Alex Hormozi: I Built 4 Businesses In A Row To Show It's Not Luck

Last updated: Jun 18, 2023

The video is about Alex Hormozi sharing the frameworks and lessons he learned from building four successful businesses in a row, including his first big company, Gym Launch, which was a licensing business for gym owners.

This video by Alex Hormozi was published on Feb 22, 2023.
Video length: 14:02.

In this video, Alex Hormozi shares his experience of building four successful businesses in a row, with a focus on the frameworks and lessons he learned from his mistakes.

He talks about his first big company, Gym Launch, which was a licensing business for gym owners, and how he used a different approach to acquiring customers called client finance acquisition.

He also discusses the importance of having an exceptional product and identifying arbitrage opportunities, as well as the challenges he faced, such as over-hiring for support and dealing with the impact of COVID-19 on his business.

  • Alex Hormozi built four successful businesses in a row that cracked 10 million.
  • He shares the frameworks and lessons he learned from his mistakes.
  • The first big company he built was called Gym Launch, a licensing business for gym owners.
  • He used client finance acquisition to eliminate capital as a constraint in the business.
  • Prestige Labs was his second big company, which was a sister company to Gym Launch.
  • Lessons learned include the importance of exceptional products, timing, and different approaches to acquiring customers.
  • Allen.com aggregated data from every type of small business to predictably show what days and times got the most people to shop.

I Built 4 Businesses In A Row To Show It's Not Luck - YouTube

Alex Hormozi: I Built 4 Businesses In A Row To Show It

Introduction

  • Alex Hormozi built four successful businesses in a row that cracked 10 million.
  • He shares the frameworks and lessons he learned from his mistakes.
  • The first big company he built was called Gym Launch, a licensing business for gym owners.
  • He sold it for 46.2 million to American Pacific Group.
Alex Hormozi: I Built 4 Businesses In A Row To Show It

Gym Launch

  • The first 10 customers he got from Gym Launch were from scraping CrossFit's database.
  • He uploaded the list of emails to Facebook and marketed to get a webinar, but none of them bought or scheduled a call.
  • He manually looked up every email, friended them on Facebook, messaged them, and got a few of them on the phone to pay him $500 to fly to their gym and do the turnaround.
  • The licensing version of the model gave him the scale to sell something that had virtually 100 margins.
  • They would survey the community to figure out what problems the gym owners were currently suffering from and create a hypothesis around what might work.
Alex Hormozi: I Built 4 Businesses In A Row To Show It

Client Finance Acquisition

  • Alex Hormozi used a different approach to acquiring customers called client finance acquisition.
  • It means getting the customers to finance the acquisition of the next customer.
  • All you have to do is have enough money to get the first sale, and if you make more in the first sale than the cost to acquire that customer, you eliminate capital as a constraint in the business.
  • All his gyms were able to outspend everyone else because of this aggressive acquisition perspective.
  • He has used this model in every single business he has.
Alex Hormozi: I Built 4 Businesses In A Row To Show It

I Built 4 Businesses In A Row To Show It's Not Luck - YouTube

Prestige Labs

  • Prestige Labs was Alex Hormozi's second big company, which was a sister company to Gym Launch.
  • They built the whole thing of an affiliate base that they acquired through Gym Launch.
  • The first month of being fully operational, they did 1.7 million.
  • He didn't want to sell supplements for a very long time because he thought supplements were unnecessary.
  • He eventually started selling supplements and created a unique selling proposition that made them stand out from the competition.
Alex Hormozi: I Built 4 Businesses In A Row To Show It

Lessons Learned

  • The product has to be exceptional if your customers are in love with your product.
  • The little inch between good and great is yours, and the return you get on it from the word of mouth that compounds is hard to fathom.
  • Timing is crucial, and identifying arbitrage opportunities can give you a significant advantage.
  • Having a different approach to acquiring customers, like client finance acquisition, can eliminate capital as a constraint in the business.
  • Building an affiliate base can be a powerful way to acquire customers and grow your business.
Alex Hormozi: I Built 4 Businesses In A Row To Show It

Gym Launch

  • Started as a licensing business for gym owners.
  • Recruited gym owners to sell supplements to cover the cost of acquiring customers.
  • Created a brand only gym owners could sell.
  • Priced supplements higher on the main site and gave gym owners a good selling system.
  • Managed centrally and shipped directly to the consumer.
Alex Hormozi: I Built 4 Businesses In A Row To Show It

Prestige Labs

  • Cost $4 million to start, with $1 million going to tech.
  • Created an entire point of sale for supplements specifically made for gyms.
  • Used distribution base to sell to first customers.
  • Realized they needed to get agencies on board rather than small businesses.
  • Sold 75% of the business to a strategic buyer for $12 million in the trailing 12 months before the sale.
Alex Hormozi: I Built 4 Businesses In A Row To Show It

Allen.com

  • Aggregated data from every type of small business to predictably show what days and times got the most people to shop.
  • Started to solve the problem for gym owners, but expanded to agencies.
  • Did two webinars with people who had big agency audiences to get a thousand customers in one pitch.
  • Sold 75% of the business to a strategic buyer for an all-stock deal.
  • Lesson one: need an in-house CTO if getting into software.
Alex Hormozi: I Built 4 Businesses In A Row To Show It

Lessons Learned

  • Need an in-house CTO if getting into software.
  • Run pricing surveys early to unlock pricing power.
  • Having aligned incentives with customers often makes more money.
  • Allocating more time to making Gym Launch better would have made it bigger.
  • People don't stick with fitness stuff for a long time, making the end consumer not sticky.
Alex Hormozi: I Built 4 Businesses In A Row To Show It

Alignment and Throughput

  • Alignment is crucial in any business, from stakeholders to small business owners.
  • It's important to align everyone's goals, from showing up to shopping, to getting paid based on shops.
  • Throughput on appointments is important, and the amount of days per week, hours, and increments of time matter a lot.
  • Business owners who give the most availability and flexibility to their customers have the most throughput and make the most money.
  • Small business owners often make small business owner decisions, which is why they stay small.
Alex Hormozi: I Built 4 Businesses In A Row To Show It

Building a Business Portfolio

  • Acquisition.com is the fourth business portfolio company that does over 200 million dollars a year.
  • The first 10 investments were people the CEO knew, but now most of the businesses come from people who read the book, watch videos, or listen to podcasts.
  • The average business in the portfolio is doing 17 million dollars.
  • Acquisition.com was built on a personal brand and inbound with content, which is a slower business overall.
  • The CEO co-owns all the businesses to learn as much as possible and cross-pollinate ideas that work well in one industry and apply them to another.
  • The company hires from the top down, which can only be done if the business is well-capitalized.

Watch the video on YouTube:
I Built 4 Businesses In A Row To Show It's Not Luck - YouTube

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