In this solo presentation, Leila Hormozi critiques three pieces of advice that are widely circulated among entrepreneurs but are largely suited to unicorn‑scale founders rather than the majority seeking steady, low‑risk businesses. She argues that being first to market, insisting on a completely unique product, and targeting markets with little or no competition are misguided for most founders. Hormozi explains why these strategies raise barriers such as costly customer education, high capital needs, and market mis‑fit, especially for bootstrapped companies. Instead, she proposes practical alternatives: focus on a niche, restructure the offer (referencing her husband’s $100M Offers), segment and package customers, and identify a 20% differentiator that becomes a “special sauce.” She illustrates her points with two personal case studies—a failed gym‑CRM that tried to create a new category and the Allen software venture that succeeded by entering a sub‑category with a pay‑per‑performance model. The overall message is to aim for repeatable “base hits” rather than high‑risk “home runs,” leveraging existing market structures and modest differentiation to achieve financial and time freedom.
Chapters
What's up? On this video today, what I want to share with you is the worst advice I hear people give entrepreneurs who are looking to start a business. I want to give context to this because I think that I'm giving this— I am talking about this advice because it is advice that I heard in the beginning and that me and Alex talked about and we didn't follow. And I'm really glad we didn't follow it because I think a lot of advice is given entrepreneurs outside of context, right? I think that a lot of the traditional advice that we hear is actually geared towards people who are you know, who have hit a 10 out of 10 home run. What I mean is like the founders of Facebook, of Zappos, of, you know, Twitter, like all of those kind of people, and people who are looking and interested in having those kinds of businesses. And I think those are awesome businesses. I don't look to start a business like that, and we do not typically work with businesses like that because there's high risk, high reward. And I actually think that most of the time what most people want is they want to take calculated risks and they actually would like more certainty because usually when you're starting a business, I think the majority of people, at least the people I've talked to, you know, they're looking for financial freedom, time freedom, purpose. They're looking to do what they love to an extent and challenge themselves and have a way to grow. And I don't think that in order to do that, you have to, you know, become one of these unicorns out there. And what I've noticed is just a ton of the advice that's out there is geared towards that kind of subset. And so the first piece that I hear a lot of people say when they're talking about what they want to start as a business, but I don't think they realize it's not matching what they actually want is that they need to be first to market. And the reason that this is so difficult, and I don't advise anyone to try and be first to market most of the time, is that being first to market in a completely new subset, a completely new category, is a very difficult task for somebody who's never run a business before. Because what you have to do is you don't just educate the buyer on your product, you educate the buyer on the problem that causes them to even buy the product. And a lot of people don't know how to do that in an effective way. You also don't have the resources most of the time, especially if you're a bootstrapped company, you don't have a ton of VC money or liquidity, then it's very hard to do that. And so if you have a ton of cash, if you have a ton of liquidity, if you've got investors, you've got people who have built Facebook and Twitter and all those, sure, I think that maybe it makes sense if that's what you're going after and you are okay with the fact that there's a high likelihood of failure just given the nature of that business. However, if you're just looking for, you know, certainty and a base hit that's going to take you out of debt, that's going to take your employees out of debt, that's going to help your customers, it's absolutely not necessary to be first to market. And I can tell you that because, you know, I've had a taste of this in which we started Allen, our software company. And even in that business, we weren't even first to market in the category, but in the subset of that category, we were, you know, we were working leads with AI. And that was different than what anyone else was doing. And it was a pay-per-performance model, which had never been brought to that market before. And so what I noticed was it was really hard to educate the customer. They didn't understand how the product worked. They didn't understand how the billing worked. They didn't understand why you do pay-per-performance. Why isn't it flat rate? Why is it— why is this better? Right? And so you're— there's so many different sales they have to overcome when you're first to market that you don't have if you're not first to market. And so that is the first piece, um, I think that personally, when I look at a business, I think that a lot of the times if you look at the market in terms of competitors, if you're 80% like a competitor and you just have 20% that's different, that's enough to make your space. That's enough to take your piece of the pie. I don't think that you need to be 100% different and be first to market and completely create your own category in order to win. I just don't think that's true. I actually don't think most people want that because it's just so much higher risk and volatility. If you've never run a business before, then I just don't know why you would start there. So I don't know why people give that piece of advice. Um, the second piece that kind of— and these all have a theme to them, you'll notice they go hand in hand— is that you need a unique product or service. And the truth is, you don't need a unique product or service, but you need to offer the customer more value than they get for the going rate of your competitors. Okay? And so when you— what do in order to, to do that, right, is there's 3 things that I see, right? One is you can pick a niche, right? Because automatically, you know, if you look at niching down, it's going to be more specialized, which means you can increase price and increase value because you can be more specialized in terms of what you deliver. The second piece is that you can restructure your offer. If you would like to know how to restructure your offer, buy my husband's book, $100 Million Offers. You can differentiate your entire business just by changing your offer. You didn't even— you don't need to change the product, you don't need to change suppliers, you don't need to change anything on the backend. You can just reframe how you sell your product. And then the last one is segmenting customers and packaging. And so what I mean by that is you can come into the market where everyone's selling a certain package, right? Like say at a gym, most gyms, you know, you go into a CrossFit and they're like, you know, we're $99 a month and you get all the classes, right? That's pretty much most CrossFits. And you could come in and say, we're going to segment our customers. So we've got the elderly rate, we've got the beginner's rate, we've got the intermediate rate, and we have different packages for each of those people. And so it's actually almost niching down or segmenting within that niche to get even more specific about what that customer needs. And I think it's Marcos Riviera that talked about how much packaging can increase your revenue. I think it was in total of like some companies it was 60-70% increase in revenue just by packaging things differently for different segments of your customer. So if you were to look at who your best customers are, create unique packages for them, and then create, you know, unique packages for say the second and third tiers of customers that you have, you can probably create more value through just specializing with a separate package. And then the last piece is that, um, I hear this given a lot, which is you should enter a market with little to no competition. Again, I think that if you're going to do that, what that relates back to is that you're probably one of the first to market. Or there's a reason that there's no market because people don't actually want it. And I see that happen all the time where I've talked to people and I think you like get in your head, you have like one hit of success and then you think, oh, like I'm going to break out and like build this whole new market, whole new thing. And then what you realize is that people actually just don't find that valuable and it's been attempted to do, to be done before and it's just not a good idea. I think in reality what you want to do is like I talked about the 80/20, you want to take the 20% and make that your special sauce and just change that. And that's how you can compete in a market. You just look at your competitors, you see, um, there's a couple different things, right? So you can look at where are they not keeping up with the consumer, and then how can you deliver the product or service differently, right? And so you look at like Uber with taxis, and it's like taxis were, you know, they're only at the location and you can only get them by calling a number, right? So Uber went and they got an app. You have an app that you can use to access people, right? Imagine if taxis had just come out with an app. I think about things like that. And so it's like, how do you deliver the product? I think right now a lot of people do a lot of things through even just still fax and mail and all these things. It's like, how could you go into an even an antiquated market and you could revolutionize it by just changing 20% of how you deliver the product digitally, right? That's an easy one for a lot of people. A lot of people are doing that nowadays. But all in all, I think that those 3 things are The worst pieces of advice that I've heard, and I have never followed any of them, and the time, um, that I can think of that Alex and I have even attempted to do that is we actually built, um, a gym CRM. And the gym CRM cost us almost a million dollars, and the entire thing was geared around the 5 forces of retention, which we talk about. That's how you retain customers in a gym facility. And so we thought, nobody's done this before, Nobody's built a CRM that actually, you know, retains clients. It also, you know, has upsells and such throughout the CRM, et cetera, et cetera. And we were about 8 weeks away from launching it when we realized that nobody gave a shit about retention. Like the top of the top, like the cream of the crop of gym owners did, but everybody else just wanted new sales. And so we're like, we built a product for ourselves and for a market that is tiny, like the tip of my finger tiny. And nobody else. And so yeah, we could be first to market, we could try and educate everyone and have this huge barrier to entry, but we were like, we're just not going to do that. Because we presented it to some of our clients in Gym Launch and they were just like, I mean, it's cool, but like, you know, I'm not going to really pay much for it. Like, I'm more focused on sales. And that's when we were like, all right. And so we actually threw that out and started Allen, which again was difficult because like I said, like, we had the barrier to entry of educating people in the new market, but it was not nearly as hard as trying to sell people something that they didn't even want. And so I think that if you're looking at starting a business or you're even looking at your next product line, take these things into consideration. You know, I think that some of the best moves that we've ever made in business are just looking at what other people have done and then just doing it a little bit differently. Like, you don't even need to do it much differently. Look at what your strengths are and take your strengths and put them into that 20%, and that's your special sauce, and that's how you start a business. And I think for most of us, we don't want that Facebook home run or that Twitter home run. I think most of us just want to do base hits over and over again and not get knocked in the face too much. And so if you found that useful, go ahead, hit subscribe, and there will be more on the next one.
