The Game with Alex Hormozi

The Question That Actually Fixes Your Business | Ep 988

11 min
Jan 7, 20265 months ago
Listen to Episode
Summary

Alex Hormozi presents the 6M Framework, a decision tree for diagnosing business constraints and identifying what's actually holding a company back from scaling. The framework helps entrepreneurs ask the right questions about metrics, model, money, manpower, and market to focus resources on the highest-leverage problems.

Insights
  • Entrepreneurs often pursue what they enjoy learning about rather than what's actually constraining their business growth, leading to wasted time and resources
  • Most business problems can be traced back to one of six core constraints: metrics, model, money, manpower, market, or mission clarity
  • Some business challenges are inherent features to manage rather than problems to solve, requiring acceptance and strategic navigation rather than elimination
  • Industry averages are useful only for diagnosis and benchmarking conversion rates and lead costs, not for setting performance targets
  • Scaling is cyclical: solving one constraint (e.g., manpower) requires returning to metrics to measure the new variable
Trends
Diagnostic frameworks becoming essential tools for business coaching and scaling consultationShift from aspirational learning to constraint-based problem solving in entrepreneurship educationRecognition that business model fit and psychological resilience are as critical as operational metricsIncreasing emphasis on understanding industry-specific dynamics and inherent business features vs. fixable problemsData-driven decision making moving beyond vanity metrics to actionable constraint identification
Topics
6M Framework for business diagnosticsSales closure rates and conversion optimizationLead cost analysis and pricing strategyMetrics tracking and measurement systemsBusiness model validation and opportunity assessmentCash flow and profitability constraintsSales team scaling and talent acquisitionMarket size assessment and geographic limitationsLifetime customer value optimizationEntrepreneurial psychology and uncertainty managementIndustry benchmarking and comparative analysisDemand generation vs. supply-side challengesBusiness scaling methodologyConstraint identification and prioritizationImplementation workshop frameworks
People
Alex Hormozi
Host and primary speaker presenting the 6M Framework for diagnosing business constraints and scaling challenges
Quotes
"you can get a lot of stuff wrong if you just get the one or two things that you're really going to dedicate your resources to, you really can get one or two things right and get just about everything else wrong if you get the right things right"
Alex Hormozi
"the reason that you get paid 10 or 100 million dollars for an exit is because it's fucking plants and that most people don't have the intestinal form to go through it"
Alex Hormozi
"a lot of the pain of entrepreneurship is walking into a dark room. You can't see anything and racing for how you're going to get it. And then just continuing to walk into a little while you're like, oh, I scream"
Alex Hormozi
"This is not a problem to solve. This is a dichotomy to be managed. This is just going to be part of the shit that you deal with in the business"
Alex Hormozi
"the vast majority of the time, the things that we enjoy the most are rarely the things that's holding a business back"
Alex Hormozi
Full Transcript
You'd have this small amount of time to get a very high leverage answer. And so I wanted to make sure that every single person who asks their question asks the right question. And I'll tell you a story that might illustrate the point. I think like probably six months back, there was a guy who came here. He was one of those over the back. Got up and said, hey, can you talk to me more about the closure framework? And I said, well, before I do, you know, what's your closure rate? And he said, 40%. I was like, okay. So you got excited. You bought these tickets. You reserved the date. You waited for Pat. Got a click. Flood out here. Got a hotel. Got everything ready. Left your business behind. Went through the first day. And then you had this opportunity to ask you a question. I was like, and the answer to this question will do nothing to change your business. There's nothing to trade the business. He just likes sales stuff. And so when we hear Alex Larnold about sales stuff. And what's interesting is that the vast majority of the time, the things that we enjoy the most are rarely the things that's holding a business back. And so that's why I like so much of entrepreneurship. which is like eating glass, which is so painful because as soon as you get good enough at something that is so over the constraint, it's like, great, I just feel like I started to get a hold of this and now I have to get kicked in the genitals. There you go, it's both sides. Over here, this thing that I don't know anything about. And so that's why we organized it that way. So that hopefully, because you probably hear a lot of things from today, so of course, today and yesterday. Yes? Okay, cool. We'll do it. And notes are very valuable, but they're only valuable insofar as they translate into whatever you're going to do when you get home. And so all of you guys at some point are going through getting to a plane or in a car and open up a blank tablet page or if you're old school, actually writing things down. And you're going to a blank page and you're looking at your eight pages of notes, whatever it is, and say like, okay, what the hell am I actually going to do? And you're going to write like three or four things on that next page. and my entire objective, objective of this little portion, is to make sure that the three or four things that you write on the page are the correct ones. Because you can, I'll say this, I've grown and worked with a lot of businesses, you can get a lot of stuff wrong if you just get the one or two things that you're really going to dedicate your resources to, you really can get one or two things right and get just about everything else wrong if you get the right things right. And so I, and what are you talking about, constraints who here is that the implementation workshop the online okay so this will be largely new for a lot of you so I have not the distinct pleasure of doing lots of Tuesdays for businesses and when I thought through what is the actual decision tree that I walk through when I talking to somebody by trying to figure out where the business is stuck And so I call the 6M framework the Mozy 6 the way we record it and they just happen to all have Ms, which is convenient for me, and for anyone else to remember things. So the first and obvious question that I've always asked everyone, and I'll let a point as we're going through this, so you can see this reviewable framework. The first question is, why can't we do more of what we're currently doing? If you can't do more of what we're currently doing, then great, you now have permission. Go do more of what we're currently doing, and great. We have now scale. Now, when I asked that question, it was like, I can't. It's like, okay, why not? The first one is metrics. I can't do more of what we're currently doing because I don't even know what I'm doing right now because I have no numbers to have a predictable anything process because we don't know what we're doing. Okay, fine. You don't have enough metrics. Each of these become off-ramps. The idea is, as soon as you find it, create that two attacks, so that you can eventually go and do more. So the route of all of this is always back to as soon as you knock out this other stuff underneath, you go back to, we keep doing more. The next issue that comes up is model. Which is, I don't want to do more, because I'm not sure if I'm in the right boat. I'm not sure if I have opportunity to use the right vehicle. I'm not sure if this is even worth it or if it's going to be accomplished with my goals. And that becomes kind of a larger question like am i getting out of this what i want and i would say my my one tidbit on model is that a lot of times when someone's stuck on a model issue i would say like 75 percent of the time when i talk to them it's just that they need to be reminded that it's going to be difficult and that they have this big goal and then the reason that you get paid 10 or 100 million dollars for an exit is because it's fucking plants and that most people don't have the intestinal form to go through it and a lot of it comes down to being able to manage uncertainty Like fundamentally a lot of the pain of entrepreneurship is walking into a dark room. You can't see anything and racing for how you're going to get it. And then just continuing to walk into a little while you're like, oh, I scream. And you're like, oh, dog shit again. Yeah. And that's a lot of what the off-road process is for just many years at a time. And then you're like, I think there's light at the end. And then it's actually a flashlight. Somebody's going to beat you over the head of it. And so you have these moments, these glitters of hope that only get crushed. Back to this. So, one of them asked the question, why can't we do more? We don't know our metrics. Great, get our metrics, then we can do more. I don't know if this opportunity is right for me. And this is the feature, not bug. Like, this might just be a feature of your business, rather than something. This is not a problem to solve. This is a dichotomy to be managed. This is just going to be part of the shit that you deal with in the business that you in I mean you choose polar examples If you in in the cleaning business finding business is really not that hard Many people want you to clean them It just not a hard business to get them in Finding people who want to clean other people's stuff, much harder. That is the feature of that business. On the fitness and weight loss side, wanting people to come and train at a facility and talk about fitness stuff, tons of super fitness geeks who do it for free all the time. Really hard to find people who are overweight, who want to lose weight, who want to sign up for a gym. Really difficult. It's always going to be a demand-centric business because people in and of themselves lose motivation. And so these are two completely different industries. And they have dynamics that are embedded within human psychology, human behavior that are inherent to those businesses. And so if you were like, hey, you know, the cleaning business is tough. It's just really hard to find good people. No shit. That's the problem that you get to solve in exchange for money, right? And then on this side, it's like, hey, you know, I've got this beautiful gym. I've got all these people that want to train. But like, no one actually wants to like step on the diet and work out. It's like, oh shit. Welcome to the gym business, right? And so it's just like, these are inherent to a lot of the businesses that we're in. And sometimes you see each other like, yeah, that sucks too. Do you want to start over? No? Well, at least you have five years of experience and now you have five years of somebody starting up today, right? Okay. So we've got more metrics model And the next issue that comes up is money. Okay. Which is, I can't do more because I can't afford to. Okay. So when we're leaving through this, we're like, all right, can we not afford to because leads cost too much? Can we not afford to because we close too few of our sales? We're closing too few is a conversion rate issue. Is the problem that we have our lifetime gross profit is too low? We make too little on it? right? Are these the, these are the kind of like sub offshoots of money. So maybe we have to, like if I isolate each of these, because all of these can sometimes seem similar. So we can't afford to because it's too expensive. Well, are our leads too much? Or do we not make enough money? Or are leads the right price? We don't know how to close. And so this is where having industry averages, which is the only time in my life where I'm okay with looking at industry averages. every other time just toss it out because why would you want to be average? But it is decent to at least understand like, okay, if I'm closing off of a webinar and we're closing 0.5% of leads, we're off, right? Now, what's our lead cost for this personal development thing? Well if we at that too high because that just not what the CPS that industry dictated That where a lot of pattern recognition that where a lot of R2 can help a lot on the diagnosis of this stuff The last step here is manpower. So, simply put, so these are sub. So this is like A, B, C, sorry. So we've got one, two, three, four, five. And there are SIDS, and I'm forgetting one of them. I wrote it, so I should know what they are. maybe one of my guys can tell me the last one is manpower which is like I would do more but I just don't have more salespeople I don't have the agents right I have metrics, I'm fine with the model we can afford to do it I just don't have enough people which here's the cool part about this model it goes back to the top what do we do to get manpower? why can't we do more? we can't do more because I don't have metrics around how I track talent okay let's get our metrics and then we can do more of the attraction account so it's a it's a cyclist always repeats itself and so this actually took me to like you know only 10,000 fucking calls to figure out but yeah that's how I'm going to say what's my sixth one anybody I'd say like free lunch anybody figures it out but here I am so alright with that being said was that helpful market market thank you thank you it's I I forget it because it's such a bullshit one. My market's too small. Okay. Sure it is. Tom. Alright. So my market's too small. There's only, like, it's so rare that your market is actually too small. Like, if you are in Bumfuck, Kentucky, you might actually have a market that's too small. That's fair. And that actually works all the way through. I can't find a super AI technologist in Bumfuck, Kentucky. so I can't do more reach outs because I've texted everyone in my market because I know them all and they're in my cell phone and none of them are AI whatever's. Okay, that's fair. It's just that the vast majority of businesses are not in that situation. Even if you're a local, if you're in a market that's 50,000 and up, you're pretty much dead. And then obviously the follow-up question is like, is there a motion? So we do hybrid or two. Am I remote? We have some of those conversations. but yeah so these are the reasons that people get stuck and that is the model like this is the deconferencing model like this is what we run through and then obviously for each of these levels it's like okay what do I do instead thank you guys so much thank you thank you