E200: 21 Harsh Truths Nobody Will Ever Tell You - Alex Hormozi

30:14If he works out, it's not as focused. So it's like how do we get it so that – so if we think about that as the pinnacle of focus, then the idea of all these productivity hacks is just like, in my opinion, we had a little joke this morning about it. It was like a complete and utter waste of time. People are like, I want to focus more. But focusing more is about removing everything that isn't the thing you want to focus on, not doing something else. It's such an American idea to add something in order to try and get more of something. And you say the number one productivity hack is to say no. Yeah, it's the cheapest one too.

30:50So going back to this video game analogy, you're on level four. You get tired of losing. You start level one, level two, level three. certainly in some skills like management or fundraising or leadership you have to beat level four but is there sometimes another game that you could play where there is no level four and you just go level five it's a really good question i think i think it it's basically like what is you know what's the constraint what's the constraint of the system for most entrepreneurs they are the constraint of the system but fundamentally a business has has to have these functions occur.

31:28And if you were the only entrepreneur in the business or only founder, sometimes they're for sure like key people who can come in and can help you out. But if these things must occur, then like let's say you get to a point where you need to get more leads for your business. Just keep it simple, right? Okay. If I don't know how to advertise, advertising must occur. It has to happen in some way, in some form. And so if I never learned the skill, then the only option I have is to go recruit somebody who has the skill. But what if I don't have the skill of recruiting? Now, maybe the level four boss becomes a level 4.5 or a 4B, right?

32:02Which is, okay, well, I can get over this bridge multiple ways, which is actually really interesting because this is something I've been thinking a lot about, which is it's actually loops back to what we're talking about with advice, there for sure is bad advice, for sure. But I think there's also a lot of good advice that is half-heartedly executed, which then makes it into irrelevant advice because the execution nullifies the effect. And so I, as somebody who gets asked for advice, I have increasingly spent my time on how do I increase this person's conviction around the advice and less on the advice itself.

32:46Because if we use the analogy of a mountain, there typically are multiple ways up the mountain. Like you could make this thing a super viral product. You could also, you know, have a super, you know, heavy sales team and marketing obviously depends on the goal size, right? But like, let's say somebody has a modest goal of hitting a million dollars a year or 10 million dollars a year or whatever it is. Not a trillion dollar company. Sure, that'll have a more defined path but if if someone wants to make 10 million dollar your business it's like you could do that a lot of ways but no matter what way you pick you have to be committed to it and so it's like what are the few things that must be true right that you have to be committed to you have to be focused on on whatever that thing is so you can get good enough at it you can get deep enough into it that you can actually like break through level five of paid ads of organic but if you're if someone would say how do i market this like how do we market this podcast hypothetically right Right.

33:35Well, we could run ads. Right. We could go find affiliates who have audiences already and then see if there's a way that we could partner with them, have them promote it or come on, whatever. We could we could just get better at the organic game itself and get really into the nitty gritty of like retention curves and packaging, clue through rates, all that stuff. Right. And we could go on. Right. These are all these different ways. And so could all of these things result in the views of this going up? Yes. And so if someone says, which one should I do? All of them would work, but they will only work if you do.

34:09So then the problem to solve is which one of these things does the person have the highest conviction on? And the largest percent of existing skills, so in the inverse, the smallest skill deficiency between proficiency and where they're currently at. And so that is typically what my follow-up questions will be. Well, have you ever made videos before? Do you know a lot about this? Have you ever run media before? Have you ever done paid ads? Do you know anybody who's run paid ads? Like, are you a natural networker? It's like, oh, I'm a natural networker. It's like, boom, this is going to be the highest likelihood path.

34:39All of these work. And so it's like two people ask Alex who both have podcasts the same question, how to promote a podcast. And then there's different answers. It's like, well, because they're different entrepreneurs. And so I want to have the shortest gap between where they are and what would be proficient in order for them to get up the mountain. so that's i also think there's like a consciously understanding that you can't pass this level and subconsciously going to the next shiny object yeah and just to give you two counter examples to having to pass the level the most extreme mark zuckerberg yeah i don't know if you saw any clips with him and theo but he still sounds like a robot he still has no personality and yet he hasn't kept that from building a trillion dollar company yeah sam altman yeah realizes he's a genius strategist, has all these skills, open AI.

35:24He realizes he sucks at hardware. He just paid$6.5 billion for Johnny I. That's not going to be a limit for him. So there is a power to knowing which levels to play and which characters you want to play in those levels as well. Yeah, I think it comes down to what functions must occur. And then it is my job to make sure that those functions happen. Now, the cheapest way, not the fastest, the cheapest way is to learn them yourself. right and so then you become increasingly stacked with all of these different skills so that you can solve them or you're to problems in the business um but if there's a gigantic skill like i i will probably never be the person who's head of finance um in terms of like operational finance like i'm not going to run the pnls and all that like i'm just i'm not going to do that um but somebody should we have to have that right um and so but like i could go learn how to do that but it's easier for me to go find somebody else.

36:16And so I think basically it's buy or build but don't own an equals one. Am I going to buy this and bring Johnny Ivey in, right? Or am I going to build this within myself or within obviously somebody else if you want to train up the team. But if we're assuming we're trying to go fast, then no, am I going to try and learn it or am I going to bring somebody else in? You just alluded to this, the smallest deficiency in skills. It's the one concept. I've talked to many people about this. you have a very controversial view that I haven't been able to square. Okay. And the idea that you could teach somebody culture and teach somebody personality traits versus skills versus hard skills.

36:55Have you ever seen that executed outside of acquisition.com? And how do you teach a 50-year-old how to change their behavior? Oh, so, okay, a couple things here just for defining terms. So hard skills, soft skills, I see those as the exact same thing. they're just words that people use but they are fundamentally changes in behavior so across the board thing number one um and how do you change a 50 year old's behavior it will take longer they're less plastic um but nonetheless they're still still teachable um on a long enough time because the thing is some people so everyone is teachable the question is is it worth it and that no that's that's actually the real that's the organizational question is like buy or build is an ROI decision, right?

37:40Like should I buy this and what's the likelihood of success and somebody coming in or immersion into the business versus me building this capacity internally? How much is it going to cost in both time and money, right? And a lot of that's going to come down to your efficacy at transferring skills, at teaching somebody else how to do something. And so what part was controversial? I'm like, I'm so curious. The controversial part is you don't work. So at acquisition.com, you recruit for people that want to develop themselves. So you have a very special culture. But for the average business, if somebody, if CFO comes to me and I want to put them in a public company and I start telling them, like, you should smile more, you should wave more, that's going to be a very difficult conversation.

38:22Is that practical or am I missing something? And how do you go about changing somebody's what I would call soft skills, which you would call just another type of skills? Just a bucket of term. A bucket of term. Yeah, it's just like there's 28 small things that you can do differently that will increase the likelihood of people like you. So I think it would be awkward if I demanded every single person does this. I don't demand that everybody smiles. If somebody has a problem where people are not listening to them, and I think that they do have the base skill set, but they're having difficulty with influencing their coworkers, then I would probably say, okay, well, let me give you a remedial course on influence.

38:59which is here's six things that you're currently doing that decrease the likelihood they listen to you. So if we reverse these six things, we'll increase the likelihood that the desired outcome happens. And the most difficult part about this is actually the observation.

39:18People will use a bucketed term to describe somebody else. They'll say this guy has a lot of charisma. But if you ask them why does he have a lot of charisma, that is where people get in trouble because there's so many things you notice that you don't put words to typically, right? Like we have a lot of good pattern recognition, you know, for like, this guy's a threat. This guy, I don't know, he just gave me the wrong vibes, right? It just really means that he did things that remind me of other people who have wronged me. And I don't like, and so being more conscious about it, this is where like watching game footage and things like that become incredibly valuable because you can see like, he blinked a lot and he was, you know, wringing his hands.

39:54Now, if somebody comes in and a lot of people in the office are saying, I don't know, this guy doesn't seem trustworthy. The question is, is this guy trustworthy or does he behave in ways that remind them of other people who are untrustworthy, which are two different questions. And so if I just want to teach somebody how to act in a way that decreases the likelihood that people call him untrustworthy, then I could say, hey, put your hands in your pockets and do this instead, right? And so we always hire for the small skill deficiency. And so the public CFO for sure is going to have to have a massive, you know, skill set that's going to take many, many years to develop, right?

40:34If I'm picking between two candidates and I've got a nice guy who doesn't know finance and a guy who's a killer at finance and he's not a nice guy, I can teach somebody to be amenable and not that long, right? But teaching somebody finance is going to be a much bigger, a much bigger beast And this guy, the guy who's really good at finance, you'd rather hire a nice guy that's really good at finance but if he's the guy you have yeah there is a way to change him yes and then again all the the thing about this is like i think people hear this and think oh like alex is a soft like let's go train everybody at looks no 100 not at all it's it's an roi decision every so i see the the chief role of the entrepreneur is allocation of resources period that's what we're supposed to do and i see strategy is prioritization of resources so like how are we prioritizing what we got we have limited resources unlimited stuff and be able to make the decisions where you get the most bang for the buck.

41:20And so if we can have somebody who has, you know, tremendously, you know, deep finance, this guy's a finance savant, okay, great. Is the deficiency that he has in the interpersonal department something that's going to cost us our culture? And how little do I need to do to improve where he's at to make it at least not a negative, right? And so that's the, I think there's the basic calculus there that happens. Now, if somebody has like a massive ego, it's going to be tough because they're not going to be receptive to anything, which means what you see is what you get. And you've got to be really happy with that.

41:52There's also a difference between somebody that lacks self-awareness and somebody that knows that they're an asshole and basically doesn't care. Yeah. Thinks they're so good that they're not going to change. Yeah. Some people are like, I am an asshole. And they have accepted that about themselves. And some people had no idea that people thought they were an asshole and would love to change that. And I think the crux of that is maybe the difference between somebody you hire or don't. You mentioned game footage. For your last book launch, you've practiced over 30 days. You did over 100 presentations of the presentation.

42:21You mentioned that early on you got a lot of benefit, and then you were getting incremental benefits with each iteration. Why keep doing that? Why do 100 iterations of something where you're getting marginal returns? So my initial response is marginal returns are still returns. And I think that most games are won at the edges, right? They're one in the margins. And so the benefits in most systems accrue to the person who's number one. And even if you're number one by a tenth of a second, you're still number one, and you get a disproportionate amount of the gains. And so I've been rewarded so many times historically for just getting a tiny bit better with a shitload of work that it's still worth it.

43:06So I have diminishing returns in skill, but gigantic absolute returns in what I get for getting that increment, that very small increment. And so to put math behind it, if I have 500 ,000 people who are signed up for the book launch, if I knew that there was going to be a stage that had 5 ,000 people, I'd probably prepare. Like I'd probably prepare. Well, imagine 100 times that where each increment is an entire stadium, you know what I mean, or a gigantic arena of people. Well, if that's the case, then like I will get a good return on that. Now, if I'm going to have a presentation in front of 100 people, if I get 1 % better, maybe it affects one more person.

43:50But if I get 1 % better in front of 500 ,000 people, it's 5 ,000 people. And so it makes sense there. So it's like, again, it's an allocation of resources thing. I will prep that much because it's worth it. If it's not worth it, I'm not going to do that kind of preparation. So it's efficiency equals work over returns. Yeah, totally. So in other words, it's highly efficient, even though from the outside sounds feels inefficient because you're just getting just a little bit better. But it's being magnified by it. It's relative versus absolute. So I had this decision because we have this big book launch coming up and we're saying like I won't share too much.

44:22But like we have such big numbers that I'm expecting of people who are going to be coming because last one was awesome. And this is the third book. Do you have a date for that? Yeah, August 16th. Okay. Yeah. Just announced. So it's not exactly on my wedding day. That's great. Yeah, yeah, it's not exactly underwater. We'll try to make it out. And so the point, though, is that if someone says, ah, that's going to be, you know, if we add that little, you know, an abandoned cart sequence for the book, like, ah, it sounds like work. It's like, dude, we're going to have a million people register. So 2%, right, is 20 ,000 more books sold, right?

45:02Which is, and I've got some goals that I have around the book that I'll share after the launch. But like, yeah, man, it's worth it. Like there's some businesses that do entire campaigns that don't even come close to that. Yes, we're going to hit all the little crumbs. We're going to hit all the little crumbs because the thing is, is when you have that much scale going through it, the crumbs become bakeries. And so, yeah, I would say like I tend to be a maximizer more than an optimizer in general. And I want to double click on what you said. You want to share your goals after. Talk to me the pros and cons of sharing your goals ahead of when you're going to do them versus.

45:36It's a great question. I say, so I think of this as like, does sharing the goal, there's two components. So one is, or at least two components that I think of, which is does sharing the goal increase the likelihood the goal occurs? And the second thing is, does sharing the goal give me some other benefit? So I think Babe Ruth calling a shot and then hitting the home run accrues a benefit for him calling the shot. If he had just hit a home run, no one would remember it. And so there's other benefits. now does him calling the shot increase the likelihood that he hits the goal on one hand maybe his adrenaline spikes because now he has way higher stakes on the other hand maybe the pitcher pitches a little bit nastier too um and decreases the likelihood so there's a little bit of you know there's there's multiple variables at play um but i think that if i shared uh all the goals that i have around it um i don't know if it increased likelihood and for me even it's a null outcome, like it doesn't increase or decrease, for me, it would take the spot of a different messaging that would increase the likelihood.

46:38And so by default, the opportunity cost of the headspace that it would take up to talk about it in the prospect of the audience's mind is not worth the real estate. I'd rather fill it with something that's more salient to them. I know you hate the word manifestation. Hate it. Yeah. Well, the word I have no issues with. But if I was to repackage, and I agree with you just for the record, if I was to repackage it into visualization and also, comma, and also bring up the fact that Michael Phelps visualizes, Michael Jordan visualizes, people that have accomplished great things use this tool of visualization.

47:17Is there room for visualization? So I think visualization and manifestation are different. So I would have to define the terms, right? And I've had a really tough time. So I've probably gotten a handful of heated discussions about this. But I've yet to have anyone clearly define manifestation for me, which is why manifestation to me, as I define it, is a word that people say to other people that gets them to nod and give them approval for saying the word. And also not take the action that is required to actually get that. And that's – and now some people then go to, well, you have to change things in your mind before they occur in reality.

47:57And then I would just say, like, how do you know that? And what can we observe, right? So I just focus on the observable world, and I pretty much ignore everything else. And it's been one of the most useful razors for honestly predicting reality much more accurately. It's like evidence-based versus not evidence-based. Yeah, 100%. Yeah, of course. And where does – visualization, obviously, you could probably run a scientific experiment. but it's not very evidence-based. Is there a certain point? So that's a tough one because I do think that there's a decent amount of evidence that like you can like, like if you practice free throws in your mind for like two hours.

48:32I think there was a study on that. And then you do it. Yeah. There was a real study on that. Yeah. And your percentages go up. Yeah. And by like almost more than if you just do like it's, and when you pair them, it gets crazy. And the visualization exercise I think is really interesting, especially for like athletes because you have no joint wear and tear and so it's risk-free upside so so again i'm i'm all for that now me telling someone hey you have to visualize how do i know they did it like so this is where i get into like i just try to focus on the things that i can see and i'm trying to think like in what in what context would i say visualization is the thing that I would tell someone to do because they're not going to change reality until they interact with reality.

49:23And so that's why I just focus on that. So like, did visualization help people? Sure. And they still had to pick up the basketball and they still had to go do free throws too. And so I think that's the, that's the yin and yang of it. But for me, I just focus purely on what we can see. And I think it makes conversation so much easier. And I do owe a disproportionate amount of, I think, the accolades that I receive from content and whatnot, because I exclusively focus on that. And so people say things like, man, your content's so digestible. It's so easy to understand. It's because I just eliminate everything that is not observable.

50:01And then it becomes very clear. And that's the thing. It's repeatable. And people use words. People use words that other people don't understand. People use words that they themselves don't understand. And so it's like, if we can't even define the terms that We're talking about what are we doing. We're just making noise at each other. And then one person nods, the other person nods. Neither person knows what they're talking about, but they've been rewarded for nodding and talking and making noise at one another for a long time in their lives. And so they keep doing it, and that's fine. But it doesn't really change behavior.

50:25And so I'm very obsessed with what changes behavior because if I change behavior, then I change what happens in reality. And that has a high predictive function. Which, by the way, circles back to what we were talking about earlier, which is if you hang out with you and watch you do content, you may realize what you thought was working hard on content is orders of magnitude away from what you're actually doing. You can't witness it. That's what's difficult. It's like I can say, so there's a video that I'm putting on one of the pages for the book, kind of like marketing pages and whatnot, that I've now done nine times.

50:58And we have edited three versions of it. Like I've done nine recordings of it. We've edited it and had to edit it from scratch three times. And I saw the ninth version and I was like, it's missing these two things. And so a lot of people probably would ship it, and it probably would do fine. But, again, 2 % on a million people is a big number. And so, yeah, I think that's the part that people don't see, is being willing to do it again. And that's intuitive, kind of the 2 % multiplied by millions of people. It's a real number. What may be not as intuitive is why there's these zero-sum dynamics in some of these industries.

51:38In sports, there's one champion. you know, Olympics, there's one Olympian, but you seem to think that there's kind of this winner take all in, in many of the things that you do. Why is that? I think in, I think it depends on goal size. If you want to, you know, make a million dollars a year as a long care person, you don't really need to worry about your competition. Like you just need to go find 200 houses that'll pay you whatever the math is to get a million dollars a year. Like it's not, it's not crazy complicated right 400 bucks a month um but in the open ai world right like there's probably going to be one model that ends up you know winner take all or it'll just be like pepsi and coke but there's there's not going to be a ton um i don't know like i guess if there's a network you know effect that's going to occur then it makes sense to kind of like get market share um i guess in the marketing world you could call it be attention share but the so there is a fixed amount of attention um like in the world take 8 million people people times 24 hours or times the number of hours they're awake like there's a there is that much attention right and i think technology has just increasingly put advertised it has stolen attention from irls you know in real life like friends and family um and put it in a place that you can advertise um and so from that's what i think from an attention perspective there like there is do we know what that number is no but there is a fine there is a number and it is finite um and so does somebody watching my video preclude them from watching your video no because they could watch both videos but if they only have an incremental 10 more seconds that they're going to watch one business clip then in that instance the person who has right and so that's that's kind of how i think through it overall but i just i think about a lot of life in, in percentage like, like it's, how, how likely is this, is this increased likelihood that this thing that I want to have happen occurs?

53:36And so that's, that's basically all I do is I just try to make bets. Looking back, reflecting on your career and your inputs and your outputs, do you find that if you would have spent more time on the things that did really well, they would have done even better well, or would you have more diversified your time and effort into different projects? Man, it's a really interesting question. So like the biggest financial mistake I've made was I had Gym Launch and I started this company called Allen, which is a software company that did lead nurture before all the AI stuff. And so it was just like decision trees on responses and things.

54:17If I had not done that and simply made a CRM for gyms rather than a lead nurture software for gyms, that company would have sold for half a billion dollars instead of for$50 million. And 46. to be exact. Um, I, that was the biggest mistake that I made. Um, but when it comes to like, would I have, you know, gone deeper on one thing versus spread out, it's tough because I can't play out the other, the other side, right? Like if I had never diversified, maybe I'd have 500 gyms right now. If I never got out of the first thing that I did, it's possible. Right. And like maybe with 500 gyms, depending on how profitable the gyms were, maybe I'd be richer than I am now.

54:59I don't know. Actually, 500 would be tough, so maybe 2 ,000 gyms by now, or like some monstrous number. So I think the difficulty is like we can't play out the other way. What's been unique about the path that I had because it's been so defined by my ADD, which is why I talk about focus so much, is that like I've had a B2C business. I've had a service business that was brick and mortar. I've had an online service business. The first business I had was an online fitness business that I then turned into in person. I have had a physical products business, which was B2B2C. So I had to manage both direct-to-consumer media buying and ads, and also have kind of a wholesale distribution to brick and mortar gyms.

55:45I have had B2B SaaS with Alan. I've had B to C SAS or prosumer with school, right? I have, you know, the investing side. And then from the exit side, it's like I've sold to a competitor. I've sold to a customer. I've sold to a partner. I've sold to private equity. I've sold to friends. Like I've had, I've done seller finance deals. I've done cash deals. I've done, you know, leveraged buyouts. I've done like, so this, this very weird, it's kind of like calligraphy for Steve jobs. Like that became, you know, key to the Macintosh and kind of their whole vibe. Um, but for me, all of those experiences have made me exceptionally good at what I do now, which is to talk about business.

56:29And so me being able to talk with like good depth on each of these things, cause I founded and started and scaled almost all of those, not school, but like, um, those companies and deeply involved in them, I have a very good understanding of how these businesses work. And so that, like, maybe if I hadn't done any of those, the Alex Formozzi brand wouldn't be what it is today. And so that's why I have a tough time with, like, was it the right call? Well, it's like, I don't, maybe I wouldn't be doing what I'm doing now. And what I'm doing now has worked really well. So, like, I don't know. You know what Peter Thiel says is his number one regret in his investing life?

57:04What? He's actually not doing Facebook Series A. He did the seed round. He was on the inside track. He didn't do the Series A. So sometimes really doubling down on your successes could have really big returns. I think Munger talks about that too. And, I mean, yeah, I think just like what's tough about, and I'm sure you've seen this too, is that like the best companies are really expensive. Yeah, feel expensive. Yeah, they feel great. Yeah, great correction. Yeah, like best companies feel expensive and still yield higher returns oftentimes. And I have to be reminded of that sometimes because like the, you know, I think a lot of this is me, you know, I know you'll have a lot to say about this.

57:55But like I think a lot of investors who start investing their own money, you know, they almost have to reinvent the wheel. It's like Warren Buffett talked about the cigar butt businesses where you just take your last few puffs and they're wonderful prices and fair businesses. And then eventually you're like, you know, this is not worth it. Like we can get even better returns and less headache if we just buy these wonderful companies at fair prices or even would feel expensive. And so I've had – I mean I feel like I'm still – the game's long, so I'm not saying I'm developed there. But I've had to learn that the hard way with just some of the cigar butts fall on your lap, and you're like, ow, that hurts.

58:35It's still lit. Google Ventures, this was like a decade ago. Google's Venture Arm did the study on what drives returns. And one of the biggest signals that they had was when a company was priced at a much higher round than the last round because it felt so expensive, and yet there was a new person. And even when the insiders were the ones leading that round. yeah so the insiders had this like there's this friction of increasing the price and yet if it still got to that price it was still probably underpriced right because and um i think teal talked about this but it's like typically if a company does have this material change let's say in like six months i think paypal had like a 3x or 5x or something in terms of a change in valuation he's like well it's because they like materially changed the risk profile like there was some big thing that they were able to solve.

59:24And so if you have this, okay, I think this is a 10 % likelihood outcome of getting to a billion dollar company. And then the big thing that takes away 40 percentage points there is that there's a network effect that hasn't really caught on where people are sharing with each other or you figure out your viral coefficient in terms of virality. It's like, well, if you get that right, then it's like, well, boom, we go to 50. Then it makes sense that even though the time duration has been small, the problem was still solved, which was the thing that created the discount for risk. That it's just like, it's just, you know, we all are like, it's not fair that six months ago I could have bought this for...

1:00:01But actually, it is fair if it was much more risky. No, we think that way. Yeah. If it was much more risky, it's actually extremely fair. Yeah. No, exactly. Exactly. It's totally fair. It's just the emotions. There's regret. Yeah. Yeah. And then you're like, don't want to... and you're like, if I buy it now, then if I buy it now, I'm an idiot for not having bought it. Yeah, you have to acknowledge your mistake. Yeah, exactly. So now you just hope this thing dies so that the first thing for when, now you hope it dies because you missing out when it was one-tenth the price doesn't feel like as big of a mistake.

1:00:32One of the interesting things on Facebook, the way that it all came together from an investor standpoint is Peter Thiel and Reid Hoffman who started LinkedIn and Mark Pincus from Zynga. And they had almost like this mastermind. They would sit around and talk about social networks. I think Reid Hoffman started outside of LinkedIn. Also started another one that before wasn't successful. And they were in this small room of people that ended up being so huge in the space. When you think about building out your peer set in your mastermind group, I know it's kind of a hokey word, mastermind. But how do you look about your peer group and how do you build that out?

1:01:10And tell me about your strategy there.

1:01:14I would say it hasn't been super deliberate. I would say that a lot of it has kind of happened organically, pun intended with organic growth. But I would say we sit at this really interesting intersection between business and content, which is cool, right? Which is like, okay, there's this creator world over here. And then there's this investing money business world over here. And so finding people that are on either side of that, because like in this room, it's like I don't talk about clicks in YouTube have been retention curves and whatnot and then i go into this room and i'm not talking about you know return profiles um but i think understanding both worlds gives huge alpha on both sides because everybody on over here in the creator world it's like man i just don't know how to monetize and everybody over here is like man i just wish i could have way more deal flow yeah and so it's like marrying those two um creates a huge you know it creates huge benefits on both sides but in terms of um i'd say my my you know i'd say it's less about masterminding and more like if there's ious that i can collect for the future i'll do it if i think that um i might i might need or want to cash it in later and so it's like if i can help somebody out i tend to have that slant of like i'll help if i can um because you never know when you'll need some and so i just try and like dig the well before i'm thirsty and i would say that that's probably been the strategy that i've used um for the vast majority of my my career just like give first as much as i can because those ious have been incredibly valuable for me at in times of need um but like what am i basically who am i actively like recruiting in my my head right now it's not a lot i would say that i'm i'm trying to get more into the tech side of things because like these two sides i feel like i understand okay um and that's you know with all the ai stuff that's going on right now i see that as um uh some deficiency like i'm not deep in you know like i have the ignorance yeah yeah exactly i have huge ignorance that and so i think people even deep in the industry have ignorance that and they most of the people don't know what's going on and they're all running around and then if you're not in the industry you're for sure yeah you're more disadvantaged you're like i mean no i i use catchy of course right it's like um yeah i try not to think about that too much because um it makes me depressed you're the most methodical person i think i've ever observed or looked at and yet you said your networking strategy is you know i like to give and do ious and see what happens yeah so double click on your strategy there and tell me about your thinking.

1:03:51I'm sure you've thought deep on this. What's your thinking in terms of the give and take in the interpersonal relationships? So I would say that the earlier on in your career, so this is me going to the audience more, but like the earlier on in your career, the more generalized you should be in your giving because the variety of things that you will need will be very diverse in the beginning. And unpredictable. Yes. And so you just want to give to as many people as you can. At some point you will exceed your capacity to give. And then if you gain skills, then people will want you to give to them, which then means you start to shift the supply-demand curve in your favor in terms of favor giving and favor receiving.

1:04:26And so when I remember the first or the second, the second kind of peer group that I entered, I actually won an award. They invented an award for me, which was member of the year. And it was because I met with every single person and was just like, hey, I'm really good at these three things. I can help you with these three things. And so I would just do that, which at the time was just sales and marketing. and so I would just be like cool I'll help you with you know build a sales team or help you script this out or help you you know put the sales motion in place with this process and they'd be like can I do anything for you and I'd be like honestly no but I'm sure like I'll need help with insert whatever thing that you're good at at some point in my life and you know that you know maybe I'll hit you up and a lot of the businesses that I had like when I do those like deep dives in industries I'll call up somebody that I talked to five years ago that I did a favor before i'm like hey man you got an hour i just want to understand more about this particular thing that you're involved in um and they'll give me a huge amount of information really quickly and that's because you gave them something of value yeah it's not because you tried to give them something of value you tried versus actually yeah sure yeah i think even trying um still buys you something do you ever remind them of what you did for them so they basically subconsciously have already integrated that that you've provided values and i will so this is me just being transparent between different stages right so like in the beginning i had nothing i had only the only thing i had was skills i had very little money and i was just like i'm good at this and so that's that's what i gave um as i became more materially successful in business people wanted to talk to me in general just because i was pretty good at you know stuff that they wanted to get good at and so i guess the level the level set of the skills kind of kind of increased um but and so not to contradict my earlier statement but like i think where i focus my attention now is like pretty narrow in terms of the people that i will regularly interact with because the it's like the path that like i have i think to use nivolts it's like i have significantly less exploration now and significantly i'm on i'm in exploitation mode like i know what i'm good at and i'm and i'm pretty clear on what the path is ahead right there's there's some there's some degrees of variance but it's still super narrow um and so which is basically getting even better at what you're already doing.

1:06:40Yeah. If I, like, right now, it's like if we have, to call it 15 or 20 million, whatever it is, you know, followers across platforms that are in business, it's like, well, if we get to 50, then that'll be better than 20. What's the TAM of small business owners or however you define it? Well, there's 32 and a half million in the U.S. And that's, if we define that as people who have an LLC. But we're, like, my audience right now is, I think, 55 % ex-U.S., so non-U.S. And so take the rest of the world. There's a huge amount of people there. so um i'm obviously cool with with sticking with the u.s uh and english speaking for now but we'll probably quickly not quickly but like probably in the next quarter or two we'll be transitioning to everything will be all languages yeah i'm in ai obviously yes it enhances that for sure i'm guessing you're not learning 10 different languages actually i'm really curious your take on this so like i have held back even though like the tech has been there for probably two quarters for us to do the translations and dubbing in in different languages globally especially on like YouTube, we can do it all.

1:07:37I haven't because I actually don't want deal flow from countries, from people that I don't speak the language for. Now, maybe the 2.0 version is probably me being short-sighted, but like the 2.0 version of this is like, we're both talking through AI mics to one another and we're both listening in our own languages and whatnot, but I just haven't done any international deals. And so that's why I haven't really pushed it. And also, So it's not like we can give them services in a language they don't understand. You know what I mean? So I'm curious to your take on that. I think that's very thoughtful.

1:08:10I think it makes a lot of sense. I think also one of the areas that AI is going to really help is deal flow analysis. So you're going to be able to, if you don't already, you'll be able to process hundreds of thousands of deals to find the one or two that matter. That being said, you don't want a product in the market that disappoints 99.9 to the 12th power of your audience. So I think that makes a lot of sense. Okay. No, that's interesting. To your point, though, some of the AI stuff, it's like resume screening, right? Like you just upload job description and say, here's 500 resumes. Tell me which one are the ones that you would select, and then what questions would you ask these people?

1:08:54and it's exceptionally good. I want to put a cap on this giving and taking. Growing up, I thought managing money meant paying bills and balancing a checkbook. But as you know, that is only a small piece of the financial puzzle. Managing your money takes more than just checking your bank account every once in a while. And great financial decisions come from having a complete picture and proactive management of your income, expenses, and investments. Take control of your finances with Monarch. It brings together all of your accounts, investments, saving goals, and spending into one place. making it much easier to understand where your money is going and whether you're actually on track to achieve your financial goals.

1:09:28What I like most about Monarch is that it doesn't just tell me what already happened, it helps me plan ahead. The AI system lets me ask questions about my finances in plain English, and the AI weekly recap highlights spending changes or upcoming expenses before they become surprises. It's like having a financial advisor in your pocket. Write your own money story with Monarch. Use code INVEST.MONARCH.COM to get your first year of Monarch Core half off at just$50. that's 50 % off your first year at monarch.com with code invest because i think you're really good and you have been very giving to me i just want to understand your strategy and what are some of the mistakes that you made i'm sure you gave too much to somebody or you made an ask too quickly like what are the best practices there you know i actually don't think i've made an ask too quickly um i i'm maybe i tend to be like too ask insecure of like i want to make sure that I leave no doubt that I have given enough here that I can make this small ask.

1:10:30You know, I would say that honestly one of my best skills has been that. I've never actually identified that until this moment right now. But it's probably one of my strongest skill sets has been knowing when to invest and when to pull back in relationships. um and people will probably see me as transactional um i just believe everyone's transactional and some people are just better at defining it um fundamentally like you if you have a like if you have a relationship with someone and like man we you know we used to be homies and you know i got to be loyal to that to me translate that into human behavior is i have a history reinforcement with this person and i have a belief that that that reinforcement will return on a long enough time horizon.

1:11:16And so I'm willing to incur some cost in the short term. And obviously the relationship that you've had the strongest and longest periods of reinforcement for like a spouse, you're willing to give longer periods of time where things suck in order for things to, you know, come back to being good or different. Or the payback is your ego of being somebody that never defriends your homies or is always like friends with the same person. That's your payback. Yeah. You get to see yourself as such a good person. Totally. Yeah. You get to be an idealist. I got a definition for So I call a friend somebody that provides more value than he or she detracts from you in your life.

1:11:50Yeah. So a lot of people don't fall into that category for many people. A lot of people don't fall in that category. And also, it's also two-sided. So you could have somebody completely crazy that you would never even want to associate yourself with. Yeah. But that comes through for you when you need them. That's a friend. And somebody that's there every day and just like, you know, making you depressed. And you've known for 30 years would not be a friend. No, no, it's really good. And what's interesting is that if you keep a relationship, right, then it means you do have reinforcement from this person.

1:12:23The question is, what are they reinforcing? So, like, maybe you hate being alone. And so even though you don't like being with them, you prefer being with them than you prefer being alone. Or to your point about the, like, you have some story that you tell yourself about how you are X person, and you get to tell yourself that story over and over again every time you see this friend. And so this person having this relationship serves you in some way, and it's usually just not in the way that people expect that they're being served. But to try and put a nail on the original thing, I think one of the big – like I wish I knew where I read this.

1:12:59but I remember being completely engulfed in this game theory book about basically the prisoner's dilemma where they played out different give-to-take strategies within the prisoner's dilemma. And they proved that the best give-to-take ratio was 8 out of 10 give-to-take. Because if you're 10 out of 10, you get walked all over, right? And if you're on the other side— So 8 give, 2 takes? Yeah, basically. um and and they even went so far as like it's eight out of ten and they factored in forgiveness and learning between all the players with the different give ask ratios and so it was like um somebody who learns um but does not let someone wrong them yeah at an eight out of ten and so it's this really like it's pretty precise in terms of and i think the the reasoning behind it because they wrote this whole thing about it was basically the eight out like you have to give first most of the time because that's what opens up doors of opportunity if you're a tit for tatter so the five out of ten like give and take then you don't wait for the other person to give and then you get yeah those people don't get nearly the exposure of the eight out of ten people on the givers because they open up so many more doors by giving first the never askers just never they never benefit right and so there's a there's a sweet spot which is disproportionately giving but you still have to know when to ask and um i think this is really this is i think about this a lot because this it's actually very akin to people who get good at saving, saving money, just in a basic term, withdrawals and deposits, right?

1:14:34There's, I call it the fallacy of the third marshmallow. So in the marshmallow test, you know, they have, take one now and take two later. People have this pathology where they believe that if I wait forever, I'll get a third marshmallow, like an even bigger outcome. And that's not the truth, right? There is a point in your life where you should start spending more money than you make, which is frightening for high achievers and earners who've spent way more time always earning more than they spend. But it's like, okay, then at the end you have this big pile of crumbs as an ant and then you die.

1:15:07And so you didn't get any of the – so there is this sweet spot. Obviously, it's difficult to get to, to balance that because most people don't even know how to save. So this is only for high achievers that I'm talking about here. But I've had so many doors in my life. And so functionally, what I think organic content did for me was it allowed me to do that at scale. So prior to me making content, like Layla existed in my life to be the yang, to my like yin of give first. So she was like, you just like Alex would be nonstop just like, let's do this dinner. I'm going to hop on the phone for three hours and help this guy do this thing.

1:15:48I'm going to help this guy with this. whatever the things were that I was trying to help somebody with I would just always do that and she would be the one who was kind of like and that's why I think Laila and I've been such a good partnership um and she'd be like I think you're about to get taken advantage of here I think you're I think they're just they're just using you at this point yeah um and so it was right she would kind of pull me back um but as soon as I was able to transition into making content um that allowed me to it's the same energy for me like me making content is the same energy as what I used to do for one person, all that effort, and for helping someone solve a problem, I now just do that same thing, and then just many people benefit.

1:16:24And so that's where the huge leverage on giving came. Instead of fighting your intrinsic traits, you've weaponized it into scalability. One-on-one. It reminds me of a quote that Naval says. He says, my brand is my value add. He'll invest, and he'll say, my value add is that Naval Ravikant has now invested in your business. So for you, your brand is your value add. Yeah. And your content is your value add. Yeah, and ideally, someone's had such a strong history of reinforcement from consuming stuff and using the stuff that I gave them that I'm already in the green. You know what I mean? Like if they do a deal with me, they're like, you've already paid for yourself.

1:17:04A surplus. Right. Before you've even talked to them in real life. Exactly. And so my cool giving strategy, I know this was probably deeper than you expected, but it was actually an awesome question because I hadn't thought about it. But my strategy has remained the same. I give to as many people as I possibly can. It's just that as soon as technology and distribution came into play with media, I was able to put that on absolute steroids. And so I do significantly less these, you know what I mean? One to one. Yeah, and those ones are... But there's also the audience. Yeah, exactly. That's what I'm saying.

1:17:36So it's like, there's still an excuse, right? There's still a scale. Um, but if, but that's, but if I'm, if I'm going to choose at this point, and I'm sure you have the same issue, which is there's the supply demand of your time, right? There's just a, such a limited amount. And as supply, sorry, as demand increases, the supply is fixed. And so it just becomes so, so, so precious. So you have to just almost be path a lot. You have to completely switch, which is what's been tough for me, but I have learned it is you have to almost pathologically say no to everything. No is the default. How many messages are inbox?

1:18:08A lot. I'm always very conscious to text you because I feel bad because you're probably have thousands of messages. No, but when you take it to the national extreme, it's like you don't actually owe someone a response. Especially since you've already given them so much of your content. So it's not that they haven't done anything for you. It's that you've already done so much for them. Just the time. So right now I probably get somewhere in the neighborhood of a message every three minutes across social media. It might be hard. It's probably in that neighborhood. Right. And so like if I were because I remember I think it was right after the book launch.

1:18:46Yeah. Right after the book launch or my offers book, maybe it was an offers book came out. I manually DM'd anybody who who tagged me in the book and I said, could you please leave a review? And manually being you did. Yeah, I did it. and I remember finishing my inbox and then the responses from the people who I DM'd plus the new DMs that had happened in that same period of time were greater than when I had started like it's like you have to paint the bridge by the time you get finished painting except it would be like the bridge now extends it's like it was literally impossible for me to actually DM every single person because by the time they had responded there was even more that I had to respond to their response.

1:19:32So I had to just get, I did it for four days. That's all I did because I wanted to get office. That's another efficiency thing. Yeah. It seems hyper inefficient, but yet it probably made your book rise and it had some network. Yeah, it got to a few hundred, I think it got to like 600 five stars within the first few days. And I was like, okay, that's now, it's an Amazon book that it doesn't look like it has five, you know, five stars on it. but all that to say in the beginning you have to say yes to everything and in the end you have to say no to everything and so being able to manage that apparent dichotomy comes down to resource allocation which is still the core entrepreneurial skill set like where is it worth it what got you here won't get you there one tip that I that I've learned and I think I came up with this I can't remember where I learned this but how somebody treats you in the first day in the first week of how they when they meet you is how they will treat you over the next 10 years because it's not about you it's about them some people are naturally givers some people are naturally takers no it has nothing to do with you they're a formed individual they might be a 30 year old they have 30 years of conditioning just because they met you doesn't mean yeah you change their behavior in neurobiology so i tell everybody notice how somebody treats you in the first day because that is how they will treat you for the rest of their lives and that that's very telling It's super good.

1:20:54I'll give one more. I'll give a tactic too that I found is never decline or cancel the first meeting. Because like you meet at something, someone makes an introduction, you have a text convo, whatever. And someone says, hey, can you meet at 7? Or can we do this dinner? Can we do this call? things come up because especially a new connection is very has low typically has low issue value to you as a person so like almost anything that could come up that is not that you probably might be willing to move the the call or the meeting forward to take the thing that you know has more importance or whatever i i have found that it's very difficult to get the second like the second conversation or the second meeting after the if the first one gets canceled for whatever reason, especially last minute.

1:21:48And so I have like an increased priority on making sure that if I do meet somebody who's new, and I think they're worth meeting, that that meeting takes a huge priority to one happen quickly. And then second, that it actually occur. And the flip side of that is that I'm actually willing to be very flexible for first meetings, because I think that typically even just to that one meeting, it's like, it transforms from being like, someone introduced us to like we have had a conversation and i have a good feeling i have some feeling about this person strong signal yeah exactly one way or the other and even from one meeting i can i can probably call somebody up a few years later because like we had the meeting if we didn't have the meeting it's useless and so i try to prioritize that one other kind of relationship hack that my friend max who worked at goldman for many years he said always be willing to fly out even if it's 3 ,000 miles for a single meeting.

1:22:40Yeah. And because it's that powerful. If it's an important meeting, flying out and spending a day or two days, it goes back to this efficiency thing. It seems hyper inefficient. But yet if you calculate efficiency as input over output, it's actually highly efficient. And especially because there's the assumption that if I'm flying out, I'm not going to somehow work on a plane. Yeah. Which is like, it's almost like... Or meet other people. Yeah, some people just choose to fly because it's the most efficient working. So like it's really just the meeting takes the same period of time. Like the only inefficiency is the drive from the airport to the meeting.

1:23:13Like that's the actual inefficiency in that process. And I'm so on board with that. You are one of the best communicators I've ever come across in real life or on YouTube or podcasts, et cetera. How have you become such a good communicator? Break that down for us.

1:23:35I'd love that the response starts with um. uh filler filler yeah right yeah um

1:23:49it comes down to every everything that we've talked about which is you have to define the terms that's like that's really it like if we think about communicate like what is communication right um so what is so what is the objective of communication so i would ask that and i'll communicate. Yeah. What do you think? What do you think? So what is the output of communication? If I were to ask you. It's interesting because when you say that, my head goes to two different things. One is sounding really smart. Sure. Yeah. And very charismatic. Another one is transferring knowledge. Okay. So for me, the purpose of communication is solely to change behavior.

1:24:23That's it. It's the only reason that we communicate anything to somebody else is to change their behavior. Now, if we want to sound smart, it's because we want to change their behavior around how they treat us in some way. We want them to treat us like they treat people who they think are smart, right? Or have a social status. On the flip side, what was the other one you had? So one was the being smart, the other one was transferring information. So one was the being smart, the other one transforming of it. Right. Epistemology, essentially. Yeah, and so if I want to transfer information, I don't actually want to transfer information.

1:24:49I want to get someone to do something, right? So either of these situations is the purpose of communication is to change what they do. And so if we say that is the point of communication, then being very clear about what I want someone to change makes it way more effective. And so you waste so few words when you're clear, which is what I want you to do. And so on the flip side, I listen with that filter, which is I had a meeting with a VC. So they're on the board of one of the companies that we're invested in. And they wanted to touch base. And I was like, okay. And I asked five times during the meeting, I said, what would you like me to do as a result of this meeting?

1:25:34And they're like, well, we just wanted to, you know, just get your perspective. And I was like, what is going to change about reality as a result of us talking? And there wasn't really a clear answer. And that for me just drives me absolutely bananas. And so then I have to infer what I think, because obviously there is a point for the meeting. And so there, you know, I'd be like, there is a point. There's either they're going to tell me or I have to figure it out. But that's allowed me to make such stronger predictions on what someone wants from me. And also, if I want something to occur, asking like even simply like if you have an employee who messes something up, right?

1:26:16The natural instinct is you want to punish them in some way because you're just upset that they messed something up, right? It's a very human thing to do. but if I think to myself what would I like to have happened what do I want to occur it actually fundamentally changes what I'm going to say to this person I'll give you a perfect example of this so um gosh I want to say six seven years ago I had I launched a company called done for you meals so we had our distribution of gyms and I thought maybe we could do done for you meals I partnered with the white labeling you know company that did it and then we launched it right so this was a huge launch for me at the time and we had 4 000 gyms who'd signed up to you know attend the launch of 4 000 locations saying that they wanted to distribute meals is a lot of locations like that would have been really big and so the day before the launch uh was supposed to happen my call it my secretary sent out the text at noon saying we're live 24 hours early and so now all 4 000 these people are like i thought it was tomorrow but people are like well they said they're live and so they start hopping on this zoom after like probably a million dollars in advertising and months and months of prep for this launch and so um she's like well i do and i was like you need to hop on the zoom and you need to have a sign that says you know we messed up and so people hopped on and were like god damn it hopped on guys like just over and over again and she just stood there with the sign telling people my bad it was there tomorrow and so after that you know onslaught she um you know i i met up with her and she said um don't worry i'm packing my stuff like you know i'm i'm i'm sorry i'll i'll get i'll get out and i was like what are you talking about and she was like well i'm assuming you're firing me i was like well does this increase or decrease the likelihood that you're going to make a mistake again in the future and she was like well i mean i'll never make this mistake again i was like right so you're technically more valuable to me now than you were before and so i was like i just paid a million dollars for you to learn this lesson and never make the mistake again i was like i will always trust you with my launches because you will never have this happen again now if somebody has a history of many many many mistakes which this person didn't then might have been maybe different but this one i was like i was sure i mean she was she was the type of person that would she would like die of anxiety in front she actually doesn't i don't even get into it but like she had huge anxiety issues around this stuff and so for her to make this kind of mistake was like gargantuan um and so thinking about it from that perspective of course i was upset but what is it me yelling at her increases the likelihood that she makes a mistake again in the future because she's stressed so thinking always through that filter has has double click on that why would that increase so let's say there's a launch three months later yeah why she let's say you yelled at her the first time why does that increase the chance well i think that she'll just she'll just have increased anxiety and she already had too much anxiety so if anything anxiety leads to errors yeah yeah exactly why is that um that i don't know i would just say that i've observed people who are very stressed out and like if you go on stage and you're very stressed you do worse than if you're relaxed i would say in general and so people don't do as well when they have super high adrenaline that would be my my pseudo-scientific guess um but that has been my filter and that has has led to like such higher percentage goal achievement and behavior change in the direction that I want.

1:29:29And so this also works with relationships. Like if you have your wife and it's like, you're upset about something, but it's like, does this increase or decrease the likelihood that she wants to talk to me? Does this increase or decrease the likelihood that she does this thing again in the future? And that has, I'm telling you, like that has been, so you asked the question of like, why are you such a clear communicator or a quote, good communicator? It's like, number one, I define communication as change of behavior. And number two, I'm very clear about what behavior I want to change. And I only think in service of that goal.

1:29:54And that's it. so said another way yeah what you say in a youtube video gets people to change and that ties it back to they're conscious of this that ties it back to your content versus i might listen to somebody else and it sounds really smart but it's not actionable and it doesn't change my life as much as a hermosi clip and that's what you would attribute to your communication not some kind of stylistic ways of talking or some rhetorical device maybe there are some um i would say they're not super conscious i would say some rhetorical devices might be like alliteration i know like if i can say something that alliterates it like people tend to like it give me an example um shoot i don't know we just look at my twitter you know like but like if i say you know i say if you if you repeat words in a sentence or if you have you know flips of like um

1:30:46it's more sentence structure

1:30:51it's not the x to the y it's the y to the x right that's almost always going to be something that's going to convert no matter what the the x's and y's are if if the sentence still makes sense in both so you like kind of look for those like isms that that makes sense um words that are similar in nature um you know exploration and exploitation have all talked about that like he used those words because they sound similar and they start with start with the same letter right and so because if it rhymes it means it's true uh i'm joking but like we do remember that right like um and so where this gets really nasty in a cool way um is that if you want to change someone's behavior the most effective way to change their behavior is for them to think it's their idea for them to think it's their idea it means they have to remember it and so by making things that are memorable people will forget that you were the one who said it but then they will think that they said it or they thought it and then they will believe it's true and then they will act on it and so having rhetorical style increases the likely that you change someone's behavior basically vis-a-vis that that pathway um so that's on the stylistic part but i still think the vast majority of it um to what you originally brought up is if i can give people clear instructions on what to do and then they do those things and they get the outcome it will increase the likelihood that they listen to my instructions again in the future and somehow their brains are are linking it so the dopamines are getting released ahead of the time that you're even talking because the last three times that they've listened to you history of reinforcement yeah history of reinforcement it's not really what you're saying it's the history of providing value-added advice to people that basically makes people just in encapsulated what you're saying and i'll give you i'll give you an example so of i had this happen to me so i'm not a huge uh i I don't consume very much.

1:32:43We talked about this earlier, but I saw this clip by Huberman and I don't listen to much biohacking stuff in general, but he said this thing. It was like, how to get rid of hiccups if you have hiccups? And I watched it and I was like, huh, I'll remember that. And then I had hiccups like a month later and then I remembered the clip and then I did the thing in the clip and my hiccups went away. And in that instance, in that moment, he gained influence over me. I am more likely to listen to something else he says in the future to solve a future problem that he prescribes a solution for. And that happens whether you want it to or not.

1:33:20Let's see, they're more nasty about that. For you to even remember that clip, you already had some level of subservience or status to him speaking. Enough to try it. We have, there was a study, Queens University, we have 6 ,200 thoughts per day. It used to be there's this old tale that's like 60 to 80 ,000, but 6 ,200 per day. So we, and we forget almost all of them. So you don't even remember all the thoughts that you forgot. So the fact that you even remembered to try it itself, there was status and then you were reinforced. Yeah. And so, so functionally, that is all I'm trying to do within a very narrow audience of business owners, which is if I can give, and this is where it separates from, I read this book, I thought it was good and I read Hermosi's book and it made me this much money.

1:34:06That is what I'm going for. And if I do that, like, there's i think it was boardwalk empire um he says uh nothing says sorry like money or nothing makes friends like money i can't remember what the saying was but i just i remember hearing that i mean like that's cute i will remember that and so it's like well what do most business owners want most of them want to grow most want to make more money well why don't i just give them instructions that i think will increase the likelihood that occurs now when i do that over a massive population there's going to be a good percentage of people that will be better off from directly following that thing like i think martha stewart was one of the most influence or was the first female billionaire self-made because of the nature of her content so the reason that uh entertainers have significantly less influence than educators is because entertainers never give you anything to do they just distract you the point like what they never let you disappoint yourself right what is the output of entertainment the output of entertainment or what's the point of it is to continue to be watched that's it the only point of entertainment is to be consumed.

1:35:06Now, the point of education is to change behavior. Now, can these two things occur at the same time? For sure, right? Like if you watch the Avatar movie, plenty of people at the end of the movie felt more green earth and might have changed their behavior. So in that instance, it would have changed some percentage of the population. But if you are a pure educator, then you gain more influence because you have given people instructions, they have followed those instructions and they have improved their lives. And so when they want to improve their lives again and you give them instructions on how to do it, which might be buying your thing, they're more likely to do so.

1:35:41And so that is why these, you have these massive TikTok accounts, you know what I mean, that have 20 million subscribers and they launch a popcorn and no one cares. Whereas you have this micro influencer, I have this lady that I met, 5 ,800 followers on Instagram. She only makes content about how to more effectively bill insurance as an RD, a registered dietitian. That's all she does. She just talks about how to better bill insurance for registered dietitians. For 5 ,800 people. Yes, 5 ,800 people. And she's doing, I think it was one or$3 million a year, I can't remember, but it was between one and three, a million dollars a year in that business with 5 ,800 followers exclusively sourced from her Instagram.

1:36:25And so you say that to, like an entertainer, plenty of entertainers have a million, 2 million, 5 million followers and barely make a million dollars a year. She has 5 ,800 and she's making over a million. And so to me, the difference there, the differential is just influence. Now, does it make sense for the Logan Pauls and the Mr. Beast to have these brands that then they confer some status to whatever company is? I think the greater value is that they increase exposure to the product and the more quote on brand it is the more similar it is the things that they have reinforced their audience for it then the more likely it works um but this is something that i think i mean obviously i think a lot about it like why do some entertainers products bomb and other ones succeed to me it comes down to this let's say you want you needed to start a YouTube without your face, you had AI replace your face with just some random person nobody knew, how long would it take for you to reestablish and to get rabid fans for that?

1:37:36I think it would still work. And I actually, I just, it was so weird you asked this. I was thinking about this this week. And I have proof that it's not because of my dashing good looks and my high sense of fashion. It's because, like when I started, my first book that I wrote, $100 million offers. I had virtually no following. I had enough following to make a post to say, I wrote a book, go check it out. But then that book, every single month, sold more and more copies than the month before. And that was before I had an audience, before I was making content. And so it was the quality of the ideas.

1:38:12It was a book. They didn't even see me. It was just text, right? The quality of the ideas, the clear of the communication, is what people were attracted to. People read it, applied it. Got results, told their friends. Yes. And to this day, offers still continue to sell more and more. And the brand was actually the book. It wasn't even human. People don't know that. Yeah, I'm a writer first. Like X is my, so all content that you see from the Alex Ramose brand is written first. So like this is going to get wild. I post on X probably 30, 40 times a week. I post all the time. from the posts that do well those become shorts that i then say those those tweets they become carousels that are just different versions of the exact same tweet they become the captions of all of my images and so if i have a one tweet about friendship they'll just search friendship of my you know six seven thousand tweets that i've made and they'll just find another friendship tweet and post that as the caption my linkedin is multiple tweets string together just in longer format my youtube videos are like 20 to 30 tweets put together that are high performers 27 with transition truths 100 100 that are transition lines every single thing that comes out was started written first they're like how can the brand like how have you been able to get so much content out when you don't control it.

1:39:45Well, I have one pot that I put my effort in, which is X. And then that feeds literally everything. Your team literally goes in and repackages. Our paid ads are my organic content that are high performers, which came originally from Twitter, or from X. And then we just staple CTAs on the end. And the principle there is that if the atomic unit of the tweet is good, but putting them together will create something even better. 100%. And then you put in a bunch of lights and a bunch of crazy graphics, and it's going to be even better. What's interesting is that it doesn't work in reverse. So if you have a viral clip, and then I take the transcription, and then I post it, it may or may not do well because there's so many other variables.

1:40:26But if the foundational need of just black and white text, the idea, the words are interesting or compelling or clear, you can do it in another format and it works. when you have an original idea how much of it is something you've heard before said other words or yeah is there such a thing as a truly original idea i would say that the the majority of my tweets come in response to things so either it's something that will come out organically like we'll have this conversation and my team will be right there and they'll be like you said these three things we wrote them down for you and then i'll just tweet those out or I'll scroll, I'll see something that'll trigger some sort of like, well, that's retarded.

1:41:10And then I'll basically tweet a response to something that I won't call out. And so that's why sometimes my tweets are emotionally charged is because like, they're typically me responding to either something that happened, you know, like somebody shows up late and says something and I'm like, people want to get these, because like I'm like, this person wanted a promotion and he didn't show up, he showed up late to a meeting. I'm like, what are we talking about here? right so then i probably have some you know triggering tweet about being on time and how they people don't even do that they want the world right um and then that would probably get some people upset on linkedin and now they're like you should you should you know whatever and so that's um that's the core of how um everything that i have is spread but to loop to the original of like if i had a faceless account um would it work i think so because it's the ideas and clarity of communication to your point do i think it's original no I think the thing that makes the content maybe slightly more, slightly differentiated from other people's is, number one, is I always try and state the facts and tell the truth and focus only on the observable.

1:42:13And I talk in terms of behavior. And so the nice thing is that if you have those two filters and you apply it to all content, you can filter out the vast majority of content because it's mostly noise. people just like quite literally knowing people just making noise with their face and just saying words that they've never defined and not telling people to do anything and mostly entertaining when they think they're educating. And so it serves as a wonderful filter for consuming information. But in terms of dispensing, the word composition becomes so much tighter that the quote value per word or value per second goes way up because you actually can do something with this.

1:42:48One of the topics you talk a lot about is doing things that other people may not approve of. Yeah. And now with your social network, you're around many billionaires. Yeah. And you get to observe them. What is something that billionaires do that would surprise the majority of the population?

1:43:11I don't know if it would surprise them, but I guess it would probably be jarring for many of them in close quarters, is they would probably be surprised by the level of agency that billionaires will demonstrate. Like they're, almost all of them are just, they come up to their own conclusions on their own. And if everyone disagrees with them, then great, because they got there by disagreeing with the masses. And so like you can't have an exceptional outcome and also do what everyone else does. Like it's their antithetical, like you can't. And so you're, you know, kind of by definition going to get people who reason for themselves.

1:43:44And I think that that's like, it's such an underappreciated, underestimated component of success to get outsized returns. You can get beta, right? You can get the normal returns. And I say not just from an investing perspective, just from like a life perspective. If you just like get life beta, right? If you just follow the norms, like you will get a normal outcome. If you don't want a normal outcome, then by definition you can't follow the norm, which then means that you will be an outcast. You'll be in the out group. You will be not the norm. And then people have to in some way resolve that discrepancy or that apparent discrepancy.

1:44:22And so and the more outside the return you want, typically almost like the more willing to disagree or willing to disagree with comment, with convention, you have to be. and so i would say that that's uh probably a huge through line for all of them um beyond that they focus on leverage focus on what they're going to get you know return on time return on effort i see that as a huge thing and if you are able to make decisions for yourself and get the highest returns possible which is only enabled by making decisions for yourself then you typically get better returns than people who don't i've interviewed now eight billionaires i found two two necessary components one is going non-consensus doing something away from everybody else for many years typically and two is some compounding either it's network effects where it's like facebook every new user or it's a marketing advantage or some financial advantage so it's literally like running in the opposite direction everyone's walking in one direction you're not only going in the opposite you're sprinting you're all in like 90 miles per hour and everyone's looking at you like you're a crazy maniac no and for like nine years and people i think that's one of the things yeah people do not realize how painful that is for nine years this is why i think that first point that you made and i just made about like being willing to buck consensus or reason from first principles reasons for yourself is that if you only believe what you believe or act in the way that you act because of other people's approval or it was because someone else's idea, it's very difficult to maintain conviction for an extended period of time.

1:46:05And so if you find yourself waffling, it's simply because the ideas that you're adhering to are not your own. If you derive something from zero and built the foundation of whatever reasoning you have for whatever outcome or conclusion you have, and you believe in all the math or, you know the reasoning that you're you're basing basing the the decision on if so if someone just if the whole world shouts at you that two plus two was five if you're like it's here i mean here's two bottles and here's two bottles and one two three four like that's what it is you're and if you know that there's a big pile of money if you're right on that then you're almost excited that most people don't agree with you because you're like it's just going to mean a bigger pot at the end and so i I think that it's so difficult for most people because thinking is very hard.

1:46:51It takes effort. You almost need to create a bunker of like-minded people that believe in what you believe. And you could basically stress test each other's theories or have somebody stress test and be like, are you seeing what I'm seeing? Oftentimes, we have the same thing. We're merging media and limited partners. Literally, trillions of dollars of people have gone on this podcast. We're at$5 trillion now. That's amazing. And now it's become a little bit more consensus. But in the beginning, people are like, why are you running a media business? Why not an asset manager? We're like, this is that.

1:47:20This is the right to win. This is a competitive advantage. So even the most obvious things, if they're non-consensus, it could seem like you're an idiot. You're like, well, explain to me how this decreases the likelihood that I get more deals. Yeah. Or explain, here's my logic. Poke holes in the logic. Forget about what everybody else is doing. but here's kind of my business plan. Yeah. And sure, like I want to actually improve, which where are the big holes here? Yeah. What assumptions am I basing this on that you think are wrong? Because there's obviously going to be some assumptions that we're not going to improve.

1:47:54And so some of them are going to be wrong or could be wrong. And how wrong can I be and still be right? And how many of them can be wrong and I still be right? And so I like, we call them need to beliefs, but like if we have some big bet, it's like, what are the need to beliefs for this to work? And if we're comfortable with the, like there's really only one need to believe and we we think it's likely then it's like well hell like let's let's push let's push our chips in this rooting of conviction i think is the most underrated thing one of the most underrated things investing the joke is people ask when to buy they never ask when to sell yeah and i'll give you a good example let's say your friend told you to buy bitcoin at a hundred dollars yeah a decade ago you probably would have sold at 140 once it went down from 160 yeah right so you could have bought bitcoin but if you had spent you know 10 15 200 hours really understanding bitcoin and stress testing you and understanding the strengths and the weaknesses you might have hold hold yeah hodled because you actually had conviction so i think it's this investment of time and understanding and rooting of conviction that helps you weather any kind of storm and i think the only way that you can have that level of conviction is either you're delusional or you have it in some sound argument that you reasoned.

1:49:14And I will also say this is probably like one wrinkle that I would add to the two elements of like high agency, some sort of leverage or compound, you know, some element that gives them better returns is the willingness to change on a dime if something of some part of their reasoning was proven untrue so it's not like they are romantic with the truth not romantic with their process of getting the truth and so if you said here these are the these are my five points and this is why i'm going all in on this thing if someone says well i think this one's wrong and here's my evidence my experience um the people that i've seen that are most successful will just look at that they'll take like a big long you're right we need to change everything and it's just like and then they take action right because they're like wow this whole pillar that i that i base this whole you know thesis on is actually incorrect and so i need to change everything now andreessen horowitz defines this as strong conviction loosely held the ability to have very strong conviction but yet be able to revise them when new data comes up he's great he's a g i love his ex we're both big elon fans i sent you some clips on elon specific specific portions uh i've been going down this rabbit hole of how he manages his companies how do you explain how a human being could manage seven companies now also run doge and all the other things that he's doing

1:50:45i can't you know i mean i think he gets he has tremendous like he obviously gets tremendous return on his time and operates with huge operational leverage. Um, there's, you know, the thing is I have, I have very little insight besides the clips that I see, you know, on, on Instagram is like, what is reality? Yeah. Um, so I mean, decision-making is probably some of the highest leverage thing that you can do. And so it's like, it's probably just what is the minimum amount of context that is required to make an accurate decision. And then he just is a decision making machine um and is able to spot problems pattern recognize and quickly correct course on the most important things across that many companies i mean it's obvious that he has some i mean i think he said it was like some sort of genetic mutation some likely thing that his brain works better faster stronger than most people's um but from what i understand he just basically works until he's exhausted then plays diablo for you know a bunch of hours and then And that's what gets him down the plug.

1:51:47And then he starts again. He obviously has a bunch of lieutenants in each of those companies that he has absolute trust with. And they know kind of like the Elon way. And so I'd say probably a large degree is his ability to reinforce behaviors within the company that are conducive to value creation. and so that has to happen from the top down in terms of like what culture exists at SpaceX or Tesla or the boring company um where they operate with this you know in his words a maniacal sense of urgency at all times and I think a big part of that is you know one of the things that I think Elon has been exceptional at which is something that I'm it's actually a deficiency of mine something I'm working on is like he's very good at painting a very clear vision for the future which is typically like a big amorphous word for you know if someone like me to say but you know we're trying to make human life multi-planetary okay that's a gigantic goal and in order for that to occur we need to have solar power in order for that to occur we would need to have cars that work on electricity in order for that to occur we need batteries in order for that to occur we would need uh you know tunnels tunnel technology in order for that to occur we would need to have that freedom of speech and so he has he has somehow because of this massive thing that he wants linked every one of his companies to we're saving the world and i think that people will bend over backwards and work a hundred times harder to save the world than they will for just about anything else and they will also sustain and endure significantly more pain so there's this this study was done i wish i could remember what what the name was but basically your ability to endure pain on behalf of somebody else is like five times greater than your ability to endure pain on your own so like if jessica's in the other room and she it was like you take a shock or she takes a shock your ability to sustain higher and higher levels of shock is is like supernaturally higher if you know you're saving her from the shock if it's just you you tap out way sooner and so i think that that can be generalized to like i mean people storm the beach of normandy to save the world functionally at the time right um and so i think that he has he has created that environment where everyone feels as though they're saving the world and acts in accordance with that and so if we think about a vision and culture or values as very large bundled direction sets that included within them have hundreds of behavior sets underneath of them that orient behavior, then they are some of the highest leverage things that you can do in a company as the leader of the business.

1:54:34It's just difficult. It's rare. It's not common that like our bank is saving the world. Like we're going to have to have banking in space. Like, how do you tie that? You know, like my fund is going to get a good, like, how do you really get everyone that level of motivated? And I think that to me is like, obviously he's got the deep technical expertise obviously he's he's a he's a maniac with his time and all that stuff but i think that he's able to get that level of behavior change across hundreds of i don't know how many employees he has lots because of how that how everyone's oriented towards that goal do you want me to take a stab at this one please i'm i'm like uh i'm like the one-eyed uh man in the land of the blind i've had probably dozens of conversations uh so i've seen a couple aspects yeah one is he fundamentally redefines what in the ceo title he even had this whole tweet how ceos are made up titles so when you when you apply for delaware c corp there is no ceo title so it is fundamentally made up yeah he doesn't he doesn't do things like operations and things like that there's probably for everything that he does he doesn't do a hundred different things so first of all he fundamentally focuses on a couple things what he focuses on is really his brand this brand allows them to recruit the very top engineers in the world i interviewed jamie gull um who previously worked at spacex and one of the things i said that there was a lot of people at spacex that were lifers because they couldn't find a bigger mission yeah you know they they believed and i think appropriately so that human beings going to mars was important for for the for the species to survive so so one aspect is he uses brand and recruiting the other thing the most interesting tactical thing which was uh popularized by mark andresen is he goes into his companies and he deals out with one issue a week and he sits down with people five to 15 minute meetings and he says what is your number one issue yeah he helps them solve that which has two effects one is they're constantly getting rid of their constraints they're constantly removing their bottleneck at speed and and four and this kind of bleeds into the fourth aspect is he is a player coach yeah he is in the cockpit he is working the 100 hour weeks he's not telling people this is this is my mission now you go and i'll be on a yacht sure he is in in the arena battling uh battling the bulls with everybody and i think that really has huge effect on the culture a huge effect on recruiting i think the more interesting question is how did he start spacex before he was elon kind of like how did you start with 100 million dollar offers yeah um you know i have theories on that but today he just keeps on leveraging his existing uh which is recruiting and brand and those are inter interlinked and when you go when you go to these highly technical problems there's actually the most finite resource is actually not money it's actually engineering talent the top top engineers in the world yeah the 10x or the 100x engineers and he has a large market share of that sometimes they even transfer companies that's what i've been able to know i love that so far i love that and so i took so two things then one add-on so the doing you know helping them solve in these five or 15 minute meetings whatever the one problem is also force functions them to prioritize so if you're gonna bring one to know what their one yeah Exactly.

1:57:53It's like just that alone probably generates a huge alpha for the business. The plus one piece, as you've heard of Elon's algorithm? I don't think so. Oh, gosh. It's like I probably use this all the time. It's like the most useful thing that I've gotten from Elon of all the things that I've consumed. So it's the five-step process that they apply at SpaceX, but they apply it to everything. And he now just refers to it as the algorithm, which is question the requirements, delete all the unnecessary or dumb rules or requirements um optimize then pull up timelines then automate and so it's like if you're trying to fix a media department you come in you're like why do we do this that way okay well we don't need to do these 28 things that you guys are currently doing because it's dumb all right so how do we get the best guys to do the thing that that makes us the most money or gets us the most views optimization so we're out reallocating resources towards the highest return.

1:58:50Okay, great. Now that we're doing that, how can we do it faster? Great. Now how can we automate it? And walking through that process has been like, it's been the back of my mind for when I'm fixing something because it's just like really good. And especially the question of the requirements, which was one of the hardest ones because it forces unconstrained thinking, which is you have to be like, well, why do we do that? And a lot of people don't know why they do what they do because it's how we've always done it. And most, it's so funny how humans are so easy to add things, kind of like we referenced at the very beginning.

1:59:22We add things so easily, and we're so afraid to remove things. We remove steps, remove processes. And we almost develop this mythology around process. We don't do it that way, and I think that's a survival brain. Well, it has worked. We haven't died doing it this way, so we should just keep doing it this way and wear pink socks. But why? Right, totally. You know what the greatest thinkers in the world and seven-year-olds have in common? What? they always ask why yeah and if you just listen to a seven-year-old to say why and then they'll say something and then they'll say why why do you do that yeah and you lead to some really good questions yes i ask even on the podcast i ask some very fundamental like are you diversified yeah and if it's a very high level thinker they'll actually like think really deeply on it and because it's like how do you know you're diversified by what vectors it's like how do you these like dumb questions could end up being quite interesting answers.

2:00:15One of my closest friend, who's basically a brother to me, he has a saying, which is the shorter the question, the longer the answer. Like, what's the meaning of life? Like, well. What is it that I wrote? I didn't have much time, so I wrote a very long letter. Yeah, no, exactly. Yeah, 100%. I think it was Pascal who said that. another concept uh spacex has specifically is responsible engineer which you mentioned this high agency which is the engineer in charge of the part they are fully responsible for everything with that part yeah and the example they give internally is if supplier hasn't delivered any other parts why aren't you on the plane going to that supplier right it's your fault and and a lot of the employees burn out after six months because they can't deal with this level of agency agency has a cost yeah there's a reason why everybody is in high agency it takes a lot of mental and physical power and emotional yeah yeah it's so funny the the question the requirements like i won't even get because i could tell horror stories of the times where i've like walked in and been like why do we do this and it's like oh that costs us 500 grand a year for this one department and we don't even need it like i'll tell you one so we bought for media right we bought um a bunch of really expensive cameras that looked really nice because you know the team was like all right we're gonna build the studio or whatever and so then i was like why so it started with i was told we were gonna build the studio so that it would be faster for me to record so that i could just like literally walk across the hall and then just record right but then i i realized months after the studio was built because we'd always done that way um that i would have to say hey i want to go record and And then they'd be like, all right, we'll be ready in two hours.

2:02:01And I was like, why is this taking so long? This is your new studio? Yeah. And so they said, well, we have to set up the lights or whatever. And I was like, I'm always in the same spot. Why do we have to reset up the lights? And they're like, well, we use the same lights in your office as we do in Layla's studio. And I was like, well, how much do lights cost? And they were like, it's like two grand. And I was like, so I spent$500 ,000 on this studio, and we didn't think to spend$2 ,000 on the lights, which confers the main benefit of having the studio, which is we don't need to set it up and break it down.

2:02:43I started with the idea that the expensive cameras, right? Here was another one. After the videos were happening, I was like, why can't, I was like, tell me what stops us from posting it within 24 hours, because I had like two-week lead times on my videos. I was like, this is absurd. Like, why is this taking so long? and they were like well you know it actually there's a big part of it is like uploading and download the files is actually this big pain in the butt and i was like okay why do why do we need big files and they're like well because we have these nice cameras and i was like why do we have nice cameras

2:03:16And there was no real answer because I have tons of videos. Because they're nicer than the not nice ones. Right, right. Because all the people who are buying or people who are media dorks and love cameras and audio, right? But the reality was I can have an iPhone and say the same video and it'll crush. Because the only thing that really matters, at least in the education space, is the quality of the information, not… The behavior change. Yeah, it doesn't matter. It almost matters zero. The effects and the lighting and the… Like, none of that matters. in terms of video performance. And so when I brought that up, it was like, okay, so we have these massive 16, I don't know, some massive, very expensive cameras.

2:03:55And I just said like, we're not going to use them. I was like, put iPhones up. And so I got so upset about this that I went on a plane and I was like, we're doing this whole thing with an iPhone and you're going to post it in 24 hours. And we did that. I saw that on the chat. Yeah, that's exactly what it was. And yeah, that video got almost 2 million views. and so it was to prove the point i'm like guys this is not what matters and so i had to like i had to go through each of these elements of like and and so so walking through this it's finding the constraint within a process and i think that's what the algorithm is so effective at is like is and so we ask this also with companies like one of my favorite questions is okay so what stops us from 10xing the current um our current deal let's say it's demand constraint so like let's what stops us from from doing 10 times more what we're currently doing um and they say well we couldn't do that because and then insert reason and if that reason's solvable then it's like well why haven't we done it now if there if that reason is obviously solvable well then why haven't we solved it and then they'll bring up this other reason and so you keep asking why yeah and eventually you get to like oh hr just hasn't put out the wreck for that person yet and i'm like why because we have these other three roles that don't matter nearly as much but this is the one constraint of the business so this happens all the time in businesses and i think part of it is because it's so rare to have people who actually do i call it like pulling the thread it's like just keep pulling the thread like what happens next what why is this preventing us from from doing ultimately the thing that has the greatest leverage on the growth of business and a lot of people just don't know and i think part of that is because they don't have enough business acumen or business context to see like no when like this is the tip of the spirit like if we if we need three times the sales guys to triple the business and let's say that's aligned with the business objective, then us not had like, why haven't we just hired 10 recruiters, vendors to just go place all these roles immediately?

2:05:46Well, you know, we have one recruiter. I'm like, yeah, but it'll take us two quarters at our current rate. I was like, when we could fill it in seven days. And so the cost, and this is what I have to outline. I'm like, the cost is what 3x sales is over two quarters. So if we tripled revenue, because we tripled the sales team by, you know, because let's say we have sufficient demand. Let's say it's a million dollar a month company for simple math. It's like, okay, so it would cost us$12 million of lost gains because you didn't want to pay a recruiter 20K times whatever the number of sales guys is that we need a triple revenue.

2:06:23Do you feel like that's a good decision? Like we don't want to pay 200 to make 12 million. That seems dumb. We should not do that but people don't boil it like people don't pull the thread do you solve that on an individual level or do you find ways to get people to be high higher agency so what i'm going to say is probably going to be a little controversial but um i do think i do think a big part of it is actually just like mental horsepower um i think some people don't have it and you can't cope with that with multiple variables yeah multiple variables actually being able to sustain like multiple thoughts in your mind at the same time and play out scenarios i think is really tough for a lot of people yeah um and and that's where it's not that they don't they want to be inefficient yeah no i don't think anyone wants to be efficient inefficient i that's where that's where it gets into competence and so like is that trainable maybe uh i don't think horsepower is trainable i do think that skills are trainable to what degree is that a skill i don't know i probably think more about it um but skill is almost a reallocation of horsepower yeah yeah that's where it's like what behavior change yeah i can have someone follow a process but like if yeah anyways um but that that piece though um i i think a lot about and i would say the i would say the one common theme that's occurred in my business career has been that the quality of talent that i bring in has literally only got up that's like one constant in terms of like my income has been directly correlated with the quality of the people that i bring around bring in and what i'm willing to pay them.

2:07:57Because, I mean, every person has, it's almost like this limiting belief of what you can pay somebody. I mean, shoot, they just paid, you know, John Ivey, 6.5 billion. Yeah, 6.5 billion. So, like, there's a price, right? There's a price to get the best in the world or whatever it is. In an open AI stock. Yeah. No, I mean, Not cash. Good on the AI. I mean, that's a big commitment on both sides, right? But, I mean, if they do go through the hardware thing, It's a very rational deal. It's a completely rational deal because if he actually unlocks the hardware, then they combine Apple with their i mean they they just murder and i think they will are you familiar with david deutsch's uh concepts on memes he's the person that popularized memes that elon passed and i think everything in kind of a medic behavior humans are basically follow these memes um you mentioned one earlier that's so ingrained in silicon valley that startups change the world that's actually a meme yeah that's that's there's there's no rationality behind it why a fintech company is changing the world yeah just something that's that's repeated one thing that i found in a lot of the top ceos is that they have these meme the specific type of meme called folklore so do you know about like the nordstrom tire meme so nordstrom back in the day was number one in customer service and they used to tell the story that this angry customer come it came in and they wanted that had been using a tire for like 10 years and they want to change the tire and Nordstrom has this unlimited return policy.

2:09:20And they gave him back the money on the tire. And the joke is Nordstrom doesn't even sell tires. And there's this extreme version to show that the customer is right. And if they were to go around and say the customer is right, it may not resonate. But the tire story, and you see this over and over, Amazon has the meme of the two pizza teams. And these are like really useful packaging to tell these beliefs. So maybe that is a story is maybe the light story becomes a meme at acquisition.com and you tell it to people. And then they may not think from first principle, but they might remember, oh, like, is this like the light thing?

2:09:57Why is there a company we could make$100 million from and we won't pay for their lunch because it's not in the budget or something? Exactly. It could be memed into the actual culture. No, I love that. I love that. Yeah, and I see that. So I see these types of folklore stories as coming with series of behaviors that they seek to change. So it's not just one thing. It's many sets of behavior. So I'll tell you. I mean, I could tell a zillion of them. So I'll pause. But like, yes, I love that. I wanted to get your advice on my own business and just brand building. A lot of what we're built was inspired by you.

2:10:31Just like giving content for an audience. Outside of just doing more, we're seeing some really great early results. What are some other kind of practical guides for somebody wanting to build their brand in an audience, whether niche or not. If I want somebody who's between, they want to start a fund or they already have done their first and they want to get their second or third, right? I'm then thinking like, what do these people consume? What are the biggest problems that they're dealing with right now? And then all of my content seeks to solve all of those problems. I mean, that's it. So create the reinforcement loop of listen to David, problem solve, listen to David, problem solve.

2:11:14Yeah, this guy's helped me so much. That's the Hermozification. Yeah. Well, what do business owners struggle with? They struggle with marketing. They struggle with sales. They struggle with cash flow. They struggle with fixing their product, decreasing churn, recruiting. So these are all, because obviously we're operators. We actually run a business. So that's what they struggle with. And so I make my content for business owners because that's what I'm trying to attract. So the two sides of your business, just to distill what's made you so successful, one is you're reinforcing, listen to Alex and good things will happen.

2:11:44And two is actually you're building a surplus of goodwill. So there's both goodwill as well as trust in you as an operator of businesses to make them more successful. You know, interesting because the trusting about the, like, so, like, I would get into, those seem similar to me, both those buckets. And probably derived from the same action set. and I think it just comes down to like does this increase the likelihood that someone would would do something with me for me uh and if they have a history of positive reinforcement for me then that increase that that likelihood increases that's that's I just leave it there um that's about it like goodwill I just would redefine as a history of positive reinforcement that's it And so there's this big misconception, I think, in the kind of creator world.

2:12:37You've probably heard the like give to ask ratio, that kind of thing. But it's interesting because when you read Steve Jobs' autobiography, he talks about this. Or not his biography, Isaac Waltersson. Walter Isaacson. Thank you. Thank you. He talks about how like he still saw that withdrawal deposit concept within Apple. but via every product. And so he saw some, like he believed that if the product was great, then we've deposited into the person's bank account, right, figuratively. Whereas a creator feels like if they ask for money, they have withdrawn from their quote goodwill. But the underlying assumption there is that the thing that you sold them was not good.

2:13:25Because if you were a creator and you came up with an iPhone, then people would be lining up around the block for the next time you sold something. So it's this zero-sum mentality where I've provided all this, and now you spend your money. You spend something that you don't really need. Reciprocity. Yeah, you don't really need it. Whereas your second trade would also be a creative. Exactly. And I think that is a fundamental misconception. I think the reason for that is because creators typically don't know how to make products that are exceptional. And they typically don't put it, not always, but sometimes they don't have enough capital, or they aren't good at making products.

2:13:59They're good at making media. It's just a different skill set. So just to double click on that for acquisition.com. So you give all this content. They love it. You help them go through one to 10 million. They come to you at 10 million. They're lucky enough for you to invest. You could take them to 100 million. So you're not taking 30%. You're saying this is mine for helping you. You're actually helping them even further. Everybody wins. You're like, give me the opportunity to help you further. And the reason that you can believe that I can help is because I already have. So it also self-selects.

2:14:28Because if they adhere, basically if they have changed their behavior based on the content that I have, then it's likely that they will be able to respond favorably again in the future to the same types of direction. Right? And also likely that they're grateful and that they're aware that you helped them. Because some people will be helped and just never attributed to it. We'll just internalize it. So that's actually a super interesting one. Yeah, attribution is very interesting. And think about how tough it is to have something amazing happen in your life and say, that wasn't me. That was that guy.

2:15:06Or that was something else. Like, we usually take the opposite approach. It's just everything that's good is because of me and everything that's bad is because of other people and circumstances. And so it's actually— Do you think that's true in successful people? I think it's true in humans. I think there's just degrees. Like, not binary. I think it's just a continuum. Probably some people are more this way. Some people are more that way. um but no i a hundred percent getting attribution the the the and this is why i think having directives that are so specific is so important if i if i gave big vague directions right that somebody has to derive behavior change from then basically the more derivatives they have to to do then I think, and I think rightfully so, the more they should attribute that to themselves.

2:15:53If I said, on this podcast, make it this headline, and I will give you the thumbnail, and then it outperforms the click-through rate, if you thought that was because your team did it, I would be like, that feels a bit odd. If I said, I think it should be you and me, and both of our faces kind of big in the middle, and let's start it with the tweet that we know already you know performs best maybe that's a middle like he gave us some insight it was kind of helpful but like we still made it right and that's it's that last like well we still like whatever that part is it's like the less gap there is between whatever your your advice was and the action i think the smaller the gap the more the attribution will be there which is why i am so specific with um with the stuff that i put out and would you would a good criticism of my strategy be, it's always podcasts, it's always with LPs or GPs, and there should be more talking heads.

2:16:47Or if people are observing this and getting the value from the actual guest, that's fine. Do I have to go to a talking head as well? So thinking about this from like a short form, long form, how do I translate this into action for us, right? Short form, let's say somebody watched one short a day for me for a year, okay? And let's say that as short as 30 seconds for simple math. All right, so I have 365 shorts. That's 180-ish minutes, right? So that's three hours that they watched from me. Now, we know that most shorts are not 30 seconds. It's probably a third of that, right? So if they watched a short every day for a year, it's probably an hour-ish of content.

2:17:28Okay, I would for sure rather have someone just watch. I mean, I would probably like that frequency of exposure, like if it was one hour to one hour. But if I had to pick, I'd rather have a one three-hour podcast versus that. But that's, to me, I see the purpose of short form. Is that why podcasts are underrated medium? Because you have one listen, but it could be two hours and it goes pretty deep. I've thought about this a decent amount. So I see podcasts actually as email lists. So with the exception, like true podcast, this is like YouTube plus podcast. You repurpose there. But the vast majority, I would bet, of the channel growth comes from YouTube.

2:18:04and then it sustains on the audio right if you did audio only it's very difficult to grow audio only because there's very little suggestion spotify is beginning this but for a very long time people had to only grow off of word of mouth sending podcasts to friends and family whatever and so if we see podcasts as a an email list then when someone comes to me and says hey i'm thinking about starting a podcast to grow my business i'm like that's like saying i'm thinking about starting an email list. Like that's not going to grow the business. Now, unless you have a way of getting, you know, exposure to it, then that's the way that it's going to grow.

2:18:37But if we look at, you know, percentage likelihood of conversion, a podcast listener who subscribes is more valuable than any other subscription. If we just think about percentage of kind of timeshare, if you will, which is the average person, I think has like five or seven, five to seven podcasts and like that, that they subscribe to. You think about Instagram, it's like most people have like a thousand people they find it's like not even close order of magnitude different you go on a lot of other podcasts tell me about the calculus why would you go on somebody else's con podcast is essentially you're building their their listenership sure tell me about the the thought so i don't do a ton um i almost exclusively do with people that i like it's somebody that i actually do really want to have a conversation i would say that's probably the biggest it's like the biggest vector yeah it's the biggest yeah it's like i'd seen you a while and i i always i always find our conversations fascinating um because you have such a different perspective from the from the like super lp side you know what i mean like that always brings such fresh eyes to what i'm thinking about like in the super kind of like operational side um that's probably the biggest thing from a from like return on time perspective i think it's uh like clips will generate that's like what's the the only upside for me realistically is probably like clips um and relationship right those are those are the two kind of like alphas for for doing it it's not because you get to talk to a whole new audience and part of them will convert to you with your audience it's it's it's so niche and unique like there's definitely value there um because you have a superstar audience um i would say asking as a general like why what why do i select them in general um the audience that i have is the audience that i want um and so when i'm going with someone else's audience i'm basically trying to like i don't even think about it this way but i guess you could you could imagine it's like okay of the people where's the overlap of business people who listen to chris williamson you know in modern wisdom okay like i'll some of those people will then start you know following my stuff that they hadn't heard about me before that but if that were the case that I would definitely be maximizing like only new podcasts rather than doing the same podcast over.

2:20:49And I tend to do the same podcast over. So if I'm looking at my behavior rather than what I would like, so my behavior would dictate that I usually just go to people that I enjoy talking to. Well, uh, Alex, this has been a pleasure to catch up. Um, how should people follow you? Um, on, uh, on whatever platform you watch or listen to the most, you can just, um, type in Hormozzi and hopefully I'm there. But I do have a book launch though, August 16th. So if you want to come, you can go to acquisition.com. Actually, I don't know. I can't tell the link yet. So just you'll find it. Alex Hormozzi, new book launch.

2:21:28And for those that have only watched the YouTube videos, I did read the book. They're exceptional. They're exceptionally well-written. So highly recommend it. The third one's going to be the best. Awesome. Looking forward. Thanks, Alex. Thank you. Appreciate it. Thanks for listening to my conversation. If you enjoyed this episode, please share with a friend. This helps us grow. Also provides the very best feedback when we review the episode's analytics. Thank you for your support.