Reward Over Punishment

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.

[DaFrienze]

He explained the Big 4 firms model perfectly.

[HeinrichKok]

This guy knows everything about business and I'm all in for it

[TheoriginalBMT]

"Bringing out the best in people" is a fantastic book that goes over this concept. It really changes how you think about interactions. Positive and negative reinforcement is much more nuanced and sometimes we mistake what reinforcement we are actually using.

[kamilsynak]

The greatest historical example are the Punic wars btw Rome and Carthage. In short, Rome rewarded its generals for success while Carthage was known for severely punishing its generals' failures. This combined with Rome's ability to adapt, learn from mistakes, and employ new tactics was instrumental in its victory. Great example of "reward > punishment" and "you don't lose until you quit" principles.

[ProjectExMachina]

I'm in a process of moving to lower salary job just so I can recover from burnout. And I live paycheck to paychek.

[RichardHarlos]

I don't recall where I heard this, but a couple decades ago (approx.) someone said that "If you treat someone as a resource, you're going to use them". He followed up by saying that there was a famous saying by a Canadian lumberjack, who said:

"If, when I see trees, I see dollar bills, I'm going to treat them one way. But, if, when i see trees, I'm going to treat them differently".

This person, whose name I'll probably remember tomorrow, then went on to say, "If, when I see a woman, I see orifices, I'll treat her one way, but if, when I see a woman, I see a human being, I'll treat her differently".

I think the point that I took from that part of the talk is this: sure, you can voluntarily be someone's puppet if your highest priority is to be better than the other puppets, but what it says about you is that you have no self-respect. You'd rather work yourself to the grave for some short-term accolades, than to take care of yourself and to remember that, yes, there are certain rewards for those who care only about money, prestige, competition, etc. But... there's also a certain reward that can't be measured in dollars, where you have enough self-respect to say, "No, I'm not going to trade time (with my family, for my health, etc.) for money, because you don't give a shiit about me as a human being. You want to dangle a carrot in front of me and if I'm game, you'll use me for all I've got and then boot me to the curb as soon as another young buck shows up with fresh energy".

Don't be used. Sure, work hard, be smart, etc., but once you know that (imagine George Carlin's voice here), *"They don't give a fuuck about you; they don't give a fuuck about you!"*

Then you're truly free to decide for yourself how much life you're wiling to exchange for dollar bills.

[timothymartin]

I think it will bite them back eventually. Younger generations are not as interested in living at work, more in living outside of work

[javierluengomolero]

As an MBB employee, I 100% agree.

People are always working with a punishment-avoidance mindset.

I find it very toxic and not a good match for my own, less risk averse, personality.

[smokeo]

I really like how you highlight the flaws with using punishment. The best thing you could do is to reward performance, and grow the output of your workers and stagger that to the growth of your workers to consistently develop high performers regardlessness of their initial Performance ; no matter what you are growing the person or understanding where the celling is for the individual and can know when it is time to part ways

[restlessnosleep]

This is such a clear description of what it feels like to be an amazon delivery driver

[Ryan.G.Spalding]

If you are into that kind of thing, it is fun to work there. I enjoyed my time at MS. But you are right—there aren't many lifers, but maybe there shouldn't be.

[iqmotivation]

So true treat employees with respect and they will in return do the best effort

[relvingonzalez]

I’ve thought about this for years. The reward for doing great work is more work and eventually it takes a toll. Good performance is rewarded with punishment. I wonder if good work was rewarded with bonus pay or a Friday off, how less turn over and loyal people companies would have.

[usho]

Amazon is a master of this system since day 1

[marzero]

Always Fresh meat for the grinder.
Bonus is that the ones at the top never have to share
Their compensation keeps skyrocketing and the new meat gets entry level to mid level compensation.

[Li_Mu_Bai]

This is exaclty how the post office operates.

[crackedwindow]

X - Y leadership, pain and suffering short term motivation, happy and joyful long term

[CarlitoFluito]

Solution is Playing Camp. The future of well-being at work. Looking forward to join Acquisition Alex

[frodom]

Just got “burnt out” lol. Gave everything too so it stings a bit. Very important lesson in HR.

[MarcAngelosNYC]

Publicly traded firms…vs PRIVATE companies.

THAT is the crux.

You and Gary and all the “kindness” approaches are right….but will only work in the absence of short-.term incentives like stock options and share price….