what got you to you know one or three million is not necessarily what gets you to 10 million and 30 million because in the beginning you need to sell something to someone where people make the mistake is that they get this positive reinforcement from the fact that they market and sold and think i need to do more of that and i'm going to say yes you will but just not at this moment because at this point is actually a pause point and the goal is not to even necessarily make tons of profit at this point the goal is to fix the product such that you start to generate a significant amount of business from referrals until that occurs there's no point in adding more gas to the acquisition engine because you're basically just setting yourself up for failure at a later point that will then reach a point of equilibrium where the only way to grow is to sell more people and at some point you will run out of people to sell depending on the niche that you're going after [Music] all right welcome back to the show everybody i have been looking forward to this interview for a few weeks um mutual friends of ours that turned me on to alex said you need to get with this young man and get him on your show and then when i dove into his content and his work i was blown away he is brilliant i don't say that very often introduce people i think he's probably got one of the highest iqs of anybody i've ever had on the show and his content as it relates to personal success and particularly entrepreneurship is very unique very special very detailed and i wish we had three hours today like other podcasts have because we could we could use that entire three hours and still have a bunch of time and stuff left over so he is the host of the game with alex hermosie on all these different platforms he's a serial entrepreneur by the way he's built brick and mortar businesses virtual businesses he's written incredible books he's got another one coming out so alex ramosi welcome to the show thank you so much for the introduction i will do my very best to live up to it better live up to it the fact i was so impressed with him i got into all of his content and then i said can you be here next week like one week from now and he goes yep i'm there and then he looked i think was your anniversary or something so i gave him a reprieve for a couple weeks and now he's here today you guys this is like you're on the treadmill you're going to start running faster than you normally run and you're going to want to get to a notepad too so here we go let's just dive into all your stuff we're going to go all over the place you have this really unique definition of even what opportunity is in and of itself that i've never heard before so how would you define like just the term and the the the concept of opportunity so it was something that i was analyzing a lot because we get lots of entrepreneurs who are like hey what should i do with my life etc and when i look at how my income has increased you know throughout my career a lot of times it wasn't a function of the work ethic in the beginning you have to work right but then the next big lever on that is the opportunity and so if you think about any kind of output in a system as volume times leverage equals output um the work has to start so you have to have something to multiply which is the effort and then the next is uh is that leverage and so within the context of a business i tried to define it for myself which was how many potential units of the product can i sell and then what is the gross margin potential of the product that i'm trying to sell and then what are the competitive dynamics within the marketplace and so an example of something that has two of the three and not necessarily all three would be like uh if i want to get into telecommunications so i said okay i hate that i have no service like i want to solve this problem and so i'd say well everybody needs phone stuff so huge huge potential market uh the gross margins on an additional user is almost 100 so okay really attractive but then what are the competitive dynamics oh i would have a really hard time entering into this marketplace because it's super capital intensive et cetera and it's like okay so maybe the opportunity in now we rewind the clock yeah 50 60 years or 80 years and that was the opportunity right because you had all three of the dynamics but then you look at newer things like crypto you look at you know the cannabis industry which is still nascent um and those were a lot of people smoke weed or want to you know be involved in that industry or participate in consuming it right there's there's great margins especially if you're vertically integrated with within the space um and the competitive dynamics are still like you can still be a new entrant and have a huge amount of market share as it's continuing to grow faster than the rest of the marketplace as well so there's a fast-growing market that's growing faster so if you just stayed the same as the market you're still going to outpace anybody else really good and there's fewer people taking it up and so it's like you have two two competitive dynamic kind of like trail winds behind you and so when i looked at um like we exited our three companies last year i was like okay i want to be really really selective about what opportunity we pursue because i know that you know warren buffet's like one of my big heroes and he talks about how it's much more about not not about how hard you row but about what boat you're in yeah um and he tells a story about how he had a companion who was basically the same as him and they both split off from colombia and he became warren buffett the other guy just had a normal career in the steel business different opportunity and so i think being selected about the opportunities we pursue is probably the greatest leverage point you have on your career what if you're in the middle of one so this is a really interesting topic i was thinking about driving in here today i want to ask you some of the stuff like your take on it and by the way our take is very similar but i think this is an interesting time where perhaps you should be evaluating your boat people just keep rowing yeah they like just keep rowing because you're so far in you're like i'm 70 percent of the way down the road here i'll just row harder but i'm wondering about looking at that boat two things on it one should someone that's really laser focused should they even look up and evaluate the boat and two what about these times you spoke about buffett you had this great talk a few weeks ago about inflation and about maybe what your boat should or shouldn't look like in high inflationary times which we're clearly in now so does inflation impact any of what you've described in terms of evaluating the boat or what you do with it um i would say two components so first would be someone's timeline and so if they're like five years from retirement it doesn't really make sense you should eke out the compounding returns you have of the 30 years that you put into whatever it is um or not should that would be you know if i were in that and that's what i would do um if you can think in longer cycles and you have one two entrepreneurial cycles left then you get the opportunity cost starts to really weigh in we're like okay well i might not make as much next year but three years from now i could be making five times as much am i willing to give up two years of earning to make five times more three years from now and then set myself up for the rest of that time the younger you are in my opinion the more you should be taking those types of bets and then within an inflationary period this is you know uncle warren speaking but uh you want to have things that are have low capital expenses so you don't need to add new equipment new facilities in order to expand whatever business you're in and then you want it to be things um that produce lots of cash flow um and so if you have something that's high cash flow and has low capital expenses when you're growing in an inflationary period you can adjust the prices very easily and when you make those adjustments it drops straight to bottom line rather than having to then go back buy more equipment which now has eaten up that additional cash flow yeah see i totally agree with you by the way this idea right now of you know scalability which we're going to talk about in a minute too by the way when he says young people when you're listening to this man speak he's 32 years old and so there's two things about you one your brain is really big and two you have a wisdom far beyond your years my sense is that that has a little bit to do with your relationship with your dad which we might get into later and the other is just vast amount of experiences you've crammed into basically your 10 years or so post-college right one of the things you've been pretty good at doing though is using leverage and leverage to most people typically means uh borrowing money from other people but you define leverage freaking brilliantly so talk a little bit about what real leverage is and the way you define it so leverage is the difference between the inputs and outputs in a system it's the discrepancy between what you put in and what you get out so if i have a lot of leverage then it means if i put a little bit in i get a lot out five low leverage i have to put a lot in to get a little bit out if i'm working at a froyo shop i have to put a lot of time in to get a very little amount of money so i have very low leverage if i um if i do put a deal together right and i make a couple phone calls and then that deal yields me 10 million dollars from connecting parties and then maybe underwriting something all of a sudden that's a lot of leverage so i put a very little amount of time in i get a lot of money and so the idea of of using more leverages looking at what my inputs and my outputs are and figuring out how i can create bigger and bigger discrepancies between those are there different types of leverage other than just money yes which are so um anything that increases your output okay without per unit of effort is leveraged and so that can happen in the physical space so like a literal lever is increases your leverage if i take this we take this podcast and you put it on youtube that was leverage because we put the same input in but then we get more output if i have a cold calling system and i'm able to now dial 10 phone numbers per minute because i have a dialer that's doing outbound i have more leverage per unit time if i um take a form of media and then i transcribe it and then i also make an audio version that is leverage so all of those are different versions of just getting more out for what you put in hard question so i uh let's let's let's dig deep i'm an entrepreneur and i'm listening to this doesn't matter i can be self-employed i sell life insurance i'm a mortgage broker i'm in real estate i've got a cannabis business i got six people working for me and i now kind of get from listening to this dude and listening to ed regularly like this idea of leverage is what successful and wealthy people do right they do it better than other people this is a really big deal everybody listening to this right now they do this better than you they understand the concept of this better than you and to the extent that you can understand it and most importantly apply it is where you make a shift so it's a hard question because you've answered it but i want to push you harder on this if i have any type of business right now and i've evaluated the concept that you've described here how do i apply it what do i look at in terms of buttons i could push to get more leverage yeah so naval robocon does a really good job of defining his four types of leverage now within those i described a lot of different leverage around one which is media right but you have leverage around labor which is you buy other people's time so that is a first version of leverage so is there something that i'm currently doing that i can pay someone else to do to gain time back and then use the access time i have to make up the difference so if i can pay someone 10 an hour and i know that i can make 50 an hour on the phone selling then i can pay somebody to do any of my tasks for 10 and then i make up the time selling stay on that uh brilliant we're gonna go the other three just stay on that this is something i struggled with young i don't know if you did when i was young i didn't have a lot of capital i used to think no i'll just i will do these things because i can't afford the expenditure right now were you ever that way when you were young in business totally i just held on because i'm like i i had this scarcity idea that this may be the two thousand dollars a month that keeps me in business yet it was the very thing that kept me in the small business that i had i think there i mean you got to work double time i have there's no real sexy answer that i have for that which is just like you have to work the normal amount you would to make your money and then you have to make enough then you work again to make someone else's money and that's in the beginning so it's like i'm making my job and i'm making someone else's job so that i can buy that time that i used to work to pay someone else very good to then make more money in that period of time really good and the big thing that i think a lot of guys because i on the flip side of the entrepreneur's space the influencer or whatever space people are always talking about buying your time back but they don't talk about what you do with the time you bought back so if you just buy your time back and don't do anything you're going to make less money like just want to be clear but um because i had an entrepreneur who was talking he was like i bought all my time back he's like but i'm really not making it i was like you're not doing anything like you still need to work you just got to now work on higher leverage opportunities more dollars per time so in that that input is my time my output is my money so it's a higher leverage varying my time what are the other three so you got labor which is the which is the most operationally complex and heavy of the of the types of leverage the next one is capital if you can raise money leverage other people that's the one that you know the mortgage brokers that are more familiar with real estate guys um because if i don't have to put any money up and i can buy something and then i can sell it for more money then i get to make the the difference between those two things and i used it on some on basically someone else took the time to earn the money and then they just gave me that time if you think of money as a tradable unit of time um that i got to borrow and then make the difference on something the third one and i think three and four kind of go hand in hand but it's you've got software sure code and then media so code is just you know you write code and it it takes you one time investment to get the thing to do something and then every additional time so the input was the time i took to build once and then every additional person who uses the software and gets a benefit from it i get almost no incremental cost and so that's leverage and then with the the media side we you know said it earlier if it takes the amount of time for us to make this one podcast if one person listens to this or million people listen to this it's the same amount of effort yeah i told you guys when i introduced them that there'd be stuff you've not heard before so and it is there's another type of leverage and i really related to this i'm i'm 20 years further down the road than you on some of these things i very much relate to some of the things you talk about obviously you have this relationship with your dad maybe we'll go there but that you were you know just trying to prove him wrong all the time but you said something in one of your quotes you said i found out later that i was constantly trying to prove a fictitious person wrong meaning the type of leverage that i got on myself when i was young i'm gonna prove them wrong i'm gonna prove them wrong it was like this i mean i think the best way to describe me as an early entrepreneur was a little bit angry and i i leveraged intensity yeah i leveraged anger i actually leveraged fear of losing to this fictitious person of um them being right and by the way some of that probably served me really really well but i don't know that it was healthy long term so what about that getting leverage on yourself idea would you recommend someone operate out of that space and talk about your own journey on it i would recommend you use the resources you have to create the life you want and so if the cards that you have dealt right now are anger and fear and disappointment then you can either wallow in those or you can turn something good out of it and so i mean i love the saying you can either let life beat the strength out of you or you can let it beat it into you and i think that you can use that you could put pain you could put disappointment you could put fear you could whatever that that life you know thing is and so it's just a decision of whether these circumstances are going to serve me or i'm going to serve them and so i think that whatever your raw materials are a lot of people lament what cards they're dealt but you don't have control over those cards you only have control of how you play the hand and so i think everyone just needs to move past that and you know stop the pissing contest on who had a sadder upbringing yeah i also think though that you have to be if you're making progress you know one of the things that's made jordan great or brady great is changing the leverage they get on themselves so it's not that tom brady still isn't playing football to prove the fact that he was a six-round draft pick right but this notion that that's what he gets up every single day that's the chip on his shoulder anymore is not true he's now playing for greatness he's playing because it's his standard yeah it's praying to so and i find with a lot of entrepreneurs they don't ever change the leverage and so when they get to where they have proved that fictitious person wrong or they have gotten to where they are no longer starving they don't have any mechanism to drive themselves any further you know what i'm saying like i do i think a lot of people are just oblivious to the fact that you've lost leverage i'm not motivated anymore i'm not inspired it's because the old lever you pulled that worked at one stage you need to now find jordan used to say listen i play every day jordan didn't take a bunch of games off he said because there's a kid in the stands who it's the one time he's ever going to see me play is that night in sacramento and even though it's the kings i'm going to play all out because that kid's going to tell stories about seeing me play that's different than his motivation his rookie year to prove he belonged in the league right entrepreneurs don't find that new lever you obviously have i so i don't i've made some content on that specific thing that michael jordan said so i super resonate on that like that was my biggest of the whole series that i watched that was like the point where i like had to pause and like chew on it um but it really made me appreciate like every every podcast every every opportunity that we have to share something to really try and bring it rather than call it in you know what i mean um but yeah for me my my leverage has changed i think i was really angry um younger and ver more fearful than angry me um just really just the idea of the disappointment and him being right was just like unbearable him being dead yeah yeah isn't it do you think i think that um anger is typically the manifestation of fear and so i when i say angry i wasn't throwing chairs all the time or anything like that but there was this almost like game day intensity type anger every day of the way i approached my life in my business so let's just touch on it since we've gone there for a minute because everyone has these different things that move them but as i get it your dad was a doctor and just no matter what you freaking did it was just never good enough right it was just hey man you got you got a 99 on the spelling test what was up with the one you missed right or you know i've made millions of dollars dead yeah but you're a vanderbilt magna [ __ ] laude why aren't you a brain surgeon or a neuro or whatever right so this was a driving mechanism for you has it has it been resolved now and i think a lot of people can relate to this i'm going to prove my parents wrong i'm going to prove this hater wrong i'm going to prove this friend of mine wrong yes it has been resolved i think it you know it i kept leveling up the ante of like i would make as much as my dad i want to make more than my dad i want to make more than my dad's ever made his entire life like you know all of those kind of like points and then once that had once i i thought it was beyond contestation it was undeniable and that was the i mean that was my first goals like i wanted to be beyond reproach i didn't want there to be a pause or whisper or hesitation in saying you won and so after transitioning from that it was like i but i didn't have a gap in in in motivation though to be honest yeah okay so yeah i didn't i didn't really have a gap from there it was just what else can i do and how big can this get and i want to see what life looks like when we're there i think that's the separator though i think most do and i think the reason you've had multiple exits and then you decided okay i'm gonna get into social media and then you've been good at that right i think that that's because you haven't had the gap but i think you'd agree with me vast majority of people listening to this either have not become successful yet or get to a particular level and they bought their time back and then they do nothing with it yeah like what you said they just can't find that that starvation fear thing that they had when they were broke they just don't have it now that they're eating you know they can go to mastros and have dinner and get a glass of wine once in a while right and they go okay that was it and i think part of that is because it was always this place to get away from and also that it's not become a standard like for me i think often in life we don't know we what do you get your goal or not as a material you're going to get your standard long term so i'm always evaluating what my standard is and for me that standard is i want to be excellent i want to be great i also want to contribute and i know that i was on my show recently rory vaden he said something that's probably never going to leave me the rest of my life he says you're best equipped and capable of helping the person you used to be oh yeah but what where what i heard was that's why it's incumbent upon me to keep growing and changing so that there are previous versions of me of people that i can help like i look at you and i there's a part of me when i was studying your stuff i'm like i'd like to become close to this duke so i think i can help him because i've been the 32 year old successful dude you've got a great wife that you talk about all the time i want to watch you the next 20 years like legit change the planet because i think you have the drive and the intellect and the experience to do it so but speaking of that time the next 20 years i have this debate with my friends all the time and i'm like so if you could give up all your money but you could get 10 years back in your life would you do it would you go back to 15 years old again in this interest i'm diving into your stuff and you literally said i would easily i think you said correct me if i'm wrong i would give up all of my money to get 10 years back and be 22 years old again is that accurate because you're nodding but we're on audio okay and then and then you also connect it to what the next 10 years also means or doesn't mean to you yeah everyone like just get ready for this answer right here because it's awesome go ahead well i um i play with time a lot in terms of like when i think through decisions and so i was thinking about my 85 year old self and i do think that i'll be a billionaire multi multi-billionaire just looking on the math if i don't change anything right now um and i know that that man looking back at me today would trade everything he has to be 32 again and not only just 32 again he'd be 32 and picking up trash having nothing i know that i would trade all my wealth to do that and so to the same degree if i were to look 10 years into the future i know that that 42 year old would trade everything he has to be my age again and so it forced me to take a new look at what i was supposedly sacrificing time etc for for something that i know that i would willingly trade back to have the moment and so it made me experience the present in through old eyes anew oh my gosh and what's that mean does that mean that you choose what you're doing more carefully does it mean you're more present in the moment what what is it how does that apply and manifest itself this is something that i think a lot about me too um so i so caleb's probably not in the back um i call the grandfather frame um because give me two minutes so so there's something called the frame of the veteran which is if you're really upset about something if you imagine that that thing were to happen a thousand times in a row every single day all of a sudden it starts to become immaterial because it's just how you expected it to be it's always this way if every time you go to traffic it's always an hour you're not going to get as upset about if you know that happens every single day and so it's called the frame of the veteran and so that was really good for helping me decrease stress earlier on in my entrepreneurial career i used that frame but i was like i wonder if i can think of a different frame that would allow me to experience gratitude because it's something that i've struggled a lot with i'm just not an inherently like i don't five minute journal every day like i'm just not that guy um and so when i think about my 85 year old self waking up in a body that doesn't hurt right and i wake up to my wife and i look at her and i'm like and she's so young because i'm 85 and i'm coming back to revisit this moment and i'm thinking about the problems that i'm experiencing in the business i'm like how cool is this i remember when i was doing this stuff and experiencing these little problems like this is cute you know what i mean and it just gives me it gives me this huge veil of like serenity for lack of a better term to experience the moment through different eyes and then to the same degree when it comes to like the rush and etc of like growing the business and whatnot i think what it does is it's almost like an occam's razor of focus of like what are the few things that matter most right now are we truly helping the customer because when i'm 85 i'm not going to care nearly as much about the money i made but the people i helped and so i think it keeps the main thing the main thing and it allows at least for me and i want to be very clear i try to keep this frame at the at the forefront of my mind and i practice it and it takes time and i you know i catch myself getting i'm like hey i was 85 in this moment how would i think about this and then it reframes the whole situation just like the frame of the veteran does and so i'll tell you a short tactical story of this so this is gonna sound really lame but i had a cat and it was two years old and my wife and i loved the cat really cool dude anyways he died had some weird heart thing and i thought to myself he's two years old what if i had expected that he was only going to live six months i was like what if that was what all cats normally only lived was six months and i got him four times longer than that period of time and so it shifted my likes my my sorrow into gratitude for just all this extra time i got to have with this little cat now you could take cat you can make it whatever you want but like that reframing things has allowed me to decrease my emotional reactivity to circumstances so that i can make better decisions in the present around people business etc and so that served me well i am blown away that a 32 year old has those thoughts but i love you because i've been having those thoughts all my life my dad died about a year maybe two years soon and i actually moved it to one more day not my 85 year old self but if i had one more day how much more grateful would i be for this challenge i'm going through right now or this moment where they walk through because i too uh struggle with gratitude actually i struggle with being present and i i love these conversations on the show because i actually built this bizarre gratitude muscle where i was actually more grateful for the thing i was dreaming about that i didn't have than when i actually got it totally got it you know what i mean 100 yeah and like that's not cool way to live because you're always not where you are you're always projecting i'm like i would get more excited and more turned on about what i had not yet done that i know i'm going to do than the actual very thing i was doing right and now when i put it through that one last day yeah i go this is pretty awesome right now what would i give on that last day for this moment right now driving out here today i had a conversation with myself about the things i want to be doing now in my life because of this question i asked myself and it was interesting i was like if i had to choose would i actually drive if i were choosing would i drive out and do the show today with you and i have one other show and the answer today was yes but lately there have been certain things that i was doing that i needed to do when i was young and coming through that i no longer need to do and that valuation is really really healthy i'm going to give you the contrast now of your content so we've gone to this not pollyanna but conceptual thinking but then you have this thing called the everyday urgency blueprint so i love the concepts of time because there's people you know they're just like very spiritual long-term thinking almost esoteric and conceptual thinking and then there's like the day-to-day what the heck do you do to get to where you can afford these thoughts and conversations you and i have so what is the everyday urgency blueprint because this is some good stuff right here i'm really good you know it's it's the it's the chopping of wood it's the taking out the water we call it do the boring work which is repeating successful actions over and over again if it worked once it'll work again and more times than not people do something it works and they think oh i should change it yes when so one of the big concepts that i preach at least in business is that simple scales fancy fails and so the idea is how can we take something like with scale comes complexity we do not need to add complexity to a system if you take a hundred phone calls today and you turn into ten thousand phone calls a day there is inherent complexity that gets added because you have more communication lines from different people you have systems that have to organize it etc etc and so we don't need to go do more fancy things if we simply do the volume the complexity will come and so we don't need to add the additional variable variable of complexity to scale it happens on its own and so simplicity so thinking through the razer of simplicity creates a forcing function of you remove all other things besides volume to the equation so it's like i can either sell more units or make them worth more that's it that's all we can do to make more money and so always thinking through that frame of if we're trying to grow the business do more of the thing right right or make the thing expense more expensive or worth more to the customer so we can charge more and ultimately make more per customer and so anyways that has been always like the to the rubber meeting the road of the the grandfather frame of gratitude down to like you have to do the stuff that makes the money yep um by doing more of that i think that duality is super powerful so that's why i wanted to stack them we're talking about other stacks in a minute to stack them back to back because i think you can hold two thoughts at one time i think you can have this concept about your life where you want to reflect on the final days yet have tremendous freaking urgency in the moment right and and have concepts that move the needle every single day of your life why do i say that i think there's two types of people right now on the planet there's the seminar goer person who's all in the thoughts in the clouds about reflection and energy and this and that and the other thing and frankly they're not getting around to making their life matter day to day then there's the people that you and i used to be which is we're making our life matter every single day but we have none of the energy the spirituality the concepts of time in our life and so i think the duality the complexity of those two things the contradictions is what makes this conversation the most valuable now i want to talk about what you're going to add one thing to that please so i i i in in the comments on youtube and things like that i know that a lot of people struggle with that concept and so i want to give a different example that i think might drive this home you already do believe multiple contradictory things at the same time you believe in justice and you believe in mercy you believe in variety you believe in consistency and so there are these these these yins and yangs that exist and it's not to say that the white part of the inning or the black part of the is right it's understanding the middle path and i think wisdom is knowing when to do what and so it's when am i using justice versus mercy it's not that justice is right and mercy is wrong or mercy is right and justice is wrong the wisdom is allows us to walk in the gray and be comfortable and and select which is appropriate for the moment oh brother so good yesterday i was coaching someone who used to lead a pretty big country a big one and um and we had this conversation he said you know when i was really at my most productive i operated out of fear often and now i'm constantly forcing myself to operate out of gratitude and abundance and all these other things and i said sir the truth of the matter is it's knowing when to select those mechanisms fear is not necessarily a negative emotion it's the abundance of it that can become negative or too much of it but if you never leverage fear heck fear helped me prepare for this podcast today i don't want it to bomb i want it to do great right so there's there's leverage in everything and wisdom truly is i love what you just said of knowing which lever to pull when and no one knowing when the right part of it applies so good man again i'm sitting here in front of a 32 year old i don't mean to i you know for a lot of people listen to this they're like 32 is old i'm 23 right so i want to make sure that i don't use my own age bias but the same time i think i had many of these thoughts when i was your age but i certainly don't have the ability to articulate them like you do and i'm super super impressed i just want to acknowledge you because you're serving millions of people right now also i think you could serve them with parts of your story they don't know um there are people listening this right now that are are failing they're they're bleeding money and maybe they've just had a business shut down or the last two years has wiped them out a little bit or they're they're looking right now going all right i'm gonna have to make a pivot so you're a guy who had a lot of success building gyms it's really really going well as i understand it you go over the next one you pour all the juice from all the profits into the next one and you go bust so there was a point where this man that i'm talking to you right now by the way not that long ago was busted you were broke what did you do when you were on your ass were you on your ass mentally ever or was it just a physical being broke and then what did you do to make a move because there's a lot of people right now right where you were i just focused on the controllable so there was a lot of things that i felt like i could not control or that were circumstantial etc and so it's just it was kind of like the simplicity thing of like what are the few levers that i have at my disposal and at the time i was like i know how to market and i know how to sell and so that's what i'm gonna do and so i i the the story is crazy but um i had a credit card left from all the businesses that i had sold and then lost all the money but i still had the credit card and amex thank god had not actually changed my credit limit so i had a hundred thousand dollar credit card and i wanted to launch gym launch which was like this turnaround business where we'd fly out to gyms and so we had six guys that i had already recruited and i thought this cash was going to be there and it wasn't and so i put 3 300 a day on a credit card and i only had a thousand dollars in my bank account and so every day i was becoming thirty three hundred dollars poor and when we started that i didn't even have a payment processor because we got shut down and that was where the extra money was supposed to come from and so we were we were doing you know i had it was 3300 a day in hotels airfare ad spend rental car per diem food for all the sales guys who are out on the road like doing the gym turnarounds and i could not process the money that they were sending contracts over from and so i'm seeing these contracts stack in stack and stack and i had no way to process it and i'm just watching this debt bill go up and then um and i got a processor the last week of the month and it was only for 50 grand and we had like three hundred thousand dollars in contracts and i had a hundred thousand expenses but he was like hey it's per month which means on the first of next month you can run another 50. and so i ran 50 on like the 28th of january and then i ran 50 on february 1st i got two more that week and got us another 50 so the 250s back-to-back covered my 100k from the last month and that was like kind of like the the plane coming under there's like way more of me about to lose it like and losing it again and again after that but um i can go as deep on that side as you want but well like where were you mentally i mean were you mentally when this happened you're like my dad was right he's got me or were you like still i'm gonna prove him wrong oh i was so i had made the decision that i would either die um or i would succeed and so i didn't know when it would happen i just figured if i continued so i i so if there's one thing for the audience if anyone who's going through it right now like one of the the thing that i would re the refrain the repeat repeated message that i had to myself over and over again was i cannot lose if i do not quit and so it was that was under my control then when i talk about like controlling the controllable like i could choose not to quit and so if i could just have that then it meant it was like this tiny little thing is like if i don't quit i didn't lose it just means i still get to play and when you think about like i think i can't remember aristotle's or plato but he says like you shouldn't judge a man until the day he dies and so you know you have an amazing life and then the last five years like everything goes when you get executed publicly it's like wow would people say to good life or bad life like you only judge after the man is dead and so i also think about that within my own life now like when you think about like what's the leverage for the next for the next chapter it's like well i'm not dead yet and so i got to keep going because that's what you know that's what we're going to look back on and so i had this little thing that i could protect which is my willpower and it's just like if i do not quit i cannot lose and so i was so afraid of losing that just not quitting became the one thing and so if i just kept moving one foot at another one phone cough or another one sales appointment after another i knew that if i did that long enough eventually it would turn around and i could myself out of this situation yeah wow i i'm blown away because i have equated only losing with quitting all of my life and the reason for that is i just want to share because we're going back and forth well my dad my dad was an alcoholic when he got sober i said dad are you never going to drink again he goes i can't promise you that i'm just going to quit for one more day i'm not going to drink for one more day and many many times in my business i'm like i can't i am incapable mentally right now saying i'm never going to quit that's a like 80-year decision based on a bunch of crap right now but i can decide not to quit for one more day and that means i have not yet lost i literally equated quitting with losing and so no matter how behind in the score i was i had not officially lost the game the clock has not run out until i go i quit yeah and so i was still in the game so this this concept i just i love when someone says stuff and i put it through my life barometer my meter i'm like nope i did that you're exactly right i know someone who did that you're exactly right what a great answer now you're talking a lot about stacks by the way can you guys if we have a show by the way this moves this quickly through stuff before like bam bam bam let me get more in your brain let me get more in your i almost feel like i'm using you today you know i mean like i'm just working this dude through the whole show but it's great to have somebody on that i could just keep working for my audience because this is my family sometimes when you're talking to something like all right let me help you along here with this with you i'm just like go go go give them that one give them that one give them that one and i love that about you the stack stuff is super cool to me and i love the terminology used so now we're gonna move a little bit back over to marketing and branding and all that kind of stuff you have this thing called the scarcity stack i'm a big believer in this i just literally did a real estate deal based on the premise that you teach now i would i didn't call it this but i don't think people get the concept here at all and i think it's it's one of the lost art forms in marketing and you describe it in a modern way so what's the scarcity stack so if we think about all exchanges as as forces between supply and demand right within a marketplace and i think the the more cycles i have in entrepreneurship and i understand that i'm still young in the game um the greater and greater appreciation i have for those simple two forces of supply and demand and what's interesting is that you you can influence demand or you can artificially stimulate demand by by marketing stuff by making increasing awareness about your thing right and so more people find out about it so your demand goes up and so that artificially shifts this the demand curve in your favor and so you sell more stuff right the other side is not nearly as well used and i think is almost as powerful if not more powerful than the demand side which is how can i cut supply and the first time i really saw this happen in person was i was at an arnold schwarzenegger charity event um at his house and uh i was they wanted to introduce me some of the big donors because we're big donors and um the guy was a jewelry like mega dude right and so he and he was like a first generation from serbia hard dude like but he sold like you know 500 000 watches things like that and um they had just raised the prices for the charity event from 15 000 to 25 000. and the charity organizer who made the introduction was like yeah we listened to george he told us to do this thing i was a little nervous about it and he just said it so matter-of-factly he said whenever demand increases he said cut supply and when you look at what chanel and louis vuitton and some of these all these luxury brands do is like they are masters of scarcity and so when you can get someone into a fomo situation where they fear missing out you can actually trigger this incredibly emotional decision and what happens is you decrease the action threshold and so you have a person who normally wouldn't take action and so the scarcity the fear of missing out on this opportunity decreases their threshold of taking action and they they walk across the line and if you use this concept of scarcity and use it within your business where the way i like to think about it is that so whoever's listening right now if you have a business or even if you're if you're a salesman whatever if you were to 100x your volume tomorrow you probably couldn't handle it and so there is an actual cap on your business as it currently stands you're just not articulating it because you're afraid of saying well if i can only take 10 people then they'll think i'm a small business or whatever but if you said i only take 10 people even though it is your actual cap it has a very different feel to it and what happens is you now actually pace your business at a point where you don't over over extend yourself and you create a stronger pool of the customers into your world i'm just looking at you i don't want you to stop i'm sure you know when i'm looking at you like that it's not i want you to stop i just it's brilliant and it's totally true and the the to the extent that here's what i like if you can listen to the concept stuff and then do the hard work those of you that are listening or watching this to the application in your business so this scares the idea you go no no i'm in the protein business so we have unlimited amounts of protein but maybe the scarcity isn't the product the scarcity is the time meaning that if they don't hurry up and start doing it every day they fall back like saving money if you're in the financial services business no no there's plenty of these contracts for investments or insurance yeah but every day they don't move forward there's a scarcity of time that they can make up for with the compounding of money so the getting the concept of fomo or the the limiting amount of it or how few people do it absolutely increases value proposition so so so good it's a for for the salesman in the room or in the room right um think about it in terms of the opportunity cost or the cost of inaction and so the nice thing is that you'll always have a cost of an action that's amounting and so that will typically stack in your favor as the salesman with every second that passes and so all we have to do is direct the prospect's attention to the cost that is already happening but they are just not aware of or focusing on and so we just direct the attention and then all of a sudden what was non-existent becomes a problem and so you see this in politics all the time whatever they are talking about more becomes the hot topic of the election but it's only because they're putting attention to it not because people actually care more or less about it right they're telling us that we should care more or less about it by the attention they're putting towards it right and so this is the media or masters of this and by the way these things work so well everyone that you have to leverage them ethically yeah this is one of things i just want to say up front because these concepts of scarcity and fomo it has to be ethically stated and truthfully stated because long term if you push these levers the wrong way you'll destroy your reputation if there's not a factual basis for what you're describing okay a couple more stacks i'll give you a q oh no please so so there's there's two elements of trying to create fomo um besides like risk reversal is a whole another thing with guarantees and things like that but there's scarcity which is a function of the number of units and then there is uh urgency which is a function of time and so a lot of people say scarcity and urgency they don't know the difference between the two and so urgency is it doesn't matter how many units i have the deal ends tomorrow yes right and so if you can't introduce that and so i'll give you an example of like well we have protein it's like well you have protein but i may have a valentine's day special that is ending this week and then next month i might have a spring special but the thing is is when i'm articulating to a prospect i can say hey this particular promotion ends tomorrow or ends in two days like you should get this starter to get get your loan application in because like i can't guarantee that as soon as we get into the spring spring time we're going to have the same things right and then with uh with the scarcity component uh it's a function of units and what we were saying earlier um there's always a way to think about it like with the protein like i thought of a different example i thought of flavors i was like oh just have a limited flavor protein is going to be here but this particular flavor will not be and so it's like you can always or you can put scarcity in terms of the bonuses you add so it's like hey i have proteins and they're all vanilla i was like but for this month i'm going to be adding a free workout or a free workout template or a nutrition template that i'm going to add with my protein which i'm not going to be giving next so it's so then what you can do is you create these additional value ads which no one else is doing and then with the additional value add you both add value and create scarcity at the same time to urge the person to take action very good so please don't be sorry because that's informative even for me listen to me everyone this is this i told you you're gonna get stuff on today's show this is why i do the show by the way i want to provide a value and a depth of insight between two people communicating that you wouldn't get anywhere else based on their experiences and here's the thing on this listen to me everybody it is your ability to take these concepts that are absolutely surefire and find the applications in your own life get them with your team as well i have to tell you in business i have found that the principles are sort of enduring over time this fomo concept or scarcity concept is as old as time technology timing marketing changes the application and the mechanism of which you deliver it but this is not a new idea it's new idea for 99.9 percent of you because nobody nobody talks about these things anymore because they haven't done the hard work of how does this apply now how does this apply now warren buffett you and i both still take advice from a guy who is double my age and i'm already old because the principles that this dude teaches are timeless it's our ability to apply them now that separates us in our life trim and stack hack what the heck is that i wrote it down because it's a cool term so when we're when we're thinking and this is this is if you have more control over the services that you're selling yeah so this tends to be a little bit more on the service side you can still think through it from an e-commerce side but i'm just gonna apply this to service because easier so the first thing that we like to do when we're when we're thinking about creating a new product line or when i say a new service line we think about what are all the problems that our prospects are suffering from and what are the things that are coming up on sales calls that they're saying they're struggling with or they wish that we could solve for them and so we think about and the way to think through this is tactically what has to happen step by step by step and there's a hundred mini steps like you think oh yeah we do these two things if you really chunk down and zoom in and and look at it's like well they first they have to click this thing and then they have to integrate their whatever and then they like there's all these micro steps and so we list out all of these problems and then we translate those problems into solutions yeah and so we word it as solution wording to the problem that we are solving and then once we have okay this is these are all the problems that we're now solving these are the solutions okay now how do we deliver on these solutions so we can think about this in terms of like we could have we could have a portal that does a training we could do some sort of one-to-many thing we could have a semi-private or small group we could have it be in person we could have it be remote we could have it be a phone call we could have it be a chat support so i have something called a delivery cube which kind of goes with this in terms of how you get into levels of service um so on one level of the cube you have what is the ratio of the people so like like i said one to one a small group one to many you have the uh speed of response so it's like is this going to be uh we respond instantly or is it so we respond in 24 hours or we respond by the end of the week is it um something that we have uh and then is the quality of the service are you gonna just get a frontline support rep or are you going to get a vip you know concierge and then the medium of that service which is is it zoom is it in person is it a phone call whatever um and so there's a cube and i go in more detail about it but when you're thinking through this you think through those variables how you're going to deliver the solution and so we have the problems we have the solutions and then we think about how we're going to deliver the solutions okay there we are now when we think about that we then write what's the cost of delivering this solution and so then we we look at all of those things and we say okay if we had to prioritize just the ones that these people find extremely valuable and that are low cost for us what if we just combined all of those and then took out the rest of them so all the things that provide tremendous value and happen at very little or no incremental cost to us and then that is what we will package together and then we'll bundle that whole thing as a much bigger problem-solving solution and so then then when you put those things together and then you add some scarcity you add some bonuses you decrease the risk with some sort of guarantee if you can if you add some sort of urgency around acting then you have what i would consider a very compelling offer and if you have a compelling offer it makes it very difficult to be poor because because what happens is when you make offers that people feel stupid saying no to they tend to say yes and when people tend to say yes to offers you have you tend to make more money and if you did it and you designed your offer in a way that that you provide a lot of value and it costs you very little to do it you make lots and lots of money and so that is the idea and we try to repeat that action as many times as we possibly can yes that's sort of business yeah nobody when you step back and look at it you take these very complicated things and make them simple and to you it's like yeah but what you just described is actually called four years of business in college right distilled into like 90 seconds because that's exactly how business works i have this other theory right now that's gone by the wayside in business and it just blows my mind and that is like at the end of the day i want my existing clients to send me or customers to more clients and customers and it and of all of this stuff it's like i i'm blown away by how little time and i mean like almost none with independent contractors or big old companies spend on the product and the in the client or customer experience with you what did i feel what energy did i get that would make me want to tell someone else you should have the same experience i had they spend all this time on everything other than that thing which is the only thing that will cause your business to grow without your effort afterwards so i want you to talk about that this is like my favorite topic okay very excited about this okay so uh i'm gonna quote involve robicon because i love this quote he says you only sell because you don't know how to market and you only market because you don't know how to build a product and so the idea is and so if let's break down things to the basic units right there's there's only five ways you can get more customers number one is you reach out to people privately so you cold call cold dm cold email whatever right the next one is that you make content that attracts people to you they find your stuff they discover it right the third is that you um run paid ads right and then um the fourth is that you get affiliates and partners who who are other businesses to serve people like your customers and refer them to you and then finally customers tell other customers yes so here's what's interesting is that if you think about when we talked about leverage so this is gonna come full circle which is great the first four that i discussed have linear they are linear in nature meaning if i make 10 more dials i can predict how many customers i'm going to get from that 10 more reach outs or i spend 10 more dollars on ads or i make another piece of content it's there it's relatively predictable in terms of what's going to come back it is a linear equation you add more in you get more out with a quadratic equation you get a an exponential and unfortunately the entrepreneurial space people are like exponential they say it a lot but they don't know what it means they really just means it multiplies which is not what exponential is um but with a referral or a customer telling another customer one person tells two two tell four four tell eight and so one of the difficulties that i see a lot of businesses get into is they get to three million or they get to 10 million to 30 million especially like consumer products um there are constants in business one is that the cost of acquiring customer will go up over time because impressions will cost more money and you'll have more operational um drag on your business and so if those two are constants then you have to have an opposing force that is going that cannot be linear in nature that's going to contradict that and so if you are in a consumer-based business the only one that can that can counteract a one-way direction of increasing cost of impressions and infrastructure is the decreasing cost of acquisition because every time you get a customer that customer brings you to more customers and so that is like the great equalizer in business and i had a first-hand experience with this recently with the book the offers book because i made one post about it one and i didn't have a following a year two years you know whenever i put these a year ago um and that book from what i understand it sold more than new york times bestsellers i just didn't do the politics thing um but right now it sold over 200 000 copies in the first year and i have no paid ads i have no anything it was just because people were like dude you should check this book out yeah um and so i say that to say like if you nail that piece everything else gets easier and it's much harder it's easier to market and make money in the beginning and then harder to fix it once you have a bad product the reverse is also true is that it's harder to spend more time in the beginning fixing the product but then when you scale it's easier and so the question is whether you want it to be hard to break through and this may not be real for some of you but like once you get to a 10 million enterprise like it gets very difficult to break through that barrier if the product's not that good that's right and it's much harder to take the time and effort to fix the product and i'm gonna do quick segue here because this happens all the time so when this is just at least our experience so the portfolio comes we have um what got you to you know one or three million is not necessarily what gets you to 10 million and 30 million because in the beginning you need to sell something to someone that you have to promote it you have to promote the stuff you have otherwise no one knows about you and you're obscure and so people have to buy it where people make the mistake is that they get this positive reinforcement from the fact that they market and sold and think i need to do more of that and i'm going to say yes you will but just not at this moment because at this point is actually a pause point and the goal is not to even necessarily make tons of profit at this point the goal is to fix the product such that you start to generate a significant amount of business from referrals until that occurs there's no point in adding more gas to the acquisition engine because you're basically just setting yourself up for failure at a later point that will then reach a point of equilibrium where the only way to grow is to sell more people and at some point you will run out of people to sell depending on the niche that you're that you're going after and so the idea is to actually alternate so you focus on the acquisition in the beginning you get one i would always say one product one avatar one channel that's what you have to do to get to one to three million and so at that point then you fix the product and if you fix the product you will sneeze your way to 10 million without doing anything else and then once you're at 10 if you have fixed the product and the customer experience such that you have a large percentage of your business come from word of mouth now you've extended the ltv the customer you have increased gross profit per customer that you can now spend profitably and out-compete everyone else who just wanted to bulldoze their way to 10 million with a lower ltv and then you can go crush them on every other channel that they're on and then you go back and say hey we're going to build a cold email team hey we're going to build a cold call team hey we're going to build a payday same hey we're going to build affiliate partners and channel partners and you can do that because you have so much [ __ ] extra profit per customer because you spent the time up front to fix it and make it good and you'll sleep better yep and you've got proof of concept so you just scale the crap out of it yeah um no one's ever said that on my show no one's ever said that to me about the pause part in the middle and um one of the most insightful really you would have had to have already done something significant in your life type breakthrough thoughts that someone's ever shared on the show and i almost want to move it to the very beginning of the show because it's so important i hope everybody stuck around for that i got one last question for you first i like you a lot i respect you a lot tell us where they can find you but then i got a better question for you at the end uh the game podcast alex remozy that's if you like podcast that's the easiest thing if you like videos we're on youtube really big and if you like short stuff if you type my name on whatever social media channel you'll probably find me um you i told everybody this would fly by by probably the fastest show i've ever done really the fastest show i've ever done before curious and i don't even know what you're gonna answer so we go all the way back you're this kid being raised by this uh dad uh that's pretty demanding dude uh smart dude all these options go to vanderbilt crush it by the way in the middle there had a dui had some stuff happen that wasn't really good that i read about and you've turned it around business failures then tons of success then multiple exits and then obviously this really unique way of looking at business that's accurate by the way but you've worked really really hard and you've sacrificed a lot of things in your life you're still very young but i grabbed you at 32. i'm curious if it was worth it and i want you to be honest like if you had to do it again would you do all this stuff again or would you have done something differently if you could go back those 10 years give up all your money like okay you're back you're 22 again you're just getting out of college yeah so i took all your money from you which was our proposition earlier would you go do all of this again or would you live a different life i wouldn't do all of this again i would do all of this better but i would do i would live this life i mean the moment you asked the question i was like the yes was in my throat just waiting to for you to finish uh the question but like i'll i'll be a little crude um balls to bones um through and throw like this is this is what i love it's my it's it's my it's it's it's what i love i mean i draw pictures about business i write books about business i make videos about business i do business every day if somebody doesn't have a business it's difficult for me to be friends with them um because we have so little shared context not because it's their fault but because i have nothing else that i that i do in my life and so they want to talk about biking and i'm like that sounds cool for you i have no interest and people like what's your hobby and i'm like i don't have any and i'm cool with that and so i i took me a while to just accept that that's okay and so i 100 would do what i do i love what i do this is the most fun thing in the entire world and uh the deeper i get in business the more i want to live a long time and that was something that i didn't have earlier on in my life and so i just there's just so much i want to do that i just i just i that's you know it's like i crammed a lot in 10 years i'm like i just there's so much cool stuff and i i want to do it all you know as much within this world that you know that we have i can't wait to watch you do it you're outstanding brother thanks they're outstanding i really enjoyed today a great deal and you're gonna come back on i don't know when but we're gonna have you back on because there's like 19 other hours we could be doing today so make sure you guys follow alex and hey everyone make sure you get my book the power of one more it's number one book in the world still right now and please share the show we're the number one growing show in the world for a reason which is because you guys share it and i bring the best people on every single week and i get the best out of them when we communicate because all of you mean so much to me i love all of you and i want you to continue to max out your lives god bless you [Music] you