The Game with Alex Hormozi
My 2024 Lessons in Business That Will Make You Rich | Ep 819
Thu, 02 Jan 2025
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 the $100M Roadmap Course Free here: www.acquisition.com/trainingGet access to the free $100M Scaling Roadmap at www.acquisition.com/roadmap
Chapter 1: What lessons did Alex Hormozi learn in 2024?
Every year I make a podcast on the lessons and failures from the year before, and every year it is my most listened to podcast. And the wait is over. This is my lessons and failures from 2024. To give you context on the companies that I own, our average position at acquisition.com is just about 40%.
And the reason it's just about is because we have options, we have performance kickers, things like that, but it's about 40%. Our EBITDA growth, meaning basically the profit of those companies in total, went from just over $50 million to this year we'll probably finish just under $100 million in EBITDA. So really good growth here for us.
For back of napkin math, if you assume a 10x multiple on the valuation, the company in total in aggregate is over $1 billion. Probably pretty easily because the bigger the company is, in general, the larger the multiple. Now, to be clear, I don't want to claim that until we have some sort of third party validation. But it was a very good year for Acquisition.com.
Chapter 2: How did Acquisition.com achieve significant growth?
And so we'll likely cross $300 million in revenue up from $85 million in 2020. And so we have consistently grown year over year. And so this video is about what changed from $85 million in revenue to 300 plus. My first piece of advice is set fewer goals and do less long term planning. Hear me out.
The first big shift that I would say that's happened over the last year has been I have emphasized less and less long term planning. And this may sound contradictory. does some of my content about being patient. And so I think the patience is about being able to figure out what you're going to do in the meantime as you pursue your long-term goals. And I think long-term goals are very important.
But the obsession over the minutia of how you're going to get there is, I believe, an act of mental masturbation. You try and create these massive projections that are based on hundreds of variables that in reality, you just don't know what's going to happen.
And so over time, I've consistently trimmed and trimmed and trimmed our planning processes such that at this point, I pretty much only care what we're going to do in the next 12 weeks. And beyond that, we might have one target or two targets by the end of the year, but we're not going to dedicate a lot of resources to this. And this is somebody who's a big fan of preparation.
Chapter 3: Why is long-term planning considered a waste of time?
But I've just found that it ended up being a huge waste of time, mostly because whenever I looked at the plans that I made the year before, one year later, I was like, man, half this stuff isn't even relevant anymore because of new changes in conditions. I will probably continue to lean more in this direction.
And I think this has become a little bit more popularized by some of the CEOs like Jensen Huang, who despite having Nvidia over 30 plus years, has recently talked about how he basically doesn't do a lot of long-term planning. Because fundamentally, you have things that you can do today, and those are the things that you begin to allocate.
Now, sometimes what you need to do today is work for something that's going to happen in the future, but you can only control what you do today. And so I have shifted more and more in terms of what will this change about our behavior, and the rest of it, I more or less toss out.
The first thing is that we think that you're going to have this really neat line of how the growth is going to happen, right? But reality is very messy. And so what's likely going to happen is that you will flatline and then figure something out and then you'll flatline and then figure something out and then flatline to figure something out.
This is what it looks like if you were to zoom in on this little area here. If you were to zoom in here, it actually looks closer to what this is, which is you have the stagnation and then you have these improvements that occur and then increase revenue.
Now, one of the things that's also shifted my perspective on how to plan is let's say that we've got thing A, thing B, thing C, thing D, thing E that we need to do. Well, before this, I would try and, you know, diverse, you know, delegate each of these things to person one, person two, person three, person four, person five and so on.
But I would say that that appears to me like I have not done my job because I need to do a better job prioritizing. One of these things is the most important. And if you can't decide what that is, then you are not doing your job and you certainly can't expect your team to make that decision for you.
And so I've had to look at this and say, if I could only pick one of these things and we only accomplish that thing, which of these would get us closer to our vision for what the company should be? Which one would move us the furthest forward? Which of these is the biggest domino? And so what I've redone is I say, okay, A is actually the priority. I don't need to order B through C here.
I don't need to worry about what order these are in. And then I will take 1 plus 2 plus 3 plus 4 plus 5 and get all of these resources concentrated on solving A. And then what I found is that once you solve A with all those resources because everyone's aligned, then all of a sudden B happens faster, C happens faster, D happens faster than trying to do them all at once.
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Chapter 4: What is the importance of prioritizing goals?
as a consequence.
And this is why, to be clear, if you're like, wait, well, they're just going to say build a better product because if you have a good product, you're not going to lose people, you're going to get word of mouth, you're going to have higher LTV, or they're just going to say, you know, Alex is just going to say build a good brand because if you build a good brand, then all these other problems go away.
No shit. That's called leverage. And so you're like, no, no, no, I don't wanna do the one thing that would solve all my problems. I wanna try and solve each of my problems individually. Well, that's amazing for you, and you should probably get that looked at.
But the point is, is that a good strategist has to look at all available options, given the resources they have, and say, which one of these gets me the most? And fundamentally, that is leverage. Next up is the strongest force in all of business. And so I believe in this so thoroughly that there are only two concepts that are embedded within the acquisition.com logo.
The first is this cross here, which is the supply and demand curve that exists in any market. The second part is why is this a triangle? The triangle is there to exist as a fulcrum for leverage. And so fundamentally, If you can have a supply-demand curve that is dramatically in your favor, that alone will dictate this.
If you are the only person who sells this one thing and the entire world wants it, you are going to make a lot of money pretty much no matter what. Doesn't matter how good you are at marketing, doesn't matter how good you are at sales, doesn't matter how good you are at pricing, you're gonna make a ton of money.
And so I try to think, what are the fewest things that have to be true in order for me to win? And I would rather just get those things right and then everything else can fall away. And so think about this in sequence. Supply demand is the first and most important thing.
As long as we have those things, then if you had that hypothetical example of the entire world wants something and you're the only one who does it, what's the next thing you would need? Which is leverage. you'd want to be able to get as much for the effort that you put in because you would get bottlenecked based on maybe your supply chain.
You'd have other dependencies that would prevent you from capitalizing on the opportunity that the supply and demand curve has put in front of you. And so in a perfect world, you have all of that and unlimited leverage. And that allows you to maximally capitalize on opportunities. And that is why I designed the acquisition.com logo to exhibit those things. Now,
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Chapter 5: How can businesses leverage their constraints?
And so I'm going to paint a different picture for you. If I played video games all day, And someone came up to me and said, hey, why don't you go outside? And I say, I don't want to go outside. I want to keep playing video games. The thing is, is that that person's making some moral judgment that I should do something that they have projected onto my life.
Now, I'm a big believer in personal freedom, which is if you want to play video games every hour of every day until the day you die, that's your prerogative. It's not how I would want to live my life, but more power to you.
If you have an outcome that you're optimizing towards, which would be financial wealth, which is kind of the point of my channel, the people who work the most tend to make the most money. And there's a number of reasons for that. So number one is you make more money when you work more because you have less time to spend it. That sounds obvious, but I think it's like kind of silly.
If you work, you make more. If you stop working, you not only don't make, you also spend. So it's a negative to positive swing. It's actually disproportionate. The next thing is that a friend of mine messaged Elon about his vacation. He's like, hey, you should go on vacation or we should go here for vacation. And Elon's response was, I don't do vacations. And I was like, man, I love this guy.
I bring this up yet again because I feel like the more you get in the game, the more addicted to the game you get. And I think that addiction is just a term that society uses for activities that people do that have negative consequences rather than simply things that you do on a regular basis. Well, I'm addicted to food because I do it every day. I'm addicted to sleep because I do it every day.
I'm addicted to talking to Layla because I do it every day. And so it's just that addictions is when they decide that the outcome of that thing is somehow negative. But if the outcome of what I do helps more businesses grow and is something that I enjoy, why is this wrong? Big picture for me, we did end up doing one vacation in, we did two very bad vacations this year.
one was in july 4th which i ended up basically just traveling and then working the whole time so i don't know if i would consider that a vacation and then the other one we went to truly do a vacation and so this one was going to be two days uh we got there and it was this beautiful luxury resort and there's only 22 villas it's like three or four people per villa like very you know ritzy whatever and i look out on the patio of the villa that we have over the mountains and i'm like man this is beautiful
and i don't care and i think it was this realization that even vacations were something that had been passed on to me from someone earlier in my life that i was something that i should do that i must do this or else i will not gain their approval and i will get judgment from people that i care about
But when I think about who do I care about, who would care about whether or not I go on vacation, there are very few and they certainly don't have the things that I want or have accomplished what I would like to accomplish. And so why would I listen to them? And so one of the other things that we did this year is that we traveled significantly less.
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Chapter 6: What are the six horsemen of business stagnation?
cleared the desks and we're like, okay, well, let's see if some businesses would want to fly out to our headquarters and have us spend like two days kind of going over how we create value because then that way it's like, it will provide value to them. And the people who are like, oh, this is really cool. I would love to potentially like follow up with them over the long haul.
They become, they kind of enter a longer term nurture process and we can potentially do deals with those people, et cetera. That's also why we spun up ACQ Ventures, et cetera. And so that whole division of workshops came out of, we have extra space, and the portfolio team isn't fully allocated.
They work on the portfolio, obviously, but they can step down for a day or two during the month to meet other companies, network with them, share how they are turning around different companies in our portfolio, specific divisions or departments, and that'll be very additive. We can add value to everyone, it adds value to us, it adds value to them, and I get content from it.
And so that was a big W. And the reason I bring this up is, there are some things in your business that check more than one box. And so it's like, I don't want a single box check. I want like four boxes checked. And so this generates deal flow. This generates cash flow. This generates content. This generates talent flow.
And so all of these things, and it utilizes a resource that I already have paid for. I pay this building every month, right? This cost exists. I pay my team every month, no matter what, either way. And so it used an existing cost basis to create a new opportunity for content and deal flow.
And so from that, it's like, if you can just look at the pieces you have on the board, and this is actually what I do, is I look at, I try and write down with as much detail, what are all the things we do on a regular basis? Like what are the calls we take? What are the conferences we attend? What are the, like every single thing we do, and I'm like, is there a way I can recombine these things
into something that would be valuable at no cost to me. And that's where I've had these really disproportionate gains in profitable divisions or products in our company, obviously, and then within the portfolio. You probably have SOPs and checklists within your business, right, of how you do whatever you do.
Well, if you can take that and then turn those into lead magnets, then not only are they valuable for you, they also generate demand. And so that's just a very micro example of like take something you're already doing and find another use for it that requires no extra work. The next one's really big. And so this is a little bit leaking, you know, like looking forward into 2025 and beyond.
And so I believe this. So this is a bet. So I'll be clear. This is this is me making a bet and calling a shot. that IRL and AI exist on polar opposite sides of a continuum. And I think that doubling down on both of these is a good decision. And so within our portfolio, we are pushing heavily on both sides. And so post COVID, I still feel like there's unmet demand for people who want to connect.
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Chapter 7: How can you overcome overextension in business?
If you're in person, you can get away with a lot less. Now, Four roles, like fundamentally we say like, why does this person need to be here? We would only want people to be here who should be here. If finance doesn't really need to be in the office, that allows us to recruit from a wider net.
So we can recruit from all over the United States rather than requiring people to move or only picking from, call it Las Vegas, right? And so for us, the pros have been training is much better in person, culture is much stronger. I think you have an eye to efficiency, which to be fair is somewhat offset with the additional cost of the building.
You're able to see people in deep work and correct meeting cadences and things like that. Like if you're walking around everyone's on meetings all day, you're like, who's working, right? And so this allows you to, you get faster feedback loops, which I think is important. The cons of in-person is that harder to attract talent because they have to move. That's a big one.
It's probably the biggest one. But it's easier to attract other people though. So for us, what we did to accommodate this is we, for some roles, depending on the level of the role, we will also include signing bonuses and things like that. So if you're in that position, including more incentive for them to move or move their families to your place of business is a good way to do it.
I also recommend having them come out for like 30 days and stay at a hotel, just so that they don't like, you know, Deplant their whole family if for some reason it doesn't work out kind of the first month you'll know and so that's that's like a little in-between that I think is worth doing that has worked well for us and To be clear for me.
I think 30% of our portfolio is in person 70% of remote So I don't have I don't care at all about how someone chooses to structure their employee teams, I think you should just, whatever way it is, I just want there to be sound reasoning behind it. And so for us, obviously we have a lot of media, and so having the entire media team here makes sense, because I film here, I'm here.
And so they should be here too. Whereas, like I said, finance, it doesn't really make sense. And so it's just making sure that you're not being a stickler in either direction for the sake of it, and instead just saying, what problem are we solving, and which path increases the likelihood that it gets solved. Here's a few productivity hacks that helped me work a lot more this year.
And so, as I was saying earlier, I worked a lot more days this year, a lot more hours per day than I probably worked in recent history, and I needed to optimize more things. It's kind of like when a car's driving at 60 miles an hour, it's like it moves a little bit, but when you're at 200 miles an hour, a tiny movement makes a huge change. It's kind of the same thing in terms of me.
um with the increase in hours the increase in days i was like i need to get everything else dialed one massive one which is going to sound so silly is the big three of sleep so number one is pitch black and when i say pitch black i mean pitch black so tape the little lights on all the electronics in the room get blackout curtains i'm telling you just do it i took way too long to do it just do it just do it please do it
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Chapter 8: Why is understanding missed opportunities versus problems crucial?
There's the people who are always way too early. It's because they do worst case on everything. And then you've got the people who are, they do best case on everything and they're always late, right? So it's like, how do you estimate time? And how do you set reminders for yourself to get places by the time you need to?
And so literally breaking down that skill, which seems obvious, and yet there's many young people, and to be fair, sometimes old people, who don't know how to show up on time. Understanding this and saying, if we don't share this criticism, we are being nice, not kind. We are seeking contentment. We are seeking approval from everyone. We are seeking consensus. We're not seeking truth.
And so we need to be truth seeking as a business. And so we must always state the facts and tell the truth. And if someone is not up to snuff, we need to communicate that as fast as possible and give them the steps in order to remedy the situation. And so this is the part, I think both of these things get missed. Bosses will say, he's a dick, he's lazy, he's whatever.
And sometimes they'll say it to the person, sometimes they'll say it behind their back. Both of those are bad. Instead, I would encourage you to go criticism and then steps. So the way to do this is you say, tell them what to do instead. So Don't just say, don't do this. Say, do this instead of this. That way you give them directions because no one can operate on a negative. Give them what to do.
And this has dramatically improved my skills as an operator within the business. And hopefully the kind not nice is something that you can give to your team and that you can say is like, we are here to be kind. I want to help you win, but I'm not here to be your friend.
Like, and I think Reed Hastings has a really wonderful frame around this, which is like, we're a professional sports team trying to win the world championships. We are not a family. Because you're not going to fire your kid. You're not going to fire your spouse. You're not going to fire your mother. But if you're on a professional sports team, it's like we are all here to win.
And if you don't want to win, this is not the team for you. There's AAA. There's other teams. There's other teams that are pros that don't want to win. And that's fine. But that's not what we have here. And so the kindest thing that I can do for someone is give them clear feedback and opportunity to improve.
And if they don't improve, give them the opportunity to work at a place where they will better fit in. Now that it's been five years and I'm back into operating day to day on the media and conversion team that we have at acquisition.com, it's been fun to turn things around. Now I already went through the optimization framework and that's what I executed.
But the output of that was, number one, I removed all meetings. Number two, I said, you can have ad hoc stand-ups between each other when you want to solve a specific problem. So I don't want to stop communication. I just want to stop regular wasted time blocks that don't increase your output.
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