Explosive Growth | Alex Hormozi | Straight Outta The Lair Podcast Ep43

Introduction

The host introduces the guest, Alex Hamosi, and provides a brief overview of his accomplishments. They discuss their previous chance encounter 14 years ago.

Meeting Flex Lewis

• The host met Flex Lewis by chance at a Roy Jones fight when he was 19.

• Flex Lewis gave advice on how to accomplish goals by cutting out distractions and focusing on one thing.

• The host remembers the conversation because of Flex's conviction and how he was living what he preached.

Quantity Begets Quality

Flex Lewis discusses the importance of putting in work to get better at something.

Sucking for a Long Time

• People want to be good without doing the work to get good.

• You have to suck for a long time until it's unreasonable that you don't suck.

Building an Office and Writing a Book

In this section, the speaker talks about two projects he is currently working on. The first project is building an office in Vegas for his media team and personal gym. The second project is writing his third book, "100 Million Dollar Leads," which has taken 18 months to complete.

Building an Office and Personal Gym

• The speaker is building an office in Vegas that will be headquarters for his media team.

• The office will be around 4-5 thousand square feet and will also have a personal gym for the speaker.

• The speaker likes to fatigue his mind during the day and then work out at the end of the day as a reset.

Writing a Book

• The speaker's third book, "100 Million Dollar Leads," is coming out soon.

• He has spent 18 months working on it with 18 drafts so far.

• There are around 127 pages of graphics that will go into the book to explain complex topics related to advertising.

• The book has been distilled down from around 800 to a thousand pages to about 240 pages.

Doing Deals

In this section, the speaker talks about how doing deals is how they make money. He discusses different stages of deals in their pipeline.

Deal Pipeline

• Doing deals is how they make money.

• There are different stages in the deal pipeline, including negotiating prices and doing diligence to ensure there are no lawsuits.

• The speaker spends most of his time doing deals.

Entrepreneurial Mindset

In this section, the speaker talks about how he got into entrepreneurship and his mindset around it.

Getting Into Entrepreneurship

• The speaker was a good student but always had an entrepreneurial mindset.

• He started his first business at 19 years old selling t-shirts online.

• The speaker believes that being an entrepreneur is about solving problems and creating value for others.

Entrepreneurial Mindset

• The speaker believes that having an entrepreneurial mindset means being willing to take risks and fail.

• He also believes that it's important to have a long-term perspective and not get too caught up in short-term wins or losses.

From Management Consultant to Entrepreneur

In this section, the speaker talks about his journey from being a management consultant to starting his own business.

Starting a Business

• After feeling depressed in his job as a management consultant, the speaker decided to start his own business.

• He applied to business schools but realized that he could save money by using his savings of $50-60k to start a business instead of paying for school.

• The speaker chose fitness as the industry for his first business because it was something he was passionate about and had experience with.

• He started with one gym location and eventually expanded to six locations.

Turnaround Business and Licensing

• After selling five of his gym locations, the speaker started doing turnaround businesses where he would help gyms reach full capacity within 30 days.

• The speaker then began licensing this model to brick-and-mortar facilities and has since licensed over 5,000 facilities.

Other Ventures

• The speaker also started a supplement company called Prestige Labs and a software company called Allen which were both sold in 2021 for millions of dollars.

• With the cash on hand from these sales, the speaker started investing in other businesses through their family office acquisition.com. They currently have 16 portfolio companies that do around $200 million per year in aggregate revenue.

Creating Successful Products

In this section, the speaker discusses the importance of focusing on one product and making it successful before creating additional products.

Focusing on One Product

• Many people create new products because they don't know how to sell more of their first one.

• The approach should be to pick one product and get it to a hundred.

Learning from Failures

In this section, the speaker talks about his failures and how he learned from them.

Rags to Riches Story

• The speaker had a rags-to-riches story with many failures along the way.

• He started a gym that failed, which was a critical part of his learning experience.

Gym Failure

• The speaker had several gyms that were mostly successful except for one where he was only a 1/3 owner.

• He ended up having a falling out with one partner and bought him out using cash flow from other facilities.

• He reached a point where he didn't know what to do and went to an event where he learned about online marketing.

Turning Point

• A guy at the event suggested that the speaker show others how he opened up each facility at full capacity.

• This suggestion led to the speaker starting a turnaround thing that worked well, so he sold all his gyms and put all his cash into a new partnership with someone who had been indicted for fraud.

New Partnership

In this section, the speaker talks about his new partnership with someone who had been indicted for fraud.

Launch and Go Model

• The new partnership was supposed to be based on a launch-and-go model where the speaker would open up one or two facilities every month, and the partner would come and operate them after they were filled up.

• The speaker filled up a gym, but the partnership did not work out as planned.

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Starting a Business and Facing Financial Challenges

In this section, the speaker talks about starting a business and facing financial challenges. He discusses how he had to process money and get contracts stacked up while spending $3,300 per day. He also talks about how he lost $75,000 in 21 days due to refunds.

Starting a Business

• The speaker started his own business.

• He processed money and got contracts stacked up while spending $3,300 per day.

Facing Financial Challenges

• The speaker lost $75,000 in 21 days due to refunds.

• Two of the locations where they launched stood up on chairs and told everybody to refund with them.

• They owed around $100,000-$150,000 in refunds which led to a vicious cycle of selling more to cover the refunds.

Starting the Gym Business

In this section, the speaker talks about how he started his gym business and switched to a licensing model.

Starting the Gym Business

• The speaker wrote ads, sales letters, and websites for his gym business.

• Within 14 days of running ads, they were making $1,000 a day online.

• The speaker called all eight sales guys to sell and make $8,000 a day in profit.

• One guy refinanced his house and maxed out credit cards to start a gym. He asked for help from the speaker who initially refused but eventually agreed to show him what he did for $6k.

Switching to Licensing Model

• After seeing success with one gym owner, the speaker switched to a licensing model where he gave access to internal trainings externally.

• Thirty gyms were launched using this model which generated around $300k in one month.

• The first 30 gyms that used their system averaged an additional $30k in cash collected within their first 30 days.

• They had trouble keeping up with phone calls as more gym owners wanted to use their system.

Growth of the Gym Business

In this section, the speaker talks about how their gym business grew over time.

Growth of the Gym Business

• Their revenue increased each month: $480k, just under $800k, then hit $1M.

• They hit $4.5M a month in 20 months and made $17M in profit in their first year of the licensing model.

Building and Scaling a Company

In this section, the speaker talks about how he started The Southern Company and scaled it to become a successful business. He also discusses how the COVID-19 pandemic affected his businesses.

Starting and Scaling The Southern Company

• Started The Southern Company.

• Scaled the company to reach 37 million Top Line in its biggest year.

• Sold the company to American Pacific group for 46.2 million in 2021.

Dealing with COVID-19 Pandemic

• COVID-19 pandemic hurt both of his businesses.

• Despite this, the stable base of his companies made them valuable enough to sell.

Pursuit of Growth and Character Development

In this section, the speaker talks about his pursuit of growth and character development through challenging circumstances.

Pursuit of Learning Through Doing

• Purpose of life is learning.

• Can only learn through doing.

Importance of Challenging Circumstances

• Challenging circumstances create character.

• Cannot have good character without going through hard things.

Fear of Underutilizing Potential

• Feels like he has underutilized potential despite being lucky in life.

Coping with Depression

In this section, the speaker talks about depression and how he copes with it.

Depression as Aimlessness

• Describes feeling aimless and questioning the point of everything.

Coping Mechanisms

• Staying active and constantly pursuing growth and evolution helps him cope with depression.

Making the Switch to Pursue Personal Goals

In this section, the speaker talks about how he made a difficult decision to leave his previous life and pursue his own goals.

Living for His Father's Dreams

• The speaker lived a life that was for his father and not himself.

• He realized that he had to pick whether he was going to die for his father or live for himself.

• He decided to quit his job and pursue a new path, which caused tension with his father.

Shifting Gears

• The speaker shifted gears from trying to beat his father at his own game to finding meaning in what he wanted.

• He realized that he was trying to win at a game that was not his own and questioned if it was the game he really wanted to play.

Creating Meaning

• The speaker believes that we can create our own meaning around the things we want.

• He realized over time that the approval of his father was always going to be out of reach, so he focused on learning instead.

Momentous Apology

• Seven years after leaving for the gym, the speaker's father called him and apologized.

• Rather than having it be a nice moment, the speaker expressed anger towards his father.

Relationship with Mentor

In this section, the speaker talks about his relationship with his mentor and how it has evolved over time.

Disrespecting His Mentor

• The speaker admits to disrespecting his mentor when he was younger.

• He stopped caring about what his mentor thought five years ago.

• The speaker had to let go of the vision that his mentor had for him in order to pursue his own path.

Approval from His Mentor

• The speaker always felt like he needed approval from his mentor.

• Despite their past, the speaker and his mentor are now on good terms.

• The speaker believes that there is no way that his mentor looks at what he has achieved and is not proud.

Achievements and Celebrations

In this section, the speakers discuss achievements and celebrations.

Focusing Forward

• Both speakers are focused on moving forward rather than looking back at their achievements.

• The second speaker hopes that the first speaker is able to celebrate himself more in the present moment.

Always On To The Next

• Both speakers admit to always being focused on the next thing rather than celebrating their achievements in the moment.

• Even though they have achieved a lot, they are still focused on improving themselves.

Giving Praise

• The second speaker encourages the first speaker to give himself praise for all of his accomplishments.

• Despite receiving compliments, the first speaker is always focused on improving himself.

Fitness and Business

In this section, the speakers discuss fitness and business.

Passion to Work

• The first speaker used to enjoy fitness until it became his work.

• He opened a gym which made fitness feel like work rather than a passion.

Commitment to Gym

• The second speaker asks if the first speaker was still committed to the gym during his business ventures.

• No response given.

Training and Seasons

In this section, the speaker talks about his perspective on training and how he sees it as a job. He also discusses how he approaches training in seasons and what works best for him.

Gym Training as a Job

• The speaker saw gym training as part of his job when he owned a gym.

• He has been training for almost 19 years, with the longest break being six weeks.

• The speaker sees things in seasons, including relationship building, physique work, and business.

Minimum Effective Dose

• The speaker thinks of training in terms of the minimum effective dose to avoid going backward.

• He can maintain his physique with less effort than it took to get there.

• This approach is similar to investing where you work hard initially and then reap passive benefits later.

Enjoyment of Training

• The speaker enjoys training more when he has people to train with rather than doing it alone.

• He looks forward to sessions without time caps where he can shoot the breeze between sets.

• His happiest times were when he had regular training partners.

Productivity Hacks

In this section, the speaker talks about productivity hacks that have worked well for him.

Waking Up Early

• Waking up early is the number one productivity hack that has served the speaker well.

• He starts working at 4 am every morning and gains four hours before stepping into the office.

No Meetings Until Noon

• Another productivity hack that works well for the speaker is not having any meetings until noon.

• If someone did these two things (waking up early and no meetings until noon), they would gain six hours every day to move things forward.

Pre-Planning Your Day

In this section, the speaker talks about how he pre-plans his day and the benefits of doing so.

Pre-Planning Your Day

• The speaker usually has a list of two or three things that he puts together the night before to get done in six hours.

• He creates a list of tasks for the next day, which could be one big thing or multiple smaller ones.

• The speaker sends himself an email with the list of tasks for the next day.

• Having something to work on in the morning helps him feel productive and avoid wasting time.

Early Morning Routine

In this section, the speaker discusses his early morning routine and why it works for him.

Early Morning Routine

• The speaker wakes up at 4 am every day to have some time to himself before his kids wake up.

• He used to go to bed late but found that he was not spending enough quality time with his wife. Now they are both early risers.

• The speaker has trained himself to stay away from certain things that stimulate him at night so that he can sleep better.

• His early morning routine involves dealing with international business messages and going to the gym before starting work.

Seasons of No

In this section, the speaker talks about "seasons of no" and how they help him focus on what is important.

Seasons of No

• A season of no is a period where the speaker turns down things that he would otherwise accept, such as speaking engagements.

• The more successful he becomes, the more people try to take time from him, so a season of no helps him focus on what is important.

• During a season of no, the speaker focuses on one priority and does not have multiple priorities. For example, if working out is his priority, he will make sure to do it at least twice a week for 45 minutes.

Balancing Personal Brand and Business Responsibilities

In this section, the speaker discusses how he balances his personal brand with his business responsibilities.

Personal Brand as a Business Responsibility

• The personal brand brings in deals for the business.

• The team records content every 14 days based on prompts from comments and tweets.

• Tweets are used to create short-form content that is later expanded into long-form content.

• Four or five long pieces of content become podcasts and YouTube videos every 14 days.

Scaling Personal Brand

• The speaker's personal brand has grown tremendously over the years.

• Growing a personal brand is time-consuming.

Day-to-Day Business Operations

• The day-to-day operations involve writing books, cash flow projections, diligence calls, recruiting potential CEOs, etc.

• There are subject matter experts across departments who identify constraints in businesses and solve them.

• Internal experts help solve problems such as sales issues, marketing problems, conversion optimization issues, pricing issues, delivery issues, customer success issues, third-party logistic issues.

• Recruiting function finds the best people who have already been there done that to build the business.

Investing in Businesses

In this section, the speaker talks about investing in businesses.

Identifying Good Investments

• A good investment is one where they can identify a constraint and solve it.

• They invest in companies where they can bring value through their expertise.

Investment Criteria

• They look for companies with $1 million to $10 million in revenue per year.

• Companies should be profitable or close to profitability.

• Companies should have a clear path to growth.

Due Diligence Process

• They have a due diligence process that involves talking to senior leaders at the company, analyzing financials, and assessing whether they can add value to the company.

Advice for Entrepreneurs

In this section, the speaker gives advice to entrepreneurs.

Focus on Solving Problems

• Entrepreneurs should focus on solving problems rather than just starting a business.

• Identify a constraint in an industry and solve it.

Importance of Networking

• Networking is important for entrepreneurs.

• Attend conferences and events to meet people who can help you grow your business.

Be Patient

• Building a successful business takes time.

• Be patient and keep working hard.

Competitive Advantage of a Family Office Private Equity Firm

In this section, the speaker discusses the competitive advantage of a family office private equity firm in attracting top-tier talent and building valuable companies.

Advantages of a Family Office Private Equity Firm

• The personal brand of a family office private equity firm attracts better talent.

• A family office private equity firm can get more responses from higher-level individuals compared to smaller businesses.

• The firm can tactically add value at the operating company level and recruit people into those roles, which builds value in the company itself rather than just at holdco.

Steps for Entrepreneurs to Reach Six Figures in Fitness Industry

In this section, the speaker provides advice for entrepreneurs who want to reach six figures in the fitness industry.

Steps to Reach Six Figures

• Focus on one specific customer on one channel (e.g., Instagram DMs or YouTube videos).

• Learn how to sell through that channel and consistently do activities that generate sales.

• Add back-end products to increase lifetime value of each customer once you reach seven figures.

Turning a Hobby into a Business

In this section, the speaker talks about how he turned his hobby into a business and shares insights on what it takes to be successful.

Pursuing Goals

• The speaker emphasizes that turning a hobby into a business is the easiest way to start.

• He encourages aspiring young hustlers to put themselves in uncomfortable situations until they become comfortable.

• The speaker shares his own story of pursuing his goals by putting himself all over California until he found the best version of himself.

Learning from Failures

• The speaker highlights that every successful person has faced trials, tribulations, and failures.

• He admires the humility and drive of successful people who are always aspiring to be better every single day.

Solving Problems

• The speaker advises young people to figure out what problem they are trying to solve before starting down any career path.

• He suggests playing out different scenarios for solving problems before making strategic decisions.

Finding Success: Problem Solving and Input-Output Equation

In this section, the speaker discusses how to find success by solving problems and understanding the input-output equation.

Defining the Problem

• The first step in finding success is defining the problem you want to solve.

• Play out different scenarios to determine which problem you prefer to solve.

Understanding the Input-Output Equation

• To be successful, you must understand the input-output equation for achieving your goal.

• Determine what primary actions you need to take that will stack up over time.

• Examples of primary actions include reaching out individually to friends and family, running ads, posting content, or getting affiliates/referrals.

• Figure out what your input-output equation is for achieving your goal.

Taking Action

• Once you have determined your input-output equation, take action as many times as possible.

• Ignore those who tell you that you're wrong or won't succeed.

• Create unreasonable equations for yourself and do them every day for 10 years without stopping.

• Eliminate waste in your life by removing activities that don't matter and focus on doing the few inputs that matter most.

How to Get Good at Something

In this section, the speaker talks about how to get good at something and the importance of mentors.

Importance of Mentors

• Having mentors is important because they can help you figure out if you're doing the wrong things or not doing enough of the right things.

• Mentors can also help you identify if you're doing the right thing but in the wrong way.

Doing the Right Thing Takes Time

• If you're doing the right thing, sometimes it just takes time to see results.

• Volume begets quality - meaning that quantity leads to quality. The more you do something, the better you get at it.

• People often want to be good without putting in the work required to get good. It's important to understand that improvement takes time and practice.

Figuring Out Why You're Not Doing Something

• People often hide behind not knowing what to do when they really need to figure out why they're not doing something.

• To make progress, it's important to get directionally correct by figuring out what you like and moving in that direction.

• The only way to know if something is right for you is by trying it out and iterating based on your experiences.

Learning from Failure

• Your first business or attempt may not be successful, but failure teaches valuable lessons that can be applied in future endeavors.

• Reading books or listening to podcasts can provide information, but actually doing something is necessary for true understanding and growth.

Entrepreneurship and Problem Solving

In this section, the speaker discusses the importance of operating with incomplete information in entrepreneurship. He emphasizes that it's important to make the best bet you can and get directionally correct, then adjust as needed. The speaker also provides advice on how to choose an opportunity to pursue.

Choosing an Opportunity

• To choose an opportunity, ask yourself: what problem are we solving? What's the goal?

• Determine your goal - do you want to be a millionaire or billionaire? This will help determine which path to take.

• Match your unique skill sets with available opportunity vehicles.

• Identify the hardest parts of each opportunity and decide which one you prefer tackling.

Pursuing Your Goal

• Once you've chosen an opportunity, focus on inputs and outputs.

• Put effort into something to become good at it - whether it's business or bodybuilding.

• Enjoy the process of chasing low-hanging fruits while keeping your ultimate goal in mind.

Finding Your "Whale"

In this section, the speaker talks about the importance of finding a single focus for your business instead of chasing multiple smaller opportunities.

Focus on One Thing

• The speaker advises that it's important to find a "whale" or a single focus for your business instead of chasing multiple smaller opportunities.

• The speaker shares an anecdote about a world-class athlete who had multiple businesses but only one was successful. When asked what he would do if he could kill all his other businesses and focus on growing that one brand, the athlete said he could easily triple its size.

• The speaker emphasizes that volume times leverage equals output, and that leverage is unlimited. Therefore, it's important to pick the right activity with the biggest multiplier effect on the work you're putting in.

Choosing Your Focus

• The most important decision you can make in your entrepreneurial career is deciding what to dedicate the next five to seven years of your life to.

• To choose your focus, draw a line in the sand and say that if it's not going to make you X amount of money, it's not worth your time. Then narrow down your options by considering which problem you want to solve and which opportunity has the biggest potential return on investment.

Committing to One Thing

In this section, the speaker talks about committing to one thing as an entrepreneur and how it can lead to success.

Eight Seasons of Entrepreneurship

• The speaker believes that committing 60 months or five to seven years to one thing can lead to success as an entrepreneur.

• He compares Microsoft's rise from zero to one of the biggest companies in the world in seven years as an example of what can be achieved in five to seven years.

• The speaker believes he has eight seasons or opportunities as an entrepreneur from beginning to end.

Being Selective About Opportunities

• The speaker emphasizes the importance of being selective about which opportunities he pursues.

• He uses the analogy of having a limited number of tickets and being careful about which ones he punches because picking too many guarantees failure.

• Pursuing multiple business endeavors at once is like trying to be a champion in CrossFit, strongman, and bodybuilding at the same time - it's not possible and will result in mediocrity.

Don't Stop

In this section, the speaker talks about how life is an infinite game and emphasizes the importance of not quitting.

Life as an Infinite Game

• The speaker describes life as an infinite game where there are known and unknown players, no agreed-upon rules, and the only point is to keep playing.

• Winning isn't necessarily important; staying healthy, continuing your marriage, or staying in business are more important than winning at them.

The Importance of Not Quitting

• The only way to lose in business is by quitting, so the speaker emphasizes the importance of not stopping.

• As long as you stay in the game, you have unlimited innings and at-bats.

• The speaker's advice to viewers is to pick one thing and not stop pursuing it.