E200: 21 Harsh Truths Nobody Will Ever Tell You - Alex Hormozi

What is something that billionaires do that would surprise the majority of the population?

Um,

is they would probably be surprised by the level of agency that billionaires will demonstrate.

Like, they're

they come up to their own conclusions on their own, and if everyone disagrees with them, then great because they got there by disagreeing with the masses.

And so, like, you can't have an exceptional outcome and also do what everyone else does.

Like, it's such an underappreciated and underestimated component of success to get outsized returns.

If you

only believe what you believe or act in the way that you act because of other people's approval or it was because of someone else's idea, it's very difficult to maintain conviction for an extended period of time.

And so, if you find yourself waffling, it's simply because the ideas that you're adhering to are not your own.

If the whole world shouts to you that two plus two was five, and if you know that there's a big pile of money, then you're almost excited that most people don't agree with you because you're like, it's just going to mean a bigger pot at the end.

Alex, welcome back.

Thank you for having me.

You say that entrepreneurship is a game of the heart, not the head.

What do you mean by that?

I suppose everything could be boiled down to skills, but the ability to continue to persist.

Some people would probably think of this as a spiritual battle, if you want to use that language, but fundamentally just learning to have a long extinction curve on behaviors, which is like, you know, many people never knock, and then a huge amount of people will knock maybe once,

but then very few will knock a hundred times in a row after a door not being opened.

And I think that that's what it takes.

Because if you think about two natural extremes, I think about this a lot, like, okay, let's just take this to the natural extreme.

It's like, well, if you have somebody who's absolutely brilliant and another person who's absolutely 100% determined, I think it might have been actually Andreessen.

We were talking about this earlier.

It's like, if you, actually, there's Horowitz, but like, you start taking points from determination, and very quickly you've just got this philosopher who does nothing, right?

On the other hand, you take a few points of intelligence and you can keep taking points away and this guy's going to win.

And so I think about that as like if you only had two things, which is get better, don't stop,

winning becomes guaranteed.

It's just expanding the time horizon long enough to allow the win to occur.

And so if we think about entrepreneurship as the infinite game, then the only goal is to not stop playing, which is why I think it's more of a game of the heart than the mind.

Why do you think human beings systematically underappreciate how long it takes for them to be successful?

I think it's because time is actually really difficult to observe.

So if you think about it, like

I've been thinking about this a lot with regards to like, why is it that when people come in person to work with Layla and I,

the speed of behavior change is so rapid and

they're able to assimilate traits very quickly from us, whereas remotely it's more difficult.

And I think it's like, for example, consistency is something that's incredibly important for most human endeavors.

But you can't witness consistency unless you're with someone consistently.

Right?

Like, if you see someone practice, like, you can't do a montage of consistency.

You can't really experience it in 10 seconds.

It actually has to, like, you have to experience consistency with time.

And I think that's why it's so hard, because the parts where people take pictures are the beginning and the end, but the middle is where the race is won, and that's on your own.

And I think that's why it's so hard for people to transfer, like for that skill to transfer, which is why sometimes it's like, you know, I learned this from my dad.

I just saw him every single day just going in, because that kind of proximity is, I think, the only thing that gives you kind of a window into the reality.

What other skills or advantages accrue to those that are around excellence?

So, Angela Duckworth wrote this book called Grit.

You might have read it.

What I thought was really like one of the most interesting things I thought about the book was: if you want to win, join a winning team.

It's because there's so many microbehaviors that exist on a team that just become standard practice, and there's already reinforcers in place for reward and punishment for all of these behaviors, which is why that team's a winning team.

That you kind of by default learn to do a hundred small skills in order to be successful overall.

How do you know what you don't know?

This ignorance death that you talk about.

Oh, yeah.

It's a really good question.

I mean,

I spend all the time and all the money that I have to try and solve ignorance debt.

And so I don't know if there's a solution besides

trying to talk to people who are ahead of you, who can help you look around corners.

I think advice is one of the hardest things to even think about because so much advice is wrong because people lack context, right?

Or they have misaligned incentives, which is huge.

Either they lack context, they lack confidence, or lack incentive.

And if you have any of those three that are off, the advice is not necessarily good.

And so, and that's, it's common to have one of at least one of those three off.

And so it's like, advice is so tough.

Because at some point, it's like you have to have a parallel kind of engine that's like, I have to be willing to take advice, but I have to run it through some sort of filter that I'm responsible for, which typically would be some sort of first principles reasoning of like, does this make sense?

Given the things that I absolutely know to be true.

And a lot of people can't bridge that gap.

And so there are some people who actually do have maxed out execution, but the problem is is they change direction so quickly because they will just listen to different people who give them different advice that's conflicting.

And not because anybody has bad intentions, but just because they either aren't competent enough or they don't have enough context or both.

And human beings are wired, they learn from people with higher social status.

They look at somebody,

achieve some kind of skill, and they listen to that person.

Tell me about that, and how does that act as a guide to contextualize information?

It's a really interesting question.

because

it's

so I think it's it's like what so I think many people give advice some people's advice is listened to more than others which we could ladder up to like some people have more influence than others and then it's then what then what are the things that create influence that make your advice more likely to be followed than others and so you have status which is somebody who who is controlling reinforcers so if you have money you have fame you have something that other people want and you control that then that gives you status in any in any situation right like if you're a a bartender in the bar, you have status because you control scarce resource.

As soon as you walk out of the bar, your status disappears.

But right in the bar, you have power, or sorry, excuse me, status.

Um,

you've got credibility, which is that you've said something that would occur and then it does occur.

Uh, you have uh power, which is say-do correspondence, which is essentially like

if I say, hey, follow this recipe, and this is going to happen, and it's a good thing, and then someone follows the recipe, and then that happens, then they're more likely to adhere to instruction later.

And then finally, you have likeness, which is is how similar are we?

Like, I'll tell you a story.

So, I had, so we had a small event at our headquarters, and there was a

logging company, like loggers, like lumberjacks.

And the guy comes up to me, the guy who's running it, and he's like, dude, I've grown this thing from, you know, $2 million a year to $13.9 million in the last four years, just listening exclusively to your content.

And I was like, that's awesome.

And he said, is there any way we can get a picture?

And so

before I had a chance to answer, he said, just because

you have a hardcore following in the logging community.

And I was like, what do you mean?

He's like, we're almost a nation.

But it was like, it was like dead serious.

And I remember thinking about that.

And I was like, well, that makes sense.

I was like, I look and dress like this.

I was like, I have such similar likeness.

I have that as a baseline.

And then that's like for the whole community.

And then the other three above that, it's like, do I control some sort of, you know, reinforcements they want, which might be fame fame or money?

Sure, I've got that.

Then it's like, okay, have I done, did he do things that I told him to do and good things happened?

Yes.

So I had power that was checked off.

And so it's like, you can look through that as your litmus test to

how much people or a specific person will adhere to your directives based on that criteria.

And so that's kind of how I like reverse engineered that of like, okay, how much influence do I have in a given context?

And there's a fifth column, which is truly first principles thinkers being able to take in information that you're giving,

applying kind of pattern matching to their own experience and saying, this guy knows what he's talking about.

Yeah, I see this as just like, this is the psychology side, the soft human side of human behavior.

And then there's the physics.

It's kind of like the art and the science.

And then there's the physics side of like, well, if we want to boil water and we want to boil water at 100 degrees, it's not going to happen.

So like if that's what was required to get this water over there and it has to be boiling, it's only 100.

Like it's not going to happen.

Because I found it really interesting and almost paradoxical.

Your Mosey Nation in Silicon Valley is mostly the super successful entrepreneurs and the billionaire venture capitalists.

And the reason, my theory for that is they're able to appreciate your first principles thinking despite maybe a

pattern matching

that does not match Evan Spiegel and the Mark Zuckerberg.

It is something that we've seen, me and my partner Curtis, see it all the time.

The smartest people are like, Yeah, I love, I love Hermose.

I listen to all this stuff.

And the other people are inadvertently saying, Well, I don't love the titles, I don't love the packaging.

Like, it doesn't pattern match to what I think is a great first principle.

So, that just made my day.

So, great.

I'm glad the billionaires

in the VC world like my stuff.

So, we alluded to ignorance debt.

Yeah.

What is ignorance debt?

Really good question.

I haven't defined it, and I should have.

I would say it's the delta between the behavior that maximizes your trajectory towards a goal compared to your current behavior set.

And so the discrepancy between those two things is the amount of the debt.

And so obviously it's hypothetical because to some degree, like no one knows besides God or whatever your creator being is of what the perfect move is.

But that delta, I think, represents like where you're at now versus what you should be doing.

And so I see ignorance as the difference between actual and should.

Another way that I look at it is the unknown unknown.

And what tools or measures can you use to know how much ignorance debt you have in a specific domain?

Man, these are really good questions.

My first initial thought response to that was how far away you are from the top,

honestly.

like, if somebody's like, I know everything about this, and yet they don't have any proof that they have skills, they have no evidence, then it's tough to say, like, like, I, people will probably dislike this, but I do think that people who are wealthier of the subset of human beings who would like to make money, whatever subset of.

So, if that is the goal, the people who are poorer have a less accurate view of reality.

And so, that distortion impairs their ability to get what they want because they take actions that they believe will yield the outcome that they want and then it doesn't.

And so I see

that's why I like entrepreneurship in general because you have absolute objective feedback from the marketplace and it's also typically very quick.

And so you have so many more feedback loops, which is tougher when you're starting out to not have those feedback loops unless you're just trying to start something for you, right?

But all that to say, like, how do you, how do you know how big your Ignite is?

It's just typically the earlier in your journey you are, the bigger it is,

typically.

and the further away you are from the top of whatever endeavor you're going after, the bigger it is.

The only caveat there is time.

Because some people are on the right path.

They just haven't given enough time.

Sometimes they're growing extremely fast.

They may not be a billionaire, but they're making millions of dollars every month.

And they're on the same path.

They might even be growing quicker in wealth than the billionaire who's accumulated it.

And this is where it's really nasty.

So

have you heard of the pasta tower exercise?

No.

Okay.

So basically, it's like you take pasta, you have marshmallows, gum, whatever it is, right?

You give a couple things, and you have to build a pasta tower as tall as you can in like 60 seconds.

And

when you do it, if you stop the clock, there's a number of questions that happen afterwards, right?

Which is like,

if I give you 10 minutes, would you have built it differently?

Okay, if we had to build it to as tall as this building, what would you have done differently?

And so there's a lot of sub-lessons that I think come from it, but basically the fastest way to build a $10 million business is not the fastest way to build a billion-dollar business.

And so that's where it gets really, where it gets more nuanced, right?

So it's like, okay, well, I'm 20 and I'm doing $10 million a year.

That may mean that you have something that could become a billion dollars, or it might mean that

it's something that isn't really going to make more than $30 million a year because of the nature of how the business was set up.

So it's like, what foundation do we have underneath the building?

Is it aligned with the kind of like the footprint of what would then eventually become this ultimate thing?

And so how do you recognize that when you don't know?

There's a concept in Silicon Valley called a zero million dollar business and a zero billion dollar business.

It's that same foundation.

And I think a lot of people think they're they're going to make a million, then five million, then ten million.

But if you look at open AI, some would argue they're not making any money, but yet they're valued at hundreds of billions of dollars.

And maybe they still will end up not making money.

But that is the roadmap to making a trillion dollars versus just scaling kind of incrementally.

Totally.

And I think the only tough part that I think,

not only there's plenty of tough parts, but

for newer entrepreneurs is

the context of the advice that's being given, right?

So like if I'm, if you're talking software and billion dollar, trillion dollar companies, like there's a whole set of advice that makes sense here.

If you are trying to scale a loan care service business, a lot of that advice will actually be

disadvantageous to what your ultimate goal is.

And so I think that that's, again, that's that filter where how do you know what advice to listen to, what advice not to listen to?

And a lot of times, because of the nature of the internet, you can't give context because it kills the clip's reach.

And so

I think that that layer of being able to judge becomes increasingly important as the context is increasingly removed from most content that we consume, or at least that gets massive reach.

Aaron Powell, so the truly niche knowledge is not being

shared and memed across the ecosystem.

So you have to find in other ways.

One way that I look at ignorance debt

is if you want to learn how to be a top YouTuber, you go and spend time with the top 10 YouTubers, and they will tell you the unknown, unknown.

So you probably don't know ahead of time what you're not doing.

But they basically being around people that have actually done it are the ones that'll

unchow.

Otherwise, it's very difficult to know the unknown, unknown.

Super hard.

And, you know, so I was a management consultant before I entered this new life that I have.

But one of the ways that whenever we'd enter a new field where, you know, I'm 20-something years old trying to learn about space cyber and intelligence in the military and make a recommendation to the military, which is absurd, right, as a 21-year-old.

Right.

So it's like, how do you, how do you become competent at something really quickly?

And so the method that we always use, I think the consulting method, is

we'd ask the person who gave us the...

the project, who are the five smartest people that you know about this particular issue?

And then we'd ask every one of those five people every question we could possibly think of, to like give us the understanding of the whole space, blah, blah, blah.

We go all the way through it, and at the very end, we'd say, Who are the five smartest people that you know about this?

And so, eventually, we'd ask, we'd interview every single one of those people, and by your 20th or 30th of these interviews, like you have a pretty good feel for what's going on.

And then when someone says something, you're like, but you know, so-and-so said this, and how do you feel?

And, like, you can start kind of mapping the network.

And eventually, you ask for five friends until the names become the same.

Like, it's the same names.

I've already talked to him, I've already talked to him.

And so, whenever I want to do research on like a new industry, that typically is how I do it.

I still use the same exact method I did there.

Um, it's just faster now because I can just pick an Instagram story and people can reach out.

But, like, when I wanted to learn about like banking and payments and credit cards, um, because I was looking at investing in something there, um,

I did exactly that method over two weeks.

I had like 30 conversations with people that had exited between 30 and 3 billion.

And I learned so much and I was like, oh, okay, I know, I don't want to enter this space.

This sounds more interesting than what I originally thought.

But But you don't know that going in because you just have a blank slate, no context.

The only change to being around those people is you could always delete or add things based on your own personality and what you naturally want to do.

People are kind of have this fear that they're going to become this person just because they learned whatever behaviors they're using.

And I think it's limiting.

Let's talk about a topic we're both really obsessed with: compounding.

Okay.

So, why is it so hard for people to compound their skills?

So compounding skills, I'm trying to think about how I would clearly define it for the audience.

I would probably say it's when multiple skills, when used together, create an allotized outcome compared to either of the skills used independently, just so we have a basis for talking.

But beyond that,

I think part of the difficulty is that you do not know what you're going to yield and

the perspective change that's going to occur after you have a new skill that you don't have yet.

And so it's like if you understand accounting and then you learn e-commerce, it's like, oh, this makes like

you don't know what you were going to know.

It's a very unknown unknown, right?

Similar context to what we were talking about earlier.

And so that's in terms of like, why do I think it's difficult people to imagine the upside potential of having multiple skills that stack together?

I give this example all the time, but like you think about like Jay-Z, right?

Yeah.

So in the beginning, he might have had a bass level of like, call it rhythm.

That was like his, maybe he was naturally inclined that way.

And then he started developing, you know, beats, and that was a skill that he, you know, figured out.

And then he started, you know, rapping, and then that became a skill.

And then from there, he learned how to promote.

And it's like, okay, that's a much more valuable, you know.

If he only knew how to promote and didn't have rap,

it wouldn't have been nearly as valuable of a skill, but having both makes him a super successful rapper.

But then after that, it's like, okay, well, then he had to learn how to recruit other

artists and musicians.

And so it's like, okay, well, recruiting is a different skill than promoting publicly and doing deals is another skill.

And so all of a sudden, it's like these skills when stacked together become a label, right?

And then that becomes the next thing that he's able to do.

But a lot of times, like you can only, you can only, and this is Steve Jobs, but you can only connect the dots in reverse.

And I think the one thing that I would say is consistent among the people that I frequent who are hyper-successful is that they're just intensely curious about things in general.

And so I'll see somebody who's a billionaire have a conversation with somebody who makes,

I'm just, I'm only using money here as a, you know, to show the stark contrast, but you know, somebody makes $80,000 a year, you know, fixing lights, whatever.

And they'll find a way to extract information from this person and be like, so how does that work?

So tell me more about that.

And they'll still be able to, at the end of that conversation, be better off than they were prior.

And I think they're kind of bloodhounds for knowledge.

And I'd say that

that is probably like just something that I have witnessed.

But why is it so difficult for people to do compounding?

There's the obvious answer, which is patience.

And the other is that they don't understand the upside.

How do you balance compounding of skills with becoming a master?

in one skill?

It's really good.

Well, you know, I would say that the difference between those two things

is really just comes down to how narrowly we define the domain.

So it's like, let's say you want to be a, quote, master at business.

It's like, well, there's so many skills there.

It's like you've got marketing, you got sales, you've got recruiting, you got finance.

There's so many things.

Compounding becomes part of the master.

Yeah, it's like, so which, yeah, so where, where,

where's the skill

versus going, you know, super deep on biotech, right?

Now, in the world of biotech and going deep on anything, it feels like you're still, like, the deeper you go in something, the more you feel like you don't know anything.

And I certainly feel that way constantly.

Curse of ignorance.

The curse of knowledge.

I was like, I have this, we have this big marketing thing that's going to, that's going to happen.

Why have my next book's going to come out?

And I have some big plans for it.

And I think it's going to do big stuff.

And I was already playing out what I thought I'd be able to say afterwards, which is like, this is my letter to the internet.

I still don't understand marketing that well.

I just feel like there's so much that I honestly have no idea about.

Is it because you don't understand the details or are you still missing some of the bigger picture areas?

I think it's just like there's so many things.

It's just like, when I think about what has gotten me success with marketing has been like, there's probably maybe like 15 rules that I pretty much follow and the rest is just like, let's like the amount of times that I've been like, this is going to be a winner and it bombs.

And something that we do in five seconds as like a last second thought ends up being the home run advertisement or, you know, an email that just crushes compared to another one.

I just, I have I have been I've been wrong so many times that I have like zero ego when it comes to marketing it's interesting because a lot of people will discount and say that's just probabilistic but it isn't when you put out a new video yeah hundreds of thousands of people are telling you this is a 5.2 percent click-through versus 7.2 it is not probabilistic it's just the wrong answer yeah meaning there's some kind of ignorance debt there.

Totally.

How could there be an ignorance debt after you've done something something so many times?

That's what

drives me nuts.

But like, so to this point, though, it's like,

so I see prediction and control as the same thing,

equal opposites at the same point.

Like, if you could predict something with absolute certainty, provided you have influence over the variables, then you can control the outcome.

Right.

And I see that as like

intensely cool.

But

like for us, let's say a sales conversation, right?

If we have one person here, I do believe that there is something that could occur that would create a 100% closed-rate process.

The problem is it just might not be worth creating that process because some people might have to go back to their childhood and re-educate them on elementary math in order to get them to understand this concept or whatever it is, right?

So there's a certain amount of education that has to occur in order to get someone to change their behavior, or at least the way that we want.

I'm going to loop this back to the marketing thing.

But I see like sales is just increasing the likelihood that somebody purchases within a conversation.

And so marketing serves more or less the same function, just done one to many.

The amount of variables that exist in marketing, I don't think anyone has even come close.

I mean, maybe AI will, but like human beings, like, I don't think any humans have come close to quantifying every single variable that exists.

And so we can say, here's 15 things that I know always work.

Like fast will pretty much always beat slow.

So you can control like 70% of

the probability, and then there's 30% variance.

That's completely, exactly.

So perfect.

You got to exact where I was going, which is like,

if there's a thousand variables, it's like maybe the 15 that we know that are the chunky ones, it's like maybe that gets us 60% of the way.

And then we still roll the dice, and it's just our downside's truncated.

And I think it's just over time, you just continue to move up the median,

at least from a content, from an organic content marketing perspective.

But the same thing, you know, same thing with paid ads, just different, different beast.

So another way, in the land of the blind, the one-eyed man is king.

So you are the one-eyed man.

He's just willing to take a high compliment.

Yeah, I've honored.

So there's compounding of skills.

There's also the compounding that accrues to somebody that sticks to a domain.

Why do people systematically underestimate that?

And why can't people stick with one thing for many years?

Man.

These are all hard hitters.

So I think that

luck surface area is something that it's a very kitschy term.

Basically,

if you think about,

I'm going to draw a little analogy and I think it'll make sense.

But if you think about intelligence as accuracy and determination as the number of shots you take as you're shooting a target, then

it's great to be intelligent.

But if I had to pick between unlimited shots and perfect aim, I would rather have unlimited shots.

Right?

And so the idea of the the luck surface area there is like if we're shooting at least in this direct, like this general direction, eventually one of my arrows is going to hit the target.

And on a long enough time horizon, one of them is going to hit the bullseye.

And so the advantage of sticking with things is that you tip

luck in your favor.

You just are around for more things to occur.

And

basically the same concept of this, there's a certain level of variability that's going to always occur just within business, chance, whatever.

But if we're there the whole time, it's like

we give luck time to happen rather than like, if you try to quote time things, it's like you almost never get it.

But if you're there the whole time, then luck occurs.

And so, and those, those lucky breaks are the ones that typically like define people's careers.

It's just you just don't know when it happens.

I mean, Ogilvy talked about this all the time where he said, like, you know, I've wasted

90% of my advertising dollars.

He's like, I just don't know which ones, right?

Like, to say, it's like the vast majority of the things that we do in our careers are not going to actually make a meaningful difference.

And then a very small percentage make all the difference in the world.

You just don't know which one it's going to be, which means that you just want to maximize the likelihood that it occurs.

But in business, you internalize, once you get a hit, you internalize it.

You're like, oh, I said this line in the sales script.

Now I could scale it across all my salespeople.

Totally.

And so you do know in most cases of business, it just, you don't know when your next knowing is going to come.

Yeah, the next big breakthrough.

And I think that's like kind of that truncated downside risk.

It's like,

I used to say this a lot, but like the bottom floor of the building of your opportunities continues to get higher.

So like when I

when I quit my job when I was in my early 20s, my plan B, if my gym didn't work, was going to be I was going to drive Uber and strip.

And so that's a pretty, you know, that's, that was kind of a baseline, you know, floor of the building.

Once I learned how to sell, I was like, okay, well, the absolute worst case scenario here is I can keep my clothes on and I don't have to work, you know, 18 hours, or I probably still work 18 hours, but now I can sell cars, right?

I can sell something that's like high, high velocity.

I could probably make $400,000, $500,000 a year just being top, top car salesman.

Okay, so that's now my baseline.

And then once I learned how to advertise and get leads, then it was like, oh, okay, multiple millions of dollars a year is kind of like the baseline.

It doesn't really matter what place I'm going.

If you know how to market, you know how to sell.

you can drive business you're a rainmaker fundamentally and so it's so like the bottom floor of that building um because like when people are like you know if you lost all of your reputation and all these things and you had no money like what would you do i'm I'm like, I've had that happen twice, and I'll tell you what I did.

Like, I don't have to do that as a hypothetical.

I'll tell you exactly what I did, right?

Like, I went to a business owner and I said, hey, I'll bring you business.

Let me keep whatever I kill.

And then you get customers for free.

And most business owners say, sure, zero CAC sounds good.

And then that's it.

And I've done that.

I've done that.

That's what I did both times.

And I was able to just restart and generate cash quickly.

And that was a few years into my career.

That was after I already had the marketing hat.

So I didn't have to go back to doing car sales or something like that.

I've heard you use this analogy of levels.

Once you learn how to pass and beat the level one boss and the level two boss, you could quickly get to that level three and then you start from there.

Yeah,

it's tough because I think to circle back to the question you had earlier about why do people struggle with this?

And I think it's because you get, it feels good to win, right?

And losing sucks.

And so if you know how to beat level one, two, three and you get stuck on level four, there's a big part of you that after a sustained period of time of not beating level four, you're like, you know what, I'm just going to start a new character and I'm going to play the game slightly differently this time.

And then the thing is, you have a rapid feedback loop of things going well because you're probably better.

And you breeze through one, two, and three again, but then you hit four and then you're still there.

But now four is hard because you're still battling level four on the other one.

Typically,

because most people don't completely stop doing one thing, they try to chase

too many rabbits and then they catch none.

And so I would say the single, at least for me, the single hardest thing about entrepreneurship is focus,

which I kind of see as like the

embodiment of commitment, which is the elimination of alternatives.

Like that's how I, like, how do you commit?

You eliminate alternatives.

Like the most focused person in the world does nothing but that thing.

Like if we if we had to like a math, the most focused person, most focused video game player does nothing but play video games.

And

that would be, okay, well, the most focused person who plays video games would die, right?

So then how much extra stuff do we need to introduce just to make sure he doesn't die?

So he has to eat, he's got to sleep,

he's got to drink water,

and then he's the most focused video game.

If he has a girlfriend, he's not as focused.

Nobody doesn't have a girlfriend.

If he works out, it's not as focused, right?

So it's like, how do we get it so that...

So if we think about that as the pinnacle of focus, then the idea of all these productivity hacks is just like, in my opinion, we had a little chat joke this morning about it.

It was like a complete and utter waste of time.

People are like, How do I want to focus more?

It's like, but focusing more is

about removing everything that isn't the thing you want to focus on, not doing something else.

Like, it's such an American idea to add something in order to try and get more of something.

And you say the number one productivity hack is to say no.

Yeah, it's the cheapest one, too.

So, so going back to this video game analogy, you're on level four,

you get tired of losing, you start level one, level two, level three.

Certainly, in some skills like management or fundraising or leadership, you have to beat level four.

But is there sometimes another game that you could play where there is no level four and you just go level five?

It's a really good question.

I think it's basically like,

what's the constraint?

What's the constraint of the system?

For most entrepreneurs, they are the constraint of the system.

But fundamentally, a business has to have these functions occur.

And if you were the only entrepreneur in the business or only founder, sometimes they're for sure like key people who can come in and can help you out.

But if these things must occur, then like, let's say you get to a point where you need to get more leads for your business.

Just keep it simple, right?

Okay.

If I don't know how to advertise, advertising must occur.

It has to happen in some way, in some form.

And so if I never learn the skill, then the only option I have is to go recruit somebody who has the skill.

But what if I don't have the skill of recruiting?

Now, maybe the level four boss becomes a level 4.5 or a 4B, right?

Which is, okay, well, I can get over this bridge multiple ways,

which is actually really interesting because this is something I've been thinking a lot about, which is, it's actually loops back to what we were talking about with advice.

There for sure is bad advice, for sure.

But I think there's also a lot of good advice that is half-heartedly executed, which then makes it into irrelevant advice because the execution nullifies the effect.

And so, I,

as somebody who gets asked for advice,

I have increasingly spent my time on how do I increase this person's conviction around the advice and less on the advice itself.

Because

if we use the analogy of a mountain, there typically are multiple ways up the mountain.

Like, you could make this thing a super viral product.

You could also, you know, have a super, you know, heavy sales team and marketing.

Obviously, it depends on the goal size, right?

But, like, let's say somebody has a modest goal of hitting a million dollars a year or $10 million a year or whatever it is, not a trillion-dollar company.

Sure, that'll have a more defined path.

But if someone wants to make a $10 million a year business, it's like you could do that a lot of ways.

But no matter what way you pick, you have to be committed to it.

And so it's like, what are the few things that must be true, right?

That you have to be committed to.

You have to be focused on whatever that thing is.

You can get good enough at it.

You can get deep enough into it that you can actually break through level five of paid ads, of organic.

But

if someone were to say,

how do we market this podcast, hypothetically, right?

Well, we could run ads, right?

We could go find affiliates who have audiences already and then see if there's a way that we could partner with them, have them promote it or come on, whatever.

We could just get better at the organic game itself and get really into the nitty-gritty of like retention curves and packaging, clue through rates, all that stuff, right?

And we could go on, right?

These are all these different ways.

And so could all of these things result in the the views of this going up?

Yes.

And so, if someone says, which one should I do?

All of them would work, but they will only work if you do.

So, then the problem to solve is which one of these things

does the person have the highest conviction on?

And the largest percentage of existing skills, so said in the inverse, the smallest skill deficiency between proficiency and where they're currently at.

And so, that is typically what my follow-up questions will be.

Well, have you ever made videos before?

Do you know a lot about this?

Have you ever run media before?

Have you ever done paid ads?

Or do you know anybody who's run paid ads?

Like, are you a natural networker?

It's like, oh, I'm a natural networker.

It's like, boom, this is going to be the highest likelihood path.

All of these work.

And so it's like two people ask Alex who both have podcasts the same question, how to promote a podcast, and then there's different answers.

It's like, well, because they're different entrepreneurs.

And so I want to have the shortest gap between where they are and what would be proficient in order for them to get up the mountain.

So that's I also think there's like a consciously understanding that you can't pass this level and subconsciously going to the next shiny object.

And just to give you two counterexamples to having to pass the level, the most extreme, Mark Zuckerberg.

I don't know if you saw an eclipse with him and Theo, but he still sounds like a robot.

He still has no personality.

And yet he hasn't kept that from building a trillion-dollar company.

Sam Altman realizes he's a genius strategist, has all these skills, open AI.

He realizes he sucks at hardware.

He just paid $6.5 billion for Johnny Ive.

That's not going to be a limit for him.

So there is a power to knowing

which levels to play and which characters you want to play in those levels as well.

Yeah, and I think it comes down to what functions must occur.

And then it is my job to make sure that those functions happen.

Now, the cheapest way, not the fastest, the cheapest way is to learn them yourself.

Right.

And so then you become increasingly stacked with all of these different skills so that you can solve them or your problems in the business.

But if there's a gigantic skill, like I will probably never be the person who's head of finance

in terms of like operational finance.

Like, I'm not going to run the P ⁇ Ls and all that.

Like, I'm just, I'm not going to do that.

But somebody should.

We have to have that.

Right.

And so, but, like, I could go learn how to do that.

It's just, but like, it's easier for me to go find somebody else.

And so I think we're basically it's buy or build, but done on an equals one.

Am I going to buy this and bring Johnny Ivey in, right?

Or am I going to build this within myself or within obviously somebody else if you want to train up the team?

But if we're assuming we're trying to go fast, then, you know, am I going to try and learn it, or am I going to bring somebody else in?

You just alluded to this, the smallest deficiency in skills.

It's the one concept.

I've talked to many people about this.

You have a very controversial view that I haven't been able to square.

And the idea that you could teach somebody culture and teach somebody

personality traits versus skills versus hard skills.

Have you ever seen that executed outside of acquisition.com?

And how do you teach a 50-year-old how to change their behavior?

Oh, so okay, a couple of things here, just for defining terms.

So hard skills, soft skills, I see those as the exact same thing.

They are just words that people use, but they are fundamentally changes in behavior.

So cross-the-board thing number one.

And how do you change a 50-year-old's behavior?

It will take longer.

They're less plastic.

But nonetheless, they're still teachable on a long enough time rise.

Because the thing is, some people, so everyone is teachable.

The question is, is it worth it?

And that, no,

that's actually the real, that's the organizational question.

It's like buy or build is an ROI decision, right?

Like, should I buy this and what's the likelihood of success and somebody coming in or

immersion into the business versus me, you know, building this capacity internally?

How much does it cost and both time and money?

Right.

And a lot of that's going to come down to your efficacy at transferring skills, at teaching somebody else how to do something.

And so

what part was controversial i'm like i'm just the controversial part is is you don't work so at acquisition.com you recruit for people that want to develop themselves so you have a very special culture yeah for the average business if somebody if cfo comes to me and i want to put them in a public company sure and i start telling them like you should smile more you should wave more that's going to be a very difficult conversation yeah is that practical or am i missing something and how do you go about changing somebody's what i would call soft skills which you would call just another type of skill?

Just a bucket of term of

here's 28 small things that you can do differently that will increase the likelihood of people will like you.

So I think it would be awkward if I demanded every single person does this.

I don't demand that everybody smiles.

If somebody has a problem where people are not listening to them, and I think that they do have the base skill set, but they're having difficulty with influencing their coworkers, then I would probably say, okay, well, let me give you a remedial course on influence, which is, here's six things that you're currently doing that decrease the likely they listen to you.

So if we reverse these six things, we'll increase the likely that the desired outcome happens.

Like, and

the most difficult part about this is actually the observation.

It's

people will use a bucketed term to describe somebody else.

They'll say, this guy has a lot of charisma.

But if you ask them, why does he have a lot of charisma?

That is where people get in trouble because there's so many things you notice that you don't put words to typically right like we have a lot of good pattern recognition you know for like this guy's a threat this guy i don't know he just gave me the wrong vibes right it just really means that he did things that remind me of other people who have wronged me and i don't like and so being more conscious about it and this is where like watching game footage and things like that um become incredibly valuable uh because you can see like he blinked a lot and he was you know wringing his hands now if somebody comes in and a lot of people in the office are saying i don't know this guy doesn't seem trustworthy The question is, is this guy trustworthy or does he behave in ways that remind them of other people who are untrustworthy?

Which are two different questions.

And so, if I just want to teach somebody how to act in a way that decreases the likelihood that people call him untrustworthy, then I could say, hey, put your hands in your pockets and do this instead, right?

And so

we always hire for the smallest skill deficiency.

And so the public CFO for sure is going to have to have a massive skill set that's going to take many, many years to develop.

If I'm picking between two candidates and I've got a nice guy who doesn't know finance and a guy who's a killer at finance and he's not a nice guy, I can teach somebody to be amenable in not that long, right?

But teaching somebody finance is going to be a much bigger, a much bigger piece of money.

And this guy, the guy who's really good at finance, might not, you rather hire a nice guy that's really good at finance.

But if he's the guy you have, there is a way to change him.

Yes.

And then again,

the thing about this is like, I think people hear this and think, oh, like, Alex has a soft, like, let's go train everybody up.

No, 100%, not at all.

It's an ROI decision.

So I see the chief role of the entrepreneur is allocation of resources, period.

That's what we're supposed to do.

And I see strategy as prioritization of resources.

So, like, how are we prioritizing what we got?

We have limited resources, unlimited stuff, and be able to make the decisions where we get the most bang for the buck.

And so, if we can have somebody who has tremendously, you know, deep finance, guys, finance savant, okay, great.

Is the deficiency that he has in the interpersonal department something that's going to cost us our culture?

And how little do I need to do to improve where he's at to make it at least not a negative?

Right?

And so, that's that's the, I think there's the basic calculus there that happens.

Now, if somebody has like a massive ego, it's going to be tough because they're not going to be receptive to anything, which means what you see is what you get.

And you've got to be really happy with that person.

There's also a difference between somebody that lacks self-awareness and somebody that knows that they're an asshole and basically doesn't care.

Yeah.

Thinks they're so good that they're not going to change.

Yeah, some people are like, I am an asshole, and they have accepted that about themselves.

And some people had no idea that people thought they were an asshole and would love to change that.

And I think

the crux of that is, you know, maybe the difference between somebody you hire don't.

You mentioned game footage for your last book launch.

You've practiced over 30 days.

You did over a hundred presentations of the presentation.

You mentioned that early on you got a lot of benefit and then you were getting incremental benefits with each iteration.

Why keep doing that?

Why do a hundred iterations of something where you're getting marginal returns?

So my initial response is marginal returns are still returns.

And I think that most

games are one at the edges, right?

They're one in the margins.

And so the benefits in most systems accrue to the person who's number one.

And even if you're number one by a tenth of a second, you're still number one.

And you get a disproportionate amount of the gains.

And so I've been rewarded so many times historically for just getting a tiny bit better with a shitload of work that I still, it's still worth it.

So

I have diminishing returns in skill, but gigantic absolute returns in

what I get for getting that increment, that very small increment.

And so to put math behind it, if I have 500,000 people who are signed up for the book launch,

If I knew that there was going to be a stage that had 5,000 people, I'd probably prepare.

Like, I'd probably prepare.

Well, imagine 100 times that,

where each increment is an entire stadium, you know what I mean, or gigantic arena of people.

Well, if that's the case, then like, I will get a good return on that.

Now, if I'm going to have a presentation in front of 100 people, if I get 1% better, maybe it affects one more person.

But if I get 1% better in front of 500,000 people, it's 5,000 people.

And so it makes sense there.

So it's like, again, it's an allocation of resources thing.

I will prep that much because it's worth it if it's not worth it i'm not going to do that kind of preparation so it's efficiency equals work over returns yeah totally so and

in other words it's highly efficient even though from the outside sounds it feels inefficient because you're just getting just a little bit better but it's being magnified by it's relative versus absolute so i had this decision because we have this big you know book launch coming up and we're saying like um i won't share too much but like

we have such big numbers that i'm expecting um of people who are going to be coming because last one was awesome and this is the third book.

Do you have a date for that?

Yeah, August 16th.

Okay.

Yeah, just announced that.

So it's not exactly on my wedding day.

That's correct.

Yeah, yeah, it's not exactly on your wedding day.

We'll try to make it out.

And so

the point, though, is that

if someone says, ah, that's going to be, you know, if we add that little, you know, you know, an abandoned cart sequence for the book, like, ah, it sounds like work.

It's like, dude, we're going to have a million people register.

So 2%, right, is 20,000 more books sold, right?

Which is, and I've got some goals that I have around the book that I'll share after the launch.

But

like, yeah, man, it's worth it.

Like, except there's some businesses that are doing entire campaigns that don't even come close to that.

Yes, we're going to, we're going to hit all the little crumbs.

We're going to hit all the little crumbs because the thing is, is when you have that much scale going through it, the crumbs become bakeries.

And so, yeah, and I would say, like, I tend to be a maximizer more than an optimizer in general.

And I want to double-click on what you said.

You want to share your goals after.

Talk to me the pros and cons of sharing your goals ahead of when you're going to do them versus

it's a great question.

I say, so I think of this as like, does sharing the goal, there's two components.

So one is, or at least two components that I think of, which is, does sharing the goal increase the likelihood that the goal occurs?

And the second thing is, does sharing the goal give me some other benefit?

So I think Babe Ruth calling a shot and then hitting the home run accrues a benefit for him calling the shot.

If he had just hit a home run, no one would remember it.

And so there's other benefits.

Now, does him calling the shot increase the likelihood that he hits the goal?

On one hand, maybe his adrenaline spikes because now he has way higher stakes.

On the other hand, maybe the pitcher pitches a little bit nastier too and decreases the likelihood.

So there's a little bit of, you know, there's multiple variables at play.

But I think that if I shared all the goals that I have around it,

I don't know if it would increase the likelihood.

And for me, even if it's a null outcome, like it it doesn't increase or decrease, for me, it would take the spot of a different messaging that would increase the likelihood.

And so by default, the opportunity cost of the headspace that it would take up to talk about it in the prospect of the audience's mind is not worth the real estate.

I'd rather fill it with something that's more salient to them.

I know you hate the word manifestation.

Hate it.

Yeah.

Well, the word I've noticed.

But

if I was to repack it, and I agree with you just for the record, if I was to repackage it into visualization

and also

comma and also bring up the fact that Michael Phelps visualizes, Michael Jordan visualizes, people that have accomplished great things use this tool of visualization.

Is there room for visualization?

So I think visualization and manifestation are different.

So I would have to define the terms, right?

So like,

and I've had a really tough time.

So I've probably gotten in a handful of

heated, heated discussions about this.

But I've yet to have anyone clearly define

manifestation for me, which is why I like manifestation to me, as I define it, is a word that people say to other people that gets them to nod and give them approval for saying the word.

And also not take the action that is required to actually get that.

And now some people then go to, well, you have to change things in your mind before they occur in reality.

And then I would just say, like, how do you know that?

And what can we observe?

So I just focus on the observable world, and I pretty much ignore everything else.

And it's been one of the most useful razors for,

honestly, predicting reality much more accurately.

It's like evidence-based versus reality.

Yeah, 100%.

Yeah, of course.

And where does visualization obviously,

you could probably run a scientific experiment, but it's not very evidence-based.

Is there anything else?

So that's a tough one because

I do think that there's a decent amount of evidence that you can like,

if you practice free throws in your mind for like

when you do it, yeah, there was a real study on that.

Yeah, and your percentages go up.

Yeah.

And by like almost more than if you just do, like, it's, and when you pair them, it gets it gets crazy.

And the visualization exercise, I think, is really interesting, especially for like athletes, because you have no joint wear and tear.

And so it's a risk-free upside.

So, so, again, I'm all for that.

Now, me telling someone, hey, you have to visualize,

how do I know they did it?

Like, so this is where I get into, like, I just try to focus on the things that I can see.

And

I'm trying to think, like,

in what context would I say visualization is the thing that I would tell someone to do?

Because they're not going to change reality until they interact with reality.

And so that's why I just focus on that.

So, like, did visualization help people?

Sure.

and they still had to pick up the basketball and they still had to go do free throws too and so i think that's the that's the the yin and yang of it but for me i just focus purely on what we can see and i think it makes conversation so much easier and um i do owe a disproportionate amount of i think the accolades that i receive um from content and whatnot um because i exclusively focus on that and so people say things like man your content's so digestible it's so easy to understand it's because i just eliminate everything that is not observable.

And then it becomes very clear.

And that's the thing.

It's repeatable.

And people use words.

People use words that other people don't understand.

People use words that they themselves don't understand.

And so it's like, if we can't even define the terms that we're talking about, what are we doing?

We're just making noise at each other.

And then one person nods, the other person nods.

Neither person knows what they're talking about, but they've been rewarded for nodding and talking and making noise at one another for a long time in their lives.

And so they keep doing it.

And that's fine.

But it doesn't really change behavior.

And so I'm very obsessed with what changes behavior.

Because if I change behavior, then I change what happens in reality.

And that has a high predictive function.

Which, by the way, circles back to what we were talking about earlier, which is if you hang out with you and watch you do content, you may realize what you thought was working hard on content is orders of magnitude away from what you're actually doing.

You can't witness it.

That's what's difficult.

It's like I can say, so there's a video that I'm putting on one of the pages for the book,

kind of like marketing pages and whatnot, that I've now done nine times.

And we have edited three versions of it.

Like I've done nine recordings of it.

We've edited it and had to edit it from scratch three times.

And I saw the ninth version and I was like,

it's missing these two things.

And so a lot of people probably would ship it and it probably would do fine.

But

again,

2% on a million people is a big number.

And so, yeah, I think that's the part that people don't see is being willing to do it again.

And that's intuitive, kind of the 2% multiplied by millions of people.

It's a real number.

What may be not as intuitive is why there's these zero-sum dynamics in some of these industries.

In sports, there's one champion, you know, Olympics, there's one Olympian.

But you seem to think that there's kind of this winner-take-all in many of the things that you do.

Why is that?

I think it depends on goal size.

If you want to, you know, make a million dollars a year as a lawn care person, you don't really need to worry about your competition.

Like, you just need to go find 200 houses that'll pay you whatever the math is to get a million dollars a year.

Like, it's not, it's not crazy complicated, right?

400 bucks a month.

Um,

but

in the open AI world, right, like there's probably going to be one model that ends up you know, winner take all, or it'll just be like Pepsi and Coke, but there's, there's not going to be a ton.

Um, I don't know.

Like,

I guess if there's a network, you know, effect that's going to occur, then it makes sense to kind of like get market share.

And I guess in the marketing world, you could call it maybe attention share.

So there is a fixed amount of attention

in the world, take 8 billion people times 24 hours or times the number of hours they're awake.

There is that much attention.

And I think technology has just increasingly put advertise, has stolen

attention from IRLs, you know, in real life things, like friends and family,

and put it in a place that you can advertise.

And so

that's what I think from an attention perspective, there.

Like, there is, do we know what that number is?

No, but

there is a number and it is finite.

And so,

does somebody watching my video preclude them from watching your video?

No,

because they could watch both videos.

But if they only have an incremental 10 more seconds that they're going to watch one business clip, then in that instance, the person who has, right?

And so, that's that's kind of how I think through it overall.

But I just think about a lot of life in percentage-like likelihoods.

How likely is this?

Does it increase the likelihood that this thing that I want to have happen occurs?

And so

that's basically all I do is I just try and make bets.

Looking back, reflecting on your career and your inputs and your outputs, do you find that if you would have spent more time on the things that did really well, they would have done even better well?

Or would you have more diversified your time and effort into different projects?

Man, it's a really interesting question.

So like the

the biggest financial mistake I've made

was

so I had gym launch

and I started this company called Allen, which was a software company that did lead nurture before all the AI stuff.

And so it was just like decision trees on

responses and things.

If I had not done that and simply made a CRM for gyms rather than a lead nurture software for gyms, that company would have sold for half a billion dollars instead of for $50 million

and $46, to be exact.

That was the biggest mistake that I made.

But when it comes to what I have, you know, gone deeper on one thing versus spread out, it's tough because

I can't play out

the other side, right?

Like if I had never diversified, maybe I'd have 500 gems right now if I never got out of the first thing that I did.

It's possible, right?

And like maybe with 500 gems, depending on how profitable the gems were, maybe I'd be richer than I am now.

I don't know.

actually 500 to be tested maybe 2,000 gyms by now or like some some monstrous number

so

I think the difficulty is like we can't play out the other the other the other way

what's been unique about the path that I had because it's been so defined by my ADD which is why I'm so focused why I talk about focus so much

is that like I've had a B2C business.

I've had a service business that was brick and mortar.

I've had an online service business.

The first business I had was an online fitness business that I then turned into in person.

I have had a physical products business which was B2B to C.

So I had to manage both direct-to-consumer media buying and ads and also have kind of a wholesale distribution to brick-and-mortar gyms.

I have had B2B SAS

with Allen.

I've had

B2C SAS or ProSumer with School.

I have

the investing side.

And then from the exit side, it's like I've sold to a competitor.

I've sold to a customer.

I've sold to a partner.

I've sold to private equity.

I've sold to

I've sold to friends.

I've done seller finance deals.

I've done cash deals.

I've done leveraged buyouts.

So this very weird, it's kind of like calligraphy for Steve Jobs.

That became key to the Macintosh and kind of their whole vibe.

But for me, all of those experiences have made me exceptionally good at what I do now, which is I talk about business.

And so me being able to talk with like good depth on each of these things, because I founded and started and scaled almost all of those, not school, but like those companies and deeply involved in them,

I have a very good understanding of how these businesses work.

And so that, like, maybe if I hadn't done any of those, the Alex Ramose brand wouldn't be what it is today.

And so that's why I have a tough time with like,

was it the right call?

What's like, I don't, maybe, maybe I wouldn't be doing what I'm doing now.

And what I'm doing now has worked really well.

So like, I I don't know.

You know, Peter Thiel says is his number one regret in his investing life?

What?

It's actually not doing Facebook Series A.

He did the seed round.

He was on the inside track.

He didn't do Series A.

So sometimes really

doubling down on your successes could have really big returns.

I think Munger talks about that too.

And I mean, yeah, I think just like

what's tough about,

and I'm sure you've seen this too,

is that like

the best companies are really expensive.

Yeah.

Feel expensive.

Yeah, they feel exactly.

Great, great, great correction.

Yeah, like best companies feel expensive and still yield higher returns oftentimes.

And I have to be reminded of that sometimes because like the, you know, I think a lot of, this is me, you know,

I know you'll have a lot to say about this, but like, I think a lot of investors who start investing their own money, you know,

they almost have to

reinvent the wheel.

It's like Warren Buffett talks about the cigar butt businesses, where you just take your last few puffs and they're wonderful prices and fair businesses.

And then eventually you just get, you're like, you know what, this is not worth it.

Like, we can get even better returns and less headache if we just buy these, you know, wonderful companies at fair prices or even what feel expensive.

Right.

And so I've had, I mean, I feel like I'm still,

the game's long, so I'm not saying I'm developed there, but

I've had to learn that the hard way with just some of the cigar boats fall in your lap and you're like, ow, that hurts.

It's still lit.

Google Ventures, this was like a decade ago.

Google's venture arm did the study on what drives returns.

And one of the biggest signals that they had was when a round, a company was priced at a much higher round than the last round because it felt so expensive and yet there was a new person.

And even when the insiders were the ones leading that round.

So the insiders had this like, there's this friction of increasing the price.

and yet if it still got to that price, it was still probably underpriced.

Right.

Because and I think Teal talked about this, but it's like typically if a company does have this material change, let's say in like six months, I think PayPal had like a 3x or a 5x or something in terms of a change in valuation.

He's like, well, it's because they like

materially changed the risk profile.

Like there was some big thing that they were able to solve.

And so if you have this, okay, I think this is a 10% likelihood outcome of getting to a billion-dollar company.

And then the big thing that takes away 40 percentage points there is that there's a network effect that hasn't really caught on where people are sharing, you know, with each other, or you figure out, you know, your viral coefficient in terms of virality.

It's like, well, if you get that right, then it's like, well, boom, we go to 50.

Then it makes sense that even though the time duration has been small, the problem was still solved, which is the thing that created the discount for risk.

That it's just like, it's just, you know, we all are like, it's not fair that six months ago I could have bought this for

a while.

Yeah, if it was much more risky, it's actually extremely fair.

Yeah.

No, exactly.

It's totally fair.

It's just the emotions.

There's regret.

Yeah, yeah.

And then you like, don't want to, you're like, if I buy it now, then I'm, if I buy it now, I'm an idiot for not having bought it.

Yeah, you have to acknowledge your mistake.

Yeah, exactly.

So now you just hope this thing dies

so that the first thing for when now you hope it dies because you missing out when it was one-tenth the price doesn't feel like as big of a mistake.

One of the interesting things on Facebook, the way that it all came together from an investor standpoint is Peter Thiel and Reid Hoffman who started LinkedIn and Mark Pinkas from Zynga and they had almost like this mastermind.

They would sit around and talk about social networks.

I think Reid Hoffman started outside of LinkedIn, also started another one that before wasn't successful.

And they were in this small room of people that ended up being so huge in the space.

When you think about building out your peer set in your mastermind group,

I know it's kind of a hokey word, mastermind, but how do you look about

your peer group and how do you build that out?

And tell me about your strategy there.

I would say it hasn't been super deliberate.

I would say that a lot of it has kind of happened organically, pun intended with

organic growth.

But I would say we say that this really interesting intersection between business and content, which is cool, right?

Which is like, okay, there's this creator world over here, and then there's this investing money business world over here.

And so finding people that are on either side of that,

because like in this room, it's like I don't talk about clicks in YouTube and retention curves and whatnot.

And then I go into this room, and I'm not talking about, you know, return profiles.

But I think understanding both worlds gives huge alpha on both sides.

Because everybody over here in the creator world is like, man, I just don't know how to monetize.

And everybody over here is like, man, I just wish I could have way more deal flow.

And so it's like marrying those two creates a huge, you know, it creates huge benefits on both sides.

But in terms of,

I'd say, my,

my,

you know, I'd say it's less about masterminding and more like,

if there's IOUs that I can collect for the future, I'll do it.

If I think that

I might need or want to cash it in later.

And so it's like, if I can help somebody out, I tend to have that slant of like, I'll help if I can,

because you never know when you'll need some.

And so I just try and like dig the well before I'm thirsty.

And I would say that that's probably been the strategy that I've used for the vast majority of my career, just to like give first as much as I can, because those IOUs have been incredibly valuable for me at in times of need.

Um, but like, what am I, basically, who am I actively like recruiting in my head right now?

It's not a lot.

I would say that I'm trying to get more into the tech side of things because, like, these two sides I feel like I understand okay.

Um, and that's you know, with all the AI stuff that's going on right now, I see that as um

uh some deficiency.

Like, I'm not deep in you know, I mean, like, I have the same ignorance, yeah, yeah, exactly.

I have huge ignorance that, and so um,

I think people, even deep in the industry, have ignorance that, and they most of the people don't know what's going on, and they're all running around.

And then, if you're not in the industry, you're for sure.

You're more sure.

You're like, I mean, no, I use catchy pd,

of course, right?

It's like, um,

yeah, I try not to think about that too much because it makes me depressed.

You're the most methodical person I think I've ever observed or looked at.

And yet, you said your networking strategy is, you know, I like to give and do IOUs and see what happens.

So, double-click on your strategy there and tell me about your thinking.

I'm sure you've thought deep on this.

What's your thinking in terms of the give and take in an interpersonal relationship?

So, I would say that the earlier on in your your career, so this is me going to the audience more, but like the earlier on in your career, the more generalized you should be in your giving because the variety of things that you will need will be very diverse.

Non-predictable.

Yes.

And so, you just want to give to as many people as you can.

At some point, you will exceed your capacity to give, and then if you gain skills, then people will want you to give to them, which then means you start to shift the supply-demand curve in your favor in terms of favor-giving and favor-receiving.

And so, like, when I, I remember the first or the second, the second kind of like peer group that I entered, um, I actually won an award.

They invented an award for me, which was like member of the year.

And it was because I met with every single person and was just like, hey, I'm really good at these three things.

I can help you with these three things.

And so, I would just do that, which at the time was just like sales and marketing.

And so, I would just be like, cool, I'll help you with, you know, build a sales team or help you script this out or help you, you know, put the sales motion in place with this process.

And they'd be like, can I do anything for you?

And I'd be like, honestly, no, but I'm sure, I'll need help with insert whatever thing that you're good at at some point in my life.

And, you know,

maybe I'll hit you up.

And a lot of the businesses that I have, like when I do those deep dives in industries, I'll call up somebody that I talked to five years ago that I did a favor for.

I'm like, hey, man, you got an hour.

I just want to understand more about this particular thing that you're involved in.

And they'll give me a huge amount of information really quickly.

And that's because you gave them something of value.

It's not because you tried to give them something of value.

Tried versus actually.

Yeah.

Yeah.

Yeah.

I think even trying still buys you something.

Do you ever remind them of what you did for them?

So they basically subconsciously have already integrated that you've provided value to them.

And I will, so this is me just being transparent between different stages, right?

So like in the beginning, I had nothing.

The only thing I had was skills.

I had very little money, and I was just like, I'm good at this.

And so that's what I gave.

As I became more materially successful in business, people wanted to talk to me in general just because I was pretty good at stuff that they wanted to get good at.

And so I guess the level set of the skills kind of increased.

And so not to contradict my earlier statement, but I think where I focus my attention now is

pretty narrow in terms of the people that I will regularly interact with because

it's like the path that I have, I think to use Naval's, I have significantly less exploration now and significantly, I'm in exploitation mode.

I know what I'm good at and I'm pretty clear on what the path is ahead.

There's some degrees of variance, but it's still super narrow.

Which is basically getting even better at what you're already doing.

Yeah.

Right now, it's like if we have, to call it 15 or 20 million, whatever it is, you know, followers across platforms that are in business, it's like, well, if we get to 50, then that'll be better than.

So TAM of small business owners or however you're doing it.

Well, there's 32.5 million in the U.S.

And that's if we define that as people who have an LLC.

But we're like, my audience right now is, I think, 55% X-US, so non-US.

And so, take the rest of the world, there's a huge, a huge amount of people there.

So

I'm obviously cool with sticking with U.S.

and English speaking for now, but we'll probably quickly, not quickly, but like probably in the next quarter or two, we'll be transitioning to everything will be all languages.

Yeah, I mean, AI obviously enhances that for sure.

I'm guessing you're not learning 10 different languages.

Actually, I'm really curious your take on this.

So like, I have held back, even though the tech has been there for probably two quarters for us to do the translations and dubbing in different languages globally, especially on like YouTube, we can do it all.

I haven't because I actually don't want deal flow

from countries, from people that I don't speak the language for.

Now, maybe the 2.0 version, this is probably me being short-sighted, but like the 2.0 version of this is like we're both talking through AI mics to one another and we're both listening

in our own languages and whatnot, but I just haven't done any international deals.

And so that's why

I haven't really pushed it.

And also,

it's not like we can give them services in a language they don't understand.

So I'm curious to hear that.

I think that's very thoughtful.

I think it makes a lot of sense.

I think also one of the areas that AI is going to really help is deal flow analysis.

So you're going to be able to, if you don't already, you'll be able to process hundreds of thousands of deals to find the one or two that matter.

That being said, you don't want

a product in the market that disappoints 99.9 to the 12th power of your audience.

So I think that makes a lot of sense.

Okay.

Oh, that's interesting.

Yeah, to your point, though, some of the AI stuff, it's like

resume, like resume screening, right?

Like such a, like you just upload job description and say, here's 500 resumes.

Tell me which one are the ones that you would select, and then what questions would you ask these people?

And it's exceptionally good.

I want to put a cap on this giving and taking.

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Because I think you're really good, and you have been very giving to me.

I just want to understand your strategy and what are some of the mistakes that you made.

I'm sure you gave too much to somebody, or you made an ask too quickly.

Like, what are the best practices there?

You know, I actually don't think I've made an ask too quickly.

Maybe I tend to be like too ask insecure.

I want to make sure that there's like

no doubt.

Yeah, I leave no doubts that I find people talking to me.

Like, I have given enough here that I can make this small ask.

you know

I would say that honestly one of my one of my best skills has been that it like you know I've never actually identified that until like this moment right now but it's probably one of my one of my strongest skills skill sets has been knowing when to invest and when to pull back in relationships

and people

will probably see me as transactional.

I just believe everyone's transactional, and some people are just better at defining it.

Um, fundamentally, like, you, if you have a

like, if you have a relationship with someone and, like, man, we, you know, we used to be homies, and uh, you know, I got to be loyal to that.

To me, translating that into human behavior is I have a history of reinforcement with this person, and I have a belief that that reinforcement will return on a long enough time horizon.

And so, I'm willing to incur some cost in the short term.

And obviously, the relationship that you've had the strongest and longest periods of reinforcement for, like a spouse, you're willing to give longer periods of time where things suck in order for things to you know come back to being good or different or the payback is your ego of being somebody that never

defriends your homies or is always like friends with the same person

that's your payback yeah you get to see yourself as such a good person totally yeah you get to be an idealist um i got a definition for you so i call a friend somebody that provides more value than he or she detracts from you in your life yeah so a lot of people don't fall into that category for many people a lot of people don't fall in that category and also it's also too two-sided so you could have somebody completely crazy yeah that you would never even want to associate yourself with yeah but that's comes through for you when you need them that's a friend and somebody that's there every day and just like you know making you depressed and you've known for 30 years would not be a friend no no that's really good and what's interesting is that if you

if if if you keep a relationship right then it means you you do have reinforcement from this person.

The question is, what are they reinforcing?

So like maybe you you hate being alone.

And so, even though you don't like being with them, you prefer being with them than you prefer being alone.

Or, to your point about the, like, you have some story that you tell yourself about how you are ex-person, and you get to tell yourself that story over and over again every time you see this

friend.

And so, this person having this relationship serves you in some way, and it's usually just not in the way that people expect that they're being served.

But, to try and put a nail on the original thing,

I think one of the big things-like,

I wish I knew where I read this, but I remember being completely

engulfed in this game theory book about basically the prisoner's dilemma, where they played out different give-to-take strategies within the prisoner's dilemma.

And they proved that the best give-to-take ratio was

eight out of 10, give to take.

Because if you're a 10 out of 10, you get walked all over, right?

And

if you're on the other side.

So eight give, two takes.

Yeah, basically.

And

they even went so far as like, it's eight out of ten, and they factored in forgiveness and learning between all the players with the different give-ask ratios.

And so it was like

somebody who learns

but does not let someone wrong them at an eight out of ten.

And so it's this really like, it's pretty precise in terms of, and I think the reasoning behind it, because they wrote this whole thing about it, was basically the eight out of, like, you have to give first most of the time, because that's what opens up doors of opportunity.

If you're a tit for tatter, so the five out of ten, like give and take, then you don't wait for the other person to give and then you give that.

Yeah, those people don't get nearly the exposure of the eight out of ten people and the givers because they open up so many more doors by giving first.

The never askers just never benefit, right?

And so,

there's a sweet spot which is disproportionately giving, but you still have to know when to ask.

And I think this is really, this is, I think about this a lot because

it's actually very very akin to people who get good at saving saving money just in a basic term withdrawals and deposits right

there's I call it the fallacy of the third marshmallow say in the marshmallow test you know they have you know take one now and take two two later people have this

pathology where they believe that if I wait forever I'll get a third marshmallow like an even bigger outcome and that's not the truth right like there is a point in your life where you should start spending more money than you make which is frightening for high achievers and earners who've spent way more time always earning more than they spend.

But it's like, okay, then at the end, you have this big, big pile of crumbs as an ant, and then you die.

And so, like, you didn't get any of the, so there is this sweet spot, and obviously it's difficult to get to

to balance that because most people don't even know how to like save.

So, it's like, so this is only for high achievers that I'm talking about here.

But I've had so many doors in my life.

And so, functionally, what I think organic content did for me was it allowed me to do that at scale.

So, as I, as I, prior to making, me making content, like, Layla existed in my life to be the yang, to my like yin of gift first.

So, she was like, you just like, Alex would be non-stop, just like, let's do this dinner.

Let's do, like, let's, let's, let me, I'm going to hop on the phone for three hours and help this guy redo this thing.

I'm going to, I'm going to help this guy with this, whatever, whatever the things were that I was trying to help somebody with, I would just always do that.

And she would be the one who was kind of like, and that's why I think Layla and I have been such a good partnership.

And she'd be like, I think you're about to get taken advantage of here.

I think you're, I think they're just, they're just using you at this point.

And so it was right that she would kind of pull me back.

But as soon as I was able to transition into making content,

that allowed me to, it's the same energy for me.

Like me making content is the same energy as what I used to do for one person, all that effort and for like helping someone solve a problem.

I now just do that same thing and then just many people benefit.

And so that's where the huge leverage on giving

instead of fighting your intrinsic traits, you've weaponized it into scalability.

One-on-one.

It reminds me of a

quote that Naval says.

He says, my brand is my value add.

He'll invest and he'll say, my value add is that Naval Ravikan has now invested in your business.

So for you, your brand is your value add.

Yeah.

And your content is your value add.

Yeah, and ideally, you know, someone's had such a strong history of reinforcement from consuming stuff and using the stuff that I gave them that I'm already in the green.

You know what I mean?

Like if they do a deal with me, they're like, you've already paid for yourself.

Surplus.

Right.

Before you've even talked to them and realize that.

Exactly.

And so my cool giving strategy, I know this was probably deeper than you expected, but it was actually an awesome question because I hadn't thought about it.

But my strategy has remained the same.

I give to as many people as I possibly can.

It's just that as soon as technology and distribution came into play with media, I was able to put that on absolute steroids.

And so I do significantly less

these, you know what I mean?

Like

one.

Yeah, and those ones are.

But there's also the audience.

Yeah, exactly.

That's what I'm saying.

So it's like

scale.

But if I'm going to choose at this point, and I'm sure you have the same issue, which is there's the supply-demand of your time, right?

There's just such a limited amount.

And as supply, sorry, as demand increases, the supply is fixed.

And so it just becomes so, so so precious so you have to just almost be pathologically you have to completely switch which is what's been tough for me but I have learned it is you have to almost pathologically say no to everything no is the default how many messages in your inbox a lot I'm always very conscious to text you because I feel bad because you're probably have thousands of messages no but what's where it gets when you take it to the natural extreme is like

you don't actually owe someone a response

just but like because especially since you've already given them so much of your content so it's not that they haven't done anything for you, it's that you've already done so much for them.

Just the time.

Like, if I, so right now, I probably get somewhere in the neighborhood of like a message every like three minutes across social media.

It might be, it might be higher, but it's probably in that neighborhood, right?

And so, like, if I were, because I remember

I, I think it was right after the book launch,

the, yeah, right after the book launch or my offers book, I think maybe it was when the offers book came out, I

manually

DM'd

anybody who tagged me in the the book, and I said, could you please leave a review?

And

manually being, you did it.

Yeah, I did it.

And I remember finishing my inbox, and then the responses from the people who I had DM'd plus the new DMs that had happened in that same period of time were greater than when I had started.

Like, it's like you have to paint the bridge by the time you get finished painting, except it would be like the bridge now extends.

It was literally impossible for me to actually DM every single person because by the time they had responded, there was even more that I had to respond to their response.

So I had to just get,

I did it for four days.

It's all I did.

Because I wanted to get that's another efficiency thing.

Yeah.

It seems hyper inefficient, but yet it probably made your book rise and it has something that got to a few hundred.

You know, I think it got to like 600, five stars within the first few days.

And I was like, okay, that's now, it's an Amazon book that it doesn't look like it has five, you know, five star, five stars on it.

But

all all that to say,

in the beginning, you have to say yes to everything.

And in the end, you have to say no to everything.

And so being able to manage that apparent dichotomy comes down to resource allocation, which is still the core entrepreneurial skill set.

Where is it worth it?

What got you here won't get you there.

One tip

that I've learned, and I think I came up with this.

I can't remember where I learned this, but how somebody treats you in the first day, in the first week of when they meet you is how they will treat you over the next 10 years because it's not about you, it's about them.

Some people are naturally givers, some people are naturally takers.

It has nothing to do with you.

They're a formed individual.

They might be a 30-year-old.

They have 30 years of conditioning.

Just because they met you doesn't mean you change their behavior in neurobiology.

So I tell everybody.

Notice how somebody treats you in the first day because that is how they will treat you for the rest of their lives.

And that's very telling.

It was super good.

I'll give one more.

I'll give a tactic too that I found is um

never

decline or cancel the first meeting

because like you meet at a you meet at something someone makes an introduction you have a text convo whatever and someone says hey you know can can you meet at seven or can we do this dinner can we do this call

things come up because especially a new connection is very has low typically has low-ish value to you as a person.

So like almost anything that could come up that is not that, you probably might be willing to move the call or the meeting forward to take the thing that you know has more importance or whatever.

I have found that it's very difficult to get the second,

like the second conversation or the second meeting after the if the first one gets canceled for whatever reason, especially last minute.

Um, and so I have like an increased priority on making sure that if I do meet somebody who's new and I think they're worth meeting, that that meeting takes a huge priority to one happen quickly and then second that it actually occur.

And the flip side of that is that I'm actually willing to be very flexible for first meetings because I think that typically even just that one meeting, it's like it transforms from being like someone introduced us to like we have had a conversation and I have a good feeling, I have some feeling about this person.

Strong signals.

Yeah, exactly.

One way or the other.

And even from one meeting, I can probably call somebody up a few years later because like we had the meeting.

If we didn't have the meeting, it's useless.

And so I try to prioritize that.

One other kind of relationship hack that my friend Max, who worked at Goldman for many years, he said, always be willing to fly out, even if it's 3,000 miles for a single meeting.

Yeah.

And because it's that powerful.

If it's an important meeting, flying out and spending a day or two days, it goes back to this efficiency thing.

It seems hyper inefficient, but yet if you calculate efficiency as input over output, it's actually highly efficient.

And especially because

there's the assumption that if I'm flying out, I'm not going to somehow work on a plane when I, which is like, it's almost like a hard meet other people on a plane.

Yeah, some people just choose to fly because it's the most efficient working.

So it's really just the meeting takes the same period of time.

The only inefficiency is the drive from the airport to the meeting.

That's the actual only inefficiency in that process.

And I'm so on board with that.

You are one of the best communicators I've ever come across in real life or on YouTube or podcasts, et cetera.

How have you become such a good communicator?

Break that down for us.

I'd love that the response starts with um.

Feller, feller, feller.

Right, yeah.

It comes down to everything that we've talked about, which is you have to define the terms.

That's like, that's really it.

Like Like, if we think about what is communication, right?

So, what is the objective of communication?

So, I would ask that.

To communicate.

Yeah.

What do you think?

What do you think?

So, what is the output of communication?

If I would ask you.

It's interesting, because when you say that, my head goes to two different things.

One is sounding really smart

and very charismatic.

Another one is transferring knowledge.

Okay.

So, for me, the purpose of communication is solely to change behavior.

That's it.

It's the only reason, the only reason that we communicate anything to somebody else is to change their behavior.

Now, if we want to sound smart, it's because we want to change their behavior around how they treat us in some way.

We want them to treat us like they treat people who they think are smart, right?

Which

elevated sexual status.

On the flip side,

what was the other one you had?

So, one was the being smart, the other thing.

The one was the

transforming of it.

It's a cosmology, essentially.

Yeah, and so if I want to transfer information, I don't actually want to transfer information.

I want to get someone to do something,

right?

So,

either of these situations is the purpose of communication is to change change what they do.

And so

if we say that is the point of communication, then being very clear about what I want someone to change makes it way more effective.

And so you waste so few words when you are clear, which is what I want you to do.

And so on the flip side, I listen with that filter, which is

I had a meeting with a VC.

So they're on the board of one of the companies that we're invested in.

And they wanted to touch base.

And I was like, okay.

And I asked five times during the meeting, I said,

What would you like me to do as a result of this meeting?

And they're like, Well, we just wanted to, you know, just get your perspective.

And I was like, What is going to change about reality as a result of us talking?

And there wasn't really a clear answer.

And that for me just drives me absolutely bananas.

And so then I have to infer what I think the, because obviously there is a point for the meeting.

And so

there, you know, I mean, like, there is a point.

There's either they're going to tell me or I have to figure it out.

But that's allowed me to

make such stronger predictions on

what someone wants from me.

And also, if I want something to occur,

asking, like, even to simply, like, if you have a, if you have an employee who messes something up, right?

The natural instinct is you want to punish them in some way because you're just upset that they mess something up, right?

It's a very human thing to do.

But if I think to myself, what would I like to have happened?

What do I want to occur?

It actually fundamentally changes what I'm going to say to this person.

I'll give you a perfect example of this.

So,

gosh, I want to say six, seven years ago, I had, I launched a company called Done for You Meals.

So we had our distribution of gyms and I thought, man, we could do Done for You Meals.

I partnered with a white labeling company that did it, and then we launched it, right?

So this was a huge launch for me at the time.

And we had 4,000 gyms who had signed up to attend the launch.

The 4,000 locations saying that they wanted to distribute meals is a lot of locations.

Like that would have been really big.

And so the day before the launch was supposed to happen, my

call it my secretary sent out the text at noon saying we're live 24 hours early.

And so

now all 4,000 of these people are like, I thought it was tomorrow, but people are like, well, they said they're live.

And so they start hopping on this Zoom after like probably a million dollars in advertising and months and months of prep for this launch.

And so she's like, what will I do?

And I was like, you need to hop on the Zoom and you need to have a sign that says, you know, we messed up.

And so people hopped on and were like, God damn it, hopped on.

I was like, just over and over again.

And she just stood there with the sign telling people, my bad, it was there tomorrow.

And so after that, you know, onslaught, she, you know, I met up with her and she said,

don't worry, I'm packing my stuff.

Like, you know,

I'm sorry,

I'll get out.

And I was like, what are you talking about?

And she was like, well, I'm assuming you're firing me.

I I was like, well, does this increase or decrease the likelihood that you're going to make a mistake again in the future?

And she was like, well, I mean, I'll never make this mistake again.

I was like, right.

So you're technically more valuable to me now than you were before.

And so I was like, I just paid a million dollars for you to learn this lesson and never make the mistake again.

I was like, I will always trust you with my launches because you will never have this happen again.

Now, if somebody has a history of many, many, many mistakes, which this person didn't, then it might have been maybe different.

But this one, I was like, I was sure.

I mean, she was horrible.

She was the type of person that would, that would, she would like die die of anxiety in front she actually doesn't I don't even get into it but like she had huge anxiety issues around this stuff and so for her to make this kind of mistake was like gargantuan um and so thinking about it from that perspective of course I was upset but what is it

me yelling at her increases the likelihood that she makes a mistake again in the future because she's stressed

so

Thinking always through that filter has has completely different.

Double click on that.

Why would that increase?

So let's say there's a launch three months later.

Why is she, let's say you yelled at her the first time, why does that increase the chance?

Well, I think that she'll just have increased anxiety and she already had too much anxiety.

So, if anything, anxiety leads to errors.

Yeah, exactly.

Why is that?

That I don't know.

I would just say that I've observed people who are very stressed out.

Like, if you go on stage and you're very stressed, you do worse than if you're relaxed, I would say, in general.

And so, people don't do as well when they have super high adrenaline.

That would be my

pseudo-scientific guess.

But that has been my filter.

And that has led to

such higher percentage goal achievement and behavior change in the direction that I want.

And so, this also works with relationships.

Like, if you have your wife and it's like you're upset about something, but it's like, does this increase or decrease the likelihood that she wants to talk to me?

Does this increase or decrease the likelihood that she does this thing again in the future?

And that has, I'm telling you, like, that has been, so you asked the question of like, why are you such a clear communicator or quote, good communicator?

It's like, number one, I define communication as change of behavior.

And number two, I'm very clear about what behavior I want to change.

And I only think in service of that goal.

And that's it.

So, said another way,

what you say in a YouTube video gets people to change.

And that ties it back to their conscious of this.

That ties it back to your content versus I might listen to somebody else and it sounds really smart, but it's not actionable and doesn't change my life as much as a Hermosi clip.

And that's what you would attribute to your communication, not some kind of stylistic ways of talking or some rhetorical device.

Maybe there are some.

I would say they're not super conscious.

I would say some rhetorical devices might be, like alliteration, I know, like if I can say something that alliterates it, like people tend to like it.

Give me an example.

Shoot, I don't know.

We just look at my Twitter.

But

if you repeat words in a sentence or if you have flips of like

it's more sentence structure.

It's not the X to the Y, it's the Y to the X, right?

That's almost always going going to be something that's going to convert no matter what the X's and Y's are, if the sentence still makes sense in both.

So you kind of look for those isms that make sense.

Words that are similar in nature.

Exploration and exploitation, Naval talked about that.

He used those words because they sound similar and they start with the same letter.

And so, because if it rhymes, it means it's true.

I'm joking.

But we do remember that.

And so

where this gets really nasty in a cool way is that if you want to change someone's behavior, the most effective way to change their behavior is for them to think it's their idea.

For them to think it's their idea, it means they have to remember it.

And so by making things that are rememberable, people will forget that you were the one who said it, but then they will think that they said it or they thought it, and then they will believe it's true, and then they will act on it.

And so having rhetorical style increases the likelihood that you change someone's behavior basically vis-a-vis that pathway.

So that's on the stylistic part, but I still think the vast majority of it to what you originally brought up is if I can give people clear instructions on what to do and then they do those things and they get the outcome, it will increase the likelihood that they'll listen to my instructions again in the future.

And then somehow their brains are

linking it.

So the dopamines are getting released ahead of the time that you're even talking because the last three times that they've listened to you.

History of reinforcement.

Yeah, it's history of reinforcement.

So it's not really what you're saying, It's the history of providing value-added advice to people that basically makes people just

encapsulated with what you're saying.

And I'll give you an example.

So I had this happen to me.

So I'm not a huge,

I don't consume very much.

We talked about this earlier, but I saw this clip by Huberman.

And I don't listen to much biohacking stuff in general.

But he said this thing that was like, how to get rid of hiccups if you have hiccups.

And I watched it and I was like, huh, I'll remember that.

And then I had hiccups like a month later, and then I remembered the clip, and then I did the thing in the clip, and my hiccups went away.

And in that instance, in that moment, he gained influence over me.

I am more likely to listen to something else he says in the future to solve a future problem that he prescribes a solution for.

And that happens whether you want it to or not.

That's what I'm saying.

What's even more nasty about that?

For you to even remember that clip, you already had some level of subservience or status to him speaking.

Enough to try it.

There was a study at Queen's University.

We have 6,200 thoughts per day.

It used to be, there's this old tale that's like 60 to 80,000, but 6,200 per day.

So we, and we forget almost all of them.

So you don't even remember all the thoughts that you forgot.

So the fact that you even remembered to try it itself, there was status, and then you were reinforced.

Yeah.

And so

functionally, that is all I'm trying to do within a very narrow audience of business owners, which is if I can give, and this is where it separates from, I read this book, I thought it was good, and I read Hermosi's book, and it made me this much money.

That is what I am going for.

And if I do that, like, there's, I think it was Boardwalk Empire.

He says,

nothing says sorry like money, or nothing makes friends like money.

I can't remember what the saying was, but I just, I remember hearing that and being like, That's cute.

I will remember that.

And so it's like, well, what do most business owners want?

Well, most of them want to grow.

Most of them want to make more money.

Well, why don't I just give them instructions that I think will increase the likelihood that occurs.

Now, when I do that over a massive population, there's going to be a good percentage of people that will be better off from directly following that thing.

Like, I think Martha Stewart was one of the most influential, or was the first female billionaire, self-made,

because of the nature of her content.

So the reason that entertainers have significantly less influence than educators is because entertainers never give you anything to do.

They just distract you.

They never let you disappoint yourself.

Right.

What is the output of entertainment?

The output of entertainment, or what's the point of it, is to continue to be watched.

That's it.

The only point of entertainment is to be consumed.

Now,

the point of education is to change behavior.

Now, can these two things occur at the same time?

For sure.

Right?

Like, if you watch the Avatar movie, plenty of people at the end of the movie felt more green earth and might have

changed their behavior.

So in that instance, it would have, you know, it changed some percentage of the population.

But if you are a pure educator, then you gain more influence because

you have given people instructions, they have followed those instructions, and they have improved their lives.

And so, when they want to improve their lives again and you give them instructions on how to do it, which might be buying your thing, they're more likely to do so.

And so, that is why these you have these massive TikTok accounts, you know what I mean, that have 20 million subscribers and they launch a popcorn, and no one cares.

Whereas you have this micro-influencer, I have this lady that I met, 5,800 followers on Instagram.

She only makes content about how to more effectively bill insurance as an RD, a registered dietician.

That's all she does.

She just talks about how to better bill insurance for registered dietitians.

For 5,800.

Yes, 5,800 people.

And she's doing three, I think it was 3 million, it was $1 or $3 million a year.

I can't remember, but it was between $1 and $3 million a year in that business.

with 5,800 followers exclusively sourced from her Instagram.

And so you say that to like an entertainer, plenty of entertainers have a million, two million, five million followers and barely make a million dollars a year.

She has 5,800 and she's making over a million.

And so to me, the difference there, the differential is just influence.

Now,

does it make sense for

the Logan Pauls and the Mr.

Beast to have

these brands that then they confer some

status to whatever

company is?

I think the greater value is that

they increase exposure to the product.

And the more, quote, on-brand it is, the more similar it is to the things that they have reinforced their audience for, then the more likely it works.

But this is something that I think, I mean, obviously I think a lot about it.

Like, why do some entertainers' products bomb and other ones succeed?

To me, it comes down to this.

Let's say you needed to start a YouTube without your face.

You had AI replace your face with just some random person nobody knew.

How long would it take for you to re-establish and to get rabid fans for that?

I think it would still work.

And I actually, I just, it was so weird you asked this.

I was thinking about this this week.

And I have proof that it's not because of my dashing good looks and my high sense of fashion.

It's because

Like when I started my first book that I wrote, $100 million offers, I had no, I had virtually no following.

I had enough following to make a post to say, I wrote a book, go check it out.

But then that book, every single month, sold more and more copies than the month before.

And that was before I had an audience or before I was making content.

And so it was the quality of the ideas.

It was a book.

They didn't even see me.

It was just text, right?

The quality of the ideas, the clear of the communication, is what people were attracted to.

People read it, applied it, got results, told their friends.

Yes.

And to this day, offers still continue to sell more and more.

And the brand was actually the book.

It wasn't even human.

People don't know that.

Yeah, I started.

I'm a writer first.

Like, X is my, is my.

So

all content that you see from the Alex Ramosi brand is written first.

So, like, this is going to get wild.

I post on X probably 30, 40 times a week.

I post all the time.

From the posts that do well,

those become shorts that I then say

those tweets.

They become carousels that are just different versions of the exact same tweet.

They become the captions of all of my images.

And so if I have one tweet about friendship, they'll just search friendship of my

six, seven thousand tweets that I've made, and they'll just find another friendship tweet and post that as the caption.

My LinkedIn is multiple tweets stringed together, just in longer format.

My YouTube videos are like 20 to 30 tweets put together that are high performers.

27.

With transition lines.

Truth surface.

100%.

100%.

That are transition lines.

Every single thing that comes out was started written first.

They're like, how can the brand, like, how have you been able to get so much content out

when you don't control it?

Well, I have one pot that I put my effort in, which is X.

And then every that feeds literally.

Your team literally goes in and repackages.

Our paid ads are my organic content that are high performers, which came originally from Twitter and then or from X and then we just staple CTAs on the end.

And the principle there is that if the atomic unit of the tweet is good, putting them together will

get something even better, potentially 100%.

And then you put in a bunch of lights and a bunch of crazy graphics and it's going to be even better.

What's interesting is that it doesn't work in reverse.

So if you have a viral clip and then I take the transcription and then I post it, it may or may not do well because there's so many other variables.

But if the foundational need of just black and white text, the idea, the words are interesting or compelling or clear, you can do it in another format and it works.

When you have an original idea, how much of it is something you've heard before or said otherwise words?

Or is there such a thing as a truly original idea?

I would say that the majority of my tweets come in response to things.

So either it's something that will come out organically, like we'll have this conversation and my team will be right there and they'll be like, you said these three things, we wrote them down for you.

And then I'll just tweet those out.

Or I'll scroll, I'll see something that'll trigger some sort of like, well, that's retarded.

And then I'll basically tweet a response to something that I won't call out.

And so that's why sometimes my tweets are emotionally charged is because like they're typically me responding to either something that happened, you know, like somebody shows up late and says something.

And I'm like,

people want to get these, because like I'm like, this person wanted a promotion and he didn't show up, he showed up late to a meeting.

I'm like, what are we talking about here?

Right?

So then I probably have some, you know, triggering tweet about being on time and how they people don't even do that and they want the world, right?

And then that would probably get some people upset on LinkedIn, and others are like, you should, you should, you know, whatever.

And so that's

the core of how everything that I have is spread.

But to loop to the original, of like, if I had a faceless account,

would it work?

I think so, because it's the ideas.

And clarity of communication, to your point.

Do I think it's original?

No.

I think the thing that makes the content maybe slightly more, slightly differentiated from other people's

is, number one, is I always try and state the facts and tell the truth and focus only on the observable.

And I talk in terms of behavior.

And so the nice thing is that if you have those two filters and you apply it to all content, you can filter out the vast majority of content because it's mostly noise.

People just like, quite literally, noise, people just making making noise with their face and just saying words that they've never defined and telling and not telling people to do anything and mostly entertaining when they think they're educating.

And so it serves as a wonderful filter for consuming information.

But in terms of dispensing, the word concession becomes so much tighter that the quote value per word or value per second goes way up because you actually can do something with this.

One of the topics you talk a lot about is doing things that other people may not approve of.

And now with your social network, you're around many billionaires and you get to observe them.

What is something that billionaires do that would surprise the majority of the population?

I don't know if it would surprise them, but it might, I guess it would probably be jarring for many of them

in close quarters, is they would probably be surprised by the level of agency.

that billionaires will demonstrate.

Like they're

almost all of them are just, they come up to their own conclusions on their own.

And if everyone disagrees with them, then great, because they got there by disagreeing with the masses.

And so like you can't have an exceptional outcome and also do what everyone else does.

Like it's they're antithetical.

Like you can't.

And so you're, you know, kind of by definition going to get people who

reason for themselves.

And I think that that's like, it's such an

it's such an underappreciated and underestimated component of success to get outsized returns.

You can get, you can get beta, right?

You can get the normal returns.

And I I say not just from an investing perspective, just from a life perspective.

If you just get life beta, right?

If you just follow the norms, you will get a normal outcome.

If you don't want a normal outcome, then by definition, you can't follow the norm, which then means that

you will be an outcast.

You'll be in the out group.

You will be not the norm.

And then people have to, in some way, resolve that discrepancy

or that apparent discrepancy.

And so, and the more outsize the return you want, typically almost like the more

willing to disagree or, you know, willing to disagree with comment, with convention, you have to be.

And so, I would say that that's

probably a huge through line for all of them.

Beyond that, they focus on leverage, focus on what they're going to get, you know, return on time, return on effort.

I see that as a huge thing.

And if you are able to make decisions for yourself and get the highest returns possible, which is only enabled by making decisions for yourself, then you typically get better returns than people who don't.

I've interviewed now eight billionaires.

I found two necessary components.

One is going non-consensus, doing something away from everybody else for many years, typically.

And two is some compounding.

Either it's network effects where it's like Facebook, every new user, or it's some marketing advantage or some financial advantage.

So it's literally like running in the opposite direction.

Everyone's walking in one direction.

You're not only going in the opposite direction, you're sprinting

at like 90 miles per hour.

And everyone's looking at you like you're a crazy maniac.

No,

and for like nine years.

And people, I think that's one of the things.

People do not realize how painful that is for nine years.

This is why I think that first point that you made and I just made about like being able to buck consensus or reason from first principles, reasons for yourself is that if you

only believe what you believe or act in the way that you act because of other people's approval or it was because of someone else's idea, it's very difficult to maintain conviction for an extended period of time.

And so if you find yourself waffling, it's simply because the ideas that you're adhering to are not your own.

If you derive something from zero and built the foundation of whatever reasoning you have for whatever outcome or conclusion you have, and you believe in all the math or the reasoning that you're basing...

basing the decision on,

if someone just, if the whole world shouts at you that two plus two was five,

if you're like, it's here, I mean, here's two bottles and here's two bottles and one, two, three, four, like that's what it is.

And if you know that there's a big pile of money, if you're right on that, then you're almost excited that most people don't agree with you because you're like, it's just going to mean a bigger pot at the end.

And so I think that

it's so difficult for most people because thinking is very hard.

It takes effort to think.

You almost need to create a bunker of like-minded people that believe in what you believe.

And you could basically like stress test each other's theories or have somebody stress test and be like, Are you seeing what I'm seeing?

Oftentimes, we have the same thing: we're merging media and limited partners.

Literally, trillions of dollars of people have gone on this podcast.

We're at five trillion now.

That's amazing.

And

now it's become a little bit more consensus.

But in the beginning, people are like, Why are you running a media business?

Why not an asset manager?

You're like, This is that.

This is the right to win.

This is a competitive advantage.

So it's

even the most obvious things, if they're non-consensus, it could seem like you're an idiot.

Yeah, you're like, well, explain to me how this decreases the likelihood that I get more deals.

Yeah.

Or explain, here's my logic, poke holes in the logic.

Forget about what everybody else is doing, but here's kind of my business plan.

Yeah.

And sure, like, I want to actually improve, which, where are the big holes here?

Yeah.

What assumptions am I basing this on that you think are wrong?

Because there's obviously going to be some assumptions that we're not going to prove.

And so some of them are going to be wrong or could be wrong.

And how wrong can I be and still be right?

And how many of them can be wrong and I still be right?

And so I like, we call them need to beliefs, but like

if we have some big bet, it's like, what are the need to beliefs for this, for this to work?

And if we're comfortable with the, like, there's really only one need to believe and we think it's likely, then it's like, well, hell, like, let's, let's push.

Let's push our chips in.

This rooting of conviction, I think, is the most underrated thing.

One of the most underrated things in investing.

The joke is people ask when to buy.

they never ask when to sell.

Yeah, and I'll give you a good example.

Let's say your friend told you to buy Bitcoin at $100 a decade ago.

You probably would have sold at $140 once it went down from $160.

So you could have bought Bitcoin, but if you had spent 10, 15, 200 hours really understanding Bitcoin and stress testing it and understanding the strengths and the weaknesses, you might have hold or hodled because you actually had conviction.

So, I think it's this investment of time and understanding and rooting of conviction that helps you weather any kind of storm.

And I think the only way that you can have that level of conviction is either you're delusional

or you have it in some sound argument that you reasoned.

And I will also say this is probably like one wrinkle that I would add to the two elements of like high agency, some sort of leverage or compound, you know, some element that gives them better returns is the willingness to change on a dime if something of some part of their reasoning was proven untrue.

So it's not like they are romantic with the truth, not romantic with their process of getting the truth.

And so if you said, here,

these are my five points, and this is why I'm going all in on this thing.

If someone says, well, I think this one's wrong, and here's my evidence.

My experience,

the people that I've seen that are most successful, will just look at that.

They'll take like a big long,

you're right.

We need to change everything.

And it's just like, and then they take action, right?

Because they're like, wow, this whole pillar that I, that I based this whole thesis on is actually incorrect.

And so I need to change everything now.

And Dreessen Horowitz defines this as strong conviction loosely held.

So the ability to have very strong conviction, but yet be able to revise them when new data comes up.

He's great.

He's a G.

I love his ex.

We're both big Elon fans.

I sent you some clips on Elon's specific portions.

I've been going down this rabbit hole of how he manages his companies.

How do you explain how a human being can manage seven companies and now also run Doge and all the other things that he's doing?

I can't.

You know, I mean, I think he gets tremendous.

He obviously gets tremendous return on his time and operates with huge operational leverage.

the thing is, I have very little insight besides the clips that I see, you know, on Instagram.

It's like, what is reality?

Yeah.

So,

I mean, decision-making is probably some of the highest leverage thing that you can do.

And so it's like, it's probably just what is the minimum amount of context that is required to make an accurate decision.

And then he just is a decision-making machine

and is able to spot problems, pattern recognize, and quickly correct course on the most important things across that many companies.

I mean, it's obvious that he has some,

I mean, I think he said it was like some sort of genetic mutation, some likely thing that his brain works better, faster, stronger than most people's.

But from what I understand, he just basically works until he's exhausted, then plays Diablo for a bunch of hours, and then that's what we get some dumb plug, and then he like starts again.

He obviously has a bunch of lieutenants in each of those companies that he has absolute trust with, and they know kind of like the Elon way.

And so I'd say probably a large degree is his ability to reinforce behaviors within the company that are conducive to value creation.

And so that has to happen from the top down in terms of like what culture exists at SpaceX or Tesla or the boring company where they operate with this, you know, in his words, a maniacal sense of urgency at all times.

And I think a big part of that is

You know, one of the things that I think Elon has been exceptional at, which is something that I'm, it's actually a deficiency of mine, something I'm working on, is like he's very good at painting a very clear vision for the future,

which is typically like a big amorphous word for, you know, someone like me to say, but,

you know, we're trying to make human life multi-planetary.

Okay, that's a gigantic goal.

And in order for that to occur, we need to have solar power.

In order for that to occur, we would need to have cars that work on electricity.

In order for that to occur, we need batteries.

In order for that to to occur, we would need

tunnels, tunnel technology.

In order for that to occur, we would have freedom of speech.

And so

he has somehow, because of this massive thing that he wants, linked every one of his companies to we're saving the world.

And I think that people will bend over backwards and work a hundred times harder to save the world than they will for just about anything else.

And they will also sustain and endure significantly more pain.

So there's this

study was done.

I wish I could remember what the name was, but basically, your ability to endure pain on behalf of somebody else is like five times greater than your ability to endure pain on your own.

So, like, if Jessica's in the other room and she, it was like you take a shock or she takes a shock, your ability to sustain higher and higher levels of shock is

like supernaturally higher if you know you're saving her from the shock.

If it's just you, you tap out way sooner.

And so, I think that that can be generalized to like,

I mean, people stormed the beach of Normandy to save the world functionally at the time, right?

And so I think that

he has created that environment where everyone feels as though they are saving the world and acts in accordance with that.

And so if we think about a vision and culture or values as

very large

bundled direction sets, that included within them have hundreds of behavior sets underneath of them that orient behavior, then they are some of the highest leveraged things that you can do in a company as the leader of the business.

It's just difficult.

It's rare.

It's not common that like our bank is saving the world.

Like, we're going to have to have banking in space.

Like, you know, like, how do you tie that?

You know, like, my fund is going to get a good, like, how do you really get everyone that level of motivated?

And I think that to me is like, obviously, he's got the deep technical expertise.

Obviously, he's, he's a, he's a maniac with his time and all that stuff.

But I think that he's able to get that level of behavior change across hundreds of, I don't know how many employees he has, lots

because of

how everyone's oriented towards that goal.

Do you want me to take a stab at this one?

Please.

I'm like the one-eyed man in the land of the blind.

I've had probably dozens of conversations.

So I've seen a couple of aspects.

One is he fundamentally redefines what the CEO title.

He even had this whole tweet how CEO is a made-up title.

So when when you apply for Delaware C-Corp, there is no CEO title.

So it is fundamentally made up.

So

he doesn't do things like operations and things like that.

There's probably for everything that he does, he doesn't do a hundred different things.

So first of all, he fundamentally focuses on a couple things.

What he focuses on is really his brand.

His brand allows him to recruit the very top engineers in the world.

I interviewed Jamie Gull,

who previously worked at SpaceX.

And one of the things I said that there was a lot of people at SpaceX that were lifers because they couldn't find a bigger mission.

They believed, and I think appropriately so, that human beings going to Mars was important

for the species to survive.

So one aspect is he uses brand and recruiting.

The other thing, the most interesting tactical thing, which was popularized by Mark Andreessen, is he goes into his companies and he deals with one issue a week.

And he sits down with people, five to 15-minute meetings, and he says, What is your number one issue?

And he helps them solve that, which has two effects.

One is they're constantly getting rid of their constraints.

They're constantly removing their bottleneck at speed.

And four, and this kind of bleeds into the fourth aspect, is he is a player coach.

He is in the cockpit.

He is working the hundred-hour weeks.

He's not telling people,

this is my mission.

Now you go and I'll be on a yacht.

He is

in the arena

battling the bulls with everybody.

And I think that really has huge effect on the culture and huge effect on recruiting.

I think the more interesting question is, how did he start SpaceX before he was Elon?

Kind of like, how did you start with $100 million offers?

I have theories on that.

But today, he just keeps on leveraging his existing,

which is recruiting and brand.

And those are interlinked.

And

when you go to these highly technical problems, there's actually the most finite resource.

It's actually not money.

It's actually engineering.

The top top engineers in the world.

The 10X or the 100X engineers, and he has a large market share of that.

Sometimes they even transfer companies.

That's what I've been able to

get there so far.

I love that.

And so I took, so two things, then one add-on.

So

helping them solve in these five or 15-minute meetings, whatever the one problem is, also force functions them

to prioritize.

So if you're going to bring one of them, they know what their one problem is.

Yeah, exactly.

It's like just that, that alone probably generates a huge, huge alpha for the business.

The plus one piece, as you've heard of Elon's algorithm, I don't think so.

Oh, gosh.

It's like I probably use this

all the time.

Like, it's like the most useful thing that I've gotten from Elon of all the things that I've consumed.

So it's the five-step process that they apply at SpaceX, but they apply it to everything.

And he now just refers to it as the algorithm, which is question the requirements, delete all the unnecessary or dumb rules or requirements,

Optimize, then pull up timelines, then automate.

And so it's like if you're trying to fix a media department, you come in, you're like, why do we do this that way?

Okay, well, we don't need to do these 28 things that you guys are currently doing because it's dumb.

All right.

So how do we get the best guys to do the thing that makes us the most money or gets us the most views?

Optimization.

So we're reallocating resources towards the highest return.

Okay, great.

Now that we're doing that, how can we do it faster?

Great.

Now, how can we automate it?

And walking through that process has been like, it's been the back of my mind for when I'm fixing something because it's just like really good.

And especially the question of the requirements, which was one of the hardest ones because it forces unconstrained thinking, which is you have to be like, well, why do we do that?

And a lot of people don't know why they do what they do because it's how we've always done it.

And most, it's so funny how humans are so easy to add things, kind of like we referenced at the very beginning.

Like, we add things so easily and we're so afraid to remove things,

remove steps, remove processes.

And we almost developed this mythology around process.

We don't do it that way.

And I think that's a survival brain, right?

Well, it has worked.

We haven't died doing it this way, so we should just keep doing it this way and wear pink socks, right?

But why?

Right, totally.

You know what?

The greatest thinkers in the world and seven-year-olds have in common.

Why?

They always ask why.

And if you just listen to a seven-year-old and they'll just say why, and then they'll say something, and then they'll say, Why do you do that?

Yeah.

And you lead lead to some really good questions.

I ask, even on the podcast, I ask some very fundamental questions, like, are you diversified?

Yeah.

And if it's a very high-level thinker, they'll actually think really deeply on it.

And because it's like, how do you know you're diversified by what vectors?

It's like,

these dumb questions could end up being quite interesting answers.

One of my, well, not one of my closest friend who's basically a brother to me,

he has to say, which is the shorter the question, the longer the answer.

Like, what's the meaning of life?

Like, wow.

What is it that uh i i wrote of uh i didn't have much time so i wrote a very long letter yeah no exactly yeah yeah 100 i think it was a i think it was pascal um who said that but yeah another concept uh spacex has specifically is responsible engineer which you mentioned this high agency which is the engineer in charge of the part they are fully responsible for everything with that part.

And the example they give internally is if supplier hasn't delivered any of the parts, why aren't you on the plane going to that supplier?

Right, it's your fault.

And a lot of the employees burn out after six months because they can't deal with this level of agency.

Agency has a cost.

There's a reason why everybody is in high agency.

It takes a lot of mental and physical power and emotional

people.

Yeah, it's so funny the question, the requirements.

Like, I won't even get it, because I could tell horror stories of the times where I've walked in and been like, why do we do this?

And it's like, oh, that costs us 500 grand a year for this one department, and we don't even need it.

I'll tell you one.

so we bought for media right we bought um a bunch of really expensive cameras that looked really nice because you know the team was like all right we're gonna build the studio or whatever and so then i was like why

so that it started with

i was told we were gonna build the studio so that it would be faster for me to record so that i could just like literally walk across the hall and then just record right but then i i realized months after the studio was built because we'd always done that way um

that i would have to say, Hey, I want to go record, and then they'd be like, All right, we'll be ready in two hours.

And I was like, Why

is this taking so long?

And

this is your new studio, yeah.

And so they said, Well, we have to set up the lights or whatever.

And I was like, I'm always in the same spot.

Why do we have to reset up the lights?

And they're like, Well, we use the same lights in your office as we do in Layla's studio.

And I was like,

Well, how much do lights cost?

And they were like,

it's like two grand.

And I was like, so I spent $500,000 on this studio, and we didn't think to spend $2,000 on the lights, which confers the main benefit of having the studio, which is we don't need to set it up and break it down.

I started with the idea that the expensive cameras, right?

Here was another one.

After the videos were happening, I was like, why can't, I was like, tell me what stops us from posting it within 24 hours?

Because I had like two-week lead times on my videos.

I was like, this is absurd.

Like, why is this this taking so long?

And they were like, well, you know, actually, there's a big part of it, is like uploading and download the files is actually this big pain in the butt.

And I was like, okay,

why do we need big files?

And they're like, well, because we have these nice cameras.

And I was like, why do we have nice cameras?

And there was no real answer because I have tons of videos.

They're nicer than the not nice cameras.

Right, right.

Because all the people who are buying or people who are, you know, Media Dorks and love, love cameras and audio, right?

But the reality was, I can have an iPhone and say the same video, and it'll crush.

Because the only thing that really matters, at least in the education space, is the quality of the information, not the behavior change.

Yeah, it doesn't matter.

It almost matters zero.

The effects and the lighting and the like, none of that matters in terms of video performance.

And so

when I brought that up, it was like, okay, so we have these massive

16, I don't know, some massive, very expensive cameras.

And I just said, like, we're not going to use them.

Put the, I was like, put iPhones up.

And so I got so upset about this that I went on a plane and I was like, we're doing this whole thing with an iPhone, and you're going to post it in 24 hours.

And we did that.

I saw that on the chat.

Yeah, that's exactly what it was.

And yeah, that video got almost 2 million views.

And so it was to prove the point.

I'm like, guys, this is not what matters.

And so

I had to go through each of these elements of like, and so walking through this, it's finding the constraint within a process.

And I think that's what the algorithm is so effective at.

And so we ask this also with companies.

Like one of my favorite questions is, okay, so what stops us from 10xing

our current deal?

Let's say it's demand constraint.

So what stops us from doing 10 times more what we're currently doing?

And they say, well, we couldn't do that because, and then insert a reason.

And if that reason's solvable, then it's like, well, why haven't we done it?

Now, if that reason is obviously solvable, well, then why haven't we solved it?

And then they'll bring up this other reason.

And so you keep asking why.

And eventually you get to like, oh, HR just hasn't put out the rec for that person yet.

And I'm like, why?

Because we have these other three roles that don't matter nearly as much, but this is the one constraint of the business.

So this happens all the time in businesses.

And I think part of it is because it's so rare to have people who actually do, I call it like pulling the thread.

It's like, just keep pulling the thread.

Like, what happens next?

Why is this preventing us from doing ultimately the thing that has the greatest leverage on the growth of the business?

And a lot of people just don't know.

And And I think part of that is because they don't have enough business acumen or business context to see like, no, when like this is the tip of the spin, like if we, if we need three times the sales guys to triple the business, and let's say that's aligned with the business objective, then us not have, like, why haven't we just hired 10 recruiters, vendors, to just go place all these roles immediately?

Well,

you know, we have one recruiter.

I'm like, yeah, but it'll take us two quarters at our current rate.

I was like, when we could fill it in seven days.

And so the cost, and this is what I have to outline, I'm like, the cost what 3x sales is over two quarters.

So if we tripled revenue because we tripled the sales team by, you know, because let's say we have sufficient demand, it's like the cost, let's say it's a million dollar a month company for simple math.

It's like, okay, so it would cost us $12 million of lost gains because you didn't want to pay a recruiter 20K times whatever the number of sales guys is that we need to triple revenue.

Do you feel like that's a good decision?

Like we don't want to pay 200 to make $12 million.

That seems dumb.

We should not do that.

But people don't boil it.

Like, people don't pull the thread.

Do you solve that on an individual level or do you find ways to get

a higher agency?

So what I'm going to say is probably going to be a little controversial, but

I do think a big part of it is actually just like mental horsepower.

I think some people don't have it.

You can't cope with that.

With multiple variables.

Yeah, multiple variables, actually being able to sustain multiple thoughts in your mind at the same time and play out scenarios, I think, is really tough for a lot of people.

And that's where it's not that they want to be inefficient.

Yeah, no, I don't think anyone wants to be inefficient.

That's where it gets into competence.

And so, like, is that trainable?

Maybe.

I don't think horsepower is trainable.

I do think that skills are trainable.

To what degree is that a skill?

I don't know.

I probably have to think more about it.

But.

Skill is almost a reallocation of horsepower.

Yeah, yeah, that's where it's like what behavior change.

Yeah, I could have someone follow a process, but like if it, yeah, anyways,

but that

piece, though,

I think a lot about.

And I would say the one common theme that's occurred in my business career has been that the quality of talent that I bring in has literally only gone up.

That is like one constant in terms of like my income has been directly correlated with the quality of the people that I bring in and what I'm willing to pay them.

Because

every person has that, it's almost like this limiting belief of what you can pay somebody.

I mean, shoot, they just paid John Ivey.

Yeah, 6.5 billion.

So like, there's a price, right?

There's a price to get the best in the world.

Open AI stock.

Yeah.

No, I mean, not cash.

Good on that.

I mean, that's a big commitment on both sides.

But I mean, if they do go through the hardware thing, it's a very rational deal.

It's a completely rational deal because if he actually unlocks the hardware, then they combine Apple with their, I mean, they, they just murder.

And I think they will.

Are you familiar with David Deutsch's concepts on memes?

He's the person that popularized memes that Elon passed.

And I think everything in kind of memetic behavior, humans are basically follow these memes.

You mentioned one earlier that's so ingrained in Silicon Valley that startups change the world.

That's actually a meme.

There's no rationality behind it why a fintech company is changing the world.

It's just something that's that's repeated.

One thing that I've found in a lot of the top CEOs is that they have these

meme this specific type of meme called folklore so do you know about like the Nordstrom tire

meme so Nordstrom back in the day was number one in customer service and they used to tell the story that this angry customer come in came in and they wanted they had been using a tire for like 10 years and they wanted to change the tire and Nordstrom has this unlimited return policy yeah and they gave him back the money on the tire

and the joke is Nordstrom doesn't even sell tires right yeah And there's this extreme version to show that the customer is right.

And if they were to go around and say the customer is right, it may not resonate.

But the tire story kind of said, and you see this over and over.

Amazon has the meme of the two pizza teams.

And these are like really useful packaging to tell these beliefs.

So maybe that is a story is maybe the light story becomes a meme at acquisition.com and you tell it to people.

And then they may not think from first principle, but they might remember, oh, like, is this like the light thing?

Why is there a company we could make $100 million from and we won't pay for their lunch because it's not in the budget or something?

Exactly.

It could be memed into the actual culture.

No, I love that.

I love that.

Yeah, and I see that exactly.

So I see these types of folklore stories as

coming with series of behaviors that they seek to change.

So it's not just one thing, it's many sets of behaviors.

So I'll tell you, oh, I mean, I could tell a zillion of them.

So I'll pause.

But like, yes, I love that.

I wanted to get your advice on my own business and just brand building.

A lot of what we're built was inspired by you and just like giving content for an audience.

Outside of just doing more, we're seeing some really great early results.

What are some other kind of practical guides for somebody wanting to build their brand in an audience, whether niche or not?

I want somebody who's between

they want to start a fund or they already have done their first and they want to get their second or third, right?

I'm then thinking, like, what do these people consume?

What are the biggest problems that they're dealing with right now?

And then all of my content seeks to solve all of those problems.

I mean, that's it.

So create the reinforcement loop of listen to David, problem solve, listen to David, problem solve.

Yeah, this guy's helped me so much.

That's the harmosification.

Yeah.

Well, what do business owners struggle with?

They struggle with marketing.

They struggle with sales.

They struggle with cash flow.

They struggle with fixing their product, decreasing churn, you know, recruiting.

So these are all because obviously like we're operators, we actually run a business.

So like

that's what they struggle with.

And so I make my content for business owners because that's what I'm trying to attract.

So the two side, the two sides of your business, just to distill what's made you so successful, one is you're reinforcing, listen to Alex and good things will happen.

And two is actually

you're building a surplus of goodwill.

So there's both goodwill as well as trust in you as an operator of businesses to make those more successful.

You know, interesting, because the trusting about the, like,

so like, I would get into, those seem similar to me, both those buckets,

and probably derive from the same action set.

And

I think it just comes down to like, does this increase the likelihood that someone would

would do something

with me for me?

And if they have a history of positive reinforcement for me, then

that likelihood increases.

And I just leave it there.

That's about it.

Like goodwill,

I just would redefine as a history of positive reinforcement.

That's it.

And so there's this big misconception, I think, in the kind of creator world.

You've probably heard the like

give to ask ratios, you know, that kind of thing.

But it's interesting because when you read Steve Jobs' autobiography, he talks about this.

Or not, his biography by Isaac

Walterson.

Walter Isaacson.

Thank you.

Thank you.

He talks about how

he still saw that withdrawal deposit concept within Apple, but

via every product.

And so he saw some, like, he believed that if the product was great, then we've deposited into the person's bank account, right?

Figuratively.

Whereas a creator feels like if they ask for money, they have withdrawn from their quote goodwill.

But the underlying assumption there is that the thing that you sold them was not good.

Because if you were a creator and you you came up with an iPhone,

then people would be lining up around the block for the next time you sold something.

So it's this zero-sum mentality where I've provided all this and now you spend your money,

you spend something that you don't really need.

Reciprocity.

Yeah.

You don't really need it.

Whereas your second trade would also be accretive.

Exactly.

And I think that is a fundamental misconception.

And I think the reason for that is because creators typically don't know how to make products that are exceptional.

And they typically don't put it, not always, but like they don't, sometimes don't have enough capital or they

aren't good at making products or good at making media.

It's just a different skill set.

So just to double-click on that, for acquisition.com.

So you give all this content.

They love it.

You help them go through one to 10 million.

They come to you to 10 million.

They're lucky enough for you to invest.

You could take them to 100 million.

So you're not taking 30%.

You're saying, this is mine for helping you.

You're actually

helping them.

Everybody wins.

You're like, give me the opportunity to help you further.

And the reason that you can believe that I can help is because I already have.

So it also self-selects because

if they adhere, basically if they have changed their behavior based on the content that I have, then it's likely that they will be able to respond favorably again in the future to the same types of direction, right?

Now, the nature of that.

And also likely that they're

grateful and that they're aware that you help them.

Because some people will be helped and just

never attribute it to it.

We'll just internalize it.

So that's actually a super interesting one.

Yeah, attribution is very interesting.

Most, like, think about, think about how tough it is to have something amazing happen in your life and say, that wasn't me.

That was that guy.

Or that was something else.

Like, we usually take the opposite approach, which is everything that's good is because of me, and everything that's bad is because of other people and circumstances.

And so it's actually.

Do you think that's true in successful people?

I think it's true in humans.

I think there's just degrees.

Like, not binary.

I think it's just a continuum.

Probably some people are more this way, some people are more that way.

But no, 100% getting attribution,

and this is why I think having directives that are so specific is so important.

If I gave vague,

vague directions, right, that somebody has to derive behavior change from, then

basically the more derivatives they have to do, then I think, and I think rightfully so, the more they should attribute that to themselves.

If I said,

on this podcast, make it this this headline and I will give you the thumbnail and then it outperforms the click-through rate.

If you thought that was because your team did it, I would be like, that feels a bit odd.

If I said, I think it should be you and me and both of our faces kind of, you know, big in the middle.

And this, you know, let's start it with the tweet that we know already, you know, performs best, maybe that's a middle.

Like he gave us some insight.

It was kind of helpful, but like we still made it.

Right.

And that's, it's that last, like, well, we still, like, whatever that part part is, it's like the less gap there is between whatever your advice was and the action.

I think the smaller the gap, the more the attribution will be there, which is why I am so specific with

the stuff that I put out.

And

would a good criticism of my strategy be, it's always podcasts, it's always with LPs or GPs, and there should be more talking heads?

Or if people are observing this and

getting the value from the actual guest, that's fine.

Do I have to go to a talking head as well?

So thinking about this from like a short form, long form, how do I translate this into action for us, right?

Short form: let's say somebody watched one short a day from me for a year, okay?

And let's say that a short is 30 seconds for simple math, all right.

So, I have 365 shorts, that's

180-ish minutes, right?

So, that's three hours that they watched from me.

Now, we know that most shorts are not 30 seconds, it's probably a third of that, right?

So, if they watched a short every day for a year, it's probably an hour-ish of content.

Okay,

I would for sure rather have someone just watch.

I mean, I would probably like that frequency of exposure, like if it was one hour to one hour, but if I had to pick, I'd rather have a one, three-hour podcast versus that.

But that's to me, I see the purpose of short films.

Is that why podcasts are underrated medium?

Because you have one listen, but it could be two hours, and it goes pretty deep.

I've thought about this a decent amount.

So, like, I see podcasts actually as email lists.

So, with the exception, like true podcast, this is like YouTube plus podcast.

You repurpose there.

But the vast majority, I would bet, of the channel growth comes from YouTube.

And then it sustains on the audio, right?

If you did audio only, it's very difficult to grow audio only because there's very little suggestion.

Spotify is beginning this, but for a very long time, people had to only grow off of word of mouth sending podcasts to friends and family, whatever.

And so if we see podcasts as an email list, then when someone comes to me and says, hey, I'm thinking about starting a podcast to grow my business, I'm like, That's like saying I'm thinking about starting an email list.

Like, that's not going to grow the business.

Now, unless you have a way of getting, you know, exposure to it, then that's the way that it's going to grow.

But if we look at percentage likelihood of conversion, a podcast listener who subscribes is more valuable than any other subscription.

If we just think about percentage of kind of timeshare, if you will, which is the average person, I think, has like five or seven, five to seven podcasts, something like that, that they subscribe to.

You think about Instagram, it's like most people have like a thousand people they follow.

It's like not even close.

Order of magnitude is different.

You go on a lot of other podcasts.

Tell me about the calculus.

Why would you go on somebody else's

podcast?

Essentially, you're building their listenership.

Sure.

Tell me about

the thought.

So I don't do a ton.

I almost exclusively do with people that I like

it's somebody that I actually do really want to have a conversation with.

I would say that's probably the biggest

vector.

Yeah, it's the biggest yeah it's like i'd seen you wall and i i always i always find our conversations fascinating um because you have such a different perspective from the from the like super lp side you know what i mean like that always brings such fresh eyes to what i'm thinking about like in the super kind of like operational side um

that's probably the biggest thing from a from a like return on time perspective i think it's uh like clips will generate that's like what's the the only upside for me realistically is probably like clips um and relationship But those are the two kind of like alphas for doing it.

It's not because you get to talk to a whole new audience and

part of them will convert to you.

With your audience,

it's so niche and unique.

Like, there's definitely value there because you have a superstar audience.

I would say asking as a general, like,

why do I select them in general?

The audience that I have is the audience that I want.

And so when I'm going with someone else's audience, I'm basically trying to, like, I don't even think about it this way, but I guess you could, you could imagine it's like, okay, of the people, where's the overlap of business people who listen to Chris Williamson, you know, on Modern Wisdom?

Okay, like, I'll, some of those people will then start, you know, following my stuff that they hadn't heard about me before that.

But if that were the case, then I would definitely be maximizing like only new podcasts rather than doing the same podcast over.

And I tend to do the same podcast over.

So if I'm looking at my behavior rather than what I would like, so my behavior would dictate that I usually just go to people that I enjoy talking to.

Well, Alex, this has been a pleasure to catch up.

How should people follow you?

On whatever platform you watch or listen to the most, you can just

type in Hormosy and hopefully I'm there.

But I do have a book launch though, August 16th.

So if you want to come, you can go to acquisition.com.

Actually, I don't know, I can't tell the link yet.

So

just, you'll find it.

Alex from Rosenyu Book Launch.

And for those that have only watched the YouTube videos, I did read the book.

They're exceptional.

They're exceptionally well written.

So I highly recommend it.

The third one's going to be the best.

Awesome.

Looking forward.

Thanks, Alex.

Thank you.

Appreciate it.

Thanks for listening to my conversation.

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