#337: You Can’t Lose If You DON’T Quit with Alex Hormozi Entrepreneur, Investor, & Philanthropist

You can't lose if you don't quit. Most of the games worth playing in life are infinite. The point of the game is to keep the game going. And so you don't win at being happy trying to win at marriage. Like you don't win at marriage, try and stay married. Right? You don't win at health, you're not going to like just finish health. You just try to stay healthy. And so people try and win at business, but the point is to stay in business. And so because of the nature of an infinite game, the point is to just keep the game going. And so there are different seasons and there's definitely periods that will suck. But like at the same time, we think forward to who we want to be later in life. Like I think about my 85 year old self a lot, like who that guy is and there's a lot of character traits that I want to develop or that I want that guy to have.

Come on this journey with me each week when you join me. You're going to chase down our goals, overcome adversity and set you up for a better tomorrow.

Fasten your seatbelt. I'm ready for my close up.

Hi and welcome back. I'm so excited for you to meet our guest this week, Alex Hermosi. He's an American entrepreneur, author and investor. Scaled four companies to 120 million-plus in cumulative sales across four different industries. Software, service, e commerce and brick and mortar in under four years, which is insane without taking on any outside capital. Hello, Sarah Blakely. He's widely considered an acquisition and monetization expert. He and his wife are the managing partners of acquisition.com a portfolio of companies funded by their own private wealth. The companies generate 200 million doll million per year in aggregate. He also makes mistakes and candidly shares his painful lessons with aspiring entrepreneurs to help them avoid his pitfalls. Alex, thanks for being here.

Thank you for having me.

I told you we need to add to your bio now. Also known as the only person me and my 16 year old son both follow online.

I should lead with that.

Yes.

It's crazy because the fact that you can capture that broad of an audience I think is pretty impressive and that's why I'm excited you're here. Other than the fact. And for anyone listening on audio, you've got to go check out the video on this one because Alex is wearing some weird breathing strip that I had actually heard him talking about on his podcast. So break down for us. What? I would never just pass this is me. Maybe it's Because I'm female, Maybe because I'm older than you. I would never wear a breathing strip on a show. Break it down for me.

I just want to breathe better. So I want more oxygen in my brain so I can say better things for your audience. And so if I can get, like, 1% better things out of, like, out of my brain to them, then I'll do it. And since they're listening, they won't even have to. To look at the eyesore.

But is that from, like, a biohacking thing or. You literally struggle with your breathing?

I had. I've had two nose surgeries. The first guy I ever went to refused to take me. He was like, you're a mess. He's like, I'm not even going to touch this. He's like, it is a mess in there. Then I went to one guy, he messed it up, and he was like, I know what I did wrong. I think I can fix it. So I went under the knife again, like a week later, again to the same thing, and then messed it up again. And so I started with nasal strips, and I continue to wear nasal strips.

Okay, that actually makes some sense because I was in a car accident once and had to have my nose reconstructed. And that is PA Painful, and I'm. The whole nose thing. And breathing.

Can't breathe. That's what's tough because otherwise I'd be on here. I'd be mouth breathing the whole time. So to the audience, this is my way of hopefully, you know, not breathing into your ears.

We appreciate you for that. So thank you. So thank you for wearing the nasal strip that. Now that I understand. All right, so, Alex, most people, as you know, look at you on the outside in. And because of social media, you know, oh, he's a baller. He's killing it. He's in great shape. He's got amazing wife. You're living the perfect life. So can you break down for us? I love the beginning of your story, your situation with your father. If you could take us back to how you started.

I kind of followed what I would consider the proven path or the well trodden path. Had a pretty, pretty hardcore dad, Middle Eastern father. I had no siblings. Mom wasn't really in the picture. And so it's just me and him. And so I very much was, like, supposed to live up to his legacy. And so that was pretty much what I oriented my entire life around.

And so he was a doctor.

Yeah. Yep. He's a plastic surgeon, and so went to Vanderbilt, which is a School in Tennessee, just relatively hard to get into. I finished in three years. I was president of the fraternity and did all the social thing. I was vice president of the powerlifting club. And then I graduated in three. And then I took a swanky consulting job at a boutique strategy firm that did defense contracting for the military. So space cyber intelligence. I got my top secret clearance when I was 20, I think it was 21 or 22, I can't remember. And I did that for two years. And I remember kind of like I was able to put the down payment on like my first condos, like in a high rise. I was alone, you know, 22 years old. I just remember looking over like out of the balcony and being like, is this it? The, the principal of the, of the firm. I looked at kind of like what her life looked like. And not to say that she wasn't enjoying it, but, but I was like, I don't want 30 more years of this because if it's just more of what I already have, then it's something that I don't want. And so I spent probably six months deliberating back and forth is about from year one and a half to two out of college, like saying I want to quit this and I want to start a business. And the actual catalyst for that was that I was kind of doing the two. And then I was going to go to business school. And so I was, I actually this weird side quest, but I, I studied for the GMAT. I did four hours a day for 16 weeks. I did 16 phone books. I did one phone book of problems every week. If you've seen those things are like this. And then I would take a test and I did every single week and I got it until I got above Harvard's mid score. Cause I wanted to go there. And the first question on the application was like, how will Harvard MBA help your short and long term goals? And I spent like three days staring at it because I was like, I want to start a business. And when I realized that I was going to forego two years of income, like incur debt, and then my starting salary afterwards on average at that time was 120 to $130,000 a year for graduating MBAs. I was like, I feel like I could not forego the income and not go $180,000 in debt for like, you know, room and board and all the other stuff. And I'd probably be able to make $10,000 a month by the time I was out. And so that was ultimately the decision that I had. Now, it took me six months to man up enough to tell my dad that I wanted to not do that. Because I think what was sad for me was that I think the proudest moment my dad had in his life was when I was the saddest. So, like, it was when I was. I had done everything. You know what I mean? I had. I crushed, you know, high school, I crushed college. I got the nice job. I actually took it at a firm that was close by. So he saw me all the time. We get lunch two or three times a week. And he was like, just, like, so proud. And it was tough because it was like, that's what I really wanted, like, my whole life. But I just felt so dead inside. Honestly, I just, like, I found myself not wanting to wake up the next morning, like, every day. I was just like. It's like, people talk about, like, suicidal thoughts, and I'm not trying to get heavy on anyone, but it was just like, I just didn't want to. I was like, if I just didn't wake up, I'd be fine. And so, you know, kind of being in that state long enough, I was like, I don't think this is good. And so it was actually confronting that. And there's been a common theme throughout my life that, like, confronting my mortality has been the way that I've been able to take the hard decisions. And so, like, the. The phrase that I kept repeating to myself, and I had kind of like that rock top moment on my balcony, which was like, I either have to die to him or I have to die to me. And I felt like I had been dying to me that whole time. And so I think, you know, there's. There's different sayings, different cultures, but, like, one for men is that you don't become a man until your father dies. And I think that you're kind of forced to do it that at that point, or you can choose to do it at an earlier point, which is really just having your own independence and making decisions for yourself. And I think it's when, at that point that I valued my own approval over my father's, which is what allowed me to take the leap. But again, it was like when I. I just realized, I was like, I would. I would actually rather let him down, then let myself down, which was just such a hard thing for me to do. I mean, just for context, everyone, like, I actually drove across the country to California from Baltimore, which is where I lived, and I only told my dad when I was halfway There because I didn't want to tell him when he was even, like, in the geographical vicinity to come and find me, because I just wanted his approval so badly. And a lot of people were like, well, I'm sure he was supportive once. He. And he's like, no, we didn't talk much. He was like, you're throwing away your education. We just, you know, I just paid all this money for. For you to school and, like, you're doing the path, like. And he obviously had his context of being a physician and, you know, struggling for a long. He came to the US With a thousand dollars, didn't speak the language. And so in a lot of ways, what I think he accomplished is much more significant than what we have. I owe him a lot for that. But anyways, we. We didn't talk for, you know, besides, you know, once a month for five minutes or whatever to say, I'm alive. But, yeah, I went to the. I went and started a gym, which in the Middle Eastern culture is not nearly as prestigious as, you know, consultant, investment banker, architect, engineer, you know, doctor. And so he was like, yeah, my son's a personal trainer after being the prodigal son. Before that, you know, acing the. The GMAT and, you know, acing the SATs and graduating lady in three and all that stuff that he could brag to his friends about. But a lot of it was because I think my. My father had. He had. His identity and mine were mixed together. So, like, he very much lived through me, and so he wanted me to do the things that he. He wanted to do. The hardest decision of my life, bar none, out of everything we've done was quitting my job.

I don't want to get weird on you right now. I was a psych major. I am not a psychologist, but I wonder if this has something to do with you not having kids yet.

What part?

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The interesting dynamic between you and your dad and a lot of the things that you said, I think everyone listening can relate to on some level or you know, someone that grew up in a similar family where there was so much pressure on a child to really live out the dreams of a parent and the fear of ever doing that to somebody else.

And I, and to be clear, like I don't think, I don't think he wanted to be a businessman but like it's just more like he had a path that was approved and you know, I could walk down that path or not. And so this was choosing not to do it that way and do it your own way I think is very, very hard because it makes sense to be risk averse as a parent. Right? Because like, you know, you look at the risk adjusted return on the move that I made was not high. Like it would have, it would have made more sense for me to stick the path I was on, you know, go to Harvard or Booth or one of the Stanford MBA or whatever and then graduate there and then go back to the consulting world or decide to switch to investment banking, you know, if I want to or you know, get to some hot new tech startup. And you know what I mean? Like those are all things that someone could brag about at a dinner, partner and party and those would be considered smart moves. But I'd really liked fitness. I was considering opening. One was test prep because I was good at taking standardized tests. One was fitness because I knew a lot about it and I enjoyed it. And the other was frozen yogurt because I actually thought this was like before the boom of frozen yogurt, I thought there was going to be a big boom. And there ended up being a big boom in frozen yogurt. But it cost 250 grand to open that up. And I only had 50 grand saved up. And so it was pretty much test prep or fitness stuff. And then I did a huge amount of work. I don't think I've even told the story, but I did this huge amount of Work with a professor at Vanderbilt. I thought we were going to do this thing together, and I did all this work, and then he ended up just taking it and using it. And to be fair, I was a kid, and I might not have understood. It could have been miscommunication, whatever it was. But for me, at the time, I felt very disenfranchised with the whole idea. And so all I had left was fitness. And there was this lady at the gym that I was going to who I was in good shape or whatever, and she asked me to talk to her about nutrition. So I just met her for lunch. It wasn't weird. I met her for lunch and I talked to her about her food or whatever, and then she just handed me a check for 100 bucks. And so that was the first money I ever made in fitness. I didn't even. I was like, oh, cool. I was like, I could make money doing this. That's wild. And so then I started something called a free training project. I've even talked about this in depth much. And the free training project was posted, you know, on my. The limiting follow limited following I had from college. I was like, hey, I'm starting this, you know, fitness thing. I'll. I'll give you, you know, nutrition plans, workout plans, et cetera, online. And this is like, before online training was a thing, this was 2012. In exchange, donate $502,000 to the charity of your choice. And so, like, I'll train you for free. Just like, I just want you have skin in the game. And so I had, you know, six people take me up on that. And then I took their results and I posted about them. And then I got, like, 20 more people who wanted to do it. And this time I was like, hey, instead of paying a charity, could you pay me? And they were all cool with it. And that. That little business did about $4,000 a month. And so that's what I pretty much lived on. And that's when I went to the west coast and decided to shadow a gym owner, because I emailed 40 gym owners who looked like they were successful, and one of them got back to me and hopped on the phone with him, and I was like, can I just, like, work for you or something? And he said, sure. And so I drove across the country. Like, I packed my food so I wouldn't have to, like, spend money, and I didn't have to stop. So I drove. In 36 hours, I drove across the country. I had nine meals packed, literally, like a cooler sitting on my Sitting on my side thing and then got there and he was like, I, dude, I'm like, busy. Like, you can't just show up here. I was like, oh, yeah? He's like, where are you staying? I was like, I don't know. He's like, what do you mean you don't know? I was like, I don't know. I just got here. It's like, geez. He's like, you can stay at my place tonight. And so the next morning, I went to the gym with him at 4am he like, shouted at the gym. He's like, anybody have a spare bedroom? And this guy came up to me. He's like, you can see one of my rooms. And I'm still friends with that guy today. Shouted that guy for three months. Started my first gym in Huntington beach, which was 45 minutes away and didn't have enough money for rent. So I slept on the floor of the gym for the first nine months. But by the ninth month, I kept making money. So it actually did do pretty well. But I just slept there. Cause I was cheap. But by month nine, I had the whole gym staffed and outsourced. And then every six months after that, I opened a new location until we had six. All this marketing presentation. And I was like, man, I need to get into this marketing stuff. Anyways, a year later, I opted in for that guy's group or Mastermind, and it was all Internet marketers. And I was just like a gym owner. I had no business being in the room. Honestly, I probably shouldn't have been sold. I remember asking the sales guy, I was like, so there. There's like lots of gym owners in this. He's like, oh, yeah, guys, you know, gym. Like, I swear, guys, he's like, just wanted to close. You do all this Internet stuff. And. And so he's like, get to the first meeting. Not only is there no gyms, there's not even a single brick and mortar business owner. And so I get up there and I'm like, hey, here's how I want to become America's Next Gym. I was called United Fitness. You know, I was like, here's how I'm going to open my next four locations, get to 10, and then I want to scale. And I gave this whole. This whole spiel. And he was like, I don't think you should be in gyms. And I. It was like, it floored me. I was actually. It was like, really devastated when he said it. I remember. I was like, what do you mean? He was like, I think you have a level 10 skill set and a level 2 opportunity. He said, I think you should be teaching people how to do what you're doing rather than doing it at the time. I, you know, I kind of have this belief where, like, if someone's not that you should take anyone's who's ahead of you's advice, because sometimes they're only one step ahead, not five steps ahead, and they don't see that they're about to fall into something. But, you know, if I pay for advice and I don't take it, I feel like it's the closest thing to burning money. At least earlier on in your career. I would advise you to do that later on. Advice has to be more nuanced. But anyways, I took his advice. I fire sold five of my six gyms. I shut one down over the next. I think it was like 90 days, and I started launching gyms. So I started flying around the country and doing gym turnarounds. So I did 32 turnarounds over the next two years. It's right around when I met my wife. She flew out with me, and so we started doing these turnarounds together. We hired her high school friends.

Well, a couple things back then. You're sleeping on gym floors. You're up at 4am you're working literally around the clock. And there is a lost art in today's world around this idea that you don't have to work hard anymore. People don't believe you have to. My own son is like, you can just turn on TikTok and become famous overnight. So I really like that element of your story that you have actually put the hours and the reps in. In every element of your business, and that you lost everything. You face major obstacles. I love the story. So. So if you can share a little bit of that, I think it's helpful for everyone.

So I sold my gyms, right? So, you know, this is my life's work at this point. I'm four or five years in, sold all the gyms. I had a little bit of a nest egg, and this was kind of like what I had to show for what I had built. So that guy that I did the presentation for in his little mastermind was like, dude, you're really good. You should speak at my next event. So I spoke at the next event as the resident brick and mortar expert. And then all these people came up and were like, I've. To this day, I've never been more mobbed in my life. Which is kind of interesting. Still Never. I was, like, bombarded. And all these guys, people came up to me and they're like, what can I buy from you? What courses do you have? And I was like, I'm a gym owner. I just showed you what I did. And finally one guy handed me his credit card and said, charge me for $5,000 and tell me what I get later. And I had a hundred business cards in my pocket from that one talk. And there was only 5, 600 people. I mean, it was crazy. So I got home, and of course, as any good salesman, I put everything into my Excel sheet of all the names and all the numbers, and I hit up every single person. I called the guy up and gave me the credit card. I was like, do you really want me to run this because I don't have anything. He's like, yeah, run it. And I was like, all right. So I ran it for $5,000, and immediately he was like, all right, what do I get? I was like, and that. And so it just so happened he had a gym that needed to be to open. And so by chance, of all the people that were there, a guy who had was about to open a gym needed help.

That isn't by chance. That is serendipitous. Come on.

I'm not a big woo woo guy. So for me, it was by chance that happened. And so I was like, great, I'll just launch your gym for you. I'll fly out, I'll sit at your front desk, and I'll just fill the gym up. And so that was. That was actually how the first gym launch happened. And so I flew out there. I think I did 191 sales in 19 days. It was like 100 grand. I was 20. Shoot, what was I, 25, 26? It was 100 grand in 20 days. And I was like, man. And I didn't have to staff it, and I didn't have to build the gym out or any of that stuff. I got to keep all the sales of a gym launch, except I didn't have any of the headache. And I was like, this is great. I could just fly around the country and just do one of these every month. Like, this is chill. And so that's pretty much what I decided to do. But that guy was like, dude, I've. I'm really good at running gyms. If you can launch these things at full capacity, he's like, I'll just come behind you and staff them, and then we can just split it. And that way every month you open a gym, like you own the gym. And so me being like, oh, of course. And he's like, but I've got some credit issues. No big deal. You'll have to personally guarantee everything and put all the money up. But, like, we'll split it after that. It's like, oh, yeah, sure. And so, you know, as the old saying goes, the money gets the experience, the experience gets the money. And so I very much live that. And so I launched the gym with him, crushed this big launch, signed all the leases and everything, did the build out. And then one morning I woke up like six, seven weeks into the launch and I had actually taken all the. Again, I didn't know. I was super young, you know, I mean, I put all the money that I made from the sale into the business account for this new gym. And he emptied the account, which was all the sale of my gyms plus the sales from that gym. And so I was like, dude, what are you doing? And he said, oh, I'm just taking my half the profits. I was like, what do you. I was like, what do you mean? He's like, I know you've been skimming. I was like, I was like, I'm here every day. Like, what are you talking. So I printed out the bank accounts, I went over to it, I was like, I. I went line by line, and as I like sat down to show this big thick thing of papers with the highlights and everything, he just threw it off the table. And that's when I knew that I had been skipped or robbed or whatever you want to call it. So the fact that he didn't actually want that meant that he didn't, he didn't actually think I was scheming anything. So anyways, I ended up shutting the gym that I launched with him down, which is why I sold by. Sold five and shut one down. Because it was a. It was a brand new gym. I was only 12 weeks into the gym and I shut it down, which is horrible. I signed a five year lease. It's terrible. I had like news reporters saying that I was like trying to take people's. It was horrible. I had a coach at the time, like a performance coach or something. It's like a headset, whatever. Headset, mindset coach. I was going through a lot and so he said, just do right by everyone. And just like, he's like, if anyone asks for refunds, give them the refund. Like, do right by the partner who wronged you. He's like, just do right by everyone and you'll come out of this Unscathed. And so it was so painful for me to write these refund checks to every single client out of my savings. You know what I mean? And, like, I couldn't. And I had to honor the contracts that I had sold in the beginning for the gym, but I couldn't sell any new people because I wanted to shut the gym down. And so basically, 100% of the rent and the payroll and all the cost of the gym basically just was just drained my. My savings because, you know, the average small business owner has, like, 28 days of savings on hand. And so, like, and I had no way to generate new money, so, because all the extra cash from the earlier clients had gone to actually building the gym, like, the equipment and the paint, the sign and all that kind of stuff. So I lost everything then. And so then Layla's obviously with me at this point. My not wife yet, you know, right as I met her, I said, you should quit your job and do this thing with me. And she says, I just met you from the Internet. No. And so I was like, all right, I'm going to launch these gyms and come back. And so I did, and I came with this big stack of contracts, and she helped me process them. We processed, like, a hundred grand in an hour when she picked me up from the airport, and she was like, is this legal? And I was like, yeah. She's like, all right, I'm in. And so she quit her job, and she started doing the launches with me. As I just lost everything in this gym. She actually launched a concurrent gym, and she crushed it. And so she ended up doing, like, a hundred thousand in sales. And that money actually paid for, like, all the refunds that I had at the current gym. And so at the end of this whole bonanza, I'm at basically nothing still. I haven't made any money. And so anyway, she's like, hey, we should keep doing that launch thing. Like, this worked, like, we could make, like, a hundred grand every time we did it. Like, this whole partnership idea was terrible, but, like, we should still do the launch thing. She got six of her friends from high school to quit their jobs. We're all selling shake mixes for MLMs, and I train them on how to sell, you know, gym memberships and gym programs. And so we had time to do one more launch before her friends were going to start, like, to quit their jobs, et cetera. And so her friends were going to start on the 26th of December, which is the best time, because that's when all the sales for new year start for gyms. And so we had one launch in December to hit. And so by chance, the gym that we were going to launch, I got reached out to because I'd spoken on a different stage for like trainers and something, and this trainer reached out to me out of the blue and it's like, do you have a sales job? And I was like, no, I don't have a sales job for you. And he's like, well, if you have anything. I was like, well, I do have this one gym that I have to launch next month, but I was planning on launching it myself. And he's like, well, where is it? And he lived 10 minutes from the gym. And we're talking nationwide. I'm in Virginia when I'm talking to the guy and it was in San Diego and it happened to be 10 minutes from his house. And so he's like, I have a new baby on the way, I've got a one year old son, I need this money. And so I was like, all right man, you just need to crush it. And he's like, I'll do whatever it takes.

And.

And he crushed it. He did a hundred thousand in sales. The problem was, so I knew my processing date. So like on Tuesdays is when I would always get my big deposit. And then I'd get Wednesday, Thursday, et cetera. And Tuesday came on that first week and I was like, there's no money. And I processed all the payments. Like I knew the payments were successful and I was like, what's going on? You know, I didn't mind it. And then the next week, still no deposit. So then on Wednesday, the next week I called and I was like, hey, like what's going on? They're like, oh, it's a standard review, we do it every year. And I was like, okay. I mean, I've been with you guys for five years. Like I've never had this happen. And they're like, no, no, it's just normal. I was like, all right, Another week goes by and then still no deposits. So now, now we've racked up like almost 100 grand at this point. That's just sitting in like escrow in payment processing. It's now Christmas Eve and I've called a couple more times. They kind of gimme the runaround. And so it's Christmas Eve now. I'm also at Layla's parents house, which I have never met before. We're six months into dating. She quit her job to go gallivancing across the country with this Guy that just lost everything.

You're feeling real good in this moment.

Oh, I'm crushing life. And so it's Christmas Eve. I'm on the phone, and I tell the guy, I'm like, I'm not getting off the phone until you send me money. It's like, I just. I will not do it. I will call. I will find where you live. I need to. Give me the money. Like, I. I was like, I have employees. Like, you have to. You have to pay me. It's like, it's not your money. I was like, we sold services. And they were like, that's actually not true, per the agreement. And it was a payment processing agreement. And if anyone doesn't know this, if you get flagged for anything weird. And the weird thing that I had was that I was running all of my gym launch stuff through my brick and mortar location in California. And so they were getting sales from, like, Canada and Virginia and Kansas, you know what I mean, that were running through this thing, but. But it was through a brick and mortar thing. They're like, you didn't get approved for this use case, so we're just going to hold it all. By the way, I actually never ended up getting that money, but they said they were going to hold it for six months. And I was like, I have this guy. I have to pay. Like, at least give me enough money to pay the commissions on these sales. And so he done 100,000 in sales. I owed him about $22,000 at this point. After all the refunds and losing everything and like, all that stuff, I had $23,000 left in my bank account. And so I wired the guy the money with the baby. And so I went from 23 to $1,000. And that was on Christmas Eve. And so Christmas Day, Layla's dad was like, you know, this guy seems kind of stressed, you think? And so the next day, the 26th, because all of her friends quit their jobs, obviously, to go support this guy, she went from the Internet. I had six campaigns, six flights, six hotels, six rental cars, six per diem's for food, not to mention commissions for whatever sales are going to bring in, which was $3,300 a day that was going to be going out starting the 26th. And so, you know, I sat down with Layla, you know, on Christmas, and I was like, hey, this might go horribly wrong. I'm kind of a sinking ship right now. And so, like, if you want to, like, not be with me, like, I respect it. Like, we're cool. And so that's when she kind of like grabbed my chin. And it's like, I would sleep with you under bridge if it came to that. I mean, that was probably when I decided I wanted to marry Layla. Anyway, she believed and that's what I needed at that, at that exact moment. And so I was like, I have a hundred thousand dollar limit on my, from my gym days. And they hadn't changed my limit on my amex. So I was like, I'm just going to max this out this month. And this could go horribly wrong. And so the next day, 3,300 a day started going off this card that I had, mind you, for everyone in the audience. I had no way to process money because I didn't have a payment processor. And so these guys are just stacking contracts every day. I'm getting 20, 30, 40 sales a day that are going through here and I have no way to process them. And so I'm on the phones every day with different processors. And by the way, if you ever get canceled from a payment processor, it's like going bankrupt in business, it's like you have this black mark. It's like one of the questions I ask, have you ever been turned down by rob processor? And so finally I get like porn and casino and online gambling, payment processing, which is a totally different world. They charge like 10% of all. It's like a crazy, like, it's ridiculous. Huge fees. They have reserves on top of that, which is like a rolling reserve that they keep a percentage and they give it to you six months later, ongoing. And so I think I was giving something like 15 or 17% of top line away to just process the money. And so I got processing turned on the last day of January and I was like, great, so I can run this. And the guy was like, not exactly. You have a $50,000 limit. And I was like, I need like 200,000 to run like the sales. And he's like, good news is per month. So on February 1st you can run another 50. And so I ran 50 and then 50 the next day. That covered my credit card bill of three, you know, 3,300 a day. Just for everybody who's keeping track at home, I'm still broke, still broke, just break even on my credit card. And then we got two more processor stuff spun up for like another 50 or another 75, and I got the other guy bumped or whatever. And so the next month I did, I think like 180 or 200,000 in sales that we were able to process. And we made, like, $30,000 of profit. And I was like, I think I'm in the clear. And then March rolls around. All of a sudden, Layla taps me on the shoulder one morning. This is, like, when I feel like I finally figured it out. Like, escaped death of, like, you know, I've done all this stuff, almost feeling good about myself. And so she taps me on the shoulder, and I turn around. She shows me her laptop. And it has, like, negative, you know, 399, negative 499, negative 599, negative 499. Just like. And she keeps scrolling this, like, ocean of negative transactions. And I was like, what is this? She was like, those are all the sales that we did from, like, last month and the month before. And I was like, what happened? What's going on? She was like, I got a text from one of the clients, and they said that the gym owner stood up on a chair in the middle of class and was like, everybody just like, refund. Just go home. I don't want to deal with this. Because we were taking gym owners who had like a hundred clients and selling like 200 more in a month. And so you go from a business as 100 clients, 300 clients in 30 days, and they. They just break, you know, I mean, they just. They don't have. They can't deal with it. And that was because I didn't understand as much as a business owner at the time. Like, you have to, like, look at more facets. I was like, that's their problem. We're here to sell. That's what we're going to do. But I held the bag on the processing still, because I always. I prefer to always control the processing if I can, but I didn't have, like, a risk mitigation, like, tool. And so I think that was like $75,000 in refunds. Mind you, I now only have like 30,000 that I just made from the month before. And then a few days later, she comes and shows me the laptop again. Another sea of refunds. And I was like, what is going on? And she said, yeah, one of the gym owners told all the clients that they should just refund through us and then sign up through him for half of what they paid us. Because we let you know, we'd fly in, we'd fill it up, and then we'd leave. And so they had the relationship. We didn't have the relate. We just made the transaction. And so it was like $150,000 in refunds. And I needed to make it up. And I, it was, it had to be profit in the next 30 days. And I had no idea what I was going to do. So we start selling more and more to cover the, COVID the refunds that are coming in. But the more we sell, the more refunds we create. And so it's this like horrible cycle that I just like, I like couldn't sleep, I couldn't breathe. As I'm not breathing or sleeping, I wake up, if you can call it that, and I start writing down ideas of like, what could I do? I was like, I could sell supplements to everyone. It's like I could try and pre sell next launches. I could try and get deposits from people. But like the numbers never made it to like 150,000 in profit. I was like, I'm not gonna be able to do this. Like, so I started looking up bankruptcy lawyers. I was like, I don't know what to do. And so what ended up happening was Leila comes in that morning when I'm writing these ideas down and she pulls up her laptop and starts working. And I was like, what are you working on? She's like, oh, my online business. I was like, she'd had this this whole time. She transitioned her in person training clients to online. She was a personal trainer for everyone who doesn't know. And I was like, how long does that take you? He was like, I don't know, like 30 minutes a week. I was like, how much does that make you? It's like probably four grand a month. And she was defensive because I was like so stressed at this point. She was like, hey, it's paying for our food. I was like, no, no, it's all good, it's fine. It's like, what if I just start marketing that we just cut out the middleman. Like, we know how to sell weight loss. We have all the programs. Just, we'll just make it under your brand. Instead of me being the face, you'll be the face and I'll just be the back end. I'll just like do the sales and marketing. She's like, okay. And so I again didn't sleep and took a lot of stimulants and made the best sales letter my entire life. We started queen transformation and so we started running ads. We started doing thousand bucks a day with her, just taking phone sales and just selling a 16 week program for 500 bucks she'd sell to a day. And I was like, holy. I was like, if we have all eight of our sales guys come, they can fly Home, they don't have to deal with the fact that they're on the road all the time. If they each do two sales a day, we do 8,000 a day. After cost and commission. I was like, you're pretty close to 150 in profit because we know all their costs. So I was like, let's do this. And so she's like, what about the gyms that were supposed to launch next month? Because I always had to pre sell a couple months ahead of time to make sure that I had enough gyms for all the guys. I was like, I'll just. I'll just call them during lunch and just say that we're not doing it. So I called the first guy up and I was like, hey, sorry, we're not. We're not flying out. And he was like, dude, I just maxed out all my credit cards and I just refinanced my house for this gym. Like, you. You blew up a buddy of my gym. Like, I know you can do this. And obviously his buddy was like, just a good guy. And we did, you know, didn't do anything weird. And it worked out fine. Honestly, I was in kind of like this really stressed spot where I didn't have a lot of empathy. And so I was like, dude, I'm not doing it. And he's like, please, man. And so finally I said, all right, I mean, I'll show you what, what I do to launch the gyms. I was like, but I'm not flying out there to save your ass if you can't close. He was like, no, no, that's fine. I just need leads. And so he's like, well, how much? And so I just picked the highest number I could think of at the time, which at the time was $6,000. And he was like, 6K. And I was like, yeah. And he was like, done. And I remember staring at the phone, like, I like, zoomed out at myself. And I was like like, holy, six grand. And then I was like, oh, what car would you like to use? And I started writing it down. And so I called the second guy, same conversation. He's like, how much? And I was like, eight grand. And he was like, done. I was like, holy. I called the next guy. Same conversation, how much? I was like, 10 grand. He was like, no problem. And by the end of the day, I'd done $60,000 in sales, selling licensed materials, all the ads, all the landing pages, all the scripts, the follow up sequences, how we set up the gym, like, all the stuff that we would do. And I already had all these materials because this is what I would train my team with. And so the only thing that was missing was just, like, giving them the ads and the landing page. Everything else I already had. And so he was like, all right, well, when do I get the access? And I was like, Monday. It was a Friday. And so then I put everything together, put all these videos in and just, like, put it facing outwards. And, you know, I got back in after selling that day. Layla came in the door because she was walking outside. We kind of walk in close and she's like, got another one. I was like, babe, you wouldn't believe what just happened. And it's like, I just made $60,000. She was like, what? I was like, yeah, selling the system that we were doing. Just selling that to gyms rather than doing it. She's like, so what is that? Is that what we're doing now? Like, I thought we were doing this other thing. And I was like, I think we're still in the gym business. I think we're just doing it wrong. And so that was the big. That was the big turning point when we switched from done for you, like, sales teams to a licensing model. I then called up all the guys that we had launched. We had 30 or so, you know, gyms that we launched. At that point, I was like, hey, remember how I ripped 100 grand out of your gym? I was like, want me to show you how I did it? And they were like, sure. As a total side ducks. I think this is interesting. Like, three or four of them were like, how do I know it's going to work? I was like, I literally did it at your gym. Like, at your gym. I did it at your gym. And they didn't do it. Like, just to show you how limited some people's belief sets are, which is. I was like, you saw me pull 100 grand in a month out of your gym? Like, what if you could do that every month? Didn't matter. So anyways, it sold, you know, whatever it was high 20s, 30. And in that next month, I made enough to make the 100,000, 150,000 in profit to cover the refunds from the. From the weight loss, the done for you side. And then from that point on, it was just like, it took off like a rocket. And so we finished that year at like 6.8 million, top line, 3 million in bottom line. And then the next 12 months, we did 26 million top line, 17 million.

In profit, all from the licensing.

Yeah, I was 27 and then we started a supplement company the next year I think we went to 37 million top line and 13 million bottom line is because I put a ton of cash in the inventory. I also over hired, I didn't know a lot about scaling. We went to 135 people in the business and yeah lots of lots of mistakes were made. We continued that and then in 2021 we sold the business to a private equity group called American Pacific Group at 46.2 million in an all cash deal. I still own a third of the business. We also started a software company in 20 so 2018 we started the cell phone company, 2019 we started the software company 2021 we sold all three of those. I sold 75% of the software and I sold 67% of the software and the sorry of the supplement and the licensing business. And so between the we took about 40 million in distributions before we sold and then we had our cash deal and then we took that and started acquisition.com and so the day after we sold which was also here's a weird weird coincidence, we closed the transaction with APG on Christmas Eve. So it was like exactly five years later from like the day I lost everything.

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The speed at which you turned it around from nothing to such a massive company is incredible to me. So well done. When you look back over that five year period and you look to other businesses and you help other entrepreneurs, what are the key takeaways that you share with people?

It's amazing what you can accomplish when you have no choice. Most of the hard decisions and the hard times, like I didn't have an option, you know what I mean? Like, or at least I didn't perceive that I had an option. Like when I quit my job it was like death or do this. And so then I did it. I actually had a bunch of partnerships at some point. Like when I had my gyms earlier on when I was like kind of newbie entrepreneur, shiny object. I had six gyms, I had a chiropractor agency, a dental agency, I had a supplement company that I started early with a different partner that I didn't know what I was doing and somehow I managed to make no money during all these things and I actually got into a DUI head on collision 60 miles an hour. And I told you about that mindset coach that I had. It was right after that that he was like, he was. He was Hispanic. He was like, Alejandro, he's like, your stress is going to kill you. He's like, you have these unmade decisions. He's like, you got to make these decisions. He's like, you know, you don't want to be in these partnerships. He's like, you need to close these loops. And so after I was yet again confronted with my own death and walked away from a head on collision at 60, after that, I felt like I could call. I could call anyone. I was like, hey, yeah, I know it's not working out. They're like, what do you mean we can't. I was like, yep. I was like, you can just hate me. That's okay. Because the tough part was that for most of this partnership, I was the rainmaker. And so, like, if I wasn't in the business, there wasn't going to be a business. And so ended all those businesses. And that's when I sold everything. Like, during that fire sale period. Like, that's when I sold everything. And so I think, you know, when I lost everything the first and second time, they seem like choices and they seem like, like tough guy, you know, But I didn't, I just, I didn't perceive a choice. Like, I was like, I just, I just have to keep going. And I think honestly a lot of the time when it was. When it was really tough, I just didn't give myself time to dwell on it. Like, it just didn't serve me. And so I just honestly didn't think about it. Like, I knew I was screwed. And so it's like, well, that's not helpful. Like, what else? Like, what can I do? And so just focusing on the controllables kind of in those, in those circumstances was like kind of my breath of air. Like my, you know, my safety or my lifeline. And so I guess four people who are going through it. I mean, I say this a lot, but like, you can't lose if you don't quit. Because, like, most of games worth playing in life are infinite meaning. Like, the point of the game is to keep the game going and so you don't win, you know, at being happy. It's like trying to say, like, I want to eat all the pizza I've ever for the rest of my life. It's like, it doesn't work that way. And like, trying to win at marriage, like, you don't win at marriage. Try and Stay married, right? You don't win at health. You're not gonna like just finish health. You just try stay healthy. And so people try and win at business, but the point is to stay in business. And so because of the nature of an infinite game, the point is to just keep the game going. And so there are different seasons and there's definitely periods that will suck. But like at the same time we think forward to who we want to be later in life. Like I think about my 85 year old self a lot, like who that guy is. And there's a lot of character traits that I want to develop or that I want that guy to have. You know, when we think about like you have your son, it's like if I think about somebody who's patient, it's like, well, that guy probably didn't get everything immediately. And if I think about somebody who's tough, it's like probably went through hard times. And so it's like I can't both want these character traits but not be willing to pay the price of achieving them. And so like, if I'm in one of those seasons, I'm like, oh, I'm just paying the price tag for this trait that I want to have. People want to talk like mental toughness and whatnot. It's like, well, how do you know if you're mentally, quote, tough if you haven't been through anything that's tough? And so I think a lot of ways the hard circumstances that we go through are the gift of proof or they give us evidence of who we really are.

The good way to look at it. But I feel like these days, who hasn't been through hard stuff? Don't you feel like everybody has been?

I wholeheartedly agree. It really just comes down to how we respond to it. There's a great quote I heard from Donald Miller about the difference between villains and heroes. I don't know if you saw it, it was really good. He said. So an interesting characteristic between heroes and villains is that they have the same origin story. And so if you look at the hero is usually alone, they're an orphan. And the point is they have some sort of tremendous pain that they have in their early days. But if you also look at villains, they usually have a scar on their face or they look maimed in some way, they've got a limp. And it's to just signify that they've gone through hard times or they've been through painful. But the only difference between the hero and the villain, which is so Interesting is that why they're so similar is only how they react to the pain. Right? The villain says, like, you hurt me, world, and I'm going to hurt you back. The hero says, you hurt me, world. I'm gonna make sure no one else goes through this. And so it's just how we react to pain and hard times that I think defines a lot of the character that we ultimately have.

I like that. I had never heard it before. All right, so you mentioned that you were the rainmaker in these partnerships. What made you a rainmaker in so many part?

What.

What are those special skill sets or talents?

I knew how to market, I knew how to sell. And so, I mean, fundamentally, like, you have to be able to generate demand. You have to be able to convert demand. And so you can know how to recruit affiliates to go get your business. You can learn how to get referrals from your own clients. You can learn how to run ads. You can learn how to do warm outreach to friends and family. You can learn how to do cold outreach to strangers. You can learn how to post content. Like, all of those are different ways that you can get customers or at least leads. And then from that point, it's like you have to learn how to persuade people, which is, you know, for me, I had my rocky cutscene that no one saw, which was like, I did 4,101 sales selling gym memberships, but no one. No one sees that part of the story. And so, you know, I get a lot of comments. People like, oh, so eloquent when you speak and whatnot. I was like, I talk to strangers, 20 consults a day for years. Like, years of 20 consults every single day. Talking to Sandra, who's coming in, you know, and she's in a rush. And your kids drawing a permanent marker on my wall. I'm trying not to lose my. So I can close her credit card so I can pay to repaint the wall. You know what I mean? Like, those skills were forged.

That's how you were. The rainmaker was from sales and marketing. Okay. So in your book, offers, which this book did incredibly well. I've actually read the book. It's amazing. For anyone in business, what are the takeaways that you want to share with everyone listening that can help them in their business?

I had a really early mentor. This is two weeks before my first gym, and I hadn't. I didn't have a gym. And it was a gym mastermind, different guy. Everything was going way over my head. And they were saying all these Were like, cpl cpa. I was like, I don't know what the hell is going on. And so he pulled me aside because he saw I was like really lost and I paid like $3,000 for this thing and I had no idea what was going on. He said, hey, you want to know the secret to sales? And I was like, yes, please. Like, I thought it was like one thing. I was like, yeah, this is going to be awesome. So I pulled out my notebook. He said, make people an offer so good they feel stupid saying no. I like highlighted and wrote it down. It changed my perspective on how selling really worked, which is like you can learn to be exceptional at sales or you can make an incredible offer and it's a lot easier to make an incredible offer than be exceptional at sales. And so it's like a hack, it's a shortcut to getting people to say yes is try and find a way to put as much value as humanly possible to actually solve all their problems. And so if you do that, then you will get a lot more people to say yes. And so like the nature of the book is all the components that make something more valuable. And so there's four variables to value as least as I define it. One is that you have the dream outcome that someone wants. So if you. So for everyone who's listening, just imagine a fraction. So you got two variables on the top, two variables on the bottom. So one is you got the dream outcome. And between different categories. This is where like make money things in general tend to sell for more than like beauty things. That's just because, or at least for guys, they will value them more and so it's more aligned with their dream outcome. Now maybe for women it might be flipped, but point is that's one element of value, all right. The next is perceived like of achievement, which is like the opposite of risk. How likely do I think if I buy this thing I will get what I want? Right? There's always a risk factor that we, that we discount any kind of purchase. Like we think we're going to get something, but we have some element of chance that we're not going to get exactly what we want. And so we increase someone's perceived likelihood of achievement by providing ancestral proof. It's like third party edification, authority, etc, and so like a simple example here is like if a doctor just graduated from medical school and they said they want to do a weight loss surgery for you, for example, and there's another guy who's done 10,000 of them, which of them, would you pay more for the guy who's done 10,000?

Why?

Because you're perceived like an achievement's higher, right? Even though that guy might even spend less time with you than the guy who is not as experienced. And so all the other factors are the same. It's just the person's experience, your perceived likelihood goes up, so you can actually charge more. And the cool thing about that is that I'm willing to pay more before I get the surgery just because of my perceived likelihood, right? So those are the top two parts of the equation. So you want to make something that people really, really want and make it really, really likely. Now, I spent the first half of my marketing career, or really business career, only focused on the top half, which is like, I just need to make bigger promises and show people more proof over and over and over again. But the big behemoth companies focus on the bottom part of the equation. And there's two parts.

There's.

You've got the time delay, so which is the opposite of speed, right? So, like, how fast is this going to happen? Or how long do I have to wait? And so I'll give you a B2B example. So if. If I own a marketing agency and I sell to chiropractors and I sell leads, and there's two agencies, one guy gets on the phone and says, hey, all right, we're gonna need to, you know, get everything spun up for you. And it'll take us about 60 days for you to start seeing leads from our stuff, right? That's version one. Version two is as soon as you, the business owner, hang up and you give them your credit card, your phone rings with a lead, and you pick up the phone. Now, the actual lead might be the exact same thing between day one and day 60, but how much more valuable the service would that be? Significantly. And so, like, one of my favorite business models in the world is look at a business model that's already proven and just do it in half the time. And so it's like, whatever you can do, just if you can do stuff faster, people will value it more. It's like speed is the ultimate hack for value. And so it's the bottom half of the equation. So we want to decrease the time delay between when they buy and when they get. And then the final part of the equation is effort and sacrifice, which is kind of two sides of the same coin. So effort is things that you have to start doing as a result of a purchase that you don't want to do. Like so you might have to wake up early to go to the gym. You might have to be sore right after you work out. There are all things you have to start doing as a result of the decision. On the flip side, you have sacrifice for the things that you have to stop doing that you want to do that you can't do as a result of the decision. So you want to go to Margarita Mondays, and you want to go to Taco Tuesdays, and you go with your girls or whatever, you want to sleep in on Saturday, and you have to sacrifice those things. And so the idea is, if we want to create a more valuable product, we make sure that it's. It's what people actually really want. We show that it's really, really likely they're going to get it, and it's going to be really, really fast. It's going to be really, really easy. And so when we demonstrate all four of those things, then we create a really valuable product. And so that's kind of the structure overall, which I call the value equation. And then when we're actually making an offer to someone, we want to think about what are the, what are the next things that they're struggle with. So I think about it in sequence. I give a weight loss example because most people can just kind of relate to it. But, you know, you sign up at a gym, like, what's the next thing you need? Well, you need to go to the grocery store because, you know, buy new food. It's like, okay, well, can I solve that problem? After they do that, what are they like? Literally, what's going to happen? It's like, well, they're going to put it in their car. They're gonna have to unpack when they get home, they're gonna have to prep it or they're gonna have to store it. It's like, okay, well, what about meal prepping? Is there something I can solve there? Okay, cool. And with any of these things, we can solve the problem in a lot of ways. It's like I could give someone a. A cheat sheet. I could give them a course, I give them a workshop. I could walk with them through the grocery store if they're a new customer, like every week, every. All new customers do a grocery store with me. Like, there's a lot of ways you can solve the same problem. And so the idea is I write down every single problem that the customer is going to experience immediately, sequentially, after they make the purchase with me, and then think, okay, what are all the ways I could solve it? And Then I look at every single problem and all the ways that I could solve each of those problems and I think, okay, which of these provides the most value and is the lowest cost to me? Me. And so then I call it trimming and stacking. But basically you trim all the things that are probably too expensive for you, too costly, based on whatever price tag you have, and the ones that can still solve most of the value. Because what will end up happening is that when you do solve all those problems, you also create an even more compelling offer because then you start solving problems the person hasn't thought of yet. And so then you can bring that up and they're like, this guy knows more about this than I do. And then they feel like they're in very good hands. The perceived likelihood of achievement goes up. They feel like it's going to happen faster, it's going to be easier. And so like by making a superior offer, you become more persuasive and so you actually rely less on your, your rapport building skills or like your obstacle overcomes. It's just like make stuff people really want and they'll buy it.

That's such a. I mean, I love how the way that you frame it up, I love the equation and it's so, so accurate. And I was even thinking back to your gym launch days and then how you, you know, ultimately launched the supplement company and always looking at what is that next need that somebody's going to have. So thank you for sharing that. Tell us about how did you get so big on social media and why did you go all in on social when you had already built up so much success? I'm so interested to know that.

Yeah, I had a friend who's pretty famous and we were sitting around the kitchen counter. He's one of the guys I was talking to when I was considering selling versus not. And you know, he gets recognized when he goes out, you know, in public. And you know, he was telling me how he gets like death threats and letters from weirdos and stuff like that. And I was like, dude, I want nothing to do with this. I was like, I just want to be rich and anonymous, that's going to be the play. And he just like looked at me like square in the eyes and he's like, if that's the price I have to pay to make the impact I want to have, he's like, I pay that price every day of the week and twice on Sunday. And I just felt like he was calling me a pussy. And so I like, right after That I started making YouTube videos. And, I mean, there was. I would say there were chinks in the armor before that, right? So, like, I was really big on, like, no branding. I had, like, actually, I think my seventh podcast episode of all time, this is six years ago of all time, said stop branding. And it was because for local gyms, like, to be fair, the product is the brand in a local market. A lot of times, like, you don't have enough to really affect the marketplace. But also what they need to do if they want to, like, go make more money is like, old outreach. Run ads. Find affiliate partners that can send you, like, those are the ways that you'll immediately make more money in the business. I had made all my money doing that, and I told everybody, like, that's all you need to do. Just master those things. You don't need. Worry about anything else. Like, content's a waste of time.

Time.

But then George Clooney had his exit for a billion, and then Huda Beauty sold two thirds, or, sorry, a third, at a $600 million valuation. And then Kylie Jenner was on the COVID of Forbes as the youngest billionaire. And the Rock had Teremana. And then Conor McGregor had proper 12. And so each of these, and he had a $600 million exit. And obviously, Teremana is worth 6 billion now. And I have this fundamental belief that if someone's making more money than me, they know something that I don't know. They know more about the game of business in some way than I am, and I should learn from them. And so when Kylie was on the COVID of Forbes, it fucked me up for a week because I was like, man, I got beat by a chick, and she's younger than me. Because I felt pretty good about myself, you know what I mean? I was like, I got $100 million net worth, my young 30s, whatever. But this girl's billionaire, and she was a decade younger than me. And so.

And a Kardashian.

Yeah, right. I try not to give her that because I want to think, what can I learn from this? Right? And so I was kind of forced to realize that I think my whole perspective on brand was wrong. And so it was all of those things. And then that conversation happened. I decided to go all in on Brand. And so I started making YouTube videos. Channel started growing. And then I had a guy reach out to me and said, hey, you don't have to do anything. Here's the school offer. He'd read the book. I'll just cut your YouTube videos into. Into shorts, you don't have to do anything. Like, literally just give me permission. And I said, sure. And so he did it. And then the short started blowing up. So then we hired a team and we brought everything in house. And, you know, 6 million person later in 18 months, like, here we are.

Well, where can everybody find you? Where can they get your podcast? Where can they get more of Alex?

Mark, your calendar is the next book. $100 million leads is coming out in August. So that's exciting. Beyond that, I have a podcast called the Game. I think it's with Alex Ramosi. If you type in Alexi, you'll find me wherever you listen to podcasts. But if you. If you're more of like an Instagram person or a TikTok person or a YouTube person or a LinkedIn person, I'm on all those platforms. If you just type in H O R M o Z I so hormozy, you'll find me.

Well, guys, check him out. The amount of valuable free content he is putting out at frequency is incredible. Alex, thank you so much for all the work you're doing to help educate and help everybody else out there.

Thank you so much. I appreciate it. Thank you for being letting me be here.

All right, guys, until next week, keep creating your confidence. I decided to change that dynamic. I couldn't be more excited for what you're gonna hear.

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