Alex Hormozi reveals how Acquisition com builds companies

0:00We operate from the theory of constraint, which is that every single business is not growing because of a single constraint. And a system will grow until it is constrained again. And so we spend a lot of our time trying to identify what the constraint of the business is and then can we solve it. Usually, if we can and it's in our wheelhouse, then that's what we is the type of business we'd invest in. Once those people come in, we kind of go a layer deeper. So it's like, okay, we have is it a sales problem? Is it a marketing problem? Is it a is it a conversion optimization issue? Is it a pricing issue? Is it a is it a delivery issue? Is it customer success? Is it third-party logistic? Whatever the problem is, right? And we have internal experts who have in, you know, very deep niche expertise around like building and scaling outbound sales teams, building and scaling inbound sales teams, how to create, you know, video sales letters, how to, you know, do like CRO optimization, so conversion optimization across pages, etc. And so we'll then figure out what the constraint of the business is, task one of our internal kind of experts to solve that problem, and then that will deconstraint the business and they will continue to grow.

0:56And then the other kind of half, I would say, of of HoldCo for us is uh recruiting function. And so if the way that we think about things is that you find the people and the people build the business. And so we find the best people who've already been there, done that. So if we wanted to take a company on that's doing, let's say, 10 million a year in top line revenue, um in whatever mortgage sales, we would go and recruit uh an operator or head of sales or head of marketing, whatever whatever the constraint is of the smaller business, from a company that was at 30 or 50 or 100 million in mortgage sales. And then we'll recruit that person in, place them, and we have the advantage of one, the personal brand that we have cuz we can attract better talent, but secondly, because we are a family office {slash} private equity firm, you know, depending how you want to see it, um we get a lot more responses to from higher-level individuals, where, you know, a a normal, you know, 10 or you know, $20 mortgage company is not like a huge business, and so they might not be able to get responses from what we would consider a, you know, level A or top-tier talent. So that's kind of one of our competitive moats is that we can tactically add value at the operating company level and we can recruit people into those roles and then they interface with Holdco. So, it's like sales is a problem, go find the salesperson, put the salesperson in who's a director and who's done this before, and then we take our sales expert and say, "Here's our playbook.

2:14This is how we want you to do it." And then they implement that within the company. And then that way, the value is actually built in the company rather than at Holdco. So, like if the holding company was If all the companies relied on Holdco in order to function, yeah, then it would actually make them less valuable because it means that Holdco is required to function, whereas if you have a company that can stand on its own two feet and grow on its own, then that company in and of itself becomes more valuable. And so, it's a harder solution, but it's the better long-term solution. And so, that's how we build companies.

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