Why Alex Hormozi is the best entrepenur on the internet.
Alex Hormozi is an Iranian-American entrepreneur who started his first business in 2013 and scaled it to six locations within three years. After successfully turning around 32+ businesses, he created a licensing model that expanded to over 4000 locations in 4 years. Hormozi founded and scaled three other companies across different industries, generating $120M+ in sales without external capital. He has successfully scaled and exited seven companies, with his most significant exit being his licensing company for $46.2M in 2021. Transitioning from CEO to owner/shareholder, Hormozi founded Acquisition.com to invest his wealth into other businesses. His investment focus is on asset-light, high cash flow, sales-focused service, and digital products businesses.
Hormozi has wrote two fantastic books in business and it is the cold hard truth. We have heard from Rich Dad Poor Dad “let money work for you” and that you should not work for money. This just sounds like an advert to get into to some serious debt. We have heard from the epithets of The Richest Man in Babylon of “Wealth, like a tree, grows from a tiny seed” which although can be philosophically compelling is much like Iago saying “put money in thy purse” when talking about saving.
In his first book million dollar offers Hormozi lays out concrete concepts of making what he calls a grand slam offer. This is an offer which is so good that people would fell stupid saying no.
The first thing Hormozi does is break down what actually is an offer. This is in his words “the goods and services you agree to give or provide, how you accept payment, and the terms of the agreement. It is what begins the process of getting customers and making money. It is the first thing any new customer will interact with in your business. Since the offer is what attracts new customers, it is the lifeblood of your business.” It is interesting to note that this is not just about finding some fantastic product, Hormozi hones in the payment terms and how time is used to put forth your product.
He outlines his motives in his book very humbly.
“I give all these materials (this book, the accompanying course, and all other books and courses which you can find at acquisition.com) for free or at cost in order to help as many people as humanly possible make more and serve more. And I have made these with the intention of providing more value than you can get from a $1000 course, any $30,000 coaching program, and hilariously more than a $200,000 college degree. And I do this because, although I could sell these materials in that format, I just don’t want to. I’ve made my money doing this stuff, not teaching how to do this stuff, contrary to most of the marketing community at large”
Already I feel that I have escaped Tai Lopez’s garage.
But what makes an offer a grand slam offer?
“It’s an offer you present to the marketplace that cannot be compared to any other product or service available, combining an attractive promotion, an unmatchable value proposition, a premium price, and an unbeatable guarantee with a money model (payment terms) that allows you to get paid to get new customers . . . forever removing the cash constraint on business growth.
In other words, it allows you to sell in a “category of one,” or, to apply another great phrase, to “sell in a vacuum.” The resulting purchasing decision for the prospect is now between your product and nothing. So you can sell at whatever price you get the prospect to perceive, not in comparison to anything else. As a result, it gets you more customers, at higher ticket prices, for less money.”
One thing I love from Alex Hormozi’s book is the idea of the starving crowd.
““A marketing professor asked his students, “If you were going to open a hotdog stand, and you could only have one advantage over your competitors . . . which would it be . . . ?”
“Location! ….Quality! …. Low prices! ….Best taste!”
The students kept going until eventually they had run out of answers. They looked at each other waiting for the professor to speak. The room finally fell quiet.
The professor smiled and replied, “A starving crowd.”
You could have the worst hot dogs, terrible prices, and be in a terrible location, but if you’re the only hot dog stand in town and the local college football game breaks out, you’re going to sell out. That’s the value of a starving crowd.
At the end of the day, if there is a ton of demand for a solution, you can be mediocre at business, have a terrible offer, and have no ability to persuade people, and you can still make money.”
The idea presented here emphasises the critical role of demand in a successful business. It suggests that even with subpar products, high prices, and a poor location, a business can thrive if there is a high demand for its product or service - the "starving crowd." This can serve as a potent reminder for businesses to prioritise understanding their market and identifying areas of high demand or need. I have seen great coffee shops fail along with underrated Youtubers. What makes your target market click? The market does not care one bit about you. Thomas Sowell said it best when he said “Capitalism knows only one color: that color is green [the color of money]; all else is necessarily subservient to it, hence, race, gender and ethnicity cannot be considered within it.” Capitalism is driven solely by the desire for value. If you position yourself in the right part of the river you can catch the waves.
