Imperfect Action and Certainty Ep 192

Summary Notes


In the Gym Secrets podcast, the host and guest discuss the necessity of taking imperfect action in the face of uncertainty, particularly highlighting the challenges faced by gym owners during the pandemic. They emphasize the urgency of adapting to a new business model, transitioning from in-person to online services, and the importance of maintaining a positive, action-oriented mindset despite incomplete information and the inevitability of mistakes. The conversation also touches on managing business finances, conserving cash flow, and the potential benefits of a remote business model. The host, Alex Hormozi, stresses the importance of leadership and providing certainty to both teams and customers, while also being prepared to learn and improve from the inevitable initial shortcomings of a rapid business pivot.

Summary Notes

Introduction to Gym Secrets Podcast

  • Speaker B introduces the podcast, which focuses on customer acquisition, maximization, retention, and the learnings from failures and successes.
  • The podcast aims to provide valuable insights to listeners who are interested in the gym industry.

Welcome to the Gym Secrets podcast, where we talk about how to get more customers, how to make more per customer, and how to keep them longer, and the many failures and lessons that we have learned along the way. I hope you enjoy and subscribe.

This quote sets the stage for the podcast, outlining its purpose and inviting listeners to engage with the content.

Imperfect Action and Certainty

  • Speaker A discusses the concept of taking imperfect action versus being paralyzed by fear.
  • The topic addresses common concerns among business owners, particularly in the context of needing to pivot or start new ventures.
  • Speaker A emphasizes the inevitability of making choices under imperfect conditions.

About imperfect action and certainty. And so a lot of you have either recently started, had to make a massive pivot in your business, or you've been paralyzed by fear.

This quote introduces the main theme of the segment, which is the importance of taking action even when the outcome is uncertain or the situation is not ideal.

The Reality of Business Decision-Making

  • Speaker A acknowledges that business decisions often have to be made with incomplete information.
  • The discussion focuses on the lack of alternatives and the urgency to act in challenging circumstances.
  • Speaker A and Speaker C highlight the messiness and imperfections inherent in rapid decision-making.

It's going to be ugly. There's going to be shit you're going to fuck up. Your team is going to be operating on incomplete info. Because the thing is, what other options.

This quote captures the essence of the challenges faced by businesses, especially during times of crisis, emphasizing the need to move forward despite the lack of perfect information.

The Pressure of Business Environment

  • Speaker A describes the intense pressure businesses face, particularly when external factors force immediate changes.
  • The conversation underscores the necessity to adapt quickly to new regulations or market conditions.
  • Speaker A suggests that the urgency of the situation should dictate the pace of action.

Once you've pressure tested everything and gotten, the process flows down. And it's not like the thing is, a lot of you guys had. Everything's cool. And then the next day you were announced you're not allowed to do business, right?

This quote illustrates the sudden and drastic changes businesses may encounter, necessitating swift and decisive action to remain operational.

Emotional Permission and Team Dynamics

  • Speaker A talks about the importance of giving the team emotional permission to accept imperfection and still take action.
  • The concept of emotional permission is linked to the leadership's role in setting the tone for the team's response to challenges.
  • Speaker A and Speaker C discuss the lack of alternative solutions, reinforcing the need for decisive action.

So when you're talking to your team, be like, listen, right after you explain everything to do, listen, guys, I know this is not perfect. I know this is not even pretty.

This quote emphasizes the leadership strategy of acknowledging imperfection while still rallying the team to move forward with the best available plan.

Business Adaptation and the S Curve

  • Speaker A explains the concept of the S curve in business, which represents the life cycle of a product from development to maturity.
  • The discussion relates to how businesses traditionally adapt over time but are currently forced to do so rapidly.
  • The S curve is used as a metaphor for the need to repurpose existing resources and skills to meet new market demands.

This is what businesses do over longer cycles. They call these s curves, where an old product dies over time. And then you begin r and D on a new product.

This quote provides a theoretical framework for understanding how businesses evolve and adapt, which is particularly relevant in the context of forced, rapid change.

Transition to Remote Work

  • Organizations were forced to switch to remote work without prior experience.
  • Teams lacked knowledge on using remote communication tools like Zoom.
  • There were concerns about maintaining communication cadence with clients.
  • Challenges included scheduling and onboarding new employees remotely.

Never having done it. Your team doesn't know how to do remote. You don't know how to get Zoom to work. You don't know what the communication cadencies will look like. Your clients don't know how to make that stuff work.

This quote highlights the immediate challenges organizations faced when transitioning to remote work, emphasizing the lack of experience and familiarity with remote communication tools and protocols.

Embracing Uncertainty and Imperfection

  • Leaders must project certainty in times of uncertainty to inspire confidence.
  • The phrase "confidence for boys, and certainty is for men" suggests maturity is reflected in certainty.
  • It's acceptable to make mistakes, but inaction is not.
  • Imperfect action is necessary, especially when learning new skills like selling over the phone.
  • The initial quality of remote services may not be high, but improvement is expected over time.

We need to reflect certainty in times where you are not certain because that is what everyone is looking for from you as the leader, right?

This quote emphasizes the importance of leaders showing certainty to inspire their teams, even when they themselves may feel uncertain.

It's okay for you to fuck up right now, right? But what's not okay is for you to do nothing.

The speaker encourages taking action despite imperfections, stressing that mistakes are part of the learning process but inaction is unacceptable.

Proactivity and Learning from Others

  • Waiting for a crisis to affect one's own area before taking action is discouraged.
  • Proactivity and preparedness are advocated for.
  • Humans have the unique ability to learn from others' mistakes.
  • The situation with the pandemic is evolving, and lessons should be learned from regions already affected.
  • Massive and immediate action is necessary to adapt to significant external changes.

And if you're in an area that isn't quarantined, do not be the guy with the dunce hat on who says, well, I'm going to wait.

This quote criticizes the attitude of waiting for a crisis to hit before taking action, instead of proactively preparing and learning from others' experiences.

You got to take imperfect action. And it has to be massive because you're not going to take a small incremental shift from a shift from a massive external change.

The speaker advises that in response to a massive external change, one must take substantial and immediate action, even if it's not perfect.

Podcast Engagement

  • The hosts jokingly chastise listeners who have not yet rated or reviewed the show.
  • They emphasize the importance of listener engagement for the growth of the podcast.
  • Listener reviews are highly valued by the hosts.

Hey, if you're a return listener and you have not rated or reviewed the show, I want you to know that you should feel absolutely terrible about yourself.

This quote is a humorous attempt to encourage listeners to engage with the podcast by leaving ratings and reviews.

But it would mean the absolute world. To me if you guys would go ahead and do that, and you don't. Even have to pause the show.

Here, the hosts express how much they would appreciate listener reviews and ratings, suggesting that it is a simple action that can be done while continuing to listen to the podcast.

Entrepreneurial Resilience and Adaptation

  • Entrepreneurs must be self-reliant and proactive in the face of challenges.
  • Adapting to new circumstances, such as those brought by the coronavirus, is crucial for business survival.
  • Businesses should focus on conserving cash flow and prioritizing essential expenses.
  • Marketing and sales are vital to maintain customer acquisition and business growth.

"It's okay if you suck. It's okay if the things that you do don't work as nearly as well as you wanted them to."

This quote emphasizes the importance of being forgiving to oneself during trying times and accepting that not everything will go as planned.

"The one thing you cannot stop is marketing and sales."

This quote highlights the necessity of continuous marketing and sales efforts to ensure the inflow of new customers and the survival of the business.

Financial Management Strategies in Crisis

  • Eliminating or reducing rent expenses can be a strategic move to conserve cash.
  • Legal counsel should be consulted when making decisions about rent and credit obligations.
  • Credit forgiveness may be available, especially for businesses affected by government shutdowns due to the pandemic.
  • Forbearance options from lenders can provide temporary relief for landlords and tenants.
  • Cash flow should be directed towards customer acquisition and essential business operations.

"If your landlord doesn't have to pay his mortgage, you and all likely will do not get penalized for not paying your rent."

This quote suggests that tenants may have leverage in negotiating rent payments if landlords are receiving mortgage forbearance.

"I would be conserving cash flow and only focused on one thing, which is acquisition."

This quote advises businesses to concentrate their resources on acquiring new customers, which is crucial for maintaining revenue streams during a crisis.

Operational Adjustments for Business Continuity

  • Learning new acquisition and fulfillment processes is necessary to adapt to remote operations.
  • Businesses should transition to digital platforms like Zoom for sales, fulfillment, and customer engagement.
  • Non-essential expenses, such as maintaining a physical location that no longer provides value, should be cut.

"Learn a new acquisition process. Learn a new fulfillment process of selling over the phone, selling over Zoom, fulfilling over Zoom, having zoom workouts, having remote check ins."

This quote underscores the need for businesses to pivot to online methods for sales and service delivery in response to physical distancing measures.

Managing Workforce and Expenses

  • Non-essential employees may need to be let go to keep the business viable.
  • It's important to differentiate between an employee's personal value and their ability to provide value in the new business context.
  • Government economic programs and unemployment benefits can support affected employees.
  • Reducing fixed overhead and payroll expenses can help maintain a business's recurring revenue.

"If you can no longer provide value in this new vehicle, then there's really no place for you here."

This quote addresses the tough decisions businesses must make regarding staffing, based on the changed requirements of the business during the crisis.

"You have to let go of nonessential employees who are not going to provide value in the new setting."

This quote suggests that businesses need to assess and act on staffing changes to align with the operational shifts necessitated by the crisis.

Long-Term Landlord-Tenant Dynamics

  • Landlords may be more willing to negotiate rent terms considering the difficulty of finding new tenants during an economic downturn.
  • Offering free rent or forbearance could be a strategy for landlords to retain tenants in the long run.

"Would they rather give some months of free rent or give some forbearance so that they could potentially keep you on the longer side? Probably."

This quote implies that landlords may prefer to offer concessions to keep tenants rather than risk prolonged vacancy periods.

Business Continuity and Adaptation Strategies

  • Emphasize the importance of not allowing cancellations, only pauses, to retain customers.
  • Highlight the potential of maintaining or even increasing profit despite a loss in recurring revenue.
  • Advocate for the preparation and implementation of remote, high-value services.
  • Stress the necessity of embracing change as an opportunity for a more profitable business model.
  • Encourage action and resilience in sales, particularly over the phone, and provide practical tips for improving sales calls.

"Quick side note, don't let anyone cancel. They can only freeze."

This quote emphasizes the strategy of preventing customer cancellations by offering the option to pause services instead, allowing for easier re-engagement once normal operations resume.

"And you lose 40%, so you're down six... That means you have 9000 recurring left. If you have no rent and you only have one person who's assisting you, you may actually be able to make more money."

This quote illustrates a scenario where a business loses a significant portion of its recurring revenue but could still potentially increase profits due to decreased expenses, such as rent and payroll.

"Like eight or nine months ago, I pushed... for a remote fumbling system, right? Because you're going to be able to prepare and have another way of providing high value, high margin services."

The speaker reflects on past advice to prepare for remote operations, highlighting the potential for high-value, high-margin services that can be provided remotely.

"Remote is a better business model. It's a higher profit model. It has more scale to it."

This quote underscores the benefits of a remote business model, including higher profitability and scalability.

"All we have to do right now is just learn it and be okay and give ourselves permission to suck a little bit in the beginning."

The speaker encourages acceptance of the learning curve associated with transitioning to a new business model and the importance of allowing for initial imperfections.

"Use that if you don't know how to fix your tone."

This practical tip suggests using a mirror or reflective surface to improve tone and communication during sales calls.

Resilience and Action in Times of Change

  • Reinforce the idea that change can be positive and should be internalized as an opportunity.
  • Encourage continuous action and not remaining idle in the face of adversity.
  • Reject the expectation of external rescue and emphasize self-reliance.
  • Express solidarity and optimism for the future within the industry.

"Just because it's change doesn't mean it's bad."

This quote serves as a reminder that change should not automatically be perceived negatively but rather as a potential avenue for improvement.

"Superman ain't coming. It's just us."

The speaker uses this metaphor to convey that individuals must take responsibility for their own actions and not wait for an external savior.

"Thankfully, we're in an industry that we could actually very easily pivot to remote."

Acknowledging the advantage of being in an industry that lends itself well to remote adaptation compared to others that may face more significant challenges.

Gratitude and Perspective

  • Recognize the relative ease of pivoting certain industries, like fitness, to remote operations.
  • Compare the challenges of transitioning other industries, such as restaurants and event planning, to remote formats.
  • Encourage appreciation for the current opportunities and capabilities within one's industry.

"Switching to remote restaurant, much more difficult. Switching to remote events. Doing zoom events, not necessarily as valuable as an in person three day event."

This quote provides perspective on the varying degrees of difficulty industries face when adapting to remote operations, highlighting the unique challenges of some sectors.

"So be grateful for what we got."

The speaker calls for gratitude, acknowledging the benefits and opportunities present in the current situation despite the broader challenges.

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