# My Address To The Gym Industry At The Onset of COVID

## Метаданные

- **Канал:** Alex Hormozi
- **YouTube:** https://www.youtube.com/watch?v=_tF3ODk56hg
- **Дата:** 01.10.2020
- **Длительность:** 27:23
- **Просмотры:** 13,366
- **Источник:** https://ekstraktznaniy.ru/video/16748

## Описание

Download your free scaling roadmap here: https://www.acquisition.com/roadmap-yta5
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If you're new to my channel, my name is Alex Hormozi. I'm the founder and managing partner of Acquisition.com. It's a family office, which is just a formal way of saying we invest our own money into companies. Our 10 portfolio companies bring in over $250,000,000+ per year. Our ownership stake varies between 20% and 100% of them. Given this is a YT channel, and anyone can claim anything, I'll give you some stuff you can google to verify below.

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 

## Транскрипт

### Intro []

gym owners. Uh happy Monday. Hope this uh video reaches you at a good time wherever you're at. Um this is uh I think this is a very important video that I want to make. Um it's been on my mind for probably the last month or two. Um but it became apparent to me that we needed to um clearly state our position. starts with context of where the industry is at right now and then kind of how uh gym launch sees ourselves best supporting the industry and uh gym owners within it. So right now u as I see it from the various sources that I've collected 25 to 30% of all independent gyms um have permanently closed. I believe and I said at the very beginning that I thought it would get to 30 um but I think I was wrong. I think I underestimated how many more gyms would actually not be able to stay in business. And so I think that number may climb over the next six months to maybe 40 or even 50% of independently owned and operated facilities. The reason um that I wanted to start with that is that um in the world of investments and finance, they have a saying which is in a if you have can pick between a strong operator and a we in a weak market or a strong market with a weak operator in both cases the market wins which is you can be the best you know entrepreneur in the world but if you're trying to figure out something that helps newspaper companies you're probably not going to succeed because newspapers are going out of business. And I'm not saying that gyms are newspapers. That's not my point. The point is more so that just to illustrate uh growing versus static versus shrinking markets. So where uh do I think the market is going? I think the gym industry has a very rough next year ahead. I think that the vast majority of consumers, as I said earlier, have already had the opportunity to switch to different um fitness vehicles. I think that the brand of fitness that we have to offer right now um given the constraints in the political environment and what we are forced to do um whether right or not uh are massive um constraints on the business, right? We cannot create the experience that we have wanted to create for our customers. We want to create a memorable experience for them. Um, and I don't think that the constraints that are there give us that opportunity. I also think it creates tons of variability in workforce and labor because we cannot predict uh how if we're going to get shut down again or if it's going to reopen or if there's going to be a spike or new constraint or we have to do temperature thermometers or this type of mask or they have to you know all of these different things massively weigh into and I don't know if you've to just to illustrate this for you personally I am not going out to eat at restaurants nearly as much mostly because I just don't feel like dealing with the hassle and I think that is true amongst many people who are looking at going back to service-based facilities right now. If you're looking at, you know, if you're a woman and you're trying to get your nails done or you get your hair done or any of those types of things, go in and ask them how business has been, right? They have the same constraints that you know Jim has. And many of those people would like to go back and have that desire and yet they have not. And so I think what we've done or what what's happened in the marketplace is that we've permanently trained consumers uh to consume or fill this need in a different way. And I think just by nature of you know from zero to 100 if we had a 100% of our clients before this if all of those clients are introduced to a new type of service or a new solution for this need an amount greater than zero uh will stick with that. And so I, uh, I think that the market overall, uh, is shrinking and will continue to shrink for the foreseeable future. So, um, to put this statement open and clear, gym launch is loyal to gym owners. We are not loyal to gyms. My goal is to equip everyone here in this community with the best opportunity vehicle to package their skills to be able to provide for their families and be able to serve their communities in a way that makes them healthier. That has been the goal since day one. Gyms at the time for the last three four years has been a vehicle for that individual um which when put together with you know the gym launch system uh creates a profitable business for the gym owner and creates a superior experience for the customer and helps people get healthy which is the goal. To that end, Gym Launch uh as a company will be pivoting and that is because I believe that the best opportunity for gym owners is remote for a variety of reasons. I think that first off, from a lead generation standpoint, for most small businesses, lead generation is the hardest thing. In a remote environment or an online environment, you have virtually unlimited lead generation. You will never fatigue the United States's need for weight loss. you won't even fatigue a 50 mile radius for weight loss. But a five mile radius, it's definitely possible, right? It's much more difficult. And I can tell you this right now firsthand on the GLX side, the people that we're working with for in person versus remote. Uh they cycle through the copy and creative at three to four times the rate. It burns out much faster. So there's more effort that has to go in for a lesser volume result at a higher cost. uh and the lead costs if you just think conservatively if 30% of people are not going to like

### Lead Costs [5:30]

people already have excuses to not going to the gym when they have no constraints. But if you add even a little bit of friction towards something that they already kind of don't want to do, then that constraint may double. And that's pretty much what we're already seeing. The lead cost on average across all the markets for in person is about $30. For many people, that does not and that's for a free offer, right? Not even paid, right? That's average. Now, some people might be better, some might people worse, but this is just on average what we're looking at. And so when we take these things into account, right, we can get way more leads at a way lower price with less effort and more consistency. Factor one. Factor two, the model itself, how difficult is it to implement? How much margin remains for the business owner? uh how does it enable the business owner's lifestyle? Uh in an online setting or remote setting, the business owner can move and live wherever they want. They don't have to be in a single area. They can have freedom with their family. They don't have to show up at the gym at 4:00 in the morning. They don't have to be there until 9:00 at night. They don't have to drive in for an appointment to have that person no show and then have another one at 7 o'clock at night that they just sit there and wait for. Right? A lot of those things that we've had to deal with as gym owners and small business owners in a brick-and-mortar setting no longer has to exist. All right? And very frankly, I have always wanted to figure out a way to make online work at scale. Why? Because you no longer are geographic constrained. You're far less temporally constrained and financially the model is more profitable. Period. And as a like just from the business setting, that would probably be enough for me. But on top of that, many people achieve superior results in a one-on-one setting compared to a group workout setting, right? Many of you have hired TKN, have worked with Trevor, have worked with an online coach, whether on the strength side or the nutrition side or body composition or whatever, and you did that because you knew the one-on-one attention allowed you to get a better result, right? If you had to change someone's life and you if they signed on and somebody in your family were going to die, what way would you train them? If you had the option of group workouts or one-on-one coaching online, if you had to, which one would you do? Because if you say group workouts, but then you'd start doing the one-on-one nutrition, that's not the model. That's not the question. The question is which would you because that is realistically what we're offering in the marketplace. All right? And so I already said there was enough of a case from business standpoint to make that argument. But on the fitness component side, I believe that the actual fulfillment is better for the end user and is more profitable. On top of that, you have fixed margins in the business. You do not necessarily need to have rent. Now, if you have to deal with the fact that you have rent, then that's a separate issue. But the business model itself is not constrained by the sunk cost of decisions that have been made in the past. And the reason that I did not have an online business model until COVID hit was one because we didn't have to, but two because no model that I could find and I looked at everyone's out there could be done at scale by anyone without a superior skill set without uh having an authority or having a following or requiring an inordinate amount of effort. For example, there are three primary models that exist in online today, excluding the GLX model that I'm going to talk about. Vehicle one, outbound messaging, right? We have the cold messenger training. I bought two or three $10,000 courses. I took all the best findings and I put it into a course for $37. Right? You guys all have access to it. Fundamentally, why is it not something that I see is enormously valuable? Because it requires effort. Right? Simply put, you have to spend two, three, four hours a day outbound messaging people. Does it work? Yes. Does it require a ton of effort? Yes. Can you scale that? Not really. Right? And so that is opportunity vehicle number one. And if you've seen all the gurus over the last 70 years, the reason none of them have an enormous business is because the vehicle is not that good. It's okay. Right? And with an okay vehicle, you can build an okay business. All right? So that's vehicle one. Vehicle two is doing a webinar. So that's building out a sales presentation that edifies you, generating traffic online to register for the webinar, watch the webinar, pushing to an application that they then schedule a call with you so you can do a $2,000, $3,000 plus sale. Typically, those models do not make a ton of money. One, because the webinar is fatigued. Two, because the cost per application is extremely expensive. You're looking at $100 applications many times. Three, some of the people who are who I know in that space who are experienced only get one, two to one upfront on their ad spend with a high ticket sale. And that's the people who know what they're doing. That doesn't seem like a model that I would scale to others. Third model is doing an online challenge model. What that means is not the way that we're talking about it, but they do group challenges. So that's where you tell everyone to sign up for a group. It's a five-day challenge. You make content day one through four and then you make a pitch on day four and try and get a day pitch on day three. It doesn't matter. Point is that you're trying to solicit people from a free group where you provide value where you're somewhat edified to then get on the phone with you to buy some stuff, right? Um and that model is again a very effort effort-based model. It's very stop and go. It's very clumpy. Um and in my opinion, it's very difficult to scale, which is why you don't see any massive online weight loss companies that just do these 5day online challenges. And I'm gonna say massive. I'm saying real massive, not like small person big businesses. And so because of that, those are the three models that I saw that existed uh for people who did not have a following. And it was not a consistent acquisition model. And so I could not put my weight behind it because I knew that if I were to implement one, two, or three or all three of those together, the vast majority of the people in our community would not succeed. Period. It is what it is. All right. So the reason I like the model that we have now is that after all the trial and error that we've been able to create, we can start a new business, which is essentially what this is overnight because in a semi-reional marketplace, so the same state as you, you have a certain amount of trust that exists. with a free trial front end. It does not require a tremendous amount of skill in order for you to sell it or scale the sales to someone else. Try and outsource a $3,000 high ticket fitness sale. You're not going to be able to do it well. I can promise you. All right? If you're having trouble outsourcing a $200 sale, try outsourcing a $3,000 sale. It's not going to happen. All right? So, the front end, we know that the acquisition is easier because we have

### Front End [12:30]

unlimited leads. That's massive for consistency of business operations and for consistency of cash flow. All right. On the sales side or so on the lead nurture side, Allen has already solved this problem at scale. Up to this point, you couldn't get 800 leads, a thousand leads a month and have any any dream of being able to work that lead flow without two to three full-time people. Not going to happen, right? With Allen, we can do that. And we can set the price at fixed so you always know what it costs to get a new customer right on the phone. Period.

### The Magic [13:04]

For the sale itself, for a free trial sale, someone with very, very low skill set can still sell a free trial on the phone. It is such a lowrisisk offer. And so the magic of the model is the fact that we have now found out after this whole community has tried and tested it that the traineriz app that we've built out, my accountability, right? When paired with a free trial person in the model that we espouse, which is supplement sale number one and then abandoned hope number two, right? Both of those sales are easy enough that you can scale them and break even or come close to it on the first transaction. And then by day 30, you will be able to convert those customers at the same price as you were able to before in a gym setting, except you have far more of them. You acquired them for less and they're staying at a higher profit margin. You no longer have to do sessions. There's no rent that you're you're forced to do. And ultimately, there are many of you who over the last month have built out three or $4,000 a month of recurring revenue. That's in 30 days, right? For those of you like Marcia, and hopefully didn't mean to call her out here, she's built up $40,000 in recurring revenue. Ross built out another $40,000 in recurring revenue, and she's been doing it as well. All right. This model, if you give it one month, two month, three months, four months, it is going to be far superior to the revenue and profit that you were able to make at the gym, except it has no signs of slowing down, right? You do not have to be constrained by your geographic uh five mile radius. If you've had the desire to impact your community in a much bigger way, if you've had the desire to not be constrained to the five miles around the location of your gym, that's only uh valuable to you when your ads are converting because you have the combination of ads, copy, and creative and placements that are actually working in this specific market at that time with the promotion you made, which is real talk how it works, right? If instead of having all that, you can virtually have an unlimited front end and all you have to do is tweak the skills on the back end that you can consistently create because there's only three roles that exist in the model. Person who sells the trial up front, the coach, and that's it, right? And there's you as the owner. And so, as long as you and if you wanted to at scale, you could have one person does all three, right? Um, but the point is that each of these roles, getting someone to sell free trial is not difficult. Getting someone to convert on a same day offer where they don't even have to pay on that day, which is like, hey, normally it's 59, today it's 49. You don't have to say yes right now. Or, so you don't have to pay right now, just say yes right now. You want to use the card you have on file. Many people can make that sale for the nutrition. Hey, don't need to buy all these things. I just need you to get this stuff to get started, right? Great. Most people can make that sale. These sales are not complicated, but can be done at absolutely massive scale and retain a customer at a $2,000 price point where you can acquire them in high volume very consistently. All right? And so I need everyone. So I wanted to at least clarify this for everyone in terms of where Gym Watch's position is in this marketplace. We are going to be serving gym owners and we're in the way that we know best and we're going to align ourselves with the model that's going to make them the most money. And very transparently, I'm going to be doing this because I believe that I would like to serve a marketplace that's going to grow and make the most money because the more money you make, the more money I make. And you know that I'm a capitalist at heart and always have been transparent about my intentions, right? My goal is to run a profitable, wildly profitable business that grows fast, right? And so to that end, if I'm in a B2B space, I have to align with a model that I believe has the highest likelihood of success and profitable growth for my customers. And

### The Future [16:42]

so for the foreseeable future, that is where Gym Launch is going to be focused. We're going to be focused on bringing the online revenue to everybody here. And I can tell you that if you have been on the fence, it is not going to get easier. If you're if you're clinging to in person, it is not going to get easier. Now, is there anyone in this marketplace that I believe is better at running in person? No. Why? Because they all bought my book to try and build their whole temp coaching program, right? Like the business mentality, the business models behind that system are running in parallel. We're using the exact same skill sets, the exact same choreography of sales. The only thing that's changing is that we're fulfilling through an app instead of inerson workout. That's it. That's all that's changing. And so if you have the same $5,000 to spend on marketing, if you spend that same $5,000 in for online clients, you will make more money. Simply put, it is easier right now to get 50 new online clients than it is to get 50 inerson clients. And I don't see that trend changing any time for the rest of 2020. All right? And it and the thing is what I do feel is known is that the rest of 2020 is going to be for gyms in general. What is unknown is whether 2021 is going to get any better. And so it's I feel like I've been holding this back. Um I've been hinting at it. I've been alluding to it, but I have not been able to be transparent in the fact that I believe this is the best model for this community. I've been always loyal to gym owners and I believe that this is the best opportunity vehicle for you to package your skills, serve your community, serve your family. And in terms of ROI on your time and your capital and the skills that you need to train your team on, this model, I believe, is more scalable, more profitable, will have higher ROI over the next six to 12 months um than the inperson model. The fallout questions that happen as a result of that is, well, what do I do with my my in-person business? So there's something called a sunk cost fallacy in economics which basically means because I've invested XYZ before this moment I'm going to use that to cloud the current decision at hand right and so it's like if I've spent I'm trying to hopefully everyone knows what sunk cost is but it's basically you have a you have you've made an investment that is irrelevant in the variables of the current decision in front of you right and you're using that like I committed to you know like I spent money on XYZ and all right hopefully you get the point. That being said, if you still need to make decisions about it, you have a couple of different versions that you can handle this with. All right, one is that you can simply walk away from your gym and deal with the ramifications of that. I don't think that the court systems evictions and creditors are going to be hitting hard on businesses that so clearly were affected by this. I think that we'll have if there's ever a time that you'd be able to get out of a lease, this would be it. This would be the time where you would be able to get out virtually scot-free and many of you already have.

### The Second Solution [19:48]

The second solution is that you make enough money in the online setting that you can pay for it. Because if you think about it, you have the same $5,000 that you're going to spend. You have you're gonna have to spend it on whatever business you're doing, right? If you spent it on the superior opportunity vehicle, you will make more net money doing that. And then you can still like you will make more money doing that even though you have this gym as your anchor. If you spent $5,000 trying to fill the gym up because you have it versus spending $5,000 on something else, you will make more money and still be able to cover the cost better because the opportunity vehicle is superior. Think about it. Let it sink in. All right. And so anyways, um my entire goal is always to make people the most money possible is to get is to give them the freedom they want, give them the security they desire. And I believe that this is the best way for us as a company to do that. And so all of my focus will be to that end. I do think that we are actually on the precipice and we're currently in a golden opportunity era where there's this huge amount of demand for online services and there's not a lot of supply. I don't know how long that window is going to happen. But for the people that take action now, most of you already have. But if you were on the fence, this is the time to take that action. What you don't know is that many of our seven figureure gym owners, the top guys you see in this group, have pivoted 100% online. Some of the guys you hear me talk about their names all the time, they've already sold their gyms and they've pivoted 100% to just going online because they saw the math. They didn't let their emotions cloud the judgment. Now I understand that everyone listening to this is human makes emotions emotional decisions and then puts logic to them later. So then let me just speak to your emotions. If you have the desire for more security, less unknowns in the future, if you have the desire to not have to worry about acquisition, not worry about where your next customer is coming from, worry of whether or not your lead cost is getting too high, worry about whether you're going to have just another creative, another home run to save the month, right? If you don't want to have those concerns, right? You want to be able to travel with your family. leave your gym for God's sake. You know, I didn't take a vacation for five years. I never even left because I was so afraid. I went back for Christmas and every single year for three straight years came back after two days because I couldn't handle the stress of being gone. All right? And so if you don't want to deal with that, I do believe that there is a time window that we are in right now where the entire marketplace understands now what online training is. And there is a massive shortage of professionals who have the skill set like gym owners, right? Like us, we are all very experienced fitness professionals. If you compare us to some guy who's interested in fitness on Instagram, right? Or compare us to uh even to some of your trainers, right? We are more experienced than they are. And so if you want to do the market a favor, let people work with the best professionals and that's you because they're going to do it anyways and they might as well work with you. So anyways, um to wrap this up, uh that is what all of my direction is going to be on executing the model because this model now is as clean as a whistle in my opinion. You don't like this thing is as just about as robust as the original gym launch model. the front-end offer is compelling, we will always be able to get people to sign up for free things for weight loss. Period. That is something I can bet on. Second, do I believe that people can sell free trials at scale with low skill? Yes. Do I believe that you can sell supplements to people who want to uh lose weight in a in a one step in upsell environment? Yes. Do I believe that uh getting people to stay on continuity at $49 a week, $39 a week, $59 a week is something they will do for one-on-one training and support? Yes. Do I now believe that people prefer or value or get a superior experience from a one-on-one customized uh meal plan, customized workouts and groups online? Yes, I do. And because of those beliefs that I have, and you may not share those beliefs, but I've made some pretty big bets in the past in this space, and most of them have been right. And so I'm asking you to at least factor that in if it's something that you're still on the fence about that you at least consider the argument that I'm giving you right now. Um because genuinely my interest is in making you money. And so our interests are aligned. It's just a question of whether you believe the vehicle that I'm talking about right now is the best way. Most of you already made this call. But that is what we're going to be doing with Gym Launch. Um, and it's been very transparent that the people who run that simple model uh can scale and can make um a lot of money because the only thing you really have to do is just make sure that you're fulfilling the clients using the app that automates 80% of it anyways. Um, and that is so much easier than having to worry about trainers and sleeping with clients and broken equipment and cleaning out the bathrooms and getting the right music. Like all of that stuff is gone now or has the opportunity to be gone if you make the choice. Um, obviously the choice is yours. Um, we will support you at Gym Launch independent of what you choose. If you want to rock in person, we will help you. All right, we've done it. And I honestly think you're like having seen and talked to most of the people in this industry with half of them being ex-clients of mine slash exemp employees of mine, right? With half of them being that, I can tell you without any drop of doubt in my mind that we are by far the best. Not even close. Like there's not like, oh yeah, we're like we are ages. We are eons above and the proof of that is if they were as good at business as we are then they would be bigger than us but they are not. And so I would say trust the people who've been doing this the longest and doing this the best with the biggest uh biggest reach and biggest data set. All right. If you want to stay in person we will try and set you up for the best success. But given your skill set and your desires and your wants and needs I think that same skill set desires and beliefs would be better packaged in this vehicle. The question is just whether or not you want to take the jump. All right. So, anyways, for those who have made the jump, I think you made the right uh the right call. Hopefully, this entire video is just reinforcing that belief. For those of you who have made that jump. Uh for those of you not, hopefully this um at least gives you some transparency into why we're going to be talking more about online, why it's going to be my focus. Um and all the clients that we're going to be bringing in are all going to be gyms who want to go online and or you know, experienced fitness professionals who want to go online and scale. Um because now for the first time ever that's possible, right? You couldn't do this without an authority. a following uh before this, but now you can. So um that is my perspective. Um I hope that provides value to you. I hope it provides clarity um in the direction of our company and where I believe that the fitness industry is going and where we're going to be aligning um our company. And we do that because we want to align on the winning side. And I think that is going to be the winning side. Um, no one 50 years from now would say, right, if you're thinking about it, no one 20 years from now would be like, man, who would have thought

### Conclusion [26:38]

that inerson gyms were going to survive this long, right? That online fitness was not going to be bigger 10 years from now than it is now, right? I don't think anyone's going to make that argument. And so, I think that it's um it was time for me to make that make that line in the sand for us as a business of what we are going to focus on. Um, and that is So, anyways, lots of love. Um, as always, we're still going to release plays. We're going to release, you know, the stuff that we do to u to help gyms because that is what we've always done. But I just want to be honest about what I see so that you can be on the same page as me.