Before You Create Your Next System

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.

[bole]

A 70k quote to automate an inputting task sounds more like a software developer problem than an accounting problem

[MossSquid]

Software engineer here.

So one, your quote of 5k a day is insanely high. They gave you the "I don't want to work with you price." Realistically you could get a 2-3 year experienced engineer for around 70k-90k a year.

Two, 4 hours of manual input means you will have a ton of human inaccuracy. A system means you won't have to worry about human error.

Three, having anyone do 4 hours of data entry when their job is supposed to be much bigger is going to create turnover and you'll lose excellent accountants because you are requiring them to do shit work.

Four, Your accountants are super cheap. 70k a year for an accountant is a steal yet you are paying your software engineer team 1 million dollars a year for automation tasks? Your numbers are just so far away from reality.

Five, as others pointed out it frees those accountants up for 4 hours a week so they can be productive on shit they actually want to do.

Thanks for coming to my TED Talk.

[filip_without_ip]

People often forget that the main purpose of a system in the first place is to save you time and money not waste these things

[Tankcat]

Tbh. I work as a systems engineer. They want to charge 70k over 14 days to develop a system that automates something that generally takes 4 hours of manual input? That sounds like you're being taken for a ride.

[pepperjackcat]

Alex, you are forgetting that not only will it save the 7k like you said, but their 4 hours are free to get more work done on more things. double positive.

[its_vin_]

Him: How much will it cost?
Dev: umm.. 5000...
Him: a day?
Dev : yeah sure, why not?

[basedbulgarian]

"I'm gonna keep making my employees do unproductive busy work because i can't be bothered to ask for quotes from other devs"

[Stevenpwalsh]

Alex is making the common "I'm a smart business guy mistake". Concentrating on the bottom line, instead of a bump on the top line. He's only looking at the cost of saving a person's time. But often, the greater return is "what if without needing a person I can scale up this task 1000x". Often scaling up a task increases revenue.

[LaMontPrice]

So much missing here that we don't know...

1) Would the improvement potentially increase revenue or reduce cost by X factor?

2) By freeing up potentially 208 hours of manual input per year, could their time be spent on something else that reduces cost / increases revenue?

3) You could very well automate to the point where you reduce the number of staff thus adding more revenue to your bottom line.

Love Alex but this one I question...and there's nothing wrong with that. Keep the content coming, I'm always watching.

[Bennevisie]

I have a software development company and we always draft a business case, which includes calculating ROI, before we start building the system. We have turned away lots of business because the projected ROI for the client would not justify the cost and effort.

[ASkepticalHumanOnYouTube]

Sounds like the developers you quoted were absolutely REAMING you. Unless you're automating some insanely complex shit, you can get a ton of stuff automated for surprisingly cheap.

[MarinHeadlands]

I’m now convinced that Alex makes up the majority of the scenarios he “solves”. I paid a lot of money signing up for his Gym Launch business and it was terribly run and not worth a fraction of what I paid.

[AndyDoesHisBest-msvt]

I love Alex and I agree here because it’s just accounting. But you need to be careful. If you have a creative team or customer-facing team, you need to consider the extra time and energy they’d have to help grow the business.

You wouldn’t suggest a 5-star restaurant use paper plates, even though it looks good on paper with instant savings. So many businesses make this mistake of only counting dollars.

[CarlLopez-xw]

He once talked about a book The Architect of Riches and I can’t believe how underrated it is. This book has some serious knowledge you won’t find anywhere, definitely changed my life since.

[TechRevi]

That’s one benefit to just having a dev on payroll. They can bounce around to your orgs and set up systems.

[JeanMarcLagace]

AMEN to

It's actually one of the very first question I asked clients when automating processes.

[HamzaRashid]

True not everything should be automated. However, as an IT Consultant with programming background, I see a lot of developers inflate the effort it will take when they don't want to work on something. I also see their estimates are limited to their skillset, which is around development of new software, not automation. Important tip for business owners/managers - ask automation engineers to automate things. Ask developers to make new things.

[amsakharov]

Logically you are correct. You mitigate this by building processes at the beginning of company growth to not have inefficient processes ever.

[psgredz]

As a US-based SWE consultant. A) rate is way too high and B) there are likely faster / more dynamic / cheaper solutions available that would solve this problem (big assumption on problem).

[Airsoftshowoffs]

To counter argue. By creating a system, you are actually documenting it, auditing it, improving the process, allowing for handovers or people covering in case of sickleave or job leaver. Automating it will allow other automation to integrate with it. Increasing data handling and lessening time between linked tasks and groups. When someone is counting the cents, they can't see the dollars.