Kind: captions
Language: en
Alex horoi welcome back to the show
thank you so much for having me very
excited truly a pleasure Mutual let me
ask why do smart people stay poor they
don't do the things that makes people
rich and I think they probably convince
themselves that they're smarter than
they are and so if you were smart then
you would be
rich and so then it follows that there's
probably a a series of traits of
behavior that you don't do either
because you think you're above them uh
or you don't know about them so either
it's a declarative knowledge deficit
meaning you don't know about the thing
uh which has nothing to do with the
intelligence like if somebody eats an
apple sorry a banana and they're from a
different country and they just eat it
through the skin it doesn't mean they're
stupid it means they're ignorant which
is very different that's a declarative
deficit then there's procedural deficits
which is knowing how to and I think one
of the big difficulties with smart
people is they have tremendous amounts
of declarative knowledge and very little
procedural knowledge and so it's like
saying you read a book on how to do a
private Equity deal and you know
everything that has to happen but you've
never done a private Equity deal it's
probably unlikely that you know how to
do a private Equity deal and so um
delineating those things has been
helpful for me and since the procedural
knowledge has significantly more utility
on a daily basis from a money-making
perspective I have reduced at least this
is me you know transition to me but like
I have reduced the amount of time that I
spent on declarative knowledge um and I
try to get to the procedural part of it
as fast as I possibly can because I know
that I'll learn significantly more by
failing and doing it than
you know reading a 100 books on sales
versus doing 100 phone calls like you'll
learn a lot more in the first calls yeah
it's interesting this to me is I'm
always trying to get entrepreneurs to
one think from first principles which
most people don't even know what that
means so you start by defining it but um
this feels like that getting to
understand the essence of what it is so
that you understand it the way that
somebody understands a combustion engine
so you can get in and be like well I
know what has to happen for this car to
go and if I know what has to happen you
can break it pull it apart and I'll be
able to put it back together cuz I
actually understand how this works so
how does wealth creation
work uh you have to have a mechanism for
letting people know about your stuff and
so that can happen on a variety of
channels that typically happens either
one-onone or one to many and so one
onone would be you knock on doors you
reach out to people via DM you send
emails you send direct mail you uh you
make phone calls you send text messages
any of those are 101 uh Outreach is one
way of letting people know you could do
one to many uh to people who already
know who you are which is basically
today's equivalent of a billboard which
is social media you make posts you make
content um the Third Way would be that
you run paid advertisements so on those
same platforms you just pay to get the
exposure rather than doing it by earning
it uh through quality content um and
then the kind of like the door door four
uh would be using those three methods to
then get someone who already has the
type of person that you want to
advertise to and doing structuring some
sort of deal with them but you'd still
need to reach out to them 10one you'd
have to make content to attract them or
you'd have to run an ad to get to that
person so these are the core things that
someone must do to promote whatever they
have because if we think about it from
what must occur in order for a
transaction to happen well people have
to know that you exist or that your
product exists no one can buy something
without knowing it exists and so we have
to start with promotion the second
component is that they have some sort of
voluntary exchange and so that means you
have goods and services that are
exchanged for money and so I think the
idea of like money being created really
only happens with the government but for
everybody else we exchange for it and so
there are people all around us like one
of my really fun exercises is looking at
whatever room you're in and knowing that
everything that was there there's a
business behind it so like the walls you
have there's there's the person who
manufactured the raw materials there's
the person who sourced the materials
there the labor that went to installing
it There Was An Architect who designed
it and then you look at this mic and
you're like okay well there's there's
this foam thing which he probably got
from a third party then there's the the
the mechanisms inside which is another
business there's the distributor that
you bought this from like there's all
these pieces when people are like man I
just I don't know what opportunities
there are I'm like you can literally
open your eyes and everything that you
see has a business behind it and so from
the the value component um for people
who are I'll just tie this into people
who are starting out I recommend most
people start with Services because it
requires no capital and you require time
and when you start out you use what you
have and so if you have no money and you
only have time then you trade the time
for money and so either you're going to
do something other people don't want to
do that they know how to do so like
taking someone's trash out doing Lawn
Care washing things like cleaning those
those are all things that people know
how to do but don't want then the second
level of that is doing things that
people don't want to do or know how to
do and obviously that's knowledge work
what you get you the amount that you can
get paid is predicated on the value that
whatever that skill deficiency is to the
other person and so um I think about it
like that the person has to know you
exist so you have to do one of those
advertising activities I referenced and
then the the thing that you give them is
you're going to give them some some some
amount of time back either the time to
learn the skill or the time to do the
skill um and then once that exchange is
made uh then both people say thank you
because they didn't want to do the work
and you wanted the money and so everyone
wins and then around and around we go
okay so the around and around we go you
and I both know that even though you
just laid out a lot of things that are
very very true do you think about the
Gap as to why the vast majority of
humanity will not be able to translate
that into actual
money
um I think a lot of people spend a lot
of time on everything that isn't Revenue
generating and so everything that's not
will we just outlined like if you're not
reaching out to people oneone you're not
posting content or you're not running
ads or getting in touch with someone who
already has an audience of the people
you want to reach if you're not doing
that right now then nothing else you do
matters it doesn't
matter you have to have something to
sell which like I said you can start
with your time very easy and my
recommendation is to go and get money
from a stranger doesn't matter what you
sell just get a dollar from a stranger
to to actually walk through the process
that's the procedural knowledge like
it's one thing okay oh shoot how do I
take a credit card oh that's a whole
another thing oh I have to get a payment
process oh to get a payment process I
need a bank account oh to get a bank
account I need LLC right so like you
walked like oh here we go now now I can
get my first dollar across once you get
the first dollar across the second one
comes very fast and so um why don't
people uh why don't people do the stuff
that it takes to make money because
they're doing everything that doesn't
make
money I've got so I am now teaching a
business scaling course and so yes it
actually is a lot of fun uh where can
people find it oh sure it's so funny
because the answer of course is school
your company but I promise we did not
talk about that set that up uh but yeah
on school and the it's got me asking a
lot like okay I really want these people
to be successful for no other reason
than to be a glowing testimonial and so
what's going to be the place that they
fall down um there is a concept in
sailing that I am beginning to think
other than intellect which unfortunately
matters I'm beginning to think is like
the thing it's called velocity made good
vmg okay and the whole idea is that you
can have a lot of wind but if your Sals
aren't angled in the right direction you
could be moving fast but not going in
the direction that you want to go you
could be not moving at all because your
sales just aren't able to capture it it
um or you could actually be moving fast
in the direction that you want to go and
that to me like pulling that apart as to
what are the things that people don't
understand what are like if we were
going to make angling the sales not a
metaphor but like a reality um what is
it like as somebody who's now scaled a
business
tremendously what is it in all of those
things that allows you to capture the
potency of your intellect to understand
that making just making content doesn't
do it the content has to be aimed in a
direction it has to have a goal in mind
how would you teach entrepreneurs how to
quote unquote angle the
sales so the process that I follow is
common factors analysis for basically a
retroactive look back window now that
sounds like a whole bunch of fancy words
but basically I look back at stuff I did
and see what worked better than other
stuff and then I say okay well the top
10% what things did they have in common
and then the bottom 10% or the bottom
half what things that did those lack
compared to the top 10% then I try and
do a next batch of activities whether
it's phone calls whether it's content
whether it's product iterations that
then do more of the thing that worked
and so that process has been I think the
fastest feedback loop that I've had so
rather than trying to find like a
specific course around something super
Niche which is gets really difficult the
more Niche it is I rely on the universe
for feedback which is like we have to
try 100 repetitions of whatever the
thing is look at the top 10 or 20% look
at the common factors and then do a
whole next batch of 100 with those
common factors if performance goes up
then the variables that we isoled
isolated were the correct ones and then
within that next batch there will be
another top 10 or 20% that by variation
of repetition which will always happen
uh there will be other mutations like in
DNA that occurred in in that subset that
I can then replicate again and that
process is how I got good at sales
that's how I started making content I
just I but I think the first piece that
people stop that they prevent themselves
from doing is doing the hundred
repetitions because they think that
they're it's the it's the fallacy of the
perfect pick like they're going to get
it all right so that they don't have to
fail the first time but like my favorite
one of my favorite scenes in The Matrix
is when Neo tries to jump across both
build and then he falls and Cipher
everyone's like what does it mean and
he's like everybody falls the first time
so even the one Falls the first time
obviously it wasn't the one then
whatever we can get into that but I I
just like that as a failure as an
assumption rather than something to
avoid like Elon was able to get the
Rockets up because he failed five times
faster than people were able to do one
so he got five failed Rockets out before
he got a sixth and everybody was looking
at the five failures but he's like well
look at how much further we got with
each one and I think that most so one of
the difficulties with skill is that
Masters have more Milestones along the
way and so they're able to mark progress
with more Nuance a beginner only sees
kind of a binary outcome between it
worked or it didn't work but for me if
I'm going to go into a new advertising
channel for example if I want to say I
want to start uh doing cold outbound
well actually have a great story about
this when we started doing cold outbound
for gym launch um my executive team so
you know not like experienced people
about three or four months in basically
did like an intervention with me and
they said you're putting all of your
time and attention to this we think this
is a shiny object using my words against
me right this is a woman in the red
dress uh and we think you should stop
and let's double down on what works
which for us at the time was paid ads
and some content and the thing is is
that they were too far away to know the
progress we were making and so they just
saw that we basically hadn't made any
sales we made one sale in like three
months but I knew that the first problem
we had is we didn't know where to get
the data from where do we get these
lists from so then we finally got the
list and we're like okay but no one's
picking ah we have to enrich the data
okay then we enrich the data then no one
was still picking up so then we're like
oh oh we have to find out how to get
people to pick up so we have to do local
call wrapping on our phone so that
increases the pickup frequency so people
start picking up but then no one wanted
to book a call because our script was
off so we fixed the hook and then people
would listen to us but they didn't like
the offers and we fixed the offer then
people would came to the second call but
then they weren't showing up to the
second call and then we're like okay we
have to create a followup sequence now
at this point they're like hey you need
to get you need to stop but it was just
we have a hundred steps that we have to
take and we're 33% of the way there but
if you're a beginner you don't know
you're 33% of the way there and so I
think one of the difficult things as a
beginner is that there is there is a
leap of faith like when you do your
first week at the gym you're not going
to get results but it doesn't mean that
working out's wrong it just means
they're measuring on the wrong time
Horizon and I think one of the things
that has has thrown a ton of beginners
off is the understanding of volatility
and volume so basically when you when
you have a a new business or a new ever
what appears inconsistent or volatile is
typically a function of doing too little
volume and so it's like if I it's like
yeah you know one sale comes in every
you know a couple weeks it's I'm still
you know but if we look at the
activities that generate that sale it's
like you might have done a 100 reach
outs over 30 days and then one of them
becomes a sale so it appears volatile
but really it's just you got 1% and
you're doing far too little and so if we
did 100 a day then all of a sudden we
might make one sale a day and all of a
sudden it seemed very consistent and so
the volatility is only a function of two
or of of insufficient volume and so um I
think that that misconception is why
many people who start out fail quickly
or choose not to start because they are
measuring their feedback loop on two
short of a Time
Horizon all right so if 90% of
businesses fail outright sure uh
90 6% fail to break a million and only
4% go over that what is it that those
have in common the ones that make it are
do they share something in common and if
so what well I think to cross a million
you need a consistent acquisition
process I think that's about it customer
acquisition yeah sorry yeah customer
acquisition process like in the
beginning you have to do something
period zero to one you have to do
something and then you have to make your
first dollar and then uh your
advertising is inconsistent because
you're inconsistent when you once you
become consistent then your sales become
inconsistent because you don't have a
process so then you have to D dial in
the sales process so basically
advertising in sales have to become a
consistent process with predictive
metrics we know that if we do 100
primary actions whether that's 100 posts
$100 in ad spend um 100 reach outs that
that will generate this many leads which
generates this many calls which
generates as many sales and it could be
on e-commerce or it could be you know in
in a service or um environment like I'm
describing with calls um but
fundamentally you just have to get to
that equation and once you get there
then it's just inputs and outputs and
then you're just pouring as much in and
then figureing out what the constraint
are from you putting more in at least
that's how I think about it do you force
yourself to predict the outcome of
initiative before you do it um not as
much as I used to to be really honest
with you this actually a huge change for
me um in terms of how we grow how we
grow our portfolio now I I'm actually
really curious what you think on this um
but I heard Jensen hang say it and so I
feel like a little bit better uh but
basically they did away with all
long-term planning and I always felt
like long-term planning cuz when I got a
year later I was like half these things
that we were talking about a year ago
the variables of the environment Talent
many of the major movers have changed
what the priorities are in the business
and so I focus almost exclusively now on
what are we going to do in the next 12
weeks now we obviously have long-term
objectives but I don't want to plan out
forecasts and and basically obsess and
get everything down to the decimal when
I can't even estimate the big forces
that are going to be at play now if I
say I think if we build the brand this
year that is a good thing and that's our
number one priority then great then I
can reverse that but I'm reversing it
only into the present for the next 12
weeks because things will
change very interesting so I'm thinking
a slightly different angle so here's
what I always tell entrepreneurs to do
so you describe a very similar thing to
the way that I try to go about scaling
which I call the physics of progress
okay so to me progress has a nature
there's just a way that it works so you
try a thing and it either works or it
doesn't but to know if it worked you had
to say this is where I'm trying to end
up this is is what I think is my
obstacle this is the thing I think I
need to do to overcome my obstacle now
I'm going to do that but what I find is
entrepreneurs will lie to themselves
when they get the result they'll be like
yeah that's roughly what I expected now
the problem is that that will break
their ability to do things as a thought
exercise and so now they have to
actually test everything not realizing
they don't know how to predict the
outcome so what I tell them to do is
look and this is what I do myself uh I'm
going to do this thing whether it's um
build a piece of content and put it out
whatever uh and I think this is going to
get a million views 1.5 whatever so when
it does 75,000 views I'm like whoa there
is something I did not understand and so
when it comes to content I'll even
predict at the idea level and I okay
this is what I think it's going to get
then we'll execute and I'll say actually
now see execution I don't think it's
quite as good and so now I think it's
going to be this and then you put it out
and that way if you can really come to
understand why something works or
doesn't work now you've got a better
shot but because I know I'm prone to lie
to myself that yeah that's roughly what
I was expecting because people want to
look cool yeah um but you're saying in
that scenario you guys just sort of art
by the pound get a lot more things out
are you looking to build Intuition or um
yeah I mean I think I'm so aligned with
what you said uh you know what are the
causal factors uh and I mean the whole
common factors analysis concept is
basically trying to do that like how can
we identify like we're going to do
everything with these variables in
addition to the last time and if those
variables don't meaningfully change then
they are not the correct variables um
but I it's so funny you said that
because I thought you were going to go
in a different direction so I've been um
putting together this hundred million do
scaling road map uh it's probably the
biggest project that I've done in a long
time it actually releases on Black
Friday um it's free it's free for
everybody I'm so shocked Alex horos with
the free stuff um but the I had first
thing I I I spent a long time on was
like is there a micro framework that
fits into this larger framework which is
like how does anything scale and then I
try to make an acarine out of out of it
and I think I think I have a decent one
so s is start you got to start you have
to do something C is compound you have
to do more so first you start then you
do more a is augments and then you do
better so it's like okay I've done a lot
that's the common factors part so I'm
going to try and do something better L
is leverage so how can I get it to be
consistent how can I do how can I
automate it both sides of that and then
e is expand you do it again so that's
the loop so that scaling Loop exists on
content at all levels uh organizational
structure because that that one first we
start then we do more then we do better
then we try and make it consistent and
automate it and then we expanded the
next thing um that works for markets it
works all the way across so that
fundamental unit became how I thought
through scaling all eight departments
which is what I I divide everything into
so it's customer service product sales
marketing it uh HR recruiting and
finance uh I don't put legal in there
because I didn't think it was most
people Outsource anyways for a while um
and so those are the eight functions
that I had of the business going from 0
to 500 people head headcount I did 0 100
million because no one would know what
zero to 500 people would be but most
businesses at 500 had cter you know are
usually over 100 million and it was
easier to draw parallels on
organizational structure rather than bu
Revenue because like a software company
like school can do $100 million with 25
people whereas uh a restaurant might do
a million dollars with 25 people and so
doing it by Revenue felt to uh it would
it wouldn't be it wouldn't be valid or
use F uh and so instead I went by head
count which had far more similarities
and so in thinking about that scaling um
I broke it into first there was
functions like what must occur in order
for us to move to the next level and
then you have the people who do those
functions and then the third element is
the operations that connects the people
to the functions and so that would be
like training meeting Cadence
communication structures that's all the
operation side and then the people is
what is the hierarchical uh how does how
does the hierarchy look who do you need
to hire at what point typically um and
so that's basically the three sides of
the of the pyramid in terms of thinking
about scale uh the scaling road map that
I have that I came out is just the
functions part because it was already a
monster um basically it's like an hour
plus long video going through each of
the functions of each of the departments
at each level and then I vetted it with
uh uh a few of my friends who have
multi-billion dollar companies and they
were like dude this is so accurate it's
freaky and so I was like I felt really
good about that and they helped me with
a couple of them like I would raise it
like this and maybe this is you know
move this instead of here um but that
micro framework of we have to start then
we have to do more we have to do better
then we have to automate it or or create
some sort of Leverage around it and then
we expanded the next thing was the micro
concept that I then applied across all
departments um to tease out the
functions that happen at each at each
level makes a lot of sense now so again
I'm always trying to figure out where
are people going to fall down because
you can give this stuff to people and
they're still going to struggle so you
said something earlier that that is
profoundly insightful that I want to
know how if you have a method for that
or if you just have a brain for it but
you said we need to get local call
wrapping as people are more likely to
pick up a local number so you're sitting
in a room you're not getting the results
that you want and you start thinking to
yourself what is stopping this from
happening yeah does it just bubble up
into your conscious mind or do you have
a method so I would think so if I were
to have to solve this problem out loud
in front of everyone I would think okay
what we're doing is not working what is
it that increases the likelihood that I
pick up my phone when a phone number
calls okay if I know the person and like
them that would be the highest
likelihood person that I'd pick up okay
so Lila that's the highest likelihood
pick up the second highest likelihood
would be somebody that I know so they're
their number is saved okay got it now
what numbers that I don't know would I
be more likely to pick up the numbers
other numbers that I don't know well uh
a local number that would either be
local for my hometown or local to my
regional area those be the categories
that I would probably pick now the call
wrapping feature that we were able to do
could only do one of those because it
didn't know where they were but it did
know what what area code they had so we
could call from that but if there was
another software for example that could
do both and that would have been even
cooler but that's how I would reason
through it and then obviously the the
lowest probability would be like a
four-digit number that's calling from
you know Zimbabwe or a private call or
something like that I probably wouldn't
pick up and so I just walk through it
from from that perspective then I
probably also ask other people what are
the calls that you'd be most likely to
pick up what are the call you know then
walk through it and then I would try and
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today now let's get back to the show
this is so interesting so that is one of
my favorite things to do is to go to a
conference stand up on stage with a
microphone and say okay ask me your
hardest question I have nowhere to go
there's nowhere for me to hide what is
that biggest problem that you have in
your business I've had people ask me
stuff like uh I'm a farmer in South
America and I'm going up against the
cartel what do I do I mean like
CRA but if you can do what you just did
in a formal fashion which I'll round to
thinking from first principles like if
you just start so I I'll tell
entrepreneurs you need to start at
literal physics like what do we know
about physics start from there so this
was the thing at Quest where we go to
make the bar everyone says the bar can't
be made and we're like hold on this does
not violate the laws of physics you then
realize the thing that's actually
stopping us is that for the last 70
years corn has been subsidized by the
government so everybody uses high
fructose corn syrup so all the equipment
that's being engineered is being
engineered thinking you're going to use
high fructose corn syrup which has a
certain viscosity and so now you go oh
wait a second so all we'd have to do is
engineer our own equipment got it now
maybe we're not willing to do it but at
least now I know what that sequence
going back to a combustion engine if you
understand how the engine works you can
walk through and be like it's broken
right there yeah and now you can go okay
how would I fix that what is the the
level of physics it's going to carry
across now what you did which is the
shortcut that most people will take is
look I'm trying to sell a thing to a guy
and so now I'm just leaping leaping to
the physics of the human mind so what do
I know to be true about people and the
way that you just walk through that it's
so brilliant um how do you get people to
do that like do you have magic words do
you have a training thing that you do
for people that come on so first off I
think it's a practice that I think it's
a skill I think you practice doing it
over and over and over again and you get
better at doing it um but I would say
the thing that I try to practice by
modeling that other people can model is
thinking about things only in the
observable universe and so eliminating a
lot of the Fanfare of like uh motivation
energy frequency you know manifestation
like all of these things I see all of
those as noises that we make with our
faces that may or may not increase the
likelihood that we take certain actions
and those actions have either high or
low correlate or high are higher low
correlates for the outcome that we want
and so um in trying to break apart a
system or an apartment that's not
working uh I I think about a lot in
terms of approximations what increases
or decreases the likely that what we
want to have happen happens and that
creates a really easy razor black and
white does this increase the lik okay so
if our team is incentivized on
performance have a higher likelihood
that they do the stuff that performs if
they're incen Iz on hierarchy then
increases the likely that they will
perform in terms of hierarchy and
politics so it's like okay well then I
can bet then I should do that then we
have to get into the execution of it but
just from a from an ideological
perspective getting those what would
make it more likely to occur has been a
really has been like my first razor for
this and then in terms of the creative
problem solving which I love that you
just went through with the bar thing um
is there was like an implied question
that you ask which is probably my the
two most frequently asked questions are
the one I just said which is what does
this increase or decrease the likelihood
and the second is what would it take and
I love that question because it it it
presumes or it assumes success or it
assumes reality that we can make a bar
that would do that okay then what would
it take for that to happen well I guess
we'd have to like have our own
facilities okay well we'd have to have
our own machine like we'd have to have a
different supplier that it's okay great
now that we know what that is do we have
the resources today or do we need to use
resourcefulness it's one of the two
either we have the resources or we have
to go get them them and is the tradeoff
for the for the outcome
worth assembling those resources and
what I found and this is really fun
stuff at Le this is like probably the
most fun thing that I do in my life
which is asking the question of like
okay what would it take what else would
have to be true for inact Theory to get
10 times the views in 12 months it's not
physically impossible there's no reason
for it to be like somebody else is
there's another YouTuber right now who's
going to do it this year so
what would it take for us to get that
now that might mean we'd have to we'd
have to get the smartest people okay
well what does it take to get the
smartest people well probably more money
or maybe some chunk of The Upside and
maybe I have like and I might not get
that guy but there's probably 10 of
those guys or 20 of those guys and if I
go to all of them is it reasonable to
believe that all 20 will turn me down
probably not okay what offer what I need
to give them to make it worth it for
them and then is what I give them worth
less than what I get m on the larger
umbrella and if the answer is no then we
make the trade but I think a lot of
people think in terms of I'm here how do
I how do I do more of what I'm doing
rather than what would have to be true
for this to be 10 times bigger and are
the resources required to have that
happen within my control and often times
they are but it's a move that's off the
board it's not in the in the immediate
do more and I'm all about do more or do
better like to be clear but every once
in a while the order of magnitude
changes to the business happen when you
do something different and it's usually
and to me that is strategy is that you
have limited resources against unlimited
potential moves there's a million things
you can do but you only have this much
time this much money this many people
and so the best strategists in my
opinion have the most visibility to the
most potential moves and allocate the
asset or the resources to the thing that
gets the highest return and I think the
thought process of thinking what would
it take for this reality to be true and
then working backwards has been one of
the most fruitful and productive thought
processes that I go through from a
street perspective dude violent
agreement so Lisa and I call it no
[ __ ] what would it take okay so of
everything you're trying to do in your
business no [ __ ] what would it take
again you might not be willing to do
itally but you shift out of problem
mindset into solution oriented mindset
this is one of the things that I find
the hardest to instill in people
especially if just by Nature they're uh
a problem finder where they can tell you
all the reasons why something isn't
going to work but uh Peter teal has a
really cool way to this is to ask how do
I make my 10e plan happen in months
because he said everybody gets locked
into this incrementalism like how do I
make this 10% better 30% better he's
like you have to throw everything that
you know away when you have to make
something 10x or 100 times better now
all of a sudden you're going to be
reaching for a what I call a frame of
reference that is so radically different
than the way that you look at the world
now and I'm always trying to get
entrepreneurs to understand you are
trapped inside of a frame of reference
right now and you don't even realize it
it's [ __ ] that your parents said to you
when you were a kid it's the girl that
you asked out and it didn't go well it's
the first sales calls you did and they
failed it's that business that went
under it's a thing a VC said to you one
time in a meeting that just kicked you
in the nuts and once you understand oh
okay wait a second I have to get out
this is the box that people are telling
me to think outside of and I have to
find a way out of this and that Peter
teal angle of I have to make something
that I thought would take me 10 years I
have to make it happen in six months and
I refuse to let myself believe that it's
impossible so now it's like like you
said what would have to be true yeah I
love that and the for the for the
beginner who's at zero so we went we
went Sky now we're going to go back down
to
dirt the way that you'd frame that is
what would I have to do that would make
it unreasonable that I didn't get a sale
like how much action would you be like
there's no way there's no possible way
that if I ask a thousand people to buy
something one doesn't buy it there just
there's no way
and so then you take that and he like
okay well just in case I'll multiply by
10 if I ask 10,000 people and the thing
is is that 10,000 is not that hard to do
like you hear that you're like 10,000
but like right now if you think about
that you're like well I mean yeah
obviously if I ask 10,000 people okay
100 people a day 100 days it's a quarter
and if right now you've been stuck in
years of not making that first dollar of
years of wanting to start a business
then a quarter is nothing and so again
we have this well it would be
unreasonable that if you make uh you
know 10,000 asks of different people and
the thing is is that you'll also have a
feedback loop which is that you look at
the first 100 well which ones got closer
to saying yes because you didn't get a
yes yet maybe maybe you do get a yes on
the first one it happens a lot people
are like they commit mentally to doing
10,000 and by day four they're like oh
my God I got a sale but the idea and
maybe this is maybe I should teach this
differently because maybe I should just
say do a 100 today but I want people to
stick with it uh but when when when
people do that um the feedback loop of
which ones went well which ones didn't
go well what did I do in the beginning
this one's I made a joke at the
beginning okay I'm going to make a joke
on all of them next time great now I
made a joke okay I got further in the
sale with these guys this guy even asked
me about price okay what happened in
that one okay this one I asked him about
what he was struggling with earlier on
okay I'm gonna start asking that
question too so I'm gonna make my joke
and I'm ask him what he's struggling
with and I'm gonna do that a 100 times
and so that's the that's the process of
iteration that that can get you to that
first that first W and then you just do
it as many times as you can
yeah iteration iteration it's funny
people are so terrified of failure that
they don't even stop to think that oh if
I could just not worry about
embarrassing myself then I could get in
the game Throw the punches look foolish
but I will get better and better I've
often joked it's definitely not a joke
but I've often said that part of what is
my superpower is that I can be
embarrassed longer than the next person
and also let me know what you think
about this I think you have whatever 8.4
billion chances to make make a first
impression probably more than that cuz
most people are going to forget that
they ever encountered you in the first
place and so getting out ultimately I
think what people care about is can you
they have a screaming problem that you
make go away and they'll forgive
everything that they've encountered up
to that point if you can and anybody
somebody that they respect told them no
for real like this works I think you
bother a you have a 100% chance of
bothering somebody on Earth by existing
and so if every action you take has
somebody who will hate it then it kind
of cancels everything out and you might
as well just do whatever you're going to
do
anyways very fair speaking of somebody
that clearly windes people up you
mentioned Elon earlier yeah uh what is
it that makes him
special I I'm I so many things you know
um I mean how many guys have six billion
dollar companies and run all of them and
have time to go all in on political
campaigns in in the meantime not
withstanding what side or any of that
but just just the sh like the big
question that I feel like is the
unspoken one right now at least my in
the Zeitgeist of the entrepreneur world
is how does he do it and I love the
impossible nature of the Feats that he
takes on literally pushing the the realm
of physics obviously with with SpaceX
but he reinvented the car industry he's
creating brain you know brain chips he's
he's aggressively attacking AI I'm sure
you saw the the Jensen Wang interview
where he's like he did a 19 days what
everyone else takes three years to do
and so we're talking multiple orders of
magnitude in terms of improvement
compared to the basics because he starts
at physics and works his way but he
truly does it because he's also like a
physicist he really knows it like I I
get to pretend to sound that in you know
intellectually you know whatever he
really does and so um I that that's his
his material achievements but I think
the thing that I admire the most uh is
the balls the man is not a coward and I
think that in thinking about him I think
about what are the things that he does
what are the things that I do he is more
successful than me how can I do more of
those actions that he does in order to
approximate his success and so I think
modeling is one of the most effective
ways for people to learn it's how
children learn it's how monkeys learn
it's cross species and I think that he
functions as a model for many people now
again he only became political in the
last three years so if you all of a
sudden now hate him like maybe question
that if you didn't hate him three years
ago um but you cannot question that he
is the best like right now people say
he's the best entrepreneur of Our
Generation I think he's the best
entrepreneur of all time it seems like
it to me it's it's not even to me it's
not even CL like he's yeah I mean I
could I could get on a on an Elon parade
but um he has forced me to think
significantly bigger about the problems
that I want to take on and who I want to
become and what to do with the small
platform that I have that best serves
humanity and so that's what and I I
think at least from my point of view
that he really genuinely wants to do the
best thing for Humanity some people
disagree with that I don't I don't agree
with them I think if there was ever
somebody who would have you know with
great power com great responsibility
he's probably the guy you'd want agreed
why balls why is that the thing that
catches your eye he had the most to lose
lit like literally financially he had
the most to lose so I'm quite like he
had the most to lose and went the most
polar uh on the bets that he took and I
think that again there's a really great
like master class in winning here that
he did with this whole election thing
because if you think about how Elon
tried to solve the election he
absolutely treated it like any business
problem and so he looked at the whole
map and then it was whoever wins
Pennsylvania wins the election and then
zooming into Pennsylvania it's there are
28 counties or whatever the amount of
counties that we have to win and so then
he flies to Pennsylvania himself and
then sends three weeks campaigning gives
a million dollars away a day just to get
people to register to vote holds Town
Halls every day so it's like he finds
the greatest point of Leverage and then
just bombs the hell out of it with
unbelievable amounts of action in at
that one crucial spot and I see that as
that's how he violently solves problems
it's like how do I like how do you build
a how do you build a super super
computer for AI in 19 days like he
looked at the whole supply chain and he
found the point of greatest leverage and
then was like we're going to dump as
much into this we possibly
can there are two options before people
in life so option one is lay your balls
out on the table like Elon did and you
give people a chance to smash him with a
big [ __ ] Hammer right or you can hide
you can go a long way hiding why do you
admire people that slap them up on the
table I think courage is the Quin
essential trait that leads to everything
else like you have to first have courage
you have to have courage to quit your
job you have to have courage to get
rejected you have to C have courage to
ask the girl out to shoot the shot to
run the ad and if you don't first have
courage nothing else follows and so I
see it as again it's not are you
courageous or not it's how courageous
are you it's not a binary and so I just
like I think that based on my history I
have courage because I have done things
that have required it but I think Elon
has more courage than I do and so I see
that as how can I how can I move more in
that direction if this is a trait that
leads me into the better version of
myself how do you model yourself after
somebody from afar so we live in the age
of the internet where you know people
want to get to know somebody uh I'm old
enough to look at the internet and be
like you you do not understand what a
glorious time this is to be alive I mean
it's un imaginably cool uh so people
will look at you and say well you can
get access to anybody but somebody like
Elon who you say is worthy of modeling
how would you run something that all of
them now can do yeah so this actually
comes down to I wasn't sure if you were
going to press me on this but like
courage for example
um I try to the single most effective
decision that I've made about how to run
my life across all functions has been
only thinking about behavior and erasing
everything else because it's the only
thing you can observe and I'll tell you
a little micro story about this so there
was a guy on my team who uh he we were
getting complaints that he was acting
like a
dick and so he had talked to three of
the leaders in my company who had had
one-on ones within him and said hey man
stop being a dick he continued to be a
dick and so uh they said Alex can you
talk to him and I said sure and so when
I sat down with him I said hey um to be
clear I don't really care um what you do
I care about the fact that you have now
taken my time and so this is now the
most costly thing that you could have
done for me personally and getting
complaints from other people detracts on
their ability to get things done within
the company which now also cost me and
so my goal here is to decrease the
likelihood that people complain about
you and so they keep saying that you're
acting like a dick and so he's like yeah
I know I'm working I was like no it's
fine I don't care about whether I was
like internally you can be a dick as
much as you want I don't care I don't
care about
intention what are the actions that you
take that increase the likely they call
you a dick and so number one is that you
interrupt them on meetings number two is
that you say that you know their
Department better than them and number
whatever I had I have my list of things
and I was like so don't do those four
things and do this instead so when this
circumstance occurs do this action
instead of this action and in the next
week everyone's like oh my God it was
like night and day and the thing is is
that we give each other feedback all the
time and this happens in marriages and
whatever it's like hey don't be a dick
that doesn't help people you have to
tell them granularly what to do instead
and focusing on the observable and so
this is my weaved in answer to how does
someone model Elon well it's not like I
need to get elon's mindset it's like no
look at what he does just with your eyes
what does he do because it's the only
thing that you can you can measure it
was funny cuz when you said earlier
about uh what do I want to have happen
uh what am I going to do that I think is
going to have to happen and so your
planning process is identical to ours
because it's the scientific
method like mankind has figured this one
out like we know how to make a guess of
like this is what we want to have happen
this is our hypothesis we're going to
test the hypothesis we say did we do the
thing or not and then and did what we
think was going to happen happen four
steps scientific method and so don't try
and reinvent that one like that one
works so um the same can be true but it
has to be observable for the scientific
method to occur it has to be something
that you can see saying like I need to
be more motivated well if you want to be
anything and this is this one trips I
think a lot of people out but have you
ever heard like B do have yes okay I
think it's complete Croc of [ __ ] mainly
because if we want to have something we
must do it I think if people are okay
you have to do stuff get stuff okay
we're good with that but if we just have
to do stuff and the having occurs we
don't need to talk about have so now we
just have be do all right then how do we
describe how someone
is we describe them by what they do I
mean even in the olden days people used
to be Carpenter John Carpenter John
Butler John Taylor right we literally
described people's beingness who they
were by what they did and so if you want
to be a certain way then you need to act
in accordance with the behaviors that
people describe as that trait and so
then I I this is how I make sense to the
world because the world doesn't make a
lot of sense to me in a lot of ways and
so this is the only way that I've been
able to navigate and this has given me
so much peace because I actually think
everyone's
wrong and it and it drove me nuts for a
long time because I didn't know how to
do what I wanted to do I was like I want
I want to be I want people to think I'm
smart I want people to to think I'm
hardworking that doesn't mean anything
be charismatic means nothing you can't
look at someone and say don't be a dick
be charismatic no what how do I do that
so they give you beings rather than
doings and so if you break it into the
the corresponding chunks which may be 20
or 30 skill sets which are into under
this condition you act in this way then
all of a sudden when you do all 20 or 30
of those things then people describe you
as charismatic and I find this
interesting because when we talk about
culture or values in a
business these values that we choose are
bundled terms that are meant to
approximate many behaviors because
there's no like when you get into a
business or a company you have to like
figure out the culture but the culture
is just the rules that govern
reinforcement in a business which is
what are the things that are rewarded
what are the things that are
extinguished and what are the things
that are punished that's it and so the
culture is just what are those rules and
so people have to basically either watch
other people get punished rewarded or
extinguished for the actions they take
or they have it themselves but either
way it's just series of if this then
that if this then that and it's a
monster list and so to speed up the
process we create a couple of phrases
that are meant to approximate the
largest percentage of those list of
rules as we can and so in thinking about
if you were to microcosm into a person
what are the traits we want then we just
have to get really granular and I think
that this is how we solve problems in a
business which is it's convenient for
communication to use these amorphous
terms confidence you know loyalty like
these things but no one can be more
loyal we have many activities that under
conditions people describe in
retrospect that this person has loyalty
loyalty has occurred and so um that
single framework of thinking through the
world has been the most valuable thing
that has finally made the world make
sense to me and so that's in fundament
like how I model people or if I want to
be more like this person be more like
this person I try and do more of what
they do what are the behaviors that Elon
does that you think are worthy for
somebody of your level of already absurd
success sorry appreciate it
um I well one is he makes big
concentrated bets and so that's a
behavior he does that I can observe that
I've seen him make big bets um he's
willing to give up equity in companies
uh for lots of capital in order to make
things happen faster that's something
that he does he TI
every company he has to saving Humanity
that's something that he does um he this
is me just paring what he has said but
his approach to solving uh systems is
one that I have adopted which is
question all requirements of the system
delete everything that doesn't that
doesn't matter optimize the rest pull up
uh uh feedback loops and timelines and
then automate and that process I've
applied to sales I've applied to
marketing content whatever and those are
things that he does and so there's I
mean a lot of things that Elon does but
those are just some of the ones off the
top of my head that I think are the
greatest impact at least the ones that
I'm specifically trying to model there's
one that really had a big impact on me
which is the idea so I had um mark
andrees on the show shout out to my boy
Mark Andre yeah love that guy love that
guy I'm such a fan Mark if you hear this
he is amazing uh and I asked him what is
it that you think makes Elon so
efficient yeah and he said making a long
story short he goes down to the level of
engineering yeah and he understands the
engineering and so he figures out what
the bottleneck is and talks directly to
the engineer that can make that problem
go away and just makes that problem go
away and eliminates the bureaucracy and
all the BS of it all and I I was like
that is utterly brilliant and even
though except on the gaming side impact
Theory we're not an engineering company
there still is that same concept totally
like if you've got a problem let's say
with a piece of content hey our uh
retention at 60 seconds is not where we
want it to be okay well who are the
engineers that can solve that problem
whether it's the editor or me myself uh
you go and you solve the problem at that
level I think so many people get sucked
into the Vortex of well this is their
boss and I need to go talk to them and
oh God I want to get around the chain of
command yeah right oh yeah we try to
encourage people to kick through any
chain of command go over go under go
around build coalitions I tell people
literally if you don't like an answer I
give you by all means build a coalition
and come back and try to convince me uh
I know that I am blind to some answers
what was that I said but you'll be wrong
oh exactly save you some time guys yeah
no I'm so paranoid that there's
something I don't see and my my primary
analogy of what life is truth exists
inside of a black bag and we're all
wearing mittens we get to reach inside
the black bag and be like I think it's
like this and then if I can get other
smart friends to reach in and grope
around and tell me what they think so
yeah I I'm on a campaign to get people
to distrust themselves people that drive
me the most [ __ ] crazy are people
that are utterly convinced they're right
oh yeah and uh yeah that that really
drives me nuts because one if you're
right and you're already right it's a
pretty short detour to be like hey
anybody see a problem that I don't see
uh and the number of times that someone
will give you like an oblique angle to
look at something you're like oh my God
that is incredibly
useful I first of so hardly agree with
the jumping into the dirt of like how do
I get as close to the problem as humanly
possible the biggest mistakes I've made
in my entrepreneurial career is um I
heard this from a mentor I like this
isn't but you have to know where the
bodies are buried so it's like if I and
it's it's been a great limus test for me
to understand when I'm getting too far
away from an apartment when if I don't
know what's going wrong in an apartment
because there's always things going
wrong if you don't know what's going
wrong you're too far away and so that's
been a really good like just a easy
black or white test for me oh I need to
get a little closer to this because they
say oh marketing's great I'm like
there's no way there's there's always
things like there's got to be things
that are wrong or missed opportunities
um the that's actually a totally a
separate entrepreneur thing that I think
you might dig a lot Leila taught me this
this year and it's it's been a huge
entrepreneurial unlock for
me and it was a huge source of anxiety
for me for my life which was I did not
differentiate the difference between
missed opportunities and problems and so
basically if we were not capitalizing on
an opportunity I treated it as though it
was a problem with the same level of
urgency and moving things out of the way
but I would say that where I'm at right
now and maybe I'll you know maybe it'll
be different in the future but right now
the thing that has been rewarding me
again and again which has been counter
to my nature is looking at the problems
in front of me as the
opportunities which is like
fundamentally like if we made these
things exceptional then maybe the
opportunity set that I'd have as a
result of that would be fundamentally
bigger different than the one that I'm
having today and whenever I in the past
allocated resources away from solving
problems towards missed opportunities I
ended up just scaling my problems and so
allowing the bigger by better path uh
and really leaning into that and doing
fewer things at a higher a higher level
um has been I think the reason that in
the last you know two years acquisition.
comom has done exceptionally well from a
returns perspective on all of our
portfolio and then obviously um you know
what we do on the content side and
things like that that's interesting it
makes a lot of sense to me the two years
ago I had to put a policy no new things
oh yeah because I am uh I'm King red
dress uh so that has been really
advantageous and if I'm completely
honest we still do too many things uh
and so yeah narrowing your focus knowing
that you have a finite amount of time
and energy especially now where so many
companies have a face it's like every
department or every company depending on
how you think about it wants to use me
my face and so it just becomes a real
time drain if I'm not careful and so
yeah really narrowing scope I think is
super important yeah where get really
wild is like I think about I heard this
someone say this often remark and it's
like it like it hit me he was like
Zuckerberg didn't have a side
hustle and it's like I it's so
true and and you think about your face
right it's there's there's there's one
of the three you know divisions that you
have underneath impact theory that has a
higher return on your face than the
other two now it might be on different
timelines or towards whatever Mission
you have but one of them has a higher
return and the thing that makes me sick
is thinking like do I need to kill my
other children because if this if I
believe what I say I believe then I
should act in accordance with that
belief I think about this
every no and that kills me and I think
it's I I had a mentor tell me he was
like so I was like this is what we're
going to do this year and I was like
these are the you know the priorities
and this is the biggest the missed
opportunities versus problems has been a
massive Improvement for me as an
entrepreneur the other one was uh a
deeper understanding of focus um and a
lot part of that was from Elon um and
people like well how does he run six
companies I'm like he's an alien but for
everyone else like we need to run one
but
basically if you don't know what the
number one priority is then how can you
expect everyone on your team to know it
and for years I came in with five annual
objectives and I think then it went down
to three and now I'm just trying to say
if we just did one of these things and
it made the biggest difference yeah I
mean I've done away with a lot of the
long-term planning components because of
the the dynamic nature of the
environment and the other one is
if if we're not sure that this one thing
is the one thing then there's another
one thing that exists that will be clear
and if I can't do it then I'm not doing
my job because if if I'm Chief
strategist which I Define as prior
prioritization right you prioritized
limited against unlimited limited
resources and limited options if I can't
clearly articulate that then I am not
doing my job I'm not allocating the
resources in the best way possible and I
say that everyone in the company is a
strategist it's just a that the
resources that you have dominion over is
smaller or narrower in scope and so it's
like I have the entire portfolio of all
the companies um of the different places
that I could allocate whatever resources
I have and then if you're the CEO of one
of those companies then you have
everything in that company if you're the
head of marketing then you have the 10
people that are in marketing but every
every person has to ask the question
these are the resources I have this is
the objective I have what is the best
mix of this to get that thing and is
there one thing that I can do that would
give me an outsize return compared to
all of the other things and I mean I
think one of the the better decisions
that I made in 2020 2020 I think um was
when we started getting into this
investing thing I was like I don't think
I'm going to beat Warren Buffett at
picking and I don't know if I'd beat him
at negotiating I was like so how do you
win in a world where everyone's better
than you at most of that stuff and I was
like well I'm pretty good at marketing
and I was like but how do you tie that
to like private equity and so then it
was like well if I had more companies
walking towards me than anyone else then
I could be pretty terrible at picking
and still do like I I could I could hit
the broadside of a barn you know like I
could I could I could get the really
easy ones right and if I'm negotiating
but I'm negotiating only with people who
want to do a deal with me then I don't
have to be the best negotiator and if
the companies are good and I'm okay at
negotiating but they're good companies
then it's not going to matter whether I
got 29% or 54% because if the thing
becomes 100 times bigger who cares and
and so that one big thing was you need
to build a big business brand and so if
I just do that one thing none of these
other things matter and so originally
you'd think okay I have to get a broker
Network you know what I mean I might
have to raise Capital like these the
normal activities that most people would
do but that was one of those kind of
like high order of magnitude changes of
like what would have to be true for me
to be able to out compete people who are
significantly smarter and better
capitalized yeah the ability to see the
problem from a different angle man is so
oh clutch that is definitely you're so
good at systems you're so good at taking
a views SK um this is why I really
encourage people anybody if you can hear
the sound of my voice right now I'm
telling you uh and I'll I'll take the
conversation somewhere political for a
second feel free to dodge as much as you
need to but um my thing is the center is
a destination and what I mean by that is
I want the friction between the left and
the right to help me find an actually
intelligent path for
I want people to help me see the problem
from different angles I don't want to
get a hard on from hearing somebody say
what I already believe which is like the
big Temptation and I get it dude it
juices me up as much as it does anybody
but I'm just like that that is not going
to help me see the problem from a more
clear perspective so I think of myself
as I'm I'm a terrible debater let me be
very clear I'm a deep thinker but a slow
thinker so debates never going to be my
thing but I want to know as if I were
going to have to debate this I want to
know the best arguments from both sides
because if I really understand the
smartest people who think that my angle
is just idiotic if I can say okay I'm
going to steal men's argument I know
their argument as well as they do and
then here's why I believe which my whole
thing is predictive engine to getting
you where you want to go right so I know
my goal and then what has the most
predictive validity cool so I want the
Collision of those ideas but there is
something in the human brain just the
very architecture where people are so
hungry to be told what they already
think yeah that that one makes me sad
for them
because if you can do what you just did
which is go okay I have a problem but I
need to see this from a totally
different angle and then I need to
formalize what I see if you can do that
and then you're willing to iterate
iterate iterate and go actually I need
to update this uh this breakdown that I
have and while I haven't seen you do it
I absolutely will bet my entire net
worth that if you found a better system
you would update your thinking You' tell
the world yeah I'm doing something
differently now which I think is
incredibly powerful oh thanks well I
think um I think Zuckerberg said that
he's a well he said he's a truth teller
but I think before you can be a truth
teller you have to be a truth seeker and
basos also talks about this which is
that their goal is truth so when we're
making decisions he said the goal
shouldn't be to compromise like if you
say it's 10 feet tall for the ceiling
and I say it's 11 feet tall we shouldn't
meet in the middle we should find a way
to know who's right we should get a tape
measure out and we should measure it yes
and so um from that from that truth
seeking
perspective I probably like you I just
want to
win and winning doesn't care whether it
was your idea or not or whether it was
your original idea it just cares whether
you did it um and like we recently
because we talked about this before the
the the show started but like um a
quarter or two ago we had a hypothesis
which was hey we're going to make wider
content because if you know Mr Beast
because my theory was okay taking the
natural extreme Mr Beast everybody knows
who Mr Beast is or many people do uh and
so he has by default all business owners
in his audience or many business owners
and so then I will go the how do I go
wider and general Fame and we then ran
that pretty hard for about 16 weeks and
when I saw the data that came back which
was all of the vanity metrics the views
the subscribers things like that were
all way up but the the metrics that I
cared about which which was how many
people were going to acquisition. comom
how many people applying to be portfolio
companies how many people were buying
books all of those metrics were down and
I thought that was so it was countered
to my hypothesis but at that point I had
to look at the team and be like yeah so
uh that experiment was wrong uh and
that's on me uh but we're going to go
what we called back to business and so
everything is going to be business
related which means that we all need to
accept now that all of our views are
going to be lower our subscribers are
going to be lower but we're going to
attract business owners ERS and I had
one anecdotal experience that really
like cemented this I had a guy who came
out who's a business own does probably
10 million bucks a year and he was like
yeah I listen to your podcast for years
and I you know I just I guess I'm not
really in your audience I'm not your
core audience anymore um and so I
stopped listening to it probably in the
last six months and I was like you are
100% my core audience and that was like
this kick to my stomach but I mean like
you probably being right has zero value
like why I just want I want to win and
so that's I mean my my uh my little ISM
for my team is just win and that's
that's that's all I care about like just
win and if if it's your idea it's my
idea it's the the janitor's
idea test it see if it works and so
that's been that's been uh really really
big for me how do you get people to buy
into that I find the I run into um
frames of reference natural ego
evolutionarily placed algorithms like by
default most people just really want to
be right
yeah
um I don't tolerate that much so I um I
we let the data talk we let the DAT to
decide dat is King and so I mean sure we
can try your way do it your way we'll do
it my way and we'll see which one works
and if yours works I'm all it and so I
think that's like there's no Arbiter of
truth that's arbitrary uh well right um
that just just just says you are now
right it's we can we can know this now I
think where it gets difficult is on the
ones that you don't know or let's say
you have limited shots on goal which
shot do we take that's where it gets
harder and then we try to we try and
assemble as much you know as much data
to support argument but I think
fundamentally at the base level of
Entrepreneurship is you make
approximated bets Like You by the time
you have complete information to make a
decision the opportunity is gone yeah
for sure and so we have to and this also
goes for beginners because I think this
especially for beginners is there's this
fallacy that you're going to know
everything before you can begin and you
simply cannot and so you have to get
over the discomfort of the unknown and
you have to get comfortable making bets
of saying okay is this
reversible yes and to what degree is it
you know reversible okay if you lose all
your money is money replenishable yes
okay now how long will that take given
my skill set uh like and that that'll
that'll give you a degree of how big of
a bet this is now is there a way that I
can an approximated bet can I get a
directional bet on this that would you
know uh give me a much better clue as to
whether this bigger bet that I'm going
to make afterwards is correct and so
I'll try and make smaller bets that give
me a little bit more information that
are a little bit more reversible before
making a big one uh but like that was a
big bet that we made with all the
resources that I had and all my time for
16 weeks making all that now you could
make the argument okay we gained
audience that's not really core and then
that might hurt my later videos and I've
got you know 50 more years so okay we
lost a quarter yeah big deal yeah now
the willingness to try things I think is
incredibly important um you said earlier
about courage I want to go back to that
so what is what is the most courageous
thing you've done I actually think it's
quitting my
job when the hard thing back in the
early days yeah I because actually
weirdly I think about this a lot um like
what are the hardest things that I've
done uh hard thing number one was
quitting my job the the decision of
quitting my job and then leaving
Baltimore uh cuzz I I to give you
everybody an idea like you see me now uh
but I was so afraid of my father's
judgment and the few people that I knew
from back home that I was going to like
quit my white collar job to
go to go start a gym and be a personal
trainer uh that I actually drove across
the country and called them when I was
already there because I basically left
in the dark of night like no one knew I
basically was a stow away to my own
fear and so I had to just to say I just
had to I just drove there and I I called
my dad I think when I was going through
Texas and uh Texas is like forever when
you're driving across it yes it is and
um I called him I was like hey I'm
goingon to I'm going to do the gym thing
and he was like yeah no worries he's
like just you know come over we'll talk
about it at lunch because he would
always talk me off the ledge he'd be
like hey you've got the you you did
venerable you did in three years you got
the good consulting job he's like you
aced the Gat he's like you're going to
go to Harvard you're going to get your
NBA there or Stanford you'll pick one of
them he's like and you're set like
you're good just just follow the plan um
and I was like I I don't I don't want to
do that and uh when I was like I'm
already gone then like the flip you know
then the thing that I was most afraid of
was that he was freaked out which is
exactly what he did and the thing is is
that a lot of people would expect the
story to be like oh my dad understood
and he was super supportive um but he
wasn't we didn't talk for a few years
after that because I was the prodigal
son and I did everything to his plan and
I was living the most successful version
of his life not mine and it was one of
those realizations you're like I'm
winning at a game that I didn't design
yeah and so I'm actually by default the
loser and so um me quitting my job to
then pursue Fitness was the hardest
thing I've done the second hardest thing
I've done was actually getting my gym to
work um because I didn't I I I had so
little understanding of how anything
worked I I had $50,000 saved up uh when
I was 23 um from the consulting job I
lived on basically nothing and almost
banked all my pay and I basically B it
all on the gym I had $5,000 left after
paying for all the equipment and
everything else and I had $5,000 a month
in rent and I had never sold anything to
anyone and so the idea of making $5,000
having never really sold anything to
anyone in a local business which I never
had in a in California which I was from
Baltimore I knew no one so it wasn't
like I could just get on my immediate
friend group to come and at least pay
the rent I had no one and so
I think when I was like sleeping on the
actual floor of the gym because I
couldn't afford two rents um was when it
like really hit me that no one was
coming to save me and like if I failed I
would have to go back and tell my daddy
was right and that felt like worse than
death for me and so that was incredibly
hard um I remember that I I was I I have
I have a pretty decent work ethic um but
at that time I was my first session
would start at 4:30 so I'd wake up at
4:00 and then my in my last morning
session ended at 10: and then I would do
the Marketing sales meetings I would
clean the gym I would set up the next
thing I would do the get the workouts I
would get the music prepped and then my
4:00 would start showing up and then 4
until 7:30 or so people were at the gym
and then after that I would run the
billing and make sure the contracts are
right and then reset up for the morning
and do it all over again but I had zero
employees and so I didn't know I didn't
know you could hire employees it was
only when a member of mine who was an
entrepreneur came up to me and I'd been
short with the class that morning um and
she was like you can't treat people like
that and I was like what do you but I
knew that if she was saying it like I
was really off off base and I think I I
was sleeping right around 4ish hours a
night and people say that um but I did
it for I want to say I want to say like
close to six months oh God yeah I was
like Delirious i f I'd fall asleep on
the like leaning on things yeah I was
very very tired and I used to tell
people that it was the kind of kind of
tired that a good night's sleep couldn't
fit
yeah like I needed a lot of time um but
that was probably the second hardest
thing that I did uh and a lot of it was
just because I I made up for a a
tremendous lack of knowledge with just I
just have to make rent and then
everything else is mine so I didn't have
any understanding of like I just I I
spent money on nothing my first gym had
sandbags that I wrapped in duct tape as
the equipment that I started with wow
yeah it was crazy um and when I opened
the gym I was selling people into a gym
that had no equipment because I thought
that you should open as fast as possible
to start making money now if I knew now
I would have said I would have three
months of pre-sales only collect money
and have no have no classes that's what
I would have done but I didn't know any
better and so I was trying to get open
as fast as I could which then meant that
eight hours a day at Baseline is me with
a microphone in front of customers
training doing all of that before I
could work on the business and so like
it was very real 16 18 hours a day and I
I think setting that standard for people
who are new is useful because when you
start you don't have enough money to pay
other people and so you either have to
raise money which you can do I wouldn't
recommend especially if it's your first
shot or you have to work three jobs and
and basically throw out all of the
opinions of everyone who has no idea how
business works because the only people
you probably know when you're starting
out don't have businesses and so they
will tell you all these things you
should be doing and you should take more
time off and you should have more
balance and this isn't healthy and they
will tell you all these things but they
are not where you want to be so don't
listen to what they say completely
ignore them and instead like I like this
little ISM but
it's listen to the opinions of people
don't listen to the opinions of people
who are closest to you listen to the
opinions of the people who are closest
to your goals and a great approximation
of that is I if I had known that when I
was doing the decision to quit then I
would have known that this is where I
want to go eventually I want to start a
business and if it's hard for me now
it's never going to get easier as I have
more responsibilities kids wife whatever
that's only going to get harder and the
the the people that I looked up to the
most were the most aspiring
entrepreneurs and they would have said
go for it but everybody I knew was
saying don't go for it don't throw away
what you have but I think sometimes you
have to trade good for great and there's
always going to be a J curve there's
going to be a dip where instead of being
immediately rewarded for the decision
you're immediately punished and you
think that you're making the wrong move
because of what immediately happens
after which is how humans learn which is
why it's so tough um but it's like the
first week of the gym just because you
haven't seen results doesn't mean you're
doing the wrong stuff you're probably
measuring on the wrong time Horizon and
so um quitting the job starting the gym
was the second hardest thing that I've
that I've done um I would say that the
the third hardest that I've worked has
been now the season that I'm in right
now this is probably close to the
hardest I've worked um but it's
different
uh there is nothing urgent everything's
important and I am taking fewer days off
than I ever have and basically working
at all hours that I can physically and
so the times that I'm not working is
active rest so that I can increase my
total output over a longer period of
time there's a long-winded answer but
those are the two things that I feel
like those were hard hard calls for me
to make and those were real struggles
for me but those those were the times
when I feel like it it was I'm very
proud of who I was then to do
it now I heard you talk recently about
you can feel a shift in culture people
moving away from the soft stuff getting
a little bit harder yeah what do you
think's going on in culture oh I think
the pendulum swung back and I'm so
excited I do think that it's going to
swing back too hard that people are
going to go way too hard into like dire
and all that stuff oh hustle porn oh
that I I don't mind about hustle porn no
I meant societally like from the
political R and stuff I think that the
pendulum definitely reached his Pinnacle
on the other side and then is going to
swing back and there's going to be and
the thing is is that when the way
pendulums work is that we have we start
swinging back and everyone agrees it's
not everyone but more people than not
agree that the it's better coming back
to the middle and then it's better and
then it's better and then all of a
sudden but hey more of that was good but
then at some point it stops being better
right and so and this I think Cycles is
why Humanity lives in cycles and so I
think it's likely that we will over
crack but it might take 10 years for
that to happen so I think right now
we're going in the right direction um
which is uh basically pushing away from
the political correctness and leaning
more into reality uh which I am I am a
heart staunch proponent of reality you
and I both now you've said that you want
a normalize guys young men working 12
hours a day six days a week yeah why
because I think that's what's required
to get where you want to go on the
timeline that they want why men why not
men and women
I have a 88% male audience or something
like that and so I feel like it's my
place to speak to them there are
obviously women who follow my stuff and
if that's you then you can assume that
when I say men I mean men and women but
I think that if a message is going to
hit
people if I say men I will have a
stronger reaction and a higher
likelihood that it changes someone's
Behavior than if I said people or men
and women and so if I if if I look at my
effect size of my message if 88% of the
people hear my message or men then I'd
rather make it as potent as possible
that's why I do it though makes sense uh
so what should young men be doing like
what they're if they're working their
ass off 12 hours a day how do they make
use of that 12 hours I think being
really clear on
trade-offs so I and I think you I think
I'm speaking for you here um I gave up
my 20s uh I always say I sold my 20 yeah
sure yeah I yeah I sold my 20s I I'll
say that well I actually ended up losing
everything um and so I did have to start
over at zero again but hey with way more
knowledge so all day long so I traded my
20s how about that so and that and that
perfectly mixes with the trade-offs is
that you can have the nights out the
fantasy football league the wreck
dodgeball team that you want to go to
beers on
Tuesdays you can do
that you just can't also
build your dream unless that is your
dream and I think that's the big part is
like entrepreneurship isn't for everyone
and I as much as I I talk about
entrepreneurship a lot I think there are
plenty of people who don't want that in
which case great like you've already won
congratulations right it's simply the
complaining about reality that's my
problem and so uh I think that most
young men could accomplish all of their
goals if they extended how long they
would be willing to give themselves to
accomplish now not to anti- Peter theal
here because I'm a huge teal fan as well
but I think that when you are a novice
you have no approximation of reality and
so one of the difficult Parts with how
we
observe success a lot of it's social
media driven and this is the EAS this is
the best analogy I have if you were to
look at an Olympic Marathon look at
where the people in the stands are
situated they're situated at the
beginning of the race and they're
situated at the end of the race
but watching someone start a race and
watching someone's finish a race has
almost nothing to do with running a
marathon and
so that is the closest approximation
that people think that's why everyone's
really excited to start a business and
they're really excited to sell a
business but everything in between the
the mundane middle as I like to call it
they're just okay if I if I I'm four
miles in it's this times six okay I I'm
five miles in it's this times 5 plus one
like you just keep playing these mental
games with yourself to learn to endure
and I think that that endurance is if I
had to pick one trait for a young man to
have it would be
resilience and I Define resilience as
the amount of time after an averse of
experience that you return to Baseline
function and so if you have a series of
behaviors that you do under certain
conditions and then something bad
happens how quickly you return back to
the original Behavior set and so in
doing that like if someone can not give
up and
learn then on a long enough time RIS and
you guarantee Victory like if you only
had those things you don't stop and you
get better that's it and I think that if
those are the two hypothetical extremes
that's what I would want young men to
have and if you know that then I know
for me because I've been asked before
like did you always know you're going to
be successful and I don't really like
the question because I only knew and I
and I I to my core believe this I knew I
would never stop and that was the only
thing I could commit to I just knew I
would never stop and I knew that I
wouldn't go home to Baltimore if the gym
failed for whatever reason and so my
plan B and this is this is super
Tactical for anybody is that I think you
should look at your plan B in
excruciating detail now Arnold has this
whole thing of don't have a plan B make
plan a work and I understand both both
sides of this but me knowing my plan B
allowed me to pursue plan A allowed me
to take the jump but I think the day
that I decided to live for me was the
day that I I allowed my father's dream
to die and so I think that you either
live out your own dream or you live
someone else's and one of them has to
die for the other to live wow yeah
that's heavy it's interesting I never uh
love my parents but I never felt in any
way shape or form beholden to what they
wanted for me now I will say though sort
of a bizarre similarity uh I was trying
to write I wanted to break into the film
I need a screen that's going to be my
call card this is all YouTube and my mom
want calls me in the middle of the day
and I'm sleeping she's like why are you
asleep in the middle of the day and I'm
like I got a new job doing what driving
driving what uh driving uh models
driving models that's escorts and I was
like oh God and so my mom was like you
have to call them right now and like
turn this down there's no way and so
that is the one time where I let my
mother's Superior judgment I think in
this case but yeah so that I could write
I took a job driving lingerie models uh
to their appointments someone has to
someone has to and the funny thing is in
the interview they're like first of all
the guy he's sitting there playing
guitar while interviewing me and he goes
I have to ask why are you interviewing
for this job and I was like I need
something that'll let me write during
the day he's like okay well here's how
it's going to work the girls going to
have a pager you're going to have a
pager if they page you you know what
they're like you go in there with a gun
you kick the door down and and I was
like oh God oh God but I actually took
the job I can't believe I did yeah very
stupid uh I'm very grateful to my mom
for ensuring that that did not happen
but I was actually going to go on a job
where they're like you kick that [ __ ]
door down you get in if she sends you a
seven or whatever the number was I was
like okay cool if that's what it takes
to write man yeah then we'll go for it
but thankfully not I think it's worth um
for those who are young man or young
woman there you go who were listening um
I think planning out what be looks like
and not being ashamed of it because the
thing is is people will judge you based
on the career path that you're making
but you are not making that as your
career path you're making that as the
launch pad for what you really want to
do and I think that if you can if you
can reconcile that reality which is that
you will have like for me it was super
tough because everybody had Vanderbilt
was that all the guys I knew were pretty
successful and and so a lot of people
were like oh back home now high school
friends sure different but like my
college friends I went to a good school
like almost all of them are investment
bankers management Consultants private
Equity like they all make good money you
know they're like heading some software
thing like they all are successful and
so when I went to do this personal
training gym thing it was like oh herzi
gave up like he's out of the race you
know he's not he's not playing the game
anymore um and I would have these almost
like these F these shame fantasies of
what they were saying about me while I
was sleeping on the gym floor not being
successful having literally kids above
my roof cuz it was I was in a garage so
kids would like party at night while I
was trying to sleep really tough um but
like literally in front of me
demonstrating the life that I could be
having while I actively was on the floor
um but they weren't thinking about me to
begin with and nor do they really care
and they're going to All Die eventually
and so if if they were to die for me
then their opinions wouldn't matter and
if I'm going to eventually die then what
happened to me won't matter either and
so then it's like wow I'm going to
change my entire present existence to
satisfy the fictitious idea of what
other people are saying behind my back
when they aren't thinking about me that
seems silly but it's hard but people
don't do it and so I'm saying don't be
ashamed of the the lingerie job or the
Uber or whatever it is that you're doing
as long as you're using it to build
towards thing now if you're if you're
live you know you're driving Uber all
day long and you're making 70,000 a year
and you spend 100% of it then what are
you doing you're using all your time up
and using all your money like you have
to be banking something you either be
banking time so you can work you're be
banking money so that you can invest in
something when I say invest I mean
invest in skills invest in Opportunity
not trying to you know play the crypto
Market or become a day trader because
you will lose yes you will uh speaking
of things that people may lose at and
that might be giving them existential
dread what do you think about AI for
entrepreneurs oh it's a great question
um I I'm not worried about it at all
from a what will it change about what I
do so I have seen I basically see the
history of humanity as humans then
humans plus tools and then tools beat
all humans and so AI for now is a tool
just like the internet just like
computers and we will use the tools so I
as an entrepreneur will use all the
tools available to win and so AI will
come online and we'll do that stuff
until AI can do everything better than
everyone and at that point it doesn't
matter nothing matters and so again me
dreading that changes nothing about what
I do today and so what I will do today
is what I've always done which is do the
best I can with the resources at my at
my fingertips what's available to me and
so I absolutely across all portfolio
companies are pushing how do we how do
we incorporate AI into this how do we
you know put it into the streamlined
process how can we incorporate in sales
and marketing whatever um and we will
continue to do that until an AI is
starting and running businesses without
us and at that point we will try and do
that and if if AIS are AI own AI
businesses and they're just out
competing humans at everything then the
world is different and I have no ability
to predict that and so I'll just keep
playing the game until I can't play
anymore what's the most jaw-dropping use
of AI that you guys are doing in a
portfolio company uh we're getting
really close to being able to have uh it
take
calls whoa yeah specifically inbound I
assume uh no outbound works too whoa
sales uh setting I think it will get to
sales yeah I think end of next year
it'll be able to do sales whoa but like
setting I think we're we're basically
like three months off um so main thing
the only issue right now is lag so the
actual responses are are perfect they're
on script they all reasoned all that
stuff works the only issue is the lag
time between someone saying something
and the response or if someone says
something the person starts the AI
starts responding and then they say
something else it can kind of like jump
start it and so the next big iteration
that's going to happen is voice to voice
so right now what happens is you you
know Prospect says something it goes to
a satellite which then goes down to a
database which then transcribes it AI
takes that as a text prompt responds in
a text prompt beams it translates it to
voice and then beams it up to the
satellite to then say it to the other
side that takes like a second and a half
as soon as it's voice to voice it
eliminates like three steps and so it'll
probably be like a half second and at
that point that's just human latency and
so um that's close like that's I think
that's three three months off four
months off like that's that's that'll be
end of q1 next year wow now are you guys
doing any of the training or are these
companies that are building these mod
these are tools that we I'm not an AI
company and so it's like we were talking
earlier about the platform of like are
we a you know are we a Dev company um
acquisition. comom as a holding company
is not is not an AI company we want to
utilize the tools that are available to
us and most of the AI companies that
we've like you know started vendor
relationships with Etc there's usually a
training period that you want to train
your specific you know model AG whatever
um so we've that process yeah that's
where I want to get my hands in the mix
I want to do the reinforcement learning
so that it will do the things we want to
do but yeah I don't want to have to
build the AI out itself AI is the one
that man this really gets me excited
when I think about how much it's already
sped us up and we're you know what are
we just under two years from when it
launched it's absolute Insanity how far
it's already come if you could push a
button and get it to work in one area of
your compan that would just have a huge
impact where would you want
it it's tough I I'll give you three I'll
take them um so I mean Marketing sales
so uh marketing is like how can we get
the content stuff to be like truly top
1% the the thing that's tough is that
whatever whatever the thing that I hate
and like about it is that whatever skill
AI can do for you it can do for everyone
yep and so it has a massive
Equalization so like the ability to
execute is going to be not nearly as
much of a competitive Advantage which
I'll just say transparently I'm bummed
about because I'm pretty good at it I
get it um but I'd say marketing and
sales uh both of those and then the one
that I that people might not expect is
um is
decision-making like if if it can get
better at prediction than me for
outsized returns then of the three that
would be the highest return thing that
we do and so I think that again but if
it can do that for me it can do it for
everyone and so that's where that's
again this is where I struggle with it
so I just think of like what can I do
today and then I I don't spend any time
on what might happen in the future with
it because when it changes I'll be there
yeah yeah no that's I think the right
way to think about it with that kind of
stuff the nice thing now is AI doesn't
have taste and so what I have found is
that because the output of the prompt
matters so much in terms of what I give
it that that still feels like it matters
a lot to your point about you have
infinite re or uh limited resources
against infinite possibilities the same
is true with AI so you can have it Go a
thousand different directions 10,000 a
million whatever and that matters so
understanding the end Target person that
you're creating this piece for but it
taking all of the manual work off of my
plate so that now I can iterate faster
so I just have to think about okay I
need to understand my customer I need to
understand what it is that trying to
communicate the angle that I want to do
it knowing which piece to say yes to
which to say no to where to push it and
then to be able to edit it it it is it's
taken so much time off of so many of my
different workflows that's cool it's
really incredible and for us because
game development is such a big part of
what we do if it can do 3D characters
yeah oh my God the all of the cost is in
the creation and the um rigging of the
3D characters how far is that
now I'm going to guess so I just saw
very compelling 2D to 3D stuff it's
static so you can't rig it yet so I'm
going to guess 2D to 3D over the next
year is going to be extraordinarily
compelling give it another 18 months so
18 months to 24 months and I think that
the financial structure of a gaming
company changes overnight yeah yeah it's
pretty crazy so you were saying that
your bum about it uh replacing certain
aspects of marketing because you're
really good at it what is the thing
because we can all look at you and go
yeah there's something here that you
were unusually good at what is that
thing I think it's rhetoric say more um
how you structure statements to make
them more interesting or
compelling uh for an audience so you
doing it intuitively or do you have a
method um the single greatest training
grounds for this is Twitter and or x i I
started tweeting uh I can't remember you
probably look at my profile probably
three three-ish years ago um and I think
Twitter is one of the best writing tools
that exists because it gives you
real-time feedback immediately for how
good the quality of your writing and
thinking is and so there are basically
sentence structures that resonate better
with people and so that would be like
having three things in a row where you
have they all start with the same letter
um if if you have basically like a
reverse sentence like it's not about um
it's not about listening to people who
are closest to you it's about listening
to people closest to your goals and so
it's like there's there's repetition
there um and you change one variable uh
you know if you can't do it in a decade
or if if you wouldn't do it for a decade
don't do it for a day so there's
alliteration um and so there's there's
and I would say some of it some of this
has been probably subconsciously
intuitive because I've I've tweeted
probably 6,000 times over last you know
3 years and so I've had a lot of
reinforcement loops and it's and this is
where like AI will do better than I will
eventually but like right now I can look
at I want to record this because there
was this time where Lea and I were
driving and she wanted to like tweet
while I was driving and so she would
read me what she wanted to say and then
I would tweet it back to her and they
ended up like they just banged and you
kind of get in the flow I was like
driving on the road I could just like
kind of like zone out and think about it
and like that
that's something that I'm I've gotten
significantly better at over the years
and making more content so it's like I
have verbal practice and feedback loops
which are more delayed so I don't think
it's as strong as the Twitter feedback
loop and that's probably been I think
that's that's the from from a from a
copy and content perspective that's
where I think um I've put more emphasis
I love it because this is really
interesting for persuasion is that if
you make the statement more
memorable people have a higher
likelihood of remembering it if people
have a higher of remembering it then
they will think it was their idea if
they think it was their idea they're
more likely to do it and so the best
persuasion is one where someone doesn't
feel persuaded they just think it's
their own idea and then they do it and
so if you make things memorable in a
very real way you will in influence and
change more people's behavior and so if
you look at the best orators of our of
our time the last hundred years they
were very skilled uh retor rhetoricians
or whatever whatever you um and and and
they use specific standard structures
that people tend to like and same is
like probably chords and music I think
it's the same thing happens uh with
words that's interesting all right
what's some of the worst business advice
you see people give out all the
time do a bunch of things and see which
one works why is that terrible God so
many reasons um well first off trying to
do many things at once you already have
such limited resources the easiest
analogy I can think of is
imagine you've got you one cup of water
and you need to uh overflow uh another
cup to get it to Be an Effective dose
right enough volume for you to see an
outcome the visual I can give is okay
let's line up seven shot glasses because
millionaires have seven streams of
income apparently and so now we're going
to pour that that water into all of
those glasses and then hope that it
somehow overflows but it's not going to
and so what ends up happening is you
just have insufficient volume of action
on seven things and then you accomplish
none and the fallacy is thinking that
you'll see which one will work which
assumes that the environment the
circumstance is going to be the thing
that makes it work rather than you and
so better stated is that you can make
any of them work but none of them will
work unless you focus on one of them
that's all Ric right um that's that's
the idea and so I think that is um a
very
Insidious piece of advice I think that
you can try many things if you want uh
if you are going to do that do it in
sequence do one at a time but I say that
knowing that if you actually try hard at
the first one you'll probably make that
work so try the first one that you think
is the best one first in which case why
do you even have six through you know
six through two or 7 through two um and
so that and I think there's this big
idea this is one that I remember talking
to a portfolio company about um um he
was like I'm not really sure if I'm
passionate about this anymore like about
like this this this product or the
company whatever and so he was like I
think I want to consider starting
something else and I said what do you
think the natural extreme of this looks
like at the top because all in my
opinion all businesses at the top look
the same which is you're going to have
AE of marketing you're going toe of it
you're going to have it as sales head of
head of product had of customer success
whatever and so if you win and you win
all the way it looks the same
and so where where your entrance point
to the maze is doesn't really matter if
that's what the hypothetical extreme is
and so I have this story about a friend
of mine who started a cookie store
actually here in California so he
started this cookie he was in Fitness
right so that was kind of hilarious like
it's the really fit guy who starts a
cookie store and I remember I asking him
I was like are you passionate about
cookies and he was like No And I was
like huh weird he's like well I looked
at the market there's there's a a lot of
people and this is before cookie before
crumble so he had he had a inclination
that like high-end cookies were going to
be a thing so he he did his he did his
his
homework but what he was passionate
about was being excellent and he did
amazingly well and so I think that you
can be passionate about ideals and
translate that to anything and so I had
a conversation with uh uh Ben Francis
from uh jym shark um this year probably
the most the best the best day that I
had from a business owner perspective
was hanging out with him um just had a
really good conversation and there's not
a ton of people you can talk to about
like Revenue levels and problems that
come at that and we had a great
discussion
and what was interesting he like I can't
believe that you're doing all these
different things because he saw each of
the portfolio companies as a different
thing he's like I can't imagine doing
anything besides gym shark this is all I
want to do and I thought about it for a
second I was like acquisition. comom is
the only thing that I'm doing right
these are just like fundamentally like
you have different types of clothing how
I can't believe you have all these
different types ofo all these different
types of apparel so it's really chunking
up and chunk chunking down and so if
anyone hears that and thinks wait wait a
second I thought you told me that I
should focus on one thing how are you
doing all of these different things
there's a very big misconception when
you are starting out that CEO and owner
are the same thing and they are not and
that's because in the beginning they are
the same because you're the only guy but
if you look at you know Berkshire
hathway for example uh Warren Buffett is
not CEO of Coca-Cola he's not CEO of
Geico he has
operators who are in charge of each of
those companies now those guys couldn't
run three companies they can only run
the one they're at and he can only run
Berkshire hathway and so it's really
chunking up or chunking down a level to
understand how do you do how do you have
multiple things because you can always
go down and say okay well if you have an
agency then you have 10 clients how can
you have 10 clients you should only have
one well it doesn't the logic doesn't
carry but it's really just that one
person has limited resources and so by
limiting the scope of the problems that
we have to solve we get more leverage as
in we get more for what we put in in my
opinion and so um that was how I
reconcile those two kind of styles of
doing business is that I'm not CEO of
any of them and I'm not even really CEO
of acquisition. comom um if at all and
so that's that's been uh that was that
was how I how I how I made sense of that
because that's the only one thing that I
think about all right so what is the
difference between what life is like
when you're running a million-dollar
company versus aund million doll
company I was going to give the obvious
answer which is scale um that's like the
first what's the knock on yeah
um so we have only one theory of how we
grow everything and so it's kind of been
our unifying principle which is the
theory of constraints so a system will
grow until it's constrainted and then
will grow no further and until you
relieve the constraint whatever the
bottleneck is it will stay there and so
the difference between uh a
million-dollar business and a hundred
million business is typically if you're
a million dollar business you're still
you're doing a lot of everything still
at 100 million you're predominantly
making decisions and SWAT teaming in on
high leverage problems that need to get
solved so kind of like the Elon like we
jump in and Lea and I have both uh kind
of championed this methodology of close
ceoing which is um rather than having
somebody who's kind of like running the
basically driving so driving objectives
on a regular basis we see as like
traditional operations and management
versus kind of like CEO uh as saying
okay the single most important thing
that we need to solve right now is this
product Ascension piece or we need to
solve this sales constraint we need to
solve this CS issue whatever it is and
then basically CEO goes in is now on
every huddle for for that because the
operators who are running each of the
divisions or functions are continuing to
drive the ball forward and so uh the
tldr is in the very beginning you're
doing everything at the end you're doing
one very well and your understanding of
talent will dramatically shift over that
time period And so right now you can't
imagine having anyone else do anything
because everyone who works for you
probably isn't that good um and that's
because you don't know how to recognize
Talent Andor you can't compensate them
well enough and unless you're giving
away big chunks of equity to people
which is a strategy there's nothing
wrong with that but either you're
Building a Dream Team or you're or
you're bootstrapping it if you're
bootstrapping it you're going to be
doing a hell of a lot of work uh if you
build the Dream Team then you're going
to have to give slices of the pie away
again cool either way expecting a
different outcome from a different
decisions where the problem comes in and
so that's kind of I see like at at a
very high level you're doing a lot of
stuff with no help to you're doing a few
things with tons of help so that all of
the normal day-to-day activities
continue and you're just thinking what's
the highest leverage move we can make
how do you recognize
Talent um so this is probably so if I
had to say like the three things that
have changed in terms of me as an urner
for the year um or like last two years
like big big moves one is my
understanding of brand so probably four
so understanding of brand has has
deepened my understanding of focus has
deepened my understanding of talent has
deepened so it's not like oh I learned
about Talent it's just my understanding
of it has grown more nuanced
and the Arbitrage that exists between B
and
A+ and so I still think that one of the
greatest returns that you can make as an
entrepreneur is paying someone who's
exceptional exceptionally
well and Steve Jobs gives this so I'm
not going to claim credit for it but he
says if you look at the best cab driver
in New York compared to the worst cab
driver it's probably a 3X difference
between and that's the best and the
worst but the best marketer and the
worst marketer it's not a 3X probably a
100x difference same thing for the best
engineer and now that's the best and
worst what about good and best or good
and top
0.1% well the difference between those
guys is probably still like 25x it's
huge huge highly leveraged and so um
the Arbitrage is that you don't
typically have to pay the best guy 25
times more than the good guy you can
just pay him three times more and then
the all the increase in throughput goes
to the company and that has been my
shift and moving away
from so basically head hunting happens
in level right in the beginning you
start running ads to get first you you
talk to friends and family right and
then you start running like indeed ads
and Craigslist ads to get people and
maybe you post in communities you own or
you make public posts whatever that's
how you get your next level of talent
and then from there uh you start
networking maybe you hire head hunters
and recruiters to help you maybe you get
an internal resource who starts doing
outbound looking for specific types of
candidates and this also follows with
the functions of the organization if
you're finding a lowle role you can
still do the lower leverage ways the the
higher the role the more individualized
the approach just like a whale would be
if you're trying to go after uh a big
client a high value client like okay I
want to I want to sign sign Amazon for
my warehouse services like okay we're
going to have a really tailored approach
you're not going to run an ad to get
Amazon you're going to have to know
somebody you're going to have to work
your way in it's going to take a while
and so I would say that now my thinking
has rather been like let's go find a
unicorn two I need Jon from this company
to work for me and I don't know John but
I know he's really good and I need him
how do I what would it take for me to
get him to be here and so I'd say that
that has been the shift and I am more
okay with getting I'm basically being
involved in some of the highest level
recruiting and those roles Take 6 12 18
months uh to actually come to fruition
because it's it's like a courting
process it's more like a marriage like
they don't need your company and like
they have a career you're not giving
them an opportunity like they're giving
you a company because they can drive an
entire division of growth they can take
you International because that's what
they're you know that's their Rolodex is
or or they're they can take you public
if that's where they're you know what
their specialty whatever the thing is
and so
that's that's kind of how I see as as a
very high leverage use of my time
despite the fact that it's a very slow
process that has very delayed
reinforcement yeah Talent is a whole
Beast how do you go in when you've got a
role that you don't necessarily know how
do you make sure that you can't be
Bamboozled so Leila so I'm stealing this
from Lila um her frame is talk to as
many really smart basically reach out to
people who you would want to hire ask
them if they know anybody uh hop on
calls with them and she uses the
interview process as her learning
process yeah and so from there you know
if you only talk to One customer success
person you have no idea if they're good
or bad if you talk to 20 you have a
really good idea and so because then by
the by the 17th you're like but what
about this and what about this other
thing and the the way that I think
through this is a couple razors so razor
number one is the quality and quantity
of metrics they track and how they
influence those metrics so if I talk to
let's say I wanted to find a sales
manager um I might say something like
okay so you know how do you how do you
think about running sales and improving
sales performance now if the guy says
you know got to get in there get the
team riled up you know make sure make
sure the culture is good uh you know
drive drive outcomes I'd be like okay
how do you measure that now if the guy's
like you know make sure the close rates
are good and uh and yeah and I'd be like
okay how do you make that go up now the
best guys would say well they would have
every metric all the way down so it's
like what's our contact rate what's our
what's our what's our offer percentage
what's our close rate what's our cash
collected what's our backout rate by rep
uh what's LTV to rep so because some
reps have higher LTV because they have
lower return because how they're sold
what expectations were set and so if
these are the metrics that I'm doing
they would then say well which metric
would you want me to improve I be like
okay if let's say that offer rate's low
what do you do like okay well then
that's probably going to be a lead
nurture issue which is not qualifying
people on the front end we probably need
to fix uh the headlines that we have in
the ads and maybe the offer that we're
doing for whatever giveaway we have
that's generating these leads and then I
would probably add in some sort of
disqualification process earlier so if
the guys can look at the stats I could
remove them from the calendar so they
can open up a slot and then increase
through
put now if someone said that then I'd be
like okay that's clear I zoomed in on a
metric because he had many and he had
quality metrics and he knows how he can
influence them and so if you have a very
good idea because I remember the first
really good HR person that we that we
brought on um um they introduced all
these new metrics to me that I had no
idea about and I was like this is great
she was like well what's the cost to
acquire Talent here and I was like I
haven't thought about it she like oh
yeah well we need to know we can spend
this much to acquire talent and this is
our average cost to acquire a role at
each level and then what's our what's
our two-way fit percentage and I was
like what do you mean I was like well at
90 days what percentage of people are
saying it's a 10 out of 10 from the
manager to the person and the person to
the manager so it's a two-way fit both
people say that this is a good a good uh
thing and then what's our average time
to fail and I was like I don't know
right and so all of a sudden she had all
these different metrics I was like this
makes complete sense to me and I've
never measured this and then all of a
sudden from that point going forward for
every single head of people or director
about whatever it is we're doing if
they're in charge of some sort of
recruiting function then if they're not
bringing up those metrics then I know
that they're already not at that caliber
and so again it's like the and this is
where I think um like entrepreneurial
pattern recognition is so valuable is
like every entrepreneur that I know who
has had something successful and then
started something else with the
assumption that the first thing wasn't
because of luck cuz we we have probably
both seen some guys that got richer than
they should have um I'll just put it
that way because I remember had I had a
dinner with somebody once who was like
and I'll I'll loop back but he said
isn't it crazy that like gym launch
could be the biggest thing you ever
built and I was just like that is not
true I just like I wholeheartedly reject
your premise I like I I know exactly
what we did Du to Bill gym lunch and I
know all the reasons that it was not as
big as I want it to be and I know what
I'm going to do next and I know how to
win and uh that guy never ended up
building something bigger than the exit
that he had uh and it might have been
because of his view of the world or
because he got lucky or whatever but
that pattern recognition for most
entrepreneurs that truly are self-made
that forced their will into
existence their ability to get it again
after losing it all or just when they
when they take their second or their
third or their fourth swing they almost
start like for me every company I've
built has gotten to each Revenue level
faster than the company before and it's
because it's like I already beat the
boss at this level I know what has to
happen here oh I know what has to happen
here and then you finally get into
virgent territory you're like I don't
know what's going on and then your rate
of progress slows again and so it's like
you want to crystallize the artifacts of
the knowledge of beating the game at
every level so that when you when when
you get to that level again you're like
oh this is another one of those I know
good sales managers look like this they
they know these metrics they say these
things they interview this way this is
the best source for them and then all of
a sudden when it takes someone 18 months
to find a sales manager because they
hire wrong the first time and then it
takes them a year to figure that out and
then they go back into process and then
they have to two sales mened themselves
and then they finally on their third try
and that was the constraint they can't
fix it and so they stay stagnant that
whole time whereas if you think about
how much faster it goes when you're like
all the roles are right and then it's
like boom you just go to the next level
next order of magnitude I think that's
the that is the those are the scars and
the lessons that we collect as
entrepreneurs so that we have our cheat
codes for when we get to that level next
time all right as you scale up and you
are just really entering a whole new on
how do you think about or do you think
about political environment does the
government matter to you at all do you
think about tax or anything like that um
so I'll start with tax uh I don't think
much about it I have always been of the
belief I should just make more money and
that's more under my control and now
we'll be you know we'll be sensible if
we buy a building we'll depreciate it
you know you know we'll donate a certain
amount to charity because we can you
know write off 30% of adjusted gross
income it's like okay well that takes me
from 37 to 29
um you know you know we work our way
down um but we still pay taxes right and
I I'm still waiting for this this I'm
like what what is what is this no taxes
that billionaires are paying I'm still
trying to find this this loophole that
all these politicians are talking about
um but the big realization that I had
around taxes was realizing and this was
when Elon still lived in California that
all the richest people in America lived
in California or many of them did and
and New York and I was like if they're
the richest people and they're in the
highest tax state what do they
understand that I don't understand about
making money and so the big misn or B
misconception that I had is that my
understanding of making a billion
dollars which was a goal that I had for
a very long time um was and to be clear
for anybody who has that goal like it
wasn't always a billion it was first a
million and then it kind of moved its
way up um but the first way I thought of
making a billion dollars was it said I
had to make $2 billion in net income and
then after taxes I would have I would
have a billion and then the second
version was oh I just need to make
enough and then I'll invest that money
and then if I if I make maybe you know
400 million over 10 years with
appreciation of the stock market and
things like that I could get to I could
get to a billion okay that was my like
2.0 version and then the 3.0 version um
was oh you the thing the asset itself
has inherent value and so I only need to
get to like a 100 million in ibida with
a conservative 10x multiple uh to have a
billion dollar asset which I can then
take loans against or I could sell
portions of it or whatever I want to do
there and so that's kind of like how my
evolution of of getting to a billion
kind of changed over time I know you
know this is obvious but like for me I I
I didn't I didn't even understand how it
worked um so that's the the the tax
component um and some of the the
Enterprise Value component what was the
other part of the you had two two
questions Sor well so do you care about
who's in government oh yeah
um no that's my simple answer
I who is in government the regulations
that they put in place I will only be
affected by those regulations or changes
in tax code like you know like we just
said if it was something that affected
me disproportionately maybe like Elon uh
then it might make sense for me to
change my behavior in a way to try and
influence the outcome of the election
because then it's like I have high you
know we I think we all try to have High
agency like what can I do about it but
as a rule I try not to think at all
about things that I cannot control and
so so we like sure you can vote okay but
you know the one vote I have in in the
one state of the county that's already
whatever color you're in whatever um but
if I really wanted to get into it it's
not your vote that matters it's how many
votes can you influence like that's the
game sure um and so the the easiest liit
test I had for this I remember this was
like a formative experience for me is
that when we went through Co I was in
the gym space which if woof right 100%
of my customers were not allowed to do
business legally in 24 hours and
so that year we went from 37 million in
Revenue to 31 million in Revenue okay so
we did 31 million in sales in an
industry that was not legally allowed to
do business whoa and I think is one of
the biggest entrepreneurial successes
I've had despite the fact that we shrunk
that year and
I remember managing the team during
2020 saying if we cannot control it we
do not talk about it
period only talk about the things that
we can control and whenever there's a
disadvantage it means all of our
competitors are screwed and so that
means there'll be more for us because
we'll work harder while they get
disheartened and so they're going to be
talking about all the things that it's
not fair and blah blah blah but we are
going to advertise our asses off we're
going to sell our asses off we're going
to deliver like crazy and we're going to
find a way to make it through this
because every one of I was like gyms
will not stop existing so if we believe
that to be true then we need to find a
bridge for them to get from here to
there and so we can build that bridge
and the nice thing is we have more
resources than our competitors which
means we can build a better Bridge than
anyone else can what was the bridge so
we we came up with something in seven
days called the hybrid gym and so
basically what we would do is you could
meet with people one-on-one in person
that was loud you couldn't do workouts
and so what we did was I got all the
gyms together to teach different classes
in different variations the whole gym
launch community so that we had 12 hours
a day of sessions that were being
streamed by different gym owners and so
everyone was able to maintain their
membership and have way more classes
than they did before and do them at home
and so we were pulled the
resources very smart and so we we
cobbled together the streaming thing so
that because we you know we we paid for
all of the Baseline Tech that was
required to do that they supplied the
talent um to lead to lead those sessions
and then from marketing and sales
perspective they either sold over the
phone which we had more ramped up sales
scripts which was more reasonable at the
time because people understood it or
you'd meet in person one-onone to do it
and some people were able to meet
one-on-one just do one-on-one training
things like that um and we leaned really
heavily on supplement sales because we
still have Prestige labs and so Prestige
Labs uh a lot of gym owners were able to
get more people to take supplements
during covid because they shipped
straight to their door and not have to
come to the gym and so the combination
of those two things allowed the majority
of gym owners to get through now what
was really interesting now I think
you'll dig this so about I want I can't
remember the exact number I want to say
between eight and 10% of all gyms went
out of business in 30 days oh my God
yeah and my theory around this whoa yeah
my theory around this was that they were
waiting for a good enough reason to give
up
interesting and so they were waiting for
a reason that they could look at their
friends that they're like you know what
are you going to do they were looking
for a socially acceptable re people had
owned a gym for eight years 10 years and
then when the second wave of shutdowns
happened like nine months later whatever
it is when they were like maybe we'll
open it they shut it down that was when
of the guys who really wanted to but
could who literally couldn't pay the
bills anymore went out of business so it
happened in two waves the first ones
gave up the second ones had no of course
you always have a choice but like those
guys run out of resources and so um but
yeah we we we were able to make it
through wow what an awesome example of
no [ __ ] what would it take what do
you like off camera like are you do you
have a super hard Edge like you have a
really playful Vibe you've said a couple
things here that uh if we can't control
it we don't talk about it like things
like that I can see I think people are
always surprised when they come to work
for me if they seen me on camera now I
have the world's most angry face so that
helps at least a little bit but I'm very
look this is me on camera but I I am
very intense for sure yeah um yeah
what's your what's the off camera like
not for play I don't [ __ ] around or um I
think the number one thing that I get
from the people who work with SL for me
is that I uh I have a much a lighter u
sense of humor when uh when they see me
kind of dayto day I do like to uh poke
fun and make uh illicit jokes and things
like that that people were like is that
HR compliant I'm like definitely not for
sure you should talk to them but they
work for me so I guess it doesn't really
matter um so uh that side but I think it
depends on the stakes and how far in a
deficit people are so like high
performers I think like me in general
like I'm super encouraging I'm very
rewarding telling great job Etc I want
to create an environment where people
people can win and if you win you will
love me and if you don't win you will be
very uncomfortable and so I see the job
as the of the manager is to create the
best possible environment for the best
performers and a terrible environment
for low performers and a lot of people
don't like the second half of that are
you flirting with me that that is and so
I'm here for that I want and and I think
a problem that has happened in a lot of
management I think some of the is and
the wokeism stuff is like the idea that
we should accommodate
everyone and I heard this from someone I
can't remember where I heard it but it
was like this company is a dangerous
place to work and I just love that
saying now I don't think like Lea would
probably be like you know shiver you
know would be not happy me saying this
but
um I want a place where winners want to
win and I want to build a company where
ambitious people can build worldclass
products and whether your product is
consistently delivering a sales script
or it's making amazing content or it's
just the actual companies themselves if
you're an entrepreneur like I want to
create an environment where ambitious
people can build worldclass companies
and if I believe that which I do then my
actions need to be aligned with that
which means that if if you don't like
metrics if you don't like being held
accountable to your performance if you
would rather have a political
environment where people jockey and
backstab and gossip this is not the
place for you because I will root that
out quickly and ruthlessly um I prefer
in my opinion the perfect organization
has zero
managers hypothetical ideal of course
you need to align people's I mean in
that hypothetical ideal everyone works
period that's all they do every day is
they produce and so if that's the
hypothetical ideal then every layer of
management fundamentally acts as waste
now we have to orient that behavior so
that it's aligned within whatever the
objectives of the department or or the
company are but that should be the only
real role and rewarding people who do
well and providing feedback for people
to improve and so I see fundamentally
that is the role of the manager and that
means that the manager most of the times
also should probably work on stuff
besides like I do all this stuff and if
we see a good manager then they should
increase the overall output of the team
now if I add a manager and and
performance stays flat then I don't need
you I could not have a manager in
performance stay flat right like and if
performance goes down even worse and
where I hate is the outside cause you
know pointing outside to external
circumstances and I I tell the story of
Co to my company as well which is hey if
we have a company that relies on
financing let's say you're in home Home
Remodeling whatever so financing is a
big part of our car sales um hey credit
you know you know interest rates are
higher it's harder for us to do sales
can we control that no why are you
talking about it it's just a very easy
razor to drive like what can we control
well good more for us because other guys
are all like they all have all these
disadvantages we don't live with it they
do CU they'll talk about it we won't and
I um I I think the world needs a little
hardcore and I'm okay being that I love
that as always my friend it is wonderful
to have you where can people follow
along for the hardcore um if you listen
to a podcast then uh I have a podcast
called the game uh you can check that
out I have I think it's like 580
something you you'll probably find it I
have uh two books that give away for
free on my podcast $100 million offers
$100 million lead so it's dollar sign
100m and then offers dollar sign 100m
leads those are the book titles um
they're on Amazon too if you like like
physical copies but they're free if you
if you like consuming them and if you
still can't find it just Google it and
you'll find it on my podcast um that's
probably the the best thing you can do
and if you're on YouTube then you can
you can check out the the videos on
YouTube I Love It I highly encourage
people to do so and speaking of things I
encourage you to do if you have not
already be sure to subscribe and until
next time my friends be legendary take
care peace if you like this conversation
check out this episode to learn more
stop lying to yourself you know you have
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fraction of your potential all the while
that voice deep inside screaming at you
that you are meant for something more
now I know that feeling because I have
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