Real Estate

Leila and Alex Hormozi’s Unbelievably Simple Investing Advice


Leila and Alex Hormozi are arguably the most popular business owners on the internet. After growing Gym Launch, one of their first major brands, and selling it for many millions, Leila and Alex knew that they had the secret sauce for building businesses. When someone asked them to use the same strategy for another brand, the idea of Acquisiton.com was born, and the seven, eight, and nine-figure wealth building began.

Now, Leila and Alex are running Acqusition.com at a rate that most entrepreneurs couldn’t even fathom. Their monthly revenues alone blow most businesses’ yearly numbers out of the water. And they’re doing it all as husband and wife, with less bickering and a lot more business getting done. Almost every wannabe entrepreneur wants what Leila and Alex have, so what’s their blueprint to success?

In this episode, Leila and Alex break down how they’ve built their nine-figure businesses, the secret to scaling your brand and making millions, the do’s and don’ts of working with your spouse, and Alex’s new book, $100M Leads. This is a masterclass in running your business the RIGHT way, and if you want to build multimillion-dollar wealth, you CANNOT miss this episode.

David:
This is the BiggerPockets Podcast, show 798.

Leila:
Really, the philosophy behind it is if we can build a place where we don’t just achieve success of becoming a firm that does 10 billion by turning people out, by paying them so much money that they feel like they can’t leave, but by actually fostering an environment where people are constantly learning and developing and we’re encouraging them.
(singing)

David:
What’s up, everyone? This is David Greene, your host of the BiggerPockets Real Estate Podcast, the biggest, the best, and the baddest real estate podcast in the world. I’m joined today by my partner in crime, Rob Abasolo, with a incredible episode for everyone. Today, Rob and I are going to be joined by Alex and Leila Hormozi as we talk about business, real estate, people, relationships, success-

Rob:
Investing.

David:
… frustrations, investing…

Rob:
Butterflies.

David:
… making money, a lot.

Rob:
A lot. We really did cover a lot.

David:
Alex and Leila were kind enough to share a good chunk of time with us and open up about both their relationship, their business, and their future. In fact, they hired an executive for one of their companies while we were doing the podcast.

Rob:
That’s right, yeah.

David:
These are some hardworking folks that are dedicated to the cause that took some time to help our listeners. What were some of your favorite parts of today’s show?

Rob:
Oh, pretty much all of it. The Hormozis are my favorite people. These are really not just my favorite content creators, but my favorite entrepreneurs because they really tackle business problems and really the foundations of business in a way that I’ve never heard it before. And really, it was super cool because you always hear them give these masterful insights on building a business and scaling to a million or scaling to 100 million, and the thing is you always hear them do it separately, but you never really get them in a room together. So this is the first time I’m really seeing that.

David:
You saw some Hormozi magic.

Rob:
We did-

David:
Chemistry.

Rob:
… some Hormozi magic. I think I did pretty good for being a fan.

David:
You kept your inner fan girl together pretty well.

Rob:
They couldn’t tell until you told them.

David:
How excited did you get when Alex recognized your posts on his thread?

Rob:
I was pretty excited. I was pretty excited.

David:
He remembered it.

Rob:
That’s right.

David:
Very nice. When I hear Jocko Willink talk in the times that I’ve met him, he’s got this vibe about him that you don’t see in other human beings. Jocko has been through things in life that have made him very different than everyone else in a really good way. I get the same thing from Alex and Leila. The experience they have with building, scaling, and exiting businesses and then managing them, I don’t know how many other people on the planet have the perspective that they have-

Rob:
[inaudible 00:02:41] they do.

David:
… specifically on that. Do you notice that?

Rob:
Oh, absolutely. It’s just the way they explained building out your team and the operations, which is very applicable in the world of real estate, especially if you’re trying to scale, that’s exactly what you need to do, and you need to do it well. It just seems so simple coming from them, and that’s how you know that they’re masters at this because they explained an incredibly difficult concept in a way that just makes perfect sense instantly when you hear it. They gave me free consulting. Many people would pay tens and tens of thousands of dollars for that kind of thing, and I feel like a lot of people at home, they’re going to be like, “Ugh, this is what I needed to hear.”

David:
Yeah. I opened up about struggles that I’m having in business, areas that I’m weak in, they gave me some advice. I laid it all out there. We talked about investing in fears that hold a lot of people back, things that are tripping people up, and most importantly, the fundamentals that lead to success in real estate investing, in starting a business, and in wealth overall. My two cents is that with the market getting tougher, more and more people are going to need to move into building or buying a business. This is a very crucial wealth building block as real estate investing is getting tougher and tougher and you still need to be able to make money. Today’s episode is… I mean, it’s probably worth hundreds of thousands of dollars for somebody who’s going to go do something with it, so you guys are in for a treat.
Now, you may be noticing that our background looks a little different. That’s because Rob and I are here in Downtown Los Angeles at the Spotify Studios recording for your viewing pleasure. Before we get to Alex and Leila, today’s quick tip is: consider making your money and investing in the thing you enjoy doing. Alex talks about how we can all get shiny object syndrome, and he refers to a conversation between Dave Ramsey and Graham Stephan, where they actually get into the fact that Graham should be investing in the thing he’s passionate about, and Alex realized that. Which is why they doubled down on acquisition.com and scaled it to be incredibly successful rather than starting a bunch of different business ventures. And as a second quick tip, Alex actually mentioned how before he met his wife he had nine different businesses and none of them were profitable. She really helped bring clarity into his life and his business environment, and then the two of them exploded when they met each other. So keep an eye out for who your partner might be or potentially your spouse as we get into that as well.
All right. Well, we hope you enjoy the studio, we hope you enjoy the show. And get ready because several BiggerPockets episodes are all going to be released from this same location, and they’re all fantastic with some of the best guests in the business. Speaking of that, let’s bring in Alex and Leila.

Rob:
And be sure to keep an eye out for episode 800. We ask a lot of people here at the Spotify Studios some pretty amazing entrepreneurial questions that will come out for episode 800. So get excited.

David:
Alex and Leila, welcome to the BiggerPockets podcast. Thanks for being here.

Leila:
Thanks for having us on.

Alex:
Honored to be here.

Rob:
So welcome back, Alex. Funny quick little anecdote, I think when we interviewed you about eight months ago, I said I had hired one of my sales guys to become my COO, and then you’re like, “Well, I don’t know if I would’ve done that.” And then he listened to it, he is like, “What? Man.” He’s was like, “What do you think about that?” And I was like, “You’re doing great.” He’s doing great.

Alex:
Oh, good.

Rob:
Just a small update. Just a small update. And Leila, I’m really happy to have you here. Happy birthday. Thank you so much for being here. I wanted to say, actually, I subscribed to your YouTube channel first. It was a video you did about a year ago called How to Go From Zero to a Million Dollars, and it was a longer piece of content. I was like, “Okay, well, like I do, I’ll watch a minute or two.” I watched the whole thing, and I was like, “Wow, this is really good.” You had a PowerPoint. It was the whole thing. I was like, “This is great.”
And then a couple of days later, I get served up one of your videos, Alex, and I’m like, “I’m pretty sure her name was Hormozi, but what are the chances there’s another YouTuber named Hormozi. This is all crazy.” You two are the only YouTubers that I will watch an hour-long video for them. I just watched your hour-long video last week, and I was like, “Wow,” every minute. Thank you.

Alex:
Oh, sweet.

Rob:
So good content from start to finish. Excited to talk about some of those principles and things that-

David:
He’s not lying, man. I’m glad you guys are here because this is all Rob has talked about for the last three days.

Rob:
Okay. Okay. That’s partially true.

David:
“Alex and Leila are coming? Can you believe that Leila’s coming on her birthday? We can’t mess this up. It’s got to be perfect.”

Rob:
Really can’t mess it up. I’ve been rehearsing in the mirror, but it’s all good.

David:
Well, I’m glad you guys are here, thank you, especially on your birthday, that’s very, very sweet of you. So we appreciate it, and our audience does as well.

Rob:
Absolutely.

David:
Tell us about acquisition.com, why are you guys passionate about this project?

Alex:
Oh, fine, okay.

David:
Is that the signal?

Alex:
Sneak attacks?

Rob:
You got to deal [inaudible 00:07:08].

David:
Is this like, “You need to steal second base,” is that what she’s telling you?

Alex:
Well, yeah, so because if we ever go together, she always jokes that I will be like, “You should go,” and then I have time to think about what I say.

Leila:
Then he crafts a better answer.

Rob:
The trick is-

David:
100% percent, that’s what we’re doing.

Rob:
The trick is you’re supposed to say, “That’s a good question,” to buy yourself some time. And then you get into it.

David:
No, I do that all the time too. I do it with you, you don’t realize it. All the time.

Rob:
I’m like, “That’s really nice.”

David:
I make you talk first and then I sum up what you said better than you said it, and add maybe one piece [inaudible 00:07:32].

Alex:
A little piece on the end. Right, right. No, I mean the reason for acquisition.com, interestingly, most of our businesses have come out of personal need. And so I got in shape, and then people started asking me how I got in shape, and then I started helping people get in shape, and then I started growing a business of helping people get in shape. And then people who helped people get in shape asked me how I got the business of people getting in shape. And then people who had businesses that helped other small businesses started asking me how my business was going. You know what I mean?

David:
Absolutely.

Alex:
And so just continued to work out that way. And so Leila and I still had at the time when we started what would then become acquisition.com, we owned Gym Launch, Prestige Labs, and Alan. Alan was our software company, Prestige Labs, our supplement company, and Gym Launch was our gym licensing business.
We had, I think at the time, just about 4,000 people who had gone through our licensing program, and we had the same amount of people who were selling our supplements to that same distribution base. And COVID happened. The software was actually how to get… It was a martech solution, so how to get leads in the door for brick-and-mortar businesses of any kind. It was supposed to be for gyms originally and then other people who were like, “Hey, man, I have a bunch of plumbers, I have a bunch of whatevers, does it work for them?” And it turned out it did, so it actually had a much bigger market than we thought it did originally.
And so middle of COVID, things are tough for gyms, I’m almost like, “I got to take my mind off this stuff.” I get a sales call because rolling out software, I’d read all the books, it’s like, “Founders should take the first sales call so you can get to know the customers.” I still had a tiny-ish brand, you know what I mean? I had a tiny fan base.

Rob:
It is tough.

Alex:
Yeah. And so I was right on the cusp where it was still okay for me to take those calls where it wouldn’t be weird where people just hop on to have no interest in actually the product. And so anyways, this particular call guy got on and was like, “I don’t want anything to do with your software.” He’s like, “But I’ve read everything that you’ve ever put out, I’ve applied all of it, and I tripled my business, and I want you to partner with me to scale it.” I was like, “This isn’t really the right time.” Whatever.
Anyways, he sold me on it, and I really liked him. He owned a photography business that’s called Enchanted Ferries. And at the time he had one studio, and he was doing really well. And he had an agency business on the side that helped photographers. He marketed photographers the same way he had it for his own studio. After finding out about that, I was like, “You know what? If we just stop this agency thing and just scale the hell out of this chain?” And so we invested in the business. That was three years ago, and that business now went from one single location to doing two and a half million a month with over 30 locations that we just own all of them. We just continued to scale that. And so that was the first deal we did. And then…

Rob:
You own all of those as in they’re not franchised out or anything?

Alex:
Right, we own them.

Rob:
Wow. Okay, cool.

Alex:
And so then it was like, “Well, that went well, maybe we should do this again.” And so we did another deal, and then that business went from 16 and a half million in top line to 50 million in top line the next year, and I was like, “Okay, that worked well.” And then we did another deal, another deal, and so by the end of that year, we had done, I think three or four, I can’t remember what it was. It was three deals. And we were going back and forth on selling Gym Launch. Because it was COVID, it was not the ideal time to sell a gym company, but the flip side was interest rates were zero, and so there was tons of money in the market. So it’s like, “Okay, this is a great macro time to sell, but a really bad micro time for the business to sell.”
But Leila and I committed a few years earlier that we would sell the business if we felt like we no longer loved the business anymore. We’d both been in fitness for 10 years. I didn’t want to be the gym guy anymore. And the fact that these other deals had gone well. I wonder how different life would be if those first deal or two didn’t work out. We probably wouldn’t have sold. But they did work out, and so the day after we sold, which was December 24th of 2021, we started acquisition.com the next day. And so then because we were probably taking 40 million in distributions up to that point, and then we also had our sale money, which was 46, and we started our family office, which is acquisition.com. And so we buy and scale businesses.

Rob:
That’s really cool. So Leila, I know you’re the CEO of acquisition.com. What exactly is the type of workplace that you’re trying to build there?

Leila:
I’m trying to… And it’s really we because we’re a small business, I think. But technically, the team reports to me, but we work on everything together. Really what we want to build, is in terms of the type of place… You look at traditional private equity, it’s a very punishing environment, I think. It’s run by fear. They’re pretty much like it’s the golden handcuffs, which is like, “All right, I’m going to get my two years at,” I won’t say their names, but these top firms, “and then I’m out.” Right? Because it’s so unsustainable.
And so when we looked at doing what we were going to do, I was like, “The only thing is I just don’t want to build a place that actually treats people like that. I want to build a place where we don’t just build companies, we also build people.” Because really behind the philosophy of acquisition.com, there’s strategy and there’s all the strategy that we deploy into the businesses in terms of how are we going to grow these things. But who grows those is the people that are in their businesses, and who directs the people on how to grow those functions and the businesses overall is our team. And so really the philosophy behind it is if we can build a place where we don’t just achieve success of becoming a firm that does 10 billion by turning people out, by paying them so much money that they feel like they can’t leave, but by actually fostering an environment where people are constantly learning and developing and we’re encouraging them.
I think that there’s a lot of talk against this, and any time that it’s kind of risen in the management philosophies, it’s so hard to apply and to understand that people just reject it. And so my goal is to just build Acquisition to 10 billion and then have people ask how we did it, and then tell them that we did it this way. You don’t have to be mean to people and pay people exorbitant amounts of money because it’s such a terrible job. You can engineer an environment where the business wins, the people win, and our partners win. And that’s really what it is. I think that the founder of Whole Foods, he talks about that all the time. John Mackey, I think that’s how you say his last time, I always say it wrong, but he talks about creating a win-win-win, and not even a win-win-win, but a win-win-win-win and win. It’s like a win for the community, a win for the environment, a win for the employees, a win for the business, a win for the business financials, a win for the customers. We just take that approach at Acquisition.com. It’s like if it’s not going to make a win for every single person that it touches, then we can’t do it.

Alex:
We just keep working on it.

Leila:
And so the business itself exists to be an example of a win-win-win, a win for our portfolio companies, a win for acquisition.com, a win for our employees. It just makes it more enjoyable too because I can’t imagine going and being the CEO of a company where I felt like people didn’t want to be there. That just sounds awful to me. I wouldn’t want to be there. I think what we want to create is a place where people actually like working, and I think we’re doing it.

Rob:
So I mean, it seems like acquisition.com, when you’re working with these companies, you’re effectively helping them scale, you’re helping them build out their systems, their teams. Is your company set up from an operational standpoint the same way you set up the companies? Do you have operators, or is every employee at acquisition.com meant to be a super sniper operator that can be inserted into any business?

Leila:
It’s a good question. We essentially have a setup where there’s the executive team at acquisition.com which services the internal things that we need to have done at acquisition.com. And then we have what we call pods. And so there’s one portfolio operator with a team of what we call subject matter experts, say managing director of people, managing director of customer success, managing director of sales, managing director of marketing, and they as a pod can service a certain amount of businesses. They can do the value creation for those businesses in our portfolio, and then you duplicate that. As of right now, we’re focused on more professional services and a brick-and-mortar chains. That’s probably the two niches that we’re focused on. If we decide to branch out into SaaS, then we would build that same structure but with people who have background in SaaS. So that’s how acquisition.com is structured. And then we bring in outside expertise and consultants as needed for special projects.

Alex:
The way that we’ve built this is that a company comes in, and let’s say a company’s doing 10 million top line and 3 million bottom line, so probably 30 or so employees somewhere in there, what we would then do is we will identify what department usually needs to go from zero to one. It’s usually just non-existent. And then we will go and actively headhunt and recruit some of the best people from businesses that are maybe two or three times the size of that business and put them into the business. And then our subject matter expert will deploy our playbooks with that person. That way, we can create the most enterprise value at the portco, at the portfolio company level, not at the holdco level. For us, it’s like each of these SMEs, we call them, subject matter experts, if they were sitting on the balance sheet of any of the portfolio companies, it would definitely hurt the P&L. But because we can fractionalize that and a lot of high skilled labor doesn’t require tons of time, it just requires deep…
It takes 10 years to learn where to hit the machine, you know that whole thing? And so it’s like we can consolidate that cost at holdco so the actual profit is, I don’t want to say inflated, but just way better-

Rob:
Yeah, supercharged.

Alex:
… at the portfolio level. Yeah, exactly, because we can consolidate all this brain power and then copy and paste things the way we already know it’s working, and we can take learnings across the portfolio. And so we’re like, “Hey, this sales setup is working really well in these three companies. We just got a new portfolio company in, let’s deploy that here” or “Hey, this new media platform is doing really, really well, let’s deploy that playbook into the rest of them.” We can learn way faster and deploy way faster.

Rob:
A lot of companies, a lot of personalities mixing, so when you’re looking at some of the companies that you’re acquiring, if a company is coming in with a sour work culture, can that be fixed or is that something that might cause you to walk away from a deal?

Leila:
I think given the size companies that we’re investing in, these companies are typically just a little too small for private equity. And so when they’re coming in, they have a sour work culture not because of bad practices, but because of no practices.

Alex:
Ignorance.

Leila:
They just truly don’t have any standards in place, any systems in place to ensure that they can have a good culture. So it’s like we’re starting from ground zero. Now, I think what’s harder is when businesses get bigger and they have systems in place that promote a bad culture. I think that when they’re small, it’s just you’re just accidentally creating a culture because you have nothing in place. When you get bigger, you have put things in place and still have a bad culture because of the wrong things. That’s harder to turn around. That’s called a turnaround.
We don’t necessarily do that. I think we’ve done it with one business, and it’s honestly a lot harder and it requires a different kind of skill to put the systems in place to promote a good culture because they just have whatever-

Alex:
Hodgepodge.

Leila:
… naturally occurs, right? Yeah, it’s like a hodgepodge. That’s something that we’re good at doing, but it does take time, it does not happen overnight. The culture is the piece that takes the longest, and honestly, it’s still what I’m trying to crack because you can change all the people around the founder, but the founder themselves, if they do not change, it’s just really hard to change that.

Rob:
David, I mean, you have a big team at the David Greene team. Is there a lot that you have to do to insert what you see the culture being, or is that really something that you put more on the operator level at your company?

David:
No, I haven’t been able to get an operator to do that very well. That’s like why I’m stuck. That’s really where I’ve failed over the last four years, over and over and over, was taking myself out, putting a person in. They understand the organizational chart, they understand the processes, they understand what’s happening. As long as the money, the revenue, the deals flow in, they can keep the whole thing going. There’s a change in the economy, interest rates go up, something changes the flow that was nice, and they don’t know how to go and lead the people into a new realm. And then I will have to step back in. But now it’s like I’m out of shape because I haven’t been at the gym at six months, so it takes me a long time to re-acclimate myself to what’s happening, figure out who are the pieces that are working, who are the pieces that have been slacking when no one was looking.
You get the whole thing running again, and then that business over there is having the same problem. I’ve just been bouncing around for the last several years because of exactly what you guys are describing, it’s that leader, the one that can inspire the culture. And that’s really what makes the business work is people come to the one brokerage or the David Greene team because they hear me talk on the podcast and they’re like, “I want his standards. I want that guy’s work ethic. I want that guy’s eyes on my deal. I want to feel the way he makes me feel when he talks about real estate.” And then when you put a person in your org chart to do a job but they don’t inspire that same level of confidence in the customer, the conversions become a whole lot harder. What they’re describing is building the culture of leaders that all adhere to the same standard. The subject matter experts are really the ones holding that line, it sounds like you’re saying, that are keeping everyone operating, or is that not the role that they’re playing?

Leila:
They hold the standard of what good looks like in each function. I think that the portfolio operators who’s the leader of those subject matter experts is the one that more so is distilling that cultural piece. I’ve definitely developed a philosophy around that, which is hiring people who either have our values or are so open-minded that they can flux into our values.

David:
That’s what’s been missing, to your question, exactly what you’re saying. We used to-

Leila:
[inaudible 00:21:29]. Just personal opinion, I always look at it like either we’re going to be really good at hiring this person or what we did at Gym Launch, was really good at building. Because if you are used to investing in people, then maybe you just bring someone in to be your successor, and over a span of two years, they watch you, they’re there with you at everything and you just keep them by your side, and then two years in, somebody with very little experience can do it.

David:
That is what I’ve tried. I just picked the wrong person. They got a little taste of what it’s like to be David Greene’s guy, and their ego became insane. Or they got a little taste of all this money and they’re like, “Oh, great, I don’t have to work 70 hours a week to make it work anymore. Now I can cut back to 30 and enjoy my life.” They’re taking their foot off the accelerator before you’ve hit escape velocity would be the way to look at it. I can admit, I think when we actually did the first interview with you, this is the hardest part for me, is to be the guy who is…
I was a police officer before this. I’m very familiar with enforcing a standard or a law. Then you step into the podcast basin and you’re like a magnet of, “Hey, you guys can do this,” and I have not done well bouncing between those two roles. A lot of the people that will find come to me from the podcast and now I’m crushing their soul when I’m like, “You have to step it up.” Or if they’re not from the podcast, they don’t understand the ethos that people have from the BiggerPockets realm. You guys are nodding like you understand the struggle I’m having here, but I can admit I’m not good at it.

Leila:
It’s a skill in itself.

David:
Yes.

Rob:
So between both of you, is there a difference between the way y’all wake up? Is one of you really focusing on the internal operation of the company versus the external side of it?

Alex:
Yeah. I mean, everything that Leila talked about earlier in terms of getting a win for acquisition.com, getting a win for our internal team, and getting a win for the portfolio companies is what I would consider the internal mission of acquisition.com. The external mission is very much the stuff that we put out there, which is to make real business knowledge accessible to everyone. And so the idea is if we can make the entire marketplace better, then we are net positive in the marketplace, we can hopefully teach skills that then allow people to work at companies and quit the jobs they don’t like to take jobs they do, and maybe even take jobs at acquisition.com or our portfolio companies.
But yes, Leila is absolutely internal facing, I am external facing. Our days are almost polar opposites in terms of how we work, what we work on, how they’re structured. The holdco, because it’s a holding company, it’s not like we have a gazillion people there. We probably have 20-something, it’s not big. And so it still functions like a small business in that way, in that Leila and I will talk about big strategic decisions, but for the most part, we try not to change the strategy that much.

Rob:
Sure.

Alex:
But you got to give time time.

Rob:
Sure. Well, in episode 649, we spoke with you about scaling from zero to $100,000, $100,000 to three million, and three million to 30 million, so I want to talk about setting up some of the operational frameworks when you’re in those phases. I started a company recently, it’s called STR Coseg. I feel like the partners and I, we are all visionaries. And so we’re at this point now where from a funnel marketing standpoint we’ve got the leads, we’ve got a very warm set of emails, we’ve had a lot of good conversions, we’ve actually done really, really great for the two months that we’ve been operating. But for me, I’m trying to understand, who do I hire next? What is the ROI of that person? Because it seems like I need someone that is somewhat of an operator, but I also feel like I need someone to actually run the marketing and the follow-up to actually convert some of those leads.

Leila:
I think we probably have similar ways of looking at this, which is, in the beginning, the first thing is that when your business is small the reality is you need everything, right?

Rob:
Yeah, that’s definitely-

Leila:
You don’t have a head of marketing, you don’t have a head of sales, you don’t have a head of CS. It’s all just like open wound. But the question is, which artery if clogged prevents the most blood loss? That’s the way I look at it. And so it’s like, “Okay, where do we get the highest ROI if we put a person there?” I think that often what a lot of people want to do is they want to get out of pain themselves. And so in the beginning you do see a lot of people who have a skill in terms of, say, it’s sales or, say, it’s client acquisition, and then they think, “Well, gosh, this is taking up all my time, I need to hire somebody.” However, the question is, can the business bear you stepping back, bring someone in who’s going to be 30% less effective at first? Say that sales person, you are closing at 80%, they come in and they close at 50%. It’s like, “Well, can the business actually even support that?”
In the beginning, the answer is usually no. The question is, where are we going to get the highest ROI if we bring somebody in, which is, what is the biggest constraint right now? Not saying it feels bad to me, right? Because I think we’re so often in pain that we’re like, “I want someone to come in and take this thing off my plate,” but what’s the biggest constraint on the business? And so I would look at it from that perspective in terms of what is not happening that if it were happening the business would be 10X better or what is happening that needs to stop happening to make the business 10 times better?

Rob:
That makes sense. Yeah, because the company is very profitable for where we are. We can certainly sustain hiring somebody. From a marketing standpoint, I think the stubborn thing for me that I always feel like is I’m good at marketing my stuff, and it’s very hard for me to relinquish that control. It almost feels like perhaps I can’t walk away from that business quite yet, but maybe if I put more of a project manager, someone that’s pushing the daily agenda in line, that would compliment my skillset a little bit.

Alex:
Can I throw this out there?

Rob:
Mm-hmm.

Alex:
Is there a reason that you want to step away from the marketing?

Rob:
Not particularly. Just time. I have other businesses that I’m also… I’m marketing a lot, right?

Alex:
Yeah.

Rob:
I have four or five different companies that I market, so that’s the tough part for me.

Alex:
You’re not going to stop marketing, right?

Rob:
Mm-mm.

Alex:
I feel like a lot of times just as business owners, entrepreneurs in general, we do a lot of things based on shoulds that someone else has told us at some point in our career. It could have been a whisper, it could have been at lunch five years ago, and you’re just like, “Oh, this is fact,” and you can operate the rest of the time until someone’s like, “Hey, I don’t know if that’s true. But you look at Dave Ramsey, they’re doing 300 million a year, he still does his podcast every day. And so I think unless the goal is to exit the company, if you enjoy doing the thing, then it’s like, okay, well then how can we get the most of you doing the thing because that is the highest leverage time for you? And then it’s like, how do we clear everything else off of your calendar so that you can do the most of that?
Anyways, that’s just-

Rob:
That makes sense.

Alex:
We’re big leverage points in the business. It’s just funny because a lot of times we’re like, “Man, I got to get out of sales.” And you’re like, “Well, you’re an amazing sales manager, and right now you’re doing, I don’t know, 600,000 a month, maybe that might not be the time right now. We might need to think about what are the other things on your time and take everything else off and then keep that. And then we’ll have even more resources because we’ll be twice as big to then go get a killer who we can hire who has an amazing track record at a company that’s twice as big, who knows this type of sale, et cetera, et cetera.”

Rob:
That makes sense for me. I would like to just show up and market. So because I’m doing a little bit of the operational side back and forth, I feel like I can’t do the operational side good. Yeah, it’s just always very painful to hire. Is it always painful to hire?

Leila:
Well, one thing I would say is also I think that at different levels in the business, I think a project manager that’s everyone’s go-to when they’re not really sure what role. So that’s actually one that I think vague roles like a project manager is actually where I see usually what it means is that we’re missing a roll over here, a roll over here, and then somebody right here is weak, and we fill it in with a project manager.

Alex:
The junk drawer.

Leila:
Yeah, the drunk drawer. I would just be weary. Hiring is a skill in itself, so it’s just like, “Dude, I’m… awful at real estate.” Sorry.

Rob:
For now.

Leila:
For now, yes. Yeah. Terrible. Awful. As good as business, that’s how bad I am at real estate, the opposite. It’s because I’ve never applied my skillset. It’s not like I think I’m dumb and can’t learn it, it’s that I’ve never taken the time. I think that I was forced to learn how to hire well because in Gym Launch we grew so quickly and I had to hire so many people so quickly, I learned all these lessons that I think take honestly a lot of people decades to learn. I’ve hired thousands of people at this point, and that’s just not something most people of my age have done. I think that it was in a compressed period of time, which then I think even cemented the learning even more. And so it is a skill. I think that if somebody’s not good at hiring, sometimes it is best that you defer to a recruiting firm and watch what they do, learn from them.
Because I think a lot of times we think we know what good looks like, and we think that hiring is just a thing you do to get people, but there are complete hiring departments. There are multiple different roles that help people hire. I mean, it’s an entire process of its own. So just like there is client acquisition, there is talent acquisition. I think that Alex is very good at client acquisition, and I am very good at talent acquisition. Honestly, it’s just flipping client acquisition, all the things you do for that, you do to acquire talent. It’s just that most businesses, in fact, 80% of businesses, do not match their external strategy with an internal strategy. And so that’s why talent acquisition doesn’t exist in most businesses.
Most people say, “Well, my business is too small for that.” And I’m like, “Well, how do you think your business gets big?” By having that. And so I think that if it’s treated as a skill of its own and one that is imperative to the growth of the business, then I think people would see it. I guess that’s what I strive to do, is to show people the importance of it. There’s a lot of stats to back the importance of the people that we bring on, how we bring them on, the culture that we have as a team. I think it’s starting to become more relevant. Even when I started making content I think two and a half years ago, I felt like I was speaking something that nobody talked about. You know what I mean?

David:
To discuss this is almost like, “Oh, yeah, you have to be able to hire people. ”

Leila:
It’s an afterthought.

David:
Yes.

Leila:
But something super interesting is that for every strategy, for every three strategies that a company commits to, saying like, “This is our strategy that we’re going to do for this year one, here’s year two, here’s your three,” two-thirds of strategies fail not because the strategy is wrong, but due to execution. And when they say, “Well, what makes the difference in companies that are able to actually execute these because that means that only 33% of strategies that we say we’re going to do actually happen?” Well, there are some companies that are able to execute 78% of strategies. What makes up the delta is what people, and I guess McKinsey defines this as the soft stuff, which is talent, acquisition culture and people. I feel like I’m saying all the stuff and people are like, “Leila is about the fluff.” I’m like, “Oh my gosh, this is not the fluff. This will make you so much more money. You will grow your business so much bigger.”

David:
There’s people that analyze the economy, what the government’s doing, and they figure out what the overall environment looks like. There’s people that analyze an individual real estate investment and look at what’s the income stream, what are the expenses? There’s people that analyze businesses. There’s people that analyze stock opportunities. It’s all form of risk allocation, like, “How do we know where this is going to work?” We’ve talked to so many people today, and the biggest hurdle in all of their growth was hiring. And yet, you don’t put that same effort into the analysis of humans, which are the one thing you can’t scale without once you get to that limit like where I am.

Alex:
You’re really good at marketing, and you probably have sales teams, you’ve probably taken a lot of sales calls in your life, and you take 1,000 sales calls or 2,000 sales calls. And then you think about that from the context of hiring, it’s like a lot of entrepreneurs have had 30 interviews that they’ve actually tried to make a judgment, be like, “Man, I suck at this.” It’s like, “Well, it’s reasonable that you suck at it, you’ve only done it 30 times.” You know what I mean?

Leila:
I tell people all the time, if they’re like, “Leila, I don’t think I need a sales manager,” and I’m like, “Do me a favor, I just want you to interview 10 and then tell me if you need one.” Because they don’t even know what a sales manager for their business should be doing.

Alex:
Yeah. One of the other issues in the beginning is just ignorance, not stupidity. It’s just that a lot of entrepreneurs early on don’t know what good looks like. You probably know what a good salesperson looks like. You’ve probably hired enough of them, I mean, just from what it sounds like in your business. It’s like, well, how many good operators have you ever hired? And so it’s like-

David:
That’s such a good point.

Alex:
Right. So there’s no ideal scene to look at. You’re like-

David:
My brain need that.

Alex:
… [inaudible 00:34:00] roll the dice again.

David:
I remember when I was trying to hire agents that could close my clients, I tried, I failed, I tried, I failed, they couldn’t close it. I hired one, Johnny, and he could do it, and I was like, “That’s what I was looking for.”

Alex:
That’s what it looks like.

David:
And then they all came after. There’s something about mentorship maybe where you’re following someone else and you see what they’re doing that you get this pattern in your mind of what… That’s a great point that you just made. I haven’t hired, I called it a leader, but it’s an operator like what you’re saying, the person that can run…

Alex:
We’ve placed operators in, what, two-thirds of the portfolio?

Leila:
More. Almost all of them, except for like…

David:
So you have a pattern in your mind of what that looks like.

Alex:
You know, you-

Leila:
[inaudible 00:34:37] all of them.

Alex:
Yeah. Basically, I guess it is all of them. We’ve taken an operator and put them in. Because usually the entrepreneur is the one who starts, who gets the fire going and gets to a certain point, and they don’t like a lot of these things. I’d say probably one of the bigger mistakes, and this is one that we’ve made earlier on, was hiring the project manager and calling them COO or calling them director of operations. What it really is is somebody who you’re like, “Oh, they’re really detail-oriented. They love Asana, and they love checking boxes. And it’s like, that’s actually not what an operator looks like.

Rob:
Well, I think that’s why I said project manager because it feels like going straight to operator or COO is too big of a role for where we’re at. Probably not. But funny story, my COO that I was telling you about, we’re thinking about hiring his wife as a project manager. So if he listens to this, he’s going to be hurt again, but…

Leila:
Don’t do it.

Alex:
A different way of describing it maybe would just be, and I guess I’m describing this as me watching what Leila has done in all the companies, because I’m pretty good at acquisition, and that’s been my hat for a long time. But when I met Leila, I think I was doing two-ish million bucks a year in just total revenue, not making really any profit. But when she came in my life, she had a totally different perspective on how to just treat people and how to actually run a business. It was not all the detail stuff and the Excel sheets and things like that that I thought it was going to be. It was just leadership.

David:
She was like your catalyst.

Alex:
It was leadership. And that was the thing, so when we’re looking at operators, we’re like, “Is this a leader? Does this person inspire me? Do I admire them? Will other people in the team admire them?” You talk about setting standards, it’s like, “Well, if everyone on the team doesn’t admire the character of this person-

David:
They’re not going to emulate it.

Alex:
Exactly. And so that’s where you get more and more nuanced on, “Oh, we can pick this.” It’s been really cool because our director of people… It’s funny, we have probably have all these marketing stats and acquisition stats. We’re like, “Your CPL, your CP, all these different stats,” but the same level of rigor can be applied to talent. So it’s like if I said, “Hey, what’s your time to fill?” a lot of people would be like, “Mm.” It’s like, “What’s your average time to fill?” And they’re like, “I have no idea.” It’s like, “Okay, well, what’s your employee churn?” They’re like, “I have no idea.” “What’s the two-sided fit?” And it’s like, “What is that?” Two-sided fit is 90 days later, the manager and the employee rate themselves on a scale from one to 10 and say, “How much of perfect fit is this?” If one person says zero and one person says 10, then you’re a zero. If both people say zero, then it’s a negative 10. If both people say 10, then it’s a 10. And so right now, our two-sided fit is 8.7, so that means that on average both people are saying 8.7 on both sides of that equation 90 days later.
Not just like you probably hired someone and be like, “It’s their first week. They’re killing it. They’re awesome.” And then I have this conversation over and over again, I’m like, “Hey, how’s that marketing person?” And they’re like, “Oh, they suck.” I’m like, “I thought two weeks ago, you… ” Right? It’s you got to give it time to breathe. But having the archetype and then understanding the process and truly looking at it as acquisition, like talent acquisition where it’s like… I’m going to draw a parallel. So you’ve got lead gen on the customer side, and then you’ve got application generation. And then you’ve got lead nurture on the customer side, and then you’ve got application nurture. And then you’ve got sales on the customer side, and then you’ve got interviewing, and then you’ve got whatever the offer is, and you also have the offer that you’re going to give them. And then you have onboarding for a customer, you have onboarding for employees, and then you have retention and ascension for customers, and you have retention and ascension for employees. And so the entire customer lifecycle is actually mirror images, we use different words for it. But if we don’t have-

David:
Pattern’s the same.

Alex:
Because it’s people.

David:
Yep. You got me thinking, very few people learn sales because they start off as a W-2 worker. If someone brings a house cat, it’s tuna. It doesn’t learn how to hunt. A handful of people can figure out how to hunt if they’re hungry enough. But then of the salespeople, how many of them actually make it to the tier, like you’re saying, of being able to fill who could actually replace me? That’s usually where I try to take off and then I fail and I come back down and end up bouncing up and down. It’s just rare to have a human that can get that skillset because they don’t stick with it like you guys did. So if you could just clone yourself and make a whole bunch more Leilas like the business world would be-

Rob:
That’d be nice.

David:
Yes. Have a whole podcast called Find Your Leila-

Leila:
[inaudible 00:38:46].

David:
… to Entrepreneurs. Find Your Leila. That’s it.

Rob:
Okay. So you have husbands and wives, you’ve got work husbands and work wives. For y’all it actually ends up being the same. Dave’s my work husband as much as he doesn’t want to admit it. I’m curious, I am actually at a point my wife does not work at the moment, she really does want to work. She’s not super passionate about real estate, but she wants to be a part of the business. What are your thoughts on involving your spouse in your work? I mean, I feel like y’all can probably speak to this. Nose goes, got him.

Leila:
I think it was different for us because when we met we both were incredibly voraciously focused on our careers/businesses. It just so happened that they were in the same industry and we had similar views on what that looked like and what we wanted our futures to look like. I have a lot of people that come to me and say, “How can I get my wife interested in the business?” and I don’t really have an answer because it wasn’t like that. You know what I mean?

Rob:
You liked it.

Leila:
I liked it on my own, and then I met Alex.

David:
Does it sound like he’s saying, “How do I get this employee that doesn’t really want to be in this role to the role?”? Is that the same?

Leila:
Yeah, it’s like if she herself has voiced interest, then I think that you make it easy for her to acquire knowledge about it. If someone’s really actually interested, then they’ll be like, “Can I come to work with you? Can I shadow your calls? Can I do all of this?”

David:
They start taking things from you.

Leila:
They start… Yes.

David:
“I can do that. I can do that. I can do that.”

Leila:
They insert themselves, just like anybody else would. I don’t look at it, “Oh, it’s your wife,” I look at it like it’s a person. If they have interest, then they’ll find those ways to do it and they’ll be very eager. I think that a lot of people have a great marriage and then say, “Well, could we also do this together?” I don’t know. I think that there’s so many things that we learned in the beginning in that our natural skills that fit together eliminated a lot of friction. But there was still friction. I think in the beginning of working together, even though we had similar mission, values, complimentary skillsets, still learning to work together was a skill of its own. It’s an ongoing thing that we have to continue to learn and get better at. I feel like every year I’m like, “Gosh, we’ve gotten so much better.” You’re never finished, right?

David:
We… I’m sorry, go ahead.

Leila:
No, no, no. And so I think we had a different kind of scenario. I think that there’s a lot of people who want to enter that. I mean, it’s like I said earlier, you pay the toll, like there’s a toll that’s paid, which is a learning curve. And I think it’s not a matter of weeks or months, it’s years of learning how to work with your spouse.

Alex:
Yeah, I was just going to say that I think we actually fell in business love before we fell into romantic love. I’ve said this publicly before, but I think Leila and I both loved each other the day we got married, but I feel like I felt more in love with her the more we did business together. Our first date was only about business, and it was four hours long. I didn’t even ask her about anything else because I’m like, “Oh, you see this stuff?” And she’s like, “Oh yeah, I heard about these Facebook ads.” This is years ago. And I was like, “Oh, yeah, I’m running those.” And she’s like, “What?” You know what I mean? That was the whole four hours. At the end of the date, I pitched her on working for me. I was like, “Hey, this might not work out, but you should totally work for me.”

David:
Did you still have the hangover?

Leila:
This is like the first time I drank in two years. No, I felt okay that day.

Alex:
At this time, she had a book of business already, so she knew how to hunt, she knew how to kill. She had a full client roster as a personal trainer, and I was a gym owner, just a few career steps ahead. I was also older than her. And so-

David:
It seems divinely inspired that you guys got married. I’m sitting here listening to you talk thinking, “You couldn’t have created in a lab better partners for each other.”

Leila:
Yeah. I think that it’s very much like when people say, “How do you win the game?” It’s like you win in the draft.

David:
I had two questions. One is, do you feel like you fell for her as a business partner before romantic partner because your love language is business, making money, success, you’ve mentioned that before, right?

Alex:
Yeah.

David:
Which led me to the next question I was thinking is we typically do it the other way where we want romantic sparks, we want butterflies, and we’re like, “I’ll make all the practical stuff work, but I really want to be attracted.” You took the opposite approach. And from what we see now, it looks like the romantic stuff happened still. You didn’t have to just wander through life until you found that person that exploded with passion. Do you think that’s good advice for people in general that are trying to figure out who to marry?

Alex:
I will say that it has worked exceedingly well for us. And so I think Lela and I talk about this just on our own time a lot, we’re like, “All the relationships that we had before this were those crazy chemistry, all that stuff.” In the beginning of Leila and I’s relationship, literally on our second date she was like, “I just feel like you’re a friend type of guy.”

David:
Ooh, friends on a second date.

Alex:
Yeah.

Leila:
He hadn’t kissed me, and I was like, “What the hell?”

David:
Was that your way of trying to tell him he needed to do something different?

Leila:
Yeah.

David:
A little bit, okay.

Alex:
And then I just gave the most sickening belly laugh of all time.

Leila:
And then it’s never [inaudible 00:43:55]-

Alex:
First time in my entire life that any girl had been like, “You seem like a friend [inaudible 00:44:00].” I have never-

David:
You’ve never been a fan of that ever?

Leila:
You know what he told me? He’s like, “I actually respect you.”

Alex:
And that was what it was. I was like, “I enjoy talking to you.” I was like, “I don’t feel like I have to pretend to wait for you to stop talking so that I can try and talk about something that I find more interesting.” And so it’s not like, “Okay, your turn now to talk about your day.” I was like, “I just want nothing to do with that.” It just killed me inside. And so I just liked hanging. I think we hung out every day after the first date, and we didn’t go on any dates for a month until finally Leila was like, “You have not taken me anywhere,” but we spent all day… I was like, “I’m going to be working here if you want to meet me there.” And then she would just work next to me. And that was what we did after the first date. And then I was like, “I’m going to start this thing called Gym Launch,” and she was like, “Okay.” I was like, “You should quit. You should quit your job, do my thing.” Still she didn’t, and then I did the thing and came back and I was like, “Look, it worked.” And then she was like-

David:
I’ve heard you mention the moment that you were like, “That’s a girl for me.” I don’t remember the details of the story, but it had something to do with her going overseas or out of town to go crush a gym that you had just started and you hammered getting the signups. You basically filled it with lifeblood so that it could exist, and that was when it clicked for you there was something different. Did the romantic part change at that point, do you remember?

Alex:
It didn’t. It didn’t change at that point.

David:
You just did it inside.

Alex:
It made too much… I don’t have too much sense is the right word, but it was like she had basically eternally earned my respect at that point. I already respected her, but when she had gotten into that really tough spot… or I was in that really tough spot. Basically, at any other point, it would’ve been reasonable for any other person to just walk away because we split up and she went. And so she had quit her job to join me do this thing. Six months later I’m like, “I don’t know if I can do this. I’m so overwhelmed. I’ve got nine businesses and none of them are making money. Somebody stole from me.” I had all this stuff that’s going wrong. I just had a DUI, my mother’s in the hospital. I’m just like, “I have nothing left.”
And so she was like, “Well, I’m going to go do the launch that we’re supposed to do.” And then she broke every record. She still has the all-time record for the biggest launch. It was like she stood tall when shit was tough. I think that’s where I was like, “Well, wherever I want to go, I’m going to need someone like that.”

David:
I think that’s where all my best friends came from, those moments when you don’t feel strong, you feel vulnerable, you know you need somebody and they show up for you. It creates a bond that is deeper than just an attraction that can come and can go.

Alex:
She made a hundred grand in 24 days.

David:
At a time when you needed it-

Alex:
Every dollar.

David:
… more than any other time.

Alex:
Every dollar of it.

David:
Do you ever go to bed at night and just think how awesome you are that that moment happened?

Alex:
“Oh, this is because of me.”

David:
It was like the [inaudible 00:46:37].

Rob:
You have a mirror on the ceiling?

David:
Two strikes, ninth inning, bottom of the ninth, then you hit the home run that led to the New York Yankees becoming the biggest brand.

Alex:
I was just going to full circle it, which is just a lot of people are going through the dating side of this or they’re in the marriage side. There’s two different seasons on this. If you were on the dating side, I do not give advice because there’s so much individual variation that goes into relationships and whatnot. We can only comment on the fact that this was a very different dynamic for both of us, and it just so happened to have worked out. All I can share is that if you think about something all day long every day then it is very helpful to have someone else who also thinks about the exact same thing.

David:
That’s your love language it sounds like. Not many people could have figured out how to hit your love language there.

Alex:
Yeah, just talk to me about business all day.

David:
What about from your side [inaudible 00:47:28], what advice would you give to guys that are trying to figure out, “How do I get a girl in my life that can also work with me? How do I figure out if we’re partners?”?

Leila:
I think the first piece of advice that I would give is what I’m so grateful for with our relationship is that we’ve never compared it to anyone else’s. I think that even people comparing their relationship to ours, you’re going to lose, because you can’t be Alex and Leila. I think what we’ve never subscribed to is any traditional relationship norms, rules, is this okay? Is that okay? Is this bad? Is this good?

Alex:
One date night per week.

Leila:
We literally will say, we’re like-

David:
Put it in a calendar.

Leila:
“We don’t care if it’s good or bad. We like it, and it works for us.” And so I think everyone has to find that in their relationship, and I wish everyone could just release judgment of their relationship. If you like it and it works for both of you, then keep doing it. I don’t care what that looks like. I don’t think anyone else does. But I think that we’re so busy comparing ourselves. People only see us on social media, and I do think that we’re pretty transparent, but at the same time, it’s like no one relationship looks the same. You just have to stop judging yourself for whatever you do have if it’s working for you.

Alex:
Maybe it works better in other places that ours doesn’t. You know what I mean? You’re just seeing one side. You hear on this podcast, you’re like, “Man, wouldn’t that be nice?” But maybe you have something else that we don’t have. You know what I mean?

Leila:
And we just don’t know it doesn’t exist.

Alex:
Yeah. And we’re good with that.

Leila:
Yeah. works for us though [inaudible 00:48:50].

Rob:
Before we wrap up today, I did want to ask, you mentioned Dave Ramsey a little bit earlier. Did you recently have a light bulb moment in how you invest your money?

Alex:
I saw a podcast that he did with Graham Stephan. I don’t remember when it was. But Graham had him look at his investment portfolio, and he was asking Dave to just analyze it. Before Dave looked at it, he was like, “Well, what I can tell you having talked to all the billionaires that I know, they all tend to do one thing that they like and they’re good at, and they just do a lot of it.” And so he asked the follow-up question to Graham, he said, “Okay, if this pie chart, this circle where your total knowledge and experience and resources and connections, what percentage of it would be stock or market stuff, what percentage of it would be real estate, what percentage of it would be business, et cetera?” He is like, “Well, shoot, I’d probably say 85% of my knowledge is about real estate.”
When he looked at the circle, 85% of his assets were real estate. He is like, “Well, then I think this is a perfect distribution for you.” And that one bit it felt like gave me permission to do what we wanted to do but didn’t feel like it was right. Because to the point about we’re talking about relationships, I had spoken to all the guys that I knew who were at 500, a billion and up who were ahead of me, and I was like, “What should I do with this money? How should I invest it?” All this stuff. And literally every single person had an entirely different strategy. And so I was like, “Maybe I should get into hard money lending. Maybe I should get into fix and flip stuff. Maybe I should just buy apartment buildings. Maybe we should do business investing. But wait, are we doing business? Why don’t we just start another business?” I was going through all this stuff and I just didn’t know what to do.
But when I thought about that, I was like, “We like business, and we’re good at business.” If I were to draw that circle, it would be 100% business. And so our circle of assets, though high risk from the outside, when you’re buying companies that are doing two to 5 million in profit a year, which is usually around the size that we come in, those are from a investor class asset considered risky investments. But to quote Warren Buffet, “It’s only risky if you don’t know what you’re doing.” I mean to be fair, there’s always bodies. You know what I mean? But at least if you know which closets are going to have the bodies, then you’re like, “Oh, I know there’s going to be bodies there.” I mean, sure, we still get surprised every once in a while, but you have fewer surprises and the damage that you suffer from the surprises continues to go down and down. And so you can get outsized returns you have an information advantage. And so that was the piece that Dave gave us and then that’s why Acquisition. We’re like, “Well, what are we really good at? We’re really good at scaling brick-and-mortar, we’re really good at scaling services, both consumer service, professional services.” It’s like, “That’s what we’re going to buy.”

Rob:
Man, I watched you do that, and I’m just looking at this whiteboard in front of me that you actually have the marker, really missed opportunity. I should have you illustrate it.

David:
That’s great advice though everybody else is looking for what they’re doing wrong, what’s the secret. “I’m making money this way, but it could be better if it was over here,” and they’re bouncing around and no one asked the question you said, “What are you good at? And what are you happy doing?” You make money in that, and it’s going to be a much lighter lift when that’s what you’re doing.

Alex:
And if I can tack onto that, let’s say you’ve been doing something for three years and you’re making some money at it. In my opinion, the biggest mistake that entrepreneurs will make at that point is that they then look at the greener grass on the other side of the fence and say, “Man, wholesaling is actually the thing. I shouldn’t be doing flipping, I should be doing wholesaling.” And that’s actually even a little bit too close. They say crypto trading or whatever, something a little bit more out outside of the loop. They have uninformed optimism. So they go into it being like, “This is going to be amazing,” and then right after that, they get six months in, and they’re like, “I now have informed pessimism about this opportunity.” And then they go into the valley of despair, and that’s usually where they’re at at year three-ish.
But the thing is, the next part of that loop is informed optimism. Is it like, “Okay, I remember the things that got me into this. Those things are true, but there are these other things that you also have to account for.” And then you get to the fifth step, which is just mastery, achievement of the goal, whatever it is. And so most people just do step 1, 2, 3 over and over again, uninformed optimism, informed pessimism, valley of despair, switch, uninformed optimism, informed pessimism, valley of despair, switch. And so the thing is that when you’re at year three, the gains that you get from year three to year four are greater in terms of absolute return than the gains that you get from year zero to year one.
Now you’ll learn more in the first year than you do in any other year, but the time that you get the outsize return is year 10 to 11, is year 14 to 15. And that’s where if you’re thinking about business value, it’s way easier to take a business that’s doing 20 million a year and take it to 25 million a year than take a company from zero to 5 million. But in terms of absolute of which one of these is going to make you wealthier, the 20 to 25, as boring as it might be, is going to make you way wealthier than going from zero to five. And so, a lot of people start over when they really just need to push further.

Rob:
Yeah., I love that. You’re always going to be asking if the grass is greener.

Alex:
There’s always shit on the other side.

Rob:
You always want to know, “What does tasty wheat taste like?” Well, callback, that’s from The Matrix.

David:
I know. That was good. You don’t have to explain your joke.

Rob:
I do-

David:
[inaudible 00:53:59].

Rob:
… you don’t ever get my movie quotes, because you’re always like,

David:
You don’t know if I get The Matrix?

Rob:
I’ve been sitting on that one for 50 minutes.

David:
You’re just waiting.

Leila:
He’s waiting.

Rob:
I’m just like, “There will be an opportunity for tasty wheat.” Well, awesome. Well, before we wrap up, can you tell us a little bit about your new book coming out, a little preview?

Alex:
Yeah, yeah, for sure. The first book, $100M Offers, has sold us under 500,000 copies with no advertising.

Rob:
[inaudible 00:54:18].

Alex:
Thank you. Pretty pumped about that. Just word of mouth, which has been cool. That book answered the question, what do I sell? It’s like, “What do I sell to anyone?” That’s usually when someone gets into the entrepreneurial journey, that’s what they’re trying to figure out. The next thing is, “Okay, I know what I’m going to sell, but who do I sell it to?” And you need leads. And so that was the reason I put Offers before I put Leads. I wrote this book and that book actually at the same time, but I was like, “I have to put Offers out first.” And so Leads shows how to get… I’m going to rewind.
If I said, “Hey, what is a lead?” people are like, “Oh, I know what a lead is, we talk about leads all the time.” But I had a friend of mine who’s not at all in business and very smart be like, “What’s a lead?” I was like, “A name and a phone number.” And he was like, “So is an Instagram follower a lead?” I was like, “Well, I guess that is also a lead.” He’s like, “What about a YouTube subscriber?” I was like, “Well, I guess that’s not really a lead.” He’s like, “Why not?” that discussion became the pillar that Leads was built off of, which is a lead is a person you can contact. Period. That’s what it is. But then when you realize that that’s the definition of a lead, you realize you don’t actually want leads, you want to engage leads. You want someone who’s shown interest in the stuff you sell who you can also contact. And getting someone from a lead to an engaged lead, you create something to make them take that switch.
And then from there it’s like, “Okay, if I know how to get people to engage, what do I do to do that?” It’s like, “Well, you have to advertise.” And so there’s four ways that any one person can advertise, and there’s four ways that you can get other people to advertise on your behalf. So there’s only eight ways that you can get other people to know about your stuff. And so, fortunately, we’ve done over eight figures in sales in each of these eight types. Obviously in some of them more than that. And so I feel really confident that I know how to build referral systems that generate real amounts of traction. I know how to build affiliate systems that build real amounts of traction, how to run paid ads. I know how to make content. I know how to do cold outbound. I know how to run an agency to do these things on our behalf. I know how to get employees to do these actions on our behalf.
And so these are all the different ways that you can get other people to know about your stuff. And if you just know one of them, you can make good money. If you know how to do a couple of them, you can pretty much just write your own check. That for me bridges the gap for especially the newer entrepreneurs who are coming in or the more experienced entrepreneurs who are like, “Okay, I’m at a million a month, I want to get to 10 million a month, what does that look like?” And so the book starts chronologically with you have nothing. And then the end of the book basically paints the pictures of how do I have $100 million plus lead machine and just step by step how to build it. And so it took two years, 2,000 hours of writing time, so six hours a day for two years. It was the first six hours of my day every day to write the book. I’m incredibly proud of it. I do think it’ll be bigger than Offers.

Rob:
Awesome. Offers, which is also a staple in the business community. This is Daniel’s, not mine, but I look forward to pre-ordering that. Where can people get it? When does it come out? Give us some of those details.

Alex:
Acquisition.com/leads, L-E-A-D-S, is where the event… I’m going to be doing a live launch, so it’s going to be a big thing, August 19th [inaudible 00:57:30] birthday.

Rob:
You said it’s going to be a huge thing, right?

Alex:
Yeah, we’ve got 263,000 people who’ve registered so far. We’ll see what happens.

Rob:
It’s going to be awesome.

Alex:
It’s like I just hope the tech works.

Leila:
I hope nothing breaks.

Alex:
Yeah. The whole vibe is just-

David:
Who did that just happen to?

Alex:
[inaudible 00:57:46], but no one will know.

Leila:
Huh?

David:
Who did that just happen to on Twitter? Didn’t someone just-

Leila:
There’s like so many instances.

David:
Was it Tucker that had that?

Alex:
[inaudible 00:57:53] took it down.

David:
Or Elon Musk? Somebody was like announcing… No, DeSantis was announcing he’s running for president-

Alex:
Oh, really?

David:
… and Twitter’s servers couldn’t handle it, and it was a huge thing in the news. You’ve clearly been writing so much that you didn’t catch it. You’ve been hiring rock stars, so you don’t know what’s going on.

Alex:
I never know what’s going on. We’ve put a million bucks into this event, just into the event, and I’ve another project I’ve been working on for four years that I’ve not told a soul about that will be releasing live to everybody-

Rob:
That’s awesome.

Alex:
… there.

Rob:
And a little preview, what is it, just for the podcast?

David:
It’s absolutely-

Alex:
All I can say is that it’s more than a gift card and it’s less than a Tesla, and every single person who’s there will get one.

Leila:
My team doesn’t even know. It’s like a super-

David:
Did you hire Oprah to hand it out, whatever it is?

Alex:
If that Oprah episode met entrepreneurship, that’s what it will be like. I’m stoked, but it will only be for people who are there live, so it’s going to be fun.

Rob:
Yeah. Awesome. Well, if people want to learn more about you, where can they learn about your socials, YouTube, Instagram, all that kind of stuff?

Leila:
I’m pretty sure if you just search Hormozi Alex and myself will pop up on all platforms.

Alex:
Actually, I think except for Snapchat, we’re on every platform, so like LinkedIn, Twitter, Instagram, Threads.

Rob:
That’s right. Yeah-

Alex:
YouTube.

Rob:
You’ve been punching the Threads, man, love it.

Leila:
Alex is like, “This was built for me.”

Alex:
Yeah, because I’m a Twitter guy.

Leila:
He’s a writer.

Rob:
I think the first thread you posted out, I was like, “Yeah, can you just do these so we know who to copy?”

Alex:
I think I saw you comment that.

Leila:
That’s funny.

Alex:
Yeah, that’s where we’re at in acquisition.com, is if you’ve got a company doing two to 5 million in profit or EBITDA a year, we’d love to see if we can help.

Leila:
Or if you want a job, because we have rolled out what’s called Morzi Talent. So people who are looking for work, basically if they subscribe to Morzi Talent, then they get first dibs at any of the jobs in our portfolio companies or at acquisition.com.

Rob:
Cool.

David:
My last question for you guys, we’ve been asking everybody this today, my social media handle is davidgreene24. I’ve been getting roasted by all these marketers that say it’s-

Rob:
Boom.

David:
… boring and nobody likes it. Your guys’ professional opinions, how terrible is it, and can I just keep it?

Rob:
We’re wondering if he should drop the 24. Someone suggested earlier maybe that he adds a seven. So it’s davidgreene247. Thoughts?

David:
You won’t hurt my feelings.

Alex:
Oh, no-

David:
I can handle it.

Alex:
… I think it’s just on brand.

Leila:
Yeah, I think if you’ve been riding it this long, it’s funny. It might be just be part of the brand. I personally-

Rob:
We’re laughing with you, bro.

Leila:
I don’t know if you can get your handle at this point because like, trust me, I’ve tried to get mine, they’re like, “Yeah, yeah, for 300 grand.”

David:
Yes.

Rob:
Yeah, someone-

Leila:
I’m like, “Hold me hostage.”

Rob:
… wanted to sell me my URL for 20 grand, and I was like, “No.”

David:
No, I have the website, but if I switch it now I got to go try to get all the new stuff. I am a straight shooter, I’m not really known for being this big marketing scheme. So you guys are saying, “David, you’re not a moron because… ”

Leila:
I think it’s kind of quirky if you keep the 24.

David:
That’s a good thing.

Leila:
It’s kind of funny.

Alex:
It’s kind of cute. It’s kind of cute.

Rob:
Yeah, I suggested thydavidgreene. That’s been shot down in every room we’re in.

Leila:
Thydavid.

Rob:
Or thee.

David:
You see why I don’t trust the advice I’ve been given right now.

Rob:
Well then there’s also therealdavidgreene, but I said you should do the realestdavidgreene.

Leila:
Or the real real.

Alex:
I’ll just give a funny anecdote on this. I used to pooh-pooh everything brand related and was like, “It’s just quant. It’s just conversion and all that stuff.” And so our supplement company I called Prestige Labs, and I did it out of… Jokingly it’s out Prestige Worldwide, which was-

David:
I see that was.

Alex:
Right. And it was because my whole point was that the name doesn’t matter. Xerox is made up. You know what I mean? We ascribe meaning to it after the fact. And so I don’t think it matters one bit.

David:
Like ACME supplements or something.

Alex:
Yeah, I don’t think it matters one bit.

Leila:
Michelin star restaurant from Michelin Tires.

Rob:
That’s true. Awesome. Well, if you want to find David on the socials, davidgreene24, or possibly, thydavidgreene. We’ll see where we land with that. And you can find me at robuilt over on threads, Instagram, YouTube, Zenga, everything under the sun.

Alex:
MySpace

Leila:
Vine.

Rob:
Vine, that’s…

David:
Wow, that’s [inaudible 01:01:52].

Rob:
Vine is retired now, unfortunately.

David:
Well, thank you, guys.

Leila:
Thank you guys for having us.

Rob:
Really thanks for coming out.

Leila:
Thank you.

David:
Awesome interview. And thanks for sharing so much of your personal lives as well. I mean, obviously people like to hear the business stuff, but I think there are a lot of human beings that are hearing this and thinking, “Oh, I’m not crazy. I don’t have to do what other people are doing. I can look for a partner that fits into my life from a practical element before we run off and try to get into a honeymoon and I don’t have to swipe 7,000 people on Tinder to find the one that hopefully ends up working out. There’s a better-

Rob:
She’s out there, bud.

Alex:
Chase that beautiful butterfly.

David:
And that was our interview with Alex and Leila Hormozi. Rob, I know you’re on cloud nine right now. What was your favorite part of that interview?

Rob:
Well, I think they really stressed the importance of hiring and hiring intentionally. I brought the question of hiring a project manager and bringing them onto my team. It’s really funny because this is a role that I’m also needing to hire on the real estate side, but it seemed like what they were saying is project managers effectively are the junk drawer position because most people think of it incorrectly. A project manager’s there to keep timelines and set deliverables and all those types of things. But what they were saying was people just backfill every role position and call it a project manager, and I am 100% guilty of doing that. I was like, “I need a project manager on the real estate side, and I need a project manager for my CoSeg company,” but really it sounds like they want me to drill down and hire specific roles that I actually need to fill like an acquisitions manager, a dispositions manager, an underwriting manager, all that type of stuff. I was definitely just thinking of it as one grand position. So pretty eye-opening for me. It’ll definitely have some pretty big implications on the hires that I make here in the next week or two. What about you?

David:
What I thought about with that project manager was when you hire someone and they’re not doing their own job, they’re not making sure the project’s getting completed, they’re just giving you excuses for why it’s not. We think we need to hire a project manager, but what that really means is we need to hire a babysitter for the other person I’m already paying. So now you’ve created a salary to pay someone to make sure that other people that you’re paying are doing their jobs. And now if the project manager’s not making sure that the first person’s doing their job, you now have two salaries to get nothing done. I could just see how quickly companies can run out of money when you start throwing money at problems rather than hiring people that are held accountable to getting a result. So that jumped out at me. Especially with real estate sales, really any commission based job, it’s very easy for employees to say, “Well, I’m doing my best,” but they’re really not. They’re doing as much as they’re willing to do, and now you’re hiring a project manager, which is just a bandaid for the fact you made the wrong hire.
I think that’s what they were saying, is if you have to hire a project manager, you might have the wrong person in that job because someone who’s taking responsibility for the outcome that you want doesn’t need to be babysat. They don’t need someone to make sure they’re doing it. I thought that was fantastic. Especially when it comes to real estate, how many times have we hired a contractor whose job is to oversee the subs, then you got to hire a project manager to oversee the contractor to make sure that the subs are doing their job? You’re just throwing money at these problems that aren’t getting fixed.

Rob:
That actually just happened to me on a flip that I’m doing right now. I was trying to bring in a project manager and we were trying to write out their roles and responsibilities and we were just like, “What do they really do? I guess they’re going to manage the project.” When I told my contractor about this, I was like, “Hey, yeah, they’re going to help manage the project,” he was like, “I mean, I can do it, man.” He’s like, “All the stuff you’re saying that you’re going to hire them to do, that’s my job.” I was just like, “Oh.” I wasn’t used to having a contractor that was actually good at their own project management, so it was a pretty interesting follow up. I mean, this just happened to me after this conversation with the Hormozis, so it’s nice to see all the dots connecting in the world of real estate.

David:
Alex isn’t necessarily a real estate investor, but business is business, and real estate investing is a business, owning a property is like owning a business, and owning 10 properties, which is a portfolio, is like having a portfolio of businesses. And it’s business principles that determine if we’re good at what we do or not. He talked about lead follow-up as one of the key things that business owners miss out on when it comes to lead generation. He even wrote the book about it. In my real estate business, lead follow-up is crucial. In deal-finding, when I’m in buying mode, I’m always following up with offers that I wrote and seeing if they changed their mind, and I frequently will get good deals. In fact, when we bought our Scottsdale house, we used that technique. We wrote the offer, they said no, and we’re like, “All right, let’s let them wait.”
This is what I want you to say. Call in three days and say this. Call two days after that and say this. And then if they say that, that’s when we know we’re in a good place. Lead follow-up is crucial, and these principles apply no matter what you’re doing. The whole idea of win-win-win and why culture matters I thought was really good also, that you need to make sure everyone wins. That’s a mistake I made in business many times where I put myself in a position where the employee was winning, but I wasn’t. So they were getting paid regardless of how they performed. It’s a win for them, they get a paycheck, but it’s not a win for me. Well, then you don’t stay in business. Or I’ve had times where I am winning with the structure of the business, but they feel like they’re not motivated enough. So if they don’t think they’re winning, they’re not going to work. You really do have to tweak with this thing over and over and over until you get a win-win-win. Is that something you’ve noticed in your business life as well?

Rob:
Yeah, this whole episode just made me realize how lazy I’ve been about workplace culture. Because my teams are small, I’ve got several different companies, but within every single company, I mean, my team can be anywhere from one person to three people. I think my biggest team is like 10. And so in my mind running these businesses, I’m like, “Well, we’re not really that big of a company to where culture is all that important.” I think talking to them made me realize that I should really be fundamentally trying to create that from the beginning because it only gets tougher to fix and adjust the bigger the company gets.

David:
Yeah, and the same thing is true with your portfolio. You just got to remember that a company and a real estate portfolio are different versions of the exact same thing, and the principles that work in real estate work in business, and vice versa. I thought it was funny that when we asked Leila about real estate investing she made a joke and she’s like, “Oh no, I’m terrible at it.” But it’s just a flavor of business that they don’t have as much experience with. They understand gyms, they understand some of the other structures that they’re comfortable with. I’m sure they’d be good at real estate investing if they really-

Rob:
Oh my gosh, they’d be better than us.

David:
But why would they, right? If they’re able to scale with businesses instead of needing to… Because you know how it is, real estate is all about delayed gratification, is a get rich slow scheme, for sure. They’ve got a system figured out that I think is much more complicated and much more risk intensive and not passive income, it’s active. But it works for them, so that’s why they’re doing what they do. We were very lucky to have them come in. I don’t know that they’ve ever done an interview together like that.

Rob:
First time I’ve seen it, but yeah.

David:
Anything I’ve seen online, right, where you got both sides going deep into deeper things, not giving surface level questions, so this was awesome.

Rob:
Yeah. Well, I’m excited. I’m going to go start a business now, implementing everything they talked about.

David:
Yeah, just don’t name it acquisition.com. I don’t know why Alex picked a word that no one knows how to spell. So many vowels in that thing. You got to pick something easier. jobs.com.

Rob:
I’m sure that URL is taken. I’ll GoDaddy it in a second.

David:
You’re probably right. All right. This is David Greene for Rob the GoDaddy Abasolo signing off.

 

 

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