Alex Hormozi Gave Away the Playbook. The World Got Rich!

Alex Hormozi built a portfolio of companies worth over $200 million before he turned 35. No outside funding. No famous co-founder. No viral moment that handed him an audience. He did it by studying the math of business more seriously than almost anyone in his generation, then teaching everything he learned in public. That last part is what separates him from most founders. He gave away the playbook.

The question worth asking is whether Hormozi is the greatest business educator of his era, or something bigger. His books have sold millions of copies. His content reaches tens of millions of people. But the real measure is what his audience does with it. Entrepreneurs are closing deals, pricing their offers, and scaling their teams using frameworks Hormozi posted for free on the internet. That kind of impact is hard to argue with. This episode, we find out what drives the man behind the movement and whether the GOAT conversation is even worth having.

Transcript

SPEAKER_01 0:00

My dad always told me that you only get one name. So invest in it accordingly. And I always thought about that. I thought it was a really good line. Just like you only get one name. Like you can change your companies, you can go bankrupt, but like your name stays with you.

SPEAKER_03 0:12

Yeah.

SPEAKER_01 0:12

And so that can either be an asset or it can be a liability. Hi, I'm Alex Ramosi. I own acquisition.com, which is a portfolio of companies. It's $100 million a year. I have a best-selling book. I have a YouTube that some people find interesting, and you are on Behind the Brand with Brian Elliott.

SPEAKER_00 0:33

Hi everyone, I'm Brian Elliott. Welcome to another episode of the show. Alex, thanks for having us to your uh your home grown mission control. It's great to be here in Las Vegas.

SPEAKER_01 0:44

Thank you for having me. I'm very excited. I guess having me and we're having each other, I guess. Having me on your show.

SPEAKER_00 0:51

Well, I usually ask my guests, how did you get this job? This job. Yeah.

SPEAKER_01 0:56

Uh so um I was a management consultant uh right out of college. I did space, cyber, and intelligence for the military, which was um sounds much cooler than it really was, but I had a top secret clearance. It sounded really good at dinner parties and just about only that. Um and you know, one day I looked out uh from my balcony because I had a really nice place because I could afford it at the time. Um and I was like, is this it? And I was, you know, in my young 20s. Um and you know, at that point I had done everything that I think I was supposed to do. So I was, you know, I did well in school. I, you know, was president of all the clubs, you know, graduated in three years, got the good job. Um, and I realized that it was I was living, you know, a life for me that my father wanted me to live. And so that was kind of, you know, I went, I I faltered back and forth for probably a period of six months um of really not wanting this to be my life, but not wanting to let my dad down. And so at some point, the the thing that kind of pushed me over the edge was I can either, you know, die to myself or I can die to my father. And at the end of the day, you know, I have to survive. So I will if I if I make this decision and he no longer wants to be my dad, then I can accept that. Wow, is that extreme then?

SPEAKER_00 2:08

Yes. Wow. Uh say more about that. Were are you an only child?

SPEAKER_01 2:12

Yeah. So only child raised by a single father, um, Middle Eastern. Um he was born in Iran. And um you know, I uh everything in my life uh up until that point was really just to make him proud. So I it was very much a seeking approval, seeking validation kind of drive at that point in my life. And so the idea of disappointing him or not getting his approval felt like death. And at that point, I was actually contemplating not living, um, which is why that it really and it it's a common theme if you have watched some of my YouTube stuff. Um mortality has been the single biggest driver and the biggest decisions that I've made in my life, and it has become a more routine process for decision making for me in general. Uh, because I think it it provides clarity and it provides context to most of the decisions we have, which the vast majority of them don't matter, which is helpful in and of themselves. And then, you know, beyond that, it helps me make the decisions that I think removes everyone else from the playbook. Because if you if you study subjective well-being and how people perceive how they're doing in their own lives, it looks like a smiley face. So seven-year-olds think they're killing life. And then it it drops dramatically between 20 and 30. And then there's still a little bit more of a dip right around 45. That's like when people are their true they hate life the most. And then and then it kind of slowly get goes up until like 55, 60, and then it shoots right back up again when people see that they're going to die and that life is short and that they can make the decisions without worrying about the ramifications of other people. And some of the people they're worried about are also dead. Right. And so it was using that context for that biggest decision that's been duplicated many times in my life since then, because if I have a good decision-making algorithm, I try and reuse it as many times as I can.

SPEAKER_00 3:55

Yeah, there's a lot there. Um, I like it. Um it's just making me think. I mean, I have watched maybe all of your videos, so I have some context, but maybe let's unpack it for the audience a little bit. So um, you know, when we're seven, let's let's uh let's expand that a little bit. I mean, we don't have a care in the world. Uh the artist or the whatever we want to be has not been beaten out of us yet. Uh no one's told us that we are not what we think we are. We're still popping wheelies and climbing trees and falling out, and that's okay. And then you get to your 20s and 30s and you the rubber hits the road a little bit. Um and if you've made money, I guess, and if that's your way of validating your work or that's your sign of success, then you're okay. But if not, you're kind of hosed. And then in your 40s, I'm guessing uh you start to have more life experience. 50s, maybe you start caring less what people think, and then um and then you s fast forward all the way to maybe near death. Uh and then you really get to a point where you don't care what anyone says and you really boil it down to what's important, and probably I'm guessing that's love, relationships, uh legacy, and then you just like peace out.

SPEAKER_01 5:15

Is that pretty accurate? I think for most people, yes. Yeah. Uh for me specifically, the legacy piece less so. Um, but I think for most people, yes.

SPEAKER_00 5:23

And uh why is the legacy piece less important?

SPEAKER_01 5:27

Um more so, and I uh whenever I get into this topic, I think a lot of like some people get get sensitive about it. And so I just like to put the disclaimer like this is not me judging your beliefs, and me stating my beliefs is in no way a judgment on anyone else. Um but if you just look at expanding the time horizon over a much longer period of time, if you look at it at in 10,000 years or 100,000 years or a million years, right? All of a sudden, you know, uh and the easy way to test this is to go backwards, right? Which is do you know your great-great great great great great great grandfather? Probably not.

unknown 5:55

Right.

SPEAKER_01 5:56

And then if you look at it from a how much has somebody achieved standpoint, um I happen to be in a in an interesting situation where my great-great-grandfather was in the ruling class in Iran and he had 400 children. So he was literally, you know, like ruled and had a lot of wealth. He had a lot of wives to create 400 children, right? Um and I actually still can't remember his name because I uh my dad told me one time and I can't remember it. Um and I've never seen any of the quote legacy that I'm sure he felt like he was leaving. And so if that was that level of success and legacy, and only four or five generations later, I don't even remember the man's name, nor do I have any piece of that legacy. Yeah. It seems a little bit irrelevant.

SPEAKER_00 6:36

Yeah, I I I totally see what you're saying. And that context matters. I mean, Prince died a couple years ago.

unknown 6:42

Right?

SPEAKER_00 6:44

Right. See, I had no idea. Are you serious?

SPEAKER_01 6:46

Yeah, no idea. I don't follow the news.

SPEAKER_00 6:49

Prince. Prince.

SPEAKER_01 6:51

I thought he was formerly known as. Is he is did he get that removed too? He's now back to being. I think it toggled back to Prince.

SPEAKER_00 6:57

Got it. Uh and then unfortunately he I think he he overdosed, accidentally overdosed, um, and he passed. And uh, you know, one of the greatest musicians of all time, and I didn't think about him until you just said this. Yes. So what chance do I have? I'm screwed.

unknown 7:15

Yeah.

SPEAKER_01 7:15

And I think on a long enough time horizon, we're all screwed. And I think in some ways people find that incredibly disheartening. But an equal opposite is if you can't find it both disheartening and also not freeing, because all of the decisions that we're making that are not for ourselves or what are or are are subject to chains that we feel pressure from, whether that be society, societal, I'll put quotes there because that's a big word. Um, or family, friends, expectations that we perceive other people to have of us. Um if you can if you can just relinquish all of those chains, I think it's incredibly freeing. And um I choose to live that way.

SPEAKER_00 7:54

Yeah, I also.

SPEAKER_01 7:56

I still definitely feel it. No, that's fair. That's fair.

SPEAKER_00 7:59

And I think also um that may help us that advice is good because it helps us live in the moment. Because you know, even if you believe in something after, that's still in the future.

SPEAKER_02 8:10

Yeah.

SPEAKER_00 8:11

And there's a question mark because no one actually knows with you know with knowledge, yeah. Uh at least someone with a pulse doesn't know what happens or if something happens. So you might as well live in the present, make the best of it.

SPEAKER_01 8:24

Yeah. An interesting one that I thought through around that was um a lot of us, not all a lot of us, all of us, have 100% experience uh not being alive.

SPEAKER_03 8:34

Right?

SPEAKER_01 8:34

It was before we were before we were born, we were not alive. And so we know what that was like. There was nothing um that we can recollect. And so I would imagine that that's the closest experience that we can have to not being alive yet again. Um, which to me is not that frightening. Aaron Powell Yeah.

SPEAKER_00 8:48

And it is freeing, you're right, because it's it's both uh humbling to know that you don't matter in the grand scheme of things, but at the same time, um you you matter infinitely if you just focus on the present and the mark that you're gonna leave here and now.

SPEAKER_01 9:06

Aaron Powell I I I contemplated I had to die to my father or die to myself, and I realized that I I would rather die to him, um, which pretty much ended up happening. Um and so my fears were relatively justified. Um he was not in support of the things that I wanted to do. I ended up quitting that job, sold everything I had, packed my car, went to California because that's where I thought the land of fitness opportunity was, because that was the only thing I really enjoyed. Um mentored under a guy for a few months to try and at least learn the ropes, started my first facility, slept on the floor for the first nine months, which was a very terrible experience for me.

SPEAKER_00 9:36

Aaron Powell And timestamp the age for me now?

SPEAKER_01 9:38

I was twenty three.

unknown 9:40

Okay.

SPEAKER_01 9:41

So I left at twenty-two and I turned twenty-three two weeks after my gym opened.

SPEAKER_00 9:44

Got it. So you graduated early, you got that dream job, and then you bailed. Yeah. Yeah. Two years.

SPEAKER_01 9:49

And that was really at the time, um, and all of this kind of it was at the uh a splitting point where I I had done two years, and the kind of career path traditionally is like two to four years of management consulting, and then you go back to an Ivy League for your GMAT, and then from there you go into, you know, you can you can go do investment banking, you can do private equity, you can do you know, some of the bigger white-collar jobs. But um it was I just didn't I didn't want more of what I had. Um and so I thought that I would have a better shot taking $200,000 in two years, which is what the you know economic equivalent of what the degree was, um, and starting something on my own. And I figured I would learn more in the first two years and with that money, and maybe even have a business by the end of that period of time that made an equivalent amount of money compared to what I would have had as a job offer.

SPEAKER_00 10:31

Aaron Powell Let me ask you, I talk a lot about signals on this show to other people. In my personal life, I've I've had signals that were subtle, um, some more overt. The subtle ones I missed and then had I had to learn later. But how did you what signals did you get? I mean, you're saying like I wasn't feeling it, but like, so where was your motivation? Because I see you as this hustler, this go-getter, this, you know, this um salesperson, you know, who just is all about gobbling up new opportunities. Um I mean you've it tr it transcends beyond that now. But like at first it sounds like you were just all about the go-get. But how did you know like you graft you drifted into fitness because you were into maybe, you know, I mean at first I was driven by fear.

SPEAKER_01 11:23

Okay. It was all fear. Fear of failure, feel of disappointment, fear of other people's judgment. Right. Um What did your dad end up saying? Did he say good luck with you? No, he thought it was stupid. He thought I was wasting my life. Yeah. And wasted a degree that he'd spent money on, and wasted a good job opportunity that he had set up for me, all these things.

SPEAKER_00 11:43

Right. In his defense, uh did he immigrate here? Yeah. Okay. So in his defense. 100%. Right. And I just want to tell the audience so that they they're not like, but it's like, you know, if you have a justified in saying that. Yeah. If you escape from a country where there's trauma um and impending danger, then your son squanders an opportunity. Yeah. You might get a little anxious about that.

SPEAKER_01 12:08

100%. I mean, my dad came here with $1,000, you know, and a and a medical degree.

SPEAKER_00 12:13

Yeah.

SPEAKER_01 12:14

And then built every didn't even speak English. Right. So I can I can I mean, I think Gary Vee said this, but uh I think what he did was harder than what I've done. Like I got to I got to stand on his shoulders.

unknown 12:24

Okay.

SPEAKER_01 12:25

You know. In what way? I mean, I speak English.

unknown 12:28

Okay.

SPEAKER_01 12:30

Just the basics. Like I speak English, I went to a good school, um uh, you know, I just all the the support infrastructure known and unknown that was around me to you know to be successful.

SPEAKER_00 12:41

Yeah, I think it's healthy to recognize your privilege. Yeah. Uh but at the same time, you know, it came with lots of baggage too. Interesting. Okay. And so you had signals which were mainly fear-based.

SPEAKER_01 12:54

Yeah. And I I mean the the biggest thing that made the decision for me, I would say I had the logical decision and then I had the emotional decision. The emotional decision was um I can I don't want to do this. This is not the life I want to lead. Um, I am not happy doing this every day. I would prefer to not be alive if this is what my life will be continuously. And I was like, well, if that is what if I would prefer to not be alive, then that kind of opens up my decision calculus.

SPEAKER_00 13:17

And what was it I'm trying to put my finger on? What what what was it that made you happy? Was it just the freedom to do what you want?

SPEAKER_01 13:23

I didn't know what made me happy. I knew it was not making me happy.

SPEAKER_00 13:25

Okay. Yeah. So I think that's another important lesson, too, if I can just extract them, which is one, you know, I'm sure a lot of people watching they feel the same kind of family pressure. Um they want to be what other people expect them to be, if you know, if that's who you are. And that's totally normal. Um but we should always remember, you know the the context in which that advice is given. Could be given through the lens of a certain um they live that certain a certain lifestyle, a certain time frame. Um but also, you know, you said um it's a process of elimination sometimes, isn't it? Like you don't always know I and the reason I think about this is so I've got a son who is in eighth grade, and sometimes I see him look looking very serious. And I'm like, son, what's up? How are you you know what how are you feeling? It's kind of like you know, you can see kind of the face kind of going in, and you see him in deep thought, and like, what are you thinking about right now? He's like I don't know what my college major is gonna be. Yeah. I'm like, bro, you're in eighth grade. Why are you thinking about that right now? But like I think that's a thing. Whether you're young or middle-age, yeah, you're trying to figure out what you want to be when you grow up. You're trying to have it all figured out. Yeah. Because we don't it seems like we don't like uncertainty. But I think your message, if I'm hearing you, is sometimes you have to try it on for size to see if it fits or not. And you get it on, you're like, well, I thought that dream job was gonna be like perfect, but turns out, you know, it's tight in the crutch. You know, it's like I I I need something different.

SPEAKER_01 15:10

Mm-hmm. And I think giving yourself permission to do that. And you know, as a side to what you were saying about my dad, like education saved his life. Like he was only able to leave the country because he was educated. And so there's very deep roots there, and I can appreciate that. But for this context or for my life, it just wasn't appropriate.

SPEAKER_03 15:27

Right.

SPEAKER_01 15:27

And when we did come to terms later, um, the only time he's ever apologized to me in my life, um, he said, after his apology, he qualified. Um, and said, But to be fair, in my time I would have been right. Oh, absolutely. And he would have been. It's just not the same time. Right.

SPEAKER_00 15:43

Yeah, yeah. I mean, and and yeah, absolutely. It wasn't that it was inappropriate, it was just out of context and it didn't necessarily translate to this new life and new opportunities you had. Yeah. Yeah. I think that's so important. I I can't imagine how many people are sort of, you know, suppressed to the point of their parents or the people that have influence around them put on them.

SPEAKER_01 16:08

Yeah.

SPEAKER_00 16:08

Or sometimes it's on ourselves.

SPEAKER_01 16:10

Yeah, it's most I mean, mostly. I I love the saying, you know, in our 20s, we're concerned about what everyone thinks about us. In our 40s, we don't care what anyone thinks about us. And in our 60s, we realized that no one was thinking about us to begin with.

unknown 16:21

Right.

SPEAKER_01 16:21

And I just I just feel like that's I mean, who else have you thought about today besides yourself? Probably not. I mean, you have your kids, which is an extension of yourself. But you know what I mean? Like not a lot. And so most people are like that. And you know a lot of it like we have a lot more leeway than I think we give ourselves credit for. And I think the more that I have now, you know, I'll say accomplished with quotes in in material success, the more I am excited about the things that I can do. And that was why the opening of the book was like, there are no rules. And it just took me a very long time to realize that. And I continue to unlearn rules that I thought existed, you know, as I continue to, you know, go on this journey. Trevor Burrus, Jr.: Yeah, I love that idea of unlearning. Yeah. I think we all just try and go back to being like we were when we were children. Like if you like just because when when you're a child, you're purely present, right? You're just present in the moment. And I I I don't like the word happy very much. Um I prefer using joy because you can be, you can mourn joyfully. Right? Because it's it's a it's a it's internal rather than ha happiness, which I feel is more like happen stance. It's more from external. And so um, you know, what are the things that bring me joy? What are things that I find, you know, find joy in? Um and I think for anyone who's who's listening, it's a much harder question to answer what are the things that bring me joy, than answering the question, what are the things I hate? And it's easier to correct those first. You're like, well, I hate my job and I hate my relationship and I hate the city. Okay, those are all very changeable. And a lot of times you get there by uh by inversion. Well, if I wanted to destroy my life, I wanted to have the worst life possible, what would I do? And then taking all those things that you would do to really destroy your life and make your life miserable and then reverse them. It's a much easier way to solve the positive psychology equation, in my opinion.

SPEAKER_00 18:00

Aaron Powell Yeah. I love that. I and I'm remembering this this Picasso quote, which is I think he said, everyone is born an artist. Yeah. Right? And then eventually we we uh you know get convinced that we're not. Yeah. And we have to really just strip away and get you know, get back to basics. And I'm using art metaphorically too. It's like what you do at acquisition.com or what you did in the fitness industry, or what I'm doing with film, you know, this can be considered our art. 100%. Mine's not that great, but um you know, everyone can be an artist and perfect their art, you know. I love that. Um okay, so you get to uh fitness, you're the uh apprentice to a master.

SPEAKER_02 18:38

Yep.

SPEAKER_00 18:38

Uh you're not swole yet, I'm guessing. I was less swole. You're getting there. Trevor Burrus, Jr.

SPEAKER_01 18:43

I was actually, I had already um I was you know, I was competing at that point. So I was uh but I was a strength competitor. So I was very strong for my body weight. Deadlift, second. Yeah, as a powerlifter. Um and then I started my my gym. Uh and that was the first day that fitness became second in my life. So up until that point, I was fitness obsessed, and everybody I worked with was like, dude, you should quit this job and start a gym. It's all you talk about all day. And it was what I was obsessed with. And so maybe like my go-getting was really directed towards that. And I figured this was the only thing that I did I did know that I liked that. And so I was like, okay, I'll do more of that. And then when I started the gym, I realized that I was doing none of that. I was starting a business which had nothing to do with I mean, insofar as I was selling fitness, there was a component of it, but the vast majority of my day had nothing to do with fitness whatsoever. Um but I did find out that I liked business more than fitness. And that was, and that's where I think that there's been a lot of luck in my life where, you know, I just so happen to really enjoy the thing that happens to be rewarded by the marketplace with a lot of money. You know, like I that is where I feel like there's there's a lot of luck that has lined up in my life, and it's in indirect ways like that. I just happen to love this. And so I and because of that, I will do it for a long period of time for more than most people, and enjoy learning about it and talk to people in my free time and do everything I can because it's just the thing I like. And it just so happens to be rewarded monetarily well.

SPEAKER_00 20:04

Yeah, and also uh, you know, the the physical uh benefits from it, right? I mean, you can literally you put in the work, you can see the result, right? It's one of those very empirical, right? It's very measurable. Right. But it's like yeah, it it's and I think I've heard you talk a lot about choosing the right market. Like if you're not in something that can scale, um you might want to re-rethink that. If scalability or um profitability is your goal, perhaps you're you're not in a market that can scale. Yeah. And we can talk about that in a minute. Okay. So you thought uh you you build it. You build the um your your repertoire. Yeah. Um and and then you start acquiring gyms. What are you doing?

SPEAKER_01 20:52

No, so I um so I opened up uh four more locations. So I had five total on in Southern California. Was it under the umbrella of this? So I had four under that umbrella, and then the fifth one I did on my own. So I ended up starting the gyms on my own. Nine months in, I I let two partners in for lack of a better term. Um I sold two-thirds of the equity in my business for basically nothing. Um and at that point, I was already making $20,000 a month take home. Uh and they said that it wasn't valuable. Um and in some ways they were right, and in other ways they were not. Um either way, that is what happened. Uh and then from there, uh I stayed in that partnership. I ended up staying in partnership with one of the guys. We didn't work well with the other guy. Um and then after that guy was no longer in the partnership, I disagreed with the the other partner over time. Not on a personal level, we actually got along really well, um, but just business strategy wise. I wanted to be a premium price leader, he wanted to be the low cost leader. And so that it was just it just and so we ended up just meeting the middle, which was a very mediocre. Business. And so I started I wanted to start my own facility with kind of like my own credo. And that was the fifth gym, which was Body Force Late Forest. And that gym did really well. And then I I made that gym I acquired compared to the other four. The other four I started, this one I acquired. And I acquired for no money down for $50,000 over a year. And so I basically took the whole gym over and then had to pay $4,000 a month to the owner. And I made $50,000 in the first month. And so I was like, this is great. And that's when I realized that I was I'd made so much money launching and opening gyms, and then I didn't even really care as much about the running afterwards. I mean, I knew how to do it. I just liked the launches, they were more exciting. And so I had this idea for a model where you'd fly around and just like launch and fill other people's gyms. And so uh this is right around the time that I met my my now wife. Um so I pitched her the idea on our first date and asked her to quit her job, um, which was obviously the the most reasonable thing to do. Uh when you when you're talking to the top sales rep at 24 Hour Fitness, which she was at 23. Um and so it's like, listen, this may not work out, but we'll make a ton of money together. You should work with me. Um and uh and she didn't say yes. So I went and I launched three gyms. I came back five weeks later um and I asked her to help me process the contracts. Uh so we ended up processing like 120 grand in an hour. And she looked at me and she was like, Is this the thing that you started? And I was like, Yeah. She's like, is it legal? That was her first question, is it legal? Um I was like, Yeah, it's legal. And she was like, Can you teach me how to do it? I was like, Yeah. She's like, all right, I'm in. And so that was when she quit her job. And then she and I started launching these gyms together. We did that for almost a year. Um still very, very, very hard time for me financially. Um, mostly because I was just way I had so many poor decisions, I was paying off at all times. Um I then uh ended up saying, you know what, I'm gonna sell my gyms and transition. During this period of time, I got a DUI, head-on collision. My mother went to the hospital. That's why I actually did those first gyms, because they were all around the hospital. So I wanted to keep busy. Um and so you know, there was it was there's a lot of bittersweet during this whole period of time. Like that processing contracts was after I came back from like the hospital with my mom. So it's just like just a lot of different like things I was going through. Um but uh and and selling the partnership that I had there uh was really hard for me. Again, it was like this, you know, need for validation approval. And I had noticed that over my life, until I solved this problem, it kept reoccurring, which was I always wanted to find father figures. And so the guy that I did the apprenticeship with, like at the very beginning of the story I was saying earlier, like I ended up getting in a really weird uh financial situation with him, which didn't end well. Um, we ended up making up years later, but it was it was fine. But like there was a long period of time that we were estranged. Um, both of those guys came in, very father-like figure feelings. I got into partnership with another. Like, so I kept repeating the same mistake until I had to learn. I was like, you keep doing this. So maybe you should stop. Um and I looked at my track record and all the businesses that I had only owned myself, I made a ton of money in. You know, all the businesses that I partnered with, I had made no money and lost money in. And I was like, huh, maybe I should do more of that. And so that was uh so at this point, you know, we're launching the gyms and whatnot. And uh I sold all the gyms and entered another partnership uh with one of the guys that I had launched. And he's like, dude, I'll come behind you. You shouldn't be giving up all the backside, like back end of the of all these launches. Like, I'll come behind you and fill the gym, you know, and manage the gyms, and that way every gym you launch you own. So by the end of the year, you can own 12 gyms and you can just launch them and fill them. He said, But I have some financial, you know, issues, nothing big. I was indicted once, no big deal. Um, big misunderstanding. Uh, and I was like, of course. And he said, so you'll have to sign everything front, all the money, all that stuff, but we'll split it. And I was like, sure, of course. Why wouldn't we? So I sold all my gyms, put all the money into the bank account for the new business that we were gonna start, you know where this is going. Um sold 400 people, which is a massive launch for a small gym. Uh in a matter of like six weeks, woke up, all the money was gone. Um, he was like, that was my half the profits. I was like, we haven't made any profit, we started the gym with the money. Um he was like, Well, the fact that you spent it is your fault, not mine. Um and so, like that, all the money I had done from all my gyms at this point in four years of my life was gone. Um and I was saddled with a gym that had no money in it with 400 members and payroll that I didn't have money to pay for, and I couldn't sell people because if I sold them, I would have to continue to fulfill them. And I didn't want to be in, I didn't want to own more gyms, I just sold all my gyms. And so um at that point, I sent Layla to go launch a gym in Hawaii. She crushed it, she did a hundred thousand in and collect it, and that was enough to fund all the refunds for all of the members to gracefully, which was not graceful, exit the facility. Um Wow.

SPEAKER_00 27:00

Yeah, I mean, talk about signals, missed signals, um learning lessons the hard way. Brutal. Um but also I mean, story of my life. I could I could talk about similar things where I just I had literally had to get beat up uh and continue making the same mistake. So very relatable.

SPEAKER_02 27:21

Yeah.

SPEAKER_00 27:21

Um but oof. Okay. So wow.

SPEAKER_01 27:29

I'll speed the rest up.

SPEAKER_00 27:30

So much I it's so fascinating.

SPEAKER_01 27:34

There's we're like not even there's way more bad that happens after that. Um so but the the thing is is I'm telling this, in it's all all this happened in like a nine-month period. So this was just insane. And so, like my mother getting sick, the ending of the partnerships, the new partnership, the money get getting taken, my DUI head on collision. So the head on collision actually was the next big catalyst for me because that was yet again, I was faced with my own mortality, and I it it reprioritized things again. It was like, hey, idiots. Yeah. And so I at that point I had a partner that I had two marketing agencies with, by the way, started that on the side. Um, a chiropractor and a and a dental agency. I had my five gym locations with a different partner. I had now the one current location that I had started with the new partner, right? And I had the launch business where we're launching, turning around gym launches. And I'm 26.

SPEAKER_00 28:30

Yeah. I'm imagining, you know, those plate spinners.

SPEAKER_01 28:33

You've got at least nine plates going. I was drinking a half a bottle of Johnny Wagger Black every night to function, not to like not to get drunk, to not to feel back to not being stressed. That was the only thing. And um, like some people have like like I would never have called myself an alcoholic because it was like I still functioned fine. I never was drunk at work or anything like that. I just every night I would just drink that to like breathe. Yeah. Um that was your escape. Yeah, it was. It was very much escape because I wasn't handling the things that I needed to handle. And so I had a coach at that time who was really more of just a therapist. And he said, Alex, your stress is literally going to kill you. And so that was right after I had the DUI and the head-home collision. And so he said, You need to change stuff. Like, what are you afraid of? You you almost died. So fuck it. And so I ended that partnership. I ended the partnership with the agencies. I I believe it or not, even after the money was taken, I was still in a partnership with him. Um, because I was like, maybe he's right. Like I knew I knew that it was fraudulent when I showed him the financials and highlighted everything and was like, there's no other money that was here, and he didn't want to look at it. And that's when I was like, oh, he he doesn't actually think that I took the money. He he was making a reasonable. So, anyways, I got out of all of that stuff. I lost all my money, and then I was back at zero. And this was now, this was November of 16. So I'm now three or four years later from me opening the gym on the floor. So all a lot of the stuff happened quickly. Um at that point, uh, we went to go launch a gym because Layla was like, Hey, I quit my job for this, so you know, can we like still do the thing you said you were gonna do? And so we we realized that okay, I'm going all in on the gym launch business. Um, and I went to go launch this gym in San Diego, and this guy had reached out to me because he'd like followed me because I had made some content about gym stuff, not much. Um, and he said, I've got a newborn kid, I really need this money. Like, let me sell for this this gym. And it was let it just so happened to be 15 minutes from his house. Like, I had gyms all over the nation that I was doing one at a time, and he happened to reach out to me and it happened to be next to his house. So I figured, all right, maybe someone's looking out for this guy. Okay, cool. Sell it and it'll give me time to get all the materials ready so we can launch way more gyms next month. He crushed it, does $100,000 in sales, which was like a big launch. Um and I owed him $22,000 in commissions. After Layla's launch and paying all the refunds and everything, I had $23,000.

SPEAKER_03 30:59

Okay.

SPEAKER_01 31:00

So I paid him the $22,000, and the $100,000 that I made from the sales never came. Because the processor, because of the refunds from the gym before, uh shut us down and said there's a regular activity, there's too many complaints, blah, blah, blah, which is the reason why I shut a gym down right after, like, right. And so they said, We're gonna hold on to this hundred grand. And so I now had a thousand dollars total. During this period of time, before I knew that we weren't gonna be able to get the money, Layla had told her six best friends to quit their jobs and join us at Gym Launch. Oh and so I find out on Christmas Eve at Layla's parents' house, where I'm meeting them for the first time, that I had one, lost all my money. Two, all of her friends had quit their jobs and are gonna start selling for us the next on the 26th, so two days later. And on that 26th, $3,300 a day was gonna start getting debited from my account because I didn't have the money that was supposed to become for that hundred grand. And so I sat Layla down and was like, I pulled the credit card out and I was like, I have a hundred thousand dollar limit on this card. And it was from all my gyms, it was like my master like working cred capital card. I was like, but I want you to know that like you can leave now and we're cool. Like, I won't judge you, like carte blanche, you can leave, and we're um like I I was like, this has a very low likelihood of working. This is probably like a 10 to 15% shot that this actually works. And that's when she said, I'll um she's like, I'd sleep with you in Urbridge if it came to that. And so that was when that was when I knew that like we were like, she was it, she was the one, she's with me, you know, ride or die, like she's the girl I'm gonna marry. Yeah. And so um what a moment. Yeah, it was it was great. It was actually honestly, I felt numb at the time um from everything, but later I can appreciate it. Um so we started the start the the account started getting debit at 3300 a day. Here's the catcher we started doing, you know, uh what was it? We were doing we did like 200 grand in the first month, so that's 7,000-ish a day. This is this is where it gets hairy. I didn't have a processor. So we're getting $7,000 a day in contracts that I cannot process. And the money's still coming out.

SPEAKER_03 33:07

Right.

SPEAKER_01 33:08

Right. At the end of the month, I get one processor turned on after calling every single figure. I was calling friends over, like, hey, can you process contracts? I'll give you 10%, just send me the money after and they're like, this sounds really sketchy. No. And they were right to not do that. Yeah. And um, so processor gets turned on at the end of the month, but they said, Hey, it's a new business, so we'll give you a $50,000 limit. I was like, dude, I need $200,000 like yesterday. They're like, $50,000 is the limit. So I called the guy up and he said, Well, it's per month. So, and I got it like two days before the end of the month. He said, So you can run $50,000 today, and in two days you can run $50,000 again.

SPEAKER_02 33:42

Okay.

SPEAKER_01 33:42

So I was like, okay, and that's what I did. I ran $50,000 and then two days after I earned $50,000, which was enough to cover the $100,000, the $3,300 a day that was coming out of the card. So I made literally, I made like $100 in profit that first month. And then he got two more turned on, so I got up to like $180,000 or something, and then he doubled the $50 to $100,000 so we had $200,000 in limit the next month. So we hit the full $200 the next month, but we're still billing from shit from last month while still making and still playing catch up. But we made like a little bit of profit that month. So I was like, okay, I think I'm in the clear. I think we might have. But wait, there's more. And so now we're going into March. So this is January is the first full month, December, uh uh January's the first full month, February is is when we're started, we're playing catch up on processing. March, March comes. And I just wrote the store out of my book, so all the details are fresh. Um we we get the uh call. Layla comes up to me, I'm like, thinking life is good. I think we're out of the out of everything. And she's like, she's like white. And I was like, what's going on? And she turned her laptop to me, and there was just scrolls of of negative transactions on our account. And I was like, what am I looking at? She was like, These are all refunds. I was like, again? How? I we already did all the refunds from that gym. Like we can't, they can't refund again. Like we already gave all the because I thought it was from the gym from like way back when we that I had to shut down. She was like, no, one of the gym owners that we launched got up on his chair and told everyone to refund. He just said, Go home, I can't deal with all this. Because we had taken this gym from 70 to 270 clients in a month. It was three, I mean, it was just it was just unfathom the amount of infrastructure that's required to handle that, which I hadn't thought through. I was like, You want A plus sales and marketing? We will sell, we will sell your gym. We'll blow your gym up. Yeah. And so that's that's what we did. And then he refunded everything.

SPEAKER_03 35:30

Yeah.

SPEAKER_01 35:31

And um Unbelievable. It was it, so that just blew all the profit from the the month before. And uh that was horrible. Um, but then I was like, okay, one-off circumstance happens, not a big deal. Like, we'll get through it, we'll just do more launches, it's fine. Two weeks later, she comes back again and she's like, it's happening again. I was like, what are you talking about? She's like, the refund thing. I was like, he can't refund. Like, we no one can refund. Like we already gave all the money back. What do they want? And um she said, no, two gyms uh told the client to refund and then buy the same services from them for half price since we had left after selling. So it's like someone comes in, we sell them a membership, you know, for the way we did it, we'd do a six-week program for like five or six hundred bucks. They would pay for it. We'd keep that money for the marketing sales, hotel, rental car, everything, ad spend, commissions. That's what we'd keep, and whatever was left was the profit, right? After that, that gym got all those customers for free to convert. Yeah. So it's like you got really, yeah, yeah, you got really high qualified customers because these aren't trial customers. They're paying, you know, 600 bucks to be there. So like they care, they'll show up, they'll follow instructions. And you should, if you're doing a right, convert 70% on the back end. So like you just gotta wait, so you gotta provide fulfillment for six weeks. And most gyms have fixed costs, not a lot of variable costs. And so they didn't really need to staff out that much. Um, not a ton, right, to handle that. And and so these guys were just like, you know, what would be cooler is if we just told them all to refund and then we got half the money. Right. And then that gives them a reason. And mainly unethical. Yeah, and they had the relationship with the clients. I didn't, but I held the bag for the processing. So, anyways, they uh they they did that, and that's when so we had 150,000 in refunds, and again, I had no money. Um and so it was like this impossible situation where I looked at Layla and I was like, okay, if you fly out and I fly out, we can both do 100,000 and we can make sure the gyms don't do anything stupid, and we can cover the 150. And I just remember this other thing that she said to me, which was she was like, Alex, like we can't sell our way out of this. Like, if we do that, we're just gonna create more, like there's gonna be more refunds, like the amount of refunds is just gonna keep going up. And so I didn't, I really didn't know what to do. Um, and so at that point, um, she had this little side business because she still like she still wasn't sure how things were gonna work out. So she was doing like three or four thousand a month from all her personal training clients that she had transitioned to online. And as I'm trying to like think of every possible idea under the sun, including like me being a prostitute, didn't matter. I just was like, whatever I can make to get 150 grand. Yeah, I didn't, I mean, but it was it wasn't even 150 grand in revenue, it'd be 150 grand in profit that I had to come up with. Otherwise, her friends weren't gonna get paid, right? And so you can feel the stress. And so, and so I um I so I sit her down, I was like, wait, so three or four thousand a month, I was like, what's your cost in that? She was like, nothing. It's like okay. What if we blow your business up? Forget my business. Clearly, I suck. It's like, what if we just blow you up? Um, she's like, really? I was like, yeah. Like, and so she said yes, and I spent I pretty much every week and moment after that writing the best sales copy of my entire life, writing an amazing ad campaign, and launched everything within like 48 hours. And then within a few days, we were doing um a thousand bucks a day of just her selling over the phone with no fulfillment. It was just like online programs for her weight loss program. And I was like, this could work because if I get the eight sales guys that we had at the time to come not have to travel anymore, they'd all do a thousand bucks a day. We'd do eight thousand a day. After commissions, we'd have about a hundred and fifty grand. Yeah. Without the overhead and all that. Right, yeah, yeah. Exactly. And I was like, and no gym owners, there no one's gonna refund because no, no one's telling them to refund. And so um that was the plan. And so I told her the plan, she was good with it. And so we had eight gyms that were supposed to launch the next month. So I called those guys up and I was like, hey, we're not doing it anymore. Change the direction, whatever. Yeah. And the first guy tells me this long story about how his friend had referred him and that we had saved his friend's gym and how um he was gonna lose his house and that he had refinanced everything, he'd maxed out all of his cards, he'd quit his job, spent two years not making any money for the gym, and then he needed this. Sub story. Okay. Yeah. And I said, Cool, not really my problem. Because like everything that happened at this point, I was like, my level of give a fuck was very low. Um and so I said, sorry, man. He's like, Can you can you at least show me what you did at my friend's place and I'll just do it, try and do it myself. And at this point, I needed money, right? And so uh I was like, maybe. Um, but I also didn't want to go create this whole thing because I knew the value of focus. I'd learned that lesson at this point. Um, and so I said, fine, I'll show you how to do it, but I'm not gonna fly out there to save your ass if you can't sell. And he said, No, that's fine, it's fine. And so he said, How much? And at the time I picked the highest number I could possibly think of because I thought I wanted him to say no so I could move on with my life. Yeah, what's your IP worth? Yeah, yeah. And so I said, six thousand dollars. No, mind you, this is someone who's doing a hundred thousand dollars in every single gym we launched in a month. And um, he's like, Deal. And I I still remember I looked at the phone and I was like, Holy shit. I I I kept and then I just was like, cool, what card do you want to use? And um, I wrote it down on a napkin and then you know, finished the phone call. I went over to Layla, and I was like, holy shit. I was like, this guy just paid six thousand dollars for like all of our like sales scripts and all this stuff. Yeah.

SPEAKER_00 40:43

Uh how soon did you realize you'd left a ton of money on the table? Well, this this was the moment.

SPEAKER_01 40:49

And so I I was like, I think I think there's something here. And so I went and called the rest of the guys that were supposed to launch the next month. There's seven more guys, and and it, you know, next guy how much eight grand, next guy, how much, ten grand, next guy, and then I did sixty thousand dollars in sales that day.

SPEAKER_00 41:05

Yeah, you're seeing how elastic it was.

SPEAKER_01 41:07

Yeah, and there's yeah, and I saw at 60 grand in one day. And it was, I mean, it was a day that changed my life. And so that's when I I was like, I think we're still in the gym business. I think we're just doing it wrong. And she's like, So we're not doing the weight loss thing? I was like, I guess not. I think we're gonna do this. She's like, Well, how are we gonna get new customers? I was like, Well, we don't need to worry about that yet, because I'm gonna call the 30 something other gyms that we did the launches for and be like, hey, remember how I filled your gym up? Wanna see how I did it? And within the next month, I think I did uh like four, like I don't remember the cash collected. Um I think we collected 200,000 in cash, but we ended up doing like four or five hundred thousand dollars in sales.

SPEAKER_00 41:45

So let me ask you more about this system. Yeah. Was it like written down somewhere?

SPEAKER_01 41:50

Yeah, it was my whole gym opening system. It's like how I would do these launches. Did you have videos in like a module?

SPEAKER_00 41:54

Okay, watch step one, two, three.

SPEAKER_01 41:56

So so the way that I had structured this, the the old gym launch version, is we would fly out to do these turnarounds.

SPEAKER_00 42:01

Well, and I had more questions about this because I want to ask you because I'm sure that there's a lot of people who want to create modules or you know, learning modules or teaching modules, whether they are doing it in-house for those people or they want to learn, or maybe create their own. The courses are a big thing, right? Um but but so like were these underproduced, well-produced, overproduced? Like the videos, was it like mixture of both. Okay.

SPEAKER_01 42:26

Yeah, because I had hired a guy to do like really professional videos when I did the original launch, like the old school one, that walked the gym owners through like here's how to service these customers, here's how to do nutrition consults, here's how to sell supplements, here's how to sell the membership on the back end. And those are all like really nicely done professional videos. Yeah. And so I had everything there already for the back end. The sales training, I had already trained my sales guys with. So that training already existed. The scripting and that sales training was brutal and fucking awesome. Yeah. Still, like it's interesting because when you make a training with the intention of like someone has to go through this and sell shit on the other side and it's my money on the line, it's different than when you try and make a course on sales. Right. Because people try and make a course on sales and justify the cost that they charge someone for it. Mine was an hour-long training that taught someone how to fucking close. And it was this particular product at this price point for the gym. So it was super specific selling, right? Here's how you set the chairs up, here's how the office needs to look when they walk in the door. This is a joke you make, this is how you do the tour. When they sit down, make sure they set up on the weight, make sure they look at the weight. If they cry, they buy, make sure they sit down. Like, you know, you do the whole thing, right? Aaron Ross Powell, and it was all methodical, strategic. I'd done 4,000 of these. Like I knew like we know this conversation like that. I can still do it. Still. And um anyways, all that was stuff was documents. The only thing that wasn't documented was just the ads and the landing pages. And I just did to show how to place them.

SPEAKER_03 43:42

Yeah.

SPEAKER_01 43:42

So I all I had to build was just that. And we're just talking about Facebook ads or Google ads. Yep, it was Google and Instagram. Or sorry, uh Facebook and Instagram. Yep. And we already had the ads. They didn't even make them. I was like, this is the ad, and they would use my video because I knew my videos worked. So it's just like boom, post this, goes to this page, which is a copy paste of the page that I already made, change the name of the city, right? Like that's it. I was like, and when they like, here's how you work the leads, which was the sales training the guys had. Here's how you sell them, sales training the guys had. And then the back end they already had the training for. So it was proven. It was already there. I didn't have the ads part. Like document it. So I documented that and um I sent it out. I called the other guys. We crushed it. And then and then and then the average gym that of those first like 30 or 40 that bought um did $30,000 in additional collected cash, not membership, not like contract value, like cash collected in their first 30 days. So you're a hero. Overnight. They were just like overnight success. And then um, and then I mean, as soon as that happened, they were like, what else do you have? And I was like, Well, glad you asked. You know, I have I have my three-year licensing where I'll give you all the rest of the things that I used to run run and scale my gyms. And so that was that became Gym Legacy, which is the back end of Gym Launch, which was the two programs that we had, front end and back end, which fundamentally is actually exactly how I did weight loss programs. We have front-end and backend, we have a defined end program, we sell in a continuity, same process. Just the they just added zeros. That's all it was. Um and there was no the the cost of goods was significantly lower because it's licensing. You know, I mean licensing materials, licensing ads, licensing pages. It's not hard you know.

SPEAKER_00 45:08

Yeah. And and if I can just point out what I'm hearing too, is you got rid of partners. Yeah, right.

SPEAKER_01 45:15

I'm not against them now. I I I had to learn I had to learn how to do business on my own in order to learn how to partner later.

SPEAKER_00 45:23

Aaron Powell Yeah, but I also think you know self-awareness is key. Like sometimes uh you know, Nadal is a great tennis player. Uh he doesn't play doubles that I know of. Right? He's a solo player for a reason. Or, you know, and we had Russell Wilson on this show, who's the quarterback now of the Denver Broncos from the Seahawks, you know, and Russ is a team player. So if you're a team player and that works for you, that could be fine. In your model, it wasn't working.

SPEAKER_01 45:50

It was not.

SPEAKER_00 45:51

And and you weren't getting the hint until you finally did. Yeah. I think Layla was a strong nudge there. Yeah. Yeah. But those are those are super good lessons for people who may not have to make them the hard way. That's yeah.

SPEAKER_01 46:06

If if you're going, and this is because I get questions like this all the time for neuro entrepreneurs. It's like, you know, either they're in a partnership, and this is how most people partner. Hey, we like each other and we kind of like the subject. Let's get into business together. Terrible reason to get into business together. But like Y Combinator, we were talking about this off off offline two seconds ago. Um Y Combinator has shown that three partners, three founders is actually like the like the sweet spot. Like three to four-ish actually works the best for building huge companies. Now, that's huge companies, not everybody's trying to build a huge company. And the founders that they have have very specific roles and functions. So you've got the guy who's the you know head of coding, and then you've got the promoter who's head of sales and marketing, and then you have the operator, typically, which will be kind of the third leg of the stool, which is kind of the minimum three roles that exist. And so if you are going to partner with people, they have to have a clear role or responsibility that is different than yours.

SPEAKER_00 46:54

Complimentary skills.

SPEAKER_01 46:55

100%. So complementing skills aligned values. And if you are partnering, the splits don't need to be even. And that's often a common thing, which is like, okay, there's three of us, therefore, we should have thirds. That isn't necessarily true. You know, like some people might be bringing a bigger network or something, you know, other things to the table that that tip the scales. And and that's you know, that's part of business. But all that to say, I'm not against partnerships. I at that time did not understand how to partner and therefore was only able to successfully have business when it was just me.

SPEAKER_00 47:24

Fair enough. Incredible. I mean, there's just so much there. Um let's pivot a little bit. Uh I want to get granular on some of this advice because, you know, again, when I started this show, it was I was sailing right into the perfect storm of the recession. Um, I got my ass handed to me and then had to, you know, climb back out of the pit that I've jumped into, basically. And and I wanted this to be the solution for me, and it turned out to be what exactly what I needed, but also for a lot of other people. Um what's what's a deeply held belief that you had maybe three to five years ago? Uh and it could be business or personal, but like something you you really held to be true that you no longer believe? Like do you still trust people the way that you did? Sounds like you you're you I mean, I know nothing about psychology uh except through my own research and and therapy and all that. It sounds like you had a very codependent relationship, especially with father figure in your life, right? So but so naturally you had this very trusting uh character. Yeah. Um did that change over time? Do you still have uh that strong trust?

SPEAKER_01 48:43

So I think that a lot of the revelations I think came in retrospect more than were active decisions. I'd say the vast majority of the things were I I made mistakes and stumbled into the right way and then tried to think like what was different than last time. Um and I think one of them that you touched on is trust, but a different version of that is like the gift-taken relationships. And I think that I was I'm I think I am naturally like if there's a on a scale from one to ten, like you know, one being a taker and ten being a giver, I'm I'm naturally a ten. Um and tens get run all over. Ones don't get opportunities because they're always just trying to take and people just get tired of them. The vast majority of people are tit-for-tatters. So you give, I give, which is like the fives, which is the vast majority of the population. It's transactional. And I think that what happened over my career is that I shifted from a 10 to like an eight. Um and they've actually done a lot of game theory research on this and found that like eight out of ten is the is the proper amount of give-take for optimal outcome. Aaron Powell Really? Okay.

SPEAKER_00 49:49

So to be clear, you're saying you used to be a giver. I just gave all the ten out of ten, and now you've ratcheted that down to eight out of ten, and that's about the right range, you think. Yeah. You just have to know when it is your turn to take.

unknown 50:02

Right.

SPEAKER_00 50:02

And also I would guess, because I can speak from that same experience, a very relatable, I'm I'm sort of right there with you. And I was gonna ask this just for personal selfish reasons too. Sometimes I feel like I'm always the one giving. But then I I remember that you know, if you're truly giving without the expectation of return, then I shouldn't have those feelings, right? Because, you know, you give it, and then if it's without expectations and it's not transactional, then you shouldn't care.

SPEAKER_01 50:33

You know, it's interesting because like I I spent a lot of time defining words. Um and so I think there's the like it's it's worth looking into like the what the word give means. Um because you know, what is the difference between giving and donating?

SPEAKER_00 50:47

Right.

SPEAKER_01 50:48

One would be one has no expectation of return, I would imagine with donation. Giving might not necessarily have no expectation. I don't know. Like it's a it's like these are the things that I jam on, you know what I mean? Um so I don't know. I don't I would normally pull my phone, but like, let's go look the word up.

SPEAKER_00 51:01

Well, I I love riffing on this because um I think it's uh it depends on the person and it's also it's all about intention. It's the same reason you know, some people give to a certain charity and they want to be known for status.

SPEAKER_02 51:17

Sure.

SPEAKER_00 51:18

Uh or conscience. Or maybe it's like uh brownie points in the life after. Or maybe it's to feel good right now because you know, maybe your life is trash, and it's like if I do a little bit of good, that'll offset my feelings. There's lots of different, you know motivations, right? Um that's very interesting. So you think that you've changed the most in the giving category. You've ratcheted it only down to an eighth, though. That's still pretty high.

SPEAKER_01 51:43

Oh, I mean, yeah. I mean, you've you've consumed some of my stuff. Like it's still very, very, very much give give-centric. Yeah. The thing you say in every video is I have nothing selling you. Yeah. So it's like, you know, the book's 99 cents, the courses are free. Like, you know, at this point I just I would like and you know, is there selfishness in the giving? Sure, I feel good. You know what I mean? It makes me feel better. I do gain status from doing it. Like there's plenty, like there's always ways I can pull back to being, you know, selfish. And I probably would define it rather than like giving and taking, is I think the from a strategic perspective, I have now noticed that it's it's give, give, give, get rather than give, give, give take, or give, give, give, ask is probably, I think Gary's is give, give, give, ask. Um, I do prefer give, give, give, get because I think that that is that that has happened, and that might seem contrary to what I just said about 10 out of 10 givers. Um but I can I think the 10 out of 10 giving is giving without understanding boundaries. It's like not holding your own space. Yeah. It's like you can like I will give this and I will give that because I have agreed that for me this is something that I'm willing to give and I will give it relentlessly. But it's when you are when you are allowing other people to take from you um things that you were not planning on giving, and then you choose to rationalize why it's okay.

SPEAKER_00 52:57

Right. Or like your partnerships you know totally screwed you, and then you know, you you went back for more.

SPEAKER_01 53:03

Yeah, and I and I and I just qualifying, like I meet, I own those. Like those were my mistakes. I did not know how to structure partnerships, I did not know what to look for. Yeah. You know, and and they were all lessons for me. So I'm you know I'm grateful for the them now.

SPEAKER_00 53:17

Aaron Powell Well, but uh also in your defense, it seems like you have high moral character, you have uh a big heart, and you want to give people a second chance, maybe, or the benefit of the doubt at least. Um tell that story about the deal you did with someone who you lent money. And um and and then you invoiced them or something. And it ended up being the wrong calculation. Tell that story.

SPEAKER_01 53:41

Aaron Powell Yeah. So I um I so I I I in wholesaling, uh you try and get a building under contract, right? And so someone had found a really dilapidated building that they could buy from the bank, uh, I think for three million bucks. And so they called me up because they were like, we need three million dollars, but we need it tomorrow. Aaron Powell Yeah. The Bank of Alex. Trevor Burrus, Right. Bank of Alex. And I tend to always have a lot of cash on me. So I was like, sure. Um and they were gonna pay a really good interest rate, which is $100,000 a month as long as they carried the money, which is like 48% a year. So I was like, cool, I'm in. Um and you know, from a security standpoint, it was secured against the building, which had already been valued uh at 5.6. They already had an offer with earnest money on the table. So they'd already lined up both sides.

SPEAKER_00 54:20

Had you done business with this person before? Okay.

SPEAKER_01 54:22

So that's why that was so important.

SPEAKER_00 54:23

First brush, okay.

SPEAKER_01 54:24

Right. Um, so they both personally guaranteed it. I was first lean on the on the like this is stuff you learn over time, right? I was first lean on the property, and they had earnest money down from a new buyer. So like all my sides are more or less covered. Took all the risk out of it for you. Right. No brainer. So I wrote the check. And then the uh so my real estate lawyer, which was actually a new lawyer I was trying out, um sent the invoice over uh once they said, Hey, we've received the funds, like we'll send it to you with the interest, whatever. And he had miscalculated the amount of interest that was supposed that had accrued.

SPEAKER_00 54:58

Because they did very well on the sale.

SPEAKER_01 55:00

Yeah, they did, yeah. They did, I mean, they it was a great deal for them, right?

SPEAKER_00 55:02

Yeah.

SPEAKER_01 55:03

Um, you know, they borrowed three for, you know, they c I think carried it for three months-ish. It's like three and a half months, so they paid 330 or 350,000 in interest. They sold it for five six on some someone else's money.

SPEAKER_02 55:14

Yeah.

SPEAKER_01 55:14

So they made two six minus the three hundred. So they made two point three for 90 days' work. It's not a bad deal. Um so, anyways, uh, we sent the money and or sorry, they sent us the money on the invoice, and uh they were like, hey, thought this didn't make sense because the agreement we had was this, and so we're actually just gonna send you the correct amount, which is higher than what you invoiced us. Calculation was off. Yeah. So there was like I think they they invoiced 280 and it was 330, I think was the actual numbers. And so it was it was down by 50 grand. And um I obviously, you know, communicated to my lawyer that I was disappointed that he had not thought through it, but I probably should have looked better too. I just didn't think about it. Um and he, his lawyer, the guy that sent the money, had advised him to not send the extra 50 grand. He said, Listen, that was his invoice, send him the money, and you'll, you know, hey, he'll make 50 grand extra. But um, try not to hit the mic. Um, he said, you know what, like I want to do deals with Alex in the future, and this feels like a very short-sighted move. And so he sent the money, and he did end up getting more goodwill from me uh from that move. And so, you know, he was the one who ended up saying something to me when he flew out to like we did like a salvatory dinner. Um he said, you know, my dad always told me that you only get one name, so invest in it accordingly. And I always thought about that. I thought it was a really good line. Just like you only get one name. Like you can change your companies, you can go bankrupt, but like your name stays with you.

SPEAKER_03 56:44

Yeah.

SPEAKER_01 56:44

And so that can either be an asset or it can be a liability.

SPEAKER_03 56:48

Yeah.

SPEAKER_01 56:48

And why not have it be a huge brand have brand power in and of itself.

SPEAKER_00 56:53

Yeah, what's that line like integrity is what you do when no one's looking.

SPEAKER_01 56:57

Yeah.

SPEAKER_00 56:57

Right? And who knows he it you could have been setting him up. I could have. Right? And then what happened to that lawyer that you hired? Oh yeah, I mean he's gone. And how about his lawyer? He's also gone. So I mean, that's a super good lesson about you talk a lot about in your videos how you hire people.

SPEAKER_02 57:14

Yeah.

SPEAKER_00 57:14

Um, not based on skill per se, first, it's all about moral character. Yeah. Yeah. Refresh us on what those are.

SPEAKER_01 57:22

So we look at uh I mean, for us, the values that we have at acquisition.com, and I think it changes by the type of company that you that you are. Um for us, it's unimpeachable character, sincere candor, and competitive greatness. And so those are the only three things. And we look for them pretty much in that order. So, and most people flunk the first one, so we don't have to really look for the other two. Um But when you think about unimpeachable character, for for me, I I like the Navy SEALs test um that I was told, and this may or may not be true, but I like the test either way, which was not only like um, you know, in in their world, it's like, will this guy give me give his life for me? And I'm not, that's not what I'm expecting my teammates to do. But bear with me. He said, but that's the ticket to entry to be, you know, in team six or Navy SEAL. He said, or to be Navy SEAL. He's like, but Team Six, it's do I trust this guy with my wife when I'm not there for a long period of time? Right. Do I if I give this guy a huge amount of money and just say, I'll be back for it, I like I don't know when, but I'll be back for it. Yeah. Will it be there 10 years later?

SPEAKER_02 58:20

Right.

SPEAKER_01 58:20

And so if you ask those types of questions, like harder questions, and the favorite one that I have from Warren Buffett that he got from a Holocaust survivor was, you know, during the Holocaust, like would this person let me in? And so I think that like those are hard questions, right? And I'm not saying that I'm expecting a teammate, but they give you frames on like how deep someone's character can go. Um and so we try and we assume that there will be hardship in business because it is a hard game. And so that is guaranteed. And so it's just a question of when, not if. And so we try and run out the risk on teammates and portfolio companies by asking ourselves the hard questions before they are in urgent need.

SPEAKER_00 59:00

Would the Alex Now hire 20-something Alex under the same scrutiny?

SPEAKER_01 59:07

From I would, I would probably just asked me a lot of questions. So I probably would have found that it was not. I would have noticed that he probably saw me as a father figure and was like, this is probably not healthy for this kid at this point. And given the level of ambition that I think he has, I think he will outgrow the role in a very short period of time. Um, I would either have to tie him into some sort of, you know, something I don't know. I would have to figure something out, or I would say, listen, man, I think like why don't we do a one-tier internship or something like that and just like go on your own. Um, or I would probably, you know, it it would just really depend on what little Alex wanted. But that I mean it would just be asking questions, honestly. I mean it sounds like you're saying no, that you wouldn't hire him. It's because I know him. And so I I mean I think that you know, uh some people some people need to be number one. Um and you know, we look for that. And if if that's a need, then I would probably pass. Right.

SPEAKER_00 1:00:10

Have you been have you ever been wrong about someone's character? Yeah. I mean, like now.

SPEAKER_01 1:00:15

Now that you're more hundred percent. You know who's you know who's unbelievable? Layla. Girl does not miss. Like, I am still more trusting. I am still more like, you know what, he was having a bad day. Or like, you know what, like maybe like I still will try and because I think I I empathize a lot with people who are in difficult situations because I have been in them and I understand the difficulty. Right. Um Layla just doesn't give a fuck. Um, Layla just sees through people. It's crazy. Like, I mean, even when we like check in with our portfolio companies, like this just happened. We had a portfolio company recently. Um, we hopped on, we do, we we check in regularly and whatnot, obviously. Um and the CEO is on, we're like, anything to report? What's new? You know, he gives normal stuff. And we got off the call and she was like, he's not telling us something. And I was like, what? Like, you know, like I mean, it's fine to me, right? And then lo and behold, we like we find out that there was some, there was a big problem that they hadn't told us about. And it's just like she just like doesn't miss.

SPEAKER_02 1:01:14

Yeah.

SPEAKER_01 1:01:15

And so I I do lean on her a lot with that stuff. So our our single rule of marriage that's helped uh tremendously um has just been if we both don't agree, we don't do it.

unknown 1:01:27

Yeah.

SPEAKER_01 1:01:27

Whatever it is, whether it's an investment, it's a hire, it's a strategic decision. I have overridden her one time, and it was uh when I was starting Allen the software company, which was our third company after just Jim Launch Prestige Labs, which are our software company, and then we had Alan the software company. And I really wanted to pursue this opportunity. And she didn't think it was smart given the resources and the team we had at the time. She thought they were stretched too thin, et cetera. And I I kind of bulldozed and was like, we're doing this. And um, and and it and it blew up. I mean, we were at 1.7 million a month within like six months in that business. Um, so I felt very validated that I had made the right call. But on the longer term time horizon, she had seen that there were some flaws in the model and some things that I I hadn't foreseen that ended up you know biting us in the in the ass. And so um I go back to what I said originally, which is if we don't if we both don't agree, it goes the other way too. It's just I tend to be the S guy.

SPEAKER_00 1:02:20

Yeah, that's healthy. I actually got the same advice w when I got married because you know you you either succeed together or you fail together. And and and either one can actually be great. Yeah, it's together. You're never divided. Can I ask a personal question? Um So do you guys have joint bank accounts? I gave her my bank accounts two weeks into dating her. Okay. So they're completely joined. Yes. And she takes care of the money because she's good at that. Yeah. Okay. So you don't have separate accounts and you don't have to.

SPEAKER_01 1:02:51

I don't even have a login. I don't even I don't even know how much money we have. I really don't. I get one email from our from from her EA every week that just has our balance totals between all of our assets.

SPEAKER_02 1:03:02

Yeah.

SPEAKER_01 1:03:02

And that's it. And I just scroll to the bottom, I look at the number, and I'm like, cool.

SPEAKER_02 1:03:05

Yeah.

SPEAKER_01 1:03:06

She could she could make it up for all I know. I have no idea.

unknown 1:03:09

Right.

SPEAKER_01 1:03:10

I could be poor. I could be broke. And I could just somehow, somehow I just like live and my credit card always goes through, so I have no idea. So is she I don't think that's true.

SPEAKER_00 1:03:17

Are you are you like the um Are you like the the optimist and she's the realist? Like you you're out there, you know, seeing the vision, what's possible, and she's like bringing you back down to earth like, hey, you know, let's get real with this.

SPEAKER_01 1:03:29

Yeah. Depends on the circumstance. Depends on what we are talking about. So I think it the subject matter matters. Um whether it's people, whether it's friends, whether it's um a business decision. I think I think some of those matter like we tend to, but I would say maybe in general, I think like with a very broad brushstroke with with with exceptions, um, she tends to be more uh conservative, I would say. Yeah. And we always joke like if if it were only Layla, we would never have any businesses. And if it were only Alex, we'd have too many.

SPEAKER_00 1:04:01

Yeah. Well, that's sim that seems, you know, like complimentary skills. The yin-the-yang. And I'm guessing also that she doesn't like surprises or uncertainty.

SPEAKER_01 1:04:08

No. And I think we I will say this though. I think we now over-index to both of those polls more because we know the other person exists. So like if Layla somehow were hit by a bus tomorrow and I were taking over all of our affairs, I know that I would correct towards the middle. I'd be like, I want to do this. She probably like I have a pretty good gut feel for what she would say yes to, but I'll still, I'll still push it just in case. And sometimes I'm surprised. I'm like, oh, you are? You do you do think this is good? I'm like, all right, let's do it. Sometimes I just throw them out there as softballs for like her to squat down so that when I when I uh when I really want one. You know what I mean? I'm like, you did say no to all these other ones. I was like, so I feel like it's time. You know what I mean? Yeah, um I love that.

SPEAKER_00 1:04:46

I almost see like a little um uh dialogue bubble, like what would Layla do? You know, it's like that runs through your calculation.

SPEAKER_01 1:04:52

Her picker is unbelievable. But like I think we have a very like uh Warren Buffett Charlie Munger uh dynam, obviously, you know, we're married, but like Charlie always says no. Warren wants to pursue. It's just like I think that's it's very natural to have somebody who's gonna try and pursue opportunities and somebody else who's like, is it core? Is it does it align with where we're trying to go? Yeah, etc.

SPEAKER_00 1:05:11

No, I I love that story of you know, you basically got married for business first. 100% and and then figured out how to navigate the rest. That's super cool.

SPEAKER_01 1:05:20

Yeah. We were living together five weeks after we met. In motels. In one room.

SPEAKER_00 1:05:26

Okay, Alex, here's the one for you. Um you talk about competitive advantage. How do you create competitive advantage?

SPEAKER_01 1:05:33

The easiest is just information. Like just know more than the other person.

SPEAKER_00 1:05:38

And and how do you do that?

SPEAKER_01 1:05:41

I mean, aside from It's usually doing more and doing more research. It's both things. And a lot of times doing more is the research. So, like if you think about um every business that exists, and that's a very broad statement, but I think I'm I think I can back it up. Um they all exist based on information arbitrage. One party knows more than the other party. So what either even If you're like, I remember I said this and I there's a bunch of comments, and they were like, Well, I own a cattle ranch. How is that information overtrushed? I'm like, you know how to farm, you know how to raise deer, and you sell it to people who do not know how to do that as profitably as you do. Yeah, you know how to run that business and you know how to do it profitably, and you sell it to people who don't know how to do that. And because if they did have all the knowledge you had, then they would just do what you're doing and do what they're doing, and then they would swallow up the supply chain. And that's what vertical integration fundamentally is, is you eat up all the other aspects of the supply chain for within your vertical.

SPEAKER_00 1:06:29

Well, and information arbitrage is an interesting and spot on, but also it makes me think um sometimes making it more efficient or time-saving is the key. Maybe you know, all the information I I know how to get six pack abs. Okay. Okay. I just haven't done it yet.

SPEAKER_02 1:06:48

Yeah.

SPEAKER_00 1:06:48

Right? Um so I know probably as much as you do about how to get six pack abs, you know, or how to, you know, you know, get the guns. Yeah. Um but maybe you've got a shortcut or you've got um which would mean I would know more. Yes.

SPEAKER_01 1:07:07

Yeah. You're right. But but I say that in terms of information arbitrage between a a buyer and a seller. In terms of how to create value, that's a different question. You know what I mean? Like, how do how do how do I communicate value to a prospect? That's you know the entirety of persuasion and all that other stuff. But like in terms of like how how do we pursue opportunities, um, which is a subject that I'm gonna write a whole book about. Um but like opportunity itself, which is just like this big word that people like to throw around. But like, what is opportunity? How do you have a good opportunity versus bad opportunity? And so um the number one YouTube that have uh video I have on my channel is is I I touch on the topic. Um, but I see it as three variables. So you have uh the total number of potential units to sell, which some people will call TAM, right? Total adjustment market, but how many, how many units of this widget could I potentially sell? Number one. Number two is what is the value to uh cost discrepancy? So how much profit can I potentially make solving this particular problem? And then number three is what are the competitive dynamics within that marketplace? So uh an example that has two of the three would be like, what if I wanted to sell a cell phone service? Lots of people need it. The how much it costs me to add an additional customer is very, very low. So very high gross margins. But what are the competitive dynamics? Well, there's a lot of really entrenched players, it's very hard to get into that, right? And so when I'm looking at an opportunity, I want to see all three. Now, the the difficulty with using those three is that that equation can evolve over time. And so if you're starting a business right now, you might not have, you know, sell something that everyone in the world can buy, right? Actually, there's probably not many things that everyone in the world can buy. Um I was talking to a uh they they sold Kangen water. It's like a it's like alkaline water.

SPEAKER_03 1:08:46

Yeah.

SPEAKER_01 1:08:46

And you know, I was talking to them about their TAM, and they're like, everybody, everybody drinks water. I was like, yeah, but no one's buying a $2,000 water machine. So the TAM isn't everybody, it's people who are foo foo enough to buy $2,000 water machines, which is a much smaller potential of the 7 billion people on earth, where 80% of them don't have internet. I don't think your TAM is as big as you think it is, right? And so um, but as you get into business, you learn more, and then you realize that you can expand your market in one way or another. And I could get into how the different ways you can expand your market. But yeah, give us a little taste.

SPEAKER_00 1:09:17

The one thing I remember from maybe one of the things that you taught me was to think about uh the scalability of things. Yeah.

SPEAKER_01 1:09:24

100%. And the scalability comes uh there's the entrepreneur component, which is like, you know, skills, traits, beliefs, which we can hidden out if you want. Um but then there's the scalability of the of the deliverable, which is like how do I create a deliverable that is more scalable? When I, if you think about my trajectory, I first got in shape that and I was had a job, right? And then I uh started selling fitness services because that was a skill that I learned. And then I got other people to do fitness services for me. So this is all levels of leverage. So like opportunity is just a fancy word for leverage. Um and then after that, I sold licensing, which was with media, right? So my cost of incremental uh my incremental costs were basically zero, right? Every new customer was very low for me to didn't cost me much to add them, right, compared to how much money I could make from them. And so with the different business, you know, the different iterations of fundamentally the same skill set, I knew how to get people in shape. That was the skill set, right? I added in learning how to market, learning how to sell. And those were things that added value, right? And that was when we get into the the entrepreneur skill straits beliefs, like that was from that side, but that is why I was able to climb the opportunity ladder and gain more leverage on the opportunity that I was pursuing. Um and with regards to how do you increase your total adjustable market, like so there's four ways to increase it, there's five ways to adjust it. So um the first four are the same, don't worry. The fifth one's just the last one. So you can go upmarket, which means you're selling to bigger versions of the same thing. So let's say I was helping hair salon owners. I could help people who have chains of hair salons, or I could help franchise oars or licensors of hair salons. That'd be much a much smaller demo, but they'd be much bigger clients. It'd be enterprise, right? I could go down market, which would be selling smaller versions, which would be like I could I could sell hairstylists, right? If I want to go down market from there, people who aspire to be hairstylists, right? So it's like a pyramid. Um you go upmarket, you can go down market. You can go adjacent market, which is what's similar to hairstylists that probably has similar wants and needs. So it'd probably be like a lash salon or nail salon or something like that. Nail salon, yeah, exactly. So that would be an adjacent market. Um, or I could go broader. So broader is where you take all adjacent markets under one umbrella, which would be beauty, right? So it'd be like, I help all beauty type brick and mortar businesses, right? That would be going broader. And so there's other four ways you can increase the total adjustable market of whatever thing that you're serving. The fifth is you can go narrower. So I say that you can increase it four ways. The fifth is you go narrower, you get more specific about the constraints that you apply to the requisites to become a customer. The reason that most times with businesses that I take on in the portfolio, it's actually the first step we do is we actually narrow it most times. And it's because they are they don't even know who they serve and they don't know who they serve best. And so when you're starting out, one of the best practices you can do is uh the fancy word is a common factor analysis, but basically what is what do all the best clients we have have in common? So if we take 100 clients and we look at the top 20%, because it's Pareto, they're probably responsible for 80% of the revenue anyways. We look at that 20%, we say, what do they all have in common? And then what if we only sold that amount of people and we sold now the same hundred, but they were all of that 20%? Right. Well, we would 5x our revenue. Same operational drag because it's the same size company, but we're selling better customers. And most people, you know, I I get on with entrepreneurs all the time and they're like, I think I've saturated my market. And I'm like, all right, what's your what are your what's your revenue? They're like two million bucks a year. I'm like, okay. Well, the market you're serving is a $60 billion industry, and you are making $2 million a year. Little room of ground. Do you feel? Yeah, I was like, do you feel like it, like you might be premature, or you just don't know how to get more customers? They're like, well, I guess I don't know how to get more customers. Like, that's a problem that's solvable. So let's solve that, right? And so then we can we can we can break it down. There's a million ways to get customers. So I can break that down too if you want to.

SPEAKER_00 1:13:05

Yeah, but is there a certain type of business or industry that you gravitate to for the acquisition?

SPEAKER_01 1:13:11

Yeah, yeah. So we work with uh business services, consumer services. Ideally, businesses that are e-learning course, like I love licensing models. So I love um low overhead, yeah, high cash. Yeah, yeah, exactly. Yep. And the problems that those companies typically have, and we take them on usually between three and ten million is when we like in top line sales is when we start working with them. The problems that they usually have is that it's too founder led, it's too personality brand driven, they don't have enough customer lifetime value, as in they sell something one time and they can't get people to keep buying, they can't get people to stick, they have high churn. Um, but they typically have high cash flow, but it's very dependent on usually one or maybe two channels of acquisition. And so we will kind of lay out our five-year plan to getting them from basically a company that has almost no value to getting to like 30 to 50, maybe $100 million in enterprise value. Um, and a company that has multiple acquisition streams has an extended LTV. The LTV allows us to have all these different acquisition channels, but we it depends on the or like the order in which we solve them depends on the business. Yeah.

SPEAKER_00 1:14:12

Did you what did you have to pay for the domain acquisition.com? Was it expensive? Yeah, it was 400 grand. Okay, not that bad, actually.

SPEAKER_01 1:14:19

I looked at marketing.com, it was 5.6 million.

SPEAKER_03 1:14:22

Okay.

SPEAKER_01 1:14:22

I thought about that. I told Layla, I sent her a proposal. I I I never email. I don't email, I don't check email. If anyone ever emails me, I don't, I won't read it, so just letting you know. Um and I literally said a proposal. I was like, so I was thinking. Um so I I price anchored with marketing.com. And then I was like, we could also get acquisition.com, which is 400 grand. She was like, well, that seems much more reasonable because I anchored 5.6, but that was smart. Um but marketing.com, I still sometimes think about because uh I do like that. I like that domain. But the thing is this the reason I ended up doing acquisition wasn't even for the money. It was because the type of of people and portfolio companies that I am looking for use the word acquisition. Like people who don't know business, not don't know, but like everyone knows what the word marketing means or thinks they know what the word marketing means. Trevor Burrus, right. It's a little bit more um general. Right. People who are trying to scale their companies talk about cost of acquisition. And so it also had the double entendre of we, you know, acquire minority acquaintances in the companies in addition to helping with acquisition. So I kind of like that component too.

SPEAKER_00 1:15:23

Yeah, 400 grand. I mean, it seems like a seal because I think I was like five or six years ago, Zuckerberg bought FB.com for like eight million dollars or something like that. Right. Just like probably also a great deal. Yeah in in retrospect, yeah.

SPEAKER_03 1:15:36

Yeah.

SPEAKER_00 1:15:37

Yeah. Interesting. All right, I got a couple more zings. Um I'm telling you, I could I could sit uh I could sit for hours. Um I I think a lot of people want to know this. The answer to this next question, which is what is the fastest road to financial freedom? You talk about everything you're doing on YouTube, I have nothing to sell, I'm doing it to help people who you know are broke.

SPEAKER_02 1:15:59

Yeah.

SPEAKER_00 1:16:00

You've got uh assuming ten plus million dollars sitting in the bank today, maybe thanks to Layla, closer to 15, I'm guessing. Oh, I don't have way more than that. In cash. Way more than that. Okay. And talk about that too. Like why can't we? Yeah.

SPEAKER_01 1:16:22

So I mean, I I sold three companies last year, and a house, and two cars. So I sold everything last year. Okay, yeah. So you're you're looking at what's happening, predicting. There was inflated pricings. I mean, a lot of people are really afraid of inflation, and I think that's super warranted. Um I don't know. I think it's just like that's a purely like this is like looking at Uncle Warren, right? He's got 150 billion in cash sitting right now. He's not worried about it. I'm like, hmm. He's seen more cycles than I have. Right. So he's got 25% of his entire company value sitting in cash. Like he's waiting.

SPEAKER_00 1:16:59

And so And that means it's I mean, to be clear, it's not working for you. It's not earning I mean, it's earning a tiny amount of interest compared to what you could have in stocks or investment or properties.

SPEAKER_01 1:17:11

So a little inflation's not going to kill me. Um but like when you look at the Nasdaq during the crash in whatever 01 or whatever the year was, um, it dropped by 78%. Right. So that would be significant. It would be significant. Yeah. Um and so I'm I think I think just given the timing, I'm willing to wait a little bit and see what's going on. Um and I also am very close to a transaction, so I'm not gonna like immediately allocate all the money. That sounds like a bad idea. Um and so that is why I have more cash than I probably would normally.

SPEAKER_00 1:17:42

Yeah. Uh do you see yourself coming like do you see see yourself they talked about this scarcity mindset? Do you think that's rooted maybe in your family story, which is, you know, your your dad basically had to reinvent himself as the doctor coming over from a different country. Aaron Powell I don't think he had a scarcity mindset. I don't think so. He's I mean wasn't that the reason he was worried about you choosing this path? I don't know if it was scarcity. I think it was fear. I don't think they're necessarily the same thing. Fear of losing anything, right? Like fear of not being able to provide or of not being successful.

SPEAKER_01 1:18:12

I mean, I think my dad was afraid of what me being a failure would reflect on him. I don't think it had anything to do with scarcity. I think it just like he was afraid that it would look bad on him.

SPEAKER_00 1:18:20

Gotcha. So then back to the quickest road to financial freedom.

SPEAKER_01 1:18:25

Mm-hmm. I think it I think I mean the first answer that can't, like the bullet, like the quick answer was knowing thyself, right? Which is a lot of people, because right now entrepreneurship's cool, it won't be cool in a few years when everyone loses everything. Um and so it'll probably it'll probably calibrate a little bit. Um so I think it's just it's just the one thing that you can always protect yourself with that and this is something that I have learned from my you know Iranian family, is you know, when when the revolution happened in Iran, we talk about legacy, lands, buildings, houses, bank accounts. Government just says those are ours now. That's it. There's your legacy, gone. So that's why I'm like, and people are like, I want to build a legacy. I'm like, US might not even be the superpower in 500 years. Your kids, your kids might be in in in Bangladesh. Who knows? India might be the the the hotspot in 500. No one knows, right? And so that was a touch on legacy. But skills are the only thing that we'll always appreciate in time and work in compound, compound in concert. So when they work together, if you know how to do math, then you can learn how to do accounting. If you learn how to do accounting, you can learn how to do tax work. If you learn how to do tax work, you can figure out how to insurance works. If you figure out insurance works, then you all of a sudden you're a CFO and you can prepare companies for sale. Like the skills stack on top of each other. And specialized skills are valuable independent of the currency or the economic climate. And so if you are good, you will always have a place to provide value because people want good stuff. Prices may vary, currencies may vary, but people will want the things you have if you are good. And the only way to get good is to work. And so I think that a lot of people spend a lot of their time in paralysis trying to figure out what the quote ideal opportunity would be when you won't know what the ideal opportunity is because you don't have a baseline. And I believe that research is done through doing, and you learn a lot more by doing stuff in action, and then you will gain the insights of where the opportunities lie, which is why accommodator comes up again. What they look for in past founders, one of their criteria for a successful business is past experience in the industry. So, and that can be, I just wrote a tiny blurb about this in the book that I'm writing. That can be tangential. Like if your dad owned a mechanic shop or was a mechanic, you probably know a lot more about cars than you, than like you to you, it seems obvious, but like I don't know anything about cars. Nothing. Nor do I really have the interest. But like if you wanted to get in the space, you probably have some level of knowledge. Some people look at just the whole world and they're like, I don't know anything, but this is maybe a good like, but I think it's better to have some level, because usually we have learned stuff in our lives, whether we like it or not. And starting in the in in in every industry that your parents, your cousins, you worked in, there was massive opportunity. It just depends on how you structure it. Right. So, like, let's say my first job was I was a blender tender at Smoothie King. It's the first job I got. Blender tending, not a very good opportunity. Right. I'm probably not gonna scale that, right? Managing there, probably not either. Owning the owning the location, a little bit more leverage, because now I have leverage on labor, right? Owning the franchise, much more. Right? And so, like all industries, if you go high enough up, and this is the rule of thumb for anyone, if you want to see where where opportunity exists, look at the businesses that have been here the longest because they make tons of money. The only reason they would exist is because they can they can exist during downturns. The only way you can exist during downturn is you make tons of profits all the time so that you can weather it. Like JP Morgan's been here for longer than anybody's been alive, right? Some of the big insurance companies. Why is insurance so profitable? Because you pay them for nothing.

SPEAKER_02 1:22:04

Right.

SPEAKER_01 1:22:05

Like pay hundreds of, I mean it depends on what like you pay thousands and thousands and thousands a year for something that may never happen. And they just know how to appropriately value risk, assess risk, excuse me. And so wonderful business, right? Insurance. Um, and so the the the point is this like I've now learned to see this as like when I see big businesses, the bigger the business, the more I realize that there's probably a very high gross margin opportunity. So you look at the biggest companies on the stock market, look at what they're doing. The base unit that they're selling typically has tremendous like the biggest company in the world right now in terms of profit is like Exxon. That's the number one in terms of net free cash flow that's created. Isn't that crazy? Like people are like Facebook, no, it's it's Exxon. Why? Because they drill water out of the ground and they sell it for however many hundred dollars per, right? It's not water, it's oil. But it works the same way, right? And so, and that's a massive overgeneralization, but like you get the idea. And so Facebook sells eyeballs, which cost them basically nothing. Google sells eyeballs, it costs them basically nothing. And so all of these types of businesses, and this is where people get into the ethics around capitalism and whatnot, but like you sell for what the market values it at, period. And your goal as a business is to drive your cost down as much as you can, right? As long as you're still long-term greedy, which is if you drive them too low or you don't pay people well enough, you introduce new levels of risk, which then long-term, you actually lose money. So that's when you get into the long-term short-term, like CEO ship of uh publicly traded companies and stuff, which we don't need to get into. But like if you if you were to only own the company and you could not ever exit and you made your decisions with long-term greed in mind, um, then you usually make the right calls. And I'll say one last thing about the how to how to get freedom. Biggest mistake that I see young people or people who are young in the game making is that they want to be become millionaires in 90 days. And when most times you could guarantee that you could become a millionaire in a decade. But you have to be willing to not be a millionaire for nine of those 10 years. And if I had everyone sign a contract that said that when they were 20, they could all be millionaires when they're 30. But no one's willing to do that. And so what happens is for the rest of their lives, they s keep chasing the shiny object over and over again and keep battling the same boss and losing.

SPEAKER_00 1:24:12

So you're talking about taking a thousand dollar paycheck and taking 300 of it and putting it into savings and living on less. Yeah.

SPEAKER_01 1:24:22

Living under your means for nine years, and that compounds and that you know, I mean, there's the investment side, and I I'm not, I'm not uh despite having a high net worth, I'm not uh an Uber investor. I've made my money with businesses. I haven't made my money investing. Um and so for people who are starting out, the know thyself piece is am I going to be somebody who has entrepreneurial tendencies and could potentially own a business? Business ownership is the best way to create wealth. It's also the best way to lose wealth. So, which I hopefully illustrated at the beginning of this. Um and so it's high risk, it's high reward. And so, yes, it is the way to it is the way to the most wealth. It may not necessarily be be the way to the fastest wealth. So, like if you're like, I think most guys who have entrepreneurial tendencies could could make 200,000 a year, 300,000 a year, becoming excellent at sales. Like if you just learn that skill, and that skill translates to all aspects of life, right? Um, anyone who's in most people who are in business know how to sell at some level. They know how to sell investors, they know how to sell their teams, they know how to sell someone to recruit to bring on the like you have to sell. And so um I think for most people, gaining that, I think I think those initial jobs are undervalued for your ability to learn. And so a lot of guys are just looking for the perfect job when the perfect job is the assembly of maybe three or four jobs that you have to gain skill sets in different areas. And I think Warren Buffett said it best, that's probably a good wrap-up, which is whenever you're working, you should either be learning or earning. So either you're you're working for the paycheck because it's it's it's material to you, or you're working because the the incremental increase in knowledge is material to you. But it should check one of those two boxes.

SPEAKER_00 1:26:01

So this show is called Behind the Brand. Um What do you think the definition of a brand is and and how do you build a brand?

SPEAKER_01 1:26:11

So I see brand as reputation, and I see reputation as what people say about you when you're not there. So that is your brand. I think a lot of people take a lot of time to try and build their brand. Um but I think you build your brand inside, out. Aaron Powell So what is the Alex Ramosi brand? Well, I mean, I would say it's aligned with the values that we have. You know, it's unimpeachable character, sincere candor. I try and be honest with as much as I possibly can. I try and do the right thing as much as I possibly can. Um and competitive greatness. Like within the rules, like we will play and we'll play to win.

SPEAKER_00 1:26:47

And uh I don't need to know your current net worth. I'm sure I'm sure you shared it.

SPEAKER_02 1:26:52

Uh we're about a hundred.

SPEAKER_00 1:26:54

Yeah. And so you're gonna say that, right? Well, so do you have your sights on a particular goal? Are you trying to get to a billion or yeah?

SPEAKER_01 1:27:03

So I have two I have two goals on the horizon. Um the first goal is to get Layla on the Forbes 100 for self-made richest women. Um so we only have to have 250 million to get her there. So that's that's like the like the immediate goal.

SPEAKER_00 1:27:17

Okay.

SPEAKER_01 1:27:18

Um how far away is that?

SPEAKER_00 1:27:19

Is that 150. I mean, like, is it a year away?

SPEAKER_01 1:27:22

Is it No, I think I think realistically, I think we'll get there in like 36 months. Yeah. Um Yeah, I think we'll get there in 36 months. The the the the you know, the next goal would would be uh would be billion, and that's just because like if you look at how the high this is actually kind of funny for anyone who's curious. Uh the way net worth is broken up is you have uh high net worth, very high so high net worth is one to five million in assets, investable assets. Uh very high net worth is five to thirty million in investable assets, and then thirty to a billion, big range, is ultra high net worth. And then above a billion is a billionaire. Those are the four, those are the four net worth categories that exist. Right? And so um that so that for me it's like we're all trying net worth now. And so, you know, getting to the billion, I guess, is the next thing. Um, but all the while we realize that we're doing it for no real reason other than for the love of the game and because the mission of the company, and so like if you talk about brand, I told you about our values, but the mission is to document and share the best practices of building world-class companies. And so that's why we make the books, that's why we make the YouTube, that's why we make the courses, that's why education will be a core to everything we do. Um, because that's the what we're doing also that matters most to us.

SPEAKER_00 1:28:43

Uh let me ask you a follow-up question, which is why is that Forbes 100 list important to you for her, or is it her goal? I think it's it's more, it's definitely my goal. Why why is that important to you?

SPEAKER_01 1:28:55

I think it's cool. I think like for really no other reason like I think it's cool.

SPEAKER_00 1:28:59

Yeah.

SPEAKER_01 1:28:59

I mean it's a vanity metric. Sure.

unknown 1:29:01

Yeah.

SPEAKER_01 1:29:01

I think it's cool. Why not be awesome? Like that'd be cool.

SPEAKER_00 1:29:05

Yeah.

SPEAKER_01 1:29:05

And I think that's good, that's a good enough reason. Because it'd be cool.

SPEAKER_00 1:29:08

Okay. Okay.

SPEAKER_01 1:29:10

Um final parting words of advice. Dan Sullivan said something that I really like. And he said, wanting something is reason enough. A lot of people trying to ask you to justify why. Why do you want that? Why do you want to date that girl? Why do you want to start that business? Because I want to. Like that is the reason I want to. Or maybe because you can.

SPEAKER_00 1:29:32

Yeah.

SPEAKER_01 1:29:34

What was the last question you said?

SPEAKER_00 1:29:35

Uh uh final parting words of advice. Oh, parting words of advice. Um You're writing this new book. Maybe let's ramp into it that way. So the last book, you know, you sort of left off um where some of your last videos are. Give us a preview into what the next chapter is, what the next book is about.

SPEAKER_01 1:29:57

So the next book tentatively is titled Hundred Million Dollar Leads, uh, because most people had to fix their offers, which is the title of which is $100 million offers was the first book, which is what are you actually going to present to a customer in order to get them to give you money? Um the second thing that happens after people have that and people start giving them money is they want more. And so they want more people to present to, and so they need more leads. And so the subject of that, the title of the book is leads, but the subject of the book is advertising, um, which by the definition is to make known. So how to make known.

SPEAKER_00 1:30:25

So you've made a shift recently, which is you know, you used to basically buy leads or buy advertising. So, you know, a advertising by definition is to spend money to make known, right?

SPEAKER_01 1:30:36

Aaron Ross Powell, by definition, it's to make known. Right. Not to spend money. Just because it's a it's a it's an important point.

SPEAKER_00 1:30:41

Aaron Powell That's fair. Uh my interpretation is there's two paths. There's there's direct marketing or direct response, advertising, and then there's branding. And I I think I've heard you say that you're more if you were 80-20 advertising or uh direct marketing before, you are now flipped the script and you're more into branding. Why did you do that? And why do you think that's better now? It's because you're more established, you have the money in the bank, you've done the business.

SPEAKER_01 1:31:09

I think that having the money in the bank enables more branding.

SPEAKER_02 1:31:12

Right.

SPEAKER_01 1:31:12

And so I actually think that branding is a higher return on advertising over a longer time horizon. Aaron Powell Me too. And so it just takes longer to come to fruition. And if you are patient and have money, it's by far the superior strategy. Right. But when you don't have money, you need to make money today to pay for ad for for your advertising in general, whatever those efforts are to make known, then having a direct response. So I think people do end up shifting over time from direct like Seth Godin is famous for being a hardcore direct response marketer and then being all about branding now. Gary V was, you know, more direct response, built on built the wine library on PPC from Google is more about branding. And I feel like I've I've I've made a similar transition. But I think you have to like it's almost like you have to discover it yourself rather than be told it. Like it doesn't, it has to become real for you, and then it has to click. And so for me, I feel like branding has clicked in terms of my understanding of its value overall. Um, it is more difficult to measure, but it is absolutely like when you look at Louis Vuitton and you know Bernard Arnaud, who's the who's the owner, right? He's worth 150 billion or whatever it is now. He's the only one who's not a tech guy who's all at the top of that list. And it's because he's built a brand. He's able to sell a purse that costs him $100 for $8,000.

SPEAKER_03 1:32:27

Right.

SPEAKER_01 1:32:28

Simply because of a brand. And that's like, so what is his return on advertising? Probably higher than people who are at the hardcore direct response, you know, funnel, you know, upsell, downsell, blah, blah, blah, blah, blah, you know, buy two purses for one off, like that's direct response. Whereas it could just, you know, branding could just be a picture of LeBron with a with a LeBron with a Louis Vuitton handbag or whatever.

SPEAKER_00 1:32:50

I I mean, so your opinion, you're you're right, aligned with with what I've heard from everyone else. And I had this conversation with Seth many times. Okay, yeah. Yeah. And and he said he said a lot of good things. He said, well, I I said that uh direct response is sort of like the tortoise and the hare. Like so it's the the hare's race is the advertising or the direct response. And you're right, uh sometimes you need to fill the funnel uh because you've got to keep the lights on, or or you're you know, you're bleeding out $3,000 a day and you got to get those leads that convert to sales. Um and then if you can do branding, it's like the tortoises' race, slow and steady, but it ends up winning the race. And he said, you know, um, if if you want to know whether or not you have a brand or not, um, you know, people will pay extra a premium for a brand. And he said, if you go into most hotels and you don't look at the marquees, look at the carpet around the walls, if you don't know where you are, you can't smell it, you can't see it, you can't taste it, then you don't have a brand, you have a logo. And uh a brand is, you know, he used the example of Nike in this story. He goes, you know, if Nike built a hotel, you could kind of imagine what that might look like or smell like or feel like. And you know, the same goes for our personal brands, but our personal brands too, right? If we're building empires like Gary is, you can imagine what Gary's, you know, next thing could look like, or Alex's next thing is probably gonna have, you know, arms sleeves cut off, so there's room for the arms to go. Or at least legs. Are you a leg guy? Yeah, I think so.

SPEAKER_03 1:34:28

I mean, we were just sitting back, you know, chopping it up, reminiscing about the good old days and all that, you know, tracking my roots where I came.