Business Owners: You NEED to Know This Number

How I got here…

21: Graduated Vanderbilt in 3 years Magna Cum Laude, and took a fancy consulting job.
23 yrs old: Left my fancy consulting job to start a business (a gym).
24 yrs old: Opened 5 gym locations.
26 yrs old: Closed down 6th gym. Lost everything.
26 yrs old: Got back to launching gyms (launched 33). Then, lost everything for a 2nd time.
26 yrs old: In desperation, started licensing model as a hail mary. It worked.
27 yrs old: "Gym Launch" does $3M profit the next 6 months. Then $17M profit next 12 months.
28 yrs old: Started Prestige Labs. $20M the first year.
29 yrs old: Launched ALAN, a software company for agencies to work leads for customers. Scaled to $1.7mmo within 6 months.
31 yrs old: Sold 75% of UseAlan to a strategic buyer in an all stock deal.
31 yrs old: Sold 66% of Gym Launch & Prestige Labs at $46.2M valuation in all-cash deal to American Pacific Group. (you can google it)
32 yrs old: Started making free content showing how we grow companies to make real business education accessible to everyone (and) to attract business owners to invest or scale their businesses.

Today: Our portfolio now does $200M/yr between 10 companies. The largest doing $100M/yr the smallest doing $5M per year. Our ownership varies between 20% and 100% ownership of the companies. Many of them we invested in early and helped grow (which is how we make our money - not youtube videos).

To all the gladiators in the arena, we’re all in the middle of writing our own stories. The worse the monsters, the more epic the story.

You either get an epic outcome or an epic story. Both mean you win.

Keep crushing. May your desires be greater than your obstacles.

Never quit,

Alex

*FULL DISCLOSURE*
I make content to make money - just - on a longer time horizon than most. I want to build trust with business owners so we can find the best ones and help them scale. And if they’re awesome, write them a check and go all the way as partners.

[kevinjones]

No fancy edits, no sound effects, no crazy jump cuts. Just straight up GAME. Alex always delivers

[speakingwithyasirkhan]

This sit-down format is my favourite by far.

[mainaste]

I can’t lie, this new style of video just ruined his past videos for me.

These are soo much better to my ears without the unnecessary music and sound effects.

[AlTel]

It baffles me that I didn't learn about this in college while studying corporate finance 💀

[FitOneswithVarun]

0:00 - Introduction and Overview
0:21 - Achieving a $100 Million Net Worth at Age 31
0:30 - Importance of Maximizing a Key Number
0:49 - The Key Ratio: LTV to CAC
1:00 - Defining LTV: Lifetime Gross Profit
1:34 - Understanding CAC: Customer Acquisition Cost
1:56 - The Impact of LTV to CAC Ratio on Business Growth
2:32 - Case Study: Mismanagement of LTV and CAC
3:48 - Correct Calculation of Lifetime Gross Profit
4:40 - The Role of Gross Profit in Business Reinvestment
5:10 - Clear Understanding of LTV and CAC for Business Owners
6:02 - Example of Efficient LTV to CAC Ratio: Starbucks
6:42 - Marketing Efficiency and Customer Acquisition Cost
8:00 - Strategies to Improve LTV to CAC Ratio
8:46 - Ethical Competitive Advantage through Higher LTV to CAC
9:20 - Real-Life Example: Business Coach’s Misunderstanding of LTV to CAC
10:08 - Importance of Knowing Data for Business Scaling
10:31 - Breaking Down LTV and CAC Metrics
12:00 - Example: Service-Based vs. Product-Based Business
13:00 - Optimizing Business Structure Based on LTV to CAC
14:50 - The Power of Cross-Selling and Upselling
16:00 - Case Study: Glass Repair Business Optimization
17:25 - Example: Pool Design Business Optimization
18:26 - Productizing Services for Higher Efficiency
19:00 - Following Business Passion vs. Business Efficiency
20:00 - Example: Gym Launch and High LTV to CAC Ratio
20:46 - Strategies to Improve LTV and CAC
21:51 - Practical Steps to Increase LTV
22:54 - Improving CAC: Funnel Efficiency
24:54 - Front-to-Back Strategy for CAC Optimization
25:54 - Summary of Business Insights and Strategies
26:29 - The Importance of Understanding and Applying Business Ratios
27:00 - Advanced Business Metrics and Strategies

[willtalebian]

27:30 I spent a few hours today charting and reviewing discounted cash flow projections until 2043 for an oil and natural gas company out of Alaska.

When Alex said “can this apply to investing” I had the same face because I found myself finding ROI multiples for different projections 😅 lots of variables like barrel pricing, recovery rate, and regulatory factors but a base case 40x and a High side 270x are exciting projections.

Thank you Alex for always bringing VALUE for FREE to everyone who is willing to listen 💪🏼

[KristenFish]

27:01 A business lesson that rolls a math class into a language class.🔥 100% invaluable and simplified. Thanks Alex, love this format.

[darthsul]

Sorry I cant attend this meeting, Hormozi posted

[MrTaylorWillis]

TL;DR wining and dining will always work.

We are service based. It’s been calculated the average CAC is 4, 200 USD.

.

We immediately realized we were penny pinching ourselves out of millions.

Introduced gifts, golf meetings, or anything we know the prospect/client enjoys into the sales process


Since, our leads have increased and close rate is climbing.

[ThiagoRicieri]

PLEASE MORE OF THIS TYPE OF CONTENT!!!

[ayoubhr]

As a software developer aspiring to be fluent in product and bussiness, this video sounds like engineering to me which made it super clear where to fit the pieces.

[pierceenglish]

This sit down and talk type format is just like the books. Every sentence feels packed full of content. I’m here for the long run :)

[JasonValasek]

Our company is not large enough yet to get the attention of Alex and Leila, but we are actively implementing everything Alex is sharing with the intent of earning his attention in the near future. Thank you for all the knowledge! You and Leila are total bad asses 😎

[andrewmayo]

Next big channel is the guy who figures out what companies are killing it like Alex talking about Starbucks and break down each one into a case study/playbook that can be used in parallel or other industries

[El_Diablo_]

2:00 disproportionate returns for successful business over other investments
7:45 massive businesses are created from huge discrepancy between ltv and cac
14:30 how to stack multiple products to maximize ltv to cac, and scale your business
16:50 why productive services with a narrower offering can scale so much better
19:20 wealth creation of concentrated in periods where your ltv cac ratio is extremely high, rev that engine even if the money your making is so absurd it feels illegal
20:00 for to increase ltv basics
24:30 CAC can disproportionately increased at the front end
26:20 LTV is what differentiates big businesses and small businesses. Since CAC ends up converging for the same customer avatar
28:00 if what you’re doing is not getting you more customers cheaper, or making those customers worth more to you - you’re probably wasting your time

[KSG]

I LOVE the math oriented side(s) of these videos.

[azeezhajee]

Definitely watching this video 10 times a day, major value

The Fundamentals are so important

[deathveteranxd]

I love this type of in depth information. It seems to me like your hesitant for whatever reasons to make more content like this. You dont want to bore and confuse people, you dont want to go to in depth on your secrets, it would be alot more effort on your end to produce the content? Whatever your reasons are im sure they are valid.

[alvaromd]

This is a serious business class, top level. Gold.

[TylerAdamsMedia]

Wow the hair extensions and coaching example is exactly my business. Felt like a custom solution. Extremely insightful, as always!