Alex Hormozi's Best Advice on Starting a Business | 1 Hour Compilation

0:00So if someone walks up to you in the street and they say, "Alex, what idea should I pursue? I've just quit my job." >> Yeah. Right. [laughter] >> So I would say um business ideas typically come from one of three Ps. So it comes from a pain that you're currently experiencing, a past profession, so the thing that you just quit or some of the jobs that you just quit or a passion. >> So something that you're inherently interested in that you would spend your time doing anyways. uh some skill that you learned while you were in the workforce, which by the way is one of the most proven ways of making money because the economy has already showed you that people are willing to exchange money for that for that specific job. And so, uh in the world of gig economies and solarreneurs, every business can be dismantled into just jobs being done. And all of those jobs can be fractionalized. So, anybody like lit we look at any business, you've got sales, you've got you've got marketing, you've got customer success, you've got you've got customer support. If you want to differentiate that, you've got product, you've got design, you've got web pages. There's, you know, there's so many different components to a business.

0:54You just need to learn one of them >> and then it's like boom, you have a skill that you can trade for money that you don't have anybody else to report to. Um, and then pain is usually I think um in some ways um sometimes one of the biggest drivers. It's like you had an eating allergy and you couldn't find pancakes that dealt with your specific eating allergy and you bet that there's a decent amount of other people with that allergy that also like pancakes.

1:21And so then you make pancakes that that are delicious and amazing that also cater to people with that food allergy and then all of a sudden like you have a business based on pain. >> And why why does that matter? >> The pain part. >> Um >> what leverage and advantage does it give you for the next 5 years? I think that deep knowledge of the prospect is paramount or very important for creating exceptional products and you can either do that by doing a ton and ton of research or by being the prospect. And there's a certain amount of like visceral feel that you'll know like if someone wants to make a nose product for breathing. I have tried every product since I was in eighth grade. So it's been 20 plus years, 30 whatever a lot of years um that since then and I've tried everything and so I know the pros and cons of every product that exists on the market and I can tell because and I've done it's not like oh I tried it for a day. It's like I'll try things for a month at a time and so I have so much time exposure to this problem that I have a lot of nuance in my opinion on what's wrong with the solutions so I can formulate a way better hypothesis on how to fix it. And that hypothesis would will be for an investor so much more compelling because you lead with a story as opposed to logic.

2:31>> I met the guy who uh invested in Regal Cinemas which is the probably the biggest chain in the US. Um and it was when it was there was I had just one theater and it became the obvious co has disrupted that business but you know for 20 you know years whatever they they crushed and he said it was so weird to say that oh cinemas are going to make a comeback because they've kind of been on a downturn or something like that during the time that he was making the investment and he said the reason I decided to invest in it was because this guy knew everything about the business down to how much the cost of kernel of popcorn was and he just knew it so like the back of his hand that he was like this guy can't fail like he just knows too much about this business to not have it work and so investing in you know making a gazillion dollars and so but I think that that deep understanding and if you look at all of these the passion things you'll have deep understanding because you're spending all of your discretionary time pursuing this passion the pain you have a deep understanding of the of the problem and the prospects going through it because you've experienced it probably for years now the professional one I would say is a bit of a shortcut um because if you're quitting the job because you don't like it and then you say I'm now going to do for myself. Well, you're okay.

3:40[laughter] Like, um I mean, well, the the the one the one proven point about that is that that one is proven to work from an economic perspective. You will be able to make money doing that because you already have made money doing it. These other two are less proven, but sometimes have significantly more upside. >> There you were talking about the breathing example with your nose. >> It's funny because if you had sat down and said to me, Steve, I've made these like breathing nose strips. Um they are better. They're 20% more durable. They expand your nostrils by 20%. It is multiples less compelling than you telling me that story you just said about being a kid, having breathing problems, trying to solve this problem for yourself. And it's funny cuz that that story you told versus the sort of rational logical approach or the benefits approach

4:20>> is your marketing campaign for the next 5 years on Tik Tok and Instagram. It's I had a problem. I solved it. I tried everything and solved it for myself. There's almost like nothing more compelling and believable. No, >> we see that in Dragon's Den. We'll be sat there listening to these pictures all day. and I had ADHD. I tried energy products. They all made me crash. So, I went out and solved this problem for it at that point, you know?

4:45>> Yeah. So, Basos has this great framework where he talks about missionaries and mercenaries. And so it's kind of like you have the guy who says okay I looked at market trends and this is a growing category and you know I surveyed people and this was the you know the result that came back and so I believe that if we time this product right uh at this point in the market we'll achieve huge you know mass adoption blah blah blah blah and it's like logicing your way through and to be fair some people do you know do make it work but the missionarers the ones that end up making the most money because like they do it sure for the money because the business has to have some economic engine behind it. But really because they viscerally experienced this problem and don't want anyone else to solve to deal with that problem either. And so like if I were to tell that story like you were saying like when I was in eighth grade was the first year that I I started really noticing I couldn't breathe at night.

5:35And so I learned how to fall asleep with my hand on my face like this so that my nostril would so I could fall asleep and my hand would stay because you there's no actually other because you can't hold your because you fall asleep, right? And so if I fall asleep with my hand like this, right? like I like I'm on the couch and I fall asleep like that, it keeps my nostril open and I can fall asleep and it doesn't move. And so that's how I learned how to sleep for years uh before founding like just like simple nasal strips and things like that. But there's tons of problems with with those solutions that exist right now that I won't get into, but um maybe someday I'll make a nasal product.

6:06[laughter] >> I think I mean just pinches. I can tell you if you put if you put every product in front of me that exists right now, I can tell you what's wrong with it because I've tried I've tried literally all of them. Not like I'm pretty obsessive. And so like I've tried all of them. >> Missing an opportunity here. >> I've tried I've tried the ones from Europe. I've tried the one like not just US. Like I've tried I've tried every product that exists on Amazon. I've tried all the ones from foreign countries. Every every fan or follower who sends me a product that is a nasal company that's new. Um I will try the product. I still do. Um, and there has yet there's there's yet to be one that has truly solved it.

6:41>> I mean, you should I mean, [laughter] >> but I I think in some ways uh so this is actually a really good meta concept here, which is that um if you want to be compelling, a demonstration or a model is always more compelling than anything else. And so me even going through that entire narrative, right, is taking everyone else who's been listening to this on some journey. It's like if you want to make a compelling pitch for a business, it's like we pretty much just kind of went through one. Um, and so that's that's really what it comes down to.

7:14You're like, well, what do I do with my business? It's like create your narrative of why you're even doing this. And if you can explain to somebody why why they should care about this problem or more specifically why you care about this problem, I'll tell you this, more investors will like I might be like, I don't care about kitchen utensils, but this girl certainly does. And I'm sure there's other women who do too. And what everyone wants to see is obsession. And unfortunately in like some of the world, I know more in the UK than the US now.

7:42Like that kind of perspective of like just being allin obsessed with stuff has almost been like um bastard or like you know been um chastised. And I but the people who are obsessed are the ones who change the world at least change their world. And um and I think that so a very close friend of mine um did all the uh Olympic teams um nutrition and supplementation stuff for a country overseas and he said you know the difference between champions and everyone else and I was like what he said everyone always looks at them and says what do champions have that I don't have and he said it's they have it backwards. He said it's what do champions not have that I have. It's what do they lack? And it's an off button. They just don't stop. And so in dealing with the gold medal, it's like they just never stop. They just can't stop. Everything in their life is geared towards one goal. And so finding that thing and they approach everything in their life that way. And I think that that level of obsession around like everything that you touch on a daily basis is required for really getting to where you want to go.

8:53>> All right. So, my name is Hector Koga. I uh I'm the owner of an immigration law firm. We do >> immigration law firm. >> Immigration. Yeah. >> Got it. US. >> Yes, sir. >> Okay. >> Uh 24 million last year or run rate right now. >> 24 million last year. >> 24. Yeah. >> Okay. >> And our run rate right now is 60 million. >> Nice. >> Yeah. Something happened in January. So, >> um we would like

9:18>> It's amazing for you. >> Yeah. We like to be at a 100 million uh on revenue. So what is stopping me is I'm sure I I have a little bit of a shiny object before me and that is I can expand our current uh operation open more locations and why not do more but to get to the 24 and 60 we develop quite a bit of technology inside uh or processes procedures software apps all of these

9:49>> and it's to the point where uh from my perspective when when you're trying to develop tools for the thing and those tools are probably more valuable than the thing itself. >> I feel that I could profit out of that. >> Don't start a software company. >> It's too late. [laughter] >> Way too late. >> So, but no, I'll be clear what I mean.

10:15So, this is actually I think this is really important for a lot of people. So a lot of services over time become more technologically enabled and you do that because you want to expand your service ratio, right? You want to get you can drive more incremental margin because you can get one guy who can normally do 10 deals or 10 customers, whatever to doing a hundred in the same period of time. So it dramatically improves the margin of the business. But the thing is is that the the decision to then say, you know what I could do is I could start selling this to other immigration firms. I'm telling you right now, if you have a hund00 million per year with probably high margins because you use technology in terms of how you're doing it, do that.

10:54The likelihood that you that you actually do like true software is such a different animal. But the thing is is that you can get almost the best of that world with tech enabled service which is what you have. And so you have service revenue multiples, sorry, service eB multiples, and then you have tech enabled service which sometimes can get 13, 15, 18 times bottom line, and then you have true SAS multiples, which you're just not going to have anyways because you're not going to burn your business to the ground. So I just don't think it's worth pursuing. But you can get a huge amount of alpha in terms of uh enterprise value lift just from having the tools, which you have. So you're doing everything the right way.

11:27Don't just try and sell it to other people. Just keep using it to maintain and multiply your your competitive advantage compared to the marketplace. This gives you a market leadership position. You drive more eBay than everyone else does. And for them to copy you, they have to copy your software. >> Okay. Then let me pivot. If I was let then let me pivot just for a second. Pivot. >> So I'm going to say not to the software thing. Sure. I'm going to go for >> keep building it, but for yourself. >> Yeah. >> Yeah.

11:52>> Now going into new areas cost me about 150,000 to open a new location, get a train is too slow. I feel like I have I can only open about two three firms in a year. >> Okay. >> To get it profitable. >> Sure. >> If I could lease my factory. In other words, I can go to other lawyers and say, "Listen, family lawyers, bankruptcy lawyers, other lawyers and say, "Here's how you sell this. I'll train your salespeople and feed your cases through my machine." Because what they care is about winning, right? So, if you feed it through my machine, we can we can get that. I could sort of amplify the speed on which I could on do more.

12:36Right. >> Yeah. >> So, you just told him longterm versus short-term. >> It's definitely new to be clear. This isn't a do more strategy. >> Yes. [laughter] Okay. >> Okay. Um >> I was a followup, but that's that's >> you're like do more so that I do new so that I could do more. I was like I know what you did there. >> [laughter] >> Um, so, so basically you want to have an affiliate model um that you want to introduce to these other other attorneys. [sighs] What do you want to do with the business? You want it to 100 million.

13:05Right. >> Right. >> So, how many offices do you have to open to get to 100? >> Probably like five more offices, maybe four. >> So, 24 months to go from 24 million to 100 million. Then why are we talking about anything else? Mhm. >> No, I'm being super real. Like, >> right? >> Like this happens honestly more times than it doesn't happen, which is, hey, I've got this thing. I am incurring this friction, right? I have this this constraint in front of me. And so, rather than deal with the constraint, I'm going to start a new business.

13:36>> It it's like the it's like we all do this. >> So, but the like what's the one thing if it were true would make all my worries go away. Well, if you got five more offices open, you'd be at 100 million. So, let's just do that. It's the thing you already know how to do. You open up five more. If it takes you two to three, I'll bet you if you just put out of your mind they could do this other thing that if you took all of that effort and said, "How could I open five this year?" >> Right.

14:03>> Then you probably would figure it out because it's not a capital issue. 150 is nothing. No. >> For a new location relative to the revenue each. So each office does what? Like 15 million a year or something like that. >> Yeah. >> Right. >> So like let's do that. The thing is is like what you're running into is is a problem that everybody deals with, but it's just it's purely a focus issue. And this is why like the Zuckerbergs and and uh and and Jobs get on say and Basos get on stage and they talk about how like it's just ruthlessly focusing and at every level the opportunity that you have to say no to looks juicier.

14:32>> Yeah. >> Because Exactly. Because you have already this base. But if you know you can get a hundred million and there's very low likelihood that that doesn't occur and it's doing more of the thing that you already know how to do and you have market dominance compared to other people because of tech that you invested in for the love of God do it. Just do that. It's hard though because the other thing looks juicy. >> Which one's info? Which one's the service business? [sighs] >> Left is info. Right service. >> Right. I mean to say anything else you already know.

14:59>> Yeah. >> Right. And so the difficulty with the quote information education world is that it's very it's it's one of the easiest businesses to make some money on. It is one of the hardest to make a tremendous amount of money on >> them. What do you think that like ballpark numbers just so everyone knows like what when you say like some amount of money are we talking like >> I mean let's let's look at like there's there's a handful of $30 million a year businesses you know in the quote information space. There's tons in the one to three. Tons and tons and tons because that's about like if you just reverse engineer price points. It's it's so I I like to reverse things to like to the human capacity because that's a constant. And so some of you guys are familiar with Dumbar's number um between 120 150 is the amount of people that someone can like kind of manage in their heads, right? And so businesses will typically cap with no systems, which are the vast majority of businesses don't actually have systems. They say they have systems, but they don't. um caps around 150 people to manage. And so most of those businesses b if you reverse engineer price point um for any kind of ser you know information plus services um gets you somewhere in the neighborhood of 3 million maybe $5 million a year and then they kind of cap around there. Now the difficulty is that if someone is good enough okay here's my analogy. So let's say that I have the best tasting milk in the world. All right that sounds weird. I have the best let's say I have the best I have the best coffee. Thank you. I have the best tasting coffee in the world. Okay. Um actually coffee is a bad analogy for this one. So let's go back to milk. So I have the best tasting milk in the world.

16:41Okay. Um if I give you two options. Option one is I can take this glass full glass of milk which is what you're used to paying for and I say I'm going to pour shot glasses of the best milk in the world and you can have a shot of that milk. Or I can take this milk and pour it into the same size glasses, same number, but I'm going to fill the rest up with water. Which would you rather have? The the full amount but more diluted milk or a shot glass of the right kind? Which one would you rather have?

17:08>> Shot glass. That in and of itself is why the quote coaching business does not scale. So the idea that somebody will if if what you do is so special and so valuable that you can teach someone how to do it in a weekend and be a coach for you, how valuable is it? Now it might be valuable, but the likelihood that you can actually teach someone to be good in a weekend is low.

17:34And so the only quot coaching models that I have seen scale are one of two permutations. Premutation one is you take people from the audience that have been you for a very long time and you give them away uh where they they're getting a significant rev share. I'm not talking 10%. I'm talking they make half or more of the revenue where it makes more sense for them to continue working with you because you generate deal flow for them to grow their own business underneath of your umbrella. That's option one. Option two is you run a large event style business. You look at Tony Robbins, you look at, you know, whatever. Like there's a handful and there's not many. Um, and that's the Tony Robbins version of that in my opinion is best milk in the world shot glass. You're getting it's a you have smaller volume of that access or that interaction, but it's so good you're still willing to pay for it. Now, how well does Tony Robbins coaching do and this is I love Tony. I'm a big you like he's an awesome guy. Um, but I think most people I would bet I have I don't know the stats on this. I would bet that the NPS scores and the customer satisfaction scores of people going to an event with Tony for 5 days is higher than people spending 5 days with his coaching staff. That would be my bet.

18:43And so that's because you got a full dose of diluted milk or would you rather have the shot of the best stuff? And so most of those businesses do cap because you end up so the cap ends up being you can still scale it but the milk has to be so [ __ ] good that you actually have to be able to be diluted like sorry the the volume of what they get is still good at a tiny tiny amount of access.

19:07Most people aren't that good and so instead they cap at 1 to three millionish. Sometimes they sell something that's super expensive because the space they're in. um they're selling something related to you know the real estate t tends to have higher things anything investment related tends to have higher um LTVs things like that um and then those people can can get to maybe 10 20ish um but then again it becomes difficult rorowaz continues to drop margins continue to compress as you try and go to colder and colder audiences and then you end up in one of these machines where you're like I have to keep selling people in order to pay my bills and then all of a sudden you have a $20 million a year nonprofit and you hate your life.

19:44So stick with services. >> It's it just depends on what you want. If you're like I want to make a few million dollars a year, you absolutely like it's it is one of the fastest ways of making a few million. >> But if in contextualizing it myself like I feel like I've kind of jumped a lot of that hurdle like if I'm already doing like this run, man. Yeah. >> Stick with what you're doing. I I'll I'll spell this out though like I want to be clear. I don't think there's a problem with it like at all. I'm just saying that it depends on what we're solving for. If you're like, I want to build a billion-dollar company, it's probably not going to be in information.

20:16It's probably not. Um, if you want to if you wanted to have and like you probably won't even have an exit because it's so it's so keyman driven, but some people don't want to like a friend of mine PC, he was at the launch. He he he I think it was 11 years or 12 years, he lived on $70,000 a year for him and his wife and then he sold for 250 million. Some people don't want to live on 70,000 a year for all of their 20s and their 30s and then make 250. Some people would prefer to make a few million a year for their 20s and their 30s and not have the exit. I don't think there's anything wrong with that. It's just when people try to have both where it becomes a problem. And so people just unwilling to make trades and I just see that as just a human problem, not like a, you know, this versus that problem. Like I want everything. Okay, cool. So does everyone. But like it doesn't tend to work that way. I want to have a super profitable business that grows really fast and also has tons of enterprise value.

21:07>> Pick two. This is the entrepreneur life cycle until you learn how to break free from it. And so there are six stages. You have stage one, which is uninformed optimism. This is where you see your friend or you see something online and it looks like they're making money or it looks like there's some opportunity and you think, "Oh my god, that sounds amazing." and you have optimism because it looks great, [clears throat] but it's uninformed because you have no idea what it entails.

21:36So then you dive in and you say, "Okay, I'm going to pursue this this thing, whatever. Is it baking cupcakes or I'm going to I'm going to do lawnmowing or I'm going to do crypto trading, whatever." >> Second step is you get into it and you're like, "Oh my god, I don't know. There's so many things involved in this and this is significantly more complicated than I I expected." So then you become an informed pessimist. [laughter] You now know uh that it's hard or significantly harder than you expected. The third stage is you have your crisis of meaning or the value of despair. So you're continuing to do this stuff. It's continuing to not work and you keep working and it keeps not working.

22:10[laughter] And so this is the step and this is the this is the point of truth. And this is the cycle where the the paths of the entrepreneur split. And the vast majority of people take this next step which is they then say, you know what, there's that thing over there that my other friend's doing. maybe I should do that instead. And so then they hop back to uninformed optimism and then they go boom to informed pessimism and they just go around and around and around and they live the same 6 months uh for 20 straight years.

22:41Now the other path of from the valley of despair is sticking with it. And so then you become an informed optimist because now you understand you still understood all the bad stuff but you also understand the good stuff and how to avoid the bad and maximize the good. And then once you're there you do you stick on that path long enough and you end up achieving what you originally thought was really easy and fast. And so that cycle, this is more or less the um the Alex Ramosi life story, [laughter] which is why I can so intimately describe you to the steps, is that I call that loop and that uh the person on the other side the woman in the red dress, which is probably my favorite part of the Matrix movie, which is Neo, who's the main character, uh is in a program to teach him one thing. And so he's walking uh through the crowded streets of what looks like a New York City with Morpheus leading him. And uh he's drawning on about something that he's supposed to learn. And he says, "No, were you listening to me or were you looking to the woman looking at the woman in the red dress and and Neil was looking at the woman in the red dress as Morpheus is talking and then he says, "Look again." And he looks back at the woman in the red dress and it's Agent Smith with a gun pointed at his head.

23:51And in that moment, he's like, "Freeze." And he explains that you're either one of us or one of them. And they are the people who are sentinels sent to destroy us. And so what appears to be the woman in the red dress is actually a d agent from the system meant to destroy the opportunity that you're in right now. And so I love the woman in the red dress so much because it's so real because you're in this thing. You're in this relationship with your business and you're like, you know, this girl seems great. And then you get to know her and you find out she snores when she sleeps and all of a sudden it's like, you know, uh, you know, you see you see the sweatpants and no makeup in the morning and you realize that sometimes she's moody, whatever. But you get to you start to get to know, you're like, I don't know if we're going to get married, but like, you know, this is kind of where we're at. And then you see a woman in the red dress and you're like, you know what, I think that's the girl. And so you quit this relationship with your business and you get into that relationship, but then you realize that that girl has crabs. She has a crazy ex-boyfriend. And you're like, oh my god, I didn't want to deal with any of this stuff. Right? And so my CFO, so was one of the first people that you're like, "Oh my god, I hired that person.

24:56It changed everything." So my CFO in gym launch um had taken four companies from 0 to 100 million. Um she had done over 40 M&A transactions. Her largest one was 5 billion. Super experienced. Um she was at the very end of her career. And she was like, I'll take you guys I'll I'll take this one last ride with you guys. And so, you know, mind you, Laya and I'm 26 or 27 at the time. Leila's 23 24. and we're sitting across the table from a very experienced business person being like, "Please help us." And so, one of the things that she taught me that I I'll never forget is she said, "The grass is always greener on the other side. You just don't know that it's fertilized with shit." And she and she she's southern, so she had this deep southern accent. She's like, "There's always [ __ ]

25:42>> [ __ ] everywhere." And so, she's like, "I've been in enough businesses to know that all businesses have shit." And so you just have the [ __ ] you don't know about and the [ __ ] you do know about. And you're in this business and so this is the [ __ ] you know. And that has been so profoundly impactful in my life because it was so hard for me to break the cycle. Really hard for me. Um I mean I gave you my my life story of the many businesses that I've been involved in. And so like the entrepreneurial ADD has been so real for me. And I've made some of the biggest career mistakes by just pursuing and splitting my attention between multiple endeavors.

26:12And I can say truthfully that this 2024 was the first year and this is now 2025. The first time in my life where I haven't experienced FOMO. So fear of missing out. And it was one of those things that I just always had. I would see somebody doing really well. I was like, "Oh man, I mean I should be getting into that like that. I should be doing this. I should doing that." Um and it was it was one of those things kind of like being happy where like you don't realize you're happy. You just look back and you're like, "You know what? That was a really good year." You know, like you kind of like you kind of see it in retrospect. What I realized was that now when I hear someone say like, "Oh my god, I crushed it with this thing." I think that's amazing for them. I'm sure there's tons of problems that I don't know about and that's amazing, but I'm going to keep doing this thing because this is the only thing I know how to do pretty well and I'm just going to keep compounding my information advantage against everybody else who thinks this is easy and wants to get into it. And so, um, I think that that every any any massive company that you know of has existed for multiple decades. And in order for something to exist for multiple decades, the founder has to stay focused on that thing for the whole time. And I measure focus by the quantity and quality of things that you say no to. And I measure commitment or I define commitment as the elimination of alternatives. And so if you think of marriage as the ultimate commitment, then it is the ultimate commitment because you've eliminated literally every alternative besides this person. And so I think that many business problems and many entrepreneurs would 5x 10x their business if they simply gave themselves no way out.

27:39This is what I'm doing. And I'm I mean the term you know burning the boats but I'm eliminating all alternatives and structuring my life such that I I make it very difficult to pursue the alternatives. And I think by doing that, you can actually conquer this this cycle and make it past the split where you go uh crash and burn and then restart the doom loop or make it to informed optimism and then eventually to the achievement that you want.

28:06There's so much there. There's so much there, but it's such an important point. Um so where shall I start? So at that moment here, this crisis of meaning moment, >> what I see so much of is entrepreneurs not necessarily quitting the old thing, but just taking on something else. >> And I get entrepreneurs will come up to me in the gym and they'll say, "Hey, Steve, um, just want to let you know what I do and see if you can offer me any advice." And then they'll list three things. They'll say, "I'm starting this crypto thing with my friend Dave. I've got this hair business where we're selling on ecom and I've got this other thing." Yeah.

28:38>> And they almost assume that the more things they're doing, the higher the probability that they'll be successful in something. [sighs and gasps] >> My mom was that my my mom has started 30 businesses and I watched for my whole childhood how she would start a hairdressing salon and then the person down the street running an estate agents would come in and say, "We're making loads of money as an estate agent." She'd start that. That business would suck. She'd hit this moment of crisis of meaning. She then start and she so she jumped between 20 to 30 businesses

29:13>> and it's kind of still happening now where they last 6 months they eventually go bust. She sort of like you know like the monkeys that swing to the next branch swings to the next thing and there's never been the escape velocity that comes from this informed optimism part. >> So yeah this it really rang true for me in every sense of the word. this idea of like of focus going against all of your instincts and your emotions but being pivotal to

29:37>> most people fail the first time and the second and the third and sometimes what happens is that the failures just become less failure like in the beginning like not no one buys anything but you do remember building the logo on the website and thinking that you had a business but like nothing happens right and then finally you make your first sale but you're like this isn't a real business like what's going on here like I exchanged money so I guess I technically I'm in business do I have to pay taxes on this now like what happens right And then and then eventually you get to one where you're like okay now I'm starting to sell stuff and make money but like I'm not actually making money. I'm making revenue but I'm making no profit and I'm like incurring all this risk and all this debt in order to get it going. And you're like still trying to figure it out. And then on like your fourth try you're like oh what do you know? I made a profit and it took me 5 years to get here. Every entrepreneur that I know so I don't know Zuck and I don't know Jeff Peso. So you know unfortunately I'm not there but the guys that I know almost all of us like failed for a while. Like I don't know anybody who like crushed it in their first five years. Like most people like basically ate glass and stared into the abyss to to quote Elon Musk which is just existential dread at all points in time and the eating glass is the fact that all you do all day is deal with problems which are mostly revolve around people and somehow you're supposed to get work done in between. So if you're in that kind of underdog position you can pop open the leads book and I have a chapter that I wrote on this which is called more better news. So, it's 161.

30:52And I actually tell some of this story um that I'm telling you right now. And one of the things that most smaller underdogs really, no matter what size you are relatively, have this belief that's false. And so, I want to kind of crush it for you. Number one is that the volatility that you're experiencing is a result of inadequate volume. So, you're not doing enough, which gives the appearance of volatility. So, let me say it differently. If you were to sell one person every like three to five weeks and you're like, "Yeah, every month I get like one customer, sometimes I get two customers." What that really means is that there's a certain amount of advertising activity that is occurring, whether it's you doing it or it's other people doing it on your behalf or it's word of mouth, any of those things are happening. And it takes that much volume for you to get one new customer. And so the question we have to ask ourselves is how can I take the amount of advertising that's occurring over four weeks to get me one customer and crush it into one day so I get one new customer every day.

31:51That's all it is. The volume increasing volume negates luck and will give you consistency. The second piece is understanding where you actually sit here. Page 168 the size of the pie fallacy. So the issue is that most small businesses think that it's like this. They start advertising on one channel. They're really happy. Look at this big smiley face. Okay. Then a competitor comes in and they start advertising on the same channel. And then in their minds they think, "Oh no, I have half of this market now." And then all of a sudden two more competitors come in and now you're like, "Oh no, I have a quarter of this market. It's shrinking fast. It's so saturated." But that's a fallacy. It's a lie. It's an illusion.

32:32This is what it looks like in reality. So most people see their market as one method, one platform, one medium. They're like, "Well, I make Instagram reels and that's how I get my customers." So, anybody else who makes Instagram reels, they're they're in my market and it's saturated. But the reality is that there's so many ways to get customers. You can do warm outreach. You can do cold outreach. You can post content. You can run ads. You can have affiliates. You could have referral networks. You could have employees doing this on your behalf. You could have agencies and head hunters who bring people in. All of these different vehicles for advertising. And then within those vehicles, now you have the platforms of all those things, right?

33:05So, it's like you're making content on LinkedIn, you're making content on Twitter, you're making content on podcast, you're making content on on tw on t on on Twitter, [laughter] uh, Tik Tok, right, for however long it lasts, right? So, all of these different platforms. It's like, so really that little circle that you have is just this tiny itty bitty circle here. And all of these other circles and all of these other methods and all of these other mediums are basically empty. And so, the reality is no one knows you exist. And so, the answer is you have to advertise more. You have to let more more people know about your stuff.

33:37>> So, you have pest control, $200ish, thousand a year. You want to get to $10 million yesterday, and you're not sure what's holding you back. >> Well, this question might be a little bit different than what you're used to. >> Where's Ed? He's like He's like, I we went through the whole four things tossed out the window. >> No, toss it out the window because I have a partnership question. >> Okay. >> I'm 18 and I'm looking at doing partnership with my buddy who owns the pest control company. All right.

34:02>> Initially, I made the decision to partner with him. >> Okay. >> After coming here and talking to as many people as I can and just absorbing, >> people are telling me that maybe it's not a good partnership. >> Okay. Well, what does he have that you don't have? >> He's aggressive. >> Okay. >> I mean, that's >> I mean Okay. Yeah. >> He He define aggression.

34:28>> I've been asked that, >> but he's willing to chase it. lay down. >> He's willing to take a big risk and and go for it. >> Okay. >> Now, he I don't know that he has really a successful track record. >> Okay. >> So, I don't [laughter] >> Yeah. >> To me, like I haven't done a partnership before. I'm pretty limited with my my experience. >> What problem does the partnership solve for you?

34:54>> Like culture. I've been a soloreneur for two years building by myself and it's >> culture. >> This is something where >> culture of you with you >> me with him. >> This would be my person. >> Let's use a different word than culture. >> Okay. >> I'm just I'm just I don't think culture is the right word unless you mean it's the rules that govern reinforcement in organization which I don't think is what you mean.

35:19>> Everyone's aligned with growing the business and getting better. I do see skill deficits with some of the team members and >> for you >> even the partner not not I mean obviously within myself as well. >> Okay. Do you have any equity in this business? >> 5% if I bring 2 million revenue in. >> So it's contingent on revenue. >> So 5% if you bring 2 million revenue. >> Correct. >> So you have zero now. >> Correct. >> Is right. And he has 100% and this has $200,000 in revenue currently as a business.

35:47>> Yeah. So, what stops you from driving $2 million in revenue to your own business? >> I mean, I guess nothing beyond a lot of course 2 million is a lot of revenue, but >> Well, you'd have to do it to get the 5%. So, that's fixed either way. >> Agreed. I figured it would be easier to do it without having to do the fulfillment side. >> So, I'm in a sales position. >> Yeah.

36:11>> So, that's kind of how I evaluated it. >> So, Is this the first thing you've ever done? >> No, I've I've been through some hustles. I I did mailboxes. >> Mailbox replacements. That's >> We won't go down that alley, but um um Okay. So, what do you want to have happen? You life? >> This is not normally how these go, by the way.

36:35>> I I know. [laughter] >> Um I mean, I want to work with the best, be the best, and be close to business >> specific >> business itself. I >> I don't know beyond that to be honest if I'm being very honest. >> No, honesty works. Um you know my first boss, how old are you? >> 18 dude. [laughter] >> So my first boss that I had, well my first adult boss, not my first like teenage boss, but that might, you know, kind of apply there. But um she said something to me that that I've taken I've taken to heart, which was um figuring out what you want is 99% of it.

37:11Getting what you want is the easy part. And I think there's a lot to that because like if you really know what you want, then [ __ ] get it, right? And so I think that it's probably like now you might be like, well, I haven't tasted anything. And that's okay. So maybe you're in a tasting mode. I think if you don't judge yourself as much, uh you won't constantly have this like existential angst of like, am I making the right decision? Am I ruining my life by by making this or that? And kind of stay in this analysis paralysis cycle.

37:39Um if you've done a handful of hustles, you can go out on your own. If this guy like I would rather you not I would rather you get your experience with an entrepreneur who's more experienced. >> Okay. Like if I if I want to if I want to earn in at 5% I would like to go to a business that is at 10 million a year so that I can learn how to do this right because the partner and hopefully he's not here and if he is here sorry um if you're at $200,000 a year like you just figured out that your ass is down and your head is up, right? And so it's like you have so you you you know so little compared to what there is to know that um like you're both he's one step ahead of you not 100.

38:27>> Yeah. >> Right. And so I'll zoom out since you guys are both here wherever you are. Um in order for a partnership to make sense longterm and this should make sense for him too. Now if he's like how do I incentivize a sales guy? I think the way you did it is a great way to do it. >> Yeah. >> But if I'm talking to you, right, if you want to do a partnership, they got to have money you don't have. They got to have skills you don't have. They got to have time you don't have or they got to have network or distribution you don't have.

38:51>> Those are the things, right? >> Okay. Money, time, experience, skill, distribution. Those are the things. And so if somebody doesn't have one of those things, then why are we partnering? If we're both the same, then one of us isn't necessary. Because if it's like, hey, we both like this thing. Let's just like attack it together. Quickly, it's like, well, I take out the trash and I think that's a 10 out of 10 effort. You take out the trash and I think it's a four out of 10 effort. One of us will disagree.

39:23>> That's where you see a partnership foundation going. Yeah. the like Rockefeller said this and then I'll transition but um he said it's rare for great businesses to come out of great friendships but it's common for great friendships to come out of great businesses. So if you start with a friendship and then try to build a business very hard if you start with a business and then you become friends much easier. And so you would like very tactical advice and so I will I will try and leave you with this. Um I would re like if you want to keep selling doing what you're doing that's fine. If you're like I would like to make $50 million it won't happen with you owning 5% of this. So it depends on your goal. You have to figure that out.

40:09I can't tell you that. Once you figure out that goal then you think about what path is the highest likely to get there. It might not be you starting that on your own right now. It might be I take four years to learn what it looks like in a company that's going from 10 to 100 or from two to 20. And then once you get that feeling of what it looks like to do it right, then you can peel off and do your own thing. But I think it's wildly under undervalued for somebody who's starting out to get into I would say a company that's at call it 15ish headcount to like scaling from 15 to 100ish. you learn so much in that setting that it's worth letting someone else take that risk so you can learn how to do it right. Um, but it'll [snorts] still start with what you want to do. If you're like, I would like to make $100,000 a year, you could just do that right now. And you could you could discrete everything I say and just go sol. Um, but once you uh if you're like, I want to make 10 or whatever, then you can still do that.

41:04But just know that as you're following that path, the goal is for you to learn, not earn. Yeah, >> right. >> So, you're in maximizing skill acquisition mode right now. >> Okay, >> that's the entire point. >> And that was a very long answer to your question of if you want to keep selling, dude, you can keep selling. Just make sure that you're learning everything else about the business. If you don't feel like you're learning everything else about the business, you can start your own or go to a business that is going to do that. You said you wanted to partner. Realistically, you getting 5% is not you being a partner. It's you having a stake in the company. Very.

41:36>> Albus tube. I have a beauty salon in Romania. Uh, most money come in from permanent hair removal. The rest of people pay me rent. How can I scale it? Okay. Permanent hair removal. Oh, Jesus. I was thinking like [laughter] I was thinking I was like, who is paying for this body hair? Got it. Okay. H how can I scale it? I find it difficult to get customers and my costs are high. Okay. Um, most Okay.

42:06Most the rest of the people favorite. Okay, got it. So, um I mean I'm going to guess that you're I'm not sure if you're running ads. You might be mispriced, but usually like this is something that I call pseudo pseudomedical, which is one of my favorite spaces to be in because you have so much pricing power. Um so, I don't know the rules in Romania. I don't know if they're like super tough to uh to do pseudo medical type procedures there. Um and I probably won't try and translate US prices to you guys, but like I'm guessing I'll just do relative.

42:33So, the cost of a generic haircut here is probably somewhere in the neighborhood of like $75 if it's like the commoditized haircut price. And the cost of laser hair removal for a package um of call it like 6 to8 will usually be like $2,500. And so maybe you can make that appropriate difference. And so if you're looking at your price points compared to like your hair stuff that you do, uh compared to your removal stuff, that might give you an idea of maybe that you're mispriced within Romania. Um, secondarily, I think this is a it's super visual in terms of the nature of what you sell in terms of before and afters. And so, I think organic Instagram for sure uh will be like monster for you. And given um how small Romania is, I think that that actually might work pretty well. Um, so I would go organic first with before and afters. That's like easy to do. Uh, Google AdSense would be the second thing in terms of speed. Well, Google AdSense will be faster than than than posting.

43:25Um, and then the third is that I would uh run meta ads. That would be my like three-pronged approach. It's like we probably have to change the price. You probably need to sell bundles, not sessions. You need to make sure that you're priced appropriately. And then give it all of that. Then we use those three marketing strategies. Cool. All right. Uh if you had a business, if you had to build a business today with no audience, no capital in only 90 days, what would you do that almost nobody else would be willing to do? [laughter] What I've already done?

43:52Um work, man. Work. No one like No one's willing to work. It's interesting because um maybe Julian can speak to this because he he's here a lot with me at 4 a.m. Um but I think what the hardest thing to see that that no one will ever be able to witness unless they literally work at acquisition.com is consistency. Because the only way to witness consistency is to also be consistent.

44:20Like you have to be there to see someone show up every day, right? If I showed you an hour and a half long workout, you might be like, "That's it." And so like the thing is is like the one workout isn't impressive. It's just that you do it for 20 straight years. That's the impressive part. And so there's so much like where you will beat everyone is in longevity. Like it's where it's one of the last remaining alphas that exists is the patience of consistency. Is being willing to do the same thing over and over again without immediate reward. And that is the thing that almost nobody else is willing to do. which is why all the fruits are on the other side of consistency because so few willing people are able to take it. But the thing is is it is simple. It's just hard because there's so many every day that you have to do something there's a hundred reasons not to do it and there's only one reason to do it. It's far in the

45:04>> I was going to ask how important is it for someone to have that moment with the check where they just make their first >> Oh, I mean in some ways I think it's everything in other ways it's nothing. Like one of the cool um shameless plug for school the um 30.44% 44% of people who finish their first month of school make their first dollar online. And that's like so like like that's why we do it. You know what I mean? Like I know how hard that first dollar is. Like there's so much to get the first dollar across the because the second dollar comes so much faster after that. Um that I mean that's why that's why I invested in the company. That's why I'm so adamant about it. But um anyways, the the point is is that yes, I think having the first dollar get across is very important. But if you can reframe it from that experience points perspective that there's there's there's probably three levels before that. You have to like level one is that you have to understand that it's my fault. Level two is that you have to use what you have, not what you wish you had to get to where you want to go. And where you want to go isn't 100 steps forward. It's just the next step. And so like I don't think that anger drives me as much as it used to, but it was everything that I had when I started. And so if I had listened to the positivity mantra when I started, I never would have gotten going because nothing made me feel happy. And so they were like, "Follow your passion." I was like, "My passion is to not be poor and to not be here in Baltimore. That's my passion is not be here." And so that's what drove me. And so I think that it just needs to be restated that like is that the goal? Sure. But is that necessary to start? No, it's not. And so I can tell you that even when I was angry um and getting through that, making more money did make my life better. Like I had more ability to deal with inconveniences, hassles, health issues from family members that I had to foot the bill for. Like all these things like money can provide value. And so, um, I'll say this thing that a mentor told me. He said, "Money does not buy happiness, but it can help you avoid pain."

47:10And so, like, I think there's nothing wrong with getting with making money. Obviously, I like doing it. Um, but I just hate the people who espouse that you have to feel a certain way to win or that or that winning when you're angry or sad or in pain or ashamed is somehow wrong. And so I just like you have to meet success where you're at. And if the first step you have to take out of anger and the next step you have to take out of sadness and the next one you have to take out of shame and use that to to propel yourself forward. All that matters you take the step.

47:47And one of the things that I always like cuz for a very long time I didn't consider myself a good person. I mean, I still probably don't, but um in terms of like I I always identified with the villain um and the oppressor in most scenarios, which is bad. But anyways, but I there's a point to this is that I never thought that I deserved the good life. I never thought I didn't think I deserved the happy ending. I'll put it that way. And so the thing that got me through that was the idea, and this felt like honestly like gaming the system. So like from the evil side, was that I could still get the good guys ending if I just did the thing that they do to get the ending. So I didn't have to do it with pure intentions. I didn't have to do it as a great guy, but if I just still did the things, [snorts] I could still get the getting. And I think for me that that realization has been why my ruthless focus on like well what did you do? And to everyone who listens to my stuff like it's like great throw the emotions out. Throw the spiritual energy vibrations out. What do you do?

49:00Patience is just figuring out what to do in the meantime. Like courage is acting as though you weren't afraid. Like like what do you do? and then eliminating everything else and then just doing that and then doing whatever mental tricks you have to do which is like there were slaves who are seven days a week so can I like and then alternatively catastrophizing the alternative path which is that if I do not do anything this is what will happen eventually that pain in the future will be my pain today and then actively thinking about what that pain would be like and then seeing if that can make you more uncomfortable than the comfort that you're in and I Um, I think Tony Robbins says this. He says, "Change happens when the pain of staying the same, sorry, when the pain of change is less than the pain of staying the same." And so, if you're comfortable in staying the same, the point is to make yourself more in pain to get yourself to move. And so, I think there's a skill in being able to future pace and think through what pain you're going to go through. Like, if you're like, man, okay, I have gained five pounds a year and it has been four years, so I'm 20 pounds up. Well, if four years from now I'm another 20 pounds heavier and imagining the snide comments at the holiday party or the if you're a girl, the guy who says, "Man, she'd be really cute if she lost 40 lbs." Or like even like I'm I'm going girls perspective here. A guy who says something that's like, "Um, I would be with her, but she's just she's just too fat. She's just not cute enough." And you're like, "Wow, that's so politically incorrect." Deal with it.

50:36It's [ __ ] life. But the thing is is like your thoughts don't need to be politically correct. They're your thoughts. They're no one else's thoughts. And so whatever you have to do to get yourself there. And for me, the idea that a girl that I would want to be with would be like, I just don't think he's ambitious enough. I don't think he's successful enough. Like that those ideas killed me. And so I never wanted to be denied entry to somewhere because I didn't have these things. Now, do I believe that people should be denied entry? No. But I also realize that's the way the world is. And so you I think you can balance both beliefs. Like I'd love things to be different, but I accept.

51:08>> So you sell fitness coaching. You're doing $250,000 a year and you're not sure about what you want to do with your life. Okay, go for it. >> So yeah, I mean I'm preparing for medical school next year mentoring and I yeah, I'm running this fitness company as well, which I'm passionate about >> and ideally we would like to be at, you know, seven figures, you know, just running it. >> And the medical school process is slowing that down. But my endgame is is really looking at the branding, the long-term play. Like when I see what you've done ads to branding uh around making the greatest impact preventive health and and medicine possible. So

51:45>> that's kind of where I'm at trying to figure out how to think about it all. The timing, the sequencing. >> What's the question? >> Um how do I go about this process of balancing both? Is that even possible? And and achieving both. Well, you already are achieving both. >> That's true. >> Yeah. The business has been declining though. >> Declining. >> Yeah. So, it's it's

52:08>> it went from like 320 to 270ish last year. It's still Yeah. small. So, >> interesting. Volat like that. It might be the same size and, you know, you missed a week or two. Um, but it sounds like the I'm gonna say back to what I think the question is, which is like, should I quit medical school to pursue this fitness thing all in or does it make more sense for me to forgo some income today to have MD next to my name so that I could potentially make more in the future?

52:37>> It's not about making more. I think it's it's also about, you know, my vision would be to write books, speak around the world, and be an expert in preventive health medicine. >> Do all that without an MD. How how >> I mean can you name me some of the big uh health experts that aren't MDs?

53:01>> Um not at the level that I've thought of like Dr. Hyman or Peter Aia. >> Okay. >> Um >> how many years left you have? >> How many years left? >> Well, I'm just starting next year. So that would be the plan. Yeah. >> Do your parents want you to be an MD? They don't care. >> After all the success I've had business, >> well, before I before I started the business, I was pressured immensely. But

53:28>> uh after all the success where I'm in a place where with the assets I've accumulated, gratefully I don't have to do it. But it just it's calling me. I've been volunteering in the nonprofit space and with uh >> What are you so split about, dude? Like I mean, you're gonna you give what, seven years or six more years and then you're an MD? I mean, if you if you if Dr. Tia and the Aean Clinic and you know, Huberman and all that stuff. Well, well Hubman's PhD, right? He's not an MD.

53:55>> Um, and Tia, is he an MD or PhD? >> He's an MD. Yeah, >> he's an MD. >> Yeah. >> If it's like I want to be a doctor, then go be a doctor. Okay. You know, um >> the trade is that you're going to give six years and you're going to under earn for the next six >> and then you'll earn more later. How would you build a brand around it in the greatest in the best way possible? >> Being a doctor or being not a doctor >> going down that path or would you document the whole journey? What would you do for like brand leverage in the long like the best long-term way possible?

54:27>> I mean what's going to matter more is that once you become a doctor than that like you're using the establishment as your brand credibility. >> Mhm. >> You can also just like so it's not a fair comparison if we're being real, right? Right. It's not a fair comparison to say uh would me with an MD be more successful than me without an MD. It's more would me with an MD starting with a six-year uh not head start, whatever the reverse of that is.

54:52>> Uh be more advanced than me with six-year head start without an MD. So, which of those do you think? But you don't want to make money. I can't remember what was the whole thing. The goal isn't like making [snorts] >> this is why just so you guys know my biggest pet peeve in the world is that um because and I'll tell you why. I'll tell you why >> this decision is so hard for you because you have nothing to optimize against like solve my life decision. What do you want? Don't know. Hard to solve. Right?

55:22If you said I want to make more money, cool easy leverage to pull. Make big number go up. Happy face. Right? If you're like I want to have impact, then it's like cool. make the number of people that we're, you know, interacting with go up. Happy face. If it's I'm just not sure what I want to do with my life. [snorts] That's a you thing. Once you figure that out, like figuring out what to do is the hard part. >> Getting it is the easy part. >> And I think way more people get stuck in the just years of like I'm not sure what to do. And it's because they're afraid of making a decision.

55:52>> They're afraid of the path not taken. And so if you think about what deciding is, decadera, it's Latin, right? which means to cut off. And the question is, which cut which future do you want to cut off? >> When you're 85 and you look back, which one do you regret more? >> Not doing them bad. >> Done. >> Yeah. >> Great. So, you just have to eat [ __ ] for six years and realize you're not going to make as much and that's the trade. >> Cool.

56:17>> Thank you. >> Do it. [laughter] Appreciate it. >> I'll be like, what is life? There's another one up here. >> Seeking. >> It seems like in Silicon Valley there's often uh you know Naval talks about this like there's value >> Silicon Valley. [laughter] >> Well well that's what I want to know. Uh in Silicon Valley there's a lot of trend chasing. There's a lot of status seeking and there's value in like doing low status activities and I'm wondering in in mid-market entrepreneurship small businesses like what is the shape of that? Is it different than Silicon Valley? Is it less pronounced more pronounced? like what is the version of look you just need to run a series of golf courses and be happy with that that type of thing or whatever whatever the equivalent is.

57:01>> I think it depends on who they compare themselves to. I think it just comes down to that. I think tech guys compare themselves to other tech guys and they want approval from tech guys and so they do the the activities that tech guys approve of. If you're an HVAC guy, then it's going to be you're going to do the activities that HVAC people think are cool if they're the peer group that you actually uh compare yourself to, which they might not be. Um, and to be fair, >> I love the tech guys that that sell their business for nine figures and then are like, I need a cash flowing lifestyle business ASAP.

57:27>> I know a lot of them. A lot. Like a crazy amount. Like buying gas stations. Like it's a lot. >> How how bad is that? >> Bad? What do you mean? >> Like because I I imagine it's a grass is greener on the other other side thing where they enjoyed building their business. They sold it. They have all this cash, but they want cash flow. They want the stability of the cash flow. And so they want the idea of of running a small business every month. >> And they don't. Exactly. But they don't think about what it means to like at 2 am your gas station got robbed and you got to go down there and sort it out with the cops or something like that.

57:58And so I'm wondering about like what is the actual lesson there for someone who's like about to get over their skis. >> Yeah. I think humans are inherently dissatisfied. >> Okay. [laughter] >> And I think whatever you have, you want what you don't have. And so if you're married, you're like, "Ah, what life would be different if I was single?" If you're a parent, you're like, "Ah, can you remember when we didn't have kids?" And when you don't have kids, you're like, I wish I had kids. If you're an employee, you're like, man, I wish I had an entrepreneur. And somebody an entrepreneur, you're like, man, it would be so nice to just show up and clock out of five and have to think about and get a check. Like, we just always we want to make we want the benefits of a trade-off without the negatives of the trade-off.

58:28>> Sure. >> Yeah. >> And so when guys are in the cash flow business, cuz I I'll because I that's who I talk to the majority of the time is like what they're thinking about all the times is like it's hard to sell this business. Um I'm not really building my net worth. The multiples that I'm going to get on this aren't going to necessarily be that high. Um I'm dealing with people all day. I have deal with low skilled labor and I've got, you know, turning issues are finding techs that aren't going to show up drunk on the job. Like there's like my one of my favorite quotes of all time. I'm going to try not to cuss on this one, but um

58:54>> my CFO was uh deep South Texas when we were when we were in Texas when we were building Gym Launch. Um Suzanne Shifflet, shout out to Suzanne. Um she was the reason we were able to sell Gym Launch. Um she's she had been she had been a CFO for four companies from 1 to 100 million plus had done a $5 billion exit and I think she had she'd been either buyside or sellside over 20 times. >> Wow.

59:17>> She was just like she was like just so weathered in a good way, right? Um and she said, "You know what, Alex?" She's like, "It's all shit." [laughter] >> She was like, "It's all [ __ ] Every business is [ __ ] It's all shit." And I and it was but it was like she said it with so much sincerity because I was like at the time I was like man it'd be cool if we got this kind of multiple blah blah blah and she was like it just doesn't it's it it all sucks and it's just different type of suck but it all sucks. What did people not understand about this? Suck at something work for free lots of times. Suck less. Wait until people ask for free work and you can't take them on. Now you have more demand than you have supply. Begin to charge money. Boot out the free clients for paid clients and then offer to keep working with those clients for money.

59:58Congrats, you have a business. >> So, I will say I agree with that. Now, [laughter] now here's a counterpoint to that. It is hard to take people from free Yeah. >> to paying for a service. >> Totally. >> What is your way around that? >> Well, it depends. So, it depends on how how high value the services, number one. And number two is we start with free because you need to get reps because you probably suck. And so, it's like you're really getting free feedback from people that otherwise like shouldn't because you will be terrible. Um, but the transitioning people from uh free to paid really comes down to just how good you are. And if you are like, so for example, if I if I was redoing all your YouTube thumbnails and I said I would do it for free. Now, at the at your level, so everyone who's listening, don't immediately DM Graham because he already has somebody,

1:00:39>> right? But like the thing is is go for somebody who's like onetenth of Graham's size who can't really afford it. >> Give that guy the thumbnails. And if your thumbnails beat his thumbnails, uh, he will if you're like, "Okay, well, I have now all these people are paying me." So, um, you can pay me what they're paying me or I'm just going to work with them at that point. He'll either pay if he's making any money on his channel or he won't. But like there's a there's real value that's being created there. But the idea is you want to get your your roster filled so that at that point and I think part of this I I give this as advice because a lot of people in the beginning don't believe they can charge anything. And so it's like fine, don't charge, get better. And then once you literally can't take people on, it's like dude I I can't take you on. And then they're like well what would it take? And you're like oh money I could do that. I could do it for money. And then now it's like you actually can help someone break through the belief of like, yeah, you can ask you can ask for money for stuff.

1:01:26>> Do you think there's something to look out for for people who just want something for free and will never pay for it? >> Well, I'll say this. My big caveat for free if I'm going to give it away is I have to give I'll give something away for free. I'll give tons I'll give stuff away for free that cost me money if it's to a qualified prospect. So if I'm giving, you know, if I'm trying to get into enterprise IT services, right? I'm not going to start with a local I, you know, dry cleaning business who can't afford what I would like to eventually charge. So, I want somebody who has, you know, band, which is budget, authority, need timing. So, do they have the money to spend? Do they have the authority to make the decision? Do they have the need for this specific thing? Is now a good time? If I can get those four things, I'll give that person free stuff. Like, if it's like, hey, I'm only doing back massages for billionaires. Fine. Then, like, you got to be a billionaire and I'll give it to you for free.

1:02:11Eventually, I'll charge. But no, the homeless guy on the on the corner of the street will also take you free massages, but he'll never be able to pay. And so it's not that we want to give free to anyone. It's just that we want to get the most qualified prospects, get good feedback from those customers, which they we should treat them like customers so that we can then eventually charge people just like them based on the feedback that we got. >> My name is Cory Cooper. I own a design build ADU company based out of city of San Diego. >> Designville. >> Uh design build. So we're general. Yeah.

1:02:36General contractor. And we use those verticals for our own infill development uh deals that we we just hold. So we just hold them longterm. Use it depreciation to offset that income. My wife's a real estate professional, so it works. >> Good old reps. >> Yeah. >> Yeah. Thanks. So, we do $5 million a year. Looking to go to 10. >> Okay. >> Incredibly supply constrained. I work with my dad. That's one thing I didn't mention. >> Isn't talent tradesman? >> Absolutely. Absolutely. So, the design, so we the the margins are quite different on both, but in the design, the

1:03:04>> the margins are like 80%. >> It's ridiculous. On the construction, we're about 30%. We do fine. Yeah. >> Um the one of the constraints is I work with my pop. Sorry, Dad, if you ever see this. Um he's yellow pad of paper guy and there's just no way around it. So um >> we do a good job. He has We've never marketed once. We've never paid a dollar for >> Is he 80 or is he 60? >> He's 68. >> Yeah. [laughter] >> He's got some years. He's got some years left. Yeah. >> No, he he's the man. He's >> 80. You're like, "Ah, you can tough it out." [laughter]

1:03:31>> Yeah. Right. So, uh this is what's stopping me. There's a there's a uniqueness to this. So, I'm actually a professional firefighter and have been for the past 18 years. >> Okay. And so I have yet to go all in on this company because that's what >> Yeah, bro. Go all in. >> That's that's kind of like what we do. And I work 10 days a month. I'm a servant. I have a servant's heart. That's what I enjoy doing. There's it's a selfish endeavor, right? Like I I help people because it makes me feel good about myself. >> That's why everyone does everything, >> right? So um I'm I've at this point 3 years ago, I should have been I should have been retired. I should have left the fire department, but I haven't.

1:03:59>> Okay. >> So that's what's stopping me. My question is what objective criteria should I use um to figure out when it's, you know, the right time to leave the fire department? What are you making right now >> at the fire department? >> No, I >> Yeah, [snorts and laughter] I make $168,000 a year. >> Google that. >> Yeah. Right. Um, so our our margins are are pretty good. We make net about 1.2 million a year. >> Are you you're 50/50 with your pops? >> Ah, nah. He wants to go 50/50, but there's there's a lot that goes back. You know, the reason why I got involved because he got sick. He was diagnosed with cancer. Okay. So, this was to make sure that his jobs weren't losing money for a long time. I looked I'm like, "Pops, you you paid $20 or you paid $20,000 to do their job."

1:04:34>> Yeah. >> So, they've now saved a million dollars in the bank and um Yeah. So we're not we're we're 7030, but at any point we could go 50/50 and I do everything. >> Okay. So >> what is margin on the five again? >> Uh overall 1.2. It's between like 80 and 30. We're on the on the planning side of it. And I work with other developers as well. So I do their plans on the front end and they do the infill development. Cheaper than we >> let. Let me just So >> yeah, >> 1.2. Let's assume that if you pull the lever, you'd be a 50/50.

1:04:59>> Yeah, for sure. So the question is, I make $168,000 a year and in one thing and I make $600,000 a year in another thing and I would like to know when I am secure enough with my $600,000 a year to make up for 168. >> Yeah. So to reframe it, actually the reason [laughter] >> the catalyst question Yeah. No, no, no. Absolutely. And I love where this is going. The catalyst for this question was [laughter] me listening to your podcast this morning that you just did.

1:05:26>> Yeah. Um, and that's I don't want to get it's not about money. Like I have I have more than I could ever have dreamed for like ever. Ever. It would it doesn't matter. Right. And so >> you're going to get to the other side of this. I've left and I'm >> I've created another job. I'm going to have to quit another job that I don't like. Right. So it's it just seems like you know you having done that gone to the other side of it. >> Where are you going to find meaning? What do you do on the other side of this thing? Look for something else to do. Right. So I'm just >> Well, I think I'm a big believer that a man must have a quest.

1:05:53>> Sure. [snorts] And I I am not religious, but I was once. And one of my favorite uh parts about this is that before God gave man a wife, he gave him a job. And so I see work as inextricable to how we live, right? And so you I mean fundamentally you started helping your pops out with this business and running this business because you had 20 days a month on your hands because you had to do something, right?

1:06:22>> For sure. And so this seems much more like a what do I do with my life question overall? And so if you were to leave the fire department, what like I guess fundamentally like why is there a problem? Because I think the premise of this was I'm at 168. I've got 600K a year waiting for me here. And if I actually spent more time on it, I'm sure I could grow it, which I'm sure you could because you'd have the time back. Um but I don't want to quit. And so that was the premise of our discussion. And to me that's like then don't quit.

1:06:56Like you're like I don't want to quit and if you tell me to quit I'm going to tell you I don't want to quit. And I'm like all right don't quit. [laughter] >> Yeah. But no I I do want to quit. And to be honest I was ask and I would ask a question about like all this but that when they were going over all the things key man I just circled all of them. So I we're supply constraint. It's ridiculous. If >> it's business and if you had 10 more full days a month back you probably figure out some of these things. >> I think so too. >> Yeah. >> Yeah. >> So what are you going to do? >> That's a good question.

1:07:21>> Yeah. I got a 45minute flight tonight to figure it out. So [laughter] like what I like, well let's do it. Let's do it. Why wouldn't you quit? Because the money is not a thing. So the money's gone. So because you obviously numbers wise, obviously you quit and do the business. Okay. So why not? >> And forgive me because you all pay taxes. So I work for the most one of the most affluent fire departments in the nation. We work Ranch of Santa Fe is a super affluent area in San Diego.

1:07:52>> Um I used to work for a department that ran 20 calls a day. We run three calls a day. I work 40our shifts and I get more done at work than I do at home. Because of that, I've created key manner risk because I can just do it all at work. >> Yeah. >> And so to be honest, I go home and I have two young children and so I get all that work done. When I go home, I am I am there. I coach. >> You're like, "Honey, I got to go to work." [laughter] >> No. And she laughed. She's like, "All right, for sure. Whatever." I'm like, "Oh, I'm so tired." And it's like, "Well, we slept all night." So, it's like it would be insane um to walk away from that and I have a a super like high seniority position as the captain.

1:08:23>> Well, it sounds like you're getting paid for study hall. >> I mean, I hope my chief doesn't see this, but yeah. >> Yeah. Yeah. All right. Um well, fundamentally, if if you're working 100% of the time that you're if you're if like if you become less productive as a result of leaving the job, I see that as a double net negative for sure. So, if you quit the job, would you get more done in the other business? They'll just ask. Let me just answer because like the math equation is can I make 168,000 more dollars of profit times two cuz you got to split it, right? So, 300 whatever $40,000 uh of profit and you guys are running one two on five, right?

1:09:03>> And so 25ish% margins. So, multiply that by four. So, 350 by 4. So, probably like, you know, another $1.2 to $1.5 million a year, whatever the math is, um, of topline. If you quit the fire fireman job, that would be your break even. Can you do that? >> Yeah, for sure. >> For sure. >> Yeah. >> But I thought the time you get back would be less productive. >> I mean, I say that because I'm doing other [ __ ] during the day, right? I'm doing whatever I'm [snorts] right. So, if I would, you know, dove all in, remain focused and and and went for and and you cut the parachute. You have no choice. I would have no choice. I would like to think that it's in my nature to make it happen.

1:09:40>> So, you'd like to quit. You're comfortable. You think you can grow this thing more >> and you're afraid to do it. >> There you go. >> And you rationalize why because of these other reasons, but you know that's not really true. >> It's like a therapy session. Yeah. >> So, does that does that give you the answer? >> It does. >> Cool. >> Appreciate it. If you like this video and you're a business owner who wants to break through your current revenue ceiling, I distilled every lesson from scaling 10 businesses past 10 million and three businesses past 100 million into a completely free scaling road map that I've used to go from 0 to 1, 0 to 10, and 0 to 100 plus. And so you can click here and you can check it out.

1:10:11Again, absolutely free. And since you're a business owner, appreciate you and uh enjoy.