Alex Hormozi Answers Your Questions
AAlex Hormozi
ManagementAdvertising/MarketingSmall Business/Startups
Transcript
00:00:00hear ye hear ye are we live we live in this town all right what's going everybody happy
00:00:10happy Monday happy start of the week happy getting getting that money Monday if you will
00:00:15before we dive into hotlines and Q&A's which I'm this is this kicks off the beginning of
00:00:22a a rough 30-day experiment that we're doing to experiment on two two major things so number one
00:00:30is something that we're trying which is like is there a way that we can do something where we do
00:00:35live clipping which is rather than have an entire like you know ingestion process and finding the
00:00:42moments process and then editing and then post-production and QA and then posting which
00:00:46is kind of like how how things have gone is there a way that we can go from live to clipped content
00:00:53in minutes and so this is a one way of me providing them the raw material to do that and so that's
00:01:01number one and number two this started because Layla asked me a few weeks back she was like you
00:01:07know what are the things you enjoy most and I was like I really do enjoy doing these kind of hotlines
00:01:12these Q&A's because I feel like even if even if none of the content ever performs as content I know
00:01:19that the the actual content performed for that individual and so I think for whatever reason it
00:01:24tickles my you know do do good things help people out muscle so that being said I want to start with
00:01:34something that's been top of mind for me which is how much change do you change when you are at different
00:01:46points in business and I think one of the hardest things that I've had to deal with
00:01:48is I tend to want to kill a mosquito with a cannon right I want to overkill if something makes me
00:01:59uncomfortable in the business I hate it so much that I want to change everything and I would say
00:02:05it's probably one of my bigger weaknesses as an entrepreneur and I would say it's probably a cousin
00:02:09or you know step sibling to lack of focus that one being the biggest and I would say this is probably
00:02:14like the number two sin that I that I suffer the most from and so I've been thinking a lot about this
00:02:19because there's a there's a time where you need to be willing to disassemble what you have in order to
00:02:26build what you want and so there's also times where you should not really mess very much with what
00:02:32you're doing and very very moderately tweak if you feel quote uncomfortable with your current situation
00:02:37and I was like what what delineates those two things because I see people every week who are
00:02:42who are in one of those two buckets it's like they have been stuck in their particular business at you
00:02:48know a million bucks three million bucks ten million bucks whatever it is for a while and they're at a
00:02:53point where they can't really see how they're going to scale it and so when you're in that bucket and
00:02:58this gets particularly difficult once you you know have people depend on you you have a lifestyle you make
00:03:06a certain amount of money that you might actually have to take your business apart and rebuild it in a
00:03:11different way and I was I was talking about this with a friend of mine where I said it it is harder to
00:03:18build a billion dollar coaching business than it is to build a billion dollar insurance company or a
00:03:26billion dollar bank or software company and how would I know that there is no billion dollar coaching
00:03:32business and there are tons of people who want one and so when I use when I look at that it's like okay so
00:03:37there's something characteristic about this model that makes it very very very very difficult to scale
00:03:44and so when I bring that up I bring that up to say there's in any industry anybody who's listening or
00:03:50watching this if you think about your business and then think about the maximum extreme you should look
00:03:54at what the highest version of that business actually looks like and if there isn't one there's probably a
00:03:59reason for it so either you're going to be an innovator and you're going to be spacex and elon
00:04:03or there's something very very difficult about this business as it scales right and so if you're in
00:04:09that situation where you're like I want to be a billionaire multi-billionaire trillion or whatever
00:04:13your magic number is right um and then you look at your existing vehicle and you're like there's
00:04:18literally no one and this vehicle has existed for a long time that has achieved this thing that I want
00:04:23then you have to be willing to basically blow it up and that sounds like a very extreme thing but
00:04:28I I know I know so many entrepreneurs were like they got to they got to kind of like the highest level
00:04:34a local maximum right they got to the small peak on a much bigger mountain range of their potential
00:04:40and they had to be willing to say I'm going to lose my status to myself mostly because no one really
00:04:47cares right where I define myself worth by my revenue or my profit or my cash flow and of course you
00:04:51shouldn't do that but you still kind of do uh but and so and they have to be able to take this giant
00:04:58step back and then look at all the resources skills and money that they have and think okay what would
00:05:03be the best use of all of these raw assets and how could I deploy them away that would get me the highest
00:05:07return um and I'd say on that extreme you don't want to blow everything up but there is a point where
00:05:14if you have been stagnated number one so here's my like litmus test for this um because I was thinking
00:05:19about this because I think it's it's like this very interesting dichotomy between two very extreme
00:05:23uh sets of choices so number one is if you've been stagnant and there is no version of the business
00:05:31that you have that is significantly larger or has accomplished the goals that you have
00:05:35then that might be a condition where you might or should be willing to consider dramatically changing
00:05:41the business and we sold uh one of our companies to uh a different group and they basically were unwilling
00:05:53to take risks proportional to what the business required and so that I just had a conversation
00:05:59this morning about that particular thing so it's like I've had a number of small things that have
00:06:02happened in the last you know call it seven days that made this top of mind but then on the opposite end
00:06:07of that so yesterday morning um I met with a couple leaders in the company and we were talking about
00:06:15one kind of issue that we have you know within the business and I proposed what I would consider to
00:06:20be a more radical change um because I tend to I have a tendency to want to just burn everything to
00:06:27the ground and like start over um but that extreme is is not warranted when you are doing well
00:06:34right so this is this is my big point here if you're doing well and there are bigger versions
00:06:39of the business that you have and things are trending up into the right that is usually not
00:06:45the point to take out your cannon right that is not the point where you're taking out your chainsaw
00:06:50you should be having your your sandpaper and maybe a little chisel you know to just like make fine
00:06:55details in the business more than take a jackhammer to the thing and then build it all from the ground up
00:07:00and so that is so I don't know which situation you're in but in either of those situations
00:07:07you need to have a different lens because I see people stuck at both we're like they can't get
00:07:12past certain level because they keep reinventing the business over and over and over again and so their
00:07:16their team is their team and themselves and their customers are constantly in this in this reactivity
00:07:22in this whiplash of the changes that they consistently are making because they forget that most people don't
00:07:28understand all the plans in their head and all that other people understand is the few words they've
00:07:32communicated about it which most people have no context on and they didn't consume all the other
00:07:35stuff that got you this conclusion right uh and then uh on the other hand the people who uh need to take
00:07:43more change um and typically this comes in the form of being willing to sacrifice their lifestyle
00:07:48for the short term uh in order to accomplish their larger goals right like um alex becker who was at my uh
00:07:53at my um at my at my money models launch uh you know he had a he had a very large kind of information business
00:08:01and then he basically shut it all down and started high roast and then high roast became a much more
00:08:05valuable business and bigger uh sam right uh sam ovens from school had consulting.com uh and then he shut it
00:08:13down when it was making i don't know three million bucks a year and i think he was working like a day a week on it
00:08:19and think about how crazy that is like even the day a week was too much in terms of the lack of focus and
00:08:26distraction it was taking away from school and only when he shut it down did school really take off
00:08:33and so there there's something very important on both sides of these things which is like
00:08:37if no one has achieved what you want and you've been plateaued for a significant amount of time
00:08:42it might be worth taking a jackhammer to the thing and being willing to take two steps back
00:08:46from an ego perspective in order to build the thing that actually has the potential to become
00:08:49what you want on the other hand if you're winning it's the opposite set of skills that you have
00:08:54and so this is one of those very interesting things from auction or entrepreneurship perspective which is
00:08:59the right tool for the job like you need to have a jackhammer sometimes you need to have sandpaper
00:09:04sometimes you need to have your chisel out but what you want to make sure you're doing is you're not
00:09:07chopping a tree down with sandpaper and that you're not trying to uh uh jackhammer uh to do a final
00:09:14final details on the mona lisa all right and so uh i'll set that as my my monday morning intention
00:09:20for you guys in terms of the degrees of change uh if you're winning change very little if you're losing
00:09:26you might want to consider changing a lot and losing can can can mean different things to different
00:09:31people depending on your goals all right uh so with that i feel like uh i feel good i feel good i have
00:09:40one more i'll probably maybe i'll go deep in after after a few calls i'll do a little a little a little
00:09:44risky but uh what are we who we got who we got first hey alex what's up em let's rock yeah cool uh yeah
00:09:56my name is uh from netherlands uh we sell uh house plant soil uh to plant lovers um this year we did about
00:10:05six to seven million uh in revenue at about five percent uh profit okay i would like to get to uh
00:10:11dirty at uh twenty percent profit um and what's stopping me is kind of like a split focus between
00:10:18uh direct to consumer and b2b retail uh so from the scaling workshop and the acq ai i kind of have
00:10:25concluded we should shift a focus to b2b but my skill set is fully in like direct to consumer and it also
00:10:32grows uh pretty quick uh we never put any effort on b2b and we got like a hundred stores basically by
00:10:38accident and it just kind of came in yeah inbox uh but it feels like this kind of unknown thing to me
00:10:44and risky to like bet the whole uh farm up yeah um seven percent is b2b uh of our revenue and um
00:10:53yeah why this matters is that like uh it's my first business started it uh five years ago from a
00:10:57bedroom and basically lost money for the first four years uh about 700 in total uh i'm 26 so i really
00:11:04like want this to work right um it'll be like the first profitable year so i don't want to jinx it by
00:11:10yeah taking my uh focus out okay uh yeah what do you want to so you want to you want to get to 30
00:11:16with 20 margins is there any soil business that you've seen that has 20 margins in your space not that i'm
00:11:24aware of but we're quite like high price so it should work hmm it's interesting that you're when you're
00:11:31selling direct consumer that you don't have the margin is like what are your gross margins
00:11:37direct to consumer about 55 percent okay and then what's your repurchase rate do you have subscribers