Life, Death, and the Game of Business (on Diary Of A CEO) Pt.2 Apr. ‘23 Ep 549

In this insightful conversation, Alex Hormozi and the host delve into the dichotomy between living as an artist or an entrepreneur, the pressures of societal expectations, and the pursuit of happiness. Alex shares his journey from despising his job to embracing entrepreneurship, emphasizing the power of leverage and the importance of playing "the game of business." He discusses how happiness for him is autonomy and engaging in work he enjoys with people he likes. Alex also reflects on cherished failures, particularly the trying times with his wife Layla, which solidified their partnership before marriage. The discussion also touches on the concept of "talent stacking" and the strategic application of one's skill set in markets that offer the highest returns, illustrating how Alex's approach to business has evolved through leveraging labor, media, and capital.

• The speaker discusses the choice between being an artist or an entrepreneur.
• Success in either path depends on natural inclination and the likelihood of success.
• There is an emphasis on not letting one path become a constraint.

"And so I think it's like, do I want to be the artist, or do I want to be the entrepreneur? Both of them are fine. It depends which one you feel like you're more naturally inclined to or have a higher likelihood of success doing."

This quote summarizes the dilemma between choosing a creative path as an artist or a business-focused path as an entrepreneur. The speaker suggests that one should follow the path that aligns with their natural abilities and potential for success.

• Mo Gawdat's insight on happiness is referenced, stating that unmet life expectations lead to unhappiness.
• The influence of social media and successful individuals sets high expectations for others.
• There is a contrast between subjective happiness in simple jobs and the dissatisfaction that comes from comparing oneself to more successful figures.

"A previous guest on this podcast called Mo Gawdat said, we're unhappy when our expectations of how we think life is supposed to be going are unmet."

This quote explains the concept that happiness is often disrupted by the gap between our expectations and reality, a point that is central to understanding why people may feel dissatisfied with their lives despite their circumstances.

• The concept of passion and purpose is relatively new, about 60 years old.
• Advertising and media have shifted expectations of what a fulfilling life should look like.
• Historical perspectives show that happiness can be found in simpler lives without the need for extraordinary achievements.

"This whole idea of passion and purpose is probably, like, 60 years old."

The quote points out that the societal emphasis on finding one's passion and purpose is a modern construct, influenced by media and advertising. This has changed how people view their own lives and what they consider necessary for happiness.

• Subjective well-being returns to a baseline regardless of life changes or conditions.
• Modern religions and philosophies suggest that true contentment comes from within, not external circumstances.
• The speaker notes that people often mistakenly believe changing circumstances will lead to happiness.

"And so the baseline is independent of conditions."

This quote emphasizes the idea that people's overall happiness tends to return to a certain baseline level regardless of positive or negative changes in their life circumstances, a concept known as the hedonic treadmill.

• The never-ending pursuit of goals and the feeling that one needs "three times more" to be happy.
• This constant need for more is evident across all income levels.
• The speaker acknowledges this pattern in their own life but relates it to the desire to become the person they want to be.

"I'm referencing a study there where they asked people how much money they would need to be happy. And all the way up the income wealth spectrum, people said three times more than they have now."

This quote discusses a study that illustrates the human tendency to always want more, regardless of how much one already has. It shows that happiness is often perceived to be just out of reach, perpetuating a cycle of dissatisfaction.

• The speaker enjoys the "game of business" and the process of playing rather than just winning.
• They discuss the concept of finite and infinite games and how applying a finite mindset to infinite aspects of life (like health, marriage, business) can lead to dissatisfaction.
• The speaker is motivated by the game itself and the ability to play, with goals being secondary.

"And so for that, sure, we set goals for the company, but I'm 1000% super motivated. And at the same time, if we never hit it, I'm just going to be happy that I was able to play."

This quote captures the speaker's philosophy that the joy of the game of business lies in the act of playing and participating, not solely in achieving specific goals. It reflects a mindset focused on process over outcome.

• The speaker frequently contemplates death and finds it liberating, as it gives perspective on life's pressures.
• They mention a social media post about the queen's death to illustrate the fleeting nature of legacy and memory.
• The speaker is comfortable with their mortality and the idea that they will eventually be forgotten.

"And so I think about death all the time. And that's what I think for me, has given me a lot of freedom to take big shots, because at the end of the day, I think that it's not going to matter. No one's going to remember."

This quote reveals the speaker's perspective on death as a motivator to take risks and live freely, with the understanding that in the grand scheme of time, individual achievements and legacies are ephemeral.

• The speaker challenges the idea of "should" and societal expectations around work ethic.
• They express that their own work ethic is driven by enjoyment and fulfillment, rather than external pressures or norms.
• The speaker suggests that the optimal amount of work is subjective and should be based on individual happiness and fulfillment.

"I work all the time. That's all I do. And I work until I can't work. Meaning, like, my output per unit of time starts to drop precipitously, and then I know that I just need to take a break of some sort."

This quote underscores the speaker's personal approach to work, which is driven by passion and enjoyment rather than societal expectations or norms about work-life balance. It also touches on self-awareness and recognizing the need for rest.

• Speaker A got into an argument with their stepmother about life balance.
• The stepmother criticized Speaker A's life as unbalanced, implying that they do more or different things.
• Speaker A questioned the stepmother's assessment, defending various aspects of their life.
• The argument highlighted judgments people cast on others and themselves based on differences in lifestyle choices.
• Speaker A emphasized the importance of not caring about others' opinions and shared personal examples of living by their own standards.

"I got into an argument with my stepmother... She said, I would never want your life... It's so unbalanced... I think that person was casting judgment on themselves... I will try and beat out of me until I die is caring what other people think."

This quote explains the context of the argument, where Speaker A's stepmother views Speaker A's life as unbalanced. Speaker A interprets this as a reflection of the stepmother's internal judgments and emphasizes their commitment to disregard others' opinions.

• Speaker A discusses the importance of setting clear expectations and aligning values in their company.
• Layla, Speaker A's partner, prioritizes a 'human first' approach to business.
• The company culture focuses on high performance and transparency during hiring to ensure a good fit.
• Speaker A acknowledges the challenge of leading people who may not share the same drive or background.

"We try to maintain a culture of high performance... Layla is very big on human first... You can tell that's why we are yin and yang for this kind of thing."

This quote illustrates the company's emphasis on high performance balanced with a human-centric approach, highlighting the complementary dynamic between Speaker A and Layla.

• Speaker A explains the concept of making irresistible offers to customers.
• They learned the importance of making an offer that people would feel stupid saying no to.
• Speaker A defines value in terms of four core variables: dream outcome, perceived likelihood of achievement, time delay, and effort/sacrifice.
• The goal is to maximize perceived value by ensuring the offer is highly desirable, likely to succeed, immediate, and requires minimal effort.

"Make people an offer they'd feel stupid saying no to... We boiled down value into four variables... Dream outcome, perceived likelihood of achievement, time delay, and effort/sacrifice."

This quote captures the essence of what an irresistible offer entails and the factors that contribute to its perceived value.

• Speaker A discusses how they apply the concept of value to improve business offers and increase profitability.
• They provide examples of how adjusting the value variables can significantly change the appeal and price of a service.
• Speaker A shares a success story of repositioning a PR company to focus on a niche market, leading to increased prices and better customer retention.
• The approach to creating offers is seen as the most impactful aspect of business, affecting all areas from pricing to marketing.

"We try and think through each of these elements of value... We innovate our way to just keep trying to chisel towards that perfect ideal outcome... It affects all aspects of the business."

This quote emphasizes the strategic thinking behind creating valuable offers and the wide-reaching impact such an approach has on the entire business.

• Speaker A believes that the offer is the single most important aspect of a business.
• Improving the offer can lead to significant increases in both revenue and profit.
• Speaker A's personal experience with gym launch exemplifies the power of a well-crafted offer.
• They stress that if people are not accepting an offer, the solution is to improve it further.

"I just have to make things that are so good that people will feel stupid saying no... It's the highest leverage thing I think you can do in the business."

The quote conveys Speaker A's philosophy that a compelling offer is critical to business success and should be irresistible to potential customers.

• Discusses the importance of strategic partnerships and community building in business.
• Emphasizes the value of giving to the community as a means to build relationships and potential future business partnerships.
• Advocates for the concept of low investment and high perceived reward to attract people to sign up for competitions or engage with content.
• Credibility is highlighted as a crucial factor in competitions and in content marketing.
• The idea of making content or offers feel more accessible to increase engagement is discussed.

"hours into writing that book and it's my biggest give to our community. So it's my very shameless way of trying to get you to like me more and ultimately make more dollars so that later on in your business career I can potentially partner with you."

This quote illustrates the speaker's intention to provide value to the community as a long-term investment in building relationships and future business opportunities.

"So just click here and you're entered high perception that you have a chance of winning."

The speaker is explaining how a simple action paired with a high perceived chance of reward can be a powerful motivator for people to participate in competitions or engage with a product or service.

"Five minute six pack abs is a fantastic equation. Little investment, high potential reward, apparently."

This quote exemplifies the use of appealing offers to attract an audience, suggesting that offers with minimal effort and high reward are enticing to consumers.

• The entrepreneurial journey is likened to climbing a staircase, with many entrepreneurs feeling like they are always at the beginning.
• Discusses the notion that business growth is a continuous process and entrepreneurs often feel they are just getting started, regardless of their age or experience.
• The speaker reflects on a decade of entrepreneurial experience and the feeling of having just begun.

"I feel like every entrepreneur feels like they're just getting started."

The speaker is conveying the common sentiment among entrepreneurs that no matter how far they've come, they always see new opportunities ahead.

"I'm about to cross it. Decade of being just at the decade point for me from the first business I started to now."

This quote highlights the speaker's personal milestone of a decade in entrepreneurship, indicating a significant amount of experience while still feeling at the beginning of their journey.

• Offers practical advice for someone aspiring to be a millionaire, suggesting different paths to wealth.
• Discusses the potential within one's current company to achieve wealth, especially if the company is growing significantly.
• Explores the idea of starting a new business, leveraging one's core skills, and possibly partnering with others who have complementary skills.
• The speaker differentiates between being an artist (craftsperson) and an entrepreneur (businessperson) and suggests choosing based on natural inclination and likelihood of success.
• Emphasizes the importance of identifying and addressing the constraints of a system to promote business growth.

"There's a lot of ways to do it. It just depends on which way you want to go."

The speaker is acknowledging the multiple paths to becoming a millionaire and suggests choosing the path that aligns best with the individual's desires and skills.

"I'm going to die and it's not going to matter anyways. And if everybody else can make some too great."

This quote reflects the speaker's perspective on wealth and success, emphasizing the impermanence of life and the desire to see others succeed as well.

"Do I want to be the artist or do I want to be the entrepreneur?"

The speaker is posing a question that highlights the choice between focusing on the craft itself or on the business aspects of scaling and expanding the craft.

• Discusses the concept of "talent stacking," where combining multiple skills can exponentially increase one's value.
• Describes a progression of skills from basic to advanced and how each new skill can enhance the value of the previous ones.
• Advocates for continuous education and skill development as a means to increase one's value and opportunities in business.
• Emphasizes the importance of not discarding previous knowledge but building upon it.

"Many skills, like one plus one equals five when you put them together."

This quote introduces the concept of talent stacking, suggesting that the combination of different skills can lead to a greater cumulative effect than the sum of individual skills.

"And that's why I'm just like, learn the skill, find the next skill."

The speaker is advocating for a continuous learning approach, emphasizing the ongoing process of acquiring new skills to enhance one's business and personal value.

• Highlights the importance of not only possessing skills but also applying them in markets where they are most valued.
• Shares a personal anecdote about the significant impact of applying a skill set in the right market, leading to a substantial increase in net worth.
• Discusses the strategy of seeking industries where one's skills are in high demand and can command a greater return.
• The concept of "fishing in the best ponds" is used to illustrate the importance of choosing the right market for one's skills.

"You have to not just have the skill, but know what market to apply it to."

This quote emphasizes the importance of market selection in maximizing the value and impact of one's skills.

"Solve rich people problems. They pay better."

The speaker is suggesting that targeting problems faced by wealthier individuals or businesses can lead to better financial compensation for the solutions provided.

"Find the people who value what you have the most."

This quote underscores the strategy of seeking out those who will most appreciate and reward the skills and services one offers.

• The story of the father who gave his son an old car illustrates the importance of recognizing where value lies.
• Different people or markets can assign vastly different values to the same item.
• The car's value ranged from $500 as scrap metal to $100,000 as a rare antique.
• The lesson emphasizes the significance of seeking out those who value what you have to offer.
• This concept is applicable to business: sell to those who see the most value in your product or service.

"And the lesson I want you to know is that it's not necessarily who you are, but the people that value you the most."

This quote encapsulates the core message of the story, that the worth of something is not inherent but is determined by those who value it.

• Belief in what's possible is crucial when scaling a business.
• Selling higher-value items or services is essentially the same process as selling lower-value ones.
• The process of scaling involves progressively increasing the price point and value of what you're selling.
• The speaker encourages listeners to believe that selling high-value items is achievable and sometimes easier.

"It's the exact same thing. And sometimes it's easier."

The speaker asserts that selling high-value items is not fundamentally different from selling lower-value ones and can sometimes be easier, challenging the common belief that higher transactions are more complex.

• There is a skill in understanding where to sell, which is informed by information.
• Being aware of different markets and opportunities is crucial for business success.
• The metaphor of lifting a curtain reveals new opportunities for growth and profit.
• Conversations like the one in the podcast can reveal these hidden opportunities to listeners.

"It's information. It's even knowing that there was another lake over there, in part."

This quote highlights the importance of information in identifying new business opportunities and the value of sharing knowledge through conversations.

• The speaker discusses their personal income growth through various stages of leverage.
• Leverage is defined as the ratio of input to output, with high leverage yielding more output for less input.
• Types of leverage include labor, media, capital, and technology.
• The speaker's income increased as they moved from labor to licensing media, then to capital, and anticipates technology will be the next step.
• Understanding and maximizing leverage is essential for wealth creation.
• The speaker references Naval Ravikant's discussion of the four types of leverage.

"And so understanding how to get more for what you put in is the game overall."

This quote underscores the concept of leverage as the key to increasing wealth—getting more output for the input.

• The speaker values autonomy and the ability to pursue their interests as the core of happiness.
• They define happiness as doing what you like with people you like as often as possible.
• The speaker feels content with their level of freedom and engagement in their activities.

"For me, it's always been about autonomy."

Autonomy is highlighted as the central element of the speaker's happiness, emphasizing the importance of freedom and choice in personal fulfillment.

• The speaker cherishes past failures and challenges for the growth and insights they provided.
• Difficult experiences in a job and a relationship tested the speaker's resilience and revealed the strength of their partner.
• These experiences have shaped the speaker's current success and contentment.

"I cherish those times because a lot of people live worst case scenario years into their marriage, years into their relationship, and then they kind of, like, see what the other person is made of."

The speaker expresses gratitude for early challenges in their relationship, which helped them understand and appreciate their partner's strength and commitment.

• The speaker feels most emotionally connected to themselves when working, specifically when writing.
• Writing provides a sense of flow and matches the speaker's ability, offering a consistent challenge.
• The speaker has a history and passion for writing, which contributes to their sense of self and happiness.

"When I'm in the throes of writing."

This quote reveals that the act of writing is when the speaker feels most in tune with their emotions and sense of self, highlighting the personal significance of creative expression.