Wenn du so schlau bist, warum bist du nicht reich?

0:00What is something that billionaires do that would surprise the majority of the population? Um is they would probably be surprised by the level of agency that billionaires will demonstrate. Like they're they come up to their own conclusions on their own. And if everyone disagrees with them, then great because they got there by disagreeing with the masses. And so like you can't have an exceptional outcome and also do what everyone else does. Like it's such an underappreciated and underestimated component of success to get outsize return.

0:31If you only believe what you believe or act in the way that you act because of other people's approval or it was because someone else's idea, it's very difficult to maintain conviction for an extended period of time. And so if you find yourself waffling, it's simply because the ideas that you're adhering to are not your own. If the whole world shouts to you that 2 + 2 is 5, and if you know that there's a big pile of money, then you're almost excited that most people don't agree with you because you're like it's just going to mean a bigger pot at the end.

1:00Alex, welcome back. Thank you [music] for having me. You say that entrepreneurship is a game of the heart, not the head. What do you mean by that? >> [sighs] >> I suppose everything could be boiled down to skills, but the ability to continue to persist. Some people would probably think of this as a spiritual battle if you want to use um you know, that language. But fundamentally just learning to have a long extinction curve on behaviors, which is like you know, many people would never knock and then a huge amount of people will knock maybe once.

1:32Uh but then very few will knock 100 times in a row after a door not being opened. And I think that that's what it takes. Cuz if you think about two natural extremes, I think about this a lot. Like okay, let's just take this to the natural extreme. It's like well, if you have somebody who's absolutely brilliant and another person who's absolutely 100% determined. I think it might have been actually in recent we were talking about this earlier. It's like if you um actually this is Torah wetz, but like you start taking points from determination and uh very quickly you've just got this philosopher who does nothing, right? On the other hand, you take a few points from intelligence and you can keep taking points away and this guy is going to win. And so I think about that as like if you only had two things, which is get better, don't stop winning becomes guaranteed. It's just expanding the time horizon long enough to allow the window to occur. And so if we think about entrepreneurship as the infinite game then the only goal is to not stop playing. Uh which is why I think it's more of a a game of the heart than the mind. Why do you think human beings systematically underappreciate how long it takes for them to be successful? I think it's because time is actually really difficult to observe.

2:42So if you think about like um I've been thinking about this a lot with regards to like why is it that when people come in person to work with Leila and I the the speed of behavior change is so rapid and they're able they're able to assimilate traits very quickly from us, whereas remotely it's more difficult. And I think it's like like for example, consistency is something that's incredibly important for most human endeavors.

3:05But you can't witness consistency unless you're with someone consistently. Right? Like if you see someone practice like you can't do a montage of consistency. You can't really experience it um in 10 seconds. It actually has to like you have to experience consistency with time. And I think that's why it's so hard because the parts where people take pictures of the beginning and the end, but the middle is where the race is won and that's on your own. And I think that's why it's so hard for people to translate for that skill to transfer, which is why sometimes it's like, you know, I learned this from my dad. I just saw him every single day just going in cuz like that kind of proximity is I think the only thing that gives you kind of a window into the reality.

3:41What other skills or advantages accrue to those that are around excellence? >> [sighs and gasps] >> So Angela Duckworth wrote this book called Grit. You might have read it. Um what I thought was really like one of the most interesting things I thought about the book was if you want to win, join a winning team. Right? It's because there's so many so many micro behaviors that exist on a team that just become standard practice and there's already reinforcers in place for you know, reward and punishment for all of these behaviors, which is why that team is a winning team that you kind of by default learn to do 100 small skills um in order to be uh successful overall.

4:19>> How do you know what you don't know? This ignorance debt that you talk about. >> Oh, yeah. Um It's a really good question. I mean, I spent the I spent I I spend all the time and all the money that I have to try and solve ignorance debt. And so I don't I don't know if there's a solution besides like trying to talk to people who are ahead of you who can help you look around corners and being it's it's I think I think advice is one of the hardest things to even think about because so much advice is wrong because people lack context, right? Or they have a misaligned incentives, which is huge.

4:54Either they lack lack context, they lack confidence or lack incentive. And if you have any of those three that are off, the advice is not necessarily good. And so and that's it's common to have one of at least one of those three off. And so it's like advice is so tough um because at some points like you have to have a a parallel kind of engine that's like I have to be willing to take advice, but I have to run it through some sort of filter that I'm responsible for, which you know, typically be some sort of you know, first principles reasoning of like does this make sense given the the things that I absolutely know to be true. Um and a lot of people can't bridge that gap. And so there's some people who actually do have maxed out um execution, but the problem is they change direction so quickly because they will just listen to different people who give them different advice that's conflicting. And not because anybody has bad intentions, but just because they either aren't competent enough or they don't have enough context or both. And human beings are wired, they learn from people of higher social status. They look somebody Yeah. achieve some kind of skill and they listen to that person.

5:50Tell me about that and how does that act as a guide to contextualize information? So really interesting question um because it's So I think it's it's like what So I think many people give advice. Some people's advice is listened to more than others, which we could ladder up to like some people have more influence than others. And then it's then what then what are the things that create influence that make your advice more likely to be followed than others? And so you have status, which is somebody who who is controlling reinforcers. So if you have money, you have fame, you have something that other people want and you control that and that gives you status in any in any situation, right?

6:29Like if you're a bartender in the bar, you have status because you control scarce resource. As soon as you walk out of the bar, your status disappears. But right in the bar, you have power or sorry, excuse me, status. Um you've got credibility, which is that you've said something that would occur and then it does occur. Uh you have power, which is say-do correspondence. Essentially like if I say, "Hey, follow this recipe and this is going to happen and it's a good thing." And then someone follows the recipe and then that happens, then they're more likely to adhere to instruction uh later. And then finally you have likeness, which is uh how similar are we? Like I I'll tell you a story. So I had um so we had a a small event at our headquarters and uh there was a a a logging company. It's like loggers, like lumberjacks.

7:13And the guy comes up to me, the guy who's running it, and he's like, "Dude, I've grown this thing from, you know, uh $2 million a year to $13.9 million in the last 4 years just listening exclusively to your content." Um and I was like, "That's awesome." And he said, "Um is there any way we can get a picture?" And so um I was I was before I like had a chance to answer um he said, "Just because um you have a hardcore following in the logging community." And I was like, "What do you mean?" He's like, "We're all Mosey nation." But it was like it was like dead serious. And I remember thinking about that and I was like "Well, that makes sense." I was like, "I look and dress like this." I was like, "I have such similar likeness." You like just like I have that as a baseline and then that's like for the whole community. And then the other three above that it's like do I control some sort of you know, reinforcers they want, which might be fame or money? Sure, I've got that. Then it's like, "Okay, have I done Did he do things that [snorts] I told him to do and good things happened? Yes." So I power. That was checked off. And so it's like you can look through that as your litmus test to how much how much people or a specific person would adhere to your directives um based on that criteria. And so that's kind of how I like reverse engineer that of like, "Okay, how much influence do I have in a given context?"

8:24And there's a fifth column, which is truly first principles thinkers being able to take information that you're giving, apply kind of pattern matching to their own experience and saying, "This guy knows what he's talking about." Yeah, I see this is just like this is the psychology side, the soft human side of human behavior. And then there's the physics It's kind of like the art and the science. Like and then there's the physics side of like well, if we want to boil water and we want to boil water at 100° it's not going to happen. So if that's what was required to get this water over there and has to be boiling it's only 100 like it's not going to happen. Cuz I found it really interesting and almost paradoxical the your Mosey nation in Silicon Valley is mostly the super successful entrepreneurs and the billionaire venture capitalist. And the reason, my theory for that, is they're able to appreciate your first principles thinking despite maybe a a pattern matching cuz that does not match the Evan Spiegel and the Mark Zuckerbergs. It is something that we've seen me and my partner Curtis see it all the time.

9:26The smartest people are like, "Yeah, I love I love Hermosi. I listen to all of his stuff." And the other people are inadvertently saying, "Well, I don't love the titles. I don't love the packaging. Like it doesn't pattern match to what I think is is a great first principles thing." >> just made my day. So great. I'm glad the billionaires in in in in the VC world like my stuff. So we alluded to ignorance debt.

9:48>> Yeah. What is ignorance debt? >> [sighs and gasps] >> Really good question. I haven't defined it and I should have. I would say it's the delta between the behavior that maximizes your trajectory towards a goal compared to your current behavior set.

10:13And so the discrepancy between those two things is the amount of the debt. And so obviously it's hypothetical because to some degree like no one knows besides God or whatever your you know creator being is of what the perfect move is. But that delta I think represents like where you're at now versus what you should be doing. And so I see ignorance as the as the difference between actual and should. Another way that I look at it is the unknown unknown.

10:39And what tools or measures can you use to know how much ignorance that you have in a specific domain? Man, these are really good questions. Um My my gut my first initial you know thought response to that was how far away you are from the top. Honestly. Mhm. Like if somebody's like I know everything about this and yet they don't have any proof that they have skills, they have no evidence, then it's tough to say like like I people will probably dislike this but I I do think that people who are wealthier of the subset of human beings who would like to make money whatever subset of.

11:19So if that is the goal the people who are poorer have a less accurate view of reality. Mhm. And so that distortion impairs their ability to get what they want because they take actions that they believe will be the outcome that they want and then it doesn't. And so I see that's why I like entrepreneurship in general because you have absolute objective feedback from the marketplace and it's also typically very quick. And so you have so many more feedback loops which is tougher when you're starting out to not have these feedback loops unless you're just trying to start something for you, right? Um but all that to say like how do you how do you know how big your ignorance debt is is just typically the earlier in your journey you are the bigger it is. Um typically and the further away you are from the top of whatever endeavor you're going after the bigger it is. The only caveat there is time because some people are on the right path they just haven't given enough time.

12:09Sometimes they're growing extremely fast. They may not be a billionaire but they're making millions of dollars every month and they're they're on the same path. They might even be growing quicker in wealth than the billionaire who's accumulated it. And this is where it's really nasty. Um so there's Have you heard of the pasta tower exercise? No. Okay. So basically it's like you you take pasta, you have you know marshmallows, gum, whatever it is, right? You get a couple things and you have to build a pasta tower as tall as you can in like 60 seconds.

12:38And when you when you do it if you stop the clock there's a number of questions that happen afterwards, right? Which is like if if I give you 10 minutes would you have built it differently? Okay, if we had to build it to as tall as this building what if what would you have done differently? Right? So there's a lot of like sub lessons I think come from it but basically like the fastest way to build a $10 million business is not the fastest way to build a billion dollar business. Mhm. And so that's where it gets really where it gets more you know more nuanced, right? So it's like okay well I'm 20 and I'm doing $10 million a year that may mean that you have something that could become a billion dollars or it might mean that it's something that isn't really going to make more than $30 million a year because of the nature of how the the business was set up. So it's like what foundation do we have underneath the building? Um that that that we're that we're is it is aligned with the kind of like the footprint of what would then eventually become this ultimate thing?

13:30And so how do you recognize that when you don't know? There's a concept in Silicon Valley called a zero million dollar business and a zero billion dollar business. It's that same foundation and I think a lot of people think they're they're going to make a million then five million then 10 million but if you look at Open AI some would argue they're they're not making any money but yet they're valued at hundreds of billions of dollars and maybe they still will end up not making money but that is the road map to making a trillion dollars versus just scaling kind of incrementally. Totally. I think the only tough part that I think not only there's plenty of tough parts but for for newer entrepreneurs is is the context of the advice that's being given, right? So like if I'm if you're talking software and billion dollar trillion dollar companies like there's a whole set of advice that makes sense here. If you were trying to scale a lawn care service business a lot of that advice will actually be disadvantageous to what your ultimate goal is. And so I think that that's again that's that filter where how do you how do you know what advice to listen to what what advice not to listen to? And a lot of times because of the nature of the internet you can't give context because it kills the clip's reach. And so you like I think that that layer of being able to judge becomes increasingly important as the context is increasingly removed from most content that we consume or at least that gets massive reach. So the truly niche knowledge is not being shared and memed across the ecosystem so you have to find in other ways. One way that I look at ignorance debt is if you want to learn how to be a top YouTuber you go and spend time with the top 10 YouTubers and they will tell you the unknown unknown. Mhm. So you probably don't know ahead of time what you're not doing but they basically being around people that actually done it are the ones that will that will un-show. Otherwise it's very difficult to know the unknown unknown. Super hard.

15:26You know so I was a management consultant before I entered this new life that I have. But one of the ways that whenever we'd enter a new field where you know I'm 20 something years old trying to learn about space cyber intelligence in the military make a recommendation to the military which is absurd, right? As a 21 year old. Right. So it's like how do you how do you become competent at something really quickly? And so the method that we always use which I think the consulting method is you know we would we'd ask the person who gave us the the the project who are the five smartest people that you know about this particular issue? And then we'd ask every one of those five people every question we could possibly think of.

16:00Like give us the understanding of the whole space blah blah blah. We go all the way through and at the very end we'd say who are the five smartest people that you know about this? And so eventually we'd ask we'd interview every single one of those people and by your 20th or 30th of these interviews like you have a pretty good feel for what's going on and then when someone says something you're like but you know so and so said this and how do you feel and like you can start kind of mapping the network. Um and eventually you ask for five friends until the names become the same. Like it's the same names I've already talked to him I've already talked to him. And so whenever I want to do research on like a new industry that typically is how I do it. I still use the same exact method I did there.

16:34It's just faster now because I can just make an Instagram story and then people can reach out but like when I wanted to learn about like banking and payments and credit cards because I was looking at investing in something there. Um I I did exactly that method over two weeks I had like 30 conversations with people that had exit between 30 and 3 billion. Mhm. And I I learned so much and I was like oh okay I know I don't want to enter this space this sounds more interesting than what I originally thought. But you don't know that going in because you're just you have a blank slate. You have no context. The only change to being around those people is you could always delete or add things based on your own personality and what you naturally want to do. People are kind of have this fear that they're going to become this person just because they learned whatever behaviors they're they're using and I think it's limiting. Let's talk about a topic we're both really obsessed with compounding. Okay.

17:25>> [laughter] >> So why is it so hard for people to compound their skills? So compounding skills I'm trying to think about how I would clearly define it for for the audience. Um I would probably say it's when multiple skills when used together create an outsized outcome compared to either of the skills used independently just so we have a basis for talking.

17:54Um but beyond that um I think I think part of the difficulty is that you do not know what you're going to yield and and the perspective change that's going to occur after you have a new skill that you don't have yet. And so it's like if you understand accounting and then you learn e-commerce it's like oh this makes like you you don't know what you were going to know. It's a very unknown unknown, right? Sim- similar similar context we were talking about earlier. Um and so that's in terms of like why do I think it's difficult people to imagine the upside potential of having multiple skills that stack together?

18:28I give this example all the time but like you think of like Jay-Z, right? >> Yeah. So in the beginning he might have had a base level of like call it rhythm. That was like his what he maybe he was naturally inclined that way. Um and then he started developing you know beats and that was a skill that he you know figured out and then he started you know rapping. Um and then that became a skill. And then from there he learned how to promote. It's like okay that's that's a much more valuable you know if he only knew how to promote and didn't have rap like he would it wouldn't have been nearly as valuable a skill but having both makes him super successful rapper. But then after that it's like okay well then he had to learn how to recruit other artists and musicians. And so it's like okay well recruiting is a different skill than promoting you know publicly and doing deals is another skill. And so all of the sudden it's like these skills when stacked together become a label, right? And then that becomes the next thing that he's able to do.

19:22But a lot of times like you can only you can only and this is Steve Jobs but you can only connect the dots in reverse. And I think the one thing that I would say is consistent among the people that I that I frequent who are hyper successful is that they're just intensely curious about things in general. And so I'll see somebody who's a billionaire have a conversation with somebody who makes I'm just I'm only using money here as a you know to to show the stark contrast but you know somebody makes $80,000 a year you know fixing lights, whatever.

19:51And they'll find a way to extract information from this person and be like, "So, how does that work? So, tell me more about that." Um and they'll still be able to at the end of that conversation be better off than they were prior. And I think they're kind of bloodhounds for for knowledge. Mhm. Um and I'd say that that is that is probably like just something that I have witnessed. But like, why is it so difficult for people to to do compounding? There's the obvious answer, which is patience. And the other is that they don't understand the upside.

20:19How do you balance compounding of skills with becoming a master in one skill? That's really good. Well, you know, um I would say that the difference between those two things um is really just comes down to how narrowly we define the domain. So, it's like let's say you want to be a quote master at business. It's like, well, there's so many skills there. It's like you got marketing and sales, you got recruiting, you got finance, you got like there's so many things >> So, compounding becomes part of the master.

20:45>> so which Yeah, so where where where is the the skill versus going, you know, super deep on biotech, right? Now, in the world of biotech um and going deep on anything, it feels like you're still like the deeper you go in something, the more you feel like you don't know anything. Um and I certainly feel that way constantly. >> Curse of Agnar. Curse of knowledge. I I was like I I have this uh we have this big marketing that's going to that's going to have my my next book's going to come out. And I have some some big plans for it. And I think it's going to do big stuff.

21:17And I was already like playing out like what I thought I'd be able to say afterwards, which is like, "This is my letter to the internet. I still don't understand marketing that well." >> [laughter] >> I just feel like there's so much that I honestly have no idea about. Is it because you don't understand the details? Are you still missing some of the bigger picture areas? >> I think it's just like there's so many things it's just like when I think about what has gotten me success with marketing has been like there's probably a hit maybe like 15 rules that I pretty much follow and the rest is just like let's like the amount of times that I've been like this is going to be a winner and it bombs and something that we do in 5 seconds as like a last-second thought ends up being the the home run advertisement or you know, an email that just crushes compared to another one. I just I have I have I have been I've been wrong so many times that I have like zero ego when it comes to marketing.

22:07>> [laughter] >> It's interesting because a lot of people will discount and say that's just probabilistic, but it isn't. When you put out a new video, Yeah. hundreds of thousands of people are telling you this is a 5.2% click-through versus 7.2. It It is not probabilistic. It's just the wrong answer. >> Yeah. Meaning there's some kind of ignorance debt there. Totally. How could How could there be an ignorance debt after you've done something so many times? That's what drives me drives me nuts. But like so to to this point though, it's like um so, I see prediction and control as the same thing. Equals equal opposites of the same coin. Like if you can if you could predict something with absolute certainty, provided you have influence over the variables, then you can control the outcome, right? And I see that as like intensely cool. Um but like for us let's say a sales conversation, right? If we have one person here, I do believe that there is something that could occur that would create a 100% close rate process. The problem is it just might not be worth creating that process because some people might might have to go back to their childhood and re-educate them on you know, elementary math in order to get them to understand this concept or whatever it is, right? So, there's certain amount of education that has to occur in order to get someone to change their behavior or at least the way that we want. I'm going to loop this back to the the the marketing thing. Um but I see like sales is just increasing likelihood that somebody purchases, right? Within a conversation.

23:28>> Mhm. And so, marketing serves more or less the same function just done one to many. The amount of variables that exist in marketing, I don't think anyone has even come close. I mean, maybe I AI will, but like human beings like I don't think any any humans have come close to quantifying every single variable that exists. And so, we can say, "Here's 15 things that I know always work." Like fast will pretty much always beat slow. So, you control like 70% of the variant of the probability and then there's 30% variance.

23:58>> exactly. So, it perfect. You you you got to the exact where I was going, which is like it's if there's a thousand variables, it's like maybe the the 15 that we know that are the chunky ones, it's like maybe that gets us 60% of the way and then we still roll the dice and it's just our downside's truncated. And I think it's just over time you just continue to move up the median. Um at least from a concept from an organic content marketing perspective, but the same thing I you know, same thing with with paid ads just different different beast. Said another way, in the land of the blind, the one-eyed man is king. So, you are the one-eyed man.

24:29>> Yeah. It's [laughter] just willing to take >> Which is a high compliment. >> Yeah, yeah, I'm honored. >> So, there's compounding of skills. There's also the compounding that accrues to somebody that sticks to a domain. Yeah. Why do people systematically underestimate that? And why can't people stick with one thing for many years? Man. These are These are all hard hitters. So, I think that um luck surface area is something that uh it's a very you know, catchy term, but basically uh if you have if you have if you think about I'm going to draw a little analogy and I think it'll it'll make sense. But like if you would think about it in intelligence as accuracy and determination as the number of shots you take uh as you're shooting a target, then it's great to be intelligent.

25:22But if I had to pick between unlimited shots and perfect aim, I would rather have unlimited shots. Yeah. Right? And so, the idea of the luck surface area there is like if we're shooting at least in this direct like this general direction, eventually one of my my arrows is going to hit the target and if and on a long enough time horizon, one of them's going to hit the bull's-eye. And so, the advantage of sticking with things is that you tip luck in your favor. You just are around for more things to occur. And I basically the same concept of of this there's a certain level of variability um that's going to always occur just within business, chance, whatever. But if we're there the whole time, it's like we give we give luck time to happen rather than like if if you try to quote time things, it's like you're you almost never get it. Um but if you're there the whole time, then luck occurs.

26:13And so, and those those lucky breaks are the ones that typically like define people's careers. Um it's just you just don't know when it happens. I mean, we talked about this all the time where he said like um you know, I've wasted uh you know, 90% of my advertising dollars. He's like, "I just don't know which ones." Right? Like it's the same it's like the vast majority of things that we do in our careers are not going to actually make a meaningful difference and then a very small percentage make all the difference in the world. You just don't know which one it's going to be, which means that you just want to maximize the likelihood that it occurs.

26:39Uh but in business, >> Mhm. you internalize once you get a hit, you internalize there. You're like, "Oh, I said this line in sales script. Now I can scale it across all my sales people." >> Totally. And we just >> So, you do know in the in most cases of business, it just you don't know when your next knowing is going to come. Yeah, the next big breakthrough. And I think that's like kind of that that truncated downside risk. It's like um I used to say this a lot, but like the bottom floor of the building of your opportunities continues to get higher.

27:07So, like when I when I quit my job when I was in my early 20s, my plan B if my gym didn't work was going to be I was going to drive Uber and strip. >> Yeah. Um and so, that's a pretty you know, that's that was kind of a baseline, you know, floor of the building. Once I learned how to sell, I was like, "Okay, well, the absolute worst-case scenario here is I can keep my clothes on and I don't have to work you know, 18 hours or I probably still work 18 hours, but now I can sell cars, right? I can sell something that's like high high velocity. I could I could probably make 400, 500,000 a year just being top top car salesman. Okay, so that's now my baseline. And then once I learned how to advertise and get leads, then it was like, "Oh, okay. Multiple millions of dollars a year is kind of like the baseline. It doesn't really matter what place I'm going." If you know how to market and you know how to sell, you can drive business. You're a rainmaker fundamentally. And so, it it's like the bottom floor of that building um cuz like when people are like, "You know, if you lost all of your reputation and all these things and you had no money, like what would you do?" I'm like, "I've had that happen twice and I'll tell you what I did." Like I don't have to do it as a hypothetical. I'll tell you exactly what I did.

28:04Right? Like I went to a business owner and I said, "Hey, I'll bring you business. Let me keep whatever I kill and then you get customers for free." And most business owners say, "Sure. Zero catch sounds good." And then that's it. And I've done that I've done that's what I did both times. And I was able to just restart and generate cash quickly. Um and that was a few years into my career. Um that was after I already had the marketing hat. Uh so, I didn't have to go back to you know, doing car sales or something like that. So, I've heard you use this analogy of levels. Once you learn how to pass and beat the level one boss and the level two boss, you could quickly get to that level three and then you start from there. Yeah.

28:41It's tough because um I think to to circle back to the question you had earlier about why do people struggle with this? And I think it's because you get it's it feels good to win, right? And and losing sucks. And so, if you know how to beat level one, two, three and you get stuck on level four, there's a big part of you that after a a sustained period of time of not beating level four, you're like, "You know what? I'm just going to start a new character and I'm going to play the game slightly differently this time." And you And then the thing is is you have a rapid feedback loop of things going well because you're probably better and you go you breeze through one, two, and three again, but then you hit four and then you're still there, but now four's hard cuz you're still battling level four on the other one.

29:20Typically cuz you use cuz most people don't completely stop doing one thing. They try to chase too many too many rabbits um and then they catch none. And so, I would say the single at least for me, the single hardest thing about entrepreneurship is is focus. Um which is I kind of see as like the the embodiment of commitment, which is the elimination of alternatives. Like that's how I Like how do you commit? You eliminate alternatives. Like the most focused person in the world does nothing but that thing.

29:50Like if we if we had to like a map the most focused person, most focused video game player does nothing but play video games. And and that would be okay. Well, the most focused person who plays video games would die. Right? So then how how much extra stuff do we need to introduce just to make sure he doesn't die. So he has to eat, he's got to sleep, he's got to he's got to drink water. And then he's the most focused video game any if he has a girlfriend, he's not as focused as somebody who doesn't have a girlfriend. If he if he works out, he's not as focused. Right? So it's like how do we get it so that so when if we think about that as the as the pinnacle of focus, then the idea of all these productivity hacks is just like in my opinion we had a little chat you know joke this morning about it was like a complete and utter waste of time.

30:29Like people like how do I want I want to focus more? It's like but focusing more is about doing is about removing everything that isn't the thing you want to focus on, not doing something else. Like it's such an American idea to add something in order to try and get more of something And you say that Number one productivity hack is to say no. Yeah, that it's the cheapest one too. >> [laughter] >> So so going back to this video game analogy, you're on level four. Yeah. You get tired of losing, you start level one, level two, level three.

31:00Certainly in some skills like management or fundraising or leadership, you have to beat level four. But is there sometimes another game that you could play where there is no level four and you just go to level five? It's a really good question. I think I think it it's basically like what is you know what's the constraint? What's the constraint of the system? For most entrepreneurs, they are the constraint of the system. But fundamentally a business has has to have these functions occur. And if you were the only entrepreneur in the business or only founder, sometimes there are for sure like key people who can come in and can help you out. But if these things must occur, then like let's say you you get to a point where you need you need to get more leads for your business. Just keep it simple, right? Okay, if I don't know how to advertise, advertising must occur. It has to happen in some way, in some form.

31:50And so if I never learn the skill, then the only option I have is to go recruit somebody who has the skill. But what if I don't have the skill of recruiting? Now, maybe the level four boss becomes a level 4.5 or a 4B, right? Which is okay, well, I can I can get over this bridge multiple ways. Um which is actually really interesting cuz um this is something I've been thinking a lot about, which is it's actually loops back to what we're talking about with advice.

32:18There for sure is bad advice. For sure. But I think there's also a lot of good advice that is half-heartedly executed, which then makes it into irrelevant advice because the execution nullifies the effect. And so I as somebody who gets asked for advice, um I have increasingly spent my time on how do I increase this person's conviction around the advice and less on the advice itself because if we use the analogy of a mountain, there typically are multiple ways up the mountain. Like you could make this thing a super viral product. You could also, you know, have a super you know, heavy sales team and marketing. Obviously depends on the goal size, right? But like let's say somebody has a modest goal of hitting a million dollars a year or 10 million dollars a year or whatever it is. Um not a trillion dollar company.

33:06Sure, that'll have a more defined path. [laughter] But if if someone wants to make 10 million dollar a year business, it's like you could do that a lot of ways. But no matter what way you pick, you have to be committed to it. And so it's like what are the few things that must be true, right? That you have to be committed to. You have to be focused on on whatever that thing is so you can get good enough at it. You can get deep enough into it that you can actually like break through level five of paid ads, of organic. But if you're if someone would say how do I market this like how do we market this podcast hypothetically, right?

33:35Um well, we could run ads, right? We could go find affiliates who have audiences um already and then see if there's a way that we could partner with them, have them promote it or come on whatever. Uh we could uh we could just get better at the organic game itself and get really into the nitty-gritty of like retention curves and packaging close rates all that stuff, right? Um and we could go on, right? These are all these different ways. And so could all of these things result in the views of this going up? Yes. And so if someone says which one should I do?

34:05All of them would work. But they will only work if you do. So then then the problem to solve is which one of these things um does the person have the highest conviction on any and the largest percent of of existing skills? So so in the inverse, the smallest skill deficiency between proficiency and where they're currently at. And so that is typically what my follow-up questions will be. Well, have you ever made videos before? Do you know a lot about this? Do you are you have you ever run media before? Have you ever done paid ads or know anybody who's run paid ads? Like um or are you a natural networker? It's like oh, I'm a natural networker. It's like boom. This is going to be the highest likelihood path. All of these work. And so it's like two people ask Alex who both have podcasts the same question how to grow my podcast and then there's different answers. It's like well, cuz they're different entrepreneurs. And so I want to have the shortest gap between where they are and what would be proficient in order for them to get up the mountain. So, that's

34:55>> I also think there's like a consciously understanding that you can't pass this level and subconsciously going to the next shiny object. Yeah. >> And to give you two counter examples to having to pass the level, the most extreme Mark Zuckerberg. Yeah. I don't know if you saw any clips with him and Theo, but he still sounds like a robot. He still has no personality. Yeah. >> And yet he hasn't kept that from building a trillion dollar company.

35:18Yeah. Sam Altman realizes he's a genius strategist, has all these skills, OpenAI. He realizes he sucks at hardware. He just paid six and a half billion dollars for Johnny Ive. >> Right. That's not going to be a limit for him. So there is a power to knowing >> Oh, yeah. which levels to play and which characters you want to play in those levels as well. Yeah, I think it comes down to like what functions must occur and then it is my job to make sure that those functions happen. Now, the cheapest way, not the fastest, the cheapest way is to learn them yourself.

35:48Right? And so then you become increasingly stacked with all of these different skills so that you can solve a myriad of problems in the business. Um but if there's a gigantic skill that like I I will probably never be the person who's head of finance. Um in terms of like operational finance. Like I'm not going to run the P&Ls and all that. Like I'm just I'm not going to do that. Um but somebody should. We have to have that. Yeah. Right? Um and so but like I could go learn how to do that.

36:13It's just but like it's easier for me to go find somebody else. And so I think uh we're basically it's buy or build but done on a n equals one. Am I going to buy this and bring Johnny Ive in, right? Or am I going to build this within myself or within obviously somebody else if you want to train up the team. But if we're assuming we're trying to go fast then, you know, am I going to try and learn it or am I going to bring somebody else in? You you just alluded to this the smallest deficiency in skills.

36:39>> Yeah. It's the one concept I've talked to many people about this. You have a very controversial view that I haven't been able to square. Okay. And the idea that you could teach somebody culture and teach somebody personality, personality traits versus skills versus hard skills. Uh-huh. Have you ever seen that executed outside of acquisition.com and how do you teach a 50-year-old how to change their behavior? Oh, so okay, a couple couple things here just for defining terms. So hard skills, soft skills, I see those as the exact same thing. They are just words that people use, but they are fundamentally changes in behavior. So across the board thing number one. Um and how do you change a 50-year-old's behavior? It will take longer.

37:22They're less plastic. Um but nonetheless, they're still still teachable. Um on a long enough time horizon because the thing is some people uh so everyone is teachable. The question is is it worth it? And that no, it's that's actually the real that's the organizational question. Is like buy or build is an ROI decision, right? Like should I buy this and what's the likelihood of success and and and somebody coming in uh or or you know, immersion in the business uh versus me, you know, building this capacity internally. How much does it cost in both time and money, right? Um and a lot of that's going to come down to your efficacy at transferring skills, at teaching somebody else how to do something. And so um what what part so what part was controversial? I'm like I'm so here cuz it's like

38:03>> is is you don't work so you at acquisition.com you recruit for people that want to develop themselves. So you have a very special culture. Yeah. >> But for the average business, if somebody if CFO comes to me and I want to put them in a public company Sure. and I start telling them like you should smile more, you should wave more, that's going to be a very difficult conversation. >> Yeah. Is that practical or am I missing something and how do you go about changing somebody's what I would call soft skills, which you would call just another type of skill?

38:31>> Just a bucketed term of of yeah, it's just like here's 28 small, you know, things that you can do differently that will increase the likelihood people like you. Um so I think it would be awkward if I demanded every single person does this. I don't demand that everybody smiles. If if somebody has a problem where people are not listening to them and I think that they do have the base skill set, but they're having like they're having difficulty with influencing their co-workers, then I would probably say okay, well, let me give you a remedial course on influence, which is here's six things that you're currently doing that decrease the likelihood they listen to you. So if we reverse these six things, we'll increase the likelihood that that they they desired outcome happens.

39:10Like and the the the the most difficult part about this is actually a the observation. Um it's people will use a bucketed term to describe somebody else, right? They'll say this guy has a lot of charisma. But if you ask them why does he have a lot of charisma? That is where people get in trouble because there's so many things you notice that you don't put words to typically, right? Like we have a lot of good pattern recognition, you know, for like this guy is a threat. This guy I don't know, he just gave me the wrong vibes, right? It just really means that he did things that remind me of other people who have wronged me. And I don't like and so, being more conscious about it, this is where like watching game footage and things like that um become incredibly valuable uh because you can see like he blinked a lot. And he was, you know, wringing his hands. Now, if somebody comes in and a lot of people in the office are saying, "I don't know, this guy doesn't seem trustworthy."

40:00The question is, is this guy trustworthy or does he behave in ways that remind them of other people who are untrustworthy, which are two different questions. And so, if I just want to teach somebody how to act in a way that that decreases the likelihood that people call him untrustworthy, then I could say, "Hey, put your hands in your pockets." And do this instead, right? And so, um we always hire for the smallest skill deficiency.

40:24And so, the public CFO for sure is going to have to have a massive you know, skill set that's going to take many, many years to develop, right? If I'm picking between two candidates and I've got a nice guy who doesn't know finance and a guy who's a who's killer at finance and he's not a nice guy, I can teach somebody to be amenable in not that long, right? But teaching somebody finance is going to be a much bigger a much bigger piece of the >> And and this guy, the guy who's really good at finance, that might not You'd rather hire a nice guy that's really good at finance, but if he's the guy you have, there is a way to change him.

40:55>> Yes. And then again, all the The thing about this is like I think people hear this and think, "Oh, like Alex is a soft like let's go train everybody at like No, 100% not at all. It's It's an ROI decision. Every So, I see the the chief role of the entrepreneur is allocation of resources, period. That's what we're supposed to do. And I see strategy as prioritization of resources. So, like how are we prioritizing what we got? We have limited resources, unlimited stuff, and be able to make the decisions where we get the most bang for the buck. And so, if we can have somebody who has, you know, tremendously, you know, deep, you know, finance This guy is a finance savant. Okay, great. Um is the deficiency that he has in the interpersonal department something that's going to cost us our culture? And how little do I need to do to improve uh where he's at to make it at least not a negative?

41:39Right? And so, that's That's the I think there's the basic calculus there um that happens. Now, if somebody has like a massive ego, it's going to be tough because they're not going to be receptive to anything, which means what you see is what you get. And you've got to be really happy with that person. >> a difference between somebody that's lack self-awareness and somebody that knows that they're an [ __ ] and is basically doesn't care. Yeah. Thinks they're so good that they're not going to change. >> Yeah, some people are like, "I am an asshole." And they have accepted that about themselves. And some people had no idea that people thought they were an [ __ ] and would love to change that.

42:08And I think the like the crux of that is is you know, maybe the difference between somebody you hire and don't. You mentioned game footage. For your last book launch, you practiced over 30 days. You did over 100 presentations of the presentation. And you mentioned that early on you got a lot of benefit and then you were getting incremental benefits with each iteration. Why keep doing that? Why Why do 100 iterations of something where you're getting marginal returns?

42:36So, my my initial response is marginal returns are still returns. Um but beyond And I think that most most games are won at the edges, right? They're won in the margins. And so, the benefits in most systems accrue to the person who's number one. And even if you're number one by a tenth of a second, you're still number one. And you get a disproportion amount of the gains. And so, I've been rewarded so many times historically for just getting a tiny bit better with a shitload of work that I still it's still worth it. So, I have dim- I have diminishing returns in skill, but gigantic absolute returns in in what I get for getting that incremental that very small increment. And so, to put math behind it, if I have, you know, 500,000 people who are signed up for, you know, the book launch, if I knew that there was going to be a state that had 5,000 people, I'd probably prepare. Like I'd probably prepare. Well, imagine 100 times that.

43:33Where each increment is an entire stadium, you know what I mean? Or gigantic arena of people. Well, if that's the case, then like I will get a good return on that. Now, if I'm going to have a presentation in front of 100 people, if I get 1% better, maybe it affects one more person. But if I get 1% better in front of 500,000 people, it's 5,000 people. And so, it makes sense there to So, it's like again, it's an allocation of resources thing. I will prep that much because it's worth it. If it's not worth it, I'm not going to do that kind of preparation.

44:02>> So, it's efficiency equals work over returns. >> Yeah. So, in in other words, it's highly efficient even though from the outside sounds feels inefficient because you're just getting just a little bit better, but it's being magnified by >> It's relative versus absolute. So, I had this decision cuz we have this big, you know, book launch coming up and we're saying like um I won't share too much, but like we we have we have such big numbers that I'm expecting of people who are going to be coming because last one was awesome and um this is the third book, you know.

44:31>> Do you have a date for that? Yeah. Yeah, August 16th. Okay. >> Yeah, just announced it last >> So, it's not exactly on my wedding day. That's great. >> Yeah, yeah, it's not exactly on your wedding day. We'll try to make it out. >> [laughter] >> Um and so, uh the point though is that uh that if if someone says, "Ah, that's going to be, you know, if if we if we add that little, you know, you know, an an abandoned cart sequence for the book like, ah, it sounds like work." It's like, "Dude, we're going to have a million people register. So, 2% right? Is 20,000 more books sold, right? Which is uh and I've got some goals that I have around the book that I'll share after the launch.

45:06But um like, yeah, man, it's worth it. Like some There's some businesses that do entire campaigns that don't even come close to that. Yes, we're going to we're going to hit all the little crumbs. We're going to hit all the little crumbs cuz the thing is just when you have that much scale going through it, the crumbs become bakeries, um and so, yeah. And I I I'd say like I I tend to be a maximizer more than an optimizer in general. And I want to double-click on what you said. You You want to share your goals after talk Talk to me the pros and cons of sharing your goals ahead of when you're going to do them versus It's a great question. Um I say So, I think of this is like does sharing the goal There's two components. So, one is earliest two components that I think of, which is does sharing the goal increase the likelihood that the goal occurs?

45:49And the second thing is does sharing the goal give me some other benefit? So, I think Babe Ruth calling a shot and then hitting the home run accrues a benefit to like for him calling the shot. If he had just hit a home run, no one would remember it. And so, there's other benefits. Now, does him calling the shot increase the likelihood that he hits the goal? On one hand, maybe his adrenaline spikes cuz now he has way higher stakes. On the other hand, maybe the pitcher pitches a little bit nastier, too. Um and decreases the likelihood of it. So, there's a little bit of you know, there's there's multiple variables to play. Um but I think that if I shared all the goals that I have around it, um I don't know if it increased likelihood.

46:27And for me, even if it's a null outcome like it doesn't increase or decrease, for me it would take this take the spot of a different messaging that would increase the likelihood. And so, by default, the opportunity cost of the head space that it would take up to talk about it in the prospect of the audience's mind is not worth the real estate. I'd rather fill it with something that's more salient to them.

46:52I know you hate the word manifestation. Hate it. Yeah. >> [laughter] >> Well, the word I've noticed is >> was to re- if I was to re-fact and I agree with you just for the record. If I was to repackage it into visualization Sure. and also comma and also bring up the fact that Michael Phelps visualizes, Michael Jordan visualizes, people that have accomplished great things use this tool of visualization. Is there room for visualization? So, I think visualization and manifestation are different. So, we I would have to define the terms, right?

47:23So, like and I've had a really tough time. So, I've I've probably gotten in a handful of like heated heated discussions about this. But I've yet to have anyone clearly define manifestation manifestation for me, which is why I I like manifestation to me, as I define it, is a word that people say to other people that gets them to nod and give them approval for saying the word. And so, >> And not and also not take the action that is required to actually get that outcome.

47:50>> and that's And now, some people then go to, "Well, you have to change things in your mind before they, you know, occur in reality." And then I would just say like, "How do you know that?" >> [snorts] >> And what What can we observe, right? So, I just focus on the observable world and I pretty much ignore everything else. And it's been one of the most useful razors for honestly predicting reality much more accurately. It's like evidence-based versus not. >> Yeah, of course. And where does visualization obviously you could probably run a scientific experiment, but it it's not very evidence-based. Is there So, that's a tough one because um I I I do think that there's a decent amount of evidence that like you can like like if you practice free throws in your mind for like two hours and then you do it, yeah.

48:34>> There was a real study on that. >> Yeah, and your your percentage go up. >> Yeah. Um and by a by like almost more than if you just do like it's and when you pair them, it gets it gets crazy. And the visualization exercise, I think, is really interesting, especially for like athletes, because you have no joint wear and tear. And so, it's risk-free upside. So, I So, I again, I'm I'm all for that. Now, me telling someone, "Hey, you have to visualize."

49:01How do I know they did it? How like So, this is where I get into like I just try to focus on the things that I can see. And I'm I'm trying to think like in what in what context would I say visualization is the thing that I would tell someone to do. Because they're not going to change reality until they interact with reality. And so, that's why I just focus on that. So, like did visualization help people?

49:28Sure. And they still had to pick up the basketball and they still had to go do free throws, too. And so, I think that's the that's the the yin and yang of it. But for me, purely on what we can see, and I think it makes conversation so much easier. And um I do owe a disproportionate amount of I think the accolades that I receive um for content and whatnot um because I exclusively focus on that. And so people say things like "Man, your content is so digestible.

49:57It's so easy to understand." It's because I just eliminate everything that is not observable. And then it becomes very clear. And that I mean that's the thing. It's just >> repeatable. And people use words. People use words that other people don't understand. People use words that they themselves don't understand. And so it's like if we can't even define the terms that we're talking about, what are we doing? We're just making noise at each other. And then one person nods, the other person nods, neither person knows what they're talking about, but they've been rewarded for nodding and talking and making noise at one another for a long time in their lives, and so they keep doing it. And that's fine. But it doesn't really change behavior.

50:25And so I'm very obsessed with what changes behavior. Because if I change behavior, then I change what happens in reality, and that has a high predictive function. Which by the way circles back to what we were talking at earlier, which is if you hang out with you and watch you do content, you may realize what you thought was working hard on content is orders of magnitude away from what you're actually doing. >> You can't witness it. That's That's That's what's been That's what's difficult. It's like I can say So there's a video that I'm putting on one of the pages for the book. Um kind of like marketing pages and whatnot that I've now done nine times. Um and we have edited three versions of it.

51:01Three like I've done nine full recordings of it. We've edited it and had to edit it from scratch three times. And I saw the ninth version, and I was like, "Ah, it's missing these two things." And so a lot of people probably would ship it, and it probably would do fine. But again 2% on a million people is a big number. And so yeah, I think I think that's that's the part that people don't say is being willing to do it again. And that's intuitive kind of the 2% multiplied by millions of people. It It's a real number.

51:32What maybe not as intuitive is why there's these zero-sum dynamics in some of these industries. In sports, there's one champion. You know, Olympics there's one Olympian. But you seem to think that there's kind of this winner-take-all in in many of the things that you do. Why is that? I think in >> [sighs and gasps] >> I think it depends on goal size. If you want to, you know, make a million dollars a year as a lawn care person, you don't really need to worry about your competition. Like you just need to go find 200 houses that'll pay you whatever the math is to get a million dollars a year. Like it's not it's not crazy complicated, right? 400 bucks a month.

52:08Um but in the OpenAI world, right? Like there's probably going to be one model that ends up, you know, winner-take-all, or it'll just be like Pepsi and Coke. But there's there's not going to be a ton. Um I don't know. Like I guess if there's a network, you know, effect that's going to occur, then it makes sense to kind of like get market share. Um I guess in the marketing world you could call it maybe attention share.

52:34But the So there is a fixed amount of attention um like in the world. Take 8 million bill people times 24 hours or times the number of hours they're awake. Like there is a There is that much attention, right? And I think technology has just increasingly put adverti- has stolen attention from IRL. So you know, in real life things like friends and family um and put it in a place that you can advertise. Um and so from that's what I think from an attention perspective there. Like there is Do we know what that number is? No, but it there is a fi- there is a number and it is finite.

53:06Um and so does somebody watching my video preclude them from watching your video? No. Because they could watch both videos. But if they only have an incremental 10 more seconds that they're going to watch one business clip then in that instance the person who has right. And so that's that's kind of how how I think through it overall, but I just I think about a lot of life in in percentage like like goods. How how likely is this this is equally as likely that this thing that I want to have happen occurs. And so that's that's basically all I do is I just try to make bets.

53:41Looking back reflecting on your career and your inputs and your outputs, do you find that if you would have spent more time on the things that did really well, they would have done even better well, or would you have more diversified your time and effort into different projects? Man, that's a really interesting question. So like the the biggest mis- like the biggest financial mistake I've made was I So I had Gym Launch um and I started uh this company called Alan, which was a software company that did did lead nurture before all the AI stuff. And so it was just like decision trees on response responses and things.

54:17If I had not done that and simply made a CRM for gyms rather than a lead nurture software for gyms, that company would have sold for half a billion dollars instead of 450 million dollars. And 46 to be exact. Um I that was the biggest mistake that I made. Um but when it comes to like would I have, you know, gone deeper on one thing versus spread out, it's tough because I can't play out the other the other side, right? Like if I had never diversified, maybe I'd have 500 gyms right now. If I never got out of the first thing that I did. [snorts] It's possible, right? And like maybe with 500 gyms depending on how profitable the gyms were, maybe I'd be richer than I am now. Um I don't know. Actually 500 would be tough. Maybe 2,000 gyms by now or like some some some monstrous number. Um so I think the difficulty is like we can't play out the other the other the other way.

55:11Um what's been unique about the path that I had because it's been so defined by my ADD, which is why I'm so focused why why I talk about focus so much. Um is that like I've had a B2C business like direct you know, I've had a service business that was brick and mortar. I've had an online service business. The first business I had was an online online fitness business that I then turned into in person. I have had a physical products business was which was B2 B2B2C. So I had to manage both direct-to-consumer you know, media buying and ads and also have kind of a wholesale distribution to brick and mortar gyms. I have had, you know, B2B SaaS um with Alan. I've had um B2C SaaS or prosumer with School. Right? Um I have, you know, the the investing side. And then from the exit side, it's like I've sold to a competitor, I've sold to a customer, I've sold to a partner, I've sold to private equity, I've sold to um uh I've sold to friends. Like I've had I've had I've I've done seller finance deals, I've done cash deals, I've done uh you know, leverage buyouts. I've done like so this this very weird It's kind of like calligraphy for Steve Jobs. Like that became, you know, key to the Macintosh and kind of their whole vibe.

56:22Um but for me all of those experiences have made me exceptionally good at what I do now, which is I talk about business. And so me being able to talk with like good depth on each of these things cuz I founded and started and scaled almost all of them. Not School, but like um those companies and deeply involved in them I have a I have a very good understanding of how these businesses work. And so that like maybe if I hadn't done any of those, the Alex Hormozi brand wouldn't be what it is today. And so that's why I have a tough time with like was it was it the right call? What's like I don't maybe maybe I wouldn't be doing what I'm doing now. And what I'm doing now has worked really well. So like I don't know. You know Peter Thiel says this is his number one regret Hm.

57:03in his investing life. What? It's actually not doing Facebook series A. He did the seed round. He was on the inside track. He didn't do series A. So sometimes really double downing double doubling down on your on your successes could could have really big returns. I think Munger talks about that, too. Um and I mean yeah, I think just like what's what's tough about um and I'm sure you've seen this, too, um is that like the best companies are really expensive.

57:34Yeah. >> [laughter] >> Feel expensive. >> exactly great great Yeah, great correction. Yeah, like the best companies feel expensive and still yield higher returns often times. Um and I I I have to be reminded of that sometimes cuz like the you know, I think a lot of in This is me, you know, I know you'll have a lot to say about this, but like I think a lot of investors who start investing their own money, you know, um they almost have to re- re- reinvent the wheel. It's like Warren Buffett talked about the cigar butt businesses where you just take your last few puffs and and they're, you know, wonderful prices and fair businesses. And then eventually you just get you you're like, you know, this is not worth it. Like we can get even better returns and less headache if we just buy these, you know, wonderful companies at fair prices or even what feel expensive, right?

58:22>> Um and so I've had I mean I feel like I'm still I'm the game's long, so I'm not saying I'm I'm I'm developed there, but um I've had to I've had to learn that the hard way with just some of the cigar butts fall in your lap, and you're like, "Ow, that hurts. It's still lit." Google Ventures, this was like a decade ago. Google's venture arm did the study on what drives returns. One of the biggest signals that they had was when a round company was priced at a much higher round than the last round because it felt so expensive, and yet there was a new person.

58:52And even when the insiders were the ones leading that round. So the insiders had this like there's this friction of increasing the price, and yet if it still got to that price, it was still probably underpriced. Right. Because in um I think Thiel talked about this, but it's like typically if a company does have this material change, let's say in like 6 months, I think PayPal had like a 3x or a 5x or something in terms of a change in valuation. He's like, "Well, it's because they like materially changed the risk profile."

59:19Like there was some big thing that they were able to solve. And so if you have this, okay, I think this is a 10% likelihood outcome of getting to a billion-dollar company, and then the big thing that takes away 40% points there is that there's a network effect that hasn't really caught on where people are sharing you know with each other. You figure out you know your viral coefficient in terms of virality. It's like well if you get that right then it's like well boom we go to 50 then it makes sense that even though the time duration has been small the problem was still solved which is the thing that created the discount for risk.

59:55That it's just like it's just you know we all are like it's not fair that 6 months ago I could have bought this [laughter] for but actually it is fair if it was much more risky. If it was much more risky it's actually extremely fair. Exactly exactly it's totally fair. It's just the emotion there's regret. And then you like don't want to you're like if I buy it now then I'm if I buy it now I'm an idiot for not having bought it. Yeah you have to acknowledge your mistake. Yeah exactly.

1:00:21So now you just hope this thing dies so that you so that the first thing for when now you hope it dies because you missing out when it was 1/10 the price doesn't feel like it's big of a mistake. One of the interesting things on Facebook the way that it all came together from investor standpoint is Peter Thiel and Reid Hoffman who started LinkedIn and Mark Pincus from Zynga. And they had almost like this mastermind they would sit around talk about social networks. I think Reid Hoffman started outside of LinkedIn also started another one that before wasn't successful. And they were in the small room of people that ended up being so huge in the space.

1:00:57When you think about building out your peer set in your mastermind group. I know it's kind of a hokey word mastermind but how do you look about you know your your peer group and how do you build that out and tell me about your strategy there. I would say [sighs] it hasn't been super deliberate. I would say that a lot of it has kind of happened organically pun intended with organic organic growth.

1:01:24I would say we sit at this really interesting intersection between business and content which is cool right which is like okay there's this creator world over here and then there's this investing money business world over here and so finding people that are on either side of that cuz like in this room it's like I don't talk about clicks in YouTube and retention curves and whatnot. And then I go into this room and I'm not talking about you know return profiles.

1:01:48But I think understanding both worlds gives huge alpha on both sides cuz everybody on over here in the creator world it's like man I just don't know how to monetize and everybody over here is like man I just wish I could have way more deal flow. >> [laughter] >> And so it's like marrying those two creates a huge you know creates huge benefits on both sides but in terms of I'd say my my you know I'd say it's less about masterminding and more like if there's IOU's that I can collect for the future I'll do it if I think that I might I might need or want to cash it in later. And so it's like if I can help somebody out I tend to have that slant of like I'll help if I can because you never know when you'll need some. And so I just try and like dig the well before I'm thirsty. And I would say that that's probably been the the strategy that I've used for the vast majority of my my career just like give first as much as I can because those IOU's have been incredibly valuable for me at in times of need.

1:02:47But like what am I basically who am I actively like recruiting in my my head right now? It's not a lot. I would say that I'm I'm trying to get more into the tech side of things because like these two sides I feel like I understand okay. And that's you know with all the AI stuff that's going on right now I see that as some deficiency. Like I'm not deep in you know what I mean like I have the same Yeah yeah exactly I have huge ignorance debt. And so I'm just trying to pay it off. Even deep in the industry have ignorance debt and they most of the people don't know what's going on and they're all running around and then if you're not in the industry you're For sure and yeah you're for sure you're like I mean no I I I use chat GPT right of course right it's like um Yeah I I try not to think about that too much cuz it makes me depressed.

1:03:34>> [laughter] >> You're the most methodical person I think I've ever observed or looked at and then you said your networking strategy is you know I like to give and do IOU's and see what happens. So double click on your strategy there and tell me about your thinking I'm sure you've thought deep on this. What's your thinking in terms of the give and take in in interpersonal relationships? >> So I would say that the the earlier on in your career so this is me going to the audience more but like the earlier on in your career the more generalized you should be in your giving because the variety of things that you will need will be very diverse in the beginning.

1:04:10Yes. And so you just want to give to as many people as you can. At some point you will exceed your capacity to give and then if you gain skills then people will want you to give to them which then means you start to shift the supply demand curve in your favor in terms of favor giving and favor receiving. And so like when I remember the first or the second the second kind of like peer group that I entered I actually won an award they invented an award for me which was like member of the year. And it was because I I met with every single person and was just like hey I'm really good at these three things I can help you with these two things. And so I would just do that which at the time was just like sales and marketing. And so I would just be like cool I'll help you with you know build a sales team or help you script this out or help you you know put the sales motion in place with this process.

1:04:56And they'd be like can I do anything for you and I'm like honestly no but I'm sure like I'll need help with insert whatever thing that you're good at at some point in my life and you know you know maybe I'll hit you up. And a lot of the businesses that I had like when I do those like deep dives in industries I'll call up somebody that I talked to 5 years ago that I did a favor for I'm like hey man you got an hour I just want to understand more about this particular thing that you're involved in. And they'll give me a huge amount of information really quickly. And that's because you gave them something of value. It's not because you tried to give them something of value.

1:05:26Yeah tried versus actually yeah for sure yeah. I think even trying still buys you something. Do you ever remind them what you did for them? So they they basically subconsciously have already integrated that that you've provided value. And I will so this is me just being transparent between different stages right so like in the beginning I had nothing I had only the only thing I had was skills I had very little money and I was just like I'm good at this and so that's that's what I gave. As I became more materially successful in business people wanted to talk to me in general just cuz I was pretty good at you know stuff that they wanted to get good at. And so I guess the level the level set of the skills kind of kind of increased.

1:06:03But and so not to contradict my earlier statement but like I think where I focus my attention now is like pretty narrow in terms of the people that I will regularly interact with because the it's like the path that I like I have I think to use in a ball it's like I have significantly less exploration now and significantly I'm on I'm in exploitation mode. Like I know what I'm good at and I'm and I'm pretty clear on what the path is ahead. Right there's there's some there's some degrees of variance but it's still super narrow.

1:06:37And so getting even better at what you're already doing. If I like right now it's like if we have called 15 or 20 million whatever it is you know followers across platforms that are in business it's like well if we get to 50 then that'll be better than 20. Well there's 32 and a half million in the US and that's if we define that as people who have an LLC. But what like my audience right now is I think 55% XUS so non-US.

1:07:02And so take the rest of the world there's a huge a huge amount of people there. So I'm obviously cool with with sticking with US and English speaking for now but we'll probably quickly not quickly but like probably in the next quarter or two we'll be transitioning to everything will be all languages. Yeah and AI obviously enhances that for sure. I'm guessing you're not learning 10 different languages. Actually I'm really curious your take on this so like I have held back even though like the tech has been there for probably two quarters for us to do the translations and dubbing in in different languages globally especially on like YouTube we can do it all.

1:07:37I haven't because I actually don't want deal flow from countries from people that I don't speak the language for. Now maybe the 2.0 version this probably me being short-sighted but like the 2.0 version of this is like we're both talking through AI mics to one another and we're both listening and you know in in our own languages and whatnot but I just haven't done any any international deals. And so that's why I haven't I haven't really pushed it. And also it's not like we can you know give them services in a language they don't understand. You know what I mean? So that's that's why I'm curious to your your take on that. I think it makes a lot of sense. I think also one of the areas that AI is going to really help is is deal flow analysis.

1:08:18So you're going to be able to if you don't already you'll be able to to process hundreds of thousands of deals to find the one or two that matter. That being said you don't want a market a product in the market that disappoints 99.9 to the 12th power of your audience. So I think I think that makes a lot of sense. But that's interesting. Yeah the to your point though some of the AI stuff it's like like resume like resume screening right like such a like you just upload job description and say here's here's 500 resumes tell me which one or the ones that you would select and then what questions would you ask these people.

1:08:54And it's exceptionally good. I I want to put a cap on this giving and taking cuz I think you're really good and you have been very giving to me. I just want to understand your strategy and what are some of the mistakes that you made. I'm sure you gave too much to somebody or you made an ask too quickly. Like what are the best practices there? You know I actually don't think I've made an ask too quickly. Um I maybe I tend to be like too ask insecure of like I want to make sure that there's I leave no doubt. Yeah I leave no doubt that I have I have given enough here that I can make this small ask. Um Yeah.

1:09:33You know, I would say that honestly one of my one of my best skills has been that. It like you know, I've never actually identified that um until like this moment right now. But it's probably one of my one of my strongest skills skill sets has been knowing when to invest and when to pull back in relationships. Um And people will probably see me as transactional. Um I just believe everyone's transactional and some people are just better at defining it.

1:10:02Um fundamentally like you if you have a like if you have a relationship with someone and like man, we you know, we used to be homies and I you know, I got to be loyal to that. To me translate that into human behavior is I have a history of enforcement with this person and I have a belief that that that that reinforcement will will return on a long enough time horizon. And so I'm willing to incur some cost in the short term and obviously the relationship they've had the strongest and longest periods of reinforcement for like a spouse, you're willing to give longer periods of time where things suck in order for things to you know, come back to being good or different.

1:10:33>> Or the payback is your ego of being somebody that never defriends your homies or is always like friends with the same person. >> True. True. >> That's your payback. Yeah. You you get to see yourself as such a good person. >> Totally. Yeah, you get to be an idealist. Um I got a definition for you. So I call a friend somebody that provides more value than he or she detracts from you in your life. Yeah. So A lot of people don't fall into that category for many people that they >> A lot of people don't fall in that category and also it's also two two-sided. So you could have somebody completely crazy Yeah. that you would never even want to associate yourself with Yeah. but that's comes through for you when you need them. That's a friend.

1:11:10And somebody that's there every day and just like you know, making you depressed and you've known for 30 years would not be a friend. >> No, no, this is really good. And what's interesting is that if you if if if you keep a relationship, right? Then it means you are you do have reinforcement from this person. The question is what are they reinforcing? Mhm. So like maybe you hate being alone. Mhm. And so even though you don't like being with them, you prefer being with them than you prefer being alone. Or um to your point about the like you have some story that you tell yourself about how you are X person and you get to tell yourself that story over and over again every time you see this this this friend. And so this person having this relationship serves you in some way and it's usually just not in the way that people expect that they're being served.

1:11:51But to the to try and put a nail on the on the original thing. Um I think one of the big like I I I wish I I I wish I knew where I read this, but I remember being completely uh engulfed in this game theory book about basically the prisoner's dilemma where they they played out different give take strategies within the prisoner's dilemma.

1:12:15And they proved that the best give to take ratio was eight eight out of 10 give to take. Cuz if you're 10 out of 10, you get walked all over, right? And if you if you're on the other side >> So eight give two takes. Yeah, basically. Mhm. Um and and even they even went so far as like it's eight out of 10 and they factored in forgiveness and learning between all the players with the different give ask ratios. And so it was like um somebody who learns um but does not let someone wrong them Yeah. at an eight out of 10. And so it's this really like it's pretty precise in terms of and I think the the the reasoning behind it cuz they put wrote this whole thing about it was basically the eight out of like you have to give first most of the time because that's what opens up doors of opportunity. If you're a tit for tat or so the five out of 10 like give and take Wait for the other person to give and then you give back.

1:13:06>> Yeah. Those people don't get nearly the exposure of the eight out of 10 people on the givers because they open up so many more doors by giving first. The never askers just never they never benefit, right? And so there's a there's a sweet spot which is disproportionately giving, but you still have to know when to ask. And um I think this is really this is I think about this a lot because this it's it's actually very akin to people who get good at saving saving money just in a basic term withdrawals and and deposits, right? Um there's I call it the fallacy of the third marshmallow. So in the marshmallow test, you know, they they have you know, take one now and take two two later.

1:13:44People have this um uh pathology where they believe that if I wait forever, I'll get a third marshmallow like an even bigger out outcome and that's not the truth, right? Like there is a point in your life where you should start spending more money than you make, which is frightening for high achievers and earners who've spent way more time always earning more than they spend, but it's like okay, then at the end you have this big big pile of crumbs as an ant and then you die. >> [laughter]

1:14:10>> And so like you didn't get any of the So there is this sweet spot obviously it's difficult to get to um to balance that cuz most people don't even know how to like save, so it's like So this is only for high achievers that I'm talking about here. Um but I have had so many doors in my life and so functionally what I think organic content did for me was it allowed me to do that at scale. With those So as I as I prior to making me making content like Layla existed in my life to be the yang to my like yin of give first. So she was like, you just like Alex would be nonstop just like let's do do this dinner. Let's do like let's let's let me I'm going to hop on the phone for 3 hours and help this guy redo this thing. I'm going to I'm going to help this guy with this whatever whatever the things were that I was trying to help somebody with, I would just always do that. And she would be the one who is kind of like and that's why I think Layla and I have been such a good partnership.

1:15:00Um and she'd be like, I think you're about to get taken advantage of here. I think you're I think they're just they're just using you at this point. Um and so it was right that she would kind of pull me back. Um but as soon as I transitioned into making content, um that allowed me to it's the same energy for me. Like me making content is the same energy as what I used to do for one person. All that effort and for like helping someone solve a problem, I now just do that same thing and then just many people benefit. And so that's where the huge leverage on giving You've instead of fighting your your intrinsic traits, you've weaponized it into scalability. One on one and then so that like

1:15:38>> It reminds me of a uh quote that Naval says. He says, my brand is my value add. Yeah. He'll invest and you'll say, my value add is that Naval Ravikant has now invested in your business. So for you your brand is your value add. Yeah. And and your and your content is your value add. Yeah, and ideally you know, someone's had such a you know, strong history of reinforcement from consuming stuff that and using the stuff that I gave them that I'm already in the green. Yeah. If they do a deal with me, they're like, you've already paid for yourself.

1:16:07>> That's surplus. Right. >> Before you've even talked to them in real life. >> Exactly. And so um my cool giving strategy, I know this is probably deeper than you expected, but um it was actually a awesome question cuz I hadn't thought about it. But my strategy has remained the same. I give to as many people as I possibly can. It's just that as soon as technology and distribution came to play with media, I was able to put that on absolute steroids. And so I do I do significantly less these you know, what I mean like um like

1:16:34>> one. Yeah, and those those ones are >> But there's also the audience. >> Yeah, yeah, exactly. That's what I'm saying like so it's like it there's still you know, there's still an excuse, right? Um but if but that's but if I'm if I'm going to choose at this point and I'm sure you have the same issue which is there's a supply limit of your time, right? There's just a such a limited amount and as supply sorry, as demand increases the supply is fixed. And so it just becomes so so so precious. So you have to just almost be path You have to completely switch, which is which has been tough for me, but I have learned it is you have to almost pathologically say no to everything. No is the default. How many messages are inbox? A lot. I'm always very conscious to text you cuz I I feel bad cuz you probably have thousands of messages. No, but what's where where it gets when you take it to the national extreme is like you don't actually owe someone a response.

1:17:24Yeah. Just be like Especially since you've already given them so much of your content. So it's not that they haven't done anything for you. It's that you've already done so much for them. Just the time. Like if I So right now I probably get somewhere in the neighborhood of like a message every like 3 minutes. Um across social media. It might be it might be higher. It's probably in that neighborhood, right? And so like if I were cuz I remember where um I I think it was right after the book launch the the yeah, right after the book launch or or my offers book I had maybe it was the offers book came out. I manually DM'd anybody who who tagged me in the book and I said, could you please leave a review?

1:18:02And Manually being you did it. >> Yeah, I yeah, I did it. And I remember finishing my inbox and then the responses from the people who I DM'd plus the new DMs that had happened in that same period of time were greater than when I had started. Like it's like you have to paint the bridge by the time you get finished painting except it would be like the bridge now extends. It's like it was literally impossible for me to actually DM every single person cuz by the time they had responded, there was even more that I had to to respond to their response. So I had to just get uh I did it for 4 days. That's all I did. Um cuz I wanted to get off

1:18:41>> efficiency thing. It seems hyper inefficient, but yet it probably made your your book rise and it had some network >> to a few hundred, you know, I think it got to like 600 five stars within the first few days and I was like, okay, that's now it's an Amazon book that it doesn't look like it has five you know, Yeah. five star five stars on it. Um but all all that to say um in the beginning you have to say yes to everything and in the end you have to say no to everything. And so being able to manage that apparent dichotomy comes down to resource allocation, which is still the core entrepreneurial skill set. Like where is it worth it? What got you there here won't won't get you there.

1:19:18One one tip that I that I've learned and I I think I came up with this. I can't remember where where I learned this, but how somebody treats you in the first day, in the first week of how they when they meet you is how they will treat you over the next 10 years because it's not about you, it's about them. Mhm. Some people are naturally givers, some people are naturally takers. Yeah. Has nothing to do with you. They're formed individual. They might be a 30-year-old. They have 30 years of conditioning. Just because they met you doesn't mean you Yeah. you change their behavior and your your biology. So, I tell everybody notice how somebody treats you in the first day cuz that is how they will treat you for the rest of of their lives. And that that's very telling.

1:19:56That's super good. I'll give one more I'll give a tactic to that that I found is um never decline or cancel the first meeting. Because like you meet at a you meet at something, someone makes an introduction, you're have a text convo, whatever. And someone says, "Hey, you know, can can you meet at 7:00 or can we do this dinner? Can we do this call?"

1:20:20Things come up because especially a new connection is very has low typically has low-ish value to you as a person. So, like almost anything that could come up that is not that you probably might be willing to move the the call or the meeting for to take the thing that you know has more importance or whatever. I I have found that it's very difficult to get the second con- like the second conversation, the second meeting after the if the first one gets canceled for whatever reason, especially last minute.

1:20:50Mhm. Um and so I have like an increased priority on making sure that if I do meet somebody who's new and I think they're worth meeting, that that meeting takes a huge priority to one happen quickly and then second that it actually occur. Um and the flip side of that is that I'm actually willing to be very flexible for first meetings because I think that typically even just that one meeting it's like it transforms from being like someone introduced us to like we have had a conversation and I have a good feeling I have some feeling about this person.

1:21:19>> signal that Exactly. One way or the other. And even from one meeting I can I can probably call somebody up a few years later because like we had the meeting. If we didn't have the meeting, it's useless. Mhm. And so I try to prioritize that. One other kind of relationship hack that my friend Max who worked at Goldman for many years, he said, "Always be willing to fly out even if it's 3,000 miles for a single meeting." Yeah. And because it's that powerful. If it's important meeting, flying out and spending a day or two days it goes back to

1:21:49>> Yeah. efficiency thing. It seems hyper inefficient. But yet if you calculate efficiency as input over output, it's actually highly efficient. And especially because there especially there's the assumption that if I'm flying out I'm not going to somehow work on a plane when I >> Yeah. Which is like it's almost similar >> Or meet other people Yeah, some people like just choose to fly because it's the most efficient working. So, like it's really just the meeting takes the same period of time. Like the only inefficiency is the drive from the airport to the meeting.

1:22:15Like that's the actual only inefficiency in that in that process. And now I'm I'm so on board with that. You are one of the best communicators I've ever come across in real life or >> Thanks. on YouTube or podcast, etc. How have you become such a good communicator? Break that down for us. Um I I love that the response starts with um.

1:22:41Filler, filler, filler. >> Yeah, right. Yeah. Um It comes down to every everything that we've talked about, which is you have to define the terms. That's like that's really it. Like if we think about communicate like what is communication, right? Um so what is So what is the objective of communication? So, I would ask that and I'll

1:23:06>> To communicate Yeah, what what do you think what do you think So, what is the output of communication? If I were to ask you. It's interesting cuz when you say that >> Yeah. my head goes to two different things. One is sounding really smart >> Sure. Yeah. and very charismatic. Another one is transferring knowledge. Okay. So, so for me the purpose of communication is solely to change behavior. Mhm. That's it. It's only reason only reason that we communicate anything to somebody else is to change their behavior. Now, if we want to sound smart, it's because we want to change their behavior around how they treat us in some way. We want them to treat us like they treat people who they think are smart, right? Uh which elevated status.

1:23:41Uh on the flip side um what was the other one you had? So, one was the being smart the other >> was that being smart and the other one was transforming of Right. And so epistemologist on Yeah. And so if I if I want to transfer information, I don't actually want to transfer information. I want to get someone to do something. Mhm. Right? So, either of these situations is the purpose of communication is to change what they do. And so if if we if we know if we say that is the the point of communication, then being very clear about what I want someone to change makes it way more effective.

1:24:11And so you waste so few words when you're clear, which is what I want you to do. And so on the flip side, I listen with that filter, which is um I had a I had a meeting with a VC. Um so they're on the board of one of the companies that we're invested in. Um and they wanted to touch base. And I was like, "Okay." And I asked five times during the meeting. I said, "What would you like me to do as a result of this meeting?"

1:24:37And they're like, "Well, we just wanted to you know, just get your perspective." And I was like, "What is going to change about reality as a result of us talking?" And there wasn't really a clear answer. And that for me just drives me absolutely bananas. And so then I have to infer what I think the cuz obviously there is a point for the meeting. And so there you know, I'd be like there is a point. And there's either they're going to tell me or I have to figure it out. >> [laughter]

1:24:59>> Um but that's that's allowed me to um make such stronger predictions on on what someone wants from me. And also if I want something to occur, um asking like even as simply like if you have a if you have a an employee who's who've messed something up, right? The natural instinct is to you want to punish them in some way cuz you're just upset that they messed something up, right? It's a very human thing to do.

1:25:25But if I think to myself, "What would I like to have happen? What do I want to occur?" It actually fundamentally changes what I'm going to say to this person. I'll give you a perfect example of this. So, um gosh, I want to say 6, 7 years ago I had I launched a company called Done For You Meals. So, we had our distribution of gyms and I thought maybe we could do Done For You Meals. I partnered with a white labeling, you know, company that did it and then we launched it, right?

1:25:49So, this is a huge launch for me at the time and we had 4,000 gyms that signed up to you know, attend the launch. So, 4,000 locations saying that they wanted to to distribute meals is a lot of locations. Like that would have been really big. And so the day before the launch uh was supposed to happen, my call it my secretary sent out the text at noon saying we're live. 24 hours early.

1:26:13And so now all 4,000 these people are like, "I thought it was tomorrow." But people are like, "Well, they said they're live." And so they start hopping on this Zoom after like probably a million dollars in advertising and months and months of prep for this launch. And so um she's like, "What do I do?" And I was like, "You need to hop on the Zoom and you need to have a sign that says, you know, we messed up." And so people hopped on and were like, "God damn it." Hopped on cuz I was like just over and over again. And she just stood there with the sign telling people my bad, it was there tomorrow. And so after that, you know, onslaught, she um you know, I I I met up with her and she said, "Um don't worry. I'm packing my stuff. Like, you know, I'm I'm I'm sorry. I'll I'll I'll get I'll get out." And I was like, "What are you talking about?" And she was like, "Well, I'm assuming you're firing me."

1:26:59I was like, "Well, does this increase or decrease the likelihood that you're going to make a mistake again in the future?" And she was like, "Well, I mean I'll never make this mistake again." And I was like, "Right. So, you're technically more valuable to me now than you were before." And so I was like, "I just paid a million dollars for you to learn this lesson never make the mistake again." I was like, "I will always trust you with my launches cuz you will never have this happen [laughter] again." Now, if somebody has a history of many, many, many mistakes, which this person didn't, then might have been maybe different. But this one I was like I was sure that I mean she was hor- she was the type of person that would have that would she would like die of anxiety in front She actually doesn't I won't even get into it. But like she had huge anxiety gargantuan. Um and so thinking about it from that perspective, of course I was upset. But what is it It me yelling at her increases the likelihood that she makes a mistake again in the future because she's stressed.

1:27:48So, thinking always through that filter has has completely >> Double click on that. Why would that in- So, let's say there's a launch 3 months later. Why she Let's say you yelled at her the first time. Why does that increase chance? Well, I think that she'll just she'll just have increased anxiety and she already had too much anxiety. So, if anything >> Anxiety leads to errors. >> Yeah. Yeah, exactly. >> Why is that? Um that I don't know. I would just say that I've observed people who are very stressed out in like if you go on stage and you're very stressed, you do worse than if you're relaxed. I would say in general. And so people don't do as well when they have super high adrenaline. That would be my my pseudo-scientific I guess. Um but that has been my filter. And that has has led to like such higher percentage goal achievement and behavior change in the direction that I want.

1:28:31And so this also works with relationships. Like if you have your wife and it's like you're upset about something, but it's like does this increase or decrease the likelihood that she wants to talk to me? Does this increase or decrease the likelihood that she does this thing again in the future? And that has I'm telling you like that has been So, you asked the question of like why are you such a clear communicator or quote good communicator? It's like number one, I define communication as changing behavior. And number two, I'm very clear about what behavior I want to change. And I only think in service of that goal.

1:28:57And that's it. So, said another way, >> Yeah. what you say in a YouTube video gets people to change. And that ties it back to they're conscious of this. That ties it back to your content versus I might listen to somebody else and it sounds really smart, but it's not actionable and doesn't change my life as much as a Hermosi clip. And that's what you would attribute to your communication, not some kind of stylistic ways of talking or some rhetorical device. Maybe there are some.

1:29:27I would say they're not super conscious. I would say some rhetorical devices might be like alliteration. I know like if I can say something that alliterates it like people tend to like it better. >> Give me an example. Um shoot, I don't know. We just look at my Twitter. You know, like [laughter] but like if I say, you know, if say if you if you repeat words in a sentence or if you have, you know, flips of like um it's more sentence structure.

1:29:54It's not the X to the Y, it's the Y to the X. Right? That's almost always going to be something that's going to convert no matter what the the X's and Y's are if if the sentence still makes sense in both. So you like kind of look for those like isms that that make sense. Um words that are similar in nature, you know, exploration and exploitation. We've all talked about that. It's like he used those words because they sound similar and they sound start with the same letter, right? And so because if if it rhymes it means it's true.

1:30:22I'm joking, but like we do remember that, right? Like um and so where this gets really nasty in a cool way is that if you want to change someone's behavior, the most effective way to change their behavior is for them to think it's their idea. For them to think it's their idea means they have to remember it. And so by making things that are memorable, people will forget that you were the one who said it, but then they will think think that they said it and then they will believe it's true and then they will act on it. And so having rhetorical style increases likely that you change someone's behavior basically vis-a-vis that that pathway.

1:30:58Um so that's on the stylistic part, but I still think the vast majority of it to what you originally brought up is if I can give people clear instructions on what to do and then they do those things and they get the outcome, it will increase the likelihood that they'll listen to my instructions again in the future. And somehow their brains are are linking it. So the dopamines are getting released ahead of the time that you're even talking because the last three times that they've listened to you History of reinforcement?

1:31:26>> Yeah, history of reinforcement. So it's not really what you're saying, it's the history of providing value-added advice to people that basically makes people just encapsulate what what you're saying. >> I'll I'll give you I'll give you an example. So of I had this happen to me. So I'm not a huge I I don't I don't consume very much. We talked about this earlier, but I I saw this clip by Huberman. And I don't listen to much biohacking stuff in general, but he said this thing it was like how to get rid of hiccups if you have hiccups.

1:31:58And I watched it and I was like, huh, I'll remember that. And then I had hiccups like a month later. And then I remembered the clip and then I did the thing in the clip and my hiccups went away. And in that instance, in that moment, he gained influence over me. I am more likely to listen to something else he says in the future to solve a future problem that he prescribes a solution for. And that happens whether you want it to or not. That's

1:32:23>> What's even more nasty about that for you to even remember that clip? You already had some level of subservience or status to him speaking. Enough to try it. We we have a there was a study at Queen's University. We have 6200 thoughts per day. It's a lot of thoughts. >> be there's there's this old tale that's like 60 to 80,000, but 6200 per day. So we and we forget almost all of them. >> Yeah. So you don't even remember all the thoughts that you forgot. So the fact that you even remembered to try it itself there was status and then and then you were reinforced. Yeah. And so so functionally that is all I'm trying to do within a very narrow audience of business owners.

1:33:00Which is if I can give and this is where it separates from I read this book, I thought it was good and I read Hermosi's book and it made me this much money. That is what I'm going for. And if I do that like there's I think it was Boardwalk Empire. Um he says uh nothing says sorry like money or nothing makes friends like money. I can't remember what the saying was, but I just I remember hearing that and being like that's cute. I will remember that. And so it's like, well, what do most business owners want? Well, most of them want to grow. Most of them want to make more money. Well, why don't I just give them instructions that I think will increase the likelihood that occurs. Now when I do that over a massive population, there's going to be a good percentage of people that will be better off from directly following that thing.

1:33:39Like I think Martha Stewart was one of the most influent or was the first female billionaire self-made because of the nature of her content. So the reason that entertainers have significantly less influence than educators is because entertainers never give you anything to do. They just distract you. The point like what is >> let you disappoint yourself. >> Right. What is the output of entertainment? The output of entertainment or what's the point of it is to continue to be watched.

1:34:05That's it. The only point of entertainment is to be consumed. Now the point of education is to change behavior. Now can these two things occur at the same time? For sure, right? Like if you watch the Avatar movie, plenty people at the end of the movie felt more green earth and might have, you know, changed their changed their behavior. So in that instance it would have, you know, it changed some some some percentage of the population. But if you are a pure educator, then you gain more influence because you have given people instructions, they have followed those instructions and they have improved their lives. And so when they want to improve their lives again and you give them instructions on how to do it, which might be buying your thing, they're more likely to do so.

1:34:43And so that is why these you have these massive TikTok accounts, you know what I mean? They have 20 million subscribers and they launch a popcorn and no one cares. Whereas you have this micro-influencer, I have this this this lady that I met 5800 followers on Instagram. She only makes content about how to more effectively bill insurance as an RD, registered dietitian. That's all she does. She just talks about how to better bill insurance for registered dietitians. For 5800? Yes, 5800 people.

1:35:15And she's doing three I think it was it was one or three million dollars a year. I can't remember, but it was between one and three million dollars a year in that business. With 5800 followers exclusively sourced from her from her Instagram. And so you say that to like an entertainer plenty of entertainers have a million, two million, five million followers and barely make a million dollars a year. She has 5800 and she's making over a million.

1:35:39And so to me that the difference there, the differential is just influence. Now does it make sense for the, you know, the the the Logan Pauls and the Mr. Beasts to have you know, these brands that then, you know, they confer some some status to whatever, you know, companies. I think the greater value is that they get ex they increase exposure to the product. And the more quote on brand it is, the more similar it is to the things that they have reinforced their audience for, then the more likely it it works.

1:36:10Um but this is something that I think a lot I mean, obviously I think a lot about it. Like why do some entertainers' products bomb and other ones succeed? To me it comes down to this. Let's say you want you needed to start a YouTube without your face. You had AI replace your face with just some random person nobody knew. How long would it take for you to reestablish and to get rapid fans for that? I think it would still work and I actually I just It was so weird you you asked this. I was thinking about this this week.

1:36:44Um and I have proof that it's not because of my my dashing good looks and my high my high sense of fashion. It's because like when I started my first book that I wrote, 100 million dollar offers, I had no virtually no following. Um I had enough following to make a post to say I wrote a book, go check it out. Um but then that book every single month sold more and more copies than the month before.

1:37:08And that was before I had an audience before I was making content. And so it was the quality of the ideas. It was book. They didn't even see me. It was just text. Right. Um the quality of the ideas, the quality of the communication is what people were attracted to. >> People read it applied it, got results, told their friends. >> Yes. And to this day offers still continue to sell more and more. And the brand was actually the book. It wasn't even human.

1:37:33>> People don't know that. Yeah, I start I'm I'm a writer first. Like X is my is my So all content that you see from the Alex Hermosi brand is written first. So like this is going to get wild. I post on X probably 30, 40 times a week. I post all the time. From the posts that do well those become shorts that I then say those those tweets.

1:38:03They become carousels that are just different versions of the exact same tweet. They become the captions of all of my images. And so if I have a one tweet about friendship, they'll just search friendship of my you know, 6, 7,000 tweets that I've made and they'll just find another friendship tweet and post that as the caption. My LinkedIn is multiple tweets stringed together. Just in longer format. My YouTube videos are like 20 to 30 tweets put together that are high performers.

1:38:32>> Package 27 >> transition lines. 100%. 100% that are transition lines. Every single thing that comes out was started written first. They're like, how can the like how have you been able to get so much content out um when you are like don't control it? Well, I have one pot that I put my my effort in, which is X, and then every that feeds literally everything. >> goes in and repackages. >> Our paid ads are my organic content that are high performers, which came originally from Twitter.

1:39:01And then or from X and then we just staple CTAs on the end. And the principle there is that if the atomic unit of the tweet is good, Putting them together will create >> 100% something even better potentially. 100% >> you put in a bunch of lights and a bunch of crazy graphics and it's going to be even better. >> What's interesting is that it doesn't work in reverse. So, if you have a viral clip, and then I take the transcription, and then I post it, it it may or may not do well cuz there's so many other variables.

1:39:28But, if the foundation lead of just black and white text, the idea, the words are interesting or compelling, or clear, you can do it in another format and it works. When you have an original idea, how much of it is something you've heard before, said other what what words are is there such a thing as a truly original idea?

1:39:52I would say that the the majority of my tweets come in response to things. So, either it's something that will come out organically, like we'll have this conversation and my team will be right there and they'll be like, "You said these three things, we wrote them down for you." And then I'll just tweet those out. Um or I'll scroll, I'll see something that'll trigger or some sort of like, "Well, that's retarded." And then I'll basically tweet a response to something that I won't call out. Um and so that's why sometimes my tweets are emotionally charged is because like they're typically me responding to either something that happened, uh you know, like somebody shows up late and says something and I'm like, "People want to get these cuz like I'm like, this person wanted a promotion and he didn't show up you showed up late to a meeting." I'm like, "What are we talking about here?" Right? So, then I probably have some, you know, triggering tweet about being on time and how they people don't even do that and they want the world, right? Um and then that would probably get some people upset on LinkedIn and then they're like, "You should You should, you know, whatever."

1:40:44And so, that's um that's the core of how um everything that I have is spread. But, to loop to the original of like, if I had a faceless account, um would it work? I think so cuz it's the ideas. And clarity of communication to your point. Do I think it's original? No. I think the thing that makes the content maybe slightly more uh slightly differentiated from other people's um is number one is I always try to state the facts and tell the truth.

1:41:13And focus only on the observable. And I talk in terms of behavior. And so, the nice thing is that if you have those two filters and you apply it to all content, you can filter out the vast majority of content because it's mostly noise. People just likes quite literally know people just making noise with their face. Uh and just saying words that they've never defined. Um and telling and not telling people to do anything. And mostly entertaining when they think they're educating. Um and so, it serves as a as a wonderful filter for uh consuming information. But, in terms of dispensing, the word concession becomes so much tighter that the quote value per word or value per second goes way up because you actually can do something with this.

1:41:51One of the topics you talk a lot about is doing things that other people may not approve of. Yeah. And now with your social network, you're around many billionaires and you get to observe them. What is something that billionaires do that would surprise the majority of the population? Um >> [sighs and gasps] >> I don't know if it would surprise them, but it might I guess it would probably be jarring for many of them um in in close quarters is they would probably be surprised by the level of agency that billionaires will demonstrate. Like they're almost all of them are just they they come up to their own conclusions on their own and if everyone disagrees with them, then great because they got there by disagreeing with the masses. And so, like you can't have an exceptional outcome and also do what everyone else does. Like it's they're antithetical.

1:42:39Like you can't. >> Mhm. And so, you're you know, kind of by definition going to get people who reason for themselves. And I think that that's like it's such an it's such an under-appreciated and underestimated component of success to get outside returns. You can get you can get beta, right? You can get the normal returns. And I say not just from an investing perspective, but just from like a life perspective. If you just like like get life beta, right? If you just follow the norms, like you will get a normal outcome. If you don't want a normal outcome, then by definition you can't follow the norm, which then means that you will be uh you will be an outcast. You'll be in the out-group. You will be not the norm.

1:43:17Um and then people have to in some way resolve that discrepancy. Um or that apparent discrepancy. And so, and the more outsized the return you want, typically the like almost like the more um willing to disagree or, you know, willing to disagree with with comment with convention you have to be.

1:43:41And so, I would say that that's probably the a huge through-line for all of them. Um Beyond that, um they focus on leverage. Focus on what they're going to get, you know, return on time. Return on effort. I see that as a a huge thing. And if you are able to make decisions for yourself and get the highest returns possible, which is only enabled by making decisions for yourself, then you typically get better returns than people who don't. I've interviewed now eight billionaires. I found two two necessary components. One is going non-consensus, doing something away from everybody else for many years Yeah. typically. And two is some compounding. Either it's network effects where it's like Facebook every new user Mhm. or it's a marketing advantage or

1:44:25>> Mhm. some financial advantage. So, it's literally like running in the opposite direction. Everyone's walking in one direction, you're not only going in the opposite direction, you're You're all in. like 90 mph and everyone's looking at you like you're an absolute maniac. No, but and I think And and for like nine years and people I think that's one of the things people do not realize how painful that is for nine years. This is why I think that first point that you made and I just made about like being able and to buck consensus or reason from first principles reasons for for yourself is that if you only believe what you believe or act in the way that you act because of other people's approval or it was because someone else's idea, it's very difficult to maintain conviction for an extended period of time. And so, if you find yourself waffling, it's simply because the ideas that you're adhering to are not your own.

1:45:13If you if you derive something from zero and built the foundation of whatever reasoning you have for whatever outcome or conclusion you have, and you believe in all the math or, you know, the reasoning that you're you're basing basing the the decision on, if so if someone just if the whole world shouts at you that 2 + 2 was 5, if you're like, it's here I mean here's two bottles and here's two bottles and one, two, three, four, like that's what it is. You're and if you know that there's a big pile of money if you're right on that, then you're almost excited that most people don't agree with you because you're like, it's just going to mean a bigger pot at the end. And so, I think that it's so difficult for most people because thinking is very hard.

1:45:53It takes It takes effort. >> You almost need to create a bunker of like-minded people that believe in what you believe and you could basically like stress test each other's theories or have somebody stress test and then be like, "Are you seeing what I'm seeing?" Mhm. Oftentimes we have the same thing. We're emerging media and limited partners literally trillions of dollars of people have gone on this podcast. We're at 5 trillion now. >> That's amazing. >> And now it's become a little bit more consensus, but in the beginning people are like, "Why are you running a media business? Why not an asset manager?" We were like, "This is that This is the right to win. This is a competitive advantage." So, it's it's even the most obvious things, if they're non-consensus, it could seem like you're an idiot. Yeah, you're like, "Well, explain to me how this decreases the likelihood that I get more deals." Yeah.

1:46:38>> [laughter] >> Or explain explain, here's my logic, poke holes in the logic. Forget about what everybody else is doing, but here's kind of my business plan. Yeah. And sure, like I want to actually improve. Which Where are the big holes here? Yeah, what assumptions Yeah, what assumptions am I basing this on that you think are wrong? Cuz there's obviously going to be some assumptions that we're not going to prove and so some of them are going to be wrong or could be wrong. And how wrong can I be and still be right? Um and how many of them can be wrong and I still be right? And so, I like we call them need to believe, but like if we have some big bet, it's like, "What are the need to believes for this for this to work?" And if we're comfortable with the like there's really only one need to believe and we we think it's likely, then it's like, "Well, hell, like let's let's push. Let's push our chips in."

1:47:21>> This rooting of conviction I think is the most underrated thing one of the most underrated things in investing. The joke is people ask when to buy, they never ask when to sell. Yeah. And I'll give you a good example. Let's say your friend told you to buy Bitcoin at $100 a decade ago, you probably would have sold it at 140 once it went down from 160. >> Yeah, right. So, you could have bought Bitcoin. Yeah. But, if you had spent, you know, 10, 15, 200 hours really understanding Bitcoin and stress testing it and understanding the strengths and the weaknesses, you might have hold hold or hodl'd because you actually had convictions. So, I think it's this investment of time and understanding and rooting of conviction that helps you weather any kind of storm. And I think the only way that you can have that level of conviction is either you're delusional um or you have it in some sound argument that you reasoned. And I will also say this is probably like one one wrinkle that I would add to the the two elements of like high agency, some sort of leverage or compound, you know, some element that speak gives them better returns is the willingness to change on a dime if something of some part of their reasoning was proven untrue. So, it's not like they're romantic with the truth, Mhm. not romantic with their process of getting the truth. And so, if if you said, "Here These are the These are my five points and this is why I'm I'm going all in on this thing." If someone says, "Well, I think this one's wrong and here's my evidence."

1:48:53My experience, um the people that I've seen that are most successful will just look at that. They'll take like a big long "You're right. We need to change everything." And then it's just like and and they take action, right? Cuz they're like, "Wow, this whole pillar that I that I based this whole, you know, thesis on is actually incorrect and so I need to change everything now." And Andreessen Horowitz defines this as strong conviction loosely held. I love the ability to have very strong conviction but yet be able to revise them when new data comes up. He's great.

1:49:24He's a G. I love his X. We're both big Elon fans. Mhm. Uh I sent you some clips on Elon's specific specific portions. Uh I've been going down this rabbit hole of how he manages his companies. Mhm. How do you explain how a human being could manage seven companies now also run Doge and all the other things he's doing? >> [sighs]

1:49:48>> Or can't. You know, I mean, I think he gets he gets treme- like he obviously gets tremendous return on his time and he operates with huge operational leverage. Um there's, you know, the thing is I have I have very little insight besides the clips that I see, you know, on on Instagram and it's like what is reality. Yeah. Um so I mean, decision-making is probably some of the highest leverage thing that you can do and so it's like it's probably just what is the minimum amount of context that is required to make an accurate decision and then he just is a decision-making machine um and is able to spot problems, pattern recognize, and quickly correct course on the most important things across that many companies. I mean, it's obvious that he has some I mean, he I think he said it was like some sort of genetic mutation. Some likely thing that his brain works better, faster, stronger than most people's. Um but from what I understand, he just basically works until he's exhausted, then plays Diablo for, you know, a bunch of hours and then like that's what will get him to unplug and then he like starts again. Um he obviously has a bunch of lieutenants um in each of those companies that he has, you know, absolute trust with and they know kind of like the Elon way.

1:51:00And so I'd say probably a large degree is his ability to reinforce behaviors within the company that are conducive to value creation. And so that has to happen from the top down in terms of like what culture exists at SpaceX or Tesla or The Boring Company um where they operate with this, you know, in his words, a maniacal sense of urgency at all times. And I think a big part of that is you know, one of the things that I think Elon has been exceptional at, which is something that I'm I'm it's actually a a a deficiency of mine, something I'm working on, is like he's very good at painting a very clear vision for the future.

1:51:37Um which is typically like a big amorphous word for, you know, for someone like me to say, but um you know, we are trying to make human life multiplanetary. Okay, that's a gigantic goal. And in order for that to occur, we need to have solar power. In order for that to occur, we would need to have cars that work on electricity. In order for that to occur, we need batteries. In order for that to occur, we would need uh you know, tunnels tunnel tunnel technology. In order for that to occur, we would need to have that freedom of speech. And so he has he has somehow, because of this massive thing that he wants, linked every one of his companies to we're saving the world.

1:52:13Mhm. And I think that people will bend over backwards and work 100 times harder to save the world than they will for just about anything else. And they will also sustain and endure significantly more pain. So there's this this study was done. I wish I could remember what it what the name was, but basically your ability to endure pain on behalf of somebody else is like five times greater than your ability to endure pain on your own. So like if Jessica's in the other room and she it was like you take a shock or she takes a shock, your ability to sustain higher and higher levels of shock is is like supernaturally higher if you know you're saving her from the shock.

1:52:52If it's just you, you tap out way sooner. And so I think that that can be generalized to like I'm I mean, people stormed the beach of Normandy to save the the world functionally at the time, right? Um and so I think that he has he has created that environment where everyone feels as though they are saving the world and acts in accordance with that. And so if we think about a vision and culture or values as very large bundled direction sets that included within them have hundreds of behavior sets underneath of them that orient behavior, then they are some of the highest leverage things that you can do in a company as the leader of the business.

1:53:36Um it's just difficult. There's not it's rare. It's not common that like our bank is saving the world like we're going to have to have banking in space like you you're going to be like what how do you tie that um you know, like my fund is going to get a good like how do you really get everyone uh that level of motivated? Um and I think that to me is like obviously he's got the deep technical expertise. Obviously he's he's a he's a maniac with his time and all that stuff, but I think that he's able to get that level of behavior change across hundreds of I don't know how many employees he has.

1:54:05Lots. Because of how how how that how everyone's oriented towards that goal. Do you want me to take a stab at this one? Please. I'm I'm like uh I'm like the one-eyed man in the in the land of the blind. I've had probably dozens of conversations. >> Yeah. So I've seen a couple aspects. Yeah. One is he fundamentally redefines what the CEO title. Mhm. >> He even had this whole tweet how CEOs are made up titles. So when you when you uh apply for a Delaware C-corp, there is no CEO title. So it is fundamentally made up. Yeah. So he doesn't he doesn't do things like operations and things like that. He there's probably for everything that he does, he doesn't do 100 different things. So first of all, he fundamentally focuses on a couple things. What he focuses on is really his brand. Mhm. His brand allows him to recruit the very top engineers in the world. I interviewed Jamie Gall um who previously worked at SpaceX and one of the things that he said that there was a lot of people at SpaceX that were lifers because they couldn't find a bigger mission. Yeah.

1:55:04You know, they they believed, and I think appropriately so, that human beings going to Mars was important for for the for the species to survive. So so one aspect is he uses brand in recruiting. The other thing, the most interesting tactical thing, which was uh popularized by Marc Andreessen, is he goes into his companies and he deals out with one issue a week. And he sits down with people, 5 to 15-minute meetings, and he says, "What is your number one issue?" And he helps them solve that.

1:55:34Which has two effects. One is they're constantly getting rid of their constraints. They're constantly removing their bottleneck at speed. And and four and this kind of bleeds into the fourth aspect is he is a player-coach. Yeah. He is in the cockpit. He is working the 100-hour weeks. Yeah. He's not telling people, "This is this is my mission. Now you go and I'll be on a yacht." >> Sure. He is in in the arena battling uh battling the bulls with everybody and I think that really has huge effect on the culture and his effect on recruiting. I think the more interesting question is how did he start SpaceX before he was Elon? Kind of like how did you start with 100 million dollar offers? Yeah. Um you know, I I I have theories on that, but today he just keeps on leveraging his existing uh which is recruiting and brand and those are inter- interlinked and when you go when you go to these highly technical problems, there's actually the most finite resource is actually not money. It's actually engineering the top top engineers in the world. Yeah. The 10X or the 100X engineers and he has a large market share of that. Sometimes they even uh transfer companies. That's what I've been able to No, I love that.

1:56:41I love that. And so I took so two things then one add-on. So the doing, you know, helping them solve in these five or 15-minute meetings, whatever the one problem is, also force functions them to prioritize. So you're going to bring one thing to Elon Yeah, exactly. >> It's like just that that alone probably generates huge huge alpha for for the business. Um the the plus one piece um as you've heard of Elon's algorithm?

1:57:06I don't think so. Oh gosh. It's like I probably use this all the time. Like I it's like the most useful thing that I've gotten from Elon of all the things that I've consumed. So it's the five-step process that they apply at SpaceX, but they apply to everything and he now just refers to it as the algorithm, which is question the requirements, Mhm. delete all the unnecessary or dumb rules or requirements, um optimize, then pull up timelines, then automate.

1:57:35And so it's like if you were trying to fix a media department, you come in and you're like, "Why do we do this that way?" Okay, well, we don't need to do these 28 things that you guys are currently doing cuz it's dumb. All right. So how do we get the best guys to do the thing that that makes us the most money or gets us the most views? Optimization. So we're out reallocating resources towards the highest return. Okay, great. Now that we're doing that, how can we do it faster? Great. Now how can we automate it? And walking through that process has been like it's been the back of my mind for when I'm fixing something because it's just like really good.

1:58:06Um and especially the question the requirements which was one of the hardest ones because it forces unconstrained thinking, which is you have to be like, "Well, why do we do that?" And a lot of people don't know why they do what they do because it's how we've always done it. Um and most it's so funny how how humans are so easy to add things, kind of like we referenced at the very beginning. Like we add things so easily and we're and we're so afraid to remove things. We're remove steps, remove processes. Um and we almost develop this uh mythology around around process. Oh, we've always Well, if we don't do it that way and I think that's survival brain, right? Um well, it has it has worked. We haven't died doing it this way, so we should just keep doing it this way and wear pink socks, right? It's like, "But why?" Right, totally. You know what uh the greatest thinkers in the world and 7-year-olds have in common? What?

1:58:50They always ask why. Yeah. And if you just listen to 7-year-old and they'll just say why and then they'll say something and then they'll say why why do you do that? Yeah. And you lead to some really good questions. I ask even on the podcast, I ask some very fundamental like, are you diversified? Yeah. And if it's a very high-level thinker, they'll actually like think really deeply on it and because it's like, how do you know you're diversified by what factors? It's like How do you define that?

1:59:14>> dumb questions could end up being quite quite interesting answers. One of my Well, no, my my closest friend who's basically a brother to me. Um He has a saying which is the shorter the question, the longer the answer. Like, what's the meaning of life? Like, well. What is it that I I wrote a I didn't have much time, so I wrote a very long letter. >> Yeah, no, exactly. Yeah, yeah, 100%. I think it was a I think it was Pascal um who said that. But yeah.

1:59:39>> Another concept uh SpaceX has specifically is responsible engineer, which you mentioned this high agency, which is the engineer in charge of the part. They are fully responsible for everything with that part. Yeah. And the exa- example they give in internally is if supplier hasn't delivered any of the parts, why aren't you on the plane going to that supplier? >> Right, it's your fault. And a lot of the employees burn out after 6 months cuz they can't deal with this level of agency. Agency has a cost. Yeah. There's a reason why everybody isn't high agency. It takes a lot of mental and physical power and emotional Yeah.

2:00:15Yeah, it's so funny the the question the requirements like I won't even get cuz I could tell horror stories of the times where I've like walked in and been like, why do we do this? And it's like, oh, that cost us 500 grand a year for this one department and we don't even need it. Like I'll I'll tell you one. So, we bought for media, right? We bought um a bunch of really expensive cameras that looked really nice cuz you know, the team was like, all right, we're going to build the studio or whatever.

2:00:39And so then I was like, why So, it started with I was told we were going to build build the studio so that it would be faster for me to record so that I could just like literally walk across the hall and then just record, right? But then I I realized months after the studio was built because we'd always done that way um that I would have to say, "Hey, I want to go record." And then they'd be like, "All right, we'll be ready in 2 hours."

2:01:03And I was like, why why is this taking so long? And This is your new studio? Yeah, yeah. And and and so um they said, "Well, we have to set up the the lights or whatever." And I was like, "I'm always in the same spot. Why are we Why do we have to reset up the lights?" And they're like, "Well, we use the same lights in your office as we do in Layla's studio." And I was like, "Well, how much do lights cost?" And they were like, "Ah, it's like two grand." And I was like, "So, I spent $500,000 on this studio and we didn't think to spend $2,000 on the lights, which confers the main benefit of having the studio, which is we don't need to set it up and break it down." I started with the idea that the expensive cameras, right? Here was another one.

2:01:50After the the the videos were happening, I was like, "Why can't I I was like, tell me what stops us from posting it within 24 hours?" Cuz I had like 2-week lead times on my videos. I was like, "This is absurd. Like, why is this taking so long?" And they're like, "Well, you know, it actually there's a big part of it is like uploading and downloading the files is actually this big pain in the butt." And I was like, "Okay, why are do why do we need big files?" And they're like, "Well, because we have these nice cameras." And I was like, "Why do we have nice cameras?"

2:02:18And there was no real answer because I have tons of videos >> than the not nice cameras. >> Right, right. And because because all the people who who are buying are people who are you know, media dorks and love love cameras and audio, right? But the reality was I can have an iPhone and save the same video and it'll crush because the only thing that really matters, at least in the education space, is the quality of the information, not >> change. >> Yeah, it it doesn't matter. It almost matters zero um the effects and the the lighting and the None of that matters in terms of video performance.

2:02:49And so when when when I when I brought that up, it was like, "Okay, so we have these massive 16 I don't want to say massive, very expensive cameras and I just said like, "We're not going to use them. Put the I was like, "Put iPhones up." And so I got so upset about this that I went on a plane and I was like, "We're doing this whole thing with an iPhone and you're going to post it in 24 hours." And we did that. I saw that on the chat with you. >> Yeah, exactly what it was. [laughter] And yeah, that video got almost 2 million views. And so it was to prove the point. I'm like, "Guys, this is not what matters." And so I had to like I had to go through each of these elements of like And and and so so walking through this, it's finding the constraint within a process and I think that's what the algorithm is so effective at is like is And so we ask this also with companies. Like, one of my favorite questions is, "Okay, so what stops us from 10Xing the current um our current deal?" Let's say it's demand constraint. So like, what's what stops us from from doing 10 times more than we're currently doing?

2:03:42Um and they say, "Well, we couldn't do that because" and then insert reason. And if that reason's solvable, then it's like, "Well, why haven't we done it?" Now, if there if that reason is obviously solvable, they're like, "Well, then why we haven't we solved it?" And then they'll bring up this other reason. And so you keep asking why and eventually you get to like "Oh, HR just hasn't put out the wreck for that person yet." And I'm like, "Why?" Because we have these other three roles that don't matter nearly as much, but this is the one constraint of the business.

2:04:10So, this happens all the time in businesses and I think part of it is because it's so rare to have people who actually do I call it like pulling the thread. It's like just keep pulling the thread. Like, what happens next? What why is this preventing us from from doing ultimately the thing that has the greatest leverage on the growth of the business? And a lot of people just don't know. And I think part of it is because they don't have enough business acumen or business context to see like, no, when like this is the tip of the spear. Like, if we if we need three times the sales guys to triple the business and let's say that's aligned with the business objective, then us not have like, why haven't we just hired 10 recruiters, vendors to just go place all these roles immediately?

2:04:49Well, you know, we have one recruiter. I'm like, "Yeah, but it'll take us two quarters at our current rate." I was like, "When we could fill it in 7 days." And so the cost and this is what I have to outline. I'm like, "The cost is what 3X sales is over two quarters. So, if we tripled revenue because we tripled the sales team by you know, because let's say we have sufficient demand, I was like, the cost Let's say it's a million dollar a month company for simple math. It's like, "Okay, so it would cost us $12 million of lost gains because you didn't want to pay a recruiter 20K times whatever the number of sales guys is that we need to triple revenue.

2:05:26Do you feel like that's a good decision? Like, we don't want to pay 200 to make 12 million. That seems seems dumb. We should not do that." But people don't boil it like people don't pull the thread. Do you solve that on an individual level or do you find ways to get people to be high higher agency? >> [sighs] >> So, what I'm going to say is probably going to be a little controversial, but um I do think I do think a a big part of it is actually just like mental horsepower.

2:05:52Um I think some people don't have it. And like >> Can't cope with that. Multiple variables. Yeah, multiple variables actually being able to sustain like multiple thoughts in your mind at the same time and play out scenarios, I think it's really tough for a lot of people. Yeah. Um And and that's where >> that they don't they want to be inefficient. >> Yeah, no, I don't think anyone wants to be inefficient inefficient. I That's where That's where it gets into competence. And so like, is that trainable? Maybe.

2:06:19Uh I don't think horsepower's trainable. I do think that skills are trainable. To what degree is that a skill? I don't know. I probably need to think more about it. Um but Skill is almost an reallocation of horsepower. Yeah, yeah, that's where it's like what behavior change. Yeah, I can have someone follow a process, but like if it Yeah, anyways. Um but that that piece though um I I think a lot about and I would say the I would say the one common theme that's occurred in my business career has been that the quality of talent that I bring in has literally only gone up.

2:06:51Mhm. That's like one constant in terms of like my income has been directly correlated with the quality of the people that I bring around bring in and what I'm willing to pay them. Because I remember I mean, every every person has the It's almost like this limiting belief of like what you can pay somebody. I mean, shoot, they just paid you know, Jony Ive um 6.5 million. Yeah, 6.5 million. So like, there's a price, right? There's a price to get the best in the world or whatever. >> OpenAI stock. >> Yeah. Not cash. Good on that. Yeah, I know. I mean, there's a big commitment on both sides, right? Um but I mean, if they do go through the hardware thing and

2:07:22>> very rational deal. It's a com- it's a completely rational deal because if he actually unlocks the hardware, then they combine Apple with their I mean, they they just murder. And I think they will. Are you familiar with David Deutsch's concepts on memes? He's the person that popularized memes that Elon passed. And I think everything in kind of a memetic behavior, humans are basically follow these memes. Um you mentioned one earlier that's so ingrained in Silicon Valley that startups change the world. That's actually a meme. Yeah. That's that's There's there's no rationality behind it why a fintech company is changing the world. It's just something that's that's repeated.

2:07:56One thing that I found in a lot of the top CEOs is that they have these meme the specific type of meme called folklore. Mhm. So, do you know about like the Nordstrom tire Mhm. meme? So, Nordstrom back in the day was number one in customer service and they used to tell the story that this angry customer come came in and they wanted that been using a tire for like 10 years and they wanted to change the tire and Nordstrom has this unlimited return policy. Yeah.

2:08:23And they gave him back the money on the tire. >> Mhm. And the joke is Nordstrom doesn't even sell tires. >> Right, yeah. And it was the extreme version to show that the customer is right. >> Yeah. And if they were to go around and say the customer is right, it may not resonate, but the tire story >> Yeah. kind of And then you see this over and over. Amazon has the meme of the two pizza teams. And these are like really useful packaging to tell these beliefs. So, maybe that is a story is maybe the light story becomes a meme at acquisition.com and you tell it to people and then they may not think from first principle, but but they might remember, oh, like is this like the light thing? Why is there a company we can make $100 million from and we won't pay for their lunch because it's not in the budget or something.

2:09:05>> Right. Exactly. >> this it could be meme'd into into the actual culture. >> No, I love that. I love that. You know, I see that like so I see these types of folklore stories as coming with series of behaviors that that they seek to change. Right? So it's not just one thing, it's many sets of behaviors. So I'll tell you what what I mean, I could tell a zillion of them. So I'll I'll I'll pause. But like um yes, I love that. I wanted to get your advice on my own business and just brand building.

2:09:31A lot of what we're built was inspired by you and just like giving content for an audience. Outside of just doing more, we're seeing some really great early results. What are some other kind of practical guides for somebody wanting to build their brand in an audience whether niche or not? >> If I want somebody who's between the they want to start a fund or they already have done their first and they're wanting to get their second or third, right? Um I'm then thinking like what do these people consume? What is the what are the biggest problems that they're dealing with right now?

2:10:05And then all of my content seeks to solve all of those problems. I mean that's it. >> So create the reinforcement loop of listen to David, problem solved. Listen David, problem solved. >> Yeah, he's this guy's helped me so much. That's the hermosification. Yeah, well what do what do business owners struggle with? They struggle with marketing, they struggle with sales, they struggle with cash flow, they struggle with fixing the product, decreasing churn, you know, recruiting. So these are all because obviously like we're we're operators, we actually run business. So like that's what they struggle with. And so I make my content for business owners because that's what I'm trying to attract. So the two sides the two sides of your business just to distill what's made you so successful. One is you're reinforcing listen to Alex and good things will happen. And two is actually you're building you're building a surplus of of goodwill. So there's both goodwill as well as trust in you as an operator of businesses to make them more successful.

2:11:00>> You know, interesting because the trusting about the like so like I would get into those seem similar to me, both those buckets. Um and probably derive from the same action set. And I think it just comes down to like does this increase the likelihood that someone would would would do something with me for me? Uh and if they have a history of positive reinforcement from me, then that increases that that likelihood increases. And that's that's I just leave it there.

2:11:28Um that's about it. Like goodwill I just would redefine as a history of positive reinforcement. That's it. And so there's this big misconception, I think, in the kind of creator world. You've probably heard the like give to ask ratio, you know, that kind of thing. But it's interesting because when you when you read Steve Jobs autobiography, he talks about this. Or not on his biography by Isaac Walter Walterson.

2:11:54Um Walter Isaacson. >> Thank you. Thank you. Um he he he talks about how like he still saw that withdrawal deposit concept within Apple, but with the via every product. And so he saw some like he believed that if the product was great, then we've deposited into the person's bank account, right? Figuratively. >> Yeah. Whereas a creator feels like if they ask for money, they have withdrawn from their quote goodwill. But the underlying assumption there is that the thing that you sold them is not good.

2:12:28Because if you were a creator and you came up with an iPhone, yeah, then people would be lining up around the block for the next time you sold something. So it's this zero-sum mentality where I've provided all this and now you spend your money you spend you spend something that you don't really need. >> Reciprocity. >> Yeah, you don't really need it. Whereas your second trade would also be a creative. Exactly. And I think that is a fundamental misconception and I think the reason for that is because creators typically don't know how to make products that are exceptional.

2:12:54And they typically don't put not always, but like they don't sometimes don't have enough capital or they are you know, aren't good at making products. They're good at making media. It's just a different skill set. So just to double click on that for acquisition.com, so you give all this content, they love it. You help them go to 1 to 10 million. They come to you 10 million. They're lucky enough for you to invest. You could take them to 100 million. So you're not taking 30% and you're saying this is mine for helping you. Right.

2:13:20You're actually you're helping them even further. You're like give me the opportunity to help you further. >> And the reason that you can believe that I can help is because I already have. So it also self-selects because if they if they if they adhere basically if if they have changed their behavior based on the content that I have, then it's likely that they will be able to respond favorably again in the future to the same types of direction. And also likely that they're grateful and that they're aware that you helped them. Cuz some people will be helped and just never never attribute it to it. We'll just internalize it.

2:13:54>> So that's actually a super interesting one. Yeah, attribution's very interesting. Most like think about it's think about how tough it is to have something amazing happen in your life and say that wasn't me. That was that guy or that was something else. Like we usually take the opposite approach, which is everything that's good is because of me and everything is bad is because of other people and circumstances. And so it's actually >> that's true in successful people? Um I think it's true in humans. I think there's just degrees. Like not binary, I think it's just a continuum. Probably some people are more this way, some people are that way. Um but no, I 100% getting attribution, the the and this is why I think having directives that are so specific is so important. If I if I gave vague vague directions, right? That somebody has to derive behavior change from, then basically the more derivatives they have to to do, then I think and I think rightfully so, the more they should attribute that to them. That's If I said on this podcast make it this headline and I will give you the thumbnail and then it outperforms the click-through rate. If you thought that was because your team did it, I would be like that feels a bit odd. If I said I think it should be you and me and both of our faces kind of, you know, big in the middle and this you know, let's start it with the the tweet that we know already, you know, performs best.

2:15:21Maybe that's a middle. Like he gave us some insight, it was kind of helpful, but like we still made it, right? And that's if that last like well we still like whatever that part is, it's like the less gap there is between whatever your your your advice was and the action, I think the smaller the gap the more the attribution will be there, which is why I am so specific with with the the stuff that I put out. And would you would a good criticism of my strategy be it's always podcasts, it's always with LPs or GPs and there should be more talking heads or if people are observing this and getting the getting the value from the actual guest, that's fine. Do I have to go to a talking head as well? So thinking about this from like a short form, long form. How do I translate this into action for us, right?

2:16:04Short form, let's say somebody watched one short a day from me for a year. Okay? And let's say that a short is 30 seconds for simple math. All right? So I have 365 shorts. That's 100 180-ish minutes, right? So that's 3 hours that they watched from me. Now we know that most shorts are not 30 seconds, it's probably probably a third of that. But so if they watched a short every day for a year, it's probably an hour-ish of content.

2:16:30Okay. I would for sure rather have someone just watch I mean I would probably like that frequency of exposure. Like if it was 1 hour to 1 hour, but if I had to pick, I'd rather have a one 3-hour podcast versus that, but that's to me I see the purpose of short form content. Is that why podcasts are underrated medium? Because you have one listen, but it could be 2 hours and it goes pretty deep. I've thought about this a decent amount. So like I see podcasts actually as email lists.

2:16:57So with the exception like true podcast, this is like YouTube plus pod like you have you repurpose there, but the the vast majority I would bet of the channel growth comes from YouTube. And then it sustains on the audio, right? If you did audio only, it's very difficult to grow audio only because there's very little suggestion. Spotify's beginning this, but for very long time people had to only grow off of word of mouth sending podcast to to friends and family, whatever.

2:17:22And so if we see podcast as a an email list, then when someone comes to me and says, "Hey, I'm thinking about starting a podcast to grow my business." I'm like that's like saying I'm thinking about starting an email list. Like that's not going to grow the business. Now unless you have a way of getting, you know, exposure to it, then that's the way that it's going to grow. But if we look at, you know, percentage likelihood of conversion, a podcast listener who subscribes is is more valuable than any other subscription.

2:17:49If we just think about percentage of kind of time share, if you will. Which is the average person I think has like five or seven five to seven podcasts something like that that they subscribe to. You think about Instagram, it's like most people have like a thousand people they follow. It's like not even close. Order of magnitude different. >> You go on a lot of other podcasts. Tell me about the calculus. Why would you go on somebody else's podcast as essentially you're building their their listenership? Tell me about the the thought.

2:18:17So I don't do a ton. Um I almost exclusively do with people that I like it's somebody that I actually do really want to have a conversation with. I would say that's probably the biggest the biggest vector. Yeah, it's the biggest yeah, it's like I'd seen you a while and I I I always I always find our conversations fascinating. Um cuz you have such a different perspective from the from the like super LP side. You know what I mean? Like that always brings such fresh eyes to the to what I'm thinking about like in the super kind of like operational side.

2:18:46Um that's probably the biggest thing. From a from like return on time perspective, I think it's like clips will generate. That's like what's the the only upside for me realistically is probably like clips and relationship. Those are those are the two kind of like alphas for for doing it. It's not because you're get to talk to a whole new audience and part of part of them will convert to you. With your audience, it's it's it's so niche and unique like there's definitely value there because you have a superstar audience.

2:19:15I would say asking as a general like why what why do I select them in general? The audience that I have is the audience that I want. >> [laughter] >> And so when I'm going with someone else's audience, I'm basically trying to like I I don't even think about it this way, but I guess you could you could imagine it's like okay, of the people where's the overlap of business people who listen to Chris Williamson you know on Modern Wisdom. Okay, like I'll some of those people will then start you know following my stuff that they hadn't heard about me before that. But if that were the case then I would definitely be maximizing like only new podcasts rather than doing the same podcast over and I tend to do the same podcast over. So if I'm looking at my behavior rather than what I would like. So my behavior would dictate that I usually just go to people that I enjoy.