From Broke At 26 To $100 Million Net Worth By 31 (Alex Hormozi Interview)

I have come to accept that I love working and I don't need to judge myself for that or take in other people's judgment on how much I should, quote, do. Like, this is my life and this is what I like doing.

Because I'd never heard of you before and I was like, A, this guy is popping up all over my YouTube all of a sudden. What the hell is going on? And B, he's saying that this gym, I don't know, I called it a course, which actually is incorrect.

I was like, there's one, if there's like one thing that I could make just for the, almost for the audience's sake, cuz like we're, we are much closer to what a franchise would be. Um, and overall in the very beginning, that was what the big decision was like, am I gonna go the franchise route? Cuz I had 6 working locations, I was 26 years old and they, you know, they worked. And that's when a mentor was like, you should stop owning all these gyms. You need to license the model out. And so that was when I kind of transitioned from B2C to B2B. What you might not know is that for 2 years, I actually, because I wasn't confident, I was like, I know it works in my 6 markets. I was like, but does it work in all of these markets? So my wife and I actually did 32 gym turnarounds in the next 2 years. So we'd fly out in person, fix their pricing, change how they did their layout, change their sales.

So just like a consultant, like, like a management consultant for a gym.

It's exactly that. And then from there, we, you know, we figured out we cleaned it up to just like completely dial it in. And then I would love to say it was some stroke of brilliance of like, and then in my master plan, I decided to start licensing. That was not what happened. We ended up doing these launches and the flaw of the business model was that I didn't control the fulfillment. So we would go in, we would charge nothing. It's pure performance. We'd fly in and I would charge 100% of the upfront cash collected that we would do while we were there. So we averaged about $100,000 in cash collected in 21 days, and that's what we would average per gym that we'd come into.

So that means each gym is making an incremental $100 grand a month from your—

So if I had, if I were launching 8 gyms in one month, we would make $800,000. We would.

Got it. Right. Oh, that's, and this was when the model before you were like—

Exactly.

Doing gym launch.

And, and so what ended up happening though was like, and it started scaling really quick. I was like, fuck, this is, this is the game. Like, this is what I need to be doing. This is awesome. And they didn't have to spend money on ads. They like, they did literally nothing. They gave me a place to go market and sell. Is basically what happened. And so what happens, we would dip out and then all these customers that we sold would then be fulfilled by a facility that was struggling because that's why they called us. So they typically had pretty poor product and I didn't have the bandwidth to stay there for 6 weeks on top of that and retrain trainers and show them how to set up, like I didn't have the time to do it 'cause we were marketing, selling most times we were there. And so anyways, we would fly out and then what happened in an unfortunate percentage, They basically were like, hey, you signed up and paid this guy $500. I would give you the same thing for $200. Refund with him and just sign up and I'll do everything through me. And so within a matter of months, I had, uh, like $150,000 in refunds between like 3 facilities because they talked to each other. And then I was like, fuck. Yeah. And I already incurred the cost of the marketing, the flight, the sales guy, the hotel, rental car, everything.

Well What was the name of this gym franchise? This, this—

it was Gym Launch. It was Gym Launch.

Okay.

But I'll tell you this, the original concept was Gym Rescue. Um, just like Bar Rescue, that was kind of the idea.

Um, but you said gym owners didn't want to be rescued.

Bingo. So it's— who doesn't want to get launched though, right? So it's Gym Launch, even though you're already open. Um, and so nice branding switch. Uh, and so anyways, we were like, okay, this is not the model, something's wrong here. So I had to basically keep selling more every month to cover the refunds from the month before. It was horrible, very stressful. And so my wife had a little side training business that she had kept. She was doing like $3,000 or $4,000 a month. And I was like, you know what, screw the gym thing. We know how to sell weight loss, you know, direct to consumer. That's what we're good at. I was like, why don't you become the face? I'll go in the back and I'll just run the, you know, I'll run the acquisition side and we'll sell like 16-week transformations just over the phone. And so we started doing that. That's it.

That doesn't seem like a good idea, does it? Right.

I mean, it started working. 14 days we're doing $1,000 a day switching it.

And I just would have thought it was so crowded.

We're, you know, I mean, we're good. Like, we're good at that. You know, I mean, like, we— that space we understand very well. And so we were able to do that. And I was like, all right, the 8 sales guys can come in. We can do $8,000 a day selling these, like, the transformation programs. Great. And so I had 8 gyms that were supposed to launch the next month. And so I called him up and I was like, hey, we're not doing the thing we were doing before. You know, you didn't pay us anything. So best of luck. You know what I mean? Basically, it was kind of what it is. And then the first guy was like, dude, I just refinanced my house. I just maxed out my credit cards. Like, I need this. My buddy, like, filled his gym up with you. Like, I know your thing works. Like, I just need— please, like, help me. And so we heeded and hawed. And then finally I was like, all right, man, listen, I'll show you what to do. I was like, but I'm not flying out there to save your ass if you can't close. And he was like, No, no, that's fine. That's fine. And he was like, well, how much? And this— that was like the magic moment where I was like, oh. And so just to show you where I was at the time, I picked the highest number I could think of with the intention of getting him to say no because I didn't want to do it. And so I said $6,000 and he was like, done. And I was like, I just remember looking at the phone and being like, holy shit, $6,000. And so I hung up the phone and then I called the next guy who I was supposed to cancel on. Same spiel. And he was like, how much? And I was like, $8,000. And he was like, what are you giving these guys?

So you're giving them a playbook to sell in their market, which included what? What did they do? But you did—

you probably actually didn't even know what you were going to give them.

Well, so we had already had the entire— the entire front end process was super, super lubricated. So like, these are the ads, these are the pages, here's how you place them, here's the targeting. Once they come in, these are the 5 texts that you send. Here's how the reminder sequence works. Once they walk in the door, here's how you set up your lobby. Here's where you need to sit. This is—

that's the stuff that a gym owner would send to a client who wants to get trained.

So it's not a course. It's also not like EOS. It's not like a backend operations thing. It's, it's like a marketing machine. You would, you'd basically license—

I licensed the acquisition. So we were the ads. So it was ads that I was in. Cause I was like, these ones work. So I would run these ads that I had written to pages that I had built. And I would, and so what I was doing is—

But on, on their URL, you basically were, you were a services business.

Yeah. 100%. We're a services business. And the training component was like, okay, well, how do you sell? So instead of getting one-on-one, I was like one of the— and so what I did was I actually gave them my internal sales training. So it was this thing that I put my guys through. And like a lot of— it's kind of interesting because I fell into this where I think a lot of the, the e-learning space try and create stuff to have stuff rather than creating, uh, as, as short of a time commitment to get someone from point A to point B, which is I needed to get a guy in who used to be selling Shape Mix for MLM and get them to close $500 deals day one with 2 hours of training. And so that training is what I gave to them. So I already had everything, I just didn't have the marketing part. So all I did was I built the marketing part over the weekend 'cause I already had the ads, I didn't make a training for it, but the training for like, how do you weigh them in? How do you do the food stuff? How do you, like all that stuff I already made 'cause I had to do that during the Gym Rescue time. So I literally just added in how to run the ads and then the whole product was there and we helped them implement it, implement the acquisition system within the business. And the average gym collected $30,000 in additional cash in the first 30 days. So we would do $100,000, but them not being as good as us still did $30,000 in additional cash in the first 30 days. And so the price point for the system was $16,000. So they were stoked. And then at that point we signed 3-year licensing agreements for $42,000 a year. So they were like, what else do you have? And what happened? And what happened?

And what happened?

And what happened? And what happened? Because all of a sudden they go from 100 members to 250 in 2 months and be like, how do I hire trainers? How do I scale a sales team? How do I, you know, be like, and then all of the other problems emerged and we already had done this because I had 6 gyms. So I was like, here's my ads for trainers. Here's how I train them. Here's how we set up the classes to maximize square footage. Here's how we do the ascensions into semi-privates. Here's, and so we just, We just did the whole thing.

What could I Google to see one of these gyms? I want to see like, like, did you do that? I know you use ClickFunnels. I think I could tell by the favicon because I like ClickFunnels too. But you— what, like, can I Google something to see one of your clients, one of your students? I don't know what you call them.

Yeah, one of their gyms look different because they're all— they don't, they don't take my brand. So franchises, system, fee, name. right? So we were just System and Fit. Otherwise I'd be operating as an illegal franchise.

And so let's zoom out for a second. So you basically go from, for those who don't know the story, and I, I only barely know the story, but the story is you open up a couple gyms yourself. So you open up a gym, I did, and you get to 6 locations.

Yeah.

You're sleeping on the gym floor, which is always, you know, any business I do, I'm just gonna sleep in a garage at least one night so I could say that. But, but, but you know, you know, maybe, maybe you did the real deal where you, you actually had to sleep there. I don't know.

So 9 months.

9 months. All right. So you're sleeping on the gym floor for 9 months. Uh, you end up getting 6 locations off of cash flow. So, you know, you're not like, you know, getting a bunch of investors to come in or whatever. And somehow, some way you stumble into this, like, I don't know, like a mastermind or a retreat by Russell Brunson. The, the, or I dunno if he hosted or he was just there. Um, who's the ClickFunnels guy?

Mm-hmm.

How did you even get to that event? And then I want to ask you a couple questions about it. Yeah.

So for, for avoidance of doubt, I had 2 partners that after I had my successful gym, uh, one was the ex-COO of Broadcom, number 2 at Broadcom, $10 billion company, um, and the other guy had 22 tanning salons. And so the Broadcom guy brought in the tanning salon guy and was like, hey, let's scale this thing. And I was like, awesome. Long story short, the partnership didn't work out, um, and so I ended up opening the next 4, 3 on my own, um, and I opened up 2 more with them, and then I ended up buying out both of them over time. So just for—

did you have a job before this? Because you're only 29, 30, 32.

Um, I was a management consultant before that, so I quit my management.

Makes sense.

And then, and then started this.

Um, the question that you asked though originally was, so how did you end up at this thing where it's at this hangout or this mastermind or this meeting where you, where you realize I'm in the wrong business, I shouldn't be running gyms, I should be teaching other people how to run, run their gyms.

Right.

How did you even end up at that thing?

It was— it was— and it was like Russell's idea, right? At least I saw the video. It was wonderful.

So I am— so the long story compressed was 2 years before I went to that mastermind, I went to Traffic and Conversion Summit because I knew I needed to like learn more about marketing and like my gym owner, like I'm not an internet marketer. I was like, not— this is not my world, you know what I mean? I was like, I got to learn more about marketing, so I'm going to go to this marketing event. So I go there and one of the side rooms is Russell. And he goes and pitches ClickFunnels, but he couldn't actually do the stack cuz they weren't allowed to sell. So he did his entire sales presentation and then literally just stopped before the buy button. And I was like, I want whatever. I was like, screw the gyms. I wanna learn how to do this stuff. And then like most things, because I couldn't buy, there was nothing that I did. And I went back to my life for 2 years and that was it. And then when I was having some sort of existential crisis, cuz I was now 26 or 27 at the time, you know, all the gyms were, you know, they were making money and I remember like texting one of my managers and I was like, hey, do you need anything? And he was like, I think we're good. I need some ink, you know? And I like ordered on Amazon, sent him ink, and then I was done for the day. And I was like—

Trying to be useful.

Right, I needed to be useful. So I Googled, I was like, you know what, that Russell thing was really cool. So out of the blue, I Google his name and the first link that comes up is, are you one of my dream clients or something? Which was directly to his mastermind. So I applied to the mastermind. I got sold on the mastermind and transparently, I should never have been sold on this mastermind. It's for internet marketers. And I was the only one.

And it's like $30 grand, right?

And I was the only brick-and-mortar business owner there. And they're like, oh yeah, tons of gym owners. And I've already told him, we laugh about it now. But like, anyways, I show up and I'm like, all right, all the guys show their funnels and all the stuff. And I was like, yeah, I own a bunch of gyms, I'm trying to get to 10, I've got 6. So that's kind of— I'm just here to learn, you know. That's what—

yeah, that's where I'm at.

Yeah, yeah. And so I walked through my acquisition process because we were, we were getting 30 to 1 on the front end. So 30 to 1 LTV to CAC ratio in the first 30 days.

right?

Not including my, my recurring on the backend.

And I walked through everything, which basically means, which means you're making 30, 30x what you were spending.

You spend a dollar on ads, you get $30 out on cash in the first month.

Yeah.

So when you do these launches, which is, which is like a good, for a lot of brands, like 1 to 3 over a year would be all right.

It was insane. I mean, so it would cost us $3 to get a lead and 1 out of 5 leads would give us $500. And the reason that it wasn't more than 30 to 1 is that that's me keeping the average with the sales guys. But like when we ran it and I was selling and we were working leads, like we get 100 to 1. It was insane. So anyways, he saw these numbers and was like, what is going on? And so anyways, I walked through it and he said the sentence that changed my life, which was, Alex, you shouldn't be running gyms. You should be showing gym owners exactly what you showed me. And right now you're in a level 2 opportunity with a level 10 skill set. And that was— those were the exact words that he said to me. And it honestly hit me like a ton of bricks because I was like, this is my vision. United Fitness, we're going to be America's next gym. We're going to make America healthy. Like, we've got this. And but, you know, he made more money than me at the time. And so I was like, if I don't listen to someone's advice, then why am I paying for it?

And I saw an interview with you and you said something that I've had this exact moment before, which is you meet people who are doing You know, on whatever the scoreboard is, they're, they're, they're richer, their business is bigger, their valuation's higher, they're younger, whatever. So they're more successful, quote unquote. And, uh, you meet 'em and you're like, all right, there's nothing more special about them than me. Okay. So that's the first realization. I want what they have and they're not, they don't have something I don't.

Yeah.

All right.

So then, you know, how do I do this? And I, it seems to me like that's what kind of shattered the glass of that whole like business plan that you had was that realization. Is that right?

Yeah, 100%. I mean, I didn't even know what an opportunity vehicle was. I was like, what do you mean? He was like, you should like— and I didn't—

I— same.

What was that?

Same. I don't even know what that means. I don't know what that is either. Yeah, I remember, I remember what I didn't know what that meant either.

Yeah, well, I mean, I define that now as the number of potential units to be sold and the gross margin per unit possible. So it's just one times the other. And then the third multiplier would be supply and demand dynamics within the space. So like if I were to try to get into telecom, amazing TAM, amazing potential gross profit per unit sold, terrible supply demand ratio for me to enter, right? So it's like, how do I measure the opportunity vehicle? So those are the 3 that I use to measure that vehicle. And so in this instance, he was like, okay, you have all these gyms that you can sell, you have a huge amount. And the big one that he saw was like the amount of potential gross margin per unit sold was enormous, right? And so For context, our second year of business is in the licensing business. We did $26 million top line, $17 million in EBITDA.

Amazing.

Wait, say, say those numbers again.

It was $25.9 million in top line and $17 million in EBITDA.

For the licensing.

First, I've got a bunch of questions about that. That was in year one. What year two? You said, okay, first of all, what made you, you said that you were getting this 30 to 1, um, uh, LTV to CAC. What, what were you doing that was so good? Just good copywriting? Are you just a good salesperson on the phone? What was so good about you? Well, first off, Facebook was way cheaper.

In 2013, you know what I mean, when this whole thing started, right? So I mean, like, just the cost per lead was insane, the percentage of people who would convert on landing pages was higher, everything was more responsive, et cetera. But from a, like, what we were doing is we were offering an irresistible offer, so we had a free 6-week challenge is what we'd offer people. When they would come in, we'd walk them through, you know, what the program was, et cetera, and then the shtick and the reason it was so cool and compelling was that if they lost lost 20 pounds in 6 weeks, we'd give them the entire amount of money back. And that's what made it so cool. And that's why we got crazy results. We had like 70, 80% success rates, which for a weight loss program is insane. And it's because people were basically wagering money. And that was because I didn't know that like wagers are managed by lotteries. And like, I did— like, I just— it was like, you put $500 down, you lose the weight, you get it back. But the reason it works so well is that someone would come in, so I'd pay— I'll walk you through the math. So let's say at this point I'm probably paying $10, you know, CPM. So like, and, you know, so I'm getting and probably like 4%, 5% CTRs because it was like back then. So I'm getting 50 clicks for $10, right? I'm like, okay. And now my landing page is converting half, right? So like it was, it was just, you know, like bonkers. Like, and that's why some of these in some markets were getting $0.25 leads.

You know what I mean?

And some markets were like the highest markets back then were like $5, right? And so you've got an average cost per lead of like $2, which was nothing.

You're getting what, their phone number?

Was that?

Yeah, yeah.

Name, phone, or email. And so from there we'd schedule usually like 50 to 70% of those people, half of them would show and then we'd close and depend on, you know, the skill of the sales guy. The average gym closes 35%. Our team averaged about 50. When Leila and I sold, we averaged 80. And so there's a big range there, but we'd collect the cash upfront for $500 and then 24 hours later they'd come in for nutrition consultation, which is complimentary. We'd average $200 a ticket in supplements, you know, creatine, pre-workout, etc., that we'd sell them right after that. So we get another $200 pop. 3 weeks later, what we do is say, hey, listen, you lost 12 pounds, Sandy, is that your ultimate goal? And then she'd be like, well, no, I want to like get in amazing shape and blah, blah, blah. And we're like, all right, So you understand that it's not about the 6 weeks, it's about 6 years from now, right? And she would say yes. Then I'd be like, congratulations, you won the challenge. You got the point of this. And so what I want to do is I'm aligned with your long-term goal too. So what I'm going to do is because you won the challenge, I'll take that $500, I want to spread it over the next year so you get a discount for doing it so we can align with your goal. Fair enough? She said, sure. 3 weeks after that, she gets billed for her first billing. So if you follow the money, $500, $200, and then she gets billed, right, for the EFT, even though she won the challenge. Right, right.

Yeah.

And then it's an amazing 6 weeks after that, we'd say, hey, wouldn't you like to like have a little bit more attention instead of being in this large group? We can put you into a 1-on-4 scenario. We can give you even more stuff. We can show you cooler, more advanced exercises, blah, blah, blah. And so that was, that was how we did it.

And were you just, um, but, but then this parlayed into the actual product that you really crushed it on, right? So which was when you were doing $27 million in year 2 or whatever, $20-something million with like $17 million in EBITDA on year 2. That product was the— was Gym Launch, right?

Licensing. Yeah.

And what was that? What did that look like? Was it— what software were you using and how did you package this? Like, that's because I want to get really nerdy on this stuff because I think about that. I'm like, that's a great idea. But packaging a service is— that's a challenge. That's interesting. And I want to— so I want to ask you what you did, and then I'm going to ask you, um, what other industries would you do it for?

So, I mean, that's what Acquisition.com is. So it's like, it's exactly that. Like, I know how to do this within a, within a niche. So like B2B services, if someone's like, I know how to help a lawyer make more money with their law firm, I know how to help a bookkeeper make more money with their bookkeeping business, I know how to help hair salon, you know, people make more money with their salons. Like, that's what I'm looking for is niche e-learning/service companies that we can invest in.

Our good friend Jack Butcher has a phrase called build once, sell twice. And that's basically what you were doing. You were like, people who were selling one-to-one, they had to sell, then do, sell and do. You were like, no, fuck that. We're gonna build once, sell a bunch of times. And that like process is what I'm asking about. That's interesting.

Yeah. I mean, that was when, I'm sure you're familiar with Naval, cause I know you're on Twitter. Like I kind of fell into, like, it's like you realize why you start making money. Like, I'd love to say it was some master plan. Like, you realize later why something works so well. It's like I had zero incremental cost. I was selling cars over the phone and I had no cost of goods. Like, it was insane. And so we basically would onboard people, you know, we had a concierge service back then. This is, I mean, it's 5 years ago, you know, it's been, it's been a while. But we do an onboarding process, we kick their ads off. We basically check in with them. We had calls every single day. So I would hop on a call with every new customer every day. I did it as a group call, but I was always available. And then we had a 35-person tech support team that would help them with like the pixels and setting the landing pages up and all that kind of stuff. And so, because that was the, that was the issue they would get stuck with was the tech. So they could understand the sales, they could understand the nutrition stuff. They got both of those things for the most part. The tech is where they struggled. So we really ramped up like our implementation help. And then on the strategy side, I would be there every day to take calls. And I took 400 calls over the first year. And so like, that was kind of how we did the fulfillment.

And then, but it was like a set of videos.

Yeah. Yeah.

A set of videos you watch along with like a file, a folder of files.

Yeah.

Yeah.

It'd be like, here's how you set up the, you know, I'd be like, here's why you set up the lobby this way. This is what they need to see when they walk in. You have 'em sit down here, give 'em this iPad. Here's the download for the swipe file of the presentation that they should be leafing through before they come to the office. When you come, like, when you're ready, say these things, make this joke, do this thing. When you come inside, like, sit on the corner, don't sit across from them because it seems confrontational. Have them step on the scale, make sure they step on it, make sure they look at the weight. Then she cries and you're like, okay, sit down. Now listen, we're here to help you. Let's figure this out. What have you done? So, you know, I mean, like, it's very scripted. So it's like, here's the video explaining it, here's the script that does it. And then here's 6 examples of guys in different gyms with different styles of selling, because that's one of the things that, like, we started to learned early on is that I was attracting guys originally, like, in my team, I just had everybody sell my way, more or less, right? And then I realized that a lot of people, over time, as I learned more about sales, like, people have different styles of selling, and they're just as effective. Some people are more, you know, very analytical in terms of, like, their approach, like, make— basically making logical arguments. Some people are just very emotion-driven. Some people just do it off rapport, like. And so I showed different styles of selling but still following the same framework. And so we went away from a scripted process to more of a question-based framework, which is what we've pretty much stuck with since then.

And if somebody wants to get good at selling, what, like, you know, there's a go out there and, you know, try to sell 1,000 times is one way to get better. But if you wanted to improve your rate of learning, what books, courses, whatever, what YouTube videos, like, do you remember that, like, that really clicked for me and that was like kind of like a game-changing thing for me and getting better at selling?

I have relatively strong beliefs about the topic. So I think first off, a lot of people read books before they start selling. And I've thought a lot about it, and I don't think that's the right path because you don't know what they're talking about.

Yeah.

Like, you only know, like, what the concept of building rapport is until you've not had rapport. And it's like, oh, okay, now I understand how this works. But like, until you, like, until you confront the reality, like, you can't, you can't bucket the knowledge into something that's actionable. So I'm a proponent of doing first, realizing the deficiencies, and then going to find the information now to match the, the real-life scenarios that you have encountered. Um, the second part of the question is like, which books or things like made things click? So, um, there's one moment that made things click, which was, I said this in the book, Sam, which is like, make people offer so good they'd feel stupid saying no, which was the secret of selling, right? It's like, if you just make it so good that they won't say no, then it makes your job 100 times easier. And so I did work really hard on that side to make my job easier. Yeah.

And I agree with that. My problem when I, I'm a copywriter, a former self-taught copywriter, and I knew, I know all about that, but I'm like, Oh, if people want to refund, this is going to be a pain in the butt. Like, if they— like, in order to make this— like, in order to make an offer irresistible, you could, you could go a couple different routes, but one of them is you just do lots of stuff. And when I think about that route, I'm like, oh my God, that's going to be a lot of work. I don't know if I can actually execute on that.

What's an example of that? So, uh, give an example of where you see, uh, people with a kind of substandard offer and how you would give me— and how you would switch it to be a more irresistible offer.

I mean, a simple one we did within the agency space and the software company that we started was we helped them transition from a retainer model to a pay-for-performance model. So that was an implied guarantee and we just said, listen, pay us one time upfront, which by the way, for most of them was what their LTV was because most of them sucked. So it's like if you're charging $1,500 a month, which would be probably the standard small business B2B, you know, I would say commoditized price point for generic lead gen, they're charging $1,500 a month. We said, hey, charge a person $5,000 upfront day one and say you'll never charge them again unless someone walks in the door. And so they'll cover the ad spend after that, and you don't get any percentage of it unless someone walks in the door. So you generate the leads and work the leads, and when the person shows up, you charge X. And that was based on a pricing survey that we ran internally to our customers where I said, if we worked your leads for you, um, what would you, uh, be willing to pay as a flat rate? And so there was a big pricing curve, and the, the concentration of like 75% were willing to pay between $300 $400 a month for that, just as a flat service. And I was like, okay. Now I asked the exact same scenario, same result, same everything later on in the survey. And I said, if we just said, hey, uh, pay per show, what would you be willing to pay for somebody who walks in the door? For the same exact performance, they're willing to pay 4 times as much. And so I said, well, I'll be— why don't we price it that way? And so we did it on a pay-per-show model. And so that's what we transitioned, and it also makes it way easier to sell we could cash flow the acquisition because we were making the LTV that we were— not we, but like the agencies could make normally upfront day one in cash. And what's cooler is that in the first 30 days they had people show up, so they get cash upfront. And then in the first 30 days they're still getting cash that they can use to finance the acquisition of the customer. Right. And so that's a much more irresistible offer from a chiropractor. It's like, well, how do I know it's going to work? It's like you pay us one time, just get all this shit set up. And then from this point going forward, only when someone shows up, you have to pay.

And so people understand this. You said software company. And so I looked, I mean, I watched a lot of your videos, so I know this, but you basically had like 3 or 4 or 5 businesses. The first one was this main one, which was Gym Launch, and that was doing like $30, $40, $50 million. You can correct me in a second.

That one did $26 million. Uh, so we did $6.8 million year 1. That was the hybrid between me doing Gym Rescue and transitioning to the licensing model. So about halfway through year 1, I was like, this model is not working. And so we flipped it and then that's when we shot out like a gun. Like the first month we did $120,000. The next month I think we did like $2-something, then it was $360,000, then $480,000, then $780,000, then $1 million, then $1.2 million, $1.5 million. Like that was literally the next like 6 months. And so that crossed us into the second year of business. And then that year we did $26 million. So we did $6.8 million with $3 million in EBITDA year one. The second year we did $25.9 million with $17 million. And then year three, and this is why I'm a big advocate and this is maybe just my own deficiency, but we did $37 million top line, $13.4 million in EBITDA. So Alex made a big fuck up and was like, hey, I— because at this point, even though it may sound like this is a short period of time, I was like, I had heard that I could sell this for like $100 million. So I was like, fuck yeah, let's do that. Um, lo and behold, a 3-year fucking journey. But, um, anyways, and there was this flu that went around, people lost their minds. It didn't affect the gym space at all, that was good. Um, I'm joking. Uh, so anyways, uh, we started the supplement company Prestige Labs in December of— in December of 2018.

And you're basically selling supplements to your clients?

Well, through the clients. So they never actually purchased from us directly. What we did was we created a dropshipping model because the number one issue that small business owners have is cash flow. So I said, what we did was we sent out retail kits that had 130 bottles in them, were empty. So the retail kit was like $100 and they could stock their whole wall because all consumer research shows that like the more stocked the wall is, the more likely they are to purchase. And they would only have one sampler of all of them out. And then we sent them a key kiosk with, uh, with an Amazon, uh, uh, Fire on it, right, that was preloaded with their affiliate link. So someone would try it.

Oh my God.

And they would make the purchase right there. And we'd say, hey, this is so much better because now it'll go straight to your doorstep. You don't need to take it home with you. And better yet, you won't miss a month because it'll automatically ship to you. So we gave the gyms a second recurring revenue stream through the supplement. So when someone walks in, when I was telling you earlier, like, some service and we sell them product, we'd sell 2 EFTs. So that's the gym word for electronic fund transfer, so recurring revenue. So we'd sell them a service recurring and then we'd sell them a product recurring so that we'd have two different streams that would come in. The nice thing with the product recurring is there was no, there was no operational drag for the gym. They don't have to do anything. They just have to make the one sale one time and they're going to make $80 a month from that point going forward. Pure profit for them, like just straight to the bottom line. And so what, you know, interestingly, a lot of gyms made more money selling the supplements than they did on their service because the service is low margin. But the, the product was like almost all margin for them. And we paid really aggressively. So we paid 40% commissions to them because they were paying for the cost of acquisition and doing the sale. So I said, you know, you guys should get disproportionate rewarded. And the first month we launched that— so we beta launched in December, and then January of 2019 is when it kind of officially launched. In the first month, we did $1.7 million. And so because I figured, I was like, okay, if we've got, you know, 800 active gyms, if each of those guys sells and it was actually under my projections because I was like, we're going to be, you know, so wealthy. I was like, if all of these guys just sell $5,000 a month, I was like, we'll do a million a week. It didn't work out that way, but we ended up doing that year $37 million. But my licensing business came down and I think it went to like $20-ish and then the supplement company like $17 million. And part of the reason the oopsie that I did was two big oopsies. Number one was I started a second active company when I already had one, which to me I think was a mistake given the skill set I had at the time. And then the second oopsie was that because I thought a potential acquirer would want lower churn, which is true, I lowered the price. And so I thought that if I lowered the price, that would get more people to stick. And so I cut my top line price by 25% and saw absolutely no change and just lost—

what, what, what was it and what did you reduce it to?

It went from, uh, the, it went from $800 a week, which is the licensing, uh, on the backend to $600 a week.

What's $800 a week times 52? I don't even like, what's the annual cost?

$42,000.

So it costs $42 grand to be a part of your, what do you call it? Part of your, not corp. Yeah. But what do you, what's like the noun that you use to describe this? Uh, like your program was called Legacy.

The people were called gym lords. And so we would sell Launch as a front-end program and then they would go into the Continuity, which was legacy. So if you're, if you're, if you're, if you're following along from home, for anyone in the podcast, I copied the exact same model. So I sold a 6-week defined-end program for a lot of money and then I down-sold the Continuity because $16,000 for 16 weeks is $1,000 a week. And so I said, now you're gonna get more for less for $800 a week. You're gonna get what you had before plus all this other stuff for less money than you were currently paying. And they were like, what a deal. At the gym, I'd say, hey, it's $100 a week, $600. And if you stay, we're going to drop you from $250 a month to $200 a month because we'll take your $600 and we'll spread it over 12 months. We'll go $50 a month in credit. And so then you get to $199 a month. And so it was front end to liquidate the cost of acquisition so that I wouldn't need outside capital to acquire customers. And then the back end, I would downsell the upsell so that we could keep the continuity and make it—

which is all like the most classic internet marketing shit. Which like a lot of like tech startup stuff, they don't do this and they're fools for not doing it. Yeah.

In tech startups we do the opposite typically. So we're say, hey, uh, we wanna get you in, we wanna make, you don't know us, we don't know you. Let's make the cost of, of trying so low. So free, free trial. Don't even put a credit card on file. And then try to go put the bar as low as possible. You did the exact opposite. You said, okay, I'm gonna put actually more friction up front. I'm gonna ask for $500 or $16,000, a huge number up front. And then over time, I'm going to actually be selling you on more value for less cost. Why do you think that works? Or why do you think that worked for you to charge, have such a big kind of commit upfront when, you know, that's usually when people are hesitant?

I think there's a couple of pieces. One is most software companies have funding, not all, but a lot of them have funding. I did not have that. And so I could not afford to be in the negative and incur caught— I didn't— I couldn't have a burn rate. Burn rate was Alex's bank account. So that wasn't going to work for me. From a psychological and behavioral standpoint, it always made sense to me to sell someone when they're the most excited. So you're the most excited day one, before you've gone to your first workout, because once you get your first workout, you're like, shit, this is going to be work. So— and I'm going to have to start dieting and not eating the stuff I want. Sell them when they're excited about the bikini and not about the TSA and the airplane they have to go through to get to Maui. Right. And so I followed that. And then the reason that we decrease cost over time is because it's my belief that information decreases in value over time. And so the longer someone has it and exposure to it, the less valuable it is, you know, marginally. And so we tried to accommodate that with the pricing. And since our gross margins were still basically 100%, it still made sense for us.

So let me try something. This might be a bust. We can go back to the gym stuff. This is a bust, but let me try something. You've said a couple things that I thought were really interesting nuggets. I want to kind of rapid fire, just say, I'm going to just quote you and I want you to riff on it for as long as you feel like doing, and then we can switch to the next one. All right. So I'm going to take one of yours. Um, let's, let's start with this one. Passive income is overrated. We seek freedom, but what we really want is options for engaging activities. What does that mean? And how'd you come to that realization?

So 2021, uh, we sold 3 companies, so we were, like I didn't— it was interestingly, my CFO was someone who was really engaged in those activities. Like, I was not. So I pretty much like took a really passive seat in 2021 because I didn't want to really go start hardcore on scalingacquisition.com until that was done. And so I was bored out of my mind.

Which, which 3 companies?

Allen, Prestige Labs, and Gymwatch. So those are my 3 majority holdings. Right now I have all minority holdings. So between 20% and 33% of the holdings that we target. For acquisition. Um, and so I had this— I don't want to say existential crisis, but more like, I'm bored out of my mind. I thought this is what I was always optimizing towards, which was, you know, quote, freedom, which is like you're always, you're always outsourcing all of your activities and buying your time back. And then you have all your time back and you have nothing to do. And I was like, this sucks. And I look back on the times when I was building into those companies with lots of nostalgia, and I was like, man, that was like some of the happiest times of most of my life. And so that I'm in this position, I'm getting back into the game. And like right now we're heavily recruiting, like we're 2 days a week, we're just doing interviews, uh, to build the core team out. And, um, I honestly am, I'm happy as fuck doing this, uh, and so it's like, but the difference between this time and last time is that I have the option to do it that I'm choosing rather than, uh, because if I didn't have this business, I wouldn't have the option to work. So I have to create the option for myself. And so it was like, for me, the shift was going from freedom to optionality, at least for as I had to understand the word.

Right.

First you start, you, you do what you have to do to pay for life. Then you take that money, you buy back your time, but then you need to spend your time on the thing you want. That's, that's the idea.

And acquisition.com is basically you're buying other, you're gonna buy businesses and deploy your model. What are you, what are you doing?

100%. Yeah. So we buy an interest in, we buy minority interest in the business. Um, and we deploy the model. I mean, that's, that's what we do.

Sorry, the, the business is somebody who's doing like what you did for gyms. They're doing it for legal or hair salons or something else.

Or photographers.

Yeah.

That's your latest, right? Yeah.

Yeah. That was the, that was the fourth company. That one we still, yeah, we have a 20% interest in that company.

And you say, hey, I just had a business just like this and I scaled it up. I know what it's gonna take for you to go national with your kind of like with your business. Let me take a minority seat and, uh, let me like help you grow this thing.

Yep.

That's a great, great model. What niches interest you?

I mean, really, it's just services. Like, I— and it's silly because like everybody's like really hot on software and there's all the valuations and stuff, but like I may just be a simpleton, which is very possible. Um, I just like high cash flow businesses, so I just really like— service businesses are super malleable. I can chase price points, I can change product, I can change client experience. Without a ton of dev work or engineering or UX. And, and I just like that. I feel like they're simple businesses. It's very easy to get tons of margin in them if you know how to deliver value. And so right now, the, the 4 kind of— they're all related, but the 4 targets are e-learning businesses that are in a niche, brick-and-mortar chains that already have multiple successful locations. So they're probably looking at, do I, do I go national and own them all, which is what we did with the photography business. So ironically, We actually own, we own all of them, which is different with that one, which we have, I think, 13 locations. And when we started, we had one and that was like a year ago. So like, we're just, it's an awesome business. That one I think is gonna be worth more than all the businesses that I put together. Software as a service or tech-enabled services, more tech-enabled services that could potentially have some mini, you know, software component, but not as the main thing necessarily. Um, and then, uh, and there's a fourth one that I'm just forgetting because I'm on a podcast.

So you, you said that might be the best business. What, what people are gonna be like, photography, what, what is it? So what does that do and why is it going to be such a good business?

So it's a great business. Um, the— it's children's photography, first off. Um, it has an awesome mission. We donated a million dollars last year, um, to kids stuff, uh, And so the founders are super mission-driven. The short story is their daughter got told at school to shut up, um, because she was stupid or something, and she didn't talk for like 9 months. And so they couldn't figure out how to get her to talk again. And so what they did was they started taking— they're photographers— so they started taking pictures, um, and put it into like a story experience and read her a story where she was her own hero. And so in the story that they put together for her, she like gets her voice back and like whatever. And so that actually like their daughter starts to talk again. And so that's why they're like super mission driven around like the donation stuff that they do. But the actual business model itself is really, really good. I mean, people come in and we take, you know, take pictures and it's really about the, it's called Magic, you know, Chain of Fairies, but it's a magical storybook experience. And so it's kind of like the idea of like taking Disney and putting it, you know, in some, in, in other areas.

But then walk out with a book, but then what's with you in it?

That's one of the products we sell. There's an opportunity.

And you're gonna now like teach photographers how to do it?

We don't teach photographers.

Oh, I got it.

Okay. So that, so this business was interesting. So he, at the time when he came to me, he had one location and he had, I think about 100 customers who were B2B who were doing like some sort of like hybrid agency, business coaching thing, and I really hated the model. Um, and I was like, well, how much extra does like a photography studio make? I'm not going to share the numbers, I'll just say it was a lot. Um, uh, and I was like, how much are you charging? He was like, $5,000. And I was like, all right, we're never doing that again. So how much does it cost to open a photography studio? And he was like, a lot less than it makes. And I was like, okay, well, why don't we just front all that and build them all? And so that's what we did.

Sean, he, uh, Alex, maybe I don't remember how long ago, I think recent, had a call. The headline was like, Grant Cardone just made me a billionaire or something like that. It was like a funny headline. And he did this, he paid Grant Cardone $30 grand for an hour of time. Oh yeah, pretty crazy. And basically on it, he recorded, he YouTubed the call. And on the call, he basically, you know how like you and I will talk to each other or our friends and you're like, hey, I'm in the middle of selling this company, what do I do? And then you also be like, by the way, like here's my net worth portfolio. Like, is that enough? Like you just ask all these questions like, you know, like what do I do now? Like once I have this, like how much should I expect? You know, like all these like the things that you ask like your rich uncle, like as you're growing, he asked all these questions and he was so transparent. It was uncomfortable almost. He said, um, he goes, well, look, like right now I've got $21 million in the bank. After this, I should have like $54,000 after taxes. And he like, this is all on YouTube. It's, it's wild. Why are you so open about that? I think that's, that's cool, but uncomfortable for you.

Yeah, I— it feels like the right thing to do. I think like, what are the things I'm most afraid of? And usually they're the things that I should do. And so it's like, I'm afraid of saying this because I, because I know that when I say those numbers, people can immediately judge me in one direction or the other. But in my mind, all the people that I want to talk to think that's a really small number. And so I feel insecure saying those numbers, but I want to like, I'm a big believer that like shame only exists in the darkness. And so like, if I can shed light on it, then I can hopefully quell some level of the insecurities that I have.

Yeah, but the Panda Express guy wasn't doing that when he was 32.

What are the numbers?

Yeah, no, like he, he, he didn't like, you're saying you think it's small or they, they think it's small. Um, age is a fact. Age and liquidity are huge multiples to net worth. So like the fact that you had that at age 30 and cash is way different than owning 10 restaurants.

It also seems like you know, for your model with acquisition, the more you go out there as the entrepreneur's friend and entrepreneur's helper, and you provide a bunch of value by giving out free content and stuff like that, then you're basically creating your own deal flow because of that, right? Like people, when they think, God, what do I do with this business? I've learned so much from this guy. Maybe I could reach out to him. Maybe, maybe acquisitions would be a good partner for me. Like as the next phase, like to me, that's the model, right? That's the why to me, aside from like, you know, Like, okay, this podcast is similar in that sense, right? We go on here every week. We risk getting canceled. We risk getting judged as idiots for saying stupid things off the cuff about stuff we barely know about. You know, we risk all kinds of stuff, but the gain is A, it's kind of fun to do it. And B, you get either people thanking you or opportunities coming your way. And you're like, all right, net-net, I think that the combination of the good feels and the good deals, uh, makes it worth it.

I would have to quote that. The big thing with like—

feels and deals. That's pretty good.

The mission, and like, this might be like my personal mission, and I never really understood the value of it because people do like mission statements and stuff, but like, I think people just put generic ones and they don't like resonate. Um, like my mission through acquisition.com and really my life is like, I want to document and share the best practices of building wonderful businesses. Like, that is what I want to do. And I'm like, I will die and the shit that I accumulate is irrelevant. And so like, it's a travesty to me that like Elon and Bezos and Warren, like they, they don't— they didn't write any books. Like, like that's— I mean, that's the point, you know what I mean? Like, it's just for me, for me, you know what I mean? That's real for me, uh, is like sharing that, um, And so the businesses are just there to lend credence to what— to, to the books and the topics and the lessons and give me real stories to drive real fundamental truths home. And candidly, to discover them as I go, because like, I mean, I'm horrified at the things that I, you know, said 5 years ago that I thought were true. But, you know, the only thing short of that is not saying anything, which is, is something that I consider every day of like, Is this— this is, this is as least wrong as I can think of it currently, you know, and maybe I will think of it less wrong in the future.

Were you, um, you seem like a grinder when you were building these businesses. Were you just like, uh, doing 80-hour, 100-hour work weeks? And what about now? Because you're like yoked, you're huge, you look like a bodybuilder. So, so like, how did you balance like, uh, being fit and get married and you— but I don't know you well, but you seem like you'd be grinding hard.

So my wife works in the business with me, so we are true 50/50 partners. Like, it's very rare. I like— I recognize how rare it is. She actually is 100% matched with me and like should just as much be on this call because she runs the other half. Like, she, from a work standpoint, she has more output than I do. Um, she is the operator, so she builds the infrastructure, she does the recruiting, she sets the the HR stuff. She does the culture. She, like, she does— I mean, she runs everything. Um, I just, you know, occasionally come up with a good idea and try and stick with it long enough to see it come true. But in terms of grinding, we— this is what we— like, I love business. Like, I love this, and there's nothing that really stimulates me like this. And so I do as much of it as I can. And if we want to go out to dinner, we'll go out to dinner, you know. But like, we're— I was gonna say we're single, so we don't have kids. And so we work from like 5-ish to 4-ish, you know, um, and then, you know, usually in the middle of the day we'll probably go to the gym for an hour or two and then come back and keep working and go out to dinner at night. And that's, that's kind of our lives.

You seem pretty, um, this isn't— I would say I'm a little bit— I'm definitely this. Sean has a little bit of it too. Like, Manic's not the right word, but like neurotic maybe is a better word. Um, where it's like, uh, you're, you're, there's something that's deep rooted inside of you. That's kind of, it's not like you want to do something necessarily. It feels like you're, it's more compulsive, um, or obsessed. You're obsessed about stuff, which I am as well. Um, where, if that's true, what's that rooted in? What are you trying to get done?

So I think originally the drive was from just crippling insecurity and needing approval, right? Um, and then I think from like a behavioral conditioning standpoint, I got immediate feedback that was positive, and then I was conditioned to continue those actions. Now, uh, I continue to do them without the original catalyst that got them going to begin with. So I don't, I don't think I suffer, you know, from the insecurities as much as I used to. I'd say I'm probably 30% better. Than I was at the beginning. And it might just be because I have this massive big pile of money that I can use as an emotional crutch to why I'm not a piece of shit.

That would help.

I'm just being like, I mean, and if it were all disappeared, I'd find out how much actual growth I had or if I just compensated by circumstance and, you know, compensate for the deficiency. I don't know.

You can send it to me and we'll find out. We'll see.

I just run the experiment I like. So there's the compulsion and like this last year I pretty much took off like I did not work that much. Um, and so I saw the difference, and like, I have, I have come to accept that I love working and I don't need to judge myself for that or, or take in other people's judgment on how much I should, quote, do. Like, this is my life and this is what I like doing, and their ideals that they've arbitrarily made up as what they define as balance are irrelevant to me.

You said you took last year off. What'd you do? What'd you get up to?

We went out to dinner every single night to a 5-star restaurant for 7 straight months. We went to— I mean, we, we moved to Vegas temporarily. We traveled a lot, went to Cabo, went to Scottsdale, went to Sedona, went to Flagstaff, traveled all over, went out, did, did stuff, felt, felt honestly pretty empty. Like you can only eat so many times. Like there's just not a lot to do.

It feels good having that rest though. I mean, when I sold my company, which was, uh, a year ago last week, the first 6, 6 months, I was like, I need to decompress. It felt good to have it. And then, and then I was like, and I'm in that phase now where I'm like, all right, now I'm ready for war again. You, you can't, like, I, I like, you can't be in the trenches, I think, like, or rather you need breaks from, from being in the, from being at war.

I think, and, and maybe even phrasing it, I'm just throwing this out there, like phrasing it as instead of a, like a break is a shift in how you're thinking, because like, it's really like, it's going from dirt to clouds, but I still think it's high leverage activity, you know what I mean? Or like output, it's just a different type of output.

You said something on one of your videos that, um, you're one of the only other people that I have heard say this phrase. I use it a lot, which is, yeah, I had a season like, or this season I'm doing this, or I had a season where I was really just focusing on X. And that's been like a game changer for me. My personal trainer and kind of coach, she's like my mindset coach plus trainer, he does this all the time where he's like, he's like, I'm, I'm in a season right now where I'm, I'm just, uh, and he'll be like, you know, I'm, I'm practicing not waiting. And then he's like, hey, he comes up with these little themes or he'll be like, right now I'm in a season where I'm gonna eat whatever I want. And it's kind of like in the entrepreneurial world, it's like time boxing. It's like, all right, I'm gonna give myself 2 hours to get this shit, shit done. Or I'm gonna launch in the next 2 weeks no matter what. Right? Like we, I've used time boxing for productivity and now this seasons thing, it makes every like decision you're making less heavy of a commit because you're like, it's okay. Yeah, there's beginnings and ends and this season is going to feel a little different, just like winter feels different than summer. That's how I use it. Do you, do you use it like that? I just noticed you said that phrase.

100%. Yeah. And maybe it's a fitness thing. I have no idea. Um, I, I've, yeah, I, I have no ownership over it. Yeah.

It's like bulking season.

Yeah. I mean, I, I think about it in terms of entrepreneurial seasons. And I, at least for me, might have been like 5-year chunks. And so this is going to be my 4th season and they've roughly been about the same length. So I think that it probably takes me like 3-ish years to like really see something through and then 2 years to figure out how I'm going to transition from that thing or realize or, you know, whatever. That's what I— it's kind of like a PE cycle almost.

How much of your luck do you think is a lot for your success, accounts for your success? Because your face are on a lot of ads and on your YouTube videos, it's like you looking jacked. You've got this in a lot of videos. You've got this badass handlebar mustache. For the people listening, not watching, you look— I don't know what your, what your heritage is, but you've got like cool jet black hair. You look like, I don't know, you look like a, like a, like a, like an Italian lumberjack. Like, I don't know what it is.

Persian.

Persian.

Persian. All right, there it is. Yeah, like you, you drive a, you drive a G-Wagon, but there's an axe in the back.

So I read a book, uh, by Dan Kennedy 5 years ago that said that people who have noticeable facial features are more easily, uh, recognized and remembered. And so I read that, and then I grew a handlebar mustache. And, um, that actually, actually, I sold the likeness of the mustache with the company. Um, because it was still a core part of the branding. Like, you know, at the events everyone would have stashes and it was like money, you know, stat, you know, stat cash, money stash or whatever. You know, there's a bunch of different like hashtags.

You had to stop having a mustache after that?

Was that—

you had to stop having just a handlebar mustache because you sold off?

No, but they're allowed to use it.

Yeah, I got tired of having the mustache after 5 years.

But, but what about like the speed? Because, all right, again, for the— what do you weigh? What do you— how tall are you and what do you weigh?

You're huge. I'm 5'11". 20.

Okay. So, uh, just when you're getting, getting big, is it like, do you think this is gonna look awesome in an ad?

No, no, no.

He was built before he started internet marketing, right? You were built when you started the gym business. I saw a video or a photo of you like starting your first gym and you were already jacked.

So it's not like, well, I watched, I was, I've been working on my squat and I was trying to figure out how, what I, what I can make, how what the gains I can get in 3 months. And I came across an article that you had when you were in your early 20s, I bet. And this article, the gains that you had in like 9 weeks, that was the craziest shit I've ever seen. What was it, Sean? You got to like look at this article.

That was natural. I like, I'll tell you because I'm on TRT now.

Me too.

So I was, I was, that was 100% natty.

And no, in the comments they do not think that.

That is like trend much, you know, whatever, you know what I mean? But the— that training methodology is pretty much what I've done since then. So I had a roommate, his name was Greg Knuckles. He's really big in the strength space.

Fucking amazing name. Is his real name Greg Knuckles?

Yeah. Yeah. And he's one of the two smartest people that I've ever met from a pure processing power standpoint.

Like, sounds like a mafia guy.

I mean, you know, he's, you know, got a perfect SAT score when he was 14, like very, very bright. But also stupid strong. Like when I met him, we were in our 20s and he was pulling 800, like stupid strong and natural. And so anyways, he was like, I read this research paper. What if we had you lift 6 times a day but for like 10 minutes each time? And I was like, cool. And I lived at the gym, so I was like, sure, whatever. So I set a timer and every 45 minutes I would go and do one set on 3 exercises. Then I'd go back to work, which side note is actually an amazing productivity hack because like I had this nice, uh, timing, like cadence, and I got this nice like boost from my nervous system every 45 minutes to like wake back up. And so I did that, and that's when I gained just a tremendous amount of weight. Um, but coupled that with another thing that he had done research on, which was like a pure carbohydrate diet, um, with no fat. And so basically the efficiency of fat conversion to fat that's stored is almost 100%. The efficiency of carbohydrate storage into fat is lower. Um, and so if you don't have— because you're going to have a calorie surplus, and so to give yourself a smaller percentage of that surplus that gets stored as fat, you would want 100% of the surplus to be carbohydrate, carbohydrates. And so the idea was like, I had, you know, 200 grams of protein and like 800 grams of carbs and basically zero fat besides the—

yeah, I saw what you're eating. It looked like it'd be awesome for a day, and then horrible after that.

Horrible. And anybody who's like, it didn't work, I'm like, Just try eating that. Now, the big caveat to this is like, I have what I, you know, I think I have elite genetics. I think like Dr. Kashey, who's my closest friend, he's a biochemist, he's a national strongman, he's like, you have potato chip genetics. He's like, you shouldn't give advice to people. He's like, you can just like drink Coca-Cola and work out and like you'll have a six-pack. So like I had that, plus I was doing everything maxed out like as I possibly could, and like it was not sustainable. Like my knees were shot, my elbows felt like shit. Like by the end I was sleeping terribly because I was, I was bordering on overtraining. But I put a ton of weight on and I put a ton of strength to all my main lifts. And from there what I did was I dialed back the total volume, but I kept the split. Not to get into too much fitness stuff, but instead of doing 7 sets of every exercise every day, I just dialed it down to like 5.

And then— Well, I was reading that article while I was listening to your videos and I was like, oh man, this guy carries this shit over to everything. I understand. Like it was super precise, very like, well, obviously I think what's interesting about you is you don't have a, uh, or maybe you do, but you've overcome it, uh, a self-limiting belief that a lot of people have. And you're like, well, of course this is gonna work. You're gonna do this, you're gonna do this, you're gonna do this, you're gonna do this. And it's gonna be hard, but that's the outcome is gonna be blank. And it, and, and you, here's the plan attack. And you took that same process to business. Yeah. I could, I could hear it in your voice when you talk about business and fitness. And that's why I thought it was cool.

Thanks.

Let's do like one thing. You, one of my favorite things from you is these little TikToks or Shorts I see where you're giving like a sales tip or a little sales trick or whatever. And I would love for you, I think most people probably, you know, most people who are listening to this, just, you know, the bell curve of people listening to this probably have spent, you know, zero time trying to improve their sales and have not seen some of these things. So I wanna give 'em the opportunity where they don't gotta go click and find this random TikTok that I'm talking about in the ocean of TikTok. I want to, uh, role play a little bit. Um, give us kind of like, um, give us an example of normal, like here's the default way people are doing something and then here's the rephrase or the reframe that has better results. Um, I would love to, to give, get 2 minutes of learning sales from Alex.

Sure. And just as a quick caveat to complete the loop from like 40 minutes ago, you said like, what was the book or training or whatever that— so it's my belief, if you look at Belfort, you look at Bradley, you look at Grant Cardone, some of the big sales trainers that are out there, almost all of them invariably have the same story, which is I started selling and was the best guy on the team by a fucking mile. And then I tried to figure out what I was doing. And so I do think that some people naturally, based on their childhood, their upbringings, their whatever, are just have a higher proclivity for selling, which—

yeah, just a gift of gab and, and empathy.

Yeah. And I think it carries over into how you recruit for selling too, because we've built a lot of sales teams, and I actually have a very short allowing for people to fail at sales cycle, probably much shorter than most people. And it's just because I've never had a killer salesperson who didn't do pretty well the first week. And so for me, we, you know, we turn through those quickly, but as a result of that, the team is just killers. And they know that. So I like this quote from, from Grant Cardone. He says, you know, my sales team's a dangerous place to work. And, um, I, I love that. So in terms of, uh, sales stuff, I think that— I think people don't know how— people are really freaked out about the idea of selling, right? And so I think the first reframe is like, you're not selling, you're helping someone make a decision that's going to help themselves. And the, the, the front part of that is that I do think that the number one predictor of good sales is conviction. And so fundamentally, you have one person who should believe in something, another person who does not believe it yet, and trust is the thing that transfers that conviction. So if fundamentally there's the two things you need, you need trust and you need conviction. Most times salespeople don't have 100% trust— sorry, 100% conviction. And so the also the idea of conviction as a binary is false. So it's not like I believe it or I don't believe it, it's to what extent do I believe it. Right? And so that's why, like, in terms of if I want to improve a sales team, I can do the drills, which we do, and that's like blocking and tackling. But the thing that really juices the sales team is hearing the testimonials of the people that they sold last week and what they're doing today and how their lives have changed. And so I noticed this because on my sales teams, when we were in person, whenever I did weigh-out day, which is when everyone finished their challenges and everybody was crying and so excited, I tried to stack as many sales appointments as I could while people were weighing out. And during those days we closed like 100% because people were like, dude, how can you not think this works? It's right there. And so the thing is, is like you can either trick yourself into having the right tone or you can train yourself. And I think that it's much easier to trick yourself into it by just simply believing, because if you talk, if you truly believe in the product, you will talk about it differently. And so in terms of an understanding of selling, if you need to have conviction, you need to have trust. Trust is going to come from expertise and some level of rapport, right? And so, um, I think that overarching— to help someone sell, we just have to ask the right questions to get someone to come to the conclusion on their own. And so most sales conversations follow more or less the same framework if you know what you're doing. Otherwise, people are just chasing their tail and trying to chase a prospect to an outcome that the prospect doesn't know how. Like, we've had this conversation 100 times. They have only had it once. We should be the one knowing how this conversation is supposed to go, right? We should also come in with a massive advantage to how to have this conversation go the way we want it to because we do it all fucking day, right? And so, you know, big, big front end pieces is like, why are they there? What's the problem? What have they done so far? Understanding where they failed, seeing why our product is different from the things that they failed, asking for permission to explain about the product, Explaining the product not in any way based on features, but only based on the experiences that they will have as a result of it and using analogies to explain those experiences, right? And then having a close at the end, which the TikTok, I think that you referenced, was like a no-base close. And I think a lot of natural salespeople do this anyways. Like if I want something, I'm not like, "Hey, can you do this for me?" I'm like, "Hey, would you mind?" And they say, "No." They don't, "I don't mind." right? Like, it's natural communication dynamics that most people who naturally know how to persuade people, or at least influence, do that on their own. This is just retroactively looking at it and saying, what did I do different? Like, why is this different? And, um, in terms of like overcoming— because people are afraid of confrontation, right? That's what they're afraid of. And so I believe that you can sell without ever having confrontation, and you can do that with what I like to call childlike curiosity. And so if someone says Well, my husband's not gonna approve of that. I'm like, why wouldn't he? Like, huh, that's so interesting. Tell me more about that. Rather than like, all right, let's, like, your husband's an asshole. Like, that's not gonna work because in arguments no one wins, right? And so be like, why would he think that? 'Cause I would think that he wants what's best for you, right? Yeah, he wants what's best. Does he know you're struggling with this right now? Well, I mean, yeah, he knows I'm struggling with it. Okay, so he wants what's best for you, he knows you're struggling with it. So why do you think he would be opposed to solving something that, that you're currently struggling with? Just so I understand, would he be happier if you continue to struggle? Well, no. It's like, well, great. Then would you be opposed to moving forward today? And that way— and hey, if you go home to your husband and you make a joke and a light scenario, then you close it, right? And so it's— I think childlike curiosity is the immediate that you have to train because people get defensive. So that is one thing that like fighters talk about when they're in the ring, like in the beginning, you breathe in too much, right? I don't know if you've been in like sparring and stuff, like you breathe in, you breathe too much, you hyperventilate. And so the guys who've done it enough, they slow down their breathing because when things get intense, they can slow it down. And so I think sales is a lot the same way where you're like, your adrenaline kicks in, start breathing faster, it's fight or flight. So you gotta be able to slow it down and be like, huh, that's crazy. I wouldn't have thought that. Okay, tell me more about that. And like, now you're interested. And then they don't feel like you're, combatting them, they feel like you genuinely are interested and want to help them, which is what you should be doing because you should be selling them only if it makes sense.

You're exhausting. You are full of like interesting insights and like, it's like you're, you just, you, you, you just have, you have a, you know, a lot of shit and like you've clearly packaged this in really easy to understand ways. It's almost exhausting listening. Cause it's like every, it's like when you read a really good historical book or something, it's like every sentence is packed with a fact.

Yeah.

And it's like, oh my gosh.

Like, I, cause I gotta, you gotta start, I wanna pay attention to what you're talking about. I was like, exhausting. This is awesome. Uh, but then now I know, cause there's this book, there's this book I'm reading right now. That's like, like one of the best books I've ever read. Literally the first 10 pages have more insight than any book I've ever read. And I'm only on page 30 because I'm like, I'm like rationing this not to like, not cause I don't, I think I'm gonna run out. It's like, I can only, it's like I can only have my mind blown so many times per minute. And so I gotta like chill out with this book right now. And I'm reading 10 pages at a time. Then I hand it to my trainer and he reads 10 pages just so I have a 2-day break. And then we bring it back. That's our book club right now. And I think it's more like that, like what you, what you just said, which is how many lessons were there to learn, right? So there's like, there's the lesson of like, you know, guy goes from sleeping on the gym floor to, you know, like hustling, but then realizing I'm hustling 100% or I'm hustling level 10 at a level 2 opportunity. Okay, how did he recognize that? Wait, what? And then people gotta ask themselves, what level is my opportunity that I'm at right now? And you had that formula of like number of units sold times gross profit per unit times like, you know, uh, supply demand dynamics of the market. That's like, that one nugget alone is enough for you to put down the podcast and go fucking reassess your life. All right, then we go to the next, next phase where it's like, The part where you're like, yeah, we charge $500 upfront and then we had this continuity thing where we would actually say, hey, great, congrats, you've made awesome progress. We're actually gonna offer you more for less because we want our LTV to go longer. And, uh, we know that that reduces churn, blah, blah, blah. And I'm gonna do that because the best time to sell somebody is when they're most excited.

Boom.

Nugget 2, go rethink your sales and pricing strategy. You're probably doing it backwards or you, you know, you're not maximizing the opportunity cuz you just sold to 'em once. You never figured out how to sell the backend. Then 3 is, you know, like you've had 5 in this session. And that's my explanation of Sam's weird compliment. Sam is the king of backhanded compliments. He'll be like, you're like a, you're like the weirdest looking handsome dude I've ever seen. And you're like the guy, you know, the guest doesn't know what to do. They get frozen by the backhanded compliment.

It's so good.

Well, I bet, I bet your dear friends when you're with your non-work buddies, buds, are they just like, dude, Alex, chill. I don't care. Let's just like make a fart joke.

I don't have many non-entrepreneurial friends, honestly.

So you're always able to kind of shoot the shit with them, I guess, a little bit. And that's how I am mostly with my friends. But every once in a while I'm like, I'm like, I got, I can't talk money-related stuff today. Like I do, I purposely have to take breaks sometimes.

One of the things I want to mention that you had said that resonated with me. Um, uh, Conor McGregor has this quote where he goes, Some people will look at my success and get bitter. Most will get bitter and a few will get inspired. And he's like, you know, that says more about you than it does me. And similarly, you had something in one of your talks where you were like, you know, if I share, you know, how much money we make or, you know, how we did it, whatever, it's like some people get envious, some people get angry, some people are skeptical and want to say, is this guy a scammer? Some people get confused. Like, I don't know what the hell this guy's talking about. And some people get inspired and I'm here to talk to that group at the end, like that last bit, whoever you are in this room of 100 people, like the 4 people who are here to get inspired. That's why I'm doing what I'm doing. And, uh, I think that's just a great, like, question to ask yourself if, because we all get stories all day about Elon Musk and about whatever's going on and you are gonna have some kind of reaction. I have it myself. Sometimes I get envious. Why should I get envious? Uh, you know, like, I, I gave this example. I went to, I went to Vegas and I visited somebody's house who has an eerily similar story to you. They're in the gym business, 60 gyms that were super successful, then transitioned. Their bigger opportunity was real estate. They own the real estate around the gyms and have since made a ton of money. And I felt envious because their house was the most baller house. I think they live near the Panda Guy, by the way. He has a house in the neighborhood that's, that's big as well. And, you know, unbelievable house. It's like, you know, you gotta fucking swim in a river to get to the door type of thing. And you're, and I was like, and then my trainer helped reframe it. He goes, he goes, oh man, he heard me saying, I was like, yeah, I'm feeling, you know, a little bit envious. He goes, he just kind of ignored what I said. He goes, man, that's so cool. You get to sample, you know, what you like and dislike. So when you make your money, you're gonna know what you wanna spend it on. Is it their cars or is it the pool or is it that? He's like, that's so cool. You're getting to sample it. And just switching the reaction to, you know, instead of envy that I don't have, excitement that, oh, I'm getting to play with all these toys to figure out what I want, what I really like. What, you know, I could think about it or look at images on Google, but like, this is way better. I get to drive the car instead. And so, you know, I just think that's a good thing for people to, I wanna leave people with that is like, study your reactions. And then also if you are sharing information, just speak to those who are gonna take the positive and don't get so caught up in all the people who are having the other types of reactions to it.

That's good.

Um, even without the hair, I still got the guru, Sean.

No, that was good. I, I'm learning.

You can cut the hair, but you can't cut it away.

I gotta ask you one last question. For being a, you, I don't know, you're a business guy who's having a great time on YouTube and you're succeeding a lot. Why is your setup so bad? Like, how do you, you are in a room right now that like doesn't have a carpet, I think. So it's like, I could hear the echo. You don't have a microphone. You're on your— oh my God, nice quads. You're sitting on a laptop, I think. Like, Sam, why are you blushing? That was— skies out, thighs out, baby. That was a lot of thigh. But your setup— your setup— thank you. Your setup is horrible for such a— someone who does this for a living. What the hell?

I think I don't do it for a living. You know what I mean? The first answer. Honestly, all the technical— I spent like $80 grand on a studio in my house in Vegas— sorry, in Austin, and I couldn't get the damn thing to work half the time. So I was just like— and then I ended up like getting just like immediate annoyance around the idea of having to fuck with it again. And so then I realized that I stopped making stuff because I was just annoyed by the idea of having to fix it. And so then I was like, is it better that I just make the stuff and that'll just be— it is what it is. Hey, if I can—

the answer is yes.

If I can figure out a way to, to not have it be a pain in the ass, then I will do it. But up to this point, like, I'm literally— my video guy got on today, he's like, dude, your video is stopping and freezing for half seconds like 13 times during this video. And I was like, I don't know. And he was like, can you just do the laptop? When you do the laptop, it doesn't freeze. And I was like, sure, whatever, you know what I mean? And so like, it, it— at the end of the day, I think it's like the in Gym Launch when we started, this probably made me a good wrap-up point, but like we didn't have a website until we did, until after our second year. We'd already done $40 million in sales before we even had a website. And then we didn't— I didn't send my first email until we crossed like $70 or $80 million collected, you know what I mean? And so like we've— I don't know, we kind of just do things our own way. And if people are down with it, they're down with it. And if they're like, you know what, I'd rather have a really polished guy who says less in more time, then like, go, you know what I mean? That's all good.

It's badass. Thanks. Thanks for coming. I've learned a lot. Sean, what do you think?

This was fun. Thanks for coming on, dude. I think people are going to really like this.

I'm honored you guys decided to have me on the platform. I know that you guys don't take the time of your attention, of your audience attention lightly. So I want to say thank you for thinking that whatever I had was worthy of their ears.