Alex Hormozi: How To Level Up In Business - Understanding Tradeoffs

Last updated: Jun 14, 2023

The video is about understanding tradeoffs in business decision-making, using a conversation with an 18-year-old entrepreneur who is considering whether to continue with college or focus on starting his own business as an example.

This video by Alex Hormozi was published on Dec 24, 2020.
Video length: 15:27.

In this video, Alex Hormozi shares a story about a conversation he had with an 18-year-old entrepreneur who is struggling with the decision to continue college or pursue his own business.

Hormozi walks the young man through the decision-making process, asking him to consider his goals and the tradeoffs of each option. Ultimately, they conclude that investing in his own business is the best path forward for achieving his long-term goals.

The video emphasizes the importance of understanding tradeoffs and making decisions for the right reasons.

  • The video is about understanding tradeoffs in business decision-making.
  • A conversation with an 18-year-old entrepreneur who is considering whether to continue with college or focus on starting his own business is used as an example.
  • The decision-making process is the same whether you're making a multi-million dollar decision or a relationship decision.
  • Investing in college means investing time and money into something that may not get you closer to your goal.
  • Investing in starting your own business means investing time and money into something that may not work out.
  • Being willing to sacrifice anything and everything is necessary for success in business.
  • Failure is a part of entrepreneurship and it's important to be able to deal with it.
  • When faced with a decision, it's important to choose the path that will get you closer to your goals.
  • Identifying and facing your fears, making sacrifices for success, and choosing the right path are all important aspects of leveling up in business.

How To Level Up In Business - Understanding Tradeoffs - YouTube

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Introduction

  • The video is about understanding tradeoffs in business decision-making.
  • A conversation with an 18-year-old entrepreneur who is considering whether to continue with college or focus on starting his own business is used as an example.
  • The decision-making process is the same whether you're making a multi-million dollar decision or a relationship decision.
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The Conversation

  • The 18-year-old entrepreneur is a freshman in college who got into trouble and may jeopardize his future in college.
  • A walk was taken to discuss his plan and decision-making process.
  • The outcome he wants from giving college another shot is unclear.
  • He doesn't think he will find college courses more interesting than high school courses.
  • He wants to go to college to experience having fun.
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The Real Reason for Going to College

  • The 18-year-old entrepreneur is starting a new entrepreneur thing with real estate but hasn't cracked it yet.
  • He may want to go to college because it's a socially acceptable shield for not being successful in entrepreneurship.
  • He wants to have his own business and thinks business school looks like doing business in the real world.
  • Investing $200,000 in four years into learning and trying to start his own business will get him closer to his goal than investing in college.
  • He has a clear logical outcome in terms of which decision path to make.
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How To Level Up In Business - Understanding Tradeoffs - YouTube

The Tradeoffs

  • There are tradeoffs in every decision you make.
  • Investing in college means investing time and money into something that may not get you closer to your goal.
  • Investing in starting your own business means investing time and money into something that may not work out.
  • There is no right or wrong decision, only the decision that aligns with your goals and values.
  • It's important to understand the tradeoffs and make a decision for the right reasons.
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Understanding Tradeoffs in Business Decision-Making

  • When making big decisions in business, it's important to understand the emotional drivers behind them.
  • Tradeoffs are necessary in order to commit to a certain path.
  • Frame decisions in terms of what you're willing to sacrifice.
  • Approach your goals with a mindset of out-sacrificing anyone.
  • The stories we tell ourselves about our decisions create our identity.
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The Importance of Sacrifice in Business

  • Being willing to sacrifice anything and everything is necessary for success in business.
  • Competitors may be spending their time on leisure activities, but successful entrepreneurs are willing to sacrifice those things for their goals.
  • It's important to be willing to pay the price for success.
  • Make decisions for the right reasons and understand the story you're telling yourself about those decisions.
  • Our decisions and the stories we tell ourselves about them create our identity.
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Dealing with Failure in Entrepreneurship

  • Failure is a part of entrepreneurship and it's important to be able to deal with it.
  • It's important to understand the story you're telling yourself about failure.
  • Use failure as a catalyst for growth and learning.
  • Understand that failure does not make you a failure.
  • The story you tell about your failures is just as important as the story you tell about your successes.
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Choosing the Right Path in Business

  • When faced with a decision, it's important to choose the path that will get you closer to your goals.
  • Understand the emotional drivers behind your decision-making.
  • Don't be afraid of failure and understand that it's a part of the journey.
  • The story you tell about your decisions creates your identity.
  • Choose the path that aligns with your goals and the story you want to tell about yourself.
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Identifying and Facing Fears

  • Many people know what they need to do but have an emotional trigger that stops them from doing it.
  • Digging deep and identifying the fear that is holding you back can help you face it and remove its power over you.
  • It's important to ask yourself if you're willing to let your fear of failure stop you from achieving your goals.
  • Listing out the trade-offs and sacrifices you may have to make can help you make a decision.
  • Choosing a "maybe" over a "never" can help you move forward.
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Making Sacrifices for Success

  • Successful people often make sacrifices and approach things in an unbalanced way.
  • What you do for a season of life doesn't have to be forever, but sometimes it does have to be for that season.
  • Many successful people go through a three to five year period of extreme sacrifice and effort before achieving their goals.
  • Unreasonable goals often require unreasonable amounts of effort and sacrifice.
  • People are often not willing to make the necessary sacrifices to achieve their goals.
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Choosing the Right Path

  • When making a decision, it's important to consider which path will get you to where you want to go.
  • Identifying the sacrifice required and deciding if you're willing to make it can help simplify the decision-making process.
  • Unreasonable goals often require unreasonable sacrifices, but it's up to you to decide if you're willing to make them.
  • Choosing the reasonable bet that will get you further ahead is often the best choice.
  • Knowing why you're making a decision can help ensure that decisions are not made for you by life.
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Conclusion

  • Identifying and facing your fears, making sacrifices for success, and choosing the right path are all important aspects of leveling up in business.
  • Success often requires extreme effort and sacrifice, but it's up to you to decide if you're willing to make the necessary sacrifices to achieve your goals.
  • Choosing the reasonable bet that will get you further ahead is often the best choice.
  • Knowing why you're making a decision can help ensure that decisions are not made for you by life.

Watch the video on YouTube:
How To Level Up In Business - Understanding Tradeoffs - YouTube

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