Transcript for:
Lecture on Personal and Business Growth by Alex Ramose

my dad always told me that you only get one name so invest in it accordingly and i always thought about that i thought it was a really good line just like you only get one name like you can change your companies you can go bankrupt but like your name stays with you yeah and so that can either be an asset or it can be a liability hi i'm alex ramose i own acquisition.com which the portfolio of companies is 100 million dollars a year the best-selling book i have youtube that some people find interesting and you are on behind the brand with brian elliott everyone i'm brian elliott welcome to another episode of the show alex thanks for having us to your uh your home grown mission control it's great to be here in las vegas thank you for having me i'm very excited i guess having me and we're having each other i guess having me on your your show well i usually ask my guest how did you get this job this job yeah uh so um i was a management consultant uh right out of college i did space cyber intelligence for the military which was uh sounds much cooler than it really was but i had a top secret clearance it sounded really good at dinner parties and just about only that um and you know one day i looked out for my balcony because i had a really nice place because i could afford it at the time and i was like is this it and i was you know in my young 20s and you know at that point i had done everything that i think i was supposed to do so i was you know i did well in school i you know was president of all the clubs you know graduated in three years got the good job um and i realized that it was i was living you know a life for me that my father wanted me to live and so that was kind of you know i went i i faltered back and forth for probably a period of six months um of really not wanting this to be my life but not wanting to let my dad down and so at some point the the thing that kind of pushed me over the edge was i can either you know die to myself or i can die to my father and at the end of the day you know i have to survive so i will if i if i make this decision and he no longer wants to be my dad then i can accept that wow is that extreme then yes wow say more about that are you an only child yeah so only child raised by a single father um middle eastern um he was born in iran and um you know i everything in my life up until that point was really just to make him proud so i it was very much a seeking approval seeking validation kind of drive at that point in my life and so the idea of disappointing him or not getting his approval felt like death and at that point i was actually contemplating not living um which is why that it really and it's a common theme if you have watched some of my youtube stuff um mortality has been the single biggest driver and the biggest decisions that i've made in my life and it has become a more routine process for decision making for me in general because i think it it provides clarity and it provides context to most of the decisions we have which the vast majority of them don't matter which is helpful in and of themselves and then you know beyond that it helps me make the decisions that i think removes everyone else from the playbook because if you if you study subjective well-being and how people perceive how they're doing in their own lives it looks like a smiley face so seven-year-olds think they're killing life and then it drops dramatically between 20 and 30. and then there's still a little bit more of a dip right around 45 that's like when people are they're true they hate life the most and then and then it kind of slowly goes up to like 55 60 and then it shoots right back up again when people see that they're going to die and that life is short and that they can make the decisions without worrying about the ramifications of other people and some of the people they're worried about are also dead right and so it was using that context for that biggest decision that's been duplicated many times in my life since then because if i have a good decision-making algorithm i try and reuse it as many times as i can yeah there's a lot there no i like it um it's just making me think i mean i have watched maybe all of your videos so i have some context but maybe let's unpack it for the audience a little bit so um you know when we're seven let's let's uh let's expand that a little bit i mean we don't have a care in the world uh the artist or the whatever we want to be has not been beaten out of us yet uh no one's told us that we are not what we think we are we're still popping wheelies and climbing trees and falling out and that's okay and then you get to your 20s and 30s and the rubber hits the road a little bit and if you've made money i guess and if that's your way of validating your work or that's your sign of success then you're okay but if not you're kind of hosed and then in your 40s i'm guessing you start to have more life experience 50s maybe you start caring less what people think and then then you fast forward all the way to maybe near death and then you really get to a point where you don't care what anyone says and you really boil it down to what's important and probably i'm guessing that's love relationships legacy and then you're just like peace out is that pretty accurate i think for most people yes for me specifically the legacy piece less so but i think for most people yes and why is the legacy piece less important um more so and i i whenever i get into this topic i think a lot of like some people get sensitive about it and so i just like to put the disclaimer like this is not me judging your beliefs and me stating my beliefs is in no way yeah a judgment on anywhere else um but if you just look at expanding the time horizon over a much longer period of time if you look at it at in ten thousand years or a hundred thousand years or a million years right all of a sudden you know and the easy way to test this is to go backwards right which is do you know your great great great great great great grandfather probably not right and then if you look at it from a how much has somebody achieved standpoint um i happen to be in an interesting situation where my great great grandfather was in the ruling class in iran and he had 400 children so he would literally you know like ruled and had a lot of wealth he had a lot of wives to create 400 children right um and i actually still can't remember his name because my dad told me one time and i can't remember it um and i've never seen any of the quote legacy that i'm sure he felt like he was leaving and so if that was that level of success and legacy and only four or five generations later i don't even remember the man's name nor do i have any piece of that legacy yeah it seems a little bit irrelevant yeah i i totally see what you're saying and that context matters i mean prince died a couple years ago right right see i had no idea are you serious yeah i don't follow this prince prince i thought he was formerly known as is he is did he get that removed too he's now back to being i think it toggled back to prince uh and then unfortunately he i think he he overdosed accidentally overdosed and he passed and you know one of the greatest musicians of all time and i didn't think about him until you just said this yes so what chance do i have i'm screwed yeah and i think in a long enough time verizon we're all screwed and i think in some ways people find that incredibly disheartening but an equal opposite is if you you can't find it both disheartening and also not freeing because all of the decisions that we're making that are not for ourselves or what are or are are subject to change that we feel pressure from whether that be society societal i'll put quotes there because that's a big word um or family friends expectations that we perceive other people to have of us um if you can if you can just relinquish all of those chains i think it's incredibly freeing and um i choose to live that way yeah i also try to i still definitely feel it no that's fair that's fair and i think also um that may help us that advice is good because it helps us live in the moment because you know even if you believe in something after that's still in the future yeah and there's a question mark because no one actually knows with you know with knowledge yeah uh at least someone with a pulse doesn't know what happens or if something happens so you might as well live in the present make the best of it yeah an interesting one um that i thought through around that was um a lot of us not a lot of us all of us have 100 experience uh not being alive right it's before we were before we were born we were not alive and so we know what that was like there was nothing um that we can recollect and so i would imagine that that's the closest experience that we can have to not being live yet again um which to me is not that frightening yeah and it is freeing you're right because it's it's both uh humbling to know that you don't matter in the grand scheme of things but at the same time you you matter infinitely if you just focus on the present and the the mark that you're going to leave here and now i i contemplated i had to die to my father who died of myself and i realized that i i would rather die to him um which pretty much ended up happening um and so my fears were relatively justified um he was not in support of the things that i wanted to do i ended up quitting that job sold everything i had packed my car went to california because that's what i thought the land of fitness opportunity was because that was the only thing i really enjoyed um mentored under a guy for a few months to try and at least learn the ropes started my first facility slept on the floor for the first nine months which was a very terrible experience for me and time stamped the age for me now i was 23. okay i left at 22 and i turned 23 two weeks after my gym opened got it so you graduated early you got that dream job and then you bailed yep yeah two years and that was really at the time um and all of this kind of it was at the a splitting point where i had done two years and the kind of career path traditionally is like two to four years of management consulting and then you go back to an ivy league for your gmat and then from there you go into you know you can you can go do investment banking you can do private equity you can do you know some of the bigger white collar jobs but um it was i just didn't i didn't want more of what i had um and so i thought that i would have a better shot taking hundred thousand dollars in two years which is what the you know economic equivalent of what the degree was um and starting something on my own i figured i would learn more in the first two years and with that money and maybe even have a business by the end of that period of time that made an equivalent amount of money compared to what i would have had as a job offer let me ask you i talk a lot about signals on this show to other people in my personal life i've i've had signals that were subtle some more overt the subtle ones i missed and then had i had to learn later but how did you what signals did you get i mean you're saying like i wasn't feeling it but like so where was your motivation because i see you as this hustler this go-getter this you know this um sales person you know who just is all about gobbling up new opportunities um i mean you've it it transcends beyond that now but like at first it sounds like you were just all about the go get but how did you know like you craft you drifted into fitness because you were into maybe you know i mean at first i was driven by fear okay it was all fear fear of failure feel of disappointment fear of other people's judgment right um what did your dad end up saying did he say good luck with you no he thought he was stupid he thought i was wasting my life yeah and wasted a degree that he'd spent money on and yeah wasted a good job opportunity that he had set up for me all these things right in his defense did he immigrate here yeah okay so in his defense 100 right and i just want to tell the audience so that they're not like but it's like you know if you have justified in saying that yeah if you escape from a country where there's trauma and impending danger then your son squanders an opportunity you might get a little anxious about that 100 i mean my dad came here with a thousand dollars you know and a medical degree yeah and then built every didn't even speak english right so i can i can i mean i think gary v said this but i think what he did was harder than what i've done like i got to i got to stand on his shoulders okay you know in huawei i mean i speak english you know like just the basics like i speak english i went to a good school um uh you know i just all the support infrastructure known and unknown that was around me yeah to you know to be successful yeah i think it's healthy to recognize your privilege yeah uh but at the same time you know it came with lots of baggage too interesting okay and so you had signals which were mainly fear-based yeah and i i mean the biggest thing that made the decision for me i would say i had the logical decision and then i had the emotional decision the emotional decision was um i could i don't want to do this this is not the life i want to lead um i am not happy doing this every day i would prefer to not be alive if this is what my life will be continuously and i was like well if that is what if i would prefer to not be alive then that kind of opens up my decision calculus and what was it i'm trying to put my finger on what what was it that made you happy was it just the freedom to do what you want i didn't know it made me happy i knew it was not making me happy okay yeah so i think that's another important lesson too if i can just extract them which is one you know i'm sure a lot of people watching they feel the same kind of family pressure um they want to be what other people expect them to be if you know if that's who you are and that's totally normal um but we should always remember you know the the context in which that advice is given could be given through the lens of a certain um they lived that a certain lifestyle a certain time frame um but also you know you said um it's a process of elimination sometimes isn't it like you don't always know the reason i think about this is i've got a son who is in eighth grade and sometimes i see him look looking very serious and i'm like son what's up how are you how are you feeling it could be that bad it's kind of like you know you can see kind of the face kind of going in and you see him in deep thought and like what are you thinking about right now he's like i don't know what my college major is going to be yeah i'm like bro yeah you're in eighth grade why are you thinking about that right now but like i think that's a thing whether you're young or middle age you're trying to figure out what you want to be when you grow up you're trying to have it all figured out yeah because we don't seems like we don't like uncertainty but i think your message if i'm hearing you is sometimes you have to try it on for size to see if it fits or not and you get it on you're like well i thought that dream job was going to be like perfect but turns out you know it's tight in the crotch you know it's like i i need something different and i think giving yourself permission to do that and it was a side to what you were saying about my dad like education saved his life like he was only able to leave the country because he was educated and so there's very deep roots there and i can appreciate that but for this context or for my life it just wasn't appropriate right and when we did come to terms later um the only time he's ever apologized to me in my life um he said after his apology he qualified um and said but to be fair in my time i would have been right oh absolutely and he would have been it's just not the same time right yeah yeah i mean and yeah absolutely it wasn't that it was inappropriate it was just out of context and it didn't necessarily translate to this new life and new opportunities you had yeah yeah i think that's so important i i can't imagine how many people are sort of you know suppressed to the point of their parents or the people that have influence around them put on them yeah or sometimes it's on ourselves yeah it's most i mean mostly i love the saying you know in our 20s we're concerned about what everyone thinks about us in our 40s we don't care what anyone thinks about us and in our 60s we realized that no one was thinking about us to begin with right and i just i just feel like that's i mean who else have you thought about today besides yourself probably not i mean you have your kids which is an extension of yourself but you know i feel like yeah not a lot and so most people are like that and you know a lot of it like we have a lot more leeway than i think we give ourselves credit for and i think the more that i have now you know i'll say accomplished with quotes in in material success the more i am excited about the things that i can do and that was why the opening of the book was like there are no rules and it just took me a very long time to realize that and i continued to unlearn rules that i thought existed you know as i continue to you know go on this journey yeah i love that idea of unlearning yeah i think we all just try and go back to being like we were when we were children like if like just because when you're a child you're purely present right you're just present in the moment and i i i don't like the word happy very much um i prefer using joy because you can be you can mourn joyfully right because it's it's a it's a it's internal rather than happiness which i feel is more like happenstance it's more from external and so um you know what are the things that bring me joy were things that i find you know to find joy in um and i think for anyone who's who's listening it's a much harder question to answer what are the things that bring me joy then answering the question what are the things i hate and it's easier to correct those first you're like well i hate my job and i hate my relationship and i hate the city okay those are all very changeable and a lot of times you get there by by inversion well if i wanted to destroy my life i wanted to have the worst life possible what would i do and then taking all those things that you would do to really destroy your life and make your life miserable and then reverse them it's a much easier way to solve the positive psychology equation in my opinion yeah i love that and i'm remembering this this picasso quote which is i think he said everyone is born an artist yeah right and then eventually we we you know get convinced that we're not yeah and we have to really just strip away and get you know get back to basics and i'm using art metaphorically too it's like what you do at acquisition.com or what you did in the fitness industry or what i'm doing with film you know this can be considered rr 100 mine's not that great but um you know everyone can be an artist and perfect their art you know i love that um okay so you get to uh fitness you're the apprentice to a master uh you're not swole yet i'm guessing i was lustful you're getting there i was actually i'd already um i was you know i was competing at that point so i was uh but i was a strength competitor so i was very strong for my bodyweight deadlifts yeah as a power lifter um and then i started my my gym and that was the first day that fitness became second in my life so up until that point i was fitness obsessed and everybody i worked with was like dude you should quit this job and start a gym it's all you talk about all day and it was what i was obsessed with and so maybe like my go-getting was really directed towards that and i figured this was the only thing that i did i did know that i liked that and so i was like okay i'll do more of that yeah and then when i started the gym i realized that i was doing none of that i was starting a business which had nothing to do with i mean insofar as i was selling fitness there was a component of it but the vast majority of my day had nothing to do with fitness whatsoever um but i did find out that i liked business more than fitness and that was and that's where i think that there's been a lot of luck in my life where you know i just so happen to really enjoy the thing that happens to be rewarded by the marketplace with a lot of money you know like that is where i feel like there's there's a lot of luck that has lined up in my life and it's in indirect ways like that i just happen to love this and so i and because of that i will do it for a long period of time for more than most people and enjoy learning about it and talk to people in my free time and do everything i can because it's just the thing i like and it just so happens to be rewarded monetarily well yeah and also you know the physical uh benefits from it right i mean you can literally you put in the work you can see the result right it's one of those very empirical right it's very measurable right but it's like yeah it it's and i think i've heard you talk a lot about choosing the right market like if you're not in something that can scale um you might rethink that if scalability or profitability is your goal perhaps you're you're not in a market that can scale yeah and we can talk about that in a minute okay so uh you you build it you build the um the your repertoire yeah um and and then you start acquiring gyms what are you doing no so i um so i opened up uh four more locations so i had five total on in southern california was it under the umbrella of this so i had four under that umbrella and then the fifth one i did on my own so i ended up starting the gyms on my own nine months in i let two partners in for lack of a better term um i sold two-thirds of the equity in my business for basically nothing and at that point i was already making twenty thousand a month take home uh and they said that it wasn't valuable um and in some ways they were right and in other ways they were not um either way that is what happened and then from there i stayed in that partnership i ended up staying in partnership with one of the guys we didn't work well with the other guy and then after that guy was no longer the partnership i disagreed with the the other partner over time not on a personal level we actually got along really well um but just business strategy wise i wanted to be a premium price leader he wanted to be the low cost leader and so that it was just it just and so we ended up just meeting in the middle which was a very mediocre business um and so i wanted to start my own facility with kind of like my own credo and that was the fifth gym which was body force lake forest um and that gym did really well um and then i made i i that gym i acquired uh compared to the other four therefore i started this one i acquired and i acquired for no money down um for fifty thousand dollars over a year and so i basically took the whole gym over and then had to pay four thousand dollars a month to the owner and i made fifty thousand dollars in the first month um and so i was like this is great um and that's when i realized that i was i'd made so much money launching and opening gyms and then i didn't even really care as much about the running afterwards i mean i knew how to do it i just liked the launches they were more exciting and so i had this idea for a model where we'd fly around and just like launch and fill other people's gyms and so this is right around the time that my my now wife so i pitched her the idea on our first date and asked her to quit her job um which was obviously the the most reasonable thing to do uh when you when you're talking to the top sales rep at 24 hour fitness which she was at 23 um and so it's like listen this may not work out but we'll make a ton of money together you should work with me um and uh and she didn't say yes so i went and i launched three gyms i came back five weeks later um and i asked her to help me process the contracts uh so we ended up processing like 120 grand in an hour and she looked at me and she was like is this the thing that you started and i was like yeah just like is it legal that was the first question is it legal um and i was like yeah it's legal and she was can you teach me how to do it i was like yeah she's like all right and so that was when she quit her job and then she and i started launching these gyms together we did that for almost a year um still very very very hard time for for me financially um mostly because i was just way i had so many poor decisions i was paying off at all times i then ended up saying you know what i'm going to sell my gyms and transition during this period of time i got a dui head on collision my mother went to the hospital that's why i actually did those first gyms because they were all around the hospital because i wanted to keep busy and so you know there was there's a lot of bittersweet during this whole period of time like that processing contracts was after i came back from like the hospital with my mom so it's just like just a lot of different like things i was going through but uh and and selling the the partnership that i had there was really hard for me again it was like this you know need for validation approval and i had noticed that over my life until i solved this problem it kept reoccurring which was i always wanted to find father figures and so the guy that i did the apprenticeship with like at the very beginning of the story i was saying earlier like i ended up getting in a really weird uh financial situation with him which didn't end well um we ended up making up years later it was it was fine but like there was a long period of time that we were estranged um both of those guys came in very father-like figure feelings i got in a partnership with another like so i kept repeating the same mistake until i i had to learn i was like you keep doing this so maybe you should stop um and i looked at my track record and all the businesses that i had only owned myself i made a ton of money in in all the businesses that i partnered with i had made no money and lost money in and i was like huh maybe i should do more of that and so that was uh so at this point you know we're launching the gyms and whatnot and uh i i sold all the gyms and entered another partnership uh with one of the guys that i had launched he's like dude i'll come behind you you shouldn't be giving up all the backside like back end of all these launches like i'll come behind you and fill the you know and manage the gyms and that way every gym you launch you own so i think that you're going to own 12 gems and you can just launch them and fill them he said but i have some financial you know issues nothing big i was indicted once no big deal um big misunderstanding uh and i was like of course he's saying so you'll have to sign everything from all the money all that stuff but we'll split it i was like sure of course why wouldn't we so i sold all my gyms put all the money into the bank account for the new business that we were gonna start you know where this is going um sold 400 people which is a massive launch for a small gym in a matter of like six weeks woke up all the money was gone um he was like that was my half of the profits i was like we haven't made any profit we started the gym with the money um he was like well the fact that you spent it is your fault not mine um and so like that all the money i had done from all my gyms at this point in four years of my life was gone um and i was saddled with a gym that had no money in it with 400 members and payroll that i didn't have money to pay for and i couldn't sell people because if i sold them i would have to continue to fulfill them and i didn't want to be in i didn't want to own more gyms i just sold all my gyms yeah and so um at that point i sent layla to go launch a gym in hawaii she crushed it she did a hundred thousand and collect it and that was enough to fund all the refunds for all of the members to gracefully which was not graceful exit the facility um wow yeah i mean talk about signals missed signals learning lessons the hard way brutal uh but also i mean story in my life like i could talk about similar things where i just i had literally had to get beat up and continue making the same mistakes so very relatable yeah um but okay so wow i'll speed the rest up so yeah no you're good we uh just so much so fascinating there's we're like not even there's way more bad that happens after that um so but the the thing is i'm telling this and it's all this happened in like a nine month period so this was just insane and so like my mother getting sick the ending the partnerships the new partnership the money get getting taken my dui had on collision so the hedon collision actually was the next big catalyst for me because that was yet again i was faced with my own mortality and i it re-re-prioritized things again it was like hey idiot yeah and so at that point i had a partner that i had two marketing agencies with by the way started that on the side a chiropractor and a dental agency i had my five gym locations with a different partner i had now the one current location that i had started with the new partner right and i had the launch business where we're launching turning around launches and i'm 26. yeah i'm imagining you know those plate spinners you've got at least nine plates going i was drinking a half a bottle of johnny walker black every night to function not to like not to get drunk to not to feel back to not being stressed that was the only thing and um like some people have like like i would never have called myself an alcoholic because it was like i still function fine i never was drunk at work or anything like that i just every night i would just drink that to like breathe yeah um how's your escape yeah it was it was very much an escape because i wasn't handling the things that i needed to handle and so i had a coach at that time who was morally more of just a therapist and he said alex your stress is literally going to kill you and so that was right after i had the the dui and the head on collision and so he said you need to change stuff like what are you afraid of you you almost died so [ __ ] it and so i ended that partnership i ended the partnership with the agencies i i believe it or not even after the money was taken i was still in a partnership with him um because i was like maybe he's right like i knew i knew that it was fraudulent when i showed him the financials and highlighted everything and was like there's no other money that was here and he didn't want to look at it and that's when i was like oh he he doesn't actually think that i took the money he he was making a reason up so yeah so anyways i got out of all of that stuff i lost all my money and then i was back at zero and this was now this was november of 16. so i'm now three or four years later from me opening the gym on the floor so all a lot of the stuff happened quickly at that point we went to go launch a gym because layla was like hey i quit my job for this so you know can we like still do the thing you said you were going to do and so we we realized that okay i'm going all in on the gym launch business um and i went to go launch this gym in san diego and this guy had reached out to me because he'd like followed me because i made some content about jim's stuff not much um and he said i've got a newborn kid i really need this money like let me sell for this this gym and he was like it just so happened to be 15 minutes from his house like igem's all over the nation that i was doing one at a time and he happened to reach out to me and it happened to me next to his house so i figured all right maybe someone's looking out for this guy okay cool sell it it'll give me time to get all the materials ready so we can launch way more gyms next month he crushed it does a hundred thousand dollars in sales which was like a big launch um and i owed him twenty two thousand dollars in commissions after layla's launch and paying all the refunds and everything i had twenty three thousand dollars okay so i paid him the 22 and the hundred thousand dollars that i made from the sales never came because the processor because of the refunds from the gym before uh shut us down and said there's a regular activity there's too many complaints blah blah which is reason why i shut a gym down right after like right and so they said we're gonna hold on to this hundred grand and so i now had a thousand dollars total during this period of time before i knew that we weren't gonna be able to get the money laila had told her six best friends to quit their jobs and join us at gym launch and so i find out on christmas eve at layla's parents house where i'm meeting them for the first time that i had won lost all my money two all of her friends had quit their jobs and are going to start selling for us the next on the 26th so two days later and on that 26th 3 300 a day was gonna start getting debited for my account because i didn't have the money that was supposed to be coming for that hundred grand and so i sat layla down it was like i pulled the credit card out and i was like i have a hundred thousand dollar limit on this card it was from all my gyms so it was like my master like working capital card i was like but i want you to know that like you can leave now and we're cool like i won't judge you like carte blanche you can leave and we're i was like this has a very low likelihood of working this is probably like a 10 to 15 shot that this actually works and that's when she said i'll um she's like i'd sleep with you under a bridge if it came to that and so that was one that was when i knew that like we were like she was it she was the one she's with me you know ride or die like she's the girl i'm gonna marry yeah and so um what a moment yeah it was it was great it was actually honestly i felt numb at the time from everything but later i can appreciate it um so we started to start the account starting debited 3300 today here's the catcher we started doing you know uh what was it we were doing we did like 200 grand the first month so that's 7 000 ish a day this is this is where it gets hairy i didn't have a processor so we're getting 7000 a day in contracts that i cannot process and the money is still coming out right right the end of the month i get one processor turned on after calling every single favorite i was calling friends up like hey can you process contracts i'll give you 10 just send me the money and they're like this sounds really sketchy no and they were right to not do that yeah and um so processor gets turned on at the end of the month but they said hey it's a new business so we'll give you a 50 000 limit i was like dude i need 200 grand like yesterday they're like 50 000 is the limit so i called the guy up and he said well it's per month so and i got it like two days before the end of the month he said so you can run 50 grand today and in two days you can run 50 grand again so i was like okay and that's what i did i ran 50 grand and two days after around 50 grand which was enough to cover the hundred thousand dollars the 3 300 a day that was coming out on the card so i made literally i made like a hundred dollars in profit that first month and then he got two more turned on so i got to got up to like 180 or so and then he doubled the 50 to 100 so we had 200 000 in limit the next month so we hit the full 200 the next month but we're still billing from [ __ ] from last month while still making and still playing catch up but we made like a little bit of profit that month so i was like okay i think i'm in the clear i think we might have but wait there's more and so now we're going into march so this is january is the first full month december uh january's first one february is is when we're started we're playing catch up on processing march march comes and i just wrote the story out of my books all the details are fresh um we we get the call layla comes up to me i'm like thinking life is good i think we're out of the out of everything and she's like she's like white and i was like what's going on and she turned her laptop to me and there was just just scrolls of of negative transactions on our account and i was like what am i looking at she was like these are all refunds i was like again how we already did all the refunds from that gym like we can't they can't refund again like we already gave all the because i thought it was from the gym from like way back when we that i had to shut down she was like no one of the gym owners that we launched got up on his chair and told everyone to refund he just said go home i can't deal with all this because we had taken from 70 to 270 clients in a month it was three i mean it was just it was just unfought the amount of infrastructure that's required to handle that which i hadn't thought through i was like you want a plus sales and marketing we will sell we will sell your gem we'll blow your gym up yeah and so that's that's what we did and then he refunded everything yeah and um unbelievable it was it so that just blew all the profit from the the month before and uh that was horrible um but then i was like okay one-off circumstance happens not a big deal like we'll get through it we'll just do more launches it's fine two weeks later she comes back again and she's like it's happening again i was like what are you talking about she's like the refund thing that's like he can't refund like we no one can refund like we already gave all the money back what do they want and um she said no two gyms uh told the clients to refund and then buy the same services from them for half price since we had left after selling so it's like someone comes in we sell them a membership you know for the way we did it we do a six-week program for like five or six hundred bucks they would pay for it we'd keep that money for the marketing sales hotel rental car everything ad spend commissions that's what we'd keep and whatever was left was the profit right after that that gym got all those customers for free to convert yeah so it's like you got really yeah you got really high qualified customers because these aren't trial customers they're paying you know 600 bucks to be there so like they care they'll show up they'll follow instructions and you should if you're doing a ride convert 70 on the back end so like you just got to wait you got to provide fulfillment for six weeks and most gyms have fixed costs not a lot of variable costs and so they didn't really need to staff up that much um not not a ton right to handle that and and so these guys are just like you know would be cooler is if we just told them all to refund and then we got half the money right and then that gives them a reason and it's really unethical yeah and they had the relationship with the clients i didn't but i held the bag for the processing so anyways they uh they they did that and that's when we had 150 000 in refunds and again i have no money um wow and so it was like this impossible situation where i looked at layla and i was like okay if you fly out and i fly out we can both do a hundred thousand and we can make sure the gyms don't do anything stupid then we can cover the 150. and i just remember this other thing that she said to me which is like alex like we can't sell our way out of this like if we do that we're just going to create more like there's going to be more refunds like the amount of refunds that's going to keep going up and so i didn't i really didn't know what to do um and so at that point um she had this little side business because she still like she still wasn't sure how things were gonna work out so she was doing like three or four thousand a month from all her personal training clients that she transitioned online and as i'm trying to like think of every possible idea under the sun including like me being a prostitute it didn't matter i just was like whatever i can make to get 150 grand yeah i didn't i mean but it was it wasn't even 150 grand in revenue it'd be 100 figuring a profit that i had to come up with otherwise her friends weren't gonna get paid right and so you can feel the stress and so and so i um i so i set her down i was like wait so three four thousand one that's what's your cost in that she was like nothing it's like okay what if we blow your business up forget my business clearly i suck it's like what if we just blow you up um she's like really i was like yeah like and so she said yes and i spent i pretty much every weekend moment after that writing the best sales copy of my entire life writing an amazing ad campaign and launched everything within like 48 hours and then within a few days we were doing um a thousand bucks a day of just her selling over the phone with no fulfillment it was just like online programs for her weight loss program and i was like this could work because if i get the eight sales guys that we had at the time to come not have to travel anymore they'd all do a thousand bucks a day we did eight thousand a day after commissions we'd have about 150 grand yeah without the overhead and all that right yeah exactly and i was like and no jim owner no one's going to refund because no one's telling them to refund and so um that was the plan and so i told her the plan she was good with it so we had eight gyms that were supposed to launch next month so i called those guys up and i was like hey we're not doing it anymore change the direction whatever and the first guy tells me this long story about how his friend had referred him and that we had saved his friends jim and how um he was going to lose his house and that he had refinanced everything he'd maxed out all of his cards he'd quit his job spent two years not making any money for the gym and that he needed this sob story okay yeah and i said cool not really my problem cause like everything that happened at this point i was like my level of give a [ __ ] was very low uh so and so i said sorry man he's like can you can you at least show me what you did at my friend's place and i'll just do it try and do it myself and at this point i needed money right and so uh i was like maybe um but i also didn't want to go create this whole thing because i knew the value of focus i'd learned that lesson at this point um and so i said fine i'll show you how to do it but i'm not gonna fly out there to save your if you can't sell and he said no that's fine it's fine and so he said how much and at the time i picked the highest number i could possibly think of because i thought i wanted him to say no so i could move on with my life yeah what's your ip worth yeah yeah and so i said six thousand dollars no mind you this is the student was doing a hundred thousand dollars in every single game we launched in a month and um he's like deal and i i still remember i looked at the phone and i was like holy [ __ ] i i i kept and then i just like cool what card you want to use and uh i wrote it down on a napkin and then you know finished the phone call i went over to layla and i was like holy [ __ ] i was like this guy just paid six thousand dollars for like all of our like sales scripts and all the stuff yeah how soon did you realize you left a ton of money on the table well this this was the moment and so and so i i was like i think i think there's something here and so i went and called the rest of the guys that were supposed to launch the next month or seven more guys and and you know next guy how much eight grand next time how much 10 grand next and then i did 60 000 in sales that day yeah seeing how elastic it was yeah and there's yeah and i saw at 60 grand in one day and it was i mean it was a day it changed my life and so that's when i i was like i think we're still in the gym business i think we're just doing it wrong and she's like so we're not doing the weight loss thing i was like guess not i think we're going to do this she's like well how are we going to get new customers like well we don't worry about that yet because i'm going to call the 30 something other gyms that we did the launches for and be like hey remember how i filled your gym up want to see how i did it and within the next month i think i did uh like four like i don't remember the cash collected um i think we collected 200 000 in cash but we ended up doing like four five hundred thousand dollars in sales so let me ask you more about this system was it like written down somewhere yeah it was my whole gym opening system it's like how i would do these launches did you have videos in like a module okay watch step one two three so so the way that i had structured this the the old gym launch version is we would fly out to do these turnarounds all right i have more questions about this oh sorry well i want to ask you because i'm sure that there's a lot of people who want to to create modules or you know learning modules or teaching modules whether they are doing it in-house for them people or they want to learn or maybe create their own like courses are a big thing right um but but so like were these underproduced well produced overproduced like the videos was it like a mixture of both okay yeah because i had hired a guy to do like really professional videos when i did the original launch like the old school one that walked the gym owners through like here's how to service these customers here's how to do nutrition consults here's how to sell supplements here's how to sell the membership on the backend and those are all like really nicely done professional videos and so i had everything there already for the back end the sales training i had already trained my sales guys with so that training already existed the scripting and that sales training was brutal and [ __ ] awesome yeah still like it's interesting because when you make a training with the intention of like someone has to go through this and sell [ __ ] on the other side and it's my money on the line it's different when you try and make a course on sales right because people try and make a course on sales and justify the cost that they charge someone for it mine was an hour-long training that taught someone how to [ __ ] close and it was this particular product at this price point for the gym so it was super specific selling right here's how you set the chairs up here's how the office needs to look when they walk in the door this is the joke you make that's how you do the tour when they sit down make sure they set up on the weight make sure they look at the weight they cry they buy make sure they sit like you know you do the whole thing right and it was all methodical strategic i'd done four thousand of these like i knew like we know this conversation i could still do it still and um and so as all that was stuff was documents the only thing that wasn't documented was just the ads and the landing pages i said to show how to place them yeah so i all i had to build was just that and we're just talking about facebook ads or google ads yep there's google instagram i'm sorry facebook instagram yep and we already had the ads they didn't even make them i was like this is the ad and they would use my video because i knew my videos worked so it's just like boom post this goes to this page which is a copy paste of the page that i already made change the name of the city right like that's it i was like and when they like here's how you work the leads which was the sales training the guys had here's how you sell them sales training the guy's head and then the back end they already had the training for it it was proven it was already there i just didn't have the ads part like documented so i documented that and um i sent it out i called the other guys we crushed it and then and then and then the average gym that of those first like 30 or 40 that bought um did 30 000 in additional collected cash not membership not like contract value like cash collect in their first 30 days so you're a hero overnight they're just like yeah overnight success and then um and then i mean as soon as that happened they're like what else do you have and i was like well glad you asked you know i have i have my three-year licensing where i'll give you all the rest of the things that i use to run run and scale my gyms and so that was that became gym legacy which is the back end of the gym launch which was the two programs that we had front end back end which fundamentally was actually exactly how i did weight loss programs we had front end and back and we have a defined end program we sell in a continuity same process just they were just added zeros that's all it was um and there was no the cost of goods is significantly lower because it's licensing you know licensing materials licensing ads licensing pages it's not you know yeah and and if i can just point out what i'm hearing too is you got rid of partners yeah right i'm not against them now i i had to learn i had to learn how to do business on my own in order to learn how to partner later yeah but i also think you know self-awareness is key yeah like sometimes uh you know nadal is a great tennis player uh he doesn't play devils yeah that i know of right he's a solo player for a reason or you know and we had russell wilson on this show who's the quarterback now of the denver broncos from the seahawks you know and russ is a team player so if you're a team player you know and that works for you that could be fine in your model it wasn't working it was not and and you weren't getting the hint until you finally did yeah i think layla was a strong nudge there yeah yeah but those are those are super good lessons for people who may not have to make them the hard way that's yeah if you're going and this is because i get questions like this all the time for newer entrepreneurs it's like you know either they're in a partnership and this is how most people partner hey we like each other and we kind of like the subject let's get into business together terrible reason to get into business together but like y combinator we were talking this off offline two seconds ago um well combinator's shown that three partners three founders is actually like the like the sweet spot like three to four ish actually works the best for building huge companies now that's huge companies not everybody's trying to build a huge company and the founders that they have have very specific roles and functions so you've got the guy who's the you know head of coding and then you've got the promoter who's head of sales marketing then you have the operator typically which will be kind of the third leg of the stool which is kind of the minimum three roles that exist and so if you are going to partner with people they have to have a clear role of responsibility that is different than yours complementary skills 100 so complimentary skills aligned values and if you are partnering the splits don't need to be even and that's often a common thing which is like okay there's three of us therefore we should have thirds that isn't necessarily true you know like some people might be bringing a bigger network or something you know other things to the table that that tip the scales and and that's you know that's part of business but all that to say i'm not against partnerships i at that time did not understand how to partner and therefore was only able to successfully have business when it was just me fair enough incredible i mean there's just so much there let's pivot a little bit i want to get granular in some of this advice because you know again when i started this show it was i was sailing right into the perfect storm of the recession i got my ass handed to me and then had to you know climb back out of the pit that i've jumped into basically and and i wanted this to be the solution for me and it turned out to be exactly what i needed but also for a lot of other people what's what's a deeply held belief that you had maybe three to five years ago and it could be business or personal but like something you you really held to be true that you no longer believe like do you still trust people the way that you did sounds like you you i mean i know nothing about psychology uh except through my own research and therapy and all that it sounds like you had a very co-dependent relationship especially with father figure in your life right so but so naturally you had this very trusting character did that change over time do you still have uh that strong trust so i think that a lot of the revelations i think came in retrospect more than were active decisions i'd say the vast majority of the things where i i made mistakes and stumbled into the right way and then tried to think like what was different than last time um and i think one of them that you touched on is trust but a different version of that is like the gift taken relationships and i think that i was i'm i think i am naturally like if there's a on a scale from one to ten like you know one being the taker and ten being a giver i'm i'm naturally a ten um and tens get run all over ones don't get opportunities because they're always just trying to take and people just get tired of them the vast majority of people are tit for tatters so you give i give which is like the fives which is the vast majority of the population it's transactional and i think that what happened over my career is that i shifted from a 10 to like an eight um and they've actually done a lot of game theory research on this and found that like eight out of ten is the is the proper amount of give take for optimal outcome really okay so to be clear you're saying you used to be a giver ten out of ten and now you've ratcheted that down to eight out of ten and that's about the right range you think yeah you just have to know when it is your turn to take right and also i would guess because i can speak from that same experience a very relatable i'm i'm sort of right there with you and i was going to ask this just for personal selfish reasons too sometimes i feel like i'm always the one giving but then i remember that you know if you're truly giving without the expectation of return then i shouldn't have those feelings right because you know yeah you give it and then if it's without expectations and it's not transactional then yeah you shouldn't care you know it's interesting because like i i spent a lot of time defining words um and so i think there's like it's it's worth looking into like what the word give means um because you know what is the difference between giving and donating right one would be one has no expectation of return i would imagine with donation giving might not necessarily have no expectation i don't know like it's like these are the things that i jam on you know what i mean um so i don't know i don't i would normally pull my phone but like let's go look the word up well i love riffing on this because um i think it's uh it depends on the person and it's also it's all about intention it's the same reason you know some people give to a certain charity and they want to be known for status sure uh or conscience or maybe it's like uh brownie points in the life after or maybe it's to feel good right now because you know maybe your life is trash and it's like if i do a little bit of good that'll offset my feeling there's lots of different you know motivations right um that's very interesting so you think that you've changed the most in the giving category you've ratcheted it only down to an eight though that's still good it's oh i mean yeah i mean you've consumed some of my stuff like it's still very very very much give give centric yeah the thing you say in every video is i have nothing to say yeah so it's like you know the book's 99 cents the courses are free like you know at this point i just i would like and you know is there selfishness in the giving sure i feel good you know what i mean it makes me feel better i do gain status from doing it like there's plenty like there's always ways i can pull back to be you know selfish and i probably would define it rather than like giving and taking is i think the from a strategic perspective i have now noticed that it's it's give give give get rather than give give give take or give give give ask is probably i think gary's his gift give you to ask um i do prefer gift give give get because i think that that is that that has happened and that might seem contrary to what i just said about 10 of 10 givers but i can i think the 10 out of 10 giving is giving without understanding boundaries it's like not holding your own space yeah it's like you can like i will give this and i will give that because i have agreed that for me this is something that i'm willing to give and i will give it you know relentlessly but it's when you are when you are allowing other people to take from you um things that you were not planning on giving and then you choose to rationalize why it's okay right or like your partnerships you know totally screwed you and then you know you you went back for more yeah and i and i and i just qualifying like i made like i own those like those were my mistakes i did not know how to structure partnerships i did not know what to look for yeah you know and they were all lessons for me so i'm you know i'm grateful for the them well but and also in your defense it seems like you have high moral character you have a a big heart and you want to give people a second chance maybe or the benefit of the doubt at least tell that story about the deal you did with someone who you lent money and um and and then you invoiced them or something and it ended up being the wrong calculation tell that story yeah so i um i so i i in wholesaling uh you try and get a building under contract right and so someone had found a really dilapidated building that they could buy from the bank uh i think for three million bucks and so they called me up because they're like we need three million dollars but we need it tomorrow yeah the bank of alex right bank of alex and i tend to always have a lot of cash for me so i was like sure um and they were gonna pay a really good interest rate which is a hundred thousand a month as long as they carry the money which is like 48 a year so i was like cool i'm in um and you know from a security standpoint it was secured against the building which had already been valued uh at 5.6 they already had an offer with earnest money on the tables they'd already lined up both sides had you done business with this person before okay so that's why that was so first brush okay right um so they both personally guaranteed it i was first lean on the on the like this is stuff you learned over time right i was first leaning on the property and they had earnest money down from a new buyer so like all my sides were more or less covered took all the risk out of it for you right no brainer so i wrote the check and then the uh so my real estate lawyer which was actually a new lawyer i was trying out um sent the invoice over uh once they said hey we've received the funds like we'll send it to you with the interest whatever and he had miscalculated the amount of interest that was supposed that had accrued because because they did very well in the sale yeah they did yeah they did i mean it was a great deal for them right yeah um you know they borrow three for you know they i think carried it for three months ish it's like three and a half months so they paid 330 or 350 000 in interest they sold it for five six on some someone else's money yeah so they made two six minus the three hundred so let me put 2.3 for 90 days work it's not a bad deal um so anyways uh we sent the money and or sorry they sent us the money on the invoice and uh they were like hey thought this didn't make sense because the agreement we had was this and so we're actually just going to send you the correct amount which is higher than what you invoiced us calculation was off yeah so there was like i think they they invoiced 280 and it was 330 i think was the actual numbers and so it was down by 50 grand and um i obviously you know communicated my lawyer that i was disappointed that he had not thought through it but i probably should have looked better too i just didn't think about it um and he his lawyer the guy that sent the money had advised him to not send the extra 50 grand he said listen that was his invoice send him the money and you know hey he'll make 50 grand extra but um i'll try not to hit the mic um he said you know what like i want to do deals with alex in the future and this feels like a very short-sighted move and so he sent the money and he did end up getting more goodwill from me from that move and so you know he was the one who ended up saying something to me when he flew out to like we did like a celebratory dinner um he said you know my dad always told me that you only get one name so invest in it accordingly and i always thought about that i thought it was a really good line just like you only get one name like you can change your companies you can go bankrupt but like your name stays with you yeah and so that can either be an asset or it can be a liability yeah and why not have it be a huge brand have brand power in and of itself yeah what's that line like integrity is what you do when no one's looking yeah right and who knew he you could have been setting him up i could have right and then what happened to that lawyer that you hired oh yeah i mean he's gone and how about his lawyer he's also good so i mean that's a super good lesson about you talk a lot about in your videos how you hire people yeah um not based on skill per se first it's all about moral characters yeah yeah refresh us on what those are so we look at uh i mean for us the values that we have at acquisition.com and i think it changes by the type of company that you that you are um for for us it's unimpeachable character sincere candor and competitive greatness and so those are the only three things and we look for them pretty much in that order so and most people flunk the first one so we don't have to really look for the other two um but when you think about an impeachment character for for me i like the navy seals test um that i was told this may or may not be true but i like the test either way which was not only like um you know in in their world it's like will this guy give me give his life for me and that's what i'm expecting my my teammates to do but bear with me he said but that's the ticket to entry to be you know in team six or a navy seal he said all right to be navy seal he's like but team six it's do i trust this guy with my wife when i'm not there for a long period of time right do i if i give this guy a huge amount of money and just say i'll be back for it i'd like i don't know when but i'll be back for it yeah we'll be there 10 years later and so if you ask those types of questions like harder questions and the favorite one that i have from warren buffett that he got from a holocaust survivor was you know during the holocaust like with this person let me in and so i think that like those are hard questions right and i'm not saying that i'm expecting a teammate but they give you frames on like how deep someone's character can go um and so we try and we assume that there will be hardship in business because it is a hard game and so that is guaranteed and so it's just a question of when not if and so we try and run out the risk on teammates and portfolio companies by asking ourselves the hard questions before they are in urgent need would the alex now hire 20 something alex under the same scrutiny from i would i would probably just asked me a lot of questions so i probably would have found that it was not i would have noticed that he probably saw me as a father figure and was like this is probably not healthy for this kid at this point and given the level of ambition that i think he has i think he will outgrow the role in a very short period of time um i would either have to tie him into some sort of you know some i don't know i would have to figure something out or i would say listen man i think like why don't we do a one-tier internship or something like that and just like go on your own um or i would probably you know it would just really depend on what little alex wanted but that i mean it would just be asking questions honestly i mean it sounds like you're saying no that you wouldn't hire him it's because i know him and so i mean i think that you know some people some people need to be number one um and you know we look for that and if if that's a need then i would probably pass right have you been have you ever been wrong about someone's character yeah i mean like now now that you're more 100 you know who's you know who's unbelievable layla girl does not miss like i am still more trusting i am still more like you know what he was having a bad day or like you know what like maybe like i still will try it because i think i i empathize a lot with people who are in difficult situations because i have been in them and i understand the difficulty right um layla just doesn't give a [ __ ] um layla just sees through people it's crazy like i mean even even when we like check in with our portfolio companies like this just happened we had a portfolio company recently um we hopped on we do we we check in regularly and whatnot obviously um and the ceo is on we're like anything to report what's new you know he gives normal stuff and we got off the call and she was like he's not telling us something i was like what like you know like i mean it's fine to me right and then lo and behold we like we find out that there was some there was a big problem that they hadn't told us about and it's just like she just like doesn't miss yeah and so i i do lean on her a lot with that stuff so our our single rule of marriage that's helped tremendously has just been if we both don't agree we don't do it yeah whatever it is whether it's an investment it's a hire it's a decision i have overridden her one time and it was uh when i was starting allen the software company which is our third company after we had jim launch prestige labs which our supplement company then we had allen the software company and i really wanted to pursue this opportunity and she didn't think it was smart given the resources and the team we had at times thought they were stretched too thin etc i i kind of bulldozed and was like we're doing this and um and and it and it blew up i mean we were at 1.7 million a month within like six months in that business um so i felt very validated that i had made the right call but on the longer term time horizon she had seen that there were some flaws in the model and some things that i i hadn't foreseen that ended up you know biting us in the ass and so um i go back to what i said originally which is we don't if we both don't agree it goes the other way too it's just i tend to be the us guy yeah that's healthy i actually got the same advice when i got married because you know you you either succeed together or you fail together and and either one can actually be great yeah it's together you're never divided can i ask a personal question um so do you guys have joint bank accounts i gave her my bank accounts two weeks into dating okay so they're completely joined yes and she takes care of the money because she's good at that yeah okay so you don't have separate accounts and you don't even have a login i don't even i don't even know how much money you have i really don't i get one email from our from from her ea every week that just has our balance totals between all of our assets yeah and that's it and i just scroll at the bottom i look at the number and i'm like cool yeah she could she could make it up for all i know i have no idea i could be poor i could be broke and i could just somehow somehow i just like live and my credit card always goes through so i have no idea so i don't think that's true are you are you like the um are you like the the optimist and she's the realist like you're out there you know seeing the vision what's possible and she's like bringing you back down to earth like hey you know let's get real with this yeah depends on the circumstance it depends on what we were talking about so i think the subject matter matters um whether it's people whether it's friends whether it's um a business decision i think i think some of those matter like we tend to but i would say maybe in general i think like with a very broad brush stroke with with exceptions um she tends to be more uh conservative i would say yeah and we always joke like if if it were only laila we would never have any businesses and if it were only alex we'd have too many yeah well that sim that seems you know like complimentary skills the yin yang and i'm guessing also that she doesn't like surprises or uncertainty no and i think we i will say this though i think we now over index to both of those polls more because we know the other person exists so like if layla somehow were hit by a bus tomorrow and i we're taking over all of our affairs i know that i would correct towards the middle i'd be like i want to do this she probably like i have a pretty good gut feel for what she would say yes to but i'll still i'll still push it just again and sometimes i'm surprised i'm like oh you are you do you do think this is good i'm like all right let's do it sometimes i just throw them out there as softballs for like her to swat down so that when i when i uh when i really want one you know i mean i'm like you did say no to all these other ones i was like so i feel like it's time you know i love that i don't see like a little um dialogue bubble like what would layla do you know that runs through your calculations her picker unbelievable like i think we have a very like uh warren buffett charlie munger uh dyna obviously you know we're married but like charlie always says no warren wants to pursue it it's just like i think that's it's very natural to have somebody who's going to try and pursue opportunities and somebody else is like is it core is it does it align with where we're trying to go yeah no i love that story of you know you basically got married for business first and then figured out how to navigate the rest that's super cool yeah we were living together five weeks after we met in motels in one room okay alex here's one for you um you talk about competitive advantage how do you create competitive advantage the easiest is just information like just know more than the other person and and how do you do that i mean aside from it's usually doing more and doing more research it's both things and a lot of times doing more is the research so like if you think about um every business that exists and that's a very broad statement but i think i think i can back it up um they all exist based on information arbitrage one party knows more than the other party so even if you're like i remember i said this and there's a bunch of comments and they were like well i own a cattle ranch how is that information architecture like you know how to farm you know how to raise steer and you sell it to people who do not know how to do that as profitably as you do yeah you know how to run that business and you know how to do it profitably and you sell to people who don't know how to do that and because if they did have all the knowledge you had then they would just do what you're doing and do what they're doing and then they would swallow up the supply chain and that's what vertical integration fundamentally is you eat up all the other aspects of the supply chain for within your vertical well and information arbitrage is an interesting and spot on but also it makes me think um sometimes making it more efficient or time saving is the key maybe you know all the information's i know how to get six-pack abs okay okay i just haven't done it yet yeah right um so i know probably as much as you do about how to get a six-pack or you know or how to you know you know get the guns yeah um but maybe you've got a shortcut or you've got um which would mean i would know more yes yeah you're right but but i say that in terms of information arbitrage between a a buyer and a seller in terms of how to create value that's a different question you know i mean like how do how do i communicate value to a prospect that's you know the entirety of persuasion and all that other stuff but like in terms of like how how do we pursue opportunities um which is a subject that i'm going to write a whole book about um but like opportunity itself which is just like this big word that people like to throw around but like what is opportunity how do you have a good opportunity versus a bad opportunity and so um the number one youtube that i have a video i have on my channel is is i i touch on the topic but i see it as three variables so you have uh the total number of potential units to sell which some people call tam right total decimal market but how many how many units of this widget could i potentially sell number one number two is what is the value to uh cost discrepancy so how much profit can i potentially make solving this particular problem and then number three is what are the competitive dynamics within that marketplace so uh an example that has two of the three would be like what if i wanted to sell cell phone service lots of people need it the how much it cost me to add an additional customer is very very low so very high gross margins but what are the competitive dynamics well there's a lot of really entrenched players it's very hard to get into that right and so when i'm looking at an opportunity i want to see all three now the the difficulty with using those three is that that equation can evolve over time and so if you're starting a business right now you might not have you know sell something that everyone in the world can buy right actually there's probably not many things that everyone in the world can't buy um i was talking to a uh they they sold kangen water it's like a it's like alkaline water yeah and you know i was talking about their tim they're like everybody everybody drinks water i was like yeah but no one's buying a two thousand dollar water machine so the tam isn't everybody it's people who are fufu enough to buy 2000 water machines which is a much smaller of the seven billion people on earth where 80 of them don't have internet i don't think your team is as big as you think it is right and so um but as you get into business you learn more and then you realize that you can expand your market in one way or another and i could get into how the different ways you can expand your market but yeah give us a little taste the one thing i remember from maybe one of the things that you taught me was to think about uh the scalability of folks yeah 100 and the scalability comes uh there's the entrepreneur component which is like you know skills traits beliefs which we can not if you want um but then there's the scalability of the of the deliverable which is like how do i create a double deliverable that is more scalable when i if you think about my trajectory i first got in shape that and i had a job right and then i uh started selling fitness services because i was a skill that i learned and then i got other people to do fitness services for me so this is all levels of leverage so like opportunity is just a fancy word for leverage um and then after that i sold licensing which was with with media right so my cost of incremental uh my incremental costs were basically zero right every new customer was very low for me to didn't cost me much to add them right compared to how much money i could make from them and so with the different business you know the different iterations of fundamentally the same skill set i knew how to get people in shape that was the skill set right i added in learning how to market learning how to sell those were things that added value right and that was when we get into the the entrepreneur skills states beliefs like that was from that side but that is why i was able to climb the opportunity ladder and gain more leverage on the opportunity that i was pursuing and with regards to how do you increase your your total adjustable market like so there's four ways to increase it there's five ways to adjust it so um the first one are the same don't worry the fifth one's just the last one so you can go up market which means you're selling to bigger versions of the same thing so let's say i was helping hair salon owners i could help people who have chains of hair salons or i could help franchisors or license orders of hair salons it'd be much a much smaller demo but they'd be much bigger clients it'd be enterprise right i could go down market which would be selling smaller versions which would be like i could i could sell hairstylists right if i want to go down market from there people who aspire to be hair stylists right so it's like a pyramid um so you up market you can go down market you can go adjacent market which is what's similar to hair stylist that probably has similar wants and needs so probably like a lash salon or nail salon or something yeah exactly so that would be an adjacent market or i could go broader so broader is where you take all adjacent markets under one umbrella which would be beauty right so be like i help all beauty tight brick and mortar businesses right that would be going broader and so those are the four ways you can increase the total stressful market of whatever thing that you're serving the fifth is you can go narrower so i say that you can increase it four ways the fifth is you go narrow you get more more specific about the constraints that you apply to the requisites to become a customer the reason that most times with businesses that i take on in the portfolio it's actually the first step we do is we actually narrow it most times and it's because they are they don't even know who they serve and they don't know who they serve best and so when you're starting out one of the best practices you can do um is the fancy word is a common factor analysis but basically what is what are all the best clients we have in common so if we take 100 clients and we look at the top 20 because there's a pareto they're probably responsible for 80 of the revenue anyways we look at that 20 we say what do they all have in common and then what if we only sold that amount of people and we sold now the same hundred but they were all of that 20 percent right well we would 5x our revenue same operational drag because it's the same size company but we're selling better customers and most people you know i i get on with entrepreneurs all the time and they're like i think i've saturated my market and i'm like all right what's your what are you what's your revenue they're like two million bucks a year i'm like okay well the market you're serving is a 60 billion dollar industry and you are making two million dollars a year do you feel like it's like do you feel like like you might be premature or you just don't know how to get more customers they're like well i guess i don't know how to get more questions like that's a problem that's solvable so let's solve that right and so then we can we can we can break it down there's a million ways to get customers so i can break that down too yeah is there a certain type of business or industry that you gravitate to yeah for the acquisition yeah so we work with uh business services consumer services ideally businesses that are e-learning course like i love licensing models so i love um low overhead yeah high cash yeah yeah exactly in margin yep and the problems that those companies typically have and we take them on usually between three and ten million is when we like in top line sales is when we start working with them the problems that they usually have is that it's two founder led it's too personality brand driven they don't have enough customer lifetime value as in they sell something one time and they can't get people to keep buying they can't get people to stick they have high churn but they typically have high cash flow but it's very dependent on usually one or maybe two channels of acquisition and so we will kind of lay out our five year plan to getting them from basically a company that has almost no value to getting to like 30 to 50 maybe 100 million dollars in enterprise value and a company that has multiple acquisition streams has an extended ltv the ltv allows us to have all these different acquisition channels but we it depends on the like the order in which we solve them depends on the business did you would you have to pay for the domain acquisition.com was it expensive yeah it was 400 grand okay not that bad actually no i looked at marketing.com it's 5.6 million okay i thought about that i told layla i'd send her a proposal i i never email i don't email i don't check email if anyone ever emails me i don't i won't read it so just let me know um and i literally said a proposal i was like so i was thinking um so i price anchored with marketing.com and then i was like we could also get acquisition.com which is 400 grand she's like well that seems much more reasonable because i anchored 5.6 but that was smart um but marketing.com i still sometimes think about because uh i do like that i like that domain but the thing is is the reason i ended up doing acquisition wasn't even for the money is because the type of of of people and portfolio companies that i am looking for use the word acquisition like people who don't know business i don't know but like everyone knows what the word marketing means or thinks they know what the word marketing right it's a little bit more um general right people who are trying to scale their companies talk about cost of acquisition and so it also had the double entendre of we you know acquire minority you know stakes in the companies in addition to helping with acquisition so i kind of like that component though yeah 400 grand i mean it seems like a seal because i think i was like five or six years ago zuckerberg bought fb.com for like 8 million or something like that just like probably also a great deal in retrospect yeah yeah interesting all right i got a couple more zings um i'm telling you i could i could sit uh i could sit for hours um i i think a lot of people want to know this the answer to this next question which is what is the fastest road to financial freedom you talk about everything you're doing on youtube i have nothing to sell i'm doing it to help people who you know are broke yeah you've got uh assuming 10 plus million dollars sitting in the bank today maybe thanks to layla closer to 15 i'm guessing oh way more than that in cash way more than that okay and talk about that too like why why because i think everything's really fluffy right now yeah so i mean i i sold three companies last year and a house and two cars so i sold everything last year okay yeah so you're you're looking at what's happening predicting there's inflated pricings i mean a lot of people are really afraid of inflation and i think that's super warranted um i don't know i think it's just like that's a purely like this is like looking at uncle warren right he's got 150 billion in cash sitting right now he's not worried about it i'm like he's seen more cycles than i have right so he's got 25 of his entire company value sitting in cash like he's waiting and so and that means i mean to be clear it's not working for you it's not earning i mean it's earning a tiny amount of interest compared to what you could have in stocks or investment properties so a little inflation is not going to kill me um but like when you look at the nasdaq during the crash in whatever 01 or whatever the year was um it dropped by 78 right so that would be significant it would be significant yes um and so i'm i think i think just given the timing i'm willing to wait a little bit and see what's going on um and i also am very close to a transaction so i'm not gonna like immediately allocate all the money that sounds like a bad idea um and so that is why i have more cash than i probably would normally yeah do you see yourself coming like do you see yourself they talk about this scarcity mindset do you think that's rooted maybe in your family story which is you know your your dad basically had to reinvent himself as the doctor coming over from a different country i think he has scarcity mindset i don't think so he's i mean wasn't that the reason he was worried about you choosing this path is because i don't know if it was scarcity i think it was fear i don't think they're necessarily the same thing fear of losing anything right like fear of not being able to provide or of not being success i mean i think my dad was afraid of what me being a failure would reflect on him i don't think he had anything to do with scarcity i think it just like he was afraid that it would look bad on him gotcha so then back to the quickest road to financial freedom mm-hmm i think it i think i mean the first answer that came like the bullet like the quick answer was knowing thyself right which is a lot of people because right now entrepreneurship's cool it won't be cool in a few years when everyone loses everything and so that'll probably probably calibrate a little bit um and so i think it's just it's just the one thing that you can always protect yourself with that and this is something that i have learned from my you know iranian family is you know when when the revolution happened in iran we talk about legacy lands buildings houses bank accounts government says those are ours now that's it there's your legacy gone that's why i'm like and people were like i want to build a legacy i'm like u.s might not even be the superpower in 500 years your kids your kids might be in in bangladesh who knows india might be the hot spot 500 no one knows right and so that was a touch on legacy but skills are the only thing that will always appreciate in time and work in compound compound in concert so when they work together if you know how to do math then you can learn how to do accounting if you learn how to do accounting you can learn how to do tax work learn how to do tax work and fair how insurance works for your insurance works then you all of a sudden you're a cfo and you can prepare companies for sale like the skills stack on top of each other specialized skills are valuable independent of the currency or the economic climate and so if you are good you will always have a place to provide value because people want good stuff prices may vary currencies may vary but people will want the things you have if you are good and the only way to get good is to work and so i think that a lot of people spend a lot of their time in paralysis trying to figure out what the quote ideal opportunity would be when you won't know what the ideal opportunity is because you don't have a baseline and i believe that research is done through doing and you learn a lot more by doing stuff in action and then you will gain the insights of where the opportunities lie which is why y combinator comes up again what they look for in past founders one of their criteria for successful business is past experience in the industry so and that can be i just wrote a tiny blurb about this in the book that i'm writing that can be tangential like if your dad owned a mechanic shop or was a mechanic you probably know a lot more about cars than you then like you to you it seems obvious but like i don't know anything about cars nothing nor do i really have the interest but like if you wanted to get in the space you probably have some level of knowledge some people look at just the whole world and they're like i don't know anything but this is maybe a good like but i think it's better to have some level because usually we have learned stuff in our lives whether we like it or not and starting in the in in every industry that your parents your cousins you worked in there was massive opportunity it just depends on how you structure it right so like let's say my first job was i was a blender tender at smoothie king first job i got blender tending not a very good opportunity right i'm probably not gonna scale that managing there probably not either owning the owning the the location a little bit more leverage because now i have leverage on labor right owning the franchise much more right and so like all industries if you go high enough up and this is the rule of thumb for anyone if you want to see where where opportunity exists look at the businesses that have been here the longest because they make tons of money the only reason they would exist is because they can they can exist during downturns the only way you can exist during downturn is you make tons of profits all the time so that you can weather it like jp morgan's been here for longer than anybody's been alive right some of the big insurance companies why is insurance are profitable because you pay them for nothing right like pay hundreds of i mean depends on what like you pay thousands and thousands thousands a year for something that may never happen and they just know how to appropriately value risk assess risk excuse me and so wonderful business right insurance um and so the the point is is like i've now learned to see this as like when i see big businesses the bigger the business the more i realize that there's probably a very high gross margin opportunity so you look at the biggest companies on the stock market look at what they're doing the base unit that they're selling typically has tremendous like the biggest company in the world right now in terms of profit is like exxon that's number one in terms of net free cash flow that's created and they're crazy like people are like facebook no it's excellent why because they drill water out of the ground and they sell it for however many hundred dollars per right it's not water it's oil but it works the same way right and so and that's a massive over generalization but like you get the idea and so facebook sells eyeballs which costs them basically nothing google sells eyeballs that cost them basically nothing and so all of these types of businesses and this is where people get into the ethics around capitalism and whatnot but like you sell for what the market values it at period and your goal as a business is to drive your costs down as much as you can right as long as you're still long-term greedy which is if you drive them too low or you don't pay people long enough you introduce new levels of risk which then long term you actually lose money so that's when you get into the long term short term like ceo ship of publicly traded companies and stuff which we don't need into but like if you if you were to only own the company and you could not ever exit and you made your decisions with long-term greed in mind then you usually make the right calls and i'll say one last thing about the how to how to get freedom biggest mistake that i see young people or people who are young in the game making is that they want to become millionaires in 90 days and when most times you could guarantee that you could become a millionaire in a decade but you have to be willing to not be a millionaire for nine of those 10 years and if i had everyone signed a contract that said that when they were 20 they could all be millionaires when they're 30. but no one's willing to do that and so what happens is for the rest of their lives they keep chasing the shiny object over and over again and keep battling the same boss and losing so you're talking about taking a thousand dollar paycheck and taking 300 of it and putting it into savings and living on less living under your means yeah for nine years and that compounds and that you know i mean there's the investment side and i i'm not i'm not uh despite having a high net worth i'm not an uber investor i've made my money with businesses i haven't made my money investing um and so for people who are starting out the know thy self piece is am i going to be somebody who has entrepreneurial tendencies and could potentially own a business business ownership is the best way to create wealth it's also the best way to lose wealth so which i hopefully illustrated at the beginning of this and so it's high risk it's high reward and so yes it is the way to it is the way to the most wealth it may not necessarily be the way to the fastest wealth so like if you're like i think most most guys who have entrepreneurial tendencies could could make 200 000 a year 300 000 a year becoming excellent at sales like if you just learn that skill and that skill translates to all aspects of life right um anyone who's in most people who are in business know how to sell at some level they know how to sell investors they know how to sell their teams they know how to sell someone to recruit to bring on like you have to sell and so um i think for most people gaining that i think i think those initial jobs are undervalued um for your ability to learn and so a lot of guys are just looking for the perfect job when the perfect job is the assembly of maybe three or four jobs that you have to to gain skill sets in different areas and i think warren buffett said it best that's probably a good wrap up which is whenever you're working you should either be learning or earning so either you're working for the paycheck because it's it's it's material to you or you're working because the the incremental increase in knowledge is material to you but it should check one of those two boxes so this shows called behind the brand um what do you think the definition of a brand is and and how do you build a brand so i see brand as reputation and i see reputation as what people say about you when you're not there so that is your brand i think a lot of people take a lot of time to try and build their brand um but i think you build your brand inside out so what is the alex ramose brand well i mean i would say it's aligned with the values that we have you know it's unimpeachable character sincere candor i try and be honest with as much as i possibly can i try and do the right thing as much as i possibly can um and competitive greatness like like within the rules like we will play and we'll play to win and uh i don't need to know your current net worth i'm sure i'm sure you've shared it uh yeah we're done yeah and so well so do you have your sites on a particular goal are you trying to get to a billion or yeah so i have two i have two two goals on the horizon um the first goal is to get layla on the forbes 100 for self-made richest women um so we only have to have 250 million together there so that's that's like the like the immediate goal okay um how far away is that is that 150. i mean like is it a year away is it no i think i think realistically i think we'll get there in like 36 months yeah um yeah i think we'll get there in 36 months the the the you know the next goal would be uh would be billion and that's just because like if you look at how behind this is actually kind of funny for anyone who's curious uh the way net worth is broken up is you have uh high net worth very high so high net worth is one to five million in assets investable assets uh very high net worth is five to 30 million investable assets and then 30 to a billion big range is ultra high net worth and then above a billion is a billionaire those are the four those are the four net worth categories that exist right and so um that so that for me it's like we're all trying to work now and so you know getting to the billion i guess is the next thing um but all the while we realize that we're doing it for no real reason other than for the love of the game and because the mission of the company and so like if you talk about brand i told you about our values but the mission is to document and share the best practices of building world-class companies and so that's why we make the books that's why we make the youtube that's why we make the courses that's why education will be a core to everything we do because that's the what we're doing also that matters most to us let me ask you a follow-up question which is why is that forbes 100 list important to you for her or is it her goal i think it's more it's definitely michael why is that important to you i think it's cool i think like for really no other like i think it's cool yeah i mean it's a vanity metric sure yeah i think it's a trophy yeah why not be awesome like that'd be cool yeah yeah and i think that's good that's a good enough reason because it'd be cool okay okay um final parting words of advice dan sullivan said something that i really like he said wanting something is reason enough a lot of people trying to ask you to justify why why do you want that why do you want to date that girl why do you want to start that business because i want to like that is the reason i want to yeah or maybe because you can yeah what was the last question you said final parting words of advice oh party words of advice um you're writing this new book maybe let's ramp into it that way so the last book you know you sort of left off where some of your last videos are give us a preview into what the next chapter is what the next book is about so the next book tentatively is titled hundred million dollar leads uh because most people had to fix their offers which was the title of which 100 offers was the first book which is what are you actually going to present to a customer in order to get them to give you money the second thing that happens after people have that and people start giving them money is they want more and so they want more people to present to and so they need more leads and so the subject of that the title of the book is leads but the subject of the book is advertising which by the definition is to make known so how to make known so you've made a shift recently which is you know you used to basically buy leads or buy advertisings you know advertising by definition is to spend money to make known right by definition it's to make known right not to spend money just because it's a it's a it's an important point that's fair uh my interpretation is there's two paths there's there's direct marketing or direct response advertising and then there's branding and i think i've heard you say that you're more if you were 80 20 advertising or direct marketing before you are now flip the script and you're more into branding why did you do that and why do you think that's better now it's because you're more established you have the money in the bank you've done the business i think that having the money to make enables more branding right and so i actually think that branding is a higher return on advertising over a longer time horizon me too and so it just takes longer to come to fruition and if you are patient and have money it's by far the superior strategy right but when you don't have money you need to make money today to pay forever for for your advertising in general whatever those efforts are to make known um than than having a direct response so i think i think people do end up shifting over time from like seth godin is famous for being a hardcore direct response marketer and then being all about branding now garyvee was you know more direct response built on built the wine library on ppc from google is all about branding and i feel like i've i've made a similar transition but i think you have to like it's almost like you have to discover it yourself rather than be told it like it doesn't it has to become real for you and then it has to click and so for me i feel like branding has clicked in terms of my understanding of its value overall um it is more difficult to measure but it is absolutely like when you look at louis vuitton and you know bernard who's the who's the owner right he's worth 150 billion or whatever it is now he's the only one who's not a tech guy who's off the top of that list and it's because he's built a brand he's able to sell a purse that cost him a hundred dollars for eight thousand dollars right simply because of a brand and that's like so what is his return on on advertising probably higher than people who are at the hardcore direct response you know funnel you know upsell down syllable like discs you know buy two purses for one off like that's direct response whereas it could just you know brandon could just be a picture of lebron with a with a lebron with a louis vuitton handbag or whatever yeah i mean so your opinion you're you're right aligned with with what i've heard from everyone else and i had this conversation with seth many times yeah and and he said um he said a lot of good things he said well i i said that direct response is sort of like the tortoise and the hare like so it's the the hairs race is the advertising or the direct response and you're right sometimes you need to fill the funnel uh because you got to keep the lights on or you're you know you're bleeding out three thousand dollars a day and you gotta get those leads that convert to sales and then if you can do branding it's like the tortoises race slow and steady but it ends up winning the race and he said you know if if you want to know whether or not you have a brand or not you know people will pay extra a premium for a brand he said if you go into most hotels and you you know don't look at the marquis look at the carpet around the walls if you don't know where you are you can't smell it you can't see it you can't taste it then you don't have a brand you have a logo and a brand is you know he used the example of nike in the store he goes you know if nike builds a hotel you could kind of imagine what that might look like or smell like or feel like and you know the same goes for our personal brands but our personal brands too right if we're building empires like gary is you can imagine what gary's you know next thing could look like or alex's next thing is probably going to have you know arms sleeves cut off so there's room for the arms to go or at least legs are you a leg guy yeah i think so i mean we were just sitting back you know chopping it up reminiscing about the good old days and all that you know tracking my roots