Should You Make the Bet?
Summary
- Evaluate the size of the investment (the "bet"), the potential return, and the likelihood of success before making a decision.
- For instance, if your Shopify store has a 1% conversion rate and there's data showing the average rate is 3%, identify actionable steps to improve that.
- If improvements can be made by dedicating two hours a day, and these can potentially double your conversion rate, it's worth considering the investment of time.
- Always weigh the cost of an investment against its risk-adjusted return, such as dedicating resources to increase the likelihood of success.
- Be cautious with high-risk investments that could jeopardize the entire company, like betting the company on a venture with a 1 in 10 chance of a 100x return.
Video
How To Take Action
A good way of doing things is to look at what can be improved in your business, like your online store's conversion rate. First, find out how well others in your space are doing. If they are doing better, like a 3% conversion rate compared to your 1%, dig into what they're doing well that you might not be.
Next, make a list of the tactics they're using. Ask yourself, "Can I put in two hours a day to work on these improvements?" If the answer is yes, and these changes could double your sales, then it's a smart move. It's all about the time you put in and what you can get back from it.
Always think about the cost and the return. If you are spending a little time to make big changes, that's great. But stay away from big risks that could hurt your business a lot. If you're thinking of something risky, like a new venture that has only a 10% chance of a huge profit, be extra careful. Don't risk everything on it.
Here's what you can do:
- Compare your numbers to the average. Know where you stand.
- Make a list of steps to take to meet or beat the average.
- Decide how much time you can spend on these steps every day.
- Think about the what-ifs. What's the best that can happen if it works? And the worst?
- Go for the smart risks. If there's a good chance of success without risking it all, go for it!
Remember, it's about smart actions that help you grow without breaking the bank or the clock.
Quotes by Alex Hormozi
"how big is the BET how big is the return and How likely is it and then you make the call"
– Alex Hormozi
"our Shopify store is converting at 1% and here's this big report that says average Shopify stores in our space convert at 3%"
– Alex Hormozi
"if I can spend 2 hours a day doing them I think I can get at least from 1% to 2% conversion"
– Alex Hormozi
"cost is 2 hours a day of this person's time potential Roi is doubling our conversion on our store"
– Alex Hormozi
"whatever the project is just is going to have a cost and is going to have a risk adjusted return"
– Alex Hormozi
Full Transcript
how big is the BET how big is the return and How likely is it and then you make the call hey our Shopify store is converting at 1% and here's this big report that says average Shopify stores in our space convert at 3% and there's like 11 items on this list that they say that all Shopify stores should do if I can spend 2 hours a day doing them I think I can get at least from 1% to 2% conversion then you're like okay well cost is 2 hours a day of this person's time potential Roi is doubling our conversion on our store yes that makes sense whatever the project is just is going to have a cost and is going to have a risk adjusted return so it's like we have a one in 10 shot at 100x it's like well if the investment is you bet the whole company on that it' still be a tough bet to make because 9 out 10 times you're gonna lose your whole company and so it's just
