From: alexhormozi
This article outlines the journey to making the first $10,000 online, focusing on key strategies, what worked, and common pitfalls to avoid based on personal experience [00:00:00].
Origin Story: From Passion to Profit
The speaker’s journey began with a lifelong passion for fitness, starting at 13-14 years old and continuing through college as Vice President of the powerlifting team [00:00:09]. Even during a consulting job, fitness remained a constant topic of conversation [00:00:19]. Friends encouraged turning this passion into a business [00:00:24].
The pivotal moment came when a woman at the gym, Sandy Smith, asked for help with her diet [00:00:51]. After an hour and a half of discussion at a pizza shop, she paid $100, which was the “light bulb moment” realizing that profit could be made from this passion [00:01:18].
Four Stages to Acquire First Customers
The speaker identifies four stages followed to get the first 10 customers:
Stage 1: Homies - Getting Initial Proof and Testimonials
The first step involved reaching out to friends and family who already knew and liked him [00:02:12]. He offered free training to about six friends, primarily to obtain “before and after” pictures, testimonials, and verifiable results [00:02:26]. This strategy is crucial because people need proof that a service works, especially if it’s similar to their own needs [00:02:50]. Examples of results included one guy losing 50 lbs, a girl losing 50 lbs, and another guy achieving body recomposition [00:03:22]. This stage took approximately six months [00:03:41].
Stage 2: Referrals - Leveraging Existing Success
After gaining initial results, the next step was to ask these “homies” for referrals [00:03:56]. Referrals are considered the most important type of marketing because they are free, have a higher likelihood of conversion, and can command higher prices [00:03:58]. People who come via referral are also more likely to refer others [00:04:22]. If no referrals are generated, it indicates the service might not be good enough yet [00:04:36]. This stage brought another 6 to 10 referrals [00:11:31]. However, because it was still entirely free, many referred individuals didn’t take action [00:11:46].
Stage 3: The Free Training Project - Adding “Skin in the Game”
To address the lack of engagement from free referrals, the “Free Training Project” was launched [00:11:57]. Instead of paying him, clients were asked to donate 1,000 to a charity of their choice for three months of free training [00:12:04]. This mechanism ensured clients had “skin in the game” without directly paying the trainer, while also generating positive public support [00:12:09]. This phase provided the necessary proof and experience to transition to a fully paid model [00:12:26].
Stage 4: Skinny to Swole Project - Monetization
A year later, the “Skinny to Swole Project” was launched, publicly asking new clients to pay 4,000 per month, totaling $12,000 over 12 weeks [00:13:17].
The launch post was a simple announcement of being “open for business” with a website showcasing transformations and contact information [00:17:39]. He advises modeling this post, focusing on proof and a clear call to action (CTA), ideally with images/carousels to boost engagement [00:18:07].
What I Would Have Done Differently: Accelerating Success
The speaker now advocates for starting an online service business for beginners due to its low cost, good economics (low delivery cost, low recurring overhead), global accessibility, and use of existing technology [00:14:04]. This allows for learning inevitable mistakes in a low-stakes environment [00:14:26].
The Rule of 300 for Lead Generation
An advanced strategy for starting with no audience, currently being tested successfully within a community on School, is the “Rule of 300” [00:05:00]. This expands on the “Rule of 100” (from his “$100 Million Leads” book) which suggests daily repetition of:
- 100 warm outreach (people who know you) [00:05:23]
- 100 cold prospects outreach (people who don’t know you) [00:05:37]
- 100 minutes making and posting content [00:05:40]
- Spending $100/day on ads (minimum) [00:05:46]
The “Rule of 300” breaks down the warm outreach into three tactical steps:
- Post Content: Make one simple post on one platform [00:06:08].
- 100 Comments: Leave 100 thoughtful comments in a group or community related to your target audience [00:06:17]. This allows piggybacking on others’ reach, increasing your visibility and making you stand out [00:10:28]. Comments should be thoughtful, not salesy [00:10:46]. This can take 2-4 hours daily [00:11:02].
- 1-on-1 Outreach to “Lukewarm” List: Reach out to those who liked your post, commented on your post, liked your comments, or replied to your comments [00:07:10]. These individuals have already indicated interest by taking an action, making them engaged leads rather than strangers [00:07:51]. Start conversations by referencing their engagement, e.g., “Hey, saw you liked my content, what about it drew you in?” [00:08:25].
Lessons Learned
What Worked Well
- Walk the Walk (Proof over Promise): Be the living embodiment of what you sell [00:20:13]. If you’re selling weight loss, be fit; if investing advice, be wealthy [00:20:24]. Having results for yourself and others builds belief [00:21:03]. Proof is more powerful than an amazing offer without proof [00:03:07].
- Live Cheap (Build Runway): Minimizing expenses allows for financial security and the ability to take bigger risks, like quitting a job [00:21:24]. Saving money doesn’t make money, but it buys time and options [00:22:05]. Working more is a “hack” for saving money, as it leaves less time to spend [00:23:19].
- Start Free: Offering services for free initially is the easiest way to gather proof, testimonials, and feedback [00:23:34]. Non-monetary compensation like testimonials, feedback, and referrals can be more valuable than immediate cash in the long run [00:24:03].
- No Discounting: Adopt a “full price or free” philosophy, similar to Chick-fil-A [00:24:46]. Discounting communicates that your prices are negotiable, leading to endless haggling [00:25:03].
- Templated One-to-Many Solutions: Invest time upfront (e.g., 200 hours on an Excel sheet) to create systematized solutions that can be personalized quickly, saving time later [00:25:40]. This free period is for building future efficiency [00:26:33].
- Niching Down: Specializing in a specific problem (e.g., “skinny to swole”) allows for more templated, in-depth solutions, providing greater value at a lower cost to the provider [00:27:22].
- Recurring Business Model: Opting for a business model that generates continuous payments (e.g., monthly subscriptions) provides stable income [00:28:00].
What Didn’t Work
- Not Ascending Anyone: Failing to have a second offer or a clear path for clients to continue paying after the initial program ends [00:28:38]. The speaker recommends offering “more of that thing they just bought” [00:28:57].
- Stopping for New: Abandoning a successful online business that was generating significant profit for minimal work to start something entirely new (e.g., a brick-and-mortar gym) [00:29:16]. This was driven by a belief that the online business wasn’t “legit” [00:29:41].
- No Good Offer / No Sales Process: Not having a clear offer or engaging in direct sales calls, which limited potential income and led to undercharging for personalized services [00:30:38].
- Judgment: Making major life decisions based on perceived judgment from others (classmates, family) [00:31:44]. This can keep one “poor” [00:32:21].
- Not Getting Help Early: Doing everything solo prolonged the learning process [00:32:50]. Seeking mentorship and external help is crucial for accelerating growth [00:33:01].
Key Advice for Building and Growing Successful Businesses
These pieces of advice were shared with a group of entrepreneurs starting a new venture [00:33:09]:
- Follow Instructions: Adhere to proven methods [00:33:31].
- Google First: Before asking for help, try to find the answer yourself. Most friction points can be resolved with a quick search [00:33:33].
- Post What You Learn: Share solutions to problems you’ve overcome; it adds value to your community [00:34:04].
- Follow the Rule of 100 Daily: Consistency is paramount. Inconsistent inputs lead to inconsistent outputs [00:34:12]. More consistent and faster actions yield more consistent and faster results [00:34:51].
- Work Starts When Excitement Ends: Initial motivation fades. The real work begins when you face discomfort and tasks you don’t know how to do [00:34:54].
- You Are the Product: Your personal growth and development are as important, if not more, than the business itself [00:35:28]. Frame challenges as happening for you, not to you [00:36:22].
- Everything is Unscalable in the Beginning: Embrace the tedious, manual work. It’s how you learn every aspect of the business, leading to mastery and skill development [00:36:28]. This pain drives you to seek better, more leveraged ways of doing things [00:37:01].
- Pain of Repetition Forces Improvement: The discomfort of repetitive tasks pushes you to find efficiencies and gain skill [00:37:28].
- Don’t Complain: Complaining expends effort without results. It often seeks pity, attention, or affection. It’s better to be envied than pitied [00:37:35].
- You Are Not Special: Thousands have succeeded before you. Repeat their actions to get similar outcomes [00:38:20]. If results differ, it means an unidentified variable exists, not that the method doesn’t work [00:38:32].
- Write Down Your “Why”: Motivation fades, so have a “big bag of why” – both what you’re running away from (e.g., hating being broke) and what you’re running towards [00:39:03]. Revisit it when consistency is challenging [00:39:12].
- Business is Simple, Consistency is Hard: The difficulty lies in consistently doing the work, especially when results are not immediately visible [00:39:41]. The most potent individuals can work for long periods without immediate rewards [00:40:39].
- Just Win: Achieving one success can be addictive and make the difficulties of the journey fade in memory [00:41:05]. The pain of the process will pass, but the achievement will stay with you for life [00:41:57].
This detailed account provides practical strategies for entrepreneurial success and insights into overcoming initial setbacks in entrepreneurship when starting a business with limited skills and resources.