My 2024 Lessons in Business That Will Make You Rich | Ep 800

Every year I make a podcast on the lessons and failures from the year before, and every year it is my most listened to podcast. And the wait is over. This is my lessons and failures from 2024. To give you context on the companies that I own, our average position at acquisition.com is just about 40%. And the reason it's just about is because we have options, we have performance kickers, things like that. But it's about 40%. Uh, our EBITDA growth, meaning basically the profit of those companies in total, went from just over $50 million to this year we'll probably finish just under under $100 million in EBITDA. So really good growth here, uh, for us. For back of napkin math, if you assume a 10x, uh, multiple on the valuation, the company in total, in aggregate, is over $1 billion, probably pretty easily, because the bigger the company is in general, the larger the multiple. Now, to be clear, I don't want to claim that, uh, until we have some sort of third-party validation, but it was a very good year for Acquisition.com. And so we'll likely cross $300 million in revenue, up from $85 million in 2020. Uh, and so we have consistently grown year over year. And so this video is about what changed from $85 million in revenue to $300+ million. My first piece of advice is set fewer goals and do less long-term planning. Hear me out. The first big shift that I would say that's happened over the last year has been I have emphasized less and less long-term planning. And so this may sound contradictory to some of my content about being patient. And so I think the patience is about being able to figure out what you're going to do in the meantime as you pursue your long-term goals. And I think long-term goals are very important, but the obsession over the minutia of how you're going to get there is, I believe, an act of mental masturbation. You try and create these massive projections that are based on hundreds of variables that in reality you just don't know what's going to happen. And so over I've consistently trimmed and trimmed and trimmed our planning processes such that at this point I pretty much only care what we're gonna do in the next 12 weeks. And beyond that, we might have 1 target or 2 targets by the end of the year, but we're not gonna dedicate a lot of resources to this. And this is somebody who's coming, who's a big fan of preparation. But I've just found that it ended up being a huge waste of time, mostly because whenever I looked at the plans that I made the year before, 1 year later, I was like, man, half this stuff isn't even relevant anymore because of new changes in conditions. I will probably continue to lean more in this direction. And I think this has become a little bit more popularized by some of the CEOs like Jensen Huang, who despite having NVIDIA over 30-plus years, has recently talked about how he basically doesn't do a lot of long-term planning. Because fundamentally, you have things that you can do today, and those are the things that you begin to allocate. Now, sometimes what you need to do today is work for something that's going to happen in the future, but you can only control what you do today. And so I've shifted more and more in terms of what will this change about our behavior, and the rest of it I more or less toss out. The first thing is that we think that you're gonna have this really neat line of how the growth is going to happen, right? But reality is very messy. And so what's likely going to happen is that you will flatline and then figure something out, and then you'll flatline and then figure something out, and then flatline and then figure something out. This is what it looks like if you were to zoom in on this little area here, right? If you were to zoom in here, it actually looks closer to what this is, which is You have the stagnation and then you have these improvements that occur and then increase revenue. Now, one of the things that's also shifted my perspective on how to plan is let's say that we've got thing A, thing B, thing C, thing D, thing E that we need to do. Well, before this I would try and, you know, diverse, you know, delegate each of these things to person 1, person 2, person 3, person 4, person 5, and so on. But I would say that that appears to me like I have not done my job because I need to do a better job prioritizing. One of these things is the most important. And if you can't decide what that is, then you are not doing your job and you certainly can't expect your team to make that decision for you. And so I've had to look at this and say, if I could only pick one of these things and we only accomplish that thing, which of these would get us closer to our vision for what the company should be? Which one would move us the furthest forward? Which of these is the biggest domino? And so what I've redone is I say, okay, A is actually the priority. I don't need to order B through C here. I don't need to worry about what order these are in. And then I will take 1 2 3 4 5 and get all of these resources concentrated on solving A. And then what I found is that once you solve A with all those resources, because everyone's aligned, then all of a sudden B happens faster, C happens faster, D happens faster than trying to do them all at once. And the reason I say this is because I tried the other way first and what ended up happening is I would have A, B, C, D, E and then by the end of the year, you know, A would be half done, B would be, you know, half, you know, one-third done, C we hadn't tried, D was no longer relevant, E was no longer relevant. And so what ends up happening is that when you do it this other way, After you've accomplished A, what you might find is that if you have B, C, D, and E as your remaining options, you might figure out that actually these are now irrelevant. There was no point in allocating that effort originally. So the two people in your original scenario who were working on these, 4 and 5, were basically doing wasted work because it's no longer a priority. Because once you accomplished A, basically all the variables change. The context of the entire business will change if it's truly a good priority, right? It means that it's gonna make a big dent. And so if it does make a big dent, then it doesn't make sense to spend all of this time wasting on trying to plan out how D and E are gonna work out because the whole scenario, all the players on the board and the rules will change. And so what happens is once you do hit A and that changes the paradigm, we change, we hit A, all of a sudden you might have F that becomes number 1. So this is now the priority, and then you align yet again those resources to making F come true. And part of the reason that solving problems this way I think is more effective is that because all of the rules change and the paradigm changes, so too do your resources. And so your original plan for how you were gonna do D and E is based on today's resources and today's solutions. But in the future, once you've accomplished A and the paradigm changes, then all of a sudden F becomes the priority, but you have all the resources of a business that has now accomplished A. And so this further changes why I think long-term planning, um, it's good to have long-term goals, but the, the, the obsession around every single little task and item and who's going to do what, I think oftentimes is just a waste. So let's say that you ran, uh, an agency, right? So you do, you know, Meta ads for small businesses, like a very typical business. So if that was your business, you might say, okay, we need to, you know, get more leads. So that means we're going to increase ads. Okay. That's one of the things we're going to increase show up rate because our show up rate sucks. So we're going to, we're going to try and fix that. We've got to hire, you know, a sales manager and whatever else, right? Like you've got, you've got, you've got your task. Now, if this was your objective, A good strategist says, given the resources I currently have, what one thing could I do that would make all of these problems disappear? Well, the good strategist would then say, well, if I had a brand and I invested in my brand, well, would that, would that accomplish my leads thing? Yup. Now I wouldn't have ads, but it would accomplish my problem of getting leads. Now, would show up rates be higher if I have a warm audience? Yes. Would my close rate be okay because everyone is being warmer? Probably. Now you might have to still hire the sales manager, but you can see how the entire dynamic would change if only this were true. And so then it follows, okay, well, what are the resources required to make this happen? And if I know what those resources are and I have those resources available, then it would follow that I should do this one thing and then in so doing accomplish all of these other things as a consequence. And this is why, to be clear, if you're like, wait, well, they're just gonna say build a better product because if you have a good product, you're not gonna lose people, you're gonna get word of mouth, you're gonna have higher LTV, or they're just gonna say, you know, Alex is just gonna say build a good brand because if you build a good brand, then all these other problems go away. No shit. That's called leverage. And so you're like, no, no, no, I don't wanna do the one thing that would solve all my problems. I want to try and solve each of my problems individually. Well, that's amazing for you, and you should probably get that looked at. But the point is, is that a good strategist has to look at all available options given the resources they have and say, which one of these gets me the most? And fundamentally, that is leverage. Next up is the strongest force in all of business. And so I believe in this so thoroughly that there are only two concepts that are embedded within the Acquisition.com logo. The first is this cross here, which is the supply and demand curve that exists in any market. The second part is, why is this a triangle? The triangle is there to exist as a fulcrum for leverage. And so fundamentally, if you can have a supply-demand curve that is dramatically in your favor, That alone will dictate this. If you are the only person who sells this one thing and the entire world wants it, you are going to make a lot of money pretty much no matter what. Doesn't matter how good you are at marketing, doesn't matter how good you are at sales, doesn't matter how good you are at pricing, you're gonna make a ton of money. And so I try to think, what are the fewest things that have to be true in order for me to win? And I would rather just get those things right and then everything else can fall away. And so think about this in sequence: supply-demand is the That's the first and most important thing. As long as we have those things, then if you had that hypothetical example of the entire world wants something and you're the only one who does it, what's the next thing you would need? Which is leverage. You would wanna be able to get as much for the effort that you put in because you would get bottlenecked based on maybe your supply chain. You'd have other dependencies that would prevent you from capitalizing on the opportunity that the supply and demand curve has put in front of you. And so in a perfect world, you have all of that and unlimited leverage. And that allows you to maximally capitalize on opportunities. And that is why I designed the Acquisition.com logo to exhibit those things. Now, the first piece here is understanding whether your business is supply or demand constrained. And so a supply constrained business, for example, is one that's like cleaning. Like cleaners often don't have a hard time finding other businesses or other homes to do cleaning for. A lot of people just don't wanna do it. The issue they have is finding staff who can do the cleaning with them or for them. And so that means that your supply side of how you can deliver to the demand is usually the issue. And this happens a lot of times with what I would consider nuisance services. So services that people might know how to do but just don't wanna do. And so a different example of this in a professional setting would be like accounting firms. Accounting firms, a lot of people don't want to hire accountants and for a big period of time in a lot of companies' growth in the beginning, you don't have in-house accounting. And so having an out-of-house accountant, there's plenty of demand for them. The issue they have is recruiting really good accountants. Yet again, they are a supply-constrained business. Now this works again with legal, it works with high-end consulting. Like if you're a very good consultant in a niche, it's very like, Easy to get people to want to buy from you. Very hard to get other people to do what you can do because you're really good at this thing, right? And so this is very typical in a lot of businesses, especially service. That would be supply-constrained businesses. And if that is the constraint, then what do we do to gain leverage over the constraint? And so this is where, okay, is there a way that we can build a community of accountants that we can then recruit from? Is there a way that we can create some sort of environment that attracts more cleaners? Can our compensation structure— can we have a referral system internally for our team or our employees? Because I know what a cleaner— I know what a legal person— I know what another consultant is worth to me, to my business, in total gross profit per year. And why would I not be willing to pay 20% of that to somebody? Now, you might do that math and be like, holy cow, I make $250,000 a year per new lawyer who joins my firm. It'd probably be a lot more than that, honestly. In that case, then why would I be unwilling to spend $50,000 to go, and not only that, give that $50,000 to someone on my team for bringing another great lawyer in? And so this scales all the way up and all the way down based on the revenue that each of these high-end or supply-constrained employees provides the business. Now those are supply-constrained businesses, and if you're in one of those, you need to recognize it because the real businesses you're in is attracting, hiring, training, managing, and incentivizing these people to perform. That's the real business, 'cause the demand kinda takes care of itself. Of course you have to do the basics, but the real issue's gonna be on the back end, not the front end. Now, let's flip the tables. There are some businesses that are demand constrained. Now demand constrained businesses will be typically like e-commerce businesses, oftentimes, Software businesses, specifically B2B software businesses, can be demand constrained. Typical consumer products, weight loss for example, is a very demand constrained business. Now this might sound wild to you, like wait, I think so many people wanna lose weight. Yeah, there's just even more people who supply it and so many different methods for doing it. Now again, all of these things can shift, right? Supply and demand is a curve, like it can move, right? This is dynamic and this video exists in time and unfortunately the environments change. But anybody who's been in fitness would understand that getting customers is actually typically the hardest part. Finding trainers, not that hard. There's lots of people that like training and they'll even do it for free. Same thing with musicians. Like if you teach music classes, right, one of the difficulties there is attracting people who want to buy music lessons, but there's tons of people who play music and do it for free, right? And so the idea is which side of this curve are you on? And then whatever that side is, is asking yourself, how can I gain more leverage over this problem so that I can solve it at scale once and for all, rather than having to solve it continuously over and over and over again? So I'll give you an example. I had a company who came out that we were looking at, and they were a little bit on the smaller side, but they were a home services company. And so the issue they had is they were struggling to attract plumbers. One of the things that we put in place for the business was, well, what does a plumber bring in every year? And let's call it $400,000 in gross profit. Okay. So if you have a nut of $400,000 that you know you've got the demand for, they're turning away business because their phone's ringing too much and they can't even take it. I says, you got a $400,000 nut. What are you willing to pay one time to unlock $400,000 every year in gross profit? Well, if you were to think about that like an investment, right, which would be like, okay, I've got this stock that yields $400,000 in gross profit per year to me. What would I be willing to pay for it? And that's every year. Well, shoot, I'd be at least willing to pay $400,000 if it was a stock, right? That's 100% return, 'cause next year I'm gonna make $400,000 too. Now, there is an element of risk that comes into the equation. What if the person leaves? What if they get fired? What if they're not good? All of those things, so those are for sure there. Which means that we would then apply some sort of discount to account for that risk. But I think that one of the big misconceptions that business owners have is they're not willing to pay enough for talent that is the constraint of their business. Like right now, if you could get 10 more, like if you are in a supply-constrained business, if you could get 10 more of, not star, just appropriately competent employees who could service the demand that you have, would that, double or triple your business? If so, yes. What would you pay in order to double, triple your business? Probably a lot more than it costs you to attract those people. Cool, then what do we do? Well, the easiest thing is incentivize all the people in your existing workforce to go do that recruiting for you. Like, too many business owners will give like a $1,000 referral bonus on something that makes $400,000 a year in gross profit. Well, that's dumb. If, if I can give $25,000 away or $50,000 away and I can get it solved in a month, then every month, because that $400,000 doesn't happen at once, it happens over this period of time. And so if I can actually solve the problem 2 months earlier, then that means I could get to collect $35,000 for 2 more months of gross profit. Okay, so there is a time component of this. So maybe you can get the referral, maybe it does take you 6 months instead of 3, but you missed out on whatever that is, $105,000 in gross profit that you could have had, had you just been willing to pay a little bit more. But still less overall, and you still get to keep that person for life. So you'll notice that I'm talking a lot about who in these examples, and, you know, it's one of those big, obvious, trite responses that everyone who is a, you know, a senior entrepreneur or senior investor or Warren Buffett or Steve Jobs, they all say the same thing, which it's just about the people, right? Bet on the jockey, not the horse. There's tons of isms in this world and everyone nods along. But the problem is that people don't have the context to understand the levels of talent that exist. And this is why these mistakes are so hard to bear, because you have to have some sort of pattern recognition of having worked with one terrible people to know how to avoid them. And then secondarily, what star talent looks like. And sometimes it takes luck in the beginning, and then over time you start recognizing what that looks like so that you can do it on purpose rather than on accident. And if you think about people as one of the highest leverage things you can do, So think about this as hypothetical. If your business had people who could do everything that currently exists and you could simply own it, that would mean that you could work zero and make almost the same amount that you do now. You'd only have to find someone who could do what you do. Like, literally just think about what you currently make. Think about what you currently do. If you could pay someone less than what you currently make in distributions to do 100% of what you currently do, you could feasibly retire at your current income level just with that one hire. The idea of getting really good people is still undervalued in the marketplace, which is why there's always an opportunity for people who know how to attract and retain the best talent. There's a reason that the most expensive companies in the world in the stock market are at war for talent. I think, I wanna say like 18 months ago, one of the headlines of, I think like the New York Times or something was, "The Talent War." And the whole idea was just that there's just, it's an onslaught of signing bonuses and kumbaya and free lunch and all this stuff to try and attract the top talent because they know that the leverage of having somebody who's a 10x engineer or a 100x marketer for their business is always worth more than what they're going to pay the individual. And so they're just doing everything they can to get them. And this is me trying to translate that to you in terms of my emphasis over the last year or years that has yielded this outcome. If we're thinking about more or less in terms of my focus, this is one that I'm doing more of. I'm more focused on talent. I'm more focused on better people, fewer better people, and incentivizing them and incentivizing other people to bring them in. Yeah, and there's some semiconductor companies that are offering 3x salaries, their current salary, to poach people from one company to another because the cost of switching is obviously high. If they're making more money than you, you should look at what they're doing. So next point up for me is of the first 100 days this year, I took 0 days off. I bring this up because this is a very taboo topic, and I wanna be clear, do whatever you want, alright? I'm just saying that when I see the entrepreneurs who are obsessed with their work, they do better than people who aren't. It's basically that their discretionary time that would go to hobbies, that would go to other things, basically all flows into this one thing. I'm gonna paint a different picture for you. I played video games all day and someone came up to me and said, "Hey, why don't you go outside?" And I say, "I don't want to go outside. I want to keep playing video games." The thing is, is that that person's making some moral judgment that I should do something that they have projected onto my life. Now, I'm a big believer in personal freedom, which is if you want to play video games every hour of every day until the day you die, that's your prerogative. It's not how I would want to live my life, But more power to you. If you have an outcome that you're optimizing towards, which would be financial wealth, which is kind of the point of my channel, the people who work the most tend to make the most money. And there's a number of reasons for that. So number one is you make more money when you work more because you have less time to spend it. That sounds obvious, but I think it's like kind of silly. If you work, you make more. If you stop working, you not only don't make, you also spend. So it's a, it's a, it's a negative to positive swing. It's actually disproportionate. The next thing is that a friend of mine messaged Elon about his vacation. He's like, "Hey, you should go on vacation," or, "We should go here for vacation." And Elon's response was, "I don't do vacations." And I was like, "Man, I love this guy." I bring this up yet again because I feel like the more you get in the game, the more addicted to the game you get. And I think that addiction is just a term that society uses for activities that people do that have negative consequences rather than simply things that you do on a regular basis. Well, I'm addicted to food 'cause I do it every day. I'm addicted to sleep 'cause I do it every day. I'm addicted to talking to Leila 'cause I do it every day. And so it's just that addictions is when they decide that the outcome of that thing is somehow negative. But if the outcome of what I do helps more businesses grow and is something that I enjoy, why is this wrong? Big picture for me, we did end up doing one vacation in, we did two very bad vacations this year. One was on July 4th, which I ended up basically just traveling and then working the whole time, so I don't know if I would consider that a vacation. And then the other one, we went to truly do a vacation. And so this one was gonna be 2 days. We got there and it was this beautiful luxury resort and there's only 22 villas. It's like 3 or 4 people per villa, like very ritzy, whatever. And I look out on the patio of the villa that we have over the mountains and I'm like, "Man, this is beautiful and I don't care." And I think it was this realization that even vacations were something that had been passed on to me from someone earlier in my life that it was something that I should do, that I must do this or else I will not gain their approval and I will get judgment from people that I care about. But when I think about who do I care about, who would care about whether or not I go on vacation? There are very few, and they certainly don't have the things that I want or have accomplished what I would like to accomplish. And so why would I listen to them? And so one of the other things that we did this year is that we traveled significantly less. And so this year in total, I think we took somewhere in the neighborhood of 12, you know, 10 to 12 days off in total. And I would define a day off as not working at all. That would be a day off. And so I would say a workday I would define as more than, call it 4 hours of work as a workday. So maybe on the days off, I would still consider I worked for a few hours, but I'll count that as a day off. So big picture, the increased focus and decrease in change in variables in my environment allowed me to work more because I had fewer changing variables that I had to accommodate on a regular basis. And so Layla and I were looking over our calendars yesterday. We did a joint, a joint podcast going over each month of the year, like what we focused on in that month. And what was interesting is that we kept swiping through and it was just like work, work, work, just like an onslaught of things that we did over and over and over again. I can tell you this is that the periods where I've had tremendous financial growth across different companies that I founded have almost always had these very long periods where I just have to do reps. And this is like I'm in a Rocky cutscene of my own right now. and I know that it's likely going to take 3-ish years, and I'm probably about a year in, and I probably have 2 more years to get to the other side, and it's just that I've been on this roller coaster before, and I know how the song goes. And so it's less like weird for me, and also I don't have the anxiety of will this be forever? I know it's not gonna be forever, and I know that it's a season, and even if it is forever, I have found that it's far more productive for me to work 7 days a week, 8 to 10 hours a day, than it is for me to work 5 and take 2. People have different preferences, but for me, it's kind of like the summer gap in, in learning. So when kids take 3 months off for the summer, they have this whole summer catch-up that they have to do, which takes like another quarter for them to just get back to where they were. And so if you think about the 3 months plus the catch-up, it's like Kids are only like net positive for like 6 months of the year, and the other 6 months they're not. So basically learning at half speed, not to mention you're learning at the slowest person in the class, which we won't even get into. But from an entrepreneur perspective, we're incentivized to get as much quality work done as possible. And so for me, I work very well on realistically a 10 to 12 hour a day schedule. Um, obviously there's probably 2 or 3 days a week that I'll work 16 to 18. But I would say my true average is probably 7 days a week of 12, and I'd say weekends are shorter, and I probably have 2 or 3 days, like I said, during the week that are probably 18s. And so that gets me somewhere in the 90 hours a week range, but for me that's actually fairly doable because my wife's here with me, I have a gym downstairs, I have all the people that I care about who, and I care about them because they support me, they take interest in my goals, and they want to help me accomplish them. And so they increase the likelihood that those goals occur. And so how could I— like, what else could I ask from someone? Like, for my life, like, I'm, I'm very happy with my life. And I think that a lot of people take offense to me being happy about my life because they think that I cast judgment on them living differently. You can do whatever you want. I make this channel because I've been trying to document this since I had nothing all the way to $1 billion plus and just say what's worked for me. Now, when we think about heaven, A lot of people see heaven as this place where no one works, right? But that sounds like hell. And what's interesting to me is that biblically— and I'm not a Christian, so, you know, don't get upset— but the Bible begins with giving Adam a job before he gives— before God gives Adam a wife. And I see that as God seeing work as just as, if not more important to our life, like he's modeling what we're supposed to do. And to be clear, I have a lot of Christian values, I just don't necessarily believe in the narrative overall. Not the point of this video. But I see work as integrally human. So in case you're watching this before the end of the year and you've got someone in your life who's like, "Dude, just chill out. Hey, just relax." I wrote this thing in response to this because it was something that I got a lot, was like, "Dude, relax. Like, hey, everything's fine. Like, you're doing great." I got really violent about it. And so almost no one in my life would describe me as a chill guy. And I don't think I ever will be. And it got me thinking about this, and it's that greatness isn't chill. Greatness is jealous, it's obsessive, it's demanding. It required me to sleep on the gym floor, to live on the road, and lose everything I had twice. Greatness required me to quit my job, leave home, enter a new industry where I knew nothing and no one. Greatness required me to use all of my savings to make new partnerships and then break old ones. It required me to get rejected by strangers, have people laugh at me, have money get stolen, get betrayed by friends. And today it requires me to work longer hours than I did even in the beginning with fewer days off and do it with a smile. And I still work like my life depends on it because I believe that it does. So my point is, every time you hear someone tell you to relax, telling you to ease off the gas, just remember that it just means there's gonna be more for the few, more for those who hunt, who fight and persevere, and it means more for you and more for me. And the thing is, is that it's so easy to beat people nowadays because people are so soft and they can't stick with anything. They're distracted. Instead of doing what they know they should, they waste their time counting their notifications rather than the tasks they should get done. And so they want the goals without the pain, without the focus, and without the sacrifice. They want the promise without the price. And people think they need work-life balance, but work-life balance is a great goal if you're okay with being balanced in the middle between the best and the rest. But if you want to be the best, chill is not going to be good enough. Greatness is just too fickle. She demands too much, and she doesn't let you split your attention. She won't let you coast. She won't let you relax. She won't let you chill. And the moment you do, she'll leave you for someone who will give her more, who will put more on the altar. And so whatever you're not willing to sacrifice to keep her, someone else who wants greatness more will. And so the TL;DR is I want to achieve great things, and great things have a great price, and that price never feels, looks, or pretends to be relaxed. So my little message is, if you want what you say you want, Being relaxed, being chill, easing off the gas won't get you there. And being willing to sacrifice more for longer than anyone else probably will. And don't expect anyone else to understand. It will be a lonely path because if they could understand, they'd be right there with you. So play by your own rules. Win the game that you want to play. You know, my grandfather, when he died before I was old enough to remember him, Every picture I've seen of him, he's standing up bone straight, like proud. And he ended up getting taken to prison and tortured for many years in Iran during the revolution. And when he came out, he was a very changed man. He didn't remember anyone because just torture was tough. He didn't— yeah, I'll just leave it there. And so what's interesting about that is like, I see him as a great man. But many people describe my grandfather, and I've talked to countless, and the thing is, is they've all said the same thing. They were like, Hussein was a serious man. And if I had to choose between how people would describe me, like he was a really relaxed guy, or like he was a serious man, like if I had to describe those two people with just only those two descriptions, which one of those people do you think will impact the world greater? And for me, I would rather sacrifice cool points in the eyes of people that I don't care about to do what I feel like I came here to do. On the back end of that serious note, fun things did happen this year. And so I ended up buying acq.com, a 3-letter domain from Yahoo. And so they had owned that since 1998 or '96, I can't remember. It was '96 through '98. They said they had owned it for like 26 years, something like that. And I finally was able to wrestle it from their grip. And so that was really cool. For those of you who are curious, it was $480,000 to buy the domain. You know what? I don't buy a lot of crazy shit, and I'm allowed to spend my money however I want to spend it. And I think acq.com is dope. And so on the back end of that, part of the reason I did that was because we just stood up ACQ Ventures. So really proud of that. That was a project that we took on. Zach Choi, we brought in-house. He's basically managing the investments on that side. Long history of venture capital work. It's primarily focused on SaaS and tech-enabled services. The reason that we're doing it is basically because our family office, which functions like a private equity, but it's a family office in that we don't have outside LPs or limited partners, people who give us money. So we don't have any people who give us money. It's all our money, which is why it's a family office. Family office. But in terms of the day-to-day, most family offices tend to be passive. We are very active in our investments, and we take significantly larger positions. We stood this up because we have a tremendous amount of people who are entrepreneurs who we meet through the various things that we do that would like investment, they would like help, but they don't want to necessarily hand over control or hand over— have that level of engagement. And so we stood up ACQ Ventures because there's just honestly a ton of demand for a different capital structure for our investments. We just did our first 3 deals in ACQ Ventures. I think should finalize in the next week or 2, so before the end of the year. Kinda cool. And so that will be a much higher volume deal side for Acquisition.com, and that branch will just be on the venture side. Also, free gift for you. One of the big things that I worked on this year, probably a month of my life, Honestly, went into building out $0 to $100 million scaling and what that looks like from a headcount from 0 to 500 people and from, you know, $0 to $100 million plus. And I did it across all 8 departments. So the departments were sales, marketing, customer service, product, IT, HR, recruiting, and finance. And so what problem exists at every level? And I broke it into 10 stages. And what you need to do to graduate from that level. So you can literally just look at your own business and see what's, what things you're missing, what things you're lagging on, maybe sometimes what things you're ahead on, because it's very neat to put these things into 10 stages, but reality is messy. And so it's more that you'll be at stage 5, you'll have some things that you're at stage 7 on and some things that you're at stage 3 on, but those stage 3 things will likely be things that you will need to fix sooner than the things that you're at stage 7 on, right? And so it's very much the constraints concept where you have a weak link and this helps you see where you're the furthest behind so that you kind of up-level those things faster. And so I just dropped the training. It's at acquisition.com/training and just click the $100 million scaling roadmap and you can go there. We also have a little button there that you can get a personalized plan made for you. So you just answer some questions and we'll tell you what stage you are at and we'll give you the one before and the one after. So you know what you should be finished and what you have a line of sight to. It's absolutely free. You just go there and enjoy. It's 14 hours. You don't need to watch the whole thing. Just watch the section that's that's specific to your business right now. So big thing right now is growth trends. And historically when I would do my podcast recap of the year, it was always my most popular episode. And so now I'm just doing it on YouTube. But these were the things that I would say we learned or that we doubled down on in the portfolio that yielded really good results. So number one is we focused a lot on leadership talent recruiting. All right, so you call this key player recruiting. And the big thing here is that I kind of switched my perspective on this, which is fundamentally if you listen to Steve Jobs, you listen to Bezos, you listen to Zuckerberg, a lot, Elon, a lot of them take a hugely active role in bringing in top talent. My understanding of talent has been probably the single largest shift that I've had this year in terms of my understanding of business and why I think that we're disproportionately growing across the portfolio. The companies that are doing the best are the ones that we've been able to, to place key players. Part of that is being willing as the CEO, as the founder, to actively show interest in these types of people. And they are the type of people that would not respond to traditional recruiter because they are either so good at what they do and they want to know that their investment in the company is going to be valuable. These are not the type of people who feel like you're giving them an opportunity to work for you. These are the types of people that they are giving you the opportunity of helping build your business, bringing their entire Rolodex of people they already know, of teams that sometimes they can, they can bring with them, and just a huge stack of skills that ideally should disproportionately benefit the business. And fundamentally, this is one of the highest leverage things that you can do, because at the most basic level, what you need to do as a CEO is is attract the absolute best people and align incentives ruthlessly for them to work and then get out of their way. Number 2 was focus, all right? Now I talk about focus a lot, so I'm gonna try and say this in a different way than I normally do. It's really top-down focus and prioritization, which is just another word for strategy, but just how much more important strategy is for businesses because what happens is when they pursue too many paths, they look up a year later and they haven't grown much at all. And if you're a small business, like you absolutely can double, triple, quadruple, 5x every year for a few years before sometimes that'll slow down. Now if you have a compounding mechanism, it could even keep going and getting faster. But at the very least, like growing at 10% a year, again, there's nothing wrong with that. But if you're at $1 million a year, $5 million a year, even $10 million a year, like you should be able to grow a lot faster than that. And typically it's because you lack people and because you lack focus. And when I say people, it means you lack good enough people. The people you have, you might have a high headcount but a low talent count. And focus, you might have lots of priorities but they're the wrong ones. And so fundamentally, if you can't focus on one thing, one objective that is most important, that makes the rest of your objectives less important, then you are not doing your job as the CEO. To tell the team how they should be allocating their attention. And that, and here's the important part, is deleting everything that is not this. And so a lot of people are like, these are our objectives, also keep doing everything else. It's like you can't do that. You can't just add more because now you've even further diluted what's important. Now for sure, people need to continue to transact. Sales guys still need to sell, customer service still needs to service. But the discretionary effort that exists in the top talent, the leaders of the company who who aren't as involved in the day-to-day and are basically all times they have between aligning teams should be dedicated to a single priority that if accomplished would be an order of magnitude improvement in the business. And so this level of focus is what I continue to drill with the founders and the CEOs of the portfolio companies and it has yielded outsized returns. And there's a great razor for this which is when I wanna fix a system or when I go into a department The first thing I do is eliminate as much as humanly possible. And here's the thing is people are afraid of eliminating meetings, eliminating communication lines, eliminating processes. But if you eliminate just about everything, you'll find out that the vast majority of that stuff was complete waste and complete distraction. And here's the cool thing, you can always add it back. So there's this fear of loss. People literally have fear of loss around processes and meetings, which is ridiculous, but that's just how we're wired psychologically, which is why Companies in general, as they grow, create bloat. There's too many people doing too many things that don't matter or not enough stuff to begin with. And all of them together don't know how what they do makes the company money. One of the easiest tasks that you can do is zoom all the way out and think, what is the output of this department? What is the output of finance? Have you ever thought about like, what is the output of finance? The output of finance is information to make decisions. That's it. And so if you're getting too much information or you're getting the wrong information or the information that you're getting doesn't change your decisions, then the function of finance is inadequate. You're not getting enough of what you need of output from that department. If the function of IT is to gather, store, display, and analyze information, then are you getting the correct data? Are you able to analyze it? Are you able to display it and see in real time? And be able to make decisions off it. Also another information output department. Kind of interesting, right? So many of these departments really exist just to have information to make decisions. I bring this up because you have to delete until you have the fewest things that matter. It's like you wanna cut to the bone. You don't wanna cut to fat or cut muscle. You wanna go all the way to the bone and then add the few things that matter most back in. And I think that I'm doing this better now because honestly I think I'm just more ruthless and I think I care less about judgments of other people. I think, honestly, I think it's just like I'm more confident what I'm doing now. And so it's like, I think I conceptually felt the same way. I just was like, this feels crazy, even though it makes sense to me. And so fundamentally, first principles thinking operates from this perspective of like, okay, physics are laws that we have to obey. What else do we have to obey? The law of the land. So we've got government laws that we have to obey. Besides that, tell me a physical law or government law that prevents us from doing this thing in 1/10 the time. Tell me the law. If not, then there is a way. And here's the thing, is that there will simply be resources that are required. And so one of the things that I'm trying to get my team to understand is if I ask to do something and they say we can't do it, that's saying it's impossible and it's ridiculous and of course they're wrong. So it's a terrible position to take. It's also very frustrating. Instead, tell me what it would take, tell me the resources that would be required that we'd have to take from something else, and then we together can decide whether it's worth the trade. So for example, if my whole media team, I said, hey, I wanna make a motion picture, for example, right, I'm not saying I wanna do that, but let's say that we decided that was a big strategic priority. If we were to get, you know, one big motion picture that was as big as Avatar, then it would be, you know, maybe it would do things for the business, okay. Then they might say, "Well, we can't do that." Now implicit in that statement is we can't do that and keep making content at the level that we're at. So then we'd say, "Okay, well, if we allocated all the resources and stopped making content and we actually were able to get a feature-length film with the existing media team, that— would the benefit of that be worth the cost? And if it is, then great, we'll do it." But a lot of times we get a soft no immediately out the gate rather than a what it would take. And this has been one of the biggest shifts that I think has empowered me is asking better questions. And so one of the most frequently asked questions that I will probably, my question of the year is what would it take? And by doing this, the reason I think it's such a powerful question, it also works for deals, it works for sales, it works for anything, is that it assumes the result occurs. It assumes success. And so because it assumes success, you work backwards from the reality that you wanna create, rather than forwards, trying to figure it out as you go. I'll tell you something funny. So we had a company that we were looking at in the diligence process. I said, "Hey, you've got this downsell. Basically no one takes it. Have you considered just giving it away for free to get more leads?" And they ended up doing it, and they tripled their lead flow the next week. And so that downsell was worth maybe 5% of revenue, But what's the value of tripling lead flow? Tripling revenue and probably disproportionately dropping to the bottom line. So tripling, really it would triple lead flow so it would cut CAC by 2/3. But fundamentally it would triple the business. There are so many of these little things that exist inside of companies and just being focused enough to say no, this is our core product, this is where we make all of our money, anything that's not that distracts us from making this thing better. So theme number 3, was CRO. And so I'd say this year the companies that made the biggest gains had a discipline around conversion rate optimization. That means that at any given point they're running, call it, 3 to 10 different split tests on the key parts of the pipeline for revenue generation. Meaning, if you have a landing page where you get a lot of traffic, or you have a homepage that you get a lot of traffic, or you have a follow-up sequence, that a huge percentage of your customers are in, actually testing things out there. So one of the companies we had, um, had 3 CRO improvements, and this was the largest company we have in the portfolio. So we got a +20% CRO test improvement, which is a mass— a monster win, especially at the level of optimization that this company is in. So we're talking 8 figures plus a month in revenue, like it's a big company. And so 20% lift is huge, but on top of that We got a 50% lift, then we got a 28% lift. So we had 3 mega wins. Now the question is, how many split tests did we have to do for that? I mean, probably 100. But the thing is, is that that was basically one guy and a couple devs split, basically running these sprints on a regular basis. But how valuable is that to the company? Tremendously valuable because things that are efficiency improvements typically are long-lasting. And so what's cool about that is that when you have an efficiency improvement, it means your LTV to CAC ratio expands, which allows you to spend more money in advertising, more money in talent acquisition, all the way around the business. It literally just makes the business stronger. And so I'll give you a little hack that is worth looking at, which is many businesses integrate third-party tools into your processes, right? You've got 100 different softwares that you probably pay for. What none of those softwares typically advertise is what their conversion rate is. And so if anything is customer-facing that a prospect might interact with, I would look at 3 or 4 other tools within the exact same use case and see which one has a higher conversion rate on the UX, so the user experience. I think you will get disproportionate returns on that. It's typically a heavier lift because splitting between multiple tools is a pain in the ass, but, um, I've seen monster lifts there. So those are the 3 probably biggest themes, which was people, focus, and then optimization around the things that worked really well across the portfolio, uh, in 2025. Now the next part is, okay, well, what are the detractors, right? These are the things that grew those businesses, but what are some of the things that hurt those businesses? And so, um, I actually see this as the personal stuff. All right, so we had a few entrepreneurs, I think, took their foot off the gas, they started making more money than they'd been accustomed to, and were like, this is good enough. And so this is where having, you know, some people call it a big reason why, you can have whatever you want as long as you change your behavior, I don't really care whether it's a big reason why or you just change, but either way, you have to find something that's going to keep driving you. So for me, it's the love of the game, I just enjoy business, and so I spend all my time doing business. Some people don't enjoy business as much, It either has to be some mission that you have around the problem that you solve, like it actually has to light you up, otherwise you will make enough money and you'll stop pushing that. Now, again, if you accomplish your goals, that's amazing, that's great. Again, I make my channel for people who just want to consistently grow, consistently grow in personal development and using money as just a stick for seeing how far you've stacked your skills, right? Also, not saying that money is a virtue or having money is a virtue, just saying that in general, you become more skilled and you can measure how skilled you are in the game of business by the amount of money you make. Here's one that's going to be uncomfortable for a lot of people is spouses and/or partners. One of the big detractors, believe it or not, and I've seen this and this is a big focus that Leila and I have across the team is how much support do the key players on your team and/or the entrepreneurs have from their spouses? You basically have the worst type of spouse, which is a spouse who actively decreases the likelihood you hit your goals. So they are constantly reminding you of the negatives that exist. They are trying to constantly distract you, say, "Hey, stop working, stop talking about that, let's do this instead." So not only do they try to get you to stop working, they try to incentivize you by doing something else. And so it's reversing a negative and a positive. It's like a double whammy. And the thing is, is that, I wanna be clear, I don't think there's malicious intention here. But the result of what they do still massively damages the business. Like, if you were to think of an enemy, what would an enemy do? They would try and get you to not think about the business and then do something else that you get addicted to instead. It's almost like going to your competitor and being like, "Try some heroin, I think you might like it." Like, fundamentally, the actual, what occurs is more or less the same. And again, I'm not talking about intention here, I'm just talking about what happens. And so when we look back, so we did like a retroactive analysis of this, of like, who were the stars who just crushed and kept growing? They were the ones who had absolute spouse support, who were like, if they need to work late, they need to work the weekends, I'll pack them with a lunch, I'm here at home. And this happened for husbands and wives, both sides. The ones who, where you had somebody who came in who presented like a star but then eventually fizzled was typically because, and this is where it's so nefarious, is that they would get into a relationship at some point, or they would upgrade the relationship, like they'd move in together, something like that. And that person would have a disproportionate effect on the entrepreneur. And so what's really interesting is that entrepreneurs are typically— we're so concerned with our surroundings, who we want in our space, who's good, who's helping us out. And then for some reason, the person who has a 0.71 correlation with your subjective well-being, the person who will probably have the largest influence on your behavior in your life, you don't hold to the same standard. And I find that crazy. But it happens all the time. And just because everyone else does it doesn't mean that it makes sense. It's also why most people are mediocre. One is that if you're looking to bring a high-level person onto the team, I would consider talking to their spouse. Just gauge their interest level, see if they're supportive. Like, in the middle they're neutral, but I think neutral becomes negative over time. So you need someone who's active, who's, who's, who when, when the employee inevitably has a bad day, because everyone does, they say, hey, this is a great job, this is great for us as a family, You got this. I trust you. I believe in you. I support you. What can I do to help? Tell me how I can make this easier for you. That is the type of support you want. Whereas if you have somebody who says, let's put work, let's leave work outside, it's home now, and I don't want to hear about that. Let's do all this other stuff instead. That sounds innocent. The problem is that it decreases the likelihood they win. And again, I know this will be controversial, so, you know, take it or leave it. Again, my two cents. You can tell me to shove it. It's up to you. Let's talk about the next big one. So, uh, in creating that scaling roadmap that I was talking about earlier, I wanted to create like a microcycle I felt had to exist within every process, right? And so I'm going to break down two different processes that are different. One is scaling, the other is optimization. All right, so I'm going to walk through both. So whenever you have a system, you'll typically start as the first step. So whatever you're doing, you want to start out, you have to start. Number 1, S. Then you have C, which is compound. All right, so you have to do more. Okay, great, we're doing more. The next is augment. So how do we do better? Then we have leverage, which is how do we make it consistent, right? How do we automate it? And so I'll just, I'll make this a little infinite thing. And then finally, how do we expand again? And so this is actually a loop between each of these steps. So you start, and then you do more, and then once you do more, you try to get better. Once you get better and you know what works, you try and automate it and make it consistent and have low volatility, and then you expand to the next territory, you expand to the next channel, you expand to the next type of content, you expand to the next product. The same process, and it's nice because it has this little, what are these called, acronyms? Yeah, it's got this nice acronym, S-C-A-L-E. And so it actually fit in there. I was super pumped about that. And so now when I think about what someone has to do next within an apartment, I often think, okay, where are they at? Okay, they just started this thing, so they just need to do more. Oh, they've done a lot. Okay, so maybe there's probably a lot of waste. So now we probably should do better. How can we augment? How can we streamline? How can we optimize? Once they're doing better, it's like, okay, they're doing really well, but there's more demand that's coming in. How can we make this consistent? How can we automate this or portions of this work? Work. And then finally, once we have this thing airtight, we're like, cool, how can we do this again? And we expand. If we're thinking about this within the context of content, it's like we start on a channel, then we start posting— like, we start posting on a channel, then we say, okay, well, one post a day works, can we do 3 posts a day? So we do more. Then we're like, hey, some of these posts do better than others, how can we make our posts better? And then we say, cool, what percentage of these processes can we use AI for? What things can we pre-prep so that we can, we can basically make better happen more easily? And more consistent? How can we make it instead of having, you know, one do 10K views and one have a million views, how can we get all of them over 100K? How can we get all of them over 250K? And then finally we're like, okay, I think we've maxed out this specific channel. How do we now go to TikTok? How do we take this process and go to Snapchat or whatever? So it works for anything. Now the second process, so that's about scaling. This is about optimization. And so this is typically when you come in and fix something that already exists. Exists. And so I got to have a lot of experience with this this year because I took over media and conversion within acquisition.com, and I haven't operated day-to-day probably in like 5 years. And so it was actually a ton of fun for me because honestly it's just like I've developed a lot of skills since the last time I operated. It's been great. So anyways, so the first thing is you question the requirements. And I got this framework from Elon, and it's freaking awesome. So question the requirements. Why are we doing everything that we're doing? Please explain to me, how does this thing relate to this output? And this is why defining what each department is supposed to create is so valuable, right? It's like, you're the content team. The goal here is to make as much good content as humanly possible. Anything that does not facilitate content creation in terms of volume and quality is waste. If you're an engineering team, it's like, you have code that you must type, which then creates, uh, software that people can use, and we want the quality of that software to be really high. And so anything that does not relate to those things are things that are waste. So We question why we do everything. The second, once you kind of get lay of the land after questioning, is you delete. And you delete because the next few steps are gonna be adding resources to the system. And so you delete everything that doesn't matter. So the first step that I did when I took over the media team was I deleted all meetings. Now, to be clear, it doesn't mean that we're never gonna have meetings again. It just means that I will find out which meetings matter and then we will add those in proportionally. And so I said, you can have ad hoc discussions about clear things, but otherwise I'm canceling the recurring meetings and I replaced all team meetings, all one-on-ones with just a daily huddle. That way, basically the entire day, and these were also deep workers. So everyone who's creating content really just wants to get into flow and anything that prevents flow massively impacts their performance. And so it's like the solution of just adding more people and adding more meetings just gets more people to not work. It's terrible. And most people also hate it. Most people wanna work. And so once you delete, then you optimize. Which is saying, okay, what are the things that we're doing right now, uh, get us the most results? What is, what are these things that get us the least results? What are the resources required to do them as in like time spent or money spent in order to get it? And then we optimize it. So we say the things that give us the most for the least, we put as the first priority. The next thing that gets us, uh, you know, the most for the most, we put as the second priority. The things that get us a very little amount that cost a lot, we put at the end and we're just basically going to not do those things. And so you re-optimize the actual processes once you've deleted everything else. Then you pull up timelines. You say, "How can we make this happen faster? How can we do this in 1/10 the time?" And what's crazy is that you honestly can increase the speed of things by 5x, 10x. It's mind-blowing when you do it because you're like, "I can't believe how much waste we've had this whole time." But all you do is when you ask questions, you say, "How many hours does that take?" And so then someone's going to respond with how many hours it takes. So rather than This is the classic, instead of doing end of week deadlines, you just make it end of day. And so if a team is used to delivering something to a team meeting every Monday and you say, cool, how many hours does it take? Great, let's have it done by the end of today. You 7x the speed of that team. 7x. And so some people can't comprehend how one company can grow at so much faster rate than others and it's because of this resource allocation. They pull up time. If you accomplish a goal in 100 years, who cares? Time is a huge function of business. And so if you don't have a process around pulling up timelines consistently, then here's why it's so important. Let's say there's more utilization on the team, they have bandwidth, and you pull stuff up and they're like, "Hey, we don't need that for another week. Why are you making me do it by the end of today?" Because we don't know what's gonna happen next week, and we might have a priority next week that we do need to get end of day, and then when that happens, we still won't have done this other thing, And now we have to do the other one. So this other thing's now 2 weeks delayed. And so basically you want to use up all available resources that are renewable on a consistent basis to get the highest return. So I wanna make sure, like, you understand the argument there, 'cause you're gonna have to tell it to your team. The reason I'm gonna drive this outcome, even though there's no apparent outside urgency, is because it assumes that the future is going to be exactly like today. And one of the things I can guarantee is that the future won't be. And that there will be things that you didn't expect, and when that day comes, you will want to have all of the things that you've accomplished behind you supporting you, and have as many resources as humanly possible available to you to deploy in that moment. Because the most adaptable player in the system survives. That is what the survival of the fittest means within the context of business. It's the most adaptable player. The most flexible. And so the final step here is automate. Same as before. And so this is what you look at when you're trying to fix something or turn something around or make it better. All right? This is when you're trying to scale something. I could probably come up with something cute around optimize, but that's too many letters. Hopefully those two frameworks give you two different ways to look at departments where you come in, you're like, okay, is this a scale thing? So we need to do more, we need to do better, we need to make it reliable or automate a portion of it, or do we need to expand? Or is this everything screwed up? Why are we doing what we're doing? Okay, delete all that stuff. Optimize the things that get us the most outcome, pull up time requirements, then automate. Having these types of frameworks to solve problems makes life so much easier, which is why I share it with you. So the next one is about success and failure and knowing why. So Professor Bergman from Stanford has this statement where he says, it's better to fail and know why you failed than to succeed and not. Now, notwithstanding the outcome itself, but he's talking about you as an individual. It's better to know why you want— why you lost than not know why you won, because you can't learn anything from it. Essentially, it means that the success is purely chance. Right, which means you can't repeat it. And so Edison, you know, had 10,000 ways not to know how to make a light bulb, right? Same kind of idea. Like, if— as long as you learn from your failures on a long enough time horizon and you don't give up, you will win, period. And so an expert you can define as somebody who's made all the mistakes that you can possibly make in a very narrow field. And so fundamentally, that's what we want to be within our businesses. And so within that context, I have now spoken to a lot of business owners because we started this workshop division so we could meet more businesses, so we could do ACQ Ventures. And obviously within the main portfolio. You're noticing I'm lining up a lot of sheets here. So there are what I call the Six Horsemen of Business Stagnation. And so if you are stuck, this is for you. So there are 6 reasons that I've seen that have been continuous rock and hard place scenarios. And the reason that business owners get stuck here is because you have to choose between 2 apparently impossible choices. One is pain today, the other is pain forever. And both of them sting. And that's why people just wade water in pain because it hurts a little bit less to keep pain forever than have a lot of short-term pain now. Alright, so these are the big 6. So, number 1 is being underpriced. This is how it presents. A business owner is at close to full capacity. Let's say they provide some services and they're like, "I can't work any more than I already have." my team can't work any more than it already is, and, and this is the key point, and we're not making money. So when that occurs, they want to look at all these different things, but the problem is you're just mispriced. Now there's the fear that if I raise my price, I will lose my customers and then it will get worse. But the thing is, is that I have, I have, I have shepherded so many businesses through price raises that it makes me sick. And the process of raising price works like this. You get to the price, and then you say a higher number. And you keep going up until people stop buying. That is how you do it in the back of napkin, redneck logic way that I prefer most times. All right, and so if you're in that situation, you get to pick. Do you wanna have a few people say no and you make more money? Or do you wanna be barely above water and not be able to expand forever? Because the reason you can't expand the business is 'cause you don't have cash flow. You don't have cash flow because your prices are wrong. We need to fix the price. Once we fix the price, we'll free up cash. With the freed up cash, we can expand into locations, we can hire that key person that you need to bring in. Number 1, if you are full capacity and you aren't making money, you need to raise your price. An easy way to do it is every 5 plus 20. All right, so I actually got this from lifting weights, uh, believe it or not, which is basically once you, uh, it's the reverse of this, which is Once you increase volume by 20%, bump your intensity up by 5, meaning add 5 pounds, right, or 5%, right? So bump volume by 20, bump intensity by 5, and then volume will drop again, but now you have higher intensity. And so it's this kind of balanced progression process. It's just a very simple one, but it actually works the same way for price. And so it's like you sell 5 customers, if they all, if they all say yes to that price or around the same percentage, or you net more money overall, You bump the price by 20% and do it again. And you just keep doing the 5, 5 and 20, keep doing 5 and 20 until eventually not enough people are saying yes, so you're netting less money. Now the problem is if you have small sales numbers, it's harder to hear no more often because your brain isn't going to calculate the fact that you made 20% more. It's gonna be binary in its thinking of like it was a yes or a no. And the thing is is that if you sell, 3 people at twice the price, it's better than selling 5 people at half the price. But you're gonna hear no more often, and so it's gonna hurt more, but it is better for the business for 2 reasons. One, you actually make more money. Secondly, and this is the big one people forget, you also have fewer people to service. So you have less cost and more revenue, which those 2 things together create a disproportionate increase in profit. So, big thing number 1, fix your price. So, the second big problem is overcompensation. Now, what I mean by this is actually paying people, not like you're overcompensating for stuff, okay? This typically happens when you have a set of employees, especially in service businesses, where you accidentally in the beginning give some sort of revenue share or something like that, so it doesn't matter, you can't outearn it, right? Like if you grow the business, they just grow their revenue. Like you overcompensate them or you compensate them. And maybe you did that in the beginning because the revenue was really low and you never thought you'd get to where you're at now, and then your big fear, right, each one of these has a rock and a hard place scenario. The big fear is, if I tell them that I have to change the compensation, they're going to leave. And the answer is, maybe. But if you don't, you'll never grow. So what are you going to do? Right? You have to go through the short-term pain to get the long-term gain. The process that I'd recommend doing, number one, is you shore up the infrastructure, which means that you bring someone else in, that can do the same thing as that person and do it at the new price that you want to pay them for. Then you can have the conversation with them with more leverage and saying, hey, the market is this, I'm paying you this, I understand this is what I need to pay you in order for us to accomplish our goals, which is what I sold you on, is that we want to accomplish this big vision with the business. Now I understand that isn't like I'm changing expectations, and so go home, talk to your wife, sleep on it, and come back tomorrow if you want to stay here for that compensation. I'll give you a delay. So this is the key part is you say, hey, I'll keep paying you this for the next 2 months or 3 months, whatever. And after that, then you'll go to this, to this new kind of compensation philosophy. If they come back and say, no, I feel underappreciated, blah, blah, blah, then that's fine. And the good news is you already have somebody who's right there ready to go. That's the second big, big issue. The third big problem, and this is a big one, is this is really common when you're smaller. So I'd say sub-$3 million. This is you guys. All right, serve too many, I'll just say infinite avatars. All right, meaning you serve too many customers. So you're serving too many people. And what happens is all these different people have different demands. And so they are telling you all these different things and you can't get your offer right, you can't get your advertising right because you're serving too many people. Now again, what's the rock and hard place scenario? Well, if I get narrower on my avatar, I'm gonna sell fewer customers. And I'm getting all these other people. Well, to me, number one is, if you fix your messaging, you will attract more of the right people, but you haven't been willing to take that bet. The alternative is, you can try and be effing everything to everyone, which you know isn't going to work, because it's what you're already doing, and you know it's not working. And so, you have the evidence that your existing path is going to stagnate you. Again, the impossible choice is, do you wanna keep stagnating forever, and maybe you make some money now, but it's preventing you from growing, or are you willing to, And business is about risk. Like, you have to be comfortable with risk. All of these are risks, but the alternative is you never risk and you stay exactly where you are. And so for me, that is a much greater risk. It's like when you get into investing, anything you invest money into can go down, so you incur that risk. But if you never invest, you absolutely will never get wealthy. So what are you gonna do, right? You have to take the small risk so that you avoid the much larger long-term risk. And each of these is small short-term risk to avoid large long-term risk. Here you have to niche down who you're serving, which you do by 80/20. So that means you look at all of your customers and you say, what are the top 20%? Who are these people? What do they do? Where are they from? And you say, how do I make this my message? And how do I make an offer that's only for them that they would go nuts for? And here's the part people miss. And price it accordingly. So if you have customers that you provide 5 times the value to, and I'm sure you do have those people, well, all of a sudden, if you were to turn some of these bad ones away, then your price could reflect the value that you serve to only that much narrower avatar, and that's okay, and that's great. So you may, yet again, and by the way, this is the point, make more money. Again, all of these are counterintuitive, which is why people get stuck. So the next one, the next rock and hard place scenarios is overextension, all right? So this one is Alex's favorite. This is Alex's greatest hits of mistakes is me trying to take on too many things, right? Is I have a plate that's this big and I start putting food on the table because I can't fit it on the plate. And typically this is where you get ahead of your skis. Where you open that second location when the first location isn't really operating as much, as well as you think it is. And as soon as you go there, the revenue from the first one drops and you're like, uh-oh, but a lot of that was my profit. And so now you've got these fixed costs, the revenue's down, and then you've got this one, but this one's new, so it's not doing as well as the first one was. And your star person's there, but you're not there. And so now you're splitting between two locations and you're like, oh man, now I'm actually making the same amount as I was with one, but now I have twice the risk. And you're like, oh, you know what the solution should be? I'll open a third. And then between the three, now your profit goes down even more, and now you're not making any money, but you have three locations, and you have tri— three times the risk, and you're stressed out of your mind. So what do you do? Honestly, you have two solutions. You either have to hire incredibly impressive people, which means that you're going to probably give up your income in order to bring this person on, or you have to cut your losses. You have to prune the tree, you have to reconcentrate, get it right, and then scale back out again the right way. And so overextension is typically a who problem, which is you don't have enough good people that you left behind who can actually run it without you. This happens a lot of times in like the $1 to $3 million range. It happens at all ranges, but a lot there because when you get there, you typically suck yourself out of the day-to-day. You're not actually selling people, you're not doing customer service, and you're not doing delivery. But the issue is, you think that because you're not involved in the acquisition and delivery, that you're not required to run the business. But the thing is, is that you work every hour of the day right now. And so, if you work every hour of the day, but you're not selling and you're not delivering, then it means you're doing other stuff. And that other stuff you're doing is very much operating the business. And so, a lot of owners will mistakenly think that CEO and owner mean the same thing. You happen to be both. But they are not the same. And so right now is you leave, so it's like the CEO leaves the business and all of a sudden the business stops running as well because the CEO's gone. So you have to have somebody who's going to operate behind you. You have to basically backfill yourself. And in my opinion, I like a 6-month test. At the very least, do a 1-month test, which is go away for a month and you hand your phone, you show your phone to your operator and you say, hey, here's the deal. You're gonna get this override on the business, so a little profit share or whatever, some stock, and in doing that, I'm doing this in exchange for this not ringing. That's the deal. That's the trade. And if this rings, then that's not the deal. And so, it's like, then you role play it out. So it's like, let's say a pipe burst. What do you do? If it's call you, wrong answer. 'Cause what do you think I'm gonna do? I'm gonna call a plumber. So what are you gonna do? Just call the plumber directly. You don't need to call me to call the plumber. Same idea. If it's an emergency, call 911. If it's not an emergency, don't call me. Either way, don't call me. And so this is the trade. So if you're overextended, you either gotta dip into your own paycheck to bring someone in, or you gotta prune the tree, reconcentrate, and then build it back right. And the 6-month test that I was alluding to is the business has to either maintain or grow for 6 straight months without your direct involvement. Now that last point is the big one, without your direct involvement. Now some of you are gonna run that test still continue to work in the day-to-day for 6 months and then say, oh, I think I did it, but you just didn't change what you did at all and the business continued to operate with you as CEO, which is not the case. So you just delay 6 months and then you open the next location. Well, which would still make you a little bit better in terms of your cash position, but not my recommendation. So what's, what's, what's number 5? So number 5 is, uh, more than one business. So this is also an Alex special. I have a lot of specials here, but 4 and 5 are my personal favorites that I've made the most often, which is you've got 2 businesses or you've got 3 businesses because you don't know how to pick. And you operate from the fallacy that Zuckerberg had a side hustle. Zuckerberg was also flipping Airbnbs and doing wholesaling on the side, right? And that's how he built Facebook. Of course not. One of these businesses is the business you should be doing. And the thing is, is that the opportunity is the problems that you need to solve and are not. It's not in the missed opportunities, it's the problems that need to be solved. Right, it's the hairy work that you're not sure what the answer is but you know you need to fix it. That is where the opportunity is. 'Cause fundamentally, if the product were exceptional and everybody loved it, you wouldn't have an issue, you'd be going all in on that business. And so if that's the case, then just do it. Now, you're gonna have this sunk cost fallacy of like, I already put all this money into this and I already got it going and I already have a partner there. Yes, Short-term risk, you lose relationship, you lose maybe short-term income from that business. Long-term risk, you never grow any of these things to any material size because you're too distracted. Pick. Again, do whatever you want. But I'm just saying, these are the most common ones. And then finally, we've got No Data Daddy. Alright? No data, Papa. I have no projections, Papa. Okay, so with No Data Daddy, the issue is, You don't even know what your problem is because you don't collect any data. And so it'd be like, hey, what do we need to grow? What's our lead cost? No idea. What's our close rate? No idea. What's our churn? No idea. Well, you can't really do much if you have no idea what's going on. And so this then becomes the constraint of the business, which is we need to start collecting data. Now, to be clear, the first 5 have what I consider an impossible scenario. There's some cost. The cost here is that you give up a business. The cost here is that you have to cut, you have to prune things, or you have to hire someone and hurt your own income. Here, the issue is that you have to say no to customers that you're currently making money from. Here, the issue is that you have to say no to employees that you're currently overcompensating. Here, you have to turn down customers at a lower price and have to hear no more often. Those are the short-term costs. But the one big risk of all of these is that your business isn't going to grow. And you've been stuck for long enough to know it's already not happening, and there's not going to be a silver bullet. You got to confront this. The no data daddy issue is just, hey silly pants, get your data. Then you'll actually be able to grow. Now there's no downside to this one. The only downside here is that you've got some shiny object that you think is really, really sexy and interesting and you don't get to do that because you need to do this. So do this first. And I'll give you a really useful razor for how to think about what data to collect, all right? The easiest test for is this data valuable is when it changes, does it change behavior? So if we track our views on a social media channel, if the views go up, does it change what we do? If the views go down, does it change what we do? If the answer is no, then we don't need to track it because you can track unlimited variables in the world. Like you could track the temperature of the room when, when people are walking in, you could track it, but will it change your behavior? You can also reverse engineer into what are the behaviors we do What data affects it? And those are the only pieces of data that you need to track. So my biggest personal growth lesson of the year— so I give you all the portfolio growth things, but my number one was rush is imaginary. Now, I just gave you that whole speech on urgency, but one of the things that is that I've had to learn is my biggest mistakes have been shiny object or woman in the red dress and overextension. And so I have these arbitrary goals that I set for myself that I never say out loud, that I think about every day, that mean nothing to no one. And then I try and force everything to happen on this arbitrary timeline that I made up. And then I'm upset when people who don't know my arbitrary timeline fall short of the speed that I want it to happen, even though I made it up to begin with. Layla gave me this frame that I alluded to briefly earlier, but it's probably been I'd say talent focus, and this is a subset of focus, but it's missed opportunities is less than problems. So what I mean by that is that the opportunities that you're looking for are in the problems that you need to solve. And me understanding this, I've, I've repeated it because it's, it's really been singed into my brain. There are, for example, if you're starting to get low reviews, these are things that threaten the livelihood of the business. That is a problem. If you're not doing email follow-up, that is a missed opportunity. And unless your, call it, you know, payback rate or your LTV or some sort of conversion mechanism is the risk of the business, then that would be a missed opportunity. If the number one risk in the business right now is that like you can't make money because you aren't converting a higher percentage of leads, then that would shift into a problem, right? And so it's not that like any specific thing is one or the other. It's recognizing contextually within your business, is this something that would be nice to do, or is this something that we must do in order for us to achieve our ultimate goal? We might be able to achieve our ultimate goal without doing email follow-up. If our product sucks, we will never achieve our ultimate goal. And so it's understanding the order of magnitude or the importance of the potential tasks that you have. The reason that this stressed me out for so long and this is the big one, is that problems in your business are actually finite. You can list all the number of problems in your business, by and large. Missed opportunities are infinite. And so I basically took, I would look at the world of all the things that we could do, and here's the thing, is the better you get at business, the more things you know you should be doing that you aren't. And you see this huge unlimited potential options of things, and you look at these tiny little resources that you have, and Then it's like, we need to do all of these things. And this is where you stress out your team and you stress out yourself for literally no reason. It's been difficult for me and it's been a discipline now to ask myself first when I want something to happen, is this a missed opportunity or is this a problem? And 9 times out of 10, it's a missed opportunity. And so I've been doubling down on problems and solving those. The thing is, is that problems are typically not nearly as fun as missed opportunities. 'Cause missed opportunities have all the new gloss on them. They're still in the wrapping paper. You're like, "Oh my God, this is gonna be amazing." But as soon as you get into it, you're like, "Ah, there's problems here too." And then, and I've said this before, but what ends up happening is when you have this missed opportunity bug, you start building all of these half-built bridges, right? You never actually get all the way across. You've got a dollar here, but you're standing on this side of the land, right? And you need to get this dollar across. And you start building and then you find out that there's problems. And then you're like, oh no, so you know what I'm gonna do? I'm gonna build a second bridge. And then you find out that there's problems. And you're like, oh no, I hate problems. I'm gonna go find another one that doesn't have problems and immediately just makes me more money. But there's always problems. There's always problems. And so it's like I have to just use the problems and I've gotta stitch this thing together so that I can get the dollar all the way across and then into my very large pocket. Here's the difficult part of this for an entrepreneur. Is that when you quit your job, when you started this business, you were very reinforced for pursuing a missed opportunity. You weren't doing this thing, you start this business, and you get rewarded for doing it. And the problem is, is that you need to unlearn that behavior, because it's a behavior that you only wanna do once when you start your business, and then every time after that, you have to confront, you have to endure, you have to stick through the problem and see it to its natural end. You have to get it all the way there so the dollars can make it across the bridge, or you'll just have spent all the resources, all the distraction to build and reinforce this thing that actually results in nothing. And so this has been probably my, my single biggest tier of lesson because this is a subset of focus for me specifically. I ask, is this a missed opportunity or is this a problem? And if it's a problem, then I need to solve it. And I just need to confront. A lot of the problems are things that you don't know how to solve yet. That's why they're still unsolved. And so you have to become comfortable in enduring the failure of working with limited information or incomplete information because the reality of businesses is that you will almost always not have enough information to know perfectly whether this is the right call. And so you have to be comfortable in ambiguity. You have to be comfortable with incomplete data sets and still making the call. Because when you have a complete data set, there's really no stress. The answer is obvious because you have the data. It's, it's all the times where you're like, oh well, I wish I had tracked that one thing that I didn't know was going to be important now and I can't go back 6 months to get it. That happens all the time, and you just got to be able to make the call. Because the thing is, is that we have this fear that we're leaving money on the table, right? We feel like this missed opportunity right here We're like, "Man, there's so much money on the table." But the real money on the table sits in the problems that you know you should be solving but aren't. And so once I realize that the problems are the things that I need to be solving, then I can deploy all of the resources that I normally would use to distract myself, to reinforce this bridge and reinforce this bridge and reinforce this bridge before I've made a dollar go across, and then point all of those resources to one, this big dollar sign, so I can go put it into my pocket. And actually solve it. And so the compounding that occurs in business happens from focus. It's from doing one or two things exceptionally well, not doing many things mediocre. And missed opportunities are the gateway drug to mediocrity. And how I deal with this emotionally is I have a big list of Alex's big money ideas. And I've done this at very different times in my life. Like when I know what we need to do and we just have to keep doing more of it, and the thing is, is like you probably know this too, and yet you have this need for novelty, right? I get it, believe me. And so what I do is I add this idea to my big money list, and then when we do have bandwidth, I say what one big thing on this big money list are we gonna attack? What's crazy is I'm like, I've got 100 ideas on this list, Then it's a fun problem for you to be like, "Okay, which of these things is the biggest thing that will get us the furthest?" What's crazy is, and if you actually do this, I have found so many times that I'm in love with an idea and then a month later, 2 months later, I look at that idea on the list and I'm like, "I can't even believe I was so into that." The thing is, is that if you don't have that discipline, you don't just write on it, you don't let it marinate for a little bit, sometimes you end up deploying all these resources into something that you, a month or 2 later, would be like, "I don't even know why I did that." I did that. If this is resonating with you right now, then do more of this. Put more of the ideas on a big idea list and then just let it cook and don't tell anybody. 'Cause you have this need to share, you have this need to talk the idea out loud. I get it, I do it. Just write out as much as you need to there and then it's like you get it out of your head so you didn't have to, you got all the details and all the craziness out and you're like, I can shelve it, I'll deal with it later. It's kinda like Abraham Lincoln, he used to write these letters when he was really 'cause he'd get angry at people. He'd write these huge letters, just scathing letters to these people, and then he would seal 'em and then he'd put 'em in his desk and he said he'd sleep on it and the next day if he wanted to send it he could. And so his desk after years was just filled with all these letters that he never sent. But it allowed him to get through the moment. So I wanna hit on this rush piece 'cause I think this is important. Rush is imaginary. So something that I've been thinking about is like, where does this rush come from? So fundamentally, unless you have a network effect business, so you have a winner-take-all market, like you're trying to become the, you know, Uber of whatever, right? There's a network effect that there's one winner who will win and that's it. Like if you're either gonna be Apple or you're gonna be Android. There's no one else in the market, like you've got two spots in the market for phone creators and that's it, that's the monopoly, right? Unless you're in one of those settings, which 99% of businesses are not in that situation, I have realized that for me, rush is actually linked to one thing, which is my competition reference point, which is fundamentally who I choose to compare myself to. And so my rush is entirely arbitrary because I just pick who I'm comparing myself to. Now here's what's kind of crazy. Do you compare yourself to a 5-year-old who doesn't actually, like, do you look at a 5-year-old and be like, "What a loser. They don't have a business as big as me." No, of course not, right? But the thing is, is that you, like, why wouldn't you compare yourself to a 5-year-old? Well, because they haven't had any time and because they are not developed yet. But the thing is, is that they're another human just like you and they will eventually, now like let's fast forward 20 years. Now they're 25 and let's say they're crushing it. Do you now compare yourself to them? Why do you compare themselves at 25 and not at 5? No real reason, because we think it's acceptable to compete against that particular person. And so for me, the realization that rush is entirely linked to who I choose to compare myself to meant that it's entirely made up in my mind. So I can just change who I compare myself to, or I could try to compare myself less, much more difficult. And so in thinking about this, it's more how does this comparison change what I do every day? And if it changes my actions, that decreases the likelihood that I achieve my long-term goals, then these comparisons hurt me. The question that follows from the comparisons is, how does this serve me? And if it doesn't, then why do it? Like, do you feel guilty in middle school that you weren't the richest person in the world? Well then, why do you feel guilty at 30? I'm not saying that's my goal in life, it's not. But like, fundamentally, you don't, like flipping roles, when you're in middle school, Do you feel like a loser because you're not making money? Maybe a couple people, right? But y'all are weird, right? But most people, when middle school, you're like, oh my God, I have, you know, I'm getting chest hair or whatever the hell, right? You're like, I'm navigating life right now. Like, I'm a child, look at my limbs, they're longer, right? And so the thing is, is that we just choose to enter this comparison game, but we're all gonna die and all of our stuff's gonna go right back into the middle and other people are gonna play with our chips, so who cares? And if this rush is impacting your business, then you need to find a way to quell it. Now, a third door is to compare yourself to your heroes at that stage in their lives, right? Which is, where was Warren Buffett at age 35? Okay, am I on track with him? But again, you're not gonna be Warren Buffett because Warren Buffett lived through the greatest growth in American history and was born at the perfect time, right? And he also bought his first stock when he was 7. Did you buy your first stock when you were 7? No. Here goes, there goes my 5-year-old analogy, right? But did you? So if you didn't buy your first stock when you were 7, you're not Warren Buffett. Now you can model his behavior to have outcomes that will be probably proportionally smaller than his, but that's okay. It's only a problem if you think it's a problem. So the next big category of kind of growth trends or focuses for me for the year of 2025, my big lessons, um, was branding. So I talk about branding a lot and that's because it's That's really important. But I had a one day where I spent with Ben Francis. So he came out to Vegas for the Olympia and then we spent the day together. He came a day early, which is great, and we just hung out. And Noel Mack, who's his head of brand, was there with him. And we got to spend a wonderful time talking about brand in general. They told me this story that has really stuck with me. And I got to actually connect through them with the CMO of New Balance. And so this is the story. New Balance's CMO, their growth had plateaued after a number of years, and so they were kind of stagnant, and they needed to shake things up. So he became the CMO of everything, and he went to the CEO and said, "Hey, can I just swing really big?" And the CEO said, "Sure." And so then he said, "I want to take our spend, which right now is 70% bottom of funnel and 30% top of funnel," And I wanna flip these two things. I wanna make 30% bottom and 70% top. And you feel like, what does that mean? This is brand awareness, storytelling, associations that you make with different athletes. That is all top of funnel, like, wow, New Balance is cool, right? The bottom of funnel stuff is buy, shoes, right? And so after doing this, what was crazy is that for the first 18 months, they made less money. And so the company's return on their advertising budget went down for 18 months. But on month 19, it went like this, boop, it started going up. And then it went up even more, and then it went up even more. And so they've had this massive rebirth from this shift in strategy. And so when I heard that story, it was really compelling for a number of reasons for me, and it changed my behavior. So number one was, this is a good ratio to think about in terms of investing in an audience versus kind of withdrawing from the audience. And the reason the 70/30 I found interesting is that in the $100 Million Leads book, I talk about this at length, but there's been a, there's been a, a 3-to-1 ratio that's been studied by television, it's been studied by radio, which is content, right, to ads. So if you're on your Facebook newsfeed and you scroll every 3 posts, the 4th post will be an ad. All right. If you're on YouTube, it might be number of minutes. Now they have AI and all this stuff, but for the typical one, it's a 3 to 1 ratio. Now this ratio is what is required to basically keep a brand, to keep a channel, people keep coming back. Now if they change this to 2:1, all of a sudden people stop watching that channel. They stop watching, they switch to something else, right? That ratio being reflected here I see as a human thing. And so I think to myself, okay, I need to make sure that I always keep my ratio at least 3:1 in terms of value-driven. Uh, and now you can think about this in terms of views, like impressions per person, cause that's what really matter. Uh, or you can think about this in dollar spend if you want to think about it from a budgeting perspective. But for me, I think about this at the individual level. I wanna make sure that someone's getting at least 3 or 4 positives from any kind, before they have any kind of ask for me to do something. Now, the net-net world is that if your product is exceptional, the ask is not an ask because they're excited to buy something else from you. And so this is why brand and product long-term are interwoven together. Your reputation with somebody will be reinforced or diminished by the quality of the product because you make a promise with your advertisement and you deliver on that promise or overdeliver. Real quick, the rumors are true. $100 million scaling is live on my site at acquisition.com/training. It is the full 14-hour, uh, saga of going from from 0 to 100 million across 8 functional departments at 10 different stages in the business. There's so much time went into putting this together for you. And yes, it's absolutely free. So if you're a business owner and you're trying to get to whatever the next level of scale is for you, whether you're trying to go from 50 to 100 employees or 100 to 250, or you're just going from, you know, 5 to 10, uh, there are clear things that you have to do at each stage. Having done it multiple times in a row now, I feel Really proud of this and it's all yours. So if you want that, you go to acquisition.com/training and enjoy. Deliver on their promise with the product. And if it's worse, now you got to put more in the bucket here to kind of like get them to be willing to take another shot with you again. Or if you have a really good product, the amount they have to put back in here is actually less. You could sell something else even faster. So if Apple came out with the next iPod, right, people would be really excited about it. And if the next day they said, "Hey, we also have this other amazing thing that doesn't necessarily compete with the iPod," as long as you had the money, which is a different question, as long as you had the money or financing available, you'd be excited to buy the next thing too, provided the first thing was awesome. And so this is the idea, is that products can reinforce brand and should be the thing that reinforced me over the long term, which is why I want everybody to read my books first, because the books have been the pieces of content that I put more single time in than anything else. I put 2,000+ hours in each of those books, like no joke, 2,000+ hours. And so they are the single best pieces of content that I will likely ever make, and they will outlive me. These videos will go away, like podcasts will disappear, but the books will remain. That is why I want everyone to read them, which is why I've made them free. You can listen to them on my podcast for free, and if you like hard versions, you go on my site or you go on Amazon, you can grab 'em, all right? They have 26,000 5-stars, there's a million copies that have been sold, and it's because they're good, right? And it's 'cause I put so much time into them. This lesson, first off, was important for me 'cause the ratio, and it corroborated what I kind of already think about in terms of content and giving to asking. The other piece that I thought was really interesting was the time delay, which is that he made this shift and then he had to wait a year and a half, and that's given the size budget New Balance has, which means that if you wanna build a brand, you've gotta expect, you gotta measure in years. You're not gonna build a brand in months. It's just not gonna happen, right? And people see my brand now, but like my first YouTube videos also started at zero. My first Facebook page started at zero like everyone else. My first Instagram started like at zero like everybody else. And so it just takes time. Like my first YouTube videos, I think it was 2019. Don't expect to have a 10-year outcome in 12 months. One of the questions that I ask myself is like, okay, For branding for CPG companies, so for companies that sell to consumers, direct-to-consumer, the branding playbook is very well tested. You go find influencers in that world or brands that are similar, you do collaborations with them, you basically cross over on values, their values become similar to yours, you kind of rub off on one another, you go find champions and athletes that are top of their field, you make the associations, people then want to buy your product because of that association, and the history of positive reinforcement they had with that particular athlete. I was like, how do I do this in a B2B setting, right? And so I have split this up into basically two major categories. If I want to build a brand in a B2B setting, right, you typically want to educate your audience because you wanna be positioned as an authority. So if you're an accountant, you're a lawyer, whatever it is, you wanna be known as somebody who knows what they're doing, right? And so category one is you help them. Accomplish their goals for free. Very simple. So a lot of this is going to be content, right? Like, this is why we brand with content, is that if you like— what's the most positive association someone can have? They have a goal, you help them achieve it. Okay, so they will link their goal achievement to your help. Great. The next thing is that you help someone like them. So it's an approximation. I am a lawyer and I help someone negotiate some deal. and that person, and I have to advertise it, I have to let people know about it. Me seeing that as a plumber, and this lawyer only helps plumbers negotiate these deals, I say, oh, someone just like me got exactly what I want. So this is a degree removed. The next one is that you do the aspirational outcome yourself. Now both of these can be aspirational, to be clear, and this was actually something that Ben and I talked about a lot, Ben Francis, which was oftentimes brands are built on the aspirational because it's almost like an extreme version that I translate into decreasing risk of purchase. So let me explain. So North Face can help people get to Everest, and so if it's really cold at the top of Everest, if I buy that jacket, it will likely keep me warm on the way to work from my car to the door, right? If Range Rover makes an ultimate outdoor vehicle and that they're the off— ultimate off-roader, then it'll probably help me if I have to get over a curb. Right? It's these extreme versions that get regressed down to, well, if it can do that, then it'll probably help me with my thing. Right? Sebum is the, is the, is the best fitness influencer right now in this generation. And so if he wears this stuff to compete at the Olympia and train for the Olympia, then for me to just try and be the strongest guy at my gym, it'll probably work for me. And so the question is, what is that aspirational outcome? Like Red Bull, if I could, I could, drink the Red Bull and jump out of space, then it'll probably get me a little bit motivated when I have 5 hours of sleep, right? Like you notice the theme here, like all of these brands had these big aspirational outcomes. There's a reason that my brand grew when I had a $46 million exit because it was an aspirational outcome. Now what I'm trying to do now, and I've been public about that, is cross a billion dollars. Like that's the goal. And when that occurs, my brand will be reinforced. It'll be strengthened because it'll be an aspirational goal for more more people. Now the good news is a $50 million exit or $46 million exit is a good enough occurrence for many people. Now a different aspirational thing might be our portfolio performance now. We're worth significantly more than when we had that exit, but it's less validated. It's less third party signed off, and when we have that sign off, it'll become validated. Now I'll give you a fun story on this. The amount of people that gave me kudos for selling Gym Launch was significantly more than the people who gave me kudos for owning Gym Launch. But the owning of Gym Launch, I was richer the day before I sold the company than the day after because the equity in the business compounded tax-free. And the moment I sold it, I had to pay taxes on what I gained. And so by definition, I had less money after the transaction than before. But everyone perceived it because there was a third-party edification that occurred because the third party at arm's length made the transaction happen, and so it was real. But as long as you don't live in the minds of other people's perceptions, which to be fair, in branding you kind of do, you don't want your self-worth to be tied in their perception, but your brand ultimately will be. The idea is, the question to answer if you're a B2B business, and you're trying, which is over half of businesses are B2B, fun stat, I didn't know. I was looking this up for school actually. Is that these are basically your buckets. Is how do I help them do what they want, How do I help people like them? And how can I accomplish something aspirational in their mind, right? Or help other people like them accomplish that aspirational thing? And this is where like, you can help them accomplish their goals or the aspirational goal, it's either of those things. But the aspirational one I find incredibly interesting because like, some people saw the book launch last year for the $100 Million Leads, we had a gazillion people there live, it was awesome, and they were like, I would like to do something like that. And so that in and of itself was a brand reinforcing event. Big picture, this is what I see as the process for building a B2B brand because it's not like you're going to, like think about it like this, if you're an attorney, you're not gonna sign the top attorney, you know O.J. Simpson's attorney, I can't remember, it's the Kardashians' ex, I can't remember what, Jenner? Anyways, no that's Bruce Jenner, forget about it, you get the idea. If you're a business person, then it's like Elon's not gonna endorse you, right, it's not gonna happen. And so it's like you have to do the other things that can approximate your proficiency with proof. The final TL;DR of this is you have resources, this is what your brand must accomplish, this is the timeline that it has to go off of, this is the ratio you need to follow, and this is how you spend your money and time to make these things happen for the audience. And that's how you do it. And so this has been my focus, uh, one of the big kind of like crystallizations of knowledge, maybe deepened my understanding of branding and how it translates back and forth between D2C and B2B. Next up, I had more legal issues this year than I think I've ever had, and I don't see it as a problem. I have positioned it as a cost of doing business, which is that the more you have stuff, the more people will want to take it from you, or alternatively, people will believe that you don't deserve it because you don't need it anymore. And so both of those situations are obviously outside of an original agreement. And so I'll give you some of my takeaways that might be helpful for you. So number 1 is the point of an agreement is not for when things are good, it's for when things are bad. And I think this is a mistake I made earlier on in my career, which is like, oh, it'll be fine. It's like, this is always gonna work. The whole point is for when it's not working. And I probably would have been more vigilant in how I thought through some of the agreements that I made earlier on. In assuming, like, assume that this does not work out. Like, think about, really think about all the ways this could go wrong, and then assume it is 100% wrong or worse, and then operate from that perspective. Now, that doesn't mean that you wanna have negotiations in an agreement that are contentious, but it's good to operate from that angle. So, the second thing is I would look at legal stuff purely based on a return on time. And so at least in the US, the bar for suing, getting sued, whatever, is basically zero. And so it's a very litigious country that we have a lot more lawsuits, a lot more lawyers. In Europe, for example, like, it's, it's, it's very difficult to get malpractice lawsuits. It's really hard. So they don't have all the malpractice insurance industry. They don't have— like, all of that doesn't exist there. And so it is very much dependent laws of the land. But for me, I look at everything from the business perspective of dollars and cents. And the idea is, okay, if we have to go through some sort of litigation or some arbitration or some sort of thing that we have to deal with, I upfront like to understand what does it look like to have to go all the way. Obviously you want to settle, you want to like do things in mediation because it just saves time for everybody. But if you have to go all the way, then this is my absolute highest cost, which is gonna be time. If you are smaller in the business, then money would be an issue. Obviously, the lawyer bills can go as high as you want, I guess. But for me, limitations hasn't really been financial, it's just been time. And so the process that I apply to this is like, okay, walk me through every single piece of time requirement I will have to do and contribute to this. That an attorney cannot do on their own. Once I have an understanding of how much actual time it's going to take and I look at it at total time. So if it's like it might take 2 years for this to come to fruition, well, if it's 2 years, but there's really only 6 days that are going to be taken over this 2 years, then I really just think about the 6 days and then I think, okay, what is the potential cost in terms of downside risk? And then what is the potential gain in terms of upside of a 6-day cost? And so from there, I'm able to look at how much do I make per day now, what would it cost me to pursue this or defend this or whatever, and in those instances, I just use that as my cost. In the defensive situation, you obviously have to defend yourself, and because it becomes, it's one of those things that's very hurry up and wait, and so it will take all of your attention for a very small period of time, and then it will disappear again for for a few months and then like the next kind of move kind of moves forward because the legal process is incredibly long and difficult. And so the TL;DR of all of this is by all means, at all costs, try to avoid any kind of legal conflicts because it will typically take more attention and time than it is worth. But there are times where you must defend yourself where when that occurs, I would just look at the dollars and cents, does this make sense, and then not try and make the decision again. Because as things go on, your emotions will move, but the dollars and cents will remain the same. Shiran Srivatsa, good friend of Layla Nine, currently the CEO of Real, also has Cirillo Capital, which is his investment firm. He gave me this little quip that I really like, and he said, "Talent only gets better in the future." And that has been, I mean, you'll notice a common theme around people in this, and that's because when I look at the things that we did really well with this year is bring good people in, get bad people out. And the companies that did the best portfolio, like, that strategy rang true. Like, the highest-performing company in the portfolio, we put in probably like 6 great leaders, and it's just crushing. And that's not an accident, right? So that's thing number 1 in terms of talent. The second thing is work with the people who move towards you. And so I have spent, too much time in my life trying to sell people on why they should do things my way or with my values or with my kind of rules, which I define culture as rules of reinforcement in a business. So like, these are the rules of the game as I would like to play it. And I noticed that if I kind of had this like kind of recurring conflict with a handful of people, I was like, I don't need to do this. Like there's another person who is stoked to be here, will agree with the path, and it will be so much more efficient because they'll want to talk to me, I want to talk to them, we agree to the rules of the game the way we both want to play it, and so we'll just play that much better, that much longer. And so, um, this is more of like a warning shot because I think what happens is you habituate, especially if you're an entrepreneur, you have a high pain tolerance, like you're used to, like you're used to suffering. Suffering is just the current state. And so sometimes someone comes in, things are okay, sometimes they change, sometimes you change, whatever, but fundamentally conflict emerges. And if you cannot resolve the conflict, then over time your communication cycle lessens and lessens. You start talking less and less frequently, and if this person is close to you or close to your function, it becomes very difficult to basically— for them to do their job and for you to get what you need out of the role. And so my single line of advice is work with the people who move towards you. And so a corollary second point of that, that's a different frame to think through, is if your team doesn't admire some aspects of you, you either have to change them or you have to change you. This is a tough one though because you want— this is my opinion. If your team doesn't admire certain things about you, then the likelihood that you have strong influencer of their behavior outside of basically punishment is low. And it's much better, in my opinion, to have a team who admire different traits of yours. Now, they don't have to say everything you do is amazing, but like, there are, there are skills you have, there are behaviors you do that they're like, man, it'd be really cool if I had that, or it's really cool that he has that or she has that. That creates this, this element of respect in the relationship that I think is really required for high performance. Performance. And you have two choices there, like either you change or they change, or you get someone else, so you change the whole thing, right? I think making sure that you've established the rules of the game and just subtly noticing, like, is there someone who just like disrespects you on a regular basis, or they chide, or they're the first one to disagree? I want to be clear here, I'm not saying that you shouldn't have healthy tension and disagreement at the top. It's actually very common. Everybody who has like different perspectives to yield the best outcome, like that's how you get truth. So that's good. But if you're consistently blocked on what you consider to be like par for course behaviors, that can grate on you. And I think that I tolerated that for too long. And I have done that for, in different occasions, and I want to shorten the time that I tolerate those kind of dynamics. So next up is sawdust. My favorite businesses in the world are businesses that are started off of waste from someone else. So let me explain. So I love the Airbnb and I love Uber, the way that people have excess capacity or sawdust. They have something that they're not using that would be valuable for someone else. And so an easy example in a brick and mortar scenario is like, I don't use my gym. My gym was closed after 8:30. And it was, no one used it until 4:30 in the morning. And so I'm paying for this rent. And I have this space and there's probably some people who would like to have that space but can't, right? And I didn't have, you know, weekend hours and at afternoon, right? And so there are many of us and Airbnb did this on the residential side, obviously, like you have a spare bedroom, you can let someone crash there and you can make money for it. But the thing is, is that within businesses you also have excess capacity, you have sawdust. And so the sawdust analogy comes from lumber mills when they would strip the trees of bark, they would turn them into planks, and then they ship the planks out. But a smart foreman of the factory looked on the ground one day and they had to just keep sweeping up all this dust from the saw. And then finally one guy said, "Hey, could we just mix this with glue and make plywood?" And then all of a sudden a whole new kind of industry was born from that where you could take the scraps and then turn into something else. And in the fur business that I did when I was 16, 17, 18, in there, the owner would have to make these jackets and he would cut off these snippets. From the snippets, he was able to make earmuffs, and then he was able to sell these earmuffs or give the earmuffs away as bonuses. And so he was able to make something from nothing. And so there are sawdust things that exist in your business, and I'll tell you one of the big ones that came from Acquisition.com. Our primary business is obviously the portfolio, and that's where the majority of our resources are allocated towards. We tried to figure out a way where we could meet more potential portfolio companies. So I tried a few different things. So one thing I tried was, OK, could we just, like, invite people out to come out? Well, the barrier was too low. We got mixy-matchy, and I was like, that's not good. So we tried that one, and we didn't meet good people. And I was like, all right, that's not good. That's not good. So the next thing I did was like, okay, what if we raise the qualifications really high and then we like kind of have these dinners? So we did like 4 or 5 dinners where people would fly out, we'd meet them. The whole idea for me was like, I have to eat either way, so I might as well eat with people. Like, again, like sawdust. Like, what do I have to, I also have to make content, so if I go to dinner, I make content and I meet people, this is all good, this helps us generate deals. And the reason that I was trying to figure this out was because the best portfolio companies, we have, our number 1, number 2, number 4 best performing company, were companies that we had worked with for 6 to 12 months prior. So we had an existing relationship, we had helped them grow, and then we were like, okay, I think they're portfolio ready now, and then we made our investment and we grew them from there. And our best performers were like that, so I was like, how can I have this happen on purpose rather than by accident? So I was really struggling with this. Mind you, I was also like running the portfolio too, so it was like I wasn't putting full attention towards it. And then in January, I was like, okay, well, we have this building, there's an open floor space, there were a bunch of desks there, but I was like, we weren't using those desks, everybody had offices. And because we do a lot of confidential calls and whatnot, we're more of an office closed-door setup. And so we cleared the desks and we're like, okay, well let's see if some businesses would wanna fly out to our headquarters and have us spend like 2 days kind of going over how we create value, because then that way it's like, it will provide value to them, and then people who are like, oh, this is really cool, cool, I would love to potentially follow up with them over the long haul, they kind of enter our longer-term nurture process and we can potentially do deals with those people, et cetera. That's also why we spun up ACQ Ventures, et cetera. And so that whole division of workshops came out of we have extra space and the portfolio team isn't fully allocated. They work on the portfolio obviously, but they can step down for a day or two during the month to meet other companies, network with them, share how they are turning around different companies in our portfolio, specific divisions or departments, and that'll be very additive. Like, we can add value to everyone, it adds value to us, it adds value to them, and I get content from it. And so that was a big W. And the reason I bring this up is there are some things in your business that check more than one box. And so it's like, I don't want a single box checked, I want like 4 boxes checked. And so this generates deal flow, this generates cash flow, this generates content, this generates talent flow. And so all of these things, and it utilizes a resource that I already have paid for, I already, I have to pay, I pay this building every month, right? Like this cost exists. I pay my team every month no matter what either way. And so it used an existing cost basis to create a new opportunity for content and deal flow. And so from that, it's like if you can just look at the pieces you have on the board, and this is actually what I do is I look at— I try and write down with as much detail what are all the things we do on a regular basis, like what are the calls we take, what are the conferences we attend, what are the— like every single thing we do. And I'm like, is there a way I can recombine these things into something that would be valuable at no cost to me? And that's where I've had these really disproportionate gains in profitable divisions or products in our company, obviously, and then within the portfolio. You probably have SOPs and checklists within your business, right, of how you do whatever you do. Well, if you can take that and then turn those into lead magnets, then not only are they valuable for you, they also generate demand. And so that's just a very micro example of like, take something you're already doing and find another use for it that requires no extra work. The next one's really big. And so this is a little bit leaking, you know, like looking forward into 2025 and beyond. And so I believe this. So this is a bet. So I'll be clear, this is, this is me making a bet and calling a shot. So I believe that IRL and AI exist on polar opposite sides of a continuum. And I think that doubling down on both of these is a good decision. And so within our portfolio, we are pushing heavily on both sides. And so post-COVID, I still feel like there's unmet demand for people who want to connect. I mean, obviously this is why I invested in Skool. Like, I believe community is really good and I think it's lacking right now. So I think there's huge demand for it. And we've never— we've, we've never been more connected and also feel so apart. And so it's, it's almost like we have a lot of false false solutions. It's like we're eating fake food that keeps you full but doesn't satisfy you. It's kind of like porn to sex, like it's not the real thing, right? And so the idea is this is the real thing, this is efficiency. And so it's like, how can I, how can I get as much efficiency as possible so that I can do as many of the unscalable things that are the real thing? And this IRL push that I'm doing, I'm doing across all the portfolio companies. Companies, because the interesting thing about IRL is customers who have in-person experiences have tremendously different brand affinity. Uh, they're more loyal, they refer more, they rate higher, they buy more often. And if you have a strong culture within your marketing or your branding, you will attract like-minded people. And so that allows you to provide them value at no extra cost. So think about it like this. If I assemble a party, I'm the host of the party, everybody who meets at the party feels like the party was awesome if everyone else at the party was great. I could not talk to any of the guests and have them think, "Alex's party was awesome," and I will get a disproportionate amount of the reward from the associations and the time they had, but that network allows people who assemble to provide value to each other, which is almost like salt. You, you just organize it and you let them provide the value. IRL and AI, I'm, I'm heavily pushing on this this year. Sam Altman said that this year is the year AGI will come out, 2025. So artificial general intelligence, which basically AI is better than everyone at everything, which is frightening, but we'll figure it out. In the meantime, though, it'd be great if you could take some sales calls and set some appointments pretty accurately. So, and maybe help with some content and and things like that. But in the meantime, we're staying really abreast on this, and we're actively kind of like, I'm not trying to be the AI company. I want to be a company that uses AI well, just to be clear about my position on this. IRL though is something that I feel like AI will not disrupt, and I think that the demand for in-person experiences will continue to rise, and I think that it is a good bet to make. And so this is what I'm betting on next year. I will mention this because a lot of people don't like IRL because they say it's unscalable. Feasible, right? But I care so much more about is it valuable? And if it's valuable enough, it's worth scaling. And so the thing is, is that just because it's harder doesn't mean it's not worth doing. And the benefit of scaling something that is harder to scale but also valuable means that once you scale a little bit more, you'll have more resources to continue scaling it. And so if we can build cities in the middle of the desert or the middle of the ocean, we can absolutely scale an in-person experience. So, uh, next fun one is Skool. So, uh, what's crazy about this is that this was this year, uh, which feels like, you know, an eternity ago, but we, uh, we negotiated the deal in 2023, and then in January we came out publicly with it. So this was the first brand deal that I did this year, uh, or sorry, the first brand deal I've ever done. And the main reason behind doing it was that I believed in the product and I believed in the and I thought it was the best one, and I think it's going to win. And so that is why I was willing to make that bet. And to be very clear, opportunity always looks like risk today. This, this bet has proven out very well. The platform continues to grow like crazy. We have millions and millions of users, uh, which is awesome. And that was kind of the goal. And the reason that I, I ended up betting on this versus like any other potential thing I could do was it felt very uniquely fit for me. So I'll explain what I mean. There's a make money component to school. There's an education component to school. There's a community component to school, which I just see as like plus for social, right? And then all of these together are in an opportunity vehicle that is high leverage. And so for those reasons, I was like, I feel like I am uniquely qualified or education, media would be another one here. There's definitely a huge media component with the business. So it's like education, media, business, societal good, operational leverage. Like, this was, it was like if you could make a business that hit a lot of the things that I'm about. And for me, it also helped people who are going Zero to One. And I have a huge percentage of the audience that, want to start a business, don't have one, and didn't know where to go. And so I wanted to have something that I could say, "If you aren't a business owner yet, this is a very easy business to get started. It's very low risk. There's not many moving parts. You can do it without any employees. You don't have to have inventory. You literally just need to learn the basic skills. And so this is a great vehicle for doing it." And so I was super pumped when we and we found out that the average community made $1,360 per month as paid communities. And I think that's really cool, because it's like, no, this isn't, you're not gonna be a gazillionaire by doing this, but it can help get you started, and that, I see this as a great gateway for getting into entrepreneurship. As a side note, for existing businesses, I think every existing business should have it, like every gym owner should have a school community, every realtor should have a community for their, for their customers. Every HOA should have a community, a school community for the people in the neighborhood. Like, whatever business you have, like if you have an e-commerce business, there's a ton of e-commerce businesses joining school right now that realize that the email deliverability, like if you can reach 100% of people who bought your product, the feedback that you can get on the product, the reviews, the likely they buy the next thing goes way up. And so it's like, sure, add them to the email list, but also add them to a live community. And so I see that as, again, the IRL versus AI, like how do we, how do we bring people together? And so we're also doubling down on that with Skool because we are not, we don't see ourselves as, I mean, obviously it's a technology business, but like it's a community business. And so we're also doubling down on how can we facilitate in-person connections between people of similar, similar interests. So I'll give you some, some specific lessons that I've learned from growing Skool tremendously over the last year. Number 1 is CRO usually decreases— hold on, usually your split test will fail. And so basically the more optimized something is, the more likely a change from optimal results in a decrease. And so our first launch of the page, of the Skool Games page, did so well that we've done like 14, sorry, 16 major split tests and only 2 of them have won. And so like anything from the control, like so basically the control is really, really dialed. So, and it typically like if you have monstrous amounts of traffic, when you incur the cost of change, like it is a real cost. The second kind of thing that I would say that like I've learned, or rather been reinforced from school, is kind of customers above everything. Which is just always a great reminder. Paul Graham has this statement that I probably feel like I've said a whole bunch of times this year, which is you can solve almost every problem in a business by talking to your customers more. Like if your marketing isn't working, talk to your customers. If your sales isn't working, talk to your customers. If your product isn't working, talk to your customers, right? You are never too big to not talk to your customers. And so that was a big emphasis. I would say the next one is the value of, of offers, it was just, you know, the school games itself was a really cool offer that we came up with, and then we added in, you can win a Cybertruck if you win, which made it even crazier. And so, the uplift that a business can get from having a superior offer, we got to see that, you know, it's just, it's nice to see things proven out. So that was a really good one. The next big lesson, I'll put this one, this is really big, is the value of deletion and simplicity. So I'll explain what I mean here. So we have tried to make it as easy as humanly possible for people to win on the platform, and we get better and better every day. But a big part of it is the number one reason people cancel things is overwhelm. It's not, it's not, and so overwhelm translates into zero value because they stop. And so if, so what happens is people hear overwhelm and then add more stuff. And so it's rare that addition improves things rather than simply making things better or taking something out and replacing it with something better or eliminating it altogether. Like you want it to be as simple as possible but no simpler, right? Like if you take away all the friction that occurs from using a phone, what's left is an iPhone, right? The only next version of that would be you just talk in the air. And then like you get connected with people. Like that would be the next version of that. But what Steve Jobs did was an order of magnitude improvement off of the existing phones. And he just looked at all the things that suck about a phone, removed all of them, and what was left was the iPhone. And so thinking about product and value this way, right? So the value equation, you've got the outcome, you've got the risk, right? You've got speed, and then you've got effort, right? So the idea is how do we, make it faster and easier, faster and easier, faster and easier, over and over and over again on this value equation. And a lot of times what makes things faster and easier is removing things. I have, I have grown more and more affinity towards looking at what's there and saying, okay, we need to maximize value per second, not seconds of value. And so this comes from the media side in terms of making content, but on the product side, like As long as the, like, every customer will ask you for different things, and they will, and if you give them every single thing they ask for, they will cause their own demise and then leave. And so then you get these Frankenstein products that have a gazillion gizmos that no one knows how to use because to fit it all in, it's like there's 100 specific use cases that don't apply to everyone. And so product discipline around keeping simplicity and speed and ease as the What's your primary goal is an incredibly difficult thing to focus on and making those strategic bets. And so that has been a great focus and kind of relearning, I would say, of this year with school. And I would say finally, having, like knowing what your loop is. All right, so it's like what's your flywheel? So Jim Collins has a short book on this called The Flywheel, I think, or Flywheel Effect. And it's basically like, can you draw a circle within your business? Which is, first we do this, which then if we do this, this is what must occur. When this happens, this next thing must occur. If this occurs, this next must occur, right? And so I'll show you what I'm talking about. So if we make a lot of media for businesses, so we make a lot of business media, if we do that, then we will get business owners interested in our stuff, right? And if we get business interested, business owners who are interested in our stuff, right, they will then do deals. If we do deals with them, we'll have stuff to make media about. And so this is a basic wheel of Acquisition.com. We talk about business stuff, that gets businesses interested, we do deals with those businesses, those businesses get outcomes, which then we talk about in the media. And so round and around we go. We want a wheel that feeds itself, and so the only The only thing that's required is to get the wheel moving. Within school, we have multiple different loops that we have that generate the growth that compounds within the business. These loops are so important because when you have a linear input/output equation in terms of how business grows, then it means that you just have to keep adding more on the front end. What you want is something that you spark once, the engine runs, and then all of a sudden it spins and spins and goes out of control and it just keeps growing. right? And so that is the ultimate goal, is having multiple of these flywheels. So a simple example is like Amazon, right? They have, they bring, you know, they make products that are really cheap, cheap, they don't make products, so they create a marketplace that has the cheapest products that have the highest fidelity in terms of the risk that someone has to make when they purchase 'cause they have the reviews. So if they do that, then they will get more customers. If they have more customers, then they will be able to get more suppliers. If they have more suppliers, they're able to get more competition and selection for customers, which then brings in more customers, right? And so round and round we go. And so businesses often have multiple flywheels like this that exist that self-reinforce, and the quality of that flywheel, what you wanna figure out is what are the friction points that prevent this wheel from spinning, and then smooth it out so it just runs. So this is probably, I would say, number 5 in terms of the things that I've gotten away from school this year. And school's probably, I'll also call, will be, it'll probably have been one of the best investments I've ever made. So this year and somewhat last year, we got this great office, right? And part of the reason we did this is because I wanted to have a massive gym. I'm being really honest with you. Like, I wanted to have a really big gym, which I have. And I wanted to have a place that I could record that wasn't like out of my house or out of a closet. Closet. As much as it is great to have my team in and out of my personal space, I prefer it in a studio. And so, uh, that was the reason for, for building this to begin with. Then we started having a lot of teammates just started like spending more time here, and they're like, maybe I'll move here. And so then we started to become more and more in person as a business. And so I will remind anyone, I started in person exclusively with gyms. Then we went to Gym Launch, which was entirely a remote business. And we were entirely remote before it was cool. Like we were entirely remote when people were like, you can't be a remote business, it's not legit. For real. Like we would struggle to get like some banking relationships sometimes 'cause they were like, we need to, I remember there was some software that we needed, they were like, we need to see a picture of your filing cabinet. And I was like, what year is it? But it's like, it was antiquated until COVID and then it became the norm. I wanna talk about pros and cons of this 'cause some of you guys are business owners and you're trying to make this decision. And so number one, I think, is understanding which roles are remote and which roles are in person. So for us, because we know how to manage, I think remote teaches you how to manage better than in person does because there's so many ancillary small communications that occur in person that don't get documented remotely that still have a material impact on the business. And so if you're only remote, you have to be very structured with communication. If you're in person, you can get away with a lot less. Now, for roles like, Fundamentally, we say like, why does this person need to be here? We would only want people to be here who should be here. If finance doesn't really need to be in the office, that allows us to recruit from a wider net. So we can recruit from all over the United States rather than requiring people to move or only picking from, call it, Las Vegas, right? And so for us, the pros have been training is much better in person, culture is much stronger. I think you have an eye to efficiency. Which to be fair is somewhat offset with the additional cost of the building. You're able to see people in deep work and correct meeting cadences, things like that. Like if you're walking around, everyone's on meetings all day, you're like, who's working, right? And so this allows you to, you get faster feedback loops, which I think is important. The cons of in-person is that harder to attract talent because they have to move. That's a big one. It's probably the biggest one. But it's easier to attract other people though. So for us, what we did to accommodate this is we, For some roles, depending on the level of the role, we will also include signing bonuses and things like that. So if you're in that position, including more incentive for them to move or move their families to your place of business is a good way to do it. I also recommend having them come out for like 30 days and stay at a hotel, just so that they don't like, you know, de-plant their whole family if for some reason it doesn't work out. Kind of the first month you'll know. And so that's like a little in-between that I think is worth doing that has worked well for us. And to be clear, for me, I think 30% of our portfolio is in person, 70% are remote. So I don't care at all about how someone chooses to have, you know, structure their employee teams. I think it should just, whatever way it is, I just want there to be sound reasoning behind it. And so for us, obviously we have a lot of media, and so having the entire media team here makes sense 'cause I film here. I'm here, and so they should be here too. Whereas, like I said, finance, it doesn't really make sense. And so it's just making sure that like you're not being a stickler in either direction for the sake of it, and instead just saying like, what problem are we solving, and which path increases the likelihood that it gets solved? Here's a few productivity hacks that helped me work a lot more this year. And so as I was saying earlier, you know, I worked a lot more days this year, a lot more hours per day than I probably worked in recent history, and I needed to optimize more things. It's kind of like when a car is driving at 60 miles an hour, it's It moves a little bit, but when you're at 200 miles an hour, a tiny movement makes a huge change. It's kind of the same thing in terms of me. With the increase in hours, the increase in days, I was like, I need to get everything else dialed. One massive one, which is gonna sound so silly, is the big 3 of sleep. So number 1 is pitch black. And when I say pitch black, I mean pitch black. So tape the little lights on all the electronics in the room, get blackout curtains. I'm telling you, just do it. I took way too long to do it. Just do it. Just do it. Please do it. Number 1. Number 2 is it's got to be cold. Like, it has to be super cold. And if you are in a different temperature than the person you sleep with, then get one of those mattress pads that has the temperature control thing. It will change your life and it will certainly change your sleep, which could very much change your life. Just do it. Like, it's— it's— I think they're like $2,000 and you spend more time in bed than anywhere else. Like, It's the wellspring of youth. It's everything, like worth doing. And the third one, and this is the most recent one, is that I actually added in earplugs. So I now sleep with earplugs, which you get just the simple foam ones, like nothing crazy. And sleeping with earplugs had a 4 beats per minute drop to my resting heart rate. At the bottom of my sleep. And so I bring this up because like it had a material difference in basically how deeply I rest. And my deep sleep is basically very chunky and front-loaded rather than like intermittent throughout the evening. So it's like basically as soon as I get to bed, I have like deep sleep because I hear nothing. It's like I'm in this black float tank, essentially this cold dark tank where I can't see anything or hear anything. And so you'll know when it's dark enough if when you open your eyes and when you close your eyes, it's the same. That's where you want to be. And so those are some, those are some significant ones. The next big one for me was making sure that my work environment was basically just as tailored. And so I've usually been better about this, but I always black out my windows because I get distracted with good weather. I just want to go outside. And so I block all that stuff out. I had 2 desks that I set up, one for standing, one for sitting, because I realized that having a desk that moved, I ended up just not moving it because I didn't want to, like, mess the wires up and like all the other stuff. I just set up 2 desks. And so that was helpful. The biggest pain relief thing that I did this year, because I spent a lot of time on my desk, is I got a kneeling chair. All right. Which sounds ridiculous and they look goofy. But if you sit in one position all day, like I was getting really bad neck pain, like it was very tough for me. And so by switching the kneeling chair, originally I thought I was going to do half my day in one chair, half my day in the other chair. But then I realized that when I was in the kneeling chair, I actually have like 6 different sitting positions that I do in that chair. And so by constantly varying my sitting position, because as soon as I get a little bit uncomfortable, I just, I just change it up. I was able to basically decrease the resting stress on like my muscles being in this one frozen position for an extended period. And that eliminated my shoulder pain, like gone, like really, really helped me out a lot. And so I don't, I don't know what you're doing, but like it was probably like $100 and like such high ROI for me. So the last thing was fitness-wise, because I was in this very heavy season, um, I decreased my workouts to 2 a week, which is pretty light for me. But I just made those the absolutes. So I basically did Saturday, Sunday as my 2 workout days. And I just go really hard on those days. And that's actually kind of, in a weird way, it's been more fun for me than trying to do shorter, more frequent workouts. And so it's actually kind of brought some, like, more life back into my training. Even though I'm doing it less frequently, I'm like looking forward to it. And I realized that for me, I love training on one condition: that I'm not in a rush. Like, I hate having to like do a workout in 45 minutes because I have a call. Like, it takes all the fun out of it for me. And so I do it on Saturdays and Sundays because I can just wake up, I will work out as long as I feel like, and then I'll start working. Um, and that's been like really, really good for me, but Part of this has also been my transition. At 35, I told myself, you know, when I was 15, I get 35, I will, I will transition to longevity. And so I have made that transition now. And so I'm light, I'm probably the lightest I've been in a long time. I'm like 203-ish right now, which is very light for me. For context, my heaviest was 250, so I was very buzzed, and it's all, all steak. And so now I'm 203, and basically Chihuahuas live longer than Great Danes, which is small dogs live longer. And so I wanna put less stress on my heart. And so for those of you who are like, Alex looks smaller, that's true, 'cause I have lost weight. I've lost about 10 or 15 pounds. And so I'll probably stay around here. Maybe I'll get in the high 190s. But I'll probably, I maintain here pretty easily. And so that's my update on that part. And I do think that, It's okay to have seasons. Like, I'm not saying I'm only gonna work out twice a week forever. I'm saying I'm gonna work out twice a week now. Like, I worked out 3 times this week, and so it's not like I have these rules. It's just that I absolutely committed to Saturdays and Sundays and being a weekend warrior, and that has worked well for me to not work— basically give myself permission to do that so that I could keep working harder on the stuff that needed to get moved forward. So next one is culture. So I define culture as the rules that govern reinforcement in a business, and so that means like the rules of behavior, what is good, what is neutral, what is bad. And typically people have some sort of values that they create that are supposed to embody that culture. But those values typically are either phrases or they're one or two words, and you have 3 to 10 of them, right? And so for us, I've always believed in 3, 'cause I don't think anyone remembers more than 3, and if they can't remember them, there's no point in having them. But those 3 typically are very bucketed terms that then need to have hundreds of behaviors underneath them that kind of roll into that culture. It's not like you only have 3 rules of behaving. You have 3 concepts that have many applications across different conditions. A big one that we've been focusing on, Leila and I together, has been kind, not nice. And so I think that in the wake of in the wake of wokeism, if you will, there's been a lot of accommodation that has been accepted or tolerated within businesses, which is like, you know, everybody, everybody needs to have these like, you know, safety zones and everyone's, everyone, everyone has to feel hugged and fluffy and like all this stuff. And I believe that this is a pendulum, right? And I think that the pendulum swung here. And I think a lot of brands— Walmart just came out recently rolling back some some of its initiatives. I know Victoria's Secret did last year. A lot of them are starting to swing back. Now I do think that we're going to swing too far the other way, to be clear, because that's how we do things. That's how us humans do things, right? But I think it's going in the right direction right now, which is going back towards the middle. And so within Acquisition.com, we have this big belief that we're very good at training. We're very good at training skills because it's something that Leila and I pride ourselves on, and we're in this in-person environment. We're good at fast feedback loops. We're very good at breaking skills down into smaller chunks to make them manageable for somebody who's new. The problem is that sometimes that goes into no man left behind. And we are not a government program. Instead, it should be, if you can't keep up, you can't come. And so I think this is a departure from the traditional, like, all accepting, all arms open. Like, if someone has— like, they don't like working late, it's like, well, then this isn't for them. And they can find another job that's that will accommodate that, but I do not. Because we are trying to accomplish great things, and great things require great sacrifice. And it doesn't feel like a sacrifice to the person who also wants the great thing. It only feels like a sacrifice for someone who doesn't. And so that price diminishes for someone who's aligned. And so Kind Not Nice also brings into light, like, being able to have these sincerely candorous conversations of saying, like, you are not where you need to be. and I'm going to give you a really good nug on this— is that right now you can pause this video and I need you to show it to your team because what they don't understand is the difference between an insult— and you might not understand it either, and this changed my life— insult and criticism. So an insult is where basically you slander the other person. You assign a word that has a negative connotation. So I say something like, "You are lazy. You are a piece of shit. You're a dick. You whatever." Whatever, insert, insert the insult you want. A criticism is the gap between desired and actual. This is a commentary which is factual. The expectation is that you show up every day by 9 AM. You've shown up every day at 9:05. Therefore, there's a discrepancy here. In order for you to continue maintaining your employment, you need to be here before 9. So this is a criticism. It's simply observing reality. And if you can do this, this will allow you to help people without having the emotional charge. Now, if I say you're 5 minutes late and you're— that makes you lazy, or that makes you uncommitted, or that makes you insert whatever insult, it then turns this into an emotionally charged conversation. And so what happens is, and this is why I think it's important, is that you need to explain to your team criticism is not negative. It's an observation of reality. An insult is where we attach judgment to that discrepancy, like, "Your content sucks." That's tough. And the secondary of that is, "You suck because your content sucks," which is even harsher. But instead it says, "Our channel average is 100,000. The content that you make is 75,000. In order for you to keep your employment here, you need to be above 100,000." And now let's break down what do we need to do behaviorally that will increase the likelihood that you meet desired or exceed it. And so then this is where you get to teach. This is where you get to train. If someone's always late to meetings, they might not be lazy, they just might not have the skill of showing up on time, which is a skill. And so you then say, "Okay, do you set alarms? How do you estimate your time of driving? Do you do it on the fastest time you've ever driven somewhere or the slowest time you've ever driven somewhere? Right, do you do it on the fastest time you've ever gotten dressed or the slowest time you've ever gotten dressed? And so typically when people estimate time, they usually just skew to one of these two things. There's the people who are always way too early, it's because they do worst case on everything. And then you've got the people who are, they do best case on everything and they're always late, right? So it's like, how do you estimate time and how do you set reminders for yourself to get places by the time you need to? And so literally breaking down that skill, which seems obvious, And yet, there's many young people, and to be fair, sometimes old people, who don't know how to show up on time. Understanding this and saying, if we don't share this criticism, we are being nice, not kind. We are seeking contentment, we are seeking approval from everyone, we are seeking consensus, we're not seeking truth. And so we need to be truth-seeking as a business. And so we must always state the facts and tell the truth, and if someone is not up to snuff, we need to communicate that as fast as possible and give them the steps in order to remedy the situation. And so this is the part, I think both of these things get missed. Bosses will say, "He's a dick, he's lazy, he's whatever," and sometimes they'll say it to the person, sometimes they'll say it behind their back. Both of those are bad. Instead, I would encourage you to go criticism and then steps. So the way to do this is you say, "Tell them what to do instead." So don't just say don't do this, say do this instead of this. That way you give them directions, 'cause no one can operate on a negative. Give them what to do. And this has dramatically improved my skills as an operator within the business, and hopefully the kind not nice is something that you can give to your team, and that you can say is like, we are here to be kind, I want to help you win, but I'm not here to be your friend. Like, and I think Reed Hastings has a really wonderful frame around this, which is like, we are a professional sports team trying to win the world championships. We are not a family. 'Cause you're not gonna fire your kids, you're not gonna fire your spouse, you're not gonna fire your mother. But if you're on a professional sports team, it's like, we are all here to win. And if you don't wanna win, this is not the team for you. There's AAA, there's other teams. There's other teams that are pros that don't wanna win, and that's fine, but that's not what we have here. And so the kindest thing that I can do for someone is give them clear feedback and opportunity to improve. And if they don't improve, give them the opportunity to work at a place where they will better fit in. Now that it's been 5 years and I'm back into operating day-to-day on the media and conversion team that we have at Acquisition.com, it's been fun to turn things around. Now I already went through the optimization framework and that's what I executed. But the output of that was, number 1, I removed all meetings. Number 2, I said you can have ad hoc standups between each other when you want to solve a specific problem. So I don't want to stop communication, I just want to stop regular wasted time blocks that don't increase your output. The next thing, and to be fair, when I did all my one-on-ones with every single person in the department to understand what they were struggling with, one of the biggest things that came back was, "We're in meetings all day. We hate being in meetings. I just want to work." And I was like, "Great, let me make it easier for you to work." The next thing was, and this was feedback that I got from some of the managers when they saw me running this was they saw a framework that I like a lot, which is what, who, when. So think about when you have a meeting and you're like, hey, we gotta do this thing, right? That's the what. All right, then a lot of times that's it. That's the meeting, everyone just goes about their separate way. The next level of that is, okay, this is what it is and this is who needs to do it. So who's gonna own this? Who's gonna own this one, right? Who's the chest of, chest to poke, the throat to choke. Alright, who's the one who's responsible? Now, if you have what and who, that's already a better start. But where it gets really nasty is when you put in when. And so the question that I like to ask here is how many hours will this take? I don't ask how many days, I don't ask what day you're gonna get it done by, I say how many hours will this take? And then that person will say it'll probably take, 'cause then you get to hear it. So it's like if someone says like 20 hours, I'm like 20 hours, right? But if you ask them what day, they might be like, ah, today's Tuesday, I can get to you by Friday. I'm like, why is it gonna take 3 days? Right, so when you ask hours, it's like, this will probably take, I don't know, 90 minutes. I'm like, okay, cool. So you can get this done in the next 90. Now, they will then say, well, I have other things to do. I'm like, okay, what are those things? And then you get to dive in, and this is fundamentally, I think, the job of the boss is to prioritize. This is strategy. And they're like, oh, well, I have this other thing that's for this massive project, and I have to get that done. I'm like, well, how long does that take? And they'll say, okay, this many hours. And say, "Okay, do that first, and then this one you can start on tomorrow morning. You'll have it done by lunch, so hit me up at noon tomorrow when you have it done." Now, people get scared about this because they're like, "Why are you driving all these deadlines?" The more deadlines you have, the more opportunities you have to say nice job. I would rather tell someone, "You did a great job," 7 times in a week than once a week. And so, I also have found that the best performers want to work. And they hate not working and they hate things that get in the way of work. They hate office politics, they hate meetings, they hate gossip, they just wanna work. And so I wanna create an environment for those people. And if there are a bunch of people who wanna gossip and wanna have lots of meetings and wanna ideate all day, amazing, just not here. With the Who, What, When framework, this also gets stacked and recapped, alright? So think about how a meeting runs, right? So okay, first thing we gotta do is this, okay. What is it? Who's got it? When are you going to get done by? How long is that going to take? Can I pull it up? Can I pull it up? Can I pull it up? Yep, that's fine. All right, great. Next one. What's the next thing? Great. Who's going to own it? Uh, how long is it going to take? Great, you'll do it by this time. And then so what we do is, is I will recap every one of them every time. And so by the time I've done my fourth one, they've heard one four times, two three times, the third one two times. And so there's this repetition that gets built in, and then obviously the thing at the very end is also gonna be the freshest. So it's like, I can repeat the least the thing that's the most fresh, and the thing that I started with, which is like way outta their mind at this point, has been repeated like 7 times. And so it makes it more likely that they will actually do it. Now if you wanna go the 201 version, which I had to do for a little bit, was repeat it back to me. So I would say, okay, got it, that's what you're gonna do? Say it back to me. And I kid you not, if you ask them to say it back, This is crazy. Like 1 out of 3 times they'll just completely get it wrong. It's because they weren't listening, they weren't paying attention, whatever. And so I'm like, oh my God, I can't believe that I was about to leave this meeting and they still, they didn't understand what they needed to do. And so you could stack the who, what, when you recap it all the way through. And then if you have a team that's not doing as well, ask them, have them explain it back to you so they know what needs to happen. Now once you have this loop in place, what do we do? We lubricate it, we add money, we add incentives. So how can we align what they do with the outcome of the business. And so back into ops, I looked at everything, eliminated all the meetings, and then I said, okay, in this department everything is based on quality. And so we just need to make better stuff. I said, if you make better stuff, I will pay you more. I'd rather have one guy who makes 3 times the money than 3 mediocre guys. In a very real way, it's easier for me to manage one person. There's way less communication, there's way less overhead, way less waste. And we'll get better outcomes. And so if you're like, okay, I understand that you did all this, but how did you communicate with them if they had no meetings? So I just switched to a daily standup, which is every day, same time, uh, we all hop on and I run departments like sales teams. All right. And I think that you can do this with any business. And the reason that I like modeling sales teams for two reasons. One, I have a lot of experience with them. Two, I believe that the way sales teams are structured and operated, have already been optimized for performance because the feedback loops are so tight. If you're not managing your sales team well, you find out very quickly. And as soon as you fix how you operate it, you find out very quickly. And so I think that sales teams overall are run typically very well. Now, what are the things about sales teams? So for new people, when they come in, what do they do? They listen to a lot of game tape. This works for customer service, this works for media, this works for sales. They watch a lot of the right way to do things. Then what happens? There's a lot of role playing in sales. So it's, if you could role play in customer service, you could role play around what would you look at with this piece of content? What would be the moments that you would clip out? How would you structure it? And you ask them to explain the work that they would do. That's, that's when someone new is coming in. And then we say, okay, we're going to give you a half calendar. If you're a sales guy, I'm going to give you a half calendar for your customer service. I'm gonna give you a half calendar for media to make sure you're not posting tons of crap. You're just gonna get one post a day. And then if you do a good job, you meet KPIs, then you get a full calendar. Then I can give you an uncapped calendar, right? So we have these progressions as long as they maintain their quality metrics. And so like sales, we have a similar onboarding process. The huddle process itself is let's look at the good stuff and let's tear apart the bad stuff. So we've reviewed a call that went well, great. And the far more valuable, let's look at a call that didn't go the way it should have, and then we let the person who did the call correct themselves. So it's really tough if you go jump in and like jump down everyone's throat and tell them why they sucked. It's much easier for them to say, "These are the things that I messed up," and then the team gets to say, "Here's all the things you did well." That way they get some praise from everybody else, but they still get to have that feedback. And then you can prioritize, okay, this is the thing that's the most important. But that still works for customer service, It works for product, it works for media, which is, okay, uh, why did this clip suck? And let's look at it. And if you notice a common theme for when clips suck, then you just repeating it and reinforcing it keeps it top of mind. We have switched to that process and it has been very good. I also got people off the bus who weren't aligned with it. And so if you have a change that you want to do and you foresee that people will not be aligned with that change, then I think that you owe it to the high performers to create an environment that is only other high performers. You want to get it to the point where it's so self-managed and self-policed that if someone comes in and isn't pulling their weight, they just get removed. Simple as that. And the whole team comes to you and is like, "Dude, I don't think this is the guy." Right? It shouldn't come from you, it should come from the culture of the team. And that's why you can't have a culture of acceptance where it's no man left behind. Behind like, oh, they're not as good as we thought, but we're just gonna keep training them, we're gonna keep deploying these resources. It's not to say that you can't train someone. The question is, is it worth it? The next big theme along operations, I'll break this into another chunk, is technical versus management, all right? And so this is very common in tech companies, right? You have an engineer who's exceptionally talented and you wanna give them away to move up in the company, but they don't wanna manage people. And in most companies, the only way to move up is to increase the headcount that's underneath of you. And so when I saw this within our company, I was like, this feels dumb. We should find a way for the best sales guys to keep making more and more money. We should find ways for the best media guys to make more and more money, the best customer service starts making more and more money, especially in the roles that have high leverage. So basically, the best content creator has more leverage than the best sales guy. Sales guy. Best sales guy is closer to the reward though, to be fair, and so the likelihood that what they do generates revenue is much closer, whereas marketing or content could be significantly further away, so there's a discount that's applied there, right? But big picture is, is there a track for both types of people? Because there are many— the people who are experts at something, you just want to let them cook, right? And so when I realized that the orgs that I— basically the divisions that I took over The only way that someone would win was by moving up. And when you have a, the only reward structure is people underneath of you, then what does that incentivize? It incentivizes you keeping things to yourself because if someone gets better than you, then they move ahead of you in the line, number one. Number two is it incentivizes the managers and the whole team to always ask to hire more people because if you hire more people, then it means they by default move up in the organization. The third thing is that whoever is in charge of the promotions and the titles becomes chief person whose ass we must kiss. And that means that if you— it basically becomes entirely subjective as to who gets promoted. And so then the job— so then the next incentive that comes up that's perverse is you want to show how much you're working rather than do work. which are different. And so this is where people are like, if I said, what did you do yesterday? And I was like, you need to give me 1,000 bullets. You could probably come up with 1,000 bullets. You're like, I tied my shoes and then I stood up straight. And then I put one pant leg, my right pant leg on, and I put my left pant leg on. And so people make it seem like they're just doing all of this work, but they don't tie that work to the output of the division. And when that happens is when you have misaligned incentives. So every one of these incentives is perverse in that it doesn't fuel the business, but it does fuel costs. With this and with the aligned incentives, the team post-change has more than doubled output. More than. And so I think the lesson here, and I think that we'll probably get to triple or quadruple, like for real, maybe I'll do an update later, but this has been a recent takeover for me. But the thing is, is that people typically have significantly more output potential potential if you can tap into what we call discretionary effort, which is what is that effort above and beyond the minimum required to keep their job. So everything above you not getting fired is discretionary effort. And in most companies, there's a massive amount of effort above not getting fired that is unlockable if the incentives are aligned. Many people can, in a very real way, triple how much they're doing, quadruple how much they're doing? Only if they're incentivized to. When you have a political hierarchy, it just means elbowing, no one teaching each other anything, saying we always need to hire more people, decreasing your output to the lowest potential possible as long as you don't get fired. And this, when coupled with a management style of never firing, is a great way to create waste. So in order to facilitate this, there typically has to be a change in compensation. So I've talked about incentives a couple times through here. And so my goal is to try and have everything be pay for performance to the highest degree possible. Now here's where your operations and your finance team will push back. They'll say, this is complicated. Why can't we just do it the way everybody else does it? Because just because it's hard doesn't mean it's worth it. So there's a price, but there's also a return. And so all they are talking about is the price of this thing, not what we're going to get from it. I could then go back to that finance person and say, hey— and to be fair, this isn't me saying anything about my finance. I'm saying you might have to deal with this. Hey, if we were able to quadruple our output by creating a more complex incentive structure that might require someone full-time just to manage, is the cost of that one person full-time managing it worth the increased output of 4x across the entire company? Duh, of course it is. But it's more complicated. And it's also worth it. And so I bring this up because you will probably get pushback if you try and incentivize people on performance. It takes more math, it takes more tracking, but I will, I will say one key part, which is that if people are going to be paid on performance, my recommendation is two things. One, if you make the transition, allow them to keep their existing salaries and then add the performance on top. And then for new people, bring them in and then just have the performance. But this allows complete adoption of the new way, rapid reinforcement loops that they're like, this is way better. And then ultimately, if you make the jumps in comp proportional to the output that you seek to get, then you will still make more than the cost. So it's like going— it's going to the store, buying out— buying, buying 3x output at twice the price of your 1x. It's still a better deal even though it costs more. Around this pay for performance, it will also very clearly demonstrate who is really good and who isn't. And I haven't really talked about like letting people go who are low performers, and I'll just only say this one word about it, which is bloat is like cancer in a business, or it's like weeds in a garden, is that bloat naturally occurs. People hire more people because the simplest solution is throw money and bodies at stuff, and it's often not the right one. And so you have to keep your garden healthy by pruning it, by de-weeding it. You keep a tree healthy by cutting off the stray branches that are growing in the wrong direction because it's detracting from the growth of the overall trunk. And so this is the part that, that is, that is probably contrarian for most of you. Fire when things are good, not when they are bad. So when things are good is when you have the most bloat. And so it is far better to let people go at that point for low performance because it doesn't feel like the company's losing. It feels like we're being disciplined. If you let people go only when the company performance drops, it feels way worse. Having done both, I strongly recommend the other. So for example, we were very fortunate, but during COVID— prior to COVID, we had been very militant about making sure that we were making— make sure that everyone was efficient and that the that the headcount made sense based on the demand. And so when COVID hit, we had very minimal amounts that we had to change internally in the business. And so because of that, I think it was able to maintain morale relatively well during a time when my industry was getting destroyed. And there's a number of ways you can do pay for performance, and you don't need to have as much performance as you might think in order to incentivize action. And so if you're like, I don't have budget for that, that's okay. Just make a couple tiers of performance and then you can have flat bonuses by hitting some tiers. Like, I mean, literally, you don't have to think in percentages. It can just be flat amounts based on tiers and I think it's a very good structure. And a good way to test this out is once you figure out your compensation thing that you wanna do, backtest it. So just look at what it would've been the month before and then see what it is and if that makes sense, then it's like, cool, well, I'm gonna assume Do I assume the performance is gonna go up if I pay for that added performance? And am I okay with this increase? And if so, which if you align it with the incentives of the business, it should more than pay for itself. This, the structures that I'm talking about with the sales team management functions best in my opinion when you have teams of similar function. So what that means is like an executive team is going to be very, is as many people with very different functions and expertise. A customer service team has many people with the same function and expertise. And so this style of management of, you know, reviews, onboarding, huddles, what did we, what could we do better here, those are great when everyone does the same thing. If everyone does different things, you will have a different structure of, maybe it's far more roundtable where everyone's more or less updating and then coming with the discussion topics that affect everybody else and problem solving together more than upskilling together. So that's really probably the main difference between those is one is like we're really solving problems together for the majority of time. Not to say you don't do it the other way, but the majority of time we're solving big problems with disparate teams or different teams, diverse teams, and then with similar teams, homogeneous teams, is typically upskilling together and aligning priorities. This is huge. So problems and solutions have delays. All right, so hear me out on this. Right now you are living with problems that you created 6 months ago, and when you begin to implement your solution, the problem will not immediately go away. And so there will be this period of time where you're executing a solution on a problem that you caused 6 months ago, and you will still continue to live with the problem because the solution has not borne fruit yet. It hasn't, it hasn't latched in yet. It hasn't come to fruition. And so you have to give solutions the amount of time they deserve to work before appraising whether or not they worked to begin with, which I recommend doing prior to implementing the solution. So basically, when you're about to do something to fix some problem, say, how long do I think this should take before I can and say if it worked or not. And then stick to that because in the moment you will only incur even more cost, which is why it's so painful. It's like you have this problem and now you're incurring more cost to try and solving it and you're still suffering the problem and the cost of solving it without the benefit. And so this is kind of the endurance part of entrepreneurship is that you have to keep working without seeing the result of your work. You don't need to change anything, you need to learn to endure because just because it's not working doesn't mean you're not on the right path. And so the easiest way to think about this is like if you were to go to the gym and you start working out and you start eating better, you're 50 pounds overweight. That problem was created years in the past. You now incurring the solution is incurring the problem— you're still overweight— and the cost of the solution, which is now you go to the gym, now you're not eating the foods you like, whatever. But you're still overweight. And so after 7 days you might think, okay, well, I should stop doing this because it's obviously not working. You have to give time, time for the solution proportional to the size problem it's solving. And if you don't approach it this way and you ignore your problems, when you scale, you scale your problems with you. Which means that this is why I'm such a believer in solving the problems in order to scale rather than scaling despite my problems, because then it just makes my problems bigger, hairier, and nastier. If you're living in good times right now, you can't rest on the laurels because it's not from the work you're doing today. It's from the work that you did 6 or 12 months ago. And this has been a constant reminder for Leila and I when we go through things. When things are good, we're like, what did we do 6 months ago that is causing this? And if things are bad, we ask, what did we stop doing, or what do we add in, in the past that created this. Too often we look at today and think that our bad day is because of what we did yesterday, and it often isn't. And so properly attributing where the cause of the solution or problem came from can give you the outsized return that you're probably looking for. And I'll give you this very tactical tip: if you see a, a decline in performance in a division or a function of the business It'll typically look like this. So let's say, let's say that you've got this, let's say it's lead flow, whatever, and then it starts to flatten out and then it starts going down, right? So you notice, right? So what happens is people wake up here and say, we don't have enough leads, right? And so they say, okay, well show me the ads this week, show me the ads last week. And so you have to look at where the delta first occurred and then what happened in this, what happened leading up to here, what did we change? Oftentimes it's a who. Who did, and here's a fun one, a lot of people think, oh, we must have lost someone key. Most of the times you added someone. You added someone terrible. I'm dead serious. We had an issue where our ascension rates all of a sudden, like I noticed, like why are ascension, you know, we started looking at all these different, we looked at the functions, we looked at messaging, stuff. And finally I was like— and Layla brought it up, she's like, let's just look at the month when they stopped going up. We looked at that month and we looked at what had happened. The only change that had happened was that we had hired a new head. We added someone to do the job, and by adding this bad person, they destroyed the function. Sometimes it's a how, sometimes, sometimes you change your process, and sometimes that's the culprit. but a lot of times you added someone who actively is destroying your business. So another big lesson of this year was around content. And so I made this video called Back to Business. I don't think it was called that, but that was my theme. Was basically we did this experiment for 16 weeks where we made very, very wide content. So like, you know, meals and workouts and vlogs and things like that, where we wanted to see, okay, well, if we get more views, then maybe a percentage of those people will be business owners, and so our relative amount will go down that are business owners, but our absolute amount will go up. And so that's all I care about is the absolute amount. And so it turns out that that hypothesis was wrong, at least for us. And so when we made wider content, we had fewer absolute amount of business owners who were opting in, who were buying the books. And so for me, book sales is actually a very leading indicator for the people who we want coming towards acquisition.com. And so, and email opt-ins on the site, that's a big one. By the way, if you're not subscribed to Mosey Money Minute, it's one of the best things that I put out there. It takes a minute, and I deliver 2 every week that are extremely tactical things that you can immediately use to make more money. Like, very tactical. One of the best things I put out there. So, I think you go to acquisition.com/MoseyMoneyMinute, newsletter and it's there. So you can opt in, grab that. I think you will like it. It's very good. I put a lot of time into it. Okay, back to business. So in finding that out, we shifted our content indeed back to business and lo and behold, we got more business owners. Crazy. But I think this is important because a lot of us fall into this wide views vanity trap. And so being clear about why you're, why you're making content to begin with, is important. If you're a business owner and you're making content because you wanna make more money, then you need to stay on point. Stay, serve the avatar you serve. And that has served us very well, especially in the longest forms content. I think the shorter stuff you can get away with what I would consider adjacent, right? So like if you're a salon lady and you sell haircuts, then if you talk about beauty in general, you will probably attract the type of avatar who spends money on these types of things. And so I see that as okay. But if you're gonna do a long video, probably don't do it on makeup tutorials if you sell haircuts. So another big part of this is that the structure of the content for entertainment is not the same as, as education. And so with education, a lot of the effort is in the goes into pre-production. With entertainment, a lot of the effort goes into post-production. There's obviously pre as well, but the post-production, there's just got, like think about making the Transformers movie. How much post-production is there in that movie? A ton, right? Whereas some of the top education videos on the internet are just a dude with a whiteboard, which just goes down to the quality and the simplicity of the content itself. And so you can make something significantly more compelling by making the language more readily accessible to your avatar. Now, two components to this. One is the examples that you use, you want it to be as relevant to the avatar as possible. I'm talking to, if I'm talking to a bunch of mechanics, then I'll probably make a car analogy. If I want to talk to a bunch of ladies, I might use a cooking analogy, right? And that's with traditional gender roles and stereotypes, deal with it. Alright, and so the idea here is I will try and speak in a way that I think has the highest likelihood of being language that will be comprehended by the widest slice of my target audience. Now, if you have an even broader audience, then you would limit the amount of analogies to things that everyone understands, so probably be human things. I might be talking about just eating in general, sleeping in general, brushing your teeth in general, would be the analogies that I would use, and the grade language of my speech would be as low as humanly possible. So I looked at this, uh, uh, uh, politics thing. This was before this election, but they had shown that the politician that spoke at the lowest grade level won every election. Now, I don't know if that's held true since then, but I thought it was relatively telling with all of these different marketing strategies. The one that mattered most was actually being understood. which leads into one of the biggest next things that we did, which was we were focusing more on pre-production. Like this video right now, we prepared for hours. Like what are all the lessons I have? What are the examples I want to talk about? Like this isn't me just turning on the camera and saying like, what's up? I actually put a lot into this. And because it was a whole year, it was also helpful for me because I like to crystallize my own knowledge. But pre versus post. And then another one is clear packaging, right? Is just be very clear about what it is your content is about and what they're gonna get from it. And so from that, we came up with the 3 Ps, which is proof, promise, plan. And so every introduction of every video has to have these 3 things. Now it doesn't have to, but we found that when we included those things, those videos did better. And so you notice every video since this Back to Business theme, we have proof, promise, plan within the first, call it 30 seconds. And so it's what are you going to get from the video? Why should you believe me? And this is how we're going to do it. That's it. And so in this video, I started with we have these 3 companies, you know, 3 of our companies are over $100 million. We scaled a lot this year. We went from, you know, $50 million in EBITDA to just under $100. You will learn the lessons from this so you can apply it to your business. And the plan that we're going to do it is I'm going to walk through them step by step. All right. There we go. Right. Very straightforward. And the last piece, which was a small one, which I actually got pushback from my team on, which is why I'm sharing it with you, is introduce yourself, right? So a lot of people are like, "Oh, we don't wanna introduce, my audience knows who we are." Well, good thing you're not just making it for them. You're making it for people who don't know who you are yet, right? And so what we did is that we've actually now consolidated this to lower third. And so at the beginning of this video, you should see Alex Hormozi, managingpartneracquisition.com. So we're actually able to cut that out of me saying it because we want to keep the intros really tight. I also have taken out the, uh, hey, if you don't know who I am, just say, I'm Alex Hormozi, I'm the managing partner of acquisition.com, this is what we do. Or put it lower third and then just skip forward, right? You want to keep it as tight as humanly possible. And when we look back at the videos that did exceptionally well, these were the things that— these were our common themes. We put more in pre, we introduced ourselves, we made it very clear packaging, we had a proof, promise, plan, that was laid out. We had examples that were clear and relevant to our avatar, which is business owners. And so we made content about business, and lo and behold, it has been good. Yeah, and on a personal note, I prefer making business content to not business content. I like resented, I'll be really real with you, I was so, I was afraid of the results that were gonna come in, 'cause I was like, if I'm gonna have to make meal videos, I'm gonna kill myself. I just like, like, then we'll do our workouts next. I'm like, no, I'll just be dead. Dead. It won't matter. Like, it doesn't matter. I'll just die. And so, like, I'm sure from, like, the thing is that I have a relatively high pain tolerance. So, like, if it was the way to win, I would, like, if you were like, hey, if you hit your hand with this hammer, your business keeps growing, like, my hand would be a pancake, right? I would just keep going at it. But I would prefer not to do it that way, and I'm very grateful that you guys like business content better because that's what I like making too. Alright, so the next one is around platforms, and I think this was really interesting. So I looked really deeply at the platforms from this last year. I made a whole tier list video about this, so I'm not going to go in super depth on this, but I would say that the MVP of the year was email, or maybe most improved if you want to call it that way. I have not traditionally spent a long time on email, which seems ridiculous because written word is my best format. And so I started writing emails and they start doing well. Duh. Like maybe I should hate money. I don't know. Anyways, so email was kind of the MVP of the year for me, probably the most improved, like didn't expect it. The feedback I've gotten has been exceptional, and I made also a separate video on how I just write my emails, and so you can watch that. I'm sure it'll be, I'm sure you can find it. Beyond that though, Facebook was a, in terms of like book sales per follower count and per view count was kind of like the, the highest leverage, like we actually got a lot from that, so we're investing more in Facebook right now. The perennial champs were IG and YouTube in terms of percentage of traffic that came to Acquisition.com. YouTube and Instagram were by far the biggest ones. The unbeknownst one was books. This is one that no one talks about, but Amazon is actually responsible for like 15% of my traffic, which is kind of cool, meaning basically the amount of people buy books and then read the books and then go to the site. Like a huge percentage of my traffic indirectly comes from Amazon because they, because my books do really well, um, and have a lot of reviews and Amazon wants to have people buy products that they like on Amazon because then they associate the good things from that product with Amazon. Haha. Right. It's like they have a strategy. And I also said in my tier list video that TikTok was something that I was deprioritizing and I thought more learned more about that since that video. So it's been like 7 months, I think, since I made that video. I think that it's not that TikTok is not a good platform for business. I think that we had a skill gap around TikTok. And so I'm actively trying to remedy that right now and bringing in some really amazing people from the TikTok side. It's a platform I don't know very well. And so we are going to just bring in great people and align their incentives and see what happens. But fundamentally, I know there are business owners on TikTok. I just haven't been able to package my content in a way that did well on that platform. But if you're curious, since we made the incentive change, our TikTok is up 300% this week. So, you know, incentives work. And speaking of those platforms, I would recommend checking out my email. I did say it earlier, Mosey Money Minute. I put a lot of time into them. I think they're really good. If you like my books, you'll love the emails. It's like super, super distilled down that. Really proud of them. It's just worked out really well. And so I think you will like them. It's acquisition.com/newsletter. And by the way, if you haven't read the books, for the love of God, it's the best stuff I have. So like, if you like my videos, you will like the books more. Straight up. You'll like them more. They're better. And I feel like I can say that objectively. Like, I work on both both of them, and I think that, and it's just fundamentally, it's because I haven't spent 2,000 hours on a video. I have spent 2,000 hours on a book. So, um, $100 Million Offers, $100 Million Leads, check 'em out. Otherwise, stay awesome. If this was valuable for you, it would mean the world to me if you shared it with another entrepreneur or people inside of your team. It's the only way that the podcast grows, and it's the only thing that encourages me to keep doing this as I shout into the dark abyss. Um, But no, share it on your stories, text it to friends. It would mean a lot. I don't have sponsors for this thing. And so that is my only ask.