From: alexhormozi

Scaling a business rapidly often “feels illegal” due to the extraordinary growth rates achievable through effective advertising strategies [00:00:01]. For instance, Gym Launch grew to over 1.5 million per month in its first year [00:00:06]. These achievements highlight the critical role of powerful growth levers in business expansion.

Addressing Obscurity: The First Step

For businesses under $1 million in revenue, the primary challenge is that “nobody knows you exist” [00:00:23]. The initial four hours of every workday should be dedicated to moving from obscurity to awareness [00:00:32]. This can be achieved through:

The key is to pick one method and commit fully to it [00:00:48].

Advertising as a “Boom”

Advertising is considered a “boom,” a term referring to a “business order of magnitude change” [00:00:54]. While other business activities might offer optimizations (e.g., increasing close rates or conversion rates by 10%) [00:01:07], advertising has the potential to 100x the number of people who discover your business [00:01:22]. Many small business owners get stuck in an “optimization mouse trap,” focusing on marginal gains rather than massive lead generation [00:01:29].

Marketplace Perception vs. Reality

Entrepreneurs often mistakenly believe their marketplace is small and competitive, imagining a fixed “pie” that shrinks with more players [00:01:45]. In reality, the marketplace is vastly larger than perceived, with numerous communication methods and audience segments [00:02:06]. For example, a gym owner needing only 200 members can thrive in a city of 1 million people, even if 100 other gyms are advertising on the same platform [00:02:47].

Outcompeting by Growing: “Shrink Your Competition”

Instead of directly competing, a powerful growth strategy is to “shrink your competition” [00:03:23]. This involves two approaches, exemplified by Eminem’s responses to hate:

  1. Grow so big they become irrelevant: Be so loud and prominent that competitors cannot be heard or seen [00:03:52]. This is akin to building the tallest building, casting a shadow so large that smaller structures are obscured [00:05:19].
  2. Kill them with kindness: Respond to negativity with grace, disarming critics by claiming your flaws or offering congratulations for their success [00:03:56].

This strategy involves overwhelming the marketplace to drown out competitors, making them irrelevant by comparison [00:09:09].

The Power of Repetition: Most People Don’t Know

Many business owners incorrectly assume that saying something once is enough for the entire world to hear [00:06:46]. In reality, most people need to be reminded more than they need to be taught [00:07:58]. This means mastering variety in rephrasing the same message [00:06:55]. Even established figures like Seneca, who died 2,000 years ago, have their quotes appreciated repeatedly [00:07:37].

Clear, Not Clever Communication

A critical rule for marketing is “clear not clever” [00:10:21]. High-converting ads often use simple language, understandable by a third grader [00:10:41]. This approach lowers the comprehension barrier, allowing more people to understand the message, benefiting both experts and beginners [00:11:07]. Using complex vocabulary might feed ego but not the bank account [00:11:16].

Richard Feynman's principle: "If you can explain it to a third grader, then you understand it; if you can't, you don't and you need to understand it better" [00:13:10].

Simplifying language and using appropriate analogies (e.g., cars for mechanics, houses for realtors, universal human experiences like food or sleep for broader audiences) increases comprehension and puts marketing and advertising on steroids [00:13:20]. This can be tested by running email copy through a reading grade level app, aiming for below fifth grade [00:14:30]. One experience resulted in a 50% increase in email conversion just by simplifying the language [00:14:46].

Proof Over Promise

While a strong offer is important, “proof is your single highest priority” [00:15:38]. A business with a moderate promise but thousands of positive reviews will outperform one with a grand promise but little proof [00:16:02]. Before launching a product, it’s crucial to get beta users, even working for free, to gather testimonials, reviews, and feedback [00:16:35]. This process refines the product and generates compelling proof, allowing for “show, don’t sell” advertising [00:17:26]. The messenger (your credibility) is inextricably linked to the message [00:18:06].

The Importance of the Hook

The “hook” is paramount in advertising [00:19:21]. No one will see your proof or message without a compelling hook [00:19:34]. Hooks can double, triple, or even 5x the number of people who open, click, or watch your content [00:20:13]. This is a force multiplier, creating an order-of-magnitude change in business [00:20:34].

A common hook formula is Proof, Promise, Plan [00:21:17]. Obsessing over the first few seconds or frames of an ad is critical, as it significantly impacts perception and engagement [00:22:03]. Trimming even three seconds from a video’s beginning can dramatically increase views [00:23:07].

The “More” Strategy: One to “N”

Growth can be achieved through “more, better, and new” strategies [00:23:46]. While entrepreneurs often prefer “new” (shiny object syndrome), the “mundane more” is typically the highest risk-adjusted return strategy [00:24:00]. Once something works (a “control”), the most effective path is to scale it by doing “one to N” – doing that successful thing as many times as possible [00:24:16]. For example, instead of trying to improve a 30% closing sales guy to 35%, hiring three more sales guys yields a 300% improvement [00:25:04]. Increasing volume in outreach, paid ads, or content posting directly leads to growth [00:25:49]. Many businesses underestimate how much more they can do [00:26:10]. Perceived fears of increased volume are often unfounded [00:26:57].

"What presents as volatility is typically a symptom of low volume" [00:29:15]. Consistent, high-volume activity smooths out perceived inconsistencies.

Understanding Word of Mouth

While positive word of mouth (referrals) is valuable, negative word of mouth is significantly stronger and faster [00:30:40]. Disney research suggests it takes 37 positive “magic moments” to make up for one negative “tragic moment” [00:30:57]. Rising cost per lead (CPL) when cost per impression (CPM) remains stable indicates fewer people are responding, often due to negative word of mouth working against the business [00:31:37]. This highlights the importance of getting the product right, even working for free initially, to gather positive feedback and prevent negative sentiment from spreading [00:32:50].

”Steal From Yourself”: The 70/20/10 Rule

When a message or process works, keep using it [00:33:39]. Businesses get bored of their successful advertising far before their customers do [00:34:42]. The “70/20/10 rule” suggests:

  • 70% of effort should go into directly copying what already works [00:34:58].
  • 20% on adjacent ideas, slightly varied from the core [00:35:13].
  • 10% on entirely new, “out of left field” initiatives [00:35:39].

Most entrepreneurs inverse this ratio, spending too much time on new ideas and too little on scaling what’s proven [00:35:49]. Changing what works is more likely to destroy it than improve it [00:36:39].

Emotional vs. Logical Buyers: The Continuum of Awareness

Instead of a binary “emotional vs. logical” buyer, consider a continuum of “high information” vs. “low information” buyers, also influenced by how much information they’ve already received [00:37:34]. Direct response marketing typically targets low-information, “most aware” buyers, a smaller pool that offers quick wins but limited scalability [00:38:50]. To scale significantly, businesses must educate a higher percentage of the audience who require more information before purchasing [00:39:19].

Eugene Schwarz’s Five Levels of Awareness

Eugene Schwarz’s “Breakthrough Advertising” outlines five levels of awareness [00:39:31]:

  1. Unaware: No idea about anything (broad curiosity) [00:39:40].
  2. Problem Aware: Acknowledges a pain or problem (e.g., “Do you wake up to pee three times a night?“) [00:40:41].
  3. Solution Aware: Knows potential solutions and needs help choosing [00:40:59].
  4. Product Aware: Knows specific products and needs details [00:40:53].
  5. Most Aware: Typically existing customers, ready for direct offers [00:41:09].

The 70/30 Give-to-Ask Ratio

To move people along this continuum and reach broader audiences, a 70/30 ratio of “give to ask” in advertising is recommended [00:43:14]. This means 70% of advertising impressions should be focused on giving value (storytelling, education, endorsements), building brand and goodwill, while only 30% is direct sales [00:42:17]. This approach, exemplified by New Balance’s CMO, can take 18 months to see a return but builds long-term, sustainable demand [00:42:35]. This strategy, especially for B2B, involves demonstrating aspirational outcomes, showing how others (like the prospect’s avatar) have been helped, and providing free content or services (e.g., courses, free books) [00:45:55]. This creates “zero degrees of separation,” where the prospect experiences value directly [00:46:50].

Marketing Laws: State the Facts & Tell the Truth

A core marketing principle is to “state the facts and tell the truth” [00:48:35]. This forces businesses to change reality by “doing epic stuff” rather than exaggerating an underwhelming product [00:48:51]. This means:

  1. Making the truth more compelling: Actively changing reality to have impressive facts [00:49:19].
  2. Showing only what you can show: Highlighting unique aspects of your business, even if narrow (e.g., a “double secret black belt” martial artist, or a cigarette company highlighting “toasted” tobacco) [00:49:24].
  3. Saying what only you can say: Emphasizing your distinct qualities [00:51:27].

The goal is to be the best in a “puddle,” not necessarily the world. Being the best in a niche is more compelling from an advertising perspective [00:52:03]. John D. Rockefeller famously overpaid for a refinery to become the biggest, leveraging that “story” to consolidate the market, demonstrating the value of investing in brand and reputation [00:52:27].

The Importance of “The List” (Targeting)

Effective advertising success heavily relies on targeting the correct audience [00:54:53]. Showing winter coats to people in South Florida, for instance, won’t yield results regardless of the offer or ad creative [00:54:32]. In outreach, target individuals suffering from the problem you solve [00:55:12]. For paid ads, leverage platform targeting features [00:55:24]. When creating content, the algorithm influences who sees it based on your appearance, speech, and content [00:55:44]. To attract a specific avatar, ensure the person in the ad looks like that avatar and that the communication matches their language [00:56:37]. Ultimately, “all marketing works as long as you get the targeting right” [00:57:47].

Mastery: More Ways to Win

Masters of advertising (and business functions) have a greater quantity and quality of metrics to measure progress [00:58:42]. Beginners often rely on binary, lagging indicators (e.g., “sales are down”) [01:00:27], while masters track leading indicators and milestones along the entire process (e.g., cost to acquire talent, time to fill a role, two-sided fit for employees) [00:59:09]. This allows for precise identification and correction of issues at each step, ensuring “directional correctness” rather than just looking at the final outcome [01:02:14]. This comprehensive measurement is crucial for navigating the complexities of scaling.