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My First MillionAlex Hormozi’s Plan To Grow Acquisition.com To $1 Billion (#462)
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CHAPTERS
- 0:00 – 4:01
Current Focus: Acquisition.com, Media Economics and the Leads Book
Shaan asks what Alex finds fun to discuss, and Alex says his focus is Acquisition.com and the upcoming leads book. He explains that the media business loses money, with books and AdSense barely covering a 10-person team.
- •Two top priorities: Acquisition.com and the leads book launching after two years of work
- •Media side loses money overall
- •Book earns about $1M a year in profit and AdSense about $500K
- •Media team is 10 people plus vendors, with one recording day every 14 days
- 4:01 – 10:51
The Pros and Cons of Fame
Alex describes fame as having cons like weirdos, security needs and the loss of ordinary in-person experiences. He says the pros outweigh them, citing talent, deal flow and meeting heroes. Sam and Shaan share stories of admired people reaching out.
- •Recognition grew from once a month to five or six times per outing
- •Pros include top talent at market rate and proprietary deal flow
- •Heroes such as athletes and podcasters now follow him
- •Shaan frames it as being so good you can't be ignored
- 10:51 – 16:18
Origins of Acquisition.com and Enchanted Fairies
Alex explains Acquisition.com as his portfolio of companies, launched the day after exiting his three businesses in 2021. He tells how a photography studio owner's sales call led to the Enchanted Fairies deal, which now has 36 locations.
- •Sold the gyms, supplement and software companies in 2021 and started Acquisition.com the next day
- •COVID gave him space and he took a minority stake in a photography business
- •Founder shut down a profitable agency to go all-in on owning locations
- •Enchanted Fairies has 36 locations and does 30-plus million a year
- 16:18 – 18:24
Why Acquisitions Aren't Publicized and the Portfolio Today
Alex gives two reasons for not publicizing portfolio companies: endorsements would reshape deals and complicate exits. He says there are 11 portfolio companies, funded entirely with his own money.
- •His endorsement could 5-10X a company overnight
- •Including an endorsement would mean owning a majority
- •An influencer tied to a brand complicates a sale
- •11 portfolio companies, all funded privately by Alex
- 18:24 – 24:37
Deal Structures, Soft Influence and Lessons Learned
Alex names the hardest part of minority deals as founders who only half-listen to advice. He describes iterating deal structures, deciding when to put in capital, and leaning toward more majority deals. He cites some of the biggest wins.
- •Soft influence in minority positions is the hardest part
- •Founders who take half the advice cause problems
- •Deal feedback loops take a year versus 60 days for products
- •Capital goes in only where its use and return are clear
- •Biggest win went from $16M to $50M revenue with $20M EBITDA
- 24:37 – 29:38
Why a Conglomerate Model: Bigger Markets and A-Player Recruiting
Alex describes Acquisition.com as a merger of a family office and a conglomerate. He credits a meetup of founders with much larger markets for pushing him toward a bigger TAM. He explains that recruiting A players is the most valuable hands-on help.
- •Family office plus conglomerate; long-term holder, not an exit-seeker
- •Gym market was only about 50,000 micro gyms
- •Peers had markets 10 to 100 times larger
- •Layla's idea of recruiting led to finding A players for portfolio companies
- •One company's executive team was built entirely by HoldCo, leading to a majority purchase
- 29:38 – 33:39
Regrets About Selling GymLaunch
Sam asks about the Grant Cardone line that rich people sell and wealthy people never sell. Alex says he doesn't regret selling GymLaunch because he was emotionally done and it gave him credibility. He admits he later learned he could have used debt without a personal guarantee.
- •Sold at $46.2M after the business had been valued around $150M pre-COVID
- •Still owns a third of the business
- •Walked away mid-deal and came back after friends said he lit up about the new thing
- •Later understood debt financing could have de-risked him
- •Sale gave the credibility needed for Acquisition.com
- 33:39 – 39:55
Making Space, Hindsight and Tactics vs. Strategy
Shaan relates to making space for something new, drawing on relationships and selling Bebo. He and Sam discuss looking back at past mistakes and the gap between tactics and financial strategy. Alex says combining macro financial thinking with operating skill is powerful.
- •Shaan says to get what you want you sometimes need to make space
- •Shaan marks years by how many times he looks back and calls himself dumb
- •Sam says tactics must be bridged to strategy like debt and other people's money
- •Alex says private equity does inorganic growth while operators can also triple the businesses
- 39:55 – 41:50
Comfortably Rich and Playing the Infinite Game
Alex references Felix Dennis's How to Be Rich, calling himself comfortably rich with new wants always creating a deficit. Shaan argues that what he really loves is playing the game. Alex adds that one kind of deficit is financial, and the other is a mission.
- •Personal consumption needs are already satisfied
- •Wanting a skyscraper or huge company creates a new wealth deficit
- •Shaan says the game only works if you care about the score
- •Alex sees financial and mission-based deficits as two ways to create drive
- 41:50 – 46:41
Praise Over Punishment: The Mission of Acquisition.com
Alex explains that Acquisition.com separated from Mozi Media and clarified its mission as building companies on praise rather than punishment. He ties this to GymLaunch's mission and the hurt of employees and clients copying and competing with him.
- •Mozi Media holds the content and education mission; HoldCo has a different mission
- •Goal is to prove people perform better with praise than punishment
- •Billion-dollar mark is secondary to building something much bigger
- •GymLaunch's mission was taking gyms from their knees to their feet
- •Felt hurt when 17 former employees and clients tried to copy the business
- 46:41 – 57:12
Mission Statements: Truth, Spin and Evolving Reasons
The conversation turns to Elon's ability to tie everything to a grand mission. Shaan is skeptical of mission statements, citing Snapchat and Uber. Alex says the truth of why someone does something can evolve, and Sam points to older companies like Panda Express and Koch.
- •Shaan calls Elon a Teflon Don for spinning news into a mission
- •Shaan prefers admitting the primal motives like status and pleasure
- •Alex says reasons evolve from internal to external as money's marginal pleasure fades
- •Sam notes inspiring missions in traditional businesses like Panda Express and Koch
- 57:12 – 1:00:01
People Alex Admires: Panda Express, Buffett, Elon and MrBeast
Shaan asks who Alex admires. Alex cites Andrew Cherng for building a private company around his employees, Warren Buffett for patience, Elon Musk for vision and MrBeast for personal branding.
- •Cherng's Panda Express: 2,600 locations, $3.7B a year, 27% net margins, no outside money
- •Buffett for long-term compounding and rational decisions
- •Elon for connecting to a larger mission and owning his flaws
- •MrBeast for big thinking, work ethic and personal brand
- •Three influences: personal brand, investing and big vision
- 1:00:01 – 1:05:39
Fitness, Simple-Not-Easy and the Four Levels of Love
The hosts note that Alex's fitness and diet content is very useful to them. Alex says simple but not easy applies to fitness, nutrition, marriage and business, and describes marriage as rewarding more than punishing. Shaan relays Tony Robbins's four styles of love.
- •Never Skip Dessert came from poking fun at fitness people
- •Alex says no one ahead of you criticizes your advice
- •Marriage is about rewarding more than punishing
- •Robbins's four levels: baby love, tit for tat, unconditional love and monk love
- 1:05:39 – 1:15:30
Alex's Uniform, Obsessive Product Testing and Gear
Sam and Shaan ask about Alex's repeated outfit. Alex explains his shoes, shorts, beater tanks, backpack and gym bag came from iterating through many options. The aim is a setup that works from 40 to 120 degrees in many settings.
- •Brand grows out of what's true, as with the calf training story
- •Tested 40 or 50 brands of beaters and went through stacks of shoe boxes
- •Shorts have hooks, a phone pocket and cargo pockets for mic packs
- •One backpack covers four weeks of travel
- •Being deliberate beats sleepwalking through life
- 1:15:30 – 1:19:42
Best Personal Spend and Portfolio Allocation
Alex names JSX semi-private flying as a great personal spend and explains private flights help most on short trips. Sam asks about his portfolio, and Alex says about half treasuries, a quarter indexes and a quarter private companies. The episode ends with thanks.
- •JSX tickets cost around $300 and save time on short trips
- •Private flying has the highest marginal benefit on trips under two hours
- •Portfolio roughly half treasuries, a quarter indexes and a quarter private companies
- •Holds cash so he never misses a deal that could 10X
