Rich Businessman Explains New Way to Make Your First $1
Alex Hormozi・72 minutes read
The speaker invested in a school to understand investment strategies and increase wealth, influenced by the potential for passive growth. They aim to make real business education accessible, focusing on community growth over profit maximization.
Insights
- Understanding the thought process behind investments and applying decision-making frameworks can significantly increase wealth, as exemplified by the speaker's success in reaching a net worth of over $100 million by age 32 through strategic investments and business decisions.
- The education industry is undergoing a significant transformation, with a shift towards alternative education due to practical skill acquisition. Investing in platforms that offer community-based learning models, like the school mentioned, can provide scalable and profitable opportunities for business growth while emphasizing the importance of recurring revenue and community engagement in online ventures.
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Recent questions
How did the speaker achieve a net worth of over $100 million by age 32?
The speaker reached a net worth of over $100 million by age 32 through selling their last company for $46.2 million and making strategic investments, particularly becoming a co-owner of a school. This investment was inspired by successful individuals like Jeff Bezos, Warren Buffett, and Elon Musk, emphasizing the importance of understanding investment strategies and decision-making frameworks to increase wealth.
What factors influenced the speaker's decision to invest in a school?
The speaker's decision to invest in the school was influenced by multiple aligned factors, including the potential for passive growth, exceptional passive growth metrics, and the company's mission to make business education accessible. The speaker believed in the underlying fundamentals and mission of the school, aligning with their personal experience in serving creators and aspiring entrepreneurs.
How does the education industry's value split between formal and alternative education?
The education industry globally is valued at $10 trillion, with the US portion split between formal education at around $850 billion and alternative education at $200-250 billion. While formal education is shrinking annually by 6%, alternative education is growing by $40 billion per year, indicating a shift in buying behavior towards more practical skills.
What are the key features of the school's business model?
The school's business model operates on a $99 monthly fee model, focusing on community growth over profit maximization. It offers low-risk value provision and revenue generation, with community management saving costs compared to Facebook groups. The platform's gamification, community interaction, and community ranking system aid in user experience and growth.
How can individuals achieve success in online business partnerships?
Success in online business partnerships involves demonstrating hard work, dedication, and attention to detail. Building a portfolio of work, showcasing it to potential partners, and targeting engaged influencers can lead to successful partnerships and business growth. Additionally, focusing on product excellence, promotion strategies, and people skills are key aspects of building successful partnerships in the online business realm.
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Summary
00:00
"From $46.2M Sale to $100M Net Worth"
- The speaker sold their last company for $46.2 million and reached a net worth of over $100 million by age 32.
- They made their largest investment by becoming a co-owner of a school, inspired by wanting to understand the investment strategies of successful individuals like Jeff Bezos, Warren Buffett, and Elon Musk.
- The speaker emphasizes the importance of understanding the thought process behind investments and how to apply decision-making frameworks to increase wealth.
- They invested in the school due to multiple aligned factors, referencing Charlie Munger's concept of the "lollapalooza effect" where multiple factors contribute to success rather than a single silver bullet.
- The education industry globally is valued at $10 trillion, with the US portion split between formal education at around $850 billion and alternative education at $200-250 billion.
- Formal education is shrinking by 6% annually, while alternative education is growing by $40 billion per year, indicating a shift in buying behavior towards more practical skills.
- The speaker's personal experience with companies serving creators and their audience split between business owners and aspiring entrepreneurs aligns with the school's mission of making business accessible to all.
- The speaker's decision to invest in the school was influenced by the company's potential for passive growth, indicated by a high percentage of customers referring new customers.
- The school's metrics showed exceptional passive growth potential, leading the speaker to believe in the company's underlying fundamentals and mission.
- The speaker's ultimate goal is to make money while also making real business education accessible, acknowledging the financial needs of their team and the importance of profitability in business ventures.
14:15
"Doubling Business Value Through Strategic Investments"
- An e-commerce business with a $10 million top line and $3 million profit might trade at 2x its top line, valuing it at $20 million.
- Doubling the business could increase its value to $40 million, resulting in a $20 million increase.
- A tech/software business with the same top line and profit could be valued between $100 to $200 million, depending on trading multiples.
- Doubling this tech/software business could create $200 million in value.
- Effort put into doubling a business can yield significantly higher returns.
- The decision to promote a business was based on its alignment with audience needs and quality.
- The decision to invest in and promote the business was driven by its potential to help many people.
- The "school games" initiative offered coaching calls, courses, community, and tools for free.
- The initiative aimed to bring transparency to an industry often lacking it.
- The school platform operates on a $99 monthly fee model, focusing on community growth over profit maximization.
27:32
"Emulate successful platforms for business growth"
- Borrowing brand credibility can help new businesses lower technological difficulties.
- Successful online platforms like Amazon, Zillow, and Airbnb share a similar layout.
- Emulating successful platforms can lead to increased traffic and conversions.
- Building a community can create recurring revenue streams.
- School's model allows for low-risk value provision and revenue generation.
- School's community management saves costs compared to Facebook groups.
- School's gamification and community interaction enhance user experience.
- School's platform ranks communities for easy discovery, aiding growth.
- Having a community in one place benefits various businesses.
- School's model offers a scalable and profitable approach to business growth.
40:14
"Online Communities Drive Business Success and Revenue"
- With an iPhone and internet connection, one can achieve fame and distribute content at zero cost, disrupting traditional distribution methods.
- The government's support in the education industry has delayed its disruption, offering interest-free loans and backing lenders.
- The creation and distribution of digital education courses are cost-free, lowering the barrier to entry for starting a business.
- Starting a business today involves lower risks compared to a century ago, requiring minimal technology and effort.
- Communities on the internet can generate significant revenue, with some reaching millions monthly, based on quality products and traffic.
- Exclusive access, content, courses, and events are key features that drive value in communities, as per a business survey.
- Community engagement often surpasses course engagement, emphasizing the importance of community in education businesses.
- Building a community around a shared lifestyle or identity deepens connections with users and enhances business success.
- School's business model offers simplicity, low risk, and few moving parts, making it an attractive option for online ventures.
- Long-term recurring revenue is crucial for business value, with successful communities providing ongoing value and growth opportunities.
53:09
"Strategies for Successful Online Business Partnerships"
- Making content on the internet can attract an international audience, eliminating concerns about borders, tariffs, and taxes.
- The School Games allow anyone to participate, potentially leading to business growth and partnerships.
- The School Games focus on new recurring revenue, encouraging fresh participants to compete each month.
- Successful School Games participants have varied strategies, including cold outreach, organic audience utilization, and influencer partnerships.
- Obsessiveness and attention to detail are key traits for successful entrepreneurs, like Sam, who aims to create the best product for online business success.
- A successful partnership in business involves individuals who excel in product, promotion, and people aspects.
- Building a successful community and scaling revenue can involve various tactics, such as cold outreach to influencers and providing exceptional value.
- Demonstrating hard work and dedication in partnerships can lead to success, even without prior reputation or connections.
- Building a portfolio of work and showcasing it to potential partners can increase credibility and success rates.
- Starting small and targeting engaged influencers can lead to successful partnerships and business growth.
01:04:10
"Online Money-Making Course with Accountability Options"
- The text discusses three types of accountability in a course designed to help individuals make money online: peer accountability, coach accountability, and alumni accountability. The course offers different paths to success based on individual preferences, such as content creation, advertising, audience building, outbound strategies, or partnership, with the opportunity to win prizes and receive guidance through a one-day deep dive session for the top 10 communities.
- Participants are encouraged to join the course for free, inviting three people to their group to access all resources and downloads. The course offers a 14-day free trial period, emphasizing that 30.4% of those who complete the first month of the program make their first dollar online, highlighting the potential for success in the online business realm.
