Why Selling Wasn't Always Second Nature (with Ali Abdaal) Pt.2 Oct, ‘22 Ep 537

In a deep dive into business growth and personal development, Alex Hormozi shares his journey from despising sales to leveraging it as a critical skill in building a successful gym chain and subsequently a multi-million dollar business empire. Initially resistant to sales, viewing it as beneath him, Alex's desperation to cover his gym's $5,000 monthly rent drove him to master Facebook ads and craft compelling offers, leading to rapid client acquisition and expansion. His approach to business involves a relentless pursuit of knowledge, investing heavily in learning from experts, and a belief in the power of accountability and discomfort in achieving success. Alex discusses the scalability of business models, the significance of alternative education, and his mission to democratize business knowledge. He emphasizes the importance of starting content creation early, focusing on both depth and breadth to reach a wider audience, and the necessity of adapting to evolving consumer behaviors. Additionally, Alex touches on personal health, explaining the straightforward yet challenging path to maintaining a six-pack through consistent diet and exercise.

• Small business ownership requires a deep love for the product and the experience.
• Skills acquired in running a successful gym translate to other businesses.
• The podcast aims to discuss customer acquisition, increasing customer value, retention, and lessons from failures.

"You have to love small business ownership, and it has to be about really being in love with the product and the experience." "Welcome to the game, 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 we have learned along the way."

The quotes highlight the importance of passion in small business ownership and introduce the podcast's focus on practical business strategies and learning from past mistakes.

• Selling can be challenging due to internal mental friction and the perception of sales as a "black box."
• Transitioning from sponsorships to selling a product can be difficult and requires a mindset shift.
• Sales are essential, especially when financial pressure exists.

"I wonder if we can zoom into the sales thing a little bit, because I think selling is a massive black box for a lot of people."

This quote introduces the topic of sales and acknowledges the common perception of sales as complex and daunting.

• Initial reluctance to engage in sales due to feeling it was beneath one's dignity.
• Realizing the necessity of sales to sustain a business.
• Learning to sell through direct experience and the urgency of meeting financial obligations.

"Yeah, I hated everything in the sales. And the side story in that was that when I quit my job, my dad's budy was a. Or my dad's financial, his investor, dude, the guy who managed his money was like, dude, you should just come work for me. He's like, you can sell. And I was like, me? I was like, I'm an academic. I am a cerebral thinker. I'm a management consultant. I am not a salesman."

The speaker expresses initial disdain for sales, viewing it as beneath their professional identity, but later recognizes its importance in business.

• Facebook ads were a pivotal tool for attracting gym clients in 2013.
• Investing in learning to run Facebook ads can have a significant return on investment.
• The effectiveness of direct offers and the importance of pre-sales were key learnings.

"So I had gone to a weekend workshop that I spent $3,000 for, which was a tremendous amount of money for me at the time to go learn how to run Facebook ads."

The speaker recounts the investment made to learn Facebook advertising, which was instrumental in acquiring the gym's first clients and covering initial expenses.

• Defined programs with specific outcomes and timelines can be beneficial for business onboarding.
• Charging more initially can help cover the higher costs of customer acquisition and onboarding.
• This strategy can be applied across various businesses for effective monetization.

"What happened is, and I still do like this in terms of businesses in general, is I do like having defined in programs on the front end because it gives a very specific outcome for someone on a specific timeline."

The speaker discusses the advantage of having structured programs with clear outcomes as a business strategy to liquidate acquisition costs.

• Paying for learning can accelerate the acquisition of skills and provide access to expert troubleshooting.
• One-on-one paid sessions can be more effective than courses for learning specific applications of skills.
• Investing in learning can significantly increase earning potential by adding to one's skill set.

"Yeah, I think things can get learned on YouTube. I think what you pay for is speed. So you pay for speed, you pay for troubleshooting, you pay for somebody else who's already done it and not fucked up as many times as you're about to to get you there faster."

This quote emphasizes the value of paying for learning as a means to quickly gain expertise and avoid common pitfalls, thereby speeding up the path to success.

• Starting a business at a young age, such as 23, can be a risky venture.
• Ignorance and lack of awareness of potential risks can sometimes work in one's favor.
• The speaker reflects on the naivety and luck involved in their early business decisions.

"Not much. Not much. Honestly, it was ignorance. I got lucky, you know what I mean? I got lucky that I didn't know what I didn't know."

This quote reflects the speaker's realization that their lack of knowledge at the time of starting their business was both a risk and a factor in their eventual success.

• The speaker initially planned to use Groupons to attract customers to their new gym.
• The strategy was modeled after the speaker's mentor, who successfully used Groupons for customer acquisition.
• The speaker faced intense competition in Southern California, making it difficult to attract customers through Groupons alone.

"The plan going into the gym was the guy who I apprenticed under. He just ran groupons, and that was how he got." "I ran a group on too, and I didn't get anybody."

The quotes explain the original business plan for customer acquisition and its failure due to high competition in the market.

• The speaker attended a workshop that introduced them to Facebook ads.
• This alternative marketing strategy came at a crucial time, just two weeks before the gym's opening.
• The speaker credits this newfound knowledge with the gym's eventual success.

"But he was like, oh, you can run ads on there." "And that is, honestly, it's the only reason."

These quotes highlight the pivotal moment when the speaker learned about Facebook ads, which played a significant role in the gym's success.

• The speaker's decision to quit their job was driven by emotions, not financial calculations.
• They were leaving a traditional career path, which caused conflict with family expectations.
• The speaker's relationship with their father was strained due to the decision.

"It was an emotional decision, which for me was, I'm leaving the path that I've spent the last, basically my entire life leading towards." "He was like, this is a terrible idea. I strongly disapprove of this."

These quotes reveal the emotional challenges the speaker faced in making a career change that deviated from family and societal expectations.

• The speaker's determination to prove their father wrong was a significant motivator.
• They felt dead inside due to dissatisfaction with their job, prompting the career change.
• The speaker avoided direct confrontation with their father by moving away before discussing the decision.

"I was going to fucking die. I just wasn't going to do it." "I would either have to die to him or die to myself."

These quotes underscore the intense internal conflict the speaker experienced and the lengths they went to assert their independence.

• The speaker's gym experienced rapid growth, increasing revenue by $5,000 monthly for seven months.
• By month 15, the speaker had outsourced the gym's operations and opened a second location.
• The speaker joined an internet mastermind group, which led to a pivot in their business model.

"The gym starts being successful. It grows by $5,000 a month for the first seven months." "I joined an Internet mastermind, and they were like, if you're really this good at business, you shouldn't be owning gyms."

These quotes chronicle the gym's success and the strategic shift towards teaching others how to replicate that success.

• The speaker transitioned from a turnkey model to a licensing model, which resulted in exponential growth.
• The licensing model allowed the speaker to leverage their expertise and scale the business rapidly.

"We switched from doing the turnkey system to doing a licensing model, and then that was 2017, and that's when everything just took off like a rocket."

This quote describes the strategic pivot that catalyzed the speaker's business growth.

• The speaker believes owning a gym can be profitable if one loves small business ownership.
• Skills learned in running a gym are transferable to other businesses.
• The speaker emphasizes the benefits of learning sales and service in the fitness industry.

"You can make money owning a gym. You have to love small business ownership." "Some of the best entrepreneurs, some of the best salespeople especially, learn how to sell and fitness."

These quotes provide insight into the potential profitability and skill development opportunities in gym ownership.

• The speaker discusses different levels of wealth and their impact on lifestyle.
• They emphasize the importance of spending on information and knowledge as a high-return investment.
• The speaker advocates for a savings-to-spending ratio that aligns with one's comfort with risk.

"Every penny I've made has come from knowledge." "We're both actually pretty risk averse."

These quotes reflect the speaker's philosophy on wealth, spending, and the value of investing in knowledge.

• Speaker A has a preference for liquidity, valuing the ability to make large investments on their terms.
• They prioritize having cash available over seeking returns through traditional investments.
• Speaker A believes in taking bigger risks to achieve greater wealth and is planning significant investments in the media sector.
• They are considering moving from minority to majority stakes in companies that align with their portfolio.

"No, I count it. We invest, but I kind of have a bigger play for what we're going to do. So right now, I'm just stacking it, and I've always been a pretty big cash stacker. I always have a lot of liquidity."

The quote emphasizes Speaker A's strategy of accumulating cash to maintain liquidity for future investment opportunities.

"I am going to take bigger risks with the wealth I have because it's kind of the next level of the game for me is taking big bets."

Speaker A is expressing a willingness to take greater risks to escalate their wealth, indicating a strategic shift in their investment approach.

• Speaker A is planning to invest heavily in media within the next 12 to 18 months.
• They analyze the cost of acquiring subscribers and the return on investment, including the indirect benefits from deal flow.
• Speaker A is considering taking majority stakes in companies that can be integrated into their conglomerate, focusing on internal services and leveraging buying power.

"Broadly, you'll see more stuff for me on the media side, probably in the next twelve to 18, I'll be probably making really major investments in media."

This quote outlines Speaker A's timeline and focus area for future investments, highlighting media as a key sector.

"I'm not going to push that kind of money towards something that I don't own majority of, at least."

Speaker A discusses their strategy for investing in companies, indicating a preference for majority ownership when significant funds are involved.

• Speaker A's goal is to grow their wealth to $10 billion.
• The mission is to make real business knowledge accessible to everyone, aligning all their activities with this purpose.
• Speaker A values their freedom and the optionality that wealth provides, allowing them to pursue their mission.
• They are motivated by the potential to learn from scaling their portfolio and wish to share that knowledge with others.

"The goal is to get to 10 billion, but the mission is to just make real business knowledge available for everyone."

Speaker A clarifies their financial goal and underlying mission, linking wealth accumulation to the broader objective of disseminating business knowledge.

"I just want to have options. And so I wouldn't have that if all of this stuff didn't exist."

The quote reflects Speaker A's desire for freedom and the role that business success plays in achieving it.

• Speaker A credits their success to alternative education and mentorship, differentiating them from other business figures.
• They advocate for paying for skills and knowledge outside of traditional educational systems.
• Speaker A's personal journey through non-traditional learning channels fuels their passion for making business education widely available.

"I'm a huge advocate for alternative education and paying for skills as fast as you can."

Speaker A promotes the value of alternative education and investing in skill development, which has been instrumental in their own career.

• Speaker A spends the early part of their day working on personal projects before transitioning to meetings in the afternoon.
• They value having a structured routine that includes time for the gym and personal life.
• Speaker A is based in Vegas but travels frequently, maintaining flexibility in their location.

"Usually five to one is Alex time to do whatever."

This quote outlines Speaker A's personal work schedule, highlighting the balance between work and personal time.

"Go to the gym, eat, and then I'm done."

Speaker A describes the latter part of their daily routine, emphasizing the importance of maintaining a healthy lifestyle alongside their business activities.

• Speaker A started creating content without a media team, emphasizing the importance of just beginning and adapting over time.
• They have gradually improved production quality to cater to different attention spans and preferences.
• Speaker A is focused on making content accessible to a wide audience, adapting their strategy to the changing media landscape.

"The path illuminates as you walk."

Speaker A encourages starting projects and learning through the process, suggesting that clarity and direction come with action.

"I'm just not one to complain about what it is, what it is. And so I will do my best to match providing value to the context that people are consuming it."

Speaker A accepts the reality of changing consumer behaviors and adapts their content strategy to meet audience needs.

• Speaker A manages their content production with a budget, ensuring that expenses are less than the revenue generated from various sources.
• They discuss the financial aspects of content creation, including the cost per subscriber and the income from different content-related ventures.
• Speaker A's approach to content production is both strategic and financially disciplined.

"I technically spend a little bit less than I'm making, which kind of further reinforces the point."

This quote reveals Speaker A's prudent financial management of their content production, ensuring profitability.

"We've got four in hou"

The incomplete quote suggests a discussion about the size and structure of Speaker A's content production team, which is key to their content strategy.

• Speaker A manages Twitter personally due to a preference for the platform.
• They utilize various vendors for different social media platforms, including LinkedIn, YouTube, TikTok, and Reels.
• The strategy involves hiring experts, with an intention to eventually bring the operations in-house.
• Speaker A's team provides video content ideas, which are then selected by Speaker A for production.
• The content creation process is designed to require minimal effort from Speaker A due to other commitments.

"I still do Twitter, so I do Twitter full time. That's still just me. And it's because I like it." "Now we have our internal components because my whole playbook is pretty simple, which is go find the best person who's already doing this at a high level, pay whatever to get them to do it." "They have like eight ideas for videos. I'll just pick the three that I'm feeling."

Speaker A enjoys Twitter and handles it personally, while other platforms are managed by vendors with the goal to transition in-house. They emphasize a simple strategy of hiring skilled individuals and gradually increasing in-house production. Content ideas are provided by the team, and Speaker A selects what resonates with them.

• Speaker A's mission is to make business knowledge accessible to everyone.
• The strategy follows a model similar to Gary Vee's, aiming for rapid growth across social platforms with extensive content.
• There are multiple phases planned, starting with establishing presence on all platforms, then maximizing and taking control of content production in-house.
• Future plans include running paid promotions, affiliate marketing, endorsements, and creating custom production content.
• Speaker A believes in creating content that appeals to both beginners and advanced users by packaging and presenting it effectively.

"We're still not even, like, we're barely scratching what I would consider to be phase one of that." "We have to take it all in house. We have to do that, which we haven't done yet." "I would like to do some more like custom production stuff that's more show ish than just like seven ways to make a million dollars without any money."

Speaker A outlines the mission to democratize business knowledge and the phased approach to expand content across social platforms. The goal is to establish a presence, maximize output, and enhance production quality with custom content. They aim to create versatile content that serves a broad audience.

• Speaker A discusses the content strategy and the challenge of catering to different knowledge levels.
• The goal is to produce content that is both broad and deep, serving beginners and experts alike.
• Speaker A emphasizes the importance of terminology, like using 'persuasion' instead of 'sales' to broaden appeal.
• The approach is to expand the audience reach while maintaining depth of knowledge.

"So I believe, because our beliefs shape our world, that we can make content that helps both." "Could I make a half step and just call it persuasion? And all of a sudden, it's not sales guys, it's sales guys, marketers and general population that want to influence people."

Speaker A believes in the possibility of creating content that caters to a wide audience without sacrificing depth. By carefully choosing terminology and presentation, the content can appeal to various levels of business knowledge.

• Speaker A reflects on what they would change if starting their content creation journey again.
• The only change would be to have started five years earlier to accelerate progress.
• Speaker A recognizes the added credibility gained over time which may not have been present five years prior.
• The focus is on executing the current plan rather than dwelling on past decisions.

"I would have just started five years ago. That's what I would have done." "The only thing I could wish for is for things to happen faster."

Speaker A wishes to have begun their content creation journey earlier but acknowledges the benefits of the credibility gained over time. The emphasis is on moving forward with the current strategy.

• Speaker A discusses maintaining six-pack abs since the age of 16.
• The conversation shifts to fitness, with Speaker A stating that motivation is key to achieving fitness goals.
• Speaker A explains that achieving a six-pack is about body fat percentage and maintaining a calorie deficit.
• To maintain fitness, minimal effort is required once a certain level of fitness is achieved.
• Speaker A suggests that people struggle with short-term discomfort for long-term goals, highlighting an accountability gap rather than a knowledge gap.

"You want to be motivated? Yeah, what is the price of the six pack? It's not that hard, though." "And so six pack is purely body fat percentage. That's it. It's just body fat percentage." "Hit every muscle group, do it three times a week, add weight or reps over the bar over a long period of time." "The issue is an accountability gap, is that people don't do stuff."

Speaker A emphasizes that motivation and discipline are the primary factors in achieving and maintaining fitness goals like a six-pack. They explain the simple principles behind fitness and the common challenges people face in adhering to them, suggesting that accountability is often the missing element in achieving success.