You Can't Lose If You Don't Quit (w Ed Mylett) Pt. 2 Aug. '22 Ep 477

In this insightful discussion, Alex Hormozi delves into the intricacies of business growth and customer acquisition. He emphasizes the significance of product refinement over aggressive marketing, highlighting the pivotal "pause point" where businesses should optimize their offerings to foster organic growth through customer referrals. Hormozi also discusses the importance of creating compelling offers by addressing customer problems with cost-effective solutions and leveraging scarcity and urgency to drive sales. Additionally, he shares his personal journey, including overcoming business failures and leveraging his marketing and sales expertise to recover from financial setbacks. Hormozi's passion for business is palpable, as he expresses his dedication to the field and his intention to continue improving and enjoying his entrepreneurial pursuits.

• Speaker A mentions an actual cap on business and the fear of being perceived as a small business.
• Articulating the business cap can change the perception of the business.
• Wealthy people view business as a game.
• Speaker A aims to document lessons learned in building acquisition.com to help others grow their businesses.

"There is an actual cap on your business as it currently stands. You're just not articulating it because you're afraid of saying, well, if I can only take ten people, then they'll think I'm a small business or whatever."

The quote highlights the dilemma of acknowledging business limitations and concerns about external perceptions.

"The wealthiest people in the world see business as a game. This podcast, the game is my attempt at documenting the lessons I've learned on my way to building acquisition.com into a billion dollar portfolio."

Speaker A's quote conveys the podcast's purpose: to share strategic business insights and experiences from growing a significant portfolio.

• Speaker C discusses the power of holding two contradictory thoughts simultaneously.
• The importance of urgency in the moment while reflecting on life's final days.
• Contrasting the seminar-goer mindset with that of people who focus on daily impact without spiritual or philosophical considerations.
• Speaker A and Speaker B discuss the balance between justice and mercy, variety and consistency.

"I think that duality is super powerful, so that's why I wanted to stack them. We're talking about other stacks in a minute, too."

Speaker C emphasizes the strength found in embracing opposing ideas and the strategic placement of these concepts in the conversation.

"You believe in variety, you believe in consistency. And so there are these yins and yangs that exist."

Speaker A points out that people naturally hold contradictory beliefs and that wisdom lies in navigating these dualities.

• Wisdom is knowing when to apply different principles or emotions.
• Speaker C shares an anecdote about coaching a former leader who operated out of fear and now tries to act from gratitude.
• The conversation highlights the ability to choose the appropriate emotional response for different situations.

"Wisdom truly is... knowing which lever to pull when, and knowing when the right part of it applies."

Speaker C's quote summarizes the essence of wisdom in decision-making, emphasizing the importance of context.

• Speaker C acknowledges Speaker B's ability to articulate complex ideas at a young age.
• The discussion shifts to Speaker B's past challenges, including business failures and financial struggles.
• Speaker A and Speaker B explore the mindset of focusing on controllable aspects during difficult times.
• The story of gym launch and leveraging credit during a financial crisis is shared.

"What did you do when you were on your ass? Were you on your ass mentally ever? Or was it just a physical being broke?"

Speaker C asks about the mental state during financial difficulties, highlighting the distinction between mental and physical adversity.

"I just focused on the controllable."

Speaker B's response emphasizes the strategy of concentrating on what one can manage in the face of overwhelming challenges.

• Speaker A and Speaker B discuss the determination to succeed regardless of circumstances.
• The mantra of not losing if one does not quit is introduced.
• The conversation touches on the philosophical idea of judging a person's life only upon death.

"I cannot lose if I do not quit."

Speaker B's quote encapsulates the philosophy of perseverance as a means to avoid defeat.

"You shouldn't judge a man until the day he dies."

Speaker A references a philosophical concept to illustrate the importance of continuing to strive until the end.

• Speaker C has always associated quitting with losing throughout their life.
• This belief stems from Speaker C's father, who was an alcoholic and taught Speaker C the concept of quitting for just one more day as a means to avoid drinking.
• Speaker C applies this principle to their own business, refraining from quitting in the face of challenges, thus equating not quitting with still being in the game.

"I'm blown away because I have equated only losing with quitting all of my life."

This quote illustrates Speaker C's realization that they have always connected the act of quitting with the concept of losing, which has been a significant mindset throughout their life.

"I'm just going to quit for one more day. I'm not going to drink for one more day."

This quote reveals the strategy Speaker C's father used to combat his alcoholism, which Speaker C has adopted in their own approach to challenges, indicating the importance of taking things one day at a time.

"And many, many times in my business, I'm like, I am incapable mentally right now saying I'm never going to quit."

Speaker C acknowledges the mental struggle in committing to never quitting and the strategy of deciding not to quit for one more day as a way to cope with the pressure.

"I literally equated quitting with losing. And so no matter how behind in the score I was, I had not officially lost the game."

Speaker C explains their philosophy that as long as they don't quit, they haven't lost, regardless of the current challenges or setbacks they face in their business.

• The scarcity stack is a concept in marketing that involves manipulating supply and demand to create a sense of urgency and exclusivity.
• Speaker A and Speaker B discuss how luxury brands like Chanel and Louis Vuitton use scarcity to drive demand.
• They also talk about the emotional trigger of FOMO (fear of missing out) and how it can lower the action threshold for consumers, leading to quicker decisions to purchase.
• Speaker A points out that businesses often have an actual cap on how much they can handle but fail to articulate it, and doing so can create a stronger pull for customers.

"The other side is not nearly as well used and I think is almost as powerful, if not more powerful, than the demand side, which is, how can I cut supply?"

Speaker A emphasizes the underutilized strategy of cutting supply to increase demand, which can be as effective or more effective than trying to boost demand directly.

"And so when you can get someone into a FOMO situation where they fear missing out, you can actually trigger this incredibly emotional decision."

Speaker A explains how inducing FOMO can lead to emotional decision-making in consumers, which is a powerful tool in marketing.

"And so there is an actual cap on your business as it currently stands. You're just not articulating it because you're afraid of saying, well, if I can only take ten people, then they'll think I'm a small business."

Speaker A points out that businesses have limits on their capacity but often do not communicate this to customers, which can be a strategic mistake.

"So this scarcity idea, you go, no, I'm in the protein business. So we have unlimited amounts of protein. Then maybe the scarcity isn't the product, the scarcity is the time."

Speaker C provides an example of how the concept of scarcity can be applied to different types of businesses, such as the protein industry, by emphasizing the scarcity of time rather than the product itself.

• The speakers stress the importance of using marketing tactics like scarcity and FOMO ethically and truthfully.
• They warn that leveraging these tactics unethically can lead to long-term damage to a business's reputation.
• The conversation underscores the power of these tactics and the responsibility that comes with them.

"These concepts of scarcity and fomo, it has to be ethically stated and truthfully stated, because long term, if you push these levers the wrong way, you'll destroy your reputation if there's not a factual basis for what you're describing."

Speaker C emphasizes the importance of using scarcity and FOMO tactics in an ethical manner, cautioning against the potential negative consequences of misleading customers.

• Speaker A clarifies the difference between scarcity, which is related to the number of units available, and urgency, which is related to time.
• They explain how urgency can be created through time-sensitive offers and promotions.
• The discussion includes how salespeople can use these concepts to highlight the opportunity cost or cost of inaction to prospects.

"But there's scarcity, which is a function of the number of units, and then there is urgency, which is a function of time."

Speaker A distinguishes between scarcity and urgency, explaining that they are different aspects of marketing that can be used to compel consumers to act.

"The deal ends tomorrow. Yes. Right. And so if you can't introduce that."

Speaker A provides an example of how urgency can be introduced in marketing, such as a limited-time offer that motivates consumers to act quickly.

• The host asks the audience to support the podcast by rating, reviewing, and sharing it.
• The host's request is presented as the only way to support the podcast since it runs without ads and does not sell anything.
• The call to action is framed as a way to help more entrepreneurs and improve their businesses and customer experiences.

"The only ask that I can ever have of you guys is that you help me spread the word so we can help more entrepreneurs make more money, feed their families, make better products, and have better experiences for their employees and customers."

The host solicits the audience's help in spreading the word about the podcast, emphasizing the broader impact it could have on entrepreneurs and their communities.

• Importance of timely loan applications due to unpredictable market conditions.
• Springtime is indicated as a period where current conditions may not persist.

"our loan application in, because I can't guarantee that as soon as we get into the springtime, we're going to have the same things."

This quote emphasizes the uncertainty of market conditions and the need for prompt action regarding loan applications.

• Utilizing scarcity to create demand for products.
• Limited availability can be applied to product features, such as unique flavors.
• Scarcity can also be added through time-sensitive bonuses.

"And then with the scarcity component, it's a function of units."

This quote introduces the concept of scarcity in terms of limited product units, which can drive urgency and demand.

"I'm going to be adding a free workout or a free workout template or a nutrition template that I'm going to add with my protein, which I'm not going to be giving next."

The quote illustrates how offering a bonus for a limited time can create scarcity and incentivize immediate action.

• Adding value to products to differentiate from competitors.
• Creating scarcity and additional value to prompt consumer action.

"So then what you can do is you create these additional value adds, which no one else is doing. And then with the additional value add, you both add value and create scarcity at the same time to urge the person to take action."

This quote details how unique value additions paired with scarcity can encourage consumers to act quickly.

• The podcast aims to provide valuable insights from personal experiences.
• The importance of applying timeless business principles to current scenarios.

"This FOMo concept or scarcity concept is as old as time."

The speaker points out that the concept of scarcity is not new, but its application in modern contexts is crucial.

• Identifying customer problems and creating step-by-step solutions.
• Considering various delivery methods to address customer needs.

"And the way to think through this is tactically what has to happen step by step by step."

The quote underlines the importance of a tactical, detailed approach to problem-solving in service delivery.

• A framework for service delivery options, considering person-to-person ratio, response speed, service quality, and medium.
• The Delivery Cube helps in structuring the delivery of solutions.

"So I have something called a delivery cube, which kind of goes with this in terms of how you get into levels of service."

The speaker introduces the concept of the Delivery Cube as a method to organize service delivery variables.

• Prioritizing high-value, low-cost solutions for customers.
• Combining valuable offerings to create a compelling package.
• Adding scarcity, bonuses, guarantees, and urgency to enhance offers.

"So all the things that provide tremendous value and happen at very little or no incremental cost to us, and then that is what we will package together."

This quote explains the strategy of bundling cost-effective solutions to create a strong value proposition for customers.

• Making irresistible offers leads to increased revenue.
• Simplifying complex business concepts for practical application.
• The significance of enduring business principles.

"If you have a compelling offer, it makes it very difficult to be poor."

The speaker emphasizes that compelling offers are key to financial success in business.

• The overlooked importance of customer experience in business growth.
• Encouraging existing customers to refer new customers.

"They spend all this time on everything other than that thing, which is the only thing that will cause your business to grow without your effort afterwards."

The quote criticizes businesses for neglecting customer experience, which is vital for organic growth through referrals.

• Naval Ravikant's quote on sales, marketing, and product development.
• Five methods to acquire customers: outreach, content, ads, affiliates, and referrals.

"You only sell because you don't know how to market and you only market because you don't know how to build a product."

This quote, attributed to Naval Ravikant, suggests that superior products naturally attract customers, reducing the need for marketing and sales.

• Differentiating between linear and quadratic growth strategies in customer acquisition.
• Leveraging customer referrals for exponential growth.

"The first four that I discussed have linear. They are linear in nature, meaning if I make ten more dials, I can predict how many customers I'm going to get from that."

The speaker differentiates linear customer acquisition methods from the exponential potential of customer referrals.

• Exponential growth is frequently misunderstood in the entrepreneurial space.
• Many entrepreneurs mistakenly believe exponential growth simply means multiplication.
• True exponential growth involves a doubling process, such as one customer referring two, and those two referring four, and so on.

"Unfortunately, in the entrepreneurial space, people are like, exponential. They say it a lot, but they don't know what it means. They really just means it multiplies which."

This quote clarifies the common misconception among entrepreneurs regarding the term 'exponential,' highlighting that many mistakenly equate it to mere multiplication rather than the doubling process it truly signifies.

• As businesses grow, the cost of acquiring new customers tends to increase.
• Rising costs are due to more expensive impressions and increased operational drag.
• To counteract these rising costs, businesses need a non-linear opposing force.

"One is that the cost of acquiring customer will go up over time because impressions will cost more money and you'll have more operational drag on your business."

The quote explains the inevitability of rising customer acquisition costs as a business scales, emphasizing the need for strategies to offset these increasing expenses.

• Customer referrals can significantly decrease the cost of acquisition.
• A successful referral system can lead to exponential growth, with each new customer potentially bringing in additional customers.
• This referral dynamic serves as a balancing force against the rising cost of doing business.

"Because every time you get a customer, that customer brings you two more customers. And so that is like the great equalizer in business."

The quote illustrates the power of referrals in business growth, suggesting that a customer's ability to bring in more customers can counterbalance the increasing costs of acquisition and operations.

• A single effective marketing post can lead to significant sales, even outselling New York Times bestsellers without traditional advertising.
• Word-of-mouth can be an incredibly powerful tool for spreading a product.

"It was just because people were like, dude, you should check this book out. Yeah."

This quote exemplifies the impact of organic marketing and word-of-mouth, where a single post can lead to substantial product sales without the need for paid advertising.

• Many businesses struggle to break through revenue barriers at the $10 million mark.
• The difficulty lies in the quality of the product and the increased effort required to improve it at later stages.
• Initial success does not guarantee continued growth without product refinement.

"It's harder to spend more time in the beginning fixing the product. But then when you scale, it's easier."

The quote emphasizes the importance of investing time early on to perfect a product, as this can facilitate easier scaling and growth later on, as opposed to trying to fix a flawed product after initial success.

• Early business growth requires promotion to overcome obscurity.
• There is a critical 'pause point' where the focus should shift from aggressive marketing to refining the product.
• Referrals and word-of-mouth should become the primary growth drivers before further scaling marketing efforts.

"Until that occurs, there's no point in adding more gas to the acquisition engine because you're basically just setting yourself up for failure at a later point."

This quote advises businesses to prioritize product refinement over aggressive marketing at a certain stage, warning that failing to do so can lead to future difficulties in sustaining growth.

• Initially, businesses should concentrate on a single product, target market, and marketing channel.
• After reaching a revenue milestone, the focus should shift to improving the product.
• A well-refined product can spontaneously lead to significant growth through referrals.

"That's what you have to do to get to one to 3 million. And so at that point, then you fix the product."

The quote outlines a strategic approach to business growth, suggesting an initial focus on acquisition followed by a period dedicated to product improvement to ensure sustainable growth.

• Enhancing the customer experience increases the lifetime value (LTV) of each customer.
• A higher LTV allows for more profitable marketing and outcompeting rivals.
• After solidifying the product and customer experience, businesses can diversify their marketing strategies.

"And then once you're at ten, if you have fixed the product and the customer experience such that you have a large percentage of your business coming from word of mouth, now you've extended the LTV of the customer."

The quote details the benefits of focusing on product and customer experience, which can extend customer LTV and provide a competitive edge in the market.

• The speaker expresses a deep passion for business and entrepreneurship.
• They have no hobbies outside of business and find it challenging to relate to non-entrepreneurs.
• The speaker would choose to live their life the same way again, but with improvements.

"I wouldn't do all of this again. I would do all of this better, but I would live this life."

This quote conveys the speaker's unwavering commitment to their entrepreneurial lifestyle, indicating that despite the challenges, they would choose the same path again, albeit with refinements.