Brutally Honest Advice For Mental Toughness | Hormozi Hotline
In this livestream, Alex Hormozi hosts a multi‑segment Hormozi Hotline where he first presents a four‑part framework for mental toughness—tolerance, fortitude, resilience, and adaptability—explaining each component, defining trauma as a permanent behavioral shift caused by an aversive stimulus, and offering concrete practices (exposure, incremental challenges, reflection) to develop these traits, illustrated with personal anecdotes such as coping with his mother’s death. The second half shifts to practical business advice for callers. Hormozi outlines how to handle a company sale without alerting employees, emphasizing confidentiality, need‑to‑know access, and incentivizing key leaders with a “sliver of the pot.” He stresses the importance of driving revenue growth in the 12‑week LOI‑to‑close window to increase leverage and improve deal terms. He then advises a CPA‑firm owner on pricing strategy, showing how a supply‑constrained, high‑close‑rate business can dramatically raise prices (double‑triple) to unlock higher margins and attract talent. Hormozi also provides hiring tactics for mid‑level staff—partnering with schools, referral programs, and direct outreach—while highlighting the need to align compensation with the new pricing model. Finally, he helps a caller decide between launching a seasonal semaglutide weight‑loss clinic versus a long‑term Medicare insurance agency, weighing short‑term profitability against recurring, sticky revenue and competitive dynamics. Throughout, Hormozi blends candid, no‑nonsense delivery with actionable, data‑driven recommendations.
Chapters
All right, this is nice. We get to spend some time together. All right, Sterling, what's up, man? Salutations. Rashank or Riz Hank. Clarissa, salutations. K Day, what's going on? Raj, Max, Subrat, Andrew, Nicholas, School of Peptides. All right, Brave Aim, Musamo, Dimitar. Dimitar is a strong name, I like the name a lot. Frank Alexandru, interesting, haven't seen that, that's a first. Um, yeah, so we're gonna do— let me give you the agenda, the agenda for today. Um, this will be a longer live stream. Um, I'm gonna go through 3 phases today. Phase 1, I, I gave a, a talk here in person on mental toughness, um, and it got a lot of really positive feedback, and a lot of people were like, wow, I'd never thought about like this. And so I actually decided to make a slide presentation so there was way more visuals, and I think it'll make it like way more real. And this has been super valuable for me, um, to quantify mental toughness via the lens of behavior, um, because I think it takes this very amorphous topic and turns it into something that you can actually work on yourself for. Um, and I'll do my best to talk slower. Um, beyond that, uh, second thing is I want to talk about one of the big fallacies that I'm consistently seeing in, uh, business owners, like in comments and chat, especially what's happening kind of like right now. And so I'll talk about how to overcome that. And I think it's what's keeping a lot of you guys significantly smaller than you should be physically. I'm kidding, but business-wise. So those will be the two big topics I'm gonna hit on and then I'm gonna open up for Q&A and we'll go live. Well, I guess we are live. So yeah, that's what we're gonna do. All right, you guys ready to rock and roll? Give me some Ws in the chat. And then we'll kick this puppy off. All right, Cal guy. All right, Anthony, W's in the chat and we're kicking. All right, here we go, let's rock and roll. So let me get my YouTube intro and then, and then we'll rock this thing. You aren't where you want to be in life because you can't withstand the hard times and hard things that happen to you and it takes you too long to recover, you fall too far when it happens, too few things can disturb you, and then finally when you do recover, you're worse than you were when you started. I'm Alex Hormozi, I own Acquisition.com, it's a portfolio company that makes lots of money, but today I want to talk about something that I think is key to entrepreneurship and even just being a human being who gets what they want out of life, and it's a topic that I think a lot about, which is one that's called mental toughness. And so I made this for you guys. So what is mental toughness? It's the chance a bad thing changes how you act in a way that's against your goals. That way we can take this big amorphous word, be like, what does it actually mean? It just means the percentage likelihood that when something bad happens, you change the way you act in a way that's not ideal. That means that mental toughness is no longer a do you have mental toughness or not? But instead it's how much mental toughness do you have? And so for example, lots of mental toughness would be a low likelihood or a low chance of a negative impact on your behavior, as in like, well, rather high mental toughness— I'm sorry, low mental toughness would be a high likelihood of negative impact on your behavior. I don't think there's a little typo here, but that's okay. Fundamentally, what we're trying to get into is how people respond to bad things. All right? And so once we have it defined, which is that the chance a bad thing happens to you, then we have to create an environment in which mental toughness can be exercised and then ideally measured. Right? And when we do that, I can give you a visual so that you can start thinking about your own behavior within this context. So I drew this out, which is how we act when bad stuff happens. So let me walk you through each of these numbered little pieces here. So number 1 here, hopefully it's to the right of me, That's how you normally behave. So whatever your normal kind of baseline is, that's how you act every single day. Then at some point, a bad thing or enough bad things happen that it forces you to change how you behave. That's step 2. Step 3 is, okay, once I've changed how I behave, how low do I go or how upset do I get, right? Number 3. Then there's a certain period of time that elapses where you continue this bad behavior and then you start coming up, you start recovering. That's the next period, which is number 4. Number 5 is gonna be bidirectional. Either you get better as a result of this hard thing or you get worse. And then number 6, the last one there is how much better did you get or how much worse did you get? And so this gives us kind of a framework to think through mental toughness, not as this like amorphous, like rah, rah, rah, like beat your chest, like alpha masculinity thing, but really just how resilient are you as a human being? All right. And to be clear, when I say bad for the rest of our time, or really when you hear me say bad in general, I just mean against your preferences. There's something that happened that you wish didn't happen, and that's what makes it bad for our definition. Okay. And so people mistakenly believe that mental toughness is one thing. And looking at the model that I just walked through, I believe that it's actually 4 separate components that make up mental toughness overall. So number 1 is tolerance, number 2 is fortitude, number 3 is resilience, and number 4 is adaptability. And so when we draw these out and we look at these visually, we have them looking like this. So each of these is a measured point in kind of this behavior frame. And so let's dive into all 4. All right. So the first component of mental toughness in my model is tolerance. And to be clear, I don't think these words matter as much as the thing that they're measuring. Alright, so the definitions matter far more than the label I'm ascribing to it. So your tolerance, which is this first part here, this is how much hardship, the number of hardships, or how long you can endure hardship. I keep wanting to say hard shit. Hard shit before you have a change in behavior. Alright, how much tough stuff can you go through before you crack? Alright, before you snap, right? And so if you're somebody who has a long fuse, aka it takes a lot to rock your boat, you have high tolerance, right? It takes a lot of stuff before you just say like, screw it, right? Whatever that moment is, that is your tolerance, how long that fuse is. And so as I'm going through these, I would love you to think for yourself like, okay, do I have high tolerance? Do I have medium tolerance? Do I have low tolerance? Because none of us is perfect. And so if we can start measuring the components of mental toughness for our own behavior, It means we begin the process of being able to improve it, right? So high tolerance is that first period. It's that first, the first kiss of hardship until eventually you crack. How long that fuse is, that is your tolerance. So like I said, short fuse, anything can set you off and you demonstrate low tolerance in that situation compared to the first example. So it's not, fundamentally it would mean that it doesn't take a lot to set you off. Now, a long fuse on the other hand versus short fuse would look like this. So here's my visual example for you. You guys pulling this in? So super long fuse, high tolerance, super short fuse, low tolerance. That's thing one. Okay. So, and I want to be very clear about this. Tolerance is not about ignoring pain, but about how long you maintain your intended behavior before disruption. As in, how long do you act normally before you stop acting normally? Now you can deal with pain. Now one of the really, I don't know if you guys have seen this, there's an Instagram channel, well there's tons of channels that have like animals in the wild. It's like when you see that deer that's walking around normally, like eating grass with its guts like spilled out, or you see that lion or whatever that has like porcupine needles in it and it's just like walking along like nothing's bothering it. Of course it's in pain, but the question is, how long can you maintain your behavior? How long do you act normally before you stop acting normally? Now, the second element here is fortitude, all right? It's the intensity of behavior change once your tolerance threshold has been surpassed. Let me translate that. So it's how much you change how you act once you've had enough hard stuff that you snap. How low do you go? How upset do you get?. All right. That's what you have to think with. Mike is cracking. That's what I'm getting in the, uh, we're good. We fixed it. All right, there we go. So the way to think about fortitude, do you take a deep breath, walk outside for 5 minutes, and then you come back? If so, then you have high fortitude. All right. So you have very small change in behavior after you crack. So even though you cracked, It's not like you didn't like, you know, well, I'll show you what, I'll show you what low fortitude looks like. So, or do you like something bad happens? This would be a low fortitude example. Do you quit your job, get divorced and get into hard drugs? Right? Look at the difference between these two things. So if you have low fortitude compared to the high fortitude example, you have a way steeper drop, a way larger change in behavior as a result. We lost your mic again. This is, this is dog shit. We're still good though. Static is gone. Mic is disconnected and died. Can still hear me though. Okay, so what are we, what are we doing here? What's going on? Are we all right? Can people hear? Can you guys hear? Yes. All right. All right, we're good. Mike has echo. All right, I don't know what to tell you. You're testing my fortitude right now. Technically, you'd be testing my tolerance right now. I'm back 100%. It's just echoey. Okay, great. Rock and roll. So hopefully you can see the two visuals next to me. Low fortitude, very small change of behavior. High— sorry, very large change of behavior, High fortitude, very small change in behavior. You've got, once you do snap, you don't really snap. You just say, you know what, maybe I'm down for a couple days. Maybe I'm down for a minute or two. Maybe I get upset when my wife says something and you think, okay, and then you're back, right? That is high fortitude. So that's the first two. So we have our tolerance, how long does it take us before we snap? How much hard stuff can we go through? The second is how, How upset do we get? How low do we go? Which is going to be our fortitude. And the third is resilience. And this one's a really interesting one. And I wanna, like, if there's one of these that I think is one of the most workable for many of you, and also probably the one that I would encourage you to work on the most if you don't have what you want in life, it would be this one. I mean, tolerance is amazing too, but I would say like maybe tolerance and resilience together, but let me explain. So resilience is after each, I'll give you the formal definition, then I'll give you the third grade definition. So after a change in behavior has occurred from a bad thing, how long it takes you to return to a new baseline. So once bad shit happens to you and you start acting out, how long does it take you to stop acting out? That's what resilience is. It's a measure of time. So do you bounce back in 5 minutes? You take a couple breaths, you walk outside, you come back in, you're good to go, right? If so, you have high resilience. So even if it's— now mind you, even if it's really steep, even if you like go crazy but then you come back real fast, you still have high resilience. You might have low fortitude but you have high resilience. You're back. All right? Or does it take you 5 years to bounce back? Compared to the 5-minute person, you have low resilience. Look how long it takes you to come back to normal. And so as you're thinking through this, I would encourage you, one, you can think about yourself, but also like who are the people in your lives who you're like, man, something throws so-and-so off and it's like they're in a funk for like months. That person is low resilience, right? If you have high resilience, what's interesting about it is that like even if something rock completely rocks you, you can come back and it doesn't massively affect your life because you're like, I'm already back, I already recovered, right? And so that's the third component. And we're gonna talk about more examples of all these put together in the mixes of these things for different types of mental toughness in a second, but I wanna define the terms. The fourth of these, and this is the final component of mental toughness, is adaptability. So how your new baseline compares to your old baseline. As a result of this hard thing, are you better for it or are you worse for it? And so did the bad thing cause you to permanently change your behavior in a bad way? All right, are you permanently worse or are you the same as you were before? That would be kind of a neutral adaptability, kind of medium. All right. So if you stabilize after a bad thing happens, which you will eventually, at a higher new baseline, then you have high adaptability. You let the hard times beat the strength into you, not out of you. If you stabilize to your former baseline after a bad thing happens, you have medium adaptability. So you're acting normally, bad thing happens, you come back and you're back to the way you were. You have medium adaptability. You didn't let it affect you. Fine, great. Now, the last version of this is that you stabilize below your former baseline after a bad thing happens. And I'm gonna talk, I'm gonna talk about this for a minute, 'cause this is gonna affect more than one of you and certainly somebody you know. If that happens to you, it means that you have low adaptability. It means the hard time beat the strength out of you. So in this little visual here, you can kind of see the 3 versions of this. Either you adapt above, you got stronger from it, you stay the same as you were before, you didn't let it affect you, or you're permanently worse off as a result of the bad thing that happened. And so if the new baseline changes in either direction, positive or negative, then the experience traumatized you. And I wanna use the actual definition of trauma here, all right? Rather than the social media influencer, foo-foo, whatever, all right? The actual definition here is that you have a permanent change in behavior as a result of an aversive stimulus. And I'll translate that in a second, all right? So that means that you changed how you acted from something bad that happened to you? So just think about that. So whenever you hear people be like, "Oh, she traumatized me," I would then respond, "In what way did you change your behavior as a result of the bad thing?" And if someone doesn't have an answer, it's like, "No, she just did a bad thing, but guess what? You showed resilience, you showed fortitude, and you showed adaptability. So it didn't actually permanently change your behavior." Now I'm gonna give you an example of trauma, bad thing, that creates a positive change in behavior, is it still trauma? By my definition, yes. But was the trauma bad? Ah, interesting. So let's dive in. So if the behavior change is positive, then it means you got better from a traumatic experience. That seems antithetical or against what most people would say about trauma. Trauma only makes you worse, right? It happens to you. You're a victim, right? What if it happens for you and you get better for it? Right? Now, if it's against your long-term goals, then you got worse from it. That's how we would, that's how we'd think through this. If you, some bad thing happens to you and then you have this goal of who you wanna become, how you wanna behave, where you wanna go, but you, it becomes less likely that occurs. It traumatized you. It did. And you had low adaptability. You got worse from it. Now I wanna be clear here. Both outcomes mean you were traumatized. You had a permanent change of behavior from a bad thing. You learned to do something different going forward. And so people who take my words out of context make it seem like I justify trauma when it couldn't be further from the truth. All right? I hope no one has bad things happen to them, right? But I see bad things, things happening against our preferences, as a fact of life. The only thing we have is our response to those bad things. And so at one extreme, you have someone who has maxed out stats of mental toughness, all 4, right? They are perfectly mentally tough. So how does this ideal person behave when something bad happens? They have huge tolerance, so almost nothing bothers them, right? High tolerance, super long fuse. If something does bother them, then their behavior change is so small, it's imperceptible, it's unnoticeable. No one can even notice that they're acting any different. And then they recover immediately 'cause they have high resilience. So even that tiny imperceptible change, and then boom, they're back within a second. They came back, high resilience. And then not only that, they use that experience, that bad thing to get better. So they have high adaptability. And so the end result of that is someone who just keeps getting better. They just keep getting stronger. They just keep improving and life happens for them, not to them. Real. And the real-world result of this is that it takes very little to throw them off their game. A tiny, on the other hand, if somebody has, let's imagine an imperfect person, all right? Let's somebody who's 0 out of 10 mental toughness. They're a mental weenie, they're a little ninny, all right? Some of you know these people as well. Some of you may be these people, all right? And so for you, it may take almost nothing to throw you off your game. Maybe it's bad weather, maybe you got a little bit of traffic, maybe the Wi-Fi's slow today, right? Maybe someone wrote a mean comment, Or maybe your post didn't get as many likes as you want, right? Somebody didn't buy and you thought they should've, right? Someone just calls you a bad name, right? They say you live your life in a way that I would not prefer, and you say, oh gosh, gee whiz, what will I do now, right? And so it takes very little to throw you off your game. A tiny inconvenience sends you spiraling. Low tolerance. Think weenie tolerance. Itty bitty bitty tolerance.
All right.
Now the next element of this mental weenie is that not only does it take almost nothing to throw them off their game, they drastically change their behavior. All right. They go super deep. They massively change how they behave as a result of this tiny little thing. Right? Again, we're thinking about a weenie here. I probably should stop saying that. Ninnie. We'll keep with Ninnie.. And then, and here's where it gets nasty, this is the third point of their mental nittiness, is that once they've massively changed their behavior, they stay down for a long time. And this is what that would look like. It takes them a super long time to restabilize their behavior. Like that tiny little Wi-Fi being so, that tiny little comment that someone said, forever, it just keeps bothering them, keeps bothering, keep replaying in their head. They said this thing. At this party and they think people laughed at them and they just keep replaying it, right? And not only that, when they finally stabilize, this is the fourth element, right? When they finally stabilize at this new lower baseline, they now are permanently worse as a result. So almost nothing threw them off. As soon as they do get thrown off, it's super deep in terms of their change in behavior. It takes them forever to recover. And then by the time they do recover, their recovery is worse than they were before. And you have met these people. I have met these people. This is the person who gets broken up with, gains 50 pounds, loses their job, and gets addicted to drugs. And key point, never recovers. And so life occurs and they simply get worse over and over and over again. Every time something happens, They spin out, they change their behavior, and then they're permanently worse. They're less likely to achieve the goals they have in their life, whatever those goals are. Life happens to them, not for them. And so of course, people in the real world like you and me, right? We sit somewhere between these two extremes, between maxed-out stats and ninism. And so you might have someone, for example, with a long fuse, Right? But when they snap, they really snap. So this is someone who has high mental tolerance but low fortitude. And so, and if they were to stay upset for weeks, then they would have low resiliency. But maybe they come back to baseline again. And that way, if they had come back to baseline, they have medium adaptability. So you've got someone with high tolerance, low fortitude. I don't remember if I said they take, they come back quickly or not. And then medium adaptability., right? So as we're thinking about this, like, think about how you'd relate yourself to each of these 4, right? Now let's give a different example. Let's say someone, you know, gets upset really fast, right? It doesn't take a lot, so they have low tolerance. They have— but so imagine somebody who gets upset really quickly but like barely changes their behavior. Okay, you know some of these people too. Like some, you know, they're sensitive, but like they're back, right? They bounce back pretty quick. So they would have high fortitude and high resilience. So it doesn't change their behavior much and they recover really quickly. Okay, doable. And they have normal adaptability. So you know these people, right? So it doesn't take much to set them off, but they only change behavior a little bit and they recover really quickly and then they go back to normal, right? Well, when you think about that, that's a different kind of mental toughness makeup than the first example. No, Richard, trauma is not more complex. People try to confuse each other and listen to other people who confuse them. Trauma is a permanent change of behavior from an aversive stimulus. Something bad happens in your life and you permanently change the way you behave. Period.
Period.
Period.
I don't know what to tell you, bro. I like, I really want to help. And that's why I'm saying this. Like people who believe that allow trauma to permanently change their behavior in a negative way and they get worse from it. And God, I hope that no one has traumatic things in their life. I hope that nothing bad happens to you, but it is a fact of life that bad things will occur. And so the question is how you behave as a result. Real. I wanna help. I really do. And this is why I'm making this stuff for you guys. All right, so real world examples. Where was I? They barely change their behavior. Okay, so this person, many things bother them. They barely change their behavior, but they get in a bad mood. They cry maybe, but then they recover. Now let's give a different example. Maybe it's someone who has low tolerance. Remember, they snap really quickly. High fortitude, so they don't change their behavior much. Low resilience, so it takes them a long time to recover. So think about somebody who's like, it doesn't take a lot, they change a little bit. So they're just like, I don't know, they're just a little bit in a funk. They don't lose their job, they don't lose their boyfriend, they're just like not as chipper, right? They're just kind of, maybe they're cold shouldering or maybe they're just like aloof. They just don't, like kind of glazed over. You guys know, like, know somebody like this, right? And then eventually, after this very long recovery process, they eventually get back to where they were before. So I'm trying to describe different types of behavior sets of what people do when bad things happen. So get in a funk easily, stay there for a long time, but it doesn't ruin their lives, right? They just stay below baseline for months until they eventually come back to normal. And so I see being able to describe the components of mental toughness as the first step to improving them in yourself and others. So just telling yourself or others to toughen up, for example, doesn't help anyone. But giving them clear instructions that they can use to change their behavior over time can help them improve it. And if you can improve it, it no longer means mental toughness is a trait that you're born with. But it's a skill you can develop. So if you have a short fuse, then you need to practice not giving power to something to ruin your day or ruin your moment, right? If you have a short fuse, then that's the behavior change that you have to think to yourself. I'm not gonna give power to this person. I'm not gonna let this thing change my behavior, right? So what I wanna say here is like, I'm not saying don't be upset. That's not my point at all. You just want to allow yourself to be more upset about letting something change your behavior than about the thing itself. So, for example, "I can't believe that person said XYZ to me." Right? Rather than lashing out, you think, "I don't want to give them that level of control over my behavior. I want to be bigger than the pain." Simply put, just continue to behave as normal despite the fact that something bad happened. And so if you ever heard somebody who says like, "Bad things happen in threes," right? Or you say like, you know, insult led to injury or bad got to worse, right? All of these things, then you need to recognize as soon as your behavior begins to change and not make more bad decisions. Right? You don't want to have a bad decision snowball. And that becomes a very slippery slope that we want to avoid as fast as possible, the negative snowball, right? And the only way you can do that is by first recognizing that you diverted from your normal behavior. You have to recognize, you know what? I got in a bad mood and I started acting differently, right? Now you can be in a bad mood, but if only you know and no one else knows, great job, right? You change your behavior. Like, okay, what would I normally say if I walk in the room when I'm not in a bad mood. Okay, well then why don't I say that even though I'm in a bad mood? Mental toughness. And so for the second kind of character trait that we're trying to improve, right, then rather than justify why it's okay that you acted out, rather than justify that it's okay that you behave differently than your normal, right, remind yourself of all the even worse things that will happen as a result of this continued slippery slope of continuing to behave in a way that is not aligned with your goals, right? 'Cause if you continue this course, or, and the way that I think about this is like, what happened the last time I went down this road? Remember that bad thing that happened? Like, I remember tons of bad things that have happened when I act out too long, too hard, right? And I think that the more you practice this, the faster you catch yourself from spinning out. You're like, okay, I just changed my behavior. Against my goals. Okay, let me come back up, right? Like as soon as I can recognize it. And so on a personal note for me, I think that this one actually hurts the worst, hurts the most, right? Trying to fix fortitude because I have to admit that I was too weak to control my behavior to begin with. I have to admit that my tolerance was not sufficiently strong to to withstand whatever hardship I went through, that I did end up reaching past my max, my theoretical max of hard stuff that I was able to withstand, that I did change my behavior. But at least once you recognize it, right, you can give yourself the opportunity to demonstrate strength. And so that's the— in some ways, that's the silver lining. When you do act out, you're like, wow, this is actually an opportunity for me to stop acting out and demonstrate to myself that I I have higher fortitude than I thought I did. And when you do that, you have the strength to change it. And so this action or this decision reverses the momentum of the bad decision, of the bad behavior that you did. And I say bad, again, against our preferences, against the goals you have, right? And it begins the ascent back to baseline. And so if you realize that you've already messed up, you snap back at your girlfriend, you said something mean to an employee, You said a snide remark to your boss after something pissed you off, whatever it is, right? You realize that you messed up. No matter how big or small, you just focus on getting back to normal. What would I do if I were not upset right now? You act as if you were not upset. You allow yourself to be upset, but not let the upsetness to change your behavior. So independent, whether you like it or not, that's the point. And so I want to be clear here. This does not invalidate your feelings. It simply breaks the direct link between how you feel and how you act. The goal is to return to baseline as fast as possible. And over time, you can act like normal faster and faster until eventually it's almost as if you were never upset to begin with, AKA your behavior doesn't change at all. And on a personal note, this is one that I found one of the easier ones to improve. Once it's like, okay, I messed up, I've acted this way, how do I jetpack back to normal as fast as possible, right? So as soon as you hit your rock bottom, whatever that is for you, of this upset period, you reverse course hardcore, full 180, full throttle forward, back to normal, all right? Because then you get to say like, it only controls me as long as I allow it to control my behavior. And so if you realize, now we're getting into the last version of this, if you realize that you are worse off than you were before the bad thing happened, we're getting into adaptability, then you have low adaptability, right? And now how do we reverse this, the fourth component of mental toughness? Then you have to ask yourself, how can I let this bad thing serve me? In what universe would this bad thing occurring actually be the beginning of something better, real. And so no matter how bad it is, our moments of greatest growth typically come after our biggest upsets. I don't know about you guys, but for me, this has totally been true. Like a lot of my greatest growth has come from like very, you know, periods where, you know, my fortitude was tested. I acted worse than I would like to. And then at that point you come back to a baseline, but then you look back on the whole experience and you're like, how could this have served me? In what universe would this actually be in a story where the protagonist grows from this? So I love this. I think I heard this first time on Joe Rogan, but I love the frame, which is that if you were to wake up, right, as the main character in a movie and you know that that movie has a happy ending and the character gets passed up for the promotion, doesn't get the girl, you know, the person they cared about most dies, what would the character in the story do to move the plot along towards the happy ending?, right? As soon as you recognize it, what would that character do? You do it. And to be clear, guilt means that you broke your own rules, and shame means you broke other people's rules. And those things are only useful after you had a bad behavior, right? As long as they get you to change your behavior for the better. Those two emotions, which come as the result of breaking your own rules or breaking other people's rules, are effective for changing behavior if you let them help you change your behavior for the better. You just simply feeling bad for the sake of feeling bad and not changing your behavior serves no one. It serves no purpose. So to be clear, I am not saying that you're supposed to numb yourself. Feel at all or not feel your feelings. I'm stating that you do not need to act out your feelings. In other words, just because you feel like shit doesn't mean you need to act like shit, treat other people like shit, or treat yourself like shit. I think separating our feelings from how we behave is a sign of maturity, which has almost nothing to do with how old you are, only how skilled And that means that you can work on it. And if that's not a hopeful message, I don't know what is. That's my internet troll disclaimer. So hope you guys enjoyed that. I wrote that obviously in the lieu of my mom's death, and I wanted to better understand the feelings that I was going through and the behavior change as a result. And I was thinking to myself like, okay, how can I use this to make me better, right? Um, how, like, how, yeah, how can I use this to strengthen me? How can I become better as a result of this? Like, no one wants to think, man, my parent died, how do I get better from this? Like, it feels like an almost uncomfortable thought. But if you think about your parent dying, your dog dying, or you getting broken up with, or whatever the bad thing that happened to you, Right? Like, what other frame serves you? And do you think that that person that let you down would want you to be worse off?
No.
I know for me, for sure not.
Right?
That person would want me to be better from it. They wouldn't want me to be permanently traumatized. They wouldn't want me to be permanently changing my behavior in a way that is antithetical to my goals, is against my goals, makes it less likely that I get what I want out of life. Why would they want that for me? Why would they want that for you? Right? And so I think one of the things that's very important for, like, that I also had to break, you know, in thinking through this is that How long I mourn has nothing to do with how much I loved, period. If you get broken up with, if you're like, man, it takes half as long to get over somebody as you were in a relationship. You guys ever heard that before? I've heard that, right? And when you think about that though, right? Why? You ever ask someone that? Like someone says like, it takes half as long, you know, that you're in a relationship to get back to back, right? Like back up to normal. Why? Why? Who made that rule? Why can't I get broken up with today and be better immediately? Why not? Like, what stops me? What rule of physics prevents me from behaving in a certain way, right? And I wanna be clear, there are biological things that can affect this. If you're low on sleep, if you haven't eaten, if you, I think there's two that are coming top of mind. But like on the flip side, it's like if you slept really well, you have a full stomach, like you are more resilient, right? You have, rather, you have more tolerance and you have higher resiliency. All of your mental toughness stats will go up when you are biologically in a better situation. And I only say that because they've measured this. People are less tolerant when they haven't slept. They're less tolerant when they haven't eaten, right? And so I don't wanna say that these things happen in a vacuum? Absolutely not. But when the bad thing happens, typically you don't expect them and you have to deal with the cards you're dealt, right? We have to take it within the fact that maybe we didn't sleep that much the night before or we haven't eaten in 6 hours, right? Or we just came off of 9 bad meetings in a row, whatever it is, right? We still have that moment and Viktor Frankl talks about this in Man's Search for Meaning, is that there's this gap, this moment between stimulus and reaction where we have a choice. We get to act how we want to behave. And I think that that is where we get to live out our ideals. And I think if there's anything that's eternal about the human life, it's about the values that we choose to live by. And as someone who recently wrote a eulogy about this, I find it interesting when I think about what things we use to describe other human beings at the end of their life to summarize everything that happened. And what's very interesting to me is that the accomplishments that the person goes through is about 1 to 2 sentences. No one cares. No one cares if you were the richest man in Babylon. No one cares if you built a bunch of skyscrapers. No one cares if you invented some new social media app that then got sold for a billion. Like, imagine at the funeral, this was John, man, he really knew how to nail product market fit. No one would say that, even though it's something that we dedicate a huge amount of our time to. And what I did find that was interesting is that there was 2 things that that persistently come up as the things that people talk about, which is number 1, service. What do they do for other people? And number 2, character, which I see character fundamentally as skills, but skills in behavior on how we treat ourselves and others, which you could maybe just say are also service, right? But it's how did they behave and what did they do as a result of this idealistic behavior? And In thinking and unpacking all this stuff while I was going through it, hopefully you guys enjoyed this, by the way, it was super elucidating. It was illuminating for me. It helped me understand it better. And for those of you who are curious, like, I write to understand. I think some people come at writing from the perspective of, like, I want to document all these things, and I think there's a component to that, but trying to take what you have in your head and write it out will show you how many gaps you have in your thinking, and it forces you to learn because there's no hiding from the words on a paper, right? The gaps in understanding become very clear when you actually try to explain it word by word in front of your eyes rather than just these amorphous thoughts that kind of swirl around your head. And so this was super valuable. I told Layla, I sent her the thing that I wrote about this, and she was like, I think you might have a non-business book in you. So if you guys would like a non-business book, let me know, because I haven't started what my next book's going to be. So how about do this: put a W in the chat if you would want a book like this, and put a B in the chat if you'd want a business book as my next book. It's gonna be— it's an either/or, so it's real. It's an either/or. So, uh, Steve said no, thank you for that. Just don't write another book, please. Some Bs and Ws. Oh, some more Ws than Bs, interesting. Yeah, I mean, I've always tried to stick more or less to business, but I have a hard time, I'm having an increasingly difficult time separating out some of these, I would say, behavior sets, interpersonal skills, self-skills from it because so many things in business rely on you having this, right? Like, you could have the best business strategy in the world,. But if you have low tolerance, if you have low fortitude, if you have low resilience, if you have low adaptability, you will fail. It doesn't matter. And what I find interesting about this is that so many people are looking for the latest tactic when most of the time they can't execute anything for a consistent period of time because they get in their own way. They allow the world to dictate how they act. And that means that you are controlled by the world. And I think that to a large degree many of us are, we're certainly influenced by it. And we can almost act as this tiny droplet of defiance, this tiny droplet of agency of like, what do I choose to do? I know all these bad things happened, but what am I going to do? And I think that there's a certain amount of inner strength that you experience or this feeling, maybe peace if you want to call it that, where you're like, I know I'm in a bad mood right now. I know bad things have happened to me, but I'm still going to behave as though this person deserves my respect, they deserve my love, they deserve my appreciation, they deserve my gratitude. And if I can get through this day, just today, or even just this conversation without them knowing that I was off or that I was in a bad mood, and that's a W. And I think when you think that way, it's like you can take it one at a time, just one W at a time. And what happens is that as time passes, as you give time time, one, that skill reinforces. You get better and better at it because you keep practicing it. But on top of that, you start to develop a reputation for being someone who's unshakable, unmovable, who's consistent, unbreakable. And then what happens is people begin to reinforce that identity with you. They start to tell you, those things. They start to tell, well, he's, dude, he's a rock, man. That guy, that guy keeps going. That guy's, you know, he's a maniac. He doesn't stop, right? People start to describe you this way and you start to believe it and you start to act in a way that confirms their positive suspicions, the traits that they choose to name you, they label you. And so that begins and kicks off the virtuous cycle. But some of you guys right now are, are in that You're in that valley of despair, right? You had, maybe you had low tolerance, maybe you had high tolerance, I don't know. And something bad happened and then you changed the way you behaved. And maybe you're in the low resilience, you're just like, you're just still kind of puttering along. And I would encourage you that one, like at the end of your life, the only thing that people will talk about is how you helped other people and how you behaved. No one, like at my funeral, no one will give a shit about how many books I sold. No one will care. No one will care about the business that we built. No one will care about the houses, the real estate, the equity, and like, no one will care. No one will care. And so I think the idea of starting at the end and working backwards is super powerful. And yeah, I appreciate you guys. I wanted to do that live with you. Hope you enjoy that. Business, but with some mindset. Built in. Okay, sweet. So that was the mental toughness one right now. I'm gonna do a second video, so you guys wanna see like what behind the scenes of doing the videos. James, I think I might have to do like, instead of $100 Million Mentality, I might do mindset even though I hate, I think I hate the word mindset so much that I might have to write a book about it. So many things in my life have happened because I like, it's so funny, it's like, I had my gyms and I had 6 gyms and like I didn't know many people who had more gyms than me for most of the time that I had my gyms. And people started reaching out and asking me for help with the gyms. And I told Layla, no matter what, I was like, I never would've become a gym guru. And then like at the end of this whole life cycle, I ended up becoming like the biggest gym guru. And so it's like, I hate the term mindset. I think it sucks. I think people have all this mythology around it. They're like, these things get stored in your body and there's these synchronicities and frequencies and vibrations and manifestation. It's like, dude, just define what you're talking about. Like, what are you saying? And whenever people say those things, I'm going to go a little amorphous and I'm going to get back to business, all right? So don't worry. Give it 2 minutes, 2 minutes, then we're going to hit business again, all right? This is my last point. When you begin to see language as behavior, So let me explain what that means. If I say hi, then I'm soliciting a response from someone. The sound hi, then they have been reinforced for saying hi back or what's up, right? And so what happens is, for example, I'll give you a different version of this. If I begin to cry, then I'm going to solicit a certain type of response from people around me. And this is where people start to create vicious cycles. Let me give you an example of one. This is one that I realized with, with Layla, my wife, so I'll just be real with you. So if Layla cries in the earlier part of our relationship, well, for many years, I'll be real with you, many years when Layla would cry, I would, I would try and comfort, and if she was still crying, I would stay quiet because I didn't know what to do, and she would still cry, and then I would get angry. And then she would stop crying. And so what ended up happening is that I ended up being reinforced for getting angry when she was sad. And so when she would cry, I would get angry and then she would stop crying. 'Cause I learned to get, not consciously, right? But I learned to get Layla to stop crying, get upset. And so then Layla was like, well, I don't wanna be upset around you because you only get angry with me. And then I had to learn more about behavior and then I was like, oh, Wow, I learned the wrong lesson here. And I bring this up to say that the words we say, oftentimes we don't even mean the words because we've never defined the words, but we say the words because of how other people respond when we say them. And so if you're in a community of people, for example, that say manifestation, frequency, synchronicities, all this wild shit, right? You say these things, these people agree with you and say you are one of us, you are accepted, we love you, then of course you're going to believe those words. You just haven't defined them, but you love the reaction you get when you say them. And so when you see these words as behavior, you begin to do that behavior more when good things happen. And so this is why, for any of you, obviously you guys have, maybe you followed my stuff for a little bit, this is why I take definitions so seriously. Like, words matter. Like, what are we talking about, right? Which is why the first step of the 3 steps I have when I'm breaking down any problem is what does this mean, how do we know, And why does it matter? And so I would encourage you, that's logic, evidence, utility, by the way. What does it mean? How do you know? Why does it matter? And so with that being said, I said 2 minutes. Now we're gonna get back to business. Cool? Rock and roll? Like it? All right, let's do it. We now begin the next, the next of our YouTuber videos. I can never crack my knuckles, it freaks me out when I see people do it, but for the moment I kinda wanna do it. But imagine, crack, okay. There's a single reason why most people stay broke and most businesses stay small. So I've been in business 14 years, I own a portfolio of companies, Acquisition.com, that last year did over $250 million in aggregate revenue, and the number one excuse that I hear from entrepreneurs about why they haven't grown is that their market is saturated, it's too small, there's so many people, it's over, it's super competitive, it's red ocean. Everyone has these different terms like, I don't wanna start this thing 'cause there's so many people doing it. Here's what's insane, 99% of people who say this are completely wrong. And so unless you're selling to 140 people in a rural town in the middle of nowhere, your market is probably 100 or 1,000 times bigger than you think. And the average entrepreneur has tapped into less than 1% of the actual market. And so there is a massive gap between how you see your market, how you perceive your market, and how big it actually is. Once you figure that out, you'll realize you've been looking at your business through a keyhole when there's actually a massive door in front of you that you can open up and see what it truly is. And so what I'm about to tell you completely change how you see your business's potential is total addressable market, and you'll see why it's actually good to go into saturated markets, why red oceans could actually be an amazing opportunity for you. And it starts with understanding why this limiting belief exists to begin with. Now, the reason this exists to begin with, for the most part in my opinion, is that people want to protect their egos. They say that their market is too small and that's the reason they haven't been able to scale. I can't scale my ads past $1,000 a day because I think I've saturated my market. No bro, you haven't saturated your market. You haven't saturated Facebook. Your ads suck. You don't know different levels of awareness. You only know how to advertise to an avatar that understands the solution and product that you're selling. As soon as you get above that, there's a much larger market above that that could actually buy your stuff, but because you don't know how to advertise, you're unable to reach it. And rather than say, I do not know how to advertise in a way that gets more leads, I do not know how to scale, instead you say the market is too small.
Real.
Now I want to be clear here. If you have a local business, it is possible, like my 140-person example, it is possible that you're in a market that literally there's 140 people in your market and you're in the middle of the Sahara Desert. Yeah, it's probably not going to work, right? But most of the time, even in local markets, if you're in like an A market or B market, there's a million people in your city, there's 400,000 people in your city, If you need 200 to make business work, you are fine, right? There's other things that are holding you back. Now, if you're in basically any other industry, which you can look up from like Google industry revenue, the likelihood that you have tapped your market is, it's almost impossible, all right? And the thing is, is that it is still one of the most commonly stated things and least commonly true. And so I'll tell you a quick story about this and then I wanna show you a really powerful visual. So when I was, when I had Gym Launch, I wanted to start doing outbound. Rather, I didn't want to start doing outbound, I was convinced to do outbound 'cause of the story I'm about to tell you. So I had a conversation with a guy who was a lead sales rep. We were recruiting him in and I asked him how they currently get leads at his company and he was actually in the gym business. I didn't find this out until I got into the interview and he was selling gym software. Whatever, and I asked them, I asked him how much they were doing a month, and they were doing $10 million a month, and I was like, holy cannoli, I've never even heard of this business, and I said, okay, well then how are you getting all your leads? He said, oh, we just do outbound, and I was like, that's insane, I didn't know outbound could generate that kind of demand, but here was this company that I had never heard of that at the time was doing 5 times more revenue than I was doing, and it broke a belief for me. So let me give you this, this visual that I think is super powerful for understanding this. Let's imagine you guys see my— can they see? We're good. Okay. So let's imagine that this is 100% of the pie. This is the entirety of, you know, like the market, right? So if you had 100% access to the market, you'd be super happy. Now, this is what happens. In people's minds when a competitor comes in. So you say, oh my God, there's them and there's me. Oh, I guess I'll be medium happy about this situation. And then let's say you have two more competitors that come in. Now you're very sad because you're like, wait, I used to have this whole pie. Now I only have a quarter of the pie. This is false. This belief set will keep you poor, or at least poorer than you would otherwise be if you adopted a different perspective. So you currently advertise in one way using one specific platform and one specific medium on that platform. And so this little, this little red, let's, red slice of pie here, right? What is it in actuality? Well, let me show you. This is what that little slice of pie looks like when we actually consider the size of the market and the aggregate attention that exists. It's so small you can barely even see that it's happening, and this could be just all the different platforms on which content, let's say content is how you get your customers. This is, maybe this is Instagram, this is Facebook, this is TikTok, this is YouTube, this is X, this is radio, right? This is TV, this is Taboola, this is Google search, like this is direct mail, this is email, right? Like you can keep going. This is school, right? All of these, and you're here, And you're saying, hey, I think I've cut my market into like there's only, I only have a quarter of the market that's available to me. But wait, there's more. We still have our ads circles which you're currently doing nothing with. Just imagine all these circles fill out. Go as fast as I can. All right, and then wait, but wait, there's more. Now we have our outreach. And on here we could do direct mail, we could do DMs, we could do DMs on Facebook, we could do DMs on LinkedIn, we could do DMs on TikTok, we could do DMs on— we could do phone calls. We could do every single way that you can contact another human being one-on-one is the different ways that you could outreach. And so when we look at this whole thing, You had 2 competitors or 3 competitors, 1, 2, and 3 that came into your marketplace and you said, oh, therefore this is now super crowded. But the reality is that you're this tiny little sliver of this one way that you get customers on this one tiny platform. And I haven't even added in the next layer of this, which is on that one platform. Are you maximizing every way to advertise on there? I make a couple of Instagram posts. Okay, cool. Are you making stories? Are you making images? Are you making carousels? Are you doing all different ways of doing that? Oh, I make YouTube Shorts. Okay, great. Are you making YouTube Longs? Are you doing YouTube community posts? How many of them are you making, right? And I told you that I wanted to shift this belief for a second because many of you are not being limited by your market, not even close to it. But even if you were, and I wanna take the opposite perspective for this for a moment. Let's imagine that you're in the absolute biggest red ocean, right? Red ocean being it's super populated, there's blood in the water, right? Do you think the business advice niche is populated? Do you think there's a lot of red ocean in business advice? Yeah, probably, right? And so should I have not gotten into this? The bloodier the water, it means the more fish are there. And so where there's the fiercest competition, there's also oftentimes the biggest rewards. Now, that being said, how do we merge this concept with the idea of you should niche down? Wait, Alex, I thought you wrote a book that said, hey, the riches are in the niches, right? So how do we merge these two ideas? Let me explain, because I get questions about this. In the beginning, you want to artificially constrain the pond that you're going after so that you can compete in a place where the sharks aren't swimming. Okay, so you want to be the biggest guy in a puddle. That's what you want to do, biggest guy in a puddle. And then you say, you know what, I'm going to go from a puddle to a pond because I think I'm too big for this puddle. And so you grow and then you go to the pond. And then once you go from the pond, you say, you know what, I'm going to go to a lake. Now I'm in a lake because I'm an even bigger fishy, right? Now I'm in a lake. And then eventually you get to the point where you say, you know what, I think that I'm big enough to go into open class, open market, and fight in the ocean. Now, if we were to look at this trajectory, I started as a trainer and I talked about nutrition and stuff. And then I talked about gym stuff. And then I started talking about business stuff. So you're going to have evolutions where you can get big enough for a pond that you can move on from the pond to the lake and the lake to the ocean. It's just that it's directly correlated with your skill and your experience. And so the reason that the, the riches are in the niches is that when you're there, number one, you're competing against fewer people. And so the upside is capped typically. Now it's usually capped at way higher than you think it is, but it is capped to a degree. And that's okay, but as a result, because we are niched down, we're able to charge niche prices, which give us more profit, more pricing power, 'cause there's fewer people, there's fewer things to compare you against, right? And so there does come a time where you can go move the market, right, move your market rather, to go after a different segment or a broader segment. So let me walk through how to think through this evolution. For a business. So let's say that your current business is this little dot here, okay? There are 5 directions that we can move with this dot. We can go— so let's imagine this is a— we've got a triangle of a marketplace, okay? So this is where you inhabit. You can go upmarket, all right? So for example, in my gym launch days, I could, instead of serving single location fragmented gym owners. I could go to franchisers, right? Multi-location owners and franchisers. So I have one-off gyms here. Now the next direction, so this is direction number 1 I can do. Direction number 2 is I can go down market, which would be that I could go after trainers. There's way more trainers. They have way less buying power, but there's a lot of them. There's fewer franchisers than there are gyms, and there's fewer gyms than there are trainers. Pyramid, right? So that's the second thing we can do. The next thing we can do is we can go adjacent. So instead of gyms, I say, you know what? I think I can help chiros. That's what I think I'm going to do. I'm going to take my systems and we go into chiropractors. That'd be an adjacent market. I could also go broader, right? Which would mean that I would look at this way. Which means instead of gyms, maybe I talk about health and wellness in general. And so that means that I could go after chiros, med spas, anybody, you know, weight loss clinics. Oops. All of these things are now broader, or I can go narrower. So Instead of gyms, I say I'm only going to work with spin studios. I'm only gonna work with dancing studios. So this is our fifth, this is our fourth, this is our third. So that gives you 5 directions that you can go in to change the direction of the market that you choose to play in. Now I outlined this and what's interesting is that most people who are especially smaller business owners have never even defined this to begin with and they pretty much just accept people's money as long as they have a pulse and a credit card. There's obviously two requirements. Well, let's say pulse is optional, as long as they have a credit card, kidding, that they accept. But the thing is, is that like you want to get really, really clear on this because if you don't, your customers will be confused because they won't know what you're really about. Can you scroll up on my notes? Keep going, keep going, keep going. Okay, so the tactics for you, if you're like, all right, I am not getting, 'cause typically people will say that they are in too small of a market because they're not getting as many leads as they want, which are two completely different issues, right? And so if you can at least believe the idea that I have, that there is other ways to get customers than you're currently doing, which I'll refer to back here. What you do is you say, how do I make content in more places? How do I make more of it? How do I make it better? And then eventually you say, how do I also run ads? How do I also pair outreach with that? And that is how you can achieve omnipresence as a business. And so you need to do more in more places, even better, consistently for a long period of time, because it's unlikely that you've actually capped the market. You were just too unskilled to capture the significantly larger percentage of the pie And that's okay. And that's why we stay in a niche for the short term. And then eventually as you get better, you can expand it and expand it and expand it. And you keep eating. And that's all right and totally normal. Now, let's be— now I said at the very beginning, if you're a local market, you can— this can sometimes bite you. So I wanna give some of the local guys, which are usually like 35% of people who are listening to this. So I'm gonna go real quick for you guys, what you can actually do to expand how much you can make with just a single location. So number 1 is you can expand your actual location. So that means you knock down walls, you add seats, uh, you just increase efficiency. Like, how can I get more, um, from my existing 4 walls? How to get more out of it? Like, for me, um, when I started getting too crowded at my first gym, I, you know, cut the class times from 45 minutes to 30 minutes. Um, and by doing that, I got, you know, 1.5 times more classes in. I cut out the like breaks between classes. So again, I could fit more people in. I could also extend and open more hours. All of those things expand your existing location. The second thing that you can do is what I just walked through, which is you add more channels. So, okay, you're posting on Instagram. Are you posting on X? Are you posting on YouTube? Are you posting on Facebook? Are you posting on TikTok? Like you expand channels. And I would say that many of you guys have heard my rule of one avatar, one product, one channel until you get to $1 million a year. The only exception to this is sometimes local businesses. Now if you're in, I would say, an A or B market, you could totally just do that to get to $2 million a year. If you're in like a C or D market, so I would say, I don't know what the numbers are there, but I'm assuming it's probably like less than 50,000 people in like a 10-mile radius. Of where you're at. If you're at less than 50, then you're going to probably need to use more than one channel to get customers 'cause there's just not as many people. You have to saturate that tiny market by getting in front of more people in more places. The third thing that you can do is you open another location. So you can expand the current one, you can add channels to drive even more into the current one, but at a certain point you're gonna max out your four walls. And so you just open a new spot. And I see that as the eventuality of most of these businesses. And I think this is kind of interesting 'cause a lot of people feel like they're like, I don't know if this is a $100 million opportunity. It's like, well, yeah, your one store isn't a $100 million opportunity, but you being able to duplicate and nail the model and then scale the model absolutely is. And so even if, I can almost promise you, Sorry, I almost swallowed my gum. If you have the goal of getting to $10 million a year, you can pretty much do it in any business. If you have the goal, with the exception of if you are a brick and mortar and there's 100 people in your local market, probably not. But outside of that, that business model, even if you were in a tiny market, could get to $10 million a year. You just open up in new markets. That's all you do, right? And so most people's goals are achievable within their current vehicle. They're just too impatient and believe that there's another shiny object that somehow will get there faster. But if you take the natural extreme and say, if I only did one thing for 40 years, do I think I'd be successful? Probably. And so if you knew that to be true, then that would give you a very strong reason to stick with whatever you're doing because, let me give you a visual for this. This is the cost of switching. So if, let's say that you're in year 3 of your current business, okay? Or current opportunity, it doesn't really matter what it is. So this is 1, this is year 2, this is year 3, okay. Now what people want to convince themselves is that they're like, I wanna start this new thing. Okay, that's fine. You wanna start this new thing. So let's see that year 1 of this new thing is higher. Okay, that's fine. This one is a little bit higher than this one on year 2. But the thing is, is that this is year 1 of this year but it's year 4 here. You're still behind. And not only that, growth when you get bigger is easier than growth when you're smaller. And you're like, okay, well maybe, maybe this faster rate of growth, I'll be able to catch up. Okay, well now you're year 2. But now we're at year 5 over here, right? And so the head start that you give yourself by sticking with something, like sticking with it is how you get the head start. It's how you keep the head start that you already began. That's something I think so many people miss when they're trying to go to this next opportunity. Unless there is something inherently wrong with the assumption that you have and skill is not the deficiency that you need to overcome, which it often is, Most of the time people get stuck on things that I call features, not bugs, and this isn't my invention, is that there's an element of your business that makes it hard. There's an element of every business that makes it hard, but that's what makes it a business and that's why you're compensated for it. If you're in the cleaning business, the difficulty you're going to have is attracting and retaining high-quality talent. If you're in the fitness business, the difficulty is attracting customers and customer retention because people are inherently really shaky, um, about staying with their fitness goals, but they typically stick with their cleaners for a really long time. Right? And so every business has elements that make it shitty. It's just the name of the game. And you know what, I'll give you a different frame on this. So if you were to think about different business models, so let's think about, I doubt many of you guys have heard this, so this is pretty sweet. So let's say that you've got e-commerce, you've got, let's say you've got service, You've got, let's say, info, education, media, and let's say you've got SaaS, all right, so software. Okay, so let's say that these are 4 different opportunities. Each of these opportunities has a different shape. So info looks like this. Starts really fast, very difficult to scale. SaaS is the opposite. Starts really, really slow, scales really, really fast. Ecom is more like this. You can scale fast, but there's difficulty with typically cash flow because you have to continue to buy more inventory. You have supply chain issues, you have to switch suppliers, switch 3PLs so they can handle your volume. All of this stuff happens as you continue to grow. So it's more like, hold on, it's more like this. That's the shape of ecom, right? And then service businesses are more like this. The slowest, but they are steady. And so when you see these 4 shapes, many of you guys just hit the crappy part of whatever the opportunity that you're on is and then say, there's something wrong with my business, therefore I should stop, rather than seeing it as what it is, which is this is just the nature of how this business works. This is a feature, not a bug. It's going to be harder for you to attract really good talent in engineering and build software, and you're probably going to be not profitable because most software sells for lower ticket, most for a period of time. And it takes a long time to get a product to actually be good. And so you're going to basically burn money, burn time for a long period, and then eventually you can scale to the moon. But it takes a long time, sometimes years to get there. And a lot of people don't have that level of tolerance. Info, on the other hand, is kind of the exact opposite of that. You can make a lot of money really quickly, a lot being relative., right? You're probably not going to become a billionaire, but you can make $1 million and then very quickly it gets very difficult to scale it. And I'll say like info specifically more like coaching, things like that. And the reason for that is 'cause there's almost no, no revenue retention. People don't stay around. Once you learn something, you learned it. That's why people graduate school. They learned, right? Service businesses, the issue is people because it's a very people, people-heavy business. You have to constantly be, Hiring, onboarding, and training, and it depends on the service you're providing. If you provide weight loss coaching service or weight loss services, I use that as an example obviously 'cause I came from that, it's easy for you to get talent because lots of people wanna talk about fitness and weight loss and food all day 'cause they're like really into it. So it's actually very easy to get good talent and for below average prices because people would do it for free. On the flip side, customers never wanna do it, and so they're canceling all the time. If I had an accounting firm, it's the opposite. Accounting firms have super high annual stick. What's the difficulty with accounting firms? Getting the people who can do accounting. And it's almost always this balance, right? If a lot of people want to do it, there's going to be a lot of competition. There's very low barriers to entry. And as a result, customers have lots of options and they don't want to do it themselves. If there aren't as many options and you have a supply-constrained industry, then you're going to have issues getting talent. Fundamentally, and you can look at this at the business level, but you can also look at the industry level. And so I talk about demand constraints and supply constraints at the business level, but you can see if you are way off track based on do you match with your industry? If your industry, and by the way, if you are the inverse of your industry, you're usually doing something either really wrong or really right, side note, so great way to think about it. If you can be supply constrained, demand constrained in like the cleaning business example that I gave, if you give supply constraints, sorry, demand constraints, as in I could take 100 times more customers than I currently am with my cleaning thing, well then you've either figured out something really amazing with cleaners to like attract them in and like you're about to go hyperscale or you're just starting out and you haven't done anything yet. There's either something really right or really wrong with what you're doing. But most of the time you probably match the same constraint of your industry. And the problem with not being experienced is you think there's something wrong. And so then you end up spending multiple years not being all in on your opportunity and then being upset that it's not growing as fast as you want it to grow. When in reality you never really gave it a shot because you're always looking, you're kind of like the guy who's in the marriage that they're like, you know, they were in love a while ago and, you know, things are okay but they, you know, he's got a wandering eye, right? He's always looking, he's always, you know, trying to look for the next thing, the next girl, the next whatever. And he's like, well, my marriage isn't good. It's like, well, no shit. You're spending all your time looking at these other opportunities rather than doubling down on the thing you got. And when you double down on the thing you got, usually when you take the marriage, it takes way less time. I would say, okay, I'm not gonna make broad sweeping statements on marriages, all right? But I will say that in my experience, from my n equals 1 marriage, it takes way less time to go from like, we're upset about something, to we're really good than it does to create the loyalty, the trust, and the track record that you have from that marriage with someone else. Real. So, with that being said, let me go back to my notes. I gotta, I gotta, no, you're good, keep going. All good, no, other way, other way. There you go. Let's see what else, keep going, keep going, keep going. Okay, cool. So that was my pièce de résistance, if you will. That was the thing that I wanted to talk about today that was top of mind. Is that so many people think that their market is actually limited when in reaction their mind is limited. And there are so many ways to advertise, but you do not have the skill to advertise it. And so I'll leave you with a really powerful question that I think is worth asking yourself when you're in these situations is instead of saying, "There are no good salespeople in my market," or, "No one can sell like I can sell," or, "It's really crowded," which really is usually a translation for, "I can't get enough leads," or, "Leads cost too much," by the way. But you say these statements, just frame it into a statement that you control. Meaning, I don't have the skill to get more leads. I don't have the skill to attract, hire, manage a good salesperson. I don't have the skill to get employees to behave in a way that is according to the goals that I have in the business. Those, as soon as you state it in that way, guess who owns the outcome? You, you become source, you become the one who can change it. And so I would just like, it just does not serve you to cast your power outside of yourself and give that as the reason for why you lack the success that you want. And here's the crazy part, you could be right. And so what? Like some prizes aren't worth winning. Like if you want to play the pity game and you want to win the pity award for person who was born with most inconveniences or person who had the worst things happen to them, you can win that award. The question is just, do you want it? Is that prize worth playing for? Is it worth competing for? For me, when I hear or see a situation like that, there's also something that I think is the same power, if not more powerful, which is, this person was able to win despite that. And that's a story that only you can have. And the more fucked up your childhood, the more fucked up the things that you went through to get to where you are, the stronger that story is for the people who follow behind you and look up to you. The more you can serve as an example for other people who have suffered the same things that you've suffered or suffered worse than you've suffered. And I think it's like you rob yourself of that opportunity by protecting your ego and saying that it was because of this other thing. And maybe you're right, but wouldn't it be cooler to be right about the fact that that was true and, and you won instead and you won anyways and you succeeded despite that? I think that's a much cooler story. And I think that if we use the story frame, which is one of my favorite razors, which is that when you're 85 and you're split between two choices in life, pick the cooler story, 'cause at the end of your life, it's the only thing you're gonna be left with anyways. And when you have these two choices, there's usually the hard thing, which is the right thing, and the other way. And the reason that I think you should always take the hard thing is because if the easy thing were the right thing, you wouldn't have had to make this decision because you would've already done it. And so you're only hesitating because it's harder than you expect. So with that, appreciate you guys. Um, hopefully that was fun. This is how we make YouTube videos. Um, thought we'd just do this for you guys. Uh, Jing Quan Bu, I'm just gonna say that that's your name. Um, what if AI kills us all? You won't know because you'll be dead. And if it kills everyone, then all status games are over. And as soon as it's human against machine, we all lose. And until then, it's going to be humans using machines against humans using machines, which is what it's been since the dawn of time, except swap machines for tech, but you get the idea. All right. That being said, we're going to do more Mosey, her Mosey Hotline, and we're going to come in hot. You feeling hot, Mr. Duke? Feeling hot and heavy? Cool. We gotta do a different one. I want a different headset. This looks so boomer. Hold on. I'm getting a little toasty. I'm getting toasty. I'm feeling that heat. That heat's moving. All right. How much will this life be? I don't even know what that means. All right, let's see here. I mean, I think it's very— ever consider going back to Iran? No. All right. Am I good?
I can't hear anything.
What time is it? Oh, we're doing great on time. OK. Yeah, you guys like that? All right. Where's the fan for Alex? I know, I should get a little fan, a little fan action. Ever coming to South Africa? Dude, I haven't even been to Africa. Literally South Africa. I don't even leave the US that much. How should I scale my real estate business? Well, maybe, maybe we'll get to that before I dive in, because I think, I think if we're lucky, Layla may end up joining us. So before I put this on, I'm actually going to do something a little before I, before I take, before I take calls. I will take calls in a second. But I want to say one more thing. I— before we hopped on, the chat was frozen because we have this like screen thing that I can see the chat, right? Um, and there was like 6 chats from the last time that were like frozen on the screen. And one of the guys said, um, I've got $1,000 and 800 old contacts. What would you do if you were me starting a real estate business? And I read that, and I've basically been thinking about it this entire time while I've been making these two other videos. And so I wanted to talk to it because it kind of moved me a little bit. What I want to, like, what I want to explain is it's, it's so fucking hard. And when I say it, I'm saying Like when you start out in business, it's unbelievably hard. And the reason that business owners at the highest levels get compensated the way they do is because they were able to make it through that period. They earn the right to earn above average. They earn the right to earn more in a day than people earn in their lifetimes. And I think there's a sort of spiritual strengthening, and that's probably words you wouldn't normally say, so maybe I'll use my behavior frame, which is that you have to learn how to behave in hard circumstances so that you can continue to make it through the hardships that will inevitably come as you grow. And growth comes from a deficiency between your current and desired or your current and required. You need to be here and you're here. And that stretch hurts because you're inadequate. You have to look at yourself in the mirror and be like, "I'm not good enough." And they call them growing pains for a reason. And so, if you're like, "Man, I wish I could grow really fast," you're actually wishing for a tremendous amount of pain for an extended period of time. And then when people don't have that or they hit their first pain, they're somehow surprised. That it hurts. And the thing of the pain of business is it's not just like this visceral physical pain. Of course you have those from time to time, but a lot of the pain of being in business is not knowing the fuck you're doing and feeling like an idiot. Being like, why am I not good enough? Why do these other people, why are they doing so much better than me? Like what conclusions can I derive from that? There's only one of two paths. Either I have something outside of my control that I can cast my blame to, or I have to take the punch to my ego and say, I'm just not that good. That guy's better 'cause he's unethical. Okay, sure, if that's what makes you feel better, and now what? And so the things that make it hard is that one, you have to accept that you're not good and you have to do it over and over and over again. Right when you think you're good again, you prove, like the world proves to you that you're not as good as you think you are. And this happens at all levels of business. And you get like the same thing is when you have those plateaus, it's been a year, it's been 2 years, it's been 3 years, right? And you've been stuck in this gear, like it means that you haven't changed. You've behaved the same and so you're getting the same outputs. And the change is painful. And sometimes the painful change means that you actually have to take 2 steps back and your ego not only has to get hurt but hurt even more because you have to realize that you built your thing wrong. You hired the wrong leader. You have the wrong team culture within a department. What do you do? Well, you either leave it there and stay perpetually under, your potential because you weren't willing to confront the difficulty of the inconveniences that are going to come to you as a result of making the changes that you know you need to make but aren't making. And so I bring this up because like everyone, humans, like we are so interesting in that we believe that we're the first people to ever love the way you've loved, to feel the pain that you felt, to feel ignorant, to feel unwanted, to feel not enough. Like we feel like we're the only people who experience this. Like our pain is more than other people's. Our love is deeper than other people's. But when we do that, we rob ourselves of the ability to learn from others that came before us. The other people who already learned what this is like, who've described the pain. And listen, even if you try to take as much advice as you possibly can, you're still gonna get burned. It's still gonna hurt. And in the earlier days, I have yet to see somebody who takes, again, and I'm talking about homo sapiens, I'm not talking about Elon Musk, all right? I'm not talking about Mark Zuckerberg, I'm not talking about Bezos, I'm talking about homo sapiens, I'm talking about flesh and blood, people who are made of normal folks, all right? I have yet to see someone really start figuring out what's going on in less than 5 years. And I'm saying 5 years of being in the game, not 5 years of I have an idea, I'm really passionate about this, I've been reading stuff on the side, I work on the weekends. I'm saying I'm all in for 5 years and you just start, you just begin to get a grasp of what it takes to be good at business. And the difficulty is that it's so hard to teach business in school because it changes so much. The principles remain the same, but the game changes, right? And I'll say one of my favorite quotes from The Wire. Cutty, who was muscle for one of the gangs, comes out after like doing a murder, taking a murder charge. Anyway, gets out 15 years later, whatever. And he goes back and he's right back on the street and he went back to the gang and he's like, man, He's talking to the other, you know, the other guy who's muscle before they're about to go, you know, shoot some guys or whatever. And he says, he's a man, he's like, the game changed. And Slim Charles says back to him, right, as they're like putting their gloves on, about to like cock their gun, he's like, nah, man, he's like, the game the same, just more fierce. And so it's like the level of game always continues to rise because the players get better. Business is an infinite game. And I think that we judge ourselves because we somehow believe that we're behind other people. It's one of the most painful things that we can do is that we just, obviously you compare yourself and then after making the comparison, there's nothing wrong with comparing yourself to other people, that's how you figure out discrepancies, but then you label, then you say, and I suck as a result and I'm worthless and I'm not never gonna be good enough, right? But if the first part is valuable, that guy's better at ads than me, what is he doing that I'm not doing? I should learn that., right? Not that guy's better than me at ads and therefore I suck as a human being and will never win. So what label do we ascribe to that discrepancy? And so if we make that comparison, right, then we can learn the steps to get better. Fine. But if we zoom all the way out and really think about this, because this is a little bit trippy, the game of business has been going on since the dawn of time. There were merchants in ancient Egypt 5,000 years ago that were in the game of business. And the game of business will never end. It's an infinite game. Who was the number one merchant in Egypt 5,000 years ago? No idea. Who was the number one merchant 4,000, 2,000, 1,000 years ago? 200 years ago? No one knows. And so we have this idea that we're somehow gonna become number one. But I'm like, at what? At net worth? And then eventually your kids become trust fund kids, and then that gets divided up 10 more ways because no one's got game like you. And eventually you just, you've got, you know, 8 family members on the Forbes list. Okay. And none of them are the ones that actually made it. And none of them know how to multiply because they aren't in the game. They never learned the skills of the game. Like, if you see the game is constant, only thing that changes is the players. So my mom used to say this thing, which was, and this, I doubt this is her quote, but the news is always the same, only the names change. So think about that. So you look at the headlines, right? It's like bankers get greedy. Sounds, does that sound like, it sound like new news? No, they just changed the names. You know, jealous husband kills wife, then self. Same news. It's not even news. It's just humans being human. And so business news is also the same way. Hot new technology comes out, grows really fast, find out actually not good, crashes quickly. Investors lose millions. This stuff is the same. It's the same. Like, boy learns how to sell. Boy learns how to advertise. Boy learns how to make product. Boy eventually makes lots of money. Boy eventually gets old, tries to give back to a certain degree, becomes a philanthropist, old in his age, retreats a little bit. The next of kin comes in line, not as good as that person. Maintains. Third generation destroys. It's just humans doing human shit, right? And so I say this because a lot of the hardship of business is comparing yourself and labeling that comparison and saying that I'm not better or worse than these people, but all the players on the board are going to get swapped in 100 years. All the players, the whole board gets wiped. The game still goes on, but the players change. And so I think like if you can, and it's not easy, I wanna be clear, it's not easy. Humans, you know, we're status-driven beings and that's kind of built into how we procreate. But to the degree that you can, if you can actually give yourself a pat on the back as long as you do one thing, which is that you stay in the game, you keep playing, you keep rolling the dice, Do you have my offers book? No. Can you— is that, is that open? Is there an open on that somewhere? Let's see if I can grab it. Hold on. Oh, my leg. I did legs this morning. Hold on. I'll read this to you guys because I think you guys— some of you guys may have heard this, some of you guys may not have. So I'm going to read this to you because I think it's cool. Oh, you know what? I think it's the leads book. I should know, I'm the one who wrote the book, right? By the way, if you haven't read these books, you should totally check them out. Where is it? Anyone, do you know which one has the dice one in it? Is that the offers book? I think it's the offers one. The many-sided dice? Where's the many-sided dice? Where's the many-sided dice? Do you guys know which book it is? It's the offers book? Where is it? I wanna read this to you. It's gonna be perfect. It's a perfect thing that I wanna keep saying here. What is it? I think it's something, some kind of searching. It's leads? I should know this, right? I wrote the damn book. Here it is. Wow, I literally turned to it. Hold, all right, cameras can confirm that. I literally turned to it. Wow, dude, it was meant, dude, the spirit's moving. The spirit's moving. All right, so someone besides me wanted you guys to hear this. So this is the story of the many-sided die. So I wrote this. I didn't hear this. This was just like a concept I wanted to, uh, to share. So imagine you and a friend play a dice rolling game. You're each given one die. One of the die has 20 sides, the other has 200. On each die, only one side is green and the rest are red. The point of the game is simple: roll green as many times as you can. The rules— sorry, the point of the game is simple. The rules of the game are as follows: You can't see how many sides you have. You can only see if you roll red or green. If you roll green, one of your sides turns gre— your red side turns green and you get to roll again. If you roll red, nothing happens and you get to roll again. The game ends when you stop rolling, and if you stop rolling, you lose. So what do you do? You roll. When you roll red, you pick up the die and roll again. When others roll green, you pick up your die and roll again. When you roll green, you pick up the die and roll again. You keep telling yourself one thing: the more I roll, the more greens I get. At first, you roll green once in a while, but as more red sides turn green, the green happens more. With enough rolls, hitting green becomes the rule rather than the exception. So what does your friend do? He rolls a few times and hits red each time. He sees you roll a green and complains that you must have a die with fewer sides. He reasons it's the only way you could have rolled green before him. And although you did, you also rolled many more times. So which is it? In either case, he rolls a few more times in frustration and hits a green. But then he complains about how long it took. He spent more time watching you and complaining than actually playing. Meanwhile, you've hit your green streak. It's so much easier for you, he tells himself. You get greens every time. This game is rigged, so what's the point? And he quits. So who got the die with the 20 sides? Who got the die with the 200 sides? If you get the game, then you see that once you roll enough times, the die you're given doesn't matter. The die with fewer sides might roll green sooner, The die with more sides might roll green later. But a die with a green side always has a chance of rolling green if you roll it. Every die hits its green streak when rolled enough times. All of us get a many-sided die. And looking at the other players, you have no idea if it's their 100th roll or their 100,000th. You don't know how good other players are when you start. You can only see how well they do now. But if you understand the game, you also know it doesn't matter. A few begin playing early, others begin much later, the rest sit on the sidelines complaining about how lucky the players are. I guess so, but they're luckier because they play. And when they hit red, which they do, they didn't quit. They rolled again. Learning how to advertise is a lot like the game of the many-sided die. You don't know if it's going to work until you try. And no matter how many players there are or the number of sides on the die you're given, you start to see the only two guarantees that the games will give. Number one, the more times you roll, the better you get. And number two, if you quit, you lose. So I read that story because that's obviously a story of an infinite game. You and your buddy get given 2 dice. One of you has a 20-sided, the other is a 200-sided die. You don't know who has which. They're all, you know, you don't know how many have reds, how many have greens. And there's 1 green on each. You roll it. And if you hit the red, nothing happens. If you hit green, you get 1 of your many sides that turns green and you get to roll again. And the only statistical probability there is that if you keep rolling enough times, all of the sides will turn green on both die eventually. But you just don't know how many sides the die that you're given has on it that are red, which means you just don't know how many shots you're gonna have to take in order to win. And that's why having high frustration tolerance, having high fortitude, having low or high resiliency, and high adaptability, those skills of mental toughness are what allow you to stay in the game of business. It's what allows you to keep rolling the dice even when you get smacked 20 times in a row as reds because maybe you have a 2,000-sided die. But if you know that the one fact of this game is that if you keep rolling, you keep playing, and if you keep playing, it means you're in the game, and if you're in the game, it means you've won. Because in infinite games, there are no winners and losers. There is only players and quitters. And so I think that it took me a very long time to learn that. And so when you are starting out, you were just early. You were just— you have more reds left to roll. You just got to get them out of the way. You got to get the failures out. It's the only way you figure out how to play. You just don't want to lose so bad that you die. But as long as you don't die, you can keep playing. And I feel like that actually is a pretty hopeful message, despite my relatively aggressive demeanor. Okay, cool. I wanted to, I felt moved by that comment earlier, and then now I will, Michael Scott, The Office, did I say, I don't know, but did I? If I did, then kudos to Michael Scott. Okay, let's do it. Let's do, Let's do some, some Holly. Do we have people, we have people ready on the, on the hotness? All right, for those of you who are curious, um, I'm, uh, I'm taking calls with people who donated a bunch of books as my way of saying thank you for donating books during the launch. And, uh, let's rock it. I know, dude, the tape ribs. I got to get a different headset. I got to get a different headset. I got a big— I got to make it different. This is so boomer. All right, go for it. Who do I got? Anybody here? I can't hear anything. Alex, I have one question. Is subscription? All right, what are we doing here? We have calls coming. Was that, uh, was that interesting for you guys? Was that cool? Invisible, I would love to know how to be a giver and not a taker. Super easy, bro. You just give and don't ask for anything back, and you give to people. And then when they ask you if they could do something, then at that point you're taking. Thank you, Lucas. Thank you for the single dub. So single, single W, I appreciate that. Do I need to hit something to hear this? Can they hear me? What's going on? I think the people on the call are not— All right, let's go to the next one. Well, they missed out.
Okay.
What if I can't find a job and don't got money? Caller 2, if you can hear this, just start talking. Hey, Alex, how you doing? What's up, man?
All right, talk to me. What's your business? Yeah, man, dude, this is, uh, Sonja. This is Dr. Sonja Duzeric, man. I'm a chiropractor. Been 2 years in so far, 7 years as a total chiropractor. And, um, yeah, man, I'm just trying to figure out like, okay, when I build momentum this year and it's like, okay, how do I know when to keep going for more? How do I know when to just keep the momentum that I'm at, not overstretch? Cause I made a mistake earlier this year. And I'm just riding the lows ever since. Like, when do you— what was the mistake? Yeah, I started diving into mentors, sales coaching, uh, marketing on Facebook.
I'm just getting in all these expenses, just trying to grow from the revenue I got. Okay, well, I wouldn't— well, first off, I'll say this: if you pay one-time expenses in order for you to learn, I wouldn't see those as losses unless you learn nothing. If you learn things that are just you need to put into place in the business and they haven't fully come to fruition yet. I just see that as an investment. So I just wouldn't frame it that way, like thing one. Okay. Second thing, are you at full capacity at your existing location? No, I was at, I'm not, no. Okay, got it.
So do you know how to advertise to get leads?
I've had some help from other marketing companies. Okay. I think it's worth you learning for yourself if you want to, like, if you want to be in this, in the— because like the transition that you have to make right now, and this is a bit of a decision for you, which is like, do I want to be an artist or do I want to be a businessman? And there's nothing wrong with either of those, but you have to make a choice. Okay. And so let me give you— let me give you a totally different example, but it'll illustrate the point. So let's say that you're really good at making leather wallets. All right. And let's say you're a craftsman. And so you make these leather wallets, people start wanting them, you keep making more leather wallets. Um, there's two success paths. Success path one is like you just love making wallets, but you have more demand than you have time. And so you keep doing a good job and people keep wanting them. And so you can only make 10 wallets a day or whatever your, you know, your math is. And then all you do is you keep raising the price because you have more demand than you can, than you can handle. Keep raising the price. And that is to me the path of the technician is the path of the artist. The other path, and there's nothing wrong with that, and you can make a ton of money doing that. The other path is the path of businessman. He says, okay, you know, I have these, these leather, leather wallets. I can hire other people to make these wallets for me. I'm going to train them up, or I can build machines that can do this with automation. I'm going to build a manufacturing line that can make these wallets even better than I could at, you know, a faster rate. And I can do it because I'm buying in bulk. I can buy, you know, materials for half the price. And then all of a sudden he becomes a businessman. Right? But all of a sudden you're like, wait, okay, I was a wallet guy, why do I have to learn manufacturing and supply and all this other stuff? It's like, well, it's because it's a different game. And so I think for you as a chiropractor, you have to make the call: do I want to be a businessman, or do I want to be a chiropractor?
Do I want to be a technician, or do I want to be in the game? I think I've been— I went from being the artist to let me switch to businessman, and then I'm like learning the hard way.
And I'm like, I think I want to go back to being an artist. The hard way is the only way, dude. It's the only way.
How long did it take you to learn to be a chiropractor? Yeah.
Uh, breaking up a bit. Say it again.
I said, how long did it take to learn, for you to learn to be a chiropractor?
I, 7 and a half years.
Right. And business isn't any different. If anything, there's more stuff. True. I'm only 2 years in, so I'm waiting for that third year to 5.
Yeah, I promise you, I promise you this, and I hope we have a great callback, so I'll see if we put a note on this. I promise you that when you're 5 years in, if you keep at it, that's the big caveat, if you keep at it, you'll grow. If that's what you want. If you keep at it. All the money I had from all my gyms went to zero after 5 years. So like, the only thing that's the outcome of this is your skills. That's all. And you're used to investing in education, so I don't think there's anything wrong with that. Okay, cool, man. But with regards to like all we have to do for your business though, like, like let me zoom all the way out for like how do you make this thing successful? Yeah, the end state of what this looks like for you is that you nail your individual model with a way to have very sticky customers. Option 1 or option 2, you find a way to charge as much as humanly possible. I've really rarely seen chiropractors who succeed in any other way. They either have a very, very good recurring model that people don't stop, or they charge $5,000, $10,000 for more specialized, you know, neuropathy, blah blah blah, you know, that kind of stuff. And they sub-specialize in the things that people are willing to pay a ton of money for, and they sell, you know, year-long service packages with supplements and things like that. So those are the— it's like either ultra high ticket, or you build something that has really high stick. Once you nail that model, then like I'm telling you the skills that you're gonna have to learn, that's thing one. Thing two is, and in learning that, you'll have to learn how to generate leads and sell them, right? Um, after you've done that part, then, uh, you're gonna have to learn the game of attracting talent and you'll probably have to give up, call it 10-ish, maybe 20, uh, of the single location to get another chiropractor in there who's motivated enough to continue to work as hard as you will to make sure that the service quality is high. And then at that point, you'll ascend into the M&A game, which is either— and I would recommend, given the nature of the business that you're in, I would probably go via the M&A route rather than build. So I'd rather just buy. Just fine. It's so easy to find chiropractors that are, you know, that will sell their businesses for basically zero, um, that it's easier to just retrofit them. Um, and then that would be once you're in the game game. But that might take 5 to 7 years, and that's okay.
I'm being real. Like, there's a joke There's a joke I made. Once you're done with medical school, you would get paid the big bucks, like, what, 10 years later?
So I'm like, what, 2 years away from that? 3 years?
Yeah, you make the big bucks a decade later. Yeah, yeah, yeah, same, same. No, man, you got it, man.
I'll stay in the game. I'll do my best.
All right, I appreciate you, man.
Thanks for calling in. Yeah, thank you. Thank you. All right, hopefully that was, uh, was that as good for you as it was for me? Uh, tell me the one thing that you want me to help you with your business right now. Who's this? Hello? Salutations, dude. I'm getting ghosted like Patrick Swayze. You know what I'm saying? That is a callback for those of you who, uh, who know that one. Dated myself a bit. Um, see, see what's happening, guys? I, uh, you know, here I am, I'm like, I'm gonna make myself available. People called, you know, people who, uh, who volunteered that we reached out to say, hey, what's up?
Hello? All right, talk to me, man. All right, so I have a school community where I help fishing guides grow their business, and I have a question about cold outreach metrics. Sweet.
You help fishing guides grow their business? Yes. Dude, that is a niche. All right, let's rock this. All right, so, okay, and you help them with outreach or you're doing outreach? I'm doing outreach and I have questions about my metrics. Okay, go for it.
So what are you, what are you doing outreach on? Yep. So, uh, real quick, I have a 30-second spiel and I'll give you my data here. So I used Google to manually find 700 fishing guides' phone numbers, and my money model is essentially to give away all the information for free as a decoy offer and then upsell them into a one-on-one coaching tier. Okay. So I, I sent them a message asking if they want a free step-by-step guide to learn how to get more bookings. About 8% of them said, sure, send it over.
Amazing.
Then I send them a link my about page, which, which converts at about 15%, uh, for that free decoy offer. And then I was able to get a couple people to pay for one-on-one coaching, which got me to about $1,000 a month. But my goal is to get to $10,000 a month. So my question for you, it should be, I'd be more focused on improving the metrics since fishing guides is such a small niche, or I just need to—
it's a slow climb. Pun intended. Uh, I need a couple quick stats that I want to get from you.
So how much does the average fishing guide make? The average fishing guide makes probably about $30,000 to $50,000 a year profit.
Oh, okay, got it. So $30K to $50K. Okay. How many actual fishing guides are there in—
I guess, I mean, shoot, is it mostly the US that you work with?
Yeah, there's, from what I can find, there's about 10,000. 10,000. Okay. Okay.
How much money can you help them make? Um, well, I've already helped other people do it. I can usually get them to about $5K per month in revenue, about $3K a month profit after about the first 3 months. But aren't they already doing that if they're making $30,000 to $50,000 profit starting? Well, when I— I mean, they are already a fishing guide and then I'm coming in and helping them scale their business.
So it's not from like literally zero revenue. So let me ask this differently. They're currently making $30,000 a year take-home. You can help them add another $30,000 to $50,000. Does that sound correct or is that too much? Ayo for yayo. Hello? Hello? I think he cut bait.
I think the line snapped.
All right, is it working? There we go. Reeled him back in. Okay. Okay. So did you hear what I said? So they're making $30,000. They're— you can— how much money do you help them make more than they're currently making?
$3,000 a month? Okay.
Yeah.
So more than they're currently making, I can usually add about an extra $2,000 on top of what they're—
I guess the part I forgot to mention is I target underperforming fishing guides. Oh, man. I mean, you just got to get 10 people to pay you like $500, $1,000 a month, right? That's what you want. Yeah. High ticket. Yeah.
I'll say this.
Don't tell yourself that's high ticket. Okay. All right. Because it's not. It's not high ticket. It's medium-ish. But the point is this, so there's 10,000. If your goal is to get to $100,000 a year or $10,000 a month, you can absolutely do it within this vehicle. If you— so you found 700 of them, you think there's 10,000 of these fishing guides?
Yeah, I've already reached out to 700. I still have a fresh list with like 900 people who I haven't reached out to yet. How many times you're reaching out? Um, to that list of 700, I hit them up probably like including follow-ups, probably 3 or 4 different times. It's pretty much I've milked them for about all they're worth now.
Well, you mean you've done 3 or 4 reachouts in total to the list?
Yeah.
Or each of those reachouts was like a multi-step attempt? Yes. Okay, so I'll tell you what I don't like, I'll tell you what I do like. I do think that the goal of getting to $10,000 a month in this niche is super doable. I don't think you should reach out to the people who are underperforming. I think you should probably reach out to people who are performing well and maybe learn from them so that you can provide more value. So it's like you have a small amount of people who don't make a lot of money and you add a kind— you got— you add a little bit of money to their business, right? So if we can, like, I'd want one of these three things to change. It's like I would like to have a lot of people that I get a little bit of value. I would like to have a small amount of people that I get a lot of value to. Right now you're kind of like— and also all those people don't have money to start with. So it's like we have 3 things kind of working against us. We have to fix one of these. So you can't fix there being more fishing guides. You can't do that. So you really just stuck with I can target people who have more money or I can make them more money.
Which of them is more, more feasible for you? Right. And my big piece of proof that I have, which is I guess it might be a limiting belief on why I don't want to swing out of my weight class, but I am a fishing guide. I've been running my own fishing charter business for like the last 5 years, and I'm at about $5,000 a month in profit. So, uh, it feels, it feels a little weird to go too far above what I've actually done.
I don't want to tell you to stop doing the business you're doing.
I do think that, like, is there, like, what stops you from doing, going from $5,000 to like $20,000 in my fishing charter business? Yeah. Honestly, I— it's going to sound like a, like a bad answer, I know, but I have all the work that I want to be able to handle with that business.
Like, I'm going to get burned out if I push myself harder. So I've got a, I've got a wild idea. What if— I mean, you know how to generate demand, right? Because I'm guessing that's how you got this business.
What if you charged more? It would have to be pretty significantly more, uh, because a double— my first fear would be that it would be, uh, productized, uh, like people would compare prices because there's a lot of other fishing guides around in my area too.
Yeah.
So what's the first chapter in Offers? Do you know? Um, I've read it about 3 times.
I should know, but I don't know. I'll tell you, the first chapter is you're selling a commodity. And so when you sell a commodity, you compete on price. When you sell a grand sum offer, you compete on value. And so to become separate from everybody else in your space, which I think is worth you learning, because if you're going to If you're going to help these guys with their businesses, they're all commoditized as well. So you have to help them out of this commoditized struggle. Otherwise they're like, fundamentally, you're just going to help them get to a business that you're currently burned out on. That doesn't feel good, right? Right, right. So I kind of want you to fix your business, which I think if you do, you will make more money in the short term and long term. Okay. Which is not the answer that you expected. Like the, the simple answer for your current thing, like if in terms of degrees of advice, the easiest thing to do would be like go find more leads, reach out to more of them and make sure that you're keeping the people you got. You can charge $1,000 a month. Okay, fine. That's like the short-term advice. But the kind of like medium to long-term advice is we have to figure out a way for you to either target ones that make more money or help the ones that come in to make more money. The only way to do that long-term is to actually like make more money with your own thing or help the people that you already have far surpass your existing numbers. Can they pass your numbers?
Could you help them if they wanted to?
Could they pass my revenue numbers?
You mean? Yeah.
Or take home? Yeah. Oh yeah, for sure. Okay. Well then why don't you go help people do that and then you'll be able to charge more.
I see.
Okay, so help fishing guides surpass my number. I hope they all beat you. Yeah, and if you don't want to go back into the fishing business, fine. You can experiment with the customers you have with a new, a better offer, but you have to be able to sell around a commoditized pricing structure. Otherwise— so let me say this differently because I think this, like, I want this to really hit for you, and obviously I'm talking to a zillion other people who are listening in. If you sell a commodity, you will be priced at the point of burnout. The marketplace is ruthlessly efficient at getting people to just make enough to survive and not make enough to thrive because that's the place where people will stay and provide a commoditized good. So you have to break out of that, otherwise the market will force you. Capitalism is very efficient. The market will force you to give as much as you can for as little as possible until eventually you can't give any more for any less. You remember that chapter in the book and there's nothing left. You are in that boat right now, man. In that boat. I'm like, I'm not even trying on that one. So we have to decommoditize the offering that either you or the fishing guides you're teaching are making so that they can charge twice as much, three times as much. What else can a fishing guide provide that other people don't provide to make the whole experience better? Can we bundle multiple things in? Can we sell multiple sessions? Can we bring food on there? Can we grill the fish with them and bring a chef so they get the full— like, I, I grilled it on the side of the boat, threw some lemon on, I've never had fish better in my life because right out of the water, right? Like, can we create an experience around this that's more than just like, I'll take you out and you'll catch a fish or you won't? Oh yeah, there's definitely ways to add a lot of extras on. Awesome. And fish— and people who buy fishing typically Many of them have a lot of money. Yeah, right.
So like, give them the opportunity to spend it with you. Yeah, that totally makes sense. And it's kind of a double whammy because it helps with the main fishing charter business and with the school community to be able to show other people how I did it.
So yeah, it's perfect. Let's do that. Sounds good. All right, do you feel better? Yes. So this, this solves the core issue. Go fix your business, make a grand slam offer, charge significantly more so that you can make more, so that you have the, uh, confidence to then show the guys that you help make way more. If they make way more, guess what you get to do? Charge more. Yes. And you'll be able to start attracting the people who aren't just You know, bottom scrapers. They're the ones who are actually doing okay but want to do great. Those are the ones who pay big dollars. People who are on their last line, they don't have much. Last line, Jesus, I like—
I'm unstoppable today.
Um, does that make sense? Yeah, I get it. All right, rock and roll. Appreciate you, man. Yeah, thanks. All right, have a good one, guys. I have a special, special treat for you. This is, uh, this has only happened one other time in human history. This is historic. So you guys, you guys are going to get this, um, and it's come from downtown Vegas. The, the queen of clout, the, the sultaness of my lovely wife, Lady Layla herself. Queen Lay has come to join us and spit some fire on Hermozi Hotline. Give her a warm W in the chat so that she knows that she's welcome here. And we're going to be, and we're going to be taking the remainder of the Hermozi Hotline calls together.
Yeah. Juntos.
Does this look good on me? It's ruining my hair. Oh, it's boomer as fuck.
It's horrible.
We're going to change these. Yeah, we're going to change. No, this is—
which one of these does not belong?
Are we doing chat or next caller? We're doing next caller. We're doing next caller.
Okay, next caller ready. Hello?
Yo, can you hear it?
Yeah, we can hear you. Oh sweet, yeah, this is sick. Okay, awesome technology. Yeah, sick. Okay, well, uh, I want to tell you, I first of all, I reposted your Just Win background once. You screenshotted it and you reposted. I got 150 3,000 impressions on that. Just wanted to let you know how much impact you have. Wow. I'm kind of nervous. You guys are both amazing. I love your stuff. I tell everyone to buy your book. So first of all, thank you for this opportunity. Thank you. So yeah, my name is Joshua. I run a performance-based marketing agency called Adsmitha for kitchen and bathroom remodels and outdoor living companies. Currently at $8K per month, profit is $7K. We work on a pay-per-show model and position them for high-end projects, so not like discounts, et cetera, without retainers or ad spend on their end. So we take the risk there. Right now it costs me around, yeah, right now it costs me around $250 to acquire a customer on the last, that's where I ran the ads. I have a $1,000 setup fee and I charge $500 to $600 per qualified appointment show. Great. Get them one appointment show, Yeah. To get them one appointment show, it costs at the worst times, like I'm aiming for $210. And if I don't get them at least 10 appointments in the first month, I refund them the setup fee. Now, currently, to let you know, I do have 2 clients on this, but I have 3 other clients still in free service, which I kept for cash flow because that's what I ran before. My question is from just what I told you guys now, and from your experience, what do you see which I currently don't see? Um, so what would you do in my position to absolutely like scale this, or maybe do differently? Um, are you keeping the customers? Oh no. Um, until I'm basically— I wanted to keep them until I'm at $10K sufficiently in the modeling, and then completely ditch the rest. Cutting out. He's cutting out.
I want to ditch the trees. Oh, you want to ditch the tree? No, no. Layla was, Layla was asking a question. Also, I think Layla's audio is low for anybody on our team.
If we can boost her audio a little bit.
Yeah, I, I didn't, I don't hear Layla at all.
I'm just on mute. Just on mute. Okay. Um, so the question was, I mean, I don't think you should cut your cash flow.
You haven't, you only have like 4 customers, right?
Currently at 5. Okay. So you have 5 customers and that means that if you're doing $8,000 a month, you said $8,000 top line, $7,000 bottom line, but you said your cost of getting a show is $210 on $500.
Those margins don't make sense. What am I missing? Yeah, because so basically, okay, I'm, I didn't. So for the $8K, I'm not basically Counting in the $200, which is lost. It just counted in the $300. Okay. Got it. And the one guy I'm currently, the one guy I'm currently onboarding, so I only have one guy currently on it.
Yeah. The other guy's currently on onboarding.
And when you say guys on onboarding, you mean a client? Yeah. The one company I'm currently onboarding to get them into the $500 thing. I got his $1,000 setup fee basically.
Got it.
But he's not actively involved with— And you have 5 clients, right?
Uh, yes, currently I'm looking to scale this now, but yeah, I mean, go for it.
I know you're gonna say what you're gonna say.
Well, I was just thinking that we have to run some more water through the well.
Yeah, can you—
did you hear Lila?
What?
No, what did she say?
Run some water through the well.
Hear that?
So I need to get more data. You need to— yeah, you need to get more data. I mean, at that point, that sample size is so so small. I think we need to focus on getting a bigger sample size and then we can go from there.
I understand. Okay, well, what is— what would you say, what is just your opinion about the model they offer? I'm, you know, I'm running this because all other agencies are basically running this pay-per-appointment and yeah, they, you know, and they pay for the ads, but like the trust is really low in that market.
So I was Dude, I think everything's fine. I think everything's fine. Okay, the, the, I'd say one risk that I see that's relatively significant is your cost per show relative to the revenue per show is kind of low. I would say the guys who I see like really murder it are at like 20%, so you're a little, you're at like 60, uh, I'm sorry, 40. So I would, I want to see if we could drive that down because my fear of the business is that when you take this to scale, you'll be less efficient and your margins are going to press. That's like, I would say like, that's kind of like my biggest red flag. Overall, the model of lead cost and arbitrage, there's nothing wrong with it. I've seen some massive, um, agencies that run that model. The next issue that you're going to run into is the types of businesses that you're serving. So you're going to want to go upmarket for people who can spend $50,000, $100,000, $200,000 a month in ads. That's, that's what you're going to want to go after because the volatility of your business is going to be predicated on the volatility of their business. So when you go after— and this is super common for small business owners, for everyone who's listening— is like, you go after— if you go— most people who are poor— I'm not saying you're poor, but like, most people are starting out a business, go after other people who are also smart, starting out a business, because that's where your confidence level is. But their business, they don't know anything either, right? So it's the blind leading the blind. And you're like, what's wrong with my business? All these people are churning, and they're churning because they don't know what the hell they're doing in their business either. And so you're going to want to earn the right to go upmarket as fast as you can. And if you have 5 clients that pay you what they're paying now versus having 5 clients and each one pays $100,000 a month, you could run the same ops and have 100 times the revenue.
Yeah. The biggest—
can you hear me? Okay. Yes, I can. Oh, okay. Fantastic. You can, you can hear me. Sounds okay. Yes. Okay, great. I was gonna say the next, the next thing that you're gonna want to realize is that, like, we've done the pay-per-show model, and we also had a software that used to enable the pay-per-show model. There's two things that you want to watch out for, which is one, when you're doing pay-per-show, a lot of times the businesses are gonna think, well, if they show but they don't close, why the fuck am I paying you? And so then you're gonna be really tempted to be like, ah, can I just help them sell these people? I'm just gonna also— maybe I should start a sales agency and close these motherfuckers. Fuckers. That's the next thing that's going to happen. The second piece to it, and by the way, don't do that. Go upmarket instead, because people that are upmarket have their own sales team and they understand that concept that even though you get somebody to show, it doesn't mean that they're guaranteed to close. You still need to have trained salespeople. So do not give in to the temptation. Don't try and serve an avatar that isn't best for you more. That's the biggest mistake people make, which is like you're serving an avatar that isn't your best avatar and you try to go above and beyond for it. You just don't want to do that. The second thing is that— okay, that's like— I feel like that's like 2010. That was good. Bringing it back. Yeah, that's fire. The second piece is that with the pay-per-show model, here's the place where it goes wrong, which I saw firsthand, which is why agencies had churn with it, which is that customers want to be able to predict how much money they're going to spend with you. So if you look at churn and you look at customer retention, The customers who retain the most are the customers who understand how much they're going to pay. And so one thing that you can do is you can give people a range estimate, or you can give them a heads up different times through the month as to how much you're going to be billing them. Now, it seems contrary because you think, okay, well, if I tell them how much they're paying, they're like, oh my God, that's so much. But the reality is actually if they get a bill that's unexpected, that is like it looks— and it's like once you get one unexpected bill from a company, it's like by the second one, there's a 50% likelihood that they're going to churn. So think about how you can communicate with those customers.
Maybe it's every other week, maybe it's every week to show them what their tab looks like.
By increment of revenue.
Yeah.
Or by increment. That's a great one too. Yeah. Just like every $5,000 or whatever, every $1,000, every $5,000 they spend, you just let it— you just automatic, just letting them know that this is happening.
We can turn it off whenever you want. So I think another piece that you could also ask is when you're getting the sale, when you're onboarding them, ask them what their budget is. I know it seems contrary, but it's like if you want to get them to spend more money with you, you also need to show them that you're okay spending as much as they're comfortable to start. Does that make sense?
And you can coach them up from there once you get buy-in.
Yeah.
Okay. Yeah, that makes sense. I currently— what I currently do is I build like this lovable thing where I put in the numbers, so close rate, average contract value, etc. And Basically I do that on the sales call though. So that's a big nugget. That's great. The onboarding, because then I can always weekly tell them like, hey, this is how much you should spend and that's what you should expect in the long term to get a return. So thank you for that tip. I mean, if you were me here, how would you think about going from like $8K per month right now to like $50K in this exact model as fast as possible and also as sustainably?
Dude, this is— we answered it. So I want to ask you, what do you think we— what do you think we just said?
Just so I want to make sure you retain it. That I need to get more data and like just sell more, probably. And? And? And that I should not switch my business model and get them to basically convince me to get them to sell. And also make sure that they know how much they get charged. And go upmarket. And go upmarket. Yes. Upmarket, the one thing I want to ask, what do you think about the average?
$1 million a book?
Because I was thinking about it.
Just go up. You guys have an opinion on this? Just go up. Just like in your ads or your outreach, look for people who are doing 10 times those numbers. Numbers go up good.
Yeah.
Big number good. Okay. Okay. Cool. Like you could literally have the same size company you have in terms of headcount. Literally just add a zero to what the people that you're trying to attract are and you will make significantly more money and love your life more.
Mm-hmm. Okay.
Cool.
Yeah. Thank you.
All right.
Rock and roll. Should I increase setup fee? No, I don't think yet, dude. It's 5 people. Yeah, you got to get more water through the well. Also, there's a— like, for everybody listening, like, it's like, okay, increase your prices, but like, you haven't even gotten to the threshold of delivery. So until you get to a point where delivery is stressed and you can see how your team and how your company operates when you are stretched when it comes to your client load, do not increase your prices. You increase your prices when you know that your product and your delivery is rock solid.
So we got to get more water through the pipes first. Okay.
Okay. I got it.
Thank you very much.
I appreciate you. Thank you. Have a good day. Dude, I feel like so weird with this headset.
This is so odd. I know. It feels like it's 1990.
My hair. Yeah.
Next caller. Next caller. I should do that. Go pineapple. This is a pineapple bun. What are these called?
Oh, hi.
I can hear me. Yes, sir. Can you hear us? Yeah, yeah, yeah.
Super nervous right now, but thank you for the call.
You should be terrified. What if I'm nervous? Yeah. My name is Jazz. I run Winnipeg Digest. It's a local newsletter slash media company.
Okay.
With an audience of 110,000 people in Winnipeg. Sweet. So that's about 70,000 on socials, 40,000 newsletter list in the last 18 months. That's awesome. We right now do— yeah, thank you. We do about $10,000 in revenue right now, $6,000 profit through local advertising. Okay. Is that per month or per year? That's per month. Yeah. Okay. And then, and then we currently have 6 annual advertisers mostly paying about $1,000 per month with 2 paying $2,000 per month. And then the rest of the revenue comes from single one-off ads. My question is a little parts. So the first one is how do I scale to a million without running out of local advertisers in the future, which I'm afraid of, or running into a supply constraint because we only send out 12 newsletters per month. So we have 12 primary— no, we send out 12 newsletters per month. So it's 3 per week.
Okay. Every Monday, Wednesday, and Friday.
And these are digital, right?
Yeah, these are, these are digital emails.
Yeah.
Got it.
Okay. Yeah.
And are you— again, so that's my question. Yeah. So I would not be worried about running out of advertisers. There's 110,000 people in the city. There's— you can for sure get enough advertisers. That's not an issue. So put that one away. You running out of ad space is more, more possible.
So you have how many people on your list?
Yeah.
So we have 40,000 on the list. The city is 1 million people. Oh, the city is 1 million?
110,000.
Yeah. So the city is 1 million people. The 110,000 is what our audience size is.
So it's 70,000 on social media. Oh, word, dude. You have so much room.
You have so much room. So much room. Yeah. So that's kind of— so, okay. So if I have room, then kind of from a growing perspective, then I'm afraid that we'll run out of ad space.
So we'll run into a supply— No, you're not going to run out of ad space. You're going to have to make sure that you're pricing your CPMs appropriately. So said differently, if you have, you know, 250,000 of the people out of the million in the city on your newsletter, you could charge a truck— I mean, every ad would be, you'd be, you know, $100,000. Like, it would be a lot. Yeah, I'm saying. So yeah, so the space itself, obviously, you have limited— you don't want to send your entire newsletter, it's just all ads, right? That's not going to work. The way that media scales via impressions and quality of impressions. And so you can charge more for the same space. That's what you have to do. So it's like, how do I scale this business?
You get more eyeballs. But it's like, there's not that, or like with, I don't know if there's enough businesses that can pay me $200,000, like $100,000 per ad, you know?
There are for sure businesses. Well, again, you're selling 12 ads a month. There's $1,000 a month in advertising is not, Like many businesses can do that. Many businesses can do 5 or 10. Mm-hmm. Dude, like my dad used to run— my dad's a local business owner, right? He used to spend $10,000 or $15,000 to be in like Baltimore Digest or something, or Baltimore's whatever. Like one magazine per month went out and he would spend $15,000 to be in that thing for like a half page, right?
Mm-hmm. So, okay.
Yeah.
So That kind of semi, I guess that kind of answers my second question too, which was like, it was either, okay, should I expand to new cities, stay in the current one, but niche down? So let's say go start another one, but say Winnipeg Real Estate Digest or something, right?
Or just keep— I want you to keep scaling this one. I do not think it's worth you splitting your attention right now. I think you have way more impressions to capture. The other piece that you want to consider here though is like you're sending a newsletter. It's like, are there other places you can like, you have 70K on social. It's like we can charge for posts, we can charge for stories, we can charge for YouTube video integrations, we can charge for news. They're like, I would rather you do all that stuff first before even considering niching down for now.
Okay.
But what you would say the next step would be to niche down after like a certain No, I don't even want you to think about niching down.
I want you to just do more. You need way more. Okay. Okay. And then, okay. And from an acquisition standpoint of subscribers, we are currently running Facebook ads and acquiring subscribers at like $1.40. Right? So that's kind of, so my question then is, do we continue to scale Facebook ads?
Cause right now it takes about like 3 months to break even on a subscriber. Okay. So you already know that.
Yeah. I mean, that's fine, man.
Yeah.
So it takes, okay. Yeah.
And so people are doing Facebook ads and social. Yeah.
You can also sell people longer periods of time on the front end. And is there, and is there like a front end offer? Like, cause I know a lot of people in this space try and achieve like negative costs for acquiring a subscriber. Right. So, having some sort of a front-end offer, would you say I should still continue to just push B2B advertising or—
You can push B2B advertising as you do your Facebook ads where people opt in for the newsletter. Just have something called an SLO, which is self-liquidating offer on the thank you page. Okay. Do you have anything on the thank you page that you sell them? No, nothing right now. I may— Bro, I'm about to change your life. I'm about to change your life. You ready? Yeah, I want you to offer a, a 10-pack of Guide to Winnipeg's Best Restaurants, Guide to Winnipeg's Best New, uh, Spots, Guide to Winnipeg's Best Ski, Best Dessert. Like, literally just put a— put 10 different kind of like magazines. Do it once, uh, make that 10-pack like $37. Put it on the thank you page. If you can get 1 out of 37 people to buy it, you're cost of acquisition is zero and then you can scale this thing to the fucking moon. So those would be physical, like physical things. You can make it digital.
You can make it digital. It's fine. Okay. I was literally about to offer that for free in our welcome sequence. So there we go. Okay. And yeah. Okay.
No, I think that kind of answers. I feel like, I feel like that was pretty good.
Yeah.
I mean, no, that was crazy. Thank you. No, like, I mean, I've been like going back and forth with like, oh shit, I start a Christmas holiday lights company on top of this.
No, no, no. That sounds fucking awful. No, that's horrible. Do more of this. All you have to do is add a self-liquidating offer on the front end. You'll be able to grow the hell out of your media. You can charge more. You can get more advertisers in. Done and done. You can also, to your concern, you can also parse your list, right? So let's say you triple your list size. If for some reason you can't find advertisers, you can pay more, which I wholeheartedly reject. But just to show you that you can still be creative here, you can say, I'm going to send 12 emails to these people, 12 emails to these people, and 12 emails to these people. List A, B, and C, because you made the list 3 times as big and you can charge that many more times.
Uh-huh. Okay, got it.
That answers, I think, all my questions.
All right.
Rock and roll, man. Appreciate you.
Thank you so much. Bye-bye. You should take this one.
What are the questions that we're prompting people with?
Yeah, I feel like I smashed that one.
I'm not going to answer a marketing question, so tell us what the next caller is. Hopefully it's a people question. I'd be like, people, they're alive.
Anything but marketing? Yeah, anything but marketing.
Anything but marketing?
I can help you answer.
All right, next caller.
What's up, guys? What's up? Hey, this is, uh, this is crazy.
I'm very excited to be speaking to you guys. We're excited to speak to you.
Oh, tell me about the biz. Um, yeah, so I, uh, run a company where I essentially help remote high-ticket sales coaches, uh, with their fulfillment by providing job opportunities and then coaching for their students slash clients on best application processes, interview, uh, support and prep and things like that.
Um, which part of the delivery do you— can you hear me?
What part of the delivery do you do? So I like post the job opportunities inside of their community, um, and then I do group coaching calls once a week with some of the clients, and then DM support, answering people's questions, reviewing their application videos and things like that. Okay, what do they do? They're responsible for sales? Yeah, so they're sales coaches, so they're teaching people the sales side of things. And most of them, before I come into the business, are doing part of the, you know, helping them land jobs, um, but often are struggling with having enough job opportunities and the coaching part of actually teaching people what to do properly to get hired.
Got it. So they're really good at getting the clients, they're not good at getting the clients the opportunities. So you bring them the opportunities, you're responsible for the sales funnel.
Exactly. Okay, great. Um, so I guess like the bottleneck that I have is we currently have 45 communities that we work with. Wow. We work on a retainer model. We don't charge the businesses anything for the recruitment services, not really recruitment services, it's just like posting their opportunities in the communities. And so the sales coaches pay a us a retainer. It's anywhere from $2,000 to $4,000 a month. And I run the entire business and fulfillment.
And so I guess my bottleneck is that the business is not a business, it's me.
Are you charging for placements when you get them opportunities?
No, so it's just like a flat retainer model. No, no, no. You're providing, let me say it differently. These guys get jobs at businesses that need salespeople. Correct? Yes. So who—
those businesses, you just give them people for free? Exactly. So I don't charge the businesses anything, um, so that that doesn't become a bottleneck, so that I can have as many job opportunities as exist in the world.
So it'd be like I would come to you and say, I need remote salespeople, and you would be like, I'll give you some for free?
Yes.
So let me know anytime you need sales reps. I mean, I wouldn't do it because I wouldn't believe that you were any good.
Yeah, there's that. Well, we have anywhere from 500 to 600 job opportunities that we post per month, so we've got a lot of people who do trust us.
I— you get what I'm saying?
Okay, so what's the problem in the business? Well, just that I guess I'm bottlenecked by I have no team and we have 45 clients. And so I'm not sure where to find the right talent, how to incentivize the right talent for the fulfillment side, like coaching, finding the right opportunities.
I guess I just don't know what direction to go in to scale beyond where we're at currently. So let me ask you, in the business right now, where do you spend most of your time? Is it on sales?
Is it on fulfillment? Like which piece? Yeah, I don't really spend very much time at all on sales. It's, it's pretty much all on fulfillment. So I guess like liaising with businesses who are looking to hire sales reps. Yeah.
And answering questions and getting on group coaching calls with the students of my clients.
How many group coaching calls a week are you getting on? Currently around 20. Per week. So a little less than half of the total clients we work with have that as part of the services I provide.
Gosh, okay. And then of that time, the rest of the time you're spending DMing people, essentially like answering questions in the group? Exactly, yeah.
Okay.
And then what would you do if you weren't—
if your time wasn't being taken by doing either one of those things? Um, I think it would just mostly be, be acquisition. Um, finding more clients and making bigger, better connections with, with businesses and people that are hiring sales reps consistently?
Yeah, I think the first thing that you should try and get off your plate is the questions, because if you can bring somebody on and you can train them on answering the questions in the group, that's like a— it's almost like they're onboarding to then take over calls from you. My question is, when you're on the calls, what is the— like, if you were to tell me the top 3 things that you're teaching them on the calls, what would those 3 things be?
Uh, I mean, I think the, like, the application videos would be the number one thing, but the, the majority of those calls and answering people's questions is all like personalized. So it's based on their situation and their past experience, because I work with some people that have a ton of sales experience and some people that, you know, this is going to be their first ever, you know, go at sales. Um, and so it's mostly personalized, like, how can we frame the experience they do have or the lack of experience in the right way to be able to help them land a better job than they have currently or their first job.
Yeah, so it's essentially a lot of career coaching to a degree, just in like a less traditional sense. Yeah. Okay, so you're looking for somebody that can essentially be a career coach for the sales, remote sales opportunity peeps.
Yeah, pretty much. And I think like the struggle is I don't know who has the understanding of the industry and, and I guess enough expertise. And obviously I can coach that, but, um, to have authority in those conversations that isn't a great sales rep who could make a lot more money selling than, uh, helping people get jobs.
So there's two different models that you can think of when you think of a coaching business like this. And I think this goes for like any coaching business in existence, which we've talked to —so many, and I've helped structure multiple teams like this. Like, there's really two models that work, and there's trade-offs in each one, meaning like you kind of just want to pick your problems. And so I'm going to describe each one, and you can tell me which one you think you would rather have the shit that comes with it. The first one is that you hire people that are going to be full-time. The downside of this is it's going to be harder to find those people because they're competing with these other opportunities. So just like what you said, it's like they could go make more money somewhere else, which means the type of people you're going to find are people who directly want to learn from you, and they see this as a learning opportunity, not an earning opportunity, and they one day want to open up a business similar to yours. So there's two downsides here. Yeah. Which is one, they're going to be competing in terms of cost, and so they're looking at these other opportunities. They're not going to come in for super cheap, even though they're trying to learn, because the anchor is just very high. It's what they can earn elsewhere. The second side to it is that there's going to be a finite timeline on this because they're coming in to learn. And so once they feel like they've learned enough that they can go off on their own or go do something somewhere else and learn more, they're going to do that. However, the benefit is that it's less management for you because if you bring these people in, you probably only need a couple of them literally to take care of all the clients that you have and you get a ton of discretionary effort from them because they're full-time employees with you and they're trying to learn. So they want to go above and beyond because they're trying to acquire the skills. That makes sense. That's the first model. The second model. Absolutely. Is easy to find and also hard to manage, which is find people that essentially are doing what you just described. They're already those coaches making a lot of money, but they want to make more money and they want to have influence. They like the status, they like the teaching. And so as a side opportunity, they can do this for 10 or 15 hours a week, maybe even less. And so then what you would do is you would get more of those people, say you need based on, you know, 20 calls a week plus whatever, say it's 40 hours, maybe you need 4 or 5 of them to cover you. You pay them a lot less, you get them fractionally in part-time. The downside to it is that it's going to be more management from you because you have to build out a schedule. You're going to have to make sure that they're all, you know, clock in, clock out, whatever, all the compliance. And so I would say that if you have a hard time finding the people, then maybe go with the model where you have the part-time coaches coming in. I would say the other upside to doing the part-time is that if you lose one, it's not a big deal. You can replace them fairly easily. There's a lot of key man risk in the first model. And so if you don't feel like you're like going to really be great at retaining them, I typically tell people steer away from that model.
Let me— yeah, I'm going to piggyback on that. So the nice thing with the partial model that Layla just outlined is that, one, you're placing all these salespeople right now and you already have a history of placing a lot of salespeople. People already, right? And they already went through your training and whatnot. And so I would say take your most successful alumni and say, hey, wanna make an extra $5,000 a month and give back to the community that you came from? Many of those guys would probably say, sure, I'd happily do it. 'Cause, you know, $5,000— 'cause a lot of salespeople do get tired of selling all the time, and so this gives them a little bit of a break and feel like they're giving back. Yeah, exactly. So I actually really like that model, and given the fact that you recruit all these salespeople, I don't think it'd be that hard. Second, because it would kill me and eat me up inside to not at least say it, you can double your revenue really easily. Can I tell you how? I would love to know. So I hear where you're coming from with the, hey, I want to have as many opportunities as possible so I can find as many placements as possible, so making it free is a way to do that. I hear you there. But you probably know of all the candidates you have that there's probably 10% of them that are killers and are going to do well. Right? Yeah, yeah, right. Have a tier that's $2,500 or $5,000 per head that you say, hey, uh, all these people are free. I personally screen these ones and give them a blue check mark, uh, from me. And these ones are $2,500 or $5,000 a pop. So if you get 600 placements a month is what you're doing, if 60 of them are paid at $2,500 or $5K, that adds $150,000 to $300,000 a month to the business.
This.
That makes a lot, a lot of sense. Boom, rested.
Okay, feel like I got to get that one out.
Yeah, I definitely, I definitely need to implement. We call that a money model.
Call that a money model right there. Right there.
You should write a book. I should write a book about that. Does that, that help? So that, Layla solved your, uh, your delivery model and And that solved your money model. Rock and roll. Yeah, that's awesome. Thank you, guys. All right.
That was a fun one.
That was good. That was nice. A little spice. I had a little spice of life. That was fantastic. What's up, Simon, by the way? All right, let's do next caller.
Let's rock and roll. Who else we got? Hey, I'm Brian. Hey, Alex. Hey, Leila. Hey, what's up? What's going on? So I run an online coding bootcamp for adults called Parsity.io, and I'm in a pretty frustrating position where we've like basically plateaued at around 30 to 40 people per year. We, we have pretty good reviews, people seem to like us. I do pretty much only organic through a podcast and around 30,000 followers on LinkedIn, and I'm just wondering, how do I hit this magical 100 people per per year target.
What do you charge? $9,200. So $9,200 is what you charge and you've got 30 to 40 people a year who are buying?
Yep. How long have you been doing it? This business has been around for about 5 years. 5 years.
And I've been running it for the last 2. And then was it at, oh, so did you buy it?
I'm sorry, can you say that again?
Did you buy the company? Yes, I did. Seller-financed purchase. Yeah. Okay. Understood.
And last year, was it also at the same number? Basically, yeah. Like it had a pandemic, you know, plateau. It went up to like 50 or 60 people during the pandemic when it was the software developer market was really hot. And now it's kind of gone to like 30 or 40. We're priced under most other coding bootcamps and we're much more personalized, but it just feels like, yeah, it just feels a little stuck at this point. Where are your leads coming from? I've never really had good experience with ads. Almost all through a podcast I do that has about 10,000 listeners per month, but it just feels like it's frustrating.
Like, that's a lot of people, but it's like no one's actually— No, dude, 10,000, is it 10,000 uniques or there's 10,000 downloads? It's 10,000 downloads. Right.
And how many podcasts do you make a month? Yeah.
Uh, 2 per week. Yeah. 8 per month. Yeah. So call it, you know, it's 1,200 per episode downloads and not all downloads are listens.
That's right.
Yeah.
Right.
So you might only have 1,000 people, right? You might only have 1,000 or 500 or 600 people. And yes, we read the chat by the way. Um, and there's only 500 or 600 people who are actually listening. So the fact that you're getting 30 or 40, that actually sounds like Good. You're getting—
yeah, you're getting 5% of your podcast to convert. Okay. Okay.
Has your podcast grown in the last year? Yeah, it did, but I think that was like from doubling the amount of episodes. So I think it was like, I was looking at it like, oh great, I'm getting more people. Yeah, yeah. I think that was the issue. And so I've been trying to like explore LinkedIn. I'm like, okay, I have like 30,000 people on LinkedIn. And then trying to write daily. It's like not as many as I think. Most of the people come from the podcast and we ask people, hey, how'd you find out about it? It's almost always through the podcast. There's like, I'd say, let's say 25% come, come through LinkedIn and that's about it.
All right. So you have a marketing issue. No one knows you exist. And it's great that you have a podcast. Podcasts are very, very difficult to grow because there's very low suggestibility. So you would want to take— so I see podcasts and like email lists, for example, is very middle and bottom of funnel. And so you need more top of funnel awareness type stuff. So LinkedIn works, that's fine. But I would also be looking at— I mean, I know it's just you, um, but I think you just need to make way more— like, instead of making more podcasts, I think you need to make more LinkedIn content, uh, for sure, because that's where a lot of people probably— like, I think that's a good place. I think X is also a pretty platform for people who are trying to like buy, you know, coding stuff. Also repurposing that content, super easy between LinkedIn and X because it's almost all words. But beyond that, if you take the words and then you make videos of those words, shorts or longs, combine the best 3, 4, 5 LinkedIn posts you make and then make those into longs for YouTube. If you combine all those things together, you'll get significantly more traction.
Beyond that, I'm assuming what's the, what's, how are people actually buying from you? We have like a— we go through a loan provider, so it's zero money up front. Like, we are accredited, so we can like get loans. People typically pay over like a year back, and we get the money up front, and the loan provider takes care of like the payments.
No, I'm not worried about that, but what's the—
but no, the convert, like click to close, what's happening? Oh, click to close, I'd say like about 25% of people, if that's what you're asking, like 25% of people convert.
No. So I see a LinkedIn post or— you're good. I see LinkedIn post or podcast. What do I—
what's my— what gets me to take action? Oh, okay.
It's like at the end of each episode, I'm like, hey, you know, go to parkity.io and fill out this application. Yeah.
Okay.
So thing one is we need a better lead magnet. So it'd be like I would say you have your course thing. I would say give the first module away for free. And say, hey, like, learn how to do this in under 60 minutes. The first, like, the one thing that's really valuable, like, oh my God, this is amazing. And then all you do is all the people get that thing for free. You'll get way more leads. You can call them up and then sell them because a direct ask of like, go apply is tough.
Yeah, for sure. Right.
Super bottom of funnel. Like you have a very bottom of funnel business. And so that's why it's not growing because everything is about just conversion.
Yeah, I was also thinking like we've had a lot of companies that we've worked with that are in this space, and the ones that I've seen that have had the highest revenue, they actually, they make YouTube videos. So the reason I think it works well for that is because like it's a very, um, like a lot of people that get into coding, like they like watching a lot of videos on coding. So it's like listening to it is very different than like watching it. I almost feel like you could take your podcasts and literally just turn them into YouTube videos. I think that you'd get a lot more buy-in, there'd be a lot more trust, and then you'd probably honestly get way more lead flow that way because it's a platform that's easy to grow on compared to podcasts. So it's like, I wouldn't stop doing the podcast. Yeah, yeah. In conjunction with what Alex said, I think the thing I'm thinking is just like, you're putting a lot of effort into a channel that's not going to give you a lot of return. Yeah. Like my podcast and Alex's podcast, like, that is like the— it's the one thing that probably comes from like, I would say like, if we want to do it the right way, it would take a ton of effort and be difficult to distribute across other channels optimized for those channels. Whereas YouTube, if you made YouTube videos, you could take that and put that across Instagram, TikTok, Snapchat, LinkedIn. Like, it's such a better source piece of content that when you're ready to scale again, you can scale that across so many different platforms, versus the podcast is always just audio.
Video turns into audio much easier than audio turns into video.
Correct.
Yeah, so yeah, yeah, that's probably keeping it going. Totally. TL;DR, 2 things you need to do. Thing 1, get a better lead magnet. Thing 2, you need to advertise way more, which means you put out higher volume of content across all platforms, especially ones that have high deliver—
uh, high discoverability. Yeah, no, that tracks.
And so you probably wouldn't do ads at this point, right? No, I think you can, I think you just, I think you can post. No, I think you can, you have so much meat on the bone with organic right now. I would do— I would just double—
I wouldn't double down.
I'd 5x down. Okay. I appreciate that. All right, man.
Rock and roll.
Appreciate you.
Oh, hey, thank you. All right. Later, brother. See ya. Scott, I just found your YouTube the other day and I liked one of your videos.
Oh, nice. And Simon, appreciate the shout for the book. I'm glad you like it. He's referencing that green book, everybody. Money Models. It's also free on my podcast for those of you who are broke. It's also a free course on my site for those of you who are also broke. It's also there. You don't even have to opt in. You can just watch it. But we're here now, so let's do this. Next caller is ready.
What's up, Nick? Caller.
Okay, let's body slam. What's going on, guys?
Can you hear me? Yes, sir. Going on. My name is Josh. I own a brick-and-mortar pest control company that focuses mainly on recurring service plans for residential clients.
Yep. So currently my constraint is optimize my offer.
I feel like there's room for improvement. Optimize your what? So my constraint is optimizing my offer. Offer. Okay. For improvement. Okay. Yep. So I've been bundling basically all the services into like a mother of all bundles type of deal. Yeah. I basically can't upsell with that since I'm bundling everything and margins get tighter, but my close rate does increase. But when we don't bundle, the opposite happens. Close rate margins do increase along with upsell potential. So my question is, which of the two would you deploy to scale the quickest?
Currently at $1 million to start the business a year ago, looking to get to $5 million next year.
My question is, you said close rate decreases when you take away the bundles, right? Uh, yeah, so, so basically, yeah, with the, uh, that bundle, um, I basically just can't sell.
Yeah, pretty much. I'm curious, do the customers— do you sell less of a specific type of customer, like in terms of like income range or type of house or something like that?
It's all upscale, like, uh, yeah, basically upper, upper middle to higher class.
Is that what you're asking me? Yeah, I was just trying to understand if like there's a specific type of customer that's more attractive that you're not getting when you switch, that you lose with the switch, but that the ones that you're getting are gonna have a, a greater LTV. So it's like kind of worth the trade-off, but I was just trying to understand if there's a difference in customer.
Yeah, it's, uh, so the customer, um, basically, yeah, it's like, so customers are pretty much the same. It's really not going to change. Okay.
So I pretty much am focusing on like a higher customer here that's willing to— Yeah, let me push back real quick. So you said your constraint is your offer. I would say, how do you know that?
Well, so, well, so because of the—
so really, honestly, it's like that close rate, it drops when we, um, when we don't bundle, and when we do bundle, it goes up.
I mean, the business is rocking and rolling. It's doing great. Honestly, I don't—
I'm just wondering if that is the constraint.
It doesn't sound like the constraint. Like, what's that like?
Why is the business not doubling revenue? Like, yeah, what's stopping you right now? I mean, you said your close rate's fine when you have the bundle, so sell the bundle.
Okay. Unless there's some other major problem. So the only thing is that the upsell potential drops, so the LTV does drop. Well, then why don't you raise the price on the bundle? Yeah, I guess you could just raise the price on the bundle.
I mean, it's like Love this for us. I will raise the price on the bundle. This is great. I'm glad we, uh, glad we had this chat. Okay, we have this thing that everyone wants to buy, but it has lower margins. It's like, well, I bet you if you're especially going to upscale, they don't know the difference. So, you know, tack on 20 and then probably like double your margins.
They won't even know.
Yeah, you're right. I love it.
Yeah, this was fun.
Appreciate it. I'm gonna be seeing you guys in December. Oh, fun!
Well, rock and roll, man. We'll see you out here.
Tell us how much more money you make in the meantime.
Yeah, that'd be lovely.
A whole lot of money. Thank you, guys.
No, you bet. Have a good one. My team, somebody's got a low battery on their Mac.
I saw a battery thing. Alex, everyone wants me to smell your beard.
Does not smell like cheese.
Why would it smell like cheese? I don't even eat cheese.
He doesn't even eat cheese. Um, okay, so what's— do we have— did we— do we hit all of our, uh— oh, we have a next caller. Okay, let's do next caller. I have a client which is my boyfriend. I'm 17. That sounds racy, JC. What? That sounds wild. "I'm inspired to start up my performance marketing agency to low cash I owe in the moment. I would love your thoughts on that, Alex." I mean, what a hook. The second part almost had nothing to do with the first part, but hilarious. "Maybe JC, how do we join the hotline?" We're calling up people who bought a bunch of books at the launch, so I'm trying to do right by as many people as I can. They helped other people get books for free, so I'm helping them.
Cheese and crackers.
Cheese and crackers, what the hell?
Dude, we don't eat crackers. Who's on?
Who's on first?
Hey, this is Paul. What's up, Paul? Hey, how's it going? Cool, all right. So I run a marketing agency for martial arts schools. Oh, that's pretty dope. I offer lead generation and yeah, I offer lead generation and appointment setting services. I currently am at $420K in revenue, $100K in profits. And yeah, I guess the problem right now is that I kind of started this just doing freelancing, kind of stumbled into martial arts on a whim after having success with the clients. I figured out like a repeatable system to get them results, get people showing up, get people coming to the first class, and that's kind of where I'm at today. Um, and I guess my problem right now is I'm selling 3-month contracts and churn's pretty high still. And I kind of just didn't really fix the churn issue. I kind of just started selling a lot and getting clients and I have a good relationship with all of them. But I've been kind of stuck at this range, this $35,000 per month for a while now. And clients just leave for a lot of reasons out of my control. Either A, I do a great job and they can't handle the one coming in, or B, they don't have the patience to kind of keep going with it.
And, uh, I think—
do you want to take this one? I don't, I don't, uh, run a martial arts school myself, so sometimes I have some issues with sales and, um, I can't really run it myself.
So I kind of just grew this agency on a whim. What do you want to have happen before I answer the question?
What do you want to say? What's your goal?
Yeah, that's the question I like to start with. Yeah, I think right now I'm trying to figure out if I should keep pushing on this or if I should pivot. And then like, I didn't really set out to start an agency.
What do you wanna have happen? What's the goal?
It depends whether you should push or pivot depending on your goal. You trying to make a certain amount of money? You trying to sell a business? Do you want a lifestyle business?
Like, you know what I'm saying? Like what do you wanna end up? I think right now, I think I wanna learn how to make a lot of money and exit and learn how to do that process from start to finish.
Yeah. We, we can tell you that. Yeah, you will not exit. So the question is, can you learn something from this business and make money at the same time, or is there a better opportunity?
Yeah, I thought about potentially selling my book of business and then opening up and pivoting to some sort of brick-and-mortar kids education business. I mean, I've kind of fleshed out the scripts on how to get parents and getting them invested into a martial arts program and the whole nurture sequence behind it. So I thought about investing the money, cause I've saved about $100,000 in this business and I was thinking of kind of leveraging that into maybe investing in an actual brick and mortar and learning how to scale that. But, um, I guess I'm just trying to figure out, do I, you know, am I in a good spot?
Should I push the agency, grow it? You know, I'm curious what Leila's gonna say. We'll probably have two different pieces, like we'll probably come at this from two different angles. So you'll get a double trouble on this one. Sure. But I'll say this. Congratulations on learning how to generate leads in a market and work them and get them in. You've learned acquisition. Super valuable. And you've learned it for a specific avatar, right? Appreciate that. The next step that this business— like, I can tell you where this is going to go. You would have to— you'd have to basically change this entire business in order to make get a bigger sellable business, which is essentially the same as starting over. If— and that's all based on your goal, because the reason that you have the churn you have is because martial arts studios in general tend to have significant— you know, they have high churn. They're typically not very good business owners, not very good, but just they're small, right? They're very volatile. And so that volatility is reflected in your business and volatility in their business and your business therefore creates a business that is not valuable, right? And so that's going to be based on them. The only way that you can get those types of customers who are volatile inherently to be sticky is to look at the things that those people already buy that they don't turn out of. So what are the things that they buy that they don't turn out of? If you were to stick with this, and I'm just using this as a mental construct, and then I'll get into more specific examples of what I think you should do next. But big picture, you could— their payment processor, they don't turn out of, right? Their CRM, they don't turn out of. Their insurance. You know what I mean? Like, they're like, there's, there's things that they don't turn out of. Marketing stuff, they will turn out of left and right and center, right? So I think that you have this whole kids education thing. If it were me, I would prefer you go and find an industry. If you want to do brick and mortar, which is fine, if you want to go brick and mortar, I would find an industry that already has a product or service that people don't turn out of. Then I would apply your skill of learning acquisition to that business, and then you'll be able to, like, you can go and start acquiring businesses, um, and then filling them up because you know how to acquire, and those businesses, um, will already have the stick in place, and so you'll have the full stack.
What was your experience prior to this business? Uh, well, I worked for a marketing company and I learned lead generation there. And then I kind of just, um, the company ended up getting sold. So I ended up, you know, trying to get a job with freelancing and I learned, yeah, I took, I got my own clients and then after I did that for about 2 years and here I am with a bunch of clients and I don't really know what the next step is.
So, okay.
That's great to know that you came from a marketing background. Yeah. Yeah. So I thought about getting into the, uh, kids education space because, you know, I did martial arts because, um, I came from a sports background teaching kids like different sports, specifically Frisbee, which was cool. Um, and I guess I thought about, you know, buying some sort of like tutoring business or kids education and taking my marketing skills there and growing that. Um, but, uh, just because if my goal is to learn how to sell and, and sell a company is—
I'm not sure if the agency space is there too. That's where my headshots than athletes did.
Just find something that has high revenue retention, high stick. I was gonna say, you wanna find something easy to market. Like, right. I think it's really impressive that you've done what you've done for martial arts studios because we've worked with thousands and it's tough. So I mean, I can say that objectively. Uh, it's like you have a, you know, like a level 8 skill that you're using on like a level 3 opportunity. And the opportunities that you're kind of presenting, they're not really that much better. It's like maybe a level 4. They're just different. I'm like, can you get a level 8 opportunity to match your level 8 skill?
And what is that for you guys? It's something that has revenue retention. I'm just telling you right now, it's something with revenue retention. Yeah. If you just solve for that, because once you have revenue retention, if you know how to acquire customers, you just grow a business every year, just gets bigger.
That's I mean, the hardest thing is revenue retention. I just want to like open up your mind. You're looking at opportunities that are linear. I want you to look at opportunities that are exponentially different than what you're doing right now. And I think the reason you're thinking linearly is because, you know, without noticing, we have these beliefs, right? That we keep ourselves in these boxes thinking like, this is what I'm good at. The fact that you're very good at marketing, you need to find a great product that retains customers easily to market. What that is, maybe it does scare you or makes you nervous. You're like, I know nothing about that. That's okay, you can figure it out. And the thing that I tell people a lot is it is just as hard to build a small business as it is to build a big business. Both of them are going to be painful. You're going to suffer. There's going to be late nights. It's also just as hard to build a, uh, I would say like a more advanced business as it is a small business. I can tell you that from personal experience. It's like building a gym up to what it needs to be is as hard emotionally as building a large company like acquisition.com. And they are hard in different ways and they're also easy in different ways. So you're going to have 50% shit and 50% good no matter what opportunity you pursue. I would love to see you pursue an opportunity that is at least worth the 50% shit you're going to go through. That's something me and Alex talk about a lot, which is like pick an opportunity that's worth the pain because it's going to be pain no matter what. This goes for everybody on the call. It's going to be hard no matter what. So pick one. Even if you're like, I don't believe that I could do it, you will figure out a way. And everybody does. Even when we started Apposition.com, you know, we didn't know anything about investing or buying companies or doing any of those things. And we learned along the way. It's just that you have to have the belief in yourself to just start. Like, you're not going to feel ready for any opportunity that's exponentially different than what you're doing right now.
You get ready by starting. Got it.
Just gotta find a level 8 opportunity. No, I literally— I would go on— I would literally go on ChatGPT and I'd be like, tell me what an opportunity is that has great revenue retention. Here's all the industries I've worked in, here's all the skills. Where is something where I can get insane revenue retention that is 5 times more likely to sell and be worth something and make me, you know, maybe it's $50 million compared to these businesses I'm in right now. And just like look at the list and then think like, okay, well, like where do I have a 30 to 50% shot of success? I mean, like, I don't know how to explain this. Like, I have never felt ready before I tried something.
I'm always like, I have no fucking idea if this is gonna work.
I could totally fail. This could totally be terrible. And like, that's gonna happen no matter what. It's just like You're picking things that are small. And here's the thing that's even worse. You said you want to sell a business. Well, then that means you have to stay in the game, which means you have to be challenged, right? If you pick something that you know you're going to win, this is like where high performers just die. And I can tell that you're a high performer, is that you pick something that's too easy and then you get disengaged and then you're like, I can already play this out, know where this is going to end up, and I don't want to go there. And then you don't even want to see it out to sell the thing because you already know where it's going to go. It's not interesting.
Interesting. Do you have anything you would add? No, you're right. Yeah, yeah, no, last year I, I remember I was at the 10K rate and I, I watched a bunch of Alex's videos and he just said double ad spends and keep the course. And here I am a year later, doubled ad spends, kept the course, and I'm now— I guess just got to find a, you know, high-leverage activity.
So also, I would just say this, You're gonna learn more trying something than you are going to learn thinking about it. We don't learn while we stay in our heads. We learn when we get out into the world and we do stuff. So like, think about a way, like, how could I test these opportunities? Can I be an affiliate of a company like this? Could I be an affiliate to an insurance company? Could I just come in and be a contractor to help build up this X company? Like, you could literally just find one big client and be like, I will do your in-house marketing just so you can learn the business.
Dang, I would love to do that. And use the cash that you have as you're saving so that you can be aggressive with your learning, right?
As in, like, that's your best day, so you don't have to worry about living. Yeah, I've been, I've been doing the whole, like, Chipotle thing, frugal thing, and I saved up for a bunch of cake. Good, man. Because of you guys, I appreciate you guys. No, I appreciate it. Appreciate you, man.
Um, awesome.
No, I'll do the thing.
All right, appreciate you, dude. Later. Yeah, we have another caller. Oh, a caller!
We have a ringer is at the door. Someone has a ring. Hmm, here I am.
Ancient king of Iran, Hormuzi, your relative. Uh, the Strait of Hormuz is, uh, is, is one and the same as my family. Yes, Hormuzi, which means coming from in, in Farsi.
E means you are somebody of that area.
Who do we have on the line? Devin. What up, Devin? Can you hear me? Yeah, we can hear you. Okay, cool, cool, cool. You guys can hear me. I was wondering. All right, bet. So I've got a small YouTube channel, like really small, and I just don't know where to go other than just make more content. What do you sell? I've watched y'all's stuff. I don't have anything to sell. What do you make YouTube about?
Should I have a product? What was that?
What do you— what's the YouTube about?
It's, uh, hunting, fishing, outdoors. I'm an outdoorsman. Okay. Oh, that's cool.
And how many, uh, subscribers do you have or views do you get a month? Uh, so I've got 2,000 subscribers. Okay. And, uh, last— in the last 28 days, I've gotten almost a quarter of a million views, mostly from Shorts.
I haven't posted any Longs yet. Okay. All right.
What do you do to make money?
Yeah, how do you live?
Uh, I have a job. I work 40 hours a week.
What do you like—
what do you do though? I make lawnmower parts. Okay. Nice.
All right.
Okay. I, I think you're early. Mm-hmm. I think you're early. So I do think that you should start making some longs because longs is what's going to deepen your kind of influence with the audience. You want to demonstrate more expertise around hunting. And if you're like, I don't know how to do that, just take 3 or 4 4 long concepts— sorry, short concepts that were good and just loop them together. Not literally loop them together, just, you know, make a video that covers each of those concepts, you know, in tandem and work your way to a 5 or 8 or 10-minute video. And I would start doing that. I just think you're early, dude. Okay, so just basically just do more. Yeah, and do better too, you know what I mean? Like, I think you just got to learn a little bit more about the content game.
Um, yeah, I would say like what right now, are you spending all of your time making content for YouTube outside of work?
Just about, yes. Yeah. And how long—
every minute I can spare, I do. No, you're good.
How long have you been doing it? So I started the channel several years ago and kind of got very, very consistent. And then, uh, about 2 months ago I decided to really get after it.
Okay, well, okay, I think that we can both tell you this, which is like YouTube is a game of consistency. Like, that's just— that's how the platform works. So I think the biggest thing that you can do right now is just be consistent. Because if you look at like how to go from just like okay or mediocre to just like good, solid, it's consistency. And then if you want to get to like great, it's like continued improvement while being consistent. So I guess the question is, how many shorts and how many longs do you commit to making per week?
So I was at one point, I was doing one a day, and I was—
it was great, but I'm kind of back down to like 3 a week, 3 to 4 a week. You mean for the shorts, right? Yes, sir. Yeah, I think I mean, you do have to do more and you have to do it consistently. And I would just tell you that like right now you're not multi— like just for your own self, do not consider yourself having done this for years. You've been doing it for 8 weeks. Yes. So you're super early, man. Yeah. You're super early. Okay. So I just like, I wouldn't even think about monetizing it right now. Like you just want to take 5:00 AM to 9:00 AM and 5:00 PM to 9:00 PM, your 5 to 9. Beginning of day, end of day. And I put all of that into making sure no matter what, I got out— I get out one short a day. And then on my weekends, I'm going to make sure that I get at least one long out.
Okay.
What's your goal? One more question. What's my goal? Yeah.
Do you want to quit your job? Do you want to build a company? Yes. I believe if I can just replace my income from my job with this, then I could scale it up. And, uh, I guess my number would be about $10,000 a month.
Okay, can I ask you something, to be super honest? What stops you from making one video a day like you were?
Like, what, what behavior? Um, mostly just life gets in the way, or I get talking and to somebody and then sun goes down and now I'm out of daylight.
So if you, if you want to ask yourself how to be consistent, the question is how do you stop the things from occurring that make you inconsistent? So it's like, do you have the right people surrounding you? Do you have yourself in the right environment? Like, those are the things that I think you want to be thinking about right now, because I know like for myself or for Alex, when we were first starting out and like making just trying to get into business, I had to put myself in an environment where it made it easy to achieve my goals, not hard, which also meant surrounding myself with people in a routine that made it easy.
Okay. Do you know how, how I define commitment? How? The elimination of alternatives. You have to get rid of your other options. And I don't mean like you need to quit your job. I mean, everything else that is not you make— if this is what you want, and it's like you can only know that, but if this is really what you want, then it means that you have to say no to everything else in order to truly say yes to this. Because every time you say yes to something else, it's saying no to this thing that you want. And almost always the things that we want to say yes to now are short-term, long-term. We say yes in the moment because it gives us a short-term, short-term good thing, but it prevents us from the long-term long-term, great thing.
Okay, so I was also thinking, should I post on Instagram, Facebook as well?
I want you to be consistent with YouTube first, man. All right, give me 12 weeks of consistency. You make 1 long and you make 7 shorts, 12 weeks in a row. You do that and you're like, you know what, I got more. The thing is, is right now You have to do that volume so you can become more efficient. Like you have to feel the pain of the inefficiency of being like, man, this is a lot of work. Because when you do that, all of a sudden you'll start getting faster, you start getting better and your work output and capacity will go up and then you'll free up the bandwidth because you got more skills, you got more efficient that you can start looking at, you know what, I'm going to repurpose this on Instagram or repurpose this on TikTok or whatever.
Okay. Just like really thinking about this in order to build a business to replace your income, like you want to build that confidence and confidence is an output, not an input. The input to confidence is becoming incredibly consistent with something. So you get the experience which makes you competent, then it leads to confidence. And I think like in general, if you can't stick with a commitment that you make to yourself, then you, you degrade the trust you have with yourself every day. And so like anything you do, it's not going to come out as good as it could be. It's always going to be harder, it's going to take longer if you don't repair that trust with yourself. So I think like right now, if you're just consistent with the posting, like that is going to make you not just better at business and content, but just better person for yourself, a better—
I would say like partner to yourself in doing this. That, that's kind of funny because I was watching one of Alex's videos where he was talking about consistency and how it— how you get better by doing the thing over and over again.
So I started doing that, and I've already noticed that trend. I think right now it's good to steer a little bit— like, I get obsessive over doing things consistently, Alex knows this, um, but I think you can steer a little bit in the obsessive, uh, direction right now.
I think it'd be good for you, and then you can course correct that later. And expect the fact— like, expect expect people who are normal and around you to not understand. Expect them to think it's weird. Expect it to not look cool. Like, everyone goes through a cringe period. Like, you're— it's going to be lonely because you're trying to do something that's very different. And I make that content where I say, like, in order to be exceptional, you have to become the exception. You're going to probably be surrounded by the majority of people in your life who don't want this, aren't interested in it, think it's dumb, think it's stupid, think it's you trying to be famous, you thinking more of yourself than you you are, all of that stuff. And you just have to just put that on the shelf and get back to work. Because like, either they'll be right or you will, and you've got a long time to be right. That's kind of what I was— all right, thank you. Yeah, they'll be right for now, and you'll be right for good. Yes, sir.
So just Keep, keep on, keep on, baby, keep on. Thank you very much.
You guys are awesome. You bet. Appreciate you, man. I'll see you. All right, let's look at, uh, all right, let's let—
what we got here today? I don't know.
I was like, yeah, I sold it for plastic surgery. I'm tired, okay? I filmed content before this. Oh my God. Horse with blinders only run with other horses. Maybe, I don't know. How do I go about hiring the right person? That is a very short question that has a very long answer. Be the right person. Yeah, well there you go. There's your short answer. Wow, wow, must be nice. I run an agency for churches. They have all cameras and equipment but no editors. Basically a clear marker for taking for backend media optimization. How should I market the ministries? Honestly, I think they're pretty easy to market to. I think I would start with outreach first. I'd get my first 10 testimonials and then ask them for referrals. And then once I have that, once your capacity gets taxed, you can ask them to start paying you because you can't keep doing it. And they're gonna start getting hooked to the fact that they had good media. After they have good media, you'll convert some of them. Some of them you'll have to drop with the excess capacity. Then you can start doing outreach using the testimonials from the 10 people that you did it for free for, and in that process you'll learn how to do the game.
I feel like in fitness content it's not impossible to post daily, but I keep running out of ideas to keep up with 7 days a week. Here's my favorite way to make content. Um, look at all the content on fitness that you fucking hate and then ask yourself, why do I hate this so much? There's your piece of content. I do this all the time. People will send me like, you should make this piece of content. Like, ew, it's disgusting. And then I'm like, why am I so disgusted by this piece of content? And I'm like, it's so cringe, why? And then that is a piece of content in itself. So like, look at what you see that why you're like, why is this so bad?
And then that becomes the content that you can make. And I'll take the best hack I've had, and I'll piggyback on what Layla said. When she's saying that, she's not saying dunk on people. She's not saying make reaction videos where you shit on other people. You probably like me, anybody who's followed our stuff, like Layla and I, we do not like— that's just, we don't operate that way. I think there's nothing I think there's enough hate in the world. I don't think I want to add to that. So I just like, you know, tall poppy, right? You can drag everyone else down or you can lift yourself up. We are very much on the like, just make better shit. And if you keep making better stuff, you will be known. I don't think there's any point in shitting on others, but it is good for, for inspiration. Yeah. Thinking about it. Yeah, exactly. Yeah. Cool. I have an event company. It has only been established for 2 months. But our competitors have been here 15 years. How do I get clients to trust me since they're comparing us to our competitors? You're going to have to— okay, so I'll give you the classic small dog frame. All right. So if you were to enter the gym space, you would have to compete against Gym Launch. And as a reminder, when I entered the gym space, I was the small dog, not the 800-pound gorilla. We were the small ones, the small, the teeniest of dogs, the itty bitty bit.
Everyone compared us to everybody else. It was like every call I got on, it was like, well, what about this person?
Yeah, every time. So you have to— you have— comparison only works in the vague, not in the specific. Meaning they're comparing your company to their company. You need to reframe the comparison as comparing you to employee number 86 at that events company. So it's like, listen, they've been here, like you want to lean into it. You want to be like, listen, they've been here longer. They've got way more, you know, track record and experience. I was like, but you're just going to be a number to them. And if there's a problem, you're going to go to account rep number 6 and you're like, and they're not really going to care. And so it's not, is my company better than their company? The question you have to ask yourself is whether I'm better and more motivated to help you have an amazing event and experience as a new business owner who will do everything to succeed compared to their hourly or salaried employee who clocks in and clocks out and doesn't care. That's who you need to compare against. And if that's the bet, I'll win 10 times out of 10. That's the reframe when you're starting out. All right. Could you please explain how to decide between a monthly— oh shit, you know, monthly subscription and what was it? I missed it. And a one-time payment. Yeah. Okay, cool. It's actually just a math thing. So it's going to ladder up to something called EPCs, which is earnings per click. All right. And so you get your earnings per click by saying you have two lines on an Excel sheet. So this is pure math. 100 clicks to offer one. 100 clicks to offer 2. And so if offer 1 gets 100 clicks and let's say you convert 2% of those clicks. All right. I'll just do the math in front of you. We love when you do math. Yeah. All right. Right. I'll be fast with it. All right. So we get 100 clicks on both of these. We've got A, which is our subscription, and we've got B, which is our lifetime. Okay. So let's say our conversion rate on this is 2% here. And let's say our conversion rate on our lifetime offer is 3% on the page. Whatever. All right. Now, our price for our subscription is going to be, let's say, $10 per month. And let's say that our lifetime offer is $50 one time. All right. That's it. Now, our churn. All right. Our churn here, let's say that our churn on this is 10%. Okay. That means our LTV is going to be $100. So if we have 2 clicks, 2%, 2 clicks, and we have 100 LTV, then we're going to make $200 in total on 100 clicks, which means our EPC is $2. If we're going through this one, our churn doesn't matter because it's lifetime. Lifetime value is going to be $50. And so we got 3 clicks, which means we got $150. So our EPC Here is going to be 100 divided, uh, 150 divided by 100, which is, I don't know, 1.5, I think. So this would be our winner. All right, now the big caveat here is that it will take you 10 months to break even on that first offer versus getting 5 times the cash up front. So there's going to be a cash conversion cycle issue, um, that you're going to have to deal with. Now these numbers actually don't make sense because realistically you might have higher conversion at a $10 price point than $50. Then again, people don't like monthly recurring compared to a one-time payment. It could be, it could go either way. And so if you're like, how do I pick which one? You test both. You look at your earnings per click. The one that has earnings per click that's higher is going to be the one that will make you the more money over time. And as long as you have the cash flow to sustain that, that's the one you do. If you don't have the cash to sustain it, then you have to start retriggering the money model. Read the green book. That's what it was all about. Boom. Snapshot that. That's right.
Uh, Hormosi Hopline, caller number 27. Next caller, please.
What do we got? Did they hung up? They were like, like, too hot.
They were like, it's too hot, getting out of the kitchen.
Did you almost hang up? You almost hang up? You almost ghost us like Patrick Swayze? Can you hear us? Hello? Yeah, what's up, man? Tell us about the business. What's going on? What's the— what is the problem that you want to solve today? How's it going, guys? You still alive? You've been killing it. All right, tell me, man. What's your name?
So, uh, so I run, uh, my name is Dan.
I run a center for seniors and the disabled. Okay, a day program. Okay. And, um, most of our members, um, are basically insurance-based. Yep. So you pick them up, you daycare them for the day, you drop them off, and you pay— you had day rates, right? Correct. Yep. Give them a meal. And the biggest issue that you have is that sometimes people don't want to, uh, come with you.
Is that the problem?
Basically, biggest issue is, is growth.
And in our area, we have a lot of kind of bad actors who are offering kickbacks and payments to join the service, even though it's completely illegal.
Yes, we are a federally funded program. Yeah. Yeah. Super familiar.
So you're struggling with growth because you have illegal actors? That's not the—
that's just an easy excuse.
Excuse to, to say, you know, um, but kind of the, the difficulty is focusing on— we kind of have 3 primary people to sell to.
It's the actual person that'll join the program. Yep.
Uh, a caregiver, either a mom, a kid whose family needs this. Yeah. Or referral sources like doctors, social workers. So it's basically these 3 archetypes of people that, that we need to sell to. Um, which one do you, uh, succeed the most with? It's a good question. Um, the referral sources always seem, seem great because they have access to a ton of people.
Um, I do in-person lunches with them and do the whole song and dance, but to get a referral, it's very difficult, uh, because once again, people are also paying for referrals, so But that's an excuse, which we said earlier, right? Correct. Okay, so let's just— let's just cast it out of your vocabulary for now.
You're gonna not do illegal things, right? No, absolutely not.
We've been in business for 20 years, so we're not playing.
We do have competitors that do illegal things. Yeah, so like, but like, it's like, it's a, it's a, it's like, it's just something that's taking up room in your mind because you brought it up twice already. Right. Okay. So you're saying that you have these song and dance conversations and you're saying it's hard for you to convert from them saying, yes, you can come to our facility with a bus and pick up people and knock on doors. I'm sorry, I didn't hear that part. So when you're doing the pickups, I'm guessing you have a bus and you grab people.
Right.
The pickups are from their house. That's when they've already become a member.
Are you doing multifamily though?
No, usually each location is a particular person.
It's not like we're not picking up from like one place, like hundreds of people.
It's just each stop is one person. Yeah.
And you've owned the business for 20 years? Yeah, well, I joined about 8 years ago as a partner. Okay.
So can you take more customers than you currently have? Absolutely.
We could take about double, if not triple. Okay, so you're demand constrained right now? Yes. Yeah. Okay. Demand constrained right now. So people don't know you exist, so we have to do more advertising and in some way. So you said you have these 3 avatars.
Do you know what one of these avatars is worth compared to the others? Uh, in a number sense, no. But let's say if you advertise to one caregiver, that's one member, and potentially a doctor's office is like 200 potential members.
That sounds like pretty simple math to me. So what stops you from going to the, the physicians? Nothing.
I go to them. But to get consistent referrals is— surprisingly, we get referrals from people that I've never spoken to.
Like, we're in the local community, we're very well known.
Yeah, but like, they know us, they know our name. Yeah.
But in terms of actually getting, getting a signature and getting a person to join, it's a very— so I don't have, uh, confidence in that. You're good. In the Leeds book, which hopefully you've read, Right. The chapter that I want you to learn like the back of your hand is the affiliates chapter, because that's exactly what this is. So these physicians are your affiliates and you're going to need like them just saying, yeah, sure, we'll refer people to you is not going to do anything. Right. Which you've already experienced. Yeah. So I prefer a launch then integrate strategy, which is great. Why don't we send an email to all those people, or if you want, I can hang out at your office and after you meet with a patient, I'll meet with them after you. Hmm. That's interesting. Great. I'll call, uh, Bam Bam. Yeah. So you want to launch, which is like if you can get them to one-to-many tell their audience, you know, about you. And I say audience, it is obviously their patient base, but like that would be thing one. That's the easy thing. Integration is what you want to have with an affiliate, which is how can you work in their existing flow so they have minimal change in business, but it ends up promoting you. So that's what— let me send somebody to your office so that they can take this for you, right? You could also say like you're worried about kickbacks. You can rent space if you wanted to and say, hey, I'll pay you $1,000 a month to put up a little, a little kiosk here.
And that would be different than a kickback because it's not based on performance. Interesting, interesting. I love it. Wonderful.
You should, you should go into business coaching. I wonder if you could do this professionally. Dude, appreciate you, man.
Does that help?
Yeah, absolutely, man. Thank you guys so much. Congrats on the new release, by the way. Thank you, man. I appreciate it.
Bye-bye.
All right, see you, man. Oh, I gotta go. You gotta go? Fine. All right, everybody, are you like permanent go or part-time go? Yeah, I'm permanent go. Permanent go? All right, everyone say bye to Layla. She's leaving. She's grown disinterested in me. She's off to greener pastures. She said, my hair can't, my hair, long hair don't care. Let's see, let me pause on these guys. All right, went from profiting $1 million a year, too long. SaaS land page CRO, how do I fill my days with work to get as many clients as possible? Okay, so you need to get more customers. I have inconsistent clients since I'm reliant on LinkedIn in-mails. 50 to 100 a month. Okay. I mean, do you have to— you have to like everybody. If you want more people to know about your stuff, you have to let more people know about your stuff, which is what I wrote this entire book on, which is leads. Right. And right now there's only 3 things that you can do as a human being to promote anything. You can do outreach, which is one-on-one communication. You can do posting content. Or you can run ads. Now with those 3 things, you can go get customers, you can get agencies, you can get employees using that same skill set, or you can get affiliates. All right. And so right now, if you just look at your calendar, if you are not doing outreach, $2 million money models, holy shit. Oh yeah. If you are not doing outreach, you are not running ads or you're not posting content with the majority of your day, at least 4 hours a day, if that is the constraint of your business, then you are not doing your job. So you have landing page CRO. Awesome. You fill your days by spending 4 hours per day. So the schedule that I like to run, if you are starting out, is I split the day into 3 chunks. All right. And it's all 4-hour chunks. And if you're like, that's 12 hours a day, Alex, sure, you can always just do less and take longer to get to your goals. That's your prerogative. All right. So you've got 4 hours, 4 hours, and 4 hours. Okay, so I'm going to spend the first 4 hours of my day promoting. All right, the next 4 hours of the day I'm going to spend building. And when I say building, there's always collateral, there's stuff you have to put together, you have to install something, whatever. And then I'm going to have delivery. And so this is how I split my day so that I can get ahead of what I need to do. And if you promote what you have, you build and you deliver, you're going to— and promotion is going to be marketing and sales. All right. Now, if you're like, I've already built everything, then you can double this up and make it 8 hours for promotion and delivery. But in the beginning, the thing that, the thing that you are fighting tooth and nail against is irrelevance. No one knows you exist. That's the issue. It's not your market. It's not your product. No one knows you exist. That's the issue. And so you have to fight. And by fighting, you have to fight against everyone else who's fighting for your customer's attention. You have to become more interesting. You have to get in more inboxes. You have to get on more newsfeeds. And by doing that, you'll get more people that you can convert into customers. And if they're not interested in your stuff, and if they're not interested in your stuff, you need to give them a better reason to get interested in your stuff, which is going to be a better lead magnet, a better resource, to give you the information. Someone said this is disconnected. Am I, am I hearing correctly? Going to turn on and off your headset. Is it on and off? I'm good now. All right, Dylan.
Dylan. Dylan is killing.
So dark. Hey, can you hear me, Dylan? What is the biggest problem of your life? Yes, I can hear you.
What is the biggest problem in your business right now? I'm trying to figure out whether I should push or I should pivot, and I've been having a lot of trouble pushing, and that makes me unsure.
Okay. The only reason that you pivot is if a fundamental underlying assumption that you came into the business has been proven untrue. If I want to start a, you know, dog lash business where it's like I sell lashes to dog dog owners for their dogs and I think there's going to be a big market and no one wants it, then that would be something I say I'm going to pivot. If it's, you know, I already like—
are other people making money in your industry selling what you sell? Yeah. Yeah, we got it working. We got $2 million a year in revenue and $500K a year in profit. But then I had a partner and I lost everything. Long story short, and we buy and sell comic books. And the problem is we've been having trouble getting enough high-value deals where money can be made on the calendar. It's tons of sellers with like 50-cent comic books and not enough sellers with $5,000 and $10,000 collections.
Okay, do you think that there's not that many that exist or you just don't know how to find them?
It's like 1% of our leads, and I've already looked at all of the ads in our industry.
And they've all like, it's just mining through a ridiculous amount of leads to get like the few gems. Yeah, I mean, to be fair, there's a lot of businesses that are like that. So that isn't necessarily a bad thing. I mean, you had 50% margins on $1 million in business, that's not bad. So I don't wanna like, I don't wanna dissuade you from necessarily doing something that could potentially be lucrative.
What, You make how much on the average deal and how much does it cost you to get leads? We're— we've optimized the shit out of the landing pages. We got funnel hacked. Like, I know the page is good.
We're getting 600 leads a month at $10 a lead. Okay, so it costs you $6,000. Okay, got it.
And then 6 of those people are potential good customers, right? Yeah. Okay. Averaging I say the average deal we want is at least $2 grand, but we've had some record months where we got some whales that are $50 or $100K, and that's what makes me, like, interested.
Okay. I think that your issue is that you're dealing with insufficient volume. So volatility is a symptom of insufficient volume. So when you have, like, I have some big months and I have some small months.
If I were to say over a year, do you think you'd have a whale? Yeah, we have, we have multiple deals. I, I want a 5x ad spend. Yeah. But then I'm worried that it's not efficient enough and that the sales team has to be too good and sell it. Like, we're buying comics, like training this. I've been through all your trainings, like training this where we're buying the comics versus like collecting money has been challenging from a commission and tracking perspective and training, etc.
These, to me, these are not pivot problems. These are just like, these are business problems. Like every business has things that are hard. And the fact that you did a million top line. Yeah, if you did a million top line and $500,000 bottom line, like to me I'm like, okay, so you've already proven that this works.
Yeah, I just keep thinking like this. I've had trouble getting this past me and I see what you did with Gym Launch and I can't help but think like, oh shit, we could scale a high ticket team.
Teaching all that stuff.
Teaching what stuff?
How we run the ads and the setter scripts and the closer scripts. For comic books or for just selling stuff in general? For buying and selling comic books. It's tough, man. Um, I'll tell you why. Like, all right, maybe, maybe I'll, like, I'll tell you why this is tough. Whenever I hear someone say, I'm really struggling to make a business work, so I'm going to teach other people how to do this thing that I'm not doing well with.
It like makes me like, you know, I'm not struggling to make it work. I'm struggling to scale it to the point where I, you know, go into a multi, multi, multi-million dollar business with multiple drivers, not just me.
Okay, well then is there a way that we can enable— is there a way that we can like arm and like make an army of people who are like running your play and then you can somehow like not get a percentage of the deals that they're like, what would they struggle with if you were to show somebody how to do this? Like, what would be the biggest issue? Because if they're, if they're being efficient with their leads, right, they're spending whatever, let's say they spend $500 a month instead of $6,000, right?
So they're going to get 50 leads. What are they going to struggle with? They struggle with they don't know how to get leads, then they don't know how to work the leads properly, then they don't know how to set appointments, then they don't know how to close a deal. Then they don't know how to properly sell the comic books.
Then they don't know how to just like keep doing it again and again. Is there a way that you could just like give them a menu and say like, like if you could take care of the— them, like, can you buy the comic books from them and then resell them and just basically have them basically decentralize the sales and then you still flip them? Because that would probably be— I would imagine getting the ability to sell the comics for a lot of money would be the hard part, is my guess.
Yeah. So acquisition. So getting more quality inventory, think gold versus scrap metal. Sure. It's like analogy, like getting is definitely the constraint of the business. The problem is getting those high quality deals on the calendar versus just regular, you know, regular stuff on the calendar, you know, where it's like you're buying tons of 50-cent comics like that. That's been the constraint. So even if we tried to build like an agent model, like, I'm worried that A, we still have to get those leads on the calendar and violently spend on ads. And then B, which we can absolutely do, but, and I want to do that, but then B, it's like they can screw us. And I'm worried about like, it's hard to track like how much you can make on this deal. It's very subjective. It's physical. It's not like revenue where it's like, clear-cut as to like how much it means, you know what I mean?
Yeah, I mean, it's a used car business. Yeah, it's a used car business, same thing. People come in with a car, it's used. Now the issue there is that it's Kelley Blue Book and there's some standards there, but like, I understand what you're saying. Um, I mean, you kind of run a digital pawn shop, kind of. Um, okay, so what do you do? I mean, I'll say this, I think you have a good skill set. I'm not sure if flipping this into a business opportunity is the right play. Like that feels meh. I think you could sell it, but you know, it's, I like, it makes me meh, you know?
Yeah, that's why I haven't done it. Like if I want to go biz op, I want to go B2B and I want to scale it to something like Gym Launch. And then I think the TAM is too small and I think it has to be all buying and selling businesses altogether. And I think I'm not a good enough leader yet. I think I need another 2 years and I'd rather just own the whole market 'cause I know that there's two options you said between you can own the whole gym market or you could just license it. So I think, I think I go either way.
I think I just keep running into challenges. Yeah, scaling it. But I just want to encourage you in saying this, like, dude, business is fucking hard, man. I know you know that, but sometimes it takes someone from the outside to be like, yep, that's, that's how it is. It just like, there's hardship, you know?
Do you make any content? Uh, no, I've been all focused. No, honestly, I haven't because I've been all focused on trying to solve this constraint and trying to be disciplined, even though I want to start like 25 different things.
I've been trying to solve this one problem. I do think that you building, making some content, because like I think comic books is definitely like a super contentable, like it's super easy. You can show them, people like watch it because it's cool, all of that kind of jazz, right? Um, but I think it could, it could generate demand for you on the buy side that would just decrease— it would offset CAC and it would start to build the brand overall, which is how this thing becomes long-term a more sellable asset. And how, like, you're like, I want to own the space—
that's how you would own the space. And the problem is, so the problem is we've been doing ads on a national level, like the logistics of even buying those deals that are past local it's like, like a traveling circus. It's so cumbersome. And I can't help but think like, this is not— I don't think this is the easiest business to start, but I do think it's the one I have the highest advantage in. And that's why, like, despite health issues and moving everything twice, like, I haven't quit.
You're not on your third time yet, so you're good. Two is— two is the— is the— is the sweet spot, you know? All right, I want to help you though. Um, so here's— here's— here's what I would— I would consider as next steps. And I will say this before I get into it: Push and pivot is an eternal personal question. It's like, how much do I consume versus invest? There is no right answer. How much risk am I willing to take, right? Those are personal questions, so I just want to be clear about that. This is me saying if I were potentially in your shoes, what I'd consider. I would see there's two paths. One of the paths is not the biz op. I would say option one is you double down on this and you do own the market. You make the content, you figure out the sales stuff, you probably need to increase your ad spend so you can decrease the volatility. If you were spending $18,000 a month, that one whale per quarter would be coming in one time per month. And you can just know that law of large numbers, it would be there, right?
That's path one.
That's what I want.
I want to do that. I want to do that. And then it's just a question of like getting the ROAS up high enough. And I've tried to like downsell the list, of course, and I've been struggling with the ROAS and the efficiency there.
No, I hear you.
But when you get your whales, your ROAS is really good, right? Yeah, yeah.
I was like, oh shit, we can make a lot of money with that. Again, I would just look at— so, okay, I'm gonna, I'm gonna zoom out because it's gonna be important point for everyone. So you spent $72,000 that year that you did $1 million in sales, right?
Yeah. Okay, so no, no, no, no, but it probably would probably be— it would probably—
I'd probably spend $15,000 a month on ads and do $1 million in sales. Okay, so you spent $200,000 or $180,000 that year and you made $1 million in sales. So you have 5 to 1 minus the cost of acquisition, right? But the cost of acquisition, I'm guessing, is not very much considering you spent whatever, 'cause you still made $500,000 in profit, right? Sure, yes. Okay, so the issue is like, okay, you're spending $70,000 currently. It's like we need to triple it and just, even if your tracking's not, like, getting a data infrastructure is just part of scaling, dude.
Do we need a money model to downsell the 99% that aren't a good fit, or the 95% that aren't a good fit, like a $97 appraisal, and then you can liquidate the app in that way?
I love that. I love that. Include with the appraisal some sort of digital thing that they would find cool or valuable.
Do I just like call 100 people and like give a triple guarantee until they buy it. And it's like, like, this works. Like, I, I will— like, if you do not get at least $300 of value, I will— it's free. Like, yeah, I, like, I've tried this so far and they're like, they don't want it. Like, they're too curious. And I can't help but think, like, there is something that liquidates this aspect.
Like, I know it's there. Yeah, I would just ask them what they want.
That's an easy way to do it.
But all they want is me to buy their comics, and if their comics aren't good, it's like a problem. Yeah, they're still interested in something. Um, and it might just be repositioning how that— so the, the, the $97 offer that you have tried and no one buys is what?
So I tried a course for $37, which was a— which was, we'll show you how much it's worth and how to sell them yourself. And they hated it. You converted at 1%.
And then I started calling a few people here and there. Was this a self-liquidating? How about this? How about you give So one is you can give, like, you give priority, number one, to those people. It's like, listen, we have a lot of people who have comic books. You can jump to the front of the line by doing this, right? I do like the idea of it's 97, and if we buy your thing, we'll credit it towards it kind of thing.
Yeah, yeah. I've been trying, I tried the course for years, and I wrote 7 different VSLs, and I'm like, either this traffic won't convert or I just haven't done a good job.
I don't think it's a course angle. I think it's about the sale. So you've got risk, you've got ease, and you've got speed. Those are the elements of value. And so speed, it's like I can see you first. The risk component is I can guarantee that I see you, which is not like you'll go to the top of the pile, and I guarantee that you'll get it. You'll get your response back from us within a day, right? Something like that. Risk reversal is, and you know, if and when we do it and it's not a fit, like we'll give you half of it back or something.
So it's not an appraiser. So we, we, we score our leads automatically so we can have our best leads go to the closer, which right now is me. But we have 70% are form DQs. Do we make an offer on the landing page to the form DQs to—
Yeah. Yeah, I mean, we're also— I mean, there's this whole idea of like we need to make a self-litigating offer. There's also just the like you got 5 to 1 last year and you could just spend the money again and just know that your volatility will happen and be counteracted with more volume.
Yeah, I just know that money's tight as a rebuilding. If I just nailed this one liquidation thing, we could scale the fuck out of it.
And to me, like, that's the thing. Yeah, then I mean, then like, this is the work of business. Let me, let me frame this question differently, then I gotta hop to the next one. But if— let's— what do you think would happen if you can get the leads to offset, if you can offset CAC or even 50% of CAC? With some sort of self-liquidating offer?
What would it do for the business? Oh my God, we can start bringing in really, really good people and help scale it like 10x.
Right. More and more. So let me frame it for you. You only have to solve this one thing, and in so doing can build a large $10 million plus business that's sellable. Yes. So instead of thinking like, man, this is a hassle, it's like, yeah, and that's why you're gonna create $10 million of value when you solve it.
Not bad. No, but I've been trying it for 2 years. I—
the downsell course didn't work. Well, of course, I don't know if a course is the way. You're right. Like, if you kept trying to resell a course, it's like, that's— to me, that's not trying for 2 years. It's trying the exact same thing over and over again. Like, you're trying to— you're trying to persuade better on a course when that's just the wrong offer. So I have to— you need to find product market fit for something else that somebody who has that wants. So I need to talk to every single customer forever? Or maybe it's a listing fee, dude. Yeah, maybe it's a listing fee. Maybe it's a combination of appraisal and listing. So it's like, listen, we can't buy it, but we have a big network of other buyers, and for $37, we'll send it to our list of other buyers to see who's interested.
Okay, I'm gonna try it. Okay, I'm gonna keep doing this. Let's figure it out.
Thank you, Alex, you're the best. Appreciate you, man. No, you're the best, dude. Appreciate you. All right, what do you suggest for someone who's better as an owner, uh, nice quick, quick, quick click on that one, Duke. Uh, what do you suggest for someone who's better as an owner rather than an operator? Own, baby. I mean, to be fair, when you say I'm better as an owner, Daniel, that's like saying I'm better at doing nothing than doing something. It's like if I bought stock and it's like, dude, I'm an exceptional Apple stock owner. Like, I'm so good at owning things. It just means that there's a piece of paper that says that the profits go to me, which I find hilarious. So thank you for that, Daniel. That kind of made my day. Venzo Matt. How do I get people to know about me and more customers? My bro, my man, if only I wrote an entire book on how to let people know about your stuff, how to get strangers to want to buy your stuff. And this book is free on my podcast. If you want a hard copy, you can get it on Amazon or whatever. You can get on my site too. Um, Romeo, could you— or no, Medic Mouse, Mal5e. Could you find a partner that shares your core values and wanna be out front? I don't even know what that one's about. Okay, let's see. Ali. No, he said, "Looking good, Alex." So I don't even know where that's gonna go. All right, let's see here. What else we got? Not responses. Okay, Romeo. I think this is a conversation. Okay, I'm going to phone calls. All right, next caller is Kevin. The man, the myth, the legend, Kevin himself. Welcome to Hormozy Hotline. Can you hear me good? I can. Tell me. Oh, great. Cool.
What problem do we have in the business? How can I help? Oh, this might be a little abstract, but the business we do, we have a SaaS agency hybrid doing about $150K for the first year so far. Okay.
What is an agency hire?
I don't know what that means. SaaS agency. So you run an agency. But also, yeah, so we, um, we kind of have like DIY structure, done with you structure, and it's done for you. Um, you have 3 different service levels at $150,000 a year? Yeah. Um, so we don't really have much of the low ticket taken up yet. Honestly, but we're building the structure out because you say all the time, more, better, new. And so essentially doing the same work but turning the camera on. So, and then putting it inside of a community. So that's why I thought it kind of made sense. But the question would be, we were under a non-compete for a while and that's lifted. And so we're starting to do our own marketing for ourselves to kind of walk the walk. And so we've been surviving on local and word of mouth. But I also know that with AI, human interaction is going to be like king. So I'm thinking about public speaking and stuff like that. And there's a certain story I'm wondering if I should leave out or include because it's pretty inspirational. So I got into entrepreneurship because— Dude in 60. Dude in 60. I will. Um, so I had a record that kept me from a lot of stuff. It wasn't nothing heinous. Sure. Okay. Um, it was just, it was a B&E. So the person who owned the house actually got introduced to me for my services. I'm actually providing valuable service for the community. And so, uh, overcame a lot and actually getting expunged, and they helped write the letter. And I don't know if I should include that story because that actually forced me into survival mode. And, you know, you mentioned the CMO skill stack on a video one, one time, and that really hit home for me. I'm like, he's talking about me, holy shit. So I just feel more urge to talk about it more than ever now. It's crazy that it's actually going to be in the past. And so I could see the benefit, but I just want to hear what your brain would think about this.
So there's a choice. To me, these are two separate things. I mean, you're a human being, and so that's always going to be tied to you. I want to figure out, do you want to— like, is the question that you have around, like, what do I need to grow my business? Or is it like, I would like to start speaking on stages because I want to share this message and then hope that that somehow turns into business for me?
Well, I think the fact that she's a client is pretty huge. It makes it kind of make sense to bring it up. But also, I think it could be— you say niche down, it could be a smaller niche.
I could see it being. So I really don't know.
But you run an agency for SaaS business owners, correct? No. So I offer SaaS and I also do agency services like digital marketing.
I would pick one or the other right off the bat.
You need to pick one.
Well, it's kind of running off that, that software, so you're running an agency. I mean, are you just white labeling something? Yeah, yeah, absolutely. Whatever, you're white labeling something. Okay, so you have an agency. Let's just like, again, it's like we just got to stick to what's, what's what. Like, the work you do is agency work, correct? Right. Okay. Yeah.
Well, who do you, who do you do agency work for?
SMBs right now. Okay.
Are you doing lead gen right now? Are you doing lead gen? In person. So we kind of honestly, like we do Facebook ads, we create a website, SEO.
You run ads and get leads for business owners, right? Right. Okay.
So you need to get more business owners to buy your thing. Right? Uh, well, yeah, I mean, honestly, it's a good trajectory because I binge everything that you put out. Um, so, um, I definitely think the more sales are coming, that's a given. We got a really good outlook considering it's just the first year. Um, so I'm sure I'll have to like trim the fat and all that stuff. And, and hone.
Like you said, we're doing too much. So, all right, dude, let me help. Can I help you? Sure. I think that you need to massively simplify, like, the story piece. You're good, dude. You're fine. This, the story piece, it's just not— it's like, it's, it's super inspirational. It's great. I want to focus on the business right now, which is that you have an SMB digital agency. This is a very normal business. You need to run ads or do outreach, pick which one you want, uh, for local business owners. You are going to quickly run into the problem that you might have heard from other people on this, which is that small business owners are inherently volatile and they will churn out unless you have a very low cost service.
What's your cost per month? Um, so we provide the tools. For $100 a month and we have clients to spend up to like $5,000 a month.
Okay. And that's you running them. They're probably like $1,500. That's you running their ads is the more expensive thing, right? And SEO. Yeah. Okay. But sure. So you're white labeling GoHighLevel probably and you're running ads and doing SEO for some of those businesses that choose to use the website stuff plus get services, right? Yeah. Okay. Yep. Great. In the future, just lead with that. I white label GoHighLevel. I run, uh, ads for small business owners. I can't grow as much as I would like to. And the constraint that I'm dealing with is that I need more demand. And so right now, can you double the amount of customers that you can handle right now?
Probably. Yeah, I think as long as we focus on systems and processes along the way.
Okay.
How many customers do you have right now that are in services?
About, I want to say like probably 10, 15 or so. Okay. So you just, I would say either pick whether you want to say like, I'm just going to do this, uh, this white label thing. You can scale that to the moon because you're not, there's not really any services with it and the stick's probably pretty good. So I would say like, can we just set up these things, maybe do SEO plus go HighLevel? Because then that way, um, and for my people, snip that part out because I don't feel like I'm endorsing some shit. But basically you want to have your white label software, you have your SEO. That's the lowest amount of work that you can do in terms of gross profit. You probably sell that at $300 to $500 a month. You probably have relatively low churn based on the SMBs that you're bringing in, and you need to run ads and do outreach to get more of those people. And if you're currently doing a certain amount of ads and outreach, you will need to do more of that. I would stop doing the agency services even though it's quite— it's higher ticket because those people will churn out and it'll be a pain in your butt. So I'd rather you stick with the stuff that's low churn, really high revenue retention, high gross margin, and sell that as the primary thing, and do more on the front end and have the scalable back end.
And I worry about the other BS when I'm closer to retiring.
Cool. Yeah. All right. Yes, sir. Rock and roll. Appreciate you. I'm glad you've done a full 180. Congrats on the story. I appreciate it, man. Thanks for calling in. Did I lose you? All right, rock and roll. Okay, um, I'm gonna answer a couple, a couple chats. And, um, I think that was— was that Kevin? Is that who I was— was that— or is that Dylan? Is that Kevin or Dylan? Dylan? I can't remember. That was Kevin. Kevin, appreciate you. And if, uh, you watch the replay later and see my, my facial expressions, it was more just me trying to understand the business And that's where my odd faces came from. Okay, so Mike, oh no, no, I'm gonna do, not Mike yet. Okay, I tried a model, a 9-figure offer, but ended up pitching heroin to my, Jesus Christ. All right, what are we talking about? Oh my God. All right, I have a website business for detailers, but it's really low-ticket niche. Should I switch to solar? If I do outreach, it'd be 10 times harder. And it's already hard, plus it's hard to lead Jen to it. So just for everyone, No Man's Land is trying to sell SMBs a higher ticket thing, and I'll explain what I mean by that. You will quickly make more revenue, but then churn will catch up with you quickly and you will create a churn machine and CAC will consistently rise, which will compress your margins. I'm telling you, this is where the graveyard of $1 to $5 million a year agency owners who sell lead gen services to SMB for between $1,500 and $3,500 a month, that's where they all live. That's where they all die. And it's miserable existence. And you're welcome to go compete there if you want. My opinion is that you have two options for that business if that's what you really want to do. You either go low ticket, very low ticket. I'm talking like basically $150 to maybe $400 a month. That's what I'm saying, maybe $500 tops for SMBs, and you have to have a truly scalable solution that costs you almost nothing to deliver. This is where like, you know, getting super high listed on Maps or, you know, first 3 for Google, this SEO type stuff works well. Maybe it's just like maintaining Google, Yelp, and whatever review stuff for a few hundred dollars a month that no one wants to churn out of. All of those are things that are super reasonable that you can sell to SMBs that they will not churn out of because the price point is appropriate. It's a nuisance thing. Whenever you start getting into heavy, true lead gen, their businesses are so volatile that they will turn it off independent of how well you do, which is a very frustrating place to be. And for you to really make it make sense, you have to charge more and they don't have the money to do it. And that's the catch-22 with that model. So I said option 1 is low ticket but high gross margin, low ticket but high gross margins. And very high revenue stick. The other angle is to go for, um, mid-market, so upmarket from there. So instead of SMBs, you're talking, okay, it's got to be a business that's doing at least $1 million, at least $2 million a year, $3 million a year, something like that. Those business owners will be more stable. And then at that point you can start charging for, uh, you know, higher price points. So it's like, I don't really want to play in anything below $10,000 a month. And if you can't sell $10,000 a month to someone that that's not going to make or break their business because they already know their metrics, they already have a sales motion, they already have LTV figured out. If they don't know those metrics, those people are not good customers for marketing services. And you'd be like, but that's everybody. It's like, yeah, and that's why most people compete there. And that's why most people never make money there. Good talk. All right. Um, someone was calling me. No, we're good. All right. Mike, this is our last call. Let's make it juicy. Let's make it spicy, Mike.
Mike and Alex, if you can hear me. What's up, Mike? Hi, how are you doing?
So I have two business, one a campground resort. Wait, what?
You have two businesses? The first one's what? It's a campground. I rent out cabins on Airbnb and I do it through my business. Got it.
For that, it's about $300,000.
And profit is about 40%— Okay, $120,000. Got it. Okay. And I have also a detailing business. I detail cars and on the main season, I do about $40,000 a month and That business I've been running for a year now.
Okay, congrats. That's pretty good. Yeah.
How many hours a week does the Airbnb thing take from you? Uh, so right now zero because I have, uh, 3 people that is working and running the place. All right. Um, basically I have, uh, no involvement in that business. And the reason I cannot, um, grow that business is because it is very expensive and I need a lot of capital. You mean you have to buy more, buy more buildings? Buy more buildings. Yeah, exactly.
I have no problem in demand, but buying a building. Okay, cool. That's fine. So to me, I'll reframe this because normally just for everyone who's listening, they'll be like, oh, Alex is going to tell him that he should shut down one of his businesses. I don't really see— like, the Airbnb is like right in the middle of like, is it investment versus is it, you know, active? That's why I asked how many hours a week you're spending on it. If you're spending 5 hours a week or less, I'd be like, that's fine. So Basically, it's like if you had a job and then you did Airbnb on the side, I'd be like, fine. So your job is detailing, you do Airbnb is what you do with the money after you get— after you take it out. Okay, great. So what's the— what do you want to do right now? Do you want to grow?
Like, what's, what's, what's not happening that you want to have happen? So, uh, the thing is I really want to grow the Airbnb business, um, and I see a lot of potential in it. You need more money. Um, potential in the Airbnb business, um But the thing is, as I said, it's very expensive and I don't have the money for it. Yeah. So I started detailing. Yeah. I started detailing to make money so that I could buy— Yeah. Airbnb properties, right? So that I could come down and for another resort so that I could build cabins and stuff. But, I, after a year of doing Airbnb, I, I'm sorry, detailing, I found out that it's very difficult, uh, you know, and it's a lot, it's a very time-consuming business. And, um, yeah, welcome to business. Yeah. Yeah. I'm not sure if, uh, um, it is something that is worth doing for a very long period of time. What would you do if it's not that? Because the, like, the, the best detailers, they do about $2 million a year, and that's the best, best detailer.
And like, I'm from Canada, that's like, that's the—
yeah, there's no good detailers in Canada. Totally. Uh, so, uh, like, my question would be, should I choose a different vehicle because a different business to do, or should I stick to detailing?
I mean, you've been doing detailing for a year and you're at $500 grand a year, man.
Not $500,000, 'cause detailing is seasonal, so probably about $250,000 to $300,000. And what's profit? So right now, 'cause I spent a lot of money on our marketing, 'cause, you know, it's the first year. Tell me the number.
So probably I would say about $50,000 a year. So I'll say this, man. Do I think it's the wrong business? No, I think businesses can always be improved. Like we could look at, like the offer and all these other things to like try and improve it. But if you like the Airbnb thing and you're good at it, and I normally wouldn't say this, but I'm just— this is me reading between the lines from your call. So this is me, I think, answering the question behind your question, which is how can I do more Airbnb? Right. That's correct. Yeah. Okay. Yeah. So there's this thing in real estate called raising money. And you get investors to buy the real estate, and then you manage it, and you give them a return. For sure. So I think you should consider doing that and then make Airbnb your full-time thing. It's like you're spending all— like, I'm— you're spending all your time for $50,000, and you're spending almost none of your time for $120,000, right? Yeah, right. So I think you just need to raise money. Definitely, that makes sense. Yeah, just use other people's money to buy the buildings, give them a preferred rate of return. After that, you split a certain percentage of the profit with them so that you're super incentivized, uh, to get them a good return and they'll feel safe. So it's like, you know, you say everything after, you know, 6%, 8%, 10%, whatever it is, um, per year, we split, you know, 80/20 my way after that, or whatever, right? And so the blended return is going to be You know, my guess is 15 or whatever.
That would make sense. Cool.
Yeah, because the Airbnb, I think I am pretty good at it. Yeah, obviously you spend no time doing it and you're making 2 times the— 2.5 times the money of your other thing. I think you're decent at it. So yeah, I think you just double down on the thing that you're good at. So we did end up eliminating one of the businesses. Who'd have thunk? Yeah, you're like, I've got this thing that I don't like that makes me no money, that takes all my time, and I've got this thing that I do like that I'm pretty good at that takes none of my time. Cool, so then let's do more of that. And you're like, I don't know how to do that, so I have to make the money to do that.
It's like, or you can use other people's money. Interesting. Yeah, absolutely.
This was a good chat. Thank you. Yeah. Thank you, Alex. You bet, man. Happy to help. Congrats, bro. Thank you. Thank you.
Today is the first day of the rest of your life.
Thank you, Alex. You bet, man. All right. Trenton Piewinski. What a name. $8.5 million, um, in trailing 12 months, $1.2 million in profit. Could I grab some advice on telling employees we're selling the company? Yes. Let me, let's talk about this. How do you balance long-term growth when the business is on the market. Dude, it is your lucky day. I have so much to say about this. I'm going to try and talk really fast, so just listen faster or watch the recording. All right, so having sold a bunch of businesses, I have made a lot of mistakes on this. First thing that you don't do is tell your employees that you're selling. Rule number 1. Why would you not tell them? Some people are like, that's dishonest. One, you don't know if the deal is going to go through yet. So you have no idea. And so to create that kind of uncertainty in their lives is horrendous. Number 2, every single one of them has a horror story that they heard that everyone's going to get fired, which of course makes no sense because why would someone buy an asset and then fire all the people within that asset right now in a strategic merger or an acquisition where it's like two things are going to combine? That's different. But I'm assuming that in your business that's probably not the case. And so thing one, don't say it. Thing two, there's good reasons why you don't say it because people have lots of preconceived notions. Think 3, okay, you're going to go as far as you possibly can in this process without anyone knowing about it. At the point where you have to include your CFO and maybe your COO, you include them and you make it very clear that they are not to share this under any circumstances, all right? And only those 2 people are probably the only people required for that. Now after that point, it's a pure need to know, and you should be already past signed LOI and very late into diligence, close to closing the sale, where maybe you would have a couple key leaders that you absolutely trust. Now, a way to make sure that you can keep them in it is I took a tiny sliver of the pot and I said, hey, you guys are gonna get a slice of this, so they're incentivized to, one, keep mouth shut, and also to actually see the deal through, you know, in the deal process. How do I balance long-term growth in the businesses on the market? Really, really good. I would strongly encourage you, the only thing that you wanna potentially not do is maybe a huge capital expense in the business, but otherwise you need to operate as though you're not gonna do the deal. And I would encourage you to do this because it's gonna do two really important things. Number one, you want to operate as though you're not gonna do the deal 'cause there's a very strong chance the deal doesn't happen, right? Statistically, very few businesses sell, especially for good numbers, and so the stats are against you. So I would not, I would not, like really change my behavior very much. Number 2, if there is something that's truly one time, now if every year you always make capital investments, then you need to just keep doing, keep running the business. But if there's something that is one-off and odd, then I would let the acquirer know that you're planning on doing this and that you like don't want that to be, don't want it to affect the deal. And so I would just be transparent with them. Most acquirers would say, well, do whatever you need to do to make sure the business continues to run because they want to buy an asset that's continued to work, right? So we keep it super, super need-to-know on the team side, slice out a tiny bit of the cash and give it to key leaders who are going to make sure that the transaction works, number one. Number two, within the actual running of the business, you want to grow, dude, because I'll tell you this, the kiss of death to these deals, especially to your valuation, is how the business performs in the 12 12 weeks from signed LOI to deal closed. All right, they're gonna be looking at everything under a microscope, and they're gonna, like, you're gonna feel so much pressure during that time. So if you wanna open up a can of whoop-ass, that is the time to do it, because that is what's gonna close the deal faster, that's what's gonna give you more leverage in the negotiation. 'Cause if you're plateauing or going even a tiny bit down, all the leverage is jacked, they're gonna ask for terrible terms, more earn-out stuff, more payouts, all of this kinda stuff, stuff that you don't want, and it's going to be miserable. On the other hand, if you start crescendoing up right as the deal's happening, you can be like, you know what, guys, business is doing great. I'm not even sure if I want to sell it anymore. They're thinking, oh my God, we put $500,000 in diligence into this business. We can't lose that money. They start getting deal pregnant. It works both ways, which means they want to have the baby. They want to close the deal. And don't let anyone tell you otherwise. The deal is not done until you have the wire in your account. All right. So like the number isn't the number. The terms aren't the terms. You can do whatever the hell you want. They're going to make it seem like this is set in stone. We don't change the terms, blah, blah, blah. It's all posturing. It's all positioning, right? The deal isn't done until the docs are signed and the cash hits your account, which means at that point, right, like as you're crescendoing in, you want to have the position of strength, which means that your business has grown since they gave you that LOI so that you can be like, hey, listen, man, um, my valuation is probably higher than it is right now than you guys are giving me, and so I want all my terms. It's my terms. And so you always have the frame of price and terms, and like, what you don't want is their price and their terms, right? If you get your price, their terms still kind of sucks. You want your price, your terms. But there's only one way to do that, and that's with leverage. The only way to get leverage is you grow. So you want to hit it hard and If you have like some seasonal plays, you wanna hit up your email list, you wanna run some, I'm not saying discount promos, but if you wanna hit it hard, that's where you put extra gas on the sales team. You give extra commission to the manager, you hit the email list hard, you post more content during that period of time. So you drive up revenue in that short period of time. And then that's how you crush it. So Trenton, hopefully that helps. Okay. Man, I felt, I felt, I felt, felt inspired just now. Um, okay. Oh, do I want to do another one? Let's see. Um, I'm looking to start a local semaglutide weight loss business or a local Medicare insurance agency. Those are two wildly different businesses. Um, interesting. Well, I'll say this, I think the semaglutide thing is going to be seasonal, so I think it's something that you can make probably more money in a shorter period of time with. But if you want something that's like, this is what I have my business for, you know, the foreseeable future, Medicare insurance, it's, you know, it's sticky, it's recurring, it'll take you longer to get it going. But once it gets going, insurance businesses are incredibly valuable and very sticky, which is why they are valuable. But just so you know, like a medical— like an insurance agency is almost entirely a sales and demand-based business because you're basically selling risk. So there's not a ton of delivery there besides just like keeping in touch with clients every once in a while. And so it really is a you question, Dylan, of do you want to make more money in a short period of time and then probably have to switch again? 'Cause the thing is semaglutide, it's a commodity, right? It's like Botox in the very beginning was this hot new thing and then there's Botox parties and then people start chipping, chipping, chipping, chipping 'cause it's a commodity, right? So you're gonna, the price is gonna go down, margins are gonna go down. And so if you had semaglutide as a business, there's obviously a lot of demand for it, but you'd wanna have other services, other upsells that are gonna allow you to outspend your competition, but you're going to be competing against some of the biggest companies out there that can almost— they can acquire customers at a loss. Um, not to say you can't do it, I'm just saying that's what you're getting into. It's pretty fierce competition, very commoditized. Um, so it's short-term, long-term. I would long-term for sure prefer the insurance business. It just depends on your time horizon. Okay, last caller is named Alex.
So Mr. Alex, Strong name. What's up?
What's up?
Hey Alex, how's it going?
Hey Alex, how's it going? It's going pretty well. Uh, so I have a bad day with a name like that for you.
All right, go for it, man. Talk to me. All right, all right. Thanks, Alex. Okay, so, uh, I just have a two-pronged question here for you. First, first and kind of foremost here, how do you kind of acquire semi-senior but not senior kind of mid-level staff, right? And then second off, how do I get mid-level staff? Yeah, yeah, that's, that's predominantly my question. Manager level, right? Because I have an easy time finding Yeah, that's true. Um, but the kind of issue that I was having was, you know, finding these mid-level staff that are qualified enough to do the position in the first place. I'm having a really hard time with it, right? You know, what kind of business?
Uh, it's, uh, it's an accounting business. Okay, got it.
Do you need an accountant who's mid-level, like an accounting manager? Well, kind of. It's, you know, I'm looking for somebody that has a CPA license or EA license, and ultimately Your supply chain.
Or is kind of on that path, right? Yeah. Well, option one is go to the schools where they're on that path and see if you can create an affiliate pro— not affiliate, but like a referral program for them. Plenty of those people want to have career opportunities for people who are in there and that can create the farm system. That's thing one. Thing two is that you can also just do direct outreach to other accountants.
Um, what is your gross profit per accountant per year right now?
Uh, gross profit right now, it's probably, I'd say about $120,000 per accountant, right? Yeah. Okay. Got it.
And what's gross revenue for an accountant?
Gross revenue is about, you know, $200,000-ish, somewhere around there. Got it. So you pay them $80,000, you make, you make $200,000. Yeah. Got it. Yeah. So I'm actually going to bet that right now you have a two-pronged issue. Which is, thing one is you're probably undercharging, and as a result of undercharging, you're not able to pay above market so that you can attract the talent that you need. Okay, sure. Yeah, I mean, that's, that's right now you're running on 60% gross margins. For me, my rule of thumb with services is 80% or higher. Yeah, right. So if 80 is the base, then we need to make $400,000 a year. Per accountant? Yeah. So you probably—
what are your close rates for customers right now?
My close rates are around 80%. Yeah, dude, 80% means you've got a, you've got a for sure double, maybe a triple in pricing that's sitting right there. Okay, so you're supply constrained, and in a supply constrained setup and with high close rates, that's a, a clear prescriptive, no question in my sleep double, triple in price, and then that unlocks an extra $200,000 a year. And all of a sudden you can go to those accountants and offer them $150,000. All right, and then you will get them. Yeah.
And you're happy to do it because at $150,000 you're still making way more money than you're making right now. Yeah, that's true.
You know, I'd be less, uh, less busy too. Great. Yeah.
Where do we want to go from here? So the kind of— okay, so the other kind of question that I had, uh, because my accounting business, you know, it's a pretty traditional accounting business, right? You know, uh, we, we do the kind of standard suite of accounting services, right? But yeah, but kind of Yeah, I was just kind of curious how you would test, you know, that pricing model then at that point, right?
What do you mean?
Because you mean test the pricing model that I just said?
Yeah, yeah. Did you do the exact same thing? You do the exact same thing you currently do, same pitch, and then right when you say the number, yeah, you just double it. Yeah, let's say you do it. Okay, sure. Yeah. And if you don't close as many, guess what?
Doesn't matter, you're supply constrained anyways. Yeah, yeah, true. Okay. Yeah, because again, to double or triple price, you know, I think I remember watching one of your YouTube videos, you know, it— to triple price, you know, it's, it's kind of a mind blower, right, for me, right? Because we do a monthly recurring model, right? Yeah. Where, you know, it's— yeah, and, and I, I think that it's a crazy value, right, you know, that we offer.
Well, you don't think it's that crazy because you're not willing to charge more.
More for it.
Yeah, true, I guess, right? You're not, you're not selling me very well right now.
I don't believe you. Yeah, if you thought it was that good, you know, charge for it. Yeah, that's true.
But, uh, yeah, you know, you got to put your money where your mouth is right now.
You're a talker. Yeah, yeah, you know, that's, that is, that is the point, Alex, right? You know, but to be quite fair, you know, you think about it, these small to medium-sized businesses is what I'm ultimately, you know, kind of fixated at, you know, $500,000 to $1 million. And, you know, ultimately we just offer this bundle package, right? A commodity of doing their taxes at the end of the year. We do the bookkeeping and then we do their payroll on a monthly basis.
Right. So are you going to try to sell me on the way that you're— let me, let me pause you for a second. One of us is going to win this sale, you or me. Your current way of doing business is why you called. Which is that you can't get talent, you can't scale because you're supply constrained. You're closing 4 out of 5 people that you talk to. Yeah. Okay.
Do you want, do you want to keep having that?
No, I, I'd rather not be supply constrained, right? You know, I'd rather be able to, you know, hire people adequately.
Then don't sell me and don't sell you on your problem.
Yeah, right, true. You got to change to change, right? You're intimidated by the fact that you just have to say a different number at the end of the phone call. That's it. Literally the worst case scenario is person says no.
It's not like you can't change the price back. Yeah, yeah, that's true. Okay, yeah, that basically solves my issue, Alex. Thank you.
Glad I could help. All right, okay. Have a good one, man. You were a sport. I appreciate you. All right, later, man. Okay, so that was it for Hormozy Hotline. Appreciate you guys. Hopefully this was a fun, fun day. I think— what did we do? We did, uh, we did 4 and a half hours. What a live stream! Was that cool? So, um, just so that I can fuel the, the massive hole of insecurity inside of my heart, Um, I would— dude, Peaks and Cellar already knew, man. He already knew what I was gonna say. You guys could, um, also I'm going to show this to Layla. If you guys give Layla in the chat, uh, because I'll have her read this, um, because I'm trying to get her to do more of these with me because I think it's more fun when there's both of us because we have different angles and perspectives and it's just generally a better time. It's a party when Layla's there, right? They don't play. So, uh, with that said, you guys are awesome. I appreciate you all. Um, genuinely, thank you guys for, uh, for hanging. Um, I tried to get as many comments as I could. I'm gonna try and go back and forth, um, going forward when we do these. If you guys like this style, let me know, let my team know, because you gotta also sell them on it because they want to do other stuff. Um, but I'm, uh, I'm jiving with this. I actually really enjoy this a lot. I could do this for hours, which I obviously just did. Um, because I think— I'll tell you guys, being real, I think, um I think the idea that like even if a clip or the livestream like doesn't get like a lot of views or anything like that, I get a lot of fulfillment out of being like, that guy's accounting firm is probably going to grow, right? And so if nothing else, his life will be better. Alex's life will be better. So I guess it is self-serving in that sense that Alex is helping Alex. But beyond that, I'm super grateful for you guys. Thank you for everything. Thank you guys for all the support. Um, and yeah, fucking crush it. Out.
