Alex Hormozi on Scaling SMMAs (FULL INTERVIEW)

Summary

In this insightful discussion, the speaker emphasizes the importance of talent acquisition and the challenges of scaling a business while maintaining quality. They discuss strategies for identifying and hiring 'A' players, the necessity of being specific in customer targeting, and the art of saying 'no' to ensure long-term success. The conversation delves into the intricacies of service-based businesses, the value of niching down, and the power of authenticity in standing out in a competitive market.

Takeaways

• 😀 Building a successful business involves recognizing that no one is irreplaceable; instead, find people who can excel in different aspects of what you do.
• 🔍 The ability to judge and attract talent is crucial for business growth and will improve over time.
• 🚫 Learning to say 'no' is essential for maintaining discipline and focusing on the right opportunities for long-term success.
• 💰 Avoid the trap of prioritizing short-term gains over long-term financial stability, which can lead to an operational rat race.
• 🤔 When scaling a business, consider productizing your services to make them accessible to a broader audience without diluting the quality.
• 🛠️ Talent acquisition is about finding individuals who are as smart or smarter than you and can bring unique perspectives to your business.
• 🔑 To become irreplaceable, focus on serving a niche market deeply and mastering your craft within that specific domain.
• 🤝 The best way to judge talent is by how specific your directives need to be; the less direction needed, the higher the talent level.
• 🎯 Agencies should maintain focus on the problem they are solving and the target audience to avoid diluting their service and losing strategic alignment.
• 📈 Scaling a service-based business requires high-quality talent and a culture that attracts and retains that talent.
• 🌟 Authenticity is key to standing out in a competitive market; being genuine and true to oneself will attract the right audience and build a loyal following.

Q & A

How can a business owner effectively delegate their responsibilities to scale their operations?

A business owner can delegate by breaking down their responsibilities into smaller parts and finding individuals who can excel in those specific areas. It's also important to develop a disciplined approach to say no to opportunities that don't align with the business's long-term goals.

What is the significance of being able to judge and attract talent when scaling a business?

The ability to judge and attract talent is crucial for scaling a business because it ensures that the right people are in place to handle the increasing responsibilities and challenges that come with growth.

How can a service-based business maintain a competitive edge when scaling?

A service-based business can maintain a competitive edge by focusing on the quality of their talent and the culture that attracts and retains that talent. Additionally, being very specific about the problems they solve and the customers they serve can help them stand out.

Why is it important for a business to remain disciplined in saying no to certain opportunities?

Remaining disciplined in saying no helps a business avoid the operational rat race and the sacrifice of long-term success for short-term gains. It ensures that the business stays focused on the right customers and opportunities that align with its goals.

What is the recommended approach for finding and hiring top talent?

The recommended approach includes looking for individuals who have demonstrated similar experiences in the past and have a proven track record of success. Offering opportunities for growth and aligning with the candidate's aspirations can also attract top talent.

How can a business ensure that its service offerings are effectively communicated to potential clients?

By breaking down the service offerings into specific steps and explaining the value of each step, businesses can help clients understand the complexity and value of their services, thus avoiding undervaluation.

What are some common pitfalls that agency owners should avoid when trying to scale their businesses?

Agency owners should avoid trying to be everything to everyone, maintaining focus on their niche and the specific problems they solve. Additionally, ensuring the quality of talent and fostering a culture that attracts and retains that talent is crucial.

How can a business become irreplaceable to its clients?

A business can become irreplaceable by deeply understanding and integrating into the client's operations, offering a comprehensive solution that is difficult for the client to replicate on their own.

What is the strategy behind narrowing down the target market for a business?

Narrowing down the target market allows a business to focus on a specific niche, becoming an expert in that area and offering unparalleled value to a defined customer base.

How can a business leverage its unique selling proposition (USP) to stand out in a competitive market?

A business can leverage its USP by clearly communicating how it differs from competitors and the unique value it provides to its target market, thus attracting clients who are looking for those specific benefits.

What advice would you give to a PR marketing agency that feels their offer is not ROI-based?

A PR agency should focus on targeting clients who understand the value of brand building and are not solely focused on immediate sales and leads, positioning PR as a long-term investment in brand reputation and awareness.

Outlines

00:00

🚀 Scaling Business Operations and Talent Acquisition

The speaker discusses the challenges of scaling a business, emphasizing the importance of recognizing one's irreplaceability and the need to delegate tasks to others who can excel in specific areas. They share insights on how to extract oneself from day-to-day operations, suggesting a narrow focus and creating a system where anyone could execute tasks without needing the founder's expertise. The conversation highlights the significance of attracting and judging talent, and the discipline required to say no to opportunities that do not align with long-term goals.

05:01

🛠 Hiring Top Talent and Avoiding Common Pitfalls

In this segment, the focus is on identifying and attracting top talent, with an emphasis on the qualities that define 'A' players. The speaker suggests that the ability to judge and attract talent improves over time and stresses the importance of maintaining discipline in selecting who to work with. They discuss strategies such as offering opportunities for career advancement to attract talent and the importance of focusing on specific problems and maintaining a high-quality team to ensure business growth and scalability.

10:02

🤝 Building Irreplaceable Service Models and Client Relationships

The speaker addresses the concept of making a service model indispensable, discussing the balance between providing comprehensive services and maintaining client relationships. They talk about the importance of breaking down services into smaller, manageable components and communicating the value of each step in the process to clients. The speaker also shares thoughts on targeting larger clients to become irreplaceable and the challenges of working with small to medium-sized businesses due to their volatility and unpredictability.

15:03

💼 Strategies for High-Value Service Delivery in Small Business Markets

This paragraph delves into strategies for delivering high-value services to small business owners, who are often price-sensitive and face financial instability. The speaker discusses the importance of defining clear problems and selecting clients carefully based on their fit with the service model. They highlight the need for discipline in saying no to clients that do not fit the criteria and the benefits of focusing on a niche market to build a successful business.

20:04

📈 Transitioning from Service to Consulting and Licensing Models

The speaker explores the transition from a service-based model to consulting and licensing, emphasizing the importance of documenting and productizing the service playbook. They discuss the benefits of licensing tested materials to clients, allowing them to implement successful strategies immediately. The conversation also touches on the challenges of maintaining client relationships and the importance of being authentic and disciplined in selecting clients to ensure long-term success.

25:07

🌟 Standing Out in a Competitive Market Through Authenticity

In the final paragraph, the speaker addresses how to stand out in a competitive market, particularly in the fitness industry. They stress the importance of authenticity and the pitfalls of trying to replicate the success of others. The speaker encourages being true to oneself and leveraging unique personal interests and experiences to create a distinct brand that resonates with a specific audience. They argue that being genuine and consistent in one's offerings is key to long-term success and differentiation in the market.

Keywords

💡Talent Attraction

Talent Attraction refers to the process of drawing skilled and capable individuals to an organization or business. In the video, it is discussed as a critical skill for growing a business, where the ability to judge and attract talent is seen as a key factor in scaling a business successfully. The script mentions that the quality of talent directly impacts growth, especially in service-based businesses.

💡Irreplaceability

Irreplaceability in the context of the video is the concept of being so integral to a business that no one else can perform the same role effectively. The speaker argues against the idea of being irreplaceable, suggesting that business owners should aim to have others who can do their job better or just as well, which is essential for scaling and delegating tasks within a business.

💡Service-Based Business

A Service-Based Business is a company that offers intangible products or services rather than physical goods. The video emphasizes that in such businesses, the quality of the service provided is directly related to the expertise and talent of the individuals involved. The script discusses the challenges of scaling these businesses due to the reliance on individual expertise.

💡Productization

Productization is the process of turning a service or a set of services into a product that can be easily replicated and sold. In the video, the speaker suggests productizing services as a strategy to scale a business, making it so that anyone, even without specific expertise, can deliver the service by following a set of established procedures or playbooks.

💡Playbook

A Playbook, in the context of the video, refers to a set of documented strategies or steps that can be followed to achieve a specific outcome. The speaker mentions playbooks as a tool for standardizing processes within a business, allowing for the delegation of tasks and the replication of successful strategies.

💡Scaling

Scaling in business refers to the process of growing a company, increasing its size, and expanding its reach or capabilities. The video discusses various strategies for scaling, such as attracting talent, productizing services, and focusing on specific niches to achieve sustainable growth.

💡Niche

A Niche is a specialized segment of the market that has specific needs or interests. The video emphasizes the importance of focusing on a niche market to build a successful business. The speaker suggests that by serving a niche well, a business can become an expert in that area and achieve a competitive advantage.

💡Operational Efficiency

Operational Efficiency is the ability to produce the maximum output with the minimum input, essentially doing more with less. The video discusses the importance of operational efficiency in service-based businesses, where the quality of talent and the systems in place can greatly impact the efficiency of service delivery.

💡Refusal

Refusal, in the context of the video, is the act of saying 'no' to opportunities that do not align with a business's goals or capabilities. The speaker argues that the inability to refuse can lead to poor business decisions, such as taking on clients that do not fit the business model, which can ultimately hinder growth and profitability.

💡Authenticity

Authenticity is the quality of being genuine and true to oneself. In the video, the speaker advises standing out in a competitive market by being authentic, suggesting that being true to one's unique personality and interests can attract a loyal audience and differentiate a brand from competitors.

💡ROI-Based Offer

An ROI-Based Offer is a product or service that promises a return on investment, typically in terms of increased revenue or leads. The video discusses the challenges of marketing a non-ROI based offer, such as PR services, and suggests that positioning and understanding the value proposition for the right audience is crucial for success.

Highlights

Importance of recognizing one's irreplaceability in a business and the need to delegate tasks effectively.

The necessity of finding and hiring individuals who can perform specific tasks better than oneself.

The concept of scaling a business by focusing on talent acquisition and the ability to judge and attract talent.

The challenge of scaling coaching models due to the expertise required and the risk of experts leaving.

The strategy of productizing solutions to make them accessible for implementation by anyone, regardless of their knowledge.

The value of narrowing down the focus of a business to a specific niche to increase efficiency and scalability.

The importance of maintaining discipline in saying no to opportunities that do not align with long-term business goals.

The approach to finding talent by assessing how specific one needs to be with directives and leveraging past experiences.

The benefits of offering a step-up opportunity to attract high-performing individuals from other companies.

The pitfalls of trying to be everything to everyone and the importance of focusing on a specific problem and audience.

The direct correlation between the quality of talent in a service-based business and its growth potential.

The strategy of becoming the marketing department for a company to increase value and irreplaceability.

The challenges of working with small to medium-sized businesses due to their volatility and unpredictability.

The concept of arbitrage in business through licensing tested and successful materials to multiple locations.

The importance of being authentic and leveraging unique personal interests to stand out in a crowded market.

The advice on focusing on a niche and becoming exceptionally good at it rather than trying to expand too broadly.

The discussion on the challenges of scaling a non-ROI based offer and the importance of targeting the right audience.

The emphasis on the power of saying no to protect the long-term health and success of a business.

Transcripts

and you're not going to find another you

to replace everything that you do you

can find three people who do portions of

what you do better than you and other

things that you do that you don't do

better than you what have you seen some

of the most common qualities among a

players when you hire them your best

talent is in the future what happens is

your ability to judge talent and your

ability to attract Talent will only go

up and here's the one that everyone

messes up who you pick like I said it

earlier say it again you don't

necessarily even want to work with all

chiropractors which means you need to

have discipline to say no I'm dead

serious that's why they stay poor they

can't say no and what happens is you go

for the short-term money and you

sacrifice the long-term money hey what

is up how's it going all good man all

good big fan

I appreciate it I'm a mutual fan

yes thank you very much yeah thank you

so much for supporting the book launch I

appreciate it awesome man awesome my

community loves you and that's all we

are here and I literally got like 150

questions I had to narrow it down to

five or six it was so hard

we'll do the best we can and if we get

through the six we can go to the number

seven best best so let me get started

with the first uh question that we have

as like uh so Alex how did you get

yourself out of gym gym launch

day-to-day operations and this is my

personal question because uh you

mentioned something in the uh 100

million dollar offer that to hit your

first 100K you don't need a lot you just

need an offer to sell and that's exactly

what we did uh but right now we are

hitting a bottleneck and our biggest

bottleneck is operations and I know I

want to know how exactly you got out of

gym launch operation because we have a

very similar business model for I know

service providers for web service

providers uh so we help uh you know

mostly agencies and digital Consultants

with lead generation and sales and the

way we do it is with a one-on-one

Consulting and in a group coaching

format okay so to get out of so the

reason that so coaching models in

general tend to be very difficult to

scale because the reason people come to

you is for expertise uh and so in order

to get other people to provide that

expertise then you have to create lots

of experts who then eventually walk off

and start the business on your behalf

and take your customers with them so the

there's kind of there's I would say like

there's a couple different approaches so

the first is that there's like the law

firm and the McKinsey kind of Consulting

model where they there's a track to

become a partner in the business and

then that's kind of the whole business

structure so there's a where a way to

share in the profits those businesses

aren't particularly lucrative okay don't

get me wrong they do make lots of money

but the owners of those end up having to

dilute themselves out not that there's

anything wrong with that you can make

lots of money doing it but that is that

is a a version of the model

um the other way is to productize the

basically get narrower on the solution

that you're providing and productize it

to the grace of your house possible so

that anyone could do it even if they

have no knowledge of it in terms of like

the implementation of the thing

um that is more the direction that we

went uh with Jim lodge because we had a

very specific we don't even we didn't

even work with all gyms like just to

show how narrow we were with it we

worked with only micro gym owners we

have now expanded to health clubs as

well but we still don't service a ton of

different parts of the gym industry we

only work with microgen service based

businesses and health clubs and so but

like the you know the five or six years

that I was doing it before we sold we

were only uh micro gems and so just to

show like how incredibly narrow that was

someone had to have at least 30 members

assigned lease one employee and be

running this type of model for them to

be a customer and then if they fit all

those things we could generate a lot of

Revenue using our playbooks and so that

was like I could have somebody who had

no gym industry no expertise whatsoever

and still say send this email

say these words here's 10 reportings of

people doing this exact same thing this

is the expected value and so that's like

from the delivery perspective now

operating the business overall comes

from Talent

um and being able to find people who are

just as smart or smarter than you and

people say that but like when you

actually meet somebody who's smarter

than you and then they admire an aspect

of what you've done so that they start

to work for you that's where you really

start to have the magic happen

but how exactly you find those talent

because I personally feel like I'm

irreplaceable in the company the

experience that I bring to my clients is

not something that anyone else can come

and yeah you're not good at teaching

you're not good at teaching

um and the idea of like I'm

irreplaceable is completely ego

um so you just have to get rid of that

like you have to be like I'm the most

replaceable person in the business like

in the like from an employee perspective

like you want like they want to become

Irreplaceable

the owner's perspective should be the

exact opposite which is that everything

that I do I can need someone else to do

better than me

so do you recommend like breaking down

whatever I do into smaller parts and

yeah 100 and you're not going to find

another you to replace everything that

you do

but you can find three people who do

portions of what you do better than you

and other things that you do that you

don't do better than you because they

have other lives that they've lived yeah

oh well so don't try and find one person

replace you try and find four

oh yeah that's that's a good Prospect

thank you very much for that yeah uh

what have you seen some of the most uh

you know Common qualities among a

players when you hire them like you know

what I need this person right now

because he's gonna crush it yeah your

best talent is in the future like what

happens is your ability to judge talent

and your ability to attract Talent will

only go up

right so it's it's kind of like uh so

the easiest way to judge talent in my

opinion is how specific you need to give

your directives right so if you take

this to a hypothetical extreme on the at

the at the bottom level you have

somebody who's has barely any cognitive

function and you have someone who you're

sort of like here's how you turn on a

computer here's how you open up Internet

Explorer like on this extreme of just

like very little cognitive function very

few meta skills on the other end you

just say build me a department that does

this and the person can just build or

spin up an entire entity that does a

certain thing within a larger

conglomerate right so like those are the

two kind of just like hypothetical

extremes of talent and so you can judge

someone's Talent by how specific you

have to be with the things that you're

asking them to do and a big function or

proxy for that is what experience they

have in the past that they've done

something similar to what you're asking

them to do

oh all right

I'll give you an example if I wanted to

build if I wanted to hire somebody to

build a app on sales team uh and I have

a B2B business then I'm gonna go find

somebody who's already built one or two

outbound sales teams for B2B businesses

ideally close close to who are already

in the industry that I'm in so the

likelihood that they'll succeed and know

how to do it is very high they already

have tons of trench knowledge they have

the experiences I just copy paste that

into my business and I can give you a

better deal a better culture uh to work

in than where you're at now

oh okay that makes a lot of sense

another hack to this is finding the

number two and so uh you know like in

the sales person example maybe your your

personal brand or your company's Brand's

not as big as the company that you're

trying to attract someone from so that's

where you can give someone the

opportunity to step up right so if

you're if you're the you know let's say

there's a sales director and you're the

lead sales person

um of the company now when I say lead I

mean lead in the technical sense not the

top sales person but a sales lead is

usually somebody who does a little bit

of training with the team

um also sells and give them the

opportunity like if they had a good

manager who you can't get you say well

you know what that manager is doing what

if you were that manager here right so

you can offer them a step up opportunity

because they still have enough proximity

to what it looks like when it's right

yeah it sounds like a lot of the time to

get such clients you'll probably have to

do a lot of Outreach like you mentioned

in the leads book and such you know

methods and the lead in this instance is

an employee exactly and right you know

what somebody actually asked this

question and I had to remove this

because I read that exact answer on 100

million dollar leads so phenomenal job

there thank you very much for writing

the book

um so yeah I'll read one of the

questions that one of them are an

audience member wrote

they mentioned uh what kind of pitfalls

to avoid that business owners know but

agency owners are usually unaware of

those of that leads them not to work

with an agency for example what this

person wanted to try is that you know

try to tell uh is that like what are

some of the things that agency owners

should avoid doing if they ever want to

scale a new experience

which question do you want me to answer

uh the second one okay so what things

should an agency owner avoid when

they're trying to scale yep yep that's

one of the questions that I have

I mean the same things that any business

owner would want to avoid when they're

scaling

um I think that agencies tend to fall

into the you know they they tend to fall

into the bucket of trying to be

everything to everyone so yeah

maintaining the discipline to be very

focused on what the problem that you're

solving and who you're solving it for

and I think that solves 90 of the

problems from a strategic perspective

for any small business owner including

an agency and the second piece is that

if you're in a service based business

the quality of your talent is going to

be

directly proportional to your growth

because you're you're basically selling

people fractionalized people that's what

service businesses are right you're

selling some level of training that

you're able to give and having more

efficiency than an individual business

owner would have like the the classic

you know small business owner Legion

agency that charges two thousand dollars

a month the idea is that if they were to

hire somebody full time to run these ads

it would cost them five or six thousand

dollars a month but you have

copyrighters designers and media buyers

and page designers who all work a

fraction of their time for this one

business and they can get it more

efficiently and you can still do it at

good margins right like that's

fundamentally what service businesses

are and so the quality of that talent

and the culture that you have at the

business to attract and keep that Talent

um are the kind of the key or The

crucial pieces of the success of the

model

Yeah you mentioned something in the book

where you mentioned the agency model

where you hire an agency to learn the

stuff and you internalize it and then

when you have stopped learning you

replace an agency but teaching agency

models agency businesses how to become

Irreplaceable right that's uh usually

one of the things and what we uh you

know help them with is like how do you

have stacks of offers where you don't

just handle one thing in one Department

you become the marketing department of

uh the company that you work with so in

your perspective how should one go there

should we start with one business then

upsell the next and upsell the next and

upsell the next offer or like it's tough

because then you it's it's it's more

like creating the irresistible offer

isn't necessarily about having a zillion

products it's more about explaining and

communicating the many small things that

you have to do anyways and so rather

than saying like I'm going to generate

leads for you that's like one outcome

but there's many things that have to

happen along the way you have to create

landing pages you have to write copy you

have to you have to have follow-up

sequences you have to work the leads you

have to have scheduling you have to you

know you have to split test you have to

make new creative like there's lots of

things that have to happen in order to

just get the single result and it's just

making sure that we're delineating those

things because in unbeknownst or an

ignorant uh business owner I say

ignorant in the technical sense like

they just don't know

um would have no idea what you're doing

you're like yeah just go get me leads

it's like well it's much easier said

than done and if I was doing it from an

outbound perspective I'd be like well I

have to warm up domains I have to you

know spin up different accounts I have

to split test different email openers I

have to like you have to explain all the

steps and they're like wow there's a lot

more work that goes into this now I can

I can appropriately value this price tag

that you describe to whatever the

service is so that's Piece One Piece two

about being Irreplaceable I think you

know

it's tough and the the way to like in

order to be Irreplaceable oftentimes

you'd have to go after significantly

bigger customers so like if you're an

agency for 4chan 1000 for Fortune 500

companies then a lot of times they don't

want to they have to it would be so

costly for them to spin up at scale the

level of talent that's required to do

like programmatic media buys across 100

different Platforms in different

countries right it'd be very difficult

for them so there's so much pain

associated with that that they can

immediately plug into your solution and

then they're likely that they want to

leave or do this on their own is

significantly lower right but the idea

that any service provider is going to

become truly Irreplaceable like any

business can do anything on their own

right so like you always have that and I

would prefer to put myself out of

business and do it in a way that aligns

my customers with me then have a model

that I know is is basically has a timer

for obsolescence

all right so uh and inside check is like

uh not everybody works it's Fortune 500

companies right yeah most people don't

and many people uh they might work with

you know a smaller medium businesses

they help them with that uh but I think

in those cases because these uh let's

say you become a marketing agency for

chiropractors in New York you become so

good at that in general people won't

leave you because you're just good at

that particular service

okay got it thanks a lot man for that

yeah and the thing is the small business

owners are really tough

yeah they're super tough

um because they're the problem

like they're super erratic they're super

volatile their cash flows lumpy

um they don't know where their next

paycheck's gonna come from and to to no

fault of your own they can cancel

because they just can't make payroll

that month

because there's other things that are

required right and so that's the reason

that like do you see any large SMB

agency in the U.S

oh yeah no right there's a structural

problem right the biggest agencies look

at the biggest agencies that exist

Ogilvy you have Vayner you know is up

there now

um yeah who do they service massive

companies why because the quality of the

customers are higher

and so they know that when they sign a

contract they actually stick with the

contract we all know that if you have a

small business under signs a 12-month

agreement for agency Services he's good

for three months

yeah

it's it's because even if you were the

best marketer in the world if they have

a shitty product or they don't work

leads or they have a terrible location

they have one star reviews Google

there's a number of things that are not

under your control if you have bigger

better customers then a lot of those

other things have been controlled for

because they've they've achieved a

certain level of success now it's harder

to get those customers why because

they're going to also look for an agency

that's equally qualified because they're

also smart enough to say well listen you

know you're in your mom's basement right

now and so I don't really feel like you

know giving all my lead generation over

to you and so I think the enterprising

individual who's very good at Marketing

in a specific Niche the short term solve

is like sure anybody can take on 10

agency clients that pay them you know 2

000 to you know four thousand dollars a

month or a thousand to four thousand

dollars a month for an SMB and make a

top one percent living and there's

nothing wrong with that it's just work

it's fine

yeah if you want to have a better

version of that opportunity it's

learning more skills and saying okay let

me see if I can understand the

chiropractor business even more than I

already do and see if I can combine that

with kind of some Consulting around the

business model itself and then start

seeing if I can put some of my own

Capital at risk and buying into these

businesses right like that's when you

start moving into private equity and

away from Pure Services now again like

are there like the biggest model that

I've seen for small business owners from

a marketing perspective

um was an agency that was running 300 a

month

a month price point because they had

figured out and like there's a key here

is that like those business owners are

so price sensitive that you're not it's

not whether you can sell them it's

whether you can keep them on their worst

month that's how you have to think about

it like the price isn't based on the

value that you can deliver on the best

month but how much you can keep on the

worst month because that's where the

churn comes in right and so the best

model that I saw uh was doing SEO for

small business owners and they had

completely automated every aspect of it

um it was basically just a Playbook and

I think it generated reviews and maybe a

couple phone calls a month but at a 300

a month price point if they got one or

two phone calls a month it was worth it

so the bar to get over to to ascribe

value and especially on something that I

call like a nuisance business where it's

like I know I should be maintaining my

reputation I know I should be doing some

of this stuff okay for two or three

hundred dollars a month I don't feel

guilty about not doing it because this

is all right does that make sense yeah

it totally makes sense so when uh in gym

launch we started helping small

allergens because that's again a small

business owner and you specifically

mentioned this I think in the gym launch

book where you know they struggle to

make the ends meet uh I think that's

where you went into the licensing model

where you started teaching them the

stuff because they can help themselves

and probably uh scale up with that uh

entire technique I think that's what it

is right yeah I mean that's a good

transition to a consulting or licensing

model like in the beginning it's

Consulting because you have a lot more

service because you haven't you haven't

like productized every part of it but if

you're diligent about productizing every

piece of your playbook because if you

consult enough times for the same type

of business you realize that you start

basically reverting to the same 6 7 10

12 plays and then you just you just

document them out right and then you

hand off one to somebody who says cool

you just execute Play One ux you play

two ux you play three

um and that can be from a circle space

you know relationship where you can

license the materials out right like for

us it was truly licensing because we

would generate we would test you know

ads in you know 20 markets and come up

with the best combination of copy

creative headline and landing page and

then we just license the material out to

a thousand locations and so for them the

cost of trying to figure out what the

best ad is going to be and the cost of

filming the ad hiring the talent doing

all these other things was far in excess

of just immediately having scratch off

tick tickets that were winners so they

could just immediately run the ads and

get a 10x return because we had already

tested 100 other ads that didn't get

that and so they could just take the

winners and take it to the bank and so

that was where the Arbitrage existed for

us and we could spend 50 Grand or 100

Grand testing it but no we had a

thousand gyms that were paying three

thousand dollars a month in order to

have that material because it was so

local so we could sell the same thing a

thousand times

oh yeah that's good and uh because when

we are in a Consulting model right what

happens is some clients actually do the

work and they get results and some

clients they need a lot of follow-ups

and they need a lot of accountability

from you right so uh how do you maintain

that like I'm I know I'm getting very

Nitty Gritty into this but yeah I'm good

with nitty-gritty I mean I get it

um I mean you you you talk to basically

one of the core problems of all B2B

businesses which is that you end up

taking over the person's entire business

until eventually they're like yeah if

you could just send me a check every

month and you do you run the business

that would be awesome right and so

that's why being very disciplined about

problem definition from the services

that you provide number one and here's

the one that everyone messes up who you

pick like I said it earlier say it again

like

it's not like even if you work with

chiropractors right as that example you

don't necessarily even want to work with

all chiropractors you want to work with

chiropractors like if so here's how I

mean I talk about in the book in the in

the referral section but you look at the

customers that you have right now that

are the best customers like the top 20

of the top 10 you say okay what

characteristics do these people have

that other people don't have in my

client list and that's both from the

software the hard perspective what are

the quantitative differences they have a

certain size business they're over a

certain amount a month they have a

number of locations they have a certain

amount of employees number of customers

like you just get all that data on them

and then also what was the experience

that they went through when working with

me and was it different than some of my

other customers because one of the

things that happens oftentimes is that

the first few customers you get become

really sticky and then you and then you

start scaling and then you have this

front revolving door but you still have

your core business of these people that

you had in the beginning right so why is

that because these people got more help

from you and actually got delivered more

value and then you basically tried to

scale without scaling the value that you

delivered to the original customers

right and so you were able to train them

enough that they could become

self-sufficient and then not need you as

much anymore and then that created a lot

more margin for you but it's really

saying okay I'm only trying to scale to

100 000 a month because of my ego not

because that's what the business

requires right now right so if you're at

whatever 15 000 a month and you've got

five customers and they're all like

having a great experience and you keep

signing people on they keep leaving it's

like okay well instead of me trying to

sell five this month why don't I just

sell one and do a great job and then not

lose them

and like that's the key to compounding

in a service business once you pay down

the basic pay down the inefficiencies of

them not knowing what to do yet

um and being very specific about who you

serve and who you don't like we did

personal trainers we didn't work with

facilities that weren't making a certain

amount of money we didn't work with

facilities didn't have a certain number

of customers we didn't work with

facilities that had a different model

than what we knew worked and part of it

I'll give you an example

um so like cycling Studios and like yoga

studios 100 could use our model

we didn't work with them because the

founders tended to be psychologically

different

they just didn't they just didn't they

just like their adherence was super low

because they just come from a totally

different world view than the guys who

are more Fitness weight loss

transformation focused even though at

the end of the day it's just a

membership with a back room where people

work out fundamentally the exact same

thing but mindset wise they had a very

hard time

um kind of adopting a different model

even though monetarily it totally made

sense

so I have to pick the 80 20 of the

things like which 20 of the customers

give us and then you have five times

more than 20. yes oh all right which

means you need to have discipline to say

no

I am and say like honestly like sales

calls that are genuine sales calls in a

service business really should be

ex genuinely Discovery calls

what's your business what do you have

what are your goals right now what have

you done so far tell me more about this

how many clients do you have Etc it's

like okay based on what you've told me

you are a fit for these reasons now

based on what you told me you might not

be a fit for these reasons I just want

to let you know now if something like

that changes in the future or if you can

fix this thing I could take you on or I

have a a down sell that might get you

prepared to be a customer for me later

that's a lower level of service because

the likelihood that I think that you're

gonna stick is very low

you're this is so hard to say no to this

new upcoming business because you know

they can help them but they just don't

fit your criteria

I have 13 companies I get 1800 a day

who reach out

right all right you have to say no

yeah

how did you go about like didn't it like

it feels weird to like say no because a

lot of the time I get

specifically that's why most people stay

poor they can't say no

that's why they that's why they stay

poor they can't say no and what happens

is you go for the short-term money and

you sacrifice the long-term money

long-term because then you just get in

this operational Rat Race and then you

scale up your your costs to meet the

fact that you took on all these

customers that you shouldn't have taken

on to begin with and then you have to

pay them every single month so then you

have to keep on taking out customers

that you shouldn't take it on to begin

with and you get in this vicious cycle

that you can't get out

until you downsize you take two steps

back five steps back

fix your ego and then say I'm only

working with these customers because

ethically I know that these are the ones

that have the highest likely to success

with everyone else I had mediocre

success and I can say it's their fault I

can say it's my fault it doesn't really

matter all that I know is the likelihood

that they achieve what I think they

should achieve is low period so I'm not

going to sell them

a lot but aren't you afraid that the Tam

will go smaller like of course yeah of

course but I build 100 company off of a

niche this big it doesn't like it really

you can build a niche an inch inch wide

and a mile deep

you don't need to like you don't need to

serve it like there's 30 million small

businesses you don't need to service

them you like there's there's 50 000

gyms that fit the model that we have

fifty thousand that's it that's not a

lot

yeah yeah right and so you will be

limited but the question is what is your

goal now if you want to build a 10

billion dollar company then yeah you're

gonna have to go after a bigger problem

but if you want to build a nine figure

company

you can do that almost you can do that

in almost any industry yeah like and I

think you can always do a 10 degree

shift and like good

I think you can always do a 10 degree

shift to the niche closest to it and

slightly expand the market as you go I

think that's what most people do right

and you know what I would say even that

just cut off the back part

just like pick the niche and don't

expand just get better

seriously just get better just get

better at delivering even more about

because what happens is you can get

better and better at it and then you can

take a greater and greater percentage of

the economics

because you're because you have so much

track record so much proof that you

deliver so much value so consistently

yeah makes sense

uh when it comes to let's say uh so I

got this I have a question that one of

my uh you know clients asked me yeah

five minutes maybe this is the right

time to ask so the question that they

asked around this is like I'm not able

to scale because my offer is a non-roi

offer so this is a PR marketing agency

and they say like hey we just do PR we

do press releases it's like and just

help them with Fame it doesn't really

help with leads and sales so how do I

position myself because it feels like my

offer is not an Roi based offer uh I

would say you're selling to the wrong

people

uh

all right so there's absolutely I mean

PR is a big Market you know there's lots

of people who want PR but the only types

of people who want PR are people who

understand brand and if you're trying to

make your rent every month you don't

understand brand you're trying to only

get leads and sales

oh yeah I think a person who needs leads

in sales doesn't understand Brandon a

person who has enough of these and now

they look at like how do I build my

brand they'll look for PR yeah

yep yep thanks a lot man so I think we

have time for one final questions sure

sure awesome so you mentioned that when

you started out you started with the

first five customer framework that was

awesome and then you just grew with

referrals so this question came from a

fitness consultant herself and she said

that with the competition that the

fitness Market is how do you stand out

because even if I get my first customers

and I post them there are 100 others

that have this many uh case studies and

testimonials to show

honestly it's just being authentic

very easy to say very hard to do

yeah so what happens is the you know 99

of the fitness Market just looks at what

other influencers doing and say I'll

just I'll copy that and I'll do stuff

like that but then you just do a worse

version of what somebody's already doing

right if you look at the top influencers

who are in that space they have a very

specific personality that like so

zooming all the way out fitness like

there's no secret

like there's no secret like work out

more stop eating shitty you'll look

better over a longer time Rising I think

that's what it is

so the reason then goes where do I want

to get my news from right people go to

different news outlets even though the

news technically is the same I'm not

getting into the you know misinformation

political part they're saying Jenna

people consume media from sources that

they like more and so the idea is how

can I there's going to be a subset of an

audience that is like you genuinely and

they want to get there if they could get

Fitness information from Alex but if I'm

a you know a 45 year old Indian mother

I'm probably not going to be her source

for Fitness information even if I say

The Identical stuff as another 45 year

old uh Indian mother now if that 45 year

old any mother looks at my fitness

content and tries to make content like

mine it's going to seem weird right yeah

and even if that 45 anybody looks at

another 45 video who is uh really

successful right then it's still going

to be it's gonna be one degree closer

but it's still being not them and so

most people you can stick out by

actually being yourself

and like I know it sounds trite but the

real like this is real there are so many

unique aspects of someone's life and the

things they're interested in compared to

other people that if you just lean into

those differences those unique things

that you're actually into that are weird

right Rogan's into aliens and mushrooms

and comedy and fighting who would have

told him like you should knit like you

should be Joe Rogan and you're going to

have people who like some aspects and

then the super fans will be people who

overlap on two or three of the interests

that you have

and so that's the idea is you just have

to show more of who you are and that

will create more pools of people who

relate to to you like if you pick my

brand to be like dessert working out

philosophy Business Marketing sales like

what are like what's Alex from Rosie's

brand like no strips right

sure these are all like they're all

completely disjointed things but they're

different they're people who follow me

because they only like the business

money stuff they're people found me

because they only like the philosophy

stuff they're people follow me because

they just think the desserts and cab

stuff is funny like it just depends on

what someone's going to come in for but

if you're just you then you can stick

with it for the long term and that's

what's going to build over time and make

you quote stand out because there is

only one version of you that's lived

your life so just live it publicly

absolutely absolutely it's a document

thanks a lot man I think we are at the

end of our tenure thank you very much

for being uh here and keep writing great

books

thank you and thank you so much to your

community who are watching this I

appreciate you all thank you for showing

up and supporting I hope the book I hope

I hope you make so much money from the

book um and just and crush it because at

the end of the day there's more problems

than any one person can solve it I hope

you build businesses to solve them so

thank you guys