Switching Mindsets, Investing, & More (on Anik Singal) Pt. 2 Sept. '22 Ep 507

In a dynamic conversation, Alex Hermozi and the host delve into the intricacies of business, emphasizing the importance of building, selling, and leading. Hermozi shares insights from his experience with gym owners, discussing the transition from a high-ticket front-end offer ($16k for 16 weeks) to a lucrative licensing model, and the subsequent backend systems that address emerging business needs. He also touches on his upcoming book, "$100M Offers," aiming to guide entrepreneurs in crafting compelling offers. Additionally, Hermozi highlights his strategic shift from paid advertising to organic content creation for brand trust and inbound marketing, revealing his preference for YouTube as a content platform and Twitter for intellectual engagement. The dialogue also covers the potential of Web3, the value of alternative education, and an interest in the finance sector, concluding with Hermozi's advice to budding entrepreneurs: hone your sales skills to fuel business growth.

• Business success requires proficiency in building, selling, and leading.
• The podcast discusses strategies for customer acquisition, maximizing customer value, and customer retention.
• Alex Hermosi shares insights from his own business experiences and failures.

"I see business as three core skills. It's like you got to learn how to build, you got to learn how to sell, and you got to learn how to lead."

This quote encapsulates the three foundational skills essential for business success: building (creating products/services), selling (marketing and sales), and leading (managing and guiding a team). The relevance is in highlighting the multifaceted nature of running a business.

• The original product offered was priced at $16,000 for 16 weeks.
• The focus was on implementing a new business model rather than just providing a course.
• The product aimed to solve immediate problems and then reveal other areas of improvement for clients.

"The original product for the first five years was 16,000 for 16 weeks. So. Sixteen k. Sixteen weeks, $1,000 a week."

This quote details the initial pricing structure of Alex Hermosi's product, emphasizing the high-value, time-bound nature of the offering. It shows the business's focus on premium pricing and intensive short-term engagement.

"It definitely was not a course, and I think that's where we parted from that probably five years ago."

Alex Hermosi differentiates his offering from typical courses, indicating a strategic pivot in his business model to provide more comprehensive solutions. This shift was likely in response to market saturation and the desire to offer more value.

"So the first one was really just kind of an accelerator to get them people in the door, get them cash in their pocket. And the second one was to buy them time back and transition it from a job to an asset."

The quote explains the two-fold objective of the product: initially to boost client income quickly and subsequently to transform their operations from a job to a sustainable asset. This showcases the strategic progression of customer value delivery.

• Upselling is a critical part of the business model, offering more of what customers have already found valuable.
• The back-end product was priced at $42,000, providing extended access to the business's resources.

"My favorite upsell. More of what you've already got."

This quote by Alex Hermosi reveals his preferred upselling technique, which is to offer customers an extension or enhancement of the product they've already purchased and benefitted from. It's a testament to the effectiveness of building on existing customer satisfaction.

"So it's a pretty seamless transition into the 40 because it's just more of what they already paid a lot of for and got value."

The discussion confirms the smoothness of the upselling process, as customers are familiar with the product and its value, making the decision to invest further an easier one. This highlights the importance of delivering initial value for successful upselling.

• There's a tendency among entrepreneurs to overcomplicate business models.
• Simplification has become more appealing, often due to changes in personal circumstances, such as having a baby.
• Focusing on what works and doing a lot of it can be a more effective strategy than diversification.

"I made learn about as damn complicated as it can get. I've made other businesses, actually. It's my superpower is I complicate things."

This quote reflects a common entrepreneurial challenge of overcomplicating business models, which can hinder growth and efficiency. The speaker acknowledges their tendency to add complexity to their endeavors.

"And lately, I'm just like. And I swear I think it's because we had a baby, so I have limited energy. So I'm just like, let's not do that. Let's not do that. Let's definitely not do that. Let's just do this. And let's just do this and do a lot of it."

The speaker shares a personal anecdote about how having a baby led to a shift in their approach to business, favoring simplification due to limited energy. This change in perspective underscores the benefits of focusing on core, effective strategies.

• Entrepreneurs often underestimate the size of their market and the potential for growth within it.
• Alex Hermosi uses the example of independent pizza restaurants to illustrate the vast opportunities available for businesses to leverage the internet for growth.
• The conversation encourages entrepreneurs to recognize and tap into the untapped potential of their markets.

"There's such a huge market. I have a really good friend of mine, he owns a pizza restaurant. So I was, like, jiving with him a few weeks ago, telling him ways and strategies to use the Internet."

This quote highlights the speaker's realization of the significant market size for independent pizza restaurants and the potential for these businesses to grow through online strategies. It suggests that many markets are larger than entrepreneurs perceive and that there is ample room for expansion.

• Alex Hermosi is writing a new book titled "$100 Million Leads."
• The book will cover strategies for lead generation, both paid and organic.
• Hermosi teases that there are four primary ways for a person to inform another about a product or service, with two additional strategies that build on the first four.

"Yeah. So there's four ways that a person can let another person know about a thing, and then there's two strategies in addition to that. So there's six in total, but the other two leverage the first four."

This quote provides a sneak peek into the content of Alex Hermosi's upcoming book, hinting at six core strategies for lead generation. The relevance lies in the anticipation it creates for readers seeking to improve their marketing and sales tactics.

"I'm guessing Q one, I finished the final, like the first draft this last weekend, and so I'll have to go through second drafts and edits and all that kind of stuff. And then usually I'm guessing that'll probably take twelve weeks, and then from there it'll take twelve weeks to get it published and"

Alex Hermosi provides a rough timeline for the release of his new book, indicating that it is in the editing phase and suggesting a possible publication date within the next several months. This information is relevant for potential readers and followers of his work.

• Alex Hermosi discusses the nature of his involvement in businesses post-investment.
• He compares his role to that of Warren Buffett and Charlie Munger at Berkshire Hathaway.
• Although not directly managing portfolio companies, he is actively involved in advising and supporting them.

"It depends how you see the hold co operations, because if you think about Warren Buffett and Charlie, I think they definitely are active in Berkshire Hathaway. They have 19 employees et cetera."

This quote highlights the analogy Alex Hermosi makes between his operations and those of Warren Buffett and Charlie Munger, suggesting that while he may not be involved in daily operations, he plays a significant role in the overarching strategy and support of his portfolio companies.

• Alex Hermosi confirms having a full team at acquisition.com.
• The majority of the team's efforts (75%) are dedicated to supporting the growth of portfolio companies.
• Team members are experts in various fields, such as marketing and sales, and provide strategic advice rather than coaching.

"Yeah, we have a full, very full team." "75% of it is supporting the portfolio companies. And so that's basically everything we can to help each of the departments of each of the companies grow."

These quotes confirm the existence of a robust team at acquisition.com focused on supporting portfolio companies. The team's primary role is to provide expertise and strategic advice to help these companies grow.

• Alex Hermosi clarifies the role of his team as advisors and consultants rather than coaches.
• The team provides actionable advice on department structure, compensation, recruitment, and software changes.
• He emphasizes the difference between accountability coaching and providing strategic counsel.

"Mostly because I think it has a different connotation. You know what I mean? I would say this is much more advice counsel than it is like coaching."

This quote emphasizes the distinction Alex Hermosi makes between coaching and advising, with the latter being the approach his team takes when supporting portfolio companies. They focus on providing strategic advice rather than holding clients accountable for tasks.

• Alex Hermosi discusses his shift from paid marketing to organic content creation.
• He identifies six customer acquisition strategies and notes that he had previously built companies using five of them, except for building an organic base brand.
• The shift to organic was driven by a desire to attract long-term, trust-based partnerships, especially since his business model involves minority stakeholding and influence rather than control.

"The one that I hadn't done is I'd never built an organic base brand. And so it sounded fun to try and do something that I hadn't done before."

This quote explains Alex Hermosi's motivation to explore a new marketing strategy by building an organic base brand, which he had not done before, highlighting his interest in diversifying his experience and tactics.

"For a very long term commitment, you have to come in with trust. And especially because we're in a minority stakeholder situation, we have to be able to lead with influence rather than with legal arm twisting, which is how I prefer not to live my life."

Alex Hermosi outlines the importance of trust and influence in his business dealings, especially given his preference for minority stakeholding. He suggests that organic marketing aligns with these values by naturally attracting partners.

• The discussion pivots to the challenges of creating content for social media.
• Alex Hermosi acknowledges the time-consuming nature of content creation and the rapid consumption of content by audiences.
• He explains his decision to focus on organic content despite the effort involved, citing the strategic benefits for his business model.

"It is so crazy how fast we burn through the stuff we shoot, because one week we'll be like, yeah, we're two months ahead. And it's like, hey, man, I'm about to run out of content in, like, three days, so can we film more?"

This quote from Speaker B reflects the fast-paced and demanding nature of content creation for social media, where content can quickly become depleted, necessitating constant production.

• Speaker B expresses concerns about sharing personal life on social media due to being a private individual.
• Alex Hermosi's shift to organic content influenced Speaker B to consider similar strategies despite privacy concerns.
• The conversation touches on the balance between personal privacy and public content creation.

"I'm a bit of a private person, so the idea of me talking about my relationship with my wife or whatever, it just didn't really settle with me."

Speaker B shares their hesitation to create content that delves into personal matters, highlighting the tension between maintaining privacy and engaging in organic content marketing that often requires a personal touch.

• Alex Hermosi and the host discussed video production and the desire to surpass previous records.
• The host aimed to create 101 videos, one more than Alex's 100, to beat the record.
• There was a tension between suggested topics and personal preferences in content creation.

"When you went to film with Alex first time, how many videos did he do? And he's like, he did a hundred. I'm like, we're going to do 101." "I was arguing with him because he would tell me to do certain topic, right? And I was like, I want to talk about that, right?"

• The quotes indicate a competitive drive in content production and the creative control desired by the host.
• The importance of balancing suggested topics with personal interest is highlighted.

• The host studied Alex's channel and appreciated the balance between professional content and personal anecdotes.
• Personal elements like the flannel shirt video and office tour help followers connect with Alex on a deeper level.

"I studied your channel. I like the mix. I think it's very meticulously done." "It does help for people that are following you to kind of see that other side."

• The quotes reflect the host's recognition of meticulous content curation and the value of personal branding.
• The effectiveness of integrating personal branding into professional content is emphasized.

• The host discussed the transition from commercial to organic reach and the impressive growth on YouTube.
• They debated the best social media platform for business, with Alex favoring YouTube for its long-form content capabilities.

"Organic will take some time. But, man, once it starts to take off, it's like a freaking freight train that right now we're getting on YouTube alone, like 15 million views a month." "I like YouTube... The long form stuff. You can go so much deeper into topics."

• The first quote highlights the power and potential of organic reach on social media.
• The second quote reveals Alex's preference for YouTube due to the depth of content that can be provided through long-form videos.

• Alex Hermosi expresses a strong preference for Twitter, citing the high quality of discussion and user base.
• He appreciates Twitter for its ability to foster concise communication and improve writing skills.
• The character limit on Twitter is seen as a way to encourage more meaningful content.

"I think the quality of the average Twitter user is so, like, they have higher average income, like, higher IQ." "Twitter has made me a better writer because it forces me to consolidate my thoughts into single, like, various shorter sound bites."

• The first quote suggests that Twitter users are of a higher demographic, leading to more engaging conversations.
• The second quote emphasizes how Twitter's character limit helps refine communication skills.

• Alex follows a mix of comedians, philosophers, and business figures on Twitter.
• The host is interested in emulating Alex's Twitter following to engage with similar content.

"Mine's like, one third, one third, one third. It's like comedians, philosophy, and business."

• The quote indicates the diverse range of interests Alex has, which influences his Twitter feed and the people he follows.

• Alex hopes Elon Musk will acquire Twitter, believing it would be beneficial for the platform.
• There is a brief discussion about the issue of fake users and bots on social media.

"I hope so. I think it'd be really good for the platform, and I really like the platform."

• The quote reflects Alex's optimism about the potential acquisition of Twitter by Elon Musk and its positive impact.

• The host and Alex discuss the challenges of dealing with fake engagement and negative comments on social media.
• Alex shares a personal anecdote regarding his wife's privacy rules in relation to social media content.

"I get 50 plus comments per post that are just robots on my Instagram." "I got my 1st 1 million view video on TikTok... it's got my wife in it."

• The first quote highlights the prevalence of fake engagement on social media platforms.
• The second quote illustrates the challenges and nuances of sharing personal life on social media, especially when it involves family members.

• Alex Hermosi reflects on an unexpected viral video incident.
• He expresses surprise at not remembering the creation of the video.
• The video unexpectedly reached over 100,000 views and later hit a million.
• Despite the usual negativity on social media, the comments on this particular video were all positive.
• This occurrence led Alex to momentarily think that people on social media were becoming nicer, which was quickly disproven by the next video's comments.

"I don't remember filming it. I'm listening to it again. I'm like, when did I say that the video hits?" This quote reveals Alex's surprise and confusion about not recalling the creation of a video that went viral.

"I check like an hour later and the videos cross like 100,000 views. And I'm like, oh, shit, this is the one of all of them and it goes viral." Here, Alex describes his realization that the video had gone viral, emphasizing the rapid increase in views.

"I thought I was being punked because they're all positive. I scanned a hundred comments and I couldn't find a single negative one, and I was like, wow, I think people are getting nicer." Alex shares his shock at the entirely positive response to the video, which deviated from the norm of mixed or negative comments on social media.

• The conversation shifts to business strategy, focusing on simplification and providing value.
• Alex is recommended to read a book by the speaker for insights into creating simple yet highly valuable businesses.
• A Facebook post suggests that Alex's book on gym launches contains valuable wisdom, despite another book being more commonly discussed.

"Like I told you, with where I am right now, I'm trying to nail that simplification side of it." The speaker indicates a current focus on simplifying their business approach.

"Stop talking about Alex's 100 million offers book. And if you're smart, go read his gym launch book." This quote suggests that there is valuable, perhaps overlooked, content in Alex's book about gym launches.

• Alex is cautious about altering his past due to satisfaction with his current success.
• He plays with the idea that advice from his future self would indicate a positive outcome if no advice was given.
• When asked for universal advice, he emphasizes the importance of learning to sell as a foundational skill for entrepreneurs.

"It's tough because I wouldn't want to mess up what's happened. I'm very happy with how things have turned out, so I really wouldn't want to mess with anything." Alex expresses contentment with his life's trajectory and hesitates to change his past experiences.

"Learn how to sell." This quote captures Alex's fundamental advice for entrepreneurs: mastering the art of selling is crucial.

• Alex identifies three core business skills: building, selling, and leading.
• Selling is the starting point, as it makes people aware of your product or service.
• Building products or services is a learning process, often involving starting with free work to gain experience and customer feedback.
• Leadership turns a skill set into a business by enabling the management of others.

"It's so. I mean, I see business as three core skills. It's like you got to learn how to build, you got to learn how to sell, and you got to learn how to lead." Alex outlines the three essential business skills that he believes are necessary for success.

"The easiest thing to do is start working for free just to get those initial successes in." This strategy is suggested as a way to gain experience and validate the value of one's product or service without initial monetary exchange.

• Alex expresses interest in acquiring companies that marry business fundamentals with web three technologies.
• He also shows a preference for businesses in unique alternative education and finance-related sectors.
• The desired sectors include finance, alternative education, and web three due to their potential and alignment with his interests.

"I definitely would love to have more web three stuff. Everything that I have seen come across our table is not people who know business." Alex is eager to see a blend of traditional business acumen with the innovative sphere of web three.

"I love unique alternative education stuff. I mean, it's our core thing. But I love those types of businesses." Here, Alex reveals his passion for alternative education as a business sector, indicating it aligns with his core interests.

"I've become a lot more interested in that side of the world and the businesses of finance rather than finance per se." Alex's growing interest in the business aspects of finance, rather than finance itself, highlights a strategic perspective on industry potential.

• The speaker thanks Alex for his insights and expresses the desire for future interactions.
• Alex is congratulated on his success and is appreciated for the value he has provided to the audience.

"Thank you so much, and congrats again on your success." The speaker offers gratitude and congratulations to Alex, acknowledging his achievements and contributions.