst thing that can happen is that the first time they come, they lose their money 'cause then they never gamble again. And so it's like they w- he wants that big reinforcing event up front because then you can become a, a gambling addict, right?
- SBSteven Bartlett
Mm-hmm
- AHAlex Hormozi
And so to the same degree, m- my, my hope for, like, my kid in the future or, or anyone who's trying to start out, is that they have something that happens in their life where they're rewarded for delaying the outcome and having a big jackpot as a result of the consistent effort where they, they delayed the reward
- SBSteven Bartlett
Hmm
- AHAlex Hormozi
Because as soon as you do learn that lesson, you see how big the big can be-
- SBSteven Bartlett
Yeah
- AHAlex Hormozi
... when you wait
- SBSteven Bartlett
Yeah. It goes back to what we were saying about long, like, long-termism as a strategy.
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
But also, yeah, like, it m- it, I, I only needed to look at that graph, the compounding returns graph once, actually looking at my own audience growth and seeing that I did 1,000 posts on Instagram and reached 1,000 followers, and then in my last-
- AHAlex Hormozi
[laughs]
- SBSteven Bartlett
... three, when I had 7,000 followers, I gained 300,000 followers in three posts because carousels had dropped and Instagram was, uh, rewarding everybody for carousels back then.
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
And me seeing that graph and then going, "Oh, it's slow, then it's fast in success," and then starting The Diary of a CEO and for three years nobody fucking listening.
- AHAlex Hormozi
[laughs]
- SBSteven Bartlett
And then all of a sudden it was like, it was just fucking crazy. It just went st- a vertical line up and going, "Oh, it's the same Instagram graph I saw-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... all those years ago." So actually, you know, it's slow, then it's fast, but most people, if you've never experienced slow, you think, "Oh, I'm inadequate. I fucked up."
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
"I'm dumb." But you now, you have that religion.
- 1:04:27 – 1:05:14
How To Know You're On The Right Path
- AHAlex Hormozi
Yeah. There are mistakes of picking the wrong path, but I think there are more mistakes of abandoning the right path
- SBSteven Bartlett
Hmm. How would you, how would you know, though?
- AHAlex Hormozi
So there's a handful of, I think, entrepreneur questions that are eternally unanswerable-
- SBSteven Bartlett
Mm-hmm
- AHAlex Hormozi
... which is when do you push and when do you pivot?
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Like, how much risk do I take on?
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Like, should, should I consume or invest? Well, you don't know when you die.
- SBSteven Bartlett
True.
- AHAlex Hormozi
[laughs] Right?
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
And so with the push and pivot one, the best answer that I have for this, 'cause I, I get this one a lot, like, "Hey, it's really hard. Should I, should I pivot the business, change it, or should I try and, like, push through?" My actual answer is, if you had a fundamental assumption that you based the business on that has been proven untrue from your business activities, I think it makes sense to pivot. If-
- SBSteven Bartlett
Hmm
- AHAlex Hormozi
... none of your original theses are incorrect, it's just not happening as fast as you want or as easily as you want,
- 1:05:14 – 1:09:48
Does Your Business Need To Be Scalable?
- AHAlex Hormozi
then you push.
- SBSteven Bartlett
What's interesting is, like, the nature of being a founder as well on that is going earlier than the world. Like, when you think about outside success-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... like, everyone understands space now and they're like, "Oh, we can do reusable rockets now. We get it." But being, being the first guy-
- AHAlex Hormozi
Yeah [laughs]
- SBSteven Bartlett
... or the first woman, um, I think is really the essence of a founder. They go earlier than, than the world's current available evidence, and thus there needs to be some kind of framework that you have. One of my frameworks, which I've never articulated before, and I don't even know if this is gonna sound correct, but it's just always guided me, is, um, do I believe that I'm offering even a t- tiny group of people scarce value? So when I started The Diary of a CEO, I was making Facebook videos with people like Jay Shetty. We, we, we could get tens of millions of views on Facebook Watch back then. No one was mentioning it. So I remember that-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... I made this video about relationships that did 33 million views. I got... No one would mention it. No one, like, no one. And then I started this podcast called The Diary of a CEO in my bedroom. I'd go- went to Apple, bought this microphone for $100, pu- plugged it into GarageBand, tried to edit it myself, uploaded it, and, like, my two best friends, the look on their faces in the office, Ash and Oliver, when they listened to it, they had never reacted to me like that ever before for the Facebook videos I'd made. And then when I didn't upload the next week, Oliver Younger came to me and said, "When's the episode coming out?" For me, that, that was it.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
For me, I was like, I, I've done something here that's delivered scarce value to the world, so much so that one of my best friends, who's very honest with me, is asking me when the next one is. And so now I follow that. So when I'm thinking about the bets we make on the future, I'm obsessed about finding things that are delivering scarce value, even if they're unscalable.
- AHAlex Hormozi
I think you bring up a really good point about the unscalable part because... So t- two, two parts to this. So one is- People will not do things. I see, I see beginning entrepreneurs say like, "Well, that's not scalable." And I'm like, "You're broke."
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
"You're broke. It's okay. You can, you can not be scale- You can just make money. That's okay." But it also assumes that your future self with more skills and more resources won't have the ability to figure out how to scale it.
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
And most things are s- like, we're building cities in the middle of the fucking ocean.
- SBSteven Bartlett
[laughs]
- AHAlex Hormozi
If you're starting a business, and this is where you have to not sell out of your own wallet, is, and this the, the nature of the Offers book is, start with the most absurdly valuable thing you possibly can. So whatever price you wanna charge, add one or two zeros to it. Okay. And it's like that's crazy. I agree, crazy. What would you have to do in order for that to be worth it? And then you list out all the things you'd... Well, I mean, well, if I was gonna get somebody in shape, I'd, I'd probably go to their house. I would, I would help them grocery shop. I would, I would drive them to the gym and back from the gym to make sure that they actually did it. For 100 grand, is it worth it? And they're like, "Well, it's not scalable." [laughs]
- SBSteven Bartlett
[laughs]
- AHAlex Hormozi
It's like, well, you only need five.
- SBSteven Bartlett
Mm.
- AHAlex Hormozi
And I think when you're starting out, there's huge value in having unscalable services because, one, you'll get better customers because you're gonna be charging much more for something that's a little bit more premium. And the value of talking to people richer than you will do more for you than what you are doing for them.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
So, like, they will shift your worldview, which is why, like, a lot of people like caddies who talk to all these millionaires when they're, when they're playing golf, it's like they learn so much from the people. Like, how do you make your money? Like, they learn so much worldview of, "Oh, I shouldn't be thinking this way. I should be thinking like this." So one is you get that. The second is that you are able to practice the unscalable thing.
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
And then you can figure out, how do I, how do I take the scarce value? Okay, this is not scalable. Fine, we can just, let's just say it's not scalable. Okay, are there elements of this that are scalable that I now know because I've done it rather than because I thought about it?
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Because your thought experiments, and I'd say for myself too, are pretty terrible. Like, our ability to predict the future is pretty god-awful. And so we think we know what it's gonna be like, and we usually have no idea. [laughs]
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
And so, and so it's like, go do it. You'll collect way richer data that no one else has done 'cause it was unscalable, and then you can actually create something that's more scalable that is unique because you actually went through it. And from a, this is getting a little bit more business hat-y, but from a branding perspective, saying, "Hey, I have a handful of clients that pay me $2,000 a month to do this premium thing. For those of you who can't afford that, I now have this thing," you've already anchored high.
- SBSteven Bartlett
Mm.
- 1:09:48 – 1:11:19
Why Unscalable Businesses Can Be Great Opportunities
- SBSteven Bartlett
if I was to forensically ana- analyze your business-
- AHAlex Hormozi
Mm-hmm
- SBSteven Bartlett
... now, and then I brought in Alex who started that business on day one, and I go, "Look at how unscalable all this stuff is that he's accomplished," I actually would argue, make the case from what you were just saying, that actually the essence of value creation in business is solving problems that didn't look scalable.
- AHAlex Hormozi
I know.
- SBSteven Bartlett
I, I was just thinking about, uh, even the Diary of CEO process here from the minute you leave. Like, so right now the team in there that are doing the testing, they're actually making you a book as, as we speak. They take, they took photos of us while we were sat here, and when this interview ends, they're gonna walk in and hand me the book. I'm gonna sign it and pass it to you. That book is gonna contain quotes from fans that loved our last conversation. They're currently printing them off on Polaroids. They're writing in it. When this con- conversation's done, we're gonna say your name 300 times using ads to see how to introduce you. I know Alex Hormozi is gonna win 'cause you're a big, you're big name now.
- AHAlex Hormozi
[laughs]
- SBSteven Bartlett
But you think about when we started the podcast. Imagine me there with, on GarageBand. [laughs]
- AHAlex Hormozi
[laughs]
- SBSteven Bartlett
With, with the $100 mic.
- AHAlex Hormozi
That's not scalable.
- SBSteven Bartlett
It's not scalable.
- AHAlex Hormozi
I use this, this, this frame a lot, which is that you are trying to solve tomorrow's problems with today's resources.
- SBSteven Bartlett
Mm.
- AHAlex Hormozi
It's a fallacy. It's ridiculous. You don't have the money. You don't have the skill. You don't have the connections. You don't have the resources. You don't have the experience and the track record. But future you will, but the hard part is future you's a stranger.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And so I think we make a lot of this content to try and approximate as closely as possible to just pull the first step for someone to take to say beli- like, you will figure it out. Like, as long as you do not quit, you'll win. Like, you just have to not stop. That's basically it. You just have to not stop. As long as you get feedback, and you take the feedback, and you improve, and you do that a long enough time horizon, you win.
- 1:11:19 – 1:12:14
How To Know When It's Time To Quit
- SBSteven Bartlett
Let's be-- So just to be clear that you're not saying pursue a bad idea all the way-
- AHAlex Hormozi
No
- SBSteven Bartlett
... and just ne- be stubborn about the pursuit of a bad idea. You're saying iterate your way.
- AHAlex Hormozi
Yeah. We have to get feedback.
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
I mean, if you wanna have a doggy skateboard, and you pitch 100 dog owners on the doggy skateboard, and then none of them want it, and you're like, "Well, I really believe in this doggy skateboard idea," and then you bring them the doggy skateboard, and then they really still don't want it, you probably shouldn't sell doggy skateboards.
- SBSteven Bartlett
So you should quit the doggy skateboard business.
- AHAlex Hormozi
Yes. But you shouldn't quit business.
- SBSteven Bartlett
Okay, yeah. That's-
- AHAlex Hormozi
I think it's local versus global.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Even if you just reframe failure in that way, it makes it way more palatable. Like, you figuring it out is a lot of failures. I mean, how many failed episodes, failed headlines, packaging?
- SBSteven Bartlett
Oh my God.
- AHAlex Hormozi
You forgot to turn the, the mic on and did the whole [laughs] I'm sure.
- SBSteven Bartlett
Yeah. Like, someone came in and stole the fucking hard drive with your audio on it. It's like... [laughs]
- AHAlex Hormozi
There's, there's gonna be 100 of those, but as long as it, it doesn't become a global failure of I'm no longer doing this, then you're good.
- 1:12:14 – 1:13:14
Ads
- AHAlex Hormozi
[page flips]
- SBSteven Bartlett
One of the smartest things a business can do is build like a bigger company without actually hiring like one. But the problem we all face is that most companies don't have every skill in-house. So when I look at the businesses seeing real success today, the consistent pattern with all of them is how quickly they move. They bring in specialists with skills in emerging areas to keep themselves ahead. Even in our company, we've spent the last year pulling in talent across areas like AI native strategy, no code builds, and product workflows, and we find this talent through our longtime partner, Fiverr Pro. Their premium service only shows you vetted talent, so you've always got the safeguard that anyone you pull in to help you with a complex project has the skills that you're after and will deliver to the same high standards as your internal team. And most importantly, they'll keep up with the pace. It's a simple strategy, but it lets us stay agile without compromising on quality. So if you need these kind of skills in your business, head to pro.fiverr.com to find pioneering talent to fill your business' gaps. That's pro.fiverr.com. [page flips]
- 1:13:14 – 1:17:43
Why Self-Awareness Is A Business Superpower
- SBSteven Bartlett
One of the great fascinations I have, and almost one of the unteachables, is self- I think it's self-awareness
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
'Cause-
- AHAlex Hormozi
I'd say judgment, yeah
- SBSteven Bartlett
... Judgment again.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
Yeah. 'Cause I... Have, have you ever had someone come up to you and say something grandio- they wanna go to the moon, let's say, hypothetical, and you look at them and you go, "You, you're not a space man"? [laughs] Do you see what I mean?
- AHAlex Hormozi
[laughs]
- SBSteven Bartlett
And how do you, how do you, what, how do you then give them that advice, which is, like, raise one's self-awareness, know what you're good at and what you're bad at?
- AHAlex Hormozi
I think what people are, are trying to get at is a, an understanding, a more accurate understanding of base reality.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And the people who are achieving the things that you want to achieve and you haven't been able to, fundamentally if you're doing stuff and what you want to have happen is not happening, your model of the world is either incorrect or the variables you have are incorrect.
- SBSteven Bartlett
How did you cultivate a more accurate vision of s- reality?
- AHAlex Hormozi
So I'm, I'm-
- SBSteven Bartlett
What practice?
- AHAlex Hormozi
... I'm a big believer in behaviorism.
- SBSteven Bartlett
What's that?
- AHAlex Hormozi
Operant conditioning, which is basically how you train machines, how they figured out how to train AI, which is reinforcement training, is the exact same way you train humans.
- SBSteven Bartlett
Okay.
- AHAlex Hormozi
And so when you see yourself as the subject that is being trained, then we can make better predictions of will people buy? Will people take this offer? Let's say I've got a grandpa, and he doesn't wanna take his medicine, and the medicine, the doctor said, was gonna extend his life by 10 years. Okay. The nurse is at home with me, and she's going to try and give Grandpa the, the pill, and he says, "It tastes like shit. I don't wanna have it," just brushes her away. She comes back, she throws her hands up, and she's like, "You lead a horse to water, you can't make it drink," right?
- SBSteven Bartlett
Mm.
- AHAlex Hormozi
The operationalist or the behaviorist would say, "No, you've made many other options the more likely option than taking the pill, and so what we need to do is make the pill the nicest and easiest option available to him." And so the first thing you would do is you'd crush the pill up, and then I would say, "Okay, let's put it in some lemonade. Put it in the, in the fridge, make it ice cold."
- SBSteven Bartlett
Mm.
- AHAlex Hormozi
"All right, I'm gonna bring out some peanuts that are salty, and I'm gonna put it in front of the grandpa, right? And then I'm gonna come out with a, you know, a chessboard or a backgammon board, and I'm gonna sit in front of him. I'm gonna set it all up and say, 'Hey, I know you said you wanted to play backgammon. I've said no the last three weeks. Here's the lemonade. Do you wanna play? If you finish the lemonade, we can play.'" How likely is it that Grandpa now drinks the lemonade?
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Super high. But at the end of the day, we just, we didn't persuade. We arranged the conditions to maximize the likelihood of the outcome that we wanted. What people miss is that the, the amount of attack vectors that people who succeed approach a problem with is orders of magnitude greater than someone who is starting out. Is they're like, "I talked to three people, and that was it, and they said they didn't want it." And I, I tell this, this story 'cause it was, it was one of those big moments for me, which is I, I had a mentor. He said, "You should put some flyers out." That's how he advertised. He had a big chain of 22 locations, and I was like, "All right, I'll put some flyers out." I put 300 out, um, and then nothing happened. Uh, well, one person called, and they said I dinged his car, and then I was like [laughs] Thank God he didn't... I didn't have any money. Um, so he called me up, or I called him like a week or two later, and he's like, "Oh, how'd the, you know, how'd the flyers go?" And I was like, I was ready to... I was like, "I'm gonna show you. Yeah, I'm gonna show you. Dude, nothing happened, man." And he didn't even... Like, I was like, I was waiting for him to try and fight me, and he was like, "Well, what was your test size?" I was like, "Hmm?" [laughs] I was like, "I put out 300 flyers." And he was like, "Yeah, it's tough to know if anything works at 300." He's like, "We usually put out 5,000, um, per test batch until we know it works." He said, "Then we do 3,000 a day after that." And so he was doing 150,000 flyers a month, and I'd put out 300. And so as much as people don't think that, like, it's like work harder, it's the, the volume of activity and output-
- SBSteven Bartlett
Mm-hmm
- AHAlex Hormozi
... that people who are 100 steps ahead of you really is oftentimes 100 times more. Now, it seems unfathomable 'cause you're looking at the top of the hill and saying, "How do I get there?" But you start by making one.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And then you learn through how painful the inefficiency is. Like, when you're editing, that you're doing the split test for the headlines at 300 of them at a time, you learn because you're like, "This is so painful. It works-
- 1:17:43 – 1:20:34
Stop Planning And Start Doing
- SBSteven Bartlett
At the very top of that, I heard this idea of, like, doing and listening at the same time, and this sounds very simple. You're talking about reinforcement learning being the way-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... that you tune yourself to reality.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
But you even said yourself, once upon a time, you were doing a lot of listening. Books.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
You were reading-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... and there wasn't much doing. Some people just do the doing and no listening.
- AHAlex Hormozi
Yeah. [laughs]
- SBSteven Bartlett
And, and so they don't tune. But this sort of, like, doing and then r- sort of reinforcement learning based on the outcomes is how one cultivates their self-awareness. That's actually the most accurate definition I've ever heard of, like, that's actually how you get more in tune with the world, is through f- painful sometimes feedback.
- AHAlex Hormozi
Data.
- SBSteven Bartlett
And then the other thing I heard was you talking just about, like, just believing in human incentives.
- AHAlex Hormozi
Yes.
- SBSteven Bartlett
And, and this, like, it, it sounds like a [laughs] it took me 10 years to just sim- settle on the simple idea that humans don't really behave outside of their incentives unless they're psychopaths, and that's, like, why they go to jail, because they acted outside of social incentives. They, like, killed someone or something. Actually, when you think about team building or customers, the first question should be why aren't they... It's like what are the, what, what are the incentives in which they are making their decision? And you talked about that example there of giving someone the, the gammon board and some-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... You're changing his incentives.
- AHAlex Hormozi
Yeah. We just need to move the levers around. And so it's like if you're not selling well, to get to a business situation-
- SBSteven Bartlett
Mm
- AHAlex Hormozi
... it's like you haven't made buying from you the most convenient, nicest option.
- SBSteven Bartlett
It's such an important way to think. Like, you offer someone a job, and they say, "No, I don't want the job." You can think lots of things, but actually if you just r- reason it down to the f- the first principle incentives, what did, what was... And you could, it could be a seesaw, like, kind of like your value trade here.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
What did I offer them? [laughs] Um, what did it cost them?
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
And was that net positive?
- AHAlex Hormozi
So I have this... So I write all my persuasion like this.
- SBSteven Bartlett
Okay.
- AHAlex Hormozi
This is, this is [chuckles] how we do it. So we say, uh, plus plus, plus minus, uh, minus plus, minus minus.
- SBSteven Bartlett
Okay.
- AHAlex Hormozi
All right? This is the easiest way to write copy, the easiest way to, to think about marketing. If you do the thing, you get more good stuff.
- 1:20:34 – 1:23:39
How To Incentivise People And Find The Right Audience
- SBSteven Bartlett
a, as someone who employs hundreds of people now, this is kind of how I think about behavioral change in a group, big group of people. You can, you can stand in front of the team and say, "Hey, everybody, adopt AI, by the way, please. Please adopt AI." But their incentive structure is to do their job.
- AHAlex Hormozi
Mm-hmm.
- SBSteven Bartlett
And have you read The Innovator's Dilemma? It's one of my favorite books of all time on the subject of like-
- AHAlex Hormozi
No, but I'm familiar with it
- SBSteven Bartlett
... talks to the same thing as well, which is just humans just act inside their incentive structure. Wanna change humans, change their incentive structure.
- AHAlex Hormozi
A lot of people who are delusional when they start out think that they're going to change people.
- SBSteven Bartlett
Yeah. [chuckles]
- AHAlex Hormozi
And I think one of my favorite market-- I think Gary Halbert said this, he's a copywriter. Um, he said, "We don't want to create demand." He said, "We wanna channel it."
- SBSteven Bartlett
Mm.
- AHAlex Hormozi
It was just such a, such an interesting nuance. He's like, "That demand, like, the demand needs to be there. We just need to just carve a little bit of that river and point it towards us."
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And I think when you're thinking about for you with the show, the attention is there. The, the attention is being spent every second of every day from every human.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And so we're not gonna create attention.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
We're going to channel it.
- SBSteven Bartlett
Mm.
- AHAlex Hormozi
And we're gonna make our option the nicest, most, most convenient option compared to alternatives. And then it's really just getting into the very gritty details of who I need to make this for, then you get into avatars and subsegments and markets because what makes it attractive to one person might not make it attractive to another.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And that is why probably one of the highest leverage decisions that you make with the business is who do I serve?
- SBSteven Bartlett
Hmm. Do you have to be intentional about that when you're starting a business or offering any product to anyone, whether it's content? Do you have to, at the start, decide who it's for?
- AHAlex Hormozi
Yes and no, which is a terrible answer. But to start, you just need to get anybody to give you money. You have then met the, the requisites for being an entrepreneur. You've accepted money from a stranger, congratulations, you have a business. Most businesses that I encounter, especially in services, 'cause it's 80% of the, at least in the US, it's 78% of all businesses are service-based. Typically, it starts with accepting all money from everyone [chuckles] 'cause you're like, "Oh, I do podcast agency stuff too. Oh, you have a... Oh, you want a startup? Yeah, I could help you too." Like, because they have a pulse and a credit card, and one of those was the requirement for being a customer, right? [laughs]
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
So you, you take what you can get, right? But you quickly realize that it becomes very difficult to scale that, and that's okay because you had to do what you need to do to survive and get started, and that's fine. But usually between one and three million, you have to make a decision where you say, "Hey, in order for me to scale this, now that I have the resources and the experience and the skill, I can say these customers are easier to deal with and pay us more-
- SBSteven Bartlett
Mm-hmm
- AHAlex Hormozi
... than these customers."
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And if I didn't have to serve 10 different types of customers, and I only had to serve one type of customer, it would make the operations in the back way easier because I could start templatizing and start systematizing what our delivery is. And on the front end, if we're advertising people, instead of saying, "We do advert- you know, podcast agency for everyone," we say, "We help doctors generate patients using podcasts."
- SBSteven Bartlett
Mm.
- AHAlex Hormozi
It's like, oh, all of a sudden, the correct customer knows that this is for them, right? And so now we're attracting the right people, and then those people are the ones that we already figured out through trial and error and feedback are worth the most, and then we have a more scalable product because we don't have to make 10 things for 10 people. We make one thing for 10 people.
- 1:23:39 – 1:26:42
Business Ideas You Could Start Today
- SBSteven Bartlett
I almost hate this question, but I'm gonna ask it anyway. Um, are there any obvious businesses that have emerged in your point of view because of what's going on in the world-
- AHAlex Hormozi
Mm-hmm
- SBSteven Bartlett
... that a young person that wants to cut their teeth should probably be aiming at? 15 years ago, for me, it was starting an agency.
- AHAlex Hormozi
Mm-hmm.
- SBSteven Bartlett
I think that opportunity is a little bit saturated now-
- AHAlex Hormozi
Mm-hmm
- SBSteven Bartlett
... if dare I say.
- AHAlex Hormozi
I think that the nature of agencies has changed. I think you, like, if you wanna do, like, a Reddit reputation management now, that's kind of a more emerging offer because Reddit's become a bigger and bigger platform, and people look there. Like, the, I think the, the old school meta ad agency might be harder to crack into than some of the more newer opportunities that exist, and clipping agencies, things like... Like, those things are still opportunities right now, I think. So if we have beginner opportunities, and then we have what I think are great opportunities that are, let's just say non-just AI, 'cause there's the obvious answer of, like, start an AI thing and automate for small businesses, and yes, you should absolutely do that, and there's lots of money to be made there. Great.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Okay. Outside of that, what's not going to change? What can you bet on? I'm gonna bet that humans are going to want to still want to look beautiful-
- SBSteven Bartlett
Mm-hmm
- AHAlex Hormozi
... in the future, as they do now. I think people are gonna wanna stay young-looking. And so I think the longevity med spa, look a certain way, peptide, all of that world is going to crush and is already crushing right now. There's a huge supply-demand issue. Believe it or not, I think, uh, wealth, um, advisors, I can... 'Cause I see so many businesses, and the ones I pay attention to are the people who are making more money than I think their skill level, um, would connote-
- SBSteven Bartlett
Mm-hmm
- AHAlex Hormozi
... right, would, would, would make sense for.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Like, on the flip side, I say, like, if I see somebody who's, who's doing $20 million a year as a restaurateur, I'm like, "Bro-
- SBSteven Bartlett
Yeah
- AHAlex Hormozi
... you could probably do $200 million a year in a different business." Um, I had a conversation with a gym owner that was doing $10 million a year. And it was a service-based gym, not a, a facility-leased gym, which is different. Like a Crunch Fitness is just like you use the equipment, whatever, but a true service-based gym, which is either personal training or semi-private training, really hard business to scale. Easy to start, hard to scale. And he's like, "What do I think? You know, what do you think the, the opportunity is for me?" I was like, "Honestly, dude, you could take your exact skill set, 'cause you've got 100 employees, and you're trying to deliver an amazing experience. But with low-skilled labor, you have to maintain culture. There's all of this stuff that you have to do." I was like, "If you took that same skill set and just applied it to a superior vehicle, you'd make more. Now, you might not want that, and you might be happy with your existing business, which keep on, just know that it's a harder, it's a harder business." So all that to say, I think wealth is a big bucket. Um, wealth-related services are still crushing. Insurance risk is still going to exist in the future.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
So there's going to need to be insurance. People are gonna to, to, to fractionalize risk-
- SBSteven Bartlett
Mm-hmm
- AHAlex Hormozi
... which is what insurance functionally does. The longevity looking nice is one, and then anything that's not cool has like a discount applied to it, is always something that's very interesting to look at. It's kind of like trash. Like, no one wants to be like, "Oh, so what do you do?" It's like, "I, I'm in trash." You know, like it just, it doesn't have the same gravitas as I'm a doctor, except that guy could be a billionaire [laughs]
- SBSteven Bartlett
[laughs]
- AHAlex Hormozi
Right? And so if I look at like, oh, I, I do, you know, I do waste management for old people, like, you know, human fecal matter, it's like there... someone's gotta, you know, like someone's gotta figure something
- 1:26:42 – 1:32:51
Why You Should Sell To People With More Money
- AHAlex Hormozi
out, right? And so those are the types of businesses where it's like, look where no one wants to look. Look at-- look for things that people would not wanna say at parties. [laughs] There's usually big opportunities there if there's obviously money where... I said old people, 'cause right now it's so... wealth is so concentrated on the... I did-- My favorite video of the year, I, I did this breakdown, and because it was my favorite video, I think it got like 300,000 views. But like [both laughing] But what I did was really interesting, is that I took wealth in the United States, and I had a hund- had it represent $100. 100% of wealth is $100. If you looked at it, right, and you had a circle for all, you know, 100 people at different percentiles, right? There's like $2 in the bottom 50th percentile.
- SBSteven Bartlett
The bottom 50% of people has roughly $2 of 100.
- AHAlex Hormozi
In wealth. Of the 100 in wealth.
- SBSteven Bartlett
Wow.
- AHAlex Hormozi
It's crazy. And then you've got your next 40, and I think that was like $27, something like that. Then you have your next 9%, which has like $36, and then the top 1% has 31. Hopefully the math maths, but it's, it's somewhere, somewhere in the neighborhood. And so when you look at that division, and then you're like, "Who should I serve?" Many people who are starting out are here, and the only people they see are here. And so their view of the world is not accurate. And this is why they stay broke, because they try to sell to other people who have no money and then assume that no one has money.
- SBSteven Bartlett
The interesting thing I, I noticed, and I think anybody that's run a service business will be able to relate-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... is when I started out, I was selling to-
- AHAlex Hormozi
[laughs]
- SBSteven Bartlett
... startup founders who had an app idea-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... whose marketing budget was approximately $10,000, and I was asking for $10,000.
- AHAlex Hormozi
Per year. [both laughing]
- SBSteven Bartlett
And they were watching me.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
They were count, counting every download they got on their apps.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
And slowly we managed to move up. And the remarkable thing is, this is a crazy thing to say, but it was easier from a client management or a client account management perspective to deal with Coca-Cola than it was Dave with his dating app idea. Coca-Cola, who would give you potentially six figures in budgets, um, would r- would be a little bit more casual than Dave with his a- dating app idea where he'd put his mortgage on the line. [laughs] But it's n- it's not easy to move up because to get that meeting with Coca-Cola, to be able to present to them-
- AHAlex Hormozi
You've to earn it
- SBSteven Bartlett
... you've got to earn it somehow. So it's all well and good saying it, but the reality of getting up there is they, they think more about credibility, track record. They'll, they'll work with people who are highly credible and who, who they can see a reality behind.
- AHAlex Hormozi
And so it's noth- there's nothing wrong with starting to sell to friends and family, but the, the goal... Again, that's if your goal is to make more money with the business, should be to move up market. And if you look... So this is kind of interesting, something I've noticed. [paper rustling] If you look at the price of a service, and this is specifically for service businesses-
- SBSteven Bartlett
Mm-hmm
- AHAlex Hormozi
... the price of the service almost has a one-to-one correlation with how advanced the business and business owner are, just as a forcing function. Because in order to go up in price, like a service business done well means you did a good job. You have more demand than you have supply, and so what do you do when supply and demand crisscross? You go up in price. And so you continue this loop, and as long as you continue to deliver more value than you're charging for, you continue to have more demand, and you just keep laddering up. And this is why price is such a strong signal for value, which why when you're starting out, it's hard to hear us say, "Hey, add a zero to your price tag. Add two zeros to your price tag." Because if someone comes to me and says, "Hey, I want to do all of your social media management for $2,000 a month," I'm like, "Dude, you can't even handle me."
- SBSteven Bartlett
[laughs]
- AHAlex Hormozi
Like you c- like even if I said yes, you can't. It do- the math doesn't math. There's no way you can do it. And so if someone comes to me, is like, the minimum I'm probably gonna be willing to spend is, I don't know, $15,000 a month for a vendor, like the minimum I could really possibly... And it'd be probably a, a smaller shop, and I know the founder's probably still integrally involved, and I'm fine with that because I'm okay with some founders like being good and basically me seeing them as a fractional employee that I'm paying less, and that works fine. All that to say, like you want to have your price go up, one, because you serve better customers. Two, because you have better margins. Three, because it would be less headache. And four, because it's a signal of how good you are at what you do.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And the best businesses and business owners will know, "Oh, this is for me." You signal to them that you, like you wanna go up market, but you have low market prices. There's, um, there's something called the Van Westendorp pricing analysis. You might have heard of it. It's from the 1970s. I do this most times when I launch a new offering. And so there's four questions you ask. Number one, at what price would this be so expensive that you wouldn't even consider it?
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Number two, at what price would this be so cheap that it would be impossible that it would be able to be valuable? It'd, it'd be too cheap. At what price would it be right at the edge, you'd have to really consider it, but you'd end up buying it? And then at what price would it be a bargain, a good deal? And so when you actually take a scatter plot to this, and now I have to-- I used to have to do these manually. Now you can literally just take the data and put it right into AI and say, "Hey, run a Van Westendorp analysis on this," which is amazing. So [chuckles] you can get it in six minutes. Um, and so you get these, there's four points on the graph if you have the scattered dots, and so you have the point of marginal cheapness [chuckles] which is basically, beyond this point, the majority... more people will think it's too cheap to be believable.
- SBSteven Bartlett
Okay.
- 1:32:51 – 1:38:42
Why Employees And Customers Deserve The Same Treatment
- SBSteven Bartlett
Of all the ideas that you've put out into the world, what are the, the sort of headline ideas or questions that you've found to be most compelling to people?
- AHAlex Hormozi
Almost all the core concepts in this book come down to figuring out who you wanna sell, what you wanna sell them, and how to get them to buy. And most of my content focus is more on acquisition since the vast majority of small businesses, say one to fifty million-
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Not always. Um, but I'd say seventy percent of businesses, this is rough estimates, that come through our doors are demand constrained. They could use more customers than they, than they have. Thirty percent are supply constrained. The phone's ringing, but they just don't have enough account reps, they don't have enough technicians, whatever it is. And so what's really interesting about this, all of these books when taken in aggregate, is that every problem is a marketing problem, and I'll, and I'll sell you on this idea. So if we were to think about a business as, okay, we've got lead gen, right, as activity number one, we've got nurture as number two, we've got sales, uh, we've got, uh, onboarding, and then we've got retention slash ascension, right? Getting them to keep paying and getting them to buy more shit. Now, this is the demand side for customers, right? Everyone... Hopefully, everyone's kind of aligned with that. Now, if you're supply constrained-
- SBSteven Bartlett
Which means?
- AHAlex Hormozi
Which means that you, uh, have more customers than you can handle, more people are interested in your stuff. Let's say you're the solopreneur and you're like, "How do I... Like, there's only one of me. What do I do?" Like, you're supply constrained. If you had unlimited you, you could make more money.
- SBSteven Bartlett
Right.
- AHAlex Hormozi
So what's the equivalent version of this? On the supply side, you have application generation, and then you have application nurture. And then-
- SBSteven Bartlett
What does that mean, application nurture?
- AHAlex Hormozi
Basically, we're working these leads.
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
We have these applicants. We need to get them scheduled. We need to get them booked. We need to make sure that they're not getting lost in the process. You know, like how, how quickly we line these interviews up, all that, right? We have the interviews themselves, which is the sale, right? And then we have onboarding, like you do for a new employee.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And then you have retention, and then the ascension is they're gr- they're going up, right? Are, are they, are they, are they moving up? Which means that you just treat humans the way you treat humans in a pipeline in a business. And so if you have a demand problem, but you know how to get employees, then do the stuff that you get to get employees to get more customers. If you know how to get customers, but you don't know how to get employees, use the exact same process, which means who's writing the copy for your, your ads and your promotions and your outreach temps? Well, somebody probably should take a look at it. If you haven't looked at this, by the way, and you're a slightly bigger business owner, you will be horrified by the outbound messages that are getting sent on your behalf to people. You'll be horrified by the job postings that your company is putting, and you're like, "No one would respond to this. How would you think this would work?"
- SBSteven Bartlett
So funny.
- AHAlex Hormozi
From a nurture perspective, the leads aren't getting worked, no one's following up. We're not giving them any materials to sell them on our bus- just like you would with a prospect. Like, why don't we have case studies? Why don't we have a video sales letter that tells the, tells the whole business? So every person who comes to Acquisition.com watches a VSL from me, and it's a thirteen-minute thing of just like, "Here's how the business works, and it's... This is our real estate arm. This is like..." And it shows everything. And like, "I'm giving proof, and this is John, and John's an employee, and John loves it here." You know, whatever.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And so then in the interview itself, it's like, do you have a script? Well, you have a sales script. Why would you not have an interview script?
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Pre-canned questions. Do we role-play this? Well, we role-play this. Isn't this just as important, if not more important? Is there more leverage on getting one ten out of ten talent person than just one customer? Yeah. On the onboarding, are we just... Do we have any process? Do we have thirty, sixty, ninety of what, what's gonna happen over the next thirty, sixty, ninety days, and what is required for them, and what information do they need to consume so they can become proficient? And then once they are onboarded, what's their, what's their career path look like? How do they... Like one of my favorite questions is, when I have somebody I really like, um, I say, "What would it take for you to work here forever? What would it take? Just tell me what it would take. I can say no. Just tell me what it would take." And then I can start moving the pieces around to figure out how I can get this person to stay forever. But the same thing happens if I have a, a customer that I like a lot. Like, what would it take for us to be your, your sole provider forever?
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Especially this, 'cause I know you have more enterprise experience, sometimes saying, "Hey, let me be the sole provider. Let's get- let's go exclusive. Let's lock in a three-year contract, and I'll give you these other things for free if we lock it in."
- SBSteven Bartlett
And I'll never work with-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... these three competitors
- AHAlex Hormozi
Yeah, yeah, yeah.
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
And so almost all problems in business can be solved by more people finding out about your stuff, either to work for you or to buy from you.
- SBSteven Bartlett
Hmm.
- AHAlex Hormozi
Which also means that you probably have ongoing marketing to your customers. You think there shouldn't be ongoing marketing to your team and employees? Do we want our customers to give us referrals? Yeah. Do we want our employees to give us referrals? Do we have a incentive for people to bring referrals? There's a great story. A friend of a friend had a, had a, a $10 million-ish a year business. He talked to somebody in the exact same space as him, uh, who was way further ahead, and he, uh, he was in business that had, like, agents, uh, that worked for him, like, kinda like a brokerage. And the mentor told him, "So what's the incentive that you have for your agents to bring more agents?" He's like, "Oh, I, you know, I pay them 500 bucks if they bring a new agent on." And he was like, "Okay. What do you make on a productive agent per year in gross profit?" And it was 250,000 a year, productive agent gross profit. He's like, "So you're only willing to spend $500 to make 250,000?"
- 1:38:42 – 1:39:30
Why Hiring Is Everything
- AHAlex Hormozi
million.
- SBSteven Bartlett
Yeah, it's crazy. [laughs]
- AHAlex Hormozi
[laughs]
- SBSteven Bartlett
I think about this a lot, even with, like, recruiting. Like, people are like, "Oh, headhunters cost a lot of money." I'm like, fucking hell. For really exceptional talent, it's almost-
- AHAlex Hormozi
It's always a deal
- SBSteven Bartlett
... it's always a great deal.
- AHAlex Hormozi
Going back in time, if I were to give the, the, like, what has changed about, uh, me then versus me now is that my standards for talent are significantly higher, and my tolerance for letting someone be mediocre and stay are lower.
- SBSteven Bartlett
I think probably all the entrepreneurs I've ever interviewed would say that exact thing. I remember one particular e- e- entrepreneur, he's built a $100 billion business, publicly listed. He said, "At 20, I thought hiring mattered. At 30, I thought it was kind of important. At 40, I've realized it's the single most important thing." And this is a guy that's built a $100 billion publicly traded company, and I was like, the, the... But it's funny 'cause that's what all of them say.
- AHAlex Hormozi
Yeah.
- 1:39:30 – 1:44:57
How To Choose The Right Romantic Partner
- SBSteven Bartlett
But I, this is a broader relationship advice lesson, which is just the best and worst decisions you'll make in your life are people. And I mean, I look at, I look at some of these things here and I go, I mean, it's true for you.
- AHAlex Hormozi
Yeah. I know, right?
- SBSteven Bartlett
This is a photo of your lovely wife.
- AHAlex Hormozi
Nugget zone.
- SBSteven Bartlett
Do you think about the variance of your outcome if you'd chosen someone else?
- AHAlex Hormozi
I do think about that. I do think about that. It's probably the single best financial decision that I ever made was marrying Leila because... And this is, this is no shade to any, any, any relationship that exists of mine or anyone's f- You know, people optimize for different things, and I'm not saying I optimize for finances. I'm saying, but within that lens, she was just down, and she believed in me a lot of times more than I believed in myself, and I think, I think that's all anyone really wants, or at least for me, that I, that I wanted, was... And the thing is, is that hasn't stopped. As the stakes have gotten higher, I remember there was this business that I was, that I was working with, and I was gonna meet with the whole team, and I was like, "This is, like, a really tough problem that they're asking me to help with." And I was like, "Um..." And she just, like, cut me off, and she's like, "Good thing you're the best at it and that you're gonna give them more help than anyone else could." And it's just like, whether that's true or not, it was exactly what I needed to hear in that moment. And so I, I also say this to people who are starting out, is just like, I, I do not have perfect, um, self-security. You know what I mean? Like, I wouldn't say it's imposter syndrome 'cause that's not true, but, like, I have doubts of, like, I don't know if I'm gonna be able to solve this. I mean, I hope I am and I keep working on it, but, like, I don't know.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And as the, the problems become more complex and have higher stakes, it's like this is harder and will cost more if I fail. Um, the pressure feels the same. I would say the only difference is that we have more resources to, to, to, to handle them.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And so in a lot of ways, when you're starting out, it's kinda like fighting a bear with your h- bare hands. But when you're further down, it's like trying to slay a dragon, but at least you have an army.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And so the foe is bigger, but your resources are bigger too. And in some ways it's almost easier later than it is when you start, but you only earn the right to face those foes by going through the earlier stages when you didn't have the resources because you learn the grit, you learn the scrappiness, and I think that, like, it's a, it's a rite of passage. And Leila was willing to go all in. And I would say that, like, if anything, kinda like a jockey bet, uh, for VCs, like you bet on the horse, not the jo- or sorry, the jockey, not the horse. When she saw me, I had, you know, a handful of gyms, and it wasn't like I'm Alex Hormozi, the, you know, whatever I am now. I was just a gym owner, and I was 26 and I worked really hard, and she was like, "I don't know where we're gonna go, but I know Alex is gonna work tirelessly to get there," and she just always believed. And I think that if... Like, I think the person that you are married is either going to increase the likelihood that you hit your goals or decrease, and you just need to decide whether that's important to you. [chuckles]
- SBSteven Bartlett
If you were single-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... do you think you would be as successful as you are now?
- AHAlex Hormozi
I wouldn't be as successful because, number one, there have been plenty of moments... 'Cause I don't struggle with anxiety. I struggle with apathy, um, not caring. Why do I even bother doing this? We already have enough money. Who cares? Leila, in a lot of ways, has bigger dreams than I do. Um, I've always had big goals for finances, but at a certain point, um, and I think I hit this kinda like last year for me, which is weird because I always-- Like, people are always like, "When is enough enough?" And it's kinda like working out. Um, I got to a point where I was, like, almost 250 and lean, and I was like, "This is more than enough. I, I'm gonna come back down." [chuckles] And so I've had bigger goals than most people for my fitness or muscles or whatever. Um, and I've had bigger goals than most people for money. But I also was like, at that point when I hit it and I was like, "I think this is enough for me." And Leila was like, "It was never about the money for me." It never was, and I think that's why our dynamic worked really well. But she's always cared about the team, um, more than anything, and she's like, I... Her dream when she and I met was to build a place that people love to come to work. And if you do that, and it also has a good business model behind it and marketing and sales and pricing and all this other stuff, it's like you end up making a lot of money.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
But I would have probably taken my foot off the gas earlier if it hadn't been for Leila. I think I would have struggled more operationally, uh, because Leila is... Leila will never get the credit that she deserves. Um, but Leila is, Leila is the, is the pure, is a pure operator, like unbelievable leader. That talent that I probably wouldn't have been able to either get or keep, stay because of her. Like, I think if, if there was like a, a, a divorce in the business, I think the vast majority of people would go with Leila. [laughs]
- SBSteven Bartlett
[laughs]
- AHAlex Hormozi
I'm serious. Like, I, I know, I, like self-awareness.
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
I- people know what I'm good at.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And I know people are loyal to Leila because she is just there for people. Um, and so for those reasons, I don't think I would have had... I, I don't think I would have kept my foot on the gas. Um, I don't think I would have been able to operate nearly as complex of a business as we currently have. And on the inevitable like troughs of my motivation, she was the one who kind of carried me.
- 1:44:57 – 1:47:38
What If Your Partner Doesn't Support Your Business?
- SBSteven Bartlett
A lot of people will be listening now, and they might be listening with their partner, maybe they're listening alone, and they're thinking, "Do you know what? My partner isn't all that supportive of me." And dare I say, some people will be listening now and think their partner is actually against-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... their ambition. What do you say to those people?
- AHAlex Hormozi
Figure out what you want. Like, we have to make trades.
- SBSteven Bartlett
How do you... Do you know what? It's, it's tricky because some of those people might say, "Right, fuck it, I'm gonna dump her or him."
- AHAlex Hormozi
Mm.
- SBSteven Bartlett
And then they pursue the business for two, three years, they become successful, and they're lonely as hell, and they look back and go, "Do you know what? That was actually my insecurity and my shame that drove me to do this, but I've, I've now I've got the mansion and I'm here alone. I should have... She was a good girl. He was a good guy."
- AHAlex Hormozi
I speak only from the pers- perspective of how do you align the conditions to maximize the, the business outcome. That's where I come from in terms of how I'm speaking about this. In terms of maximizing subjective well-being and your happiness, um, those factors are completely different. [chuckles] And so I think Arthur Brooks has this just, this amazing visual example that I love, which is imagine two scenarios. One of them is that you drive your brand-new Ferrari to a three-star Michelin restaurant, um, and you have the corner, corner booth, eating the best food in the world, looking out a view alone, or piling into your beat-up, you know, Camry, uh, going to a Denny's with your five best friends. Which one is the one you think you're going to enjoy more? It's obvious. It's obvious it's the second one. But we live our life like the first. And so I think if, again, it comes down to what you want. If you're like, this girl, guy, whatever, like satisfies so many things, like you will not find the perfect person 'cause you're not perfect. [chuckles] And so it's just what on the stats of this person am I willing to make trades on? Am I willing to have somebody who's maybe not the most supportive of my career, but maybe they're supportive of my subjective well-being, maybe they're supportive of my, of my extracurriculars, maybe they're supportive of my spiritual journey, whatever. They might just be supportive in different ways. And so again, it's what do you want? And I think people... I had a, my, my first boss, um, or last boss rather, said this thing to me, and it's really stuck with me. She said, uh, "Figuring out what you want is ninety-nine percent of the work." She said, "The easy part is getting it." And I thought about that a lot because I was like, "No, the hard part is getting it." And it's just like, no, it's like, it's how many layers deep did you figure out what you really want? And I think that's... 'Cause when you, when you really know what you want, then it's, then you just align the world to go get it.
- 1:47:38 – 1:50:47
How To Figure Out What You Really Want In Life
- SBSteven Bartlett
It's very hard to know what you want.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
Because there's all these near-term temptations. There's this external noise. There's Instagram telling you that, "You want this."
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
"No, you need this."
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
So being able to drown out all of that noise and get to some kind of signal, and also to your point about sacrificing everything you could have had, you know, two, three, four, five-
- AHAlex Hormozi
We want the upsides of all paths-
- SBSteven Bartlett
Yeah
- AHAlex Hormozi
... without the cost of each.
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
And so it, it, I just, this is the why I still believe that decision-making, which is this, the least sexy topic of all time, but still the most important. Decision-making is the highest leverage thing that you can do in life, making good decisions.
- SBSteven Bartlett
And is there, I mean, we've talked about frameworks. Is there any framework for making a better decision as it relates to what we're talking about here?
- AHAlex Hormozi
I think it's answering the first part, which is what do I want to have happen?
- SBSteven Bartlett
What do I want to have happen? Yeah. That's, um, even that, that's... Uh, uh, do you know what? I'm probably speaking from experience here 'cause when I was, what, 20 years old-
- AHAlex Hormozi
Yeah
- SBSteven Bartlett
... was it 20 or 19, I h- Mark Knor, friend of mine, mentor of mine, gave me this diary, and I remember the first page I wrote in it what I wanted. And what I wrote was, "Before the age of 25, Range Rover Sport to be my first car, million dollars, six-pack, girlfriend." I'll throw up a picture of it on the screen. And I actually took a photo of it in my Range Rover at 24 years old as like a, um... But did, was that actually what I should have written down?
- AHAlex Hormozi
Well, I think it's probably what you wanted-
- SBSteven Bartlett
Yeah
- AHAlex Hormozi
... and then you updated your wants because you got it-
- SBSteven Bartlett
Yeah
- AHAlex Hormozi
... and then you found out that you wanted different things.
- SBSteven Bartlett
Sh- fortunately there, my time horizon was quite small, so I could figure out in three or four years without any, without any s- like damage that that was not the right thing to write down. But some people orientate their lives to like, "I need to become a, let's say, billionaire."
- AHAlex Hormozi
Mm.
- SBSteven Bartlett
And the sacrifice, to use one of your words, along the way is family, friends, mental health, health. And then you get there and you go, "Gosh, I can't turn back time. I can't rebuild relationships. I can't call my mum now. She doesn't answer or she's gone." So that's kind of why I always pause on this question of what do you want because I think we're actually like, as you say, like terrible at knowing, and I don't know a better way of knowing-
- AHAlex Hormozi
Than getting in and deciding whether you want it or not I think, um, one of the, one of the interesting things with wanting is that we only want what we don't have.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
You know, uh, people who don't have kids wanna have kids. People who have kids remember the times they didn't have kids. People who are single wanna get married. People who are married, you know, reminisce about the times they get single. But I see that as inherently human, which is that we only remember good and not bad, and that's a be- so that's a behavior thing. That's not a... So, like, the reason that when you get drunk and then you're hungover the next day and you say, "I'm never gonna drink again," and then seven days later you drink again, is because punishment fades, reward sticks. Which is why you go back to the old girlfriend and you still long for them, even though when you get back, you're like, "Oh my God, I forgot she was crazy." [laughs]
- SBSteven Bartlett
[laughs]
- AHAlex Hormozi
Like, "What was I thinking?" Right? But it's because we only remember the good, which is good to know, and I think evolutionary, 'cause, like, you remember you got berries there, but you don't remember the sacrifice. Like, also to the same degree from, like, pregnancy. Horrible experience for many women, not all, but many women, it's a horrible experience.
- 1:50:47 – 1:57:47
Becoming A Dad: How Alex Feels About Fatherhood
- AHAlex Hormozi
[laughs]
- SBSteven Bartlett
Speaking of babies, Alex.
- AHAlex Hormozi
Yeah. [laughs]
- SBSteven Bartlett
There you go. You gave me a jump-off point.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
Leila's pregnant.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
How, how long till the baby arrives?
- AHAlex Hormozi
Four months.
- SBSteven Bartlett
Four months.
- AHAlex Hormozi
Yeah. Exciting.
- SBSteven Bartlett
What are all the feelings? I can see some, [laughs] a mixture of feelings on your face.
- AHAlex Hormozi
[coughs] Um, I'm stoked, you know? Uh, I'm stoked. Uh, I'd say I have elements of fear, mostly that I, I wanna do a good job, you know, being a father. Um...
- SBSteven Bartlett
I can see, Alex, that you're scared.
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
And I can tell because I know you're, you're... I've sat here probably with you for 10 hours over the last I don't know how many years.
- AHAlex Hormozi
Yeah. I'll tell you what the issue that I've been struggling the most with, which is, how do I define a good parent?
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
And how do I define a good child or a successful child? Which then just gets into sort of a meaning of life question, which is why I think it's so difficult. But, like, I'll take the parent one for example. If, if we define a good parent as a successful outcome for a child, one, in what domains, right?
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Is it a billionaire who's lonely and sad? Is that a successful outcome? I don't know. Um, but let's just assume the world's version of success, and I won't enumerate it. How many people who have all that success had bad childhoods?
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
Do we now call their parents good parents?
- SBSteven Bartlett
Can I, can I posit something?
- AHAlex Hormozi
Yeah.
- SBSteven Bartlett
And listen, I've not, I've not had kids either. But what would happen if you removed both questions?
- AHAlex Hormozi
Oh, just like, I'll just take it as it is. Well, I'll, I'll say it's very... I, it would... I, I almost wanna say it's impossible for me. [laughs]
- SBSteven Bartlett
Because of control. You like to be able to control your outcome.
- AHAlex Hormozi
I wanna know what I'm doing. I wanna know where we're... Like, I want... I ask what do I want to have happen so that I can align all of my life to try and make that happen, and so if it's, like... And even, even the question of, like, what is a successful child is, is it a child who's happy?
- SBSteven Bartlett
Mm-hmm.
- 1:57:47 – 2:09:40
How Alex Thinks About Death
- SBSteven Bartlett
to see. I saw this quote that you, you tweeted.
- AHAlex Hormozi
Oh.
- SBSteven Bartlett
And there's two quotes you tweeted that I was very curious about. The first one, which t- caught me off guard, I think I actually texted you when I saw this, was this one. Do you wanna read this one out?
- AHAlex Hormozi
Yeah. So this was February 2025. "At your funeral, friends and family will argue over who gets your belongings. People will talk about the food and the venue. Your life will be summarized in two to three paragraphs. Conversations will shift from your life to their lives. Your friends will drive away thinking about what's next on their to-do list. Some people won't be able to make it because something came up. And most of the people you know today won't even be there. You're gonna die. People move on in weeks, not years. Do what you want."
- SBSteven Bartlett
Why is that so important to hear?
- AHAlex Hormozi
I think about death probably multiple times a day. [laughs] Um, and I think that that's actually been positively correlated with subjective well-being. I mean, older people are incredibly aware of the fact that they're going to die, and I think that's what allows them... Like, I look at... So there's a, I'm sure you've seen this, but there's this graph that shows how people rate their subjective well-being over their lives, and it's a smile graph, which I think is ultimately hilarious. But kids are really happy, and then they just bec- they get more and more responsibility, and then your peak unhappiness is, like, 45 to, like, 55. Somewhere in there is, like, it's the crunch. You're taking care of kids. You're taking care of parents. You have a career. And to be fair, in some ways it's good because you're at your peak earnings, so you're making your, your... Most people are making their most money in this window and, but they also need to do it. But there's... They're very stressed, right? They're stretched really thin. And then as they kind of get into 60, 65, 70, and when I think about each of these two extremes on the child side and the elderly side, and elders are often a lot like kids if we think about what ha- Like, they, they rely on other people. They're mostly just, like, they play games. They're f- [laughs] Like, in each of these situations, they have very little responsibility, and they don't care about what other people think. If you have, if you see a toddler go out with, like, a tutu and cowboy, cowboy boots, it's 'cause, like, they don't care what other people think. And when you're at the end of your life, you're like, "I'm gonna die, dude." And one of the things that I've been very, uh, obsessed with this is borderline but probably accurate, is I'm trying to think, "How am I gonna see the world when I'm 80, and how, how fast can I, can I get to there now?" 'Cause I care more now about what other people think than I will when I'm 80. And I just wanna pull as much of that forward as I can because when I see those 80-year-olds, I'm like, "That guy does not give a fuck." [laughs]
- SBSteven Bartlett
Mm.
- AHAlex Hormozi
And I'm like, "I really want that." And so-
- SBSteven Bartlett
It's-
- AHAlex Hormozi
... I, I write a lot about death because it's... I, like, these tweets are notes to self. They're, like, they're not, it is not a, it is not, uh, from a pulpit that I say those. These are, um, as a self-help to, to Alex [laughs] when I write these things. 'Cause it's like, I probably, when I was writing that in Febra- oh, yeah, February '25. So February '25, the first quarter of '25 was the hardest quarter that I've had personally in eight years.
- SBSteven Bartlett
You tweeted this at the same time.
- AHAlex Hormozi
Yeah. "I haven't felt this miserable in years. Shit's just hard sometimes. You have tough seasons, bad losses, and what makes it harder is you don't know when it'll end. But know it will end. So for anyone going through it right now, you do the only thing you can do. Keep fighting."
- SBSteven Bartlett
I texted you when you tweeted that because I had never heard you talk like that publicly before.
- AHAlex Hormozi
Yeah. Yeah, I mean, it was, it was a really tough quarter for me. I mean, mind you, I don't have kids, so that variable wasn't there. But every other variable that probably could have gone, quote, "wrong" was outs- actually, ironically, outside of business. Business was fine. Uh, but it was just everything else. Um, and-
- SBSteven Bartlett
What do you mean by that?
- AHAlex Hormozi
So I would say we were making plenty of money.
- SBSteven Bartlett
Yeah.
- AHAlex Hormozi
Um, but I had, I think I had nine lawsuits that were open at that, at that point.
- SBSteven Bartlett
Really?
- AHAlex Hormozi
It was a lot. It was nine, nine open lawsuits. Um, and they all, like, it was like pp, pp, pp, pp. And they were all different. Like, uh, ex-employee investment that two or, two or, two or three were investments that we had made that, like, one of them got caught in stuff, and then it's like, "Are we gonna get pulled in?" It was just all this just n- stuff. Um, just a lot. Um, and, and then Leila, uh, had a h- like sh- I think I told you, she, um, she had a really horrible... She, like, tore her colon, and so that's been... It's like, it's like an 18-month recovery. And so she was in the thick of, like, going through the pain of that before about to get the surgery. And so it was just like Everything sucked. [chuckles] And Bill Ackman had this really great interview where there's a snippet that I ended up seeing, which was he was-- he had just lost, like, a billion dollars. He was getting divorced, and there was, like, one other thing. Yeah, I think there was lawsuits because of the billion dollars, whatever. And, and he said when you're going through that, that... those rough patches, he said he focused on the only thing he could do when he's like, "You can't... You're not gonna solve this in a day. Like, it... You can't finish it." And I think that's what, that's what's so painful about it is you have this open loop that whenever it-- whenever something reminds you of it, it's like you get into this loop again of, like, rumination and just like, "Oh, what if it goes wrong?" and catastrophizing. And he's like, "You just have to take one bite at a time, and then every, you know, month or two months, you can look back and be like, 'I made some progress.'" And he's like he just focused on making progress and chipping away at the problem. And I think that was more or less the approach I had, which is kinda like the, the two feet in front of you, like, what are the things that I can actually do right now? I will do those. And sometimes... And I remember in that season, a lot of what I was thinking about was... So I wrote-- So when my mother passed, uh, this year, I wrote an article for myself. Yeah. Um, I wrote an article for myself about mental toughness, and it was because I wanted to... Of course, it's not like be mentally tough when your mother dies. That's not the point. It was just like, how am I supposed to show up right now? That was kinda like the, the, the thought process I had. And so I basically... Here, hold this. So I saw it like this, which is bad thing happens, right? There's these vectors of what happens as a result. So you have how long or how many bad things have to happen before you change your behavior. So let's imagine this line is how we're acting. How many bad things have to happen in order for us to change how we act? Are we shorter with our spouse? Do we not pay attention at work? Like, what... how many bad things? If somebody, the perfect, perfectly mentally tough person, would be able to have an unlimited amount of things happen to them, and then their behavior would remain the same-
- SBSteven Bartlett
[chuckles]
- AHAlex Hormozi
... from, from, purely from that perspective. The next issue is, okay, well, let's say that you're not a perfectly mentally tough person, and something crosses your tolerance threshold, and then your behavior changes. And so we have this next measurement. So we have how long and how much can you handle. We have how deep do you go when you fall. How, how badly do you change your behavior? Do you just... Are you short with your staff, or do you get into heroin?
- SBSteven Bartlett
[chuckles]
- AHAlex Hormozi
No, like, how bad, how badly do you fall? And then the next piece is how long does it take you to recover, return back to original function? And then the part that I added to this is, and then when I return back to original function, am I better than I was before? Do I... Am I the same as I was before, or am I permanently worse?
- SBSteven Bartlett
In what dimension? Resilience or happiness or-
- AHAlex Hormozi
So, so I, I basically have term one, term two, term three, and then t- this w- I d- term this as adaptability, which is how, how do you respond after a bad thing happens? Do you get better, the same, or worse?
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
You have tolerance. Or sorry, I think this is fortitude, um, which is how much bad stuff can you handle before it hits you. You have resilience here, which is how long does it take you to return to baseline. And then you have tolerance, which is how, how low do you go. And so through mapping these four vectors of behavior, I was able to look at myself during this harder season, and this was such a mind fuck because think about this. I do a hundred and six million dollar launch. My mom got to see it, which is really cool. She dies four weeks later. I realized the goal, we talk about long term, right, hundred million dollar, hundred million dollar, hundred million dollar. The goal of the books was to have a hundred million dollar launch at the end. The Offers book was an offer so good people felt stupid saying no. I gave it away for free, made it ninety-nine cents, gave a course with it. No one had done that. Um, and it was an offer so good. Leads, I did a huge, gigantic launch, but I didn't monetize 'cause I just wanted to show what having crazy advertising for something would do, and I used all the stuff in the book to advertise the book.
- SBSteven Bartlett
Mm-hmm.
- AHAlex Hormozi
This book's about monetization, and so I had an amazing offer and crazy advertising and a money model behind it, which is why I made a hundred million dollars in a weekend.
Episode duration: 2:22:37
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