The Entrepreneur Within, Gaining Momentum, & More (on Omar Elattar & The Passionate Few) Pt. 1 Aug '21 Ep 428

In this episode of the Passionate Few podcast, host Omar Elitar interviews Alex Hermosi, CEO of Gym Launch and multiple other companies, who shares his remarkable journey from a high-achieving student to a wildly successful entrepreneur. Alex details his transition from employee to entrepreneur, driven by a desire for autonomy and fueled by the inspiration from the book "The 4-Hour Workweek." He discusses the importance of fitness in his life, not for the energy or business benefits, but as a part of his identity and routine. Alex also delves into his business strategies, from scaling his gym business to negotiating deals that ensured he received upfront cash for gym launches, while gym owners benefited from customer acquisition. He emphasizes the significance of systems in business, his approach to maintaining a consistent fitness regime, and how he copes with the pressures of entrepreneurship. Alex's story is one of growth, resilience, and the continuous refinement of systems and frameworks that aid decision-making and drive business success.

• Alex Hermosi's journey from being an employee to becoming an entrepreneur.
• The transition was sparked by the realization that no job would provide both the desired income and lifestyle.
• Alex read "The 4-Hour Workweek," which influenced his decision to pursue entrepreneurship.
• He was applying for business school but realized it didn't align with his short and long-term goals.
• Alex compared the cost of an MBA to the potential of starting a business.
• He saved $60,000 from his consulting job and used it to start his business journey.

"I realized that there was no job that was going to pay me as much money as I wanted to make and would let me live."

This quote explains Alex's pivotal realization that led him to entrepreneurship, emphasizing the importance of aligning career choices with personal goals and desired lifestyle.

• Alex Hermosi integrates fitness into his business routine.
• He maintains consistency in his fitness regimen despite the demands of running a business.

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• Alex discusses the optimization of systems for scaling a business.
• He shares thoughts on when and how to add systems to a business of different sizes.

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• Alex negotiated a deal where he kept 100% of the upfront sales from customers he signed up.
• He discusses the strategic approach to business deals and customer acquisition.

"I would fly out and I'd say I get to collect all the upfront sales, I'll spend the marketing, I'll do the sales, I get all the upfront cash, you get all the customers."

This quote illustrates Alex's negotiation skills and strategic thinking in structuring a business deal that favored his cash flow needs.

• Alex Hermosi's companies grew from zero to $110 million in revenue since March 2017.
• The growth of his companies, including Gym Launch, is highlighted.

"He's gone from literally zero in March of 2017, I think, to now just clearing one hundred and ten million in revenue between his companies."

This quote showcases the significant revenue growth and success of Alex's business ventures over a relatively short period.

• Alex Hermosi shares insights on entrepreneurship and offers advice for mindset development in business.
• The discussion includes the nuances of teaching entrepreneurship without an agenda.

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• Alex Hermosi had a successful academic career, graduating cum laude from Vanderbilt.
• His early career included considering management consulting or investment banking.
• He achieved high scores on standardized tests, including the SATs and GMATs.

"I did really well in school went to Vanderbilt, graduated in three years, magic cum laude."

This quote emphasizes Alex's strong academic background and his initial career path before choosing entrepreneurship.

• Alex questioned the value of an MBA in achieving his goals.
• He spent time contemplating a business school application question about his short and long-term goals.
• He ultimately decided against business school, opting to start a business instead.

"I spent like two days looking at the question and I just realized it wasn't going to help me with my short and long term goals."

The quote captures the moment of clarity Alex experienced, leading to his decision to forgo an MBA in favor of entrepreneurship.

• Alex Hermosi considered opening a frozen yogurt store called Evie's Treats.
• He researched the yogurt business but found the startup cost to be prohibitive.
• He had $60,000 saved and decided to use it to start a gym instead.

"I was super close to opening up a frozen yogurt store."

This quote reveals Alex's initial business idea and the thought process behind pivoting to a different venture due to financial constraints.

• Alex saved money from his consulting job after college.
• He transitioned from a fixed salary to a commission-based role, which increased his earnings.
• The experience and savings from consulting provided the financial foundation to start his business.

"From the consulting gig that I landed after college I had."

This quote indicates the source of Alex's initial capital, highlighting the importance of his consulting job in his entrepreneurial journey.

• Alex opened his first gym at the age of 24, before meeting his future wife, Layla.
• He was initially focused on creating his own income and pursuing his passion for fitness.
• The first nine months of running the gym were extremely challenging.

"And so that's when I sold my condo and I packed my car and I started driving across the country to California, which is where I opened my first gym."

This quote describes the bold move Alex made to start his first gym, signaling the beginning of his entrepreneurial venture in the fitness industry.

• Alex's initial plan did not include scaling, but that quickly changed.
• After overcoming initial hardships, he became focused on expanding his gym business.
• He hired a coach to accelerate his learning and improve his business.

"And all I could think about was, how do I scale? How do I get more gyms, how do I open more locations?"

This quote reflects Alex's shift in mindset towards growth and scaling, a crucial turning point in his business strategy.

• Alex was mentored by Sam Bakhtiar, also known as "Seven Figure Sam."
• Sam's guidance was instrumental in Alex's early success in the fitness industry.
• Alex's proactive approach to seeking mentorship exemplifies his commitment to learning and growth.

"It was seven figure Sam. Yeah."

This quote introduces Sam Bakhtiar as Alex's mentor, highlighting the value of mentorship in Alex's entrepreneurial journey.

• Alex Hermosi began his career with the guidance of a mentor named Sam.
• He joined Sam's mastermind for $10,000, despite not having a gym.
• Sam provided Alex with a job, which helped him finance his first gym location.
• Alex opened his gym with just $5,000 left in his bank account.

So he took me in, and then I woke up with him every day. I was at the gym at four with him to kind of learn the ropes. He let me sign up for his mastermind. So he was like, it's ten grand for my masterminds. I said, okay, here's ten grand. I was like, I don't have a gym. He said, it's fine. And then he turned around and gave me a job.

This quote outlines Alex's initial steps into the fitness industry, highlighting the importance of mentorship and the financial commitment he made to join a mastermind group that would shape his career.

• Alex invested a significant sum of money into the mastermind at a young age, which was a substantial financial decision.
• He managed his finances meticulously, knowing exactly how much he had left after opening his gym.

I had sixty, so I knew I had ten left or ten less, and then I had fifty. I was just running off of how much money do I have? And then I opened the gym, I think for thirty seven or something like that. And I spent money in the three months in between. So I know I had five thousand dollars left in my bank account when the gym opened.

This quote illustrates the financial risks Alex took in his early twenties and his careful tracking of expenses related to starting his business.

• Fitness has been a part of Alex's life since he was fifteen.
• His reasons for working out evolved from self-defense to attracting girls, to status, and finally to progress in powerlifting.
• Once he began his business, fitness became less of a priority, and his business became the vehicle for growth.

And so in the beginning I started working out because I wanted to be strong enough to protect myself. And then it transitioned from that to wanting to get girls, which it didn't help with, but that's what I thought it would help with. And then from there it transitioned to status.

This quote demonstrates the evolving motivations behind Alex's fitness routine and how it has been an integral part of his identity for many years.

• Alex maintains his fitness due to its connection to his identity and professional image in the fitness space.
• He acknowledges the challenges of balancing fitness with health and longevity.

My body was the vehicle for growth prior to the business and then the business became the vehicle for growth as soon as that started. I would say from then until now it's been more or less the same, which is I work out because it is a part of my identity.

This quote reflects on how Alex's view of fitness has shifted since starting his business and how it remains a part of his daily routine and identity.

• Alex recognizes the paradox of looking fit versus being healthy.
• He trains to maintain his current state, considering the long-term effects on his health.
• He contemplates future changes to his routine for better health outcomes.

It's difficult because a lot of things that make you look super fit are actually not good for your health. So like me walking right at my body weight in general is not good for my longevity which is one of the things I struggle with because I want to make progress.

This quote highlights the conflict between maintaining a certain physique for professional reasons and the potential negative health implications of doing so.

• Alex does not find that taking a break from working out affects his business performance.
• He emphasizes the importance of being in tune with one's body and diet.

If I don't work out, if anything, I have more energy. I used to sell fitness and so I would tell people like, oh, the reason you're tired is because you're not working out.

Alex challenges the common belief that working out is essential for maintaining energy levels, explaining that his knowledge of his body allows him to manage his energy without necessarily needing to exercise.

• Alex advocates for a sustainable approach to fitness and diet, avoiding temporary diets and fads.
• His dietary strategy is simple: consume a set amount of protein and fill the remaining calories with foods of his choice.
• He is writing a book to share his perspective on sustainable dieting with other entrepreneurs.

Anything that I can't do forever, I don't do. And so I don't follow diets. None of those things make any sense to me personally. Because unless you're competing, which just about no one is, then the only thing that you have to do is something that you can do for a sustainable period of time.

This quote reveals Alex's philosophy on dieting and fitness, which focuses on sustainability and practicality rather than strict or complex regimens.

• Alex spends a significant amount of time developing and refining frameworks for decision-making in business.
• He believes in conserving decision-making power by using frameworks to make more high-quality decisions.
• The process of refining systems and mindsets is a constant priority for him.

It's developing frameworks for thinking. Because at the end of the day we only have so much decision-making power. And if we can use frameworks, then we can conserve that power and make more high-quality decisions.

This quote encapsulates Alex's strategic approach to business, emphasizing the use of frameworks to streamline decision-making and improve efficiency.

• Individuals are ultimately rewarded for the quality of their decisions over time.
• The concept applies to business growth and personal development.
• High-quality decisions can lead to significant business expansion and personal satisfaction.

"at a certain point all of us are simply rewarded for the quality of our decisions over a long enough time horizon."

This quote emphasizes the importance of making good decisions consistently over time, as it will lead to rewards and success in the long run.

• Joy is a critical component of a fulfilling life and can be integrated into daily activities.
• Reverse-engineering joy involves identifying enjoyable daily activities and creating as many of those days as possible.
• Balancing routine with variety prevents life from becoming stale and maintains happiness.

"the easiest way from a programmatic standpoint to reverse engineer joy is just simply saying, what do I enjoy doing on a daily basis? And then how can I create as many of those days as possible?"

This quote suggests a practical approach to integrating joy into life by focusing on daily activities that bring happiness and striving to repeat those experiences frequently.

• Alex Hermosi experienced rapid business growth, expanding from one gym to multiple locations in a few years.
• Revenue increased incrementally each month, demonstrating successful scaling.
• Strategic outsourcing and management allowed for expansion and the opening of additional locations.
• Alex's journey from novice to expert was marked by increasing revenue and business expansion.

"I made five thousand dollars my first month in business. I made ten thousand the second month, fifteen, twenty. Twenty-five. Thirty-five. Thirty-five was month seven or eight."

This quote details the progressive increase in revenue as Alex's business grew, showcasing the potential for rapid financial growth in a successful business.

• Early mistakes in business, such as undervaluing one's company, can lead to valuable learning experiences.
• Alex sold a significant portion of his business for much less than it was worth, which he later recognized as a poor decision.
• These experiences can motivate entrepreneurs to grow and scale their businesses more aggressively to compensate for past mistakes.

"I sold two thirds of a business that was making twenty thousand dollars a month in net free cash flow to me for thirty-four thousand dollars."

This quote illustrates a significant underestimation of business value and serves as a cautionary tale for entrepreneurs to value their ventures correctly.

• Alex created a novel business model for gym launches, where he would fly out to gyms and sell memberships, keeping all the upfront sales.
• This model was advantageous for both parties, as gym owners incurred no upfront costs and Alex was incentivized by the sales he generated.
• The model demonstrated the importance of aligned incentives and risk-taking in business.

"I get all the upfront cash. You get all the customers."

This quote summarizes the business arrangement Alex had with gym owners, highlighting the mutually beneficial nature of his innovative gym launch model.

• The transition from brick-and-mortar to online business was prompted by the realization of greater opportunities in the digital space.
• Alex was encouraged to share his business knowledge with others, leading to the creation of an online community.
• The online shift allowed for a broader impact and the leveraging of Alex's expertise in gym operations.

"Online is where it's at. When he heard what I was doing with my gyms, he was like, dude, you have six gyms and you're twenty-six. He's like, you need to be teaching people what you're doing."

This quote captures the moment when Alex was advised to pivot towards online business, recognizing the potential to scale his expertise and reach a wider audience.

• Alex Hermosi experienced a scarcity mindset and faced a series of unfortunate events while scaling his gym business.
• The business scaled to opening six to eight gyms a month, which led to operational challenges.
• Alex had to balance the number of gyms with the number of salespeople and manage the delivery of services.
• The original business model had flaws, with Alex holding liability without control over service delivery.
• Gyms that were struggling with delivery were the ones seeking his services, leading to poor customer experiences.
• Alex faced a significant issue with refunds, which exceeded his business margins and forced him to sell more to cover past refunds.

"It was a mess, but cash was." "Cash only flew in after we started doing the launches." "I had to balance how many gyms I had versus how many sales guys."

These quotes indicate the chaotic nature of the business at the time, the delayed cash flow until service launches, and the struggle to align the growth of sales with the capacity to deliver.

• Alex believes that financial pressure was necessary to force him to find solutions.
• He discusses the common experience of entrepreneurs facing financial difficulties and the need to make money for various stakeholders.
• The pressure led Alex to pivot his business model, focusing on making money to alleviate his situation.
• This pivot initiated the creation of Gym Launch Version 2, a coaching program.

"Yes. I'm a big believer in that." "What's interesting is that when I started." "That's what launched gym, launched version two, which became the coaching program."

Alex affirms his belief in the necessity of pressure for growth and describes how his challenges led to the inception of a new, successful business model.

• Alex met his wife on Bumble, and she was a top salesperson for 24 Hour Fitness.
• He pitched her to work with him on their first date, and she joined him in launching gyms.
• Alex's wife was instrumental in the business's growth and supported him through difficult times, including near bankruptcy.
• Their connection went beyond fitness; they shared similar life experiences and growth mindsets.
• Together, they shifted to selling digital fitness products, which proved successful.

"So my wife and I met on Bumble, and she was a trainer and she was the top salesman for twenty four hour fitness in southern California." "But she was with me ground zero, day one, growing this thing."

These quotes highlight the beginning of Alex's personal and business relationship with his wife and her significant role in the development and success of their ventures.

• The couple decided to pivot from managing gyms to selling fitness digitally.
• Alex's wife's fitness business was generating significant daily revenue, leading to the decision to focus on digital sales.
• Alex initially resisted selling his gym launch secrets but decided to do so when planning to exit the industry.
• He set a high price for his system, not expecting buyers, but was surprised when entrepreneurs purchased it.
• This new venture led to substantial sales, which helped Alex overcome the financial burdens he was facing.

"I sold my system for six thousand dollars." "I did sixty thousand dollars in sales on that one day."

Alex shares the success of selling his business system and how it unexpectedly solved his financial problems, marking a turning point in his career.

• The next part of the podcast will discuss selecting the right niche for business opportunities.
• Alex will share his decision-making framework for tough choices.
• The importance of delayed gratification, separating effort from results, and how this separation can unlock success will be explored.

"Stay tuned for part two of the podcast coming up next, which we're going to cover." "And in part two, we discuss how to select the right niche and how important a niche is for the opportunity that you're pursuing."

These quotes preview the subjects of the following podcast episode, indicating that it will provide further insights into strategic business decisions and mindset.