Podcasts > The Game w/ Alex Hormozi > The Brutally Honest Cost of Success

The Brutally Honest Cost of Success

By Alex Hormozi

On The Game, Alex Hormozi examines the real costs of achieving exceptional success. He explains that reaching extraordinary goals requires unconventional choices, including adjustments to sleep schedules and social circles—decisions that can lead to isolation as others may struggle to understand such dedication.

Hormozi shares insights about business growth, emphasizing the value of increasing work volume over pursuing incremental improvements. Using examples from his own companies and others, he demonstrates how maintaining consistent operations and scaling up successful strategies tends to yield better results than constant optimization. The discussion outlines a practical approach to business growth that prioritizes action and consistency over perfection.

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The Brutally Honest Cost of Success

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The Brutally Honest Cost of Success

1-Page Summary

Sacrifice and Exceptional Living to Become Exceptional

Alex Hormozi explains that achieving exceptional success requires unconventional choices and sacrifices. He argues that individuals must abandon traditional lifestyle patterns, including regular sleep schedules and maintaining the same social circles. According to Hormozi, this pursuit often leads to isolation, as others may view such dedication as unhealthy or illogical.

Increasing Volume as a Business Strategy

Hormozi advocates for increasing activity volume over seeking incremental efficiencies in business. He suggests that businesses should scale up successful strategies rather than risk changing them, emphasizing that higher volume of work creates its own quality. Drawing from Napoleon's wisdom, "quantity has a quality unto itself," Hormozi explains that doing more work, even when initially inefficient, forces optimization and ultimately leads to greater success.

Perils of Over-Optimizing Vs. Focusing On Success

When it comes to business operations, Hormozi warns against excessive optimization. He notes that changes typically decrease performance by about 20% due to retraining needs and ripple effects. Instead, he advocates for consistency, revealing that his most profitable periods were when operations remained "really boring" and focused on core competencies. This steady approach, he explains, allows employees to improve gradually through consistent practice.

Examples and Anecdotes Illustrating Benefits Of Doing More

Hormozi shares the success story of Sharon, president at ACQ, who exemplifies the power of volume in business growth. Under Sharon's leadership, the company grew from a $200 million valuation to $1.2 billion in less than three years, largely through conducting 260 events in a single year. This aggressive approach demonstrates the exceptional results possible when embracing the "do more" philosophy.

1-Page Summary

Additional Materials

Clarifications

  • Alex Hormozi advocates for unconventional choices and sacrifices to achieve exceptional success, including abandoning traditional lifestyle patterns. He emphasizes increasing activity volume in business over seeking incremental efficiencies, believing that higher work volume leads to greater success. Hormozi warns against excessive optimization in business operations, advocating for consistency and focusing on core competencies. He shares success stories, like that of Sharon at ACQ, to illustrate the benefits of embracing a philosophy of doing more in business growth.
  • Napoleon's quote "quantity has a quality unto itself" suggests that simply having a large quantity of something can possess its own inherent value or benefits. In the context of business strategies, this quote implies that increasing the volume of work or activities can lead to improved outcomes and success, even if the initial quality may seem lower. The idea is that through sheer volume and repetition, there is a natural refinement and optimization that occurs, ultimately contributing to achieving greater success. This concept emphasizes the importance of consistent effort and action in driving results.
  • Excessive optimization in business operations can lead to decreased performance by about 20% due to the need for retraining and ripple effects. Instead of constantly seeking to optimize, consistency and focus on core competencies can lead to more sustainable success. This steady approach allows employees to improve gradually through consistent practice, rather than risking disruptions and inefficiencies from frequent changes. Hormozi advocates for a balance between optimization and maintaining a steady course to achieve long-term success.
  • To clarify the concept of doing more work to force optimization and achieve greater success: Alex Hormozi suggests that by increasing the volume of work, even if it seems inefficient at first, it pushes a business to constantly improve and optimize its processes. This approach challenges the status quo and encourages continuous refinement through practical experience. By consistently engaging in more activities, a business can uncover inefficiencies, adapt quickly, and ultimately achieve higher levels of success through iterative learning and growth. This strategy emphasizes the idea that quantity can lead to its own quality, driving innovation and progress in the pursuit of exceptional results.

Counterarguments

  • Unconventional choices and sacrifices may not be universally necessary for success; some individuals achieve exceptional results by integrating work with a balanced lifestyle.
  • Isolation might not be a requirement for success; some individuals thrive and succeed through collaboration and maintaining strong social networks.
  • Incremental efficiencies can sometimes yield significant competitive advantages and should not be overlooked in the pursuit of scaling up volume.
  • Scaling strategies without considering the need for change can lead to stagnation or failure to adapt to new market conditions or innovations.
  • High volume of work without regard for efficiency can lead to burnout, decreased quality, and unsustainable business practices.
  • While excessive optimization can be detrimental, a certain level of optimization is necessary to ensure that a business remains competitive and efficient.
  • Consistency is important, but without innovation and adaptation, a business may fail to capitalize on new opportunities or fall behind competitors.
  • Employee improvement through consistent practice is valuable, but professional development and training can also play a critical role in enhancing employee skills and performance.
  • The success story of Sharon at ACQ, while impressive, may not be replicable in all industries or by all companies; success strategies can be context-dependent.
  • Rapid growth, as exemplified by ACQ's valuation increase, may not always be sustainable or indicative of underlying business health and could potentially lead to future challenges.

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The Brutally Honest Cost of Success

Sacrifice and Exceptional Living to Become Exceptional

Hormozi asserts that achieving exceptionality necessitates unconventional choices and the abandonment of balance in pursuit of relentless goal orientation.

Achieving Success Requires Sacrifice and a Non-traditional Lifestyle

Hormozi argues that to become exceptional, one must step away from a conventional lifestyle, which includes sacrifices in daily routines. He suggests that individuals striving for high success are likely to abandon the typical cadences of life such as staying up late, sleeping in on weekends, and, possibly, maintaining the same friends and hobbies.

To Be Exceptional, Abandon Balance and Relentlessly Pursue Goals

He further emphasizes that to achieve exceptional success, one must prioritize their goals above all else, even if it means losing the sense of balance in life. Hormozi implies that an extreme focus on goals is often necessary to reach levels of success that set one apart from the average.

High Achievers Often Face Misunderstanding and Lack of Support

Additionally, Hormozi raises the point that high ...

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Sacrifice and Exceptional Living to Become Exceptional

Additional Materials

Clarifications

  • To achieve exceptional success, individuals may need to make significant sacrifices in their daily routines and lifestyle choices. This could involve deviating from traditional norms, such as altering sleep patterns, social circles, and leisure activities. The level of commitment required often demands a relentless focus on goals, sometimes at the expense of work-life balance. High achievers may face challenges like lack of understanding and support from others due to their unconventional approach to success.
  • Prioritizing goals over life balance can lead to burnout, strained relationships, and neglect of personal well-being. It may result in feelings of isolation, as the pursuit of success can distance individuals from their social circles. Overemphasis on goals at the expense of balance can also impact mental health and overall happiness. Striking a healthy equilibrium between ambition and personal life is crucial for long-term well-being and sustainable success.
  • The typical cadences of life that are suggested to be sacrificed for exceptional success include staying up late, sleeping in on weekends, and potentially changing social circles and hobbies. Sacrificing these routines is proposed to create more time and focus for pursuing ambitious goals and achieving exceptional success.
  • High achievers may face a lack of understanding and support because their unconventional choices and relentless pursuit of goals can challenge societal norms and expectations. This can lead others to perceive their actions as extreme or unbalanced, causing a disconnect in how their efforts are perceived. Additionally, the sacrifices high achievers make in their daily routines and personal lives may be viewed as excessive or unnecessary by those who prioritize a more traditional approach to success. As high achievers distance themselves from conventional lifestyles, they may find it difficult ...

Counterarguments

  • The notion that one must abandon balance to achieve success is debatable; many successful individuals advocate for a work-life balance to maintain mental and physical health.
  • Sacrificing daily routines and personal relationships may lead to short-term gains but could result in long-term detriments to one's well-being and social support network.
  • Exceptionality does not always require extreme sacrifices; it can also be the result of consistent, balanced effort over time.
  • Prioritizing goals above all else can lead to a narrow focus that might ignore other important aspects of life, such as personal growth, relationships, and community involvement.
  • The idea that high achievers lack support may not account for the diverse experiences of successful individuals, some of whom may have robust support system ...

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The Brutally Honest Cost of Success

Increasing Volume as a Business Strategy

Alex Hormozi lays out a business philosophy that prioritizes increased activity over incremental efficiencies, positing that doing more can lead to the highest risk-adjusted return for businesses.

Doing More Offers the Highest Risk-Adjusted Return For Businesses

Hormozi discusses how businesses that are successful in finding strategies that work should focus on ramping up those strategies rather than taking the risk of trying to find new ones. He argues that doing more within an existing framework has a higher risk-adjusted return compared to taking risks on changing something that already works.

Greater Gains From Activity Volume Than Incremental Improvements

Focusing on incremental improvements can trap small business owners in optimization loops that emphasize relative returns rather than absolute returns. Hormozi illustrates this with the example of a marketing campaign where investing more money may decrease relative return but increase absolute profit. He suggests that strategies should aim for scale and volume to ensure substantial growth and avoid the pitfalls of chasing higher efficiency, which may result in lower absolute returns despite increased efficiency.

Diminishing Returns Vs. Compounding Benefits of Repetitive Mastery

Hormozi argues that doing more, even when it initially seems inefficient, is vital because reducing volume often serves only to assist those with less resilience. He suggests that businesses experience volatility due to inconsistent promotion or advertising volumes, which fail to generate predictable sales. He proposes a large scale-up in promotional efforts to ensure business growth and mentions leveraging what one enjoys to increase output significantly.

Doing a high volume of work, Hormozi contends, forces optimization and efficiency as one looks for ways to improve quality within the high volume framework, such as increasing call pick-up rates by seeking more effective times to ...

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Increasing Volume as a Business Strategy

Additional Materials

Clarifications

  • A risk-adjusted return for businesses is a measure that considers the level of risk taken to achieve a certain level of return. It helps assess whether the return generated by a business is adequate given the risks involved. By factoring in risk, businesses can evaluate the efficiency of their investments and strategies in generating profits relative to the risks taken.
  • An optimization loop emphasizing relative returns over absolute returns occurs when businesses focus on making small improvements that only boost performance in comparison to previous states, rather than focusing on maximizing overall gains regardless of past performance. This can lead to a situation where efforts are concentrated on incremental enhancements that do not necessarily translate into significant overall growth or profit. The emphasis on relative returns can sometimes hinder businesses from achieving substantial progress if the focus remains on small, iterative changes rather than pursuing strategies that lead to more significant absolute returns. In essence, the danger lies in getting stuck in a cycle of minor optimizations that do not contribute substantially to the business's bottom line or long-term success.
  • Diminishing returns occur when the benefit gained from an additional unit of input decreases over time. In contrast, compounding benefits of repetitive mastery suggest that the more you practice or engage in a particular activity, the greater the benefits become over time. This concept highlights the importance of consistent practice and improvement in achieving significant long-term gains in skills or outcomes. Hormozi emphasizes that focusing on repetitive mastery can lead to compounding benefits that surpass the limitations of diminishing returns.
  • Investing profits back into the business to double the number of providers means using the money earned by the business to expand its operations by hiring and training twice as many service providers or employees to offer more services or products to customers. This strategy aims to scale up the business by increasing its capacity to meet growing demand and potentially generate more revenue through the additional providers offering their services. By reinvesting profits in this way, the business can enhance its offerings, reach more customers, and potentially increase its market share and profitability over time.
  • "Quantity has a quality unto itself" means that the sheer amount or volume of somethin ...

Counterarguments

  • While increasing activity can lead to higher returns, it may not always be sustainable or suitable for every business model, especially those that require high-quality craftsmanship or personalized services.
  • Ramping up successful strategies without continuous innovation can lead to stagnation and vulnerability to competitors who may innovate and capture market share.
  • Investing more in existing strategies assumes that the market conditions remain constant, which is rarely the case; markets evolve, and what works today may not work tomorrow.
  • Focusing solely on scale and volume might lead to quality control issues, employee burnout, and customer service problems, which can damage a business's reputation in the long term.
  • Doing more work does not necessarily force optimization and efficiency; it can sometimes lead to inefficiency and waste if not managed properly.
  • Reinvesting profits back into the business is a sound strategy, but it should be balanced with diversification to mitigate risks.
  • Working an unreasonable amount of time can lead to diminishing returns due to fatigue and decreased productivity, as well as potential negative impacts on mental and physical health.
  • The ...

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The Brutally Honest Cost of Success

Perils of Over-Optimizing Vs. Focusing On Success

Alex Hormozi warns about the pitfalls entrepreneurs encounter with excessive optimization attempts, advocating instead for the power of consistency in driving business success.

Small Business Owners Fall Into Change Cycles Instead of Focusing On Success

Entrepreneurs are often caught in a constant loop of trying to improve their businesses, mistaking frequent changes for betterment. However, Hormozi suggests that such a mindset can be detrimental.

Changing Things Decreases Performance By 20%, With Smaller Potential Upside

Hormozi observes that change in a business, especially when it involves people, often leads to a performance drop due to retraining needs and the ripple effects on other areas. He notes a typical decrease in performance by about 20% when changes are made. This performance dip is often compounded by a cycle of continuous changes that entrepreneurs introduce, seeking improvement but achieving the opposite.

Hormozi shares from his experience that the most profitable times for his business were not the periods of frequent change but rather when operations were "really boring" and his business focused on what it did best without interruption. He introduces a "minimum rule" asserting that any change to be considered should have the potential to be more than 20% impactful to overcome the guaranteed 20% loss due to change.

Consistency Drives Business Success

Stres ...

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Perils of Over-Optimizing Vs. Focusing On Success

Additional Materials

Clarifications

  • Excessive optimization in entrepreneurship refers to the tendency of business owners to constantly make changes in the pursuit of improvement, often without clear direction or significant impact. This behavior can lead to a cycle of diminishing returns, where the time and resources spent on frequent adjustments outweigh the benefits gained. It can hinder long-term success by disrupting stability, consistency, and the opportunity for gradual growth through sustained efforts in key areas. Entrepreneurs are advised to balance the desire for optimization with the need for stability and focus on what truly drives success in their business.
  • Hormozi's "minimum rule" suggests that any change considered in a business should have the potential to be more impactful than the guaranteed 20% loss due to change. This rule aims to prevent unnecessary disruptions and performance decreases caused by frequent alterations. It sets a threshold for change, emphasizing the need for significant positive impact to justify the inherent costs of implementing changes. By following this rule, businesses can focus on changes that truly enhance performance and avoid unnecessary fluctuations that may hinder progress.
  • Consistency in business involves maintaining a steady approach in operations, strategies, and quality over time. This reliability builds trust with customers, employees, and stakeholders, leading to long-term success. By consistently delivering on promises, businesses estab ...

Counterarguments

  • While consistency is important, the ability to adapt and evolve can be crucial in a rapidly changing market; businesses that do not innovate may fall behind.
  • The "minimum rule" of a 20% impact threshold for changes may be too rigid and could prevent beneficial incremental improvements that can compound over time.
  • Some industries may require more frequent changes due to the nature of the market or technology, making the advice less applicable across all sectors.
  • A decrease in performance following changes is not always guaranteed and can be mitigated with proper planning and change management strategies.
  • The assumption that changes lead to a 20% decrease in performance may not be universally accurate and can vary greatly depending on the nature of the change and the business.
  • The focus on avoiding frequent changes might lead to complacency and a lack of critical self-assessment within a business.
  • Hormozi's experiences, while valuable, may not be universally applicable, as different businesses have different models and what works for one may not work for another.
  • The emphasis on consistency over change could d ...

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The Brutally Honest Cost of Success

Examples and Anecdotes Illustrating Benefits Of Doing More

The discussions and personal accounts broached by Alex Hormozi highlight the pivotal role of volume in achieving quality and success, a principle that often contrasts conventional wisdom but yields tangible results.

Sharon's 3-Year 6x Business Growth Demonstrates "More"

Alex Hormozi presents the story of Sharon, the president at ACQ, whose impressive business achievements encapsulate the essence of doing 'more.' Sharon's accelerated growth from a $200 million valuation to $1.2 billion within less than three years stands as a testament to the impact of volume. This extraordinary growth owed greatly to Sharon's commitment to extensive engagement, conducting 260 events in a single year which demanded extensive ...

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Examples and Anecdotes Illustrating Benefits Of Doing More

Additional Materials

Counterarguments

  • While volume can lead to success, it is not the only factor; strategic planning, market conditions, and innovation are also critical.
  • Rapid business growth like Sharon's may not be sustainable or applicable across different industries and business models.
  • The emphasis on volume and extensive engagement could lead to burnout or a decline in the quality of interactions and services.
  • Not all businesses have the resources or capacity to conduct a high volume of events or engagements like Sharon did.
  • Hormozi's approach may not account for the value of work-life balance, which can be crucial for long-term success and personal well-being.
  • The ...

Actionables

  • You can amplify your professional visibility by setting a goal to double your current level of activity on LinkedIn. Start by sharing daily industry insights, commenting on peers' posts, and connecting with two new professionals each week. This increased activity can lead to new opportunities and a stronger network, similar to how Sharon's engagement led to business growth.
  • Boost your learning curve by dedicating one weekend a month to a new skill or project. Whether it's coding, writing, or DIY home improvements, the consistent, concentrated effort will accelerate your proficiency and could lead to unexpected success, mirroring the volume-to-quality principle.
  • Enhance your local community prese ...

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