Behind the Curtains of Successful Entrepreneurship (on The Game Changing Attorney Podcast) Pt. 1 July ‘23 Ep 622

In this candid discussion, Alex shares his journey from starting an online training charity to becoming a successful entrepreneur with a portfolio of companies. He emphasizes the importance of branding, detailing his shift from direct response marketing to building a brand with pricing power. Alex's entrepreneurial path involved starting a gym, licensing his business model, and eventually selling his companies for millions. Throughout his story, he highlights the significance of using personal pain as motivation and the role of luck in success. He also touches on his relationship with his wife, Layla, and their collaborative growth, underscoring the value of humility, drive, and impulse control in successful founders. Alex's insights reveal that a long-term perspective and strategic time management are key indicators of an entrepreneur's potential success.

• Speaker A emphasizes the importance of utilizing personal challenges as fuel for entrepreneurial endeavors.
• Entrepreneurs often encounter emotions such as anger, shame, fear, resentment, and anxiety, which can be channeled into their work.
• Speaker A advocates for leveraging existing personal experiences and emotions to drive success in business.

"But my probably singular message is use pain. Because most entrepreneurs don't need to look very far to find the pain in their lives. Anger, shame, fear, resentment, whatever it is, anxiety."

Speaker A is encouraging entrepreneurs to harness their personal struggles as a source of motivation and a means to propel their businesses forward.

• Speaker A describes their journey from starting a podcast in June 2017 to diversifying content across multiple platforms including YouTube, TikTok, Instagram reels, and Twitter.
• The strategy involved posting content on these platforms to engage with audiences and grow their brand.

"So my first podcast is June of 17. And then I think in September of 20, I did my first YouTube videos. And then I did that first. And then I think probably one or two quarters later, we started with the short video stuff on TikTok and Instagram reels. I picked up Twitter, I think in June of the next year of 21. And then that's been more or less the entire strategy."

Speaker A outlines the timeline and expansion of their content creation strategy, highlighting the importance of adapting to different media formats to reach a larger audience.

• Speaker A reflects on the shift in their perspective on branding, contrasting their initial stance against it with their current belief in its critical importance for differentiation and pricing power.
• Branding is seen as a tool to build goodwill with the audience and to enable pricing above commodity levels.
• The long-term strategy is to create a brand that adds value and can be leveraged across various ventures.

"What led to that being wrong? My 8th episode of my podcast in 17 was stop branding. 8th episode. I probably have the exact opposite perspective now, and I'm wealthier now. So hopefully I'm right and maybe in ten years I'll change my mind again, but I don't think I will."

Speaker A acknowledges the evolution of their understanding of branding, indicating that their previous views have been reversed and that they now see the tangible financial benefits of strong branding.

• Speaker A shares their entrepreneurial progression from starting an online training charity to owning gyms, then moving into gym turnarounds, licensing, e-commerce, software, and ultimately selling companies to a private equity group and starting a family office.
• The journey showcases the adaptability required in entrepreneurship and the various stages of business development.
• Speaker A illustrates the transition from direct service provision to scalable models such as licensing and software, leading to significant financial success.

"Yeah, I'll do it by businesses, so that would be easier. So first thing I did was I started an online training, running the charity business so people would pay, but then I would donate the money."

Speaker A provides a chronological account of their business ventures, beginning with a charity-based model and evolving into more complex and profitable enterprises.

• Speaker A recounts moments of adversity, including rock bottom experiences and challenges with integrity and financial management in partnerships.
• These difficulties are part of the entrepreneurial narrative and have shaped Speaker A's journey.

"Unrelatable recanting of events. There were many rock bottom moments, but I would say the two most famous of them, if stories can become famous, was when we switched out of the brick and mortar gyms and got into the turnaround business."

Speaker A admits to the hardships faced during their entrepreneurial path, particularly when transitioning from owning gyms to focusing on gym turnarounds, which was a pivotal moment marked by significant challenges.

• Speaker A recounts the experience of losing their gym business due to a partner's accusation of skimming profits.
• They tried to resolve the issue with financial transparency but were dismissed, leading to the realization of being scammed.
• Speaker A's wife, despite the situation, encouraged continuing business ventures.
• Friends were convinced to quit their jobs to join the new business venture starting on December 26, 2016.

"I just got completely scammed here. And so, yeah, I lost everything."

The quote highlights the moment Speaker A realized they were scammed by their business partner, leading to a total loss of their business.

"Hey, here's this guy from the Internet that I just left everything for. He's a real winner. He has nothing to his name, and we're going to start this business together."

This quote illustrates the precarious situation Speaker A was in when meeting their wife's parents, emphasizing the risk involved in their new joint venture.

• Speaker A describes a failed attempt to recoup money through a big launch, which was hindered by payment processing issues.
• The payment processor withheld funds due to irregularities, causing a financial crisis right before a new business launch.
• Despite the risk, Speaker A decided to use a credit card with a $100,000 limit to cover launching costs.
• Speaker A's wife expressed unwavering support, boosting Speaker A's confidence to proceed with the risky investment.

"I'm not getting off the phone until you guys send me the money."

Speaker A demonstrates determination to resolve the payment processing issue, indicating the urgency of their financial situation.

"I think this could go really terribly wrong and I think you would be justified in leaving me at this time."

This quote shows Speaker A's awareness of the potential consequences of their financial gamble and the strain it could place on their relationship.

• Speaker A managed to secure a new payment processor, which temporarily solved the immediate financial problem.
• The business initially showed signs of recovery, but gyms they worked with began undercutting prices, leading to another financial loss.
• Speaker A decided to pivot their business model to direct-to-consumer sales, overcoming reluctance from gym owners.

"I lost everything again, the little nut that I had saved up."

Speaker A acknowledges the repeated loss of their financial gains, emphasizing the volatility of their business endeavors.

"I refinanced my house, and I maxed out all my cards, like, I need your help."

The quote reveals the desperation of the gym owner, highlighting the high stakes and personal investment involved in the business.

• Speaker A shifted to a consultancy model, charging gym owners for knowledge on how to fill their gyms.
• The new approach was successful, leading to a significant one-day revenue of $60,000.
• Speaker A and their wife decided to continue in the gym business with the new model.
• Personal hardships, including a car accident and family health issues, compounded the business challenges.

"I think we're still in the gym business. I think we were just doing it wrong."

Speaker A expresses a realization that their business could still be viable if approached differently, indicating a strategic pivot.

"During that period of time. I also got a head-on collision in the DUI. My mother was in the hospital."

This quote contextualizes the breadth of Speaker A's struggles, showing that their challenges were not limited to business but also included significant personal difficulties.

• Speaker B comments on the story as an "ultimate pitch for entrepreneurship," to which Speaker A responds with a cautionary note.
• Speaker A reflects on the driving forces behind their perseverance, including the fear of failure and a desire to prove their father wrong.
• The hardships faced are seen as preferable to the alternative of defeat.
• Speaker A criticizes the overly positive portrayal of entrepreneurship on social media, emphasizing the reality of initial struggles.

"The ultimate pitch for entrepreneurship, like, beware."

Speaker A's response to Speaker B's comment serves as a warning about the harsh realities of entrepreneurship.

"I would rather have died than done that. And so as much pain as I was going through at the time, it was better than the alternative of admitting defeat."

This quote captures Speaker A's determination to avoid failure at all costs, which was a significant motivator in their entrepreneurial journey.

• Entrepreneurs often face deep depression due to a lack of knowledge and direction in the early stages of their careers.
• The feeling of hopelessness and ignorance can lead to questioning one's passion and ability.
• Speaker A advocates using pain as a motivator and resource for entrepreneurship.
• Pain, anger, shame, fear, resentment, and anxiety are emotions that can drive an entrepreneur's actions.
• Passion is not considered a necessary resource for success; instead, using whatever fuel one has is encouraged.
• Initially, moving forward is more important than the type of motivation, with 'away from' fuel being powerful but potentially less sustainable.

"Which leads to very deep depression for a lot of entrepreneurs. At different times in their careers, most guys who are starting out are thinking there's something wrong with them because they're not passionate."

This quote highlights the common struggle of entrepreneurs who feel inadequate due to a perceived lack of passion, leading to depression.

"I think you need fuel, and you should use whatever fuel you have."

Speaker A emphasizes the importance of utilizing any available emotional drive to propel entrepreneurial efforts, rather than being constrained by the traditional notion of passion.

• Luck is considered a significant factor in one's success by Speaker A.
• Certain actions can increase the "surface area" of luck, implying that while luck is influential, one can position themselves to encounter more opportunities.
• Speaker A acknowledges the advantages of their own birth circumstances and how it has contributed to their success.
• The role of upbringing and environmental factors is recognized as part of the luck that influences outcomes.

"I think luck is huge. I think there are things you can do to increase the surface area of luck."

Speaker A acknowledges the substantial role of luck in success but suggests that individuals can take steps to expose themselves to more opportunities for luck to play a role.

• Layla's exceptional judgment of character is highlighted as a key factor in her support for Speaker A.
• Layla's never-failing instincts in hiring and partnerships are praised.
• The initial phase of Speaker A's relationship with Layla was more business-focused, with personal romance developing later.
• Their relationship and marriage were atypical, with a strong focus on work and mutual growth.

"I think Layla is an exceptional judge of people."

Speaker A attributes Layla's unwavering support to her ability to accurately assess people's potential and character.

"We're not good yet, but I think that we could be good together."

This quote reflects the mutual belief between Speaker A and Layla that their partnership had the potential for growth and success, despite initial challenges.

• Speaker A discusses the "four horsemen of divorce," with contempt being the highest predictor of divorce.
• Contempt is defined as a combination of a lack of respect and feeling superior to one's partner.
• The inverse, which is having ultimate respect and viewing the partner as better, is considered a safeguard for relationships.
• Respect within a relationship is sometimes deemed more important than affection.

"The one that was the highest predictor was contempt, which can be seen visually with an eye roll."

Speaker A highlights the importance of respect and how contempt, often expressed through an eye roll, can be a significant predictor of relationship failure.

• Speaker A shares that they have been with Layla for seven years and emphasizes the intensity of their time spent together compared to average relationships.
• Acceptance is key in a relationship, especially when working together.
• Speaker A advises against trying to change one's partner and emphasizes the importance of accepting them for who they are.
• The concept of "losing in the draft" is introduced, suggesting that some relationships may not have the right foundation for both partners to achieve their potential.

"The biggest thing that has worked for us is just acceptance, which is that Leila has never tried to change me, and I've never really tried to change her."

Speaker A credits the success of their relationship and business partnership to mutual acceptance without attempting to change each other.

"I think a lot of people lose in the draft."

This quote introduces the idea that the initial choice of a partner can predetermine the success of a relationship, drawing a parallel to sports team drafts.

• Picking a partner with aligned long-term goals and values is crucial for lifelong happiness.
• Growth and change in a relationship should be in the same direction to maintain compatibility.
• The strength of a relationship with a significant other has a high correlation to subjective well-being.

"And so I think that making sure that you're picking somebody who has the same long term goal as you has the same values as you. And I think the single greatest one is that if you want to grow, that they want to grow..."

This quote emphasizes the importance of shared goals and values, especially regarding personal growth, in choosing a life partner.

• The correlation between relationship strength and subjective well-being is 0.71.
• Relationships are considered permanent and have a significant impact on daily life, unlike changeable aspects such as business or location.

"So it has a zero point 71 correlation to your subjective well-being is the strength of your relationship with your significant other."

The quote highlights the strong influence that the quality of a significant relationship has on an individual's overall happiness.

• Location and social circles are important but less so than choosing a life partner.
• The industry chosen for business has a significant impact on success.
• Certain industries may be declining, affecting the potential for success regardless of individual talent.

"But two and three, where you live, like the actual market that you're in, that's becoming less and less important. But I think just the circles you run in are important."

This quote discusses the importance of one's social environment and industry choice on personal and professional success.

• Humility allows founders to accept feedback and adapt, which is crucial for long-term success.
• Drive is essential, and successful founders often have a superiority complex, crippling insecurity, and impulse control.
• Success is not about early wake-up times or health habits but about having big goals, motivation, and discipline over time.

"Yeah, they're humble. If you have humility, you can do a lot. Because if somebody's humble, then they can accept feedback. If they can accept feedback, then they can change."

The quote emphasizes humility as a key trait for founders, as it enables them to receive and act on feedback, facilitating improvement and growth.

• The average small business owner earns a median income but takes on more personal risk.
• Entrepreneurship is often glamorized, but it involves high risk and is not always as lucrative as portrayed.
• Knowledge reduces business risk, but gaining knowledge requires taking initial risks.

"I think right now it's in vogue. It's cool. I mean, it is the way to make the most money. It's also the way to lose the most."

This quote reflects on the current trendiness of entrepreneurship and the common misconception that it is an easy path to wealth, ignoring the associated risks.

• Good decision-making is a result of experience, which often comes from making bad decisions.
• This cycle of experience and decision-making drives improvement and success.

"How do you make good decisions? Experience. How do you gain experience? Bad decisions."

The quote captures the iterative learning process where experience is gained through making decisions, which may initially be poor but improve over time.

• Successful entrepreneurs think in terms of decades and generations, indicating a long-term vision.
• Time allocation on a daily basis reveals future success, as it shows how one's most scarce resource is managed.
• Entrepreneurs often work maximum hours, so success depends on doing the right activities, not just working harder.

"You can pretty easily tell how successful an entrepreneur is by looking at two elements of time. One is the increments of time they speak in."

This quote suggests that the way entrepreneurs talk about time reveals their potential for success, with long-term thinkers likely being more successful.