Alex Hormozi: I Made $31,714,980 in 2020 (Here's What I Learned)

The video is about Alex Hormozi sharing the lessons and failures he learned in 2020, including the importance of finding new ways to grow a business and the mindset shift of focusing on what one lacks rather than what others have.

This video by Alex Hormozi was published on Jan 26, 2021.
Video length: 01:03:22.

In this video, Alex Hormozi shares the lessons and failures he learned in 2020 as an entrepreneur.

He discusses the importance of finding new ways to reach customers and the value of understanding what successful people lack rather than what they have.

He also mentions hitting $31,714,980 in sales in 2020 and the steps he took to reach that milestone, including hiring talented individuals.

• Alex Hormozi shares lessons and failures he learned in 2020.
• He learned from the 500 million dollar mastermind about finding new ways to grow a business.
• He focuses on what he lacks rather than what others have.
• Hiring good talent is crucial to scaling a business.
• Expanding additional acquisition channels is crucial for growth.
• Transitioning from the what to the who is important for scaling up.
• Hiring high-level talent is crucial for growth.
• Entrepreneurs need to focus on what they lack rather than what others have.
• Transitioning to an investor or owner type role is important to avoid becoming the bottleneck.

I Made $31,714,980 in 2020 (Here's What I Learned) - YouTube

Introduction

• Alex Hormozi shares the lessons and failures he learned in 2020.
• He keeps an ongoing email thread to himself to consolidate his 2020 lessons and failures.
• He learned a lot from the 500 million dollar mastermind about scale and finding new ways to grow a business.
• He focuses on what he lacks rather than what others have.
• He hit 100 million dollars in total sales in the last three and a half years.

Finding New Ways to Grow a Business

• Alex learned from the 500 million dollar mastermind that people who were doing more than him were going after bigger markets.
• He realized he needed to find alternative and additional channels to grow his business.
• Traditional advertising methods can be exhausted, so he needs to find new ways to reach potential customers.
• He differentiates between reaching every person on a platform and reaching every person profitably.
• He focuses on finding new ways to reach potential customers profitably.

Focusing on What He Lacks

• Alex learned that champions beat normal people at their endeavor not because they have something the other person doesn't, but because they lack the ability to stop working.
• He realized that sometimes it's more important to focus on what he lacks rather than what others have.
• He shifted his thought process to think about what he has that's limiting him.
• He focuses on finding ways to eliminate his limitations.
• He believes that this mindset shift has been a lesson of 2020 for him from an entrepreneurial perspective.

I Made $31,714,980 in 2020 (Here's What I Learned) - YouTube

Hiring Good Talent

• Alex realized that one of the things he needed to do to fix his business was to hire really good talent.
• He believes that this sounds like a "duh" moment, but it's a lesson he needed to learn.
• He believes that sometimes the lessons he learns are not novel, but they are still important.
• He believes that hiring good talent is crucial to scaling a business.
• He believes that this lesson has helped him break through the 30 million dollar barrier he was stuck at for three years.

The Importance of Finding New Ways to Grow a Business

• Niching down is important, but it can eventually constrain a business.
• Having a small niche doesn't mean you can't tap into a large market.
• It's important to differentiate between capping a niche and having a poor business model.
• Expanding additional acquisition channels is crucial for growth.
• Providing more value and finding ways to solve problems can expand lifetime value (LTV).

The Mindset Shift of Focusing on Who, Not What

• Transitioning from the what to the who is important for scaling up.
• Learning the things that make a business work is necessary before finding the right people.
• High-value talent is crucial for growth.
• Experience is necessary for judging the quality of talent.
• Find people with pre-loaded solutions to solve problems.

The Importance of Hiring High-Level Talent

• Hiring high-level talent is crucial for growth.
• Transitioning from being a CEO to an investor/owner/stakeholder is important for being above the business.
• There are levels to being out of the business, from self-employed to executive.
• Leadership and executive roles involve leading organizational change and departmental change.
• Being above the business involves protecting and growing the business.

The Lessons of 2020

• Expanding additional acquisition channels is crucial for growth.
• Providing more value and finding ways to solve problems can expand lifetime value (LTV).
• Hiring high-level talent is crucial for growth.
• Transitioning from being a CEO to an investor/owner/stakeholder is important for being above the business.
• Experience is necessary for judging the quality of talent.

Lessons Learned in 2020

• Majority of time spent on looking at the overall marketplace and thinking about how to provide more value in a strategic way to everyone.
• Refocused on the few things that provide the most value, which are getting Jim's leads and making gyms more money.
• Entrepreneurs only think about revenue and growth, rather than what they are taking home and how much risk they are exposed to.
• Scale skill zero and simple scales - need to get to doing nothing and still have the company make money and grow.
• Peel off each of the skills and traits that are intrinsically linked to every aspect of the business to keep it moving.

Importance of Focusing on What One Lacks

• Entrepreneurs need to focus on what they lack rather than what others have.
• People lose interest when talking about better retention tactics and profit margins.
• Practice what you preach and sell what they want to buy.
• Cut a ton of excess out in 2020 by focusing on a handful of key priorities.
• Business has improved since moving further away from it and giving leadership space to run the business.

Transitioning to an Investor or Owner Type Role

• Transitioned to an investor or owner type role to avoid becoming the bottleneck.
• As soon as the team grows outside of providing value, if it cannot grow without you providing whatever that value is, then it will stop there.
• Have to scale zero and get to doing nothing while still having the company make money and grow.
• Peel off each of the skills and traits that are intrinsically linked to every aspect of the business to keep it moving.
• One day a week is focused on all leadership meetings, beyond that it's just strategic insight on monthly and quarterly.

Importance of Finding New Ways to Grow a Business

• Need to find new ways to grow a business.
• 2020 was a humbling year that forced a refocus on the few things that provide the most value.
• Entrepreneurs need to focus on what they lack rather than what others have.
• Practice what you preach and sell what they want to buy.
• Cut a ton of excess out in 2020 by focusing on a handful of key priorities.

The Challenge of Hiring and Firing

• Fast hiring and firing is a common mantra in growing businesses.
• Waxing and waning demands for labor can be difficult to manage.
• Bringing people on to solve a problem and then letting them go after the problem is solved can be a consistent variability.
• Defined periods of time, such as project-based, can be a better solution.
• Letting people go can lead to business growth.

The Value of Employees

• Only one out of five employees in a company is providing value.
• Fractal 80/20 rule applies to employees.
• Creating a department to solve a problem may not always provide value.
• Getting rid of unnecessary employees can lead to business growth.
• One A player does more work than five B players.

The Importance of Constraints

• Trying to grow with fewer, smarter people pre-loaded with solutions.
• Looking at Berkshire Hathaway and Warren Buffet as examples of growing with no people.
• Constraints can lead to finding new ways to grow a business.
• One A player is more valuable than multiple B players.
• Most people do nothing and can't progress.

The Challenge of Overcoming Obstacles

• Knowing what the obstacle is and not doing anything about it can be frustrating.
• Some people struggle to overcome obstacles and make progress.
• Spending time and effort to overcome obstacles is necessary for success.
• Google and other resources can be helpful in overcoming obstacles.
• Overcoming obstacles is necessary for business growth.

Lesson 1: Productivity vs. Busyness

• Many people mistake busyness for productivity.
• Being productive means finding solutions that are sustainable in the long run.
• There are only a handful of people in a company who actually move the needle.
• If you're not doing anything, you won't be heard of.
• Focus on finding sustainable solutions rather than quick fixes.

Lesson 2: Importance of Data Management

• Having a good ERP or CRM is crucial for proper data management.
• Poor data management can cost a business millions of dollars.
• Investing in good data systems early on can make life much easier in the long run.
• Hubspot is an expensive but worthwhile investment for data management.
• Track data from click to close to avoid losing potential revenue.

Lesson 3: The Challenge of Running Multiple Businesses

• Running multiple businesses can be challenging from an attention perspective.
• It's important to learn from mistakes and make changes for the future.
• Running businesses as portfolio companies can help manage attention and resources.
• Some decisions, like starting a company, are irreversible.
• Trying to undo a decision like starting a company can be difficult and time-consuming.

Lesson 4: Knowing Your Game Beyond the Game

• It's important to know what your game is beyond just making money.
• Money is a means to an end, not the end goal.
• Knowing your game beyond the game can help you make better decisions and find more fulfillment.
• Success is not just about making money, but also about making a positive impact.
• Find a purpose beyond just making money to stay motivated and fulfilled.

Importance of Managing Money

• Ignoring money can lead to lost compounding and missed opportunities.
• Opportunity cost of not managing money can become bigger than regular income.
• Allocating money within companies can lead to disproportionate returns.
• Knowing how to allocate money is important to prevent distraction from the main business.
• Net worth in equity of business is usually larger than what is pulled out of the business.

Investments Made in 2020

• Invested in a whole life insurance policy with high cash value upfront.
• Be careful when choosing insurance agents as they can be incentivized to screw you.
• Big four insurance companies are recommended: Guardian, New York Life, Northwestern Mutual, and Mass Mutual.
• Whole life insurance policy creates a bank account that can be used to loan against cash value.
• Cash flow guarantee is guaranteed growth at about four percent a year.

Importance of Finding New Ways to Grow a Business

• Businesses need to constantly find new ways to grow and evolve.
• Stagnation can lead to decline and failure.
• Entrepreneurs need to be willing to take risks and try new things.
• Learning from failures is important for growth and success.
• Success is not guaranteed and failure is a necessary part of the process.

Mindset Shift: Focusing on What One Lacks Rather Than What Others Have

• Comparing oneself to others can lead to negative thoughts and feelings.
• Focusing on what one lacks can lead to motivation and drive to improve.
• Success is not a zero-sum game and there is enough success to go around.
• Success is subjective and can mean different things to different people.
• Gratitude and appreciation for what one has can lead to a happier and more fulfilling life.

Watch the video on YouTube:
I Made $31,714,980 in 2020 (Here's What I Learned) - YouTube