Transcription
So I got a call with Hermosi. [music] So I could just like talk about whatever I wanted. The number one thing he asked me was like, "Okay, how much do you spend on content?" I was like, "1K a month."
And then he's like, "Okay, I spend like 500x that." He was talking about somebody else who's really big now. And the person was bragging, like, "Dude, I got my content so optimized down that like it's taken me like two hours a week." [music] To get like 90 days of content. And he was just like, "Yeah, bro. It shows. I do,000x your views." And the guy just was like, [laughter] "I asked him about this and what he said, buying and trying to grow small companies is [ __ ]. The companies that are worth buying, you need a true."
So even with all of his content and all the things and the events and all this stuff, I'm sure some come from that, but he's like, "My best deals literally just come from my."
"Oh, really?"
"Yeah." The thing that really surprised me was. Let me tell you, cuz I've been saving it for here about the Hermosi thing.
"Yes."
"So 225 grand went to Hermosy's office. So, I got a call with Hormosi so I could just like talk about whatever I wanted. And then it was an event with other 10 people who spent 225 grand. So, number one, if you have any questions, let me know. I'll just roll through a few things. But, first of all, the dude's gym is unbelievable."
"It's It's at his office."
"In the basement."
"Okay."
"It's It's the best. I mean, it's not like uh like aesthetic or something, right? In terms of the equipment, it was so good that when I got back, I was like kind of depressed. I didn't work out for 3 days. I'm not even kidding because so first of all the machines are pneumatic so they're based on air pressure. So like imagine you're doing like a chest press machine so it's like constant pressure at every part of the range of motion and like it's like there's a button on each side. So as you're going, you can just decrease the pressure. And so like you get to your last rep and you're stuck, you decrease the pressure, you do another rep, decrease the cuz, you know, it's like with a drop set, you got to like change it."
"You know, and then you kind of feel like a bro at a gym like drop drop setting, you know?"
"It's just like who who does that, [laughter] right? It's like I'm not doing that, you know? Like it's the set quality was insane. Every single machine he had was literally the best machine I've ever used. like he had this good morning machine to where at the top when you're contracting in a good morning it's like you feel it in like your upper back, your glutes, your lower back, your hamstring. I mean I even it was like a all posterior chain just complete. It was insane. Then um he also had these cables that were based on magnet resistance or magnetic resistance. I don't know how this worked but you would do one rep and would basically measure your strength curve. So for instance in like a row you're much stronger here and I think you're weaker here or maybe it's the opposite. I forget, but whatever. Like obviously when you pull, you're not um strong all the way through."
"So this would measure your strength curve so that it would like lower the weight and increase the weight when you were stronger versus weaker."
"And so then what would So like I did a row like my last rep looked like this. It was like just the slowest one rep max. Imagine doing a one rep max on a one-arm cable row."
"Yeah, it's insane."
"It was insane. So that actually was badass. But I had to write down my my."
"Did he say how much he spent on the gym?"
"Oh, I don't know. I'm sure it was a lot, but like there was a guy there who's a vlogger, like a really big gym blogger and the next morning I worked out there again and he he like came up to the team and he was like, 'Do you guys realize this is maybe the nicest gym of all time?'"
"Like, do you guys know how good you have it?"
"I think that that's we won't go down that rabbit hole, but I think that that's one of the best investments you could probably make once you get some serious money is like building a $2 million personal gym."
"Well, yeah. I mean, I I think like I actually I like going to Hive and working out, but I will say here's where the ROI is is the team's always in the gym. Exactly. And so like I'm I met all the not all of the sales guy, but I met like some sales guys and some people who do this and do that and they're like bonding in the gym and it just creates like a good environment where you want to show up and work out in the morning. So that was really really cool. So aside from that, uh you'll find this interesting cuz you know we both thought about the private equity stuff. So I asked him about this and this is something I've always thought is like, okay, if you want to go buy a company doing a million, 3 million, 5 million, a couple million, a million EBITDA or 500k EBITDA and get two or three of those, essentially you're creating yourself like a job, you know? There's nothing wrong with that. That's like what Cody Sanchez teaches. Nothing wrong with that. But if you're in our position, that's like kind of a step backwards, not a step forwards. And so the the thing I was asking him about, I'm like, how do you think about these acquisitions? Because he's like, I'm like, I was like, it seems like to me if you're below, oh, a company doing 10 million a year, probably even 20 million a year, it's like you could probably, unless they have a unique strategic advantage or a moat in place, you could probably just build that company yourself, right? So then like the only companies worth buying are probably companies doing 30 to 100 million a year. A lot of EBITDA, great profit margins, amazing team, which means you got to pay a shitload."
"Yeah. Because they don't need to sell."
"Right? And what he said is he's like, basically 100% agree. He's like, 'Buying and trying to grow small companies is [ __ ] because the reason they're small is because the people just aren't that good. The companies that are worth buying, you need a fuckload of money. So, you need like you're going to have to probably take out a big loan, raise a bunch of money, you got to buy.' The other thing is is unless it's an extraordinary founder, which is very rare. He's like, in my position, if if you and you've worked with me before, if you don't have full control, it ends up being a problem, right? And so thing is is either you got to get full control and then put in a great CEO or it's like you got to somehow come across this extraordinary founder who wants to give you a part of his company. But if he's truly extraordinary, he probably doesn't even need to do that."
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"Yeah. And so what was funny is he said the majority of his deal flow really comes from even with all of his content and all the things and the the events and all this stuff. I'm sure some come from that, but he's like, 'My best deals literally just come from my personal network.'"
"Oh, really?"
"Yeah. So it's kind of crazy like."
"But but an argument can be made and I I don't know. But was his personal network also bolstered from the content?"
"Of course. Yeah."
"Yeah. So it's all an ecosystem like he is who he is because of that. But the the point and the other thing he told me is he's like the consulting for equity thing is just like [ __ ] really. He's like, 'It's a complete waste of time.' He's like, he's like, 'I've seen a million people try.' He's like, 'I've done it. It's a waste of time. Don't [ __ ] do it.' You know, either like, 'You got to go big and acquire.' I mean, if you look at the private equity people who like really destroy, they're acquiring big companies, right? Or so it's like either you got to start and grow a big company and a big brand. And you could do that through roll-ups. That's a whole different thing if you're doing kind of the Brad Jacobs playbook. Or it's like you got to just buy like a legit company. Or for him like in the school deal, he's not going to have a majority position. most likely. I don't think he does. And but he can add massive value add. That's something that's infinitely scalable, but also an insane founder."
"Yeah."
"Sam Ovens. That was the big thing I got from that was."
"So he was saying that um cuz I even remember and I it's almost like they took the video down or something, but he walked through it was this podcast. I remember I was at the gym when I was listening to it. This is years ago, four years ago. And they were saying it was like their first year and they were actually walking through the statistics of what their this is their first year or two years after they launched acquisition.com and they were walking through the stats of what the average results were, blah blah blah. And I remember hearing then that they were just like, 'Yeah, we're no longer taking minority stakes. We're no longer doing anybody less than like 5 million a year or something like that.' And that's when it started making more sense to me. And yeah, it's funny cuz I think you and I both knew that, but then it also took us doing it as usual."
"You got to do it and then be like, 'Okay, this is stupid.'"
"It's kind of similar, too. It's like I think from what I the conversation I had is that pretty much all the company's crush. But like if you're him with everything he has going on now, if he takes you from 5 to 25, you're probably elated and you're like, 'Dude, I've made it.'"
"Yeah. For him, it's absolutely not."
"And for him, he's like, 'Great. It's a waste of time.' Yeah. This was just a liability."
"Yeah."
"You know, so I would imagine probably what he's looking into is like buying something that's doing, you know, his level probably like 100 to 150 million. And and the thing is those companies also have a lot of opportunity because there's a lot of inefficiency. And also it's like anything the bigger the vision the easier it is to recruit. So then it's like his brand combined with a massive company like that with maybe billion dollar potential. He can recruit a CEO in there that actually is a savage and then they could run the playbooks but he has a majority control."
"And was he saying that he was going to keep it as like a family office his own money kind of thing when he gets in those numbers or is he going to try to start raising?"
"Um I don't think he needs to raise. I mean, do you buy a hundred million?"
"I I Well, he just did a 100 million launch."
"Launch room."
"So, 100 million laying around. We don't."
"I don't know for sure. I think if he raises it's it would be more to have the track record of raising."
"Yeah."
"And being able because maybe he I don't know. This is not anything he told me FYI, but like I would imagine for him if he raises it's more to let's say he wants to raise 10 years down the road. He can point to I raised here, raised here, raised here, raised here, look at their returns. So if he's trying to raise for a, you know, $500 million acquisition, that's where it makes sense."
"I mean, he doesn't need the money at this point. So yeah, I think it would just be like so he can start having."
"Bigger and bigger wins."
"Next thing, the main reason I went was ask about media and content and all that stuff. Obviously, this is probably not news to you or anybody, but like the number one thing he asked me was like, 'Okay, how much do you spend on content?' I was like, '1k a month.'" [laughter]
"1K a month."
"And then he's like, 'Okay, I spend like 500x that.' And you know, it should be a third of your spend, whatever. But I kind of knew going in, okay, I probably need."
"A third of your overall."
"Marketing spend."
"Marketing spend. Yeah."
"Wow."
"Yeah. And so anyways, I knew I probably need to increase the budget on that. But that wasn't the thing that really surprised me was he was like, 'How much time do you spend on it?' or I was like, I don't know, two hours a week. And he's like, 'Dude, I spend 25 hours a week on content.' And like you think about that. So he's way richer and more successful and way busier and has way more opportunities than us and can probably try less hard on content now and it's still just rip 25 hours a week."
"Yeah."
"That was the big shift for me. I was like, okay, makes sense. And it's just it's all in pre, you know, I mean obviously filming is filming, but it's just all in the pre-work. And so then he I'll tell you who this was after because it's it's not that big of a deal. But he was talking about somebody else who's really big now. And they were having dinner. And the person was bragging like, 'Dude, I got my content so optimized down that like it's taken me like two hours a week to get like 90 days of content and my four YouTube videos a week.' And he was just like, 'Yeah, bro. It shows.' It's like, 'Was that supposed to be a brag?' Because like I do a thousandx your views."
"Hermosia is a thousandx the sky. Yeah. And and the guy just was like, [laughter] but it'll blow your mind who that actually was. You'll be like, damn, that's actually good. So, um, a lot of the stuff we talked about that was really good. And let let me just say this before is like, dude, going to their office and I mean this is just and I'm not somebody who normally would probably say this but like going to their office, seeing the quality of their team, the quality of their media production, uh, you know, the gym and just like also just hearing their vision of the company and stuff. I'm like, it it was inspiring. Like it was like, damn, like this is like [ __ ] insane. Like you can just it's obvious why they're doing so well. So that was one thing. But."
"So so was is that an argument towards an in-person office?"
"So I think and I think he said this publicly but what he I asked him about this and his recommendation was get going on the content. Build that up. Once it makes sense, get cuz I'm I told him about the event idea doing two events a month, one for RCA, one for SDA. He's like, 'That that definitely do that. He's like, 'That's good.' And he's like, 'Once it makes sense because that's obviously going to cost money doing it other places. The first step of your office really should be media HQ to where you have your key media people and maybe some key executives in the office and then like build space for people to re-ook. You work there. Build space for people to come but don't make it mandatory because it constrains recruiting too much.' And so he was a proponent of hybrid."
"Yeah."
"And then essentially kind of and I think it makes sense. It's like if I'm spending let's say 15k a month hosting these events eventually once it gets rolling and I got the media team here. I'm like, 'Okay, let's just get a lease somewhere.' I get the lease. Okay, we built out the podcast studio. We built out the YouTube studio. We built out whatever we the."
"It almost makes sense probably for you right now if you think about the amount of content that you're about to start."
"But but the thing is so we me and him me and Nolan looked into it. The thing is is it's not the lease, it's the buildout. So we didn't want to distract ourselves with three months, 3 months and probably 150k of buildout when we're not even like when we're when like prior to working with Nolan and prior to working with the media people we hired on our team just in the last 30 days like my after that I was like, 'Yeah, my effort level is like one out of 10 on this.' So I'm like, 'Let me like get to a 10 out of 10 effort level and start to see some ROI from this and also like get in a rhythm with producing the most important thing which is the content and doing the events.' And then it also informed me on what type of office we need. Does that make sense? Cuz I might not even know what like I I don't know, you know, I might get an office for 60 people events. I might promote one of these and get 100 people. Like who knows what's going to happen. So I think it would make sense to do it that way."
"I remember uh to give him credit, uh Ryan Pana, we both know him. Um, I was on his podcast and I remember when I went to his office, that was one of the first times where I was like, man, first of all, he puts out an insane amount of content. And second of all, he does events probably more maybe other than Pace Morby more than almost anybody I know either uh live in person events or he does hybrid events and that's when so he has a cool office set up where exactly like you said, media team is there, studio is there and then he also has a stage with I don't know, don't quote me, but like a hundred seats. And so what he'll he'll do is he'll host events and he'll have like sell a hundred seats in person or whatever and then he'll have every he he has the setup and studio for it to be an epic uh live experience like online."
"So that's also another great idea, streaming it. That's another great idea is have the setup where cuz you know some people can do a streaming thing or a live thing but it just looks like [ __ ]. But if you were able to actually have like the VI and he was saying like I forgot who he was quoting but somebody else was doing this where like you could literally have big name speakers come to this event and speak in front of these hundred people but also speak to all these tens of thousands of people live. And so that was that was when in my head I was I actually started looking at office space my own."
"When we do get the uh media HQ, that's the one I'm modeling is his. I literally did a pod with him a month. The day before I went to Hermosy's office, I did a pod with Ryan because I was like, I want to do I was like, 'Dude, we need to do a pod, it's been so long.' And at the same time I was like, 'Dude, I just want to see your office.'"
"And because like I'm not going to get the aosi level office."
"Yeah, it's And he he does a good job at his. I actually like that."
"Yeah, I like it too. So a lot of the other stuff was I mean, kind of for probably the purposes of like content stuff like pretty boring in the sense of it was like leader really good leadership stuff. So um, they anytime they write a and I actually we started implementing this, it's sick. Is anytime they have like a new company initiative or like it's a bigger project, they force their executive team to put it on a memo. So, a memo is like it covers why is it important, what is it, what's the strategy, how does it actually work, and what do we do now? And so, it forces your team cuz you ever have a teammate come on the meeting and they're like, 'Dude, we got to do this. This is an idea.' And then they just like haven't even thought it out well. It forces them to put it on paper because when they put it on paper, number one, it makes them get clear on their thinking. It also makes you see how clear they are on their thinking. And a lot of times when you force them to put it in a memo, they realize it's kind of stupid and they just don't even do it. And then you don't have to talk about it in a meeting. Yeah. And then the other thing is as well is then once it's on a memo, everybody reads and comments on the memo. Then you just get on a meeting to talk about the next steps and it eliminates 90% of the stuff. So then I kind of implemented a little bit of this in our offsite and dude, our new off-site structure, we got 90% of the work done in the pre-work and then we got on, we just clarified like several things. We literally got done in like six hours. Zap."