These 4 Math Equations Will Make You A Millionaire | Alex Hormozi

- August 6, 2025 (7 months ago) • 01:19:36

Transcript

Start Time	Speaker	Text
00:01	Shaan Puri	You probably recognize this guy, Alex Formosie. He's known as the $100,000,000 man, and he's probably the most popular business teacher on YouTube. So last week I flew to Las Vegas, and I asked Alex to teach me the things in his new book, Money Models (How to Make Money). Thank you. Yeah. He says that this one concept has made him more money than anything else in his career. How would we improve our business by thinking in money models?
00:24	Alex Hormozi	So, let me walk you through the actual economics of this. If 10% of people buy something that's 10 times more expensive, you double your revenue. So, the classic upsells: "you can't have X without Y." You can't have a burger without fries, or whatever. It's like, "you can't have X without Y," right?
00:35	Shaan Puri	I recorded the whole session, and I want to share that with you here today. All right. If I reset your bank account and your followers, change your name and face—reset you to zero—how long do you think it would take you to get $1,000,000 in your bank account?
00:48	Alex Hormozi	Well, having lost everything twice, I'll tell you what I did.
00:51	Shaan Puri	"What do your haters get right? So, you've got a new book. If I read this book and it is going to start a little campfire in my head, what's going to happen from Money Models?"
01:09	Alex Hormozi	You will love this book if you liked "Offers." A money model is a deliberate sequence of offers. Many businesses have more than one offer, and so it's how we sequence those in the right way that accomplishes a financial objective. The financial objective for this book, and what I try to go for for every business I have, is something that I've always called "client client finance acquisition." And so the reason that we've been able
01:30	Shaan Puri	User pays for the next user.
01:32	Alex Hormozi	Yes, and a slight tweak on that. Okay — which is: so it's 2× CAC + COGS. Okay, so this is our... this is the big thing that we want. So it's basically gross profit in 30 days. I guess I could move this over here, but it doesn't matter. Gross profit in 30 days is greater than 2× CAC + COGS. [ CAC = customer acquisition cost; COGS = cost of goods sold ]
01:53	Shaan Puri	Let's just explain the terms people don't know. Gross profit — you're not talking about overheads in this, right? So gross profit. CAC — cost of customer acquisition. COGS — what it costs you to deliver the product or service that you deliver. And what you're saying is: my bar, my golden rate, my golden number I'm trying to hit is I want to take the cost to deliver the service and double it. In 30 days I need to be hitting that number. That's my goal, whether that came on the first offer or—what you're saying now—is the second, third, fourth thing I sell them along the way, along their customer journey.
02:21	Alex Hormozi	It's exactly that.
02:22	Shaan Puri	Can you do, like, a stupid, tangible example? Yeah, yeah.
02:25	Alex Hormozi	So, the first business I ever did this in was the gym business, and it's a really simple example because everyone gets it. When I came into the gym business, the vast majority of businesses ran low-ticket offers—like $21, 21-day deals. They'd also run a free month or a free 14-day trial—whatever that was. That was the primary way of getting people in. Let me walk you through the actual economics of this. If you have a business doing it the old way, right: someone comes in, and let's say you pay $10 a lead — that's your CPL (cost per lead). If you convert, say, 20% of those people to start a trial, that means it costs you $50 to start a trial. Then one out of three of those trials (which is the industry average) convert. Typically, the membership for a boot camp or something like that is going to be about $99 a month — that's what it costs. So here's... </FormattedResponse>
03:13	Shaan Puri	Your CAC. Yeah, exactly. And here's the first thirty days.
03:16	Alex Hormozi	Alright, so you're upside down here now. Not only that, it probably took you two weeks between when you got the lead and when you got the trial, and then 21 days — now you're at five weeks. So by the second month you're like, "Okay, I got $99 times two." That doesn't even take into account that the $99 is not all free — there are costs involved. But let's just say these guys are amazing and they're running 100% margins. So it's like, okay, this is going to take 60 days for this business to basically recoup the money. Now the problem is that in the gym industry, especially, many customers leave within four months, so it's a very tough way to make a buck. What I kind of came in and started doing was we run these challenges, and I'd spend the same amount — $10 — same...
03:57	Shaan Puri	"You were here when you started. You did the same model initially."
04:00	Alex Hormozi	No—doing it. I saw people doing it, and so then it was like a three-step permutation. I, like, don't even want to tell the backstory, but basically I figured it out, tried it at a gym, it worked at that gym, and then I started my gym. That's basically what happened. So, same cost per lead. I would close the same. I get 20% of these businesses. So it would cost me—let's call it $50, whatever. For me, though, off of that $50 I would sell up front and I would make $500.
04:28	Shaan Puri	Because your $500 offer was a "yes."</FormattedResponse>
04:30	Alex Hormozi	We did a challenge where you win your money back. If you lose X amount of weight, you get your money back. That was the beginning of the offer — it's an attraction offer, one of the offer types I talk about in the book. So it's like, okay, got $500. But we didn't stop there, because what are you going to do after you have your thing? Well, you need some supplements. So 48 hours later we'd sell $200 of supplements — call it 80% gross margins. So I get $160 + $500, so now I'm at $660. Alright, great. Now on top of that: three weeks in, it's a six-week deal. I would then say, "Hey, I'm gonna roll this towards a one-year membership." So we'd roll that over, which is another mechanism that we use. And so then I get the one-year membership. Great. Now at week six, or between week three and week six, we'd make a second offer and say, "Hey, you're already a member — can I just save you some money?" They say sure, and we say, "If you prepay for the whole year, we'll knock two months off." Then all of a sudden I get about 20% of people to prepay for the whole year, which is a $2,000 cash upfront. If it's 20% and we add all these together, I'm getting about $1,000 upfront in the first sale.
05:36	Alex Hormozi	A lot of the time, these guys are getting $99 or $199, so my ability to outspend them in an auction-based, attention-driven market—on Facebook, Google Search, or similar—was unparalleled.
05:48	Shaan Puri	"Right."
05:49	Alex Hormozi	And so, because of that I was able to not only outspend my competition but—if you're actually doing LTV:CAC—it cost me $50 to make $1,000. I was getting 20:1–30:1 upfront. So I was actually able to finance the opening of all my locations that way. I could spend $5,000 in ads and make $100k back, and literally paint the walls, put the lobby in, buy the equipment. By the time I actually opened the gym—because I do presales for a month or whatever—I would already be cash-flow positive day one without having to invest capital. Fundamentally, I will continue to tinker. This is where I got spoiled, or whatever—maybe my belief changed—because this was the first model I ever had. Every business I've had since then, I thought, “No, there's a way if I just keep tweaking it until eventually this thing will print.” And when that happens you don't need outside investors because you cash flow by getting customers. Basically, almost every business I've had has been supply-constrained because I can blow the doors off on the front end—I can acquire customers. This skill has probably been the largest contributor to my material success. For example: - Alan went from $0 to $1,700,000 a month within six months. - Gym Launch went from $0 to $2,200,000 a month in twenty months. - Prestige Labs went from $0 to about $1.5 million in six months. Each of them ramped very quickly because I could get customers at a profit. When you look at the mechanics of the money, as soon as one customer comes in—if he gives you that 2x CAC plus COGS—it's like, “Okay, well I've paid for him and I've paid for the delivery.” But he comes loaded; he brings the next customer with him. Then that guy brings two more. So basically you keep doubling.
07:28	Shaan Puri	"He comes loaded."
07:29	Alex Hormozi	Yeah, exactly. So then, at that point, you literally only have to acquire—you need the cash or the wherewithal to acquire the first customer. Everything after that is financed by the customers. The greater that discrepancy, the more you don't have to put additional capital into the business at all. So that was a long way of saying, as fast as I could: that's what we hope to accomplish—the "good money market."
07:49	Sam Parr	Alright, so a lot of people will talk about how you need a million dollars and three years of experience to start a business — nonsense. If you listen to at least one episode of this podcast, you know that is completely not true. My last company, The Hustle, we grew to something like $17 or $18 million in revenue. I started it with about $300. My current company, Hampton, does over $10 million in revenue. I started it with essentially no money — maybe $29 or something like that. So you don't actually need investors to start a company. You don't need a fancy business plan. What you do need are systems that actually work. At my old company, The Hustle, they put together five proven business models that you could start right now, today, with under $1,000. These are models that, if you do them correctly, can make money this week. You can get started right now — scan the QR code or click the link in the description. Now, back to the show.
08:42	Shaan Puri	I want to break down a couple of things in here, just because I can. First of all, this is great. I come from Silicon Valley. In Silicon Valley, virality rules all. Yeah — the early growth hackers... In fact, there's a book called The Viral Loop. The guy — my mentor, the person who kinda plucked me when I got to Silicon Valley — is featured in that book. Early on he was scraping Hotmail and he realized, "Wait, I have no marketing budget, but one user can get me the next user through this thing called the K-factor."
09:07	Alex Hormozi	Yeah.
09:07	Shaan Puri	And then you measure the K‑factor. It becomes—this is how Facebook and other businesses grew. You've created a version of the K‑factor for non‑tech businesses that are not going to grow virally, but you can grow: you can finance the next customer through the existing customers. I want to call out a couple of important things. The first one was: this is kind of "book one." So this is, you know, your $100,000,000 Offers book.
09:31	Alex Hormozi	Yep.
09:32	Shaan Puri	And I would say a key difference here for any entrepreneur is that you're able to charge $500, when this guy is probably, honestly, struggling to even charge $99 a month. I drove by a place here that had a $5 entry offer—the Las Vegas fitness club or whatever. You were not selling a gym membership, which is a cost to the customer; you were selling a transformation promise.
09:53	Alex Hormozi	Yep.
09:53	Shaan Puri	Right, so you're selling "customer transformation" — the happy ending. So, first of all: what are you actually selling? That was a key thing. Second, you were then upselling — an upsell of one of your money models.
10:05	Alex Hormozi	Yep.
10:06	Shaan Puri	You had a good insight in the preview your team sent me, which was basically that you want to sell when the customer's pain is highest. Can you talk about that?
10:15	Alex Hormozi	I'd love talking about this. Basically, I think so many people—businesses, especially services—think about this the wrong way. Because 78% of businesses... they think about having a term that they deliver for a customer, and they typically want to renew when they're about to stop getting paid, right? Which is typically the absolute worst time to try and renew.
10:34	Shaan Puri	"It's like an ex-boyfriend, hey."
10:35	Alex Hormozi	Yeah, right, town. Yeah.
10:37	Shaan Puri	It's like I'm on month eleven of my annual trial.
10:41	Alex Hormozi	No, exactly. And so there's basically five—five—five times that you want to sell a customer. So, number one... I'm just gonna move this, okay. Number one is immediately, right? That's like in the same conversation. The second one is after, basically, some sort of activation. Next, you have your halfway, which is—because, like, you're like, "Why halfway?" Because it's halfway, and that's why it works.
11:06	Shaan Puri	Because we're...
11:06	Alex Hormozi	Humans, at halfway... yeah. You have your "last chance" at the end, and then you have "milestone," which can happen kind of anywhere in here. But basically, they have something occur. So this is something they do; this is something that happens.
11:22	Shaan Puri	So, the action item for a company here is:
11:24	Alex Hormozi	Yeah.
11:24	Shaan Puri	Map this for yourself, yeah.
11:26	Alex Hormozi	But if you're like, "Okay, well which of the five do I do?" — do you want to sell the one of greatest deprivation, not the one of greatest value? Sometimes the one of greatest value and the one of greatest deprivation occur at the same time. Not always, though. I'll give you my simple example: if I go to the best steakhouse in the world and I have a steak and I'm like, "This is amazing," and the waiter comes back and says, "Hey, would you like another steak?" I'd be like, "I'm... I'm good." They're like, "You didn't like the steak?" I'm like, "No, the steak was great." They're like, "Why aren't you getting another steak?" I was like, "I'm good." They're like, "If you like the steak, you get more steak." The thing is that so many businesses are trying to sell and upsell—my customers suck, they're so cheap, it's like, no. So at that.
12:00	Alex Hormozi	I might have a deprivation around something that's sweeter and lighter, and that might be the right time to offer dessert—rather than more of that other thing. Now, the deprivation occurs at the same time as value creation. When the first loop of value that gets created produces the next problem, you get a natural selling moment. For example, if I help you get leads and you get leads, then you're like, "Holy shit, I'm overwhelmed." If I say, "Hey, would you like me to help you work those leads?" it's a very natural upsell, where the greatest value and greatest deprivation happen at the same time. If you are a business that doesn't have that type of loop—I'll just speak broadly—if that doesn't occur in your business, or on a short enough timeline, then you don't want to sell at that time. So that's basically what we strive for, and that's why I've always believed: when someone comes in with "red-hot pain," that's when you sell—not when you offer your trial.
12:49	Shaan Puri	Right. So, for—let's take the gym. We can use a different business if that... maybe that'd be nice. Yeah, sure. If you can, what would you—either, you know, either a business or money? No, you can either walk through a money model or...
13:01	Alex Hormozi	You can.
13:02	Shaan Puri	Walk through this for another business. Let's do another example.
13:04	Alex Hormozi	Sure. Let's say you have an SEO agency—whatever. So if you actually... we can use one of my real businesses, yeah.
13:10	Shaan Puri	Okay, so we have this business, somewhere.com. We basically help you find talent that is overseas. We help businesses when you're like, "I really want a developer, but I'm not trying to pay or invest in that, too."
13:19	Alex Hormozi	Yeah. Okay, got it. That's what I thought it was. Okay.
13:20	Shaan Puri	Got it. So we own this business, somewhere.com. For example, I got my assistant through this. I'll hire developers, graphic designers, data analysts—whatever you need. This talent is everywhere in the world, but hard to find. They put boots on the ground in different locations, like South Africa and the Philippines, and they have hundreds of recruiters in each of those areas to find who's the best 1% in each location to come work for you. Great business, great margins. Love it. Happy—love this.
13:47	Alex Hormozi	For us.
13:47	Shaan Puri	"Happy owner." Yeah, exactly. Okay, so now what's the problem? Today, the way our money model works is: customers basically listen to Sean's podcast or they follow Nick on Twitter. So we get leads from one place — well, not exactly fully, but that's the bulk of it. They come in, book a call, and on that call we try to sell them a contingency-based thing which says, "If we find someone, pay us a fraction of their salary." Now, their salary is typically so low because you're getting talent from different regions of the world, so that will come out to, let's say, maybe $6k per customer. What we do is that happens, and then we stop and we go fishing again for the next one. Okay — help us with our money model. How would you — if I read this book and I want to go help Nick improve this business — how would we improve our business by thinking in money models? </FormattedResponse>
14:49	Alex Hormozi	"Yeah, so the question would be: do we need—? If I'm looking at this right, we have attraction offers. So it's like: do we have a big demand issue, or do we have an LTV issue (LTV = lifetime value), which might be upsells? Do we have a conversion issue, which might be downsells?"
15:01	Shaan Puri	All of the above. Everything can be improved.</FormattedResponse>
15:03	Alex Hormozi	Or do you have a continuity thing, right? There are different structures that lend themselves more to one type of problem versus another, depending on what we're trying to solve. So, for an attraction offer, if you're like, "Let's get a shitload more phone calls in the door," I would say: "Hey, I just got this absolute savage," and I would present him like, "This is the dude. Alright, this guy is a fucking guy," or whatever. Then I’d ask, "Who here wants him?" I would say the business—like, we're going to do a raffle—and everybody who submits will be entered to win this guy. Now, obviously you have to be ethical and loyal, but assuming that you're not a fucking idiot, this is the guy that you're going to get, and you have to be a business that's like this in order to qualify. So they're going to enter their information to get into the raffle so they can get this guy. Then you're going to say, "We will pay for this guy for a year" as the deal—the big giveaway. Not only is he amazing, we'll also pay for him for a year. That creates huge demand. You'll get a gigantic amount of interest, but what's beautiful about it is that the demand is for your most expensive or ideal product... [sentence trails off]
16:12	Alex Hormozi	The purse — like every single other person who opts in — is a qualified lead who, say, "you know, we can't give you Carlos."
16:17	Shaan Puri	Right.
16:18	Alex Hormozi	But we can give you so-and-so, and we'll give you a partial scholarship. We'll give you a partial win, whatever, and you knock whatever off—10% or 20%—and then you roll that right into the continuity. So that would be an example of an attraction offer that you could attach to that existing thing. From an upsell/downsell perspective, it would be like... there are five different ones. That's just one that I pulled out. That's a giveaway.
16:38	Shaan Puri	Giveaway
16:39	Alex Hormozi	Yeah, and so, just for everyone listening: the weight-loss version that I had was something called "Win Your Money Back," which was a different mechanism. There are five different ones that I think work exceptionally well for bringing people in — it depends on the type of business. For yours, there's "bikes go by free" [unclear phrasing]. There are a bunch of different versions, but I think this makes the most sense. Cool — we use a giveaway. Upsells and downsells I'll start with downsells. You can have feature downsells, free trials, and payment plans. For your particular business, payment plans probably don't make sense because it's a continuity thing anyway. We have free trials, which you kind of have with contingency, so that part of the risk is averted. From a downsell perspective, they might think, "Okay, I can't afford six now" [unclear whether "six" means $6, $6k, or six payments] — that's a business decision more than anything. I like to think of feature downsells: for example, I can get you somebody who's maybe not at a PhD-level, but we can do it for $3,000 a month, and that person might give you more opportunities to say yes. That would be the downsell component. From the upsell perspective, there are four different upsell structures that I like. The classic upsell is "you can't have X without Y." For example: "You can't have a burger without fries," or "You don't want to buy this big framed art without insurance." There's always a "you can't have X without Y" approach. So, for here...
17:57	Shaan Puri	Because they said "yes," naturally say "yes" to this next thing.
18:00	Alex Hormozi	Exactly
18:01	Shaan Puri	In order to make your first decision and even more sound.</FormattedResponse>
18:03	Alex Hormozi	And this is why the whole deprivation thing that I was saying earlier is so important — where, like...
18:07	Sam Parr	Supplements in.
18:08	Shaan Puri	Your case.</FormattedResponse>
18:08	Alex Hormozi	Because some people are like, "Why? I don't want to sell them something else." It's like, well, you just created this new problem that they weren't aware of, which you will now make them aware of. Right? Which is: "Oh, sometimes these guys flake out," or whatever. So, have insurance that we can offer for this type of thing. Me, just shooting from the hip here—I was, I'm running through...
18:24	Shaan Puri	"The different situation is payroll. So, great — a lot of companies are not set up to pay people all around the world. We can manage that for you."
18:32	Alex Hormozi	Yeah.
18:32	Shaan Puri	We'll do it for you for $500 a month. Yeah — we'll take care of this because you're going to build out a remote team here, all around the world. You don't want to be doing compliance and exchange.
18:41	Alex Hormozi	Yeah, exactly — tax reporting. Yep.
18:43	Shaan Puri	We take care of all that for you. We have an accounts team that does that.
18:46	Alex Hormozi	Perfect. And so that would be the natural upsell that you tack on. A lot of business owners will think, "Why don't I just include that in the main offer?" In my experience — and as bad as this may sound — it's easier to get the second yes after you get the first yes. So maybe if I included that they'd buy it at $6,000–$7,000 a month, but you might also just raise your price to $7,000 a month and then do it again, and still have it. Believe me, if I could sell more upfront I would; it works better this way. A lot of gyms were like, "You know what? I'm gonna take the challenge system and then just include the supplements." I was like, "Or you could just do it the way that I've already tried a hundred times." I had this whole psychology writer around wallets in my mind. It doesn't work exactly this way, but my grandmother used to say something similar with food. She would have enough food for ten people when I went to see her, and she would stuff me to the gills. One time I went with my dad — she and I speak different languages so she's tough to talk to — but she said something under her breath after I walked away. I was dying and he cracked up. I asked, "What did she say?" He said, "Well, you said you were full." She said, "Your main stomach's full, but your dessert is empty." It's the same idea here: their personal wallet has been spent, but their [operations/tax pain] wallet is still full, so we can still tap that one. So if we're drawing this, it's like: okay, we've got payroll as our upsell — cool. You'll know your services better than I do, but we have one or two things that we can include in the upsells. The mechanism of doing it is part of the Money Models book — the "X without Y" approach. That's probably how we'd present it. That whole section goes into a lot more detail on the scripting of it.
20:30	Shaan Puri	Okay.
20:30	Alex Hormozi	So it's like, "Hey — what a lot of people do is they do this: 'Do you know anything else? Do you...?'" And when you say that, everyone says "yes" by saying "no." By that, you get 80–90% take rates on the upsell, rather than saying, "Hey, do you want...?" That's a binary question. It's a different question — now they have to actively consider a purchase. All of them have tiny little repositionings that work really well. That, I think, would make sense. Like you'd say, "That's the classic upsell." There's rollover upsells — which is one of my favorites — and there's anchor upsells. An anchor upsell would be like: let's say you're like, "Okay, if you want, Nick will go find the person for..." (I'm just making it up, right?) "He'll do it for $15,000 up front and, you know, $10,000 a month."
21:14	Shaan Puri	Now.
21:14	Alex Hormozi	They're like, "Shit, that's a lie," or, "If you're good—if it's the exact same work being done by someone that Nick trained—we can do it for one-third the price." And it's like, "Oh yeah, that's fine." The key part is that you anchored them. The anchor is part of it, but there's also the question of what you want to anchor. The way I learned this was actually at a Salt Lake City suit place. A friend of mine set up a private suit appointment for me. Now, I'm not balling—I had like $10,000 in my name—so my friend said, "You gotta have a boss suit if you want people to take you seriously." This was many years ago, and I really listened to that advice. I go in and the guy asks, "What do you want?" I said, "A boss suit." I was 23 or 24. He puts this suit on me and I thought, "I look awesome." Then I looked at the tag and it was $16. I think I turned white. He must have seen me freak out. He goes, "Do you care about the brand?" I said, "No, not at all." He said, "I got you." He already had his lineup picked for me. He pulled the second one, put it on me, and said, "What are you thinking?" I didn't even look in the mirror; I looked straight at the tag and it was $2. I was like, "Thank God." I thought, "Okay, my friend won't be embarrassed that he sent this poor, you know, non-matched peasant over." Anyway, I ended up checking out and he said, "Well, you can't have this without that," and, "You want to make sure you have the little pocket thing and the socks," whatever. I ended up leaving with a $2,500 bill. I remember thinking I spent five times more than I had budgeted for this. I realized the key part wasn't just that there was something expensive. Number one: you actually have to sell it. Sometimes people put anchors in but they don't commit to them. If you just say it and then immediately don't even acknowledge it, it's like, "This thing is in the sales process; don't know why it's there—it's dumb." You have to commit to it. The thing is, 10% of the time you have a whale and they'll buy it and you're like, "Holy shit." But the other 90% of the time, the differentiator between the anchor and the core offer is a very negligible thing. For me, the brand didn't matter. If he asked, "Do you care what kind of wool this is?" I'd say, "I don't care." Now somebody might. The reality is they probably don't actually—people just always buy the most expensive thing.
23:31	Shaan Puri	Right.
23:31	Alex Hormozi	Like, Leila just always asks, "What's the most expensive thing?" and then she just buys it. That's how she rolls. She always wants the best shit. Whatever. The thing is, you want to have a model that allows for that. If 10% of people buy something that's 10x expensive, you double your revenue. So it's still worth it. That's why the anchor should be super fucking high. That's an example of a different type one. But this one is a classic upsell, which would be positioned the way I said — a no-based yes. We covered the down sell with a future downsell and then continuity. Now, you already have a continuity business, so there's no real... to, like, saying how do we do that. One of the different mechanisms that I use on that side — one of my favorites — is something called a waive fee. This works really well with expensive stuff. So we would say, "Hey, for us to go find this person it's $10 up front, or I can waive it if you commit to a year." You just waive the fee, but you get the commitment. And the thing is, if you're not sure, then just pay the $10 — you get month-to-month, no sweat. With that, also you say, and we would stack it. So we'd be like, "Okay, we're gonna waive the fee, we commit to a year, and if for some reason it doesn't work out with Carlos, we'll get you another Carlos within 90 days at no cost." So then it's like the inch — you decrease cost and you decrease risk with the continuity and commitment, and we create artificial pain in the moment. Now what happens if they're like, "Hey, six months in I wanna cancel?" It's like, "No worries — just pay the fee."
24:51	Shaan Puri	"Right."
24:51	Alex Hormozi	That I waived for the commitment, so it actually creates a very simple contract: you just have to pay that on the way out the door. It also increases stickiness. It has three prongs to it that make it effective, but it's very easy to understand and very elegant. That's one of the continuity mechanisms that I use. When I'm looking at a business, I'm running through the different mechanisms that we use. Okay — we're having issues. We're having a lot of friction right now. I'm guessing because you're selling continuity on the front, it's probably not a huge deal, or maybe churn is — I don't know. But here it's like: which part of this process needs to get lubricated? Do we need to lubricate people coming in the door? That's where we'd use a raffle, giveaway, or sweepstakes on the front end. Or the thing is, they're signing for six but we need them at ten — okay, then we need to put more lubrication here. Or you know what — we're getting all these unqualified leads: 80% of the leads coming in are unqualified. We make the business decision that we want to sell to these people. Okay, we have a gross-margin product that's sufficient; it still makes sense. We still have 80% gross margins on this inferior product. How do we present it? That's where the down-sell becomes really key. I had a business — a close friend of mine had — and what we did for the down-sell was: we basically had a super high-ticket thing that we were selling. He's a PhD [in health], and he does all this really unusual health stuff for people. I'll just say: you have a problem, he's the last person you go to, and then he fixes it. That's his whole thing.
26:11	Shaan Puri	Okay.
26:12	Alex Hormozi	And so what we did, though, is we created a down-sell that re-upsold people. They'd get sticker shock, and he would say, "No worries — if you want, I can do it for $2,000 less, but I just won't include a guarantee." Then people were like, "I kind of want the guarantee," and they'd re-upsell themselves. And so the guarantee is worth... </FormattedResponse>
26:32	Shaan Puri	That 2,000... which to...
26:34	Alex Hormozi	Actually, it gets to show you—then there becomes the art. I talk about this in the book: how much do I decrease price versus how much do I decrease value, and the play between those two. The more you study the customer, the more you understand which components they value the most. So, typically, when I create a downsell structure I'm going to think: okay, the first downsell I'm going to give is actually to re‑upsell the main thing. Now, if they really can't—because they clearly said no even though it's a big issue—then the next one I'm going to do is a tiny thing with a large decrease in price. So the first one is like a small decrease in price with a big drop in value. I'd rather have the main thing. The next one, though, I'm going to have a bigger drop in price with a smaller change [in value].
27:13	Shaan Puri	In value, because at that price it's actually the same. That's the stock price.
27:16	Alex Hormozi	Right. So then it's basically: how do I ethically lower my price without saying, "I'm selling different things to different people"? That way I can change the terms rather than saying, "I... I never discount." I will change terms. For example: "Oh no, they got something different than you," which is why they pay less. If you want, I can give you that — that's fine — but you just won't get what they're getting now. So that's a brief overview of how I think through creating these. But you can see: even if you were to do something like a raffle once a quarter, that would probably feed all your leads for the next... whatever.
27:45	Shaan Puri	Yeah. I think one of the best parts about this is that every business has some version of this. Right? This is a different way of looking at a funnel. But the cool part of what I think you're doing with your books is you're basically taking the parts of the funnel — offer, getting leads through the door, being able to actually...
28:02	Alex Hormozi	"Sell the first thing."
28:03	Shaan Puri	Yeah — sell the first thing to them. And how do you string together things to maximize the value you're getting from that hard-earned lead that you already paid for and busted your ass for? </FormattedResponse>
28:12	Alex Hormozi	Yeah.
28:13	Shaan Puri	One of the things I like about this is that you've basically codified a lot of what the best people do. They do it in their business, then they get rich, and then they sort of relax.
28:21	Alex Hormozi	Yeah, yeah.
28:21	Shaan Puri	Yeah, right. I don't need to go back. I don't need to even label what each of these things were. But you've sort of looked at it and said, "Okay, let's call that an attraction offer." What are five examples of those that I've seen? Then you're on the lookout for them. You see it in this business and that business, and you sort of put it together. So I think that's very, very valuable, even as a structured way of brainstorming. I think most people in their business—most founders—will understand: "Yeah, I gotta... I wanna get more demand, and I wanna make more money per customer."
28:48	Alex Hormozi	Yeah.
28:48	Shaan Puri	But these are vague wishes. I think the key is to not be "most people." I'm like—we try to fit in; that's our nature. But consider this: most people in America are overweight or obese. Most people don't like their job. Most people get divorced. Most people don't have enough money to pay for an emergency procedure. You don't want to be "most people," yet you still want to fit in. It doesn't really make sense. So I'd love to understand from you: where do you see a lot of entrepreneurs?
29:17	Alex Hormozi	Yeah.
29:17	Shaan Puri	When it comes to money models, what do you see? What are the most common patterns you're seeing? If we sketched it out—like, "here's how most people are doing this"—and you made just one or two tweaks, you'd no longer be in the "most people" bucket. You'd be operating differently, and your business would have a higher chance of success or be worth more.
29:34	Alex Hormozi	I would say not enough entrepreneurs are students of business; they're students of the thing. I'll give an example. I will never claim to know more about remote-work businesses, HVAC, plumbing, or whatever. But people fly out here not for that—they come because I have a very good understanding of the variables that create money. So it's like, how can we arrange these variables? Then we will fit—like you said—the payroll thing. I was like, "Okay, great, you have a thing. I'm not going to be the one who immediately knows that," but I'll be like, "There's a slot here—we've got to fill it, or we'll miss it," right? So, one: they're not big enough students of business. Number two: a lot of the time it's, "Well, this is what everyone else does to you," or, "This is how everyone else operates." For example, I had a guy who did guard services. They staff buildings like this with guards, and he had huge cash-flow issues because his margins were paper-thin. It's super sticky—people stay forever—and it's very commoditized in terms of competing for bids. And so, you know, after talking for, you know, extended...
30:31	Alex Hormozi	One time I was like, "Okay, well don't we just say that people pay a quarter at a time and pay upfront?" He was like, "Oh, yeah," and then, "Well, no one does that." I said, "So let me give you the best comeback in the world." Someone's gonna ask you and they're going to say, "Well, everyone else does it." You're like, "We've just always done it this way." That's all you have to say back. That's all you have to say: "It's how we've always done it." Right? And as crazy as that is, that is still the number one — this is still the number-one thing to overcome. Like, when I used to ask for credit cards on the phone for someone to show up for, you know, training or a trial or something — most places do not do that — they'd be like, "Why do you need my card?" You say, "This is how we've always done it," and then they're like, "Oh, okay." So it's funny how some of these little lines just make huge differences in your life.
31:10	Shaan Puri	You, like, weaponize the uselessness of most processes. Yeah... it's like we're all so used to processes and stupid policies — they're stupid, 100%. </FormattedResponse>
31:18	Alex Hormozi	That we're...
31:18	Shaan Puri	Just like, "Oh, it's one of those." Got it.
31:19	Alex Hormozi	They're from management and they're like, "Oh yeah — retarded, yeah, got it in." [offensive language] So, one thing is: when I had to spend probably 30 minutes with him to just get him to be okay with asking for the money — getting paid quarterly (number one) — and getting paid before you provide service rather than after you provide service. I mean, everyone throws around the phrase "first principles," but very few people actually think from first principles, asking, "What prevents us from doing this?" I think that's the constraint: cash flow. Then, what are all the things we can do? Can we change payment terms? That's the first thing you're going to do if you have cash flow issues. Can we push our stuff out — net 30 always?
31:55	Shaan Puri	Right.
31:55	Alex Hormozi	Like, how can we change this cash-flow balance in our business?
31:58	Shaan Puri	"What's the money model of Acquisition.com?"
32:00	Alex Hormozi	So, this is really interesting. It's hard for me because what I have to write about are not the rules that I have to live by. My favorite movie in the world is The Matrix, like many people's. There's the line in The Matrix when Neo is looking at Morpheus and he says, "So you're telling me I can dodge bullets?" Morpheus replies, "I'm telling you that when you're ready, you won't have to." All of the things that I write about — even selling tactics and things like that — assume you have no brand. When you have a brand, you have so much demand and so little supply that you can set your own terms. I can have a zero-attraction offer and make the absolute worst offer. I don't have to make a grand-slam offer at all because I might say I don't want to deliver much. I will promise zero; I will guarantee nothing. Because of that, I'll have fewer operational constraints on the back end. At the end of the day, the reason I have the two parts of my logo is: this is a lever, and this is supply and demand. To me, those are the two biggest forces in business. And so, if you have
33:03	Shaan Puri	"I always thought it was a whale's tail, exactly."
33:07	Alex Hormozi	But those are two of the strongest forces in business. All of these things are to help lubricate, create, or channel demand. When you have little demand, it's hard to win. When you have an ocean of demand, it's hard to lose. The model we have is very different. It's almost like a ward away model [unclear phrase]. We invite entrepreneurs out here who we think are interesting, look at the business, and then say, "Hey, change these things. Call us in a year." That's basically what we did. We took our diligence process that we had been doing for multiple years. The catalyst was that we were getting all these thank-you emails. Founders who came in from my content would say their deal team took six calls with them and, at the end, said, "Listen, these two metrics suck. Do these things; see how it works for a year. Give us a call." They said this was the most valuable process they'd ever gone through. Then I thought, that cost me a lot of money. So I asked, what if I just charged for diligence, functionally? Then I could staff it better and do all these other things. That's functionally what we do from the advisory practice, and it feeds the deal side.
34:15	Shaan Puri	So, you have the content — which creates the brand. What you did is you turned your costs... into, whether it's a profit center or break-even, I don't know. But yeah... you know, something like this: this is your workshops.
34:27	Alex Hormozi	Yeah.
34:27	Shaan Puri	What did you call it? You called it something else just now — "advisory practice"? "Advisory"?
34:30	Alex Hormozi	Okay, yeah.
34:30	Shaan Puri	So this is your advisory. And you say, "Okay, pay us $5 — come over here." But then you do have an upsell here to more advisory.
34:38	Alex Hormozi	So, basically, from there this is how we see value creation. We say, "Is our framework for creating value." If you like this, we're happy to help you. If you're like, "This is cool — I'll go do this," awesome. The consulting side is true consulting. It's one thing: they come, we identify the constraint. We say, "Okay, we'll go look at comps. We'll look at the different ad strategies of people who are bigger. We'll say, 'This is the funnel and this is the offer we think you should do.'" We tell them, "This is all you have to do. When you do that, call us." So it's 100% from start to finish [inferred from "from. To."]. It's not an ongoing thing — it's literally one-time consulting. And that's the "quote upsell."
35:19	Shaan Puri	And then, at the bottom here, you have the equity side — where you're like, "Great." Yep, the private equity side, right? Yep... you can buy the businesses that—yeah.
35:27	Alex Hormozi	And the venture arm—now we do a lot of...
35:29	Shaan Puri	And venture—okay. Gotcha. When you started, how much of this was figured out as you went? </FormattedResponse>
35:36	Alex Hormozi	A hundred percent.
35:37	Shaan Puri	Of it: grand master plan — visionary.
35:39	Alex Hormozi	Well, there's [turtleneck?] — some things. Yeah, right. Yeah, some things. I would say the big goals for the master plan — all of this wasn't something you just figured out as you go. The books and how they've all been structured have been a five-plus-year plan. You'll see what I do with the launch and why it's going to be awesome, but it will — it'll all be revealed. The mechanics — like the prices and how we do that — were very much born from the fact that I am currently spending money on this team. We have way more demand than we have supply. Maybe, if I can generate more revenue here, we can staff it better. I can get more luck surface area because I can look at more of these deals. You've probably seen this: some companies look terrible on paper and then you meet them and you're like, "Oh, these guys are awesome." We had to do so many of those meetings. I mean, we probably talked to 1% of the papers that would come in, and I was like, "I know we're missing stuff." So that was basically the thesis behind this.
36:36	Shaan Puri	I mean, I think it was brilliant. I was like, "Wait a minute — so he basically gets paid for people to come and open up the kimono." Yeah, they get value too; otherwise they wouldn't be doing it.
36:44	Alex Hormozi	These are.
36:44	Shaan Puri	Not dummies — these are business owners. Yeah, they should be making good decisions, but I was like, "Wow, that's..."</FormattedResponse>
36:48	Alex Hormozi	The median size is 4 million, so it's not like they're small businesses. It's a median, so there are plenty—tons—of good businesses. Every time we have a workshop, the top ones are usually between 30 and 100 [million]. There are also plenty in the eight-figure range. I don't think we've ever had one that doesn't have multiple eight-figure companies.
37:05	Shaan Puri	I want to play a game with you. Do we have the game here?
37:08	Alex Hormozi	Oh, what is—what is the game?
37:10	Shaan Puri	So the game was this. Okay, so this is gonna be a game that we're calling "Make It or Take It." Alright, so you're gonna have to shoot — I know, I know, I know you're not big in a battle. We're gonna pick it up for this. Yeah. Okay, so you're gonna take a shot. We're gonna see how far back we're gonna get here. I think we'll set that as the benchmark. Okay: you make it, you're off the hook. You miss it, you have to take it with one of the tough questions that...
37:39	Alex Hormozi	We spin the bottle. We spin the...
37:41	Shaan Puri	I really like Alex.
37:42	Alex Hormozi	And I.
37:42	Shaan Puri	I was like, "What do people want?" So I asked people. They said, "What do you want—an episode?" The guy puts out a ton of content.
37:47	Alex Hormozi	Yeah.
37:47	Shaan Puri	You know, I'm not just going there to get new... let's have some fun doing it. So they were like, "Ask him some tough questions." I said, "Okay—let me think of some tough questions, but let's make it fun. How do we do this?" Alright. So, first shot: go for it... and then you get a...
38:00	Alex Hormozi	And then, if the question...
38:02	Shaan Puri	If you make it, yeah—you can ask me the question. That's fair. Or I burn the question, so it's up to you. So, this is the question at hand:
38:08	Alex Hormozi	Okay — the question: perfect.
38:10	Shaan Puri	So, the question is: what do your haters get right? </FormattedResponse>
38:13	Alex Hormozi	What do my haters get right?
38:15	Shaan Puri	"I mean, you get criticism, as anyone does. Sometimes... some criticism is fair, or components of it are fair. So, what do the haters get right?"
38:28	Alex Hormozi	Steroids is one. You know, he's just—he's here for the money. I would say, from a philosophical angle, there are people who say, "Alex doesn't have a life." I'm like, "Well, yeah—I'm pretty open about that too." So they will use a fact as an insult. I'll be like, "I agree." Right. So that's... well.
38:49	Shaan Puri	I think that qualifies. I think that's one, right?
38:51	Alex Hormozi	Like, yeah... they're...
38:51	Shaan Puri	I'm already worth pretending it as a "hate comment." [unclear transcription]
38:54	Alex Hormozi	Yeah.
38:54	Shaan Puri	But you're like, "Yes, and I agree."
38:56	Alex Hormozi	"I agree. Yeah, and if you—if only you knew."
38:58	Shaan Puri	And I'm open with that.
38:58	Alex Hormozi	Yeah, no. You guys see, I'm here seven days a week. I work all day until I cannot work anymore, then I take a day off and continue working again. I work twelve hours most days. I'm usually here from five to five or six, and so it's...
39:12	Shaan Puri	Is that a temporary thing? Are you like, "I'm in an era of my life where that's what I want to do," or are you like, "That's who I want to be"?
39:18	Alex Hormozi	It doesn't feel—this doesn't feel like a push for me. When I'm pushing, I work third shift, which is 18 [hours]. If I do that for an extended period of time, that starts to grate at me. But twelves [12-hour shifts]—that doesn't. Yeah, like five-to-five [a 5:00 to 5:00 shift], I'm like, I still feel like I've got plenty of time to chill out and do whatever. </FormattedResponse>
39:34	Shaan Puri	So, let's do another question.
39:36	Alex Hormozi	"Yeah. Okay. Yeah — gonna get her to take it."
39:37	Shaan Puri	Alright. Next question.</FormattedResponse>
39:38	Alex Hormozi	Alright, alright... do I got...
39:40	Shaan Puri	I love it. Alright—if I reset your bank account and your followers, change your name and face, so I reset you to zero. Basically drop you in another... drop you in another life, not another country. How long do you think it would take you to get rich again?
39:52	Alex Hormozi	"What? Which Rich?"
39:54	Shaan Puri	Rich would be, let's say—for the name of this podcast, "My First Million": to make a million bucks, get a million bucks in your bank a year. What would be the approach? So you're back to nameless, faceless Alex.
40:05	Alex Hormozi	Yeah. Well, having lost everything twice, I'll tell you what I did. I find a local business—typically a service—that I think I can sell for a lot of money. They're typically undercharging, so I will say, "Hey, how cheaply will you let me sell it?" Basically, "If I send you 100 customers, how cheaply would you do it? What would you charge me to do that?" I get an agreement on price from them, and then I sell for whatever the hell—because I brought you volume.
40:32	Shaan Puri	Yeah, what's the lowest you could deliver the service for that volume?
40:34	Alex Hormozi	Yeah, so let's say it's a back cracker — let's say a chiropractor or whatever. I say, "Okay, how much will you crack backs? [unclear phrase]" He says, "$25 a session. I say, "Okay, cool. So I can sell packages of 10 for $250, and you're cool with it?" He says yes. So I'm going to go and sell packages for $300, right, and I'm going to make the spread. It's because I know how to sell and how to get leads.
40:54	Shaan Puri	Right.
40:54	Alex Hormozi	And so, I mean, this is what I did. I did it in the gym space — that's what I did when I lost everything. I just went to gyms and said, "Hey..." For them, I negotiated zero. Like, "You already have all your cost basis; I'll just add you customers and then, after, take the first month." So I would take the first $500. I'd say, "I get to keep that, and then after six weeks you can convert memberships — they're all yours." Zero CAC for you. I take all the risk; I do all the work. And then I did about $100 every 21 days doing that.
41:22	Shaan Puri	Is there a better or worse type of service business that you'd go for, knowing what you know now? Like—maybe I sold to gyms. </FormattedResponse>
41:27	Alex Hormozi	I, for sure, do healthcare — healthcare. Oh my God.
41:29	Shaan Puri	"Healthcare" — what does it mean? A white lab coat? Anything?
41:32	Alex Hormozi	Yeah, yeah. I call it pseudo-medical. Okay — that's why I like teeth whitening. We have a chain of 28 stores. I love pseudo-medical stuff: laser — you know, laser skin treatments, laser hair removal, the chemical peels. I love all that stuff. The beauty-medical intersection — you can just sell your eyes out; it's amazing.
41:58	Shaan Puri	"What's the why? You love it because of the demand? Because it's..."
42:00	Alex Hormozi	"Huge supply–demand inequality, so there's... if you see..." [transcription ends abruptly]
42:03	Shaan Puri	If you...
42:03	Alex Hormozi	Look at the stats — it's insane. The amount of demand from boomers and people who want to stay young is huge, while the supply side is very low. The reason I know this is because every single med spa that walks in these doors is killing it. I talked to the founders and I was like, "Whoa." I asked, "So how do you market?" They said, "We just kind of opened up. We just announced that we have a website." Then they added, "Yeah, we have a phone number. People just kind of come in." I was like, "They don't know — that's not how it works."
42:28	Shaan Puri	That's not how most.
42:28	Alex Hormozi	That's how crazy the supply-demand difference is. They don't think about pricing. They think about nothing... they just— and they make, you know, 40% more. They have no idea, right? And so that's why I would... that's...
42:37	Shaan Puri	Like a heat signal for you.</FormattedResponse>
42:38	Alex Hormozi	Yeah, that's—yeah, 100%. When I see a lot of people who don't know what they're doing all making money, I'm like, "Okay, there's something there. That's good." So that's what I would do, because that's what I did do, right? Alright... let [trails off].
42:50	Shaan Puri	"Wait—let me get another question here that I want to do, because I got a couple."
42:53	Alex Hormozi	Yeah, because it's like this: if you need to make $100 to $1 million, you could do that. If you know how to generate leads locally and sell, you just get a service business that agrees to take customers for a price, and then you sell as much as you can.
43:04	Shaan Puri	Alright, go ahead.
43:07	Alex Hormozi	Oh, maybe you just want me to burn it. Or you can ask me, "What are you doing? What did you get most wrong in the past three years?"
43:13	Shaan Puri	Okay, I'll tell you this: I started with a bit of a portfolio approach.
43:18	Alex Hormozi	Mmm‑hmm.
43:18	Shaan Puri	So I kind of had this thing where I was like, "I don't want to operate, but these guys are operating well. I can add a bunch of value—similar to what you guys [do] in private equity—whatever." And I took minority stakes.
43:28	Alex Hormozi	Yep.
43:29	Shaan Puri	In several companies that have done well, when they succeed and I add value, I just sit there wondering, "Why the hell don't I own more of this?" I realized that I could have made more and really simplified my life with one great business. It doesn't take many great businesses to get to the next levels of wealth. You know, a business can be worth $100,000,000 or $500,000,000 — they can get very big. So I would have been better served doing less. I got it wrong. I thought I was playing the game at a bit of a higher level when, in actuality, if I had just kept it simple — picked one of those businesses or built one great business — I could have done better than I did spreading my focus with less work.
44:08	Alex Hormozi	I made the same mistake. Alright—yeah. Did we—did 24 deals in 24 months, then we consolidated down to five. Yeah, like you did. I mean, it's 80/20.
44:17	Shaan Puri	Yeah, the power law applies.
44:19	Alex Hormozi	Yeah, no. Basically, all levels still rule.</FormattedResponse>
44:21	Shaan Puri	Yeah, all right. Let's do the next one.
44:22	Alex Hormozi	Alright, alright. Now I've got—now I've got my...
44:25	Shaan Puri	I can move the...
44:26	Alex Hormozi	Benchmark: ask you, whoever.</FormattedResponse>
44:28	Shaan Puri	Alright. I was gonna ask you — this one's funny: should entrepreneurs — should successful entrepreneurs — get a prenup?
44:35	Alex Hormozi	"Should's tough as a frame."
44:38	Shaan Puri	"If it's your kid."
44:39	Alex Hormozi	It's my kid. Well, if they're my kid, they're going to have my money, so yeah — I'd say, yeah, get it (prenup). I mean, for me, I asked Leila. Basically, when you want to have a prenup and you have somebody who doesn't want to sign a prenup, that's the only way — it's actually a test. Leila and I... I thought I was rich when I met Leila, which I wasn't, but I thought I was rich. I asked, "Will you sign a prenup?" She was like, "Sure. I don't want your shit." We were on the way to the courthouse to get it notarized, and, in a dramatic flare, I tore it — I tore it — and threw it out the window because it was so not a thing. She said, "I don't want your shit," and I believed her. We've built everything together. But I think that is very risky advice, so I would say the vast majority of people should strongly consider it.
45:35	Shaan Puri	"Romantic — I like it. Alright, here we go. I'm going to give you one. Alright, one more. Okay, I like this question, so I'll—I'll do this one. Oh, perfect."
45:41	Alex Hormozi	Bumped in and out, you know.
45:42	Shaan Puri	This is an easy one. This is actually not that tough a question: if you could only follow three people on X—meaning, if you had to slim your content diet...
45:50	Alex Hormozi	That's a really good question.
45:50	Shaan Puri	To "bodybuilder mode," where it's like chicken and broccoli or whatever. Mmm. Who's your chicken and broccoli of your content diet? People you genuinely— you genuinely value what they're putting out there. I think maybe Twitter's one of your big platforms.
46:02	Alex Hormozi	Yeah, it is. I mean, Elon will be one. I have two more people... two more accounts to — to use. You know what's weird? I'm actually, I totally use Twitter like... I just let it serve me whatever, right? I just love all the—yeah. I kinda just let it feed me whatever. I'm trying to think about the other accounts that I would be like, "Oh, I'd miss them if I didn't see them." It's actually hard. It feels like a month. Who—who—who—who? Yours? Naval would be one. Okay, Naval's a good one.
46:39	Shaan Puri	You know, the others — I mean, I would cheat and be like the news aggregator, so it's like, "Oh, at least I..."
46:43	Alex Hormozi	Get all that, yeah.
46:43	Shaan Puri	But I wouldn't actually pick that.
46:47	Alex Hormozi	You know who actually thinks this is a really good concept? Ankur from Carrie. Okay. Yeah, I actually like his stuff a lot.
46:53	Shaan Puri	Interesting.
46:54	Alex Hormozi	Yeah, like his stuff — that's probably my second one.
46:56	Shaan Puri	I just think it's...
46:56	Alex Hormozi	Very tactical. Oh — you know what? I love George Mac stuff.
46:59	Shaan Puri	Yep, George Mac. Although I'd... I'd cheat. I'd be like, "Just text me the thing."
47:03	Alex Hormozi	No, George is really good. I actually really like George's stuff. Now that I'm thinking about it, see how he puts good stuff out. Obviously Williamson puts good stuff out too. So yeah—now that I'm thinking it through, I was blank for a moment, but no: I think George has some of the most unique takes, and that's why I like his stuff a lot.
47:19	Shaan Puri	Yeah, alright. Well, you for playing.
47:20	Alex Hormozi	No, dude. Thank you.
47:21	Shaan Puri	Make it or take it. You took the tough questions.
47:22	Alex Hormozi	From Rosie HotHands' "Hard Questions": Yeah — the three... you know, the biggest errors, man. That's a... because it's like: which ones cost me the most, and which ones did I miss the opportunity on the most? So it's like... I have — it's like, it could be because, just based on the... I thought I'd really beat myself up on this. I have missed more $100 million net gains — multiple $100 million net gains — than I have made. </FormattedResponse>
47:49	Shaan Puri	Right.
47:49	Alex Hormozi	Which makes me really angry. But then I thought about it and I was like: you always say no to more deals than you say yes to. As a number, you're always going to miss—you'll literally miss more winners than you get. Right? I could tell you all of them... it's like I say their names before I go to sleep. One of them is Arya Stark. There was a gym franchise— a buddy of mine I've known for years. He's been in the business for thirty years. He finally went on to start a franchise and I was like, "We need to do the business this way." He's like, "I just want to run a franchise." I said, "Dude, let's just privately own them all. It's a great model." I offered, "I'll fund the whole expansion." He's like, "I've already sold 40 units; I don't want to flip back." So I ended up not doing the deal, and he'll probably exit for about $120,000,000 in three years. I was going to get 50% of the company. He was a friend; it was fitness, and I was like, I should not have missed this deal. There's a content creator that I love and have followed for more than ten years. I talked to them—we were going to get a 33% stake in the company. From the time we said no to the deal, I'd say 24 months later they're probably a $150,000,000 company. I have four or five of these—where I just think, "I should've..." That one I said no to because I knew the amount they wanted from me would be more than I wanted to commit. I think they saw it as an acquihire, and I was like, "I'm not going to... I'll do this, but I'm not going to dive in."
49:33	Shaan Puri	I had a moment like this in Silicon Valley.
49:36	Alex Hormozi	Was... yeah.
49:36	Shaan Puri	I thought I was telling my big miss. I was like, I forgot which one it was—maybe Calm or something. I was buddies with Alex, and he was like, "We're raising it probably at a $4 or $5 million valuation." It's now $2 billion. So I could have easily written a check into Calm, disregarding the fact that at the time I had no money and it had not been angel invested. There are many reasons I missed that, in addition to just not thinking it was going to be a winner. But besides that, I was telling some story about one of these misses. I thought I sounded cool because I missed, and literally I just got big-dogged by this guy in Silicon Valley. He was like, "Okay, welcome to Silicon Valley." He's like, "What are you talking about? Everybody... anybody has—"
50:12	Alex Hormozi	Yeah.</FormattedResponse>
50:13	Shaan Puri	"Baskets of these? Are you kidding me? You wanna start?" "Like, yeah—I could. How much time, you...?"
50:17	Alex Hormozi	Facebook — number one. Uber's first and second. Oh.</FormattedResponse>
50:21	Shaan Puri	I wrote the check. I misdated it. You know what—how many different versions of this? And he—he said something smart. At first he was like, "Shut up." Basically he's like, "Shut up, you think this is like a really cool, unique story?"
50:30	Alex Hormozi	Yeah
50:30	Shaan Puri	Not only is this not cool and unique, it's actually just a standard cost of entry if you're totally going to play this. So... what are you talking about? Yeah. But the second thing he said was, "I think you're taking the wrong lesson from this," because I was focusing so much on what I missed out on.
50:43	Alex Hormozi	Yeah.
50:43	Shaan Puri	Versus: what's the root cause analysis of "why didn't I do this?" Yeah. Oh, okay. And I've actually, since then, changed this, where it's like, actually a lot of these misses were deals I liked. I wanted to do them; they wanted to do them; we just didn't chase. There was kind of follow-up. </FormattedResponse>
50:55	Alex Hormozi	Yeah.
50:55	Shaan Puri	Enough to make sure a transaction goes through, because doing a deal sure takes a sprint at the end. Then we actually operationalized a bunch of those once we got over ourselves and the kind of weird ego of missing.
51:08	Alex Hormozi	Yeah.
51:08	Shaan Puri	You know, life got a lot better for us, but I had to—I had to learn that hard way.
51:12	Alex Hormozi	But that was probably a big one. A lot of my big misses have been strategic mess-ups. One of the biggest errors I ever made at Gym Launch was that I started Allen, the software company, when I should have built a CRM for gyms. I had the right idea.
51:28	Shaan Puri	What did Alan do if it wasn't?
51:30	Alex Hormozi	It just... it worked: leads. The biggest pain they had was working leads; CRM wasn't a pain. From a monetization perspective, if I had put them all on the platform, then I would have all their metrics. I would have been in control of revenue. There's so many things I would have been able...
51:40	Shaan Puri	To you, you could use the pain to get them into, like...
51:42	Alex Hormozi	Forever, so yeah.
51:43	Shaan Puri	Products.
51:43	Alex Hormozi	100%. So that was probably a $300 million miss. That sucks. That's probably my biggest strategic miss. I literally allocated capital to build technology—and I built the wrong one.
51:57	Shaan Puri	Right.
51:57	Alex Hormozi	Like... I didn't know when. I mean, I was 27, you know.
52:01	Shaan Puri	On the other side of the coin, what are the biggest hits that have happened post the gym launch and whatever?
52:05	Alex Hormozi	This building. So, this was, like, an unexpected... wow — this was way, way more alpha than I would have guessed. What do you mean? </FormattedResponse>
52:11	Shaan Puri	By that, do you mean the literal real estate value, or do you mean just...?</FormattedResponse>
52:13	Alex Hormozi	The serendipity of the fact is this: I bought the building before we did anything else. I just wanted a place for a gym, so I decided I was going to buy a big building. Leila was like, "We don't — we're all remote," and, at the time, on the pure HoldCo side we had about 15 employees just on the investment side. I really wanted this building because it was the old UFC building — it was kind of cool. I thought, I'll figure out a way for it to pay for itself. The only reason the advisory practice got stood up was because we had the space. I thought, "Let's make a post and see if anyone wants to come out," and that’s what sparked it. There was huge demand for in-person versus remote stuff. So it was great: we met all these businesses and generated cash flow. It became both things. That whole thing definitely would not have happened if we didn't have the building — zero chance I would have done it otherwise. I wouldn't have taken that leap without the space. That was probably a huge, unexpected win — probably the biggest one.
53:20	Shaan Puri	I mean, you've got, like, you know, Michael and a bunch of guys who are here all the time now, which I think made it very tempting and very easy to be fully remote.
53:27	Alex Hormozi	Yeah.
53:28	Shaan Puri	And I think remote works. Remote works, yeah. But in the "business Olympics," the people who are serious about it are going to be together. They're going to be co-located. Yeah. You know, like I paid Diego — I was like, "Move across the country; I'll pay you more, just live here." And the rule is: here's a five-minute radius from where I live.
53:45	Alex Hormozi	Yeah.
53:45	Shaan Puri	Pick a place you know. That's the only rule of coming out here, because you can't really replace that.
53:51	Alex Hormozi	Oh, totally. We're 80% in person now, and I think we're at about 90-ish employees. The only thing we allow as remote is infrastructure. HR is actually here, but finance can be remote. Certain tech roles can be remote, and legal can be remote.
54:12	Shaan Puri	This actually became my favorite podcast question. I don't know if you have a good answer to this, because I think you're so locked in and focused on what you do. But it is: "What are you—what are you really interested in lately? What are you very obsessed with lately that's not your core day-to-day work? I don't mean a hobby, but like, 'Dude, I'm kind of fascinated by this,' or 'I keep reading about this,' or 'I keep wanting to meet people who are doing this thing.' What's that thing?"
54:35	Alex Hormozi	I only have two, and they will not be well. One's the trite answer, which is: "I'm reading up on AI just like you are, and I spend a ton of hours looking into it." The other thing, completely unsurprising, is that I'm actually really into gym equipment. My Instagram is gym equipment — it's gym equipment. </FormattedResponse>
54:52	Shaan Puri	Are we talking like novelty gym equipment, or what? Do we—like, kind of—like, I get all these...
55:09	Alex Hormozi	Machines are better than others — and you start asking why they're better. You look at force curves: where is the tension highest, and does that correspond with where hypertrophy is maxed out for the muscle's range of motion? You also consider the feel of the equipment, the range of motion, the adjustability, and what kind of bearings they use. You can go pretty deep into those details. There's a new thing that came out called the Vultra. I'm not sponsored by Beyond Power, but I think in ten or fifteen years gym equipment will look very different. It hasn't changed for a long time because magnetic resistance wasn't a thing — and now it is. The Vultra, for example, is basically the size of a brick. It can reach 200 pounds of resistance, and — importantly — you can adjust it in single-pound increments, which is amazing for strength work. A lot of times people get stuck on a machine or with dumbbells because the percentage jump is too big. For many women with dumbbells, progression is especially problematic: they go from 20 to 25 pounds, which is a roughly 20% jump in weight, and that makes it hard to progress. The ideal gym would have a full set of dumbbells in one-pound increments, so progressions are much easier. Beyond single-pound increments, the Vultra lets you change the eccentric emphasis — you can make it much harder on the way in versus the way out. You can also change the resistance curve: make it really hard at the front (useful for pulling movements where you're stronger at the front and want it lighter elsewhere), or configure it the opposite way for pushing movements (lighter at the front, heavier later).
56:47	Shaan Puri	"Do that by just telling it the movement." </FormattedResponse>
56:49	Alex Hormozi	Yeah, you can change the curve. You can manually change the curve, and so because of this...</FormattedResponse>
56:55	Shaan Puri	This is the European company, by the way.
56:56	Alex Hormozi	I don't know.
56:57	Shaan Puri	I—somebody sent me this. They were like, "Because I was buying the Bowflex adjustable dumbbells—like, you can do all these weights." He's like, "I really wanna get it and get these, and I think that's probably..."
57:08	Alex Hormozi	Bell. That's probably new bell.
57:09	Shaan Puri	Okay, maybe that was the one. That's probably what...
57:10	Alex Hormozi	It is, but yeah—the best ones right now are the Rep/Pepin adjustables. They go to 120 pounds, and they're all metal; there's no plastic. It was... I mean, like, can talk to women, but that is probably my—I'll circle, I'll close the loop on the "vulture" thing. The reason I think it's so interesting is that all the selectorized pieces—you see stacks of weight: you put a pin in it and there's the stack. Those take up so much room because you have to have space; you have to balance the piece of equipment when people are moving it. The stack takes a huge amount of space, and from a shipping perspective it's so expensive to ship 400 pounds.
57:43	Shaan Puri	Right.
57:43	Alex Hormozi	The machine, right? So it takes more square footage. It's more expensive, it has smaller increments, and you can't change the strength curve. There are all these reasons. They find the tech is finally there. I think there will be a next generation of machines that will only have the electronic components. Yeah, exactly. You just literally "plug it into the wall." The square footage will be smaller and the actual machines will be cheaper. This is Vultr's Gen One — as soon as, like, in five generations it'll be $200. Right now it's $2,000 for the brick, but it'll be cheaper than mass-based [systems] as soon as it's cheaper than... mass-based.
58:19	Shaan Puri	Physics. Yeah.
58:20	Alex Hormozi	Yeah. As soon as it's cheaper than mass-based resistance, there's basically no point to having mass-based resistance. So I get very excited about that stuff because I think it's going to be really cool for gyms. I obviously come from that space, but the amount of things that you can now do as a gym owner... Now, I don't own a gym right now — I do own a gym, it's just not commercial — there are so many more things you can do with customers. Your ability to do true hypertrophy training in a large group setting, when you have that type of resistance, is safer. You can't get hurt on it, and there are all these benefits. So I think that's my ten-year call.
58:56	Shaan Puri	Yeah.</FormattedResponse>
58:56	Alex Hormozi	I think a lot of people aren't expecting this. I think a huge amount will be magnetic. It'll be cheaper for gym owners; they don't break as often. It's incremental—all the reasons I mentioned—and it takes less space.
59:05	Shaan Puri	Dude—what a sick answer. That was the one I was like, "I don't even know if I'm going to ask him." I feel like he's told me, "I really liked writing this book," and I'm like, "Oh, okay—well, great."
59:14	Alex Hormozi	Gym equipment.
59:14	Shaan Puri	Have you?
59:15	Alex Hormozi	Seen my gym.
59:15	Shaan Puri	"No. I'll show you. Okay. Yeah, that's cool."
59:17	Alex Hormozi	Yeah, you'll see it and be like...
59:18	Shaan Puri	Chris said, "You're geeking out on AI or anything like that. What's it? You use it a ton—what do you use it for?"
59:23	Alex Hormozi	Yeah, I use it a lot. I use it... I mean, I feel—I just say I'm ashamed. I use it all the time, and I am ashamed of my use cases. I know I should be using it better, which I think many people feel. But I feel like, at all levels, everyone feels like they should be using it more.
59:39	Shaan Puri	There should be a word for AI guilt.
59:41	Alex Hormozi	Yeah.
59:41	Shaan Puri	Yeah, I have this overwhelming sense of AI guilt.
59:44	Alex Hormozi	Yeah, I think Elon has AI guilt.
59:45	Shaan Puri	You know what I mean?
59:46	Alex Hormozi	So I would say the part I'm most interested in—and where I'm focused on AI—is actually phones. I come from a sales background, so that use case matters: phone calls, sales calls, customer support calls. Right now we have fully implemented AI support and it's crushing it. It's amazing. Over 90% of all tickets are being resolved entirely with AI, which—if you have e‑commerce—[unclear phrase] it’s incredible. I'm getting thank-you emails like, "You guys rock, this was a two‑minute response," and the whole thing's AI. The text-based side is obviously there, but the voice side is the one I'm waiting to crack. If you let Grok 4 [Grok-4]—I'm sure you got the upgrade or whatever—the voice keeps getting better. Grok is the one I use for voice, so it's the only one I do voice stuff with; I do all the other stuff with the other models. It's so close. The latency is nearly there, but we’ve been working on a voice solution for a year and the latency is still not good enough. I wouldn't want to waste money on, you know, leads for it to call until the latency improves. Maybe it's six months away, but that's the use case I have my finger on the pulse of the most.
01:01:10	Shaan Puri	Yeah, that's great. Yeah, dude, I hired an AI tutor every week, because I'm like — it's a full-time job to keep up and take advantage of these cases. So I said, "I'm gonna sit down." I was like, "I'm paying $500 an hour. What you're gonna do is come with a list of 'blow my mind' items." One: "Blow my mind." Two: "But I get to drive." Yeah, right — because you set it all up, but then I get to be caveman.
01:01:33	Alex Hormozi	This is how I learn everything. Just so you know, that's how I learned how to run Facebook ads. Okay, I said $50 an hour, and I said, "Just explain to me how you're doing this and then I'll learn it." That's how I...
01:01:40	Shaan Puri	Learned it—literally: coaches are like coaches for adults. Yeah, it's just... I don't know why. There's maybe an embarrassment factor, or, yeah, a lack of imagination or creativity. I think it's just vastly underrated.
01:01:50	Alex Hormozi	High ROI money.
01:01:50	Shaan Puri	Also, the difference—it's just like engineering, right? Take 10x engineers: there are average ones, good ones, and the best ones. The best coaches are orders-of-magnitude better in how good they are. The other thing people get wrong is they just take the first coach they find. Instead, be really promiscuous: go date around and find a coach who will rock your world. Whether it's fitness, food, or something else, I have probably six or seven coaches in rotation. Oh, really? Now, in my life.
01:02:18	Alex Hormozi	For AI, or in general?</FormattedResponse>
01:02:19	Shaan Puri	I have AI — no, just general. Okay. I have AI. I have a... I call my "food girlfriend." She calls me every morning and helps me think about... like...
01:02:24	Alex Hormozi	Okay.
01:02:25	Shaan Puri	How am I going to eat today?
01:02:26	Alex Hormozi	Yeah.
01:02:26	Shaan Puri	And helping me uproot all my bad habits through that. I have my personal trainer who does a very specific functional training program that I like and follow. I also got a basketball coach. People are like, "Are you going—you're not going to the NBA?" </FormattedResponse>
01:02:39	Alex Hormozi	What are...</FormattedResponse>
01:02:40	Shaan Puri	You're doing it. It's like, "Well, I love playing basketball. I decided being better at basketball is..."
01:02:43	Alex Hormozi	"Not sucking."
01:02:44	Shaan Puri	Yeah, this is more fun. It's like I can do cardio, or I can have an NBA trainer train me.
01:02:48	Alex Hormozi	Oh, it's awesome.
01:02:49	Shaan Puri	It's way better than just doing cardio, and I know—so why am I... why would I not do that? I just have a bunch, but it's become to the point where it's comical. It's like...
01:02:56	Alex Hormozi	Yeah.
01:02:56	Shaan Puri	I'm just... looking for an excuse.</FormattedResponse>
01:02:57	Alex Hormozi	No, but...
01:02:57	Shaan Puri	"I mean, what other coaches can I add to my piano teachers? Everything?"
01:03:00	Alex Hormozi	I'm such an advocate of this for anyone. If we're still even rolling... but they've all left. Yeah, they've all left.
01:03:07	Shaan Puri	Just hanging out here... we're
01:03:07	Alex Hormozi	Just... no. But I think some of the highest-ROI money you can spend is one-on-one tutoring. Every time I really need to learn something—like what you said—I would pay a huge amount of money to just have you sit with me.
01:03:20	Shaan Puri	Which, by the way, is the killer AI use case, right? Yeah. So that'll be the thing. Once we get it... I forgot what it's called. Have you heard the Bloom "two-sigma" thing? Basically, there's this long-term effort: people want to fix education, so rich people fund research asking, "How do we do it?" They do the research and find that the number one way to get an actual two-sigma (2σ)—which is a two standard-deviation jump in outcomes—is one-on-one tutoring. The problem is it doesn't scale, so they wrote it off.
01:03:44	Alex Hormozi	Yeah.
01:03:44	Shaan Puri	"For the last 30 years we've just been like, 'Well, we know the thing that works.' It doesn't really scale; it can't be affordable. So we'll try all these other things. But it's like, hey — wait a minute."
01:03:54	Alex Hormozi	It's.
01:03:54	Shaan Puri	Bad. That's now viable, so let's see what happens, you know.
01:03:57	Alex Hormozi	"Are you in Austin?"
01:03:58	Shaan Puri	No, I'm in the Bay Area.
01:04:00	Alex Hormozi	"You're in the..." [incomplete sentence]
01:04:00	Shaan Puri	Bay Alpha School
01:04:01	Alex Hormozi	Yeah, so I talked to—I talked to Joe about Alpha School. I mean, the stuff they're doing is wild, but the issues that they are encountering have nothing to do...
01:04:10	Shaan Puri	With education, yeah.
01:04:12	Alex Hormozi	It has everything to do with policy, right? Such a pain. But it's like: two hours a day we're moving at twice the speed. So that's, like, one‑fourth the time and twice the speed — they're moving at eight times the speed of a normal school, and their scores are in the top 98th percentile. So it's like eight times the speed and the quality metrics are there. Then, the other six hours of the day, the kid just learns whatever they like. They code apps, they do public speaking, they do budgeting, they learn all these other life skills. And this is like, "God — did you hear? Did you see that clip by Alexander Wang? Hopefully I didn't..."
01:04:45	Shaan Puri	Scale, Lucy Alexander.
01:04:46	Alex Hormozi	Yeah, yeah.
01:04:47	Shaan Puri	Which clip was it? Well, he's like, "I want my kid until I'm nervous."</FormattedResponse>
01:04:50	Alex Hormozi	Until it's native, and I was like, "Man, that was..."
01:04:52	Shaan Puri	One of the more insane statements I've ever heard... in a good way. That's the good weird of Silicon Valley: you run into people who will say batshit insane stuff with a straight face. Then you're like, "Wait — am I insane? Or is he insane?" I can't... yeah, he's probably right, but he's crazy.
01:05:08	Alex Hormozi	He has way more context on this, right, which is what scares me. It's like, when you have one of those, it's like, "Well, you have to know something." If we have the same information, you might be crazy — by my standards.
01:05:17	Shaan Puri	Right.
01:05:18	Alex Hormozi	"But if I assume that you are intelligent and can make good decisions, then it means you know something I don't know. And so that's what frightens me about AI."
01:05:24	Shaan Puri	I already have different values.
01:05:25	Alex Hormozi	"But, yeah—yeah, exactly."
01:05:26	Shaan Puri	But, you know, Peter Thiel had one of his great insights when he went around saying, "University is a bubble." He was basically saying you have to look at university as a bundle. Education is great...
01:05:37	Alex Hormozi	Sure.
01:05:37	Shaan Puri	10 percent
01:05:38	Alex Hormozi	Yeah, you.
01:05:39	Shaan Puri	You know, babysitting — the maturation of 18- to 22-year-olds is... what was their social [function]? There's an insurance policy for parents where you're like, "I don't know, just go to college." That's what I needed to do for you. And there's a filtering thing which is like, "Well, we trust that Harvard filters you," so we've—yeah, yeah—"we'll just trust their filtering process." So, like, college does all these different jobs.
01:06:00	Alex Hormozi	Yeah
01:06:00	Shaan Puri	His take was basically: "If you want to disrupt it, you don't just disrupt the whole thing. You have to unbundle the bundle and figure out what to do." I feel like this is such a common business thing: people say, "Oh, healthcare sucks," or "this sucks" — yeah, it sucks. But until you've realized that the thing is actually a bundle, you really have no shot at upending it in any meaningful way. You've got to take one part of that bundle and just 10x that. Then figure out a way where the other stuff doesn't apply to you, because you didn't promise that. If you can do all that, it works.
01:06:28	Alex Hormozi	Yeah, like you.
01:06:29	Shaan Puri	I know the way I think about what you do is: you're a teacher on YouTube, which is not a surprise to you. But people think of YouTube as either "social media"—okay, maybe—or it's just content, entertainment, right? But dude, I have little kids. Miss Rachel is the best preschool teacher in the world.
01:06:44	Alex Hormozi	Yeah.
01:06:44	Shaan Puri	She has 34 million preschool students.
01:06:46	Alex Hormozi	Yeah.
01:06:47	Shaan Puri	Who watches her on her app? Great. That she's the best teacher — therefore she should get this huge, outsized number of students. Totally. And Khan Academy was a great teacher. You know, "you're a great business teacher." I literally look at YouTube like it's a high school — there are just classes to offer. I can go to David's Center and get the "History of Entrepreneurship"; that's an elective I decide.
01:07:05	Alex Hormozi	Yeah, totally.</FormattedResponse>
01:07:06	Shaan Puri	And, like, you're basically like "business one-on-one" or "business whatever" — business fundamentals. Yeah. And it's like, "Great, you can go take business fundamentals with my professor, you know, Rosie." And, like, I think when you start to look at YouTube as also a bundle...
01:07:16	Alex Hormozi	Yeah.
01:07:17	Shaan Puri	When you think of music, entertainment, and education, you start to consider how you might use it differently than the average person. Both you and I probably wish we had started on YouTube ten years earlier. It was the people who saw YouTube as more than what others saw who actually gained that advantage.
01:07:31	Alex Hormozi	Yeah, no — I think that's really good. I think it reminds me of the Nimble quote that I like a lot: "Technology democratizes consumption and consolidates production." Which means, if you're the best in the world, you get to do it for everybody, right? And so, yeah, I actually think about that a lot when we talk about our channel, which is: how do we just make this the best business content possible? I mean, that's the whole goal. If we just keep doing that, then we'll be okay.
01:07:56	Shaan Puri	Yeah, I think you're doing a pretty damn good job of it. I appreciate it. The hard part is this: I'm curious how you do it, because at one time I think I even talked about this on the podcast. I was like, "I think he's great and smart." But then the problem with YouTube—yeah—because the goddamn views are public.
01:08:10	Alex Hormozi	Yeah.
01:08:11	Shaan Puri	They gave you an outer scorecard to use. Yeah, that may not be the one you want, right? I remember once I looked at your channel and thought, "If you're broke..." [thought trails off]
01:08:18	Alex Hormozi	Do this, yeah.
01:08:19	Shaan Puri	If you don't have enough money for Chipotle, do this. And I was like, "Dude, he's just gonna attract broke people." Yeah — that's the opposite of what he kind of...
01:08:25	Alex Hormozi	Of, like, 100%.
01:08:26	Shaan Puri	Wants, you know, or like... it's easy to optimize. Because, guess what, there are more broke people—more desperate people—on YouTube with a bunch of time to kill. You're going to get 2 million views on the "broke guy" video.
01:08:34	Alex Hormozi	Yeah.
01:08:34	Shaan Puri	But I'm never gonna click that, and you probably want some people like me clicking some of your content—totally. I think that's the challenge with YouTube overall: if all of you take their metrics...
01:08:43	Alex Hormozi	Yeah.
01:08:43	Shaan Puri	As your metrics, you might have a big problem.
01:08:45	Alex Hormozi	It's a 100%. So, yeah — it's a thousand percent a problem. I'd say we put as many controls in place as we can, and it's still tough. Right now, here's where it gets... let's peel a layer back. Where it gets really interesting is that if I make six videos — this is our actual cadence — five of them I want to be business-first, business-deep, whatever we want to call it. Then one out of six I say I'm okay to just make it wide: brutally honest truth about whatever. That one video will get more views than the other five together. So then, how much does that actually weight the brand? So even if I actually think about my
01:09:24	Shaan Puri	Production versus consumption, right?
01:09:26	Alex Hormozi	So, if I actually map my inputs... I might have a 50% philosophy brand and 50%—you know—motivation, whatever you want to call it: mindset, etc. And then 50% business. But in terms of my production, 90% of my time is spent on business. It just doesn't get the reach. That actually frustrates me in some ways. If I get stopped on the street, I'm always curious: what was the thing that resonated? Business owners, for me—because I see the people who walk in the door, and you have to be at a certain level to walk in there—are more listening and reading in general. We have a whole series we do called "Cash Cows". It's kind of like what we did with the Hormozi Hotline [video series], but I have them in person and I do the whole thing—it's about an hour. Those ones right now average like 150,000, maybe 200,000 views per video, but then there's the brutally honest million views type of content. I could do those right now; I know exactly what we're going to say. When I ask, "Who here likes those? Who shows up?" they're like, "Keep making those." So I keep asking them because I need the reinforcement.
01:10:36	Shaan Puri	Yeah, of course — because you need an inner score.
01:10:38	Alex Hormozi	"I need something."
01:10:39	Shaan Puri	The outer scorecard is only going to tell you one thing. So you have to instrument—like an antenna—yourself to get the signal you're actually looking for in a way that's not necessarily biased. If I don't put up an antenna, there is no generic antenna for this, you know?
01:10:51	Alex Hormozi	Also a little, a little tiny thing that may be helpful or useful: we actually just switched our metric this quarter. Before, we used views. Basically, the way I did it before was: we would make content about these topics, and as long as they're within those topics, then we maximize views. So that's the constraint, and then we maximize within that constraint. We have now switched to subscriber count — subscriber growth — even though subscribers matter 0.
01:11:14	Shaan Puri	Right.
01:11:14	Alex Hormozi	It's just... yeah, it doesn't matter for distribution, but it's a great loyalty signal — exactly. It's a quality score of "I thought this was valuable enough." So now I could still apply the same constraints to the content, but then use the subscriber metric, because that gives us — subscriber still has baked into it some element of reach, right? But if I make a brutally honest video, I'm not going to get the same amount of subscribers as I am with "thirteen years of business advice" — like one of my best videos ever. That's hardcore business.
01:11:40	Shaan Puri	Yeah.
01:11:40	Alex Hormozi	So, anyway, it's something that we've switched to just this quarter.
01:11:43	Shaan Puri	I... I can't figure it out, so I basically figured out what I want, which I can't measure. So first was: "What do I want?" I was basically like, I created it, but, you know, in popularity they have the Q score.
01:11:55	Alex Hormozi	Okay.
01:11:55	Shaan Puri	So I basically was like, "Give me the Z-score." "What's the Z-score?" The Z-score for me is a trust score. So I was like, "Alright."
01:12:00	Alex Hormozi	Probably should have been a...
01:12:01	Shaan Puri	T-score. Okay, I'll think about it.
01:12:02	Alex Hormozi	But it was the...
01:12:03	Shaan Puri	Z-score, which is basically: I realized that for all content, what you actually want is the number of people reached multiplied by the quality of the people reached.
01:12:10	Alex Hormozi	Sure.
01:12:11	Shaan Puri	Times the depth of their trust in you. Sure — and basically that's the equation you ultimately care about. So, you can reach a lot of people on TikTok, but if they're not the people you're trying to attract, it doesn't help. You have to apply a discount factor because your second variable is not very good. And then the third is: how much do they actually trust you? Not just that they watched that piece of content or liked it, or even "hate-watched" it. You might get views, but they could be thinking, "This guy's an idiot," or "I hate this guy." That's why — that's what I wish existed. Now that's never going to exist, so I had to backchannel it. It's basically a "shame metric." I asked myself: if I make something, do I want to put it in my favorite group chats, me saying, "I made this, guys"? There's a lot of stuff I make that can get popular, but I would cringe putting it there. They'd be like, "Bro, what the fuck is this? We don't need this or care about this. What is this for? Why did you put this here versus other things?" I did this one thing that went nowhere viral. I spent two months studying the process of creativity. I've basically realized that with AI, productivity value is going down and creativity value is going up. So I asked: how do the most creative people in the world work? I've studied Elon and all those guys, but I actually had no idea how they operate. So I studied that, put it together, and put it out there. Again, it went nowhere—kaput. But I've internalized those lessons deeply, so it's still a win. That was the one I was hesitant to put in my group chats. </FormattedResponse>
01:13:36	Alex Hormozi	Yeah.
01:13:36	Shaan Puri	My most successful peers were actually like, "Dude, this is actually sick. I actually have— I didn't know this. I took this; I needed this..." </FormattedResponse>
01:13:44	Alex Hormozi	Yeah.
01:13:44	Shaan Puri	So I've had to use, basically, my own cringe factor.
01:13:48	Alex Hormozi	Yeah.
01:13:48	Shaan Puri	Do I want to put this in there, or would I feel kind of stupid doing that? Would I feel like I need to soften it with some context and some [unclear: "to put"]? </FormattedResponse>
01:13:56	Alex Hormozi	Yeah — I think... what you hit on is such a painful part of creating content: the entire reinforcement system leads you away from the actual business goal. If you do this for business — which I do — it leads you away from your business goal. So you have to have a lot of discipline: "This is the stuff I'm gonna make, and it will underperform, and that is okay." It gets harder when you learn how to make the stuff that really hits from a views-and-metrics perspective. The more you know how to make that kind of stuff, the more... yeah. This has probably been one of the largest focal points for our brand. I feel like it's an accordion: if we do just hardcore business content, then we'll be like, "Alright, let's make a little bit of personality stuff, show a little bit." Then it does great and we go, "Oh, fuck, we're way too wide," so I think we just kind of oscillate.
01:14:51	Shaan Puri	One thing I wish you did more of—just my personal request—was that you did something, I don't know, like a short or something. I don't know who made this; somebody in this room might have made it. It was like you were just talking about your figure. You were talking about your shoes.
01:15:02	Alex Hormozi	Yeah, right.
01:15:03	Shaan Puri	And I bought... So, yeah. So yeah, you hold on your Darwin outfit. You're like, "I have to wear this in the rain and then the pool, and then I can get out of the pool, go to a restaurant — it works. I can go for..."
01:15:11	Alex Hormozi	A hike. This whole thing works.
01:15:12	Shaan Puri	"Tomorrow — and, you know, I think that's great. First of all, it didn't feel like I was trying to be the Kardashian. It also didn't feel like you were trying to show me something. Yeah."
01:15:21	Alex Hormozi	Yeah, yeah.
01:15:21	Shaan Puri	"It was just like, 'Oh, you want to know something I do in my life? Here's something I do in my life.'" What I thought was interesting about that was: - a. It was a good find — you'd actually put your real nerdiness into doing something for your own lifestyle, so it meant something. - b. Every time I wear those shoes, I think of you. Oh, and there's something to physical anchors.
01:15:40	Alex Hormozi	No, totally.
01:15:40	Shaan Puri	In a digital world that actually matters. </FormattedResponse>
01:15:42	Alex Hormozi	I'm a huge believer in that. Yeah — side note.
01:15:44	Shaan Puri	Like, huge. So I think this is like a little sauce there. I think the other part of it was—I made a mission for the year. I thought it should have been about, you know, business or getting in great shape or whatever. But then it was like, "Oh, I know what I wanna do." I was like, "I wanna learn to jam out on the piano." So I just made that my mission. I took it incredibly seriously and had a great time doing it. Just yesterday, I turned on a livestream on Twitter and was like, "Mhm."
01:16:11	Alex Hormozi	I think.
01:16:11	Shaan Puri	They have this feature: I just livestreamed myself doing a piano practice — not even a performance.
01:16:15	Alex Hormozi	I was.
01:16:15	Shaan Puri	Just like fucking around, trying to learn these songs. I'm not good—I've been doing this for six months, dude. I got so many DMs with the same thing from people I don't want to send my content to because I'm like, "You're a billionaire—what do you need? How to get rich?" You know, from a guy ten times less rich than you. But I got messages like, "Dude, I've been wanting to practice. I love how you made time for this." They asked, "Which one did you get? What room is that? That's cool. Who's that teacher? How'd you find her?"
01:16:36	Alex Hormozi	Do you?
01:16:36	Shaan Puri	I think a teacher's better than the apps. I got so many of those that I was like, "there's something to the lifestyle content," when it's really, like, gym.
01:16:43	Alex Hormozi	Equipment, for example — you can probably see that I light up when I talk about it.
01:16:46	Shaan Puri	Exactly. If it genuinely lights you up and it shows, it's like—for other successful people who I don't like: "I've read all the books now; I don't really need a lot of, like, how to grow my business."
01:16:56	Alex Hormozi	I'm actually pretty...
01:16:56	Shaan Puri	Good at that, sure. One cool way I thought your lifestyle stuff worked was that it attracted me—where I probably wouldn't watch ten of the other videos. Sure, that one was kind of interesting.
01:17:05	Alex Hormozi	Really interested.
01:17:06	Shaan Puri	From a different angle, I think you kinda turned the spigot off on that. I noticed. But my personal request is: "Yeah — give me 10% of that back."
01:17:12	Alex Hormozi	Yeah, so this is the dichotomy that has to be managed, which is—the thumbprint of the creator, in my opinion, should be the representation of their current life, which means it can change. Right? So, I spend maybe—it's like 10% of my time is fitness-oriented, and so maybe 10% of my content should be fitness-oriented. Then probably 80% of my time is business-oriented. Then maybe 10% of my time is philosophical. And maybe five—and this is now a 105%—is relationship, whatever, right? So that's my mix, and maybe in a different season it'll change. The content should be—I was thinking it should be glass. It should be like when someone meets me, it's exactly as they expected. Yeah.
01:17:48	Shaan Puri	The
01:17:49	Alex Hormozi	Only thing that fucks that whole thing up is the algorithm. Yeah — because I can absolutely make that thumbprint. It's just that this one will get ten times the views. So, if you're trying to manage the mosaic of your brand with all the little shorts as tiny squares, you can't control how big the square is in the middle of the face you're trying to build.
01:18:11	Shaan Puri	That makes sense, but that's...
01:18:12	Alex Hormozi	What I'm...
01:18:12	Shaan Puri	"Saying 'that thing about your shoes' didn't get a lot of views, but it made an imprint on me."
01:18:16	Alex Hormozi	Yeah.
01:18:16	Shaan Puri	And I would say—I would carry more weight than, say, a thousand random views. Tim Ferriss said this once: "Do I want 10,000 random people selected at random somewhere in the world?"
01:18:25	Alex Hormozi	"Yeah."
01:18:25	Shaan Puri	To have people like my stuff, or to have half of Davos really respect what I do. Yeah — it's like: one's a big number, one's a big value, right? Which one do I want? I think there's something similar there. Also, you know, you were talking about how they have different wallets or different stomachs.
01:18:41	Alex Hormozi	Totally, yeah.
01:18:41	Shaan Puri	It's like I only have a certain “wallet” or “stomach” for educational business. I'm reminding myself I need to do more at work.
01:18:49	Alex Hormozi	"Yeah, right. Yeah."
01:18:50	Shaan Puri	But I... [incomplete utterance]
01:18:50	Alex Hormozi	Actually, I have another wallet to share with you. Interesting.
01:18:53	Shaan Puri	On another area — my fitness wallet share. You could get some of that. Yeah, you could get some of my outfit wallet share or my relationship wallet share. As an entrepreneur dealing with, you know, being busy but wanting relationships... think of it maybe with your own analogy.
01:19:05	Alex Hormozi	Yeah, no — I really like that. I mean, it's always... we need to be reminded more than we need to be taught. Yeah, so I'm with it, dude. Alright.
01:19:12	Shaan Puri	We should... we should cut.</FormattedResponse>
01:19:13	Alex Hormozi	Appreciate you. Thanks for having. Thanks, dude.

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These 4 Math Equations Will Make You A Millionaire | Alex Hormozi

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