My 2024 Lessons in Business That Will Make You Rich | Ep 819

Every year, I make a podcast on the lessons and failures from the year before. And every year, it is my most listened to podcast. And the wait is over. This is my lessons and failures from 2024. To give you context on the companies that I own, our average position at acquisition.com is just about 40%. And the reason it's just about is because we have options, we have performance kickers, things like that, but it's about 40%.

Our EBITDA growth, meaning basically the profit of those companies in total went from just over 50 million to this year, we'll probably finish just under 100 million in EBITDA. So really good growth here for us. For back of napkin math, if you assume a 10x multiple on the valuation, the company in total in aggregate is over a billion dollars, probably pretty easily because the bigger the company is.

in general, the larger the multiple. Now, to be clear, I don't want to claim that until we have some sort of third-party validation, but it was a very good year for acquisition.com. And so we'll likely cross $300 million in revenue up from $85 million in 2020. And so we have consistently grown year over year. And so this video is about what changed from $85 million in revenue to

300 plus. My first piece of advice is set fewer goals and do less long-term planning. Hear me out. The first big shift that I would say that's happened over the last year has been I have emphasized less and less long-term planning. And so this may sound contradictory.

doesn't want my content about being patient. And so I think the patience is about being able to figure out what you're going to do in the meantime as you pursue your long-term goals. And I think long-term goals are very important. But the obsession over the minutiae of how you're going to get there is, I believe, an act of mental masturbation.

you try and create these massive projections that are based on hundreds of variables that in reality you just don't know what's going to happen. And so over time I've consistently trimmed and trimmed and trimmed our planning processes such that at this point I pretty much only care what we're going to do in the next 12 weeks and beyond that we might have one target or two targets by the end of the year but we're not going to dedicate a lot of resources to this and this is somebody who's coming who's a big fan of preparation.

But I've just found that it ended up being a huge waste of time, mostly because whenever I looked at the plans that I made the year before, one year later, I was like, man, half this stuff isn't even relevant anymore because of new changes and conditions. I will probably continue to lean more in this direction. And I think this has become a little bit more popularized by some of the CEOs like Jensen Hwang, who despite having the video over 30 plus years,

has recently talked about how he basically doesn't do a lot of long-term planning because fundamentally you have things that you can do today and those are the things that you begin to allocate. Now sometimes what you need to do today is work for something that's going to happen in the future but you can only control what you do today. And so I've shifted more and more in terms of what will this change about our behavior and the rest of it I'm more or less toss out.

The first thing is that we think that you're going to have this really neat line of how the growth is going to happen, right? But reality is very messy. And so what's likely going to happen is that you will flat line and then figure something out and then you'll flat line and then figure something out and then flat line and figure something out. This is what it looks like if you were to zoom in on this little area here.

If you were to zoom in here, it actually looks closer to what this is, which is you have this stagnation and then you have these improvements that occur and then increase revenue. Now, one of the things that's also shifted my perspective on how to plan is let's say that we've got thing A, thing B, thing C, thing D, thing E, that we need to do.

Well, before this, I would try and delegate each of these things to person one, person two, person three, person four, person five, and so on. But I would say that that appears to me like I have not done my job because I need to do a better job prioritizing. One of these things is the most important. And if you can't decide what that is, then you are not doing your job and you certainly can't expect your team to make that decision for you.

And so I've had to look at this and say, if I could only pick one of these things and we only accomplish that thing, which of these would get us closer to our vision for what the company should be? Which one would move us the furthest forward? Which of these is the biggest domino? And so what I've redone is I say, okay,

A is actually the priority. I don't need to order B through C here. I don't need to worry about what order these are in. And then I will take 1 plus 2 plus 3 plus 4 plus 5 and get all of these resources concentrated on solving A.

And then what I found is that once you solve A with all those resources because everyone's aligned, then all of a sudden B happens faster, C happens faster, D happens faster, then trying to do them all at once. And the reason I say this is because I tried the other way first. And what ended up happening is I would have A, B, C, D, E. And then by the end of the year, A would be half done, B would be, you know, one third done, C we hadn't tried, D was no longer relevant, E was no longer relevant.

And so what ends up happening is that when you do it this other way, after you've accomplished A, what you might find is that if you have

B, C, D, and E as your remaining options, you might figure out that actually these are now irrelevant. There was no point in allocating that effort originally. So the two people in your original scenario who are working on these four and five were basically doing wasted work because it's no longer a priority because once you accomplished a basically all the variables change.

the context of the entire business will change if it's truly a good priority, right? It means that it's going to make a big dent. And so if it does make a big dent, then it doesn't make sense to spend all of this time wasting on trying to plan out how D and E are going to work out because the whole scenario, all the players on the board and the rules will change. And so what happens is once you do hit A and that changes the paradigm, we hit A, all of a sudden you might have F that becomes number one.

So this is now the priority, and then you align, yet again, those resources to making F come true. And part of the reason that solving problems this way, I think, is more effective is that because all of the rules change and the paradigm changes, so too do your resources. And so your original plan for how you were going to do D and E is based on today's resources and today's solutions.

But in the future, once you've accomplished A and the paradigm changes, then all of a sudden F becomes the priority, but you have all the resources of a business that has now accomplished A. And so this further changes why I think long-term planning, it's good to have long-term goals, but the obsession around every single little task and item and who's going to do what I think oftentimes is just a waste.

So let's say that you ran an agency, right? So you do, you know, meta ads for small businesses, like a very typical business. So if that was your business, you might say, okay, we need to, you know, get more leads. So that means we're going to increase ads. Okay, that's one of the things we're going to increase shop rate because our shop rate sucks. So we're going to, we're going to try and fix that. We've got a higher, you know, a sales manager.

and whatever else. You've got your task. Now, if this was your objective, a good strategist says, given the resources I currently have, what one thing could I do that would make all of these problems disappear?

Well, the good strategy would then say, well, if I had a brand and I invested in my brand, well, would that would that accomplish my leads thing? Yep. Now, I wouldn't have ads, but it would accomplish my problem of getting leads. Now, would show up rates be higher if I have a warm audience? Yes.

would my close rate be okay because everyone is being warmer? Probably. Now you might have to still hire the sales manager, but you can see how the entire dynamic would change if only this were true. And so then it follows, okay, what are the resources required to make this happen? And if I know what those resources are and I have those resources available, then it would follow that I should do this one thing and then in so doing accomplish all of these other things,

as a consequence. And this is why, to be clear, if you're like, wait, well, they're just going to say, build a better product, because if you have a good product, you're not going to lose people, you're going to get word of mouth, you're going to have higher LTV, or they're just going to say, Alex is just going to say, build a good brand, because if you build a good brand, then all these other problems go away. No shit.

That's called leverage. And so you're like, no, no, no, I don't want to do the one thing that would solve all my problems. I want to try and solve each of my problems individually. Well, that's amazing for you. And you should probably get that looked at. But the point is, is that a good strategist has to look at all available options given the resources they have and say, which one of these gets me the most? And fundamentally, that is leverage.

Next up is the strongest force in all of business. And so I believe in this so thoroughly that there are only two concepts that are embedded within the acquisition.com logo. The first is this cross here, which is the supply and demand curve that exists in any market. The second part is why is this a triangle? The triangle is there to exist as a fulcrum for leverage. And so fundamentally,

If you can have a supply-demand curve that is dramatically in your favor, that alone will dictate this. If you are the only person who sells this one thing and the entire world wants it, you are going to make a lot of money pretty much no matter what. It doesn't matter how good you are at market, it doesn't matter how good you are at sales, it doesn't matter how good you are at pricing, you're going to make a ton of money.

And so I try to think, what are the fewest things that have to be true in order for me to win? And I would rather just get those things right and then everything else can fall away. And so think about this in sequence. Supply demand is the first and most important thing. As long as we have those things, then if you had that hypothetical example of the entire world wants something and you're the only one who does it, what's the next thing you would need, which is leverage?

you'd want to be able to get as much for the effort that you put in because you would get bottlenecked based on maybe your supply chain. You'd have other dependencies that would prevent you from capitalizing on the opportunity that the supply and demand curve has put in front of you. And so in a perfect world, you have all of that and unlimited leverage. And that allows you to maximally capitalize on opportunities. And that is why I designed the acquisition.com logo to exhibit those things. Now,

The first piece here is understanding whether your business is supplier to man constrained. And so a supply constrained business, for example, is one that's like cleaning. Cleaners often don't have a hard time finding other businesses or other homes to do cleaning for. A lot of people just don't want to do it.

The issue they have is finding staff who can do the cleaning with them or for them. And so that means that your supply side of how you can deliver to the demand is usually the issue. And this happens a lot of times with what I would consider nuisance services. So services that people might know how to do, but just don't want to do.

And so, a different example of this in a professional setting would be like accounting firms. Accounting firms, a lot of people don't want to hire accountants for a big period of time in a lot of companies' growth in the beginning. You don't have in-house accounting. And so, having an out-of-house accountant, there's plenty of demand for them. The issue they have is recruiting really good accountants. Yet again, they are a supply constrained business.

Now, this works again with legal, it works with high-end consulting, like if you're a very good consultant and a niche, it's very like easy to get people to want to buy from you, very hard to get other people to do what you can do because you're really good at this thing, right? And so this is very typical in a lot of businesses, especially service.

that would be supplied to constrained businesses. And if that is the constraint, then what do we do to gain leverage over the constraint? And so this is where, okay, is there a way that we can build a community of accountants that we can then recruit from? Is there a way that we can create some sort of environment that attracts more cleaners? Can our compensation structure, can we have a referral system internally

for our team or our employees because I know what a cleaner, I know what a legal person, I know what another consultant is worth to me to my business in total gross profit per year. And why would I not be willing to pay 20% of that to somebody? Now, you might do that math and be like, holy cow, I make 250,000 a year per new lawyer who joins my firm. It'd probably be a lot more than that, honestly.

in that case, then why would I be unwilling to spend $50,000 to go and not only that, give that $50,000 to someone on my team for bringing another great lawyer in. And so this scales all the way up and all the way down based on the revenue that each of these high end or supply constrained employees provides the business. Now those are supply constrained businesses. And if you're in one of those, you need to recognize it because the real businesses you're in is

attracting, hiring, training, managing, and incentivizing these people to perform. That's the real business because the demand kind of takes care of itself. Of course, you have to do the basics, but the real issue is going to be on the back end on the front end. Now, let's flip the tables. There are some businesses that are demand constraint.

Now, demand-constrained businesses will be typically like e-commerce businesses. Oftentimes, software businesses, specifically B2B software businesses, can be demand-constrained. Typical consumer products. Weight loss, for example, is a very demand-constrained business. Now, this makes sense. Why do you like, wait, I think so many people want to lose weight. Yeah, there's just even more people who supply it and so many different methods for doing it.

Now again, all of these things can shift, right? Supply and demand is a curve, like it can move, right? This is dynamic and this video exists in time and unfortunately the environments change. But anybody who's been in fitness would understand that getting customers is actually typically the hardest part. Finding trainers, not that hard. There's lots of people that like training and they'll even do it for free. Same thing with musicians, like if you teach music classes, right, one of the difficult

difficulties. There is attracting people who want to buy music lessons, but there's tons of people who play music and do it for free, right? And so the idea is which side of this curve are you on? And then whatever that side is, is asking yourself, how can I gain more leverage over this problem so that I can solve it at scale once and for all, rather than having to solve it continuously over and over and over again?

So I'll give you an example. I had a company you came out that we were looking at and they were, a little bit on the smaller side, but they were a home services company. And so the issue they had is they were struggling to attract plumbers. One of the things that we put in place for the business was, well, what does a plumber bring in every year? And let's call it $400,000 in gross profit. Okay. So if you have a nut, a $400,000 that you know you've got the demand for, they're turning away business because their phone's ringing too much and they can't even take it.

He says, you got a 400,000 or not. What are you willing to pay one time to unlock $400,000 every year in gross profit? Well, if you were to think about that like an investment, right, which would be like, okay, I've got this stock that yields $400,000 in gross profit per year to me, what would I be willing to pay for it? And that's every year. Well, shoot, I'd be at least willing to pay $400,000 if it was a stock, right? That's a 100% return, because next year, I'm gonna make $400,000, too.

Now, there is an element of risk that comes into the equation. What if the person leaves? What if they get fired? What if they're not good? All of those things. So those are for sure there. Which means that we would then apply some sort of discount to account for that risk. But I think that one of the big misconceptions that business owners have is they're not willing to pay enough.

for talent, that is the constraint of their business. Like right now, if you could get 10 more, like if you are in a supply constraint business, if you could get 10 more of, not star, just appropriately competent employees who could service the demand that you have, would that double or triple your business? If so, yes, what would you pay in order to double-trib your business? Probably a lot more than it costs you to attract those people.

Cool, then what do we do? Well, the easiest thing is incentivize all the people in your existing workforce to go do that recruiting for you. Like, too many business owners will give like a $1,000 referral bonus on something that makes $400,000 a year in gross profit. Well, that's dumb. If I can give $25,000 away or $50,000 away and I can get it solved in a month, then every month, because that $400,000 doesn't happen at once. It happens over this period of time. And so if I can actually solve the problem two months earlier, then that means I get to collect

$35,000 for two more months of gross profit. Okay, so there is a time component of this, so maybe you can get the referral, and maybe it does take you six months instead of three, but you missed out on whatever that is, $105,000 in gross profit that you could have had, had you just been willing to pay a little bit more, but still less overall, and you still get to keep that person for life. So you'll notice that I'm talking a lot about who in these examples, and you know,

It's one of those big, obvious, trite responses that everyone who is a senior entrepreneur or senior investor or Warren Buffett or Steve Jobs, they all say the same thing, which it's just about the people.

Right? But on the jockey, not the horse. There's tons of isms in this world and everyone nods along. But the problem is that people don't have the context to understand the levels of talent that exist. And this is why these mistakes are so hard to bear because you have to have some sort of pattern recognition of having worked with one terrible people to know how to avoid them. And then secondarily, what start talent looks like? And sometimes it takes luck in the beginning and then over time, you start recognizing what that looks like so that you can do it on purpose rather than on accident.

And if you think about people as one of the highest leveraged things you can do, so think about this as hypothetical. If your business had people who could do everything that currently exists and you could simply own it, that would mean that you could work zero and make almost the same amount that you do now. You'd only have to find somebody who could do what you do. Like literally, just think about what you currently make. Think about what you currently do. If you could pay someone less than what you currently make in distributions to do 100% of what you currently do, you could feasibly retire at your current income level

just with that one hire. The idea of getting really good people is still undervalued in the marketplace, which is why there's always an opportunity for people who know how to attract and retain the best talent. There's a reason that the most expensive companies in the world and the stock market are at war for talent. I think, I want to say like 18 months ago, one of the headlines of, I think like the New York Times or something was the talent war. And the whole idea was just that

There's just it's an onslaught of signing bonuses and and and kumbaya and free lunch all the stuff to try and attract the top talent because they know that the leverage of having somebody who's a 10x engineer or a hunter

100x marketer for their business is always worth more than what they're going to pay the individual. And so they're just doing everything they can to get them. And this is me trying to translate that to you in terms of my emphasis over the last year or years that has yielded this outcome. If we're thinking about more or less in terms of my focus, this is one that I'm doing more of. I'm more focused on talent. I'm more focused on better people, fewer better people, and incentivizing them and incentivizing other people to bring them in.

Yeah, and there's some semiconductor companies that are offering three X salaries, their current salary to poach people from one company to another because the cost of switching is obviously high. If they're making more money than you, you should look at what they're doing. So next point up for me is of the first hundred days this year, I took zero days off and I bring this up because this is a very taboo topic and I want to be clear. Do whatever you want. All right.

I'm just saying that when I see the entrepreneurs who are obsessed with their work, they do better than people who aren't. And it's basically that their discretionary time that would go to hobbies, that would go to other things, basically all flows into this one thing. And so I'm going to paint a different picture for you. If I played video games all day,

And someone came up to me and said, hey, why don't you go outside? And I say, I don't want to go outside. I want to keep playing video games. The thing is that that person's making some moral judgment that I should do something that they have projected onto my life. Now, I'm a big believer in personal freedom, which is if you want to play video games every hour of every day until the day you die, that's your prerogative. It's not how I would want to live my life, but more power to you.

If you have an outcome that you're optimizing towards, which would be financial wealth, which is the kind of the point of my channel, the people who work the most tend to make the most money. And there's a number of reasons for that. So number one is you make more money when you work more because you have less time to spend it. That sounds obvious, but I think it's like kind of silly. If you work, you make more. If you stop working, you not only don't make, you also spend. So it's a, it's a, it's a negative to positive swing. It's actually disproportionate.

The next thing is that a friend of mine messaged Elon about

his vacation. He's like, hey, you should go on vacation or we should go here for vacation. And Elon's response was, I don't do vacations. And I was like, man, I love the sky. I bring this up yet again because I feel like the more you get in the game, the more addicted to the game you get. And I think that addiction is just a term that society uses for activities that people do that have negative consequences rather than simply things that you do on a regular basis.

Well, I'm addicted to food because I do it every day. I'm addicted to sleep because I do it every day. I'm addicted to talking to Lalex. I do it every day. And so it's just that addictions is when they decide that the outcome of that thing is somehow negative. But if the outcome of what I do helps more businesses grow and is something that I enjoy, why is this wrong? Big picture for me, we did end up doing one vacation in, we did two very bad vacations this year.

One was in July 4th, which I ended up basically just traveling and then working the whole time, so I don't know if I would consider that a vacation. And then the other one, we went to truly do a vacation. And so this one was gonna be two days. We got there, and it was this beautiful luxury resort, and there's only 22 villas. It's like three or four people per villa, like very, you know, ritzy, whatever. And I look out on the patio of the villa that we have over the mountains, and I'm like, man, this is beautiful.

and I don't care." And I think it was this realization that even vacations were something that had been passed on to me from someone earlier in my life, that I was something that I should do, that I must do this, or else I will not gain their approval and I will get judgment from people that I care about.

But when I think about who do I care about, who would care about, whether or not I go on vacation, there are very few. And they certainly don't have the things that I want or have accomplished what I would like to accomplish. And so why would I listen to them? And so one of the other things that we did this year is that we traveled significantly less. And so this year in total, I think we took somewhere in the neighborhood of 12, 10 to 12 days off in total. And I would define a day off as

not working at all, that would be a day off. And so I would say a work day I would define as more than call it four hours of work as a work day. So maybe on the days off I would still consider I'd work for a few hours, but I'll count that as a day off. So big picture, the increased focus and decrease in change in variables environment allowed me to work more because I had fewer changing variables that I had to accommodate on a regular basis. And so Layla and I were looking over our calendars yesterday, we did a joint,

a joint podcast going over each month of the year, like what we focused on in that month. And what was interesting is that we kept swiping through and it was just like work, work, work, just like an onslaught of things that we did over and over and over again. I can tell you this is that the periods where I've had tremendous financial growth,

across different companies that I founded have almost always had these very long periods where I just have to do reps and this is like I'm in a rocky cutscene of my own right now and I know that it's likely going to take

three-ish years and I'm probably about a year in and I probably have two more years to get to the other side and it's just that I've been on this roller coaster before and I know how the song goes and so it's less like weird for me and also I don't have the anxiety of will this be forever? I know it's not going to be forever and I know that it's a season and even if it is forever I have found that it's

far more productive for me to work seven days a week, eight to 10 hours a day, then it is for me to work five and take two. People have different preferences, but for me, it's kind of like the summer gap in learning. So when kids take three months off for the summer, they have this whole summer catch up that they have to do, which takes like another quarter for them to just get back to where they were. And so if you think about the three months plus the catch up, it's like,

Kids are only like net positive for like six months of the year and the other six months, they're not. So basically learning at half speed, not to mention you're learning at the slowest person in the class, which we won't even get into. But from an entrepreneur perspective, we're incentivized to get as much quality work done as possible. And so for me, I work very well on realistically a 10 to 12 hour a day schedule. Obviously, there's probably two or three days a week that I'll work 16 to 18.

But I would say my true average is probably seven days a week of 12, and I'd say weekends are shorter, and I probably have two or three days, like I said, during the week that are probably 18s. And so that gets me somewhere than 90 hours a week range. But for me, that's actually fairly

fairly doable because my wife's here with me I have a gym downstairs I have all the people that I care about who and I I care about them because they support me they take interest in my goals and they want to help me accomplish them and so they increase the likelihood that those goals occur and so how could I like what else could I ask from someone like for my life like what I'm I'm very happy with my life and I think that a lot of people take offense to me being happy about my life because they think that I cast judgment on them living differently you can do whatever you want and

I make this channel because I've been trying to document this since I had nothing all the way to a billion dollars plus and just say what's worked for me. Now, when we think about heaven, a lot of people see heaven as this place where no one works, right? But that sounds like hell.

And what's interesting to me is that, typically, and I'm not a Christian, so don't get upset. But the Bible begins with giving Adam a job before God gives Adam a wife. And I see that as God seeing work as just as, if not more important, to our life. Like he's modeling what we're supposed to do. And to be clear, I have a lot of Christian values. I just don't necessarily believe in the narrative, overall. Not the point of this video.

But I see work as integrally human. So in case you're watching this before the end of the year and you've got someone in your life who's like, dude, just chill out. Hey, just relax. I wrote this thing in response to this because it was something that I got a lot was like, dude, relax. Like, hey, everything's fine. Like, you're doing great. And I got really violent about it. And so...

almost known in my life would describe me as a chill guy. And I don't think I ever will be. And it got me thinking about this, and it's that greatness isn't chill.

Greatness is jealous, it's obsessive, it's demanding. It required me to sleep on the gym floor to live on the road and lose everything I had twice. Greatness required me to quit my job, leave home, enter a new industry where I knew nothing and no one. Greatness required me to use all of my savings to make new partnerships and then break old ones. It required me to get rejected by strangers, have people laugh at me, have money get stolen, get betrayed by friends.

And today it requires me to work longer hours than I did even in the beginning with fewer days off and do it with a smile. And I still work like my life depends on it because I believe that it does. So my point is every time you hear someone tell you to relax, telling you to ease off the gas,

Just remember that it just means there's going to be more for the few, more for those who hunt, who fight and persevere. And it means more for you and more for me. And the thing is that it's so easy to beat people nowadays because people are so soft and they can't stick with anything. They're distracted. Instead of doing what they know they should, they waste their time counting their notifications rather than the tasks they should get done.

And so they want the goals without the pain, without the focus, and without the sacrifice. They want the promise without the price. And people think they need work-life balance. But work-life balance is a great goal if you're okay with being balanced in the middle between the best and the rest.

But if you want to be the best, chill is not going to be good enough. Greatness is just too fickle. She demands too much, and she doesn't let you split your attention. She won't let you coast. She won't let you relax. She won't let you chill.

And the moment you do, she'll leave you for someone who will give her more, who will put more on the altar. And so whatever you're not willing to sacrifice to keep her, someone else who wants greatness more will. And so the TLDR is, I want to achieve great things. And great things have a great price. And that price never feels, looks, or pretends to be relaxed. So my little message is, if you want what you say you want,

Being relaxed, being chill, easing off the gas won't get you there. And being willing to sacrifice more for longer than anyone else probably will. And don't expect anyone else to understand it will be a lonely path, because if they could understand, they'd be right there with you.

So play by your own rules, win the game that you want to play. You know, my grandfather, when he died before I was old enough to remember him, every picture I've seen of him, he's standing up bone straight, like proud, and he ended up getting taken to prison and tortured for many years and he run during the revolution.

And when he came out, he was a very changed man. He didn't remember anyone because just torture was tough. He didn't. Yeah, I'll just leave it there. And so what's interesting about that is like I see him as a great man, but many people describe my grandfather and I've talked to countless and the thing is is they've all said the same thing. They were like, who's saying was a serious man?

And if I had to choose between how people would describe me, like he was a really relaxed guy or like he was a serious man, like if I had to describe this to people with just only those two descriptions, which one of those people do you think will impact the world greater?

And for me, I would rather sacrifice cool points in the eyes of people that I don't care about to do what I feel like I came here to do. On the back end of that serious note, fun things did happen this year. And so I ended up buying acq.com, three letter domain from Yahoo.

And so they had owned that since 1998 or 90 camera, but it was 96 to 98. They said they'd owned it for like 26 years, something like that. And I finally was able to wrestle it from there, from their grip. And so that was really cool. For those of you curious, it was $480,000 to buy the domain.

You know what? I don't buy a lot of crazy shit, and I'm allowed to spend my money, however I want to spend it. And I think acq.com is dope. And so on the back end of that, part of the reason I did that was because we just stood up acq ventures. So really proud of that. That was a project that we took on. Zach Choi, we brought in house. He's basically managing the investments on that side. Long history of venture capital work. It's primarily focused on SAS and tech-enabled services.

The reason that we're doing it is basically because our family office, which functions like a private equity, but it's a family office in that we don't have outside LPs or limited partners, people who give us money. So we don't have any people who give us money. It's all our money, which is why it's a family office. But in terms of the day to day, most family offices tend to be passive. We're very active in our investments and we take significantly larger positions.

We stood this up because we have a tremendous amount of people who are entrepreneurs who we meet through the various things that we do that would like investment, they would like help, but they don't want to necessarily hand over control or have that level of engagement. And so we stood up ACC Ventures because there's just honestly a ton of demand for a different capital structure for our investments.

We just did our first three deals in ACQ Ventures, I think should finalize the next week or two, so before the end of the year, kind of cool. And so that will be a much higher volume deal side for acquisition.com, and that branch will just be on the venture side. Also, free gift for you. One of the big things that I worked on this year, probably a month of my life, honestly, went into building out zero to $100 million scaling.

and what that looks like from a headcount from 0 to 500 people and from $0 to $100 million to $100 million plus. And I did it across all eight departments. So the departments were sales, marketing, customer service, product, IT, HR, recruiting, and finance. And so what problem exists at every level, and I've broken into 10 stages,

and what you need to do to graduate from that level. So you can literally just look at your own business and see what things you're missing, what things you're lagging on, maybe sometimes what things you're ahead on, because it's very neat to put these things into 10 stages, but reality is messy. And so it's more that you'll be at stage five.

You'll have some things that you're at stage seven on and some things that you're at stage three on, but those stage three things will likely be things that you will need to fix sooner than the things that you're at stage seven on, right? And so it's very much the constraints concept where you have a weak link and this helps you see where you're the furthest behind so that you kind of up level those things faster. And so I just dropped the training. It's at acquisition.com forward slash training.

and just click the $100 million scaling roadmap. And you can go there. We also have a little button there that you can get a personalized plan made for you. So you should answer some questions and we'll tell you what stage you are at and we'll give you the one before and the one after. So you know what you should be finished and what you have a line of sight to. It's absolutely free. You just go there and enjoy. It's 14 hours. You don't need to watch the whole thing. Just watch the section that's specific to your business right now.

So big thing right now is growth trends. And historically when I would do my podcast recap of the year, it was always my most popular episode and so now I'm just doing it on YouTube. But these are the things that I would say we learned or that we doubled down on in the portfolio that yielded really good results.

So number one is we focused a lot on leadership talent recruiting. All right, so you call this key player recruiting. And the big thing here is that I kind of switched my perspective on this, which is fundamentally, if you listen to Steve Jobs, you listen to Bezos, you listen to Zuckerberg, a lot of Elon, a lot of them take a hugely active role in bringing in top talent.

My understanding of town has been probably the single largest shift that I've had this year in terms of my understanding of business and why I think that we're disproportionately growing across the portfolio. The companies that are doing the best are the ones that we've been able to place key players. Part of that is being willing as the CEO, as the founder,

to actively show interest in these types of people. And they are the type of people that would not respond to traditional recruiter because they are either so good at what they do and they want to know that their investment in the company is going to be valuable. These are not the type of people who feel like you're giving them an opportunity to work for you.

These are the types of people that they're giving you the opportunity of helping build your business, bringing their entire Rolodex of people they already know, of teams that sometimes they can bring with them, and just a huge stack of skills that ideally should disproportionately benefit the business. And fundamentally, this is one of the highest leverage things that you can do, because at the most basic level,

What you need to do as a CEO is attract the absolute best people and align incentives ruthlessly for them to work and then get out of their way. Number two was focus. All right, now I talk about focus a lot, so I'm gonna try and say this in a different way than I normally do.

It's really top-down focus and prioritization, which is just another word for strategy. But just how much more important strategy is for businesses, because what happens is when they pursue too many paths, they look up a year later, and they haven't grown much at all. And if you're a small business, you absolutely can double triple quadruple 5X every year for a few years before sometimes that'll slow down. Now, if you have a compounding mechanism, it could even keep going and getting faster.

But at the very least, growing at 10% a year, again, there's nothing wrong with that. But if you're at a million bucks a year, five million bucks a year, even $10 million a year, you should be able to grow a lot faster than that. And typically, it's because you lack people and because you lack focus. And when I say people, it means you lack good enough people. The people you have, you might have a high headcount, but a low talent count. And focus, you might have lots of priorities, but they're the wrong ones.

And so, fundamentally, if you can't focus on one thing, one objective that is most important, that makes the rest of your objectives less important, then you are not doing your job as the CEO to tell the team how they should be allocating their attention. And that, and here's the important part, is deleting everything that is not this.

And so a lot of people are like, these are our objectives. Also, keep doing everything else. It's like, you can't do that. You can't just add more because now you've even further diluted what's important. Now, for sure, people need to continue to transact. Sales guys still need to sell because we're still needs to service. But the discretionary effort that exists in the top talent, the leaders of the company who aren't as involved in the day to day,

and are basically all times they have between aligning teams should be dedicated to a single priority that if accomplished would be an order of magnitude improvement in the business. And so this level of focus is what I continue to drill with the founders and the CEOs of the portfolio companies and it has yielded outsized returns. And there's a great razor for this, which is when I wanna fix a system or when I go into a department, the first thing I do is eliminate as much as humanly possible

And here's the thing is people are afraid of eliminating meetings, eliminating communication lines, eliminating processes. But if you eliminate just about everything, you'll find out that the vast majority of that stuff was complete waste and complete distraction. And here's the cool thing. You can always add it back. So there's this fear of loss. People literally have

fear of loss around processes and meetings, which is ridiculous, but that's just how we're wired psychologically, which is why companies in general, as they grow, create bloat. There's too many people doing too many things that don't matter or not enough stuff to begin with. And all of them together don't know how what they do makes the company money. One of the easiest tasks that you can do is zoom all the way out and think, what is the output of this department?

What is the output of finance? Have you ever thought about like, what is the output of finance? The output of finance is information to make decisions. That's it. And so if you're getting too much information or you're getting the wrong information or the information that you're getting doesn't change your decisions, then the function of finance is inadequate. You're not getting enough of what you need of output from that department. If the function of IT is to gather, store, display and analyze information, then are you, is there, is there

Are you getting the correct data? Are you able to analyze it? Are you able to display it and see in real time and be able to make decisions of it? Also, another information output department. Kind of interesting, right? So many of these departments really exist just to have information to make decisions.

I bring this up because you have to delete until you have the fewest things that matter. It's like you want to cut to the bone. You don't want to cut to fat or cut muscle. You want to go all the way to the bone and then add the few things that matter most back in. And I think that I'm doing this better now because honestly, I think I'm just more ruthless and I think I care less about judgments of other people. I think honestly, I think it's just like I'm more confident what I'm doing now.

And so it's like, I think I conceptually felt the same way. I just was like, this feels crazy, even though it makes sense to me. And so fundamentally, first principles thinking operates from this perspective of like, okay, physics or laws that we have to obey, what else do we have to obey? The law of the land, so we've got government laws that we have to obey. Besides that, tell me a physical or government law that prevents us from doing this thing in one tenth of the time.

Tell me the law. If not, then there is a way. And here's the thing is that there will simply be resources that are required. And so one of the things that I'm trying to get my team to understand is if I ask to do something and they say we can't do it, that's saying it's impossible and it's ridiculous and of course they're wrong. So it's a terrible position to take. It's also very frustrating.

Instead, tell me what it would take. Tell me the resources that would be required that we'd have to take from something else, and then we together can decide whether it's worth the trade. So, for example, if my whole media team, I said, hey, I want to make a motion picture, for example, right? I'm not saying I want to do that. Let's say that we decided that was a big, a big strategic party. If we were to get, you know, one big motion picture that was as big as Avatar, then it would be, you know, maybe it would do things for the business. Okay.

then they might say, well, we can't do that. Now, implicit in that statement is we can't do that and keep making content at the level that we're at. So then we'd say, okay, well, if we allocated all the resources and stop making content and we actually were able to get a feature-length film with the existing media team, would the benefit of that be worth the cost? And if it is, then great, we'll do it. But a lot of times we get a soft no immediately out the gate rather than what it would take.

And this has been one of the biggest shifts that I think has empowered me is asking better questions. And so one of the most frequently asked questions that I will probably, my question of the year is what would it take? And by doing this, the reason I think it's such a powerful question, it also works for deals, it works for sales, it works for anything, is that it assumes the result occurs. It assumes success. And so because it assumes success, you work backwards from the reality that you want to create rather than forwards trying to figure it out as you go.

I'll tell you something funny. So we had a company that we were looking at in the diligence process. I said, hey, you've got this downsell. Basically no one takes it. Have you considered just giving it away for free to get more leads? And they ended up doing it and they tripled their lead flow the next week.

And so that downsell was worth maybe 5% of revenue. But what's the value of tripling lead flow? Tripling revenue and probably disproportionately dropping to the bottom line. So tripling really would triple lead flow so it would cut cack by two thirds. But fundamentally, it would triple the business. There are so many of these little things that exist inside of companies and just being focused enough to say, no, this is our core product. This is where we make all our money. Anything that's not that distracts us from making this thing better.

So, theme number three was CRO. And so I'd say this year the companies that made the biggest gains had a discipline around conversion rate optimization. That means that at any given point they're running, call it.

three to ten different split tests on the key parts of the pipeline for revenue generation, meaning if you have a landing page where you get a lot of traffic or you have a home page that you get a lot of traffic or you have a follow-up sequence that a huge percentage of customers are in

actually testing things out there. So one of the companies we had had three CRO improvements, and this was the largest company we have in the portfolio. So we got a plus 20% CRO test improvement, which is a mass, a monster win, especially at the level of optimization that this company's in. So we're talking eight figures plus a month in revenue, like it's a big company.

And so 20% lift is huge. But on top of that, we got a 50% lift, then we got a 28% lift. So we had three mega wins. Now the question is, how many split tests did we have to do for that? I mean, probably 100. But the thing is, is that,

That was basically one guy and a couple devs split basically running these sprints on a regular basis, but how valuable is that to the company? Tremendously valuable. Because things that are efficiency improvements typically are long lasting. And so what's cool about that is that when you have an efficiency improvement, it means your LTV to CAC ratio expands, which allows you to spend more money in advertising, more money in talent, acquisition, all the way around the business. It literally just makes the business stronger.

And so I'll give you a little hack that is worth looking at, which is many businesses integrate third party tools into your processes, right? You've got a hundred different softwares that you probably pay for. What none of those softwares typically advertise is what their conversion rate is. And so if anything is customer facing that a prospect might interact with, I would look at three or four other tools within the exact same use case and see which one has a higher

conversion rate on the UX, so the user experience. I think you will get disproportionate returns on that. It's typically a heavier lift because splitting between multiple tools is a pain in the ass, but I've seen monster lifts there. So those are the three probably biggest themes, which was people focus and then optimization around the things that worked really well across the portfolio in 2025.

Now, the next part is, okay, well, what are the detractors, right? These are the things that grew those businesses. But what are some of the things that hurt those businesses? And so, I actually see this as the personal stuff. All right, so we had a few entrepreneurs, I think, took their foot off the gas. They started making more money than they've been accustomed to. And we're like, this is good enough. And so this is where having, you know, some people call it a big reason why.

you can have whatever you want as long as you change your behavior, how to really care whether it's a big reason why or you just change. But either way, you have to find something that's going to keep driving you. So for me, it's the love of the game. I just enjoy business. And so I spent all my time doing business. Some people don't enjoy business as much. It either has to be some mission that you have around the problem that you solve. Like it actually has to let you up. Otherwise, you will make enough money and you'll stop pushing that.

Now, again, if you collapse your goals, it's amazing. That's great. Again, I make my channel for people who just want to consistently grow, consistently grow in personal development and using money as just a stick for seeing how far you've stacked your skills. Also, not saying that money is a virtue or having money as a virtue, just saying that in general, you become more skilled and you can measure how skilled you are in the game of business by the amount of money you make.

Here's one that's gonna be uncovered for a lot of people is spouses and or partners. One of the big detractors, believe it or not, and I've seen this, and this is a big focus that Layla and I have across the team is how much support do

the key players on your team and or the entrepreneurs have from their spouses. You basically have the worst type of spouse, which is a spouse who actively decreases the likelihood of your goals. So they are constantly reminding you of the negatives that exist. They're trying to constantly distract you, say, Hey, stop working, stop talking about that. Let's do this instead. So not only do they try to get you to stop working, they try and incentivize you by doing something else.

And so it's reversing a negative and a positive. It's like a double whammy. And the thing is, is that I want to be clear. I don't think there's malicious intention here, but the result of what they do still massively damages the business. Like if you were to think of an enemy, what would an enemy do? They were trying to get you to not think about the business and then do something else that you get addicted to instead. It's almost like going to your competitor and being like, try some heroin. I think you might like it. Like fundamentally, the actual, what occurs is more or less the same. And again, I'm not talking about intention here. I'm just talking about what happens.

And so when we looked back, so we did like a retroactive analysis of this, of like, who were the stars who just crushed and kept growing? They were the ones who had absolute spouse support, who were like, if they need to work late, they need to work the weekends, I'll pack them with a lunch, you know, I'm here at home. And this happened for husbands and wives, both sides. The ones who, where you had somebody who came in,

who presented like a star, but then eventually fizzled was typically because, and this is where it's so nefarious, is that they would get into a relationship at some point, or they would upgrade the relationship like they'd move in together, something like that. And that person would have a disproportionate effect on the entrepreneur. And so what's really interesting is that entrepreneurs are typically, we're so concerned with our surroundings, who we want in our space, who's good, who's helping us out. And then for some reason,

The person who has a .71 correlation with your subjective well-being, the person who will probably have the largest influence on your behavior in your life, you don't hold to the same standard. And I find that crazy. But it happens all the time. And just because everyone else does it doesn't mean that it makes sense. It's also why most people are mediocre.

One is that if you're looking to bring a high-level person onto the team, I would consider talking to their spouse. Just gauge their interest level, see if they're supportive. In the middle, they're neutral, but I think neutral becomes negative over time. So you need someone who's active, who's when the employee inevitably has a bad day because everyone does.

They say, hey, this is a great job. This is great for us as a family. You got this. I trust you. I believe in you. I support you. What can I do to help? Tell me how I can make this easier for you. That is the type of support you want. Whereas if you have somebody who says, let's put work, let's leave work outside. It's home now. And I don't want to hear about that. Let's do all this other stuff instead. That sounds innocent.

The problem is that it decreases the likelihood they went. And again, I know this will be controversial. So, you know, take it to leave it. Again, my two cents, you can tell me each other. It's up to you. Let's talk about the next big one. So, in creating that scaling roadmap that I was talking about earlier, I wanted to create like a micro cycle. I felt had to exist within every process, right? And so I'm gonna break down two different processes that are different. One is scaling, the other is optimization. All right, so I'm gonna walk through both. So, whenever you have a system,

you'll typically start as the first step. So whatever you're doing, you wanna start out, you have to start. Number one, S. Then you have C, which is compound. All right, so you have to do more. Okay, great, we're doing more. The next is augment. So how do we do better? Then we have leverage, which is how do we make it consistent, right? How do we automate it? And so I'll just, I'll make this a little infinite thing. And then finally,

How do we expand again? And so this is actually a loop between these steps. So you start and then you do more. And then once you do more, you try to get better. Once you get better and you know what works, you try and automate it and make it consistent and have low volatility. And then you expand to the next territory, you expand to the next channel, you expand to the next type of content, expand to the next product, the same process. And it's nice because it has this little, what are these called?

Acronyms? Yeah. It's got this nice acronym, S-C-A-L-E. And so it actually fit in there. I was super pumped about that. And so now when I think about what someone has to do next with an apartment, I have to think, okay, where are they at? Okay, they just started this thing. So they just need to do more. They've done a lot. Okay, so maybe there's probably a lot of waste. So now we probably should do better. How can we augment? How can we streamline? How can we optimize?

Once they're doing better, it's like, okay, they're doing really well, but there's more demand that's coming in. How can we make this consistent? How can we automate this or portions of this work? And then finally, once we have this thing airtight, we're like, cool, how can we do this again? And then we expand. If we're thinking about this within the context of content, it's like we start on a channel.

Then we start posting, like we start posting on a channel, then we say, okay, well, one post a day works. Can we do three posts a day? So we do more. Then we're like, hey, some of these posts do better than others. How can we make our posts better? And then we say, cool, what percentage of these processes can we use AI for? What things can we prep? How that we can, we can basically make better happen more easily.

and more consistently. How can we make it instead of having one to 10K views and one have a million views? How can we get all of them over 100K? How can we get all of them over 250K? And then finally, we're like, OK, I think we've maxed out this specific channel. How do we now go to TikTok? How do we take this process and go to Snapchat or whatever? So it works for anything.

Now, the second process, so that's about scaling. This is about optimization. And so this is typically when you come in and fix something that already exists. And so I got to have a lot of experience with this this year because I took over media and conversion within acquisition.com. And I haven't operated day to day, probably like five years. And so it was actually a ton of fun for me because

Honestly, it's just like I've developed a lot of skills since the last time I operated. It's been great. So anyways, so the first thing is you question the requirements. And I got this framework from Elon and it's freaking awesome. So question the requirements. Why are we doing everything that we're doing? Please explain to me, how does this thing relate to this output? And this is why defining what each department is supposed to create is so valuable, right? It's like,

You're the content team. The goal here is to make as much good content to be possible. Anything that does not facilitate content creation in terms of volume and quality is waste. If you're an engineering team, it's like, you have code that you must type, which then creates software that people can use, and we want the quality of that software to be really high. And so anything that does not relate to those things are things that are waste. So we question why we do everything. The second, once you kind of get lay of the land after questioning, is you delete.

and you delete because the next few steps are going to be adding resources to the system. And so you delete everything that doesn't matter. So the first step that I did when I took over the media team was I deleted all meetings. Now, to be clear, it doesn't mean that we're never going to have meetings again. It just means that I will find out which meetings matter and then we will add those in proportionally. And so I said, you can have ad hoc discussions about clear things, but otherwise I'm canceling the recurring meetings and I replaced all team meetings, all one-on-ones with just a daily huddle.

That way, basically the entire day, and these were also deep workers. So everyone who's creating content really just wants to get into flow. And anything that prevents flow massively impacts their performance. And so it's like the solution of just adding more people and adding more meetings just gets more people to not work. It's terrible. And most people also hate it. Most people want to work.

And so once you delete, then you optimize, which is saying, okay, what are the things that we're doing right now? Get us the most results. What are these things that get us the least results? What are the resources required to do them as in like time spent or money spent in order to get it? And then we optimize it. So we say, the things that give us the most for the least, we put as the first party. The next thing that gets us the most for the most, we put as the second party. The things that get us a very little amount,

That cost a lot, we put it at the end, and we're just basically going to not do those things. And so you re-optimize the actual processes once you've deleted everything else. Then you pull up timelines. You say, how can we make this happen faster? How can we do this in one tenth of time? And what's crazy is that you honestly can increase the speed of things by 5x10x. It's mind blowing when you do it, because you're like, I can't believe how much waste we've had this whole time.

But all you do is when you ask questions, you say, how many hours does that take? And so then someone's going to respond with how many hours takes. So rather than this is the classic, instead of doing end of week deadlines, you just make it end of day. And so if a team is used to delivering something to a team meeting every Monday, and you say, cool, how many hours does it take? Great. Let's have it done by the end of today. You seven X the speed of that team.

7x. And so some people can't comprehend how one company can grow at so much faster rate than others. And it's because of this resource allocation. They pull up time. If you accomplish going 100 years, who cares? Time is a huge function of business. And so if you don't have time, if you don't have a process around pulling up timelines consistently, then here's why it's so important.

Like, let's say there's more utilization on the team. Like, they have bandwidth. And you pull stuff up and they're like, hey, we don't need that for another week. Like, why are you making me do it by the end of today? Because we don't know what's going to happen next week. And we might have a priority next week that we do need to get end of day. And then when that happens, we still won't have done this other thing. And now we have to do the other one.

So this other thing is now two weeks delayed. And so basically you want to use up all available resources that are renewable on a consistent basis to get the highest return. So I want to make sure that you understand the argument there because you're going to have to tell it to your team. The reason I'm going to drive this outcome, even though there's no apparent outside urgency is because it assumes that the future is going to be exactly like today. And one of the things I can guarantee is that the future won't

and that there will be things that you didn't expect, and when that day comes, you will want to have all of the things that you've accomplished behind you supporting you and have as many resources as humanly possible available to you to deploy in that moment. Because the most adaptable player in the system survives. That is what the survival of the fittest means within the context of business. It's the most adaptable player.

the most flexible. And so the final step here is automate, same as before. And so this is what you look at when you're trying to fix something or turn something around or make it better. All right, this is when you're trying to scale something. I could probably come up with something cute around optimize, but it has too many letters. Hopefully those two frameworks give you two different ways to look at departments. Are you coming to like, okay, this is a scale thing? So we need to do more. We need to do better. We need to make it reliable or automated portion of it. Or do we need to expand?

Or is this everything screwed up? Why are we doing what we're doing? Okay, delete all that stuff, optimize the things that get us the most outcome, pull up time requirements, then automate. Having these types of frameworks to solve problems makes life so much easier, which is why I share it with you. So the next one is about success and failure and knowing why. So Professor Bergerman from Stanford has this statement where he says, it's better to fail and know why you failed than to succeed and not.

Now, not withstanding the outcome itself, but he's talking about you as an individual. It's better to know why you want, why you lost than not know why you won, because you can't learn anything from it. Essentially, it means that the success of truly chance, which means you can't repeat it. And so Edison had 10,000 ways not to know how to make a light bulb. It's the same kind of idea. As long as you learn from your failures on a long enough time horizon and you don't give up, you will win.

period. And so an expert you can define as somebody who's made all the mistakes that you can possibly make in a very narrow field. And so fundamentally, that's what we want to be within our businesses. And so within that context, I have now spoken to a lot of business owners because we started this workshop division so we could meet more businesses so we could do ACQ ventures and obviously within the main portfolio.

that you're noticing I'm lining up a lot of sheets here. So there are what I call the six horsemen of business stagnation. And so if you are stuck, this is for you. So there are six reasons that I've seen that have been continuous

Rocket hard place in areas and the reason that business owners get stuck here is because you have to choose between two apparently impossible choices. One is pain today, the other is pain forever and both of them sting and that's why people just wade water in pain because it hurts a little bit less to keep pain forever than have a lot of short-term pain now. All right, so these are the big six.

So number one is being underpriced. This is how it presents. A business owner is at close to full capacity. Let's say they provide some services and they're like, I can't work any more than I already have, or my team can't work any more than it already is. And, and this is the key point, and we're not making money. So when that occurs, they want to look at all these different things, but the problem is you're just mispriced.

Now, there's the fear that if I raise my price, I will lose my customers and then it will get worse. But the thing is that I have shepherded so many businesses through price raises that it makes me sick. And the process of raising price works like this. You get to the price and then you say a higher number.

and you keep going up until people stop buying. That is how you do it in the back of napkin, red-neck logic way that I prefer most times. All right, and so if you're in that situation, you get to pick, do you wanna have a few people say no and you make more money? Or do you wanna be barely above water and not be able to expand forever? Because the reason you can't expand the business is because you don't have cash flow, you don't have cash flow because your prices are wrong. We need to fix the price.

Once we fix the price, we'll free up cash with the freed up cash. We can't expand any locations. We can hire that key person that you need to bring in. Number one, if you are full capacity and you aren't making money, you need to raise your price. An easy way to do it is every five plus 20.

All right. So I actually got this from lifting weights. Believe it or not, which is basically once you, it's the reverse of this, which is once you increase volume by 20%, bump your intensity up by five, meaning add five pounds, right, or five percent, right? So bump volume by.

20, bump intensity by five, and then volume will drop again, but now you have higher intensity. And so it's this kind of balanced progression process. That's just a very simple one. But it actually works the same way for price. And so it's like you sell five customers, if they all say yes to that price, or around the same percentage, or you net more money overall, you bump the price by 20% and do it again. And you just keep doing the five, five and 20, keep doing five and 20, until eventually, not enough people are saying yes, that you're netting less money.

Now, the problem is if you have small sales numbers, it's harder to hear no more often because your brain isn't going to calculate the fact that you made 20% more. It's going to be binary in its thinking of like it was a yes or a no. And the thing is that if you sell three people at twice the price, it's better than selling five people at half the price.

but you're going to hear no more often. And so it's going to hurt more, but it is better for the business for two reasons. One, you actually make more money. Secondly, and this is the big one people forget, you also have fewer people to service. So you have less cost and more revenue, which those two things together create a disproportionate increase in profit. So big thing number one, fix your price.

So the second big problem is overcompensation. Now what I mean by this is actually paying people, not like you're overcompensating for stuff, okay? This typically happens when you have a set of employees, especially in service businesses, where you accidentally in the beginning give some sort of revenue share or something like that. So it doesn't matter, you can't out earn it, right? Like if you grow the business, they just grow the revenue. Like you overcompensate them or you miscompensate them.

And maybe you did that in the beginning because the revenue was really low and never thought you'd get to where you're at now. And then your big fear, right? Each one of these has a rock and hard place scenario. The big fear is if I tell them that I have to change the compensation, they're going to leave. And the answer is maybe. But if you don't, you'll never grow. So what are you going to do? You have to go through the short-term pain to get the long-term gain.

The process that I'd recommend doing number one is you shore up the infrastructure, which means that you bring someone else in that can do the same thing as that person and do it at the new price that you want to pay them for. Then you can have the conversation with them with more leverage and saying, hey, the market is this. I'm paying you this. I understand this is what I need to pay you in order for us to accomplish our goals, which is what I sold you on, is that we want to accomplish this big vision with the business.

Now, I understand that is it like I'm changing expectations and so go home, talk to your wife, sleep on it and come back. Tomorrow, if you want to stay here for that compensation, I'll give you a delay. So this is the key part is you say, hey, I'll keep paying you this for the next two months or three months, whatever. And after that, then you'll go to this, to this new kind of compensation philosophy.

If they come back and say, no, I feel underappreciated, blah, blah, blah, then that's fine. And the good news is you already have somebody who's right there ready to go. That's the second big, big issue. The third big problem, and this is a big one, is this is really common when you're smaller. So I'd say sub three million. This is you guys. All right, serve too many. I'll just say infinite avatars. All right, meaning you serve too many customers. So you're serving too many people.

And what happens is all these different people have different demands. And so they are telling you all these different things and you can't get your offer right. You can't get your advertising right because you're serving too many people. Now, again, what's the rock and hard play scenario? Well, if I get narrower on my avatar, I'm going to sell fewer customers and I'm getting all these other people.

Well, to me, number one is if you fix your messaging, you will attract more of the right people. But you haven't been willing to take that bet. The alternative is you can try and be everything to everyone which you know isn't going to work because it's what you're already doing and you know it's not working. And so you have the evidence that your existing path is going to stagnate you. Again, the impossible choice is do you want to keep stagnating forever and maybe you make some money now but it's preventing you from growing.

Or are you willing to? And the business is about risk. Like you have to be comfortable with risk. All of these are risks. But the alternative is you never risk and you stay exactly where you are. And so for me, that is a much greater risk. It's like when you get into investing, anything you invest money into can go down. So you incur that risk. But if you never invest, you absolutely will never get wealthy. So what are you gonna do? You have to take the small risk so that you avoid the much larger, long-term risk. And each of these is small, short-term risk.

to avoid large long-term risk. Here you have to nitch down who you're serving, which you do by 80-20. So that means you look at all of your customers.

And you say, what are the top 20%? Who are these people? What do they do? Where are they from? And you say, how do I make this my message? And how do I make an offer that's only for them that they would go nuts for? And here's the part people miss and price it accordingly. So if you have customers that you provide five times the value to, and I'm sure you do have those people,

Well, all of a sudden, if you were to turn some of these bad ones away, then your price could reflect the value that you serve to only that much narrower avatar. And that's okay. And that's great. So you may, yet again, and by the way, this is the point, make more money. Again, all of these are counterintuitive, which is why people get stuck.

So the next one, the next rock and hard play scenarios is overextension, all right? So this one is, you know, Alex's favorite, this is Alex's greatest hits of mistakes, is me trying to take on too many things, right? Is I have a plate that's this big and I try and I start putting food on the table because I can't fit it in the plate.

And typically, this is where you get ahead of your skis, where you open that second location when the first location isn't really operating as much as well as you think it is. And as soon as you go there, the revenue from the first one drops. And you're like, uh oh, but a lot of that was my profit. And so now you've got these fixed costs, the revenue's down, and then you've got this one, but this one's new. So it's not doing as well as the first one was, and your star person's there, but you're not there. And so now you're splitting between two locations and you're like,

Oh man, now I'm actually making the same amount as I was with one, but now I have twice the risk. And you're like, oh, you know what the solution should be? I'll open a third. And then between the three, now your profit goes down even more, and now you're not making any money, but you have three locations, and you have three times the risk, and you're stressed out of your mind. So what do you do?

Honestly, you have two solutions. You either have to hire incredibly impressive people, which means that you're going to probably give up your income in order to bring this person on, or you have to cut your losses. You have to prune the tree, you have to re-concentrate, get it right, and then scale back out again the right way. And so overextension is typically a who problem.

which is you don't have enough good people that you left behind who can actually run it without you. This happens a lot of times in like the one to three million dollar range. It happens at all ranges but a lot there because

When you get there, you typically suck yourself out of the day today. You're not actually selling people, you're not doing customer service, and you're not doing delivery. But the issue is, you think that because you're not involved in the acquisition and delivery, that you're not required to run the business. But the thing is, is that you work every hour of the day right now.

And so if you work every other day, but you're not selling and you're not delivering, then it means you're doing other stuff. And that other stuff you're doing is very much operating the business. And so a lot of owners will mistakenly think that CEO and owner mean the same thing. You happen to be both, but they are not the same. And so right now is you leave, so it's like the CEO leaves the business.

And all of a sudden, the business stops running as well because the CEO's gone. So you have to have somebody who's going to operate behind you. You have to basically backfill yourself. And in my opinion, I like a six month test. At the very least do a one month test, which is go away for a month and you show your phone to your operator and you say, hey, here's the deal. You're going to get this override on the business. So a little profit share, whatever, some stock.

And in doing that, I'm doing this in exchange for this not ringing. That's the deal. That's the trade. And if this rings, then that's not the deal. And so it's like, then you role-play it out. So it's like, let's say a pipe burst. What do you do? If it's call you, wrong answer. Because what do you think I'm going to do? I'm going to call a plumber. So what are you going to do? Just call the plumber directly. You don't need to call me to call the plumber.

Same idea. If it's an emergency, call 911. If it's not an emergency, don't call me. Either way, don't call me. And so this is the trade. So if you're overextended, you either got to dip into your own paycheck to bring someone in, or you got to prune the tree, re-concentrate, and then build it back right. And the six month test that I was alluding to is

the business has to either maintain or grow for six straight months without your direct involvement. Now, that last point is the big one without your direct involvement. Now, some of you are going to run that test, still continue to work in the day-to-day for six months and then say, oh, I think I did it, but you just didn't change what you did at all and the business continued to operate with you as CEO, which is not the case. You just delay six months and then you open the next location. Well, which will still make you a little bit better in terms of your cash position, but not my recommendation. So, what's number five? So, number five is...

more than one business. So this is also an Alex special. I have a lot of specials here. Four and five are my personal favorites that I've made the most often, which is you've got two businesses or you've got three businesses because you don't know how to pick. And you operate from the fallacy that Zuckerberg had a side hustle. Zuckerberg was also flipping Airbnbs and doing wholesaling on the side, right? And that's how you build Facebook. Of course not.

One of these businesses is the business you should be doing. And the thing is, is that the opportunity is the problems that you need to solve and aren't is not in the missed opportunities. It's the problems that need to be solved. Right? It's the hairy work that you're not sure what the answer is, but you know, you need to fix it. That is where the opportunity is. Because fundamentally, if the product were exceptional and everybody loved it, you wouldn't have an issue be going all in on that business. And so if that's the case, then just do it.

Now, you're going to have this sunk cost fallacy. I've already put all this money to this and already got it going and already have a partner there. Yes, short-term risk, you lose relationship. You lose maybe short-term income from that business. Long-term risk, you never grow any of these things, standing material size because you're too distracted. Pick.

Again, do whatever you want, but I'm just saying, these are the most common ones. And then finally, we've got no data daddy. All right? No data, papa. I have no projections, papa. Okay. So with no data daddy, the issue is you don't even know what your problem is because you don't collect any data.

And so it'd be like, hey, what do we need to grow? What's our lead cost? No idea. What's our close rate? No idea. What's our churn? No idea. Well, you can't really do much if you have no idea what's going on. And so this then becomes the constraint of the business, which is we need to start collecting data. Now, to be clear, the first five have what I consider an impossible scenario. There's some cost. The cost here is that you give up a business. The cost here is that you have to cut, you have to prune things, or you have to hire someone and hurt your own income.

Here are the issues that you have to say no to customers that you're currently making money from. Here, the issue is that you have to say no to employees that you're currently overcompensating. Here, you have to turn down customers at a lower price and hear no more often. Those are the short-term costs, but the one big risk of all of these is that your business isn't going to grow. And you've been stuck for long enough to know it's already not happening, and there's not going to be a silver bullet. You've got to confront this. The no data data issue is just, hey, silly pants, get your data.

then you'll actually be able to grow. Now there's no downside to this one. The only downside here is that you've got some shiny object that you think's really sexy and interesting, and you don't get to do that because you need to do this. So do this first. And I'll give you a really useful razor.

for how to think about what data to collect, all right? The easiest test for is this data valuable is when it changes, does it change behavior? So if we track our views on a social media channel, if the views go up, does it change what we do? If the views go down, does it change what we do? If the answer is no, then we don't need to track it. Because you can track unlimited variables in the world. Like you can track the temperature of the room when people are walking in. You could track it,

but will it change your behavior? You can also reverse engineer into what are the behaviors we do, what data affects it, and there's the only pieces of data that they need to track. So my biggest personal growth lesson of the year, so I give you all the portfolio growth things, but my number one was Rush is imaginary.

Now I just give you that whole speech on urgency, but one of the things that is that I've had to learn is my biggest mistakes have been shiny object or woman in the red dress and overextension. And so I have these arbitrary goals that I set for myself that I never say out loud, that I think about every day, that mean nothing to no one. And then I try and force everything to happen on this arbitrary timeline that I made up. And then I'm upset when people who don't know my arbitrary timeline

fall short of the speed that I wanted to happen, even though I made it up to begin with. Layla gave me this frame that I alluded to briefly earlier, but it's probably been, I'd say, a talent focus. And this is a subset of focus, but it's missed. Opportunities is less than problems. So what I mean by that is that the opportunities that you're looking for are in the problems that you need to solve. And me understanding this, I've repeated it because it's really been singed into my brain.

There are, for example, if you're starting to get low reviews, these are the things that threaten the livelihood of the business. That is a problem. If you're not doing email follow up, that is a missed opportunity. And unless you were, call it payback rate or your LTV or some sort of conversion mechanism is the risk of the business, then that would be a missed opportunity. If the number one risk of the business right now is like, you can't make money because you aren't converting a higher percentage of leads, then that would shift into a problem.

Right? And so it's not that like any specific thing is one or the other. It's recognizing contextually within your business. Is this something that would be nice to do? Or is this something that we must do in order for us to achieve our ultimate goal? We might be able to achieve our ultimate goal without doing email follow up. If our product sucks, we will never achieve our ultimate goal.

And so it's understanding the order of magnitude or the importance of the potential tasks that you have. The reason that this stressed me out for so long, and this is the big one, is that problems in your business are actually finite. You can list all the number of problems in your business, by and large. Missed opportunities are infinite.

And so I basically took, I would look at the world of all the things that we could do and here's the thing is the better you get at business, the more things you know you should be doing that you aren't. And you see this huge unlimited potential options of things and you look at these tiny little resources that you have and then it's like we need to do all of these things. And this is where you stress out your team and you stress out yourself for literally no reason.

It's been difficult for me and it's been a discipline now to ask myself first, when I want something to happen, is this a missed opportunity or is this a problem? And nine times out of 10, it's a missed opportunity. And so I've been doubling down on problems and solving those. The thing is that problems are typically not nearly as fun as missed opportunities because missed opportunities have all the new gloss on them. They're still in the wrapping paper. You're like, oh my God, this is going to be amazing.

But as soon as you get into it, you're like, oh, there's problems here too. And then, and I've said this before, but what ends up happening is when you have this missed opportunity bug, you start building all of these half built bridges, right? You never actually get all the way across. You've got a dollar here, but you're standing on this side of the, of the land, right? And you need to get this dollar across and you start building and then you find out that there's problems. And then you're like, oh no. So you know what I'm gonna do? I'm gonna build a second bridge and then you find out that there's problems.

And you're like, oh, no, I hate problems. I'm going to go find another one that doesn't have problems. It immediately just makes me more money. But there's always problems. There's always problems. And so it's like I have to just use the problems and I've got to stitch this thing together so that I can get the dollar all the way across and then into my very large pocket.

Here's the difficult part of this for an entrepreneur is that when you quit your job, when you started this business, you were very enforced for pursuing a missed opportunity. You weren't doing this thing. You start this business and you get rewarded for doing it. And the problem is, is that you need to unlearn that behavior because it's a behavior that you only want to do once when you start your business.

Every time after that, you have to confront. You have to endure. You have to stick through the problem and see it to its natural end. You have to get it all the way there so the dollars can make it across the bridge. Or you'll just have spent all the resources, all the distraction to build and reinforce this thing that actually results in nothing.

And so this has been probably my single biggest tier of lesson because this is a subset of focus for me specifically. I ask, is this a missed opportunity or is this a problem? And if it's a problem, then I need to solve it. And I just need to confront a lot of the problems or things that you don't know how to solve yet. That's why they're still unsolved. And so you have to become comfortable in enduring the failure of

working with limited information or incomplete information. Because the reality of businesses is that you will almost always not have enough information to know perfectly whether this is the right call. And so you have to be comfortable in ambiguity. You have to be comfortable with incomplete data sets and still making the call. Because when you have a complete data set, there's really no stress. The answer is obvious because you have the data.

It's all the times where you're like, oh, well, I wish I had tracked that one thing that I didn't know was going to be important now, and I can't go back six months to get it. That happens all the time. And you just got to be able to make the call. Because the thing is, is that we have this fear that we're leaving money on the table.

Right? We feel like this missed opportunity right here. We're like, man, there's so much money on the table. But the real money on the table sits in the problems that you know you should be solving but aren't. And so once I realize that the problems are the things that I need to be solving, then I can deploy all of the resources that I normally would use to distract myself to reinforce this bridge and reinforce this bridge and reinforce this bridge before I've made a dollar go across and then point all of those resources to one this big dollar sign so I can go put it into my pocket and actually solve it.

And so the compounding that occurs in business happens from focus. It's from doing one or two things exceptionally well, not doing many things mediocre. And missed opportunities are the gateway drug to mediocrity. And how I deal with this emotionally.

is I have a big list of Alex's big money ideas. And I've done this at very different times in my life. Like, when I know what we need to do and we just have to keep doing more of it, and the thing is it's like, you probably know this too. And yet you have this need for novelty, right? I get it, believe me. And so what I do,

is I add this idea to my big money list. And then when we do have bandwidth, I say, what one big thing on this big money list are we going to attack? What's crazy is I'm like, I've got a hundred ideas on this list. And then it's a fun property to be like, okay, which of these things is the biggest thing that will get us the furthest? And what's crazy is, and if you actually do this,

I have found so many times that I'm in love with an idea and then a month later, two months later, I look at that idea on the list and I'm like, I can't even believe I was so into that, right? And the thing is that if you don't have that discipline, you don't just write on it, you don't let it marinate for a little bit. Sometimes you end up deploying all these resources into something that you a month or two later would be like, I don't even know why I did that. If this is resonating with you right now, then

Do more of this. Put more of the ideas on a big idea list and then just let it cook and don't tell anybody. Because you have this need to share. You have this need to talk the idea a lot. I get it. I do it.

just write out as much as you need to there and then it's like you get it out of your head so you didn't have to, you got all the details and all the craziness out and you're like, I can shelve it, I'll deal with it later. It's kind of like Abraham Lincoln, he used to write these letters when he was really angry at people. You'd write these huge letters, just scathing letters to these people and then he would seal them and then he put them in his desk and he said he'd sleep on it and the next day if he wanted to send it he could. And so his desk after years was just filled with all these letters that he never sent.

but it allowed him to get through the moment. So I want to hit on this rush piece, because I think this is important. Rush is imaginary. So something that I've been thinking about is like, where does this rush come from? So fundamentally, if unless you have a network effect business, so you have a winner take all market, like you're trying to become the, you know, Uber of whatever, right?

There's a network effect that there's one winner who will win, and that's it. If you're either going to be Apple or you're going to be Android, there's no one else in the market like you've got two spots in the market for phone creators, and that's it. That's the monopoly. Unless you're in one of those settings, which 99% of businesses are not in that situation.

I have realized that for me, Rush is actually linked to one thing, which is my competition reference point, which is fundamentally who I choose to compare myself to. And so my Rush is entirely arbitrary because I just pick who I'm comparing myself to. Now here's what's kind of crazy.

Do you compare yourself to a five-year-old? Do you look at a five-year-old and be like, what a loser. They don't have a business as big as me. No, of course not, right? But the thing is, is that why wouldn't you compare yourself to a five-year-old? Well, because they haven't had any time.

and because they are not developed yet. But the thing is, is that they're another human, just like you, and they will eventually, because now let's fast forward 20 years. Now they're 25, and let's say they're crushing it. Do you now compare yourself to them? Why do you compare themselves at 25 and not at five?

no real reason, because we think it's acceptable to compete against that particular person. And so for me, the realization that Rush is entirely linked to I choose to compare myself to meant that it's entirely made up in my mind. So I can just change why I compare myself to, or I could try to compare myself less, much more difficult.

And so in thinking about this, it's more, how does this comparison change what I do every day? And if it changes my actions that decreases the likelihood that I achieve my long-term goals, then these comparisons hurt me. The question that follows from the comparisons is, how does this serve me? And if it doesn't, then why do it? Like, do you feel guilty in middle school that you aren't the richest person in the world?

Well, then why do you feel guilty at 30? I'm not saying that's my goal in life, it's not. But like, fundamentally, you don't, like you don't, like flipping rolls when you're in middle school, do you feel like a loser because you're not making money? Maybe a couple people, right? But y'all are weird, right? But most people, when middle school, you're like, oh my God, I have, you know, I'm getting chest hair or whatever the hell, right? You're like, I'm navigating life right now. Like, I'm a child, look at my limbs, they're longer, right? And so the thing is, is that,

We just choose to enter this comparison game, but we're all gonna die, and all of our stuff's gonna go right back into the middle, and other people are gonna play with our chips, so who cares? And if this rush is impacting your business, then you need to find a way to quell it.

Now, a third door is to compare yourself to your heroes at that stage in their lives, right? Which is, where was Warren Buffett at age 35? Okay, am I on track with him? But again, you're not going to be Warren Buffett because Warren Buffett lived through the greatest growth in American history and was born at the perfect time, right? And he also bought his first stock when he was seven. Did you buy your first stock when you were seven?

No, here goes, there goes my five year old analogy, right? But did you, so if you didn't buy a first stock with your seven, you're not more above it. Now you can model his behavior to have outcomes that will be probably proportionally smaller than his, but that's okay. It's only a problem if you think it's a problem. So the next big category of kind of growth trends or focuses for the year of 2025, my big lessons, was branding. So I talk about branding a lot and that's because it's really important.

But I had a one day where I spent with Ben Francis. So he came out to Vegas for the Olympia, and then we spent the day together, came a day early, which is great. And we just hung out. And Noel Mack, who's his head of brand, was there with him. And we got to spend a wonderful time talking about Brandon General. They told me this story that has really stuck with me. And I got to actually connect through them with the CMO of New Balance. And so this is the story.

New Balance is CMO. Their growth had plateaued after a number of years and so they were kind of stagnant and they needed to shake things up. So he became the CMO of everything and he went to the CEO and said, hey, can I just swing really big? And the CEO said, sure. And so then he said, I want to take our spend, which right now is 70% bottom of funnel and 30% top of funnel.

And I want to flip these two things. I want to make 30% bottom and 70% top. And you're like, what does that mean? This is brand awareness, storytelling, associations that you make with different athletes.

That is all top of funnel, like, wow, new balance is cool, right? The bottom of funnel stuff is buy shoes, right? And so after doing this, what was crazy is that for the first 18 months, they made less money. And so the company's return on their advertising budget went down for 18 months. But on month 19, it went like this, boop.

started going up and then it went up even more and then it went up even more and so they've had this massive rebirth

from this shift and strategy. And so when I heard that story, it was really compelling for a number of reasons for me. And it changed my behavior. So number one was, this is a good ratio to think about in terms of investing in an audience versus kind of withdrawing from the audience. And the reason the 70-30 I found interesting is that in the $100 million leads book, I talk about this at length, but there's been a three to one ratio that's been studied by televisions, by radio.

which is content, right, to ads.

So if you're on your Facebook news feed and you scroll, every three posts, the fourth post will be an ad, all right? If you're on YouTube, it might be number of minutes. Now they have AI and all this stuff, but for the typical one, it's a three to one ratio. Now this ratio is what is required to basically keep a brand, keep a channel, people keep coming back. Now if they change this to two to one, all of a sudden people stop watching that channel. They stop watching, they switch to something else, right? That ratio being reflected here, I see is a human thing.

And so I think to myself, okay, I need to make sure that I always keep my ratio at least three to one in terms of value driven. And you can think about this in terms of views, like impressions per person, because that's what really matter. We can think about this in dollar spend, if you want to think about it from a budgeting perspective. But for me, I think about this at the individual level.

I want to make sure that someone's getting at least three or four positives before they have any kind of ask for me to do something. Now, the net net world is that if your product is exceptional, the ask is not an ask because they're excited to buy something else from you.

And so this is why brand and product long term are interwoven together. Your reputation with somebody will be reinforced or diminished by the quality of the product because you make a promise with your advertisement and you deliver on that promise or over to.

Real quick, the rumors are true. $100 million scaling is live on my site at acquisition.com forward slash training. It is the full 14 hour saga of going from zero to 100 million across eight functional departments at 10 different stages in the business. There's so much time went into putting this together for you.

And yes, it's absolutely free. So if you're a business owner and you're trying to get to whatever the next level of scale is for you, whether you're trying to go from 50 to 100 employees or 100 to 250, or you're just going from, you know, five to 10. There are clear things that you have to do at each stage, having done it multiple times in a row now. I feel really proud of this and it's all yours. So if you want that, you can go to acquisition.com for slash training and enjoy.

with the product. And if it's worse, now you gotta put more in the bucket here to kinda like get them to be willing to take another shot with you again, or

If you have a really good product, the amount that you have to put back in here is actually less. You could sell something else even faster. So if Apple came out with the next iPod, right, people would be really excited about it. And if the next day they said, hey, we also have this other amazing thing that doesn't necessarily compete with the iPod, as long as you had the money, which is a different question, as long as you had the money or financing available, you'd be excited to buy the next thing too, provided the first thing was awesome.

And so this is the idea is that products can reinforce brain and should be the thing that reinforced brain over the long term, which is why I want everybody to read my books first, because the books have been the pieces of content that I put more at single time than anything else. I put 2,000 plus hours in each of those books, like no joke,

2,000 plus hours. And so they are the single best pieces of content that I will likely ever make. And they will outlive me. These videos will go away, like podcasts will disappear, but the books will remain. That is why I want everyone to read them, which is why I've made them free. Like you can listen to them on my podcast for free. And if you like hard versions, you go on my site or you go on Amazon, you can grab them, all right? They have, you know, 26,000 five stars. There's a million copies that have been sold. And it's because they're good.

It's because I put so much time into them. This lesson, first off, was important for me because the ratio and it corroborated what I kind of already think about in terms of content and giving to asking. The other piece that I thought was really interesting was the time delay, which is that he made this shift and then he had to wait a year and a half and that's given the size budget new balance has, which means that if you want to build a brand, you've got to measure in years. You're not going to build a brand in months. It's just not going to happen.

Right? And people, people see my brain now, but like my first YouTube video is also started at zero. My first Facebook page started at zero, like everyone, not my first Instagram, started at zero, like everybody else. And so it just takes time. Like my first YouTube video is I think it was 2019. Don't expect to have a 10-year outcome in 12 months. One of the questions that I ask myself is like, okay, for branding for CPG companies. So for companies that sell to consumers, direct to consumer.

The branding playbook is very well tested. You go find influencers in that world or brands that are similar. You do collaborations with them. You basically cross over own values. Their values become similar to yours. You kind of rub off on one another. You go find champions and athletes that are top of their field. You make the associations. People then want to buy your product because of that associated in the history of positive reinforcement they had with that particular athlete.

I was like, how do I do this in a B2B setting? And so I have split this up into basically two major categories. If I want to build a brand in a B2B setting, you typically want to educate your audience because you want to be positioned as an authority. So if you're an accountant, you're a lawyer, whatever it is, you want to be known as somebody who knows what they're doing. And so category one is you help them accomplish their goals for free.

Very simple. So a lot of this is going to be content, right? Like this is why we brand with content is that if you like, what's the most positive association someone can have? They have a goal, you have them achieve it. Okay. So they will link their goal achievement to your help. Great.

The next thing is that you help someone like them. So it's an approximation. I am a lawyer and I help someone negotiate some deal and that person and I have to advertise it. I have to let people know about it. Me seeing that as a plumber and this lawyer only helps plumbers negotiate these deals, I say, oh, someone just like me got exactly what I want. So this is a degree removed. The next one is that you do the aspirational outcome yourself. Now both of these can be aspirational, to be clear.

And this was actually something that Ben and I talked about a lot, Ben Francis, which was oftentimes brands are built on the aspirational because it's almost like an extreme version that I translate into decreasing risk of purchase. So let me explain.

So North Face can help people get to Everest. And so if it's really cold at the top of Everest, if I buy that jacket, it will likely keep me warm on the way to work from my car to the door, right? If Range Rover makes an ultimate outdoor vehicle and that they're the ultimate off-roader, then it'll probably help me if I have to get over a curb.

It's these extreme versions that get regressed down to, well, if it can do that, then it'll probably help me with my thing. Sebum is the best fitness influencer right now in this generation, and so if he wears this stuff to compete at the Olympia and train for the Olympia, then for me to just try and be the strongest guy at my gym, it'll probably work for me.

And so the question is, what is that aspirational outcome? Like Red Bull, if I could drink the Red Bull and jump out of space, then it'll probably get me a little bit motivated when I have five hours of sleep. Notice the theme here, like all of these brands have these big aspirational outcomes. There's a reason that my brand grew when I had a $46 million exit, because it was an aspirational outcome. Now, what I'm trying to do now, and I've been public about that, is cross a billion dollars, like that's the goal, and when that occurs, my brand will be reinforced, it'll be strengthened, because it'll be an aspirational goal,

for more people. Now, the good news is a $50 million exit or $46 million exit is a good enough occurrence for many people. Now, a different aspirational thing might be our portfolio performance. Now, we're worth significantly more than when we have that exit, but it's less validated. It's less third-party signed off, and when we have that sign off, it'll become validated. Now, I'll give you a fun story on this. The amount of people that gave me kudos

for selling Jim launch was significantly more than the people who gave me kudos for owning Jim launch. But the owning of Jim launch, I was richer the day before I sold the company than the day after, because the equity in the business compounded tax-free. And the moment I sold it,

I had to pay taxes on what I gained. And so by definition, I had less money after the transaction than before. But everyone perceived it because there was the third party edification that occurred because the third party at arm's length made the transaction happen. And so it was real. But as long as you don't live in the minds of other people's perceptions, which to be fair in branding you kind of do, you don't want your self-worth to be tied in their perception, but your brand ultimately will be.

The idea is the question to answer if you were a B2B business and you're trying to, which is over half of businesses are B2B. Fun's dad, I didn't know. I was looking this up for school actually, is that these are basically your buckets. Is how do I help them do what they want? How do I help people like them? And how can I accomplish something aspirational in their mind?

or help other people like them accomplish that aspirational thing. And this is where you can help them accomplish their goals or the aspirational goal. It's either of those things. But the aspirational one I find incredibly interesting because some people saw the book launch last year for the $100 million leads. We had a gazillion people there live, it was awesome. And they were like, I would like to do something like that. And so that in and of itself was a brand reinforcing event. Big picture.

This is what I see as the process for building a B2B brand, because it's not like you're going to think about it like this. If you're an attorney, you're not going to sign the top attorney. You know, O.J. Simpson's attorney, I can remember. It's the Kardashian's acts. I can't remember what a Jenner? Anyways, no, that's Bruce Jenner. Forget about it. You get the idea. If you're a business person, then it's like Elon's not going to endorse you, right? It's not going to happen.

And so it's like you have to do the other things that can approximate your proficiency with proof. The final TLDR of this is you have resources. This is what your brand must accomplish. This is the timeline that it has to go off of. This is the ratio you need to follow, and this is how you spend your money and time.

to make these things happen for the audience. And that's how you do it. And so this has been my focus, one of the big kind of like crystallizations of knowledge, maybe deepened my understanding of branding and how it translates back and forth between D2C and B2B. Next up, I had more legal issues this year than I think I've ever had.

And I don't see it as a problem. I have positioned it as a cost of doing business, which is that the more you have stuff, the more people will want to take it from you. Or alternatively, people will believe that you don't deserve it because you don't need it anymore.

And so both of those situations are obviously outside of an original agreement. And so I'll give you some of my takeaways that might be helpful for you. So number one is the point of an agreement is not for when things are good. It's for when things are bad. And I think this is a mistake I made earlier on in my career, which is like, oh, it'll be fine. It's like this is always going to work. The whole point is for when it's not working. And I probably would have been more vigilant.

in how I thought through some of the agreements that I made earlier on in assuming like assume that this does not work out like think about really think about all the ways to go wrong and then assume it is 100% wrong or worse and then operate from that perspective. Now that doesn't mean that you want to have negotiations in an agreement that are

contentious, but it's good to operate from that that angle. So the second thing is I would look at legal stuff purely based on a return on time. And so at least in the US, the bar for suing, getting sued, whatever is basically zero. And so it's a very litigious country that we have a lot more lawsuits, a lot more lawyers in Europe, for example, like

It's very difficult to get malpractice lawsuits. It's really hard so they don't have all the malpractice insurance industry. All of that doesn't exist there. It is very much dependent on the laws of the land. For me, I look at everything from the business perspective of dollars and cents.

And the idea is, OK, if we have to go through some sort of litigation or some arbitration or some sort of thing that we have to deal with, I upfront like to understand what does it look like to have to go all the way? Obviously, you want to settle. You want to do things in mediations because it just saves time for everybody. But if you have to go all the way, then this is my absolute highest cost, which is going to be time.

If you are smaller in the business, then money would be an issue. Obviously, you know, the lawyer bills can go as high as you want, I guess. But for me, limitations, this hasn't really been financial. It's just been time. And so the process that I apply to this is like, okay, walk me through every single piece of time requirement I will have to do and contribute to this that an attorney cannot do on their own. Once I have an understanding of how much actual time it's going to take, and I look at it at total time. So if it's like, it might take two years for this to come to fruition,

Well, if it's two years, but there's literally six days that are gonna be taken over this two years, then I really just think about the six days. And then I think, okay, what is the potential cost in terms of downside risk? And then what is the potential gain in terms of upside of a six day cost? And so from there, I'm able to look at how much do I make per day now? What would it cost me to pursue this or defend this or whatever? And in those instances, I just use that as my cost.

in the defensive situation you obviously have to defend yourself and because it becomes it's one of those things that's very hurry up and wait and so it will take all of your attention for a very small period of time and then it will disappear again for a few months and then like the next the next kind of move kind of moves forward because

the legal process is incredibly long and difficult. And so the TLDR of all of this is, by all means, at all costs, try to avoid any kind of legal conflicts, because it will typically take more attention in time than it is worth. But there are times where you must defend yourself, where when that occurs, I would just look at the dollars and cents, does this make sense, and then not try and make the decision again. Because as things go on, your emotions will move, but the dollars and cents will remain the same.

Charon Srivatsa, a good friend of Illinois, currently the CEO of Reel, also has Surillo Capital, which is his investment firm.

He gave me this little quip that I really like. And he said, talent only gets better in the future. And that has been, I mean, you'll notice a common theme around people in this. And that's because when I look at the things that we did really well with this year is bring good people in, get bad people out. And the companies that did the best of Morpholio, like that strategy ring fruit, like the highest performance coming to the portfolio, we put in probably like six great leaders and it's just crushing.

And that that's not an accident, right? So that's thing number one in terms of talent. The second thing is

work with the people who move towards you. And so I have spent too much time in my life trying to sell people on why they should do things my way or with my values or with my kind of rules, which I did to find culture as rules of reinforcement in a business. So like, these are the rules of the game as I would like to play it. And I noticed that if I kind of have this like kind of recurring conflict with a handful of people,

I was like, I don't need to do this. There's another person who is stoked to be here, will agree with the path.

It will be so much more efficient because they'll want to talk to me. I want to talk to them. We agree to the rules of the game the way we both want to play it. And so we'll just play that much better, that much longer. And so this is more of like a warning shot because I think what happens is you habituate, especially if you're an entrepreneur, you have a high pain tolerance. Like you're used to, like you're used to suffering. Suffering is just the current state. And so sometimes someone comes in, things are okay. Sometimes they change, sometimes you change whatever.

But fundamentally, conflict emerges. And if you cannot resolve the conflict, then over time, your communication cycle lessens and lessens. You start talking less and less frequently. And if this person is close to you or close to your function, it becomes very difficult for them to do their job and for you to get what you need out of the role. And so my single line of advice is work with the people who move towards you.

And so a corollary second point of that, that's a different frame to think through is if your team doesn't admire some aspects of you, you either have to change them or you have to change you. Like this is a tough one though, because you want, like this is my opinion.

If your team doesn't admire certain things about you, then the likely that you have strong influencer of their behavior outside of basically punishment is low. And it's much better, in my opinion, to have a team who admire different traits of yours. Now they don't have to say everything you do is amazing. But there are skills you have, there are behaviors you do that they're like, man, it'd be really cool if I had that, or it's really cool that he has that or she has that. That creates this element of respect in the relationship.

that I think is really required for high performance. And you have two choices there, like either you change or they change, or you get someone else. So you change the whole thing, right? I think making sure that you've established the rules of the game and just subtly noticing like is there someone who just like disrespects you on a regular basis or they tried or they're the first one to disagree? I want to be clear. I'm not saying that you shouldn't have healthy tension and disagreement at the top. It's actually very common.

Everybody who has different perspectives to yield the best outcome, that's how you get truth. So that's good. But if you're consistently blocked on what you consider to be par for course behaviors, that can grade on you. And I think that I tolerated that for too long. And I have done that in different occasions. And I want to shorten the time that I tolerate those kind of dynamics.

So next up is sawdust. My favorite businesses in the world are businesses that are started off of waste from someone else. So let me explain. So I love the Airbnb and I love Uber the way that like people have excess capacity or sawdust. They have something that they're not using that would be valuable for someone else.

And so an easy example in a brick and mortar scenario is like, I don't use my gym. My gym was closed after 8.30. And it was no one used it until 4.30 in the morning. And so I'm paying for this rent. And I have this space. And there's probably some people who would like to have that space, but can't, right? And I didn't have weekend hours ended afternoon, right? And so there are many of us, and Airbnb did this on the residential side, obviously. Like you have a spare bedroom, you can let someone crash there and you can make money for it.

But the thing is that within businesses, you also have excess capacity. You have sawdust. And so the sawdust analogy comes from lumber mills, when they would strip the trees of bark, they would turn them into planks, and then they shipped the planks out. But a smart form of the factory looked on the ground one day, and they had to just keep sweeping up all this dust from the saw.

And then finally, one guy said, hey, could we just mix this with glue and make plywood? And then of all of a sudden, a whole new kind of industry was born from that where you could take the scraps and then turn it into something else. And in the fur business that I did when I was 16, 17, 18 in there, the owner would have to make these jackets and he would cut off these snippets.

from the snippets he was able to make ear muffs and then he was able to sell the ear muffs or give the ear muffs away as bonuses and so he was able to make something from nothing and so there are

sawdust things that exist in your business. And I'll tell you one of the big ones that came from acquisition.com. So our primary business is obviously the portfolio. And that's where the majority of our resources are allocated towards. We tried to figure out a way where we could meet more potential portfolio companies. So I tried a few different things. So one thing I tried was, okay, could we just like invite people out to come out?

Well, the barrier was too low. We got mixy matchy and I was like, that's not good. So we tried that one and we didn't meet good people and I was like, all right, that's not good. So the next thing I did was like, okay, what if we raise the qualifications really high and then we kind of have these dinners? So we did like four or five dinners where people would fly out.

We'd meet them. The whole idea for me was like, I have to eat either way, so I might as well eat with people. Like, again, like sawdust. Like, what do I have to do? I also have to make content. So if I go to dinner, I make content, and I meet people, this is all good. This helps us generate deals. And the reason that I was trying to figure this out was because the best portfolio companies we have are number one, number two, number four, best performing company, were companies that we had worked with for six or 12 months prior. So we had an existing relationship.

We had helped them grow and then we were like, okay, I think they're portfolio ready now, then we made our investment and we grew them from there. And our best performers were like that. So I was like, how can I have this happen on purpose rather than by accident? So I was really struggling with this. Mind you, I was also like running the portfolio too. So it's like I wasn't putting full attention towards it.

And then in January, I was like, okay, well, we have this building. There's an open, open floor space. There were a whole bunch of desks there, but I was like, we're using those desks, everybody had offices. And because we do a lot of like confidential calls and we're not, we're more of an office closed door setup. And so we,

cleared the desks and we're like, okay, well, let's see if some businesses would want to fly out to our headquarters and have us spend like two days kind of going over how we create value because then that way it's like, it will provide value to them. And the people who are like, oh, this is really cool. I would love to potentially like follow up with them over the long haul. They become, they kind of enter our longer term nurture process and we can potentially do deals with those people, et cetera. That's also why we spun up basic adventures, et cetera. And so that whole division of workshops came out of, we have extra space,

And the portfolio team, is it fully allocated? Like they work on the portfolio, obviously, but like they can step down for a day or two during the month to meet other companies, network with them, share how they are turning around different companies in our portfolio, specific divisions or departments, and that'll be very additive. Like we can add value to everyone and adds value to us, and I get content from it. And so that was a big W. And the reason I bring this up is

there are some things in your business that check more than one box. And so it's like, I don't want a single box check. I want like four boxes checked. And so this generates deal flow. This generates cash flow. This generates content.

This generates talent flow. And so all of these things and utilizes a resource that I already have paid, I already, I have to pay, I pay this building every month, right? Like this cost exists. I pay my team every month, no matter what, either way. And so it used an existing cost basis to create a new opportunity for content and deal flow.

And so from that, it's like, if you can just look at the pieces you have on the board, and this is actually what I do is I look at, I try and write down with as much detail, what are all the things we do on a regular basis? Like what are the calls we take? What are the conferences we attend? What are the, like every single thing we do? And I'm like, is there a way I can recombine these things?

into something that would be valuable at no cost to me. And that's where I've had these really disproportionate gains in profitable divisions or products in our company, obviously, and then within the portfolio. You probably have SOPs and checklists within your business, right, of how you do whatever you do.

Well, if you can take that and then turn those into lead magnets, then not only are they valuable for you, they also generate demand. And so that's just a very micro example of like take something you're already doing and find another use for it that requires no extra work. The next one's really big. And so this is a little bit leaking, you know, like looking forward into 2025 and beyond. And so I believe this, so this is a bet. So that would be clear. This is me making a bet and calling a shot. So I believe

that IRL and AI exist on polar opposite sides of a continuum. And I think that doubling down on both of these is a good decision. And so within our portfolio, we are pushing heavily on both sides. And so post COVID, I still feel like there's unmet demand for people who want to connect. I mean, obviously this is why I invested in school. Like I believe community is really good and I think it's lacking right now. Something that's huge demand for it.

And we've never been more connected and also feel so apart. And so it's almost like we have a lot of false solutions. It's like we're eating fake food that keeps you full but doesn't satisfy you. It's kind of like porn to sex. It's not the real thing, right? And so the idea is this is the real thing. This is efficiency. And so it's like, how can I get as much efficiency as possible so that I can do as many of the unscalable things that are the real thing?

And this IRL push that I'm doing, I'm doing across all the portfolio companies. Because the interesting thing about IRL is customers who have in-person experiences have tremendously different brand affinity. They're more loyal. They refer more. They rate higher. They buy more often.

And if you have a strong culture within your marketing or your branding, you will attract like-minded people. And so that allows you to provide them value at no extra cost. So just think about like this. If I assemble a party, I'm the host of the party.

Everybody who meets at the party feels like the party was awesome if everyone else at the party was great. I could not talk to any of the guests and have them think Alex's party was awesome. And I will get a disproportionate amount of the reward from the associations and the time they had. But that network allows people who assemble to provide value to each other, which is almost like you're not, you just organize it and you let them provide the value. IRL,

And AI, I'm heavily pushing on this this year. Sam Altman said that this year is the year AGI will come out 2025. So artificial general intelligence is basically AI is better than everyone at everything, which is frightening. But we'll figure it out. In the meantime, though, it'd be great if it could take some sales calls and set some appointments pretty accurately. So and maybe help with some content and things like that. But in the meantime, we're staying really abreast on this. And we're actively kind of like, I'm not trying to

be the AI company. I want to be a company that uses AI well, just to be clear about my position on this. IRL, though, is something that I feel like AI will not disrupt. And I think that the demand for in-person experiences will continue to rise. And I think that it is a good bet to make. And so this is what I'm betting on next year.

I will mention this because a lot of people don't like IRL because they say it's unscalable, right? But I care so much more about is it valuable? And if it's valuable enough, it's worth scaling. And so the thing is, is that just because it's harder doesn't mean it's not worth doing.

And the benefit of scaling something that is harder to scale but also valuable means that once you scale a little bit more, you'll have more resources to continue scaling it. And so if we can build cities in the middle of the desert or the middle of the ocean, we can absolutely scale an in-person experience.

So, uh, next fun one is school. So, uh, it was crazy about this is that this was this year, uh, which feels like, you know, an eternity ago, but we, uh, we negotiated the deal in 2023 and then in January, we came up publicly with it. So this was the first brand deal that I did this year, uh, or sorry, the first brand that I've ever done. And the main reason behind doing it was that I believed in the product and I believed in the team. And I thought it was the best one and I think it's going to win. And so that is why I was willing to make that bet.

And to be very clear, opportunity always looks like risk today. This bet has proven out very well. The platform continues to grow like crazy. We have millions and millions of users, which is awesome. And that was kind of the goal. And the reason that I ended up betting on this versus like any other potential thing I could do was it felt very uniquely fit for me. So I'll explain what I mean. There's a make money component to school.

There's a education component to school. There's a community component to school, which I just see as like plus for social, right? And then all of these together aren't an opportunity vehicle that is high leverage. And so for those reasons, I was like, I feel like I am uniquely qualified for education. Media would be another one here. There's definitely a huge media component with the business.

So it's like education, media, business, societal good, operational leverage. If you could make a business that hit a lot of the things that I'm about. And for me, it also helped people who are going zero to one.

And I have a huge percentage of the audience that want to start a business, don't have one, and didn't know where to go. And so I wanted to have something that I could say, if you aren't a business owner yet, this is a very easy business to get started. It's very low risk.