10 Lessons that have taken our companies to over $75,000/hr…

Summary

• Focus on the few things that truly matter for outsized returns and ruthlessly eliminate the rest to maintain efficiency and allow for mistakes.
• The size of your ownership percentage is less important than the actual value of that percentage; give pieces of the pie away to attract and compensate the right people to grow your vision.
• Big achievements take time, and it's essential to maintain long-term focus rather than seeking quick wins; this perspective allows for more substantial and sustainable growth.
• Building a strong brand relies on consistently making and exceeding promises, which in turn provides a competitive advantage and enables premium pricing power.
• Simplicity is key to scaling a business; complex business models become even more complicated at scale, potentially hindering growth.
• Emotional reactivity can undermine business success; remain rational and long-term minded in decision-making.
• Attract top talent by offering ambitious and substantial opportunities that align with their goals and vision.
• Time is a critical component of compounding business results; it's vital to control impulsive behavior and understand that small, consistent improvements lead to significant long-term success.
• Respect the risks associated with business decisions; avoid taking unnecessary risks that could jeopardize the entire company.
• Listen to customer data and supply what they want, not what you want to build, to ensure business relevance and success.
• Summarized recipe for business success: Make and keep promises, leverage brand for premium pricing, reinvest profits for growth, distribute equity for larger gains, and give time the respect it deserves in fostering growth.

Video

How To Take Action

I would suggest focusing on the key things that make the biggest impact. Let's not get distracted by all the new trends and ideas out there. Find the handful of things that really drive your business forward and give them your all.

A good way of growing your business is to share it with others. This means not being afraid to give pieces of your business to bring in talented people who can help it grow. Remember, owning a smaller piece of a big success can be more valuable than having all of a small venture.

Keep in mind that success takes time. Focus on long-term goals instead of the quick wins. Each small improvement adds up over the years. Be patient. This long-term outlook will lead to bigger achievements in the end.

Make sure you're always delivering on your promises to your customers. This helps build a strong brand, and that brand will allow you to charge more for your products or services.

Keep your business model simple. When things are less complicated, it's easier to grow. And remember, as your business gets bigger, it will naturally get more complex, so start with simplicity.

Don't let your emotions make your business decisions. Think long-term and stay rational. Big decisions should be made with a cool head.

Attract people who are going places by creating opportunities within your business that are exciting and have potential for meaningful growth. If your vision is big and believes in, you will draw top talent.

Time is super important for your business to grow. Making small, consistent steps will lead to big progress over time. You don't need to rush; slow and steady growth can bring fantastic results.

Don't risk your business on something that might not work. Avoid big gambles that could put your entire business in danger.

Listen to what your customers want, not just what you want to build. Their feedback is valuable and gives you insights into improving your services or products to match their needs.

Lastly, reinvest your profits back into the business to help it grow. And if you can, bring in people who share your business mission by giving them a stake in the company. This makes a stronger team and a more valuable business. Remember, give things time to mature and develop. Your patience and persistence will pay off.

Quotes by Alex Hormozi

"Most things don't matter and a few things matter a lot"

– Alex Hormozi

"The size of your slice of the pie matters more than the shape"

– Alex Hormozi

"Big things take time"

– Alex Hormozi

"Simple scales, fancy fails"

– Alex Hormozi

"Sell what the customer wants, not what you want to build"

– Alex Hormozi

Full Transcript

per working hour 40 hours per week and building this has taken a long time and so what i share with you in this video is 10 lessons that i have learned in observing all of those companies over the last you know 10 years let's start with the first one and if you don't know i am my name's auction mosey i own acquisition.com it's portfolio of companies does all that stuff all right so the first one is uh something that actually learned from the private equity managing partner who acquired two of the companies uh last year number one is that most things don't matter and a few things matter a lot and you can achieve outsized returns by only focusing on those few and so once you figure out those few things you can ruthlessly eliminate the rest and the thing is is that this is very hard because a lot of us get really excited we go to workshops we go to seminars we see ads on facebook and we think oh you know i should be doing this new sexy thing and the reality is that there are very few things that can give you 10x 50x results and so if you just focus on those few things you can get a lot of other stuff wrong and i think all of us could use more second chances and more padding right and so if you can just focus on those big things you can make those mistakes and still succeed and so when the private equity partner who kind of taught me this lesson is when i was observing some of the things that he's doing with jim launch prestige labs during the last quarterly uh meeting you know our team was going through all the things that uh that they were doing to kind of you know improve the company and grow and i could tell that he was only interested in only two conversations that occurred number one is that you know we were building in some technology into the business because that would yield a much bigger multiple for the business in the future the second was accretive which means basically value additive m a so looking at companies that are similar in the space that they could roll in to the overall conglomerate because in his mind he knew that the only way to you know sell that you know those two particular companies for over you know 250 million or more which is the the goal would probably come from those two main things and the rest of it for the most part he just considered blocking and tackling which was just yeah of course you know we'll grow we'll do these things but the big nuts the big levers uh for getting that growth was going to come from very few things and that is where he allocated all of his attention and to me that was a very important lesson to witness that was number one number two is that the size of your slice of the pie matters more than the shape all right so a lot of people's egos mine included right 100 of the pie which is a perfect circle right we want 100 of the pie but our bank accounts only care about how much that slice of pie weighs right if you are one percent owner on facebook you'll be significantly wealthier than owning 100 of probably the small business that you have right and so the thing is is that in order to do that it means you have to give a place to the pie because it takes more people to build big things right and so getting other people tied and compensated for the achievement of your vision is one of the key things that is required and i noticed that because as soon as we've uh done profit sharing plans and given you know bonus pools and things like that to tie leaders into the success and the achievement of the overall vision we got significantly outsized returns in excess of what we had given up and so it's just the the weight of the slice that we have or that we keep is now worth more than if we had had 100 and not had that incremental growth through enlisting the spirit and willpower and drive of other people right and one of the interesting things that i've witnessed is that if you look at the richest people in the world the vast majority of them do not own 100 of their company i mean the vast majority don't even own the majority of their company look at basis only it's 10 of amazon at this point elon owns 20 and 17 percent of spacex and tesla right and so there's you know if we take lessons from these people it's that the more people you make wealthy the more wealthy you will become right and it's true from a business to consumer standpoint if you sell kind of b2b but also just from the overall infrastructure of the of the marketplace like the more people you have who are rooting for you because they are vested in your success the more you will ultimately make and this is difficult for our egos and this took me way way too long to realize number three is that big things take time all right um i knew that when i was you know younger in the entrepreneurial game i was very obsessed with fast wins fast wins fast ones what can we do this week what can we do this month rather than thinking 10 years out 20 years out and the thing is is that when i and i learned this lesson from andrew chung who owns panda express and he lives in the building above me he actually owns this entire building uh which he bought for i think like 150 million and he owns the building next to us which he bought for 5.6 billion big dude and he owns 2 600 locations of panda express and he owns them all 100 he has no franchisees no licensors and when asked on an interview what the keys to success were there were two themes that that came out one he said your customer must absolutely love your product and number two is that big things take time right it took him 45 years and he still continues to grow this day and the majority of the growth has happened in the last you know five years or so this year he opened up 600 locations of those two of those 2 600. so a huge chunk happens near the end and that depth of expertise takes time to build because remember we're competing against other people who've also been doing this for a long period of time and the one thing that we can take to our advantage is if we've just been doing this longer right and we get these compounding results that happen over a long period of time and so i think rather than making this a patient's platitude thinking of this as what could i do for a very very long period of time because the only things that will be very big will take a long time and i must be motivated to not change my course or see some shiny object that's going to take me away from my overarching vision or goal and so i think when i started thinking this way the companies that i had continued to grow better with higher quality people and made higher quality decisions because it wasn't about the short win it was just is this gonna matter in 10 years and what are the few things that will matter in that long period of time and then let's ruthlessly limit everything else and just focus on those things number four brand matters a lot all right and so this is something that took me again a very long time to understand and the way that you build brand is that you make promises and you keep promises not only to the level that you made the promise but in excess of that so you make a promise and then you deliver above that promise brand is simply the reputation that you have in the marketplace is what people say behind your back right and what most people don't have is the invisible hand behind the scenes that's pushing higher and higher return on advertising because more and more people have heard of you from a friend before seeing your ads or your reach outs or whatever it is that you use to get customers right and so what happens is that most people do the opposite of that they make big promises they under fulfill and then over time their cost of acquisition raises beyond the increase in cost per impression or cost of time on their labor because they have an invisible hand that's suppressing their growth which is negative word of mouth which is much stronger and much more viral than positive word of mouth and so people don't understand they think they blame the platforms they blame you know pixel changes and things like that when the reality is that they have negative word of mouth that's working against them and they just don't know how big of a deal it is right and so the beauty of brand if you build it the right way is that it gives you this is the tactical behind brand is that branding gives you premium pricing power all right if you look at a cup of coffee that's plain a cup of coffee at starbucks they can charge you know four or five times the price if you look at a white t-shirt that's plain and you look a white t-shirt that has a nike logo on it they can charge 10 times more you put a gucci logo on it you can charge 100 times more right and so what the brand does is give you pricing power and that pricing power translates directly to bottom line profits right and so when you have that branding power you can have outsized profits compared to the marketplace and give yourself a competitive moat that over time if things if cost of goods increase or supply chain gets broken down the people who are trading in commodities and do not have a brand behind them will go out of business whereas you will have the padding of your profit margin to continue to weather the storm and endure for the long haul number five simple scales fancy fails all right when i look at the companies that we have that are the biggest in the portfolio they have the simplest business models because scale creates complexity all on its own you don't need to add complexity we don't need to help complexity exist it already exists at scale and so we have to make the fundamental units as simple as humanly possible we have to make our offer suite as simple as humanly possible we have to make the customer journey as simple as humanly possible and who we serve as simple as humanly possible so we can streamline our messaging streamline the customer experience streamline the products we streamline the pricing so that the customers understand what we're doing the sales team understands what we're doing the customer service team and success team understands what we're doing and so all we're doing is adding more to that machine rather than adding uh complexity and adding new doodads and i love this quote because i think it's a really good one which is do not risk the empire for a pot of gold which i heard from my good friend uh charon cervaza who sold his company for a zillion dollars all right um and i just really really like that so simple scans fancy fails and a lot of times we need to ignore the shiny objects that are sent here to test how good we are as entrepreneurs and how dedicated we are to keeping things simple because if you cannot keep it simple a lot of times it means you do not understand it which means you may not even understand your own business number six emotions are the enemy when i look at the portfolio founders who are the most successful they are the least emotionally reactive they are the most rational in their decision making they are the most long-term minded and so one of the one of the the truisms that i've adopted is nothing is ever as good or as bad as we expect except for the things that we don't expect all right and so i'll unpack that so from a tactical perspective when we make these projections we think there's this new thing that we want to add a lot of times it's not going to be as good as we think it is right it's usually going to be less than that and to the same degree the equal opposite side of the coin is if there's some threat that comes in most times it's not as bad as we think it is or it's going to be so we catastrophize uh negatively worse than it really is and we and we project that something's gonna be much better than it is and most times it's in the middle it's less than our imagination could anticipate except for the things that we never expected which is why the al size returns often come from things that we didn't expect at all right and so most times we need to be much more conservative in our estimates on either direction so that we do not become emotionally reactive and swayed by the greed or excitement of the upside or the depression and fear of the downside and i can tell you the amount of times that i thought i was going to lose the different companies that i've owned over time is a lot and the amount of times that we have lost them is zero up to this point you know in the last 10 years and so a lot of times we think things are much worse than they are and we make bad decisions because we think we're up against a wall we think that things are going to die and so that's not true that's your mind fooling you and i think one of the disciplines from the character traits that has to be honed over time is a decrease in emotional reactivity number seven level 10 talent is only attracted to level 10 opportunities i learned this from steven schwartzman who wrote what it takes he's the founder of blackstone now he's worth i think 30 billion and his and blackstone i think manages almost 700 billion dollars so a lot of money and he said this very well so i'm not going to try and pair it as as though it's my own he says you need level 10 talent to build anything big right and so we have to think long and hard about how big this can be so that others people's dreams can fit inside of it and so like if you want to build a dry cleaning a local dry cleaning business there's nothing wrong with that it's just that level 10 talent is not going to probably be attracted to that opportunity and so we have to think long and hard now if you think my true goal you're not just saying this but it has to be true to you is that i want to build a different way for people to clean their clothes in a convenient way because that's something that you are driven to do and you think you can do it for a very long period of time and you don't think you'll get distracted by other things that are shiny objects etc you will be able to build it to a size where other people start to believe you and then you will be able to enlist level 10 talent and i also learned this one from sharon because i like this quote a lot he said your best talent isn't even on your team yet the best talent exists in the future and so we have to make room for those people which goes back to the slice of pie and things that i was talking about earlier all right number eight in terms of lessons that i've learned in building our portfolio compounding in business creates breathtaking results when you add the one ingredient that people hate the most time everyone hates to add time because everyone is impatient and if you look at the people who i think in my opinion i look up to or the most successful they have one thing under control which is their impulses they can control their impulses because they see that adding time is the single greatest variable to achieving the outsized returns that you were looking for and so one of the things that i've noticed of the portfolio companies that we have the biggest companies our portfolio obsess over the 101 improvements versus trying to double in 90 days they can extrapolate the fact that a 10 per quarter growth rate means a 40x growth rate over a decade and they can actually think in decades because you know what right now if you're doing a million bucks a year if 10 years make you do 40 million a year would you be okay with that you don't need to swing for the fences every time if you just hit singles and you do that consistently set goals that are far more achievable will be that people will actually believe they can do and c gives you room to overachieve those things and i think that the goals that i have set for the portfolio companies and my own companies has consistently got more and more conservative now some people set goals that are completely silly right and you know they're they're useless in that they're so achievable that they're not worth anything and so that's not who i'm talking to and i would say the vast majority of entrepreneurs i talk with that is not their problem they're usually setting goals that are way too unrealistic and that goes back to the expectations of thinking that things are going to be better than they really are right and so we have to set goals that in my opinion if we were just to do these things and that were the assumption if we just did 10 or quarter how much bigger would it be at the end of the year if we did just 10 a quarter for the next two years how much bigger would we be right and obviously give ourselves rooms to overachieve those things but if we just did those things what would it look like and a lot of times it would look really really juicy but most people are unwilling to take that short term goal and say i'm just going to hit the 10 we're just gonna we're going to make sure that beyond any shadow of doubt we can hit that right because that is where the breathtaking results occur is that those one percent five percent 10 improvements that happen over the very long period of time and that is what creates the magic and compounding right a lot of people talk about compounding from an investment perspective but if you are in your own business shifting your hat a little bit more to the investor hat even though all of your net worth or probably the majority of your net worth is in your company if you can think about it like an investor you will start to getting the investor-like returns which is probably what you want rather than the erratic unreliable you know it would do or die type of mentality that happens especially in the earlier stages of a business but as you mature in the business itself and the business matures the thinking must change number nine any number no matter how big multiplied by zero is still zero all right and so risks are to be respected right the biggest companies take actions that have very little downside all right and so most times um or i'll say this you would only take a company-sized risk where you put your company on the line when not doing so risks the company more all right and so that's the big thing is i see people people who want to be portfolio companies so companies doing you know three million five million et cetera who right when we hop on the phone with them like hey i want to do this big thing and i'm like you know that's extremely risky for for the business at the size right now they're like yeah but we have to do it and i always kind of think do we though like do we really because the answer is probably no and it's usually emotions that are causing a distortion in reality for the founder and so you only take a company size risk when you really know that if you do not do if inaction right or continuing to do what you were doing um will create a failure now we've heard the case studies of kodak you know you know losing their business and you know blockbuster losing their business but there are far far far far more times where business was perfectly fine and the founder basically destroyed it because of their own irrational fears or excitement or exuberance over a new opportunity that was not core to the business and then put the business on the line and lost and so you do not take company size risks unless the company is truly on the line and you have very strong evidence to support that which is in the vast majority minority of circumstances and most times if you were solving a problem that most people suffer from because you already have product market fit because people already buying the thing people are always going to want to make more money people are always going to want to improve skills people are always going to want uh to lose weight people are always going to want to have better relationships people are always going to want there are a lot of things that those demands those desires will not disappear and the reason that we invest in businesses that are non-tech related for the most part is because we know that we can consistently i would say 80 portfolio is not tech based right so the vast majority of businesses we know that if we can do the boring work we can repeat successful actions once we find product market fit where people want this thing solved and we can solve it well most of the growth comes from not putting the company on the line but doing the things that no one wants to do which is simply improving simply getting better at fulfilling the promise and i'll give you a quick story on this dragon dictation way long ago there was a dictating software this is probably like 20 years ago that came out very early days in computing because a lot of people weren't even good at typing this so they created dragon dictation they created a 2.0 version of direct dictation that had zero new features zero all it did was be more accurate at dictation when people would speak they would get more uh accurate results on the screen and they were praised by so many people for making this move but the thing is is that most of us don't want to do that hard work of making the thing that we actually sell better improving the experience decreasing the the time to experience result decreasing the time to value improving the customer health score segmenting customers by their needs and and trying to match those better with the products we have a lot of people don't want to do that work because it feels boring feels heavy it's not sexy it's not exciting but that is where you drive the outsize value that is where you build the brand that gives you the premium pricing power that is where you build the word of mouth that ultimately creates the competitive moat that you can stand on as a company for years not days number 10 sell what the customer wants not what you want to build all right and this was a big one all right because our egos want to matter but the thing is is that we don't matter we want to be right but what matters more is what the data says and so we have to lead with data rather than ego and i mean there was a company um that we have in our portfolio that really wanted to do this uh at a new ascension a new product line that was going to be uh an upsell and a very high ticket thing um in their business and i felt strongly that it was not what the the clients wanted they're like dude but we're so good at this this we could provide so much value et cetera and i said well let's just let's just survey right and let's survey this is what i think we should we should offer which was more of what people were already buying just an increased version of the thing or this new thing right that's really exciting for you guys and so we did the survey and guess what came back 85 percent of the people who were customers just wanted more of the thing that they already had 15 percent wanted the new shiny thing and so the thing is is that these types of huge pivotal decisions in a business can completely off-road you and destroy your business by simply not taking the step to listen to your customer because a lot of times our egos don't want to listen to that we want to be right we want to do the thing that sounds exciting to us but that a lot of times isn't what the business requires and so what the business requires is a founder or ceo who's customer centric who's customer focused who's not focused on building what they think is exciting but building exactly what the customer wants even if it's boring to them and hell if it's born to you awesome means you're already probably pretty good at it right and that is where the depth of expertise gets built and compounded over time number 11. this is my the simplest way of putting business success into a series of statements all right so the recipes for success in my opinion can be boiled down to this make promises keep promises build brand use brand to increase pricing power above the market use extra profits that were supported by the brand to spur growth through hiring better people and adding new acquisition channels give slices of the pie to get a bigger slice overall and enlist more people in your vision and then give time time and that is it so if you don't know how my name is alex mosey like i said i'm managing partner at acquisition.com uh we take three million dollar companies to 30 million dollars plus and beyond that is what we do every day you can find out more at acquisition.com and uh if you dug this leave some questions in the in the comments i've been trying to answer the comments um more than i have in the past i've been trying to allocate some time am i scheduled to do that love you guys mosey nation you guys are amazing i don't deserve you i appreciate you nonetheless and if you're new to the channel welcome and i'll see you guys on the other side