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
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If we can't clearly state our goal, we certainly won't hit it, right? You're not going to hit it by accident, for sure.
So I'm wondering, like, you know, yesterday when we looked at the VAM, like, can the business model itself be a detractor? Like, I'm trying to think of how big can we grow this in the current model before we have to look at SaaS or products or people become, you know, obviously a big issue in this type of business. So how big can this go in this type of model?
Yeah, I think it can, I mean, it can't, it's very unlikely it becomes a billion dollar a year sales business. The biggest problem with it, so the two big problems of that business are revenue retention, number one, and number two, depending on the model, if you have like coaches, because coaching doesn't scale.
I mean, you can get to whatever, 20, 30 million a year, but it kind of like, it becomes very difficult typically after that because, yeah, Getting somebody to be as good as you, this is actually what I made my whole podcast on this morning.
So if we scale, let's just say a one-on-one business as a most rudimentary version of this, you can then go down to one on four, one on eight, one to infinity, right? So you scale that way, basically more and more fractionalized access to you or your knowledge, whatever. This way we have other people. other people, right? More other people.
Where you still have one-on-one, but it's other people who are doing this. And so here you templatize fractional, like break apart the pieces into constituent parts, and then you train people on the smaller pieces that they can replicate in theory. In practice, I think what ends up happening is that, let's say I have a glass of milk.
If I say, hey, we're gonna go to one on four, one on eight, I pour that glass of milk into a shot glass and I say, do you still want it? Now, if the milk's amazing, they're still gonna take the shot glass. The alternative here is where I have that glass of milk and I have an equal size glass of milk, but I pour a little bit of milk in there and then I just pour a lot of water in.
And I said, you want this really diluted glass of milk, but it's the same amount as what you had before. And so I found that I think more businesses do a better shot going this way. thing going this way. Now the third path is what I think is the best version of this. And so if you think about knowledge businesses, there's tons of massive knowledge businesses.
So Ernst & Young, McKinsey, Bain, all started by people who put their name on the building, right? Accounting firms, law firms, consulting, all of those fundamentally have the same thing. There was a guy who was really smart and really good at some stuff and was able to get people to give him money. The difference is that these models, are predicated on basically a career path.
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