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

Alex Hormozi

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

Sam Parr

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

Alex Hormozi

I was thinking, if there's one thing I could make, it would be for the audience's sake. We're much closer to what a franchise would be. Overall, in the very beginning, that was the big decision: Am I going to go the franchise route? I had six working locations, and I was 26 years old. They worked well, and that's when my mentor said, "You should stop owning all these gyms. You need to license the model out." So, that was when I kind of transitioned from B2C (business to consumer) to B2B (business to business). What you might not know is that for two years, I actually... because I wasn't confident, I thought, "I know it works in my six markets, but does it work in all of these markets?" So, my wife and I actually did 32 gym turnarounds.

Shaan Puri

in the

Alex Hormozi

Next two years, we’d fly out in person to fix their pricing, change how they did their layout, and change their sales profile.

Sam Parr

just like a consultant like like a management consultant for a gym

Alex Hormozi

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

Sam Parr

so that means each gym is making an incremental $100 a month from your

Alex Hormozi

so if I were launching 8 gyms in 1 month we would make $800,000

Shaan Puri

we would

Alex Hormozi

got it right

Sam Parr

oh that and this was when the model before you were like

Alex Hormozi

exactly

Sam Parr

go doing gym launch

Alex Hormozi

And so, what ended up happening is that it started scaling really quickly. **Fuck**, this is the game! This is what I need to be doing; this is awesome. They didn't have to spend money on ads. They literally did nothing; they gave me a place to go market and sell. Basically, what happened was we would dip out, and then all these customers that we sold would be fulfilled by a facility that was struggling, because that's why they called us. They typically had pretty poor products, and I didn't have the bandwidth to stay there for six weeks on top of that to retrain trainers and show them how to set up. I didn't have the time to do it because we were marketing while we were there. So, anyway, we would fly out, and then what happened, in an unfortunate percentage, is they basically said, "Hey, you signed up and paid this guy $500. I would give you the same thing for $200 refund with him, and just sign up, and I'll do everything through me." Within a matter of months, I had like $150,000 in refunds between three facilities because they talked to each other. And I was like, **fuck yeah**! I had already incurred the cost of marketing, the flight, the sales guy, the hotel, the rental car—everything.

Sam Parr

what was the name of this gym franchise this this it was

Alex Hormozi

jim marsh business

Sam Parr

it was jim marsh okay

Alex Hormozi

But I'll tell you this: the original concept was "Gym Rescue." It's like "Bar Rescue." That was kind of the idea.

Sam Parr

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

Alex Hormozi

Bingo! So, who doesn't want to get launched, right? It's Gym Launch. Even though you're already open, it's a nice branding switch. Anyways, we were like, "Okay, this is not the model. Something's wrong here." I had to keep selling more every month to cover the refunds from the month before. It was horrible and very stressful. My wife had a little side training business that she was running, making about $3,000 to $4,000 a month. I thought, "You know what? Screw the gym thing. We know how to sell weight loss direct to consumer; that's what we're good at." I suggested, "Why don't you become the face? I'll go in the back and run the acquisition side, and we'll sell 16-week transformations just over the phone." So, we started doing that.

Sam Parr

that's it that that that doesn't seem like a good idea does it right

Alex Hormozi

I mean, it started working 14 days in. We're doing $1,000 a day switching it, and I was...

Sam Parr

I just would've thought it was so crowded

Alex Hormozi

We're, you know what I mean, we're good at that. We understand that space very well. So, we were able to do that. I was like, "Alright, the 8 sales guys can come in. We can do $8,000 a day selling these transformation programs." Great! I had 8 gyms that were supposed to launch the next month. So, I called them up and I was like, "Hey, we're not doing the thing that we were doing before. You didn't pay us anything, so best of luck." You know what I mean? Basically, that was kind of what it was. Then the first guy was like, "Dude, I just refinanced my house. I just maxed out my credit cards. I need this. My buddy filled his gym up with you. I know your thing works. I just need... please help me." So, we heeded and hawed, and finally I was like, "Alright man, listen, I'll show you what to do. But I'm not flying out there to save your ass if you can't close." He was like, "No, no, that's fine, that's fine." Then he asked, "Well, how much?" That was like the magic moment where I was like... and just to show you where I was at the time, I picked the highest number I could think of with the intention of getting him to say no because I didn't want to do it. So, I said, "$6,000." And he was like, "Done."

Shaan Puri

and I

Alex Hormozi

I just remember looking at the phone and being like, "Holy shit, $6,000!" So, I hung up the phone and then I called the next guy who I was supposed to cancel on. Same spiel, and he was like, "How much?"

Shaan Puri

and I

Alex Hormozi

was like $8,000 and he was like

Shaan Puri

And what are you giving these guys? So, you're giving them a playbook to sell in their market, which included what? What did...?

Sam Parr

they do but you didn't you probably actually

Alex Hormozi

Didn’t even know what you were going to give them. Well, we’d already had the entire front-end process super lubricated. So, like, these are the ads, these are the pages, here’s how you place them, here’s the targeting. Once they come in, these are the 5 texts that you send. Here’s how the reminder sequence works. Once they walk in the door, here’s how you set up your lobby, and here’s where you need to sit. This is...

Sam Parr

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

Shaan Puri

So, it's not a course. It's also not like EOS; it's not like a back-end operations thing. It's like a marketing machine. You would basically...

Alex Hormozi

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

Sam Parr

but on on their url you basically were you were a services business yep

Alex Hormozi

a 100% we're a services business

Shaan Puri

and the training component was like okay well how do you sell so instead of getting 1 on 1 I

Alex Hormozi

was like training component was like okay well how do you sell so instead of getting 1 on 1 I was like 1 and so what I did

Shaan Puri

was I actually gave them my internal sales training

Alex Hormozi

So, it was this thing that I put my guys through. A lot of it's kind of interesting because I fell into this where I think a lot of the e-learning space tries to create stuff to have stuff, rather than creating as short of a time commitment as possible to get someone from A to B. I needed to get a guy in who used to be selling shade mix for MLM and get him to close $500 deals on day one with just 2 hours of training. So, that training is what I gave to them. I already had everything; I just didn't have the marketing part. All I did was build the marketing part over the weekend because I already had the ads. I didn't make a training for it, but the training for how to weigh them in, how to do the food stuff, and all that was already made because I had to do that during the gym rescue time. I literally just added in how to run the ads, and then the whole product was there. We helped them implement the acquisition system within the business, and the average gym collected $30,000 in additional cash in the first 30 days. So, we would do 100, but them not being as good as us still did $30,000 additional cash in the first 30 days. And so, the price...

Alex Hormozi

For the system, it was $16,000, so they were stoked. Then, at that point, we signed 3-year licensing agreements for $42,000 a year. They were like, "What else do you have?" and then what would happen?

Sam Parr

and what a member would be there

Alex Hormozi

The gym suddenly went from 100 members to 250 in just two months. They were like, "How do I hire trainers? How do I scale a sales team? How do I...?" Then all of the other problems emerged. We had already gone through this because I had six gyms. So I was able to say, "Here are my ads for trainers. Here's how I train them. Here's how we set up the classes to maximize square footage. Here's how we do the ascensions into semi-privates." We just did the whole thing.

Sam Parr

What can I Google to see one of these gyms? I want to see... like, did you do the... I know you use ClickFunnels, I think. I could tell by the favicon because I like ClickFunnels too. But what can I Google to see one of your clients? One of your students? I don't know what you call them. Yeah, you can... [speaker was interrupted]

Alex Hormozi

Their gyms look different because they don't take my brand. So, franchises, system, fee, name, right? So we were just a system and fee. Otherwise, I'd be operating as an illegal franchise.

Shaan Puri

And so, let's zoom out for a second. For those who don't know the story—and I only barely know the story—the story is you opened up a couple of gyms yourself. So, you opened up a gym.

Alex Hormozi

I see and you

Shaan Puri

get to 6 locations

Alex Hormozi

yeah

Shaan Puri

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

Alex Hormozi

so for 9 months

Shaan Puri

Alright, so you're sleeping on the gym floor for **9 months**. You end up getting **6 locations** off of cash flow, so you know you're not like, you know, getting a bunch of investors to come in or whatever. Somehow, someway, you stumble into this, like, I don't know, a mastermind or retreat by **Russell Brunson**. I don't know if he hosted it or if he was just there. Who's the ClickFunnels guy? Hmm... How did you even get to that event? And then I want to ask you a couple of questions about it.

Alex Hormozi

Yeah, so for avoidance of doubt, I had two partners after I had my successful gym. One was the ex-COO of Broadcom, the number two at a $10,000,000,000 company, and the other guy had 22 tanning salons. So, the Broadcom guy brought in the tanning salon guy and was like, "Hey, let's scale this thing," and I was like, "Awesome." Long story short, the partnership didn't work out. I ended up opening the next four—three on my own—and I opened up two more with them. Then, I ended up buying out both of them over time. So, just for...

Sam Parr

did you have a job before this because you're only 29

Alex Hormozi

30 2

Sam Parr

I

Alex Hormozi

was a management consultant before that so I put my management

Sam Parr

in the morning

Alex Hormozi

now and then and then started this the question that you asked though originally was

Shaan Puri

So, how did you end up at this hangout, or this mastermind, or this meeting where you realized, "I'm in the wrong business. I shouldn't be running gyms; I should be teaching other people how to run their gyms"? How did you even end up at that event?

Sam Parr

it was it was and and it was like russell's idea right at least I I saw the video

Alex Hormozi

it was

Sam Parr

one of those goals

Alex Hormozi

I... so the long story compressed was, two years before I went to their mastermind, I went to the Traffic and Conversion Summit. I knew I needed to learn more about marketing. I'm a Jew, and I was like, "I'm not into internet marketing." This was not my world, you know what I mean? I thought, "I gotta learn more about marketing, so I'm going to this marketing event." So I go there, and in one of the side rooms is Russell. He goes and pitches ClickFunnels, but he couldn't actually do the stack because there weren't a lot of sales. He did his entire sales presentation and then literally just stopped before the buy button. I was like, "I want whatever!" I thought, "Screw the gyms, I want to learn how to do this stuff." Then, like most things, because I couldn't buy, there was nothing that I did. I went back to my life for two years, and that was it. Then, when I was having some sort of existential crisis because I was now 26 or 27 at the time, all the gyms were making money. I remember texting one of my managers and I was like, "Hey, do you need anything?" He was like, "I think we're good. I need some ink." So, I ordered it on Amazon, sent him the ink, and then I was done for the day. I was like...

Shaan Puri

trying to be useful

Alex Hormozi

Right, I needed to be useful. So, I Googled. I was like, "You know what? That Russell thing was really cool." Out of the blue, I Googled his name, and the first link that came up was "Are you one of my dream clients?" or something, which was directly to his mastermind. I applied to the mastermind, and I got sold to the mastermind. Transparently, I should never have been sold to this mastermind. It's for internet marketers, and I was the only...

Sam Parr

and it's like $30

Alex Hormozi

Right, and I was the only brick-and-mortar business owner there. They were like, "Oh yeah, tons of gym owners." I've already told him, we laugh about it now. But anyway, I show up and I'm like, "Alright." All the guys show their funnels and all the stuff, and I was like, "Yeah, I own a bunch of gyms. I'm trying to get to 10. I've got 6, so that's kind of it. I'm just here to learn, you know?"

Shaan Puri

that's where yeah that's where I'm at yeah yeah

Alex Hormozi

And so, I walked through my acquisition process because we were getting 30 to 1 on the front end. So, a 30 to 1 LTV to CAP ratio in the first 30 days, right? Not including my recurring on the back end. I walked through everything.

Sam Parr

which basically means which means you're making 30:30 x what you were spending

Shaan Puri

you spend a dollar on ads you get $30 out

Alex Hormozi

on cash

Shaan Puri

in the 1st month

Alex Hormozi

yeah so when you first launched

Sam Parr

which is which which is like a good for a lot of brands like 1 to 3 over a year would be alright

Alex Hormozi

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

Shaan Puri

And I saw an interview with you, and you said something that I've had this exact moment before. You meet people who are doing, you know, whatever the scoreboard is. They're richer, their business is bigger, their valuation is higher, they're younger... whatever. So they're more successful, quote unquote. And you made them, and you're like, "Alright, there's nothing more special about them than me." Okay, so that's the first realization. I want what they have, and they don't have something I don't. Alright, so then, you know, how do I do this? It seems to me like that's what kind of shattered the glass of that whole business plan that you had. Was that realization, is that right?

Alex Hormozi

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

Sam Parr

I same

Alex Hormozi

what's that

Sam Parr

same yeah I don't even know what that mean

Shaan Puri

I don't know

Sam Parr

what that is either yeah I remember I remember when I didn't know what that meant either

Alex Hormozi

Yeah, well, I mean, I define that now as the number of potential units to be sold and the gross margin per unit possible. So it's just one times the other. Then the third multiplier would be supply and demand dynamics within the space. For example, if I were to try to get into telecom, there’s an amazing Total Addressable Market (TAM) and amazing potential gross profit per unit sold, but a terrible supply-demand ratio for me to enter. So, it's like, how do I measure the opportunity vehicle? Those are the three that I use to measure that vehicle. In this instance, he was like, "Okay, you have all these gyms that you can sell." The big one that he saw was the amount of potential gross margin per unit sold was enormous. For context, in our second year of business in the licensing sector, we did $26,000,000 top line and $17,000,000 in EBITDA.

Sam Parr

amazing wait say say those numbers again

Alex Hormozi

it was 25,900,000 in top line and 17,000,000 in ebitda

Shaan Puri

but life

Sam Parr

I've got a bunch of questions about that. That was in year 1, year 2. Okay, first of all, what made you... you said that you're getting this 30 to 1 LTV to CAC. What were you doing that was so good? Just good copywriting? Are you just a good salesperson on the phone? What was so good about you?

Alex Hormozi

Well, first off, Facebook was way cheaper in 2013. You know what I mean? When this whole thing started, the cost per lead was insane. The percentage of people who would convert to landing pages was higher. Everything was more responsive, etc. From a marketing perspective, what we were doing was offering an irresistible offer. We had a free 6-week challenge that we offered people when they would come in. We’d walk them through what the program was, etc. The shtick, and the reason it was so cool and compelling, was that if they lost £20 in 6 weeks, we’d give them the entire amount of money back. That’s what made it so appealing, and that’s why we got crazy results. We had like 70-80% success rates, which for a weight loss program is insane. It worked because people were basically wagering money. I didn’t know that wagers are managed by lotteries. I just thought, "You put $500 down, you lose the weight, you get it back." The reason it worked so well is that someone would come in... So, I’ll walk you through the math. Let’s say at this...

Alex Hormozi

I'm probably paying $10, you know, CPM. So, I'm getting probably like 4% to 5% CTRs because it was like back then. So, I'm getting 50 clicks for $10, right? I'm like, okay. Now, my landing page is converting at half, right? So, it was just, you know, bonkers. That's why in some markets we're getting 25¢ leads, you know what I mean? In some markets, the highest costs back then were like $5. So, you've got an average cost per lead of like $2, which was not...

Shaan Puri

you're getting what their phone number

Alex Hormozi

Was that... yeah, yeah. Name, phone, or email. And so then from there, we'd schedule. Usually, like 50 to 70% of those people would show up, and then we'd close. Depending on the skill of the sales guy, the average gym closes 35%. Our team averaged about 50%. When Layla and I sold, we averaged 80%. There's a big range there, but we'd collect the cash upfront for $500. Then, 24 hours later, they'd come in for a complimentary nutrition consultation. We'd average $200 a ticket in supplements, you know, creatine, pre-workout, etc. that we'd sell them right after that. So we get another $200 pop. Three weeks later, what we do is say, "Hey, listen, you lost 12 pounds, Sandy. Is that your ultimate goal?" Then she would be like, "Well, no, I want to get in amazing shape," and blah, blah, blah. We'd say, "Alright, so you understand that it's not about the 6 weeks; it's about 6 years from now," right? And she would say yes. Then I'd be like, "Congratulations, you won the challenge. You've got this." So what I want to do is align with your long-term goal too. Because you won the challenge, I'll take that $500 and spread it over the next year, so you get a discount for doing it. Fair enough? She said sure. Three weeks after that, she gets billed for her first billing. So if you follow the money: $500, $200, and then she gets billed for the EFT, even though she won the challenge.

Shaan Puri

right

Alex Hormozi

right yeah and then it's

Shaan Puri

an amazing

Alex Hormozi

Six weeks after that, we'd say, "Hey, wouldn't you like to have a little bit more attention instead of being in this large group? We can put you into a one-on-four scenario. We can give you even more stuff. We can show you cooler, more advanced exercises," blah blah blah. And so that was how we did it.

Sam Parr

And were you just... but then this parlayed into the actual product that you really crushed it on, right? So, which was when you were doing $27,000,000 in year 2 or whatever, $20-something million with like $17,000,000 in EBITDA in year 2. That product was Gym Launch.

Alex Hormozi

right licensing yeah

Sam Parr

And what was that? What did that look like? What software were you using, and how did you package this? I want to get really nerdy on this stuff because I think about it. I'm like, "That's a great idea," but packaging a service is a challenge. That's interesting.

Alex Hormozi

yeah

Sam Parr

And I want to ask you what you did. Then I'm going to ask you what other industries you would do it for.

Alex Hormozi

So, I mean, that's what Acquisition.com is. It's exactly that. I know how to do this within a niche. For example, I know how to help a lawyer make more money with their law firm. I know how to help a bookkeeper make more money with their bookkeeping business. I know how to help hair salon owners make more money with their salons. That's what I'm looking for: niche e-learning and service companies that we can invest in.

Sam Parr

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

Alex Hormozi

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

Sam Parr

but it was like a set of videos

Alex Hormozi

yeah there's a

Sam Parr

set of videos you watch and as long with like a file a folder of files

Shaan Puri

yeah yeah

Alex Hormozi

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

Shaan Puri

And if somebody wants to get good at selling, what... you know, there's going out there and trying to sell a thousand times. That's one way to get better. But if you wanted to improve your rate of learning, what books, courses, or YouTube videos would you recommend? Do you remember that one thing that really clicked for me? That was kind of a game-changing moment in getting better at selling.

Alex Hormozi

I have relatively stronger beliefs about this topic. First off, a lot of people read books before they start selling, and I've thought a lot about it. I don't think that's the right path because you don't know what they're talking about. You only know what the concept of building rapport is until you've *not* had rapport, and it's like, "Oh, okay, now I understand how this works." But until you confront the reality, you can't bucket the knowledge into something that's actionable.

Shaan Puri

that's

Alex Hormozi

True, so I'm a proponent of doing first, realizing the deficiencies, and then going to find the information to match the real-life scenarios that you have encountered. The second part of the question is: which books or things made things click? There was one moment that made things click, which I mentioned in the book, Sam. It was like, "Make people offers so good they feel stupid saying no," which was the secret of selling. It's like if you just make it so good that they won't say no, then it makes your job a hundred times easier. So, I did work really hard on that side to make my job easier.

Sam Parr

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

Shaan Puri

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

Alex Hormozi

I mean, a simple one we did within the agency space and the software company that we started was helping them transition from a retainer model to a pay-for-performance model. That was an implied guarantee. We just said, "Listen, pay us one time upfront," which, by the way, for most of them was what their lifetime value (LTV) was because most of them struggled. So, if you're charging $1,500 a month—which would probably be the standard small business B2B commoditized price for generic lead generation—we said, "Hey, charge a person $5,000 upfront on day one and say you'll never charge them again unless someone walks in the door." They would cover the ad spend after that, and you don't get any percentage of it unless someone walks in the door. So, you generate the leads, work the leads, and when the person shows up, you charge X. That was based on a pricing survey that we ran internally with our customers. I asked, "If we worked your leads for you, what would you be willing to pay as a flat rate?" There was a big pricing curve, and the concentration of about 75% were willing to pay between $300 to $400 a month for that as a flat service. I was like, "Okay." Then, I asked the exact same scenario, same results, same everything later on in the survey. I said, "If we just said, 'Hey, pay per show,' what would you be willing to pay for somebody who walks in the door for the same exact performance?" They were willing to pay four times as much. So, I said, "Well, why don't we price it that way?" We did it on a pay-per-show model, and that’s what we transitioned to. It also makes it way easier to sell. We could cash flow the acquisition because we were making the LTV that the agencies could normally make upfront on day one in cash. What's cooler is that in the first 30 days, they had people show up, so they get cash upfront. Then, in the first 30 days, they're still getting cash that they can use to finance the acquisition of the customer. That's a much more irresistible offer from a chiropractor. It's like, "Well, how do I know it's going to work?" It's like, "You pay us one time, just get all this set up, and then from this..."

Alex Hormozi

Going forward only when someone shows up you have to pay

Sam Parr

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

Shaan Puri

a second

Alex Hormozi

Down to $26 million. So, we did $6,800,000 in year one. That was the hybrid between me doing Gym Rescue and transitioning to the licensing model. About halfway through year one, I realized this model was not working, so we flipped it. That's when we shot out like a gun. In the first month, we did $120,000. The next month, I think we did like $200,000, then it was $360,000, then $480,000, then $780,000, then $1,000,000, then $1,002,000, $1,005,000. That was literally the next six months. This crossed us into the second year of business, and then that year we did $26,000,000. So, we did $6.8 million with $3,000,000 in EBITDA in year one. In the second year, we did $25.9 million with $17,000,000 in EBITDA. Then in year three, and this is why I'm a big advocate—this may just be my own deficiency—but we did $37,000,000 top line with $13,400,000 in EBITDA. So, Alex made a big mistake and was like, "Hey, I heard that I could sell this for like $100,000,000." I was like, "Fuck yeah, let's do that!" It was a three-year journey. Anyways, there was this flu that went around, and people lost their minds. It didn't affect the gym space at all, which was good. I'm joking. So, anyways, we started the supplement company, Prestige Labs, in December of 2018.

Sam Parr

and you're basically selling supplements to your clients

Alex Hormozi

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

Sam Parr

my god

Alex Hormozi

and they would make the purchase right there and we'd say hey this is so much better because now it'll go straight to your doorstep you don't need to take it home with you and better yet you won't miss a month because it'll automatically ship to you so we gave the gyms a second recurring revenue stream through the supplement so when someone walks in when I was telling you earlier like some some service and we sell them product we'd sell 2 eft so that's the gym word for electronic fund transfers so recurring revenue so we'd sell them a service recurring and then we'd sell them a product recurring so that we'd have 2 different streams that would come in the nice thing with the product recurring is there was no there was no operational drag for the gym they don't have to do anything they just have to make the one sale all the time and they're gonna make $80 a month from that. Going forward pure profit for them like just straight to the bottom line and so what you know interestingly a lot of gyms made more money selling the supplements than they did on their service because the service is low margin but the the product was like almost all margin for them and we paid really aggressively so we paid 40% commissions to them because they were paying for the cost of acquisition and doing the sale so I said you know you guys should get disproportionate awarded in the 1st month we launched that so we beta launched in december and then january of 2019 is when it kind of officially launched in the 1st month we did 1,700,000 and so because I figured I was like okay if we've got you know 800 active gyms if each of those guys sells and it was actually under my projections because I was like we're gonna be you know so wealthy I was like if all of these guys just sell $5,000 a month I was like we'll do a 1,000,000 a week it didn't work out that way but we ended up doing that year 37 but my licensing business came down and I think it went to like 20 ish and then the supplement company looked like 17 and part of the reason that oopsie that I did was 2 big oopsies number 1 was I started a second active company when I already have 1 which to me I think was a mistake given the skills that I had at the time and then the second oopsie was that because I thought a potential acquirer would want lower churn which is true I lowered the price and so I thought that if I lowered the price that would get more people to stick and so I cut my top line price by 25% and so absolutely no change and just lost what

Sam Parr

what what was it and what did you reduce it to

Alex Hormozi

It went from **$800** a week, which is the licensing on the back end, to **$600** a week.

Sam Parr

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

Alex Hormozi

for 42 what is it 2,000

Sam Parr

so it costs $42 to be a part of your yeah

Alex Hormozi

the license

Sam Parr

What do you call it? Part of your... not core. Yeah, but what do you... what's like the noun that you use to describe this? Like your...

Alex Hormozi

The program was called **Legacy** and the people were called **Gym Lords**. We would sell **Launch** as a front-end program, and then they would go into the continuity, which was **Legacy**. So, if you're following along from home, for anyone in the podcast, I've copied the exact same model. I sold a **6-week defined end program** for a lot of money, and then I downsold the continuity. $16,000 for 16 weeks is $1,000 a week. I said, "Now you're going to get more for less. For $800 a week, you're going to get what you had before plus all this other stuff for less money than you were currently paying." They were like, "What a deal!" At the gym, I said, "Hey, it's $100 a week, $600. If you stay, we're going to drop you from $250 a month to $200 a month because we'll take your $600 and spread it over 12 months. We'll go $50 a month in credit." So then you get to $199 a month. It was front-end to liquidate the cost of acquisition so that I wouldn't need outside capital to acquire customers. Then, on the back end, I would downsell the upsell so that we could keep the continuity and make it work.

Sam Parr

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

Shaan Puri

In tech startups, we typically do the opposite. We're saying, "Hey, we want to get you in. We want to make it so you don't know us, and we don't know you. Let's make the cost of trying so low." So, we offer a free trial—don't even put a credit card on file—and then we try to put the bar as low as possible. You did the exact opposite. You said, "Okay, I'm going to put actually more friction upfront. I'm going to ask for $500 or $16,000—a huge number upfront. Then, over time, I'm going to actually be selling you on more value for less cost." Why do you think that works? Or why do you think that worked for you to charge such a big commitment upfront when you know that's usually when people are hesitant?

Alex Hormozi

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

Shaan Puri

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

Alex Hormozi

So, 2021 we sold 3 companies. It was interesting because my CFO was the one who was really engaged in those activities, and I was not. I pretty much took a really passive seat in 2021. I didn't want to really go start hardcore on scaling Acquisition.com until that was done, and so I was bored out.

Sam Parr

of which which three companies

Alex Hormozi

Allen, so Allen Prestige Labs and GemLaunch—those are my three majority holdings right now. I have all minority holdings, so between 20% to 33% are the holdings that we target for acquisition. I had this... I don't want to say existential crisis, but more like I was bored out of my mind. I thought this was what I was always optimizing towards, which was, you know, "freedom." It's like you're always outsourcing all of your activities and buying your time back. Then you have all your time back, and you have nothing to do. I was like, "This sucks." I look back on the times when I was building those companies with lots of nostalgia. I was like, "Man, that was like some of the happiest times of my life." So, other than in this position, I'm getting back into the game. Right now, we're heavily recruiting. Two days a week, we're just doing interviews to build a core team out. Honestly, I'm happy as hell doing this. The difference between this time and last time is that I have the option to do it. I'm choosing to do it. If I didn't have this business, I wouldn't have the option to work, so I had to create the option for myself. For me, the shift was going from freedom to optionality, at least for how I had to understand the work.

Shaan Puri

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

Sam Parr

To do acquisition.com is basically you're buying other businesses and deploying your model. What are you doing?

Alex Hormozi

100% yeah, so we buy a minority interest in the business and we deploy them all. I mean, that's what we do.

Shaan Puri

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

Sam Parr

yeah or photographers that's your latest right yeah

Alex Hormozi

yeah that was the that was the 4th company that one we still yeah we have a 20% interest in that company

Shaan Puri

And you say, "Hey, I just had a business just like this and I scaled it up. I know what it's going to take for you to go national with your business. Let me take a minority seat and help you grow this thing."

Alex Hormozi

yep

Sam Parr

yeah 30% that's a great model what niches interest you

Alex Hormozi

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

Shaan Puri

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

Alex Hormozi

So, it's a great business. It's children's photography, and first off, it has an awesome mission. We donated $1,000,000 last year to kids' stuff. The founders are super mission-driven. The short story is that their daughter was told at school to "shut up" because she was "stupid" or something, and she didn't talk for like 9 months. They couldn't figure out how to get her to talk again. So, what they did was start taking pictures. They are photographers, and they began creating a story experience where they read her a story in which she was her own hero. In the story they put together for her, she gets her voice back and whatever. As a result, their daughter starts talking again. That's why they're super mission-driven around the donation stuff that they do. The actual business model itself is really, really good. I mean, people come in, and we take pictures. It's really about the experience. It's called "Magic," you know, "Chain of Fairies," but it's a magical storybook experience. It's kind of like the idea of taking Disney and putting it in other areas.

Shaan Puri

you walk out with a book with you in it

Alex Hormozi

that's one of the that's one of the products we sell there's obviously no

Sam Parr

and you're gonna now like teach photographers how to do that photographers oh I got it okay

Alex Hormozi

So, this business was interesting. At the time when he came to me, he had one location and about 100 B2B customers who were doing some sort of hybrid agency business coaching thing. I really hated the model. I asked, "How much extra does a photographer studio make?" I'm not going to share the numbers, but I'll just say it was a lot. Then I asked, "How much do you charge?" He replied, "$5." I said, "Alright, we're never doing that again." Next, I inquired, "How much does it cost to open a photography studio?" He said, "A lot less than it makes." I thought, "Okay, well, why don't we just front all that and build them all?" And so, that's what we did.

Sam Parr

Sean, he... Alex, maybe? I don't remember how long ago, but I think recently, I had a call with the headline that was like, "Grant Cardone Just Made Me a Billionaire" or something like that. It was a funny headline. He did this; he paid Grant Cardone $30 for an hour of time.

Alex Hormozi

they have a 120 reports

Sam Parr

Oh yeah, pretty crazy. Basically, he recorded the call and posted it on YouTube. On the call, he was talking about how, you know, like you and I will talk to each other or our friends. For example, you might say, "Hey, I'm in the middle of selling this company. What do I do?" Then you might also ask, "By the way, here's my net worth portfolio. Is that enough?" You just ask all these questions like, "What do I do now? Once I have this, how much should I expect?" These are the kinds of things you might ask your rich uncle as you're growing. He asked all these questions and was so transparent that it was almost uncomfortable. He said, "Well, look, right now I've got $21,000,000 in the bank. After this, I should have like $54,000,000 after taxes." And this is all on YouTube! It's wild. Why are you so open about that? I think that's cool but also uncomfortable.

Alex Hormozi

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

Shaan Puri

so yeah

Sam Parr

but the panda express guy wasn't doing that when he was 32

Alex Hormozi

what the numbers

Sam Parr

Yeah, no, like he... he didn't like... you're saying you think it's small or they think it's small? Yeah, age is a factor. Age and liquidity are huge multiples to net worth. So, like, the fact that you had that at age 30... it is significant.

Shaan Puri

also seems

Sam Parr

and cash is way different than owning 10 restaurants

Shaan Puri

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

Alex Hormozi

I would I would have to quote that the the the big thing was like

Sam Parr

deals and deals that's pretty

Alex Hormozi

The mission... and like this might be my personal mission. I don't really understand the value of it because people do mission statements and stuff, but I think people just put generic ones that don't resonate. My mission through Acquisition.com and really my life is: I want to document and share the best practices of building wonderful businesses. That is what I want to do. I feel like I will die, and the stuff that I accumulate is irrelevant. So, it's a travesty to me that like Elon, Bezos, and Warren... they didn't write any books. Like, that's... I mean, that's the point.

Shaan Puri

You know

Alex Hormozi

what I mean like it's just it's for me for me

Shaan Puri

you know

Alex Hormozi

What I mean is that this is real for me. It's about sharing that. The businesses are just there to lend credence to the books, the topics, and the lessons. They provide me with real stories to drive fundamental truths home and, candidly, to discover them as I go. I'm horrified at the things that I said five years ago that I thought were true. The only alternative to that is not saying anything, which is something I consider every day. I ask myself, "Is this as least wrong as I can think of it currently?" Maybe I will think of it as less wrong in the future.

Sam Parr

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

Alex Hormozi

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

Sam Parr

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

Alex Hormozi

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

Sam Parr

that that would help

Alex Hormozi

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

Shaan Puri

you can send it to me and we'll we'll find out we'll see I yeah let's run the experiment

Alex Hormozi

I'd like to talk about the compulsion. This last year, I pretty much took off; I did not work that much. I saw the difference, and I have come to accept that I love working. I don't need to judge myself for that or take in other people's judgment on how much I should "do." This is my life, and this is what I like doing. Their ideals, which they've arbitrarily made up as what they define as balance, are irrelevant to me.

Shaan Puri

you said you took last year off what'd you do what'd you get up to

Alex Hormozi

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

Sam Parr

It feels good having that rest, though. I mean, when I sold my company, which was a year ago last week, the first six months I was like, "I need to decompress." It felt good to have that time. Now, I'm in that phase where I'm like, "Alright, no, I'm ready for war again." You can't... like, I think you can't be in the trenches all the time. Rather, you need breaks from being at war.

Alex Hormozi

I think it may be even phrasing it... I'm just throwing this out there. Instead of a "break," it's a shift in how you're thinking. Because, like, it's really going from dirt to clouds. But I still think it's a high-leverage activity, you know what I mean? Or like output... it's just a different type of output.

Shaan Puri

You said something in one of your videos that you're one of the only other people I have heard use this phrase. I use it a lot, which is, "Yeah, I had a season like..." or "This season I'm doing this," or "I had a season where I was really just focusing on X." That's been a game changer for me. My personal trainer and kind of coach—he's like my mindset coach and trainer—does this all the time. He'll say, "I'm in a season right now where I'm practicing not waiting." Then he comes up with these little themes. Or he'll say, "Right now, I'm in a season where I'm going to eat whatever I want." In the entrepreneurial world, it's like time boxing. It's like, "Alright, I'm going to give myself two hours to get this done," or "I'm going to launch in the next two weeks, no matter what." I've used time boxing for productivity, and now this "season" concept makes every decision you're making feel less heavy of a commitment. You're like, "It's okay." There are beginnings and ends, and this season is going to feel a little different, just like winter feels different than summer. That's how I use it. Do you use it like that? I just noticed you said that phrase.

Alex Hormozi

A hundred percent, yeah. And maybe it's a fitness thing. I have no idea. I have no ownership of it, right?

Shaan Puri

that's like 13 season attacker

Alex Hormozi

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

Sam Parr

How much of your luck do you think accounts for your success? Your face is on a lot of ads, and in your YouTube videos, you look jacked. You've got this badass handlebar mustache. For the people listening and not watching, you look... I don't know what your heritage is, but you've got cool jet black hair. You look like an Italian lumberjack or maybe Persian. Persian? Alright, there it is! Yeah, you drive a G-Wagon, but there's an axe in the back.

Alex Hormozi

So, I read a book by Dan Kennedy five years ago that said people who have noticeable facial features are more easily recognized and remembered. After reading that, I grew a handlebar mustache. That actually helped me sell the likeness of the mustache with the company because it was still a core part of the branding. You know, at the events, everyone would have mustaches, and it was like money... you know, "stack cash money stash" or whatever.

Shaan Puri

you know

Alex Hormozi

there's a bunch of like hashtags

Shaan Puri

You had to stop having a mustache after that. Was that because you had to stop having just the handlebar mustache because you sold it?

Sam Parr

no but they did but they're allowed to use it

Alex Hormozi

yeah yeah I got tired of having the mustache after 5 years

Sam Parr

but but what about like the speed because alright again for the what do you weigh what do you how tall are you and

Alex Hormozi

what do you weigh you're huge I'm 511 220

Sam Parr

Okay, so just when you're getting big, is it like, do you think this is gonna look awesome right in the eye?

Shaan Puri

No, no, he... yeah, that was built before he started internet marketing, right? You were built when you started the gym because I saw a video or a photo of you starting your first gym, and you were already jacked. So it's not like... yeah.

Sam Parr

Well, I watched... I've been working on my squat, and I was trying to figure out what gains I can make in 3 months. I came across an article that you had when you were in your early twenties, I bet. In this article, the gains that you had in like 9 weeks were the craziest thing I've ever seen. What was that? Sean, you gotta look at this article!

Alex Hormozi

that was natural I'd I'd like I'll tell you because I'm on trt now

Sam Parr

me too

Alex Hormozi

so I was I was that was a 100% nanny and

Sam Parr

no in the comments they do not think that that is yeah

Alex Hormozi

Like, trend much? You know what I mean? But that training methodology is pretty much what I've done since then. I had a roommate whose name was Greg Knuckles. He's really big in the strength space.

Shaan Puri

fucking amazing name what is his real name greg knuckles

Alex Hormozi

Yeah, Greg Knuckles. He's one of the two smartest people that I've ever met from a pure processing power standpoint.

Sam Parr

sounds like a mafia guy

Alex Hormozi

I mean, you know, he's got a perfect SAT score when he was 14. Very, very bright, but also stupid strong. When I met him, we were in our twenties, and he was pulling 800... like, stupid strong and natural. So, anyway, he was like, "I read this research paper. What if we had you lift six times a day, but for like 10 minutes each time?" I was like, "Cool." I lived at the gym, so I was like, "Sure, whatever." I set a timer, and every 45 minutes, I would go and do one set of three exercises, then I'd go back to work. [Side note: This is actually an amazing productivity hack because I had this nice timing cadence, and I got this nice boost for my nervous system every 45 minutes to wake back up.] So, I did that, and that's when I gained just a tremendous amount of weight. I coupled that with another thing he had done research on, which is a pure carbohydrate diet with no fat. Basically, the efficiency of fat conversion to fat that's stored is almost 100%. The efficiency of carbohydrate storage into fat is lower. So, if you're going to have a calorie surplus, to give yourself a smaller percentage of that surplus that gets stored as fat, you would want 100% of the surplus to be carbohydrates. So, the idea was I had, you know, 200 grams of protein and like 800 grams of carbs, and basically zero fat besides the... yeah.

Sam Parr

I saw what you're eating it looked like it'd be awesome for a diet

Shaan Puri

and then

Sam Parr

horrible after that

Alex Hormozi

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

Sam Parr

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

Alex Hormozi

thanks

Shaan Puri

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

Alex Hormozi

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

Sam Parr

gab and and and empathy

Alex Hormozi

and I think it carries over into how you recruit for selling too because we've built a lot of sales teams and I actually have a very short allowing for people to fail at sales cycle probably much shorter than most people and it's just because I've never had a killer salesperson who didn't do pretty well the 1st week and so for me we you know we turned through this quickly but as a result of that the team is just killers and they know that so I I like this quote from from greg cardone he says you know my sales team is a dangerous place to work and I I love that so in terms of sales stuff I think that I think people don't know how people are really freaked out about the idea of selling right and so I think the first reframe is like you're not selling you're helping someone make a decision that's gonna help themselves and the the the the front part of that is that I do think that the number one predictor of good sales is conviction and so fundamentally you have one person who should believe in something another person who does not believe it yet and trust is the thing that transfers that conviction so if fundamentally there's the 2 things you need you need trust and you need conviction most times salespeople don't have a 100% trust I'm sorry a 100% conviction and so the also the idea of conviction as a binary is false so it's not like I believe it or I don't believe it it's it's to what extent do I believe it right and so that's why like in terms of if I wanna improve a sales team I can do the drills which we do that's like blocking and tackling but the thing that really juices the sales team is hearing the testimonials of the people that they sold last week and what they're doing today and how their lives have changed and so I noticed this because on my sales teams when we were in person whenever I did weigh out day which is when everyone finished their challenges and everybody was crying and so excited I tried to stack as many sales appointments as I could while people were weighing out and during those days we closed like a 100% because people were like dude how can you not think this works it's right there and so the thing is is like you can either trick yourself into having the right tone or you can train yourself and I think that it's much easier to trick yourself into it by just simply believing because if you talk if you truly believe in the product you will talk about it differently and so in terms of an understanding of selling if you need to have conviction you need to have trust trust is gonna come from expertise and some level of rapport right and so I think that overarchingly to help someone sell we just have to ask the right questions to get someone to come to the conclusion on their own and so most sales conversations follow more or less the same framework if you know what you're doing otherwise people are just chasing their tail and trying to chase a prospect to an outcome that the prospect doesn't know how like we've had this conversation a 100 times they have only had it once we should be the one knowing how this conversation is supposed to go right we should also come in with a massive advantage to how to have this conversation go the way we want it to because we do it all fucking day right and so you know big big front end pieces is like why are they there what's the problem what have they done so far understanding where they failed seeing why our product is different from the things that they failed asking for permission to explain about the product explaining the product not in any way based on features but only based on the experiences that they will have as a result of it and using analogies to explain those experiences right and then and then having a close at the end which the the tiktok I think that you you referenced is like a no based close and I know a lot of natural salespeople do this anyways like if I want something I'm gonna be like hey can you do this for me I'm like hey would you mind and they say no they don't I don't mind right like this natural communication dynamics that most people who naturally know how to persuade people or at least influence do that on their own this is just retroactively looking at it and say what did I do different like why is this different and in terms of like overcoming because people are afraid of confrontation right that's what they're afraid of and so I believe that you can sell without ever having confrontation and you can do that with what I like to call childlike curiosity and so if someone says well my husband's not gonna approve of that I'm like

Shaan Puri

why wouldn't he what do

Alex Hormozi

You know, that's so interesting. Tell me more about that. Rather than saying, "Alright, your husband's an asshole," that's not going to work because in arguments, no one wins. So, I'd be like, "Why would he think that?" Because I would think that he wants what's best for you, right? Yeah, he wants what's best for you. Does he know you're struggling with this right now? Well, I mean, yeah, he knows I'm struggling with it. Okay, so he knows you're struggling with it. So why do you think you would be opposed to solving something that you're currently struggling with? Just so I understand, would he be happier if you continued to struggle? Well, no. It's like, well great, then would you be opposed to moving forward today in that way? And hey, if you go home to your husband and you make a joke to lighten the scenario, then you close it, right? I think childlike curiosity is the immediate thing that you have to train because people get defensive. That is one thing that fighters talk about when they're in the ring. In the beginning, you breathe in too much. I don't know if you've been in sparring and stuff, but you breathe too much and hyperventilate. The guys who've done it enough slow down their breathing because when things get intense, they can slow it down. I think sales is a lot the same way. Your adrenaline kicks in, you start breathing faster; it's fight or flight. So, you gotta be able to slow it down and be like, "That's crazy! I wouldn't have thought that. Okay, tell me more about that." Now you're interested, and they don't feel like you're combating them. They feel like you genuinely are interested and want to help them, which is what you should be doing because you should be selling them only if it makes sense.

Sam Parr

You're exhausting! You are full of interesting insights, and it is like you just have a lot of knowledge. You've clearly packaged this in really easy-to-understand ways. It's almost exhausting listening because it's like every sentence is packed with a fact, similar to reading a really good historical book. I find myself thinking, "Oh my gosh, I have to use this! I have to pay attention."

Shaan Puri

I was like, "This is exhausting, but awesome!" Now, I know there's this book I'm reading right now that is like one of the best books I've ever read. Literally, the first ten pages have more insight than any book I've ever read. I'm only on page 30 because I'm rationing this. Not because I think I'm going to run out, but because I can only have my mind blown so many times per minute. So, I have to chill out with this book right now. I'm reading 10 pages at a time, then I hand it to my trainer, and he reads 10 pages just so I have a two-day break. Then we bring it back. That's our book club right now. I think it's more like what you just said, which is: how many lessons are there to learn? There's the lesson of a guy who goes from sleeping on the gym floor to hustling, but then realizing, "I'm hustling at 100%, or I'm hustling at level 10 at a level 2 opportunity." Okay, how did he recognize that? People have to ask themselves, "What level is my opportunity that I'm at right now?" You had that formula of: number of units sold times gross profit per unit times the supply and demand dynamics of the market.

Alex Hormozi

that's a save

Shaan Puri

Man, "nugget" alone is enough to put down the podcast and go reassess your life. Alright, then we go to the next phase, where it's like the part where you're like, "Yeah, we charge $500 up front." Then we had this continuity thing where we would actually say, "Hey, great! Congrats, you've made awesome progress. We're actually gonna offer you more for less because we want our lifetime value (LTV) to go longer, and we know that that reduces churn." Blah, blah, blah. I'm gonna do that because the best time to sell somebody is when they're most excited. Boom! Nugget 2: Go rethink your sales and pricing strategy. You're probably doing it backwards, or you're not maximizing the opportunity because you just sold to them once. You never figured out how to sell the back end. Then, 3: You know, like you've had 5 in this session, and that's my explanation of Sam's weird compliment. Sam is the king of back-end compliments. He'll be like, "You're like the weirdest looking handsome dude I've ever seen." The guest doesn't know what to do; they get frozen by the backhanded compliment. It's so good.

Sam Parr

Well, I bet your dear friends, when you're with your non-work buddies, are they just like, "Dude, Alex, chill! I don't care, let's just make a fart joke"?

Alex Hormozi

I don't have many non entrepreneur friends honestly

Sam Parr

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

Shaan Puri

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

Sam Parr

that's good

Shaan Puri

I even without the hair I still got the guru sean

Sam Parr

no no it was good I I'm learning you can

Shaan Puri

cut the hair but you can't cut it away

Sam Parr

I gotta ask you one last question. For being a... I don't know, you're a business guy who's having a great time on YouTube and you're succeeding a lot. Why is your setup so bad? Like, how do you... You are in a room right now that doesn't have a carpet, I think, so I can hear the echo. You don't have a microphone. You're on your... Oh my god, nice quads! You're sitting on a laptop, I think. Like, you have a... *Shit, that was... sky's out, thigh's out, baby!* That was a lot of thigh! But your setup... Thank you, your setup is horrible for someone who does this for a living. What the hell?

Alex Hormozi

I think I don't do it for a living well you know what

Shaan Puri

I mean

Alex Hormozi

The first answer, honestly, all the technical... I spent like $80 on a studio in my house in Vegas—sorry, in Austin—and I couldn't get the damn thing to work half the time. So I was just like... and then I ended up getting just immediate annoyance around the idea of having to mess with it again. I realized that I stopped making stuff because I was just annoyed by the idea of having to fix it. So then I was like, is it better that I just make the stuff and that'll just be it? It is what it is, and hey, if I can...

Sam Parr

the answer's yes

Alex Hormozi

If I can figure out a way to not have it be a pain in the ass, then I will do it. But up to this point, my video guy got on today and said, "Dude, your video is stopping and freezing for half a second like 13 times during this video." I was like, "I don't know." He said, "Can you just use the laptop? When you do the laptop, it doesn't freeze." I was like, "Sure, whatever." At the end of the day, I think it's like in Gym Launch when we started. It's probably a good wrap-up. We didn't have a website until after our second year. We'd already done $40 million in sales before we even had a website. I didn't send my first email until we crossed like $70 or $80 million collected, you know what I mean? So, we kind of just do things our own way. If people are down with it, they're down with it. If they're like, "You know what? I'd rather have a really polished guy who says less in more time," then that's all good, you know what I mean?

Sam Parr

it's badass thanks thanks for coming I've learned a lot sean what do you think yeah

Shaan Puri

this was fun thanks for coming on dude I I think people are gonna really like this

Alex Hormozi

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