Alex's Guest Spot On Dropping Bombs with Brad Lea

In this episode of Drop Bombs, host Bradley engages with Alex Hormozi, the CEO of Launch and a successful entrepreneur with a rags-to-riches story. Hormozi, once sleeping on the floor and penniless, now runs multiple businesses, including a meal company, and is on the verge of becoming a billionaire. The conversation delves into the importance of acquiring skills, character traits, and challenging beliefs for entrepreneurial growth. Hormozi emphasizes the significance of learning marketing, sales, and operational skills, as well as the need for discipline and consistency. He shares his journey from opening his first gym to pivoting to online services and selling high-ticket coaching programs to gym owners. Hormozi also discusses the scalability of SaaS models and the challenges of competing in the software business. The discussion touches on the Covid-19 pandemic, questioning the data's quality, the economic incentives of hospitals, and the potential political motivations behind prolonged lockdowns. Hormozi advises entrepreneurs to invest in their skills, even if it means spending a significant portion of their income, and underscores the value of one-on-one training for rapid learning. He also highlights the efficiency of combining funnels with phone sales to maximize revenue.

• Bradley introduces Alex Hormozi, CEO of Launch and owner of various companies.
• Hormozi started from the bottom, with no money, sleeping on the floor, and has built successful businesses.
• Bradley admires Hormozi's combination of technical and cool traits, as well as his expertise in building culture and brands.

"The dude used to sleep on the floor, have no money whatsoever, and then he started freaking a few businesses, and now he's a multi, multi, multi, damn near. I don't even know. He might end up a billionaire. Smart son of a bitch."

The quote highlights Hormozi's rags-to-riches story and Bradley's respect for his business acumen and potential for extreme wealth.

• Hormozi emphasizes the importance of acquiring skills, character traits, and challenging beliefs for entrepreneurial growth.
• The initial focus is on marketing and selling, followed by developing discipline and consistency.
• The evolution continues with learning to manage and train others, and recognizing the right opportunity vehicles for skills.

"And at least how I saw it was in the beginning, you're acquiring skills. The next level, you're acquiring character traits, and then after that, you're breaking and challenging beliefs."

This quote outlines the three-step process Hormozi believes entrepreneurs go through in their journey, emphasizing personal and professional growth.

• Hormozi stresses the need to learn skills firsthand to teach others and hold them accountable.
• He discusses the necessity of understanding various aspects of business, from marketing to running departments.

"Then I got to learn how to manage a sales team. Then I used to learn how to market, but then I got to learn how to run a graphics department and a video department and copywriting and traffic and media, right?"

The quote demonstrates Hormozi's belief in the importance of a CEO understanding different facets of their business to effectively lead and ensure accountability.

• Hormozi's company achieved $37 million in revenue, defying the odds of business success rates.
• He credits his ability to call people on their "bs" due to his wide range of learned skills.

"You learned it so you could call people on their bullshit."

This quote from Bradley acknowledges the advantage Hormozi has in being able to directly assess the work being done in his company because he understands it himself.

• Hormozi highlights the CEO's skill in recognizing true talent, which involves developing pattern recognition over time.
• He covers blind spots in areas like finance and HR by relying on vetted professionals and peer evaluations.

"But the biggest skill that I think we as CEOs have to know is how to be able to recognize true talent."

The quote captures Hormozi's view on one of the most critical skills for a CEO, which is identifying and hiring the right people for the company.

• Hormozi works 12 hours a day, six days a week, and maintains this schedule consistently.
• He balances his work with his personal life, including time with his wife and exercising.

"I right now work still 12 hours a day, six days a week, and I haven't really stopped that."

This quote reflects Hormozi's dedication to his work and his disciplined approach to maintaining a rigorous work schedule.

• Hormozi was passionate about fitness before starting his business, but it took a backseat afterward.
• He maintains his fitness with minimal effort due to long-standing habits.

"I was obsessed with fitness until the day I opened my business, and then it automatically took a backseat."

The quote shows the shift in Hormozi's priorities from personal fitness to business once he became an entrepreneur.

• Hormozi saved $60,000 by living frugally, which he then invested in his first business.
• He attributes his ability to save to his upbringing and disciplined living.

"I saved 60 grand by the time I turned 23, and that's when I opened my first facility."

The quote illustrates Hormozi's financial discipline from a young age, which enabled him to fund his entrepreneurial ventures.

• Bradley and Hormozi discuss the importance of reinvesting in the business rather than spending on personal luxuries.
• Hormozi lived modestly even as his business grew, focusing on increasing his savings and business revenue.

"I slept on the floor for the first nine months. But the caveat, even though you had...60 G's in the bank...No, I spent that to open the business."

The quote clarifies Hormozi's commitment to his business, choosing to reinvest and live minimally despite having the means to do otherwise.

• Hormozi never planned to have just one gym; he aimed to build a transformation-focused fitness chain.
• He learned to run Facebook ads effectively, which helped him fill his facilities quickly.

"The plan was never to have one gym. So I went into this wanting to build America's next huge fitness facility."

This quote underscores Hormozi's ambition and strategic planning for his business from the outset.

• Bradley successfully scaled his gym business by opening six locations over three years.
• His method involved saving cash from the cash flow of the business to open each new location.
• He experienced boredom due to the business running without his direct involvement.

"So at month 15, I was able to open up my second location. That cost me $250,000. And so I'd been able to save up just about 200 at that point from the cash flow of the business to open up the second location. And then every six months after that, I opened up a new facility at full capacity."

This quote explains Bradley's approach to expanding his gym business by using the profits from the existing business to fund new locations.

• Bradley attended Internet marketing conferences and was influenced by Russell Brunson's talk on funnels.
• He joined Brunson's coaching group for $25,000, which was a significant investment for him at the time.

"And I saw this guy, Russell Brunson speak, and he wasn't allowed to pitch, so he just talked about funnels and stuff. And I was like, this guy knows what he's talking about. This is cool."

Bradley was impressed by Russell Brunson's expertise in marketing funnels, which led him to join Brunson's coaching group.

• Bradley transitioned from owning gyms to helping other gyms fill to capacity using his marketing and sales strategies.
• He faced challenges with this model, including lack of control over fulfillment and issues with failing gym owners not delivering on the product.
• He pivoted to selling weight loss directly to consumers online and then to coaching other gym owners.

"But then quickly I was like, this is not a very logistically scalable model. So at that point, I was doing about 350 a month when I started launching the gyms."

This quote highlights Bradley's realization that his gym launch model was not scalable and prompted his pivot to other business strategies.

• Bradley started coaching gym owners, creating a training system, and selling his program to gyms worldwide.
• His program's success led to the creation of a yearly coaching group and substantial growth in the number of gyms served.

"And so it's been a ride. And so that was kind of the impetuous of gym launch skyrocketing."

This quote summarizes the rapid growth and success of Bradley's coaching and training system for gym owners.

• Bradley launched a supplement company, Prestige Labs, with a zero inventory model.
• He also started a meal prep service and began building software to optimize brick-and-mortar business marketing returns.

"A year and a half later I started a supplement company, Prestige Labs, because all the gyms I sold supplements a ton at my gyms and I never really had anything that worked well."

Bradley's quote reflects his entrepreneurial drive to solve problems and diversify his business ventures, leading to the creation of a supplement company.

• Bradley discusses the challenges and competitiveness of running a SaaS business.
• He enjoys the scalability of the SaaS model and the ability to show tangible software products to customers.

"It's crazy. It is incredibly so. To anybody who just knows Brad as Brad Lee, the guy you saw as the influencer, the guy on Instagram or like running a SaaS business is the hardest type of business."

This quote emphasizes Bradley's recognition of the difficulty and competitiveness in the SaaS industry, but also his appreciation for the model's scalability.

• Bradley predicted a recession and advised gym owners to pivot to remote services before the Covid-19 pandemic.
• He helped transition his community to online sales, with many contemplating not returning to in-person services due to higher profitability online.

"So that was nice. But our guys had already, we'd already built out the entire system. And so overnight, we pivoted our whole community."

Bradley's quote demonstrates his proactive approach in pivoting his community's business model to adapt to the pandemic's impact on gyms.

• Bradley suggests gyms provide remote services and one-on-one online training to maintain and grow their business during shutdowns.
• He emphasizes selling accountability and personalized services as a competitive advantage over free or commoditized fitness offerings.

"You're going to have to sell accountability. You're going to have to sell one on one. And that's where you're going to be able to still get 200, $300 a month all day long from gen pop for that level of service."

This quote underlines the importance of accountability and personalized services as a value proposition for gyms to sustain their business remotely.

• Bradley discusses the discrepancies in Covid-19 data and the potential economic incentives for hospitals to report Covid-related deaths.
• He questions the validity of the data and compares death rates to the previous year, noting no significant increase despite the pandemic.

"The same amount of people are dying right now as were last year, just from COVID now, right, for getting how we're coloring it, the total deaths."

Bradley's quote reflects his analytical perspective on the Covid-19 data and its implications for public perception and policy decisions.

• Hospitals risk going out of business due to being underwhelmed, not overwhelmed, by COVID-19.
• Healthcare workers are getting furloughed because of the lack of patients.
• The initial goal of flattening the curve was to prevent overwhelming the healthcare system.

"The downstream effect of that is that the whole point of flattening the curve was to not, or at least what we were told, or at least my understanding was, we're trying to flatten the curve so we don't overwhelm the healthcare system."

This quote explains the original reason behind the efforts to flatten the COVID-19 curve, which was to avoid overwhelming healthcare systems. The irony is that hospitals are now struggling due to a lack of patients.

• Misaligned incentives have led to questionable practices regarding COVID-19 funding.
• Hospitals receive funding for COVID-19 patients, potentially leading to overreporting.
• The lack of tests and the policy of funding based on COVID-19 symptoms alone have created a situation where hospitals are incentivized to diagnose more COVID-19 cases.

"Then human incentives is going to kick in. That's just my two cent and not."

This quote highlights the speaker's belief that human nature and the incentive structures in place can lead to increased COVID-19 diagnoses for financial gain.

• Making it a felony to be wrong about COVID-19 diagnoses could be problematic.
• Hospitals might not be blamed for claiming funding for patients with COVID-19 symptoms due to the financial incentives in place.

"Making it a felony to be wrong. So at the end of the day, again, I wouldn't blame a hospital."

The quote suggests that hospitals may be making decisions based on financial incentives rather than strict medical criteria, which could lead to overdiagnosis of COVID-19.

• The speakers discuss the possibility of conspiracy theories surrounding COVID-19.
• There is skepticism about the level of coordination required for a conspiracy to be true.
• The discussion includes whether politics have influenced the handling of the pandemic.

"I think most conspiracy theories typically aren't right. And that's just people attribute they worst case scenario."

The speaker expresses doubt about the validity of conspiracy theories and suggests that people often assume the worst-case scenario without sufficient evidence.

• There is confusion and frustration over the legal processes behind lockdown measures and the authority of state governors.
• The speakers believe that the desire for freedom is strong among entrepreneurs and that lockdown measures are particularly constraining for them.

"Well, you can google it because, yeah, you're a young man, I'm an old dog. But there used to be an after school cartoon that would be like, there'd be a rolled up piece of paper, but he had a face."

This quote refers to the process of how laws are made in the United States, implying that the current lockdown measures may not have followed the traditional legislative process.

• The speakers discuss personal spending habits and the balance between being frugal and enjoying wealth.
• One speaker expresses the importance of not being owned by possessions and the freedom to use them without worry.

"If you own your possessions, then they don't own you."

The quote underscores the idea that material possessions should not dictate one's life choices and that one should feel free to use their wealth as they see fit without fear of loss or damage.

• There is concern over the accuracy of COVID-19 death and case data.
• The speakers question the reliability of tests and the potential for false positives.
• The idea that many people could be asymptomatic carriers of COVID-19 is discussed, with the suggestion that herd immunity may be more widespread than reported.

"But my closest friend is a PhD biochemist, and he was explaining to me that coronavirus is a family of viruses, and it's not just Covid-19."

The speaker relays information from a knowledgeable source, raising questions about the specificity of COVID-19 tests and suggesting that the data may be unreliable.

• Learning to market is considered a crucial skill for entrepreneurs.
• The speaker believes that every entrepreneur should understand marketing to avoid dependency on others and to have control over their business.

"I have a fundamental belief that you cannot be broke and have time."

This quote emphasizes the importance of using one's time effectively, especially for entrepreneurs who need to market their businesses and cannot afford to be passive about their circumstances.

• Alex Hormozi emphasizes the importance of investing in skills to advance one's career.
• He advises working long hours to earn enough money for skill development.
• Continuous investment in skills is recommended until it is no longer feasible to find new skills to learn.
• Alex suggests that one might consider reducing investment in skills when earning $100,000 a month take-home.
• He shares his personal approach to buying educational resources instantly, even if it meant spending his entire paycheck earlier in his career.

"But the point is, if you work for 16 hours a day, you will have enough money to buy the things that you want to level up your skill set, but your investment, in my opinion, I think you should be consistently investing in skills until you can't even find somewhere to put the money to invest in more skills."

The quote highlights the importance of hard work and continuous investment in personal skills as a strategy for career growth and financial success.

• Alex explains that services and information are the best businesses to start for beginners due to zero startup costs.
• Knowledge is the key requirement for starting these types of businesses, and it can be acquired inexpensively.
• He mentions resources like Udemy, YouTube, and Google as ways to learn skills such as marketing, selling, and running Facebook ads.

"But typically you can sell services, you can sell information, is both the cost, zero money to start, and I think that those are the best businesses to start for people who are starting out because they don't require capital to get going."

This quote suggests that services and information are ideal business ventures for those with limited capital, as they primarily require knowledge, which can be acquired at a low cost.

• Alex acknowledges the difficulty beginners face in judging the quality of educational content.
• He recommends starting somewhere and seeking advice from experienced individuals.
• Alex names a few experts in Facebook ads and traffic generation, highlighting the importance of learning from proven professionals.

"You got to start, right?"

The quote underscores the necessity of taking action and beginning the learning process, even if one cannot initially discern the quality of educational resources.

• Alex shares his experience with paying for one-on-one training to rapidly acquire skills.
• He believes in having a personal price for one-on-one services, as there will always be someone willing to pay for personalized training.
• Personalized training can accelerate learning by tailoring the content to the learner's needs.

"So one of the hacks that I've had in my life is that when I really want to acquire a skill, I pay for one on one training."

Alex describes his strategy of investing in one-on-one training as a hack for quickly acquiring new skills, emphasizing its effectiveness.

• Alex invests in his team's skills by purchasing courses and requiring them to demonstrate how the knowledge will be applied.
• He sets conditions for continued investment in their education, ensuring practical application and accountability.

"Any course that you want, I will buy it for you. Here's the contingencies. You have to go through it. You have to take notes and you have to tell me exactly how we're going to use it."

This quote reflects Alex's approach to team development, where he provides resources for skill acquisition but demands accountability and practical application in return.

• Alex recommends ".com secrets" by Russell Brunson as a good starting book for marketing.
• He stresses that there is no single skill or question that will lead to making money, as marketing is a complex set of skills.
• Alex advises beginners not to be discouraged by not making money immediately, as many steps in skill acquisition are made before earning the first dollar.

"And building the Bridge has a lot of breaks."

The metaphor of building a bridge with many bricks represents the multifaceted process of learning marketing before seeing financial results.

• Alex discusses the economic and time-saving benefits of done-for-you meals, especially for those earning over $40,000 a year.
• He calculates the time spent on grocery shopping, food preparation, and cleaning, suggesting that this time could be better spent learning skills.

"So most people don't think rationally. If you make more than $40,000 a year, it makes no economic sense for you to take the time to grocery shop, bring it in, put the things in the cabinet, prepare your food, decide what you're going to eat, chop it up, bake it, grill it, eat the food, then clean it."

Alex highlights the irrationality of spending excessive time on food-related tasks when one's income could justify the use of done-for-you meal services, freeing up time for more productive activities.

• Alex asserts that skills in sales and demand generation are sufficient to ensure one will never go hungry.
• He suggests that connecting a phone to a funnel simplifies the process of making money online.
• Alex emphasizes the value of selling over the phone, which allows for higher pricing and compensates for less effective marketing.

"Sales and demand gen, those two skills alone will feed you for the rest of your life."

The quote emphasizes the critical importance and lifelong value of having skills in sales and demand generation.