REAL AF with Andy Frisella - 526. Q&AF Ft. Alex Hormozi： Compromises In Business, Learning Skills Vs. Hiring Professionals & Dealing With Yes Men

00:00:00.000 what is up guys it's andy priscilla and this is the show for the realists say goodbye to the lies

00:00:20.940 the fakeness and delusions of modern society and welcome to motherfucking reality guys today we

00:00:26.020 have q and af that's where you send in your questions and we give you the afs and today uh

00:00:31.260 you're going to get some extra special sauce with that i'll tell you about that in just a second

00:00:34.200 uh if you want to submit your questions to be answered on the show you can do so one of a few

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00:02:19.600 so i was hanging out with one of my good buddies today who's in town for summer smash here at first

00:02:27.000 form if you didn't know we have this thing called summer smash at first form and uh he's been on the

00:02:31.460 show before and i said hey mr homozy would you like to be on the show today and he said absolutely so

00:02:37.740 here he is what's happening brother pumped to be here yeah always yeah it's awesome man thanks for

00:02:42.780 coming on the show today thank you for having me i got an intro my show uh like that that was a

00:02:46.800 banging intro hey all the girth and the length yeah that's right yeah taking notes well you gotta

00:02:51.200 have the girth in order to intro like right the length really don't count for much it's all about

00:02:55.260 the girl let's be real all right really want listenership penetration that's right

00:02:58.920 oh man so we're gonna have alex chime in today on the q a's and uh you know he's gonna bring some

00:03:07.900 heat like he always does with everything that he does so appreciate you coming on man yeah want to be here

00:03:12.040 all right well yeah i got something good for both of you guys oh you do yeah we got we got we got

00:03:16.560 some good ones shocking yeah surprise surprise motherfuckers let's get into these guys uh andy

00:03:23.120 question number one andy you consistently talk about zero options mentality with personal development and

00:03:29.500 your goals what are some things that you will never compromise on in your business

00:03:34.960 well look i think there's about three things that have saved me millions and millions and millions

00:03:41.240 of dollars never compromising on the first one is definitely been my mental mindset and my physical

00:03:47.240 being okay in my opinion head heart body are your tools they are your weapon if you're going to go to

00:03:53.360 war with some weak ass weapons you're going to lose all right so that's the first thing the second

00:03:58.160 thing is in my standards all right i have found that when i have caved to the pressure of lowering

00:04:05.980 my standards in any way shape or form for any reason at any time i have always lost every single time

00:04:11.960 and it's hard not to do that when you have pressure to do that from people that you actually respect or

00:04:18.560 people that are following you you know sometimes things are really hard and they say well look if we

00:04:23.300 could just do this you know things could be easier and every time i've done this when everybody else

00:04:28.300 wanted to do it i've lost um you know and the third thing i think is the people that i keep around me

00:04:34.800 you know i have very high standards for the people that i call friends people that i keep around me

00:04:38.840 those people influence you uh they make up your entire life in every single way and if you have the

00:04:44.740 wrong people around you and you compromise and let them and let them around you i think it's going to

00:04:48.360 your plan up it has me every time i've let someone in you know you and i have talked about this a lot

00:04:53.280 um every time i've given someone the benefit of the doubt and said oh you know i kind of look past

00:04:59.560 the things that are a little red flags and i'm like ah it ends up burning me man and so you know

00:05:04.960 i think your mind your body uh your standards and your relationships are three things that should never

00:05:10.400 ever ever be compromised on what do you think i have some thoughts yeah so number one the first thing

00:05:17.780 that came to mind was product so in terms of like what are you going to sacrifice because a lot of times

00:05:21.960 there's always like the short cut that yeah always is more profitable in the short term but not as

00:05:26.760 profitable in the long term and in a world that gets measured by weeks and months and quarters then

00:05:31.720 the shortcut always makes sense but when you measure in decades it literally never does and so when i had

00:05:37.580 a buddy of mine who started a cookie business really simple business right and i was like how are you

00:05:42.020 going to go about like figuring this out and when he told me the story i knew he was going to be

00:05:46.340 successful so he said well what i did was i looked up the top selling cookies in the u.s like all the

00:05:51.840 boutique ones like the ones that they put online that they can still ship them like across the u.s

00:05:55.760 even though they have a local shop and i fly out there and i try and pay the chef to show me what

00:06:01.680 they do and then i fly back and i try and bake the cookies he's like and right now i'm on batch 226

00:06:07.900 and every day i bring them into the gym and i have people try them and they give me feedback

00:06:11.760 and i'm iterating it so like when when you're developing a product if you have that level of

00:06:17.080 care the likelihood that you're going to win is super high but the converse of that is if you

00:06:22.140 have a really shitty product all the marketing does is let more people know about it faster and so then

00:06:26.520 you get in the selling business which is a really tiring business to be in like i can tell you as

00:06:30.560 somebody who like came from the direct response world earlier on in my career knowing every month

00:06:34.820 that i had to sell more people than the month before just to grow the business or even break even

00:06:39.440 is incredibly yeah and the bigger you get the more it's exhausting yeah it's unsustainable yeah it is

00:06:44.200 but if you can get credit for who you sold five years ago because they're still telling new people

00:06:48.580 about you it's the only way that you can continue to scale the second thing that i wouldn't sacrifice

00:06:52.920 on is quality of the team and i think that and this is i mean andy and i are hidden hidden standards

00:06:57.840 from two different angles we're talking i'm talking personal you're talking business this goes hand in

00:07:02.160 hand and so i will say that of the entrepreneurs that i continue to see bigger and bigger and grow

00:07:08.080 every year and be more successful the bar only continues to rise on who they let in and i think

00:07:14.660 amazon actually has a really good at least motto around this that we've tried to model at acquisition.com

00:07:19.340 which is everybody who comes in has to raise the average of the team because you probably heard the

00:07:26.020 saying like a's hire b's b's hire c's and c should like get the fuck out of there right yeah and the

00:07:31.280 thing is just like this is why organizations as they scale continue to get diluted over time because

00:07:34.840 like dumb people that dumber people in because they're not because they're threatened by someone

00:07:39.240 who's as good or even better than them but people who can lead with humility want other players on

00:07:46.580 the team and what happens is is if you can create a virtuous cycle rather than a vicious cycle of a

00:07:51.740 deterioration of talent but a building or accumulation of talent then when someone comes in who's not of

00:07:57.100 the talent because they lied or they look good on the interview people are like dude we gotta get this

00:08:00.620 guy fucking out of here like he's not holding his weight because we're all running and this guy's just

00:08:04.040 doing the law of least effort he's just barely trying to get above the bar and we don't want

00:08:08.120 that on the team that's a massive that's a massive pain point for most entrepreneurs they cannot figure

00:08:14.260 out how to get their culture to self-regulate this what alice is explaining is exactly how it's done

00:08:19.480 and the thing is again all the the first two so product and then the people

00:08:23.700 you'll notice that when we talk about like the things you absolutely can't sacrifice on are the

00:08:29.000 easiest ones to sacrifice on because you're usually in pain of some sort when you're when you want to

00:08:33.140 sacrifice on product it's because you want to make profit in the short term or you want to get

00:08:36.180 something to market faster it's usually some sort of impatience with people it's the exact same thing

00:08:40.640 you're in pain because you've got a hole in the company that you're like dude we need somebody in

00:08:44.660 customer support today yesterday right yeah exactly um or or uh anyways you're suffering from this

00:08:51.740 this hole and you want to fill in the short term but the thing is is like the hiring onboarding

00:08:57.100 training and then when that person sucks because you took them on too fast then having to do it

00:09:01.800 again not to mention the lost revenue that you should have made in that period of time people

00:09:05.580 don't think about that they don't even think about it it costs so much more to run that way

00:09:09.480 and it's it's so like think okay so think about the culture as the product the internal product of the

00:09:15.820 business and the product you sell customers is the external product what you're doing when you bring

00:09:20.320 someone in who's not as good is you're diluting the internal product of the company and so both of these

00:09:25.520 are actually dilution of products it's just one it's outside and one is inside and so both of them

00:09:30.240 are just so tempting because you're you want to just get out of pain and so like the overarching

00:09:34.580 viewpoint i think on probably all the things andy and i are going to talk about with these three is

00:09:38.680 it's just you have to be willing to sacrifice the short term to get the long term which means some

00:09:42.820 the team's going to have to work double time and if you have the culture of killers you can be like

00:09:46.840 guys i'm not going to disrespect you by bringing somebody who can't can't pull their weight in

00:09:51.300 and so we're like we're going to work weekends like because the alternative is we bring someone in here

00:09:57.500 you all hate them we waste all our time trying to train them and then they go try and start you

00:10:02.500 know start the lower standard exactly yeah and so the third one um that i had was brand slash values

00:10:10.200 yeah and i mean the first two stem from this last one which is why i saved it and i know that you and

00:10:16.580 i are like incredibly aligned on the importance of brand like i think it's just brand over everything

00:10:22.140 period because it's just another way of saying reputation and a lot of people who like struggle

00:10:26.260 selling stuff in a business it's because when you walk in the door you're actually you're coming in

00:10:29.940 at a deficit you're not even at zero you have a negative reputation and the longer your business

00:10:34.400 the worse your reputation gets so if you're one of those people like man you know my cost to acquire

00:10:38.220 a customer uh dude facebook or you know youtube ads are getting more expensive well you can actually

00:10:44.020 see on a graph what the average cpm is a cost per impression for any kind of ad if your cost to

00:10:49.740 acquire customer has gone up by more than that it means that you have another force that's driving

00:10:55.120 your cost of acquisition up and it's the negative word of mouth so everyone's like oh yeah word of

00:10:59.960 mouth exists okay well it also exists in the negative and it's way fucking more powerful and

00:11:03.700 way faster and that invisible hand is somebody who's like oh i would have bought that hey they

00:11:07.960 just like the normal customers in the beginning who didn't know who you were they say hey what do

00:11:11.500 you think of this thing and in the beginning someone says oh i don't know it's like i'm gonna

00:11:14.620 check it out but the second time or the third time or one year or two years later they send

00:11:18.420 that text and the person's like oh i heard he's full of shit

00:11:20.440 and that sale that you would have had you don't have and so you got to market it twice as many

00:11:25.460 people to get the same number of sales and then two years later you got to market to four times as

00:11:29.520 many people to make the same number of sales and that's why you see people pop up and fizzle pop

00:11:33.720 up and fizzle if you ever see an entrepreneur and this might be you this might be you who's always

00:11:39.360 reinventing themselves in terms of the new thing that they're launching right now why aren't you still

00:11:44.420 selling the first thing you started selling and just making it better well because you compromise on the

00:11:49.660 product and so if you consider the product if you were one product business then like

00:11:54.480 they compromised and business is done yeah and so you can just see the easy proof on all three of

00:11:59.260 those things it's like if i if on a long enough time horizon if i dilute the product enough i'll

00:12:03.680 eventually go to zero on a long enough time horizon if i dilute the people enough i'll eventually go to

00:12:07.360 zero and on a long enough time horizon if i sacrifice my brand and my reputation i'll eventually go to

00:12:12.380 zero that's right what do you think what do you guys think is like the the hang-up right so

00:12:17.380 you alex you alluded to why people will typically compromise right but like

00:12:21.440 is it like is this is another thing there like what are they do they have a bad definition of

00:12:28.720 compromise like do they not see the the you know you do you understand yeah i you know i think that

00:12:34.980 first of all i love what you said about the product dude um you know most of you guys could solve every

00:12:39.700 single problem that you have with your entire business by just taking your product and fucking making

00:12:44.980 it the best it can be whatever it is it doesn't matter it's tires make the best fucking tire right

00:12:49.560 it's no t-shirts make the best fucking snow cone like it's very simple philosophy but i think and it

00:12:56.480 leads into your question dj i think the reason people are so quick to compromise is because there is

00:13:02.700 this false reality painted out there that there is a hack to success of a certain way right and so

00:13:11.480 people are so impatient and they hear these glory stories of you know oh i went from zero to a hundred

00:13:17.540 million dollars in three fucking days with this guy's you know like this the the expectations of

00:13:23.080 reality have been so muddied that people don't really understand what it takes to win and what it takes

00:13:28.220 to win is the exact same thing that's always taken to win which is to be fucking great undeniably

00:13:33.260 great and that does start with your product and it does you know continue on to all these other

00:13:37.960 issues that we talked about you know i'm talking a little bit more from the personal side and alex

00:13:43.940 is hitting on it from the actual business side but all of these things require zero compromise and i

00:13:49.400 think because people have this this reality painted in their brain that entrepreneurship that there's some

00:13:55.120 some sort of hack to it that they compromise everything so like they're not even seeing compromise

00:14:01.000 as a negative thing i think it sneaks up on people and i think i think people

00:14:05.180 do not understand that this is no different than nature that the strong survive and the weak get

00:14:14.220 killed and eaten and it's the same exact thing and so because we have all these goofballs on the

00:14:20.280 internet for the last 10 years telling everybody they can get rich in a fucking week we have this

00:14:25.340 false understanding of what it actually takes and things like product and reputation and the things

00:14:32.140 that he's mentioning are not even taken into account because people think it's so easy to win

00:14:36.500 and so you know i think it's a culture issue um which is why i preach so hard against it because i think

00:14:44.120 all of those things will i think when you compromise any of those six things that we talked about

00:14:48.080 you're fucked like because they all lead to further compromise which leads to zero so you know i

00:14:55.140 couldn't tell you where it comes from but my personal opinion is i think it comes from the

00:14:58.960 ridiculous state of entrepreneurship culture that exists in today's environment all right i'm gonna

00:15:05.160 gonna pay you back on this because i gotta come all right so uh number one i think your point is

00:15:10.540 spot on with this which is like we talk about fact checkers right yeah where the fuck are the fact

00:15:14.880 checkers at for this right where's the fact checkers for the the success that people are claiming to

00:15:18.360 have right now i'm not expecting that realistically but everybody has to put their fact checking hat on for

00:15:22.320 themselves and think like does this make sense is this reasonable probably look bro right yeah the

00:15:27.320 problem is that a lot of people who are early on don't have the perspective from which to make a

00:15:30.580 judgment so someone we were talking about the other day um held up their bank account on a on a picture

00:15:35.140 and this happens all over the place right it's not one person they hold up their bank account and

00:15:38.420 they're claiming that they're making you know five six million dollars a month and the amount that

00:15:42.360 they were holding up in the bank account transparently i've owned businesses personally having

00:15:46.560 owned businesses of that size like that's like not even a few days of payroll bro you'd be in fucking panic

00:15:51.700 right yeah and so the thing is is that people don't have the perspective which to make a judgment

00:15:56.020 now when it comes to compromising i think there's the internal of like everyone always tries to

00:16:01.400 sacrifice for pleasure today rather than pain today for a pleasure tomorrow that's just like

00:16:05.880 they're sold that bro yeah they're predatory sold that and here's but here's the here's the silver

00:16:12.120 lining on this is that constraints create innovation so many of us have heard of like the early

00:16:19.160 founder stories of nike and apple and you know the engineer is saying steve jobs i can't we it's

00:16:24.340 impossible it can't be done right but not compromising on the value that you're that you want like the

00:16:30.640 reason you started this business for some reason was because you wanted to solve some problem for

00:16:33.320 some person and as soon as you take that compromise you actually stifle innovation you just say like

00:16:38.680 there is a way like there's a way to do this and if we haven't hit it then we just need to keep

00:16:44.140 trying oh that's such a great point so we can maintain our values and the thing is is that the

00:16:48.660 first time you do it and like this is like this is my ask for everyone is like if you can just hold

00:16:53.460 the fucking line once and you just keep holding the line you will find a way around it and then

00:16:59.720 what happens is you start to believe that it's possible and so does your team and so then the next

00:17:04.380 time it happens you're like remember last time we're gonna hold the fucking line we're not

00:17:08.260 i know they said sugar costs have gone up for our cookies we're gonna find a way like we can't we

00:17:12.820 can't get above this price like how are we gonna how are we gonna do it don't tell me we can't tell

00:17:16.520 me how right and then uh this is just the the common sense that andy references a lot which is

00:17:23.400 like if you go to a sandwich shop and you have a sandwich and it's mediocre what do you do nothing

00:17:30.940 and that's what the vast majority of the customers that are going to these mediocre businesses are doing

00:17:35.240 so right now if you're average it's probably because you have an average product now play the reverse

00:17:39.560 scenario out that the guy at that sandwich shop and this might be you if you're the guy with the

00:17:42.980 sandwich shop like eat your own sandwiches on a regular basis like would you eat your sandwiches

00:17:48.400 like do you eat your own dog food and i think like that cookie story just like gives you the a really

00:17:53.440 simple example but whether you're in it services like have you gone through your onboarding process

00:17:58.420 as a customer do you know what the communication cadence is do you secret shop yourself like if you're

00:18:03.500 starting out one of the easiest things you can do if you actually have a couple of real friends who

00:18:07.380 really root for you hopefully you do just ask them to go through the product as a blind customer so

00:18:13.320 your your employees don't know it's a friend of yours and have them secret shop you and then tell

00:18:18.080 you tell you all the things that are wrong and i promise you there's always something that's going

00:18:21.800 wrong usually a shitload of stuff's going wrong and if you just fix those things there are no so

00:18:26.380 like i'll tell you one truth that i repeat to my team all the fucking time is that stop looking for

00:18:32.140 the silver bullet there is no silver bullet there's a hundred golden bbs and all we have to do is make a

00:18:36.960 list of every single tiny thing that we need to improve and we start at the top because most of

00:18:41.420 us know that there are some things that we should be doing in our business and then what we want to

00:18:45.580 do is instead of confronting the should do list we start the new list right this would be new this

00:18:50.000 would be exciting but that's because you don't know the should do list on the new thing and so you

00:18:54.500 just start at the fucking top and one by one you just start ticking them off and i promise you when

00:18:58.200 you're at number 100 you won't be wondering where the customers are bro we just you and i just had

00:19:03.540 this exact conversation on the ride to work today so today and this falls right in line with what

00:19:09.580 you're talking about so today normally dj follows me all right today i rode with him and he drove my

00:19:18.000 cullinan my rolls-royce cullinan okay terrible fucking truck yeah so so as he's driving it he says dude

00:19:26.880 what tell him yeah i mean like i mean pull out the fucking gate i'm like andy like this fucking

00:19:32.540 truck is unreal it's unreal and then i was explaining to him because uh you know we got it's a busy

00:19:37.780 weekend we're moving around vehicles on our end and so i had to drive my old suburban i'm driving my

00:19:43.540 old suburban home right taking home and i'm like dude like i was driving this fucking thing and like

00:19:47.740 dude compared to my denali that suburban was is a piece of shit but i thought that was like the

00:19:52.500 bee's knees when i first got it right but then now like i'm driving this fucking rolls-royce

00:19:57.040 that denali is like a fucking hoopty you know what i'm saying so he was talking about like all the

00:20:02.440 details of it he's like bro it doesn't shift weight it turns perfectly like he's like this is like

00:20:07.540 driving a cloud yeah and i said the amount of minds that went like this is the the purest uh example

00:20:13.180 of human potential and do you remember what i told you how they do it i told you exactly what he just

00:20:18.120 said i said they take every single detail that you would never think of and they dive so deep into

00:20:23.680 those details to perfect those details and then they that's these are like ingredients of the

00:20:28.600 recipe and once all those ingredients are perfected with high levels of standard and you put them

00:20:34.260 together it creates the whole thing yeah and i think part of what you're saying dude one of the

00:20:39.240 biggest things that i noticed um just from being in the personal development space for so long

00:20:44.440 in the entrepreneurship space for so long is that people think they can build an empire with a

00:20:50.800 fucking shitty product if they're a good enough marketer and you cannot do that it's impossible

00:20:55.300 for all the reasons that you just explained it's a false expectation you know and so like eat your

00:21:01.840 own sandwiches like you should only want to eat your own sandwiches you know what i'm saying like

00:21:06.940 bro i don't use any fucking buddy else's protein powder i use my fucking protein powder you know why

00:21:12.520 because i think it's the best period no offense to my homies that got other companies i don't use

00:21:19.200 your powder i use my powder because i believe in it yeah all right so it's part of the deal your shit

00:21:25.280 should be so fucking good dude that you don't even want to wear other people's shit you don't want to

00:21:30.160 drive other people's cars you don't want to take other eat other people's food you want your shit

00:21:34.860 because it's literally the best and when you figure that out you actually have a sustainable model for

00:21:41.080 the long term because the product sells itself right like dude our level one protein i dude i spent

00:21:47.500 19 months in the lab working on that product in 2008 before we even launched the company do you know

00:21:55.040 how many times we reformulated it fucking zero and it continues to sell we sell probably more raw protein

00:22:02.160 than pretty much anybody else in the fucking planet right now it's usually 19 months before it even

00:22:07.080 like that you work on it that long bro i went to the lab every fucking day this is how i actually

00:22:11.340 this is actually how i met emily because emily fucking worked at a place right next to the lab

00:22:15.080 and i was there every day so i went to fucking see my buddy john who was her this is like that was it

00:22:20.300 yes you have to be obsessed with the quality of your shit dude like and i'm not sitting here saying

00:22:24.540 there isn't better stuff but the minute i find it i'm gonna work my ass off to pass it up and like

00:22:29.580 that's the competitive nature and the obsession that you have to have about your own standards

00:22:33.500 that's going to take you where you want to go and there's really no other like you guys spend too

00:22:37.820 much time looking for the fucking hack and not enough time dealing with the reality of just being

00:22:44.320 great at what you do love that man let me give you an ab just from a leverage perspective so option

00:22:49.880 one is you spend two months formulating the product and then you spend the rest of your life trying to

00:22:54.100 sell it option two is you spend two years formulating the product and then you let your

00:22:59.120 customers sell it for you for the rest of your life like one is two months of work and it sounds

00:23:04.480 shorter but you're actually signing up for more work over the long term so if you want to be lazy

00:23:08.340 and make tons of money take longer on the front end because in the back the wave will carry itself

00:23:13.300 how much of this do you think first of all that's awesome second but dude how much of that do you think

00:23:18.260 is related to people's fear of charging a little bit more for their product

00:23:24.240 i actually think it's more because i think people wouldn't be afraid of charging more for the

00:23:29.920 product if they went through all that i think they're afraid to charge more for the products

00:23:33.620 they never did that so they see your yeah they see level one yeah and then they're like well i should

00:23:38.040 like man the margin c must be making but they never did the they haven't earned the quality of

00:23:43.280 product whether it's a service or physical good to charge the premium but they just want to they

00:23:47.420 just want to jump there and then they actually have a bigger ripoff and even more because everyone's

00:23:51.020 always price and value related right like they're amplifying the fucking fraud yeah in their own

00:23:56.440 mind like rose royce ain't worried about the cost of the truck no because they know that there's no

00:24:00.240 there's no missed dots or cross they know what the chevy silver rival drivers they know what went

00:24:04.860 into it yeah that's real yeah and then you feel like if anything you should be like my god maybe i

00:24:09.560 should raise the like i know i spent two years on this yeah right and then you you would feel

00:24:14.060 completely fine because if anyone looked at you could look them back in the eyes and be like

00:24:17.700 so the protein i was like have you ever noticed when you uh shake up your protein it's got little

00:24:21.500 lumps in it i was like huh that was a detail that the person that you bought it from didn't think

00:24:25.160 about have you ever drank and get a little gassy sometimes like it's because they added extra

00:24:28.780 filler in because they wanted to make it heavier but not actually increase the protein content

00:24:32.040 didn't think about that right like and you just start going down the hundred bbs and then

00:24:35.940 people are like okay okay i get it like it's about shit right right right and then it merits the

00:24:40.320 price uh well guys let's move on to our question number two andy where do you draw the line

00:24:45.940 between learning advanced skills such as accounting marketing e-com versus hiring it in or out of your

00:24:53.880 business well look

00:24:55.640 i think that if you are operating a business and you think you're going to become

00:25:02.700 expert level proficient at every single task or skill that you need you're delusional it's not

00:25:08.900 going to happen all right is it important to learn yeah it's very important to learn it's important to

00:25:14.720 learn because if you don't keep learning you get passed up by people who do and the only time

00:25:19.300 that it's ever fucking cool to stop learning is when you fucking die all right that's the first thing

00:25:24.720 you need to understand so always be learning should be a fundamental core value of your being

00:25:29.080 it's actually a core value of every single company i'm involved in it's a it's a it's a must

00:25:33.740 you have to always be getting better but dude in terms of like leading a brand or building a company

00:25:40.560 or this or that bro you're you should surround yourself with people who are much much much more

00:25:46.000 skilled than you at every single thing that you need like bro i want i want my executives to be

00:25:52.460 better executives than me i want them to be smarter than me i want them to understand more than me i want

00:25:58.500 them to know how to solve problems better than me i want them dedicated more than me i want them to be

00:26:03.480 better literally across the board i want them to be in better shape than me i want them to be a bigger

00:26:07.440 fucking killer than me i want them to be everything better because dude if you hire in the skill set

00:26:12.800 you first of all it frees up bandwidth for you to create all right that's a big deal a lot of you

00:26:17.760 guys try to learn every single task that there is to learn and you're not thinking that you know

00:26:22.300 there's a difference between working in the business and on the business and your job as the

00:26:26.200 creator of the brand or the business or the movement or the organization or whatever it is

00:26:29.980 is for you to be saying okay this is where we're gonna go this is how we're gonna do it and then to look

00:26:35.500 at your team and say what do you guys think and they're gonna break it down and they're gonna say

00:26:39.880 okay we do this we can do this we can do this we can do this we can do this and then by the way

00:26:43.360 they gotta go do it so in terms of having the best people around you i think a lot of people

00:26:49.360 hold themselves up with that because they're afraid of having people that are better than them

00:26:54.020 around them ego i actually i want every single person that i want every one of my friends to be

00:27:00.140 better than me i want every fucking person that works for me to be better than me it's something

00:27:04.060 and that's the attitude you have to have to build a great organization it just is it has to come from

00:27:09.060 a place of humility um i think it's good for someone to understand a fundamental base understanding of

00:27:17.360 these skill sets right like i can walk into my marketing department and i understand a lot of

00:27:22.260 shit all right but i don't understand the shit they understand okay um i can walk into our sales team

00:27:27.760 and i don't i know how to sell shit i guess i'm pretty good at selling shit but these guys are

00:27:31.760 fucking selling our shit really fucking good so i'm going to learn some things from them and i think

00:27:36.680 having a fundamental base understanding is important because it allows you to create better

00:27:41.960 okay but it also allows you to um understand when people are full of shit okay like you're going to

00:27:49.260 get people in that are pretty good like i used to run into this deal with media people right people

00:27:53.560 will come in and they'd be like oh fucking take 17 hours to make this video like it doesn't take 17

00:28:00.020 hours make a fucking video bro i made a video on my phone with some fucking words on it that shit

00:28:03.460 took 30 seconds right all right so you start to get taken advantage of whenever you don't have

00:28:08.140 a baseline understanding of the skill set so i think there's a line um and also i think it depends

00:28:16.020 on where you are in the journey i think you know when you're young in the journey like like dude when

00:28:20.120 i was when i was just starting out i had to fucking do everything so i had to know everything

00:28:23.400 couldn't afford it i couldn't afford to hire people so i had to learn the skill sets

00:28:27.080 um and so then it becomes okay what skill sets are going to produce the most value and are the

00:28:34.040 most important and those skill sets are always going to be the exact same skill sets it's going

00:28:37.640 to be uh it's going to be leadership sales well it's going to be sales and management slash

00:28:42.940 leadership like those two if you can't organize a team you can't do shit if you can't sell anything

00:28:47.480 you also can't do shit those are two skills you should never compromise on every single one of you

00:28:51.900 should learn those skills all the way fucking to the maximum of your abilities and then let the

00:28:56.860 the other skill sets the e-coms the the video production the the sales training all these things

00:29:03.340 you you you hire in people to help with those things you keep an eye on it but then they deliver

00:29:08.120 what they're skilled at i think a lot of people fuck themselves because they they think that if they

00:29:14.580 hand it over to someone that that person is going to be so much better than them that they're

00:29:18.660 going to lose the respect of their team when in reality if you have a great team they're actually

00:29:22.180 going to respect you more for putting the right person in the right position i love that man

00:29:26.120 i agree with all of these things yeah i agree with everything yes uh so three fundamental skills

00:29:32.580 you got to know how to sell shit you got to know how to build shit you got to know how to build people

00:29:36.340 yeah right so you got to have the thing to sell you got to figure out the people to sell to

00:29:40.140 which is sales and marketing and then you got to be able to stay out of jail which is all the

00:29:43.260 things like HR people shit bro is a big deal man i get asked that all the time i know you do too

00:29:48.360 man where do you find your people well i just go back out on my people tree

00:29:51.920 pick them off right i got the secret fucking people uh garden over here and i can fucking

00:29:57.300 go grab them and bring them in here bro you have to become an expert people developer sorry i had

00:30:04.780 no no you're we we agree on this so like so here's the thing so if you were to go if you were to boil this

00:30:09.880 down to fundamentals if you only had one skill which is that you could get other people to do things

00:30:13.920 for you then you could then say hey go build me a business and fundamentally that would work the

00:30:20.520 only problem if that was the only skill you had it brings up andy's issue which is you wouldn't know

00:30:25.180 who's full of shit and who isn't right and so the base level of understanding is so that you can just

00:30:30.480 pressure check the fundamentals of the business because i'll one thing that has continued to stay

00:30:34.860 true for all the businesses that we've scaled is simple scales fancy fails being advanced just means

00:30:41.560 that you do the basics at scale you're not doing fancy things you're not doing complicated things

00:30:46.700 you're just doing a hundred guys on the phones every day following the same five-step script right

00:30:53.780 that is like scale brings complexity on its own you don't need to insert it right so you got to know

00:31:01.200 how to build a product that's good you got to know how to sell it and then you got to have people now

00:31:04.760 that being said those are three different skills in the beginning you just got to be good enough to

00:31:08.340 start generating cash flow at that point you then look at your schedule and say okay of these other

00:31:13.100 things that have to happen in the business which is the cheapest one to replace right that takes up

00:31:17.360 the most of my time and then basically entrepreneurship after that is you continue to trade your time up

00:31:22.560 for the biggest chunk that costs the least to bring in and you just keep doing that until eventually the

00:31:27.360 only thing that you were doing is inspiring and leading the vision so that you can attract the best

00:31:32.280 people to be on the bus with you dude and the best part about that and this is the part

00:31:36.700 that barely very few companies ever get to is that it's what i said in the first question when you

00:31:42.780 get it to that level you're no longer having to weed people out that the culture and the and the brand

00:31:48.780 becomes self-regulating meaning if weak people find their way in the strong people will weed them

00:31:54.840 out automatically because they're not meeting standard and that will save you like dude when you get to

00:32:00.460 that level 90 of your bullshit goes away because that's what 90 of bullshit and small businesses

00:32:07.360 is you're dealing with people dealing with people is the hardest fucking thing ever when it comes time

00:32:13.880 to organize them to move the right way and so i fucking love all that bro i'm gonna throw two

00:32:19.780 warning flags out there one is the early partnership all right so a lot of times people bring in a partner

00:32:25.120 early who likes the same stuff as in they're like hey we're best friends we both like supplements

00:32:28.620 let's do supplements together but you don't have different skill sets so the only reason to partner

00:32:33.260 is that somebody has a different skill set than you has more time than you or he's got more money

00:32:37.460 than you that's right that's it the only reason to bring somebody in if you're looking right now

00:32:40.660 hopefully you're listening to this or sending this to your partner you're like shit man we both kind

00:32:43.960 of had the exact same skill set well one of you's got a like i'm not saying you break up as a

00:32:47.580 partnership but you should delineate who's in charge of what if you're both selling and both building

00:32:52.160 product and both doing the bad like eventually it's not going to work like that spider you're describing my

00:32:56.760 my actual story okay there was a conversation a real conversation that chris and i had to have

00:33:02.020 about 2010 and it was this it was listen dude somebody's got to be the face somebody's got to

00:33:12.160 be the operator behind the scenes and take care of these things and somebody's got to do these things

00:33:16.740 and it was a fucking 10 minute conversation and we went because everybody's like where's chris yeah

00:33:22.040 chris living a great life bro he fucking gets to be a part of all these businesses he gets to

00:33:26.740 work and fucking nobody knows who the fuck he is because do whatever the fuck he wants it's amazing

00:33:30.760 i got the shit end of the deal bro all right so it's it's funny because you're like literally

00:33:37.020 describing it because you use the example of supplements yeah dudes yeah hey that's us yeah

00:33:41.380 i'm like i was telling my story and i'll i'll say one thing to relate back to the question which was

00:33:46.960 i just want everyone to know i've actually never paid payroll like i've never been the one who

00:33:51.740 calculated payroll i think i think actually maybe a couple times in my life like between people

00:33:56.860 i like i i've messed it up i actually like handed people checks and they were like that's not how

00:34:01.100 i like wrote out the checks for their they're like is payroll taken out like the tag i was like i don't

00:34:05.540 know i was like this is what i owe you right and like didn't didn't know how to do payroll definitely

00:34:10.760 didn't know how to do accounting i still don't so like people might think oh alex isn't alex is a big

00:34:15.760 investor and he owns like i can i know thing is is like you can value a business with a lot of other

00:34:21.300 things besides the sheet because here's the thing is the more you learn the more you realize that

00:34:24.480 people can make anything look real that isn't so like all i would then be doing is asking if i

00:34:28.860 pretended to be really good at accounting i would just find a better criminal who could who could

00:34:33.040 outsmart me with sheets and that's not going to be where i'm going to win and so that's where you

00:34:36.540 have to look at the other person the eye be like is this guy going to fuck me and i think that

00:34:39.540 that's that's a pattern recognition that just takes time to develop and then also does the

00:34:42.640 fundamentals of the business make sense so to scoot all the way back do you need to learn

00:34:47.420 accounting i didn't yeah do you need to learn how to do payroll it has to happen but you don't have

00:34:53.280 to like learn it i mean during the period of time where i was like between people who were doing that

00:34:58.420 for me i just like called adp up and i was like hey uh i've never they're like we have an online

00:35:03.260 portal i was like can you do it over the phone they're like we can do it over the phony from 1980 i was

00:35:06.880 like i am today they're like it was like they're old people line so i like called the tech like i don't

00:35:11.740 use a computer line and they're like all right well and then we just went i would just say like

00:35:15.960 jeremy h goes you know 372 and 67 cents they're like okay and i was like and you guys are handling

00:35:23.140 the the tax stuff and they're like yep and i was like all right johnny like dude i did this right so

00:35:29.060 like i didn't know how i just knew i added up the hours added up his commissions on sales and then

00:35:32.660 i just called up adp and had them do so i'm only saying this because like a lot of people like

00:35:37.620 to over complicate the fundamentals of business but like you literally just need to go get a

00:35:41.700 stranger to give you money for the thing that you're going to solve a problem for them that's

00:35:45.500 it and then everything else after that you can find other people to help you out and the more that you

00:35:49.500 try to be the person for everything the less you can do the thing that actually needs to be done

00:35:54.520 which is getting the strangers to buy your fucking shit like dude you have to free up that bandwidth

00:36:00.320 guys because business is fucking hard because there's two kinds of people there's the kind of person

00:36:05.300 who wants to delegate everything and know nothing you lose every time because people will steal from

00:36:10.340 you and they will take advantage of you and they will crash your shit and you can only pretend that

00:36:13.860 for so long and then there's the kind of person who wants to control everything and that person gets

00:36:18.540 stuck because they're trying to do all of these things and they're like fuck i got no help and and

00:36:24.000 then they can't even create the vision and they get passed by someone over here across town who has

00:36:29.640 you know found the correct balance here of expert help but also base level knowledge that allows

00:36:36.360 them to continue to be creative and move forward and so like dude find out where you are in this

00:36:41.620 in this balance because if you're too far on one side or too far on the other side it's instant death

00:36:47.840 and i love that one of the a term that i i like is uh don't suffer from education procrastination

00:36:53.780 like a lot of you know like some people listening to this are like man i'm gonna start i just need to

00:36:58.200 learn more about i just need to like you literally need an llc a bank account and a way to process

00:37:03.560 money and all those things you can do in like an afternoon and i had these college kids i don't

00:37:07.660 know if i told you the story i had dinner with these college kids a friend of mine has a son he's like

00:37:11.400 22 and they were like they knew me from it they're like could you come to dinner so i was i go there

00:37:14.940 it's eight guys they're all like you know i'm so excited i'm gonna start entrepreneurship whatever

00:37:19.000 and so i didn't see them for six months and then she came back in town with her sons and it was his

00:37:22.780 birthday and so i come to the dinner again and i was like hey how's your business going

00:37:26.500 and he's like well you know i'm getting my llc started and i was like that's not a thing i was

00:37:31.740 like that's not like a that's not a thing i was like started i was like i was like form you fill

00:37:36.520 out yeah i was like you could do it during this dinner yeah and the thing is it's like people get

00:37:41.300 stuck in this education procrastination and it's really that they think that i don't learn accounting

00:37:46.000 and therefore i can't start a business and they let that be the reason that the real reason that

00:37:51.040 they're not doing is because they're afraid they're not going to win dude i also think there's a false

00:37:54.880 understanding it goes back to the fake entrepreneurship culture that you have to

00:37:58.660 like like people like to use this language and these big words and like all this stuff that makes

00:38:03.340 them sound important let me tell you something bro you come to dinner with me and alex like we're

00:38:07.800 going to be talking some real basic shit you guys are going to be like that's it

00:38:10.840 stop trying to posture with your language bro just speak in real terms man learn what you got to

00:38:22.500 learn and go fucking do it it's really it's really not that hard you guys make it so much harder by

00:38:27.720 trying to posture and you only fool people poorer than you yeah that's a bit like oh bro that's a

00:38:33.680 huge thing because like dude when when people are up on the mountain that you're trying to climb and

00:38:38.200 you're doing that shit to them you know what they say like bro you do that shit to me and alex right

00:38:41.860 you come up and you start telling us all this shit the minute you fucking walk away we don't even

00:38:45.960 say anything we just look at each other like it's a look true or not true a hundred like yeah a million

00:38:51.560 like is the thing is is that the guys who are really in the game they talk in the simplest of

00:38:56.240 terms right so i've got like so people struggle with this thing and i used to struggle with that

00:39:00.780 too and so then i made this thing because i was solving it for me and then some other people were

00:39:04.880 like hey can you do that for me too so i started doing it and then you know we started running a

00:39:09.120 couple ads so that we could you know get some more customers and like you know 10 years later like

00:39:13.300 here we are we're the number one it services company you know what i mean like that's how the stories

00:39:17.140 really sound not like so i was uh looking at my cap table and uh and i was really looking at how we

00:39:22.180 could leverage the opportunities and synergistic collaborations between cross-departmental training

00:39:26.500 and learning so that we could further like do like customer penetration yeah right like i will get the

00:39:30.660 fuck up and walk up like i will get the fuck up i'll be like look dude this ain't for me like i gotta

00:39:36.600 go i can't even hear it yeah it makes my skin fucking crawl yeah and like dude you guys and we're

00:39:41.540 we're joking and shit but like be be careful not to become that because dude it's it's not palatable

00:39:48.580 for people who are up the journey because those people that you're trying to impress they're just

00:39:53.500 regular people just like you who have gone down the path with some courage and just not quit and

00:39:59.440 they they're not any you know they're smarter than you because they've had more experience than you

00:40:03.240 but they're not more intelligent than you so stop trying to pretend that you're something you're not

00:40:08.620 dude and just go do some shit and people will respect it love that man uh guys andy question

00:40:14.300 number three andy i have a small team of five and i believe that it is crucial to be given honest and

00:40:20.480 accurate feedback however i am beginning to get the sense that i have a few yes men working for me

00:40:26.420 they're great performers super positive people but i just don't feel like it's truly helping with growth

00:40:31.760 and moving towards our mission how can i as the leader create a better environment to get them

00:40:37.060 out of that man first of all i'd like to say you know i think it's great that you're even aware

00:40:43.300 enough to ask that question because i think most people get really comfortable with people telling

00:40:47.320 them what they want to hear and it kills them and they never realize it but conversely i think

00:40:52.420 that a lot of people become yes people or yes men without even realizing that they're yes men

00:40:57.240 okay because what ends up happening is you guys form your team you continue to go down the path

00:41:03.060 you have a couple wins right and it's fun to win right and you're happy when you win but what are

00:41:09.340 you when you lose you're not as happy all right so if you are let's just say a fiery leader which i am

00:41:17.060 all right you can go too fiery whenever you lose which actually makes people gun shy about telling you

00:41:24.960 the truth and this is a mistake that i made in business for a very long time all right this is an

00:41:29.660 adjustment that i had to make to go from a you know a small business to a medium-sized business to

00:41:35.320 you know a pretty large privately owned business now um in my own style and so the first thing i

00:41:41.220 would say to you is how are you responding when you lose okay are you freaking the fuck out and and

00:41:47.180 bringing fire and brimstone because dude i'm gonna tell you i can i can relate to that um it sucks to

00:41:53.960 lose all right and sometimes still to this day when i when i when we lose and bro do is true oh okay

00:41:59.780 sometimes right the fucking volcano goes off all right but i always feel bad about it because i know

00:42:06.520 what it creates because it actually erodes the very information that i am required to have to make the

00:42:13.440 best decision to move ourselves forward as a team and so usually when you when you have people that

00:42:19.600 have become yes men um i've found in my experience it's because a they have a much better time

00:42:26.780 winning and b they're afraid to tell you the bad news and so you have to create an environment where

00:42:31.820 they can tell you the bad news and i think the way that i've been able to partially or just i'm much

00:42:38.180 improved okay um i still have my moments but the way i've been been able to do that for myself is to

00:42:43.920 adjust my perspective from a leader of the team okay i'm the leader of the team to just part of the

00:42:52.160 team all right so when i see myself as part of the team and i'm just doing a part right like let's just

00:42:58.680 use our podcast as as an example i'm the voice you guys produce it you guys edit it and we put it

00:43:06.040 together we're a team i do my part you do your part you guys do your part when i look at it like that

00:43:11.140 i don't get as upset i just say okay this is bad news all right how do we need to adjust this so

00:43:16.460 that we can win together when i find myself a little bit in my own ego all right and i start to

00:43:21.600 think fuck i'm the man and i'm this is my team and shit like that which bro we're all none of us

00:43:26.620 are immune to okay this is a practice especially when you've won big many times it's it's it's hard

00:43:33.300 to be humble when you're fucking great it's just the truth you have to practice it okay and that's

00:43:37.720 me saying i'm great but you know i'm pretty fucking good all right i'm just being real dude

00:43:43.780 the fucking the fucking the numbers and the stats everything it's it's real world evidence you got

00:43:48.820 the pudding so i have to fucking see myself as just part of the team rowing the boat with the guys with

00:43:54.600 the team and then that allows me to communicate in a calmer way which gets me better information

00:43:59.620 which allows me to steer the boat in the proper direction that that's my personal journey well the

00:44:05.180 guys see it too right like they see you remove yourself as that overarching leader and then oh

00:44:09.900 shit well and he's on the same team as us yeah and then then you get everybody rowing a little bit

00:44:14.320 harder man and a little bit more consistency and they want to they want to do better and so leading

00:44:19.140 from a place of humility and i listen i don't do this perfectly all right very many people do this

00:44:25.160 very few people do this perfectly they might say they do it perfectly on the internet but the results

00:44:30.100 of their life tell the story okay their success tells the story and so you know there's a lot of

00:44:37.220 guys i'm just being real a lot of guys come on the internet look i'm a humble leader well your business

00:44:40.960 sucks you must not be that fucking humble of a leader like you ain't that you ain't really all that

00:44:44.600 right so when we when i do that it's a different perspective and i feel like it encourages people

00:44:51.760 to give better information that is more honest and true um but i also think it's important and it

00:44:57.100 kind of goes into the i think it kind of goes into the realm of developing people like we were

00:45:03.180 talking about a minute ago is that you also have to develop people to have a little bit of courage

00:45:07.600 and make communicate to them like look bro i'm paying you for your fucking brain and information

00:45:13.200 please tell me the truth otherwise you're not valuable to me and setting those standards up and

00:45:18.040 holding those standards not only holding them to those standards but you as well you tell the truth

00:45:23.040 to them and uh i think all those things mixed together help correct a little bit of this problem

00:45:27.380 that's going on but for me this isn't this is a this is a lifelong project i'm already aware of it

00:45:32.980 because i have you know i'm a competitive person i'm very i very much so love to win but i really

00:45:39.180 fucking hate to lose and uh when i lose i don't always react the best way and i think that makes

00:45:43.680 people gun shy which creates a situation where i can't operate with the proper information which makes

00:45:47.800 it a harder way to win so that's my story i have so much that i want to talk about with this yeah

00:45:54.800 okay so first off kudos for bringing this up yeah second they are not yes men you have trained them

00:46:05.020 to be yes men and so it is 100 your fault so they didn't become that you made them that and so i think

00:46:11.720 andy and i will agree and i will give different language to what andy just said so there's three

00:46:16.060 reactions that any leader can have or really any human can have to any any circumstance anything

00:46:19.960 that happens one is that you can reward it second is you can punish it third you can extinguish it

00:46:26.620 so extinguishing it is just ignoring it so somebody texts you and you just don't respond they text again

00:46:32.460 you don't respond you do it long enough they just stop texting you that extinguishes behavior

00:46:36.960 that's different than if they text you and you say fuck you never text me again that's punishing

00:46:42.400 right and on the on the on the third category they text you and then you give them give them

00:46:47.140 a cookie in some way and so what's really interesting about this and there's a hundred

00:46:51.420 years of literature behind this and this is one of like the reason i have a lot to say on this is

00:46:54.960 because we're actually separating out our mission between acquisition.com and mosey media so like all

00:46:59.520 the stuff i put out in the actual acquisition.com mission and so the acquisition.com mission is to

00:47:04.560 create companies that are built off of praise not punishment and the reason for that is that

00:47:08.880 punishment is more effective in the short term and less effective in the long term because people

00:47:13.000 forget punishment fades in your memory right like you fall off a horse and a lot of times like or

00:47:19.280 someone is mean to you and like after a long enough period of time you're like it starts to fade

00:47:23.200 right whereas reward gets stronger over time and so if you want them to talk to you more then you

00:47:30.460 reward them for talking to you but not just in general you reward them immediately and so believe it or

00:47:36.080 not the speed of reward is significantly more important than the intensity of the reward so a

00:47:41.540 high five in the moment when someone does something means more than a bonus at the end of the month in

00:47:46.260 real terms for human behavior and so like this is what we're trying to embed and i'll give you a

00:47:50.740 little proof point so right now if you run a sales team and this might already be well if you're in a

00:47:55.740 company all right and there's a slack channel and i'll tell you something that happens commonly in

00:47:59.340 sales teams is that guys will put in the slack when they get a sale they'll be like close the deal

00:48:04.280 close the deal close the deal right why do they do that because the moment they do that immediately

00:48:08.720 they get rewarded they get a fire emoji they get a high five that's awesome whatever now they haven't

00:48:13.500 closed the sale yet and that's why sales guys often over estimate their actual closes versus end of

00:48:20.020 month cards that went through because the reward for closing an actual sale doesn't actually come until

00:48:25.940 much later but they get the reward immediately for reporting it and so they report it more and so if we

00:48:33.260 want to change if you want to change your team's behavior then one when they tell you like if you

00:48:38.660 want your team to talk to you all the time then reward them for talking to you all the time because

00:48:42.660 you can punt you can reward someone for accurately telling you the data you can reward them for telling

00:48:48.760 you the data and then you can reward the content of the data those are three separate things and so

00:48:53.460 ideally you want to even if someone reports at the end of the week that they close zero sales

00:48:58.380 what you don't want is them to stop telling you because for everybody who i just told that little

00:49:02.160 slack example how many times are they putting in the slack that they haven't closed zero why is they

00:49:08.000 get no reinforcement for it they get no reward and so if someone if you want them to talk to you more

00:49:13.980 then the moment they talk to you you immediately respond and say high five figuratively give them a

00:49:18.760 cookie even the skittle whatever it is awesome job thanks for reporting that you're really on top of

00:49:22.500 it and if you can put it as a label that they can identify with which is dude you're so on top of it

00:49:27.380 you're so good you're so accurate with the reporting it's awesome it makes my job so much easier

00:49:31.060 thank you for doing really good about this like you're just even as a friend you're fucking great

00:49:35.540 about it i i appreciate that a lot that means i work on it yeah a lot yeah um and yeah thank you

00:49:42.640 yeah uh and i say that because it's it's it's become the mission of our company leila and i because

00:49:47.560 so many people want to work and they get punished for working which is terrible right and so what

00:49:54.540 ends up happening and we were talking about this earlier is that people will revert to the law of

00:49:57.520 least effort is that they will do as little as possible in order to not get fired and think

00:50:01.400 about this what is the upside of them challenging you if you don't reward them and you punish them

00:50:07.240 occasionally you will completely eliminate the behavior and then they will just try and skate by

00:50:11.700 as little as they can to not rock the boat and so right now you this is going to be an extreme visual

00:50:17.060 but like you have a puppy that you have beaten the corner now you may not see it that way but from a

00:50:21.300 behavioral perspective they're in the corner in the cage and they're afraid to come out and so you

00:50:25.640 may have to reward them again and again and again and breadcrumb until eventually it's like if the

00:50:30.760 puppy looks at the at the door of the cage you reward them and then if they take a step you reward

00:50:34.860 them and then finally over time it'll take its first step outside and then you you go nuts oh that's

00:50:40.780 amazing you did such a great job and then and then all of a sudden they become addicted to you and

00:50:45.080 they become addicted to the reward because you have now re-established yourself instead of a

00:50:47.960 doler of punishment you become the source of reward and everyone does everything simply based because

00:50:54.460 they have been rewarded for it in the past i i think first of all i think that's fucking amazing

00:50:58.980 and i think it's absolutely true and i've lived that and i continue to live that and it's very

00:51:04.400 difficult it takes discipline to do that especially when you're losing one thing i want to touch on what

00:51:08.800 alex said which is very important what he said because when when you lose your temper okay and you're a

00:51:14.820 competitive person and you get hot just because you're not firing someone or you know taking

00:51:21.440 something away from them doesn't mean you aren't punishing them okay like just like when you and i

00:51:27.720 know this because like dude i've done this and this i speak from experience you will shut your people

00:51:33.220 the fuck down by getting too upset when things don't go your way or just a look yeah you mean it's like

00:51:38.980 someone challenges your idea in a meeting you just look at them they're like oh yeah like that's a

00:51:43.200 different level of awareness yeah all i'm saying is is be aware of what when you say when he says

00:51:48.040 punishment understand that he's not talking about actual punishment specifically it can be a lot of

00:51:54.400 different things body language it could be non-verbal 100 if you just pick apart someone's idea what are

00:52:00.320 they going to stop doing bringing up ideas yeah here's here's six reasons why that's not going to

00:52:04.120 work yeah right they're going to stop bringing up ideas right i actually love that answer dude i think

00:52:09.300 it's a super fucking important answer i think it's real i think it's real corrective behavior

00:52:14.300 and by the way to anybody who is erring too hard to the side of what we're talking about where it's

00:52:20.420 negative and you want people to this is the path to get them to start and uh you know dude every

00:52:27.180 hard time i've ever had with any project like let's just say getting something off the ground or or

00:52:32.300 building something from scratch it's this what we're talking about here has delayed the result

00:52:39.320 significantly okay so like remember that every single time you lose your temper all right and i'm

00:52:45.960 talking to myself too because i'm not going to sit here and say me too yeah i'm not going to sit here

00:52:49.320 and say oh dude i do this perfect okay everybody in this room would be like you're a fucking liar

00:52:53.820 right so uh but dude i think these guys know that i fucking love them and i give a fuck about them

00:53:00.020 and i want them to win and you know um i want to win together but you will get there a lot faster

00:53:06.660 if you learn to have a little bit of discipline in how you communicate when it comes to that

00:53:10.480 can i clarify something real quick yeah i want to ask make sure that i'm getting this right

00:53:15.340 are you also saying that even when mistakes are made or the team is coming to you with a fuck up

00:53:22.000 that they had you can still reward that absolutely man that's some powerful shit you you and you're

00:53:28.040 specific about what you are rewarding yeah so you're rewarding them for coming to you you're

00:53:32.780 rewarding them for being honest and accurate with the information which is the most important point

00:53:36.420 of the whole question because you can't make the decisions without the fucking information information

00:53:40.940 that's the hardest thing as a leader to fucking get man is real information and that's why this

00:53:46.040 question is so important and this is why creating the space like mentally to not flip out and just give

00:53:51.260 yourself that half second of breathing yeah then exactly to bend be say thank you for bringing this to me

00:53:57.000 this information is valuable because it allows us to make way better decisions so that we can all win

00:54:00.820 we're going to figure this out together yeah awesome work even if it even if it wasn't a win i just want

00:54:06.480 to tie this one thing because for me this was like crazy eye-opening so my close friend he's a behavioral

00:54:11.240 genie when it comes to this stuff he's a phd all that stuff and he showed me this study on training dogs

00:54:16.400 all right and if by the way if it works in all mammals it works in humans just fyi and when they and what

00:54:22.000 they did was they had a dog sit they were trying to train a dog and all they did was they changed

00:54:26.500 when they did the reward and how long it took to train the behavior and so if they immediately

00:54:31.900 gave the cookie to the dog the moment it sat down it obviously learned the fastest and then at five

00:54:37.920 seconds so it sits and they wait one two three four five and then they gave the cookie it took three or

00:54:43.300 four times longer after 30 seconds the dog was untrainable and the real around that is not that

00:54:51.580 uh if you wait longer than 30 seconds people stop being able to be trained you do train them but you

00:54:56.760 train them to do something else because whatever they did right before the reward is the thing that

00:55:00.960 you're reinforcing and so that's how important the instant that's why the timing is so like think

00:55:06.680 about how social media has trained people the moment you get a comment you get it you get a

00:55:10.660 notification and you hit it and they have trained you just like rats on levers you get the thing you

00:55:14.320 hit the button you hit the button you hit the button you scroll you scroll you scroll because

00:55:17.360 they've trained you to get that reward and then if you really want to train behavior in a way that

00:55:21.480 you don't always have to reward is that you start stretching out the reinforcement interval so you

00:55:25.600 reward and then next time you might not reward and then you reward the next time it's like gambling

00:55:30.800 right and then you reward again and then two more times you don't reward and then over time

00:55:35.080 what happens is like think about how you potty train a kid in the beginning they pee in the

00:55:39.160 sweat for the first time you go nuts amazing right and the next time you go a little less nuts but

00:55:44.160 still immediate and then the next time a little less nuts and then maybe it's a high five and then

00:55:47.640 it's slowly over time you stretch the interval and then when your 17 year old takes a shit you're not

00:55:51.660 like congratulations buddy right over just becomes the standard and what happens is and this is really

00:55:57.700 interesting from a like obviously you can tell i jam on this but um the behavior that you have

00:56:03.860 trained itself becomes inherently rewarding as in like video editors in the beginning need someone

00:56:09.560 to give them a skittle every time they do the edit but over time the act of editing videos itself

00:56:15.340 becomes rewarding and that's where you start to become a master of a skill because you can start

00:56:20.240 rewarding yourself for what you do as it and you're not actually rewarding yourself the situation is and

00:56:24.900 then it reinforces the behavior but fundamentally like that's the goal of every leader is that in the

00:56:30.960 beginning we are the manual effort that rewards specific activities that breadcrumbs breadcrumbs

00:56:35.320 breadcrumbs clap clap clap skittle skittle skittle and then over time we stretch the reinforcement until

00:56:39.520 being good at marketing rewards the head of marketing more than anything else and then we just make sure we

00:56:45.840 don't punish them for doing the job it's fun great shit i love that man i love it dude that's such a huge

00:56:51.000 huge huge point where people that will make or break you it just really is because dude how can you

00:56:58.960 drive the boat if you don't know which way you're trying to go because you don't your guys won't tell

00:57:02.800 you hey man there's an iceberg up here or hey we got a problem with this paddle back here or hey we got

00:57:08.000 some fucking holes back here like if they don't tell you that shit what eventually happens you hit the

00:57:13.200 iceberg you stop you start going in circles or your boat fucking sinks and this dude this is real shit

00:57:18.720 yeah it's a very important question i'm glad whoever asked that was aware enough to ask that because a lot of

00:57:24.000 people really do enjoy being around people who just tell them yes i don't know a single human being

00:57:31.200 that wins on a large scale that is is one of those people not a single one dude you and i talk about

00:57:37.520 this all the fucking time how how important it is to have the truth right in your fucking face man

00:57:45.600 and so and they've also and you've also trained them to be yes men because for you it is rewarding

00:57:52.400 right so you have been trained to so like i've told you like i could talk about this for a long

00:57:58.240 time but i will cut it off but people a lot of times think about human behavior and say what triggered

00:58:04.000 that right they think about what happened before someone does something it's cause and effect but what

00:58:08.000 you want to look at is what happens after because that's why people did it so for example i'm going to

00:58:13.120 give a really extreme example let's say um you have so i'll tell you like a a white label the example

00:58:20.080 let's say i have a ceo who is one of our portfolio companies and we were telling them that they needed

00:58:24.400 to make this very hard personnel decision and the individual question said i don't want to keep

00:58:28.960 talking about this i'm going to have a panic attack okay and so that is a behavior she has learned

00:58:35.200 to do that how has she learned to do that or how has he learned to do that because every time

00:58:40.480 he or she does that people quit they quit pressuring everyone backs off and so the reward for the

00:58:46.400 behavior and so and the moment you back off it gets reinforced yeah and they'll do it again and so if we

00:58:51.760 want to see why someone does something look at what happens afterwards and if you really want like i'm

00:58:55.440 going to go one more level in this and then i'll shut up but it applies to all humans in general and so

00:59:01.600 think about the the 16 year old kid who sneaks out of his house right he's trying to go get some tail

00:59:06.720 whatever that's his reward that's why he's sneaking out now what happens dad stays by the door with his

00:59:13.280 shotgun or with his belt or whatever it is and he stares at the door seething waiting for the kid to

00:59:18.720 come home the kid walks in the door what does he do he punishes him what did he punish him for coming

00:59:25.120 home he didn't punish him for leaving he punished him for coming home we already got rewarded for

00:59:31.360 getting tail too exactly no and so exactly that's real man and so what you do is you create smarter

00:59:37.680 criminals yeah you don't change behavior or you change the behavior but you're not you're not the

00:59:42.800 way you're getting the desired outcome yeah and so that this i mean obviously this is good yeah i can

00:59:49.520 but like that's that's why we're dedicating the mission of the company of like we believe

00:59:52.880 that companies can crush the companies that are built on punishment now you might say okay what

00:59:58.320 about like goldman sachs jp morgan mckinsey right these are all most people consider them very

01:00:03.360 punishing environments they take really high achievers they work them to death and then they

01:00:07.280 turn out right that's the game and so what happens is if you have and this is across mammals not humans

01:00:13.520 if you have an organism that is trapped as it cannot escape and the only thing it gets is punishment

01:00:21.520 then what it does is like i said earlier it reverts the law of least effort but what you do if you

01:00:27.840 have a completely punishing environment is that you just simply raise the bar of not getting punished

01:00:32.320 and so what happens is you get every single person to work themselves to death but here's where you

01:00:37.520 lose out and this is obviously what the thesis of our entire company is built on is that the highest

01:00:43.360 performing people the smartest super genies at goldman sachs and at mckenzie because they have some

01:00:48.080 smart people there those people can work medium hard and hit the bar of what is required but what you

01:00:55.040 miss out on is what we call discretionary effort so just like you have discretionary spending at

01:00:59.680 some pocket money at the end of the month that you go buy some stuff with you also have discretionary

01:01:03.520 effort so it's the amount of effort that you can expend on any task or you know yeah expend on any task

01:01:10.560 way above and beyond and that's what people call having passion loving your job bro it's where

01:01:15.440 all the greatness comes from and you punish the people who actually will make you the most money

01:01:20.080 because the p like because you have to set the bar if you have a punishing environment at a point

01:01:24.240 where you're not going to turn out of literally everyone and so you have to set it to a point

01:01:27.120 where the guy who just works really hard might not be a genius he can still keep his job but the guy

01:01:31.520 who is a genius he phones it in because he can still keep his job but you miss out on the best

01:01:36.800 people's best work i love that man which is what you fucking hired him to do and that's the highest

01:01:42.640 leverage thing you have like the most valuable asset in the business yeah absolutely bro love it man

01:01:46.800 man guys andy alex it's three that's all i got yeah hey bro thanks for sitting on the show man

01:01:54.640 thank you for having me yeah dude uh tell everybody again where they can follow you just so they're

01:01:58.800 following you guys you need to be following alex bro um alex hormosi h-o-r-m-o-z-i if you just type

01:02:04.480 hormosi in on any platform you'll find me and uh if you have a business and you would like somebody to

01:02:08.880 help you scale it very big then go to acquisition.com we're always looking for companies there you go

01:02:13.600 well bro thank you so much for being on sharing your uh experience and your brilliance we all

01:02:18.080 appreciate it and i appreciate your friendship very much it means a lot to me guys make sure

01:02:24.240 that you share the show don't be a ho

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REAL AF with Andy Frisella - June 05, 2023

526. Q&AF Ft. Alex Hormozi： Compromises In Business, Learning Skills Vs. Hiring Professionals & Dealing With Yes Men

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