Overcoming Hardships and Pursuing Growth (with Flex Lewis) Pt. 1 March ‘23 Ep 616

Alex Hormozi reflects on his entrepreneurial journey, emphasizing the necessity of overcoming hardships to build character and the importance of learning through doing. He candidly shares his initial motivation to prove his disapproving father wrong and the pivotal decision to leave a prestigious job to pursue his passion for fitness. Despite early failures, including a significant financial loss and betrayal, Hormozi's resilience led to the successful turnaround of his gym business model, eventually resulting in the licensing of his methods to thousands of gyms. This success paved the way for the creation of supplement and software companies, culminating in multi-million dollar sales. Now, with his family office, acquisition.com, Hormozi invests in simple, scalable businesses, seeking to maximize his potential and continue his relentless pursuit of growth and challenge.

• Building strong character requires going through difficult experiences.
• The speaker values character development over a comfortable life without challenges.
• They express a preference for having "scars" as evidence of a life that has forged character through adversity.

"If I think about myself at the end of my life, I would hope to be somebody who has strong character. But in order to achieve strong character, you have to go through hard things. You can't have one without the other."

The quote emphasizes the belief that character is shaped by overcoming hardships. The speaker associates strong character with life experiences that test and challenge an individual.

• The speaker values close relationships, particularly with their spouse, Layla, with whom they spend nearly all their time.
• They highlight the rarity of Layla having dinner without the speaker, indicating the depth of their bond.
• The speaker enjoys the occasional solitude when Layla is not around, using the time to work more.

"We do everything together. She and I have been together every night since we met, or rather since we've been married, except for one weekend. Damn, we're a package deal."

This quote illustrates the close and inseparable nature of the speaker's relationship with their spouse, reinforcing the idea of a strong partnership.

• The speaker recalls a chance meeting with Flex Lewis at a Roy Jones fight 14 years ago.
• Flex Lewis, early in his career, gave advice on focus and dedication to achieve goals.
• The advice left a lasting impact on the speaker due to Flex Lewis's conviction and commitment to his path.

"And you said, if you want to accomplish your goals, you have to cut everything else out. You have to stop the partying, you have to stop the drinking, and you need to go all in on the one thing."

The quote captures Flex Lewis's advice on the necessity of single-minded focus and eliminating distractions to achieve one's goals, which made a significant impression on the speaker.

• The speaker is working on several projects, including building a new office, writing a book, and making business deals.
• They have a structured workday, dedicating the first half to major projects and the latter half to meetings and smaller tasks.
• The book project is particularly intensive, with numerous drafts and hours invested.

"So whatever happens in that first 6 hours is usually like my big focus. And so for the last 18 months, the majority of my time of that 6 hours of creative time has been dedicated to either scripting out kind of ideas about content, stuff that I want to do. And more realistically, it's been just book."

The quote details the speaker's disciplined approach to work, allocating specific times for creative endeavors and other responsibilities, with a significant portion of time recently devoted to book writing.

• The speaker prefers to work out at the end of the day after their mind is fatigued.
• They've experimented with different workout times but find that later workouts mark a satisfying end to their workday.
• The speaker plans to adjust their routine once their office gym is established.

"I like to fatigue my mind and then my body's fresh at the end of the day, but my brain is spent and then I go work out and that's been like my favorite way to do it."

This quote reveals the speaker's personal strategy for balancing mental and physical exertion, using exercise as a way to decompress after a mentally taxing day.

• The speaker was a successful student and started their career as a management consultant before turning to entrepreneurship.
• They chose entrepreneurship over business school to save money and time.
• Their first business was a gym, chosen from several options due to affordability and personal interest.
• The speaker's gym business expanded rapidly, leading to multiple locations and a successful exit strategy.

"I graduated early from college, magnum cum laude from Vanderbilt, which is a school in Tennessee. Did pretty well in standardized tests. Got a good job after that as a management consultant."

This quote provides background on the speaker's academic and early professional achievements, setting the stage for their entrepreneurial ambitions and success.

• Speaker A established Gym Launch and licensed over 5,000 facilities within five years.
• Prestige Labs was started to sell supplements through the Gym Launch distribution network.
• Allen, a software company, was also created and utilized the same distribution base.
• Speaker A sold three companies in 2021, two to American Pacific Group for $46.2 million and one to a strategic partner in an undisclosed all-stock deal.
• Speaker A founded acquisition.com, a family office for investing in businesses, after exiting the previous companies and taking out $40 million in dividends.

"And now we licensed over 5000 facilities that model over the next five years. And then we started a supplement company to sell through that distribution base of thousands of gyms called prestige Labs."

This quote explains the growth and diversification of Speaker A's business ventures, starting with Gym Launch and expanding into supplement sales with Prestige Labs.

"And in 2021, we sold all three of those companies, two of them to a private equity firm called American Pacific Group. Two of those were for 46.2 million."

This quote details the successful exit of Speaker A's businesses, highlighting the significant financial gain from the sale.

"So we basically contributed assets to an entity, they did too. And then the hope is that five years from now, that next sale will be significantly larger."

Speaker A discusses a strategic partnership and future financial prospects, indicating long-term planning and investment strategy.

"And so from there, we started our family office, acquisition.com, and we started investing our own money because at that point we'd probably taken about 40 things, 40 million in dividends out prior to our exit."

The quote reveals the establishment of acquisition.com and the financial resources Speaker A had on hand from previous dividends to invest in new ventures.

• Speaker A invests in simple, scalable businesses with a clear understanding of their models.
• The investment portfolio includes a variety of industries, from photography studios to mortgage sales.
• Speaker A looks for businesses with one to two main products and avoids entrepreneurs with scattered focus.
• The current portfolio consists of 16 companies with an aggregate annual revenue of around $200 million.

"And so that's been pretty much the thesis behind acquisition.com was finding businesses that are simple, that we can understand, that we can scale."

Speaker A explains the core investment strategy of acquisition.com, emphasizing simplicity, understanding, and scalability.

"It's really just like, do we have a simple business model that has one to two products that we understand?"

This quote underlines the investment criteria of focusing on businesses with straightforward models and a limited number of core products.

"And most people end up creating new products because they just don't know how to sell more of the first one and then end up creating all these appendages attached to the business that ultimately make it harder to run."

Speaker A criticizes the common entrepreneurial mistake of diversifying product lines instead of maximizing the potential of existing products, leading to operational complexity.

• Speaker A experienced significant failures, including losing control of a gym due to partnership issues.
• The idea of teaching others online marketing strategies led to a pivot in business direction.
• A partnership with a person indicted for fraud resulted in financial losses for Speaker A.
• Despite setbacks, Speaker A persevered, taking risks on credit and receiving emotional support from Layla, who became a significant partner in life and business.

"I started the first gym. So all the gyms that I had were more or less successful."

Speaker A acknowledges the success of the initial gym businesses before experiencing ownership and partnership problems.

"So I started the turnaround thing, and it started working. And so then I sold all the gyms."

This quote describes the shift in Speaker A's business strategy towards helping others with gym turnarounds, which led to the eventual sale of the gyms.

"I was the one who was guaranteeing the lease, of course, because he had financial difficulties."

Speaker A details the risk taken in a failed partnership, highlighting the personal guarantee of the lease and the subsequent loss of funds.

"I have this credit card from all my gyms that they haven't canceled yet. I've got $100,000 limit, and this could go horribly wrong."

This quote captures the financial risk Speaker A was willing to take to revive the business, despite the potential for disaster.

"I would sleep with you under bridge if it came to that."

Layla's commitment to Speaker A during financial hardship illustrates the personal support that helped Speaker A continue pursuing business ventures.

• Speaker A's business faced significant financial challenges due to payment processor issues.
• The company had a large sum of money withheld by a payment processor and had to operate with a reduced processing limit.
• Speaker A had to manage a backlog of customer transactions while adhering to the new processing limit.
• The business model involved collecting cash upfront for services provided at gyms and then allowing the gyms to convert members after a six-week program.
• Some gym owners encouraged customers to refund and sign up directly with them for half the price, leading to financial losses for Speaker A's company.

"So the 100 grand, they just kept it. They never gave it back." This quote illustrates the financial loss experienced when the payment processor withheld funds from Speaker A's business.

"I run 50 grand in a day, and I still have another 100 grand in contracts." Speaker A describes the challenge of managing a large volume of business within the constraints of a reduced processing limit.

"Two of the gyms that we launched at a six in January stood up on chairs and told everybody to refund with me and that they would fulfill the same thing for half the price." This quote details the betrayal Speaker A felt when gym owners undercut the business, causing significant financial impact.

• Speaker A's business faced a cycle of increasing sales to cover refunds, which was unsustainable.
• Layla, a colleague, had a successful online personal training program that inspired Speaker A to pivot the business model.
• Speaker A developed a new online sales strategy that quickly generated significant revenue.
• The shift to a licensing model allowed the company to leverage existing internal training materials for external use.
• The new licensing model proved successful, with gyms seeing substantial increases in cash collected using the system.

"Leila had this queen transformation program, which was like her. She took her personal training in person clients to online." Speaker A explains the inspiration for the new business model came from Layla's online personal training program.

"I think we're still in the gym business. I think we're just doing it wrong." This quote signifies the realization that the business could still operate within the gym industry but needed to change its approach.

"We ended up doing, like, I think, something like $300,000 in that month." Speaker A recounts the immediate financial success following the shift to the new licensing model.

• After the pivot to the licensing model, the company's growth accelerated, reaching millions in monthly revenue.
• The first full year of the licensing model yielded $17 million in profit.
• Speaker A emphasizes the importance of perseverance and innovation in entrepreneurship.
• The podcast is promoted through word-of-mouth, without the use of ads or sponsorships.

"20 months later, we were at four and a half million a month." Speaker A describes the rapid growth in revenue following the implementation of the licensing model.

"Our first full year of business. Of the licensing model, we did $17 million in profit." This quote highlights the financial success of the new business model in its first full year.

• Speaker A's businesses faced challenges during Covid but maintained a stable base.
• The company was sold to American Pacific Group for $46.2 million in 2021.
• Speaker A often reflects on the difficult times but also acknowledges the success achieved.
• Humility is a noted characteristic of Speaker A, despite the financial success.

"And so that's what we sold to American Pacific Group for 46.2 in 2021." This quote marks the culmination of Speaker A's business journey with the sale of the company.

"Do you ever sit back and think, do you have their moments where you kind of go back into that time of waking up with that crazy anxiety of thinking, shit, how am I going to get through this day and how am I going to deliver." Speaker B prompts Speaker A to reflect on the past struggles and the contrast with current success.

• Speaker A acknowledges the risks taken in the early business model and the lessons learned from those experiences.
• The shift in business strategy was partly driven by desperation but led to innovation and a successful outcome.
• Speaker A's story highlights the entrepreneurial journey of overcoming adversity through adaptability and resilience.

"I held the processing risk, but I didn't have control over the delivery." Speaker A reflects on the oversight in the initial business model that contributed to the financial challenges.

"Desperation is one of the mother of invention." This quote captures the idea that difficult circumstances can drive creativity and lead to breakthroughs in business.

• Flex Lewis acknowledges the humility and strong work ethic of Speaker A.
• Speaker A is seen as a positive influence and role model for Flex Lewis.
• The importance of being around good influences is highlighted.

You are probably one of the most humblest guys who have got an insane work ethic and you don't come off the gas for nothing.

This quote emphasizes Speaker A's humility and relentless work ethic, which Flex Lewis admires and finds inspirational.

• Speaker A views the purpose of life as learning.
• Learning is achieved through exposure to challenging situations.
• Hardships are necessary for developing strong character.
• Speaker A fears underutilizing the opportunities given to them.
• The belief that much is expected from those who are given much drives Speaker A's actions.

Yeah, I think the purpose of my life is learning. And so learning I can only do through doing.

Speaker A explains their philosophy on life, emphasizing the importance of learning through experience and taking action.

Because at least for me, if I think about myself at the end of my life, I would hope to be somebody who has strong character.

Speaker A aspires to have strong character by the end of their life, recognizing that it's a result of overcoming challenges.

The biggest contributor to where I am now is luck, by far.

Speaker A acknowledges the role of luck in their life and the privileged background from which they come.

• Speaker A clarifies their use of the term "depressed" as feeling aimless rather than a clinical condition.
• The year without work was particularly difficult for Speaker A, leading to a sense of pointlessness.
• Speaker A finds motivation and purpose in being active and pursuing growth.

I just was, like, really aimless and felt like, what's the point of everything?

Speaker A describes the feelings of aimlessness and lack of purpose they experienced during a year without work.

• Speaker A lived a life to make their father proud, which led to a lack of fulfillment.
• The decision to pursue their own path was difficult and strained the relationship with their father.
• Speaker A's early motivation was to prove their father wrong about their potential for success.
• Over time, Speaker A sought their own definition of success and meaning, shifting away from their father's expectations.

Either his dreams die or mine do.

Speaker A faced a pivotal decision between living up to their father's dreams or pursuing their own, which was a major turning point in their life.

I had to pick whether I was going to die to him or live for myself.

This quote captures the essence of Speaker A's internal conflict and the choice they made to live for themselves, rather than for their father's expectations.

• Speaker A's father eventually apologized for not supporting Speaker A's decisions.
• Despite the apology, Speaker A had already moved past seeking their father's approval.
• The relationship between Speaker A and their father has improved, but Speaker A's focus is on self-approval.

You approve of me now. But I stopped caring about what you thought five years ago, so your approval doesn't mean anything to me.

Speaker A expresses to their father that the need for his approval is no longer relevant, highlighting the shift towards self-reliance and personal validation.

• Flex Lewis encourages Speaker A to reflect on and celebrate past achievements.
• Flex Lewis shares his own experience of not being present to enjoy his successes due to always looking forward to the next challenge.
• The conversation highlights the importance of recognizing and appreciating one's accomplishments.

I hope that you're able to be present and celebrate.

Flex Lewis wishes for Speaker A to be able to appreciate their successes, emphasizing the value of being present and acknowledging one's achievements.