Bad Advice from Good People Ep 153

In a candid discussion, the host, Alex Hormozi, delves into the complexities of entrepreneurial decision-making, emphasizing the importance of discerning good advice that fits one's specific context. He shares personal experiences of selling his gyms, underscoring the significance of seizing opportunities and calculating opportunity costs rather than waiting for ideal outcomes. Alex advises entrepreneurs to make logical, non-emotional decisions, commit fully once a decision is made, and prioritize advice from those who have achieved the success they aspire to. He concludes by encouraging his audience to share the podcast to support fellow entrepreneurs and teases an upcoming call with gym owners about revolutionizing sales strategies.

• Speaker A emphasizes the importance of showing up better as a leader.
• The speaker is at a place they refer to as the "Hormozi lair" for a morning dip, which aids in clearing their head.
• The topic of discussion is centered around discerning good advice from bad, particularly in the context of entrepreneurship.

"I've been trying to work on, is show up better as a leader."

This quote highlights the speaker's focus on self-improvement in leadership skills, which is an ongoing process for them.

• Entrepreneurs often face the challenge of determining which advice to follow.
• The speaker introduces the concept of good advice coming from well-intentioned people but not always being applicable to one's unique situation.

"And I think it's one of the hardest things that you struggle with as an entrepreneur is who do you listen to, right?"

The speaker acknowledges the difficulty entrepreneurs have in choosing whose advice to heed, underlining the complexity of decision-making in business.

• Speaker A's friend is contemplating whether to sell their six business locations or go into licensing.
• The friend seeks advice from Speaker A based on their experience of selling their own business locations.

"And so he was like, what did you do when you sold your six?"

The friend's inquiry about Speaker A's past decisions serves as a real-life example of seeking advice from peers with similar experiences.

• Speaker A chose to sell five locations and close one, which was against the advice they received.
• They believe in seizing opportunities and making decisions that benefit in the long term, even if it means accepting a non-ideal outcome in the short term.
• Opportunity cost is a key factor in the speaker's decision-making process.

"But the decisions that we ended up making ended up being the right decision for us."

This quote reflects the speaker's confidence in their past business decisions, suggesting that what may seem non-ideal to others can still lead to personal success.

• Good intentions can result in advice that only considers the short-term, or micro perspective.
• Speaker A criticizes the conventional advice of saving to become a millionaire as being too limited and not applicable to entrepreneurs who are looking to increase their income through business ventures.

"And so I think a lot of times, people with good intentions will give you advice with a micro perspective."

The speaker points out that advice often comes from a limited perspective and may not take into account the bigger picture, which is crucial for entrepreneurs.

• The speaker stresses that advice cannot be universally categorized as good or bad; it depends on the individual's context and current situation.
• They emphasize the personal approach to evaluating advice through the lens of opportunity cost.

"And so that's why it's so hard having this big bucket of, like, what is good advice versus bad advice, because there's really just contextual."

This quote encapsulates the speaker's view that advice is inherently contextual and should be assessed based on its relevance to the individual's specific circumstances.

• Speaker A uses a mathematical approach to decision-making, focusing on the potential gains from new opportunities.
• They acknowledge the challenge of ignoring well-intentioned but potentially misguided advice from family and mentors.
• The speaker concludes with the notion that personal evaluation of opportunity costs helps in making the right decisions and drowning out irrelevant opinions.

"This is 100% how I weigh out these value equations and honestly, how I can drown out the noise of my parents saying this is stupid and how mentors saying, I shouldn't make this call..."

The final quote reveals the speaker's method of decision-making, which relies on calculating the potential financial benefits of new ventures to justify their choices against the doubts of others.

• The speaker had spent years building profitable gyms and faced disbelief from others when deciding to sell them.
• Selling the gyms was a strategic decision based on the potential of a new opportunity that promised greater returns.
• The speaker emphasizes the importance of being fully committed to decisions, especially when transitioning from one venture to another.

"And so for them, they were like, you spent the last three and a half years, four years, pouring your soul into building these gyms and making them profitable and all the hardships and blah, blah, blah, blah. They're like, how can you just walk away from that?"

This quote reflects the concern and confusion of others regarding the speaker's decision to sell the gyms after investing significant time and effort into them.

"Because the thing that I'm going to do next is going to be so much bigger. And me waiting a year to do that is going to lose me what I would have made in the first year of that business."

The speaker justifies the decision by explaining the opportunity cost of not pursuing the new venture immediately, which outweighs the potential earnings from the gyms.

"And lo and behold, when I sold all the gyms the very next month, I did over 200,000 in my first month."

The quote demonstrates the immediate financial validation of the speaker's decision, highlighting the success of the new opportunity.

• People often offer well-intentioned advice that may not be suitable for one's unique situation.
• Decisions should be made logically, without the influence of momentary emotions, and based on realistic expectations.
• Once a decision is made in a neutral state of mind, it is crucial to commit fully to it.

"A lot of times, people have really good intentions and they're not bad people and they give good advice. For most people, it just may not be the right advice for you right now."

This quote acknowledges that while advice can be well-intentioned, it must be evaluated against one's own circumstances and goals.

"That needs to be a logical decision that you've come to. But once you've made the decision in a non emotional, neutral place where you've looked at the math, purely not looked at the math with an emotional perspective of like, this could be amazing, you know what I mean? But really, what is realistic?"

The speaker stresses the importance of making decisions based on objective analysis rather than emotional bias, ensuring that expectations are grounded in reality.

• The speaker sold all gyms within 120 days, demonstrating a swift and decisive action plan.
• The gyms were sold to various buyers, including a competitor, a client, and another owner who bought multiple locations.
• The speaker describes the selling process as a "fire sale," indicating a willingness to move on quickly for the sake of pursuing the new opportunity.

"I sold all of my gyms from beginning to end in 120 days."

This quote illustrates the rapid timeline in which the speaker was able to exit the gym business, emphasizing efficiency and determination.

"I sold three to one owner, I sold one to a competitor, I sold one to a client, and then I closed one down."

The speaker provides specifics on how the gyms were distributed among buyers, showcasing a strategic approach to the sales.

• The speaker advises that once a decision is made, one should not waver but instead act decisively to follow through.
• Contradictory feelings or actions can hinder progress and lead to missed opportunities.
• Evaluating the opportunity cost between settling for a less-than-ideal outcome and pursuing a new venture is crucial.

"And so if you get to that, and it doesn't have to be with the macro level of your gym, but it can be with any decision, like, if you're done with something, be done with it."

This quote encourages a mindset of definitive closure when moving on from a venture or decision, to avoid half-hearted efforts and indecision.

"Trying to then go from like I'm done to let's get ideal outcome are two very contradictory feelings, and they're two very different action sets that you would take based on that decision."

The speaker highlights the conflict between giving up on an endeavor and striving for an ideal outcome, suggesting that such a contradiction can impede effective decision-making and action.

• Entrepreneurs should make decisions swiftly and execute them decisively.
• Delaying action after a decision leads to self-doubt and weakness.
• Non-entrepreneurial individuals may advise caution and slow movement due to their preference for security.
• Entrepreneurs should weigh decisions in a non-emotional state, then commit fully once the decision is made.
• Opportunity cost should be a key consideration in entrepreneurial decision-making.

"And every day that I don't act on that decision is the day that I become weaker and I become less certain of myself."

This quote emphasizes the importance of acting on decisions promptly to maintain confidence and avoid the paralysis of indecision.

"Weigh your decisions, make the decision in a non emotional place, and then when you make the decision, go all fucking in and be done with it so that you can look at the opportunity cost."

This quote advises entrepreneurs to make rational decisions and then fully commit to them, keeping in mind the opportunity costs of alternative actions.

• Entrepreneurs should evaluate the potential returns of immediate versus delayed business actions.
• The example given involves selling a business now versus later after a proper process for a higher price.
• The decision should be based on whether the additional profit from delaying the sale outweighs potential earnings from new ventures within the same period.

"But let's say you have a business that can sell today for $3 million, and with a proper process, can sell for ten, right? And the proper process would take an extra, let's say, nine months."

This quote presents a scenario for evaluating whether to sell a business immediately or after a process that could significantly increase its value.

"Will I be able to make an extra $7 million in profit from a new endeavor in that period of time? And if it doesn't look like that's the case, then you should wait and do the right process."

This quote suggests assessing the potential profit of new ventures against the gains from delaying a business sale to determine the best course of action.

• The podcast host does not run ads or sell products and relies on audience support for spreading the word.
• Audience engagement through ratings, reviews, and sharing is crucial for the podcast's growth and impact.
• The host's request for support is framed as a way to help more entrepreneurs succeed.

"The only ask that I can ever have of you guys is that you help me spread the word so we can help more entrepreneurs make more money, feed their families, make better products, and have better experiences for their employees and customers."

This quote is a call to action for listeners to help disseminate the podcast's message, aiming to assist more entrepreneurs in their ventures.

"It'll take you 10 seconds or one type of the thumb, it means the absolute world to me. And more importantly, it may change the world for someone else."

This quote highlights the minimal effort required to support the podcast and the potential significant impact that such support could have on others.

• Consider the opportunity cost when choosing between two actions.
• Act on the choice with the greater benefit and ignore external opinions.

at the opportunity cost of doing the other thing that you would do in that meantime. And whichever one is greater is the one that you should do, and you should act on that in the moment and fuck everyone else that tells you otherwise.

This quote emphasizes the importance of evaluating the potential loss or gain from alternative choices and prioritizing the option with the higher value, while disregarding any contrary advice from others.

• Dangerous to listen to people who earn more rather than those who have achieved your desired level of success.
• Advice should be based on the outcomes you're looking for, not just on someone's higher earnings.

I think one of the most dangerous things in the world is listening to people who make more than you, rather than listening to people who make what you want to make.

The speaker warns against the common pitfall of taking advice from those who simply earn more, suggesting that it's more beneficial to seek guidance from individuals who have reached the specific goals you aspire to achieve.

• Listen to highly successful people for a broader perspective.
• Advice often comes from personal experiences and may not always be applicable to you.

Listen to titans. You know what I mean? Listen to the billionaires, listen to those podcasts, watch those guys talk, because they will be able to give you perspective from 10,000 foot view of the things that are really going to drive the outcomes that you're looking for.

The speaker suggests that insights from extremely successful individuals, like billionaires, can offer valuable high-level perspectives that can help drive significant outcomes in one's endeavors.

• People tend to give advice based on their own experiences.
• Be cautious of advice that may not align with your circumstances.

And so don't be afraid to not listen to people if it doesn't feel right for you. And a lot of times, they're just giving you based on the experiences that they have, and they're projecting it onto you.

This quote advises skepticism towards guidance that doesn't resonate with your personal situation, as people often project their own experiences into their advice.

• Aim to be significantly ahead in understanding to serve people effectively.
• Being just one step ahead may not provide the foresight needed for long-term success.

I think you need to be 20 steps ahead of the people that you want to serve. So you can actually see the battlefield for not, like, just the next step.

The speaker argues for the importance of having a long-term vision that goes beyond immediate next steps, which is crucial for truly serving others and ensuring lasting success.

• High average ticket sales and successful conversions to recurring revenue.
• Emphasizes the importance of no abandoned hope sales.

The highest person is getting $2,700 average ticket on the front end for people walking in from normal promotions, which is really cool with 100% of people going into recurring at higher average prices with no abandoned hope sales.

The speaker shares excitement about a successful business strategy that results in high initial sales and strong conversion to recurring revenue models, highlighting the effectiveness of their approach.

• Encourages comments and likes if the content is valuable.
• Open to both positive and critical feedback.

Drop a comment. Drop a like if you thought it was valuable. Otherwise, you can just tell me to go fuck myself.

This quote invites engagement from the audience, showing the speaker's openness to various forms of feedback, whether it be positive or negative.