Alex Hormozi’s Plan To Grow Acquisition.com To $1 Billion (#462)

Alex Hormozi

Like everybody here, we can all consume whatever we want. We can fly on whatever planes we like. You know, you can fly private, stay in the nicest hotels, get the nicest Airbnbs, and go out to dinner every single night of the week at a 5-star restaurant or a Michelin star. You can do that for the rest of your life. Your personal needs as a human being are satisfied. But I can't buy that skyscraper right there, and I can't buy this huge company. So what happens is the things that you want to buy change, and you create a new deficit for the amount of wealth that you want. Again, this is just assuming you like the game. I like the game, and I just want to keep playing it.

Shaan Puri

Where should we start? You do a lot of these interviews. What's the fun version of this for you? I feel like if somebody actually wants to know an answer to something, it's been published. You have a book, you have Twitter, you have 1,000 YouTube videos. If you're motivated, you can go find the answer. I tweeted out, "Yo, Alex is coming on the pod today. What would you like to know?" They replied, "I'd like to know his thoughts on offers."

Alex Hormozi

making a sure offer

Shaan Puri

Like, yes, literally his book. I think the book is like free or 99 cents, so that's just a lazy, lazy question at this point. But I know whenever I do interviews, there's some version of the conversations that are more fun. I'm like, "Yeah, when we talk about that stuff, it's more interesting to me," and that kind of lights me up in a different way. What is that for you?

Alex Hormozi

Well, I'll say there are two things that I've been focused a lot on. One is obviously **Acquisition.com** and what we're doing, and kind of clarifying the mission behind all the stuff that we're actually doing every day. The other side of it is that the **Leads Book** is coming out. It's tough because I'm sure you guys have had projects that you've worked on, and it's been on its way to coming out. All of your energy goes into writing it, building it, or recording stuff about it, and then you can't talk about it. I don't want to talk about it all the time until it's ready to go off. So, the six weeks beforehand is when we have all this prerecorded stuff. I've got full courses; I've got all this material that's going to drop when the next book comes out. But I haven't talked about anything leads-related for like two years because I've been working on it for two years for the next launch. So those are the two things that are top of mind for me: what we're doing on the **Mozy Media** side and **Acquisition.com**, and then the lead stuff.

Shaan Puri

What's the split between those two? So you've got media, you've got Acquisitions.com. Give me the time split. On a given month, what percentage... if there's a pie chart, what are you spending on the content versus acquisitions? And then also on the money side: - Are you making more off the media? - Are you making more off acquisitions? What's the relative difference between the two?

Alex Hormozi

Yeah, we lose money on media, so no, we don't make money. I think between AdSense and if you consider book sales a part of that... but I give the book away for 99¢. Actually, Amazon updated it because we reuploaded it with some fixes, and they wouldn't let us go below $1.90. Now, all the times I said 99¢, people were like, "He's trying to get us!" It sucks. Anyways, I think the book does about $1,000,000 a year in profit in terms of what it makes. Then, AdSense is probably like $500 a year. So it's like $1.5 million, and that barely covers the media team. And so, that's how big it is.

Sam Parr

is the team right now

Alex Hormozi

We've got 10, and then we've got vendors. Are you enjoying it? Yeah, I dig it. It's fun! Right now, we do one recording day every 14 days. That's for the direct-to-camera stuff. Then, you know, if I do a podcast, like I have one of my guys here, Trevor, who's reporting our side of it so that they can clip this stuff later.

Sam Parr

Are you enjoying the celebrity that comes with this? You know, getting noticed and things like that?

Alex Hormozi

Enjoy is probably like... because I feel like there are some people who love attention and some people who hate attention. I'm right in the middle, you know what I mean? I was purposefully, deliberately not public because I wanted to be rich and anonymous. That was kind of like the mission for a long time for me. Now that we are out there, I would say that there are pros and cons to increasing, you know, fame or recognition. I think the pros outweigh the cons, but there are cons. For example, you get weirdos, you know what I mean? We have security. I can't attend any event; I can't go to someone's small group meetup. It's very hard because I can't enjoy anything. I'll have a line of people asking for advice, signatures, or pictures. Again, I am grateful as shit to everybody who does that. It's just a different experience. So, I have to go into something knowing that's what my experience is going to be, not whatever or whoever's on stage.

Shaan Puri

yeah it makes the online experience dope but it makes the real life experience

Alex Hormozi

It's different. That's what fundamentally changes with the in-person experience. It's like if I walk out... What's interesting is that I have been able to mark how social media and the audience have grown by the number of real-world interventions I had per unit of time. I remember the first time I got recognized in public. Then it was once a month, then once a week, then once a day, and now it's about 5 or 6 times every time I walk outside. I get recognized. I just imagine that this continues to compound over time and with distribution. So, it's just different. But here are the pros: We get the best talent for our portfolio companies and for Acquisition.com because so many people want to come here. We get them for market rate or below because of all the learnings they want and the other pro players on the team. We get the best deal flow; these are all proprietary companies that want to work specifically with us. They're not trying to exit to anyone or sell to anyone; they want to work with us deliberately to scale the company. I continue to do it because I'm more rewarded for doing it than I am punished for doing it. But there are definitely... you know, you get weird letters and you get weird attacks and things like that. It just comes with the territory, and it's to be expected. For us, the pros outweigh the cons, but there are cons.

Sam Parr

I remember talking to Tim Ferriss, and you could just tell from the outside that he... I don't know if he's mainstream famous or not, or if I'm in a bubble, but he's popular enough that he has all these people listening to him and all that stuff. The cool thing about him was that he had high-profile people reaching out to him. A lot of people who listen to you, you're like, "I'm thankful that you listen, but I don't exactly want to go hang out with you." But he would actually have a ton of listeners who were like, you know, the Matthew McConaugheys of the world, or some football coach. Ryan Holiday has that too, where it's like someone who's a big deal, and you're like, "Oh my God, you listen to me? That's amazing! I would be honored to go and hang out with you." He had stories like that, and Sean and I have had that a little bit too, where some business person we both admire will say, "Yeah, I heard your podcast on this thing." I'm like, "Oh wow, you listened to that?" Have you crossed that threshold where you have people you admire messaging you and saying, "Man, what you said was really cool. I have a question about X, Y, and Z"? You're like, "Oh man, that's amazing! My heroes want to talk to me now."

Alex Hormozi

Yeah, I mean, yes. I don't want to put anyone on blast, but there have been some mega, mega influencers who followed me and hit me up. They were like, "Dude, this is awesome!" And I'm like, "Well, now I think less of you because you follow my content." So, that's a big red flag there, you know? I told Leila the biggest red flag I had with her was that she was into it. No, I'm kidding! But yeah, like some NFL players that I used to really look up to, like huge mob stars and huge, huge podcasters, they followed me. And yeah, it's been cool. One of the reverse situations is when I go to see, I'm like, "Oh yeah, how is so-and-so celebrity?" I click, and it says "follow back." I'm like, "Oh shit, okay!" But no, it's cool. I mean, it's surreal. I'm sure you guys have had it. It's surreal. It's very...

Sam Parr

Well, I grew up admiring Lance Armstrong. I'm big into endurance sports. One time, I got an email that said, "Hey, just want to let you know I love the hustle," and he signed it with "Lance." You could tell it was Lance Armstrong by his Gmail. I was like, "I don't believe this is really Lance Armstrong. If it is, here's my phone number. Call me right now." He called me within like 3 minutes. I was like, "He called!" He goes, "Sam, what's going on?" I was like, "Lance, is this cool of you?" I had a couple of other athletes reach out to us, and I remember thinking, growing up playing sports, I would have killed to have an athlete like this recognize me. I could never achieve the athletic greatness enough for them to acknowledge my talents. Then, you just take this totally outside path, and you get to it. One time, we had this really weird experience where the lead singer of Linkin Park, Mike, tweeted out that he liked our podcast and the hustle, whatever. I was like, "Oh, that's sick!" I never would have wanted to meet you, but there's no way I could have gone down this normal path. If we went this weird way, we finally kind of met, and I found that to be very strange and awesome.

Shaan Puri

Yeah, it's sort of that "*Be so good they can't ignore you*" as general advice for life. Like, whatever you want is on the other side of you being so good that you can't be ignored.

Alex Hormozi

at anything

Shaan Puri

And, and, and anything... Also, like, it doesn't have to be. I think that's kind of what you're saying, Sam. It doesn't have to be the thing you expect, right? Like, oh, you want to meet Warren Buffett someday. You don't have to be a stock picker. That's probably actually the least likely way that Warren Buffett's gonna want to know you. In general, you shouldn't really pick based on what they want. You should just pick based on the thing you can actually get so good at that you can't be ignored. It's hard to do, obviously. That's hard to do, but it's more about the right guidance than many other bits of advice you could take as a north star for how you're gonna, like, you know, what you're gonna go for.

Sam Parr

Right, exactly. And so anyway, it's cool that we're all kind of seeing that in reality.

Shaan Puri

in the

Sam Parr

game come true alex are you alex

Shaan Puri

go ahead sorry go ahead sam

Sam Parr

I was gonna say, are you enjoying Acquisitions.com? Because I know when we first talked to you, I think you were maybe only a year or two in. Yeah, you're relatively new. I think you had just sold Gym Launch. Are you happy with it? Is it what you thought it was going to be? Do you actually like doing it? And by the way, explain what Acquisitions.com is. What is that?

Alex Hormozi

Yeah, so it's **acquisition.com**. The reason I emphasize that is because there's somebody who bought **acquisitions.com** (plural) and it's just not me; it's a different company. But **acquisition.com** is our portfolio of companies. So, I'll give you the TL;DR in 90 seconds. I had a chain of gyms, took that, licensed the IP to 5,000 locations, started a supplement company, and sold through that distribution base. Then, I started a software company. We exited all three of those companies in 2021. We had taken about $40,000,000 in distributions prior to the exit, and we sold for $46,200,000 in the software company. I did that separately or sold it separately in a strategic deal that was all stock. I said that because you guys have probably laughed. People were like, "I googled how much is his net worth?" and it says $15,000,000. It's like, well, I sold the company for $46,000,000 in all cash, so I don't know where they got that. The only reason you do that and get that money is because it was making money. So, anyways, that was pretty much 2021. We closed on December 25th or 26th; I can't remember. It was one of those days, right around Christmas Eve. That's the one—Christmas Eve we closed, and then we started our acquisition the next day. That was when we made our kind of declaration at that time.

Alex Hormozi

Though I'd already made three minority investments that had done really, really well, that's why I wanted to make that kind of my next big thing.

Shaan Puri

If you started it the next day, that means you kind of had this idea of cooking. So, what was the genesis? Why did you realize, "Oh, this is what I should do next"? I should buy these minority stakes in companies like the one that I just built, and I should get this domain name, which I assume you had to buy. So, yeah, how were you so ready to do that? What was the thought process?

Alex Hormozi

so during covid because obviously gyms were affected by covid you know we took a hit but we took a major hit we were so profitable but it was a it was a big you know it was hard and so to kinda get some space because there wasn't a lot but like I couldn't do more you know what I mean it was you know I mean like obviously we you know we we pushed things harder but like I was above the business enough that there was nothing I I wasn't I wasn't gonna do anything right and so I kinda just needed to take my my mind off things and so by by happenstance a guy who owned a photography a single photography studio made his movie on my calendar and in the first and this is not how you do this everyone like do not do this but I was actually still taking some calls for alan because I wanted to do some like testing and this was before I had a big brand so I was just kinda like founder talking to customers to get an idea of what was going on but he knew me enough from just like I had written a small book in the gym space called gym lunch secrets that he had read that book well like love did applied it to his photography business and he just took a sales call through my software company because he knew I was taking the calls and so he hopped on and was like I have no interest in your software he's like but can you please give me 20 minutes and I was like sure man alright and I just liked his vibe and so anyways we ended up doing a deal and so we took a minority percentage of the business and that business I think had done 1.6 they were doing 1,600,000 a year at a single single location which is pretty awesome for a tiny like photography studio and he had I think he had taken and this isn't all the book clearly because there's a million thing but he had taken some of the concepts from jim o'shaker's book applied them and it had grown the business a lot and he had an agency for photographers to kinda like do the same model for them right and so we were having a conversation and he was like yeah I did exactly what you said and all the photographer studios add 400,000 a year to the top line when they use our thing and I was like they add 400,000 a year he was like yeah on average and I was like okay how much are we selling this thing for and I used to use like pennies and I was like okay so let's not do that and let's own them all and so that kind of so he actually and this is where like the the trust factor of what like the inbound deal flow which is what I love about accus.com is that we have a lot of trust and so he actually shut down a business that was making him I think 500,000 a year in profit that agency side and shut it down as 0 because he like believed that he believed me enough to to go all in on this other direction of private ownership of all the locations and so as of of today and that was 2020 as of today we have 36 locations in that biz you know just 30 +1000000 a year and it continues to grow by 1 or 2 locations every month and so and

Sam Parr

what's what's that business do

Alex Hormozi

it's and it varies so it's children's photography

Sam Parr

right dude that's insane

Shaan Puri

And you, so when we last had you on, I saw, I went to the website and I was like, "Okay, cool. What are the acquisitions?" Great.

Alex Hormozi

what are

Shaan Puri

The what they acquire... I saw basically like enchanted fairies, and I was like, "Okay, cool. They're doing like the gym launch playbook in this other space." That makes a lot of sense. If I go there today, they're still the same company. So how come you're not putting new acquisitions up there? I assume you've made a bunch of acquisitions, you know, in the last 24 months or whatever. Why not put new companies up there? You're pretty open about other stuff, but in this case, you're not putting them up there. And then also, let's start with that.

Alex Hormozi

Yeah, the main reason... so there are two big reasons why we're not public about the acquisitions. Number one is that my brand has grown to such a degree that if I say, "Hey, this business is awesome," and it has a national chain of fairs, it's less of an impact unless you're in one of those 30 markets. Also, my audience isn't like moms with kids, so it's arms-length enough that it doesn't affect the business. But as you can imagine, a lot of the businesses that come to me are business services, and they're national or international companies. So, me endorsing a company would 5 to 10x the company overnight. That comes with a couple of things. One is that I haven't negotiated those deals with brand endorsement included. If I include a brand endorsement, then I own the majority. I'm not going to risk my face on something I can't control. Most of the investments we have are minority investments. We do have a majority investment as well, but that was one that came in as a minority, and then I just bought more of a share of the business. It was up our wheelhouse. The second thing is that if we were to exit those businesses and I had done an endorsement in a minority position, then guess who has to go with the deal? Me, right? As an acquirer, if there's some massive influencer associated with the brand, he's not getting out in a deal. So, our whole goal is to build value in the business so that the business is sellable and more valuable. We use my face to bring deals in, and that's why I've been really, really tight-lipped about the businesses.

Sam Parr

how many deals have you done so far

Alex Hormozi

we've done right now we have 11 portfolio companies

Shaan Puri

is it all your own money or you raised a fund

Alex Hormozi

no it's all private it's all mine right

Sam Parr

damn dude

Alex Hormozi

so you're you're going all in

Sam Parr

On this, I asked you originally: Are you happy with how this is working out? Is it what you thought it was?

Shaan Puri

what's he gonna say no

Sam Parr

Well, yeah, I could be like, "Well..." and he's like, "Well, I didn't realize this is actually just some mostly a due diligence game." I don't know if I would love it. I mean...

Shaan Puri

What's the worst part about it? Like, what's something you didn't fully respect upfront? What's a downside?

Alex Hormozi

So, I think there's a difference between knowing something and experiencing it. They are two separate things. I know that in a minority position, we have to use soft influence to try and move things forward. I understand that, but I would say the most difficult part is listening to half-hearted advice. Let me give you an example. If I say, "Hey, we think that this operator in your business is not performing well, and we need a new operator," the person might say, "Okay." Then we find them a new operator, and they hire the new operator, but they don't fire the old operator. Like, what the heck? It's very hard to win at that. It's similar to listening to half of someone's diet advice. It's like, "Yeah, yeah, I'm doing the cheat days." But then, there are other days when you're in a deficit. Someone might say, "Yeah, but you said cheat days raise your metabolism." Sure, but you also need a deficit, you know what I mean? So, it's about listening completely. I don't know, we may move to a different approach because the business that I enjoy the most is the one where we have complete control. We bought a majority of that business, and we are growing it like gangbusters. The speed to action is so much faster. That being said, I would say the biggest win we've had was a company that came to us at $16 million the year before. Now, they did $50 million last year, with $20 million in EBITDA. It's the biggest company we have in the portfolio. We've also had the enchanted areas, which we did at around $2 million, and by combining the two things, they're pacing at $2.5 million a month right now, or $2.7 million, something like that. So, we have some pretty big wins.

Shaan Puri

Ridiculous deal, right? I had a friend message me who was like, "Dude, Hermozzi's playbook is obviously amazing, but this deal that they offered us... I don't know who would take this." He mentioned that he wasn't sure if this was actually the deal or not, but basically, he said, "No money. We'll give you no money, but we get ownership if we grow it above X." So, it kind of sounded like more of a risk-free strategy in a way. But is there a standard deal structure? Is that it? Where you're not putting capital in, you're basically saying, "Give us the equity. We guarantee we grow by this much, and if we don't, I don't know, some clawback?"

Alex Hormozi

we've iterated it honestly a bunch of times so one of the one of the so this is to answer your question sam like probably even more pointedly now that we're getting into it one of the hardest things about like the investment cycle is that when you're making a product right you're trying to sell a service you can ideate it create an mvp pitch it see how it goes within like 60 days like the whole like the whole thing soup to nuts you can you can do that whole cycle 60 days for deals it's like you can think of an you know an idea for a deal structure it takes 90 days to 6 months to close the deal and then it might take a year to see even just like some preliminaries of like how do we like this structure how does it work etcetera and so like I still feel like we are most in our infancy in the deal structures that we have so like in terms of no money in there are deals we put money in there are deals that we don't put money in it depends on the deal like the big one for money is it depends on what the need of the business is so like if we're opening up a lot of brick and mortar locations like we're about to I think we might have actually closed today or tomorrow on a a 28 location chain that one requires capital to open more location so that one I'm like I know where the capital's going I see what the returns on capital are let's get that right if it's a national based service business so let's say it's you know mortgage sales like they don't need there's no capex like they just need recruiting the incubators right and that's how that's how sales gets increased and so like that's where that's where where does the like where's the money going and what is it used for like because what I don't wanna do is just like some of a guy could go buys a mansion after I write a check like that's not the goal here like the goal is that we're both together wanting to grow this massive thing and so it just really depends on on what the what the nature of the deal is so that's number 1 in terms of how we structure them originally I had a brand slam offer type thing now it's just much more straightforward of like we're at you know we're equity holders in the business it's interesting because it's actually gotten less cute and less clever as time has gone on like it's just much more like this is our deal like we own a big chunk of the business and we're gonna grow it and I mean the thing is is that for us based on my hold go cost like I put 500,000 a year in labor into the businesses and like that's if I wanted to do like not markup labor like that's hard cost and so if a company for example you know is doing whatever 5,000,000 a year in ebitda and I'm and I'm buying a you know a 1 third stake or a 40% stake in the business like how like what am I valued at and how much of that value is gonna come in the for in the form of of just work that we're gonna do and so that's where that's where the valuation and how much cash in etcetera kind of becomes more like per deal basis but yeah so the long short short is one is soft influence has been something that I've been learning we may in the future just do more of our deals where the founder stays on because like what I wanna do is show how much more we grew this I mean we do have obviously some minority ones that have crushed too but like I I wanna murder this maturity deal I'd be like wouldn't you like to have 49% of something 10 times bigger or a 100 times bigger and so that's kind of the the the angle but yeah we're we're learning every

Sam Parr

The other day we talked to our good friend Andrew Wilkinson. He's done a similar-ish thing as you, and then we've got a handful of other friends that have done something similar. They're like, "Well, I got really inspired when I read the Warren Buffett book, and that taught me a little bit about compounding growth." Other people have cited other books or things that they learned where they're like, "Oh no, this is the way to go," and that's what... that's why I got into this. What about you? What transitioned you from going to this almost PE [Private Equity] model versus just one brand model?

Alex Hormozi

yeah and I definitely if I were to if I were to give us a a name it would be like a merge give a family office and a conglomerate because family office in that it's literally just family money like I don't I don't have any outside investors and then conglomerate in terms of like our business model like I'm not trying to exit anything I would like to continue to compound the investments we have if a founder absolutely like needs to or wants to or you know gets divorced and has to be the asset then like we will go down that that that route but long term we're long term holders but in terms of the inspiration it was actually because gym launch has there's only 50,000 microgems like in the us at least and we had already gotten on the phone with 20,000 of them so like if you're a microgib owner know who we are probably and I realized I went to this this little meetup of entrepreneurs and it was like 6 or 7 people and the whole room was doing in aggregate like 500,000,000 a year in revenue and I was all you know I I think I we're doing like mid thirties at the time and I was like I I was really excited to go because I was like what do these guys have that I don't have like I wanted to you know like what am what am I missing right and we had been there for like 3 years we've been mid thirties for 3 years and I felt like I was like something was wrong and the big takeaway I had was not that they had better systems or they're better marketing or better sales or better product they just were going after you know where like every single one of them to a man had a market that was 10 to a 100 times the size and so I said that whatever I wanted to do next was gonna be was gonna go after a much bigger market and there are significantly more businesses than there are james and so that was kind of the big things like okay well it's something that can compound forever and that has a huge tam and so we kinda like walked backwards from there and then in terms of like the the doing of this model like we believe that people like build the people and the people who build the business and so like lelo you know when we're it was like 18 months of ideation I know we're we're going full circle but like how did we start the next day well these are the things that we're thinking through and I said leila if I were to die tomorrow what what business would you start she's like I would start a recruiting firm

Sam Parr

and I

Alex Hormozi

Was like, "I don't wanna start a recruiting firm." I was like, "Is there a way that we could combine what you like and what I like into something cool?" For us, the most hands-on, valuable thing that you can do for a business is find A-players. Because if you find A-players and put them in the business, they grow the business, and that value stays inside the enterprise of the business—not the holding company, like not the goose, but the egg. So for us, we just recruit crazy talent. Our competitive mode is that we have more influence than they do. We have a whole culture community at Mozy Talent where our head of people continues to bring in tons of people every single day who are applying for portfolio positions. Then we can screen them, vet them, and because we know the company and we're long-term incentivized, we don't just want to put a body in a seat. We want to find the killer that we know will fit. We only want to fill the role once. We want to fill it with somebody who matches the culture and the skill set of the business at this level. A lot of times, first-time entrepreneurs are at whatever, $1,000,000 a month, and they're like, "Okay, do I hire a bookkeeper? Do I hire a staff accountant? Do I hire a controller? Do I hire a CFO? Do I hire a director of finance?" Like, "Who am I hiring right now, and what does that person look like?" We've done this enough times to be able to say, "Okay, at this level, you probably need a controller who has experience going from $1,000,000 a month to $3,000,000 a month."

Alex Hormozi

They will be informed upfront that we will bring in a CFO who has transaction experience in the future, so they're not jostled when that happens. The same thing applies when they're scaling out the sales team. They're all like, "Okay, well, I've got three good guys." It's like, "Cool, we need 20." You can't just take your best closer and make him a manager because he's never done this before. We want someone who has built at least one or two sales teams, specific to, let's say, inbound or maybe outbound. It depends on the sales process of the business. They've built those types of teams, and we say, "Cool, we'll bring that guy in." We have our playbooks, and during our interview process, we explain, "This is how we do things." If we feel there's alignment and they have the chops—because we do skill tests—then we can say, "Hey, I think that you'll match." Obviously, the founder still has the final say because they have to like the person; otherwise, it's not going to work. But we do a lot of the heavy lifting. We might take 100 interviews at Holdco to find one guy for one specific role for one company, and that's where that labor cost comes in for us. The reason we took the majority of that business was that we had built the entire executive team. The founder was like, "You know what? I kind of want to do other things for the business. I know it's in good hands; I trust you guys." So it was a very friendly deal. Now he just gets checks every month and enjoys his life a lot, while we continue to run the business, which we're cool with.

Sam Parr

There's this really cool video where you're with Grant Cardone. I think you're in the process, or pre-process, for selling Gym Launch. You're like... and he said something like, "Rich people sell their companies; wealthy people never sell." What's cool is that I've sold a company before, Sean has sold some companies before, and you've sold a company. What's so funny is a lot of first-time founders and second or third-time founders... I mean, a lot of people, their whole business is selling. But after they sell, they go through this realization. They're like, "Shit, I shouldn't sell ever again." And you said you sold the business for $47 million. You said you had taken $40 million in distributions. So in my head, I'm like, "That's a pretty bad sale." Do you wish that you would have just held on to it and never sold that company?

Alex Hormozi

no because the person I was then wouldn't be able to do what I can do now could I do that could I today would I hold on to it yes but I don't think I could have done it then and so a lot of the like transparently if I had I got more credibility from selling gym launch at 46 and it was valued at 150 before covid so to your. It was a shit sale but I was done I was emotionally done with the business I just didn't wanna do it anymore I still own a third of the business so like when they crush the exit the next exit at 250,000,000 I'll still get my $100,000,000 check from that but I was I was emotional I moved on and my big thing is like all my friends all my close people were like dude you sound depressed as fuck like you're not interested and I was like dude I wanna do this new thing and they're like dude you light up when you talk with this new thing and so I actually walked away from the deal during the deal process and then came back and so like yeah it was not like it's funny because people give me a lot of I I'm glad you brought it up because a lot of people give me praise for that but they don't have context like what like you know we had done we had done 30,000,000 in ebitda the 2 the 24 months prior to the deal so like you know selling a 46.2 is not like like I I told them I needed to be public about the number because I do know that the vast majority of people don't get it and that that's that is enough to give me credibility for fucking tiktok but it's not like the transaction itself isn't necessarily one that I'm like proud of I'm proud of what we built and that the continue the company's grown 40% since we sold it and so they're gonna kill on that deal but now that I also understand how debt works which I didn't understand that like again this is like knowing versus experiencing like I understood that they were gonna get debt but when I realized that 80 or 90% of the money that they put in they then just immediately hold right back out leveraging the company's books I was like well shit I could have kept the whole fucking thing and gotten 90% of the money not personally guaranteed and derisk myself but would that have created the same story of something that is sellable from a personal brand perspective and I think the answer is no and so I don't regret the sale I think the sale was required for that step in my journey I think that now because we have the credit like no one cared that I take in 40,000,000 in distributions no one gave a shit like it didn't matter like the day I sold my neighbors were like oh I saw you on forbes like congratulations I was like I was richer before I did the transaction like I was wealthier before that.

Alex Hormozi

But, like, it allowed us to do an acquisition on a con because I don't think I could've. My brand was still so... I was still the CEO, as far as people were concerned, of that company. I needed to have that space so that I could create an acquisition there. Our software is the worst.

Sam Parr

Have you heard of HubSpot? Most CRMs are a cobbled-together mess, but HubSpot is easy to adopt and actually looks gorgeous, I think.

Alex Hormozi

I love our new CRM. Our software is the best: HubSpot. Grow better.

Sam Parr

sean would you have done what do you think would you have done that

Shaan Puri

I think he explained it beautifully. I think he explained it exactly beautifully and honestly. The 22 things you just said resonate deeply with me. The last thing you mentioned is that to have what you want, sometimes you just need to make space. I learned this through relationships. When you're dating someone, and they're not exactly what you want, they're not bad, and there's nothing wrong or terrible about it. Most people just stick with it for years and years. Then they think, "Well, if there was a much better option, then yeah, I would feel more comfortable just being single." But I've always been very quick to break up if I know this isn't it. I don't need to have another great option ready or shown to me to make it real. I know that if I make space, then great things can appear. Sometimes you just have to do that. When we sold Bebo, it was the same thing. I had been doing this for 6 or 7 years, and the business was doing okay at that time.

Shaan Puri

It thought like you know but in my heart of hearts I knew this was never going to be massive and we'd all gone into that business with a basically like yo let's do something massive so by other people's standards it might have been a good business by our own mission it was going to be a failure I knew that and so it was when I was out with a friend and he was like I don't get what you're doing he's like you just need to shake things up and you know I was shook I couldn't sleep I was like he's right like I've been doing this for too long I need to shake things up and so I went into our our investor the next day and I just said I think it's time we change things up I said I need to change things up I said you you know if you wanna keep going I will help you hire a ceo and you can take have somebody else take this over I'll give you back my shares I don't need a thing from this like I I I will do whatever I can or give me 30 days I'm gonna see if I can sell or I'm out like those are the this is either way in 30 days this is gonna change for me I've I've just decided to make space basically to for something he's like well what do you wanna do next and I was like I have no idea like he's like well no really like you know usually people when they're you know they they come to me it's because they already kind of lined up something else I was like no honestly I have no idea I just know that I need to make some space and so that part resonates with me and also the idea of like you like when I look back now and I'm like oh like before I sold our company if I didn't if my company wasn't gonna be the next big thing I would just shut it down literally just turn it off take a 0 on it and then I just started looking around and I learned this word aquihire in silicon valley I was like oh people just sell failing companies and then I learned like you know the asset sale it's like oh you could just sell the code and the assets like wait who are these buyers and I didn't even really understand what my options were and so when you talked about basically I could have refinanced I could have just refinanced based on the business assets took 90% of the value I felt that same like stupidity later but like that's life life is basically looking back and being like I was such an idiot and that's how I mark years of time not by like the calendar days but by number of times I look back and say god I was so dumb I didn't even understand this I was sitting on something I didn't really under I didn't really know what I now knowing what I know now I know exactly what I should have done and at that time I didn't even I wasn't even aware that I was making a mistake

Sam Parr

Well, the difference is, like, I think that all three of us actually have done this. We are tacticians. I understand how to grow things. I understand that you build this page, you do this thing, you write these words, and here's the customer—you talk to them, whatever. I think that the gap you have to bridge is moving from tactics to strategy. I used to make fun of all my buddies who are in finance. I was like, "Dude, you're just an Excel monkey. You don't know anything. You're just this stupid, fucking head-down guy who maybe makes money, but you don't know shit." Then I realized, when they talked about debt and stuff, I was like, "I'm not going to pay attention to any of that because I think that's stupid." But then I realized how it starts working, and I was like, "Oh my God, that's the strategy." So, it's like, that's the strategy. I used to think, "I've got good vision; I understand how this works." Then I realized how money worked a little more—with debt and borrowing other people's money to do this, and like taking money off the table. All of these terms that I kind of heard about but didn't exactly understand. I realized, "Shit, if I'm going to be really good at my job, I have to understand the tactics, but you also have to understand the strategy." Which, Alex, it seems like you actually now get the strategy of how money and business work—not just the tactics. The whole "$100,000,000 Offer" book, which I read, I think it's awesome. That's mostly tactical, but the strategic stuff is what you're saying, like, "Oh, you can borrow other people's money to do this." That's some big picture stuff.

Alex Hormozi

Yeah, without a personal guarantee. So, because I'll be like, "Why do I have that on the business?" I don't want to risk that. I was like, "You are not risking it; the business is risking it." If you're willing to do a sale for X, it's like, "Well, are you willing to do...?" Because the business is just going to take the risk on either way. I mean, depending on the acquirer. But if you're selling to private equity, like I know you have a lot of a bigger tech audience, but I probably have a bigger, like, everyday business audience. You know, guys who have massive roofing businesses or a huge chain of teeth whitening studios. You know what I mean? Just those types of businesses are the ones that tend to follow more of my stuff. And like, that's usually going to be a roll-up or a private equity acquirer for the most part, right? Maybe a strategic buyer if you have another big teeth whitening chain that wants to buy you, but like, that's about it. I think I resonate with what you said, Sam. I always thought those guys, like, I was like, "You don't even understand business." And to a degree, I actually don't think they understand business, but they understand the macro level of business. I think where you can get really dangerous is when you know both and can totally play both games. Because what they do is they own almost purely inorganic growth. They try and staple things together. Like, "Okay, we bought four companies that do $3,000,000 in EBITDA, and now we have $12,000,000 EBITDA. We're going to have some equity arbitrage, and we're going to be able to solve this thing."

Shaan Puri

for engineering

Alex Hormozi

Yeah, saddle them up with debt, and then it's just a math equation. It doesn't even matter about growing the businesses. But what if you do that and you could also triple all the businesses? That's when you create these breathtaking home runs. That's kind of what I mean; that's what we're trying to do with acquisition. I don't have a huge need for more money unless it's an enormous opportunity—like there's nothing I can do. Have you ever read Felix Dennis' book, "How to Be Rich"? I think that's the name of the book.

Sam Parr

yeah we love it

Alex Hormozi

the first like we talk

Shaan Puri

About that table, a lot like the comfortably poor, you know? Comfortably rich, then you get to like, rich rich.

Alex Hormozi

It super resonated with me. It's like I'm the comfortably rich, but not the super rich. Not the... like, so I like everybody here. We can all consume whatever we want. We can find whatever planes we like. You know, you can fly private, stay in the nicest hotels, get the nicest Airbnbs, and go out to dinner every single week at a 5-star restaurant or a Michelin star. You can do that for the rest of your life. Your personal needs as a human being are satisfied. But I can't buy that skyscraper right there, and I can't buy this huge company. So what happens is the things that you want to buy change, and you create a new deficit for the amount of wealth that you want. Again, this is just assuming you like the game. And so, like, I like the game, and I just want to keep playing it.

Shaan Puri

The funny thing is that what you actually like is just playing the game. If you were to say, "Well, I'm rich enough," then you'd have to stop playing the game you really love. So instead, you start to come up with things you want that, in actuality, sound a little bit silly. It's like, I don't even think you want that skyscraper or to buy that... you know? I don't even think that's actually what motivates you. It's just that I'm actually peak loving the game right now, and the game only works if you care about the score. It is impossible to enjoy that. You can't play the game if you've said, "I've already scored the maximum number of points." Then the game becomes kind of silly. It's funny, like this is with all of our friends. It's like, "Well, why are you doing this? Don't you kind of have enough money, man?" And it's like, "Yeah, but I don't have enough enjoyment." The enjoyment thing... the game is infinite, and the thing I enjoy the most is playing this game. So, I'm going to continue playing, but in order to do so, I have to construct these silly dreams that I'm not even sure I really care as much about, as far as just playing the game.

Alex Hormozi

dude that was huge and as a side note it's like if you think there's there's kinda like I feel like 2 ways you can create a deficit right so one is like you can create a financial deficit by saying like I want this thing it's cost a $1,000,000,000 and so I need to go make a $1,000,000,000 there's my deficits to where I am and where I wanna go the other side is what I was like when you asked like what are you like excited about because I already said like what are the works parts but like I'll tell you what's what's good right now is that we have finally separated mozy media which is basically like my my layla personal brand and like the the content we put out I would say the books kinda fall into that like the courses the books all the materials we give out to to mozy media and so what we originally were saying when we started acquisition.com is that the the mission was to make real business knowledge accessible to everyone like that was the that was the mission of the company and that is still very much the mission of mozie media what we realized is that holdco's team so like our ex consultants are are people who who recruit talent our heads of sales who build out sales teams our heads of marketing who build out marketing departments and marketing functions our head of customer success who build out product in the client experience etcetera like those people didn't really resonate with making business education accessible to everyone like that wasn't actually like what their mission was and so we got really clear on what the mission of acquisition.com is which is and this kind of came organically so it's like really exciting for me but one of the things I've always envied about elon is that like every company he gets involved in basically saves the world they're like what like he finds a way to tie the mission of what he's doing to save the world so even twitter he was like free civilization needs free speech and it's like boom I was like man how did he take a meme platform with with tweets of arrogant dudes you know what I mean and turn it into a you know free speech for civilization like that's where I think a lot of his genius is and so for us I was like what's that thing and so we have the external gap of like yeah I wanna hit the billion or whatever but I think the internal one is that we wanna build a company off of praise and not punishment and so we have this huge thing in terms of how we try to build things is like you can punish people or you can praise them and we believe that you get more performance out of praise now you look at goldman sachs look at jpmorgan look at mckinsey look at bain you look at these massive companies even some of these like huge ones and it's a lot of people are like man it's a toxic toxic work environment it's really hard blah blah blah and so those are usually punishment driven cultures and so we want to and so what's what's happened is like by doing that that has aligned all of our holdco team in terms of how we wanna build these companies and the $1,000,000,000 alex mark is basically irrelevant because like to really win by their standards we need to build something that's 10 or 50 or a 1000000000 you know what I mean and that might take the rest of my lifetime and it'll probably happen after I die but if we can do that then we can prove one thesis which is like people wanna work and most environments are set up to punish people and all you do is you raise the bar of what it takes to not get punished but what happens is people churn out of work they burn out they hate their jobs they hate their lives and I think that there's a better way and leila and I are gonna try and dedicate the rest of our lives to try to prove that and so that is the mission of acquisition dotcom and what we do with the companies and we can show that that it's not just like floofy stuff and I think if it were just leila it'd be a woman driven thing people like oh it's a girl who's saying you should be nice to people but I think I given how I look how I talk I can probably deliver that message and it may take the rest of my life to do it but like I haven't felt like fucking amped about anything in a long time the last time I was this pumped was when the mission of gym launch was to take the gym industry from his knees to his feet because the average gym owner takes down $36,000 a year in personal income and has like maxed out credit cards and has like 18 days of cash on hand and I was like I wanna fix this and what ended up happening is like I because I wasn't emotionally mature enough I took enough licks from people really close to me both clients and employees that I just like I just needed to put distance like I had 17 different people who work for me try to start their version of my business you know what I mean I had clients try and you know like start their like because it was a it was a business based on consulting right it was a consulting business so like once you had kind of the models you could in theory try to be with us now no one has succeeded but it was enough that I was like dude you were bankrupt and like and like on the brink of divorce and used all of the stuff and then like you scaled to 3 locations and sold them and now your family's financially set off and like now you wanna attack me like it happened a few times

Shaan Puri

to your feet and then you kick me this is how I get repaid for this

Alex Hormozi

That's how it felt. That's how it felt, and so I wasn't... I think now I can handle it a lot better, but at the time, I just felt so disenfranchised. I just felt hurt, honestly, because I really poured my soul into trying to fix the gym industry. And so when I felt that way, we created space, and then it just became an asset we owned. That's why I was open to selling it, but... I haven't felt like that until now.

Shaan Puri

It's so funny you mentioned the Elon big mission thing. This guy, he did it with Twitter too, which was actually the biggest risk of all. He's like, "I'm just doing my part." And I was like, this guy, yeah, the Teflon Don. How did he get away with it? He spun that... like he did his full 540 on that thing, spinning it to be like, "Actually, I was also saving the planet with that one too." And I was like, this man!

Sam Parr

you're welcome

Alex Hormozi

this man you're welcome

Shaan Puri

That's that thing they call it where it's like just the male bullshit. The ability for some men to absolutely bullshit their way out of everything. Elon’s got that; he is the world leader in that.

Alex Hormozi

I think there's... yeah, just a minute though. In terms of creating a stronger narrative, I'm already amped about this narrative. But again, I think there's power in reframing what you do to be something that aligns with humanity. To be fair, it doesn't matter what you do. If you trunk up enough, people need food, right? You want to feed humanity. A lot of these things that are necessary for civilization, when trunked up enough, are pillars of society.

Sam Parr

yeah

Shaan Puri

It’s all about what story you’re telling yourself because then you’ll tell that story to others. If that story serves you, then great. I mean, I personally think this is the Silicon Valley, like, PTSD or whatever. Anytime I hear a mission statement, I’m like, “Just shut the fuck up. Tell the truth.” You want to make money? Great. You want your own life value to increase? You realize that in order for you to get that value, you have to create more value in the world. So, you identified some people that needed something, and you provided that value in spades. Whether that was dentists needing better software, or the world needing a social network, or wanting to send disappearing photos back and forth to each other’s phones. You know, you hear Evan Spiegel. If you go look at the original landing page of Snapchat or the emails that he sent to the sororities and fraternities, the landing page is like two chicks in white bikinis, kind of like taking a naughty selfie, basically. There’s a giant timer where the photo’s going to disappear. And the same thing when he’s emailing the frats and sororities. He’s not saying, “I’m trying to reinvent the way that humans communicate.” Actually, you know, 75% of our brains are wired for images, not text. So, I wanted to make a messaging app that was image-based. Then you hear him do the pitch, and he’s like, “For too long, images have only been used for memories, but I wanted to use images for communication the way we originally did with hieroglyphics.” It’s like, “Bro, it’s okay that you thought this app was fun and cool and that it might be a hit.” It took off in schools because people wanted to get around their teachers or parents being able to see photos in their ephemeral state. That’s okay. But they always tie it back.

Sam Parr

to something that's word is a submission now it's the d word it's democratize

Shaan Puri

Oh yeah, yeah, yeah. We're going to democratize access to private limos. Really, those were like... and then, of course, what does it become? Right? As the marketing teams get in there and the consultants get in there, they're like, "Our mission at Uber is to make transportation as readily available as running water." That's big. That became their mission statement. It sounds...

Sam Parr

fucking awesome yeah

Shaan Puri

but at first it was like amazing but it I wasn't really by showing

Sam Parr

up in a black limo

Shaan Puri

Yeah, he didn't start in literally the early stories of anybody who knew Travis and Garrett at Uber. They would be like, "Dude, check this out!" They'd push a button while they were at their Michelin star dinner and say, "Watch this, a car shows up!" And they're like, "Yeah, that's right, he's a baller! I can see where he's at on the map. This is amazing! This is my private driver; I summon him through my app." To me, there's always been a disconnect between what I think the truth is, which is a little bit skeptical and jaded, and then the revisionist history story that sounds really admirable and noble. Personally, I've just come down to the conclusion that I'm okay with the truth. I get that human nature is primal; we're kind of just primal animals. It's okay to seek pleasure, avoid pain, and like status.

Sam Parr

you don't wanna

Shaan Puri

flow status like it's okay

Sam Parr

But Alex is... Alex is like the mission. So, you know, Alex, maybe it started as like, "The mission of our company is to get your money and to put it in our bank accounts," right? You know what I mean? Like, that's like, we're changing our bank account $1 at a time, and we're starting with $4 by making it our dollar. That's like... I imagine it started with, "I just want to get rich and do dope shit," and then it changed to, you know, this pretty grand thing of changing work through... instead of using praise. When did that change?

Alex Hormozi

I think it's a yes. And so, Sean, I'm like the bullshit ometer, etc. I wholeheartedly hear you on that. What I mean by that is, the truth can change. It's not like we're talking about a fact; we're talking about the truth of why someone does something. That can change. For example, when I started Gym Launch, I've said this many times: the mission of Gym Launch was to not be broke. That was the mission. But what happened is, after I saw the lives that got transformed from it and I was no longer broke, the mission had to change. I had accomplished that mission, so it had to get bigger in order to continue to expand. I had families relying on me, employees, etc. Customers. So it truly became about taking the gym industry from its knees to its feet. Acquisition.com started with the thing that I was passionate about. The only thing I was passionate about was spreading good business. I love to talk about business; it's my favorite thing in the whole world. I talk about business, I write books about it, I make courses about it, I create content about it, and I do business in the meantime. I love business. That was the only thing I felt passionate about, and so that's what I made the mission about. But as we've walked the path, I've realized that the reason the businesses have done really well for us is because of the cultures we create. We believe those cultures create better businesses and, honestly, also a better working environment. They generate really good bottom lines but also great experiences for the people who work there. I haven't been amped about it, and now I see a much bigger picture than I did when we started it 2 or 3 years ago. I think your reasons evolve, and it makes sense. I think it's both, honestly. Like Evan Spiegel's personal goals—he had transferred money from that person's account to his to the degree that he could buy whatever he wanted. You just think more about it and ask yourself, "Why do I want to do this?" Because you have to have a reason; otherwise, you just go into a ball of nothingness. So, yeah.

Sam Parr

Well, look, I mean... I think the best way to actually learn that—we were talking about this in the last episode—we talked about what's the restaurant... Sean... Panda Express guy?

Alex Hormozi

yeah

Sam Parr

Yeah, and then we were like, you know, he just sells like orange chicken. That's not exactly inspiring, but he employs like 20,000 people. He gives these guys... I think we were talking about it; I have my notes here. He gives them all like... he pays a little bit for them to go to Tony Robbins. He gives them like the "Think and Grow Rich" books and all these books. And he's like, "Yeah, like the whole chicken thing, that's kinda cool and all, but I'm actually taking an hourly wage worker and we're trying to elevate them." So I'm like, "Oh, I can get behind that. I'm in on that." If you look at a lot of non-tech or non-Silicon Valley companies, they employ like 30,000 people and they're like, "Yeah, you know, we sell tires, and that's cool, but I'm really just trying to create jobs." That's very fascinating, and that's really exciting. It's cool; it's better for the economy. Or like, you know, some of these really boring brick-and-mortar businesses... I think that's actually where you see a lot of really cool missions. Or like, if you... I've read about the Koch brothers. They've... no.

Alex Hormozi

they've oh you mean coke like coke industries yeah yeah

Sam Parr

Yeah, yeah, Coke Industries. So basically, it started with the dad; he was like an oil guy. Then they used the byproduct of creating oil to produce all types of plastics and whatever. Now, it's arguably one of the biggest privately owned companies in America. He was like, "No, my whole thing is freedom for people, you know? I want to teach them that they have autonomy." Through working here, he's got a whole book on his management systems. More so, what I'm inspired by is giving and empowering people. So anyway, when I read about those older companies, I actually think that's a bit more inspiring than some dork saying that he's changing the world one computer chip at a time. I don't know, that's not exactly inspiring, you know?

Alex Hormozi

what I mean maybe it hasn't played out yet

Sam Parr

yeah yeah yeah yeah like it's yeah

Alex Hormozi

Like if Bill Gates said, when he started, he was like, "I want to have a computer," and everyone's like, "Okay." And then he did it. So I think part of it is also about what snapshot on the timeline we are looking at. But I 100% agree with you, Seth. I love it. It shifts from internal to external. In the beginning, you do it for yourself. Obviously, you do it because you get praised instead of punished. You have more good things than bad things, so you keep doing it. But once the thing that was good no longer provides the same pleasure, like the diminishing return of more money, isn't there anymore, then you have to find a new goal, like you said. And if it also coincides with other people being motivated not by making Alex rich, but by proving that we can create companies that reward instead of punish and actually have better returns, like I'm juiced! And we haven't proved it yet. That's fine. We haven't proved it yet.

Shaan Puri

We will... I want to ask you two questions. The first is around people you admire. So, we talked about the Panda Express guy on our last episode because we were featuring "Crazy Rich Asians." Basically, that was the focus of the episode. Then it turns out he lives there, and you're both in Vegas. Who are some people that you admire? I always find this interesting to hear who kind of stands out and why for different folks. So, who are some people that you admire, either past or present? You know, people that you've met. Because I know that this whole getting famous on YouTube thing opens up a bunch of doors. You meet a bunch of cool people that you otherwise wouldn't have. You expand your circle of people you get to know through this stuff. So, who are some people that you admire?

Alex Hormozi

well I definitely admire andrew patron from panda express because they're a married couple who built this whole thing and they didn't they never took out outside money and they've owned the whole thing privately they have 26 100 locations they do 3,700,000,000 a year with 27% net margins and they take $935,000,000 a year in personal income and I think that's only possible because they have created a new vision for what they wanted the company to be about which is about their employees I am inspired by warren buffett you know what I mean I mean I I I am because of the long term mentality he has and he built berkshire hathaway and in some ways I feel like he he built it he has like a beautiful life story of like just believing in the power of compounding and patience and like that's what I feel like his virtues are that he's demonstrated in making I would say that for us it's like if we can build something like that but just with our own our own spin our own zest which is around praise not punishment building companies that like we can win by their scoreboard but we do it our way so that's the the the warren angle and I mean I admire elon a lot a ton you know just like what we're talking about earlier like his ability to see vision and connect to a larger mission he's seem he's been able to masterfully do that in every single company he's been a part of and his track record's incredibly fucking impressive and he just continues to like defy the laws of like what seems to be like normal or possible over and over and over again and so I think just like how he just like stares into the abyss and says like let's do it I think that's something that I really really admire he obviously has flaws like all of us do but I think he also has been really good about like owning his flaws and being public about that he's just a human and I think he may create a new model for how big public ceos rather than maybe that you know maybe we're in the beginning of of that world and I think on on the totally other side of the coin I think I admire what like mister beast has done from a personal branding perspective I've been able to to get to know him really well and and jim's jim thinks really big and has a tremendous work ethic and I think seeing the merge like seeing where all these things are like elon has been able to build a personal brand and you know in a lot of ways like if you're a fan of elon you wanna buy all of the things but he just happens to have enormous monetization vehicles and to your.

Alex Hormozi

Sam talked about how they use their resources. "Yeah, sure, we make tires. Yeah, sure, we sell large chicken." In a lot of ways, I see all the companies we have in Acquisition.com as businesses that transact and build, but the reason we do it is deeper than that, and I think that's really dope. So, if you were to mix what I'm drawing inspiration from at Curran, it would probably make sense to see all three of these as the biggest influencers. You have Mr. Beast on the personal brand side, Warren Buffett on the investment side, and then Elon Musk for the big vision. I feel like those three are where I draw the most inspiration from in terms of our day-to-day operations.

Sam Parr

What we're trying to do... What's interesting about you is that you're pretty good at... you're very catchy. So like the whole "knees to feet" thing is pretty awesome. And then what was the line for your current company? It was "reward versus punish," right? Yeah, thanks. You're pretty [good at this].

Alex Hormozi

you have reward we wanna beat them we wanna beat them at their game and we wanna do it our way

Sam Parr

Well, you said, "We want to beat them on... we want to use their scoreboard but do it our way." So you've got... you're quite lyrical. You've also done a few things that you've talked about very casually that I've caught on to and I really like. For example, you say, "Never skip dessert." And then you also... because your whole dieting thing is you eat all of your protein earlier on, and then you're like, "Alright, now I have fat and carbs. We can go big on those." You've done a few things outside of business that I find almost more impressive, or I actually use in my daily life more so than your business stuff, which I actually find is pretty funny. You also have... I don't know if you've seen the shot, but if you Google, there's this 23-year-old Alex who does a thing where he's like, "I'm going to do a bulk over the next 8 weeks," and he has before, during, and after photos. That stuff I look at significantly more than a lot of your business stuff. I find that some of your fitness and diet stuff is more interesting and applicable in my day-to-day life than the business stuff. I'm shocked that... like this for a...

Alex Hormozi

Living for... like, I joked about it in the comments once. I was like, people admire my way of thinking about things in business. For a decade, I did that with fitness. I just don't talk about it because everyone feels entitled to an opinion because they have a body. I just... I hate getting into it. They're like, "What about salt?" I'm like, "Dude, just fuck off." You know what I mean? I have so little patience for it because I'm like, "Look at you." If you were more in shape... and by the way, no one has been more in shape than me has ever criticized any of the content I ever heard. It's just like people who are wealthier than you never say shit about business advice. You know what I mean? No one ahead of you ever said something.

Sam Parr

Well, the cool thing about it is... I use the fitness analogy a ton in business because I'm like, "Well, it's hard but it's simple." If you lift this much weight and eat like this for a year, you're not necessarily gonna look like Arnold or be [inaudible] or whatever, but you're gonna be pretty good or better than where you are now. You just gotta do it for like 2 years and you gotta be fairly strict about it. So that's why the carryover is quite fun, watching you do both of those things. I appreciate it.

Alex Hormozi

Yeah, I mean, simple not easy. I feel like that is the **theme** of so many things, like fitness, nutrition, marriage, and business. It's a simple concept to understand, but very hard to execute.

Shaan Puri

what's the simple not easy for marriage

Alex Hormozi

I mean, I think it's more about **rewarding** than **punishing**. It actually comes down to that. So, like, okay, if I want my wife to scratch my back more, I have to wait until she scratches my back of her own volition. Then, I have to reward her immediately. She will want the reward more, and so she will do it again. Then, I reward again... I reward again.

Shaan Puri

very pavlovian of

Alex Hormozi

You well, yeah. I mean, I think we're all... you know what I mean? I think fundamentally there are three things you can do when anyone does anything around you. You can punish them for doing it, you can ignore that they did it, or you can praise them for doing it. Have you ever heard...?

Shaan Puri

The Tony Robbins... I forgot what he calls it, but it's like the four styles of being in a relationship. He says something like this. I don't know, have you heard this thing? It's like the first one... let me see if I can remember it off the top of my head. So basically, he goes, you know, the first one's like a baby. It's like, "I need love, and I don't have to give anything to you." So it's just like, I cry, you give, and that's it. You better be happy with that arrangement. So that's like one style of relationship you can have. Now, obviously, that doesn't work out very well once you're an adult. You can't just cry and expect to be given everything you want and then not have to do anything in return.

Sam Parr

right because that's baby love so that's baby

Shaan Puri

Love. Then he has the next one, which is basically **tit for tat**. This is where almost everybody falls into, so this is probably going to sound familiar to at least some extent. It is probably the root of all problems in relationships. **Tit for tat** is when you measure what you get and then give based on that. When you're given a lot, you give a lot. But then, as soon as somebody breaks the cycle and they short you—consciously or unconsciously—they don't do what you wanted. You also withdraw or pull back some amount of giving. Then they reciprocate, measure, and pull back as well. Both sides do that, and you end up with a sort of race to the bottom. So that's **tit for tat**, and that's where most people stand. It's just a cycle that resets over and over again. The next one is **unconditional love**, which is basically, "I give regardless of what you give back." I give because that's who I am. I give because that's how I want to roll in my relationship. I control what I control, and obviously, that's way better. To me, that's the simple—not easy—way of being in a relationship: just go unconditional mode rather than **tit for tat**. Then he has some higher one, which is **monk love** or something like that he calls it, where...

Sam Parr

it's like spiritual love it's like

Shaan Puri

I love you even though you hate me. Like a monk, I pray for and love even my enemies and those trying to hurt me. He's like, you know, nobody gets there, but that's aspirationally what you could get to as well. It's like, you know, the love of a monk who loves even their enemies and those who try to cause harm. So those are the four levels of love I remembered.

Sam Parr

Alex, do you ever... So, I saw this video of you the other day, and now everyone's like giving you a hard time, or they're just teasing you in a good way about your outfit because you wear the same clothing all the time. So you made a funny video about it, and instead of just saying "Oh, it's comfortable," you go, "Dude, I'm just more Darwinian than them. These shorts..."

Alex Hormozi

you wanna go work out

Sam Parr

"I can go work out. You wanna go to a restaurant?" Yeah, that's what he said. He goes, "You wanna go swimming? These are waterproof. You wanna go out to a restaurant? These look just good enough that I can go and do that." I can do anything. I'm Darwinian, you're not. I win, you lose.

Shaan Puri

I bought the shoes you had mentioned because you were like, "These sandals are the perfect sandals for working out, running through, you know, like walking through rain, climbing a hill, or being at the office." In the comments, everyone's like, "Yo, what's the sandal? What's the sandal? Where's the affiliate link? We can't find it." Then some dude, like 50 comments down...

Sam Parr

he was

Shaan Puri

Dude, that's what the... it's this brand, the nightshade color of this thing, palette. Alright, respect to this guy for finding it. I'm gonna go buy this thing.

Sam Parr

Do you ever... like, does your mom and dad say, "Hey, quit being such a douche and just wear what we bought you" to be nice? At what point do you think, "This makes sense for me and it's also good for the brand" versus "Live a little and let's just fuck around"? Do you struggle with that?

Alex Hormozi

I know what I mean? I think, yeah, like "good for the brand" is actually not really a thought when it comes to it. I believe that brand comes as a result rather than being conscious, you know what I mean? Like, people are like, "So when did you think of 'Never Skipped Dessert'?" I was like, I was making fun of fitness people because my original audience was fitness people who obsessed about not eating cookies. And I was like, "Fuck off!"

Sam Parr

I'd

Alex Hormozi

Be like, "Eat dessert," you know what I mean? But do it in a way that you can sell a six-pack the whole time. So that was why I never skipped dessert. It was always like, "Never skip leg day, never skip Monday." I was like, "Never skip dessert." The calves thing is because I genuinely have started training. I start every training session since a girl told me that she thought my calves weren't big. It's still like 12 years, 14 years that I've started every session with calves. My calves have grown a lot, and so everyone's like, "Oh, Jeanette!" My calves were sticks, and I trained the shit out of them. So like, is it part of my brand? Yeah, because it's in some ways like...

Shaan Puri

It's true, Lindsay. Yeah, yeah. Thank you for my nation, Lindsay. 14 years of fuel you gave me.

Alex Hormozi

And, the outfit thing is actually because my content team wanted to make content about it. They were like, "Dude, you're a fucking maniac with this! I feel like people should know this." Everyone who knows me in person knows that for almost a year and a half, there were stacks of shoe boxes. I would wear different shoes for a day, an hour, or a week. They kind of graduated to, "If they're good enough where I can walk around the apartment, then I'll walk around with them for a day." If I can walk around with them for a week and I still like them, most of them never got there. So, I have a few finalists that made it to that point. I think I just obsess about making things better. The same thing goes for if I end up doing a, you know, if there is a good enough company that does nose strips. I'm going to iterate the product a bunch of times until I think it's absolutely untouchable. Then I'll say, "This is the one I use," and I can say that with confidence because I did the work on it. For me, I just hate having to change. I don't know what it is; it means that I started my day not thinking about what I was going to do. So, I was like, "Okay, well, if I can create a setup or a uniform for myself that I can be in the most environments..." I'm really never in less than 40-degree weather, like ever, because I usually tend to be in warmer spots of the country in general. This outfit goes from 40 to 120 degrees. I can go to the gym, I can go to the pool, I can walk for hours, I can walk all day, and I can go to a nice restaurant. I can do all those things. So, because if they need... dude.

Sam Parr

That's crazy because your wife, who I've seen, dresses lovely. She looks fashionable, and her hair always looks nice, you know what I mean?

Shaan Puri

she said it goes 40 to a 100 20 like a like a car goes 0 to 60 and I'm

Sam Parr

what it's gonna be

Shaan Puri

like this flannel this this jacket right here this thing goes 40 to 120

Alex Hormozi

Once it’s below 40 degrees, I get cold, so I have to put on pants. But up until then, I’m pretty much good within that range. I can button things up; like, this thing can go full sleeves. That’s when I’m in mass cold mode. If I go to a restaurant, there are fire sleeves I can have that, right? But otherwise, you know, I’m in “beater mode.” When we go to the gym, you know what I mean? We go to the pool, we go to the beach, we go wherever. I’m going to be in “beater mode,” you know what I mean? And this is the lightest thing I try to wear.

Sam Parr

yeah that's smart mode like that's

Alex Hormozi

smart mode

Shaan Puri

like a car yeah

Alex Hormozi

Well, my whole outfit has sports mode. People are like, "Procs and sport?" My whole outfit has sports mode, comfort mode, and weather mode. I can do that. Anyway, I enjoy finding each of these things almost as much as I enjoy wearing them. Every morning—this is true—when I put this on, I get a little boost. I'm like, "I know that I've picked every single one of these pieces out." I have no doubt that this is the best thing for me for my day. I know that the brand of white beaver that I have on right now is the right choice. I tried on 40 or 50 other brands, and I knew this one sat where I wanted it to sit. It wasn't too thick on the shoulder or too thin. It didn't drop into some string on the back. Some people like that, but I didn't want that. The tank tops themselves are thinner than regular tank tops; they're ribbed so that they fit right. I think even if you've ever seen those Under Armour tank tops or those shrink-wrap ones, they don't look good. I think they look synthetic, and for me, I prefer cotton. There are just a number of iterations. If I talked about the shoes, I could tell you a zillion things that I looked at. I mean, I have an Excel sheet that I was breaking down...

Sam Parr

I thought you would have... I have a few friends like that. I'm not as extreme, but I like buying and testing a ton of stuff. And I think Sean did... Sean wears ordered like 20 of the same shirts. What products... This is actually interesting. I don't think this is like too inside baseball, but what products and brands do you obsess with and love in your daily life?

Alex Hormozi

Well, I won't say them because I'm in talks with like Hasselman, correct? Sure, to try and figure something out. But I will caveat that with, I think that in general, for people, my life might be different than theirs. I think just being deliberate is important. So many people are just like sleepwalking through life. They're always sitting there with their pants that just don't fit right or always don't have this thing. A lot of stuff I modify. For example, my gym bag—there's a video about my gym bag. I tried out a bunch of different bags and I finally found one that I liked. Then I modified the heck out of it. Now, every time I go into a gym, people are like, "Dude, that bag's awesome!" I say, "I know because I made it for this function, and it's great. I love it. It's really good." You know what I mean? So I think it's more about finding whatever your 40 to 120 is. Because maybe you live in Michigan and it's always cold, then it's like, well, you're going to have a different standard for what standard wear is.

Sam Parr

what shorts are are they I thought you used to wear just jorts I used to make fun of you for wearing

Alex Hormozi

I used to wear jorts but jorts did

Sam Parr

yeah

Alex Hormozi

The reason is... I'll tell you, I used to wear jorts because they were more comfortable and I could do more casual settings with them. Right? They're like always showing up in athletic shorts, you know what I mean? It just looked almost too casual, I think. A lot of restaurants are like, "No athletic wear," and so I was like, "Okay, well that's annoying." Then it went through this whole thing where I had to find the best shorts. While I was doing that, the ones that I have have back hooks on them so that I can hang them to dry. I've got an iPhone pocket in there that's built in because I hate having to sit and then take it out of my pocket every time. It's such a pain! There should be a pocket for this; everyone has one, right? There's also a little place where I could put an iPad pencil in my shorts because I use my iPad a lot. I've got cargo on the other side, and these are stretchy but not too stretchy. They're stretchy enough.

Sam Parr

back one what what freight you hauling in there buddy what do you got what type of what

Alex Hormozi

do you mean the cargo or the car just mic packs

Shaan Puri

gummy bears

Alex Hormozi

No, a lot of times it's mic packs. So, a lot of times it's mic packs because we're getting... right now my mic pack's in my cargo pocket. But, like, I could put a water bottle in here if I need it, or a hotel key. Like, the hotel key is there whenever we're traveling. I also use my Nicorette because I actually use Nicorette, so I'll have that in my pocket if I go on a podcast. I just like to always have the stuff that I need there, you know? Well, it's just weird though.

Shaan Puri

The best, the best way possible. Man, this is... yeah, these are my favorite kinds of podcasts. When you find out, you know, it's like, "I wanna see your weird." That's when I know you. Until I see your weird, I don't actually know you. I feel this is my personal thing, and I'm glad we went down this rabbit hole because...

Sam Parr

we got to

Alex Hormozi

See, you're weird. It's funny because right now, I actually... I'm not going to show you the brand, but I've got this backpack here, right? This backpack I can wear when we travel. I can wear it everywhere, and it has everything I need to travel. I can travel for four weeks with it because all I have to pack is three pairs of identical shorts that are multi-functional. Then, I just have an amount of tank tops that corresponds to the laundry cycle of the trip, and that's it. I could put one flannel on top, and I'm good. I don't even have to use the expansion part of that bag, which I have options for if I need it. It also has a cool front pocket for all my wires that's flat, so it doesn't take up space. There's just a lot of thought put into it. I went through a zillion different bags to find that. I went through a zillion different bags to find the perfect gym bag. But whenever I pick it up, I'm like, "This is the best bag for the job."

Shaan Puri

What is the best way you spend money for you personally? Like, not as a business investment that you know you think has a great ROI, or something that brings you a bunch of joy, or is just dope for you. That is, let's say, not your content team and not something that's directly related to the business.

Alex Hormozi

Yeah, I mean, I would say GSX is wonderful since it's in the Southwest. It's like semi-private flying. Yeah, I fly with them.

Sam Parr

it's pretty good

Alex Hormozi

Oh, it's great! I mean, the only reason we fly private is because it saves time. It's the only reason we do it. You have a lot less hassle. But JSX allows you all the benefits of private flying. This is such a *fucking* JSX plug, but it's really good. A ticket is like $300 when it would normally be like $50. So if you want to fly JSX from Vegas to Salt Lake, or Vegas to Scottsdale, or Vegas to LA, it's $300. It's nothing, right? You really just walk up to the plane, get on the plane, and then walk off the plane. That's it! You know what I mean? It's just like private flying; there are just a few other people there. In my opinion, private flying has the most benefit for short travels and the least benefit for long travels. For long travels, you want to fly as high and as fast as possible. The bigger the plane, the better. By percentage of the trip, going through security and dealing with the hassle, if you have a 5.5-hour flight versus like 7 hours of transit, it doesn't materially change a lot. But on a short trip, where you're going sub-2 hours, you can double or triple the length of the trip by going in reverse, or cut it in half or by a third by flying private. That's where I feel like you get the highest marginal benefit. It's also the cheapest private flight for the shortest ones because it's by the hour. So that's kind of like when we go back and forth. Usually, the only time we'll fly private is if we can't get a direct JSX flight.

Sam Parr

We'll wrap up in a second here, but last time you were here, Sean asked a question about your portfolio and I want to follow up on it. What's your portfolio looking like in terms of both your private investments as well as what you're doing with your money? Are you keeping it in equities, bonds, cash? I think last time you were super heavy cash, if I remember correctly.

Alex Hormozi

or yep all treasury was

Sam Parr

Yeah, that's what it was. It was treasuries. You're like, "I'm almost entirely treasuries." What's it looking like right now in terms of, like, if you could do a pie chart and percentages?

Alex Hormozi

probably still half treasuries

Sam Parr

except now they're a lot better than before

Alex Hormozi

Yeah, so probably half in treasuries, probably a quarter in just like indexes, and the other quarter is in private companies.

Sam Parr

so pretty simple

Alex Hormozi

Yeah, probably not by value over time. That treasury part is going to continue to decline as we do more and more deals. But yeah, I still think that... I mean, I don't know what the future looks like. I tend to like having lots of cash; I feel good. I never want to not be able to do a deal that's going to 10x because I don't have cash. The cost of missing the 10x is well worth the quote "inflation" that I'm suffering for the difference between the treasury yield and the inflation cost.

Sam Parr

Well, thank you for coming on again. If you go to our YouTube page, "My First Million," you're actually like the... I don't know what they call that video, but you're like our main feature.

Shaan Puri

page video skin video for a while

Sam Parr

Yeah, and it's like a quote: > "I've come to the conclusion that I just like to work, and I don't like when people ask me why I'm working all the time." ...or something like that. Mhmm, but thanks for doing this again, and we really appreciate it.

Alex Hormozi

No, I mean thank you guys for having me on. Thank you to the audience for maybe making a request to have me back on. I appreciate it, and it means a lot to me. So thank you guys for just being awesome hosts in general.

Sam Parr

awesome well that's the part