Wie Alex Hormozi über Geschäft und Erfolg denkt

0:01Eugene is next. >> I'm switching sides just to keep things keep things interesting. The media team you guys, man. >> Sorry, Eugene from Funnel Junkies. >> Um, >> what was it? >> Funnel Junkies. >> Funnel Junkies. >> Okay, got it. >> Cool. So, um, we've got a SAS agency, high level white label. uh we run one day workshops and then from there we found it like difficult to sign up just the software so we built like a offer with like a three-day scaling workshop type thing

0:35>> um [snorts] so my questions is a lot more focused around actions beliefs focus those type of things and I think looking back at my life before I discovered Alex content um focus very dispersed like you see everyone running all these different businesses >> and um you think the way to start scaling is just opening up more businesses, more revenue streams and obviously found that other way other way around.

1:01>> So my first question with coming up with a question. So I wrote down a bunch of questions >> and it really sucked [laughter] cuz when you look at the questions and you you start writing the questions I'm like yeah Alex is just going to say do more. >> You already know the answer. So the question is related to me and to our community. With all this content available and just by asking the right questions, you already kind of get the answers. So if all this information's already available, why are entrepreneurs not scaling? Why are they still stuck at like under a million? I think was at the scaling workshop and they said 95% of entrepreneurs are stuck under a million.

1:40>> Yeah. >> So why are they getting stuck in that space when everything is available? Um, I'd say at the most basic level, it's because of an inability to delay gratification. And so, if we just think about like why do humans do things in general, it's because they're they've been rewarded more for doing what they're currently doing rather than changing what they're doing. And I think that makes sense from an evolutionary perspective that like more of what you're currently doing is safe. And so people once they find another point of equilibrium, it's very difficult for them to break out of that, even if they're quote like mentally like, I really wish I could scale. they they want to want to scale, but what they really want is to do what they're currently doing, which is why they're doing it. Um, and so I think um being able to clearly articulate also like the action. So a lot of it I do think is like so how is just like such a simple word.

2:28It's a short word, but has a lot of like depth to it, which is um if I were to talk to a toddler and say, "I want you to scale a business." They would just look at you like, "What?" um if you were to tell me, hey, can you scale this business? I'd probably say, yeah, I can. And so the the the skill bit, the amount, the specificity of a request is inversely correlated with the skill of the recipient. Meaning if you have somebody who has very low skills, I have to say like, okay, here's how you turn on a computer. Once you turn on a computer, then you're going to open up Safari. What's Safari? It's an internet browser. What's the internet?

3:16Okay, let's explain what the internet is. Right? And then eventually you're like, okay, we're going to go to Google. What's a Google? We'll get there. Don't worry. We get to Google. Okay, finally we're going to sign up here. You're going to get an email. Once you have an email, I don't know how to type. Great. Let me teach you how to type. And so the thing is is like the lower the skill level of the individual, the more aggregate skills they have to learn in order to chunk up. And so sometimes people hear the word, oh, you just need to do outreach, but that is a bundled term that has a hundred things underneath of it, which is like, how do I warm up a domain? How do I set, you know, what's an opener? How do I integrate my, you know, Clavia with my whatever, right? Like, how do I integrate these tools? And so there's a hundred how's underneath of it. and they'll usually get stuck on one of the house and being unwilling to try because it's so frustrating of like

4:02>> I think I think what makes entrepreneurship feels slow is that you can try to learn something for a day and not have an outcome and then have to come back to it tomorrow and figuring things out is by nature a wandering activity which means that if you knew how to figure it out then you wouldn't have to figure it out because you'd already know it and so it's people do really poorly with uncertainty and So entrepreneurship, a lot of it is just the the ability to tolerate uncertainty, which feels very painful the entire time you're in the uncertain period, which is what I honestly think a lot of the pain of entrepreneurship is wondering whether the investment you're currently making today, the thing you know you're going to lose, the money, the time, the effort, the sweat, is going to actually pay off to the thing that uh you hope is going to happen and you don't know when it's going to happen. And so it's almost like if you run a marathon, you know it ends at 26 miles or 0.2, I don't know, for you runners. Um but like for entrepreneurship it's just someone saying run.

4:55>> Yeah. >> And like I'll tell you when to stop and even if you like just that idea almost sounds torturous of like just run. It's like well how long? It's like run. >> It's like but what if my lungs start hurting? Run. >> Yeah. >> Keep running. And I think that's what what makes a lot of entrepreneurship painful. And then the idea of even me saying this, some of you guys probably had your heart rates go up, right? Even the idea of not knowing when something is going to end or in other words when you're going to figure it out. A lot of people just don't want to start that race.

5:22>> And so they know what they're currently doing. And it's they get more rewarded for talking about scaling, for talking about their goals than they do for pursuing them, which involves a lot of uncertainty, fe pain, and frustration. >> Yeah, >> that's my best answer for why don't people do stuff. >> Yeah, [laughter] it's a reflection of myself as well because you kind of you you see things and you get the content and then a month later you're like, I haven't done this yet. What is kind of

5:47>> stop? The next one is the blocker which is super common, right? Which is >> um you know with Frank, right? We were talking earlier. Okay, how does he he can't scale. He knows he wants to scale and has and he already has the how. He knows how to run ads. He knows that if he does it, it overruns the business. So then what's blocking him from doing that? 80% of his time is is being taken up by these two activities. Okay. So then what's blocking him from solving that? He needs two people. What's blocking him from getting two people? he has to know how to do outreach or how to hire VAS and then train those VAS to be proficient. And so some of those some element of that he might not know how to do. And so some of you guys might be stuck in like I just really need a X.

6:25But the thing is you just don't know the next how which is okay well how do I attract an X? How do I recruit an X? And then that becomes the thing that you have to now figure out which is the like run. >> I actually think of that quote from Chris Williamson thinking about the thing is not doing the thing. >> Yeah. >> Yeah. So and also something from you is doing the hard things. Yeah. >> And I think that's a big thing that I shifted away from. As soon as you get hard, >> I'll take full credit for doing the hard things as me. [laughter]

6:51>> Um, >> so there's a myriad of different hard things that we need to look at and delivery, uh, attraction, conversion, um, referral, etc. going through the loop. >> Yeah. as the CEO and the key allocator of resources at a million dollars, what is the hard thing going from a million to 10 million, for example? What is the hard thing for the entrepreneur or the CEO on that business that they should double down on?

7:18>> So, I always would love to say like this is the the the four-step path to, you know, going from 1 million to 10 million, but the reality is that every business is different, which sucks to say because everyone's like, well, obviously it depends. But it's like, yeah, it does depend because if you're a software company and you're doing a million dollars narring at X rate, you will have a different constraint than a restaurant. The restaurant might never be able to get to 10 million unless it opens new locations. The four walls might not be able to fit it. If you're a home services business, you might need more trucks. If you're in the gym business, maybe it's like you need more marketing. Like it'll depend because this is why it's so important to be like what is the constraint? Like what is the thing that's limiting us? Like because at the end of the day, like businesses only grow by getting more customers or making them worth more. Period. That's it. Sell more units, make the units worth more. And so if those are the only two things that grow a business, then we just have to answer the question of like why can't we do that?

8:06>> And the thing that limits you will differ depending on the business. And the revenue matters significantly less. Now when I make scaling road map, I do my best to put things into generalized buckets, but by and large, it's just what stops us from doing the activity. And in a world of you know AI where you have you know significantly more returns per unit of human capital like even the operational stuff is going to almost go out the window in terms of scaling like scaling from 10 people to 100 people these things will occur because this is just how because there's human human limitations and so we know where humans will break and so that will be very predictable but whether you have a 100 person company that's doing 10 million a year a 100 person company doing a billion dollars a year that's where the revenue levels get really screwy and so to answer the original question of like how do you go from 10 to 100 is that you focus on the constraint and then you ignore everything else that is not the constraint.

8:55>> Okay. Um so on that and for myself as well and a lot of people that I work with is having all the different businesses all the different products like it's over complicated and one of the things is focus. Um it focus is also eliminating distractions. So, I read somewhere or saw one of the videos where you had the chiropractor business and you had all the different entities and I'm kind of stuck in that space and there's kind of this fear cuz there's multiple businesses doing multiple same revenue

9:27>> that you own. >> Yeah. Yeah. On my business. >> Well, you have Okay. Let's make sure that they're different business. Okay. Do they serve different avatars? >> Yeah. Yeah. >> So, oh different businesses. Yeah. So the technician >> tell him [laughter] >> technician becomes the kind of business. So I started off in IT services which I just knew how to do >> art services. >> It okay >> managed it. >> Yeah. >> And um through that progressed into the software marketing etc.

9:55>> Um and I've been stuck in that space where I know I need to focus on the one >> yet there's different revenue streams. So what would be kind of your advice for someone stuck in that space where everything's generating revenue and paying for expenses. So to focus we need to eliminate all this other distractions. >> Yeah. Well, what stops you from eliminating the distraction?

10:19>> I think the fear is from a um expense perspective. >> Yeah. >> Because there's multiple teams um big offices etc. >> I'm going to I'm going to I'm going to poke. So you've got this revenue >> and you've got these expenses associated with that revenue. >> If we were to eliminate the business, then those people would go away, the cost would go away and the revenue would go away, right? >> Yeah. So some of the expenses would sp would stay.

10:46>> Um for example, office like the you have some fixed costs. Okay. >> So is it that if you got rid of the profit that those business units generate, you would not be able to pay for the office space that you're in? >> Yeah. all the other expenses, the communal expenses. >> Okay. So, you would go negative. >> Yeah. Yeah. >> Okay. Got it. So, we want to we want to eliminate these other units from taking up bandwidth.

11:14So, what's the revenue level of the of each of the three businesses? >> Um, so each of >> are they all go high level white labelers? >> No. The one business is the high level white label. >> Okay. >> Uh the other business managed IT services. So I still have it. >> What services? >> It >> Oh, it Sorry, my bad. Sorry. >> IT services. Okay. And then what's the third one? >> Uh third one is retail selling computers.

11:40>> Okay. Um so they're somewhat related, right? I mean like they're somewhat related. So you've got >> we sell computers and then once people buy computers, they need IT services to service those computers and then they need software services to service the >> manage the business. >> But it pro I'm guessing the business doesn't actually work that way though. >> It does. It works. people come in the front door and then get both of the other ones. >> Yeah. So, we've got upsells through the other ones and from the software side, we're like, well, you need laptops for your PC or for your business, so buy the laptops.

12:09>> So, >> so is there one front door or three? >> One. >> Okay. So, this is what I wanted to like you might not have. So, when I asked originally like are they the same avatar or not? If it is the same avatar, then it means you're selling three things to one person, >> right? >> So, yeah. So, I wouldn't see these as three different businesses. I would see this as different product lines within a business. That's far more okay. >> Yeah. >> If you were like, I sell to I thought you originally said I sell to artists. I was like that is way out there. Okay.

12:35What do [laughter] what are we doing? >> Right. Um but what really matters is what is the degree of operational change that has to occur between the businesses which really just means like what what does each of the additional businesses change about what you do? >> And so just like everything always boils down to like what does this change about my life? Um the reason like there's not an actual like physics limitation like I preach focus mostly because 99% of entrepreneurs already are scattered already are pursuing too many things are too resource constrained to do anything more than one thing well it's not that like well Elon Musk has six and I'm like yeah and if you're an alien

13:12>> and [laughter] and happen to have built the number one number two number five and number 10 most valuable private companies in the world if you happen to have done that then yes you can do it but you probably wouldn't be asking the question if you were Elon. And so, not you, but like anyone. >> And so, um, this is the like this is true 99% of the time and you're probably not the 1%. >> But like, not you again, everyone. Um, but

13:36>> I just get down to like is this a distraction based on how much this changes about what I do. So with Frank's example with the affiliate thing, if if all we have to do is on the call, they're already going to sign up for the software and all we do is make sure that they click our link to sign up for the software. Yeah. >> That is very little operational risk for us to add another revenue stream. >> Yeah. >> That to me is not Frank has two businesses. That is Frank has another way of making money, which great.

14:02>> Okay. If you were like, I have two marketing, you know, campaigns that are going on, advertising to two different avatars, two different sales teams selling different things, that is when it is it's just too much to take on for most people. And most small businesses are resource constrained in that they are talent constrained. you make too little money to attract highlevel talent. Because if let's say you're making a million dollar a year, if you make a million a year and let's say you run 20% margins, you have $200,000 to take home. A re a person who can actually grow another business from scratch costs more than $200,000 a year.

14:33>> And so this is why focus is so important. It's not because it's somehow physics limits us from doing more opportunities, but economics tends to because unless you raise lots of capital and you use outsized money, which artificially allows you to hire way above your your uh you know, ahead of your skis, you like you can hire at your $10 million level talent at day one, which is why a lot of them do it because it is faster in different ways. You incur different debt. You incur financial debt rather than talent debt.

14:58But if you're bootstrapped, we almost are always paying down talent debt. And so um I focus because we have to get the business to a point where there's enough profit that we can then say I like today acquisition.com we have multiple revenue streams. So somebody could say hey Alex I thought you said to focus but you have school and you also have acquisition.com and the advisory practice. You also have the the the portfolio companies. You also have the venture studio right? We have all these different things.

15:26>> We also have our real estate portfolio which is huge. how how was like, well, I'm not running like I have a general partner who runs the who runs um our venture studio. I I haven't taken a single call. I don't even write the checks. >> I don't even sign off on the checks. I just say, "Here's your budget. You can do 2 million a year into these venture bets. >> Call me later." You know, make sure they're good. You know, on on the real estate side, I have I have partners that we work with all the time um on the real estate side. Now, those ones are, you know, they're big deals. Each one's usually 50 60 million bucks each that we buy. And so like I'm going to, you know, I'm going to be heavily involved in that process. But at the same time, like I'm not looking after the tenants.

16:06>> You know, if there's fixit, I'm not the one who's fixing it. And the same thing with the private egg portfolio. Like school, Sam runs school. I promote it. But the thing is, what does it change about what I do? Well, am I going to stop making videos? No. So only thing that me being able to invest in the scale school did for me is that I just added another link on my YouTube >> and on my bio. That was the only thing that changed for me. Now it created a huge increase in wealth.

16:30>> But the activities change very little. And so when I think about like whether something is a distraction or not is what does it change about my behavior? >> And so if you can get down to that then you can see whether or not something's truly distraction. And so if your business has three product lines, it could have 100 product lines. If what you do every day stays the same, then it's fine. It's just that most times these new things require star level talent. And when you're sub 10 million, especially,

16:55>> most of the star level talent is you, which absolutely does change what you do every day, which is why it becomes a distraction. >> That was a long-winded answer, but does that make sense? >> Okay, cool. >> Awesome. So then just >> I think that was one of my better explanations for focus. Sorry. [laughter] >> Really made sense for me. And um yeah, a lot of clarity on Thanks. >> Um so [clears throat] just a personal question for me. We've got um on my business specifically.

17:21>> Uh so we run ads to a one day workshop. Cheap like 20 bucks. 1,000 people in the workshop upsell to a three-day scaling workshop. >> Uh in person. >> You get a,000 people >> in person? Yeah. >> Amazing. Wait, how many are you running? >> Uh we do it once a month in Johannesburg, once a month in Cape Town. >> Oh, super cool, man. Rocking. Okay. What do you charge for the event? Um, so we charge 20 bucks for a ticket. >> Okay. >> Just so they >> What are show rates? >> 95%. >> Do Germans, man.

17:48>> Yeah. >> 90. They're like, "We said we'd be there. We'd there. I put it on the calendar, you know, like >> um >> Yeah. And then we upsell into the 3-day scaling workshop, which also includes SAS, and that's why continuities >> after the$und00 million book launch. >> Yeah. >> We launched our own affiliate program. Okay. where we recruited affiliates part of the core four other side. So recruit affiliates who then sell the SAS products.

18:15>> Um >> and we run webinars for that. So we get maybe we've only run two webinars. >> Um and maybe 6 or 7,000 registrations about a thousand show up and then about 150 >> that signed up as an affiliate. We charge him as an affiliate. 50 bucks a month just to be an affiliate. Um now my question is from an area of focus. We've got the events that's working really well. Um and we've been doing that for about a year.

18:45>> AltV to CAC of uh seven. >> On the affiliate side, we've got a LTV to CAC within 30 days of three and within a 12 month because I signed 12 month contract of 30. >> 30. >> Yeah. Yeah. So um we've got a 25% show up rate and then a 20% purchase rate on the webinar. So from if that was your business, what would you focus on? Would you drop the events and just focus on the other stuff? Would you do a combination of both?

19:14>> So no, I wouldn't I wouldn't drop the events. So here's here's a different frame of thinking about it. If I said, "Hey, I've got I've got a portfolio of investments. This one's going to 7x. This one's going to 30x." I would be like, "Can I have both?" >> Again, right? And also you have something that's already working and so I don't want to break like that's the bread and butter of the business. I like very I will not sacrifice the base. It's super risky to sacrifice the core thing.

19:40You also been doing this that long like maybe the economics change maybe the way that you acquire like >> so I wouldn't I wouldn't mess with that. I think what you need is what are margins and what's absolute profit right now per year >> between all three >> between the three different businesses or the >> let's say it's one business that has three product lines. Yeah. >> So in total then cuz the this product line does about a million. The other one also does about a million. The other one does about 600. The retail does 600

20:08>> 600,000. Okay. A year. >> Yeah. So you're 2.6. And then what are margins on 26? >> Margins on the managed service facads and the retail about 10% on the SAS products about 30. >> Okay. So let's just say you're making 500ish. >> Yep. >> Okay. So you're right at that edge. So by the way, the reason that we call the swamp the swamp, which is 1 to 3 million, 1 to4 millionish, is because of the issue I was mentioning earlier, which is that if your business is running 20, 30% margins and you're doing $2 million a year, you've got 400, 300, $500,000 in profit. It's right at the point where you need another leader. The problem is the bet that you have to make relative to the net profit of the business is so large and that's why it's so painful.

20:53And so basically that's it's the swamp because you you you pick between two kind of impossible choices. So option one, you give away half your profit >> and you hope this person works out. >> The alternative is that you kill yourself trying to scale from three to 10 just using your own, you know, wits and and sweat. >> Um both of those suck, >> but you have to pick one. >> Choose your

21:16>> right. Yeah, you you kind of do. Um, I think that the affiliate thing, if you're getting 30 to one, that's super compelling, especially if you're liquidating acquisition costs within the first 30 days or so, which you are. >> Um, so then it looks at like which one of these is more operationally scalable. >> The numbers sound low though, because if you said you were doing a thousand person event two times a month. >> Yeah. So, >> the 24,000 people that are coming to like get business stuff from you and you're doing 2.6 million. We are up to a thousand on the last two or three months. Before that, we're doing between 150 to 400.

21:52>> Okay. Okay. So, you scaled that up. So, do you have like a venue that you go to and you do the whole thing at? >> Yeah, we've got an office similar to this. So, we run it at our own office. >> Got it. But a thousand people. This is 100. >> Yeah, we've got a big space. >> Okay. So, cool. Yeah. Um I mean, if you have 24,000 people, like you like you should be at >> you should be at a lot more >> revenue. I like for me I'm like I want to look at the sales stuff >> like what's going on there? Like lead costs are obviously fine.

22:20>> To me there's a sales motion issue. That's like the big the real big constraint. >> Um >> can you can you take on more customers right now? >> Yeah, especially on the affiliate side because that's completely automated. I don't spend any time. I literally just find a way. >> I think I think right now you have a massive sales constraint. >> Yeah. Which leads me to another question around sales. Um so I tended um >> what percentage of the audience do you close?

22:46>> Uh in person 30% online 15. >> Okay. So let's say you get 300 >> qualified leads to the next thing. What how much does a scaling workshop cost? >> Uh 500 bucks. >> Okay. So it's 500. Of the people at the 500, what percentage of those do you close? >> Um about 25 to 30%. >> Okay. So call it you closed 9% of the thousand. So you're closing 100 customers at each of these thousand person events.

23:15>> Um yeah about 100. >> So 300 and then 25% of the 300 whatever. So 7%. >> So 7% of of of the thousand end up buying the ultimate thing. >> Yeah. >> All right. So what's the price point one of the ultimate thing? >> Um that is So I just have to convert it is um 45,000 range. So it's about $3,000 >> total. >> Yeah. for like a three month coaching program

23:40>> and then there's the um SAS side. So 500 bucks a month for the SAS with CRM, AR dollars, etc. >> which is the continuity offer. >> So you should be scaling really fast right now. >> Yeah. Especially the last three months we like increasing because if you're closing 70 people a month at a,000 or $1,500 a month each, >> you should be adding over a million in ARR every month.

24:07Yeah. So that's where we moving towards >> we should do that. >> Yeah. >> So what stops you from continuing to do that? >> Let's hope it's nothing. That's the best. >> Yeah. There isn't much constraint. The biggest constraint is just venues. Uh difficult to find. >> Yeah. There's only about four venues that can host a thousand people or more in South Africa. >> Okay. >> Um >> Oh, I thought it was German. My bad.

24:33>> Cool. One last question is if I have [laughter] to Yeah. >> So, so but earlier you said that you were doing at your office. >> You're not. You are doing it at a venue. >> Yeah. Yeah. So, we've got different venues. We do Ptoria, Joeberg, Cape Town, etc. >> Got it. Um, if you were to just continue doing the thousand people a month and closing these numbers for 12 months, how big is the business?

25:00>> Um, based on our current stuff, we'll probably add about five to six million on Yeah. So, triple for the year something. Okay. So, what again? What stops you from just not messing with anything that you're currently doing and just allowing the triple to occur? >> Um, nothing. That is we should not just double. >> No, I'm being dude like >> more people destroy their success because they just don't know how to handle it than like like the only thing that can get in the way of this. It's already working is you.

25:30>> Yeah. >> So, just don't break it. >> Yeah. >> Like like you're getting seven to one and 30 to1. Yeah. >> Like just just don't let anything stop you from that. >> Yep. >> That's it. Like sometimes sometimes the most productive thing you can do, I'll tell you a story. I was talking to a friend of mine. Um he just inherited a billion dollars. His father's in private equity. He now manages their family office. And so I was talking to him about acquisition.com and school and some of the other things. And he was like, "Yeah, man." He said, "Sometimes the most profitable thing you can do is wait."

26:04And so I think that um that might be the most profitable thing you can do. Like doing nothing is something. >> It's an action. I mean [ __ ] I mean how much willpower does it take to not start new things? >> A lot. >> A lot. >> Right. And so I think you should give yourself credit for like I you're banking goodwill with the business. >> Um Jeff Basos had a a speech recently that he did in Italy. Some of you guys I shared a story of it for those you follow him on Instagram. Um but he talked about his his rate of releasing the work. And so basically he said if I had 30 minutes I could write a 100red ideas on the whiteboard that would destroy my company. And so you have you you absolutely have enough ideas to kill your business.

26:39>> So what we want to do is to prevent that from happening. And so um this is super tactical but for everybody because this is like really really really dramatically changed my trajectory as an entrepreneur. I have a lot of ideas which is like I kind of scratch my itch of ideas because I get to idea about other people's businesses and then I go home and then Leila's like you want dinner and I'm like yeah but I forgot that we have a business too. So, I wasn't allowed I didn't I didn't I didn't have a way to mess that one up, right? And so, [laughter] and so and so what I do is I have I honestly have a document that's called Alex's big list of ideas.

27:10>> And every time I have an idea, I totally flush it out. I I put, you know, I put a link on the dock to another doc that has a big memo that has like this is how it' work. This is what we'd make. This is how blah blah blah blah blah. And then I keep living my life. And then when I finally see the team looks like they have smiles on their faces, like they're well-rested, they have a glint in their eye, then I pull back out my big list of ideas. And what's interesting is that like some of the ideas that I'm like, "This is going to be huge." I'm like, "That's [ __ ] Why would I think that's a good idea?" Um because you get so emotionally charged and sold on the idea while you're in the process of the idea, in the throws of the idea. But when you get a little bit of space, you're like, "Oh my god, this is how other people would hear this idea." And I agree with them. I think it's a terrible idea. But every once in a while, um I'll give you an analogy from uh um the Sandra Bulock movie with the the offensive lineman. Remember that one?

27:56>> Blind side. So she said that I actually think about this a lot with ideas. She said if you like a shirt, she's like, you know, don't buy it, but if you go home and you're still thinking about it, you know, a week or two later, like you should probably go back and grab the grab the shirt or whatever, right? And so I think about that with ideas. Like if I'm able to like I have this fear, what if I forget the idea? If I forget the idea, it wasn't that good of an idea. But the ones that like keep you up at night, that keep gnawing at you, those are the ones that like I'll flesh out more and more and more, but I still have to release the work at a rate that the business can handle. And so then it gives you respect for the output capacity of the business. And then what ends up happening, which you real like you realize as you scale up, is that manpower is almost always the limiter is talent. Which is why you see the the billionaires on stage and they're like, "Guys, you just got to get a good team, you know, find good people and get out of their way. But the issue is that good people don't want to work for you, not you. Entrepreneurs in general. And so that's why like we have to go through this kind of bootstrap phase sometimes where we have to prove that we can earn the right to get true A-level talent because if you had the best AI person in the entire world, you could have a multi-billion dollar company within the next six months. The problem is that guy doesn't want to work for you.

29:10>> And so it's like who do I who do I need to become and what do I need to build in order to get that level of talent to come with And so we actually like a lot of in my opinion a lot of the entrepreneurial journey is creating the proof that then allows you to attract the talent that's required to build the next thing like the level of talent we were able to attract after we sold gym launch versus while we were scaling gym launch nine day not even close and so I see that as the trajectory and what also ends up happening is that you end up becoming a a collector of talent um and so the like and if you do write by people throughout the entire process what happens is the stars stay around and they come with you from thing to thing. And so all of a sudden the bench of stars just keeps getting bigger and and they don't want to work with other people because they like we we have a great team. We have a great culture. We know how we do things here. And so in the beginning of your career you have no stars. You're the only star. And then and maybe you're a half star, right?

30:00[laughter] Um but eventually you'll get one other star and you're like, "Oh my god." But the reality is like if everyone thought like, "Man, if I only had 10 of these people, I could be 20 times bigger." You will get there. It's just it takes way more not stars that you thought were stars that you then have to fire and replace with another person that's also not a star to get another person to then replace with another person that's not a star. And I fundamentally believe that the reason that you can scale so much faster the second time or third time around. Who here has been uh who here this is not their first business. Can you get raise your hand real quick?

30:28Okay, cool. Keep your hands raised. Um if you if this is not your first business and this this business you scaled faster than the businesses you did before, keep your hand raised. Right? And like why why is that? It's not like the physics of business changed. It's just because your pattern recognition improves. And in order to get the pattern recognition, it's like you have to just get punched in the face a bunch of times with shitty people. And so like for me, like I know a vertical stack of what a a salesdriven org looks like up to a few hundred sales guys.

30:58Like I know what that stack looks like. I know what an SDR looks like. I know what an SDR manager looks like. I know what a closer looks like. I know what a closer manager looks like. I know what a a director of sales looks like. I know what a VP of sales look like and they have different archetypes and they have different skills and they have different behaviors. But if you've never done it, then you hire a VP of sales and he sucks and you hire another VP of sales and he sucks. You hire another VP of sales and she sucks and then all of a sudden one comes in and you're like you don't suck.

31:24This is amazing. And then from that point going forward, either that person comes with you or you know exactly how to pattern match. And so you find the person really fast. And fundamentally every level of the business, it's kind of like bricks, right? like keep putting these level of bricks as you scale. The problem is that only one of those bricks prevents you and sometimes for years because you are lacking this hole and you don't know what it looks like when it's right. And that's one of the big issues. And so the goal is like how can I how can I be willing to have a hard conversation which means that I might like this person as a person but they're not doing their job. And how quickly can I can I can I close that gap so that I can replace them with somebody who's good. The hard part is that we don't like having hard conversations.

32:00>> Yeah. And so it's like I mean I do like the quote like the distance between where you are and where you want to be is the number of hard conversations you're willing to endure >> and a lot of people just aren't. So to ask answer the original question of like why don't people do what they want to do. A lot of them just can't have a hard conversation. >> Awesome. Thanks my thumbs up. It sounds like my dating life that lost analogy. [laughter] >> Pattern recognition dude. >> Cool. Thanks Alex. >> Yeah, sir. It's like you find your first wife and you're like, "Oh, this is the fir this is what it looks like."