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Hey guys, welcome back to the game. This is a guest spot on Impact 3 with Tom Biliu. I had a blast doing this

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particular episode. We're breaking this into two parts. We go deep on a ton of topics.

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It's me, so it's going to be business related. I don't get to go this deep on stuff often, and so it was

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enjoyable. Alex Hormuzzi, welcome back to the show. Thank you so much for having me here. It's really a

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pleasure. Let me ask why do smart people stay poor? They don't do the things that makes people rich.

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And I think they probably convince themselves that they're smarter than they are. And so if you were

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smart, then you would be rich. And so then it follows that there's probably a series of traits

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of behavior that you don't do either because you think you're above them or you don't know about

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them. So either it's a declarative knowledge deficit, meaning you don't know about the thing,

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which has nothing to do with the intelligence, like if somebody eats an apple. Sorry, banana,

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and they're from a different country, and they just eat it through the skin. It doesn't mean

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they're stupid. It means they're ignorant, which is very different. That's a declarative deficit.

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And there's procedural deficits, which is knowing how to. And I think one of the big difficulties

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with smart people is they have tremendous amounts of declarative knowledge and very little procedural

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knowledge. And so it's like saying you read a book on how to do a private equity deal, and you know,

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everything that has to happen, but you've never done a private equity deal. It's probably

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unlikely that you know how to do a private equity deal. And so delineating those things has been

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helped for me. And since the procedural knowledge has significantly more utility on a daily basis

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from a money-making perspective, I have reduced, or at least this means transitioning to me,

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but I have reduced the amount of time that I spend on declarative knowledge. And I try to get to

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the procedural part of it as fast as I possibly can, because I know that I'll learn significantly more

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by failing and doing it, then you know, reading 100 books on sales versus doing 100 phone calls.

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Like you'll learn a lot more in the first summer calls. Yeah, it's interesting. This to me is,

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I'm always trying to get entrepreneurs to one thing from first principles, which most people

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don't even know what that means. So you start by defining it. But this feels like that,

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getting to understand the essence of what it is so that you understand it the way that somebody

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understands a combustion engine. So you can get in and be like, well, I know what has to happen

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for this car to go. And if I know what has to happen, you can break it, you can pull it apart,

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and I'll be able to put it back together because I actually understand how this works. So how does

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wealth creation work? You have to have a mechanism for letting people know about your stuff.

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And so that can happen on a variety of channels. That typically happens either one on one or one to many.

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And so one on one would be you knock on doors, you reach out to people via DM, you send emails,

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you send direct mail, you make phone calls, you send text messages. Any of those are one on one

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outreach is one way of letting people know you could do one to many to people who already know

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who you are, which is basically today's equivalent of a billboard, which is social media. You make

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posts, you make content. The third way would be that you run paid advertisements. So on those same

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platforms, you just pay to get the exposure, rather than doing it by earning it through quality

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content. And then the kind of like the door door four would be using those three methods to then

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get someone who already has the type of person that you want to advertise to and doing structuring

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some sort of deal with them, but you'd still need to reach out to them one on one, you'd have to make

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content to attract them, we'd have to run it out to get to that first. So these are the core things

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that someone must do to promote whatever they have because if we think about it from what must occur

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in order for a transaction to happen, will people have to know that you exist or that your product

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exists. No one can buy something without knowing it exists. And so we have to start with promotion.

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The second component is that they have some sort of voluntary exchange. And so that means you

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have goods and services that are exchanged for money. And so I think the idea of like money being

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created really only happens with the government, but for everybody else, we exchange for it. And so

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there are people all around us like one of my really fun exercises is looking at whatever room

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you're in and knowing that everything that was there, there's a business behind it. So like the

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walls you have, there's there's the person who manufactured the role materials that's a person

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who sourced the materials, the labor that went to installing it. There's an architect who designed

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it and then you look at this mic and you're like, okay, well, there's there's this foam thing which

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you probably got from a third party. Then there's the in the mechanisms inside which is another

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business. There's the distributor that you bought this front like there's all these pieces when

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people are like, man, I just, I don't know what opportunities there are. I'm like, you can literally

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open your eyes and everything that you see has a business behind it. And so from the value component

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for people who are, I'll just tie this into people we're starting out. I recommend most people start

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with services because it requires no capital and you require time. And when you start out you use

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what you have. So if you have no money and you only have time then you trade the time for money.

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And so either you're going to do something that other people don't want to do that they know how to

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do. So like taking someone's trash out, doing lawn care, washing things like cleaning, those are all

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things that people know how to do but don't want. Then the second level of that is doing things that

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people don't want to do or know how to do. And obviously that's knowledge work which you get,

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the amount that you can get paid is predicated on the value that whatever that skill deficiency is

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to the other person. And so I think about it like that. The person has to know you exist. So you

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have to do one of those advertising activities I referenced. And then the thing that you give them

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is you're going to give them some amount of time back either the time to learn the skill or the time

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to do the skill. And then once that exchange is made then both people say thank you because they

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didn't want to do the work and you wanted the money. And so everyone wins. And then around and

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around we go. Okay so the around and around we go you and I both know that even though you just laid

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out a lot of things that are very, very true. Do you think about the gap as to why the vast majority

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of humanity will not be able to translate that into actual money? I think a lot of people spend

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a lot of time on everything that isn't revenue generating. And so everything that's not,

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well, we just outlined like if you're not reaching out to people in one you're not posting content

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or you're not running ads or getting in touch with someone who already hasn't audience of the

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people you want to reach. If you're not doing that right now then nothing else you do matters.

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It doesn't matter. You have to have something to sell which like I said you can start with your time

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very easy. And my recommendation is to go and get money from a stranger. It doesn't matter what

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you sell. Just get a dollar from a stranger to actually walk through the process. That's the

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procedural knowledge. Like it's one thing. Okay, oh shoot. How do I take a credit card? Oh,

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that's a whole other thing. Oh I have to get a payment process. Oh do you get a payment process?

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I need a bank account. Oh do you get a bank account? I need a LLC. Right. So like you walked in

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like oh here we go. Now now I can get my first dollar across. Once you get the first dollar across

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the second one comes very fast. And so why don't people do the stuff that it takes to make money

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because they're doing everything else that doesn't make money. I've got. So I am now teaching

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a business scaling course. Oh cool. Yes it actually is. We're a lot of fun. Where can people find it?

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Oh sure. It's so funny because the answer of course is school, your company. But I promise we

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did not talk about that. But yeah, on school. And the it's got me asking a lot. Like okay, I really

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want these people to be successful for no other reason than to be a glowing testimonial. And so

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what's going to be the place that they fall down. There is a concept in sailing that I am beginning

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to think other than intellect which unfortunately matters. I'm beginning to think is like the thing

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is called velocity made good VMG. And the whole idea is that you can have a lot of wind.

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But if your sails aren't angled in the right direction, you could be moving fast but not going

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in the direction that you want to go. You could be not moving at all because your sails just aren't

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able to capture it. Or you could actually be moving fast in the direction that you want to go. And

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that to me like pulling that apart as to what are the things that people don't understand.

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What are like if we were going to make angling the sails not a metaphor but like a reality.

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What is it like as somebody who's now scaled a business tremendously. What is it in all of those

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things that allows you to capture the potency of your intellect to understand that making

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just making content doesn't do it. The content has to be aimed in a direction. It has to have a

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goal in mind. How would you teach entrepreneurs how to quote unquote angle the sails.

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So the process that I follow is common factors analysis for basically a retroactive lookback

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window. Now that sounds like a whole bunch of fancy words. But basically I look back at stuff I

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did and see what worked better than other stuff. And then I say okay well the top 10% what things

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that they have in common. And then the bottom 10% or the bottom half what things that did those

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lack compared to the top 10%. Then I try and do a next batch of activities whether it's phone calls

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whether it's content whether it's product iterations that then do more of the thing that worked. And so

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that process has been I think the fastest feedback loop that I've had. So rather than trying to find

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like a specific course around something super niche which gets really difficult the more niche it is.

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I rely on the universe for feedback which is like we have to try 100 repetitions of whatever the

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thing is look at the top 10 or 20% look at the common factors and then do a whole next batch of

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100 with those common factors. If performance goes up then the variables that we isolated isolated

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were the correct ones. And then within that next batch there will be another top 10 or 20% that by

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variation of repetition which will always happen there will be other mutations like in DNA that occurred

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in that subset that I can then replicate again. And that process is how I got good at sales.

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It's how I started making content. But I think the first piece that people stop that they prevent

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themselves from doing is doing the 100 repetitions because they think that they're it's the fallacy of

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the perfect pick. Like they're going to get it all right so that they don't have to fail the first

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time. But like my favorite one of my favorite scenes in the matrix is when Neo tries to jump across

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both buildings and then he falls and cipher everyone's like what does it mean and he's like everybody

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falls the first time. So even the one falls the first time obviously wasn't the one that whatever

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we can get into that. But I just like that as a failure as an assumption rather than something to

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avoid. Like Elon was able to get the rockets up because he failed five times faster than people

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were able to do one. So he got five failed rockets out before he got a sixth and everybody was

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looking at the five failures. But he's like we'll look at how much further we got with each one.

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And I think that most so one of the difficulties with skill is that masters have more milestones

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along the way. And so they're able to mark progress with more nuance. A beginner only sees kind

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of a binary outcome between it worked or it didn't work. But for me if I'm going to go into a new

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advertising channel for example. If I want to say I want to start doing cold outbound. Well

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I actually have a great story about this. When we started doing cold outbound for gym launch

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my executive team. So you know not like experienced people about three or four months in basically

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like an intervention with me. And they said you're putting all of your time and attention to this.

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We think this is a shiny object using my words against me. This is a woman in the red dress.

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And we think you should stop and let's double down on what works which for us at the time was paid

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ads and some content. And the thing is is that they were too far away to know the progress we were

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making. And so they just saw that we basically hadn't made any sales. We need one sale in like three

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months. But I knew that the first problem we had is we didn't know where to get the data from.

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Where do we get these lists from. So then we finally got the list and they're like okay but no one's

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picking up. We have to enrich the data. Okay then we reach the data. Then no one is still picking

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up. So then we're like oh well we have to find out how to get people to pick up. So we have to do

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local call wrapping on our phone so that increases the pickup frequency. So then people start picking

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up but then no one wanted to book a call because our script was off. So we fixed the hook and then

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people would listen to us but they didn't like the offers and we fixed the offer. Then people

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came to the second call. But then they weren't showing up the second call and then we were like okay

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we have to create up follow-ups sequence. Now at this point they're like hey you need to get

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you need to stop. But it was just we have a hundred steps that we have to take and we're 33%

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of the way there. But if you're a beginner you don't know you're 33% of the way there. And so I

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think it's one of the difficult things as a beginner is that there is there is a leap of faith.

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Like when you do your first week at the gym you're not going to get results. But it doesn't mean

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that working out is wrong. It just means you're measuring the wrong time horizon. And I think one

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of the things that has that's thrown a ton of beginners off is the understanding of volatility

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and volume. So basically when you when you have a new business or a new endeavor what appears

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inconsistent or volatile is typically a function of doing too little volume. And so it's like if I

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it's like yeah you know one sale comes in every you know a couple weeks it's I'm still you know

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but if we look at the activities that generate that sale it's like you might have done a hundred

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reach outs over 30 days and then one of them becomes a sale. So it appears volatile but really it's

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just you got 1% and you're doing far too little. And so if we did 100 a day then all of a sudden we

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might make one sale a day and all of a sudden it seemed very consistent. And so the volatility is

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only a function of two or of insufficient volume. And so I think that that misconception is why

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many people who start out fail quickly or choose not to start because they are measuring their

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feedback loop on too short of a time horizon. All right so if 90% of businesses fail outright.

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96% fail to break a million and only 4% go over that. What is it that those have in common?

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The ones that make it do they share something in common and if so what?

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Well I think to cross a million you need a consistent acquisition process. I think that's about

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a customer acquisition. Yeah sorry yeah customer acquisition process like in the beginning you have

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to do something period 0 to 1 you have to do something and then you have to make your first dollar

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and then your advertising is inconsistent because you're inconsistent. Once you become consistent

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then your sales become inconsistent because you don't have a process. So then you have to

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dial in the sales process. So basically advertising in sales have to become a consistent process

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with predictive metrics. We know that if we do 100 primary actions whether that's a 100

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post, 100 dollars an ad spend, 100 reach outs that that will generate this many leads which

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generates this many calls which generates this many sales and it could be on e-commerce or it could

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be in a service or environment like I'm describing with calls but fundamentally you just have to

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get to that equation. And once you get there then it's just inputs and outputs and then you're

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just pouring as much in and then figure out what the constraints are from you putting more in.

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At least that's how I think about it. Do you force yourself to predict the outcome of initiative

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before you do it? Not as much as I used to to be really honest with you. This is actually a huge

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change for me in terms of how we grow how grow our portfolio now. I'm actually really curious

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what you think on this. But I heard Jensen Huang say it and so I feel like a little bit better.

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But basically they did away with all long term planning and I always felt like long term planning

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because when I got a year later I was like half these things that we were talking about a year ago

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the variables of the environment, talent, many of the major movers have changed what the priorities

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are in the business. And so I focus almost exclusively now on what are we going to do in the next 12

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weeks. Now we obviously have long term objectives but I don't want to plan out forecasts and

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and basically obsess and get everything down to the decimal when I can't even estimate the big

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forces that are going to be at play. Now if I say I think if we build the brand this year

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that is a good thing and that's our number and priority. Think right then I can reverse that

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but I'm reversing it only into the present for the next 12 weeks because things will change.

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Very interesting. So I'm thinking of a slightly different angle. So here's what I always tell

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entrepreneurs to do. So you describe a very similar thing to the way that I try to go about

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scaling which I call the physics of progress. Okay. So to me progress has a nature. There's just

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a way that it works. So you try a thing and it either works or it doesn't but to know if it worked

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you had to say this is where I'm trying to end up. This is what I think is my obstacle. This is the

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thing I think I need to do to overcome my obstacle. Now I'm going to do that. But what I find is

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entrepreneurs will lie to themselves when they get the result and they'll be like yeah that's

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roughly what I expected. Now the problem is that that will break their ability to do things as a

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thought exercise. And so now they have to actually test everything not realizing they don't know how

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to predict the outcome. So what I tell them to do is look and this is what I do myself. I'm going

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to do this thing whether it's build a piece of content and put it out whatever. And I think this

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is going to get a million views 1.5 whatever. So when it does 75,000 views I'm like whoa there is

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something I did not understand. And so when it comes to content I'll even predict at the idea level

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and I okay this is what I think it's going to get. Then we'll execute and I'll say actually now

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is good. And so now I think it's going to be this and then you put it out. And that way if you

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can really come to understand why something works or it doesn't work now you've got a better shot.

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But because I know I'm prone to lie to myself. Yeah yeah this is roughly what I was expecting

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because people want to look cool. Yeah. But you're saying in that scenario you guys just sort of

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art by the pound. Yeah. A lot more things out. Are you looking to build intuition or

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yeah I mean I think I'm so aligned with what you said you know what are the causal factors.

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And I mean the whole common factors analysis concept is basically trying to do that like how can

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we identify it like we're going to do everything with these variables in addition to the last time

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and if those variables don't meaningfully change then they're not the correct variables.

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But so funny you said that because I thought you were going to go in a different direction. So I've

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been putting together this $100 million scaling roadmap. It's probably the biggest project that I've

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done in a long time. It actually releases on Black Friday. It's free. It's free for everybody.

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I'm so shocked. I'm not sure I'm going to see the free stuff. But the first thing I

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I spent a long time on was like is there a micro framework that fits into this larger framework

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which is like how does anything scale and then I try to make an acronym out of it and I think

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I think I have a decent one. So S is start. You got to start. You have to do something.

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C is compound. You have to do more. So first you start then you do more. A is augment.

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And then you do better. So it's like okay I've done a lot. That's the common factors part.

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So I'm going to try and do something better. L is leverage. So how can I get it to be consistent?

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How can I do? How can I automate it? Both sides of that. And then E is expand. You do it again.

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So that's the loop. So that scaling loop exists on content at all levels,

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organizational structure because that that one first we start and we do more. Then we do better.

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Then we try and make it consistent and automate it. And then we expanded the next thing

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that works for markets. It works all the way across. So that fundamental unit became how I

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thought through scaling all eight departments, which is what I divide everything into. So it's customer

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service product, sales, marketing, IT, HR, recruiting, and finance. I don't put legal in there

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because I think there's most people out there certainly going anyways for a while. And so there's

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the eight functions that I had of the business going from zero to 500 people head count. I did zero

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to 100 million because no one would know what zero to 500 people would be. But most businesses at 500

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head count are usually over 100 million. And it was easier to draw parallels on organizational

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structure rather than by revenue because like a software company like school can do $100 million

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with 25 people. Whereas a restaurant might do a million dollars to 25 people. And so doing it by

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revenue felt to it wouldn't be it wouldn't be valid or useful. And so instead I went by head count

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which had far more similarities. And so in thinking about that scaling, I've broken into first

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there's functions like what must occur in order for us to move to the next level. And then you

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have the people who do those functions. And then the third element is the operations that connects

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the people to the functions. And so that would be like training, meeting cadence, communication

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structures, that's all the operation side. And then the people is what is the hierarchical,

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how does the hierarchy look? Who do you need to hire at what point? Typically. And so that's basically

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the three sides of the of the pyramid in terms of thinking about scale. The scaling roadmap that I

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have that I came out is just the functions part because it was already a monster. Basically it's like

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an hour plus long video going through each of the functions of each of the departments at each

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level. And then I vetted it with a few of my friends who have multi-billion dollar companies. And

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they're like, dude, this is so accurate. It's freaky. And so I was like, I felt really good about

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that. And they helped me with a couple of them. I would raise it like this. And maybe this is, you

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know, move this instead of here. But that micro framework of you have to start. Then we have to do more,

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we have to do better. Then we have to automate it or create some sort of leverage around it. And then

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we expanded the next thing was the micro concept that I then applied across all departments

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to tease out the functions that happen at each at each level.

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Makes a lot of sense now. So again, I'm always trying to figure out where are people going to fall

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down because you can give this stuff to people and they're still going to struggle. So you said

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something earlier that that is profoundly insightful that I want to know how if you have a method

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for that or if you just have a brain for it, but you said we need to get local call wrapping as

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people are more likely to pick up a local number. So you're sitting in a room. You're not getting

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the results that you want. And you start thinking to yourself, what is stopping this from happening?

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Does it just bubble up into your conscious mind or do you have a method?

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So I would think, so if I would have to solve this problem out loud in front of everyone,

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I would think, okay, what we're doing is not working. What is it that increases the

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likely that I pick up my phone when a phone number calls? Okay. If I know the person and like them,

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that would be the highest likelihood person that I would pick up. Okay. So Layla, that's the highest

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likelihood pick up. The second highest likelihood would be somebody that I know so their number is saved.

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Okay. Got it. Now, what numbers that I don't know would I be more likely to pick up the numbers,

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other numbers that I don't know? Well, a local number that would either be local for my hometown

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or local to my regional area. Those would be the two categories that I would probably pick.

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Now, the call wrapping feature that we were able to do could only do one of those because it didn't

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know where they were, but it did know what what Erica they had so we could call from that.

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But if there was another software, for example, that could do both and that would have been even

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cooler. But that's how I would reason through it. And then obviously the lowest probability would be

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like a four-digit number that's calling from, you know, Zimbabwe or a private call or something

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like that, I probably wouldn't pick up. And so I just walk through it from from that perspective

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that I probably also ask other people, what are the calls that you'd be most likely to pick up?

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What are the call, you know, then and walk through it and then I'll try and tease it out that way

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if I had to solve the problem. So that is one of my favorite things to do is to go to a conference,

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stand up on stage with a microphone and say, okay, ask me your hardest question. I have nowhere to go.

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There's nowhere for me to hide. What is that biggest problem that you have in your business?

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I've had people ask me stuff like, I am a farmer in South America and I'm going up against the

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cartel. What do I do? I mean, like really crazy stuff. But if you can do what you just did in

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a formal fashion, which I'll round to thinking from first principles, like if you just start.

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So I'll tell entrepreneurs, you need to start at literal physics. Like what do we know about physics?

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Start from there. So this was the thing at Quest where we go to make the bar. Everyone says the bar

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can't be made and we're like, hold on, this is not violate the laws of physics. You then realize

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the thing that's actually stopping us is that for the last 70 years, corn has been subsidized by

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the government. So everybody uses high fructose corn syrup. So all the equipment that's being

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engineered is being engineered, thinking you're going to use high fructose corn syrup, which has

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a certain viscosity. And so now you go, oh, wait a second. So all we have to do is engineer our

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own equipment. Got it. Now, maybe we're not willing to do it, but at least now I know what that

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sequence going back to a combustion engine. If you understand how the engine works, you can walk

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through and be like, it's broken right there. And now you can go, okay, how would I fix that?

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What is the level of physics that's going to carry across? Now what you did, which is the shortcut

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that most people take is, look, I'm trying to sell a thing to a guy. And so now I'm just leaping,

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leaping to the physics of the human mind. So what do I know to be true about people? And the way that

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you just walked through that, it's so brilliant. How do you get people to do that? Like do you have

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magic words? Do you have a training thing that you do for people that come on? So first off, I think

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it's a practice that I think it's a skill. I think you practice doing it over and over and over again,

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and you get better at doing it. But I would say the thing that I try to practice by modeling that

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other people can model is thinking about things only in the observable universe. And so eliminating

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a lot of the fanfare of like motivation, energy, frequency, you know, manifestation, like all of these

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things, I see all of those as noises that we make with our faces that may or may not increase the

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likelihood that we take certain actions. And those actions have either higher low correlates or

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are higher low correlates for the outcome that we want. And so in trying to break apart a system

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or an apartment that's not working, I think about a lot in terms of approximations. What increases

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or decreases the likelihood that what we want to have happened happens. And that creates a really

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easy razor black and white to this increase the likelihood. Okay, so if our team is incentivized on

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performance of a higher likelihood that they do the stuff that performs. If they're incentivized on

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hierarchy, then it increases the likelihood that they will perform in terms of hierarchy and politics.

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So it's like, okay, well, then I can bet then I should do that. Then we have to get into the execution

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of it. But just from from an ideological perspective, getting those what would make it more likely to

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occur has been a really has been like my first razor for this. And then in terms of the creative

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problem solving, which I love that you just went through with the bar thing is there was like an

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implied question that you ask, which is probably my the two most frequently asked questions are the one

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I just said, which is what does this increase or decrease likelihood. And the second is what would it take?

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And I love that question because it it it it presumes or it assumes success or it assumes

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reality that we can make a bar that would do that. Okay, then what would it take for that to happen?

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Well, I guess we'd have to like have our own facilities. Okay, well, we'd have to have our own

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machine like we'd have to have a different supplier that it's okay. Great. Now that we know what that

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is, do we have the resources today or do we need to use resourcefulness? That's one of the two.

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Either we have the resources or we have to go get them. And is the tradeoff for the for the outcome

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worth assembling those resources? And what I found and this is really fun stuff. This is like probably

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the most fun thing that I do in my life, which is asking the question of like, okay, what would it take

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else would have to be true for impact theory to get 10 times the views in 12 months? It's not

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physically impossible. There's no reason for it to be like somebody else is there's another

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YouTuber right now who's going to do it this year. So what would it take for us to get that?

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Now that might mean we'd have to we do have to get the smartest people. Okay, well, what does it take

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to get the smartest people? Well, probably more money or maybe some chunk of the upside and maybe

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I have like and I might not get that guy, but there's probably 10 of those guys or 20 of those guys.

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And if I go to all of them, is it reasonable to believe that all 20 will turn me down? Probably not.

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Okay, what offer would I need to give them to make it worth it for them? And then is what I give them

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worth less than what I get on the larger umbrella? And if the answer is no, then we make the trade.

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But I think a lot of people think in terms of I'm here, how do I how do I do more of what I'm doing?

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Rather than what would have to be true for this to be 10 times bigger? And are the resources required

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to have that happen within my control? And oftentimes they are, but it's a move that's off the board.

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It's not in the in the immediate do more. And I'm all about do more do better, like to be clear.

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But every once in a while, the order of magnets you change it to the business happen when you use

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something different. And it's usually and to me, that is strategy is that you've limited resources

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against unlimited potential moves. There's a million things you can do, but you only have this much

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time, this much money, this many people. And so the best strategists in my opinion have the most

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visibility into the most potential moves and allocate the asset or the resources to the thing

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that gets the highest return. And I think the thought process of thinking, what would it take for

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this reality to be true? And then working backwards has been one of the most fruitful and productive

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thought processes that I go through from a strategic perspective.

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Dude, violent agreement. So Lisa and I call it no bullshit, what would it take?

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Okay. So of everything that you're trying to do in your business, no bullshit, what would it take?

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Again, you might not be willing to do it, but you shift out of problem mindset into solution-oriented

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mindset. This is one of the things that I find the hardest to instill in people, especially if

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just by nature, they're a problem finder where they can tell you all the reasons why something

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isn't going to work. But Peter Teal has a really cool way to frame this, which is to ask,

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how do I make my 10-year plan happen in six months? Because he said, everybody gets locked into

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this incrementalism. Like, how do I make this 10% better, 30% better? And he's like, you have to

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throw everything that you know away when you have to make something 10x or 100 times better.

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Now, all of a sudden, you're going to be reaching for what I call a frame of reference that is so

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radically different than the way that you look at the world now. And I'm always trying to get

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entrepreneurs to understand you are trapped inside of a frame of reference right now and you don't

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even realize it. It's shit that your parents said to you when you were a kid. It's the girl that you

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asked out and it didn't go well. It's the first sales calls you didn't they failed. It's that

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business that went under. It's a thing a VC said to you one time in a meeting that just kicked you

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in the nuts. And once you understand, oh, okay, wait a second. I have to get out. This is the box

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that people are telling me to think outside of. And I have to find a way out of this. And that

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Peter Teal angle of I have to make something that I thought would take me 10 years. I have to make

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it happen in six months. And I refuse to let myself believe that it's impossible. So now it's like,

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like you said, what would have to be true? Yeah. I love that. And the for the for the beginner who's

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Ed's zero. So we went, we went sky. Now we're going to go back down the dirt.

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The way that you'd frame that is what would I have to do that would make it unreasonable

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that I didn't get a sale. Like how much action would you be like, there's no way. There's no

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possible way that if I ask a thousand people to buy something, one doesn't buy it. There's just

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there's no way. And so then you take that and he's like, okay, well, just in case I multiply by 10.

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If I ask 10,000 people and the thing is is that 10,000 is not that hard to do. Like you hear that

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and you're like 10,000. But like right now, if you think about that, you're like, well, I mean,

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yeah, obviously if I ask 10,000 people, okay, 100 people a day, 100 days. It's a quarter.

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And if right now you've been stuck in years of not making that first dollar, years of wanting to

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start a business, then a quarter is nothing. And so again, we have this, well, it'd be unreasonable

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that if you make, you know, 10,000 asks of different people. And the thing is is that you also

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have a feedback loop, which is that you'll look at the first hundred. Well, which one's got closure

375
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to saying yes, because you didn't get a yes yet. Maybe maybe you do get a yes on the first one.

376
00:31:22.080 --> 00:31:26.960
It happens a lot of people are like, they commit mentally to doing 10,000 and by day four,

377
00:31:26.960 --> 00:31:30.960
they're like, oh my god, I got a sale. But the idea and maybe this is maybe I should teach this

378
00:31:30.960 --> 00:31:34.480
differently because maybe I should just say do 100 today, but I want people to stick with it.

379
00:31:35.360 --> 00:31:42.080
But when when when people do that, the feedback loop of which ones went well, which ones didn't go well,

380
00:31:42.080 --> 00:31:44.880
what did I do in the beginning? This one's I made a joke at the beginning. Okay, I'm going to make a

381
00:31:44.880 --> 00:31:49.040
joke on all of them next time. Great. Now I made a joke. Okay, I got further in the sale with these

382
00:31:49.040 --> 00:31:53.600
guys. This guy even asked me about price. Okay, what happened in that one? Okay, this one I asked

383
00:31:53.600 --> 00:31:57.680
him about what he was struggling with earlier on. Okay, I'm going to start asking that question too.

384
00:31:57.680 --> 00:32:00.800
So I'm going to make my joke and then ask him what he's struggling with. And I'm going to do that

385
00:32:00.800 --> 00:32:05.440
100 times. And so that's the that's the process of iteration that that can get you to that first

386
00:32:05.440 --> 00:32:10.320
that first W. And then you just do as many times as you can. Yeah, iteration, iteration. It's

387
00:32:10.320 --> 00:32:16.560
funny. People are so terrified of failure. Right. That they don't even stop to think that oh,

388
00:32:16.560 --> 00:32:21.840
if I could just not worry about embarrassing myself, then I could get in the game, throw the punches,

389
00:32:21.840 --> 00:32:27.200
look foolish, but I will get better and better. I've often joked. It's definitely not a joke,

390
00:32:27.200 --> 00:32:32.480
but I've often said that part of what is my superpowers that I can be embarrassed longer than the next

391
00:32:32.480 --> 00:32:37.440
person. And also, let me know what you think about this. I think you have whatever 8.4 billion

392
00:32:37.440 --> 00:32:41.680
chances to make a first impression. Probably more than that because most people are going to forget

393
00:32:41.680 --> 00:32:46.320
that they ever encountered you in the first place. And so getting out ultimately, I think what people

394
00:32:46.320 --> 00:32:52.800
care about is can you they have a screaming problem that you make go away and they'll forgive

395
00:32:52.800 --> 00:32:58.320
everything that they've encountered up to that point. If you can and anybody somebody that they

396
00:32:58.320 --> 00:33:04.800
respect told them no for real, like this works. I think you bother. You have a 100% chance of

397
00:33:04.800 --> 00:33:10.960
bothering somebody on earth by existing. And so if every action you take has somebody who will

398
00:33:10.960 --> 00:33:14.000
hate it, then it kind of cancels everything out. And you might as well just do whatever you're

399
00:33:14.000 --> 00:33:20.480
going to do anyways. Very fair. Speaking of somebody that clearly winds people up, you mentioned

400
00:33:20.480 --> 00:33:30.720
Elon earlier. Yeah. What is it that makes him special? I, I, I, so many things, you know, I mean,

401
00:33:30.720 --> 00:33:36.960
how many guys have six billion dollar companies and run all of them and have time to go all in on

402
00:33:36.960 --> 00:33:41.680
political campaigns in the meantime, notwithstanding what side or any of that, but just just the

403
00:33:42.000 --> 00:33:46.800
like the big question that I feel like is the unspoken one right now, at least in the zeitgeist

404
00:33:46.800 --> 00:33:52.800
of the entrepreneur world is, how does he do it? And I love the impossible nature of the feeds that

405
00:33:52.800 --> 00:33:57.840
he takes on, literally pushing the realm of physics, obviously with, with SpaceX, but he reinvented

406
00:33:57.840 --> 00:34:03.440
the car industry. He's creating brain, you know, brain chips. He's, he's aggressively attacking AI.

407
00:34:03.440 --> 00:34:09.360
I'm sure you saw the, the Jensen Wang interview where he's like, he did in 19 days what everyone

408
00:34:09.360 --> 00:34:16.000
else takes three years to do. And so we're talking multiple orders of magnitude in terms of

409
00:34:16.000 --> 00:34:20.000
improvement compared to the basics because he starts at physics and works this way, but he truly

410
00:34:20.000 --> 00:34:25.680
does it because he's also like a physicist. He really knows it. Like, I get to pretend it's

411
00:34:25.680 --> 00:34:33.360
on the, you know, intellect, we, you know, whatever. He really does. And so I, that, that's his, his

412
00:34:33.360 --> 00:34:39.840
material achievements. But I think the thing that I admire the most is the balls. The man is not

413
00:34:39.840 --> 00:34:47.280
a coward. And I think that in thinking about him, I think about what are the things that he does?

414
00:34:47.280 --> 00:34:52.320
What are the things that I do? He is more successful than me. How can I do more of those actions that

415
00:34:52.320 --> 00:34:57.360
he does in order to approximate his success? And so I think modeling is one of the most effective

416
00:34:57.360 --> 00:35:01.760
ways for people to learn. It's how children learns, how monkeys learn, it's cross species. And I

417
00:35:01.760 --> 00:35:06.240
think that he functions as a model for many people. Now again, he only became political in the

418
00:35:06.240 --> 00:35:09.760
last three years. So if you all of a sudden now hate him, like maybe question that if you didn't

419
00:35:09.760 --> 00:35:15.600
hate him three years ago. But you cannot question that he is the best, like right now people say it's

420
00:35:15.600 --> 00:35:19.920
the best entrepreneur of our generation. I think he's the best entrepreneur of all time. It seems

421
00:35:19.920 --> 00:35:24.640
like it to me. It's not even, to me, it's not even like he's, yeah, I mean, I could, I could get on

422
00:35:24.720 --> 00:35:33.040
on an Elon parade. But he has forced me to think significantly bigger about the problems that I

423
00:35:33.040 --> 00:35:42.160
want to take on and who I want to become and what to do with the small platform that I have

424
00:35:42.160 --> 00:35:47.360
that best serve humanity. And so that's what, and I think at least from my point of view that he

425
00:35:47.360 --> 00:35:51.920
really genuinely wants to do the best thing for humanity. Some people disagree with that. I don't

426
00:35:52.320 --> 00:35:56.720
I don't agree with them. I think if there was ever somebody who would have, you know, with great

427
00:35:56.720 --> 00:36:02.960
power comes great responsibility. He's probably the guy you'd want. Agreed. Why balls? Why is that the

428
00:36:02.960 --> 00:36:07.760
thing that catches your eye? He had the most to lose literally, like literally financially,

429
00:36:07.760 --> 00:36:13.920
he had the most to lose. So I'm quite like he had the most to lose and went the most polar

430
00:36:14.720 --> 00:36:19.840
on the bets that he took. And I think that again, there's a really great like masterclass in

431
00:36:19.840 --> 00:36:25.440
winning here that he did with this whole election thing. Because if you think about how Elon tried

432
00:36:25.440 --> 00:36:31.680
to solve the election, he absolutely treated it like any business problem. And so he looked at the

433
00:36:31.680 --> 00:36:37.440
whole map and then it was whoever wins Pennsylvania wins the election. And then zooming into Pennsylvania,

434
00:36:37.440 --> 00:36:42.000
it's there are 28 counties or whatever the amount of counties that we have to win. And so then

435
00:36:42.000 --> 00:36:46.320
he flies to Pennsylvania himself. And then since three weeks campaigning gives a million dollars

436
00:36:46.320 --> 00:36:50.720
away a day just to get people to register to vote holds town halls every day. So it's like he

437
00:36:50.720 --> 00:36:56.800
finds the greatest point of leverage and then just bombs the hell out of it with unbelievable amounts

438
00:36:56.800 --> 00:37:04.480
of action at that one crucial spot. And I see that is that that's how he violently solves problems.

439
00:37:04.480 --> 00:37:08.720
It's like how do I like how do you build a ride? How do you build a super super computer for AI

440
00:37:08.720 --> 00:37:14.240
in 19 days? Like he looked at the whole supply chain and he found the point of greatest leverage

441
00:37:14.320 --> 00:37:16.640
and it was like we're going to dump as much into this as we possibly can.

442
00:37:19.040 --> 00:37:23.920
There are two options before people in life. So option one is lay your balls out on the table like

443
00:37:23.920 --> 00:37:28.800
Elon did and you give people a chance to smash them with a big fucking hammer or you can hide and

444
00:37:28.800 --> 00:37:34.320
you can go a long way hiding. Why do you admire people that slap them up on the table?

445
00:37:34.880 --> 00:37:40.560
I think courage is the quintessential trait that leads to everything else.

446
00:37:41.520 --> 00:37:46.320
Like you have to first have courage. You have to have courage to quit your job.

447
00:37:46.320 --> 00:37:50.160
You have to have courage to get rejected. You have to have courage to ask the girl out to shoot

448
00:37:50.160 --> 00:37:56.240
the shot to run the ad. And if you don't first have courage, nothing else follows. And so I see it

449
00:37:56.240 --> 00:38:01.040
as again, it's not are you courageous or not? It's how courageous are you? It's not a binary. And so I

450
00:38:01.040 --> 00:38:08.400
just like I think that based on my history, I have courage because I have done things that have

451
00:38:08.560 --> 00:38:14.400
required it. But I think Elon has more courage than I do. And so I see that as how can I

452
00:38:14.400 --> 00:38:20.800
how can I move more in that direction if this is a trait that leads me into the better version of

453
00:38:20.800 --> 00:38:28.000
myself? How do you model yourself after somebody from afar? So we live in the age of the internet where

454
00:38:28.000 --> 00:38:32.800
you know people want to get to know somebody. I'm old enough to look at the internet and be like you

455
00:38:32.800 --> 00:38:39.120
do not understand what a glorious time this is to be alive. I mean, it's unimaginably cool.

456
00:38:40.240 --> 00:38:45.680
So people will look at you and say, well, you can get access to anybody. But somebody like Elon,

457
00:38:45.680 --> 00:38:51.200
who you say is worthy of modeling, how would you run something that all of them now can do?

458
00:38:51.200 --> 00:38:55.840
Yeah. So this actually comes down to, and I wasn't sure if you were going to press me on this,

459
00:38:55.840 --> 00:39:06.080
but like courage, for example, I try to the single most effective decision that I've made about how

460
00:39:06.080 --> 00:39:13.280
to run my life across all functions has been only thinking about behavior and erasing everything

461
00:39:13.280 --> 00:39:18.000
else because it's the only thing you can observe. And I'll tell you a little micro story about this.

462
00:39:18.000 --> 00:39:23.280
So there was a guy on my team who we were getting complaints that he was acting like a dick.

463
00:39:24.240 --> 00:39:28.880
And so he had talked to three of the leaders of my company who had had one-on-ones with them and said,

464
00:39:28.880 --> 00:39:34.480
hey man, stop being a dick. He continued to be a dick. And so they said, Alex, he's talked to him.

465
00:39:34.480 --> 00:39:41.520
And I said, sure. And so when I sat down with him, I said, hey, to be clear, I don't really care what you do.

466
00:39:41.520 --> 00:39:47.760
I care about the fact that you have now taken my time. And so this is now the most costly thing that you

467
00:39:47.760 --> 00:39:52.080
could have done for me personally. And getting complaints from other people,

468
00:39:52.800 --> 00:39:57.920
detracts on their ability to get things done within the company, which now also cost me. And so my

469
00:39:57.920 --> 00:40:04.400
goal here is to decrease the likelihood that people complain about you. And so they keep saying

470
00:40:04.400 --> 00:40:09.120
that you're acting like a dick. And so he's like, yeah, I know I'm working on it. It's fine. I don't

471
00:40:09.120 --> 00:40:13.120
care about whether, as like internally, you can be a dick as much as you want. I don't care. I don't

472
00:40:13.120 --> 00:40:18.960
care about intention. What are the actions that you take that increase the likelihood to call you a

473
00:40:18.960 --> 00:40:24.880
dick? And so number one is that you interrupt them on meetings. Number two is that you say that

474
00:40:24.880 --> 00:40:28.800
you know their department better than them. And number, whatever I had, I have my list of things.

475
00:40:29.600 --> 00:40:37.040
And as I said, don't do those four things and do this instead. So when this circumstance occurs,

476
00:40:37.040 --> 00:40:41.840
do this action instead of this action. And in the next week, everyone's like, oh my god,

477
00:40:41.840 --> 00:40:46.160
it was like night and day. And the thing is is that we give each other feedback all the time. And

478
00:40:46.160 --> 00:40:51.040
this happens in marriages and whatever. It's like, hey, don't be a dick. That doesn't help people.

479
00:40:52.080 --> 00:40:57.840
You have to tell them granularly what to do instead. And focusing on the observable. And so

480
00:40:57.840 --> 00:41:03.680
this is my weaved in answer to how does someone model Elon? Well, it's not like, I need to get Elon's

481
00:41:03.680 --> 00:41:09.520
mindset. It's like, no, look at what he does. Just with your eyes, what does he do? Because it's

482
00:41:09.520 --> 00:41:12.960
the only thing that you can you can measure. It was funny because when you said earlier about what

483
00:41:12.960 --> 00:41:18.000
I want to happen, what am I going to do that I think is going to have to happen? And so your

484
00:41:18.000 --> 00:41:23.600
planning process is identical to ours because it's the scientific method. Like mankind has figured

485
00:41:23.600 --> 00:41:27.680
this one out. Like we know how to make a guess of like, this is what we want to have happened.

486
00:41:27.680 --> 00:41:30.960
This is our hypothesis. We're going to test our hypothesis. We say, did we do the thing or not?

487
00:41:30.960 --> 00:41:35.920
And then and did what we think was going to happen happen four steps, scientific method.

488
00:41:36.000 --> 00:41:41.120
And so don't try and read about that one. Like that one works. So the same can be true,

489
00:41:41.120 --> 00:41:44.240
but it has to be observable for the scientific method to occur. It has to be something that you can

490
00:41:44.240 --> 00:41:50.480
see saying like, I need to be more motivated. Well, if you want to be anything, and this is this

491
00:41:50.480 --> 00:41:56.560
one trips, I'll think a lot of people out. But have you ever heard like B do have? Yes. Okay. I

492
00:41:56.560 --> 00:42:05.840
think it's complete crock of shit. Mainly because if we want to have something, we must do it.

493
00:42:05.840 --> 00:42:08.880
I think if people are okay, you have to do stuff to get stuff. Okay. We're good with that. But if

494
00:42:08.880 --> 00:42:12.080
we just have to do stuff and they're having a curse and we don't need to talk about half. So now

495
00:42:12.080 --> 00:42:19.920
we just have B do. All right. Then how do we describe how someone is? We describe them by what they

496
00:42:19.920 --> 00:42:25.680
do. I mean, even in the olden days, people used to be carpenter, John carpenter, John Butler,

497
00:42:25.680 --> 00:42:30.640
John Taylor, right? We literally described people's beingness who they were by what they did.

498
00:42:31.200 --> 00:42:36.720
And so if you want to be a certain way, then you need to act in accordance with the behaviors

499
00:42:36.720 --> 00:42:42.480
that people describe as that trait. And so then I, this is how I make sense of the world because the

500
00:42:42.480 --> 00:42:46.160
world doesn't make a lot of sense to me in a lot of ways. And so this is the only way that I've

501
00:42:46.160 --> 00:42:51.360
been able to navigate. And this has given me so much peace because I actually think everyone's wrong.

502
00:42:52.320 --> 00:42:57.040
And it drove me nuts for a long time because I didn't know how to do what I wanted to do. I was

503
00:42:57.040 --> 00:43:03.360
like, I want, I want to be, I want people to think I'm smart. I want people to, to think I'm hard

504
00:43:03.360 --> 00:43:09.920
working. That doesn't mean anything. Be charismatic. It means nothing. You can't look at someone and say,

505
00:43:09.920 --> 00:43:15.760
don't be a dick. Be charismatic. Note how do I do that? So they give you beings rather than

506
00:43:15.760 --> 00:43:21.600
doings. And so if you break it into the, the corresponding chunks, which may be 20 or 30

507
00:43:22.400 --> 00:43:26.960
skill sets, which are under this condition you act in this way, then all of a sudden, when you

508
00:43:26.960 --> 00:43:32.320
do all 20 or 30 of those things, then people describe you as charismatic. And I find this interesting

509
00:43:32.320 --> 00:43:39.920
because we talk about culture or values in a business. These values that we choose are bundled

510
00:43:39.920 --> 00:43:45.120
terms that are meant to approximate many behaviors because there's no, like when you get into a business

511
00:43:45.600 --> 00:43:50.240
or a company, you have to like figure out the culture. But the culture is just the rules that

512
00:43:50.240 --> 00:43:53.840
govern reinforcement in a business, which is what are the things that are rewarded, what are the

513
00:43:53.840 --> 00:43:57.760
things that are extinguished and what are the things that are punished? That's it. And so the

514
00:43:57.760 --> 00:44:02.880
culture is just what are those rules? And so people have to basically either watch other people get

515
00:44:02.880 --> 00:44:06.400
punished, rewarded or extinguished for the actions they take or they have it themselves. But either

516
00:44:06.400 --> 00:44:11.680
way, it's just a series of if this than that, if this than that. And it's a monster list. And so

517
00:44:11.680 --> 00:44:17.680
to speed up the process, we create a couple of phrases that are meant to approximate the largest

518
00:44:17.680 --> 00:44:23.360
percentage of those list of rules as we can. And so in thinking about my, if you were to microcosm

519
00:44:23.360 --> 00:44:27.680
into a person, what are the traits we want? Then we just have to get really granular. And I think

520
00:44:27.680 --> 00:44:33.920
that this is how we solve problems in a business, which is it's convenient for communication to use

521
00:44:33.920 --> 00:44:41.360
these amorphous terms, confidence, loyalty, like these things. But no one can be more loyal.

522
00:44:41.440 --> 00:44:48.080
We have many activities that under conditions, people describe in retrospect that this person has

523
00:44:48.080 --> 00:44:55.040
loyalty. Loyalty has occurred. And so that single framework of thinking through the world has been

524
00:44:55.040 --> 00:45:01.040
the most viable thing that has finally made the world make sense to me. And so that's in

525
00:45:01.040 --> 00:45:06.000
fundamentally like how I model people or if I want to be more like this person, be more like this

526
00:45:06.080 --> 00:45:11.120
person. I try and do more of what they do. What are the behaviors that Elon does that you think

527
00:45:11.120 --> 00:45:17.200
are worthy for somebody of your level of already absurd success? I appreciate it.

528
00:45:19.520 --> 00:45:25.120
I, well, one is he makes big concentrated bets. And so that's a behavior. He does that. I can

529
00:45:25.120 --> 00:45:30.560
observe that. I've seen him make big bets. He's willing to give up equity in companies

530
00:45:31.520 --> 00:45:35.840
for lots of capital in order to make things happen faster. That's something that he does.

531
00:45:36.400 --> 00:45:41.680
He ties every company he has to saving humanity. That's something that he does.

532
00:45:43.600 --> 00:45:48.800
He, this is me just parroting what he has said, but his approach to solving systems is one that I

533
00:45:48.800 --> 00:45:53.760
have adopted, which is question all requirements of the system, delete everything that doesn't,

534
00:45:53.760 --> 00:46:00.400
that doesn't matter, optimize the rest, pull up feedback loops and timelines, and then automate.

535
00:46:01.120 --> 00:46:07.600
And that process I've applied to sales, I've applied to marketing, content, whatever. And those

536
00:46:07.600 --> 00:46:13.680
are things that he does. And so there's, I mean, a lot of things that Elon does, but those are just

537
00:46:13.680 --> 00:46:17.040
some of the ones off the top my head that I think are the greatest impact, at least the ones that I'm

538
00:46:17.040 --> 00:46:23.040
specifically trying to model. There's one that really had a big impact on me, which is the idea.

539
00:46:23.040 --> 00:46:26.960
So I had Mark Andreessen on the show, shout out to my boy Mark Andreessen. Yeah,

540
00:46:27.760 --> 00:46:32.560
that guy, love that guy. I'm such a fan. Mark, did you hear what he was? He is amazing.

541
00:46:33.520 --> 00:46:40.400
And I asked him, what is it that you think makes Elon so efficient?

542
00:46:41.280 --> 00:46:47.200
And he said, making a long story short, he goes down to the level of engineering.

543
00:46:48.000 --> 00:46:52.960
And he understands the engineering. And so he figures out what the bottleneck is and talks directly

544
00:46:52.960 --> 00:46:57.680
to the engineer that can make that problem go away and just makes that problem go away. And

545
00:46:57.680 --> 00:47:05.200
eliminates the bureaucracy and all the BS of it all. And I was like, that is utterly brilliant.

546
00:47:05.200 --> 00:47:09.680
And even though except on the gaming side of impact theory, we're not an engineering company,

547
00:47:09.680 --> 00:47:14.160
there still is that same concept. Like if you've got a problem, let's say with a piece of content,

548
00:47:14.160 --> 00:47:20.720
a, our retention at 60 seconds is not where we want it to be. Okay. Well, who are the engineers

549
00:47:20.720 --> 00:47:25.920
that can solve that problem? Whether it's the editor or me, myself, you go and you solve the

550
00:47:25.920 --> 00:47:30.480
problem at that level. I think so many people get sucked into the vortex of, well, this is their

551
00:47:30.480 --> 00:47:34.800
boss. And I need to go talk to them. Oh, God. I want to get around the chain of commands.

552
00:47:34.800 --> 00:47:40.560
Yeah. Oh, yeah. We try to encourage people to kick through any chain of command. Go over,

553
00:47:40.560 --> 00:47:43.920
go under, go around, build coalitions. I tell people literally, if you don't like an answer,

554
00:47:43.920 --> 00:47:48.720
I give you by all means, build a coalition and come back and try to convince me. I know that

555
00:47:48.720 --> 00:47:52.480
I will be lying to somebody. What was that? But you'll be wrong. Yeah. Exactly.

556
00:47:52.480 --> 00:47:57.840
I was saving some time, guys. Yeah. No, I'm so paranoid that there's something I don't see.

557
00:47:58.560 --> 00:48:06.000
And my, my primary analogy of what life is truth exists inside of a black bag. And we're all

558
00:48:06.000 --> 00:48:09.840
wearing mittens. We get to reach inside the black bag and be like, I think it's like this.

559
00:48:10.400 --> 00:48:14.480
And then if I can get other smart friends to reach in and grow up around and tell me what they

560
00:48:14.480 --> 00:48:20.080
think. So yeah, I, I'm on a campaign to get people to distrust themselves. People that drive me

561
00:48:20.080 --> 00:48:26.320
the most fucking crazy are people that are utterly convinced they're right. And yeah, that,

562
00:48:26.320 --> 00:48:32.320
that really drives me nuts because one, if you're right and you're already right,

563
00:48:32.320 --> 00:48:35.760
it's a pretty short detour to be like, Hey, anybody see a problem that I don't see?

564
00:48:36.560 --> 00:48:39.920
And the number of times that someone will give you like an oblique angle to look at something

565
00:48:39.920 --> 00:48:46.960
like, Oh my God, that is incredibly useful. I first of all so highly agree with the jumping

566
00:48:46.960 --> 00:48:50.400
into the dirt of like, how do I get as close to the problem as humanly possible?

567
00:48:50.400 --> 00:48:53.840
The biggest mistakes I've made in my entrepreneurial career is, I heard this from Mentor,

568
00:48:53.840 --> 00:48:57.120
I like this ism, but you have to know where the bodies are buried. So it's like, if I,

569
00:48:57.120 --> 00:49:00.080
and it's been a great limits test for me to understand what I'm getting too far away from

570
00:49:00.080 --> 00:49:03.520
a department when if I don't know what's going wrong in a department, because there's always

571
00:49:03.520 --> 00:49:07.520
things going wrong, if you don't know what's going wrong and too far away. Interesting. And so

572
00:49:07.520 --> 00:49:11.920
that's been a really good like just a easy black or white test for me. Oh, I need to get a little

573
00:49:11.920 --> 00:49:15.600
closer to this because they say, Oh, marketing's great. I'm like, there's no way there's,

574
00:49:15.600 --> 00:49:19.840
there's always things like there's got to be things that are wrong or missed opportunities.

575
00:49:21.440 --> 00:49:26.080
The, that's actually a totally separate entrepreneur thing that I think you might dig a lot.

576
00:49:26.080 --> 00:49:31.280
Laila taught me this this year and it's been a huge entrepreneurial unlock for me.

577
00:49:32.640 --> 00:49:38.240
And it was a huge source of anxiety for me for my life, which was I did not differentiate the

578
00:49:38.240 --> 00:49:44.320
difference between missed opportunities and problems. And so basically if we were not capitalizing

579
00:49:44.320 --> 00:49:49.600
on an opportunity, I treated it as though it was a problem with the same level of urgency and

580
00:49:49.600 --> 00:49:54.000
moving things out of the way. But I would say that where I'm at right now and maybe I'll,

581
00:49:54.320 --> 00:49:57.920
maybe I'll be different in the future. But right now the thing that has been rewarding me again

582
00:49:57.920 --> 00:50:04.160
and again, which has been counter to my nature is looking at the problems in front of me as the

583
00:50:04.160 --> 00:50:10.800
opportunities, which is like fundamentally like if we made these things exceptional, then maybe

584
00:50:10.800 --> 00:50:15.840
the opportunity set that I'd have as a result of that would be fundamentally bigger, different

585
00:50:15.840 --> 00:50:21.840
than the one that I'm having today. And whenever I in the past allocated resources away from

586
00:50:21.840 --> 00:50:26.000
solving problems towards missed opportunities, I ended up just scaling my problems.

587
00:50:26.720 --> 00:50:34.800
And so allowing the bigger by better path and really leaning into that and doing fewer things

588
00:50:34.800 --> 00:50:40.640
at a higher level has been I think the reason that in the last two years, acquisition.com

589
00:50:40.640 --> 00:50:44.400
is done exceptionally well from a returns perspective on all of our portfolio and then obviously,

590
00:50:45.200 --> 00:50:46.960
you know, what we do on the content side and things like that.

591
00:50:47.840 --> 00:50:53.200
That's interesting. They saw a lot of sense to me. The two years ago, I had to put a policy,

592
00:50:53.200 --> 00:51:03.200
no new things because I am a, I'm king red dress. So that has been really advantageous. And if

593
00:51:03.200 --> 00:51:10.320
I'm completely honest, we still do too many things. And so yeah, narrowing your focus knowing that

594
00:51:10.320 --> 00:51:16.800
you have a finite amount of time and energy, especially now where so many companies have a

595
00:51:16.800 --> 00:51:21.920
face, it's like every department or every company, depending on how you think about it, wants to use

596
00:51:21.920 --> 00:51:28.800
me, my face. And so it just becomes a real time drain if I'm not careful. And so yeah, really

597
00:51:28.800 --> 00:51:35.520
narrowing scope, I think is super important. Yeah, work. It's really wild is like I think I heard

598
00:51:35.520 --> 00:51:39.840
this someone say this offhand remark and it's like it hit me. It was like Zuckerberg didn't have a

599
00:51:39.840 --> 00:51:48.800
side hustle. And it's like I it's so true. And you think about your face, right? It's there's,

600
00:51:48.800 --> 00:51:52.720
there's one of the three, you know, divisions that you have underneath the impact theory that has a

601
00:51:52.720 --> 00:51:56.640
higher return under face than the other two. Now it might be on different timelines or towards

602
00:51:56.640 --> 00:52:00.720
whatever mission you have, but one of them has a higher return. And the thing that makes me sick

603
00:52:00.720 --> 00:52:05.440
is thinking like, do I need to kill my other children? Because if this, if I believe what I say,

604
00:52:05.440 --> 00:52:12.000
I believe, then I should act in accordance with that belief. I think about this every right now,

605
00:52:12.000 --> 00:52:16.720
that kills me. And I think it's, I had a mentor tell me he was like, so I was like, this is what

606
00:52:16.720 --> 00:52:20.720
we're going to do this year. And I was like, these are the, you know, the priorities. And this is the

607
00:52:20.720 --> 00:52:25.200
biggest, the missed opportunities versus problems has been a massive improvement for me as an entrepreneur.

608
00:52:25.200 --> 00:52:32.240
The other one was a deeper understanding of focus. And a lot of part of that was from Elon. And

609
00:52:32.240 --> 00:52:35.040
people are like, well, how do you run six companies? I'm like, he's an alien, but for everyone else,

610
00:52:35.040 --> 00:52:44.000
like we need to run one, honestly. But basically, if you don't know what the number one priority is,

611
00:52:44.400 --> 00:52:51.360
then how can you expect everyone on your team to know it? And for years, I came in with five annual

612
00:52:51.360 --> 00:52:56.480
objectives. And I think then it went down to three. And now I'm just trying to say if we just did

613
00:52:56.480 --> 00:53:01.360
one of these things and it made the biggest difference. Yeah, I mean, I've done away with a lot of the

614
00:53:01.360 --> 00:53:06.240
long-term planning components because of that dynamic nature of the environment. And the other

615
00:53:06.240 --> 00:53:12.960
one is if we're not sure that this one thing is the one thing, then there's another one thing that

616
00:53:12.960 --> 00:53:20.000
exists that will be clear. And if I can't do it, then I'm not doing my job. Because if I'm chief

617
00:53:20.000 --> 00:53:24.320
strategist, which I define as prioritization, right? You prioritize limited against unlimited,

618
00:53:24.320 --> 00:53:31.040
limited resources and limited options. If I can't clearly articulate that, that I am not doing

619
00:53:31.040 --> 00:53:35.360
my job, I'm not allocating the resources in the best way possible. And I say that everyone in

620
00:53:35.360 --> 00:53:39.040
the company is a strategist. It's just that the resources that you have dominion over is smaller

621
00:53:39.040 --> 00:53:43.440
or narrower in scope. And so it's like I have the entire portfolio of all the companies,

622
00:53:44.400 --> 00:53:48.160
of the different places that I could allocate whatever resources I have. And then if you're the CEO

623
00:53:48.160 --> 00:53:51.040
of one of those companies, then you have everything in that company. If you're the head of marketing,

624
00:53:51.040 --> 00:53:56.160
then you have the 10 people that are in marketing. But every every person has to ask the question,

625
00:53:56.160 --> 00:54:01.120
these are the resources I have. This is the objective I have. What is the best mix of this to get

626
00:54:01.120 --> 00:54:06.560
that thing? And is there one thing that I can do that would give me an outsize return compared to

627
00:54:06.560 --> 00:54:12.400
all of the other things? And I mean, I think one of the better decisions that I made in 2020,

628
00:54:12.400 --> 00:54:17.440
2020, I think, was when we started getting into this investing thing, I was like, I don't think

629
00:54:17.440 --> 00:54:22.400
I'm going to beat Warren Buffett at picking. And I don't know if I'd beat him at negotiating.

630
00:54:22.960 --> 00:54:27.920
I was like, so how do you win in a world where everyone's better than you at most of that stuff?

631
00:54:27.920 --> 00:54:30.800
And I was like, well, I'm pretty good at marketing. And I was like, but how do you tie that to

632
00:54:30.800 --> 00:54:37.440
like private equity? And so then I was like, well, if I had more companies walking towards me

633
00:54:37.440 --> 00:54:43.600
than anyone else, then I could be pretty terrible at picking and still do like I could hit the broad

634
00:54:43.600 --> 00:54:49.680
side of a barn. You know, like I could I could get the really easy ones right. And if I'm negotiating,

635
00:54:49.680 --> 00:54:53.520
but I'm negotiating only with people who want to do a deal with me, then I don't have to be the best

636
00:54:53.520 --> 00:54:59.440
negotiator. And if the companies are good, and I'm okay at negotiating, but they're good companies,

637
00:54:59.440 --> 00:55:05.200
then it's not going to matter whether I got 29% or 54% because if the thing becomes 100 times bigger,

638
00:55:05.200 --> 00:55:12.240
who cares? And so that one big thing was you need to build a big business brand. And so if I just

639
00:55:12.240 --> 00:55:17.440
do that one thing, none of these other things matter. And so originally you think, okay, I have to

640
00:55:17.440 --> 00:55:21.600
get a broker network. You know what I mean? I might have to raise capital like these the normal

641
00:55:21.600 --> 00:55:26.240
activities that most people would do. But that was one of those kind of like high order of magnitude

642
00:55:26.240 --> 00:55:30.000
changes. So like what would have to be true for me to be able to outcompete people who are

643
00:55:30.000 --> 00:55:35.120
significantly smarter and better capitalized? Yeah. The ability to see the problem from a different

644
00:55:35.120 --> 00:55:41.760
angle man is so clutch. That is definitely you're so good at systems. You're so good at taking a

645
00:55:41.760 --> 00:55:47.440
view as you. This is why I really encourage people. Anybody if you can hear the sound of my

646
00:55:47.440 --> 00:55:53.200
voice right now, I'm telling you, and I'll take the conversation somewhere political for a second

647
00:55:53.200 --> 00:55:59.760
feel free to dodge as much as you need to. But my thing is the center is a destination. And what I

648
00:55:59.760 --> 00:56:05.520
mean by that is I want the friction between the left and the right to help me find an actually

649
00:56:05.520 --> 00:56:10.320
intelligent path forward. I want people to help me see the problem from different angles. I don't

650
00:56:10.400 --> 00:56:15.200
want to get a heart on from hearing somebody say what I already believe, which is like the big

651
00:56:15.200 --> 00:56:20.320
temptation. And I get it. Dude, it juices me up as much as it does anybody. But I'm just like that.

652
00:56:20.320 --> 00:56:25.280
That is not going to help me see the problem from a more clear perspective. So I think of myself as

653
00:56:25.280 --> 00:56:28.880
I'm a terrible debater. Let me be very clear. I'm a deep thinker, but a slow thinker. So

654
00:56:28.880 --> 00:56:34.320
debate is never going to be my thing. But I want to know as if I were going to have to debate this,

655
00:56:34.320 --> 00:56:39.040
I want to know the best arguments from both sides. Because if I really understand the smartest

656
00:56:39.040 --> 00:56:43.840
people who think that my angle is just idiotic, if I can say, okay, I'm going to steal men's

657
00:56:43.840 --> 00:56:47.760
argument. I know there are men as well as they do. And then here's why I believe which my whole

658
00:56:47.760 --> 00:56:52.640
thing is predictive engine to getting you where you want to go, right? So I know my goal. And then

659
00:56:52.640 --> 00:56:58.240
what has the most predictive validity? Cool. So I want the collision of those ideas. But there is

660
00:56:58.240 --> 00:57:04.720
something in the human brain, just the very architecture where people are so hungry to be told

661
00:57:04.800 --> 00:57:13.600
what they already think that that one makes me sad for them. Because if you can do what you just

662
00:57:13.600 --> 00:57:17.520
did, which is go, okay, I have a problem, but I need to see this from a totally different angle.

663
00:57:17.520 --> 00:57:22.880
And then I need to formalize what I see. If you can do that, and then you're willing to iterate,

664
00:57:22.880 --> 00:57:28.480
iterate, iterate and go, actually, I need to update this, this breakdown that I have. And while I

665
00:57:28.560 --> 00:57:35.040
haven't seen you do it, I absolutely will bet my entire network that if you found a better system,

666
00:57:35.040 --> 00:57:38.480
you would update your thinking, you'd tell the world, yeah, I'm doing something differently now,

667
00:57:38.480 --> 00:57:44.960
which I think is incredibly powerful. Oh, thanks. Well, I think Zuckerberg said that he's a,

668
00:57:44.960 --> 00:57:48.720
well, he said he's a truth teller. But I think before you can be a truth teller, you have to be a

669
00:57:48.720 --> 00:57:54.080
truth seeker. And basis also talks about this, which is that their goal is truth. So when we're

670
00:57:54.160 --> 00:57:58.480
making decisions, he said, the goal shouldn't be to compromise. Like if you say it's 10 feet tall

671
00:57:58.480 --> 00:58:01.920
for the ceiling and I say it's 11 feet tall, we shouldn't meet in the middle. We should find a way

672
00:58:01.920 --> 00:58:07.120
to know who's right. We should get a state measure out and we should measure it. And so from that,

673
00:58:07.120 --> 00:58:15.760
from that truth seeking perspective, I probably like you, I just want to win. And winning doesn't care

674
00:58:15.760 --> 00:58:20.000
whether it was your idea or not or whether it was your original idea. It just cares whether you

675
00:58:20.000 --> 00:58:27.920
did it. And like we recently, because we talked about this before the show started, but like a quarter

676
00:58:27.920 --> 00:58:32.800
or two ago, we had a hypothesis, which was, hey, we're going to make wider content because if,

677
00:58:32.800 --> 00:58:37.200
you know, Mr. Beast, because my theory was, okay, take in the natural extreme, Mr. Beast, everybody

678
00:58:37.200 --> 00:58:44.880
knows who Mr. Beast is or many people do. And so he has, by default, all business owners in his

679
00:58:44.880 --> 00:58:50.640
audience are many business owners. And so then I will go the how do I go wider and general fame.

680
00:58:51.520 --> 00:58:57.920
And we then ran that pretty hard for about 16 weeks. And when I saw the data that came back,

681
00:58:57.920 --> 00:59:02.800
which was all of the vanity metrics, the views, the subscribers, things like that were all way up.

682
00:59:03.680 --> 00:59:07.920
But the metrics that I cared about, which was how many people were going to acquisition.com,

683
00:59:07.920 --> 00:59:10.480
and we were people applying to be portfolio companies, how many people were buying books,

684
00:59:11.120 --> 00:59:15.280
all of those metrics were down. And I thought that was so, it was counter to my hypothesis.

685
00:59:16.000 --> 00:59:21.120
But at that point, I had to look at the team and be like, yeah, so that experiment was wrong.

686
00:59:21.920 --> 00:59:28.000
And that's on me. But we're going to go what we called back to business. And so everything is

687
00:59:28.000 --> 00:59:31.360
going to be business related, which means that we all need to accept now that all of our views

688
00:59:31.360 --> 00:59:36.080
are going to be lower. Our subscribers are going to be lower. But we're going to attract business

689
00:59:36.080 --> 00:59:40.720
owners. And I had one anecdotal experience that really cemented this. I had a guy who came out

690
00:59:40.720 --> 00:59:44.320
who's a business owner just probably $10 million a year. And he was like, yeah, I listened to your

691
00:59:44.320 --> 00:59:48.400
podcast for years. And I just, I guess I'm not really in your audience. I'm not your core audience

692
00:59:48.400 --> 00:59:52.960
anymore. And so I stopped listening to it probably in the last six months. And I was like,

693
00:59:53.840 --> 00:59:59.520
you are 100% my core audience. And that was like this kick to my stomach. But I mean,

694
01:00:00.160 --> 01:00:08.720
like you probably being right has zero value. Like, I just want to win. And so that's, I mean,

695
01:00:08.720 --> 01:00:16.000
my, my, my little ism for my team is just win. And that's, that's, that's all I care about.

696
01:00:16.000 --> 01:00:20.640
Like, just win. And if it's your idea, it's my idea. It's the janitor's idea.

697
01:00:22.240 --> 01:00:26.880
Test it. See if it works. And so that's been, that's been really, really big for me.

698
01:00:26.880 --> 01:00:33.840
How do you get people to buy into that? I find the, I run into frames of reference,

699
01:00:33.840 --> 01:00:38.960
natural ego, evolutionarily placed algorithms might by default, most people just really want to be

700
01:00:38.960 --> 01:00:52.400
right. Yeah. Um, I don't tolerate that much. I, um, I, we let the data talk. We let the data

701
01:00:52.400 --> 01:00:57.840
decide data is king. And so I mean, sure, we can try your way. Do your way. We'll do my way.

702
01:00:57.840 --> 01:01:03.120
And we'll see which one works. And if yours works, I'm all it. And so I think that's the like,

703
01:01:03.600 --> 01:01:09.840
there's no arbiter of truth. That's arbitrary. Uh, well, um, that just, just, just as you are now

704
01:01:09.840 --> 01:01:13.280
right, it's that we can, we can know this. Now, I think we're gonna get difficult as on the ones

705
01:01:13.280 --> 01:01:18.480
that you don't know, or let's see, have limited shots on goal. Which shot do we take? That's where

706
01:01:18.480 --> 01:01:22.320
it gets harder. And then we try to, we try to assemble as much, you know, as much data to support

707
01:01:22.320 --> 01:01:26.080
an argument, but I think fundamentally at the base level of entrepreneurship is you make approximated

708
01:01:26.080 --> 01:01:32.400
bets. Like you, by the time you have complete information to make a decision, the opportunities go.

709
01:01:32.400 --> 01:01:36.080
Yeah. For sure. And so we have to, and this also goes for beginners, because I think this is

710
01:01:36.080 --> 01:01:39.760
actually, especially for beginners, is there's this fallacy that you're going to know everything

711
01:01:39.760 --> 01:01:45.040
before you can begin and you simply cannot. And so you have to get over the discomfort of the

712
01:01:45.040 --> 01:01:50.720
unknown and you have to get comfortable making bets. I'm saying, okay, is this reversible?

713
01:01:51.840 --> 01:01:56.000
Yes. And to what degree is it, you know, reversible? Okay. If you lose all your money,

714
01:01:56.000 --> 01:02:01.440
is money replenishable? Yes. Okay. Now, how long will that take given my skill set? Uh, like,

715
01:02:01.440 --> 01:02:05.680
and that, that'll, that'll give you a, a degree of how big of a bet this is. Now, is there a

716
01:02:05.680 --> 01:02:08.960
way that I can make an approximated bet? Can I get a directional bet on this? That would,

717
01:02:08.960 --> 01:02:13.360
you know, uh, give me a, a much better clue as to whether this bigger bet that I'm gonna make

718
01:02:13.360 --> 01:02:18.480
afterwards is correct. And so I'll try and make smaller bets that give me a little bit more

719
01:02:18.480 --> 01:02:22.720
information that are a little bit more reversible before making a big one. Uh, but like that was a big

720
01:02:22.720 --> 01:02:27.520
bet that we made with all the resources that I had and all my time for 16 weeks making all that.

721
01:02:27.520 --> 01:02:31.600
Now, you could make the argument, okay, we gained audience that's not really core and then that

722
01:02:31.600 --> 01:02:38.240
might hurt my later videos. And I've got, you know, 50 more years. So, okay, we lost a quarter.

723
01:02:38.240 --> 01:02:43.360
Yeah, big deal. Yeah, now the willingness to try things, I think, is incredibly important.