The Offer So Good People Feel Stupid Saying No | Ep 990

**Alex Hormozi** (0:00)
I've been in business 13 years. I've sold nine companies. My last company I sold for $46.2 million. My current portfolio at acquisition.com is over $17 million a month. And I'm gonna compress 13 years of business advice into this one video. I didn't open up a second channel of acquisition until we were at $4 million a month. Now, mind you, I started with paid ads because I was good at paid ads, and I learned how to run paid ads in my local business, which then when I went national, I knew how to do the same skill set. But after $4 million a month, I was like, okay, I need to get this second channel going. And so I started increasing that channel via cold email, cold call, cold DMs with an outbound team. But I say that because a lot of people are like, shouldn't I do this? I try to lay that as long as I possibly can because I know it's going to cost a huge amount of time, a huge amount of money, and it might not work for six to 12 months. And to give you context, it took me 12 months for outbound to be responsible for half of my revenue. So it's not going to happen overnight. Number five, always start for free, always.
And I don't usually use explicit 100% black and white language, but I have yet to see a time where starting for free has not made me more money. So let me explain.
So when I started my fitness business way back when, I started with free. I wanted to get people results, and I said, I don't have any experience, so please let me just train you for free. And because of that, I have lower stakes because they didn't pay me money. They're still paying in other ways. They're still paying time, they're paying inconvenience, all the other things that a customer has to do. Those costs are still there. By the way, those hidden costs are the things that you want to decrease as much as you can in your product so that you can charge more money because you'll find over time that the most expensive thing about your product often isn't the price.
It's everything else you require a customer to do as a result of the purchase, which is what things do they have to give up that they like doing as a result of the purchase, and what are the things that they have to start doing that they hate doing as a result of the purchase? And this happens with everything. And when I say like and hate, I use those as extremes, but fundamentally, there's some sort of friction, there's some sort of inconvenience. Like when I buy a car, I have to now get gas. That is now an inconvenience in my life. Now compared to all other cars, maybe all cars that have that inconvenience until they have an electric car, and all of a sudden, that inconvenience has been removed because I can plug the car in at night. So I'm a co-owner of school.com, and I talk to beginner entrepreneurs a lot. And so I see this happening more often than not, which is that they say, hey, no one wants to buy my thing. And I say, okay, well, where are your testimonials? Where are the people that you've used before this that you've helped get the result? And they're like, well, I don't have any. I'm like, well, why would I believe you? They're like, well, I have this amazing offer, and I'm going to talk about this in number six at length. But if you don't start for free, why should anyone believe you? And if you are doing this for the first time, why would you want to take money for something that you don't even know if it's good yet? And so this can both give you the conviction and give you the confidence to get going because you actually have some results that you can go off of. You can use those results to market to get more customers. I do this at every level of business. And so everything that I do, I always start with free, no matter what it is. And whether it's a new product line in a massive company, one of our portfolio companies, we built out a software product for the existing service base. And so we said, hey, we can now have a DIY version of our services that you can use with this software product. And what did we do? We started for free. We took our top 100 customers and said, hey, why don't you try it out? Let us know, get us feedback. And they just kept giving us feedback. And honestly, in the beginning, the fact that some people wanna charge for this is insane. It's like they're giving you so much valuable stuff. I'm just happy that they use it, right? And so you go with free, and then you go with a small, small amount of money, and then you keep raising your prices over time, which I'll get to in a second. And for those of you who are worried about your pocketbook, like I'm fronting all these costs. Well, yeah, that's why it's called investing in a business. But people who you work with for free can make you money in three ways. Number one is they can leave you a testimonial. Number two is they can refer you other customers via word of mouth that you did a good job. And number three, they can actually stay on and pay after a certain period of time when you do make it not free and you make it for money. Because if you want to keep surfacing, and this is ideally how it works out, is that you do such a good job that they're like, I don't want this to stop. And then you say, great, now you can do it in exchange for money because I can't do this anymore in exchange for nothing. Because I have enough demand, because I have done a good job, that I have these referrals, and I have this proof that people do want to pay me for my services. So if you like that too, you can get the same price they have. Number six, and this is a big one, proof over promise.