Our Gameplan for 2025

6 months, 12 months, 18 months, where all of a sudden that second person eclipses the first person. And so it's always this game of finding someone competent enough, but also has that high rate of learning.

People hear that and it's like, just hire smart people. I think that is true, but I think that oversimplifies it. It's actually create a culture where intelligence is trainable. Don't do things quickly. We improve things quickly.

The value is when someone who has done the thing that you're trying to do offhand comment that seems insignificant to them but is completely significant to you.

Every single presenter, every time a question was asked, did the exact same thing. They listen to the question, they clarify it with the person for a second.

And then go.

Boom. Welcome back to another episode of the Espresso Hour where the running joke is, this is going to be a little bit longer than an hour. I don't know about today, but we are again hyped up on caffeine. It's 2025.

We're back at it.

I just crammed this guy. Oh, Happy New Year, dude.

Happy New Year. This is.

I think.

I think this is the last official day that I can drink out of a Christmas coffee mug. And then I gotta take all the Christmas decorations down this week.

Dude, you have the best espresso cups. Those wide ones. The experiential difference cannot be understated. I need to get some of those.

Yeah, I'm excited for this year.

We.

We got some updates to share. We got some. Some big things in the works. Where do you want to start?

I think we should start with an accountability commitment to film Espresso Hour every week this year.

Okay.

I like it last year, and we've said it like a handful of times on our various episodes, but it was like the first thing to go was Espresso Hour whenever we went into a heavy build sprint. I think we need to see it as a very big rock because I regret not having six months of these last year. You know, in the middle of the year, it's like, what happened? And arguably part of the conversation is almost prep work for all the other work.

Right.

In bouncing some of these ideas around, we usually emerge with like one or two small golden nuggets that prevent us maybe from like, chasing a shiny object or going off track or something like that. So I think that just all the other benefits of putting out content and people getting to follow along on the journey, the benefit for us of slight forcing function for clear thinking, we should take into account and Therefore, keep doing it.

I agree.

Yeah.

I think the biggest benefit that I've seen from Espresso Hour is that we just hired a, a new team member, great team member, who basically said in not so many words, I religiously listened to Espresso Hour. And I think that that was so revealing to me. Where obviously this is in no way a large podcast at all. It is extremely niche and it is extremely small. But seeing that lead to someone really, really great joining the team, no other metric really matters. You know, that, that, that is the biggest roi. And yeah. Of all of the six month sprints that we should have documented, like we did a ton these past six months. And I know you feel that way at every six month interval. But yeah, I feel like we left a lot of insights on the table.

The idea and this will tie into some of the lessons we talk about today from the Hormuzzi workshop. But having a talent nurture content stream that is bringing you opportunities that actually aren't for your main product. Because, yeah, I'm sure that there's a good chunk of listeners here who ended up signing up for PGA or bought something, but usually it's people who have bought something who just want the behind the scenes look. And then as we start to either expand platforms or launch a new product or bring on someone like an HR director or something like that, I have a feeling it will come. Or the best leads for that role will come from this podcast and not from our content in general.

I agree.

Right.

Because you see behind the scenes of the company that you'd eventually work for. It makes a lot more sense than like a customer seeing that behind the scenes and then buying.

Right.

It's because you're selling something else. You're selling working for us rather than buying something.

Yep.

I've really been feeling, you know, you said it in such a pithy way a year ago. And I keep thinking about it where it's like, when you make 10 grand a month, tell everyone. When you make, you know, 100 grand a month, tell no one. And then when you make a million a month, tell everyone again.

Right.

You know, like there are these different intervals that I notice where you know, when you're making five or ten grand a month and you're, you're a like indie hacker on X or something. Right. Like, you have no problem sharing everything. You have a very small business. But I noticed that the bigger the business and the more mature the business gets, the less that people share. And there's almost an irony in that where the Bigger our business gets, the more I wish other people shared because you run into more and more nuanced problems. And I would love to see inside of other people's businesses. So knowing that as a consumer that that's what I would like, I feel like I want to share more of that with other people.

And I think we took some steps towards that with our all hands meetings, sharing full revenue profit numbers. Because I don't think we'd done that until two months ago.

Yeah.

And then that was slightly liberating because it was. We did it. And then whatever fears you have about sharing numbers like that melt away. And I think Hormozy put this well. He's like, if the biggest companies in the world have fully audited public financials, like you think you can't share your small business numbers to your small team.

Exactly.

And so we started doing that and I think it becomes valuable to do publicly as well. And maybe we'll continue to learn where it's like 10k. Tell everyone. Hundred k. Tell no one. Million a month. Tell everyone. 10 million a month. Tell no one. There's these ebbs and flows that come with each. Each level. Or we just keep documenting the entire thing, you know. Yeah, we'll see. The. The right choice will emerge.

There was definitely a faulty belief there of, you know, not sharing or how much to share. I thought it was really cool that in November was it. It was November that we did a million.

Right?

A little more. It was like a million two. And then we shared that with the team and I thought it was really cool how much that got everyone excited and really motivated and was like, whoa, reinforcement. We're on this rocket ship. This is a very cool place to be. And that was a faulty belief in myself, you know. And then now experiencing it, I can see all of the other ways. So great segue into takeaways from this Hormozy workshop. So full transparency for everyone. We started the year going to the acquisition.com headquarters in Vegas. We just got back two days ago. We spent two full days with the team. If you follow Alex or Layla, then you know that this workshop product is sort of their flagship product. It makes a ton of sense because businesses like ours go and you're at this two day workshop and then that basically creates the deal flow for their firm. It's very smart. Every single PE firm or VC firm could take a page out of that book. And we learned a lot. And it was really interesting. I wrote up a whole piece on my takeaways. Dickie. I know you're going to publish your soon too. And on the note of what we were just talking about something that I thought was really cool and really insightful that I got from Layla was talking about how when an employee wants some sort of upward mobility, you know, they, they want to get promoted or they want a raise or they, they want to move up in the company. Uh, she explained the exercise that she does. Very direct, very tough love where she goes, okay, here's where you are. Here is the job description of the role that you're essentially saying that you would like. And I'm going to highlight in red all of the things that you are currently not doing or currently do not have the skill. And having that very direct conversation and saying, it's not that we don't want to give you the opportunity, we would love to, but I just want to make it very clear visually and literally what would need to happen in order for you to become that person that would be able to do that. And I feel like the reason that came to mind is I feel like more and more, and I think both Alex and Layla, and especially Layla do an amazing job of this is more and more I'm realizing that the whole secret to any sort of leadership, like true leadership, the best companies are always the people that tell you the truth. And they either tell you the truth about your own role or they tell you the truth about what's going on in the business or they don't, they don't hide things from you.

You know, what I learned from Layla on that point was you we don't really use job descriptions very much. And so we talked on our all hands meeting about maturity and maturing as a business, maturing as leaders, maturing within each individual department. And that probably starts somewhere along the lines of formalizing and maturing each role's description.

Right.

We've, we hired a lot last year and I think we had the right idea in doing so in terms of expanding capacity, but in giving hyper clear instructions, KPIs deliverables of each role, it was more bring on and then figure it out rather than start from a place of like extreme clarity in what we're hiring for. And I think that makes sense when you have less well defined departments and responsibilities. When you're a more mature company, it's far easier to say here's this hyper specific role and here are all the things that it's going to do with the numbers it's responsible for.

Yeah, the, the follow up to that insight was again, so many of the things that I got from this workshop.

Were.

It was never like the main thing. Like, I feel like each of the presentations they did or like the big point, I was like, yeah, that's helpful. I appreciate how you explained it. But all of the insights I walked away with were single sentence insights that like happened between moments. And I think that's the part that people really misunderstand. Like, they think that. I was seeing so many people comment on my write up on Twitter or on substack and they're just like, who would pay for this? Like, this is. You could read this in a book and it's like you are completely missing the value. The value is when someone who has done the thing that you're trying to do makes an offhand comment that seems insignificant to them but is completely significant to you. Right. And another one that I can't remember who said it very offhand was, oh, yeah, we've learned that checklists are more helpful than SOPs. And it's like, okay, well, why is that? That's because sops are typically documents full of bundled words. It's like, in order for you to move up into this next role, we need you to be more of a leader. That doesn't actually mean anything. Right. And so I think going off what you just said, Dickie, the upgrade that we can certainly make to probably every single role in our business right now is looking at what are the core functions, AKA what are the actionable things that that person needs to do that creates the success in that role. And that checklist, for lack of a better term, is what allows that person to be all of the bundled words that makes them successful in that role. And I thought that was such a great insight.

Yes. So reversing up the stack on one thing you said before, that in terms of who would pay for that, it's something I think about a ton is success is somewhat correlated to how much you have to pay to learn something. And my goal is such that I can invest 10, 20, 30, 50, $100,000 in something that is an absolutely horrible investment for almost everyone else except me.

Yep.

Because who would pay for that? You shouldn't pay for that workshop. If you do not have a business of this size, you would not have gotten a positive return. Every mastermind we've joined, we've gotten positive returns because we put ourselves in a situation where we're able to invest a large sum of money to make an even larger sum, which is a very good thing. But if you don't have that foundation where you can see return by investing that amount. Of course, it doesn't make sense. So I think that's just like a small nugget when people read that, it lacks so much context of like, of course. No, it doesn't make sense for you. That's why I'm writing this for free, because that's what you'll get value from. But you don't. You lack the context to really soak these lessons in.

Yep.

A second thing I had, one of my big lessons here from the workshop was excellence is a remarkably high number of extremely small details done well. And I think it's related to what you just said of, like, a workshop like that. When you take away a bunch of these, none of them on their own are these massive insights. But collectively they are going to serve us at different levels, at different. Across different priorities. And I spent a lot of time writing down things that I knew would not be useful right now but will be useful in the future. And that, I think is a sign of a good workshop. But besides that, I said that on the workshop itself. Right. The event operations, several things stood out. There were clearly iterations from prior events. Like, I don't know if you noticed, they had multiple signs that said restrooms, dining area. And then you turn left and you immediately saw another sign. So, like, let me try to walk through this, but you, like, walk at this door and the. Both the bathroom and the dining area are to the left. So you go left, and then immediately when you turn left, you see another sign that says dining area this way and rest restrooms this way. So they point opposite. And I was like, they. They made it quite literally as easy as possible for you to find both. You make one turn and then you see. And you see the exact next instruction. And that is such a microcosm of the way they do things with their employees. And that it is. You do this thing and then you immediately do this thing. And I'm going to reinforce you as you do each of them.

Yeah.

And that I found just so fascinating. And I found it very. You know, when you see a small detail like that, that is a mic microcosm, just to say it again of the bigger company, it just makes sense why then that then carries over to, oh, we have wi fi signs posted everywhere. Right when you need them, not during a presentation, it's off to the side, but between breaks, boom, it's on the screen. Like, why? Because everyone needs it at that moment. I had another one that was, you know, I bet day one, they Ran the workshop. They probably didn't have a barista making fresh cappuccinos for everyone, but they probably said the coffee was okay. And then they were like, we're gonna have a barista next time. And boom. What a great experience. I had like three cappuccinos each day just because for the warmth of it, like a nice one in my hand versus a shitty one from the machine. And then I thought the fact that we took a nice 15 minute break every 90 minutes, like, I was less tired throughout the day than I would have been during some of the other ones where it's like four hours and then a break.

Yeah.

So just very clear iteration process that I think they pride themselves on across the board.

Yeah, yeah.

Now. Now we're pulling at the thread. So many, so many other things. Things come to mind. Another one on that topic is I think one of the coolest parts of the whole experience for me was seeing every single one of their portfolio company leadership team members all present the same way. So every person had a presentation. You know, their hiring director did one on hiring, their strategy director did one on strategy, et cetera. But they all followed the same or similar format. All of their slides looked the same. Obviously, their storytelling technique was the same. Their tone and delivery was almost all the same. And I felt like I was. The coolest part about that for me was I really enjoy watching and listening to both Alex and Layla share what they know, but watching their team share what they know in the same way. That was the moment I sat there and I went, so many more things are trainable than I have ever allowed myself to believe. I've always thought, you know, only I can do that or only you can do that. Dickie and I started to realize as we were sitting there that 99% of the questions that popped into my head could have been answered by someone else on their team. It didn't have to be Alex or Layla. And that's the true measure of, you know, how much can you get yourself out of the business?

Right.

And I thought their metaphor of how do you build a unicorn? It's with three different animals. You get a rhino.

A butterfly, a.

Firefly, a horse, and a rhino.

Yeah.

It's like, okay, if you had to unbundle a behavior, it might not be one person doing the exact same thing. And I think that's where people, ourselves included, go wrong. On what it looks like to. To train someone. It's. You think you're going to train all the same behaviors to the exact same person, but in reality, you should slice and dice it accordingly.

Yep.

To give an example, I don't know if you noticed this, but have you ever watched a Mastermind recording and someone's speaking on stage and they start to ask questions to the audience, and then they. The audience asks a question and then they start answering and you have no clue what the question was?

Yep.

So that happens when you're at the event too, because if you can't hear it and they don't pass a mic around, you don't hear it. Every single presenter, every time a question, when asked, did the exact same thing, they would go. They listen to the question, they clarify it with the person for a second and then go, okay, so for those of you who couldn't hear it, the question is blank. And I was like, that is so just clearly drilled across the board of, like, you do not answer questions without repeating it. So 1. You understand it into. The rest of the team or everyone listening can hear it as well.

Yep.

And those micro. Micro behaviors are what is. Create such a great presentation, a great workshop across the board. So that was just one of my biggest lessons.

Yeah, that was really cool, too. Another. Another thing I've been thinking about a lot, and I. I still haven't landed on the best way to articulate it. I just. I just know that it's true. A big reason why I originally wanted to go to this workshop a couple months ago when we were, like, looking at tickets and stuff, is both of us. But I'll just speak for myself. I have been very much in a season where essentially the only type of content that I consume is Alex's content. Like, the only time I consume very much in a day is when I drive to the gym, because that's when I'm not working and I just turn on his podcast and I just listen. And I have consumed so much of his stuff that there's this weird parasocial relationship that happens. You know, it's like this informal mentor from afar, and because it's through the Internet, it's such a hard thing to explain where it's like, you know, it's a real person, and yet some part of you, like, can't wrap your head around it because you're. It's this relationship through a screen. And a big reason why I wanted to go to the workshop was literally just to see him and Layla in person, because I think something happens. And I've observed this in myself over the years as I've, like, learned from people and then ultimately gone and met them. Something happens to the way that you're able to hear the information once the relationship goes beyond just the screen. And then all of a sudden it's like, even though it's the same stuff, or even though we come home and I'm like, oh, okay, yeah, I'm listening to the podcast again. I can hear it in a different way because it's almost like the primal part of my brain has now been anchored to. This is actually just a person, right? And in the best way. Like, obviously, I look up to them both and I think they're exceptional, but there was something about meeting and seeing them that normalizes them, that then normalizes for me. Like, oh, yeah, there's no reason why, like, none of these things are above you. Like, just go do them, you know? And I. Anyway, that whole loop I've been trying to figure out how to articulate, because a lot of times, again, people are like, why would you go do something like that? Like, what is the value? And it's like, well, just reframe the question. If. Let's just. Let's just put some arbitrary pretend numbers on it. Let's say that before you meet someone, everything you consume of theirs. Before you meet someone, like, in real life, everything you consume of theirs, you retain or are able to GRASP or understand 10% of it. But after meeting them in person, something clicks in your brain, and from that point forward, you're able to grasp and understand and internalize 20% of it. Spending five grand to go from 10% to 20% of understanding is an absolute joke. But it goes back to your point, which is. But that doesn't make sense for so many people because you don't even have a vehicle to invest that in in the first place.

I left with a similar thought around, like, a normalized success, but I also left with an extremely uncomfortable feeling that I've been sitting with and that I think when you listen to someone as much as I have with him and, like, see their operation and things like that, but also see its simplicity and relative straightforwardness, such that. Why does Alex make such great content? Well, he's very smart, writes a ton. But then seeing the friction to do the things that he wants to do that generate the highest output are basically zero. So, like, upstairs, he's got a podcast studio. His video guy works in the podcast studio. So at any time he is on call, if Alex walks in, it is under five to 10 seconds before he is filming and talking. He does no uploading. Not think of that. Like, would you be able to make bet more and better content. If that was true. Yes. Okay, it makes sense.

Right.

Sometimes you just have to see it. But the knock on effect is as someone who typically on the scale of like doubts ability versus is exceedingly confident in ability, I sit on the further doubt side and seeing it and seeing its possibility. I left with a feeling of not pursuing more or like a bigger presence or a bigger business. Things like that is an active choice rather than not pursuing it because you're not sure. But like now I know I could and I see the roadmap and the relative straightforwardness and then it almost bakes in like default failure in that if I don't, it's like I'm already failing. I don't have the exact words to. I'm still working through it. Right. I think it's, it's more uncomfortable to know you're capable of something and not achieve it, then think you're incapable and not achieve it.

Yeah, great point.

Right.

And that I think is the pithy way of saying it and that I left the event with a little bit of a thought of going in, I was incapable and leaving. I'm very capable. And now that presents a new feeling to sit with that I actually haven't experienced. So that was my big macro emotional takeaway of it. Uh, I do think it will end up serving me over the long term. But that is, as people have asked me, like, how was the event? I was like, I'm still wrapping my head around it, but here as I've started to talk it out, I think that's the best way to put.

Put it.

Yeah, yeah, those are all great insights. Same thing. I very much observe the simplicity of what they do. And more and more I think it's a combination of experience, paying down ignorance, tax, burning my hand enough times, you know, doing the wrong thing enough times. And probably just part of maturity and getting older is more and more I realize that the entire game is fewer things done well. And if I could summarize, like where I went wrong so much earlier in my life, especially early 20s, there's a reason my mentor called it early 20 syndrome. It's that you think that progress is always by adding more. You think like for me to be more successful, I should do more, I should take on more, I should another idea, another product, another business, another. And. And I feel like at the end of 2024, I was doing all my end of year reflection and just what went well, what didn't. And over and over again I keep learning the lesson, remove Remove, remove, remove. Just do something very, very simple. And I can see how that gets magnified the larger the business or the larger the net worth, because fewer things move the needle, you know, when you're, when you're worth 50 million. Well, going and starting a, you know, a paid newsletter that makes you five or ten grand a month doesn't do anything for you, right? So you inherently have to pick more strategic and larger potential vehicles, which inherently means there's fewer of them, you know, and in order to do something like that really well. Well, that's not going to happen over a month or a year. That's like a five or ten year commitment, you know, and so all roads lead to fewer options. Done well. So you might as well start doing that sooner because that is the only path to getting to that place anyway.

You know, and through that pursuit. I thought one of the bigger golden nugget sentences was the ultimate sign of righteousness. The ultimate size of the business is the sum of the intelligence of its people.

I loved that one.

And I want to take this a step further because I've been thinking about that one a lot. And so Alex, he put out this definition, but he also has this definition of intelligence is speed of learning, right? So really, as a math guy, the sum or the, the ultimate size of the business is the sum of the speed of learning of all its people, right? So if, if those two are true, commutative property means that that is true as well. So, and then if speed of learning, it might not be the exact formula, but the ultimate size of the company is correlated to the speed of its iterations, meaning the amount of time it takes to make a either upgrade or change or removal or whatever, and then keep moving, moving. And then lastly, if iteration is directly correlated to the size of the company, and that is trainable, then you can train the size of the company to be bigger by creating a culture of learning very quickly and so reducing that all the way down. The sum of the business is how quickly it learns.

Hmm.

And so if you do the same thing, right, so let's just pick an example. If everyone in their department has a very clear number that they're optimizing, and there are a subset of behaviors that optimize that number. If all of those numbers go up very quickly and they're the correct numbers that lead to the ultimate size of the business, then if everyone is improving that number the fastest, the business grows the fastest and ultimately reaches a bigger size. And so that is just something I'm sitting with of that is true. And the implications of that truth of the ultimate side of the business, people hear that and it's like, just hire smart people. I think that is true, but I think that oversimplifies it completely because it's actually create a culture where intelligence is trainable, people can become faster learners within your company. And that is most evident when you look at what we talked about already of the presenters, where that has built a bigger business. Because they are better presenters, they get better workshops. More people refer to the workshops because their presentations within the workshops were trained and learned very quickly. Now, such that Alex has removed himself from 90% of the present, present presentation.

Right.

And my guess is his goal is to remove himself from the pitching of the workshop upsell eventually, once he has enough reps and iterations on it. And so I'm just thinking about that across the board is what would our business look like if everyone fostered a culture of iteration?

The reason hire smart people is vague and unclear is because smart is a bundled term. And if you were to break that word into two pieces, the way that I would interpret it is you have current intelligence or experience up until today, and you have rate of learning. And sometimes the mistake is that you can hire someone who's very smart and possesses a lot of knowledge today, but their rate of learning might be negative, like, they might have peaked. And this is as much as they're willing to learn in their career. And then you bring them on and they're like, I either do it this way or I am unwilling to learn. And it goes negative.

Right.

Similarly, you can also hire someone very smart who might not possess a ton of knowledge today, but their rate of learning is very high. And there was a couple months ago I was like going back through the archives of Alex's podcast and I listened to something from three, four or five years ago where he was explaining this exact concept. And he was like, that is the. That is essentially the trade off that you make when you're hiring people is someone might be very smart today, but, you know, like play that. It's like buying a stock and then it is only ever going to appreciate by 3% per year from here versus buying a different stock that is less valuable today, but goes up 15% a year every year. And it doesn't take very long, 6 months, 12 months, 18 months, where all of a sudden that second person eclipses the first person. And so it's always this game of finding someone competent enough, but also has that high rate of learning as well.

Yeah, that is the more important thing to hire for.

Yeah.

Is. And he, you know, intelligence definitely helps, like raw horsepower. But a big function of improving something or iterating is your ego.

Right.

And so you can't hire someone with a big ego because they're less likely to iterate. There are a lot of character traits that go into that, which I think are interesting.

Yep.

Speaking of bundle terms, I thought that their three values.

Their.

Their three core values were really good. And I started to unpack why. So their three values are unimpeachable character, sincere candor, and competitive greatness. I was like, okay, why are those good? Well, they have three values. One that makes you a good person to work with, which is unimpeachable character. And so they said that is home at work, everything just unimpeachable character. They have something that incentivizes learning and feedback, which is sincere candor. So their whole thing around that is they give the feedback that needs to be heard, not that the people want to hear. And then they have a third that drives high performance, just working hard in general, and that's competitive greatness. I was like, if you combine those three things, and it gives a very clear. There are very few things that can happen in the company that they cannot point back to being either aligned or misaligned with one of those three, if you have any kind of character lapse, unimpeachable character. If you are not making an improvement on something you're not learning, you can give them feedback. And if you're not here to win, you're not.

Yeah.

What are you doing?

Competitive greatness.

Right.

And I thought that was really interesting as I heard about hours, which are extreme ownership, relentless tempo, and championship energy. It's close. But as I think more about them, I think relentless tempo versus relentless iteration would make more sense as a value, because tempo just means doing things fast, but iteration means improving something fast, which takes a different way of thinking. And then extreme ownership, I still think makes sense because you can reference. Like, are you pointing to things inside of your control and working to fix them or outside of them?

Yeah.

And then championship energy is really, like, the same.

Yeah.

Way of competitive greatness.

Right.

And so I've been thinking a little bit about that of, like, we don't have a value emoji that incentivizes and gives feedback when someone learns quickly. And I think there's something to do something there of like, if we were going to tweak that iterate, that third one, for lack of a better word.

That'S I like that we would do. I like that clarification a lot.

You know, we don't do things quickly. We improve things quickly. Yeah, yeah, I like something I'm thinking about.

Yeah, I want to make sure that we also touch on the value creation.

Okay. Yeah.

Cool.

Because I thought that this was such an interesting point. It's interesting for us where we're at in our business, but it's also fascinating to think about. As you could say, niching down happens at every level. And acquisition.com has niched down on this very specific moment in time where a large amount of value can be created that is directly tied to Alex and Layla's skill sets. You know, because there's all sorts of different niches you could pick. You could pick early stage consumer tech, you could pick late stage. We're taking companies public. But this, this moment in time, I. I thought was really interesting and no one had really explained it this way to me before. So you want to break it down.

Sure. Okay. So let's do a Finance and Business Metrics 101. You have revenue, which is all the money that comes in the business. And then you have ebitda, which is earnings before interest, taxes, depreciation and amortization. Said another way, the amount of money comes in before you pay interest on any debt you have, before you pay any tax, before you increase your earnings by depreciating assets you have. Because that actually doesn't add money to your bank account. But you can decrease your tax burden by depreciating something. And amortization is when you amortize a cost across a long period of time to again, make it look like you made more money than you did. Very correlated to free cash flow, which is just how much money came in.

Yep.

So EBITDA is what most companies trade as a multiple of. So if you have a million dollars of profit, you will value the business on that for no other reason than it basically correlates to how many years until you expect to recoup your investment in the business. Until. Yeah, that's it. So if you make. If a business makes a million dollars and you pay a 10 multiple on that and you buy the business for $10 million, if nothing changes, you will get your investment back in 10 years. Now, obviously there are ways to grow that, and so that's exactly what they focus on. So why don't I share screen and. And talk a little bit on.

Yeah, and just, just to. Just to clarify, because this is, I think, a nuance a lot of people don't understand. Revenue is all the money that comes in. EBITDA is profit, right?

Yep.

And so that, that, that is the, the thing. And I think a lot of times people think, myself included, when I was building my first business, I made this mistake too. Like, you think that you're gonna get valued on top line revenue. You're not, you're gonna get valued on profit.

Exactly, exactly. So let's look at this model for one second. Last year we did $4 million in EBITDA. And at that level, based on the different metrics that they have you walk through, we arrived at a multiple of two. So that was a function. The first day of the conference was one workshop on creating your valuation model. Basically, everything that they do for companies that they're interested in investing in, they will do that model. And so what happens is based on the size of the company, just based on your ebitda, you can get a higher multiple, Right. So the biggest companies in the world have big multiples because the stability of the earnings, the bigger you get is actually you, it's higher.

Right.

You think smaller business, it's more likely, like you could keep that amount. It's less likely. The bigger you get, the more defensible you are, the more things you've put in place to continue getting that, so you get a higher multiple, more profit. So right now if you multiple, if you gave us a 2 multiple on 4 million, we would value the business at $8 million.

Right.

Now if we then said, okay, let's get to $10 million.

Right.

So we only increase the business by 2.5.

Right.

2.5X. Pretty aggressive amount of growth.

But profit, it would probably mean tripling the top line.

Right.

And then the profit from that would be going from 4 to 10.

Right, exactly. But in the crew, in the value creation process of going from 4 to 10, you do so many things like another acquisition channel or removing yourself from the marketing or hiring executive leadership team that makes sure that they're able to run the business without you or multiple products or whatever it is that allows you to get to this number. Inherently, again, makes it less risky, which means people are willing to pay more for it because they don't need to recoup their money as quickly.

Right.

If you pay a higher multiple, you know that you have a higher chance of getting all that money back. And so you can wait a longer time to do so. And so in the process of going from 4 to 10 million, the valuation of the business goes from 8 to 80. So it's a 10x return, which is a thousand percent. That's the most interesting thing of their model to me, and you said it already. It's that you can basically create 10 times the value by only 2.5 in the company at this stage. So we need to chart it. But, like, return as a function of EBITDA growth is highest. It inflects right here, right beyond this, it would actually deflect. You would not get that much higher of a multiple going from 10 to 20 would not see the same level of return. And so there is a large percent of return on time and effort and energy and attention there.

Yeah.

So that's what we spent the first day doing. And we share these numbers on our team, all hands. And I don't know if you noticed this, Cole, but, like, that's an ambitious thing.

Right.

And so part of. Part of what Alex and Layla were saying on the vision for your company is you need something with a big enough vision of the ultimate size such that all of your employees can see themselves reaching their vision underneath or at least building skill sets that would eventually allow them to reach their ultimate vision. So when we laid out these numbers of, like, our goal is to build an $80 million company over the next couple of years, everyone use that language, they're like, wow, we're part of a $80 million business. Like, that's the goal. Like, I want to be part of $100 million business, which inherently gives everyone trajectory within it.

Right.

And so it's something I think a lot about. And as an aside, I think that is true for the company. I also think it's true for the creator. So you need a big enough vision for your followers to pursue their own underneath yours.

Right.

So why do we learn from Alex at this stage? It's because he's going for something much bigger than we are at the moment. Right. And so you, as a writer, like, why are beginner writers able to follow you? Because you're trying to become the most diverse writer on the planet. You have to have a big enough vision and cast that. And that was my actual corollary takeaway to this. You need this on the company level, but you need to talk about this as an individual to eventually attract the amount of people on your journey that you possibly could, because they need to see that they can achieve their goals. Like, if. If alex only made $2 million in revenue, I'd stop listening to him because I'm not learning anything. And so you have to just continue to expand your vision to keep growing in this Game as well, which I thought was a nice addition.

That's a terrific point. It's a great way. And that's one of those things I feel like you, you know that so unconsciously and yet making it conscious, you go, oh, not only does that make so much sense, but it also gives you direction. Like, I know I now I know what to do, I need to keep raising the bar for myself.

Right.

And something you and I have talked about over and over again on this journey is like at each, at each plateau, AKA each moment where you realize, oh, we've just scratched the surface. You know, every time you reach a new high in it's, it's the, the reward gets more and more short lived because you wake up to more and more of your potential, which shows you how much further you have to go. Yep. And something we've said over and over again to each other is, you know, but what's the alternative? You just going to stop? Are you just going to go back? Like, no, once, once you wake up to that next tranche of your potential, you just, you in, you have to, you have to keep moving. Something else about the, the valuation side that I, that I found really interesting is it makes a lot of sense why they play at that sweet spot. In the past, I, like when I was younger, I always had such a hard time understanding how does, how does a serial entrepreneur build multiple companies and sell them for 50 or 100 or 200 or $300 million like every time, you know, and after this workshop and seeing that valuation model and seeing that moment where the value really skyrockets, another takeaway for us is, you know, it normalizes. That $100 million business is not that big. No, it's really not. Like we, we are two years of work away from potentially having $100 million business. And that is from a valuation perspective and that is very cool. But again, it also normalizes, you know, this is not that difficult of a thing. There's levels of difficulty. We're not talking about building Amazon, you know, a very niche. Another one of their insights is, you know, and every niche basically can produce $100 million business. The problem is most people just stop after year two or three or four or five and it probably takes seven to 10 years to do that, you know, so a lot of really cool and empowering takeaways. And I'm excited to, to be on the journey and see where this goes.

Yeah, I'm excited to go back there. I think having March 19th is like a two month trial of like let's not, not trial but like constraint. Let's see where we're at on some of the initiatives we have. I think we can talk next week about some of those initiatives because we're going to talk with Daniel today. Get clear on those. I'll be live from Mexico City in a week. Speaking a little espanol at the beginning of this. Hopefully.

Hopefully.

And I am very excited for this year. I think there are a handful of of key pieces and decisions and opportunities on the content side that I'm really excited for. I think we've the big nugget of not bootstrapping departments anymore. It's finding a more talented person to do the bootstrapping of it. Lots of good things that I do think we will take away at multiple levels of growth from here. But first we have a handful of things. Sales manager, create high quality YouTube content and then see where that takes us and go from there.

Yep.

Yeah, well this was fun. This crystallized a lot for me. Like these are things that are probably going to take a couple weeks to soak on anyway. But yeah, what a great forcing function and container for this.

Yep.

And so that's all for this week's and I say weeks because we'll be back next week for another episode of espresso. What's the secret word that someone listened to the whole thing? Workshop. Let's just keep it simple. Workshop. Use it in a sentence. Highly recommend going for anyone listening. That's above a million dollars a year in revenue. I don't think, I don't think it's useful below that. I think before that your return is not going to be that high other than potentially seeing it's possible. And that is always a decently positive return. But you just need to sell more stuff and make more content. Like that's 90% of advice that they'll give you below a million so but above you'll see some strategic things on on how to get to 3 to 5 to 10. So that's where we're on the path to. Don't need to set any real hard line goals to try and stick up to other than make content together. Express our week after week. So that's it for this week. We'll see you guys here. Secret Warriors Workshop. Leave a comment with your biggest takeaway so we know who our most avid espresso our listeners are. If you're on YouTube, subscribe like comment. If you're on Spotify, hit five star. We need some more five stars on Spotify.

We do.

And that's it. I'll see you guys next week. Peace.

See everyone.