Minority Stake Influence Challenge

Alex Hormozi shares his experience with the challenges of having minority stakes in businesses, particularly around implementing changes and influencing operations. His perspective highlights the frustration of partial implementation of advice and the importance of having more direct control.

Key Points:

• Challenge of Soft Influence:

  • In minority positions, must use "soft influence" to move things forward
  • Can't directly control implementation of changes
  • Have to rely on persuasion rather than authority

• Implementation Problems:

  • People often only partially implement advice
  • Example: "If I say hey we think that this operator in your business blows and we need a new operator"
  • They might hire the new person but not fire the old one
  • Creates ineffective half-measures

• Evolution of Strategy:

  • Moving towards majority ownership deals
  • "The business that I enjoy the most is the one that we have complete control of"
  • Speed to action is much faster with majority control
  • Can implement changes more effectively

• Results Comparison:

  • Have had success with minority stakes
  • Biggest win: Company went from $16M to $50M/year
  • But majority control allows for more consistent execution
  • Considering shift to more majority-stake deals

• Learning Experience:

  • Similar to "listening to half of someone's diet advice"
  • Can't achieve optimal results with partial implementation
  • Need complete buy-in or control to fully execute strategy

This perspective has led Hormozi to reconsider his investment approach, potentially focusing more on deals where he can have majority control and direct influence over operations.