Alex Hormozi: I made $100,000,000 in 3 years...this is how I did it..

The video is about the importance of not starting a new business when your existing business has plateaued and instead focusing on growing your current business.

This video by Alex Hormozi was published on Sep 3, 2021.
Video length: 11:23.

In this video, Alex Hormozi shares a conversation he had with a business owner who wanted to start a new business in a saturated market instead of focusing on growing his existing business that was already making $550,000 a month.

Hormozi emphasizes the importance of not getting stuck in a business and instead focusing on repeating successful actions to continue growth.

He also discusses the only logical reason for a business to plateau, which is reaching the total addressable market, and shares examples of businesses that have plateaued due to market changes.

• Starting a new business in a saturated market with undefined value proposition is not a good idea.
• Businesses plateau when they reach the total addressable market or when the industry shrinks.
• Examples of plateaued businesses include those in shrinking industries or those with owners who don't know how to grow them.
• Theory of Constraints: prioritize and solve the constraint before starting a new business.
• Entrepreneurs should focus on solving the constraint before starting a new business.
• Asking better questions helps to understand the true constraint and prioritize problems.
• CEOs of publicly traded companies are rarely CEOs of two companies.

I made $100,000,000 in 3 years...this is how I did it.. - YouTube

Don't Start a New Business When Your Existing Business Has Plateaued

• Starting a new business in an established marketplace that is incredibly saturated is not a good idea.
• The value proposition that you have is not based on a ton of personal experience.
• Entering a space you've never been in before with a new acquisition system and undefined value proposition is not a good idea.
• If your business has plateaued, it's because you don't know how to grow it from there.
• Do the boring work and repeat successful actions to avoid getting stuck in your existing business.

The Only Reason a Business Should Plateau

• The only reasonable reason a business should plateau is that you have reached the total addressable market.
• If your market has changed, it could be a different reason for your business plateauing.
• If your business is shrinking at an inverse rate to the shrinkage of the industry, you may not be able to grow any more.
• If your business has plateaued, it's because you don't know how to grow it from there.
• Do the boring work and repeat successful actions to avoid getting stuck in your existing business.

Examples of Plateaued Businesses

• A business owner doing $550,000 a month thought starting a new business was the solution to their plateaued business.
• A friend who owned a company that does newspaper advertising couldn't grow his business because newspapers have shrunk by 25% year-over-year.
• A woman doing $4 million a year selling weight loss info products couldn't grow her business because she didn't know how to.
• If your business has plateaued, it's because you don't know how to grow it from there.
• Do the boring work and repeat successful actions to avoid getting stuck in your existing business.

I made $100,000,000 in 3 years...this is how I did it.. - YouTube

Conclusion

• Don't start a new business when your existing business has plateaued.
• The only reasonable reason a business should plateau is that you have reached the total addressable market.
• If your business has plateaued, it's because you don't know how to grow it from there.
• Do the boring work and repeat successful actions to avoid getting stuck in your existing business.

Theory of Constraints

• A system will grow until it is constrained.
• There is typically only one or two things that are constraining growth.
• Prioritize what problems to solve.
• Understand the true constraint.
• Focus on solving the constraint before starting a new business.

Importance of Prioritizing Problems

• Realize that there is typically only one or two things that are constraining growth.
• Understand the prioritization of problems.
• Focus on solving the constraint before starting a new business.
• Ask the question, "What's stopping us from being at 5 million a month?"
• When we ask better questions, we get better answers.

Don't Start a New Business

• Most entrepreneurs start a new business when their existing business has plateaued.
• Businesses will grow to the level of incompetence of the entrepreneur.
• CEOs of publicly traded companies are rarely CEOs of two companies.
• It's hard enough to be in one business, let alone multiple.
• Focus on solving the constraint before starting a new business.

Ask Better Questions

• Ask the question, "What's stopping us from being at 5 million a month?"
• When we ask better questions, we get better answers.
• Phrase the deficiency as a question.
• Focus on solving the constraint before starting a new business.
• Understand the true constraint.

Focus on the Constraint to Scale Companies Quickly

• Identify the constraint that is stopping the company from making an extra million dollars a month.
• Find the constraint and put all effort towards solving that singular problem.
• Scaling companies quickly appears fast from the outside but feels manageable and clear from the inside when everyone is focused on solving the one problem at the moment.
• Each time there is a constraint, focus attention towards it to de-bottleneck and naturally grow to the next level.
• Entrepreneurs often think they need to start another business or product line to solve the problem when they are stuck at a current level, but this is not the solution.
• Instead of starting a new business, focus on growing the current business by identifying and solving the constraint.

Watch the video on YouTube:
I made $100,000,000 in 3 years...this is how I did it.. - YouTube