Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth.Wanna scale your business? Click here.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition Mentioned in this episode:Get access to the free $100M Scaling Roadmap at www.acquisition.com/roadmap
Chapter 1: How did Alex Hormozi achieve rapid growth in his companies?
The last three companies I founded and sold grew so fast it felt illegal. UseAllen got to $1.2 million per month at the end of the first year. Prestige Labs got to $1.5 million per month by the end of the first year. And GymLaunch got to over $2 million per month by the end of the first year. And I'm going to show you the strongest growth levers I used to get these results so that you can too.
Let's start with the first one, which is nobody knows you exist. So here's what most people think when they think about their given marketplace. So let's say you're a local dry cleaner, all right? You see that you're advertising on Facebook. And so you see you have the whole pie and so you're happy. So that's just you. Then you have you plus one other person.
Then all of a sudden you've got half of the pie. Then it's you plus three other people in the marketplace. And now you feel sad. But the reality is the marketplace is significantly bigger than you ever give it credit for. There are so many humans on Earth. And so this is what it looks like in reality. You're actually only advertising on one of four different methods.
And the way that you're doing it is only on one slice of the medium. And then within that, you have your tiny little quarter. that you are taking up. And so the marketplace has so many different ways they can communicate using each of the methods of communication. So for example, if I'm talking about content, I'm like, oh, there's somebody else in my marketplace who's marketing on Instagram.
Okay, cool. So there's that. but isn't there also other platforms you can do it on? And don't you think that maybe there's enough people in your marketplace to satisfy your business? Probably. The amount of times that I would have a gym owner, for example, who'd come to me and say, hey, there's this other guy in the marketplace who's now running Facebook ads.
I'm like, you only need 200 people in your gym to be incredibly profitable. And right now, the last time I checked, you've got one million people in your city. And so you just have to get 200 of them. And so if there's 10 others, or 100 other gyms that are advertising your area, even on the same platform, you still just need to get .00002% of that audience to just come to you.
And so you think that as these people enter, you're losing market share, but the reality is you're this tiny little speck, and most people don't even know you exist. Now, the reason that I talk about advertising more so much is that advertising is a boom. And if you're like, what's a boom?
It's actually a term that I started using internally for our business, which is a business order of magnitude change. Fundamentally, if you think about a business, there are many things that you can optimize. You can increase your close rate by 10%. You can increase your conversion rate on your opt-in page by 10%. You can increase your email follow-up. All of those things are optimizations.
And so the problem is, with optimizations, you can only go to 100%. They're capped. But with advertising, you can, in a very real way, 100x the amount of people who find out about your business. And one of the keys that small business owners get stuck in is they get in this little optimization mousetrap where they're like, I need to move this.
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Chapter 2: What are the key growth levers for business growth?
I will then usually say, hey, you're right. I'm a super flawed person. That being said, it seems like you've developed like a big audience here and they seem to like you. And so congrats on your success, right? When someone sees that, it's very hard for everyone to be like, man, that guy sucks.
It's just like now, if I were to try and like list out all the points, all I do is invite more back and forth, which I don't want to do. And it's a waste of my time. And so instead, you start all hate responses with you are right, because it's all they want to hear. And there's really nothing else to say after that. Eminem has responded to hate in two ways publicly that I absolutely love.
So the first is that when Will Ferrell confronted him about some things that Afrojack had said to him, he said, hey, Afrojack's been talking trash. Do you have anything to say about it? And Eminem just said, who? And he said, and then Will Ferrell repeated the statement. And then he just looked at him and he was like, who? And he was like, okay, yep, that's what I thought.
And so the first is, I'm so big, I can't hear him. The secondary is that you kill them with kindness, right? So you either grow so big that no one can see them or hear them, or you meet them where they're at on a different game, which is you play on kindness. and grace. And so in 8 Mile, Eminem tries to claim all of the flaws that he has so that no one else can say anything.
And so I get hit on a lot, not like that, for talking about working a lot. People are like, that's not healthy. And of course, I try to put disclaimers in every video. I'm like, do whatever you want. I get hit on for like, oh, I think he's trying to make money. Duh, I try to say it all the time. But people assume that I am trying to hide this from my audience. Of course I'm trying to make money.
I'm in business, that's the whole point I do this. And that way, if I always start with I'm here to make money, when I do something nice, then people are like, oh, well that was nice of him. Rather than me claiming that I have to be this super kind whatever person, then when I try and make money, people are like, ah, shake their finger at me. Like, it's not good.
I try and learn from Eminem and just take all of the negatives that I can think that somebody would possibly say and then just claim them as my own. Because yes, we are all flawed and none of us are perfect. And so for some reason we are bothered when someone else points out our imperfections that we would readily state ourselves we know we have deficiencies.
If I had one thing that I wanted my life to represent, it's do what you want, but don't complain about what you've got. So if you're not willing to do the things to get what you want, don't complain that you don't have them. You know, in this particular incident, it's like, could I have tried to say, hey, you know, we make your annual revenue every other day. I could say that.
I could say that our goals are not the same. One billion is not the same as a million, right? It would be the same as you making $200 a month at a lemonade stand versus somebody who's doing $20,000 a month to give a proportional comparison. So of course the effort that I have is outsized. And so what's interesting is that oftentimes hate, if you boil it down, comes down to I
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Chapter 3: Why is advertising crucial for business visibility?
And to me, that would still be kind of a 20% variation. So once you're done stealing from yourself, then let's talk about emotional versus logical buyers. This was a huge, monstrous increase in business for me.
have you ever heard from from the marketing world there's logical and there's emotional buyers i had heard it growing up and i kind of repeated it over and over again because i hadn't really thought about it i don't actually think that's true and so let me explain i actually think that there's a continuum of buyers that people sit on and you've got people who require more information so they're high info buyers and then you've got people who require less information
there's two elements this one is their information requirement and secondarily how much info they have received and so you could have a high information buyer that's further closer this little this dollar sign here that only needs a little bit more information in order to buy and then you have some people that just generically buy lots of stuff everybody loves those people of course but guess what everybody fights over those people the thing is is that the amount of low information buyers is like this the amount of high information buyers is
is an order of magnitude or multiple orders of magnitude greater. Only crazy people buy immediately. It's very normal for people to want to have more information before making a decision.
When we think about our advertising, the reason that the direct response community typically can't grow very large businesses most of the time is because they only advertise to these people and this pool of buyers is significantly smaller. But the reason building a brand, for example, and investing in an audience, is because you're trying to move them down this line.
Now, when I heard this in the earlier days of my career, I was like, I don't have time for that, I need to make money. I get it, sure, in the beginning you just advertised the six inch putts. But when you want to scale, you have to educate a higher percentage of the audience. Because they will require more to buy. The way to move people through this,
is something that Eugene Swartz pioneered in his book Breakthrough Advertising. And he talks about the five levels of awareness. So he has unaware people, so people who have just no idea about anything. The next is problem aware, so they have some sort of some sort of pain, you have solution aware, you have product aware, and then you have most aware. So, those are the five stages.
Now, a customer will basically move in this direction, going from unaware to most aware. If you want to go to broader and broader audiences to get their attention, the unaware audience you typically have to go off of broad curiosity. And so if you've ever seen those crazy like ads that are like weird articles like you know Arizona State blah blah blah has this new blah.
Like they're trying to go after a massive audience of people who have no idea what's going on. That new, you know, scientific breakthrough could lead you to buying a supplement. It could lead you to buying a weight loss thing. It could lead you to buying some sort of equipment. It could lead you to buying insurance. Like it could go in any direction, but it's the curiosity that gets them in.
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